TIDMCTO
RNS Number : 4419H
TClarke PLC
01 August 2019
TClarke plc
Half Year Results for the six months ended 30th June 2019
TClarke plc ("the Group" or "TClarke"), the Building Services
Group, announces its half year results for the six months ended
30th June 2019.
Business Highlights:
-- Revenue up 12% to GBP171.3 million.
-- Underlying operating margin increased to 2.9% from 2.6%.
-- Cash of GBP3.6 million.
-- 14% increase in interim dividend to 0.75p per share (30th June 2018: 0.66p per share).
-- GBP370 million forward order book maintained (30th June 2018: GBP370 million).
Financial Highlights: Change 2019 2018
Revenue +12% GBP171.3m GBP153.5m
------------- ------------- -------------
Operating profit - underlying(1) (EBIT) +25% GBP5.0m GBP4.0m
------------- ------------- -------------
Operating profit - underlying(1,3) See (3) below GBP6.0m GBP4.2m
before depreciation and amortisation
(EBITDA)
------------- ------------- -------------
Operating profit - reported +11% GBP4.9m GBP4.4m
------------- ------------- -------------
Operating margin - underlying(1) +12% 2.9% 2.6%
------------- ------------- -------------
Profit before tax - underlying(1) +24% GBP4.6m GBP3.7m
------------- ------------- -------------
Profit before tax - reported +10% GBP4.5m GBP4.1m
------------- ------------- -------------
Net cash -23% GBP3.6m GBP4.7m
------------- ------------- -------------
Earnings per share - underlying(2) +23% 8.67p 7.06p
------------- ------------- -------------
Earnings per share - underlying (diluted)(2) +19% 8.24p 6.91p
------------- ------------- -------------
Earnings per share - basic +8% 8.46p 7.83p
------------- ------------- -------------
Interim dividend per share +14% 0.75p 0.66p
------------- ------------- -------------
Forward order book GBP370m GBP370m
------------- ------------- -------------
(1) Underlying profit is operating profit before amortisation of
intangible assets and non-underlying items.
(2) Underlying earnings per share is calculated by dividing
underlying profit after tax by the weighted average number of
shares in issue.
(3) 2019 EBITDA calculated in accordance with IFRS16; 2018 has
not been restated in accordance with the standard
Mark Lawrence, Chief Executive, commented
"The Board is pleased with these results which demonstrate that
TClarke is in excellent shape. The success of our strategy of
targeting repeat work for blue chip clients, balanced with sensible
growth, focusing on improving margins and seeking new markets
aligned to our core business, is firmly reflected in our
results.
Looking ahead, the Board is confident that the Group will
deliver a performance for the full year in line with current market
expectations. We remain very selective about the quality of the
work that we take on and despite some competitive pressures, our
order book has been maintained at GBP370 million.
September will see our annual intake of apprentices commencing
their training with TClarke and yet again the business is making
this important investment in our future workforce. We wish the 50
apprentices joining us across the UK all the success for their
future years with TClarke."
Date: 1st August 2019
For further information contact:
TClarke plc
Mark Lawrence Trevor Mitchell David Lanchester
Group Chief Executive Finance Director Company Secretary
Tel: 020 7997 7400 Tel: 020 7997 7400 Tel: 020 7997 7400
www.tclarke.co.uk
N+1 Singer (Financial Adviser and Broker) RMS Partners
Sandy Fraser Simon Courtenay
Rachel Hayes Tel: 020 3735 6551
Tel: 020 7496 3000
www.nplus1singer.com
Trading
The Group has had a strong first six months of 2019 and the
results we have delivered are in line with the Board's expectations
for the period.
Underlying operating profit for the six months was GBP5.0
million (2018: GBP4.0 million), with revenues of GBP171.3 million
(2018: GBP153.5 million). Underlying operating margin across the
Group improved to 2.9% (2018: 2.6%).
TClarke has reorganized into three Operating Regions; UK North,
UK South and London. Both London and UK South have reported strong
underlying operating margins for the first six months of 4.3% and
3.8% respectively.
At 30th June 2019 the Group had cash of GBP3.6 million and
unutilised bank facilities of GBP25 million. The half year net cash
position reflects the Group's typical working capital profile and
the cycle of our contracts, with absorption of cash during the
first half of the financial year a normal pattern.
Dividend
The Board proposes an increased interim dividend of 0.75p (2018:
0.66p). This will be paid on 4th October 2019 to shareholders on
the register at 6th September 2019.
Order Book
Our forward order book, which only reflects contracts where we
have a firm commitment to proceed, has remained resilient and of
high quality, standing at GBP370 million (2018: GBP370 million).
Revenues secured for delivery in the current year total GBP327
million, representing 96% of our expected revenue for the year.
GBP182 million is secured for 2020 and GBP34 million for 2021 and
beyond.
Operational Review
The Group is managed in three operational areas, London, UK
South and UK North, providing nationwide coverage from nineteen
locations across the UK. Our new subsidiary, TClarke Europe is
actively tendering Data Centre opportunities in Europe, leveraging
our UK Data Centre knowledge and track record.
We focus on repeat customers and framework contracts in the
following key markets
-- Infrastructure
-- Residential & Accommodation
-- Facilities Management & Frameworks
-- Technologies
-- M&E Contracting
TClarke - London
30 06 2019 30 06 2018
(GBPm) (GBPm)
Revenue 101.1 92.5
----------- -----------
Underlying operating profit 4.3 3.7
----------- -----------
Underlying operating profit margin 4.3% 4.0%
----------- -----------
Order book 236 238
----------- -----------
London is the most significant of our three operating divisions
in terms of size and profitability and includes our combined
M&E London business, our London technology business (Eton and
Intelligent Buildings) and our off-site prefabrication facility at
Stansted.
Operating margins improved to 4.3%, continuing the strong
performance in London over the last three years.
We are on site at a number of high-profile London schemes
including
-- 22 Bishopsgate
-- 100 Bishopsgate
-- 1 Bishopsgate Plaza
-- Battersea Power Station
-- KGX1 at Kings Cross
-- 1 Triton Square
-- The Minories Hotel
-- South Bank Place
-- The Peninsular Hotel.
TClarke - UK South
30 06 2019 30 06 2018
(GBPm) (GBPm)
Revenue 36.4 35.8
----------- -----------
Underlying operating profit 1.4 0.8
----------- -----------
Underlying operating profit / (loss) margin 3.8% 2.2%
----------- -----------
Order book 66 59
----------- -----------
UK South operates from our offices at Birmingham, Derby,
Kimbolton, Peterborough, Portishead, Plymouth and St Austell, and
is able to target a vast range of construction and facilities
management opportunities across the region. During 2018 we added a
specialist air conditioning capability, which has increased the
range of services we can offer to clients.
Our strategy of targeting medium sized projects has produced a
strong first half performance, with profits increasing by 75%.
Current Schemes include:
-- Dyson Technology Centre, Wiltshire
-- Aspire Defence, accommodation upgrade programme
-- Bath Spa University, new Art & Design campus
-- Various John Lewis and Waitrose Stores
-- Hendon, residential development
-- Colston Hall, concert venue redevelopment, Bristol
TClarke - UK North
30 06 2019 30 06 2018
(GBPm) (GBPm)
Revenue 33.8 28.1
----------- -----------
Underlying operating profit 0.8 1.1
----------- -----------
Underlying operating profit margin 2.4% 3.9%
----------- -----------
Order book 68 73
----------- -----------
UK North division operates from eight locations; Liverpool,
Manchester, Chorley, Leeds, Newcastle, Falkirk, Aberdeen and
Dumfries.
Underlying operating profit has fallen by GBP0.3 million partly
due to the investment in the Liverpool and Manchester offices ahead
of securing work in those areas. We are actively pursuing a number
of exciting opportunities in those areas which are due to commence
at the end of 2019 or early 2020.
Current Schemes include:
-- Springfields Nuclear Fuels
-- BAE systems at Samlesbury and Warton.
-- Sedburgh new leisure centre, Bradford
-- Maiden Castle Sports Centre, Durham University
-- Forth Valley College, Falkirk
-- Various residential schemes for Cala Homes, Taylor Wimpey, Barrett Homes
Pensions
An actuarial loss of GBP2.6 million, net of tax, has been
recognised in reserves during the period, with the pension scheme
deficit increasing to GBP26.1 million (30th June 2018: GBP18.9
million). The increase in the deficit is the result of the discount
rate falling by 0.6% to 2.4%; the effect of which has been
partially offset by investment performance in the period exceeding
the long term assumption. In accordance with the Group's agreed
deficit reduction plan, described in detail in the most recent
annual report, the annual deficit reduction contribution is set at
GBP1.5 million for the current year, and will remain at this amount
until the review of the next triennial actuarial valuation of the
scheme currently being undertaken.
Banking Facilities
The Group has a GBP10 million overdraft facility, repayable on
demand, and a GBP15 million revolving credit facility expiring 31st
August 2022. At the half year point, these facilities were
unutilised and remain available to support the Group's work flows
and funding demands during the course of the year.
Summary and Outlook
TClarke has made a strong start to the year and we are pleased
to report that we continue to expect revenues and profits for 2019
to be in line with current market expectations. To put those in
context, for the year ending 31st December 2019, these are forecast
to be revenues of GBP340 million, underlying EBIT of GBP10.2
million, underlying PBT of GBP9.3 million and underlying EPS of
17.5p.
Our long-standing client base, particularly in the London
market, is frustrated by the ongoing political uncertainty and we
are seeing some new schemes being held back as a result. Despite
this, we remain busy and there are many active discussions with our
clients indicating that schemes could be accelerated once the
political situation becomes clearer.
The strength of TClarke has been our focus for delivery across a
broad range of target markets. We are investing in new geographical
regions in the UK, in particular Manchester and Liverpool,
leveraging our UK Data Centre knowledge and track record entering
European markets in addition to promoting our broader Technologies
offering.
In conclusion, the Board remains cautiously optimistic about the
Group's future prospects and we look forward to updating
shareholders on the progress that we make during the second half of
the financial year.
Condensed consolidated income statement
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Revenue 171.3 153.5 326.8
Cost of sales (149.5) (136.1) (287.6)
----------- ----------- -----------
Gross profit 21.8 17.4 39.2
Other operating income - -
Administrative expenses:
----------- ----------- -----------
Amortisation of intangible assets (0.1) (0.1) (0.2)
Non-underlying costs - 0.5 -
Other administrative expenses (16.8) (13.4) (30.4)
----------- ----------- -----------
Total administrative expenses (16.9) (13.0) (30.6)
Operating profit 4.9 4.4 8.6
Finance costs (0.4) (0.3) (0.8)
----------- ----------- -----------
Profit before taxation 4.5 4.1 7.8
Taxation (0.9) (0.8) (1.6)
----------- ----------- -----------
Profit for the period 3.6 3.3 6.2
Earnings per share
Attributable to owners of TClarke
plc
Basic 8.46p 7.83p 14.99p
Diluted 8.03p 7.67p 14.61p
----------- ----------- -----------
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Profit for the period 3.6 3.3 6.2
Other comprehensive expense
Items that will not be reclassified
to profit or loss
Actuarial profit/(loss) on defined
benefit pension scheme, net of tax (2.6) 3.7 0.7
Other comprehensive expense for the
period, net of tax (2.6) 3.7 0.7
Total comprehensive income for
the period 1.0 7.0 6.9
----------- ----------- -----------
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Non-current assets
Intangible assets 25.5 25.8 25.7
Property, plant and equipment 8.7 4.8 4.9
Deferred taxation 4.5 3.1 3.9
----------- ----------- -----------
Total non-current assets 38.7 33.7 34.5
----------- ----------- -----------
Current assets
Inventories 0.3 - 0.3
Amounts due from customers under construction
contracts 39.2 22.5 26.4
Trade and other receivables 67.2 59.0 68.7
Cash and cash equivalents 3.6 9.7 12.4
----------- ----------- -----------
Total current assets 110.3 91.2 107.8
----------- ----------- -----------
Total assets 149.0 124.9 142.3
----------- ----------- -----------
Current liabilities
Borrowings - - -
Amounts due to customers under construction
contracts (7.9) (2.7) (8.4)
Trade and other payables (88.4) (75.1) (87.8)
Current tax liabilities (1.0) (0.8) (1.0)
Obligations under finance leases (4.1) (0.1) -
----------- ----------- -----------
Total current liabilities (101.4) (78.7) (97.2)
----------- ----------- -----------
Net current assets 8.9 12.5 10.6
----------- ----------- -----------
Non-current liabilities
Bank loans - (5.0) -
Retirement benefit obligation (26.1) (18.9) (23.0)
Total non-current liabilities (26.1) (23.9) (23.0)
----------- ----------- -----------
Total liabilities (127.5) (102.6) (120.2)
Net assets 21.5 22.3 22.1
----------- ----------- -----------
Equity attributable to owners of the
parent
Share capital 4.3 4.2 4.3
Share premium 3.8 3.1 3.7
ESOT share reserve (2.0) (0.8) (1.4)
Revaluation reserve 0.5 0.5 0.5
Retained earnings 14.9 15.3 15.0
----------- ----------- -----------
Total equity 21.5 22.3 22.1
----------- ----------- -----------
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Net cash (used in) / generated by operating
activities (see note 6A) (6.1) (5.4) 3.5
----------- ------------- -----------
Investing activities
Acquisition of subsidiary, net of cash
acquired - (0.3) (0.5)
Purchase of property, plant and equipment (0.1) (0.1) (0.5)
Receipts on disposal of property, plant
and equipment - - -
Net cash used in investing activities (0.1) (0.4) (1.0)
----------- ------------- -----------
Financing activities
New shares issuance 0.1 0.7
Facility fee (0.1) (0.2)
Repayment of bank borrowing - - (5.0)
Equity dividends paid (1.4) (1.2) (1.5)
Acquisition of shares by ESOT (0.6) - (0.7)
Repayment of HP and finance lease obligations (0.6) - (0.1)
Net cash used in financing activities (2.6) (1.2) (6.8)
----------- ------------- -----------
Net decrease in cash and cash equivalents (8.8) (7.0) (4.3)
Cash and cash equivalents at beginning
of period 12.4 16.7 16.7
----------- ------------- -----------
Cash and cash equivalents at end of period
(see note 6) 3.6 9.7 12.4
----------- ------------- -----------
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2019
ESOT
Share Share share Revaluation Retained
capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2019 4.3 3.7 (1.4) 0.5 15.0 22.1
---------- ---------- --------- ------------ ----------- --------
Comprehensive income
Profit for the period - - - - 3.6 3.6
Other comprehensive income
Actuarial loss on retirement
benefit obligation - - - - (3.1) (3.1)
Deferred income tax on
actuarial loss on retirement
benefit obligation - - - - 0.5 0.5
Total other comprehensive
expense - - - - (2.6) (2.6)
---------- ---------- --------- ------------ ----------- --------
Total comprehensive income - - - - 1.0 1.0
---------- ---------- --------- ------------ ----------- --------
Transactions with owners
New shares - 0.1 - - - 0.1
Dividends paid - - - - (1.4) (1.4)
Shares based payment credit - - - - 0.3 0.3
Shares acquired by ESOT - - (0.6) - - (0.6)
Total transactions with owners - 0.1 (0.6) - (1.1) (1.6)
---------- ---------- --------- ------------ ----------- --------
At 30th June 2019 4.3 3.8 (2.0) 0.5 14.9 21.5
---------- ---------- --------- ------------ ----------- --------
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2018
ESOT
Share Share share Revaluation Retained
capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2018 4.2 3.1 (0.8) 0.5 9.4 16.4
---------- ---------- --------- ------------ ----------- --------
Comprehensive income
Profit for the period - - - - 3.3 3.3
Other comprehensive income
Actuarial gain on retirement
benefit obligation - - - - 4.5 4.5
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - - (0.8) (0.8)
Total other comprehensive
expense - - - - 3.7 3.7
---------- ---------- --------- ------------ ----------- --------
Total comprehensive income - - - - 7.0 7.0
---------- ---------- --------- ------------ ----------- --------
Transactions with owners
Dividends paid - - - - (1.2) (1.2)
Shares based payment credit - - - - 0.1 0.1
Total transactions with owners - - (0.8) - (1.1) (1.1)
---------- ---------- --------- ------------ ----------- --------
At 30th June 2018 4.2 3.1 (0.8) 0.5 15.3 22.3
---------- ---------- --------- ------------ ----------- --------
Condensed consolidated statement of changes in equity
For the year ended 31st December 2018
ESOT
Share Share share Revaluation Retained
capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2018 4.2 3.1 (0.8) 0.5 9.4 16.4
---------- ---------- --------- ------------ ----------- --------
Comprehensive income
Profit for the year - - - - 6.2 6.2
Other comprehensive income
Actuarial gain on retirement
benefit obligation - - - - 0.8 0.8
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - - (0.1) (0.1)
Total other comprehensive
income - - - - 0.7 0.7
---------- ---------- --------- ------------ ----------- --------
Total comprehensive income - - - - 6.9 6.9
---------- ---------- --------- ------------ ----------- --------
Transactions with owners
New shares 0.1 0.6 - - - 0.7
Share based payment credit - - - - 0.2 0.2
Shares acquired by ESOT - - (0.7) - - (0.7)
Shares distributed to ESOT - - 0.1 - - 0.1
Dividends paid - - - - (1.5) (1.5)
--------- ------------
Total transactions with owners 0.1 0.6 (0.6) - (1.3) (1.2)
---------- ---------- --------- ------------ ----------- --------
At 31st December 2018 4.3 3.7 (1.4) 0.5 15.0 22.1
---------- ---------- --------- ------------ ----------- --------
Notes to the condensed consolidated financial statements for the
six months to 30th June 2019
Note 1 - Basis of preparation
TClarke plc (the 'company') is a company incorporated and
domiciled in the United Kingdom. The nature of the Group's
operations and its principal activities are set out in Note 2 below
and in the interim management report. The consolidated interim
financial statements comprise the condensed financial statements of
the company and its subsidiaries (together the 'Group').
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The statutory accounts for the year ended 31st
December 2018 were approved by the Board of Directors on 26th March
2019 and have been delivered to the Registrar of Companies and a
copy has been made available on the company's website at
www.tclarke.co.uk. The auditors' report on those accounts was
unqualified and did not contain any statement under section 498 of
the Companies Act 2006.
These interim financial statements have been prepared in
accordance with International Accounting Standard 34 'Interim
Financial Reporting' ('IAS 34) as adopted by the European Union,
and the Disclosure and Transparency Rules ('DTR') of the Financial
Conduct Authority. They do not include all the information required
for the full annual financial statements and should be read in
conjunction with the financial statements of the Group as at and
for the year ended 31st December 2018.
The interim financial statements have not been audited or
reviewed by the company's auditors.
Accounting policies
Except as described below, the financial statements have been
prepared using the accounting policies and presentation that were
applied in the audited financial statements for the year ended 31st
December 2018.
Taxes on income in the interim periods are accrued using the
estimated effective tax rate that would be applicable to expected
total annual earnings.
Estimates and financial risk management
The preparation of interim financial statements requires the
Directors to make judgements, estimates and assumptions about the
carrying amounts of assets and liabilities at the reporting date
and the amounts of revenue and expense incurred during the period
that may not be readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results
may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by the Directors in applying the Group's accounting
policies and the key sources of uncertainty together with the
Group's financial risk management objectives and policies were the
same as those that applied to the financial statements as at and
for the year ended 31st December 2018. The principal risks and
uncertainties continue to be those which are set out on pages 31-33
of the Group's annual report and accounts for the year ended 31st
December 2018, under the following headings: Political, economic
and market conditions; Financial strength; Reputation; Winning new
work; Contract delivery; People and skills; Health and safety;
Supply chain; Pensions; and Cyber security.
Going concern
Our banking facilities comprised a GBP15 million revolving
credit facility committed to 31st August 2022, all of which was
undrawn at 30th June 2019, and a GBP10 million overdraft facility.
The Group draws on the overdraft facility as and when needed to
meet working capital requirements. As with all such facilities the
overdraft is subject to annual review and is repayable on
demand.
To support the Group's operations we also have available bonding
facilities of GBP40.1 million, of which GBP22.5 million is
currently unutilised.
After making appropriate enquiries, the Directors are satisfied
that the Company and Group have adequate resources to continue
their operations for the foreseeable future. Accordingly, the
Directors continue to adopt the going concern basis in preparing
the financial statements.
IFRS 16
IFRS 16 was adopted by the Group from 1st January 2019. In
accordance with the standard, the Group now recognises a lease
liability reflecting future lease payments and a 'right of use
asset' for almost all lease contracts, whereas, previously a
distinction was drawn between finance leases and operating leases
depending on whether substantially all the risk and reward of
ownership have been transferred to the lessee.
The quantitative impact of the initial application of the
standard is outlined on page 83 of the Group's annual report and
accounts for the year ended 31stDecember 2018.
The group has elected to adopt the modified retrospective
approach whereby the standard is applied from the beginning of the
current period and, as a result, prior-period financial information
is not restated.
Note 2 - Segmental information
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 Chief Executive, who is the
chief operating decision maker. This segmentation differs from that
which was present in the most recent annual accounts in which there
were four geographical segments. Prior period information has been
restated in accordance with the current reporting segment
lines.
30th June 2019
Group costs
and Unallocated
London UK South UK North GBPm Total
GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 101.1 36.4 33.8 - 171.3
--------- ----------- ----------- ------------------ --------
Underlying operating profit 4.3 1.4 0.8 (1.5) 5.0
Non-underlying costs - - - - -
Amortisation of intangibles - - (0.1) - (0.1)
Operating profit 4.3 1.4 0.7 (1.5) 4.9
Finance costs - - - (0.4) (0.4)
--------- ----------- ----------- ------------------ --------
Profit before tax 4.3 1.4 0.7 (1.9) 4.5
--------- ----------- ----------- ------------------
Taxation expense (0.9)
--------
Profit for the period 3.6
--------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Facilities Management and Frameworks 1.7 4.6 7.1 13.4
Infrastructure 7.9 13.1 8.2 29.2
M&E Contracting 59.5 13.2 5.3 78.0
Residential & Accommodation 7.9 4.0 11.5 23.4
Technologies 24.1 1.5 1.7 27.3
Total revenue 101.1 36.4 33.8 171.3
--------- ----------- ----------- --------
30th June 2018
Group costs
and Unallocated
London UK South UK North GBPm Total
GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 92.5 35.8 25.2 - 153.5
--------- ----------- ----------- ------------------ --------
Underlying operating profit 3.7 0.8 1.1 (1.6) 4.0
Non-underlying costs 0.5 - - - 0.5
Amortisation of intangibles - - (0.1) - (0.1)
Operating profit 4.2 0.8 1.0 (1.6) 4.4
Finance costs - - - (0.3) (0.3)
--------- ----------- ----------- ------------------ --------
Profit before tax 4.2 0.8 1.0 (1.9) 4.1
--------- ----------- ----------- ------------------
Taxation expense (0.8)
--------
Profit for the period 3.3
--------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Facilities Management and Frameworks 0.8 5.9 3.0 9.7
Infrastructure 7.9 4.1 12.8 24.8
M&E Contracting 74.3 6.4 10.9 91.6
Residential & Accommodation 0.4 7.6 8.2 16.2
Technologies 9.1 1.2 0.9 11.2
Total revenue 92.5 25.2 35.8 153.5
--------- ----------- ----------- --------
31st December 2018
Group costs
and Unallocated Total
London UK South UK North GBPm GBPm
GBPm GBPm GBPm
Revenue from contracts with
customers 196.5 73.0 57.3 - 326.8
--------- ----------- ----------- ------------------ --------
Underlying operating profit 7.2 1.8 2.8 (3.0) 8.8
Amortisation of intangibles - - (0.2) - (0.2)
Operating profit 7.2 1.8 2.6 (3.0) 8.6
Finance costs - - - (0.8) (0.8)
--------- ----------- ----------- ------------------ --------
Profit before tax 7.2 1.8 2.6 (3.8) 7.8
--------- ----------- ----------- ------------------
Taxation expense (1.6) (1.6)
--------
Profit for the period 6.2
--------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Facilities Management and Frameworks 1.6 7.0 14.0 22.6
Infrastructure 13.8 29.6 12.5 55.9
M&E Contracting 137.7 26.1 10.5 174.3
Residential & Accommodation 1.4 10.0 19.7 31.1
Technologies 42.0 0.3 0.6 42.9
Total revenue 196.5 73.0 57.3 326.8
--------- ----------- ----------- --------
Note 3 - Taxation expense
The effective income tax rate applied for the period is 20.0%
(30th June 2018: 20.0%).
Note 4 - Earnings per share
A. Basic earnings per share
The earnings per share represent the profit for the period
divided by the weighted average number of ordinary shares in
issue.
Unaudited Unaudited Audited
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Earnings
Profit attributable to owners of the
Company 3.6 3.3 6.2
Weighted average number of ordinary
shares (000s) 42,077 41,542 41,531
------------ ------------ -------------
Basic earnings per share 8.46 7.83 14.99
------------ ------------ -------------
B. 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 three categories of dilutive potential ordinary shares: share
options granted under the Savings Related Share Option Scheme, and
conditional share awards and options granted under the Equity
Incentive Plan. Further details of these schemes are given in note
19 of the 2018 annual report and financial statements.
Unaudited Unaudited Audited
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Earnings
Profit attributable to owners of the
Company 3.6 3.3 6.2
3.6 3.3 6.2
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 42,077 41,542 41,531
Adjustments
Savings Related Share Options (000s) 520 193 218
Equity Incentive Plan
Conditional share awards (000s) 1,691 666 873
Options (000s) 80 - -
------------ ------------ -------------
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 44,368 42,401 42,622
------------ ------------ -------------
C. Underlying earnings per share
Underlying earnings per share represents the profit for the
period for the period adjusted for amortisation of intangible
assets and non-underlying costs and the tax effects of these items,
divided by the weighted average number of ordinary shares in issue.
Underlying earnings is the basis on which the performance of the
operating divisions is measured.
The underlying profit for the period is calculated as
follows:
Unaudited Unaudited Audited
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Profit attributable to owners of the
company 3.6 3.3 6.2
Adjustments
Amortisation of intangible assets 0.1 0.1 0.2
Non-underlying items - (0.5) -
Tax effect of adjustments - 0.1 -
------------ ------------ -------------
Underlying profit after tax 3.7 3.0 6.4
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 42,077 41,542 41,531
Adjustments
Savings Related Share Options (000s) 520 193 218
Equity Incentive Plan
Conditional share awards (000s) 1,691 666 649
Options (000s) 80 -
------------ ------------ -------------
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 44,368 42,401 42,622
------------ ------------ -------------
Underlying earnings per share 8.67p 7.06p 14.98p
------------ ------------ -------------
Diluted underlying earnings per share 8.24p 6.91p 15.38p
------------ ------------ -------------
Note 5 - Interim dividend
An interim dividend of 0.75p per share (30th June 2018: 0.66p)
was approved by the board on 31st July 2019 and has not been
included as a liability as at 30th June 2019. The shares will go
ex-dividend on 5th September 2019 and the dividend will be paid on
4th October 2019 to shareholders on the register as at 6th
September 2019. A dividend reinvestment plan is available for
shareholders. Those shareholders who have not elected to
participate in this plan, and who would like to participate with
respect to the 2019 interim dividend, may do so by contacting Link
Asset Services on 0371 664 0381. The last day for election for the
interim dividend reinvestment is 13th September 2019 and any
requests should be made in good time ahead of that date.
Unaudited Unaudited Audited
30 06 2019 30 06 2018 31 12 2018
Dividends paid in period GBPm GBPm GBPm
Final dividends in respect of previous
year 1.4 1.2 1.2
Interim dividend in respect of the
current year - - 0.3
------------ ------------ -------------
Dividends recognised in the period 1.4 1.2 1.5
------------ ------------ -------------
Note 6 - Notes to the consolidated statement of cash flows
Unaudited Unaudited Audited
A. - Reconciliation of operating profit 30 06 2019 30 06 2018 31 12 2018
to net cash from operating activities GBPm GBPm GBPm
Operating profit 4.9 4.4 8.6
Depreciation charges 1.0 0.1 0.7
Profit on sale of property, plant
and equipment - - -
Equity settled share based payment
expense 0.2 0.1 0.3
Amortisation of intangible assets 0.1 0.1 0.2
Defined benefit pension scheme credit (0.3) (0.2) (0.2)
Operating cash flows before movements
in working capital 5.9 4.5 9.6
Decrease in inventories - 0.5 0.2
Decrease in contract balances (13.3) 1.1 2.9
Decrease / (Increase) in operating
trade and other receivables 1.6 8.6 (1.3)
(Decrease) / increase in operating
trade and other payables 0.6 (18.5) (5.2)
------------ ------------ ------------
Cash (used in) / generated by operations (5.2) (3.8) 6.2
Corporation tax paid (0.8) (1.5) (2.4)
Interest paid (0.1) (0.1) (0.3)
------------ ------------ ------------
Net cash (used in) / generated by
operating activities (6.1) (5.4) 3.5
------------ ------------ ------------
B. 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.
C. Borrowings
At 30thJune 2019, the Group had unused overdraft facilities of
GBP10 million (30th June 2018: GBP5 million) and had drawn down
GBPNil (30th June 2018: GBP5 million) of its GBP15 million
committed three year Revolving Credit Facility.
Note 7 - Related party transactions
Transactions between the company and its subsidiary
undertakings, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. Full disclosure
of the Group's other related party transactions is given in Note 22
to the Group's financial statements for the year ended 31st
December 2018. There have been no material changes in these
relationships in the six months ended 30th June 2019 that have
materially affected the financial position or performance of the
Group during that period.
Note 8 - Pension commitments
The present value of the defined benefit retirement benefit
scheme and the related past and current service costs were measured
using the projected unit credit method. The amount included in the
statement of financial position arising from the Group's
obligations in respect of its defined benefit retirement benefit
scheme is as follows:
Unaudited Unaudited Audited
30 06 2019 30 06 2018 31 12 2018
GBPm GBPm GBPm
Present value of defined benefit
obligations 68.0 59.2 58.7
Fair value of scheme assets (41.9) (40.3) (35.8)
------------- ------------- -------------
Deficit in scheme recognised
in the statement of financial
position 26.1 18.9 23.0
Key assumptions used
Rate of increase in salaries 2.65% 2.55% 2.65%
Rate of increase of pensions
in payment 3.10% 3.15% 3.10%
Discount rate 2.40% 2.80% 3.00%
Inflation assumption 3.35% 3.25% 3.35%
Unaudited Unaudited Audited
Mortality assumptions (years) 30 06 2019 30 06 2018 31 12 2018
Life expectancy at age 65 for
current pensioners:
Men 21.7 22.0 21.7
Women 23.9 24.4 23.9
Life expectancy at age 65 for
future pensioners
(current age 45)
Men 22.7 23.3 22.7
Women 25.2 25.8 25.2
Statement of Directors' responsibilities
The Directors confirm that the condensed interim financial
statements have been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' as adopted by
the European Union and that the interim management report includes
a fair review of the information required by DTR 4.2.7 and DTR
4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
On behalf of the Board
Iain McCusker - Chairman
Mark Lawrence - Chief Executive
Trevor Mitchell - Finance Director
1st August 2019
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR DMGFNKMLGLZM
(END) Dow Jones Newswires
August 01, 2019 02:00 ET (06:00 GMT)
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