TIDMASY
RNS Number : 8603F
Andrews Sykes Group PLC
04 May 2011
Andrew Sykes Group plc
4 May 2011
Preliminary Results
For the 12 months ended 31 December 2010
Summary of Results
12 months 12 months
ended ended
31 December 31 December
2010 2009
GBP'000 GBP'000
Revenue from continuing operations 55,951 54,358
Normalised EBITDA* from continuing
operations 17,721 17,368
Normalised operating profit** 13,942 12,937
Profit after tax for the financial
period 10,562 11,643
Basic earnings per share from
continuing operations (pence) 24.19p 26.30p
Dividend paid per equity share
(pence) 11.10p -
Net cash inflow from operating
activities 13,863 14,334
Total dividends paid 4,800 -
Net funds / (debt) 4,905 (2,808)
* Earnings Before Interest, Taxation, Depreciation, profit on
sale of property, plant and equipment, Amortisation and
non-recurring costs as reconciled on the consolidated income
statement.
** Normalised operating profit, being operating profit before
non-recurring costs as reconciled on the consolidated
income statement.
For further information, please contact:
Andrews Sykes Group plc
J-C Pillois 01902 328700
Brewin Dolphin
Sandy Fraser/Iain Marlow 0845 213 4730
Chairman's Statement
Overview and Financial Highlights
I am pleased to be able to report that the normalised operating
profit* has increased by GBP1 million from GBP12.9 million in 2009
to GBP13.9 million in the current year.
The group continues to generate strong cash flows. Net cash
inflow from operating activities was GBP13.9 million which, due to
higher tax payments, was down a little compared with GBP14.3
million last year. As at 31 December 2010 the group had net funds
of GBP4.9 million compared with net debt of GBP2.8 million last
year despite shareholder related cash outflows of GBP6 million on
dividends and the purchase of own shares. External bank borrowings
have been reduced by GBP9 million from GBP29 million at the start
of the year to GBP20 million by the year-end.
Ongoing cost control, cash and working capital management
continue to be priorities for the group. In total working capital
has been reduced by GBP0.2 million thereby consolidating the
significant reductions of GBP2.2 million made last year. Capital
expenditure is carefully controlled and directed to assets that
will yield the best returns. Hire fleet utilisation, the fleet's
condition and availability have all been maximised.
*Operating profit before non-recurring items as reconciled on
the Consolidated Income Statement.
Operating performance
Our main hire and sales business in the UK and Northern Europe
(the Netherlands and Belgium) returned a strong performance in the
year. The operating profit from this business sector increased by
GBP2.9 million from GBP11.1 million in 2009 to GBP14.0 million in
the current year. The performance was in part attributable to the
cold weather in December which assisted the performance of our
heating division. In addition management continue to develop
non-weather dependent niche markets which has benefited the
performance of the specialist hire division. We will continue to
invest in and develop this business as well as our traditional core
products and services.
As predicted in my Interim Statement, our business in the Middle
East continues to suffer from the economic downturn in the region,
particularly in Dubai, and we anticipate that this will continue
for some time. The business does continue to make a return on
reduced levels of turnover and management are taking action to
ensure that the cost base reflects the reduced activity levels. On
a more positive note, our business in Abu Dhabi continues to grow
year on year.
The UK fixed installation business improved its operating profit
by GBP0.1 million to GBP0.2 million and we look forward to further
improvements next year.
The ongoing strategy of cost control through efficiency savings
has resulted in reduced overhead costs which have also contributed
to the overall increase in normalised operating profit during the
year.
A more detailed review of this year's operating performance is
given in the Operations Review within the Directors' report in the
2010 Annual Report and Financial Statements.
Profit for the financial year
Profit before tax increased by GBP1.1 million from GBP13.3
million in 2009 to GBP14.4 million in the current year. However,
the profit after tax for the financial year was GBP10.6 million
(2009: GBP11.6 million) due to a normal tax charge of GBP3.8
million this year compared with GBP1.7 million in 2009. This is
mainly due to a deferred tax release of GBP1.2 million last year
and a change in the group's profit mix away from the Middle East
towards the UK and Northern Europe.
A more detailed review of the profit for the financial year is
given in the Operations and Financial Review within the Directors'
report in the 2010 Annual Report and Financial Statements.
Net funds / (debt)
As at 31 December 2010 the group had net funds of GBP4.9 million
compared with net debt of GBP2.8 million last year: a positive
increase of GBP7.7 million despite a dividend of GBP4.8 million and
cash outflows on share buybacks of GBP1.2 million.
Equity dividends paid
The company declared an interim dividend of GBP4.8 million on 9
November 2010 and this was paid on 10 December 2010. The Board
continues the policy of returning value to shareholders whenever
possible and accordingly the decision regarding an interim dividend
for 2011 will be taken later in the year in the light of
profitability and available cash resources.
Share buyback programme
During the current year the company purchased 1,152,561 ordinary
shares for cancellation for a total consideration of GBP1,371,000
of which GBP187,000 remained unpaid at the year-end. So far during
2011 the company has purchased a further 402,716 ordinary shares
for cancellation for a total consideration of GBP867,000. These
purchases enhanced earnings per share and were for the benefit of
all shareholders.
As previously reported, the directors intend to continue to
actively pursue the buyback programme provided the necessary funds
are available. Shares will only be bought back for cancellation
provided they enhance earnings per share. Any shareholder who is
considering taking advantage of the share buyback programme is
invited, after taking the appropriate independent financial advice,
to contact their stockbroker, bank manager, solicitor, accountant
or other independent financial advisor authorised under the
Financial Services and Markets Act 2000, in order to contact Brewin
Dolphin Limited who are operating the buyback programme on behalf
of the company. Accordingly at the next Annual General Meeting
shareholders will be asked to vote in favour of a resolution to
renew the general authority to make market purchases of up to 12.5%
of the ordinary share capital in issue.
Outlook
The group's continuing strategy of investing in its traditional
core products and services, the increase in non-seasonal business
and investment in new technically advanced and environmentally
friendly products yet again proved to be beneficial in 2010 and
will therefore be continued into 2011.
The group continues to face challenges in all of its
geographical markets. Nevertheless our business is strong, cash
generative and well developed with positive net funds. All these
factors help us to be able to take advantage of opportunities
wherever and whenever they arise and the Board is therefore
optimistic for further success in 2011.
JG Murray
Chairman
3 May 2011
Consolidated Income Statement
For the 12 months ended 31 December 2010
12 months 12 months
ended ended
31 December 31 December
2010 2009
GBP'000 GBP'000
Continuing operations
Revenue 55,951 54,358
Cost of sales (24,015) (23,218)
----------------- -----------------
Gross profit 31,936 31,140
Distribution costs (9,219) (9,367)
Administrative expenses - Recurring (8,775) (8,836)
- Non-recurring 164 273
---------------------------------------- ----------------- -----------------
Total administrative expenses (8,611) (8,563)
Operating profit 14,106 13,210
Normalised EBITDA* Depreciation and 17,721 17,368
impairment losses Profit on the (4,239) (4,964)
sale of plant and equipment 460 533
----------------- -----------------
Normalised operating profit 13,942 12,937
Profit on the sale of property 164 273
----------------- -----------------
Operating profit 14,106 13,210
----------------- -----------------
Income from other participating
interests 400 980
Finance income 2,012 1,944
Finance costs (2,144) (2,843)
----------------- -----------------
Profit before taxation 14,374 13,291
Taxation (3,812) (1,648)
Profit for the financial period
attributable to equity holders of the
parent 10,562 11,643
----------------- -----------------
There were no discounted operations in either
of the above periods.
Earnings per share from continuing and total
operations
Basic (pence) 24.19p 26.30p
Diluted (pence) 24.18p 26.30p
Dividends paid per equity share 11.10p 0.00p
(pence)
** Earnings Before Interest, Taxation, Depreciation, profit on
the sale of property, plant and equipment, Amortisation and
non-recurring costs.
Consolidated Statement of Comprehensive Total Income
For the 12 months ended 31 December 2010
12 months 12 months
ended ended
31 December 31 December
2010 2009
GBP'000 GBP'000
Profit for the financial period 10,562 11,643
Other comprehensive income:
Currency translation differences on
foreign currency net investments (99) (1,602)
Defined benefit plan actuarial
gains and losses 1,964 (1,308)
Deferred tax on other comprehensive
income (530) 366
----------------- -----------------
Other comprehensive income for the
period net of tax 1,335 (2,544)
----------------- -----------------
Total comprehensive income for the
period 11,897 9,099
----------------- -----------------
Consolidated Balance Sheet
As at 31 December 2010
31 December 2010 31 December 2009
---------------------------- ----------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current
assets
Property,
plant and
equipment 11,817 13,697
Lease
prepayments 58 59
Trade
investments 164 164
Deferred tax
asset 721 1,042
Retirement
benefit
pension
surplus 1,990 -
Other
financial
assets -
cash held on
deposit - 3,000
------------- -------------
14,750 17,962
Current assets
Stocks 4,032 4,865
Trade and
other
receivables 15,917 13,295
Other
financial
assets -
cash held on
deposit - 6,000
Cash and cash
equivalents 25,709 18,150
Assets held
for sale - 238
45,658 42,548
------------- -------------
Current
liabilities
Trade and
other
payables (10,143) (7,408)
Current tax
liabilities (2,274) (1,670)
Bank loans (6,000) (6,000)
Obligations
under
finance
leases (203) (203)
Provisions (13) (13)
Derivative
financial
instruments (7) (23)
------------- -------------
(18,640) (15,317)
------------- -------------
Net current
assets 27,018 27,231
Total assets
less current
liabilities 41,768 45,193
Non-current
liabilities
Bank loans (14,000) (23,000)
Obligations
under
finance
leases (553) (700)
Provisions (47) (60)
Derivative
financial
instruments (41) (32)
------------- -------------
(14,641) (23,792)
Net assets 27,127 21,401
------------- -------------
Equity
Called-up
share
capital 431 443
Retained
earnings 23,607 17,828
Translation
reserve 2,842 2,895
Other
reserves 237 225
Surplus
attributable
to equity
holders of
the parent 27,117 21,391
Minority
interest 10 10
Total equity 27,127 21,401
------------- -------------
Consolidated Cash Flow Statement
For the 12 months ended 31 December 2010
12 months 12 months
ended ended
31 December 31 December
2010 2009
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 17,763 18,081
Interest paid (503) (1,653)
Net UK corporation tax paid (2,113) (1,586)
Withholding tax paid (119) (329)
Overseas tax paid (1,165) (179)
Net cash flow from operating activities 13,863 14,334
----------------- -----------------
Investing activities
Dividends received from
participating interests (trade
investments) 400 980
Movements in ring fenced bank
deposit accounts 9,000 (9,000)
Sale of assets held for sale 390 439
Sale of plant and equipment 643 813
Purchase of property, plant and
equipment (1,745) (1,661)
Interest received 168 208
Net cash flow from investing activities 8,856 (8,221)
----------------- -----------------
Financing activities
Loan repayments (9,000) (5,000)
Finance lease capital repayments (263) (150)
Equity dividends paid (4,800) -
Purchase of own shares (1,184) -
Net cash flow from financing activities (15,247) (5,150)
----------------- -----------------
Net increase in cash and cash
equivalents 7,472 963
Cash and cash equivalents at the
beginning of the period 18,150 18,233
Effect of foreign exchange rate
changes 87 (1,046)
Cash and cash equivalents at end of
the period 25,709 18,150
----------------- -----------------
Reconciliation of net cash flow to movement in net
debt in the period
Net increase in cash and cash
equivalents 7,472 963
Cash outflow from the decrease in
debt 9,263 5,150
Movements in ring fenced bank
deposit accounts (9,000) 9,000
Non-cash movements in respect of
new finance leases (116) -
Non-cash movements in the fair value
of derivative instruments 7 53
----------------- -----------------
Movement in net funds/(debt) during the
period 7,626 15,166
Opening net debt at the beginning
of the period (2,808) (16,928)
Effect of foreign exchange rate
changes 87 (1,046)
----------------- -----------------
Closing net funds/(debt) at the end
of the period 4,905 (2,808)
----------------- -----------------
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2010
Attributable to equity holders of Minority Total
the parent company interest equity
---------------------------------------------------------------------------
Share Retained Translation Other
Capital earnings reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2008 443 7,127 4,497 225 12,292 10 12,302
Profit for the
financial
period - 11,643 - - 11,643 - 11,643
Other comprehensive income:
Currency
translation
differences
on foreign
currency net
investments - - (1,602) - (1,602) - (1,602)
Defined
benefit plan
actuarial
gains and
losses net of
tax - (942) - - (942) - (942)
Total other
comprehensive
income - (942) (1,602) - (2,544) - (2,544)
------------ ------------- ---------------- ------------- ------------- ------------- ------------
At 31 December
2009 443 17,828 2,895 225 21,391 10 21,401
Profit for the
financial
period - 10,562 - - 10,562 - 10,562
Other comprehensive income: - -
Transfer on
closure of
overseas
subsidiary - (46) 46 - - - -
Currency
translation
differences
on foreign
currency net
investments - - (99) - (99) - (99)
Defined
benefit plan
actuarial
gains and
losses net of
tax - 1,434 - - 1,434 - 1,434
Total other
comprehensive
income - 1,388 (53) - 1,335 - 1,335
------------ ------------- ---------------- ------------- ------------- ------------- ------------
Transactions
with owners
recorded
directly in
equity:
Purchase of
own shares (12) (1,371) - 12 (1,371) - (1,371)
Dividends paid - (4,800) - - (4,800) - (4,800)
Total
transactions
with owners (12) (6,171) - 12 (6,171) - (6,171)
------------ ------------- ---------------- ------------- ------------- ------------- ------------
At 31 December
2010 431 23,607 2,842 237 27,117 10 27,127
------------ ------------- ---------------- ------------- ------------- ------------- ------------
There were no transactions with owners recorded directly in
equity during the 12 months ended 31 December 2009.
Notes
1. Basis of preparation
Whilst the information included in this preliminary announcement
has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
(IFRSs), this announcement does not itself contain sufficient
information to comply with IFRSs. Therefore the financial
information set out above does not constitute the company's
financial statements for the 12 months ended 31 December 2010 or 31
December 2009 but it is derived from those financial
statements.
2. Going concern
The Board remains satisfied with the group's funding and
liquidity position. The group has external bank loans of GBP20
million and has operated both throughout the period under review
and subsequently within its financial covenants. Consequently the
loans have been analysed between current and non-current
liabilities in accordance with the agreed repayment profile.
The group has substantial cash resources which at 31 December
2010 amounted to GBP25.7 million. Net funds at 31 December 2010
were GBP4.9 million. Profit and cash flow projections for 2011 and
2012, which have been prepared on a conservative basis taking into
account reasonably possible changes in trading performance,
indicate that the group will be profitable and generate positive
cash flows after loan repayments. These forecasts and projections
indicate that the group should be able to operate within the
current bank facility and associated covenants.
The Board considers that the group has considerable financial
resources and a wide operational base. As a consequence, the Board
believes that the group is well placed to manage its business risks
successfully, as demonstrated by the current year's result, despite
the current uncertain economic outlook.
After making enquiries, the Board has a reasonable expectation
that the group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the Board
continues to adopt the going concern basis when preparing this
Annual Report and Financial Statements and this preliminary
announcement.
3. Distribution of Annual Report and Financial Statements
The group expects to distribute copies of the full Annual Report
and Financial Statements that comply with IFRSs by 12 May 2011
following which copies will be available either from the registered
office of the company; Premier House, Darlington Street,
Wolverhampton, WV1 4JJ; or from the company's website;
www.andrews-sykes.com. The Annual Report and Financial Statements
for the 12 months ended 31 December 2009 have been delivered to the
Registrar of Companies and those for the 12 months ended 31
December 2010 will be filed at Companies House following the
company's Annual General Meeting. The auditors have reported on
those financial statements; their report was unqualified, did not
draw attention to any matters by way of emphasis without qualifying
their report and did not contain details of any matters on which
they are required to report by exception.
4. Date of Annual General Meeting
The group's Annual General Meeting will be held at 10.30 a.m. on
Tuesday 7(th) June 2011 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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