TIDMCTO
RNS Number : 0892E
TClarke PLC
09 March 2022
TClarke plc
Results for the year ended 31 December 2021
TClarke delivers in the First Year of GBP500m Revenue Growth
Plan
TClarke plc ("the Group" or "TClarke"), the Building Services
Group, announces its preliminary results for the year ended 31
December 2021.
Financial Highlights
RESULTS FOR THE FULL YEARED 31 2021 2020 Change
DECEMBER
Revenue GBP327.1m GBP231.9m +41%
---------- ---------- -------
Operating profit - adjusted GBP8.8m GBP6.0m +47%
---------- ---------- -------
Profit before tax-adjusted GBP7.8m GBP5.1m +53%
---------- ---------- -------
Earnings per share-adjusted 14.99p 10.29p +46%
---------- ---------- -------
Net cash at year end GBP5.3m GBP10.2m -48%
---------- ---------- -------
Total dividend per share 4.85p 4.4p +10%
---------- ---------- -------
Operating profit-reported GBP8.8m GBP2.1m +319%
---------- ---------- -------
Profit before tax-reported GBP7.8m GBP1.2m +550%
---------- ---------- -------
Basic earnings per share-reported 14.99p 2.87p +422%
---------- ---------- -------
2020 adjusted operating profit, profit before tax and earnings
per share are stated before amortisation of intangible assets and
restructuring costs. There were no such costs in 2021.
Operational Highlights
-- Performance accelerated into the second half of 2021
-- Forward Order Book reaches record level of GBP534m
-- Successfully positioned winning larger projects outside of London
-- Data Centre business expanding
-- Further progress made in broadening healthcare and smart building offering
-- The Group remains on track to achieve its growth plan to reach GBP500m annual revenue
Mark Lawrence, CEO commented
"The business is in excellent shape having finished 2021 on a
high and delivering the first year of our GBP500m revenue growth
plan, winning a wide range of work across our chosen market
sectors. This is clearly reflected in the strength of our order
book which again has reached a new record high.
We offer our clients the widest possible range of services from
a single contractor, complemented by the depth of our
resources.
It is this quality and commitment of our people that gives us
real confidence for the future performance of TClarke."
-ends-
Date: 9(th) March 2022
For further information contact:
TClarke plc
Mark Lawrence Group Chief Executive
Trevor Mitchell Finance Director
Tel: 020 7997 7400
www.tclarke.co.uk
Cenkos Securities plc (Corporate Broker)
Ben Jeynes (Corporate Finance)
Alex Pollen (Sales)
Tel: 020 7397 8900
www.cenkos.com
RMS Partners
Simon Courtenay
Tel: 020 3735 551
Chairman's Statement
TClarke has continued to grow and deliver outstanding performance
and results in 2021. Our revenue of GBP327m has exceeded the
target of GBP300m that we set at the start of 2021. Our operating
profit is GBP8.8m; over GBP6.5m of which was delivered in
the last 6 months of the year at a margin of 3.3% as our revenues
accelerated.
The success of our strategies and deliveries, the quality
of our products, services and methods, and the strength and
depth of our client relationships have enabled significant
progress to be made in the achievement of our medium term
revenue target of GBP500m.
While we continue to grow and deliver in our core Engineering
Services markets, we are also delivering significant growth
and performance in our strategic growth sectors, particularly
Technology, in which we have developed capabilities, leadership
and new client relationships. These are making a significant
and growing contribution to our revenue growth and target.
This growth and performance is supported by strong financial,
management and delivery disciplines which are constantly and
consistently applied across the Group. The forward order book
stands at a record level of GBP534m, an increase of 17% on
the year, of which GBP379m represents committed revenue for
2022. The proportion of the order book represented by Technology
has risen to 25% from 10% in 2020.
We know that our shareholders and investors value our progressive
dividend stream. We continue to be fully committed to a progressive
dividend policy while at the same time balancing the needs
and interests of all stakeholders. We are proposing a 2021
final dividend of 4.1p per share, which together with the
interim dividend paid in October 2021 brings the full 2021
dividend to 4.85p per share - an increase of 10%.
TClarke is committed to becoming a more sustainable business,
delivering improved environmental and sustainability targets
and performance. It is TClarke's ambition to be a Business
Champion with Build UK demonstrating our commitment to the
Construction Leadership Council's zero carbon change programme
CO(2) nstruct Zero.
Our growth and success is delivered through the skills, experiences,
focus and commitment of our people, subcontractors and suppliers
in all areas of the business. We continue to invest heavily
in our resources to ensure we have the capacity to deliver
our growth ambitions. We are strongly committed to developing
and adding to the skills and experience of our people through
our national apprenticeship schemes and our personal and management
development frameworks, and to be the employer of choice in
our markets. For example, we currently have 195 apprentices
representing 16% of our people whilst the industry norm is
just 5%. This is a significant investment made with the long
term belief in TClarke.
I look forward to 2022 and beyond, confident in our ability
to deliver our growth strategy. We have the capacity, a healthy
order book and many opportunities. The TClarke brand is very
strong, built upon our reputation for high quality engineering,
reliability, and delivery on time. This is made possible through
the collective efforts of all our people. It is their outstanding
effort that has allowed us to be so optimistic for the future
and I want to thank them all for their hard work and dedication.
Iain McCusker
Chairman
8th March 2022
Chief Executive's Report
Ready to Deliver
TClarke is a trusted engineering partner to blue chip clients
and principal contractors. Within this report I set out our
strategic plans and achievements for the past year but more
importantly describe with confidence how the business is achieving
its goals.
Last year we committed to a strategy of moving TClarke to
the next level and we described very clearly and concisely
our ambitions, whilst adapting quickly and decisively to the
continually changing circumstances that the country faced.
TClarke aims to be a GBP500m revenue business with sustainable
margins of 3% supporting a progressive dividend policy. Our
business is underpinned by strict financial and operational
controls and strong governance. Our growth ambitions are supported
and financed without the need for often risky and distracting
acquisitions.
New Revenue Streams
Within our business model we target five market sectors. Our
established annual revenues for the business are around GBP330m
and our strategy to reach revenues of GBP500m is based upon
these five established sectors and the new revenue streams
described below which should easily generate an additional
GBP170m of annual revenues.
* Securing larger projects outside of London with
typical project values of GBP5m - GBP10m and GBP10m+.
* Securing data centres particularly in the UK, with
typical project values of GBP25m - GBP50m with the
European data centre market remaining an aspiration.
* Securing healthcare projects across the UK with
typical project values ranging from GBP200k to
GBP20m+.
* Developing innovative smart building solutions which
bring recurring revenue streams.
I am confident that our GBP500m revenue target can be achieved
by organic growth whilst remaining true to the established
engineering strengths of the business.
This strategy is evidenced by the continuous growth of our
forward order book; our order book stood at a record GBP534m
as at 31st December 2021 (GBP456m 31st December 2020). The
order book growth has been achieved whilst continuing to follow
our selective tendering approach.
Investing in the Best People
Differentiated by the quality of our people and their relentless
drive to deliver the most successful projects, the ability
to grow our business and meet our ambitions could not be achieved
without the dedication of our great teams. Our careful attention
to resource planning will ensure we always match our capacity
to our available teams.
Being one of the few industry trainers of apprentices across
the UK leads to a wealth of future talent, designed to deliver
both engineering operatives and future leaders in volume and
quality to meet our needs. The ability to deliver projects
primarily with a trusted reliable workforce ensures that our
reputation for quality and delivery on time is more secure
compared to that of our competitors whose models are dependent
upon the use of sub-contractors.
Scale and Resource Across the UK
TClarke is very well established in its London heartland and
2021 has seen significant progress in ensuring that we can
offer our clients the same scale and breadth of services across
the UK. During 2021 we expanded our capacity in our Engineering
Services Divisions in Falkirk, Peterborough and Newcastle;
the increased opportunities are now translating into additional
revenues for these locations.
Our teams in Manchester and Peterborough have been successful
in securing four projects valued in excess of GBP25m for an
international financial institution at several locations including
two solar farm projects covering 1,800 m(2) and our new Oxford
office celebrated its successful opening by securing a project
at the prestigious Oxford Saïd Business School.
We continue to invest in our own purpose-built facility at
Stansted, that supports Modern Methods of Construction (MMC).
The use of offsite prefabrication benefits our clients and
can bring programme certainty and factory standard quality,
and by utilising less on-site resources gives us more capacity
to deliver additional revenues as a part of our strategy to
achieve GBP500m revenue.
Previously our regional teams would have focused on the smaller
to medium sized projects, often teaming up with local partners.
Today from our three operating divisions that serve 20 UK
locations, we offer the full range of Engineering Services,
alongside all the complementary technology and smart building
solutions, backed up by technical expertise.
TClarke is proud to be based in the communities it serves
and wants to ensure that we offer our teams the best environments
to collaborate, share knowledge and build exciting careers.
In October our team in Manchester moved to larger premises
in Salford Quays, in early 2022 our teams in Falkirk will
be moving to new offices in Eurocentral, Scotland and our
London Head Office will relocate to 30 St Mary Axe whereby
our teams will operate from a single productive floor space.
Exponential Growth in Data Centre Opportunities
The growth in the demand for data centres has been fuelled
by the needs of cloud storage, more devices being connected
to the internet (IoT), gaming, streaming services, e-commerce,
the arrival of 5G and the working from home revolution.
The UK data centre market is the largest in Western Europe.
Brexit and the switch to new UK specific data protection legislation
has led many organisations to open or expand data centre facilities.
Several large-scale developers have entered the data centre
market in the last 12 months. Arizton Advisory and Intelligence
predict the UK data centre market size to reach GBP6bn by
2026.
At the end of 2021 TClarke were active on 5 data centre projects
with a collective value of GBP150m with further opportunities
of additional phases. Depending on the pace of our clients'
expansion plans this value could grow by negotiation by an
additional GBP75m. Through 2022 we are aware of and tracking
bidding opportunities of circa GBP900m and a further pipeline
of project opportunities that will build out well into 2026.
The strength of the TClarke balance sheet and the depth of
our engineering resources means we expect to see strong growth
within our revenues in the technologies sector. This could
represent at least 30% of our expanded annual revenues in
2022 and beyond.
Healthcare, Healthcare, Healthcare
The 2021 UK Government Spending Review confirmed a total of
GBP100bn of investment in economic infrastructure up to 2024-25.
The Chancellor of the Exchequer announced that this includes
a GBP5.9bn capital investment in the National Health Service
(NHS) in addition to the GBP12bn per year that was promised
in September 2021. The NHS has launched a six year National
Framework Agreement for the provision of Smart Building Solutions,
TClarke has successfully secured a place on this framework
agreement.
Secured orders in healthcare schemes now stand at GBP42m.
In addition, we have preferred bidder status for a further
GBP63m of projects. Whilst it takes longer to convert a tender
to a secured order in this sector there are tremendous opportunities
both as a participant in one of the seven frameworks we are
on, but also from standalone capital projects.
Example of secured projects within the Group include:
* Modernising Medicine - Kings College Hospital NHS
Foundation Trust
* Emergency Department Refurbishment - Royal Devon and
Exeter Hospital NHS Foundation Trust
* New MRI and Oncology Unit - Royal Cornwall Hospitals
Trust
* Infrastructure Upgrade - University Hospitals Bristol
and Weston NHS Foundation Trust
* Emergency Department Refurbishment - Luton and
Dunstable University Hospital
A Smart New World
Our clients are setting ambitious decarbonisation plans. Smart
Buildings - new or retrofits - will be integral to UK plans
to reduce its carbon footprint and control energy consumption.
The global smart building market is projected to triple in
the next decade. The increasing costs of energy and legislation
related to the environment in areas such as carbon emission
and pollution are all driving building owners towards smart
building solutions.
Our technologies business recently secured the Smart Buildings
contract for the European Bank of Redevelopment at One Bank
Street, including the role of Master Systems Integrator.
Taking part in the smart buildings revolution involves the
design and installation of the building's mechanical, electrical,
security and safety systems - all existing TClarke strengths.
As we move forward each project opportunity that we bid has
the ability to lead to a Smart Building Opportunity for our
Technologies Division. Furthermore, by utilising our shared
workforce and project teams, the more of our services from
our Mechanical, Electrical and Technologies teams that are
selected, the more compelling the value engineering solutions
we can offer to our clients.
The Specialist Contractor of Choice
Risks and rewards are highest for larger, more complex projects
such as commercial offices, luxury hotel and leisure complexes,
hospitals and major education or research facilities. This
drives clients and principal contractors towards engineering
services providers such as TClarke which have the necessary
skills, governance and financial strength required to mitigate
those risks.
In London the excellent performance of our engineering services
teams has not only completed significant schemes such as Project
Green and 1 Newman Street, but has also been rewarded with
landmark wins such as the Apple fit out at Battersea Power
Station, Plot A2 at Canada Water and Building S4 at the International
Quarter London, our 4th successive project win at this development
in Stratford.
TClarke has experienced a mini boom in luxury and high-end
hotels. We successfully completed the Pan Pacific Hotel, and
the Hilton City Canopy Hotel in London and work continues
on the Peninsular Hotel at Hyde Park Corner. This is another
major market sector where the quality of our work and collaborative
approach is highly valued and has led to TClarke becoming
the preferred contractor on significant hotel schemes in London's
West End.
Our UK North and UK South teams both won significant major
residential projects as part of our targeted tendering approach.
Building our order book with these quality residential projects
and quality relationships is key to sustainable long-term
growth and repeat business. The trend towards more complex,
high value residential developments featuring a range of luxury
facilities has substantially increased the complexity and
value of package of works in those projects.
Our Infrastructure teams remain focused on the major areas
of public sector infrastructure where complexity and new technologies
play to our skill and quality advantages. During the year
we enjoyed ongoing success in education, delivering 63 education
projects and adding 36 new education projects in the forward
order book.
Educational projects that were completed last year include:
* Foxgrove School, Leatherhead
* Nanksar Primary School, Hillingdon
* Pinner High School, Harrow
* Tring School, Hertfordshire
* Turing House, Richmond
* Uckfield College, East Sussex
In summer 2021, a further 50 new schools were announced within
the second round of the UK government's School Rebuilding
Programme which is due to deliver 500 rebuilding projects
over the next decade we are confident that this sector will
continue to be a good revenue stream.
Summary and Outlook
Our people share our vision for the future of TClarke. We
are a business with people on the ground delivering our projects.
Their innovation, commitment and dedication is something that
this business is rightly proud of.
Our order book will translate to record revenues; TClarke
can offer our clients the widest possible solutions from a
single contractor, utilising our resources so that they are
assured we have the ability to deliver. That's why we believe
TClarke remains the contractor of choice for so many and we
remain focused on maintaining our market leading position.
We start 2022 in excellent shape and well placed to deliver
a strong future performance.
Mark Lawrence
Group Chief Executive Officer
8th March 2022
Group Financial review
The Group has delivered a very strong set of results for the
year, with revenue returned to 2019 levels and a record run
rate in quarter 4 of GBP100m revenue providing confidence
for our prospects for 2022 and beyond. We end 2021 with a
record order book of GBP534m (2020: GBP456m), with GBP379m
of this due for delivery in 2022 alone (2020: GBP257m due
for delivery in 2021). The rate of growth is particularly
strong within the Technologies sector where we are currently
working on five large data centre schemes totalling GBP150m.
Technologies are forecast to represent a third of the Group's
turnover for 2022, up from c.15% at present. We reported at
the outset that revenue and profit for 2021 would be slanted
towards the last six months of the year and this has proved
to be the case, with revenue and profit both accelerating
rapidly during the period. The operating margin of 3.3% for
the second half of the year restores profit margin. Our growth
has not been driven by acquisitions and this will remain our
policy going forward.
Performance
Underlying operating profit was GBP8.8m (2020: GBP6.0m) on
revenue of GBP327.1m (2020: GBP231.9m). There have been no
non-underlying items in 2021 (2020: GBP3.9m) and therefore
underlying and reported numbers are the same for 2021. Earnings
per share were 14.99p for the year (2020: 2.87p) on an operating
margin of 2.7% (2020: 2.6%). TClarke remains financially secure,
ending the year with net cash of GBP5.3m with GBP25m of bank
facilities at its disposal.
Finance costs were GBP1.0m (2020: GBP0.9m), comprising: a
GBP0.2m increase in bank interest and facility fees to GBP0.5m
(2020: GBP0.3m); the Group's defined benefit pension scheme
interest charge of GBP0.4m (2020: GBP0.5m); and an interest
charge of GBP0.1m arising from IFRS 16 (2020: GBP0.1m).
The tax charge for the year was GBP1.5m (2020: nil), reflecting
a more representative effective rate of tax for the Group,
with the 2020 charge having been heavily impacted by prior
year tax adjustments. TClarke maintains an open and collaborative
working relationship in all interactions with HMRC.
The Group paid its 2020 final dividend in full in May 2021
and has maintained its interim dividend. The Board is proposing
a final dividend of 4.1p (2020: 3.65p) which if approved at
the AGM will be recorded and paid on 20 May 2022. Total proposed
dividend therefore rises to 4.85p (2020: 4.4p), an increase
of 10%. The dividend is covered 3 times by underlying earnings.
TClarke recognises that many of its shareholders invest for
dividends.
Summary of financial performance 2021 2020
GBPm GBPm
-------------------- ------ ------
Revenue 327.1 231.9
-------------------- ------ ------
Operating profit
- Underlying(1) 8.8 6.0
- Reported 8.8 2.1
-------------------- ------ ------
Profit before tax
- Underlying(1) 7.8 5.1
- Reported 7.8 1.2
-------------------- ------ ------
Profit after tax
- Underlying(1) 6.3 4.3
- Reported 6.3 1.2
-------------------- ------ ------
Profit for the year 6.3 1.2
-------------------- ------ ------
Earnings per share
- Underlying(2) 14.99p 10.29p
- Reported 14.99p 2.87p
-------------------- ------ ------
Dividend per share 4.85p 4.4p
-------------------- ------ ------
1. Underlying operating profit, profit before tax and operating
margin are stated before amortisation of intangible assets
and restructuring costs.
2. Underlying earnings per share is calculated by dividing
underlying profit after tax by the weighted average number
of shares in issue.
3. Dividend per share represents the interim and final dividend
proposed or paid for the year in question.
Forward Order Book 2021 2020 %
Market sector GBPm GBPm change
---------------------- ----- ----- ------
Infrastructure 104.6 99.9 5%
Residential & Hotels 102.7 115.1 (11%)
Technologies 134.8 46.8 188%
Engineering Services 174.0 175.2 (1%)
Facilities Management 18.1 19.0 (5%)
---------------------- ----- ----- ------
Total 534.2 456.0 17%
---------------------- ----- ----- ------
Forward Order Book comprises jobs which are secured through
contracts or letters of intent.
London
Revenue from our London operations rose to GBP189.4m (2020:
GBP134.6m), generating an underlying operating profit of GBP6.2m
(2020: GBP4.9m). Underlying operating margin was 3.3% (2020:
3.6%). The growth in revenue has been primarily driven by
the success of our data centre offering where in addition
to our current five live projects the tendering pipeline identifies
many further opportunities. Our core Engineering Services
have also continued to deliver strongly, with work on a number
of high-profile shell and core commercial and hotel developments,
with many of which offering future fit-out opportunities.
UK South
Revenue from UK South rose to GBP67.1m (2020: GBP55.1m), with
the region delivering an underlying operating profit of GBP2.6m
(2020: GBP2.7m) and giving rise to an underlying operating
margin of 3.9% (2020: 4.9%). The region has developed a high-quality
customer base providing a significant quantity of repeat business
and is particularly strong in infrastructure with many projects
being undertaken in defence, education and healthcare.
UK North
Revenue rose to GBP70.6m (2020: GBP42.2m) with the region
delivering an underlying operating profit of GBP3.0m (2020:
GBP0.7m) and giving rise to an underlying operating margin
of 4.2% (2020: 1.7%). This strong performance has been driven
by the completion of our first major engineering services
project in Liverpool, our continued success in winning and
delivering a number of educational projects through our Leeds
office and Scotland's residential work. In addition our Manchester
office has recently started work on a significant engineering
services project for a major financial institution.
Forward Order Book
The closing Forward Order Book of GBP534m represents a 17%
increase compared to last year's, with the largest increase
being in respect of Technologies (up 188%), driven by the
success of our data centre business.
Cash Flow and Funding
Cash balances totalled GBP20.3m at 31 December 2021 (2020:
GBP25.2m). The GBP15m RCF was drawn down at both 31 December
2021 and 2020, resulting in net cash of GBP5.3m at the 2021
balance sheet date (2020: GBP10.2m). The movement in cash
can be largely attributed to VAT following the introduction
of the Construction Industry reverse charge VAT regime on
1 March 2021 and repayment of deferred amounts. The Group
has also self-funded the increase in turnover, with working
capital increasing by GBP6.5m over the year.
The Group has a GBP15.0m revolving credit facility, which
is committed until 31st August 2024, and a GBP10.0m overdraft
facility which is repayable on demand. Interest on overdrawn
balances is charged at 2.0% above base rate, and interest
on balances drawn down under the revolving credit facility
is charged at a margin above SONIA, fixed for the duration
of each drawdown. The Group was compliant with the terms of
the facilities throughout the year ended 31st December 2021
and the Board's detailed projections demonstrate that the
Group will continue to meet its obligations in the future.
The Board's projections show that TClarke is expected to maintain
a healthy cash position throughout the next three-year period,
and we do not anticipate seeking any additional facilities
during this time.
The Group also has in place GBP50.1m of bonding facilities
(2020: GBP40.1m), of which GBP24.3m were unutilised at 31st
December 2021 (2020: GBP27.0m).
Net Assets and Capital Structure
The Group is funded by equity capital, retained reserves and
bank facilities, and there are no plans to change this structure
or to raise new capital. Shareholders' equity is GBP26.5m
(2020: GBP15.7m).
Goodwill stood at GBP25.3m at the year-end (2020: GBP25.3m).
The Board has undertaken an impairment review in respect of
goodwill and has concluded that no impairment is necessary.
Defined Benefit Pension Scheme Obligations
The most-recent formal actuarial valuation of the Group's
defined benefit pension scheme at 31st December 2018 showed
a deficit of GBP24.9m, representing a funding level of 59%.
Following the valuation the Group committed to a deficit reduction
plan to eliminate the deficit over a 12 year period, and throughout
2021 it continued to make additional contributions at the
agreed rate of GBP1.5m per annum. The Group also continues
to provide security to the pension scheme in the form of a
charge over property assets up to a combined market value
of GBP3.1m. A new formal funding valuation is being carried
out as at 31 December 2021 and the results will be reported
in next year's Annual Report & Financial Statements.
The methodology underlying the formal valuation differs from
that used for the annual IAS 19 valuation included in these
financial statements, particularly in respect of the calculation
of financial assumptions. When calculated in accordance with
IAS 19 the deficit stood at GBP23.9m at 31st December 2021,
representing a reduction of GBP6.3m over the year, recognised
primarily through the Statement of Comprehensive Income. The
reduction was predominantly driven by an increase in the discount
rate applied.
Financial Risk Management
The Group's main financial assets are contract and other trade
receivables, and bank balances. These assets represent the
Group's main exposure to credit risk, which is the risk that
a counterparty will fail to discharge its obligations, resulting
in financial loss to the Group. The Group may also be exposed
to financial and reputational risk through the failure of
a subcontractor or supplier.
The financial strength of counterparties is considered prior
to signing contracts and reviewed as contracts progress where
there are indications that a counterparty may be experiencing
financial difficulty. Procedures include the use of credit
agencies to check the creditworthiness of existing and new
clients and the use of approved suppliers' lists and Group-wide
framework agreements with key suppliers.
We have performed a thorough analysis of our supply chain
during the year to ensure we comply with the Government's
new IR35 off payroll working requirements, a process which
will continue in the future.
Accounting Policies
The Group's consolidated financial statements are prepared
in accordance with the requirements of the Companies Act 2006
and in accordance with UK-adopted international standards.
There have been no new accounting policies adopted in the
year.
Trevor Mitchell
Group Finance Director
8th March 2022
Consolidated income statement
for the year ended 31st December 2021
2021 2020
----------------------------------- -----------------------------------
Non-underlying Non-underlying
Underlying items Total Underlying items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 3 327.1 - 327.1 231.9 - 231.9
Cost of sales (286.6) - (286.6) (199.0) - (199.0)
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Gross profit 40.5 - 40.5 32.9 - 32.9
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Administrative
expenses
Amortisation of
intangible
assets - - - - (0.2) (0.2)
Restructuring
costs - - - - (3.7) (3.7)
Other
administrative
expenses (31.7) - (31.7) (26.9) - (26.9)
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Total
administrative
expenses (31.7) - (31.7) (26.9) (3.9) (30.8)
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Operating profit 8.8 - 8.8 6.0 (3.9) 2.1
Finance costs (1.0) - (1.0) (0.9) - (0.9)
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Profit before
taxation 7.8 - 7.8 5.1 (3.9) 1.2
Taxation 4 (1.5) - (1.5) (0.8) 0.8 -
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Profit for the
financial year 6.3 - 6.3 4.3 (3.1) 1.2
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Earnings per
share
Attributable to
owners of TClarke
plc
Basic 5 14.99p - 14.99p 10.29p (7.42)p 2.87p
Diluted 5 13.91p - 13.91p 9.66p (6.97)p 2.69p
----------------- ---- ---------- -------------- ------- ---------- -------------- -------
Consolidated statement of comprehensive income
for the year ended 31st December 2021 2021 2020
GBPm GBPm
-------------------------------------------------------------------- ---- -----
Profit for the year 6.3 1.2
Other comprehensive income/(expense)
Items that will not be reclassified to the income statement:
Actuarial gain/(loss) on defined benefit pension scheme 5.6 (6.5)
Revaluation of minority shareholding equity investment - (2.0)
Deferred tax relating to items that will not be reclassified 0.4 1.7
Total other comprehensive income/(expense) for the year, net of tax 6.0 (6.8)
-------------------------------------------------------------------- ---- -----
Total comprehensive income/(expense) for the year 12.3 (5.6)
-------------------------------------------------------------------- ---- -----
Consolidated statement of financial position
as at 31st December 2021 2021 2020
Note GBPm GBPm
-------------------------------------------------------- ---- ------- -------
Non-current assets
Intangible assets 25.3 25.3
Property, plant and equipment 7.5 8.0
Deferred tax assets 6.4 6.2
Trade and other receivables 4.9 3.6
-------------------------------------------------------- ---- ------- -------
Total non-current assets 44.1 43.1
-------------------------------------------------------- ---- ------- -------
Current assets
Inventories 0.4 0.4
Amounts due from customers under construction contracts 51.7 41.7
Trade and other receivables 52.5 34.5
Current tax receivables 0.2 0.7
Cash and cash equivalents 8 20.3 25.2
-------------------------------------------------------- ---- ------- -------
Total current assets 125.1 102.5
-------------------------------------------------------- ---- ------- -------
Total assets 169.2 145.6
-------------------------------------------------------- ---- ------- -------
Current liabilities
Bank loans (15.0) (15.0)
Amounts due to customers under construction contracts (2.9) (1.1)
Trade and other payables (96.3) (77.5)
Obligations under leases (1.6) (1.3)
-------------------------------------------------------- ---- ------- -------
Total current liabilities (115.8) (94.9)
-------------------------------------------------------- ---- ------- -------
Net current assets 9.3 7.6
-------------------------------------------------------- ---- ------- -------
Non-current liabilities
Obligations under leases (1.3) (2.2)
Trade and other payables (1.7) (2.6)
Retirement benefit obligations 7 (23.9) (30.2)
-------------------------------------------------------- ---- ------- -------
Total non-current liabilities (26.9) (35.0)
-------------------------------------------------------- ---- ------- -------
Total liabilities (142.7) (129.9)
-------------------------------------------------------- ---- ------- -------
Total net assets 26.5 15.7
-------------------------------------------------------- ---- ------- -------
Equity attributable to owners of the parent
Share capital 4.4 4.3
Share premium 4.2 3.8
Revaluation reserve 0.7 0.8
Retained earnings 17.2 6.8
-------------------------------------------------------- ---- ------- -------
Total equity 26.5 15.7
-------------------------------------------------------- ---- ------- -------
Consolidated statement of cash flows
for the year ended 31st December 2021 2021 2020
Note GBPm GBPm
------------------------------------------------------- ---- ----- -----
Net cash (used in)/generated from operating activities 8 (0.6) 3.7
------------------------------------------------------- ---- ----- -----
Investing activities
Investment in minority shareholding - (2.0)
Purchase of property, plant and equipment (0.4) (0.2)
------------------------------------------------------- ---- ----- -----
Net cash used in investing activities (0.4) (2.2)
------------------------------------------------------- ---- ----- -----
Financing activities
New shares issued 0.5 -
Facility fee (0.1) (0.1)
Proceeds from bank borrowing - 15.0
Equity dividends paid (1.9) (1.9)
Acquisition of shares by ESOT (0.9) (0.1)
Repayment of lease obligations (1.5) (1.6)
------------------------------------------------------- ---- ----- -----
Net cash (used in)/generated from financing activities (3.9) 11.3
------------------------------------------------------- ---- ----- -----
Net (decrease)/increase in cash and cash equivalents (4.9) 12.8
Cash and cash equivalents at the beginning of the year 8 25.2 12.4
------------------------------------------------------- ---- ----- -----
Cash and cash equivalents at the end of the year 8 20.3 25.2
------------------------------------------------------- ---- ----- -----
Consolidated statement of changes in equity
for the year ended 31st December 2021
Share Share Revaluation Retained
capital premium reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
---------------------------------------- ------- ------- ----------- -------- -----
At 1st January 2020 4.3 3.8 0.9 13.9 22.9
---------------------------------------- ------- ------- ----------- -------- -----
Comprehensive income/(expense)
Profit for the year - - - 1.2 1.2
---------------------------------------- ------- ------- ----------- -------- -----
Other comprehensive expense
Actuarial loss on retirement benefit
obligation - - - (6.5) (6.5)
Deferred income tax on actuarial loss
on retirement benefit obligation - - - 1.7 1.7
Minority shareholding equity
investment - - - (2.0) (2.0)
---------------------------------------- ------- ------- ----------- -------- -----
Total other comprehensive expense - - - (6.8) (6.8)
---------------------------------------- ------- ------- ----------- -------- -----
Total comprehensive expense - - - (5.6) (5.6)
---------------------------------------- ------- ------- ----------- -------- -----
Transactions with owners
Transfer on depreciation of freehold
property - - (0.1) 0.1 -
Share-based payment credit - - - 0.4 0.4
Shares acquired by ESOT - - - (0.1) (0.1)
Dividends paid - - - (1.9) (1.9)
---------------------------------------- ------- ------- ----------- -------- -----
Total transactions with owners - - (0.1) (1.5) (1.6)
---------------------------------------- ------- ------- ----------- -------- -----
At 1st January 2021 4.3 3.8 0.8 6.8 15.7
---------------------------------------- ------- ------- ----------- -------- -----
Comprehensive income
Profit for the year - - - 6.3 6.3
---------------------------------------- ------- ------- ----------- -------- -----
Other comprehensive income
Actuarial gain on retirement benefit
obligation - - - 5.6 5.6
Deferred income tax on actuarial gain
on retirement benefit obligation - - - 0.4 0.4
Total other comprehensive income - - - 6.0 6.0
---------------------------------------- ------- ------- ----------- -------- -----
Total comprehensive income - - - 12.3 12.3
---------------------------------------- ------- ------- ----------- -------- -----
Transactions with owners
Transfer of depreciation of freehold
properties - - (0.1) 0.1 -
Share-based payment charge - - - 0.8 0.8
Shares acquired by ESOT - - - (0.9) (0.9)
Allotted in respect of share option
schemes 0.1 0.4 - - 0.5
Dividends paid - - - (1.9) (1.9)
---------------------------------------- ------- ------- ----------- -------- -----
Total transactions with owners 0.1 0.4 (0.1) (1.9) (1.5)
---------------------------------------- ------- ------- ----------- -------- -----
At 31st December 2021 4.4 4.2 0.7 17.2 26.5
---------------------------------------- ------- ------- ----------- -------- -----
Notes to the preliminary financial information
Note 1 - Basis of preparation
TClarke plc is a public limited company listed on the London
Stock Exchange, incorporated and domiciled in the United Kingdom.
The nature of the Group's operations and its principal activities
is providing electrical and mechanical contracting and related
services to the construction industry and end users. The Company
is limited by shares.
This preliminary financial information has been prepared in
accordance with the Disclosure and Transparency Rules of the
UK Financial Conduct Authority, and the principles of UK-adopted
international accounting standards and has been prepared on
a going concern basis under the historical cost convention
as modified by the revaluation of land and buildings.
This preliminary financial information does not constitute
the statutory financial statements of the Group. The financial
statements themselves were approved by the Board on 8th March
2022. The report of the auditor on those financial statements
was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under Section 498 of the
Companies Act 2006. The Annual Report and Financial Statements
will be filed with the Registrar in due course. This preliminary
financial information has been prepared in accordance with
the accounting policies disclosed in the full financial statements.
Note 2 - Significant judgements and sources of estimation
uncertainty
The preparation of this financial information in conformity
with UK-adopted international standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial information are set out below.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision
and future periods if the revision affects both current and
future periods.
Revenue and margin
The recognition of revenue and profit on construction contracts
is a key source of estimation uncertainty due to the difficulty
of forecasting the final costs to be incurred on a contract
in progress and the process whereby applications are made
during the course of the contract with variations, which can
be significant, often being agreed as part of the final account
negotiation.
Commercial reviews of all live contracts are undertaken on
a regular basis, with all significant contracts being reviewed
on a monthly basis. The Directors also take into account the
recoverability of contract balances and trade receivables,
and allowances are made for those balances which are considered
to be impaired. The Group only recognises revenue once there
is a formal contractual entitlement and the recognition criteria
of IFRS 15 have been met. As at 31 December 2021 the Group
had approximately GBP25m (2020: GBP15m) of formally instructed,
unagreed variations, of which GBP15m (2020: GBP9m) satisfy
the highly probable test under IFRS 15 and as such have been
taken to revenue.
Retirement benefit obligations
The costs, assets and liabilities of the defined benefit scheme
operated by the Group are determined using methods relying
on actuarial estimates and assumptions, which are largely
dependent on factors outside the control of the Group. Details
of the key assumptions are set out in note 7, and include
the discount rate, expected return on assets, rate of inflation
and mortality rates. The Group takes advice from independent
actuaries relating to the appropriateness of the assumptions.
Changes in the assumptions used may have a significant effect
on the income statement, statement of comprehensive income
and the statement of financial position.
Note 3 - Segment information
(i) Reportable segments
The Group provides electrical and mechanical contracting and
related services to the construction industry and end users.
For management and internal reporting purposes, the Group
is organised geographically into three regional divisions:
London, UK South and UK North, reporting to the Board who
represent the "Chief Operating Decision-Maker" as per IFRS
8. The measurement basis used to assess the performance of
the divisions is underlying operating profit, stated before
amortisation of intangible assets and other non-underlying
items.
All transactions between segments are undertaken on normal
commercial terms. All the Group's operations are carried out
within the United Kingdom, and there is no significant difference
between revenue based on the location of assets and revenue
based on location of customers. The accounting policies for
the reportable segments are the same as the Group's accounting
policies disclosed in note 1. Segmental information is based
on internal management reporting.
(ii) Segment information and revenue analysis - year ended
31st December 2021 Group costs and
London UK South UK North Unallocated Total
GBPm GBPm GBPm GBPm GBPm
-------------------------- ------ -------- -------- ------------------------- -----
Revenue from contracts
with customers 189.4 67.1 70.6 - 327.1
-------------------------- ------ -------- -------- ------------------------- -----
Operating profit 6.2 2.6 3.0 (3.0) 8.8
Finance costs - - - (1.0) (1.0)
-------------------------- ------ -------- -------- ------------------------- -----
Profit before tax 6.2 2.6 3.0 (4.0) 7.8
Taxation expenses - - - (1.5) (1.5)
-------------------------- ------ -------- -------- ------------------------- -----
Profit for the year 6.2 2.6 3.0 (5.5) 6.3
-------------------------- ------ -------- -------- ------------------------- -----
London UK South UK North Total
GBPm GBPm GBPm GBPm
---------------------- ------ -------- -------- -----
Business sector
Facilities Management 2.7 13.6 9.7 26.0
Infrastructure 15.1 34.4 29.3 78.8
M&E Contracting 91.7 14.3 10.9 116.9
Residential & Hotels 31.5 4.8 19.6 55.9
Technologies 48.4 - 1.1 49.5
----------------------- ------ -------- -------- -----
Total 189.4 67.1 70.6 327.1
----------------------- ------ -------- -------- -----
(iii) Segment information and revenue analysis - year ended
31st December 2020 Group costs
and
London UK South UK North Unallocated Total
GBPm GBPm GBPm GBPm GBPm
-------------------------------------- ------ -------- -------- ----------- -----
Revenue from contracts with customers 134.6 55.1 42.2 - 231.9
-------------------------------------- ------ -------- -------- ----------- -----
Underlying operating profit 4.9 2.7 0.7 (2.3) 6.0
Restructuring costs - - - (3.7) (3.7)
Amortisation of intangibles - - (0.2) - (0.2)
-------------------------------------- ------ -------- -------- ----------- -----
Operating profit 4.9 2.7 0.5 (6.0) 2.1
Finance costs - - - (0.9) (0.9)
-------------------------------------- ------ -------- -------- ----------- -----
Profit before tax 4.9 2.7 0.5 (6.9) 1.2
Taxation expenses - - - - -
-------------------------------------- ------ -------- -------- ----------- -----
Profit for the year 4.9 2.7 0.5 (6.9) 1.2
-------------------------------------- ------ -------- -------- ----------- -----
London UK South UK North Total
GBPm GBPm GBPm GBPm
------------------------------------- ------ -------- -------- -----
Business sector
Facilities Management and Frameworks 2.4 9.7 5.7 17.8
Infrastructure 20.6 22.1 16.2 58.9
M&E Contracting 59.4 15.7 6.5 81.6
Residential & Hotels 21.7 7.6 12.8 42.1
Technologies 30.5 - 1.0 31.5
-------------------------------------- ------ -------- -------- -----
Total revenue 134.6 55.1 42.2 231.9
-------------------------------------- ------ -------- -------- -----
Note 4 - Taxation 2021 2020
GBPm GBPm
--------------------------------------------------- ----- -----
Current tax expense
UK corporation tax payable on profits for the year 1.5 -
Adjustment in relation to prior years (0.2) (0.3)
--------------------------------------------------- ----- -----
Deferred tax expense
Arising on:
Origination and reversal of timing differences 0.2 0.3
--------------------------------------------------- ----- -----
Total income tax expense 1.5 -
--------------------------------------------------- ----- -----
Reconciliation of tax charge
Profit before tax for the year 7.8 1.2
--------------------------------------------------- ----- -----
Tax at standard UK tax rate of 19% (2018: 19%) 1.5 0.2
Tax effect of:
Adjustment in relation to prior years (0.2) (0.3)
Permanently disallowed items 0.2 0.1
--------------------------------------------------- ----- -----
Total income tax expense 1.5 -
--------------------------------------------------- ----- -----
2021 2020
GBPm GBPm
-------------------------------------------------- ----- -----
Income tax credited to other comprehensive income (0.4) (1.7)
-------------------------------------------------- ----- -----
Note 5 - Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the Company by the weighted average
number of Ordinary shares in issue during the year. 2021 2020
GBPm GBPm
----------------------------------------------------------- ------ ------
Earnings:
Profit attributable to owners of the Company 6.3 1.2
----------------------------------------------------------- ------ ------
Weighted average number of Ordinary shares in issue (000s) 42,284 42,295
----------------------------------------------------------- ------ ------
Basic earnings per share 14.99p 2.87p
----------------------------------------------------------- ------ ------
(ii) Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of Ordinary shares outstanding to
assume conversion of all dilutive potential Ordinary shares.
The Company has two categories of dilutive potential Ordinary
shares: share options granted under the Save As You Earn Schemes
and options granted under the Long-term Incentive Plan.
For the share options, a calculation is made to determine
the number of shares that could have been acquired at fair
value (determined as the average annual market share price
of the Company's shares) based on the monetary value of the
subscription rights attached to outstanding share options.
The number of shares calculated as above is compared with
the number of shares that would have been issued assuming
the exercise of the share options. 2021 2020
GBPm GBPm
------------------------------------------------------------------------ ------ ------
Earnings:
Profit attributable to owners of the Company 6.3 1.2
------------------------------------------------------------------------ ------ ------
Weighted average number of Ordinary shares in issue (000s) 42,284 42,295
Adjustments:
Savings Related Share Option Schemes 471 295
Equity Incentive Plan:
Conditional share awards 2,790 2,453
------------------------------------------------------------------------ ------ ------
Weighted average number of Ordinary shares for diluted earnings per
share (000s) 45,545 45,043
------------------------------------------------------------------------ ------ ------
Diluted earnings per share 13.91p 2.69p
------------------------------------------------------------------------ ------ ------
(iii) Underlying earnings per share
Underlying earnings per share represents profit for the year
adjusted for amortisation of intangible assets and other non-underlying
items and the tax effect of these items, divided by the weighted
average number of shares in issue. Underlying earnings is
the basis on which the performance of the operating divisions
of the business is measured. There have been no underlying
items in 2021 and therefore underlying and reported numbers
are the same for 2021. 2021 2020
GBPm GBPm
------------------------------------------------------------------------ ------ ------
Profit attributable to owners of the Company 6.3 1.2
Adjustments:
Amortisation of intangible assets - 0.1
Restructuring costs - 3.0
Underlying earnings 6.3 4.3
------------------------------------------------------------------------ ------ ------
Weighted average number of Ordinary shares in issue (000s) 42,284 42,295
Adjustments:
Savings Related Share Option Schemes 471 295
Equity Incentive Plan:
Conditional share awards 2,790 2,453
------------------------------------------------------------------------ ------ ------
Weighted average number of Ordinary shares for diluted earnings per
share (000s) 45,545 45,043
------------------------------------------------------------------------ ------ ------
Diluted underlying earnings per share 13.91p 9.66p
------------------------------------------------------------------------ ------ ------
Basic underlying earnings per share 14.99p 10.29p
------------------------------------------------------------------------ ------ ------
Note 6 - Dividends 2021 2020
GBPm GBPm
----------------------------------------------- ------ ------
Final dividend of 3.65p (2020: 3.65p) per
ordinary share proposed and paid during the
year relating to the previous year's results 1.6 1.6
Interim dividend of 0.75p (2020: 0.75p) per
ordinary share paid during the year 0.3 0.3
------ ------
Total 1.9 1.9
------ ------
The Directors are proposing a final dividend of 4.1p (2020:
3.65p) per ordinary share totalling GBP1.8 million (2020:
GBP1.6 million). The dividend has not been accrued at the
reporting date.
Subject to approval at the Annual General Meeting, the final
dividend will be paid on 20th May 2022 to shareholders on
the register as at 22(nd) April 2022. The shares will go ex-dividend
on 21(st) April 2022. A dividend reinvestment plan is available
to shareholders. Those shareholders who have not elected to
participate in the plan, and who would like to do so in respect
of the 2021 final payment, may do so by contacting Link Asset
Services on 0371 664 0381. The last day for election for the
final dividend reinvestment is 29(th) April 2022.
Note 7 - Pension commitments
The present value of the defined benefit obligation, the related
current service cost and the past service cost were measured
using the projected unit credit method. The amounts recognised
in the consolidated statement of financial position are as
follows: 2021 2020
GBPm GBPm
------------------------------------ ------ ------
Present value of funded obligations 73.4 76.3
Fair value of plan assets (49.5) (46.1)
------------------------------------ ------ ------
Deficit of funded plans 23.9 30.2
------------------------------------ ------ ------
Key assumptions used: 2021 2020
% %
----------------------------------------------------------------- ----- -----
Rate of increase in salaries 3.39 2.60
Rate of increase of pensions in payment 3.15 3.00
Discount rate 1.89 1.40
Inflation assumption (RPI) 3.25 2.90
----------------------------------------------------------------- ----- -----
2021 2020
The mortality assumptions used in the IAS 19 valuation were: Years Years
----------------------------------------------------------------- ----- -----
Life expectancy at age 65 for current pensioners
- Men 21.5 21.8
- Women 23.4 24.1
Life expectancy at age 65 for future pensioners (current age 45)
- Men 22.5 22.8
- Women 24.6 25.2
----------------------------------------------------------------- ----- -----
Note 8 - Notes to the statement of cash flows
(i) Reconciliation of operating profit to net cash (outflow)/inflow
from operating activities
2021 2020
GBPm GBPm
------------------------------------------------------------- ------ -----
Operating profit 8.8 2.1
Depreciation charges 2.0 2.1
Equity-settled share-based payment expense 0.8 0.4
Amortisation of intangible assets - 0.2
Pension deficit reduction contributions (1.5) (1.5)
Defined benefit pension scheme charge/(credit) 0.4 (1.7)
------------------------------------------------------------- ------ -----
Operating cash flows before movement in working capital 10.5 1.6
Movement in inventories - (0.2)
(Increase)/decrease in contract balances (8.2) 3.9
(Increase)/decrease in operating trade and other receivables (18.8) 3.8
Increase/(decrease) in operating trade and other payables 16.4 (4.5)
------------------------------------------------------------- ------ -----
Cash (used in)/generated from operations (0.1) 4.6
Corporation tax paid - (0.6)
Interest paid (0.5) (0.3)
------------------------------------------------------------- ------ -----
Net cash (used in)/generated from operating activities (0.6) 3.7
------------------------------------------------------------- ------ -----
(ii) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and other
short-term highly liquid investments that are readily convertible
into cash, less bank overdrafts, and are analysed as follows.
2021 2020
GBPm GBPm
----------------------------------- ------------------ -----
Cash and cash equivalents 20.3 25.2
----------------------------------- ------------------ -----
Net cash after deducting total borrowings was as follows: 2021 2020
GBPm GBPm
-------------------------- ------- -------
Cash and cash equivalents 20.3 25.2
Less borrowings (15.0) (15.0)
-------------------------- ------- -------
Net cash 5.3 10.2
-------------------------- ------- -------
Note 9 - Related party transactions
(i) Key management personnel
The key management personnel of the Group comprise members
of the TClarke plc Board of Directors and the Group Management
Board. The key management personnel compensation is as follows: 2021 2020
GBPm GBPm
------------------------------------------------------ ---- ----
Salaries, fees and other short-term employee benefits 3.3 3.3
Share-based payment charge 0.6 0.5
Post-employment employee benefits 0.1 0.1
------------------------------------------------------ ---- ----
Total 4.0 3.9
------------------------------------------------------ ---- ----
Further disclosures, including details of the highest-paid
Director, are included in the Directors' remuneration report
in the latest annual report.
Transactions between the Company and its subsidiary undertakings,
which are related parties, have been eliminated on consolidation
and are not disclosed in this note. There were no other related
party transactions requiring disclosure.
Note 10 - Annual General Meeting
The Annual General Meeting of the Company will be held at
200 Aldersgate, St Pauls London EC1A 4HD at 10am on Wednesday
11th May 2022.
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END
FR FLFIDVIITIIF
(END) Dow Jones Newswires
March 09, 2022 02:00 ET (07:00 GMT)
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