RNS Number:5754V
Andrews Sykes Group PLC
26 April 2007
Andrews Sykes Group plc
26 April 2007
Preliminary Results
Preliminary Announcement For the 52 weeks ended 31 December 2006
SUMMARY OF RESULTS
52 weeks ended 52 weeks ended
31 December 2006 31 December 2005
#'000 #'000
Turnover from continuing operations 59,768 50,673
EBITDA* from continuing operations 18,645 14,747
Operating profit** from continuing operations 14,907 11,062
(Loss) / profit on business disposals (142) 6,404
Profit on ordinary activities after taxation 9,661 14,127
Basic earnings per share from
continuing operations (pence) 22.00p 15.24p
Net cash inflow from operating activities 15,804 10,196
Net Debt 14,810 19,658
* Earnings before Interest, Taxation, Depreciation and Amortisation as
reconciled in the consolidated profit and loss account
** Operating profit as shown on the consolidated profit and loss account
Chairman's Statement
Overview and financial highlights
I am very pleased to be able to report a record group operating profit from
continuing operations of #14.9 million for 2006, which compares with #11.1
million last year. This improvement in trading is largely due to our dual
strategies of aligning costs with sustainable revenues and focussing on the
development of high margin niche markets thereby enabling the group to deliver
exceptionally good results when the opportunities arise.
Our principal UK trading subsidiary, Andrews Sykes Hire, performed exceptionally
well returning turnover of #43.0 million, an improvement of 20% compared with
last year. This was due to a combination of favourable weather conditions and
business initiatives introduced by management during the year to stimulate
demand. A more detailed review of this year's performance is given in the
Operations and Financial Reviews within the Directors' Report.
The basic earnings per share from continuing operations increased by over 44%
from 15.24 pence last year to 22.00 pence this year - another record for our
group. This reflects both the improved trading performance and the benefit of
the tender offer exercise that was completed in September 2005.
I remain confident that the current strategies being followed by management will
continue to deliver satisfactory profit levels in the future. We will continue
to contain our costs, to invest in both traditional and new products and to
develop new market places when the opportunities arise in order to maximise the
return on capital employed.
Management changes
On 5 December 2006 Paul Wood was appointed to the Board as Managing Director
having previously been Director of Operations. Paul has a vast experience in the
industry having originally joined the group in August 1978. Paul has much to
contribute to the group in terms of his industry experience and management
leadership and I look forward to working with him over the coming years.
Also on 5 December 2006 Jean Christophe Pillois was appointed Finance Director
following the resignation of Tony Bourne on 2 October 2006.
There have also been some other changes to our non-executive directors. Richard
Pollard resigned on 5 December 2006 and three new non-executive directors, Marie
Claire Leon, Xavier Mignolet and Joel Simmonds were appointed to the Board on 8
February 2007. I welcome the new appointees and I am sure that their experience
will be appreciated by the Board.
Net debt
Net debt has been reduced by #4.9 million to #14.8 million this year despite the
following cash outflows:
* Capital expenditure net of disposal proceeds #6.5 million
* Corporation tax payments #2.8 million
* Net interest payments #1.1 million
* Defined benefit pension scheme payments #1.5 million
There was a relatively high level of capital expenditure required this year in
order to satisfy increased customer demand and to invest in new products that
will give returns in future years. The other cash outflows are in line with our
expectations.
Share buy back programme
The Board continues to believe that shareholder value will be optimised by the
purchase, when appropriate, of our own shares. The earnings per share this year
has benefited from the tender offer exercise that was completed in September
2005 when the company purchased 13.4 million shares for cancellation.
Consequently at the forthcoming AGM, 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
The Board is not recommending the payment of a final dividend this year. Future
dividend policy will be reviewed regularly by the Board.
Outlook
The group's continuing strategy of containing costs and investing in both its
traditional core products and services and new environmentally friendly products
proved to be successful during 2006. Overall trading in the first quarter of
2007 was in line with expectations.
JG Murray
Chairman
25 April 2007
Andrews Sykes Group plc
Consolidated Profit and Loss Account
For the 52 weeks ended 31 December 2006
52 weeks 52 weeks
ended 31 ended 31
December 2006 December 2005
Total Continuing Discontinued Total
activities activities activities activities
#'000 #'000 #'000 #'000
Turnover 59,768 50,673 4,415 55,088
Cost of sales (26,932) (23,675) (2,414) (26,089)
Gross profit 32,836 26,998 2,001 28,999
Distribution costs (9,471) (8,038) (699) (8,737)
Administrative expenses (note 3) (8,458) (7,898) (960) (8,858)
Operating profit 14,907 11,062 342 11,404
EBITDA * 18,645 14,747 615 15,362
Depreciation and asset disposals (3,724) (3,671) (273) (3,944)
Operating profit before goodwill 14,921 11,076 342 11,418
amortisation
Goodwill amortisation (14) (14) - (14)
Operating profit 14,907 11,062 342 11,404
Profit on the sale of property 206 -
Exceptional (loss) / profit on the (142) 6,404
disposal of businesses
- discontinued (note 5)
Profit on ordinary activities before 14,971 17,808
interest and taxation
Net interest payable (1,174) (738)
Profit on ordinary activities before 13,797 17,070
taxation
Tax on profit on ordinary activities (4,136) (2,943)
9,661 14,127
Profit on ordinary activities after
taxation being profit for the financial
period
Earnings per share from continuing operations (pence):
Basic 22.00p 15.24p
Fully diluted 22.00p 15.24p
Earnings per share from total operating results (pence):
Basic 21.68p 28.16p
Fully diluted 21.68p 28.16p
Dividends paid per equity share (pence) _ 14.0p
All turnover and operating profit in the current period relates to continuing
operations. There were no material acquisitions in either period.
* Earnings before Interest, Taxation, Depreciation and Amortisation
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 31 December 2006
31 December 31 December
2006 2005
#'000 #'000
Fixed assets
Intangible assets: Goodwill 17 31
Tangible assets 14,599 12,011
Investments 164 164
14,780 12,206
Current assets
Stocks 4,336 4,532
Debtors 17,280 13,929
Cash at bank and in hand 10,190 10,342
31,806 28,803
Creditors: Amounts falling due within one
year
Bank loans (5,000) (5,000)
Other creditors (10,108) (8,627)
Corporation and overseas tax (2,292) (1,060)
(17,400) (14,687)
Net current assets 14,406 14,116
Total assets less current liabilities 29,186 26,322
Creditors: Amounts falling due after more
than one year
Bank loans (20,000) (25,000)
Provisions for liabilities (24) (469)
Net assets excluding pension liability 9,162 853
Pension Liability (4,604) (4,434)
Net assets / (liabilities) including 4,558 (3,581)
pension liability
Capital and reserves
Called - up share capital 446 446
Revaluation reserve 736 741
Other reserves 213 222
Profit and loss account 3,153 (4,994)
ESOP reserve - (6)
Surplus / (deficit) attributable to equity 4,548 (3,591)
shareholders
Minority interests (equity) 10 10
Total capital employed 4,558 (3,581)
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 52 weeks ended 31 December 2006
52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
Net cash inflow from operating activities 15,804 10,196
as reconciled in note 4
Returns on investment and servicing of
finance
Interest received 476 484
Interest paid (1,591) (946)
Net cash outflow for returns on investment (1,115) (462)
and servicing of finance
Cash outflow for taxation (2,807) (1,984)
Capital expenditure and financial investment
Purchase of tangible fixed assets (7,067) (4,056)
Sale of tangible fixed assets 526 608
Net cash outflow for capital expenditure (6,541) (3,448)
and financial investment
Acquisitions and disposals
Cash received on the disposal of - 10,204
subsidiary undertakings
Disposal costs paid less consideration (183) -
received on prior year disposals
Net cash balances disposed of with - (214)
subsidiaries
Net cash (outflow) / inflow for (183) 9,990
acquisitions and disposals
Equity dividends paid - (8,119)
Cash inflow before the use of liquid
resources and financing (5,158 (6,173)
Management of liquid resources
Movement in bank deposits - 477
Financing
Sale of own shares by ESOP 4 9
Loan repayments (5,000) (11,000)
New loans drawn down - 30,000
Purchase of own shares (16) (24,168)
Net cash outflow from financing (5,012) (5,159)
Increase in cash in the period 146 1,491
Analysis of net funds / (debt)
Cash at bank and in hand 10,190 10,342
Total loans and overdrafts (25,000) (30,000)
Net debt as reconciled in note 6 (14,810) (19,658)
Andrews Sykes Group plc
Other Consolidated Statements
For the 52 weeks ended 31 December 2006
Consolidated statement of total recognised gains and losses
52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
Profit for the financial period 9,661 14,127
Currency translation differences on foreign (321) 48
currency net investments
Actual return less expected return on pension 578 2,702
scheme assets
Experience gains and losses arising on the (340) (4)
pension scheme liabilities
Changes in assumptions underlying the present (1,937) (3,538)
value of the scheme liabilities
UK deferred tax attributable to the pension 510 252
scheme asset and liability adjustments
Total recognised gains and losses relating to 8,151 13,587
the period transferred to reserves
Reconciliation of movement in group shareholders' funds / (deficit)
52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
Profit for the financial period 9,661 14,127
Dividends paid - (8,119)
Consideration for the purchase of own (16) (24,168)
shares
Sale of own shares by the ESOP trust 4 9
Currency translation differences on (321) 48
foreign currency net investments
Actual return less expected return on 578 2,702
pension scheme assets
Experience gains and losses arising on (340) (4)
the pension scheme liabilities
Changes in assumptions underlying the (1,937) (3,538)
present value of the scheme liabilities
UK deferred tax attributable to the 510 252
pension scheme asset and liability adjustments
Net increase / (decrease) in 8,139 (18,691)
shareholders' funds
Shareholders' (deficit) / funds at the (3,591) 15,100
beginning of the period
Shareholders' funds / (deficit) at the 4,548 (3,591)
end of the period
Andrews Sykes Group plc
Notes to the accounts
For the 52 weeks ended 31 December 2006
1. Segmental analysis
The group's turnover may be analysed between the following principal
activities:
52 weeks
ended
31 December 52 weeks ended 31 December 2005
2006 Continuing Discontinued Total
Continuing activities activities activities
activities
Activity: #'000 #'000 #'000 #'000
Hire 43,088 34,459 1,930 36,389
Sales 8,762 7,024 2,485 9,509
Installation 7,918 9,190 - 9,190
Total 59,768 50,673 4,415 55,088
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 pumps,
portable heating, air conditioning, drying and ventilation.
The impact of discontinued activities on turnover (both by geographical origin
and destination), profit before interest and tax and net assets in the tables
below relates mainly to the United Kingdom.
The geographical analysis of the group's turnover was as follows:
By origination: 52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
United Kingdom 50,254 48,041
Rest of Europe 5,435 3,674
Middle East and Africa 4,079 3,373
59,768 55,088
By destination: 52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
United Kingdom 49,070 47,612
Rest of Europe 6,240 3,737
Middle East and Africa 4,116 3,478
Rest of World 342 261
59,768 55,088
The analysis of profit before interest and tax and net assets / (liabilities)
by geographical origin was as follows:
Net assets /
(liabilities)
Profit before interest including pension
and tax liability
52 weeks 52 weeks
ended ended 31 As at As at
31 December December 31 December 31 December
2006 2005 2006 2005
#'000 #'000 #'000 #'000
United Kingdom 12,670 16,141 22,254 17,642
Rest of Europe 1,876 1,155 1,940 1,785
Middle East and Africa 425 512 2,070 2,144
14,971 17,808 26,264 21,571
Net debt (14,810) (19,658)
Taxation (2,292) (1,060)
Pension liability (4,604) (4,434)
Net assets/(liabilities) 4,558 (3,581)
2. Earnings per ordinary share
The basic figures have been calculated by reference to the weighted average
number of ordinary shares in issue, excluding those in the ESOP reserve, during
the period of 44,557,701 (52 weeks ended 31 December 2005: 50,156,508).
The calculation of the diluted earnings per ordinary share is based on the
profits as set out in the table below and on 44,562,172 (52 weeks ended 31
December 2005: 50,168,119) ordinary shares. The share options have a dilutive
effect for the period calculated as follows:
52 weeks ended 31 December 2006 52 weeks ended 31 December 2005
Continuing Total No. of Continuing Total No. of
earnings earnings shares earnings earnings shares
#'000 #'000 #'000 #'000
Basic earnings/weighted 9,803 9,661 44,557,701 7,646 14,127 50,156,508
average number of shares
Weighted average number of 15,603 24,932
shares under option
Number of shares that would
have been issued at fair value (11,132) (13,321)
Earnings/ diluted weighted 9,803 9,661 44,562,172 7,646 14,127 50,168,119
average number of shares
Diluted earnings per 22.00p 21.68p 15.24p 28.16p
ordinary share (pence)
3. Exceptional administrative expenses
Administrative expenses include the following exceptional
costs:
52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
Reorganisation and redundancy payments 656 -
The above costs relate to redundancy payments and legal costs incurred following
the termination of the employment contracts of former Board members and other
senior employees during the period.
4. Reconciliation of operating profit to net cash inflow from operating activities
52 weeks 52 weeks
ended ended
31 December 31 December
2006 2005
#'000 #'000
Operating profit 14,907 11,404
Goodwill amortisation 14 14
Depreciation 4,055 4,280
Profit on sale of tangible fixed (332) (336)
assets excluding property
Decrease in stocks 196 37
Increase in debtors (2,839) (591)
Decrease in creditors and (197) (4,612)
provisions
Net cash inflow from operating 15,804 10,196
activities
5. Exceptional (loss) / profit on the disposal of businesses
The exceptional (charges) / credits during the period were as follows:
52 weeks 52 weeks
ended ended
31 December 31
December
2006 2005
#'000 #'000
Profit on disposal of subsidiary undertakings - 6,564
Adjustments in respect of deferred consideration
receivable and legal costs payable on prior year (27) -
disposals
Provisions for onerous lease commitments (115) (160)
(142) 6,404
Last year the group sold two subsidiary undertakings, Accommodation Hire Limited
and Engineering Appliances Limited, realising a combined profit on disposal of
#6,564,000. This year certain adjustments have been made to both the deferred
consideration receivable and legal costs payable which have resulted in the net
charge of #27,000 as noted above.
The group has various onerous property lease commitments inherited from the Cox
Plant business which was sold during 2002. During both the current and previous
financial years the directors have re-assessed the level of provisions required
in respect of these commitments and have accordingly adjusted the onerous lease
provision. This has resulted in a charge to the profit and loss account of
#115,000 (52 weeks ended 31 December 2005: #160,000).
6. Analysis of net debt
As at Cash Other non As at
31 December flow cash 31 December
2006 movements 2005
#'000 #'000 #'000 #'000
Cash at bank and in hand 10,190 146 (298) 10,342
Debt due in one year (5,000) 5,000 (5,000) (5,000)
Debt due after one year (20,000) - 5,000 (25,000)
Gross debt (25,000) 5,000 - (30,000)
Net debt (14,810) 5,146 (298) (19,658)
7. The financial information set out above has been prepared in accordance
with UK GAAP using accounting policies that are consistent with those
adopted in the statutory accounts for the 52 weeks ended 31 December 2005.
There have not been any new UK Accounting Standards issued during the
period that have an impact on the group.
8. The financial information set out above does not constitute the group's
statutory accounts for the 52 weeks ended 31 December 2006 or the 52 weeks
ended 31 December 2005 but it is derived from those accounts. The financial
statements for the 52 weeks ended 31 December 2005 have been filed and
those for the 52 weeks ended 31 December 2006 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.
9. 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.
The Company's Annual General Meeting will be held at 10.30 a.m. on Wednesday 6
June 2007 at Floor 5, 10 Bruton Street, London, W1J 6PX.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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