TIDMASY
RNS Number : 5268C
Andrews Sykes Group PLC
02 May 2012
Andrews Sykes Group plc
Summary of results
For the 12 months ended 31 December 2011
12 months 12 months
ended ended
31 December 31 December
2011 2010
GBP'000 GBP'000
Revenue from continuing operations 53,838 55,951
Normalised EBITDA* from continuing operations 15,387 17,721
Normalised operating profit** 11,882 13,942
Profit on the sale of property 3,113 164
Profit after tax for the financial period 11,566 10,562
Basic earnings per share from total operations
(pence) 27.05p 24.19p
Dividend paid per equity share (pence) 6.60p 11.10p
Net cash inflow from operating activities 11,606 13,863
Total dividends paid 2,818 4,800
Net funds 10,365 4,905
*Earnings Before Interest, Taxation, Depreciation, profit on
sale of property, plant and equipment, Amortisation and non-
recurringitems as reconciled on the consolidated income
statement.
** Normalised operating profit, being operating profit before
non-recurring items as reconciled on the consolidated income
statement.
For further information, please contact:
Andrews Sykes Group plc
KE Ford 01902 328700
N+1 Brewin
Sandy Fraser/ Joe Stroud 0845 213 4730
Andrews Sykes Group plc
Chairman's Statement
For the 12 months ended 31 December 2011
Overview and financial highlights
The group's revenue for the year ended 31 December 2011 was
GBP53.8 million, a decrease of GBP2.1 million, or 3.8%, compared
with the same period last year. This decrease had a virtually
direct impact on normalised operating profit* which fell by GBP2.0
million from GBP13.9 million last year to GBP11.9 million in the
year under review. This decline in trading was, however, more than
offset by the non-recurring profit of GBP3.1 million on the sale of
our freehold property in Gallions Road, London. Consequently the
basic earnings per share increased by 11.8% from 24.19p last year
to 27.05p this year.
The group continues to generate strong cash flows. Net cash
inflow from operating activities was GBP11.6 million which, mainly
due to the decline in normalised operating profit*, was down by
GBP2.3 million compared with last year. Nevertheless, net funds
increased from GBP4.9 million last year to GBP10.4 million at 31
December 2011 despite shareholder related cash outflows of GBP3.9
million on dividends and the purchase of own shares. External bank
borrowings have been reduced by GBP6 million from GBP20 million at
the start of the year to GBP14 million by the year-end.
Cost control, cash and working capital management continue to be
priorities for the group. In total working capital has been reduced
for the third year running, this time by GBP0.5 million. Capital
expenditure on the hire fleet has been increased from GBP2.2
million in 2010 to GBP4.1 million this year and the group purchased
a freehold property for GBP2.7 million to replace the property sold
during the year. These actions will ensure that the group's
infrastructure and revenue generating assets are sufficient to
support future growth and profitability. Hire fleet utilisation,
condition and availability continue to be the subjects of
management focus.
Operating performance
The second half year is normally significantly more profitable
than the first but 2011 proved to be an exception. The following
table splits the results between the first and second half
years:
Turnover NormalisedOperating
profit*
--------------- --------- --------------------
GBP'000 GBP'000
--------------- --------- --------------------
1st half 2011 27,717 5,930
--------------- --------- --------------------
1st half 2010 27,573 6,816
--------------- --------- --------------------
2nd half 2011 26,121 5,952
--------------- --------- --------------------
2nd half 2010 28,378 7,126
--------------- --------- --------------------
Total 2011 53,838 11,882
--------------- --------- --------------------
Total 2010 55,951 13,942
--------------- --------- --------------------
Our main hire and sales business in the UK and Northern Europe
has faced challenging trading conditions throughout 2011 mainly as
a result of unhelpful weather conditions but also due to the
current economic conditions.
Trading in the first half remained flat and profit was adversely
affected by the temperate weather at the end of the 2010/11 winter
which resulted in an early end to the heating season. This was
followed by another mild summer that failed to stimulate demand for
our all important air conditioning products. Unlike last year, the
start of the 2011/12 winter was also mild which did not allow our
heating division to compensate for the under-performance of the air
conditioning business. The last 18 months have also been unusually
dry resulting in the drought conditions recently announced for some
parts of the UK. Overall the operating profit, excluding profit on
the sale of property, of this business segment fell from GBP13.8
million last year to GBP12.0 million this year, this being the main
reason for the decline in the group's normalised operating profit*
in the current period.
In the light of the above factors I consider that management's
performance has been creditable ensuring that the group produced
another satisfactory trading performance. This clearly demonstrates
our ability to return acceptable profit levels even in times of
unfavourable external influence and is due, in part, to the
continuing development of non-weather dependent niche markets which
continue to benefit the performance of our specialist hire
divisions. We will continue to invest in and develop these
businesses as well as our traditional core products and
services.
Our hire and sales business in the Middle East returned an
operating profit of GBP0.6 million this year compared with GBP0.7
million in 2010 on similar turnover levels. Although the profit is
lower than last year there are now some initial signs of improved
trading conditions in Abu Dhabi although the economic conditions in
Dubai remain challenging.
The UK fixed installation business continued to improve its
trading performance, the segment profit increased by GBP0.1 million
to GBP0.3 million this year and we look forward to further
improvements again next year.
A more detailed review of this year's operating performance is
given in the Operations Review within the Directors' report in the
2011 Annual Report and Financial Statements.
Profit on the sale of property
During the year the group sold the freehold of one of its main
UK depots, based in Gallions Road, London, to a property developer.
Gross proceeds were GBP3.7 million resulting in a profit on
disposal of GBP3.1 million and this has been disclosed as a
separate non-recurring item on the face of the income
statement.
Although the group was not actively looking for a sale,
management took advantage of a unique opportunity to realise a
significant profit and cash flow advantage for the benefit of
shareholders. The group purchased a replacement freehold property
locally in Peninsular Way for GBP2.7 million and expect the
relocation to the new premises to be completed by the end of the
first half of 2012. Part of the net cash inflow of GBP1 million
will be spent on capital improvements in 2012 following which the
group will have a much improved and enlarged operating base from
which to serve its customers in London and the South East of
England.
Profit for the financial year and earnings per share (EPS)
Profit after tax increased by GBP1 million from GBP10.6 million
last year to GBP11.6 million this year and basic EPS increased by
11.8% from 24.19p last year to 27.05p this year. However this was
significantly influenced by the above profit on sale of property of
GBP3.1 million. The adjusted basic EPS, excluding the profit on the
sale of property, would have been 20.24p in 2011, a decrease of 15%
compared with the equivalent figure last year of 23.81p.
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 2011 Annual Report and Financial Statements. Defined
benefit pension scheme
During March 2012 the December 2010 funding valuation was agreed
by management with the pension scheme trustees and accordingly
revised "Schedule of Contributions" and "Recovery plan" have now
been put into place. These provide that the group will make
additional contributions, including an expense allowance, to the
pension scheme of GBP840,000 in 2012, GBP960,000 in 2013,
GBP1,080,000 in 2014 and GBP840,000 per annum thereafter until 31
December 2018, or until the funding shortfall has been eliminated
if sooner, subject to review at the next actuarial funding
valuation due as at 31 December 2013.
Net funds
At 31 December 2011 the group had net funds of GBP10.4 million
compared with GBP4.9 million last year, an increase of GBP5.5
million despite a dividend of GBP2.8 million and cash outflows on
share buybacks of GBP1.1 million.
Equity dividends paid
The company declared an interim dividend of GBP2.8 million on 8
November 2011 and this was paid on 1 December 2011. The Board
continues the policy of returning value to shareholders whenever
possible and accordingly the decision regarding an interim dividend
for 2012 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 442,216 ordinary
shares for cancellation for a total consideration of GBP945,000 of
which GBP11,000 (2010: GBP187,000) remained unpaid at the year-end.
So far during 2012 the company has purchased a further 426,506
ordinary shares for cancellation for a total consideration of
GBP815,000. 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 N+1
Brewin 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 policy of reducing its reliance on its traditional
core products and services together with the increase in
non-seasonal business and investment in new technically advanced
and environmentally friendly products will be continued into
2012.
The group continues to face challenges in all of its
geographical markets but our business remains strong, cash
generative and well developed with positive net funds. The Board is
therefore optimistic for further success in 2012.
JG Murray
Chairman
1 May 2012
* Operating profit before non-recurring items as reconciled on
the Consolidated Income Statement
Andrews Sykes Group plc
Consolidated Income Statement
For the 12 months ended 31 December 2011
12 months 12 months
ended ended
31 December 31 December
2011 2010
GBP'000 GBP'000
Continuing operations
Revenue 53,838 55,951
Cost of sales (23,873) (24,015)
Gross profit 29,965 31,936
Distribution costs (9,317) (9,219)
Administration expenses - Recurring (8,766) (8,775)
- Non-recurring 3,113 164
---------------------------------------------- ---------------------- -------------
Total administrative expenses (5,653) (8,611)
Operating profit 14,995 14,106
Normalised EBITDA* 15,387 17,721
Depreciation and impairment losses (3,911) (4,239)
Profit on the sale of plant and equipment 406 460
---------------------------------------------- ---------------------- -------------
Normalised operating profit 11,882 13,942
Profit on the sale of property 3,113 164
---------------------------------------------- ---------------------- -------------
Operating profit 14,995 14,106
---------------------------------------------- ---------------------- -------------
Income from participating interests - 400
Finance income 1,850 2,012
Finance costs (1,942) (2,144)
Profit before taxation 14,903 14,374
Taxation (3,337) (3,812)
Profit for the financial period attributable
to equity holders of the parent 11,566 10,562
---------------------------------------------- ---------------------- -------------
There were no discontinued operations
in either of the above periods
Earnings per share from continuing and
total operations
Basic (pence) 27.05p 24.19p
Diluted (pence) 27.05p 24.18p
Dividends paid per equity share (pence) 6.60p 11.10p
*Earnings Before interest, Taxation, Depreciation, profit on the
sale of property, plant and equipment, Amortisation and non-
recurringitems.
Andrews Sykes Group plc
Consolidated Statement of Comprehensive Total Income
For the 12 months ended 31 December 2011
12 months 12 months
ended ended
31 December 31 December
2011 2010
GBP'000 GBP'000
Profit for the financial period 11,566 10,562
---------------------------------------- -------------------------------- ------------------------------
Other comprehensive income:
Currency translation differences on
foreign currency net investments (184) (99)
Defined benefit plan actuarial gains
and losses (559) 1,964
Deferred tax on other comprehensive
income 184 (530)
Other comprehensive (charges) / income
for the period net of tax (559) 1,335
---------------------------------------- -------------------------------- ------------------------------
Total comprehensive income for the
period 11,007 11,897
---------------------------------------- -------------------------------- ------------------------------
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 31 December 2011
31 December 2011 31 December 2010
-------------------------------------- -------------------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 14,486 11,817
Lease prepayments 57 58
Trade investments 164 164
Deferred tax asset 760 721
Retirement benefit pension
surplus 1,629 1,990
------------------------------- ------------------- ----------------- ------------------- ----------------
17,096 14,750
Current assets
Stocks 3,561 4,032
Trade and other receivables 14,775 15,917
Overseas tax (denominated 19 -
in Euros)
Cash and cash equivalents 24,986 25,709
------------------------------- ------------------- ----------------- ------------------- ----------------
43,341 45,658
------------------------------- ------------------- ----------------- ------------------- ----------------
Current liabilities
Trade and other payables (9,696) (10,143)
Current tax liabilities (1,689) (2,274)
Bank loans (6,000) (6,000)
Obligations under finance
leases (203) (203)
Provisions (13) (13)
Derivative financial
instruments - (7)
------------------------------- ------------------- ----------------- ------------------- ----------------
(17,601) (18,640)
------------------------------- ------------------- ----------------- ------------------- ----------------
Net current assets 25,740 27,018
------------------------------- ------------------- ----------------- ------------------- ----------------
Total assets less current
liabilities 42,836 41,768
Non-current liabilities
Bank loans (8,000) (14,000)
Obligations under finance
leases (395) (553)
Provisions (34) (47)
Derivative financial
instruments (23) (41)
------------------------------- ------------------- ----------------- ------------------- ----------------
(8,452) (14,641)
Net assets 34,384 27,127
------------------------------- ------------------- ----------------- ------------------- ----------------
Equity
Called-up share capital 427 431
Share premium 13 -
Retained earnings 31,035 23,607
Translation reserve 2,658 2,842
Other reserves 241 237
Surplus attributable
to equity holders of
the parent 34,374 27,117
Minority interest 10 10
Total equity 34,384 27,127
------------------------------- ------------------- ----------------- ------------------- ----------------
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 12 months ended 31 December 2011
12 months 12 months
ended ended
31 December 31 December
2011 2010
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 15,766 17,763
Interest paid (385) (503)
Net UK corporation tax paid (3,191) (2,113)
Withholding tax paid - (119)
Overseas tax paid (584) (1,165)
Net cash flow from operating activities 11,606 13,863
-------------------------------------------- ------------------------- ----------------------------------
Investing activities
Dividends received from participating
interests (trade investments) - 400
Movements in ring fenced bank deposit
accounts - 9,000
Sales of assets held for sale - 390
Sale of plant and equipment 4,221 643
Purchase of property, plant and equipment (6,582) (1,745)
Interest received 311 168
Net cash flow from investing activities (2,050) 8,856
-------------------------------------------- ------------------------- ----------------------------------
Financing activities
Loan repayments (6,000) (9,000)
Finance lease capital repayments (158) (263)
Equity dividends paid (2,818) (4,800)
Purchase of own shares (1,121) (1,184)
Issue of new shares 13 -
Net cash flow from financing activities (10,084) (15,247)
-------------------------------------------- ------------------------- ----------------------------------
Net (decrease) / increase in cash
and cash equivalents (528) 7,472
Cash and cash equivalents at the beginning
of the period 25,709 18,150
Effect of foreign exchange rate changes (195) 87
Cash and cash equivalents at end of
the period 24,986 25,709
-------------------------------------------- ------------------------- ----------------------------------
Reconciliation of net cash flow to movement
in net funds in the period
Net (decrease) / increase in cash
and cash equivalents (528) 7,472
Cash outflow from the decrease in
debt 6,158 9,263
Movements in ring fenced bank deposit
accounts - (9,000)
Non-cash movements in respect of new
finance leases - (116)
Non-cash movements in the fair value
of derivative instruments 25 7
-------------------------------------------- ------------------------- ----------------------------------
Movement in net funds / (debt) during
the period 5,655 7,626
Opening net funds / (debt) at the
beginning of the period 4,905 (2,808)
Effect of foreign exchange rate changes (195) 87
-------------------------------------------- ------------------------- ----------------------------------
Closing net funds at the end of the
period 10,365 4,905
-------------------------------------------- ------------------------- ----------------------------------
Andrews Sykes Group plc
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2011
Attributable to equity holders of the Minority Total
parent company interest equity
-----------------------------------------------------------------------------------
Share Share Retained Translation Other Total
capital premium earnings reserve reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
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
/ (charges):
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 /
(charges) - - 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
Profit for the
financial
period - - 11,566 - - 11,566 - 11,566
Other
comprehensive
charges:
Currency
translation
differences
on foreign
currency net
investments - - - (184) - (184) - (184)
Defined
benefit plan
actuarial
gains and
losses net of
tax - - (375) - - (375) - (375)
Total other
comprehensive
charges - - (375) (184) - (559) - (559)
------------ --------------- --------- -------------- -------------- --------- ------------- ---------
Transactions with owners
recorded
directly in equity:
Purchase of
own shares (4) - (945) - 4 (945) - (945)
Issue of
shares - 13 - - - 13 - 13
Dividends paid - - (2,818) - - (2,818) - (2,818)
Total
transactions
with
owners (4) 13 (3,763) - 4 (3,750) - (3,750)
------------ --------------- --------- -------------- -------------- --------- ------------- ---------
At 31 December
2011 427 13 31,035 2,658 241 34,374 10 34,384
------------ --------------- --------- -------------- -------------- --------- ------------- ---------
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 2011 or 31
December 2010 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 GBP14
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
2011 amounted to GBP25.0 million. Net funds at 31 December 2011
were GBP10.4 million. Profit and cash flow projections for 2012 and
2013, 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 16 May 2012
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 2010 have been delivered to the
Registrar of Companies and those for the 12 months ended 31
December 2011 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 12(th) June 2012 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
FR UGUMGAUPPGQG
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