RNS No 7281h
ANDREWS SYKES GROUP PLC
1st OCTOBER 1998
ANDREWS SYKES GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS
ENDED 27TH JUNE 1998
Hire, sale and servicing of portable heating, air conditioning,
drying, ventilating and pumping equipment and general plant hire
CHAIRMAN'S STATEMENT
I am very pleased to report on the results of our company for the
last 6 months as follows:
#000
* Turnover increased by 23.4% to 33,817
* Profit before taxation increased by 17.7% to 5,938
* Earnings per share increased by 16.1% to 4.90p
* Operating cash flow increased by 20.8% to 5,642
* Net assets increased by 97.0% to 22,282
* Interim dividend increased by 20% per share to 1.20p
Turnover increased by 11.7% in the continuing businesses to #30.6
million. Acquisitions completed during the first half of 1998
contributed turnover of #3.2 million, the majority relating to Cox
Plant which was acquired on 3rd June.
The enlarged group now has an annualised turnover in excess of
#100 million with an increased proportion of hire revenue.
The increase in profit before taxation reflects an improvement in
the operating profits before exceptionals in the continuing
businesses of 7.6%, together with the net effect of exceptional
items and has led to an increase in earnings per share of 16.1% to
4.9 pence per share.
Operating cash flows continue to be strong within the continuing
businesses and, furthermore, Cox will add significantly, allowing
fast repayment of existing debt.
I am pleased to announce an increase of 20% in the interim ordinary
dividend to 1.2 pence per share which will be paid on 27th November 1998
to shareholders on the register on 17th October 1998.
J-G Murray, Chairman 1st October 1998
Andrews Sykes Group plc
Group Profit and Loss Account
For the six months ended 27 June 1998
6 months 12 months
ended ended
6 months ended 27 June 98 29 June 97 27 Dec 97
--------------------------
Cont- Acquis- Total Total Total
inuing itions
#'000 #'000 #'000 #'000 #'000
--------------------------------------------------------------------------
Turnover 30,594 3,223 33,817 27,396 59,915
Cost of Sales (16,625) (2,249) (18,874) (14,851) (31,126)
--------------------------------------------------------------------------
Gross profit 13,969 974 14,943 12,545 28,789
Net operating
expenses (including
exceptional items set
out in note 2) (7,401) (1,330) (8,731) (7,435) (16,988)
--------------------------------------------------------------------------
Group operating
profit 6,568 (356) 6,212 5,110 11,801
--------------------------------------------------------------------------
Operating profit
before exceptionals
and amortisation of
goodwill 5,498 168 5,666 5,110 11,801
Exceptional items 1,070 (485) 585 - -
Amortisation of
goodwill - (39) (39) - -
--------------------------------------------------------------------------
Group operating
profit 6,568 (356) 6,212 5,110 11,801
==========================================================================
Share of operating
profit of associates 76 - -
Net interest payable
(group) (350) (63) (98)
--------------------------------------------------------------------------
Profit on ordinary
activities before tax 5,938 5,047 11,703
Tax on profit on
ordinary activities (1,871) (1,651) (3,752)
--------------------------------------------------------------------------
Profit on ordinary
activities after
taxation being profit
for the financial
period 4,067 3,396 7,951
Dividends:
Ordinary shares (987) (737) (2,311)
Convertible
preference shares (239) (321) (546)
--------------------------------------------------------------------------
Retained profit for
the period 2,841 2,338 5,094
==========================================================================
Earnings per ordinary
share 4.90 4.22 10.02
Fully diluted earnings
per ordinary share 4.54 3.88 8.98
Exceptional items (0.33) - -
Amortisation of goodwill 0.04 - -
--------------------------------------------------------------------------
Adjusted fully
diluted earnings per 4.25 3.88 8.98
ordinary share
==========================================================================
Dividends per share:
Preference 3.50 3.50 7.00
Ordinary 1.20 1.00 3.00
There were no discontinued operations during the period.
The comparative figures for earnings and dividends per share have been
restated to take account of the sub-division of the #1 ordinary shares
into five 20p ordinary shares which was effective from 4 June 1998.
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 27 June 1998
27 June 29 June 27 Dec
1998 1997 1997
#'000 #'000 #'000
--------------------------------------------------------------------
Fixed assets
Intangible assets 7,988 - -
Tangible assets 51,086 11,559 13,369
Investments 371 164 237
--------------------------------------------------------------------
59,445 11,723 13,606
--------------------------------------------------------------------
Current assets
Stocks 9,074 5,956 7,059
Debtors 25,973 10,714 13,887
Cash at bank and in hand 3,941 3,633 4,328
--------------------------------------------------------------------
38,988 20,303 25,274
Creditors falling due within one year
Loans and overdrafts (7,382) (1,000) (2,643)
Other creditors and provisions (22,123) (13,367) (16,948)
Deferred consideration (7,200) - (700)
Corporation tax (3,903) (2,137) (4,383)
--------------------------------------------------------------------
Net current (liabilities)/ assets (1,620) 3,799 600
====================================================================
Total assets less current liabilities 57,825 15,522 14,206
Creditors falling due after more than
one year
Loans (32,128) (1,750) (1,260)
Other creditors and provisions (1,160) (1,415) (1,132)
Deferred consideration (600) - (600)
Corporation tax (1,655) (1,027) -
--------------------------------------------------------------------
Net assets 22,282 11,330 11,214
====================================================================
Capital and reserves
Called up share capital 19,847 19,145 18,857
Share premium account 8,028 86 782
Revaluation reserve 353 370 361
Other reserves
(16,424) (13,186) (16,424)
Profit and loss account 10,468 4,915 7,628
--------------------------------------------------------------------
22,272 11,330 11,204
--------------------------------------------------------------------
Shareholders' funds
Equity 18,863 6,740 7,795
Non equity 3,409 4,590 3,409
--------------------------------------------------------------------
22,272 11,330 11,204
Minority interests (equity) 10 - 10
--------------------------------------------------------------------
22,282 11,330 11,214
====================================================================
Andrews Sykes Group plc
Consolidated cash flow statement
For the six months ended 27 June 1998
6 months 6 months 12 months
ended ended ended
27 June 98 29 June 97 27 Dec 97
Total Total Total
#'000 #'000 #'000
--------------------------------------------------------------------
Net cash inflow from operating
activities 5,642 4,672 12,533
--------------------------------------------------------------------
Returns on investments and
servicing of finance
Loan facility fees (680) - -
Net interest paid (188) (44) (75)
Preference dividends paid (239) (321) (560)
Interest element of finance
lease payments (21) (15) (41)
--------------------------------------------------------------------
Net cash outflow for returns on
investments and servicing of
finance (1,128) (380) (676)
--------------------------------------------------------------------
Cash outflow for taxation (681) (421) (2,212)
--------------------------------------------------------------------
Capital expenditure
Purchase of tangible fixed
assets (2,625) (2,426) (6,274)
Sale of tangible fixed assets 399 423 1,024
--------------------------------------------------------------------
Net cash outflow for capital
expenditure (2,226) (2,003) (5,250)
--------------------------------------------------------------------
Acquisitions
Purchase of subsidiary
undertakings (44,236) - (869)
Net cash acquired with
subsidiary undertakings 359 - 97
Payment of deferred consideration
on previous acquisitions (46) (1,348) (1,405)
Purchase of interests in
associates (58) - (73)
--------------------------------------------------------------------
Net cash outflow for
acquisitions (43,981) (1,348) (2,250)
--------------------------------------------------------------------
Equity dividends paid (1,547) (947) (1,710)
--------------------------------------------------------------------
Cash (outflow)/inflow before the
use of liquid resources and
financing (43,921) (427) 435
--------------------------------------------------------------------
Management of liquid resources
Movement in bank deposits (88) (795) (1,838)
Financing
Issue of ordinary share capital
net of issue costs 8,236 4 412
New loan draw downs and
factoring advances 37,857 - 94
Loan repayments (2,472) (500) (1,000)
Capital element of finance lease
repayments (87) (184) (298)
Purchase of own shares - (91) (92)
--------------------------------------------------------------------
Net cash inflow/(outflow) from
financing 43,534 (771) (884)
--------------------------------------------------------------------
Decrease in cash in the period (475) (1,993) (2,287)
--------------------------------------------------------------------
Andrews Sykes Group plc
Notes to the accounts
For the six months ended 27 June 1998
1. The results for the 12 months ended 27 December 1997 have
been extracted from the audited financial statements that
have been filed with the Registrar of Companies and contain
an unqualified audit report. The interim figures have not
been audited or reviewed.
The new Financial Reporting Standards, FRS10: Goodwill and
Intangible Assets and FRS11: Impairment of Fixed Assets and
Goodwill, which are first applicable in 1998 have been
adopted in this interim financial statement. In adopting
FRS10, the accounting policy has been changed as described
below. In all other respects the interim financial statement
has been prepared on a basis consistent with the financial
statements for the 12 months ended 27 December 1997.
Goodwill on acquisitions made in the 6 months ended 27 June
1998 has been capitalised and is being authorised over its
estimated useful economic life. Goodwill written off
directly to reserves in previous years has not been
reinstated.
2. Exceptional items
6 12
months months
ended ended
6 months ended 27 June 98 29 June 97 27 Dec 97
---------------------------
Cont- Acquis- Total Total Total
inuing itions
#'000 #'000 #'000 #'000 #'000
--------------------------------------------------------------------
Redundancy and
reorganisation
provisions - (485) (485) - -
Release of
prior year
provisions 1,370 - 1,370 - -
Abortive
acquisition
costs (300) - (300) - -
--------------------------------------------------------------------
1,070 (485) 585 - -
--------------------------------------------------------------------
At an Extraordinary General Meeting held on 3 June 1998 the
shareholders voted to replace cash bonuses for three
directors linked to the company's share price with equivalent
share options. Accordingly, provisions relating to the cash
bonuses built up in previous periods have been released.
3. Reconciliation of operating profit to net cash inflow from
operating activities
6 months 6 months 12 months
ended ended ended
27 June 98 29 June 97 27 Dec 97
Total Total Total
#'000 #'000 #'000
-----------------------------------------------------------------
Operating profit 6,212 5,110 11,801
Amortisation of goodwill 39 - -
Depreciation 2,958 1,764 3,603
Profit on sale of fixed assets (79) (69) (150)
Increase in stocks (1,489) (1,123) (2,029)
(Increase)/decrease in debtors (1,509) 408 (1,234)
(Decrease)/increase in
creditors and provisions (490) (1,418) 542
-----------------------------------------------------------------
Net cash inflow from
operating activities 5,642 4,672 12,533
-----------------------------------------------------------------
4. Reconciliation of net cash flow to movement in net
(debt)/funds
6 months 6 months 12 months
ended ended ended
27 June 98 29 June 97 27 Dec 97
Total Total Total
#'000 #'000 #'000
----------------------------------------------------------------
Decrease in cash in the period (475) (1,993) (2,287)
Cash (inflow) / outflow
from movement in debt and
lease financing (35,298) 684 1,204
Cash outflow from movement
in liquid resources 88 795 1,838
----------------------------------------------------------------
Change in net debt
resulting from cash flows (35,685) (514) 755
Finance lease, hire purchase
and other financing arrangements
acquired with subsidiaries (42) - (285)
Loan notes issued - - (1,600)
Translation differences - 11 (43)
Movement in period (35,727) (503) (1,173)
Opening net funds 7 1,180 1,180
----------------------------------------------------------------
Closing net (debt)/funds (35,720) 677 7
----------------------------------------------------------------
5. The earnings per ordinary share has been calculated by
dividing the profit after taxation and preference dividends
of #3,828,000 (6 months ended 29 June 1997: #3,075,000 ) by
the average number of ordinary shares in issue during the
period of 78,113,835 (6 months ended 29 June 1997:
72,515,495).
The fully diluted earnings per ordinary share has been
calculated on an adjusted profit of #4,231,000 (6 months
ended 29 June 1997: #3,433,000) and an adjusted number of
shares in issue of 93,247,021 (6 months ended 29 June 1997:
88,423,595) assuming that new ordinary shares had been issued
on 28 December 1997 in respect of all share options
outstanding at 27 June 1998 and the proceeds invested in
21/2% Consolidated Stock and that all convertible preference
shares had been converted into ordinary shares at 27 December 1997.
6. Consolidated statement of total recognised gains and losses
6 months 6 months 12 months
ended ended ended
27 June 98 29 June 97 27 Dec 97
Total Total Total
#'000 #'000 #'000
------------------------------------------------------------------
Profit for the financial period 4,067 3,396 7,951
Currency translation
differences on foreign
currency net investments (9) (13) (51)
------------------------------------------------------------------
Total gains and losses in
the period 4,058 3,383 7,900
------------------------------------------------------------------
7. Reconciliation of movements in group shareholders' funds
6 months 6 months 12 months
ended ended ended
27 June 98 29 June 97 27 Dec 97
Total Total Total
#'000 #'000 #'000
-------------------------------------------------------------------
Profit for the financial period 4,067 3,396 7,951
Dividends (1,226) (1,058) (2,857)
Other recognised gains and losses (9) (13) (51)
Goodwill taken to reserves on the
purchase of subsidiary undertakings - (96) (3,347)
Proceeds from ordinary
shares issued 8,236 4 412
Consideration on the
purchase of own shares - (91) (92)
-------------------------------------------------------------------
Net increase in
shareholders' funds 11,068 2,142 2,016
Shareholders' funds at the
beginning of the period 11,204 9,188 9,188
-------------------------------------------------------------------
Shareholders' funds at the
end of the period 22,272 11,330 11,204
-------------------------------------------------------------------
8. Acquisitions
On 31 March 1998 the group acquired the entire share capital
of Watnall Refrigeration Limited for #0.4 million in cash.
Watnall, based in Nottingham, installed and serviced
commercial air-conditioning and hired portable air-
conditioning and heating units. These activities have been
integrated within Andrews Sykes' existing installation and
hire businesses.
On 3 June 1998 the group acquired the trade and assets of Cox
Plant Hire for approximately #49.6 million. Cox hires
general plant and temporary accommodation from 34 locations
throughout the UK and operates as a stand alone subsidiary
within the Andrews Sykes group.
On 15 June 1998 the group acquired the trade and assets of
the Aberdeen depot of Burnthills Plant Limited for #0.3
million and the freehold of the depot for #0.25 million.
Burnthills hired both general plant and tools and portable
heating and dehumidification equipment. The trade has been
split between these two activities, which are now operated
from the depot by Cox Plant Limited and Andrews Sykes Hire
Limited respectively. In the 11 months ended 28 February
1998 Burnthills Aberdeen had a turnover of #0.4 million and
profits before tax of #62,000.
9. Copies of the Interim 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.
For further information please contact:
Eric Hook (Chief Executive) Tel: 0171 329 0096
Andrews Sykes Group Plc Tel: 01902 328700 - From Friday 2nd October
onwards
John Goold /Emily Bruning
Shandwick Consultants Ltd Tel: 0171 329 0096
END
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