RNS Number:4434L
Andrews Sykes Group PLC
25 April 2005
Andrews Sykes Group plc (the "Company")
25 April 2005
Preliminary Results for the 53 weeks ended 31 December 2004
FINANCIAL HIGHLIGHTS
* EBITDA* from continuing operations #17.1 million.
* Profit on ordinary activities before exceptional items and taxation
#12.4million.**
* Net debt reduced by #1.8 million from last year at #2.9 million
representing 22.1% of equity shareholders' funds.
* Adjusted diluted earnings per share 14.23 pence.
SUMMARY OF RESULTS
53 weeks ended 52 weeks ended
31 December 2004 27 December 2003
#'000 #'000
Turnover from continuing operations 62,680 68,252
EBITDA* from continuing operations 17,060 19,666
Profit on ordinary activities before exceptional items and 12,364 13,976
taxation **
Operating profit 7,644 14,446
Profit on ordinary activities after taxation 4,945 9,957
Basic earnings per share (pence) 8.53p 16.82p
Adjusted diluted earnings per share (pence) 14.23p 15.30p
Interim dividend per share (pence) 1.0p -
Proposed dividend per share (pence) 14.0p 3.0p
Net debt 2,930 4,723
Gearing 22.1% 27.6%
* Earnings before interest, depreciation, exceptional items and goodwill charges (as reconciled on
the face of the consolidated profit and loss account).
** PBT #7,187,000 (2003: #14,574,000) add back adjustments following the sale of a business #305,000
(2003: less #598,000) and exceptional share option cash cancellation costs of #4,872,000 (2003:
#Nil).
Chairman's Statement
Summary of results
I am pleased to be able to report that your Group has achieved a satisfactory
result for the year 2004, despite unfavourable weather conditions. Compared with
2003 the Group's profit on ordinary activities before tax and exceptional
charges was #12.4m, compared with #14.0m last year (PBT #14.6m less #0.6m
exceptional credits). This is reduced to #7.2m after charging exceptional items
of #4.9m for the cash cancellation of employee share options and #0.3m lease
provisions on the disposal of Cox Plant. Profit after tax amounted to #4.9m.
Consequently the adjusted diluted earnings per share decreased from 15.3 pence
to 14.2 pence but the basic earnings per share reduced further from 16.8 pence
to 8.5 pence due to the effect of the exceptional items noted above.
2004 was a year of consolidation, reflecting a hiatus in the UK market place,
exacerbated by an unusual combination of weather conditions: a warm winter, an
extended period of low water tables caused by a year of low rainfall, and a cool
summer. We continue to focus on controlling costs and re-aligning the cost base
towards selling activity in order to be able to take advantage of any trading
opportunities that become available.
Despite the exceptional cash outflows of #4.9m for the cancellation of the
employee share options and #0.6m attributable to purchase of own shares, net
debt reduced from #4.7m last year to #2.9m at 31 December 2004.
I consider the Group has performed satisfactorily in a difficult trading
environment and is well placed to compete in a competitive market sector.
Overview of continuing operations
Turnover from continuing operations decreased from #68.3m to #62.7m and
operating profit before exceptional items from #14.4m to #12.5m in 2004
(operating profit of #7.6m add back #4.9m exceptional costs). The downturn
affected the UK core businesses especially Hire whose turnover decreased from
#38.9m to #36.5m. The operating profits of our main UK businesses fell from
#11.5m to #10.1m. Although all product ranges were affected due to adverse
weather conditions, the lack of prolonged summer conditions in 2004 compared to
the record temperatures of 2003 meant air conditioning was especially affected.
The UK fixed air conditioning company, Andrews Air Conditioning and
Refrigeration, achieved an operating profit of #0.6m compared to #0.7m in the
previous year. Although turnover decreased by #0.7m margins improved and the
value of gross margin was maintained.
Despite a #1.6m decrease in turnover, Accommodation Hire, our subsidiary that
specialises in the hire of temporary accommodation units and toilet facilities,
achieved an operating profit of a similar level to that in 2003.
Engineering Appliances, the specialist heating and ventilation business, saw
turnover fall by #0.9m from #3.8m to #2.9m.
The Group's well established heating and air conditioning business in The
Netherlands had a successful year achieving an operating profit of #1.1m
compared to #0.9m last year. Similarly our operation in the Middle East,
Khansaheb Sykes LLC, increased its profits to #0.4m from #0.3m last year.
I remain confident that our strategy of continuing to concentrate upon
developing the UK specialist hire and rental market by organic growth
supplemented by niche market acquisitions offers opportunity for further profit
growth and added shareholder value.
Earnings per share and buy back programme
As set out in the Note 9 of the Financial Statements, the adjusted diluted
earnings per share excluding exceptional items is 14.2 pence compared with 15.3
pence last year. Basic earnings per share was 8.5 pence compared with 16.8
pence last year.
The Board continues to believe that shareholder value will be optimised by the
purchase, when appropriate, of our own shares coupled with investment in organic
growth. Consequently, the Board will request that shareholders vote in favour of
a resolution to renew the authority to purchase up to 12.5% of the ordinary
shares in issue.
Dividend
As reported in my interim statement, the Board declared an interim dividend of
1.0 pence per ordinary share in respect of the year ended 31 December 2004 and
this was paid on 4 November 2004. The Board is now pleased to propose a final
special dividend of 14.0 pence per share, to return surplus cash to
shareholders. This will be paid on 15 June 2005 to shareholders on the register
on 13 May 2005.
Outlook
Expectations for the first quarter are broadly similar to the last quarter of
2004. With costs under control the business is well positioned to take
advantage of market opportunities as they arise. I would therefore expect the
Group to achieve a better year in 2005.
JG Murray
Chairman
22 April 2005
Andrews Sykes Group plc
Consolidated profit and loss account
For the 53 weeks ended 31 December 2004
53 weeks ended 31 December 2004 52 weeks ended
27 December
2003
Before Exceptional Total Total
exceptional items
items
#'000 #'000 #'000 #'000
Turnover 62,680 - 62,680 68,252
Cost of sales (30,286) - (30,286) (34,084)
Gross profit 32,394 - 32,394 34,168
Distribution costs (9,682) - (9,682) (9,647)
Administrative costs (10,235) (4,872) (15,107) (10,080)
Other operating income 39 - 39 5
Operating profit / (loss) 12,516 (4,872) 7,644 14,446
EBITDA* 17,060 - 17,060 19,666
Depreciation and asset (4,530) - (4,530) (5,206)
disposals
Operating profit before 12,530 - 12,530 14,460
goodwill
amortisation and exceptional
items
Exceptional items - (4,872) (4,872) -
Goodwill amortisation (14) - (14) (14)
Operating profit / (loss) 12,516 (4,872) 7,644 14,446
Income from other participating interests 304 -
Adjustments following the disposal of a business - (305) 598
discontinued
Profit before interest and 7,643 15,044
taxation
Net interest payable (456) (470)
Profit on ordinary activities before taxation 7,187 14,574
Tax on profit on ordinary (2,242) (4,617)
activities
Profit on ordinary activities after taxation
being profit for the financial period 4,945 9,957
Dividends paid and proposed on equity shares (8,699) (1,740)
Retained (loss) / profit for the financial (3,754) 8,217
period
attributable to equity
shareholders
Andrews Sykes Group plc
Consolidated profit and loss account
For the 53 weeks ended 31 December 2004 (continued)
Basic earnings per ordinary 8.53p 16.82p
share
Diluted earnings per share 8.20p 16.25p
Add back: Goodwill 0.02p 0.02p
amortisation
Exceptional items 6.01p (0.97)p
Adjusted diluted earnings per 14.23p 15.30p
share
Dividends per share:
Equity shares 15.0p 3.0p
Activities in both the current and preceding periods derive from continuing
operations.
*Earnings before interest, taxation, depreciation and amortisation excluding
exceptional items
Andrews Sykes Group plc
Consolidated Balance Sheet
At 31 December 2004
31 December 27 December
2004 2003
#'000 #'000
Fixed assets
Intangible assets: Goodwill 45 59
Tangible fixed assets 15,876 18,015
Investments 164 164
16,085 18,238
Current assets
Stocks 4,942 5,616
Debtors 15,230 14,953
Cash at bank and in hand 9,295 11,251
29,467 31,820
Creditors: Amounts falling due within one year
Bank loans (2,490) (3,749)
Other creditors (9,989) (11,173)
Proposed dividends (8,119) (1,740)
Corporation and overseas tax (1,099) (3,191)
(21,697) (19,853)
Net current assets 7,770 11,967
Total assets less current 23,855 30,205
liabilities
Creditors: Amounts falling due after more than one
year
Bank loans (9,735) (12,225)
Provisions for liabilities and charges (841) (869)
Net assets 13,279 17,111
Capital and reserves
Called-up share capital 11,598 11,615
Share premium account 10,678 10,678
Revaluation reserve 746 752
Other reserve 7,389 7,378
Profit and loss account (17,123) (13,284)
ESOP reserve (19) (38)
Equity shareholders' funds 13,269 17,101
Minority interests (equity) 10 10
Total capital employed 13,279 17,111
Analysis of net debt
Cash at bank and in hand 9,295 11,251
Bank loans (12,225) (15,974)
Net debt (2,930) (4,723)
As a percentage of equity shareholders' funds 22.1% 27.6%
Andrews Sykes Group plc
Consolidated cash flow statement
For the 53 weeks ended 31 December 2004
53 weeks ended 52 weeks ended
31 December 2004 27 December 2003
#'000 #'000
Net cash inflow from operating activities 11,677 17,329
Dividends received from participating 139 -
interests
Return on Investments and servicing of finance
Interest received 410 335
Interest paid (865) (828)
Net cash outflow returns on Investments and servicing of (455) (493)
finance
Cash outflow for taxation (4,288) (3,214)
Capital expenditure and financial investment
Purchase of tangible fixed (3,936) (7,405)
assets
Sale of tangible fixed assets 1,483 868
Net cash outflow for capital expenditure and financial (2,453) (6,537)
Investment
Acquisitions and disposals
Cash received following the disposal of a - 1,500
business
Equity dividends paid (2,320) -
Cash inflow before the use of liquid resources and 2,300 8,585
financing
Management of liquid resources
Movement in bank deposits (1) 3,862
Financing
Issue of ordinary share capital net of issue - 252
costs
Loans repaid (3,749) (3,740)
New loans drawn down - 1,259
Purchase of own shares for (630) (3,883)
cancellation
Sale of own shares by ESOP 16 176
Purchase of own shares by ESOP - (88)
Net cash outflow from (4,363) (6,024)
financing
(Decrease) / increase in cash in the period (2,064) 6,423
Andrews Sykes Group plc
Notes to the financial statements
For the 53 weeks ended 31 December 2004
1. Segmental analysis
The Group's turnover may be analysed between the following principal
activities:
53 weeks ended 52 weeks ended
31 December 2004 27 December 2003
Continuing Continuing
operations operations
#'000 #'000
Hire 40,698 43,537
Sales 12,000 13,990
Installation 9,982 10,725
Total 62,680 68,252
The Integrated nature of the Group's operations does not permit a meaningful analysis of profit
before interest and tax or net assets by the above activities.
The results and net assets are attributable to the Group's principal activity, the hire, sale and
installation of a range of equipment including portable heating, drying, ventilation, pumps and
temporary accommodation.
The geographical analysis of the Group's turnover was
as follows:
By geographical origin By geographical destination
53 weeks ended 52 weeks ended 53 weeks 52 weeks
27 December ended 31 ended 27
31 December 2003 December December
2004 2004 2003
#'000 #'000 #'000 #'000
United Kingdom 56,332 61,925 55,571 60,196
Rest of Europe 2,918 3,239 3,154 4,388
Middle East and 3,430 3,088 3,505 3,153
Africa
Rest of World - - 450 515
62,680 68,252 62,680 68,252
The analysis of profit before interest and tax and net assets by geographical origin
was as follows:
Profit before interest and tax Net assets Net assets
53 weeks ended 52 weeks ended 53 weeks 52 weeks
31 December 27 December ended 31 ended 27
2004 2003 December December
2004 2003
#'000 #'000 #'000 #'000
United Kingdom 5,901 13,983 22,597 24,211
Rest of Europe 988 771 1,391 1,155
Middle East and 754 290 1,439 1,399
Africa
7,643 15,044 25,427 26,765
Net debt (2,930) (4,723)
Taxation and dividends payable (9,218) (4,931)
13,279 17,111
Andrews Sykes Group plc
Notes to the financial statements
For the 53 weeks ended 31 December 2004
2. Reconciliation of operating profit to net cash inflow from operating
activities
53 weeks 52 weeks
ended 31 ended 27
December 2004 December
2003
#'000 #'000
Operating profit 7,644 14,446
Goodwill 14 14
amortisation
Depreciation 5,489 5,575
Profit on sale of tangible (959) (369)
fixed assets
Decrease / (increase) in 674 (924)
stocks
Increase in debtors (29) (847)
Decrease in creditors and (1,156) (566)
provisions
Net cash inflow from operating activities 11,677 17,329
3. Reconciliation of net cash flow to movement in net
debt
53 weeks 52 weeks
ended 31 ended 27
December 2004 December
2003
#'000 #'000
(Decrease) / increase in cash paid in the period (2,064) 6,423
Cash outflow from movement in net debt 3,749 2,481
Cash outflow / (inflow) from movement in liquid 1 (3,862)
resources
Change in net debt resulting from cash flows 1,686 5,042
Translation 107 (14)
differences
Movement in period 1,793 5,028
Opening net debt (4,723) (9,751)
Closing net debt (2,930) (4,723)
4. Consolidated statement of total recognised gains and loss
53 weeks 52 weeks
ended 31 ended 27
December 2004 December
2003
#'000 #'000
Profit for the financial 4,945 9,957
period
Currency translation differences on foreign currency net investments 78 (18)
Total recognised gains and losses in the period 5,023 9,939
Andrews Sykes Group plc
Notes to the financial statements
For the 53 weeks ended 31 December 2004
5. Reconciliation of movements in Group shareholders' funds
53 weeks 52 weeks
ended 31 ended 27
December 2004 December
2003
#'000 #'000
Profit for the financial 4,945 9,957
period
Dividends (8,699) (1,740)
Other recognised gains and 78 (18)
losses
Issue of ordinary - 252
shares
Purchase of own shares for cancellation (172) (4,341)
Sale of own shares by the ESOP trust 16 176
Purchase of own shares by the ESOP trust - (88)
Net (decrease) / increase in shareholders' (3,832) 4,198
funds
Shareholders' funds at the beginning of the 17,101 12,903
period
Shareholders' funds at the end of the period 13,269 17,101
6. Earnings per ordinary share
The basic figures have been calculated by reference to the weighted average
number of ordinary 20 pence shares in issue during the period of 57,967,089 (52
weeks ended 27 December 2003: 59,186,675).
The calculation of the diluted earnings share is based on a profit of #4,945,000
(52 weeks ended 27 December 2003: #9,957,000) and on 60,300,966 (52 weeks ended
27 December 2003: 61,255,953) ordinary shares. The share options have a dilutive
effect for the period ended 31 December 2004 calculated as follows:
53 weeks ended 31 52 weeks ended 27
December 2004 December 2003
Earnings Number of Earnings Number of
#'000 shares #'000 shares
Basic earnings / weighted average number of 4,945 57,967,089 9,957 59,186,675
shares
Weighted average number of share under 4,093,505 4,372,604
option
Number of shares that would have been issued of fair (1,759,628) (2,303,326)
value
Earnings / diluted weighted average 4,945 60,300,966 9,957 61,255,953
number of shares
Diluted earnings per ordinary share 8.20p 16.25p
(pence)
The adjusted diluted earnings per share excluding goodwill amortisation and
exceptional items is based upon the weighted average number of ordinary shares
as set out in the table above. The earnings can be reconciled to the adjusted
earnings as follows:
53 weeks ended 52 weeks ended
31 27
December 2004 December 2003
#'000 #'000
Earnings 4,945 9,957
Goodwill 14 14
amortisation
Exceptional items (net of tax)
Costs of cash cancellation offer 3,410 -
Provision for warranty and closure - (348)
provisions
Provision against doubtful debts - (250)
Provision for onerous lease 214 -
commitments
Adjusted earnings 8,583 9,373
Adjusted diluted earnings per share 14.23p 15.30p
(pence)
The above figures have been disclosed to demonstrate underlying performance .
Andrews Sykes Group plc
Notes to the financial statements
For the 53 weeks ended 31 December 2004
7. The tax charge for the year was #2,242,000 (52 weeks ended 27 December 2003: #4,617,000) which
represents an overall effective tax charge of 31.2% (52 weeks ended 27 December 2003: 31.7%).
The tax charge is higher than the standard 30% UK corporation tax rate primarily due to non
tax deductible items in the UK, withholding tax written off and the taxation of certain
overseas profits at different tax rates.
8. The financial information set out above has been prepared using accounting policies that are
consistent with those adopted in the statutory accounts for the 53 weeks ended 31 December
2004.
9. The financial information set out above does not constitute the Group's statutory accounts for
the 53 weeks ended 31 December 2004 or the 52 weeks ended 27 December 2003 but it is derived
from those accounts. The financial statements for the 52 weeks ended 27 December 2003 have
been filed and those for the 53 weeks ended 31 December 2004 will be filed with the Registrar
of Companies. The Company's auditors gave unqualified reports on the accounts for both these
periods and the reports did not contain a statement under section 237 (2) or (3) of the
Companies Act 1985.
10. Copies of the Annual Report and Financial Statements will be circulated to shareholders
shortly and will be available from the Registered office of the Company, Premier House,
Darlington Street, Wolverhampton, WV1 4JJ.
11. The Company's Annual General Meeting will be held at 11.00 am on 8 June 2005 at Floor 5, 10
Bruton Street, London, W1J 6PX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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