TIDMNMD
RNS Number : 7968T
North Midland Construction PLC
01 April 2016
NORTH MIDLAND CONSTRUCTION PLC
FINAL RESULTS
North Midland Construction PLC ("the Company"), the UK provider
of civil engineering, building, mechanical and electrical services
to public and private organisations, announces its final results
for the year ended 31 December 2015.
Highlights from the results:-
Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Revenue 217,612 193,175
Operating profit / (loss) 847 (2,846)
Unadjusted profit / (loss) before
tax 606 (2,970)
Adjusted profit before tax* 4,447 4,353
Total comprehensive profit /
(loss) for the year 1,251 (2,991)
Earnings / (loss) per share 12.32p (29.47p)
* Before charges relating to increased provisions on legacy
contracts
For further information:-
Robert Moyle, Chairman - 01623 518812
Daniel Taylor, Finance Director - 01623 515008
-- Operating profit in the year of GBP0.85m (2014: GBP2.85 million loss).
-- Revenue increased by 12.7% to GBP217.61 million.
-- Underlying profit before tax, excluding legacy contracts, increased to GBP4.45 million.
-- All the Joint Operations are progressing satisfactorily.
-- Positive first year for devolved Building division
-- 85% of revenues derived from ongoing frameworks.
-- Secured workload for 2016 at circa GBP181 million (2015 GBP155 million).
-- Cash position remains strong. Year-end balance of GBP6.62 million (2014 GBP5.28 million).
OPERATING AND FINANCIAL REVIEW
BUILDING:-
The division was devolved from the old Building and Civil
Engineering division at the beginning of the year into a standalone
division. On the back of improving market conditions, it is
pleasing to report a profit of GBP0.19 million generated from a
revenue of GBP11.25 million for this financial year. A GBP15
million scheme for student accommodation in Leicester was
successfully commenced during the year and the current order book
for completion in 2016 is GBP16.5 million. These give us confidence
for the future.
CIVIL ENGINEERING:-
This year has not been without its challenges. Closing out major
legacy contracts has taken a toll, not only financially but in
diverting resource and staff away from the key focus of rebuilding
the division. Settlement and completion of the old legacy contracts
resulted in the division incurring a loss for the year of GBP0.83
million on revenues of GBP7.80 million.
The concentration on legacy contract resolution has affected
Business Development input. A lower risk approach to tender
opportunities has been adopted and as a result of this, tender
opportunities to the value of GBP35 million were turned down during
the year.
HIGHWAYS:-
Highway infrastructure spend continues to increase across both
the public and private sectors, delivering greater opportunities
for the division. Profit increased by 31.8% to GBP0.44 million
(2014 GBP0.34 million) on revenues enhanced by 55.3% to GBP38.79
million (2014 GBP24.97 million).
The Division continues to grow its reputation for the delivery
of public realm and highway projects of a high quality and
increased notational value. The Southern region now has a number of
projects progressing and additional opportunities to review, whilst
the East and West regions continue to perform to expectations.
The secured order book for 2016 is currently 70% of the budget
which is encouraging and gives a positive outlook for 2016.
UTILITIES:-
2015 was a year of consolidation with the strengthening of the
management team to improve the delivery of the commercial and
operational initiatives. 2016 promises to deliver a return to
profitability on the back of the increased secured workload.
As a result of the award of two frameworks for Virgin Media in
the North West and Yorkshire during the year revenue increased
significantly by 48.6% to GBP32.58 million (2014 GBP21.92 million).
However, the resolution of a number of legacy contracts has
resulted in a loss for the year of GBP2.04 million (2014 GBP0.75
million).
NMCNOMENCA:-
The division has again delivered a strong performance during the
year, with Severn Trent awarding NMCNomenca 'Supplier of the Year'
and 'Team of the Year' as recognition for our efforts on the
framework.
We have further developed our opportunities within Joint
Ventures with the formation of the Barhale (Barhale Limited) North
Midland Alliance (BNM Alliance) and the successful tender for the
upgrade of the Elan Valley Aqueduct. Our stake in the Severn Trent
Asset Maintenance framework continues to grow. After a slow start,
we are now expanding into other areas of opportunity outside the
regulated water business.
Profitability was maintained at GBP2.94 million (2014 GBP2.89
million) on revenues which were marginally higher at GBP88.70
million (2014 GBP86.91 million).
Developing our people remains a high priority and as we continue
to inspire excellence in our people, 26
NMCNomenca staff have attended and successfully passed various
levels of the Management and Leadership Development Course.
With all work streams now delivering to expectations and
continuing to increase their market share with the framework, we
have built a great platform to take the business to the next
level.
NOMENCA:-
We maintain our drive to deliver industry leading Health and
Safety, Environmental and Quality performance with another ROSPA
Gold Medal, 2 Green Apple awards: Gold and Silver, and the North of
England Marque of excellence respectively.
Financial Performance during 2015 has been disappointing due to
the reduced order input associated with the Water Industry five
year Asset Management Programme transition and the settlement of
the legacy contracts.
Consequently profitability declined by 75.8% to GBP0.22 million
(2014 GBP0.90 million) on revenues reduced by 11.7% to GBP38.50
million (2014 GBP43.61 million).
The company has been very successful during the year in securing
a Chemical Dosing design and manufacturing framework for United
Utilities and the extension of Yorkshire Water's Chemical Dosing
Framework.
A brand new framework has also been secured with South East
Water in a 50/50 Joint Venture between BAM and Nomenca with the
potential for a fifteen year agreement.
Another great success has been securing a five plus five year
direct delivery framework with Yorkshire Water and three frameworks
secured with Wessex Water.
Our project management and engineering team, based at St
Austell, has been involved in the successful establishment of a new
GBP130m tungsten and tin mine at Hemerdon on the edge of Dartmoor.
This is the first metal ore mine to open in the UK for 40
years.
DIVIDENDS
Due to the losses incurred in previous two years and the
forecast level of growth this financial year, the Directors do not
recommend a final dividend for the year ended 31 December 2015
(2014: GBPnil). The Board is committed in the near future, subject
to a sustained return to profitability, to the payment of
dividends.
FINANCING
The Group credit facilities continue to remain adequate for the
foreseeable future and the Group has sufficient funds to support
its growth going forward. At the year end the cash balance was
GBP6.62 million (2014: GBP5.28 million).
OUTLOOK
The secured order book for the current financial year is circa
GBP181 million and this represents a significant proportion of the
2016 budget. This level of secured revenue, along with the
forecasted level of orders likely to be received under the existing
frameworks, coupled with the underlying performance, is
encouraging. This leads the Board to be cautiously optimistic for
the future.
Group Statement of Comprehensive Income
Year Ended Year Ended
31 December 31 December
2015 2014
GBP'000 GBP'000
------------------------------- ------------ ------------
Revenue 217,612 193,175
Other operating income 162 36
217,774 193,211
Raw materials and consumables (36,094) (34,747)
Other external changes (121,439) (106,848)
Employee costs (53,350) (48,919)
Depreciation of property,
plant and equipment (1,961) (1,689)
Other operating charges (4,083) (3,854)
Operating profit/( loss) 847 (2,846)
Interest received - 1
Finance costs (241) (125)
------------------------------- ------------ ------------
Profit/(loss) before tax 606 (2,970)
Tax 645 (21)
------------------------------- ------------ ------------
Profit/(loss) and total
comprehensive income for
the year 1,251 (2,991)
Attributable to:-
Equity holders of the
Parent 1,251 (2,991)
------------------------------- ------------ ------------
Profit/(loss) per share
- basic 12.32p (29.47p)
------------------------------- ------------ ------------
Profit/(loss) per share
- fully diluted 12.32p (29.47p)
------------------------------- ------------ ------------
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The company has elected to take exemption under Section 408(3)
of the Companies Act 2006 to not present the Parent Company's
Statement of Comprehensive Income. The profit of the Parent Company
for the year was GBP1,514,000 (2014 loss: GBP3,293,000).
Statements of changes in equity
Capital
Share Merger Redemption Retained
Capital Reserve Reserve Earnings Total
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- ----------- --------- --------
Balance at 1 January 2014 1,015 455 20 10,467 11,957
------------------------------- -------- -------- ----------- --------- --------
(Loss) and total comprehensive
income for the year - - - (2,991) (2,991)
------------------------------- -------- -------- ----------- --------- --------
Balance at 31 December 2014 1,015 455 20 7,476 8,966
------------------------------- -------- -------- ----------- --------- --------
Profit and total comprehensive
income for the year - - - 1,251 1,251
------------------------------- -------- -------- ----------- --------- --------
Balance at 31 December 2015 1,015 455 20 8,727 10,217
------------------------------- -------- -------- ----------- --------- --------
Capital
Share Merger Redemption Retained
Capital Reserve Reserve Earnings Total
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- ----------- --------- --------
Balance at 1 January 2014 1,015 455 20 7,843 9,333
------------------------------- -------- -------- ----------- --------- --------
(Loss) and total comprehensive
income for the year - - - (3,293) (3,293)
------------------------------- -------- -------- ----------- --------- --------
Balance at 31 December 2014 1,015 455 20 4,550 6,040
------------------------------- -------- -------- ----------- --------- --------
Profit and total comprehensive
income for the year - - - 1,514 1,514
------------------------------- -------- -------- ----------- --------- --------
Balance at 31 December 2015 1,015 455 20 6,064 7,554
------------------------------- -------- -------- ----------- --------- --------
Balance sheets as at 31 December 2015
Group Company
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
Assets
----------------------------------- -------- -------- -------- --------
Non-current assets
Property, plant and equipment 12,781 11,141 12,766 11,119
Investments in subsidiaries - - 2,437 2,437
Deferred tax asset 705 82 702 75
------------------------------------ -------- -------- -------- --------
13,486 11,223 15,905 13,631
----------------------------------- -------- -------- -------- --------
Current assets
Inventories 2,335 1,722 2,036 1,517
Construction contracts 17,537 12,838 14,054 10,621
Trade and other receivables 31,395 33,275 31,662 33,805
Current income tax receivable 21 13 22 173
Cash and cash equivalents 6,621 5,276 5,707 2,832
------------------------------------ -------- -------- -------- --------
57,909 53,124 53,481 48,948
----------------------------------- -------- -------- -------- --------
Total assets 71,395 64,347 69,386 62,579
==================================== ======== ======== ======== ========
Equity and liabilities
Capital and reserves attributable
to equity holders of the
Parent
Share capital 1,015 1,015 1,015 1,015
Merger reserve 455 455 455 455
Capital redemption reserve 20 20 20 20
Retained earnings 8,728 7,476 6,066 4,550
------------------------------------ -------- -------- -------- --------
Total equity 10,218 8,966 7,556 6,040
------------------------------------ -------- -------- -------- --------
Liabilities
Non-current liabilities
Obligations under finance
leases 2,263 2,054 2,263 2,054
Provisions 361 329 361 329
------------------------------------ -------- -------- -------- --------
2,624 2,383 2,624 2,383
----------------------------------- -------- -------- -------- --------
Current liabilities
Trade and other payables 56,588 51,453 57,241 52,611
Obligations under finance
leases 1,965 1,545 1,965 1,545
------------------------------------ -------- -------- -------- --------
58,553 52,998 59,206 54,156
----------------------------------- -------- -------- -------- --------
Total liabilities 61,177 55,381 61,830 56,539
------------------------------------ -------- -------- -------- --------
Total equity and liabilities 71,395 64,347 69,386 62,579
==================================== ======== ======== ======== ========
Statement of cash flows for the year ended 31 December 2015
Group Company
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- -------- -------- -------- --------
Cash flows from operating
activities
Operating profit/(loss) 847 (2,846) 703 (3,311)
Adjustment for:
Depreciation of property,
plant and equipment 1,964 1,689 1,958 1,683
Gain on disposal of property,
plant and equipment (131) (31) (131) (31)
Increase in reinstatement
reserve 32 87 32 87
-------------------------------------- -------- -------- -------- --------
Operating cash flows before
movement in working capital 2,712 (1,101) 2,562 (1,572)
(Increase) in inventories (613) (193) (518) (298)
(Increase)/decrease in construction
contracts (4,699) 151 (3,433) 342
Decrease/(increase) in receivables 1,880 (2,583) 2,144 (4,558)
Increase in payables 5,122 3,896 4,627 4,946
-------------------------------------- -------- -------- -------- --------
Cash generated from/(used
in) operations 4,402 170 5,382 (1,140)
Income Tax received 25 20 176 158
Interest received - 1 - 1
Interest paid (241) (125) (241) (125)
-------------------------------------- -------- -------- -------- --------
Net cash generated from /
(used in) operations 4,186 66 5,317 (1,106)
-------------------------------------- -------- -------- -------- --------
Cash flows from investing
activities
Purchase of property, plant
and equipment (1,034) (763) (1,034) (763)
Proceeds on disposal of property,
plant and equipment 180 46 180 46
Dividends received from subsidiaries 400 350
Net cash (used in) investing
activities (854) (717) (454) (367)
-------------------------------------- -------- -------- -------- --------
Cash flows from financing
activities
(Repayment)/receipt of obligations
under finance leases (1,988) 1,050 (1,988) 1,050
-------------------------------------- -------- -------- -------- --------
Net cash (used in)/from financing
activities (1,988) 1,050 (1,988) 1,050
-------------------------------------- -------- -------- -------- --------
Net increase/(decrease) in
cash and cash equivalents 1,344 399 2,875 (423)
Cash and cash equivalents
at 1 January 2015 5,276 4,877 2,832 3,255
Cash and cash equivalents
at 31 December 2015 6,620 5,276 5,707 2,832
====================================== ======== ======== ======== ========
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Cash and cash equivalents comprise funds held at the bank which
are immediately accessible.
1. Basis of preparation
The condensed Group financial statements for the
year ended 31 December 2015 included in this report
do not constitute the Group's statutory accounts
for the year ended 31 December 2015 but are derived
from those accounts. The auditor has reported
on those accounts; their report was unqualified,
did not draw attention to any matters by way of
emphasis without qualifying their report and did
not contain statements under s498(2) or (3) Companies
Act 2006 or equivalent preceding legislation.
While the financial information included in this
announcement has been prepared in accordance with
the recognition and measurement criteria of International
Financial Reporting Standards (IFRSs), this announcement
does not itself contain sufficient information
to comply with IFRSs.
The condensed Group financial statements have
been prepared on a basis consistent with that
adopted in the previous year's published financial
statements and in accordance with IFRSs.
The Group expects to publish statutory financial
statements for the year ended 31 December 2015
that comply with both IFRSs as adopted for use
in the European Union and IFRSs as compliant with
the Companies Act 2006 and Article 4 of the EU
IAS Regulations based on the information presented
in this announcement.
The condensed financial statements were approved
by the Board on 31 March 2016.
Audited statutory accounts for the year ended
31 December 2014 have been delivered to the registrar
of companies. The Independent Auditors' Report
on the Annual Report and Financial Statements
for 2014 was unqualified, did not draw attention
to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
2. Segment reporting
The business segment reporting format reflects
the Group's management and internal reporting
structure.
The group is comprised of the following business
segments:-
- 'PLC' - comprising building, civil engineering,
highways, utilities and NMCNomenca divisions
- Nomenca - mechanical and electrical engineering
products and services
Segment revenue and profit
Year ended 31 December 2015
Building Civil Highways NMCNomenca Nomenca Utilities Total
Engineering
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- ------------ --------- ----------- -------- ---------- ---------
Revenue
External sales 11,253 7,794 38,789 88,701 38,497 32,578 217,612
---------------------------------- --------- ------------ --------- ----------- -------- ---------- ---------
Result before corporate expenses 1,002 (366) 1,576 6,518 3,796 (909) 11,617
Corporate expenses (816) (460) (1,132) (3,576) (3,578) (1,208) (10,770)
---------------------------------- --------- ------------ --------- ----------- -------- ---------- ---------
Operating profit/(loss) 186 (826) 444 2,942 218 (2,117) 847
Net finance costs (241)
---------
Profit before tax 606
Tax 645
---------
Profit for the year 1,251
---------
Year ended 31 December 2014
Building Civil Highways NMCNomenca Nomenca Utilities Total
Engineering
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- --------- ------------ --------- ----------- -------- ---------- ---------
Revenue
External sales 7,886 7,886 24,970 86,905 43,608 21,920 193,175
---------------------------------- --------- ------------ --------- ----------- -------- ---------- ---------
Result before corporate expenses (2,950) (2,951) 1,071 5,859 4,165 (203) 4,991
Corporate expenses (159) (158) (734) (2,974) (3,265) (547) (7,837)
---------------------------------- --------- ------------ --------- ----------- -------- ---------- ---------
Operating profit/(loss) (3,109) (3,109) 337 2,885 900 (750) (2,846)
Net finance costs (124)
---------
Profit before tax (2,970)
Tax (21)
---------
Profit for the year (2,991)
---------
From the 1(st) January 2015, the building division was devolved
in to its own separate division. For the purposes of illustrating a
comparable previous period the results, assets, depreciation and
amortisation and additions to non-current assets of the combined
Building & Civil Engineering division have been split
equally.
Segment assets
2015 2014
GBP'000 GBP'000
-------------------------------------------- -------- --------
Building 9,337 5,666
-------------------------------------------- -------- --------
Civil Engineering 5,225 5,666
-------------------------------------------- -------- --------
Highways 8,119 7,352
-------------------------------------------- -------- --------
Utilities 21,394 16,550
-------------------------------------------- -------- --------
NMCNomenca 12,144 10,839
-------------------------------------------- -------- --------
Nomenca 15,176 18,275
-------------------------------------------- -------- --------
Total segment assets and consolidated total
assets 71,395 64,347
-------------------------------------------- -------- --------
For the purpose of monitoring segment performance
and allocating resources between segments, the
Group's Chief Executive monitors the tangible
and financial assets attributable to each segment.
Assets used jointly by reportable segments are
allocated on the basis of the revenues earned
by individual reportable segments.
Other segment information
Depreciation
and Additions to
amortisation non-current assets
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- --------- -------- ----------- --------
Building 123 98 229 109
-------------------------- --------- -------- ----------- --------
Civil Engineering 85 99 159 109
-------------------------- --------- -------- ----------- --------
Highways 424 277 791 307
-------------------------- --------- -------- ----------- --------
Utilities 356 243 664 269
-------------------------- --------- -------- ----------- --------
NMCNomenca 969 966 1,808 1,067
-------------------------- --------- -------- ----------- --------
Nomenca 4 5 - -
-------------------------- --------- -------- ----------- --------
Total 1,961 1,689 3,651 1,861
-------------------------- --------- -------- ----------- --------
There were no impairment losses recognised in
respect of property, plant and equipment. All
of the above relates to continuing operations
and arose in the United Kingdom.
The results of each segment are not materially
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affected by seasonality.
3. Information about major customer
Revenues of approximately GBP78,159,000 (2014:
GBP79,300,000) were derived from a single external
customer. These revenues are attributable to the
NMCNomenca and Nomenca segments.
4. Earnings per share
Earnings per share, both basic and diluted, is
calculated on the profit attributable to equity
holders of the parent of GBP1,251,000 (2014: GBP2,991,000
loss) and the weighted average of 10,150,000 (2014:
10,150,000) shares in issue during the year.
5. Taxation
The tax credit in the year arises from a deferred
tax asset from short term timing differences and
trading losses now recognised. There are trading
losses carried forward of GBP4,841,535 (2014:
GBP8,380,941). The provision for deferred tax
is calculated based on the tax rates enacted or
substantially enacted at the balance sheet date.
6. Dividends
Amounts recognised as distributions to equity
holders in the year:-
2015 2014
GBP'000 GBP'000
Final dividend for the year ended 31 December - -
2014 of 0p (2013: 0p) per share
Interim dividend for the year ended 31 - -
December 2015 of 0p (2014: 0p) per share
-------- --------
- -
======== ========
Due to the losses incurred in previous two years
and the forecast level of growth this financial
year, the Directors do not recommend a final dividend
for the year ended 31 December 2015 (2014: GBPnil).
The Board is committed in the near future, subject
to a sustained return to profitability, to the
payment of dividends.
7. Related parties and joint operations
The Group's related parties are key management
personnel who are the executive directors, non-executive
directors and divisional managers. The only transactions
with these individuals comprise remuneration under
service contracts.
Additionally, the Group has the following interests
in joint operations;
The E5 Joint Venture - (Waste Water Major Projects,
Coventry UK)
25% interest in a joint operation with MWH Treatment
Limited, Mott MacDonald Bentley Limited and Costain
Limited.
Ambergate Working Alliance - (Construction of
reinforced concrete covered storage reservoir,
Ambergate UK)
50% interest in a joint operation with Laing O'Rourke
Imtech.
BAMNomenca - (Water projects for South East Water)
50% interest in a joint operation with Bam Nuttall
Limited.
BNM Alliance - (Construction of Elan Valley Alleviation
scheme)
50% interest in a joint operation with Barhale
Limited.
All joint operation activities are strategic to
the company and its operating divisions NMCNomenca
and Nomenca Limited.
The condensed Group financial statements for the
year ended 31 December 2015 incorporate the following
relating to the joint operations:-
Year ended Year ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Revenue 13,947 13,609
Expenses 12,968 12,108
Assets 1,245 375
Liabilities 1,245 375
8. Share capital
2015 2014
GBP'000 GBP'000
Authorised:-
12,500,000 ordinary shares of 10p each 1,250 1,250
Allotted, issued and fully paid:-
10,150,000 (2014 - 10,150,000) ordinary
shares of 10p 1,015 1,015
9. Contingent liabilities
Aviva Insurance Limited, Lloyds Bank PLC, Euler
Hermes Europe S.A. (N.V.) and HCC International
Insurance Company Plc have given Performance Bonds
to a value of GBP4,703,442 (2014: GBP4,726,472)
on the Group's behalf. These bonds have been made
with recourse to the Group.
10. The Annual Report and Accounts for the year ended
31 December 2015 will be despatched to shareholders
on or around 20 April 2016 and will be available
on the Company's website - www.northmid.co.uk.
11. The Annual General Meeting will be held on Thursday
19 May 2016 at 12.00 noon at the Group's Head
Office at Nunn Close, The County Estate, Huthwaite,
Sutton-in-Ashfield, Nottinghamshire NG17 2HW.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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