TIDMRNWH
RNS Number : 0447D
Renew Holdings PLC
25 November 2009
This release replaces the announcement "Preliminary results for the year ended
30 September 2009" which was published at 0700 on 24 November 2009.
The following amendments have been made: under the Dividend section in the
Chairman's Statement, the final dividend of 2p per ordinary share will be paid
on 25 February 2010 to shareholders on the register at 29 January 2010. The
shares will become ex-dividend on 27 January 2010.
Renew Holdings plc
("Renew" or the "Group")
Preliminary results for the year ended 30 September 2009
Renew, the Specialist Engineering and Construction Services group, announces
pretax profits of GBP5.5m prior to exceptional items and amortisation charges
and maintains its annual dividend at 3.0 pence.
Financial Highlights
+-----------------+-----------------+--------------+------------------+-----------+
| | 2009 | 2009 | 2009 | 2008 |
+-----------------+-----------------+--------------+------------------+-----------+
| | Pre-exceptional | Exceptional | Post-exceptional | |
| | items and | items and | items and | |
| | amortisation | amortisation | amortisation | |
| | charges | charges | charges | |
| | | | | |
+-----------------+-----------------+--------------+------------------+-----------+
| Revenue | GBP316.6m | - | GBP316.6m | GBP390.6m |
+-----------------+-----------------+--------------+------------------+-----------+
| Profit before | GBP5.5m | (GBP4.3m) | GBP1.2m | GBP6.7m |
| tax | | | | |
+-----------------+-----------------+--------------+------------------+-----------+
| Earnings per | 6.1p | (5.5p) | 0.6p | 8.8p |
| share | | | | |
+-----------------+-----------------+--------------+------------------+-----------+
| | | | | |
+-----------------+-----------------+--------------+------------------+-----------+
| Dividend per | | | 3.0p | 3.0p |
| share | | | | |
+-----------------+-----------------+--------------+------------------+-----------+
| Net cash | | | GBP14.6m | GBP28.2m |
| balance | | | | |
+-----------------+-----------------+--------------+------------------+-----------+
| Net assets | | | GBP11.3m | GBP14.3m |
+-----------------+-----------------+--------------+------------------+-----------+
Operational Highlights
* Specialist Engineering revenue of GBP114.8m (2008: GBP93.3m), including organic
growth of 11%
* 67% increase in Specialist Engineering order book to GBP82m (2008:GBP49m)
* Two complementary acquisitions in Specialist Engineering in the year
* Specialist Building capacity aligned to focus on key specialist sectors
* Group order book at 30 September stood at GBP202m (2008: GBP219m)
* 80% of order book from repeat business
* Debt free balance sheet and strong net cash balance of GBP14.6m
* Final dividend of 2.0p declared, annual dividend maintained at 3.0p (2008: 3.0p)
Roy Harrison OBE, Chairman, commented:
"The Group's strategy of shifting the balance of revenues progressively into
Specialist Engineering is proving justified in the challenging market
conditions. Our debt free balance sheet and healthy cash position provides
further security and gives confidence that the Group will trade profitably
through the recession."
24 November 2009
Enquiries:
+------------------------------------------------+--------------------------+
| Renew Holdings plc | Tel: 0113 281 4200 |
+------------------------------------------------+--------------------------+
| Brian May, Chief Executive | |
| John Samuel, Group Finance Director | |
+------------------------------------------------+--------------------------+
| | |
+------------------------------------------------+--------------------------+
| Brewin Dolphin | Tel : 0845 213 4787 |
| Andrew Kitchingman | |
| Sean Wyndham-Quin | |
+------------------------------------------------+--------------------------+
| | |
+------------------------------------------------+--------------------------+
| College Hill | Tel: 020 7457 2020 |
+------------------------------------------------+--------------------------+
| Mark Garraway | |
+------------------------------------------------+--------------------------+
| Adam Aljewicz | |
+------------------------------------------------+--------------------------+
Chairman's Statement
Introduction
Against the background of the current economic climate, I am pleased to report
satisfactory results for the year.
In these challenging trading conditions, the Group's established strategy of
shifting the balance of revenues from Specialist Building to Specialist
Engineering, which now accounts for 36% compared with 15% three years ago, is
justified as both revenues and profits from Specialist Engineering have
increased. The impact of the recession has been keenly felt in
Specialist Building but the cost reduction measures which we have implemented
throughout the year leaves that part of the Group's business well placed to
negotiate these difficult market conditions successfully.
Results
Group revenue for the year ended 30 September 2009 was GBP316.6m (2008:
GBP390.6m). Profit before income tax for the year prior to exceptional items and
amortisation charges was GBP5.5m (2008: GBP9.5m). Profit after tax, exceptional
items and amortisation charges, was GBP0.4m (2008: GBP5.3m).
The Group remains debt free and at 30 September 2009, the Group's net cash
position stood at GBP14.6m (2008: GBP28.2m). The Board expects a similar level
of net cash at 30 September 2010.
Specialist Engineering revenues increased by 23% to GBP114.8m, including GBP7.7m
of revenues reclassified from Specialist Building, (2008: GBP93.3m), and
operating profit prior to exceptional items and amortisation charges increased
by 16% to GBP4.0m (2008: GBP3.5m). The specialist markets in which we operate
are in sectors which have strong regulatory drivers. This provides greater
visibility of workflow and stability of earnings.
In Specialist Building the past year has seen worsening conditions resulting in
revenues reducing to GBP202.4m (2008: GBP294.6m). These reductions have been
principally experienced in the retail and non-specialist sectors which accounted
for 27% of Specialist Building revenue in 2009 compared to 46% in 2008.
Nevertheless, Specialist Building delivered operating profits prior to
exceptional items and amortisation charges of GBP2.5m (2008: GBP4.9m).
The Group has incurred GBP4.4m of exceptional costs including GBP2.6m of
restructuring and redundancy costs. The decisive action taken resulted in
reduced capacity of 35% in Specialist Building which realigns the business
appropriately for market conditions. These actions have produced annual cost
savings in excess of GBP12m.
The Group's order book at 30 September 2009 stood at GBP202m (2008: GBP219m)
with a 67% increase in Specialist Engineering to GBP82m (2008: GBP49m). Over 80%
is in the form of repeat business for both Specialist Building and Specialist
Engineering sectors. Within Specialist Engineering 70% is in resilient markets
with regulated spending plans. Our emphasis will remain on project selectivity
to reduce contract risk and to maintain quality of earnings.
Office of Fair Trading Investigation
Renew has received the decision from the Office of Fair Trading ('OFT')
following its investigation into tender activities within the construction
sector. This decision was that a fine of GBP0.5m will be levied on Allenbuild
Limited ("Allenbuild"), one of its subsidiaries, and that a fine of GBP3.0m will
be levied on Bullock Construction Limited ("Bullock"). Bullock is a former
subsidiary of Renew, which was sold in September 2005 to a company controlled by
Bullock's management. The OFT holds that Renew is jointly and severally liable
for these fines. Having taken legal advice, Renew has appealed against the OFT
decision and the Board believes that Renew will have no liability in respect of
the Bullock fine. Accordingly, in these results, the Group has provided a sum of
GBP0.5m as an exceptional charge in respect of the Allenbuild fine.
Dividend
The Board is proposing to maintain the final dividend at 2.0p per share. This
will provide an annual dividend of 3.0p (2008: 3.0p). The dividend will be paid
on 25 February 2010 to shareholders on the register as at 29 January 2010 and in
accordance with accounting standards will be accounted for in the 2010 financial
year. The shares will become ex-dividend on 27 January 2010.
Growth Strategy
Our strategy addresses current market conditions and focuses on two distinct
business streams, Specialist Engineering and Specialist Building. Our aim is to
increase revenue in Specialist Engineering both organically and by acquisition,
whilst maintaining operating margins in the target range of 3% to 4%. During the
year, we have added to the breadth of our offering in both the Water and Nuclear
industries with the acquisitions of C.&A. Pumps Limited and Mothersill
Engineering. In Specialist Building we aim to selectively access opportunities,
maintaining profitability of at least 1% at the operating level with a longer
term target of 2% as markets improve.
Our medium term objective is to develop a Specialist Engineering and
Construction Services Group with overall operating profits of over 2% and with
Specialist Engineering providing 50% of revenue.
Outlook
The continuing difficult market presents challenges however our debt free
balance sheet with available cash resources puts Renew in a position of
strength. The Group benefits from a highly experienced management team, led by
Brian May, Chief Executive, and I am confident that the Group will deliver a
resilient performance and trade profitably through the recession.
Roy Harrison OBE
Chairman
24 November 2009
Chief Executive's Review
Overview
Our strategy of expanding Specialist Engineering activities whilst concentrating
on secure margin delivery in Specialist Building is well established.
In Specialist Engineering, Group revenue has increased by 23% (11% organically)
and now accounts for 36% of Group revenue with margins remaining within our
target range at 3.5%. Our Specialist Engineering markets are resilient and have
strong regulatory drivers. This is evidenced by the encouraging 67% increase in
forward work to GBP82m (2008: GBP49m), of which 97% is in the form of repeat
business.
In Specialist Building, as anticipated, revenues reduced by 31% (27% being in
retail and non specialist sectors). Despite this, Specialist Building remained
profitable with a 1.2% return prior to exceptional items. The decisive action
taken to reduce capacity has resulted in a Specialist Building business which is
now appropriately sized, with a competitive cost base, to meet the market
conditions anticipated over the coming years.
We have continued to look for complementary acquisitions to develop our
Specialist Engineering business. Whilst acquisitions that meet our demanding
criteria have been difficult to identify, we were delighted to announce two
acquisitions during the year. In October 2008, Seymour's capability in the water
industry was further enhanced with the acquisition of C.&A. Pumps Ltd. C&A is
based in County Durham and operates nationally providing mechanical and
electrical design, installation and maintenance services.
In May we acquired Mothersill Engineering a specialist machining and fabrication
business, which enhances our offering to the Nuclear Industry. Mothersill has
worked with our nuclear business, Shepley, for many years and provides support
to nuclear new build projects, decommissioning and production operations.
Review of Operations
Specialist Engineering
Nuclear
Shepley Engineers continues to be active in five nuclear facilities, Sellafield,
Drigg, Springfields, Capenhurst and Chapelcross. At Sellafield, where Shepley
has worked for 54 years, the company remains the largest mechanical and
electrical contractor on site. Shepley operates in the fields of both asset
support and decommissioning, underpinned by four frameworks with Sellafield Ltd,
all of which have been extended during the year. The Multi Discipline Site Wide
framework continues to provide significant volume.
The spend by the Nuclear Decommissioning Authority is planned to be GBP8.4bn
over the next 3 years with 59% allocated to the facilities in which Shepley is
active. This is providing additional opportunities outside the frameworks and
during the year Shepley has received initial orders on the GBP80m Separation
Area Ventilation project and the GBP200m B30 project, the most hazardous
industrial complex in Western Europe. Further work on these projects is
anticipated.
In addition Shepley was recently awarded the GBP4.3m project to reclad Unit 560,
direct for Sellafield Ltd. It is also part of the major group, which includes
Jacobs and Doosan Babcock, bidding for the High Active Liquid Effluent Facility,
the largest single contract to be let by Sellafield, with a value in excess of
GBP500m.
Water
Seymour, acquired by the Group in 2007, specialises in water infrastructure
development, flood alleviation and sea defences. Seymour's revenues have
increased by 50% since acquisition.
Seymour's largest client is Northumbrian Water for whom it carries out work on
four frameworks. Flood alleviation and combined sewer outflows continue to
feature strongly with GBP15m of orders received in the year. Northumbrian Water
is the 8th largest water company measured by investment spend and the frameworks
are due for renewal in 2011. Seymour has commenced work to maximise its future
position on the AMP5 frameworks.
During the year C&A has been awarded an M&E framework by Scottish Water, the
first for this client. Similarly Allenbuild has recently been appointed to our
first framework with Severn Trent, which is expected to provide GBP20m of
projects per annum for its framework partners.
Ofwat recently published its draft proposals for a GBP21bn investment programme
over the next 5 years. This is an increase over the last five year period with a
greater spend anticipated on flood alleviation.
Land Remediation
The repositioning of the VHE business last year into regional civil engineering,
due to the reduced remediation market, has proved effective. This is
demonstrated by the award of the GBP15m Cudworth Bypass contract which is the
fifth contract for Barnsley MBC.
Remediation continues to provide opportunities for VHE and during the year we
were awarded a GBP5.8m project to remediate the site of the
Commonwealth Games Athletes Village in Glasgow, one of the largest remediation
projects in Scotland. In addition, VHE has been appointed preferred bidder to
develop a remediation strategy on a redundant gas works in Jersey. Work also
continues to be awarded under our National Grid framework with discussions
ongoing to secure a 2 year extension.
VHE is the UK's leading specialist contractor undertaking remediation works
under Part IIA of the Environmental Act and recently has secured two further
awards, including a GBP1.5m scheme in Cardiff. Part IIA of the Environmental
Protection Act 1990 sets out the regulatory framework for Local Authorities to
deal with the estimated 200,000 hectares of land contaminated during previous
use.
VHE continues to improve its remediation skills and is investigating different
remediation technologies to respond to environmental and energy saving concerns.
VHE is developing an expertise in solidification and stabilisation with a
European partner. VHE remains well placed to provide its specialist skills as
opportunities arise.
Rail
Our rail business, YJL Infrastructure, has seen substantial growth in the year
and has now widened its customer base, working for 8 client bodies over the last
two years.
The principal market is within London and the Home Counties where there are
approximately 700 stations and 30 depots. GBP40bn has been committed to
Transport for London to upgrade London's transport system over the next 10
years, with Network Rail also having a GBP35bn development plan running to 2014.
YJL Infrastructure, as an accredited rail contractor, is active in both these
sectors.
In October 2008, YJL Infrastructure was appointed to the Vendor Capital
Programme framework with London Underground which will provide ongoing
opportunities over the next four years. During the last year major awards have
been the modernisation of Marble Arch and Notting Hill Gate stations, valued at
GBP15m each, station fit outs for South Eastern on CTRL and two projects for
Network Rail at Waterloo, including the complex and time sensitive Peak Hour
Subway. An award has also been received for an intrusive survey project for
Crossrail.
Specialist Building
Social Housing
Allenbuild has now established itself as one of the leading new build social
housing contractors in the South East having doubled revenues over the last
three years. It continues to receive awards recognising its reputation for
quality, delivery, innovation and value engineering and is at the forefront of
developments on environmental, sustainability and energy saving issues.
The social housing market has well established spending plans. Allenbuild has a
position on 10 frameworks, an increase of 2 in the year. These underpin the
business providing access to an annual GBP650m market. Allenbuild has
relationships with 6 of the top 12 housing associations as listed in the recent
Homes & Communities Agency grant allocation awards.
66% of projected revenues in this sector are secured for the coming year with
the balance identified and in final negotiation. In addition, there is over
GBP100m of future opportunities in discussion.
Restoration and Refurbishment
This specialist sector has remained strong, particularly for Walter Lilly, which
remains a preferred contractor for consultants in high quality residential
refurbishment. Walter Lilly has particular skills in providing innovative
solutions to the temporary works challenges in extending properties underground,
which is a major requirement for most residential projects in London. This skill
has been demonstrated in the successful completion of the 11m deep basement to
form a stacking car park at their GBP36m project in Grosvenor Crescent.
During the year, good progress was made on the extensive refurbishment of a
large Grade II listed private residence in Regents Park and Walter Lilly was
also awarded the GBP35m contract to carry out restoration and refurbishment
works to a prestigious Grade II listed property in Park Lane.
Walter Lilly was proud to be awarded the project to construct the 7th July
memorial in Hyde Park. The memorial, which was officially opened by HRH Prince
of Wales, contains 52 stelae, one for each of those who lost their lives in the
Central London bombings in July 2005.
The Group has worked on a variety of projects at the Palace of Westminster for
over 12 years and was delighted to be awarded the first phase of the cast iron
roof restoration, valued at GBP7m.
Science and Education
Substantial Government funding remains committed to improving the country's
science and education facilities. We continue to secure projects both
individually and through our 8 national frameworks in this sector.
We have continued our long association with Defra with a further GBP7m award and
have recently been awarded our 63rd project in a 17 year relationship with
GlaxoSmithKline. In addition we have received a further award on our
Imperial College framework.
Following confirmation of Learning and Skills Council funding for the Kirklees
College Waterfront Campus, we are now finalising contractual arrangements on
this GBP46m project and have commenced works on site under an enabling contract.
People
Keeping our employees and those who work with us operating safely is of
paramount importance to the Group. I am pleased that 2009 has seen us again beat
our yearly safety target with a reduction of 17% in the Accident Incidence Rate
over the year, which is a 64% reduction over the last 4 years.
The achievements of the Group, during these challenging times, is a testament to
the skills, hard work and commitment of all our employees for which the Board is
very grateful.
Summary
The Group continues to make progress in realising its objective of shifting the
balance of its revenues progressively into Specialist Engineering.
In Specialist Engineering we are active in markets that are substantially
underpinned by regulatory spending, whilst in Specialist Building we are
focusing our capacity on more resilient specialist sectors.
The Group is now appropriately structured to meet the challenges of the years
ahead. The Board has set a target for 2012 of developing a Specialist
Engineering and Construction Services Group with an operating profit margin of
over 2% and with Specialist Engineering providing at least 50%.
Brian May
Chief Executive
24 November 2009
Group income statement
For the year ended 30 September 2009
+--------+-----+------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------------+------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | Before | Exceptional | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | exceptional | items and | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | items and | amortisation | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | amortisation | of | | |
| | | | | | | | | intangible | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | of | assets | | |
| | | | | | | | intangible | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | Note | assets | | Total | Total |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | 2009 | 2009 | 2009 | 2008 |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | GBP000 | GBP000 | GBP000 | GBP000 |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Group revenue from continuing | | | 2 | 316,648 | - | 316,648 | 390,557 |
| activities | | | | | | | |
+---------------------------------------+----+--------+------+--------------+--------------+-----------+-----------+
| Cost of sales | | | | | | (282,638) | - | (282,638) | (347,820) |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Gross profit | | | | | | 34,010 | - | 34,010 | 42,737 |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Administrative | | | | | | (29,423) | (4,375) | (33,798) | (37,902) |
| expenses | | | | | | | | | |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Operating profit | | | | | 2 | 4,587 | (4,375) | 212 | 4,835 |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Finance income | | | | | | 939 | - | 939 | 1,618 |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Finance costs | | | | | | (46) | - | (46) | (254) |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Other finance income - defined benefit | | | 65 | - | 65 | 543 |
| pension scheme | | | | | | |
+--------------------------------------------+--------+------+--------------+--------------+-----------+-----------+
| Profit before income tax | | | | | 5,545 | (4,375) | 1,170 | 6,742 |
+------------------------------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Income tax expense | | | | | 4 | (1,877) | 1,085 | (792) | (1,482) |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Profit for the year attributable to equity holders of the | 3,668 | (3,290) | 378 | 5,260 |
| parent company | | | | |
+------------------------------------------------------------+--------------+--------------+-----------+-----------+
| Basic earnings per | | | | | 6 | 6.1p | (5.5p) | 0.6p | 8.8p |
| share | | | | | | | | | |
+---------------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Diluted earnings per share | | | | 6 | 6.0p | (5.4p) | 0.6p | 8.6p |
+------------------------------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Group statement of recognised income and | | | | | Total | Total |
| expense | | | | | | |
+--------------------------------------------+--------+------+--------------+--------------+-----------+-----------+
| For the year ended 30 September 2009 | | | | | | 2009 | 2008 |
+---------------------------------------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | GBP000 | GBP000 |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| | | | | | | | | | | |
+--------+------------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Profit for the year attributable to equity holders | | | | 378 | 5,260 |
| of the parent company | | | | | |
+-----------------------------------------------------+------+--------------+--------------+-----------+-----------+
| Exchange movement in | | | | | | | 622 | 574 |
| reserves | | | | | | | | |
+------------------------------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Movement in actuarial | | | | | | | (2,895) | (497) |
| deficit | | | | | | | | |
+------------------------------+--------+----+--------+------+--------------+--------------+-----------+-----------+
| Movement on deferred tax relating to the defined | | | | 811 | 116 |
| benefit pension scheme | | | | | |
+-----------------------------------------------------+------+--------------+--------------+-----------+-----------+
| Total recognised income and expense for the year | | | | | |
| attributable to | | | | | |
+-----------------------------------------------------+------+--------------+--------------+-----------+-----------+
| equity holders of the parent company | | | | | | (1,084) | 5,453 |
+--------+-----+------+--------+--------+----+--------+------+--------------+--------------+-----------+-----------+
Group balance sheet
At 30 September 2009
+---------------------------------------------------+----------+----------+-----------+
| | | 2009 | 2008 |
+---------------------------------------------------+----------+----------+-----------+
| | | GBP000 | GBP000 |
+---------------------------------------------------+----------+----------+-----------+
| | Note | | |
+---------------------------------------------------+----------+----------+-----------+
| Non-current assets | | | |
+---------------------------------------------------+----------+----------+-----------+
| Intangible assets - goodwill | | 9,558 | 8,548 |
+---------------------------------------------------+----------+----------+-----------+
| - other | | 474 | 620 |
+---------------------------------------------------+----------+----------+-----------+
| Property, plant and equipment | | 5,368 | 4,503 |
+---------------------------------------------------+----------+----------+-----------+
| Deferred tax assets | | 4,097 | 4,069 |
+---------------------------------------------------+----------+----------+-----------+
| | | 19,497 | 17,740 |
+---------------------------------------------------+----------+----------+-----------+
| Current assets | | | |
+---------------------------------------------------+----------+----------+-----------+
| Inventories | | 8,082 | 6,367 |
+---------------------------------------------------+----------+----------+-----------+
| Trade and other receivables | | 67,249 | 87,766 |
+---------------------------------------------------+----------+----------+-----------+
| Current tax assets | | 44 | 455 |
+---------------------------------------------------+----------+----------+-----------+
| Cash and cash equivalents | | 14,863 | 28,289 |
+---------------------------------------------------+----------+----------+-----------+
| | | 90,238 | 122,877 |
+---------------------------------------------------+----------+----------+-----------+
| | | | |
+---------------------------------------------------+----------+----------+-----------+
| Total assets | | 109,735 | 140,617 |
+---------------------------------------------------+----------+----------+-----------+
| | | | |
+---------------------------------------------------+----------+----------+-----------+
| Non-current liabilities | | | |
+---------------------------------------------------+----------+----------+-----------+
| Obligations under finance leases | | (6) | (10) |
+---------------------------------------------------+----------+----------+-----------+
| Retirement benefit obligations | | (2,351) | (1,479) |
+---------------------------------------------------+----------+----------+-----------+
| Deferred tax liabilities | | (233) | (256) |
+---------------------------------------------------+----------+----------+-----------+
| Provisions | | (680) | (1,068) |
+---------------------------------------------------+----------+----------+-----------+
| | | (3,270) | (2,813) |
+---------------------------------------------------+----------+----------+-----------+
| Current liabilities | | | |
+---------------------------------------------------+----------+----------+-----------+
| Borrowings | | (263) | (110) |
+---------------------------------------------------+----------+----------+-----------+
| Trade and other payables | | (93,612) | (119,246) |
+---------------------------------------------------+----------+----------+-----------+
| Obligations under finance leases | | (21) | (67) |
+---------------------------------------------------+----------+----------+-----------+
| Current tax liabilities | | (121) | (159) |
+---------------------------------------------------+----------+----------+-----------+
| Provisions | | (1,119) | (3,941) |
+---------------------------------------------------+----------+----------+-----------+
| | | (95,136) | (123,523) |
+---------------------------------------------------+----------+----------+-----------+
| | | | |
+---------------------------------------------------+----------+----------+-----------+
| Total liabilities | | (98,406) | (126,336) |
+---------------------------------------------------+----------+----------+-----------+
| | | | |
+---------------------------------------------------+----------+----------+-----------+
| Net assets | | 11,329 | 14,281 |
+---------------------------------------------------+----------+----------+-----------+
| | | | |
+---------------------------------------------------+----------+----------+-----------+
| Share capital | | 5,990 | 5,990 |
+---------------------------------------------------+----------+----------+-----------+
| Share premium account | | 5,893 | 5,893 |
+---------------------------------------------------+----------+----------+-----------+
| Capital redemption reserve | | 3,896 | 3,896 |
+---------------------------------------------------+----------+----------+-----------+
| Cumulative translation reserve | | 1,046 | 424 |
+---------------------------------------------------+----------+----------+-----------+
| Share based payments reserve | | 162 | 233 |
+---------------------------------------------------+----------+----------+-----------+
| Retained earnings | | (5,658) | (2,155) |
+---------------------------------------------------+----------+----------+-----------+
| Total equity | 7 | 11,329 | 14,281 |
+---------------------------------------------------+----------+----------+-----------+
Group cash flow statement
For the year ended 30 September 2009
+--------+-----------+---+---+---+--------+--------+--------+---+--------+----------+---------+
| | | | | | | Total | Total |
+--------+-----------+--------------------+--------+--------+------------+----------+---------+
| | | | | | | 2009 | 2008 |
+--------+-----------+--------------------+--------+--------+------------+----------+---------+
| | | | | | | GBP000 | GBP000 |
+--------+-----------+--------------------+--------+--------+------------+----------+---------+
| | | | | | | | |
+--------+-----------+--------------------+--------+--------+------------+----------+---------+
| Profit for the | | | | | 378 | 5,260 |
| year | | | | | | |
+--------------------+--------------------+--------+--------+------------+----------+---------+
| Amortisation of intangible assets | | | 309 | 248 |
+--------------------------------------------------+--------+------------+----------+---------+
| Depreciation | | | | | 1,497 | 1,708 |
+--------------------+--------------------+--------+--------+------------+----------+---------+
| Profit on sale of property, plant and equipment | | (71) | (262) |
+-----------------------------------------------------------+------------+----------+---------+
| (Increase)/decrease in inventories | | | | (935) | 716 |
+-----------------------------------------+--------+--------+------------+----------+---------+
| Decrease in receivables | | | | 21,646 | 2,405 |
+-----------------------------------------+--------+--------+------------+----------+---------+
| Decrease in payables | | | | |(30,165) | (1,599) |
+--------------------------------+--------+--------+--------+------------+----------+---------+
| Current service cost in respect of defined benefit pension scheme | 70 | 72 |
+------------------------------------------------------------------------+----------+---------+
| Cash contribution to defined benefit pension scheme | | (2,028) | (2,106) |
+---------------------------------------------------------------+--------+----------+---------+
| (Income)/expense in respect of share options | | | (71) | 136 |
+--------------------------------------------------+------------+--------+----------+---------+
| Financial income | | | | | (1,004) | (2,161) |
+----------------------------+------------+--------+------------+--------+----------+---------+
| Financial expenses | | | | | 46 | 254 |
+----------------------------+------------+--------+------------+--------+----------+---------+
| Interest paid | | | | | (46) | (254) |
+----------------------------+------------+--------+------------+--------+----------+---------+
| Income taxes received/(paid) | | 323 | (1,344) |
+---------------------------------------------------------------+--------+----------+---------+
| Income tax expense | | | | | 792 | 1,482 |
+----------------------------+------------+--------+------------+--------+----------+---------+
| Net cash (outflow)/inflow from operating activities | | (9,259) | 4,555 |
+---------------------------------------------------------------+--------+----------+---------+
| | | | | | | | |
+--------+---------------+----------------+--------+------------+--------+----------+---------+
| Investing activities | | | | | | |
+------------------------+----------------+--------+------------+--------+----------+---------+
| Interest received | | | | | 939 | 1,618 |
+------------------------+----------------+--------+------------+--------+----------+---------+
| Proceeds on disposal of property, plant and equipment | | 399 | 1,267 |
+---------------------------------------------------------------+--------+----------+---------+
| Purchases of property, plant and equipment | | (1,606) | (2,028) |
+---------------------------------------------------------------+--------+----------+---------+
| Acquisition of subsidiaries net of cash acquired | | (2,260) | (32) |
+---------------------------------------------------------------+--------+----------+---------+
| Net cash (outflow)/inflow from investing activities | | (2,528) | 825 |
+---------------------------------------------------------------+--------+----------+---------+
| | | | | | | | |
+--------+-----------------------+--------+--------+------------+--------+----------+---------+
| Financing activities | | | | | | |
+--------------------------------+--------+--------+------------+--------+----------+---------+
| Dividends paid | | | | | (1,797) | (1,317) |
+--------------------------------+--------+--------+------------+--------+----------+---------+
| Repayments of obligations under finance leases | | (104) | (470) |
+---------------------------------------------------------------+--------+----------+---------+
| Net cash outflow from financing activities | | (1,901) | (1,787) |
+---------------------------------------------------------------+--------+----------+---------+
| | | | | | | | |
+--------+-----------+--------------------+--------+------------+--------+----------+---------+
| Net (decrease)/increase in cash and cash equivalents | |(13,688) | 3,593 |
+---------------------------------------------------------------+--------+----------+---------+
| | | | | | | | |
+--------+-----------+--------------------+--------+------------+--------+----------+---------+
| Cash and cash equivalents at beginning of year | | 28,179 | 24,400 |
+---------------------------------------------------------------+--------+----------+---------+
| | | | | | | | |
+--------+-----------+--------------------+--------+------------+--------+----------+---------+
| Effect of foreign exchange rate changes on cash and cash equivalents | 109 | 186 |
+------------------------------------------------------------------------+----------+---------+
| | | | | | | | |
+--------+-----------+--------------------+--------+--------+------------+----------+---------+
| Cash and cash equivalents at end of year | | 14,600 | 28,179 |
+-----------------------------------------------------------+------------+----------+---------+
| | | | | | | | |
+--------+-----------+--------------------+--------+--------+------------+----------+---------+
| Bank balances and cash | | | | 14,863 | 28,289 |
+-----------------------------------------+--------+--------+------------+----------+---------+
| Borrowings | | | | | (263) | (110) |
+--------------------+--------------------+--------+--------+------------+----------+---------+
| | | | | | | 14,600 | 28,179 |
+--------+-----------+---+---+---+--------+--------+--------+---+--------+----------+---------+
Notes
1 International Financial Reporting Standards
The consolidated financial statements for the year ended 30 September 2009 have
been prepared in accordance with International Financial Reporting Standards
("IFRS"). These preliminary results are extracted from those financial
statements.
2 Segmental analysis
For management purposes the Group is organised into three operating segments:
Building, Engineering and Property & central activities.
Segment information about the Group's continuing operations is presented below:
+-------------------------------------+-----------+---------+---------+
| | | 2009 | 2008 |
+-------------------------------------+-----------+---------+---------+
| Revenue is analysed as follows: | | GBP000 | GBP000 |
+-------------------------------------+-----------+---------+---------+
| | | | |
+-------------------------------------+-----------+---------+---------+
| Building | | 202,358 | 294,553 |
+-------------------------------------+-----------+---------+---------+
| Engineering | | 114,779 | 93,286 |
+-------------------------------------+-----------+---------+---------+
| Property & central activities | | 535 | 8,213 |
+-------------------------------------+-----------+---------+---------+
| Inter divisional revenue | | (1,024) | (5,495) |
+-------------------------------------+-----------+---------+---------+
| Group revenue from continuing | | 316,648 | 390,557 |
| operations | | | |
+-------------------------------------+-----------+---------+---------+
+----------------------------------+--------------+--------------+--------------+---------+
| | Before | Exceptional | | |
+----------------------------------+--------------+--------------+--------------+---------+
| | exceptional | items and | | |
+----------------------------------+--------------+--------------+--------------+---------+
| | items and | amortisation | | |
+----------------------------------+--------------+--------------+--------------+---------+
| | amortisation | of | | |
| | | intangible | | |
+----------------------------------+--------------+--------------+--------------+---------+
| | of | assets | 2009 | 2008 |
| | intangible | | | |
+----------------------------------+--------------+--------------+--------------+---------+
| Analysis of operating profit | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------------+--------------+--------------+--------------+---------+
| | | | | |
+----------------------------------+--------------+--------------+--------------+---------+
| Building | 2,525 | (2,300) | 225 | 4,003 |
+----------------------------------+--------------+--------------+--------------+---------+
| Engineering | 4,008 | (1,446) | 2,562 | 3,108 |
+----------------------------------+--------------+--------------+--------------+---------+
| Property & central activities | (1,946) | (629) | (2,575) | (2,276) |
+----------------------------------+--------------+--------------+--------------+---------+
| Operating profit | 4,587 | (4,375) | 212 | 4,835 |
+----------------------------------+--------------+--------------+--------------+---------+
| Net financing income | 958 | - | 958 | 1,907 |
+----------------------------------+--------------+--------------+--------------+---------+
| Profit on ordinary activities | 5,545 | (4,375) | 1,170 | 6,742 |
| before income tax | | | | |
+----------------------------------+--------------+--------------+--------------+---------+
3 Exceptional items and amortisation of intangible assets
+----------------------------------------+----------+--------------+
| | 2009 | 2008 |
+----------------------------------------+----------+--------------+
| | GBP000 | GBP000 |
+----------------------------------------+----------+--------------+
| | | |
+----------------------------------------+----------+--------------+
| Restructuring and redundancy costs | 2,566 | 1,471 |
+----------------------------------------+----------+--------------+
| Legacy contract settlement | 1,000 | - |
+----------------------------------------+----------+--------------+
| Provision for Office of Fair Trading | 500 | - |
| fine | | |
+----------------------------------------+----------+--------------+
| Costs in relation to statutory debt | - | 1,168 |
| provision | | |
+----------------------------------------+----------+--------------+
| Profit on disposal of plant fleet | - | (122) |
+----------------------------------------+----------+--------------+
| Total exceptional items | 4,066 | 2,517 |
+----------------------------------------+----------+--------------+
| Amortisation of intangible assets | 309 | 248 |
+----------------------------------------+----------+--------------+
| | 4,375 | 2,765 |
+----------------------------------------+----------+--------------+
The Board has determined that certain charges to the income statement should be
separately identified for better understanding of the Group's results for the
year ended 30 September 2009.
Following the deterioration in market conditions faced by certain of the Group's
companies, the Group decided to reduce its cost base in its Specialist Building
business. As a result, the Group has incurred redundancy and restructuring costs
of GBP2,566,000 (2008:GBP1,471,000).
Additionally, a charge of GBP1,000,000 was incurred in respect of a final
account settlement on the last of the basket of legacy construction contracts,
which were originally provided against in 2005.
The Group has provided for a fine of GBP500,000 in connection with the decision
of the Office of Fair Trading following its investigation into tender activities
within the construction sector. The related offences occurred in 2003 and 2004
in part of the Group which has since been closed.
The Board has also separately identified the charge of GBP309,000 (2008:
GBP248,000) for the amortisation of the fair value ascribed to certain
intangible assets other than goodwill arising from the acquisitions of Seymour
(C.E.C) Holdings Limited and C.&A. Pumps Limited.
4 Income tax expense
+-------------+-------------+------------+----+-------------+-------------+-------------+
| Analysis of expense in | 2009 | 2008 |
| year | | |
+---------------------------+------------+--------------------------------+
| | GBP000 | GBP000 |
+---------------------------+------------+--------------------------------+
| Current tax: | | |
+---------------------------+------------+--------------------------------+
| UK corporation tax on | - | (159) |
| profits of the year | | |
+---------------------------+------------+--------------------------------+
| Adjustments in respect of | (32) | (409) |
| previous periods | | |
+---------------------------+------------+--------------------------------+
| | (32) | (568) |
+---------------------------+------------+--------------------------------+
| Foreign tax | - | (51) |
+---------------------------+------------+--------------------------------+
| Total current tax | (32) | (619) |
+---------------------------+------------+--------------------------------+
| Deferred tax - defined | (566) | (699) |
| benefit pension scheme | | |
+---------------------------+------------+--------------------------------+
| Deferred tax - other | (194) | (164) |
| timing differences | | |
+---------------------------+------------+--------------------------------+
| Total deferred tax | (760) | (863) |
+---------------------------+------------+--------------------------------+
| Income tax expense | (792) | (1,482) |
+---------------------------+------------+--------------------------------+
| | | |
+---------------------------+------------+--------------------------------+
| 5 Dividends | | 2009 | 2008 |
+----------------------------------------+----+---------------------------+-------------+
| | | Pence/share | Pence/share |
+----------------------------------------+----+---------------------------+-------------+
| | | | |
+----------------------------------------+----+---------------------------+-------------+
| Interim (related to the year ended 30 | | 1.00 | 1.00 |
| September 2009) | | | |
+----------------------------------------+----+---------------------------+-------------+
| Final (related to the year ended 30 | | 2.00 | 1.20 |
| September 2008) | | | |
+----------------------------------------+----+---------------------------+-------------+
| Total dividend paid | | 3.00 | 2.20 |
+----------------------------------------+----+---------------------------+-------------+
| | | | |
+----------------------------------------+----+---------------------------+-------------+
| | | GBP000 | GBP000 |
+----------------------------------------+----+---------------------------+-------------+
| Interim (related to the year ended 30 | | 598 | 598 |
| September 2009) | | | |
+----------------------------------------+----+---------------------------+-------------+
| Final (related to the year ended 30 | | 1,199 | 719 |
| September 2008) | | | |
+----------------------------------------+----+---------------------------+-------------+
| Total dividend paid | | 1,797 | 1,317 |
+-------------+-------------+------------+----+-------------+-------------+-------------+
Dividends are recorded only when authorised and are shown as a movement in
equity rather than as a charge in the income statement. The Directors are
proposing that a final dividend of 2.0p per Ordinary Share be paid in respect of
the year ended 30 September 2009. This will be accounted for in the 2009/10
financial year.
6 Earnings per share
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| | | | | 2009 | | | | 2008 |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| | | Earnings | EPS | DEPS | | Earnings | EPS | DEPS |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| | | GBP000 | Pence | Pence | | GBP000 | Pence | Pence |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| Earnings before | | 3,668 | 6.12 | 5.98 | | 7,298 | 12.18 | 11.87 |
| exceptional | | | | | | | | |
| costs & | | | | | | | | |
| amortisation | | | | | | | | |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| Exceptional | | (3,290) | (5.49) | (5.36) | | (2,038) | (3.40) | (3.32) |
| costs & | | | | | | | | |
| amortisation | | | | | | | | |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| Basic earnings | | 378 | 0.63 | 0.62 | | 5,260 | 8.78 | 8.55 |
| per share | | | | | | | | |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
| Weighted average | | | 59,899 | 61,352 | | | 59,899 | 61,497 |
| number of shares | | | | | | | | |
+------------------+--+----------+----------+----------+---+----------+----------+----------+
The dilutive effect of share options is to increase the number of shares by
1,453,000 (2008: 1,598,000) and reduce basic earnings per share by 0.01p (2008:
0.23p).
7 Reconciliation of movements in total equity
+-----------------------------------------+----------+---------+
| | | |
+-----------------------------------------+----------+---------+
| | 2009 | 2008 |
+-----------------------------------------+----------+---------+
| | GBP000 | GBP000 |
| | | |
+-----------------------------------------+----------+---------+
| Profit for the year | 378 | 5,260 |
+-----------------------------------------+----------+---------+
| Dividends paid | (1,797) | (1,317) |
+-----------------------------------------+----------+---------+
| | (1,419) | 3,943 |
+-----------------------------------------+----------+---------+
| Other recognised income and expense for | (1,462) | 193 |
| the year | | |
+-----------------------------------------+----------+---------+
| Recognition of share based payments | (71) | 136 |
+-----------------------------------------+----------+---------+
| Net movement in total equity | (2,952) | 4,272 |
+-----------------------------------------+----------+---------+
| | | |
+-----------------------------------------+----------+---------+
| At 1 October 2008 | 14,281 | 10,009 |
+-----------------------------------------+----------+---------+
| At 30 September 2009 | 11,329 | 14,281 |
+-----------------------------------------+----------+---------+
8 Preliminary financial information
The financial information set out above does not constitute the company's
statutory accounts for the years ended 30 September 2009 or 2008 but is derived
from those accounts. Statutory accounts for 2008 have been delivered to the
registrar of companies, and those for 2009 will be delivered in due course. The
auditors have reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006 in
respect of the accounts for 2008 nor a statement under section 498 (2) or (3) of
the Companies Act 2006 in respect of the accounts for 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BABRTMMMTMFL
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