RNS Number:9089R
Andrews Sykes Group PLC
29 September 2005
Andrews Sykes Group plc (the "Company")
29 September 2005
Interim Results for the 26 weeks to 2 July 2005
Chairman's Statement
Overview and financial highlights
Trading from continuing operations has been difficult across the UK operations
of the Group during the first half of 2005, due to a competitive market and low
demand caused by the unfavourable weather conditions of a mild, dry winter.
Nevertheless the Group has continued to generate cash and has successfully
disposed of a non-core subsidiary company, Accommodation Hire Limited, during
the first half of 2005. The initial net cash inflow from this disposal in the
first half year amounted to #9.2 million after costs.
The financial highlights for the first six months of 2005 were as follows:
* EBITDA (as reconciled on the face of the profit and loss account) derived
from continuing activities decreased from #8 million in 2004 to #5.5
million this period.
* Profit on ordinary activities before tax increased from #6.2 million in
2004 to #10.5 million after the exceptional profit on the sale of the
accommodation business of #6.8 million.
* After this exceptional profit, basic earnings per share from total
operations increased from 7.39 pence in 2004 to 16.70 pence this period.
* Despite the payment of the 2004 special final dividend of #8.1 million
during the period, at 2 July 2005 the Group has net funds of #1.3 million
compared with net debt of #2.9 million at 31 December 2004.
In common with many other UK companies, shareholders' funds have been adversely
impacted by the full adoption of a new accounting standard, FRS 17 - Retirement
benefits, which became effective from 1 January 2005. The net effect of this
adjustment has been to reduce shareholders' funds by approximately #6 million.
Capital reduction, tender offer and dividend policy
On 24 August 2005 the proposed capital reduction and tender offer, full details
of which were circulated to shareholders on 28 July 2005, was approved by the
members at an Extraordinary General Meeting. The offer was subsequently approved
by the High Court on 14 September 2005 and on 26 September 2005 payment of the
tender offer consideration of #23.8 million was despatched to those members who
accepted the offer. The Group's net debt subsequent to the tender offer is
approximately #24 million after taking into account a payment of #3 million into
the company's defined benefit pension scheme.
The Board has decided not to declare an interim dividend in respect of the
current financial period. As stated in the tender offer circular, the Board
intends to review its dividend policy next at the time of the announcement of
the preliminary results for the financial period ending 31 December 2005 at
which point it will communicate its decision to shareholders.
Prospects
The period of comparatively poor trading appears to have ended at the end of
May. The business performance for the month of June 2005 showed an improvement
compared with June 2004 and trading in the third quarter of 2005, to the date of
this statement, shows an improvement over the same period in 2004.
JG Murray
Chairman
29 September 2005
Andrews Sykes Group plc
Consolidated Profit and Loss Account
For the 26 weeks ended 2 July 2005
26 weeks to 2 July 2005 27 weeks to 3 July 2004 53 weeks to 31 December 2004
(as restated **) (as restated **)
Continuing Discontinued Total Continuing Discontinued Total Continuing Discontinued Total
activities activities activities activities activities activities
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Turnover 24,342 2,416 26,758 27,614 3,793 31,407 54,982 7,698 62,680
Cost of sales (12,280) (1,381) (13,661) (13,096) (2,195) (15,291) (25,845) (4,441) (30,286)
Gross profit 12,062 1,035 13,097 14,518 1,598 16,116 29,137 3,257 32,394
Distribution costs (3,969) (430) (4,399) (4,145) (600) (4,745) (8,434) (1,248) (9,682)
Administrative (4,467) (271) (4,738) (4,257) (547) (4,804) (8,863) (1,127) (9,990)
expenses - ordinary
Administrative - - - - - - (4,872) - (4,872)
expenses -
exceptional (note 4)
Total administrative (4,467) (271) (4,738) (4,257) (547) (4,804) (13,735) (1,127) (14,862)
expenses
Other operating 2 - 2 18 - 18 39 - 39
income
Operating profit 3,628 334 3,962 6,134 451 6,585 7,007 882 7,889
EBITDA * 5,478 580 6,058 8,028 890 8,918 10,792 1,641 12,433
Depreciation and (1,843) (246) (2,089) (1,887) (439) (2,326) (3,771) (759) (4,530)
asset disposals
Operating profit 3,635 334 3,969 6,141 451 6,592 7,021 882 7,903
before goodwill
amortisation
Goodwill amortisation (7) - (7) (7) - (7) (14) - (14)
Operating profit 3,628 334 3,962 6,134 451 6,585 7,007 882 7,889
Income from other participating interests - - 304
Exceptional profit / (loss) on the 6,797 - (305)
disposal of a business
- discontinued (note 6)
Profit on ordinary activities before 10,759 6,585 7,888
interest and taxation
Net interest payable (211) (366) (718)
Profit on ordinary activities before 10,548 6,219 7,170
Tax on profit on ordinary activities (868) (1,938) (2,236)
taxation
Profit on ordinary activities after 9,680 4,281 4,934
taxation being profit for the financial
period
Earnings per share from continuing operations:
Basic (pence) 4.60p 6.92p 7.56p
Diluted (pence) 4.60p 6.64p 7.27p
Earnings per share from total operating results:
Basic (pence) 16.70p 7.39p 8.51p
Diluted (pence) 16.69p 7.09p 8.18p
Dividends paid per equity share (pence, as 14.0p 3.0p 4.0p
restated)
There were no material acquisitions in any period.
* Earnings Before Interest, Taxation, Depreciation and Amortisation.
** The comparative figures for the 27 weeks ended 3 July 2004 and the 53 weeks
ended 31 December 2004 have been restated due to both the full adoption of FRS
17 - Retirement Benefits and FRS 21 - Events after the Balance Sheet Date with
effect from 1 January 2005 as set out in note 8.
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 2 July 2005
2 July 2005 3 July 2004 31 December 2004
(as restated*) (as restated*)
#'000 #'000 #'000
Fixed assets
Intangible assets: Goodwill 38 52 45
Tangible assets 11,940 16,755 15,876
Investments 164 164 164
12,142 16,971 16,085
Current assets
Stocks 4,801 4,950 4,942
Debtors 14,002 15,790 15,071
Cash at bank and in hand 12,308 10,904 9,295
31,111 31,644 29,308
Creditors falling due within one year
Loans and overdrafts (2,000) (3,119) (2,490)
Other creditors (7,738) (9,197) (9,989)
Corporation and overseas tax (1,267) (2,680) (1,099)
(11,005) (14,996) (13,578)
Net current assets 20,106 16,648 15,730
Total assets less current liabilities 32,248 33,619 31,815
Creditors falling due after more than one year
Loans (9,000) (11,980) (9,735)
Provisions for liabilities (339) (24) (310)
Net assets excluding pension liability 22,909 21,615 21,770
Pension Liability (6,050) (6,628) (6,660)
Net assets including pension liability 16,859 14,987 15,110
Capital and reserves
Called - up share capital 11,598 11,598 11,598
Share premium account 10,678 10,678 10,678
Revaluation reserve 743 749 746
Other reserves 7,395 7,392 7,389
Profit and loss account (13,559) (15,415) (15,292)
ESOP reserve (6) (25) (19)
Equity shareholders' funds 16,849 14,977 15,100
Minority interests 10 10 10
16,859 14,987 15,110
* The comparative figures as at 3 July 2004 and 31 December 2004 have been
restated due to both the full adoption of FRS 17 - Retirement Benefits and FRS
21 - Events after the Balance Sheet Date with effect from 1 January 2005 as set
out in note 8.
Andrews Sykes Group plc
Consolidated cash flow statement
For the 26 weeks ended 2 July 2005
26 weeks 27 weeks to 53 weeks to
to 2 July 3 July 31 December
2005 2004 2004
#'000 #'000 #'000
Net cash inflow from operating activities as reconciled in note 5 4,258 6,555 11,677
Dividend received from participating interests - - 139
Returns on investments and servicing of finance
Interest received 245 173 410
Interest paid (353) (396) (865)
Net cash outflow for returns on investments and servicing of finance (108) (223) (455)
Cash outflow for taxation (642) (2,175) (4,288)
Capital expenditure
Purchase of tangible fixed assets (1,856) (2,002) (3,936)
Sale of tangible fixed assets 395 818 1,483
Net cash outflow for capital expenditure (1,461) (1,184) (2,453)
Acquisitions and disposals
Cash received on the disposal of subsidiary undertakings as 9,614 - -
set out in note 6
Net cash balances disposed of with subsidiary (439) - -
Net cash inflow for acquisitions and disposals 9,175 - -
Equity dividends paid (8,119) (1,740) (2,320)
Cash inflow before the use of liquid resources and financing 3,103 1,233 2,300
Management of liquid resources
Movement in bank deposits (87) 476 (1)
Financing
Sale of shares held in ESOP 9 12 16
Loan repayments - (875) (3,749)
Purchase of own shares - (630) (630)
Net cash inflow / (outflow) from financing 9 (1,493) (4,363)
Increase / (decrease) in cash in the period 3,025 216 (2,064)
Analysis of net funds / (debt)
Bank current and deposit accounts and cash in hand 12,308 10,904 9,295
Total loans and overdrafts (11,000) (15,099) (12,225)
Net funds / (debt) as reconciled in note 7 1,308 (4,195) (2,930)
Net funds / (debt) as a percentage of shareholders' funds (as restated) 7.76% (28.01%) (19.40%)
Andrews Sykes Group plc
Other Consolidated Statements
For the 26 weeks ended 2 July 2005
Consolidated statement of total recognised gains and losses
26 weeks to 27 weeks to 53 weeks to 31
2 July 2005 3 July 2004 December 2004
(as restated*) (as restated*)
#'000 #'000 #'000
Profit for the financial period 9,680 4,281 4,934
Currency translation differences on foreign currency net investments (88) (105) 78
Actual return less expected return on pension scheme assets 419 (75) 354
Experience gains and losses arising on the pension scheme liabilities (38) 24 (601)
UK deferred tax attributable to the pension scheme asset (114) 15 74
and liability adjustments
Total recognised gains and losses relating to the year 9,859 4,140 4,839
FRS 17 prior year adjustment as set out in note 8 (6,288)
Total recognised gains and losses since the 2004 annual report and 3,571
financial statements
Reconciliation of movement in Group shareholders' funds
26 weeks to 2 27 weeks to 3 53 weeks to 31
July 2005 July 2004 December 2004
(as restated**) (as restated**)
#'000 #'000 #'000
Profit for the financial period 9,680 4,281 4,934
Dividends (8,119) (1,740) (2,320)
Consideration for the purchase of own shares - (172) (172)
Sale of own shares by the ESOP trust 9 12 16
Currency translation differences on foreign currency net investments (88) (105) 78
Actual return less expected return on pension scheme assets 419 (75) 354
Experience gains and losses arising on the pension scheme liabilities (38) 24 (601)
UK deferred tax attributable to the pension scheme asset and (114) 15 74
liability adjustments
Net increase in shareholders' funds 1,749 2,240 2,363
Shareholders funds at the beginning of the period as previously 13,269 17,101 17,101
stated
FRS 17 adjustment (6,288) (6,104) (6,104)
FRS 21 adjustment 8,119 1,740 1,740
Shareholders' funds at the beginning of the period as restated 15,100 12,737 12,737
Shareholders' funds at the end of the period 16,849 14,977 15,100
* The comparative figures for the 27 weeks ended 3 July 2004 and the 53 weeks
ended 31 December 2004 have been restated due to the full adoption of FRS 17 -
Retirement Benefits with effect from 1 January 2005.
** The comparative figures as at 3 July 2004 and 31 December 2004 have been
restated due to both the full adoption of FRS 17 - Retirement Benefits and FRS
21 - Events after the Balance Sheet Date with effect from 1 January 2005.
Andrews Sykes Group plc
Notes to the accounts
For the 26 weeks ended 2 July 2005
1. Basis of preparation
The interim report for the 26 weeks ended 2 July 2005 was approved by the Board
on 28 September 2005. The financial information contained in this interim report
does not constitute statutory accounts for the Group for the relevant periods.
The interim report is neither audited nor reviewed. The results for the 53 weeks
ended 31 December 2004 have been extracted from the audited financial statements
that have been filed with the Registrar of Companies. The report of the auditors
was unqualified and did not contain a statement under section 237(2) or (3) of
the Companies Act 1985.
The interim statement has been prepared in accordance with the accounting
policies set out in the Group's 2004 Annual Report and Financial Statements with
the exception of the adoption of both FRS 17 - Retirement Benefits and FRS 21 -
Events after the Balance Sheet date. Both these standards are applicable for the
first time this period and have a prior year impact as detailed in note 8. FRS
22 - Earnings per Share and the relevant paragraphs of FRS 25 - Financial
Instruments, Presentation and Disclosure have also been applied but have no
impact.
2. Segmental analysis
The Group's turnover may be analysed between the following principal activities:
26 weeks to 27 weeks to 53 weeks to
2 July 3 July 31 December
2005 2004 2004
Activity: #'000 #'000 #'000
Hire 17,169 20,195 40,698
Sales 5,331 6,135 12,000
Installation 4,258 5,077 9,982
Total 26,758 31,407 62,680
The geographical analysis of the Group's turnover was as follows:
By origination: 26 weeks to 27 weeks to 53 weeks to
2 July 3 July 31 December
2005 2004 2004
#'000 #'000 #'000
United Kingdom 23,574 28,419 56,332
Rest of Europe 1,529 1,212 2,918
Middle East and Africa 1,655 1,776 3,430
26,758 31,407 62,680
By destination: 26 weeks to 27 weeks to 53 weeks to
2 July 3 July 31 December
2005 2004 2004
#'000 #'000 #'000
United Kingdom 23,190 27,892 55,571
Rest of Europe 1,561 1,317 3,154
Middle East and Africa 1,665 1,832 3,505
Rest of World 342 366 450
26,758 31,407 62,680
Andrews Sykes Group plc
Notes to the accounts
For the 26 weeks ended 2 July 2005
2. Segmental analysis (continued)
The analysis of profit before interest and tax and net assets by geographical origin was as follows:
Profit before interest and tax Net assets including pension liability
26 weeks to 27 weeks to 53 weeks to As at As at As at
2 July 2005 3 July 2004 31 December 2 July 2005 3 July 2004 31 December
2004 2004
(as restated) (as restated) (as restated)(as restated)
#'000 #'000 #'000 #'000 #'000 #'000
United Kingdom 10,146 5,839 6,146 20,262 25,033 22,969
Rest of Europe 387 469 988 813 1,528 1,391
Middle East and Africa 226 277 754 1,793 1,929 1,439
10,759 6,585 7,888 22,868 28,490 25,799
Net cash / (debt) 1,308 (4,195) (2,930)
Taxation (1,267) (2,680) (1,099)
Pension liability (6,050) (6,628) (6,660)
16,859 14,987 15,110
3. Earnings per share
The basic figures have been calculated by reference to the weighted average
number of 20p ordinary shares in issue, excluding those in the ESOP reserve,
during the period of 57,976,672 (27 weeks ended 3 July 2004: 57,968,589).
The calculation of the diluted earnings per ordinary share is based on the
profits as set out in the table below and on 57,992,597 (27 weeks ended 3 July
2004: 60,421,720) ordinary shares. The share options have a dilutive effect for
the period calculated as follows:
26 weeks to 2 July 2005 27 weeks to 3 July 2004
(as restated)
Continuing Total No. of shares Continuing Total earnings No. of shares
earnings earnings earnings
#'000 #'000 #'000 #'000
Basic earnings/weighted 2,667 9,680 57,976,672 4,014 4,281 57,968,589
average number of shares
Weighted average number of shares under 30,000 4,362,604
option
Number of shares that would have been
issued at fair value (14,075) (1,909,473)
Earnings/ diluted weighted average 2,667 9,680 57,992,597 4,014 4,281 60,421,720
number of shares
Diluted earnings per ordinary share 4.60p 16.69p 6.64p 7.09p
(pence)
Andrews Sykes Group plc
Notes to the accounts
For the 26 weeks ended 2 July 2005
4. Exceptional administrative expenses
The following item has been disclosed on the face of the profit and loss account
due to its size:
26 weeks to 27 weeks to 53 weeks to
2 July 3 July 31 December
2005 2004 2004
#'000 #'000 #'000
Exceptional costs of cash cancellation offer - - 4,872
On 18 November 2004 the Board of Andrews Sykes Group plc made a cash
cancellation offer to all of the Company's share option holders. The price
offered was #1.95 per share and the offer remained open for acceptance until 8
December 2004.
5. Reconciliation of operating profit to net cash inflow from operating
activities
26 weeks to 27 weeks to 53 weeks to
2 July 2005 3 July 2004 31 December 2004
(as restated) (as restated)
#'000 #'000 #'000
Operating profit 3,962 6,585 7,889
Goodwill amortisation 7 7 14
Depreciation 2,286 2,847 5,489
Profit on sale of fixed assets (197) (521) (959)
Decrease in stocks 141 666 674
Decrease /( increase) in debtors 20 (1,266) (29)
Decrease in creditors and provisions (1,961) (1,763) (1,401)
Net cash inflow from operating activities 4,258 6,555 11,677
6. Profit / (loss) and cash received on the disposal of subsidiary undertakings
On 6 May 2005 the Group sold its subsidiary undertaking, Accommodation Hire
Limited (AHL), to Wernick Hire Limited. AHL, which specialised in the hire and
sale of temporary accommodation units and toilet facilities, was managed as a
separate business operation and the net assets sold and consideration received
and receivable are as follows:
26 weeks to
2 July
2005
#'000
Tangible fixed assets 3,231
Debtors 1,479
Creditors (922)
Cash at bank 439
Corporation tax (29)
Deferred tax 118
Bank loans (1,225)
Net assets sold 3,091
Profit on disposal 6,797
Total net consideration 9,888
Andrews Sykes Group plc
Notes to the accounts
For the 26 weeks ended 2 July 2005
Satisfied by:
Cash received net of disposal costs paid 9,614
Deferred consideration receivable less disposal costs payable 274
9,888
The exceptional charge of #305,000 in the 53 weeks ended 31 December 2004
relates to an adjustment to an onerous lease liability provision in respect of
the Cox Plant business that was sold by the Group during 2002.
7. Analysis of net funds / (debt)
As at Cash Disposal of Other non As at
2 July flow subsidiaries cash 31 December
2005 excluding movements 2004
cash
#'000 #'000 #'000 #'000 #'000
Cash 11,744 3,025 - (99) 8,818
Bank deposit 564 87 - - 477
Total cash at bank and in hand 12,308 3,112 - (99) 9,295
Debt due in one year (2,000) - 1,225 (735) (2,490)
Debt due after one year (9,000) - - 735 (9,735)
Gross debt (11,000) - 1,225 - (12,225)
Net funds / (debt) 1,308 3,112 1,225 (99) (2,930)
8. Prior year adjustment
The total of the prior year adjustments arising from the application of FRS 17 -
Retirement Benefits and FRS 21 - Events after the Balance Sheet date are
analysed as follows:
The opening equity shareholders' funds at 27 December 2003 were restated as
follows:
Equity shareholders' funds
#'000 #'000
Equity shareholders' funds at 27 December 2003 as previously stated 17,101
Adoption of FRS 17 as at 27 December 2003 (6,104)
Liability for 2003 final dividend not declared at 27 December 2003 1,740
Total prior period adjustments (4,364)
Equity shareholders' funds at 27 December 2003 as restated 12,737
The closing equity shareholders' funds at 31 December 2004 were restated as
follows:
Equity shareholders' funds
#'000 #'000
Equity shareholders' funds at 31 December 2004 as previously stated 13,269
Adoption of FRS 17 as at 31 December 2004 (6,288)
Liability for 2004 final dividend not declared at 31 December 2004 8,119
Total prior period adjustments 1,831
Equity shareholders' funds at 31 December 2004 as restated 15,100
The impact of adopting FRS 17 on the current period profit and loss account is a
credit of approximately #30,000. The impact of adopting FRS 21 on the current
period reserve movement is a charge of approximately #8.1 million.
9. Distribution of interim statement
A copy of this statement will be posted to all shareholders and is available
from the Company's registered office at Premier House, Darlington Street,
Wolverhampton, WV1 4JJ.
This information is provided by RNS
The company news service from the London Stock Exchange
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