RNS Number:9963E
Birse Group PLC
12 December 2002
Date: Embargoed until 7.00am 12th December 2002
Contact: Peter Watson, Chairman Telephone: 01652 633222
Martin Budden, Group Managing Director
Heather Appleford, Group Finance Director
Birse Group plc
Peter Otero Telephone: 0207 831 3113
Financial Dynamics
BIRSE GROUP plc - INTERIM ANNOUNCEMENT
Birse Group plc, the construction, plant hire and property group today announces
preliminary results for the six months ended 31 October 2002.
Highlights:-
* Pre-tax pre-exceptional profits increased to #1.7million (2001: #1.2million)
reflecting underlying improvement in the business.
* Exceptional operating loss relates to the full write-down taken in respect
of Leicester City debt at #5.5million.
* Construction operating losses before exceptionals reduced to #379,000
(2001: losses of #412,000).
* Plant Hire increased profit to #1.6million (2002: #1.2million).
* Solid Construction order book (excluding sports stadia) totalling
#356million at 31 October 2002 (2001: #363million).
* Net cash at #13.7million (2001: #9.2million).
* Interim dividend maintained at 0.375p per share.
"Birse is in a stronger trading position than in previous years. The Leicester
City bad debt is regrettable, however, with all our main markets expected to
remain steady we believe that further progress in the underlying performance of
the business will continue."
M Budden P G Watson
REPORT OF THE DIRECTORS
On the results for the six months ended 31 October 2002
Pre-tax profits, before the exceptional operating item, of #1.7million compare
with pre-tax profits of #1.2million for the corresponding period last year
reflecting the underlying progress that your Group continues to make.
The #5.5million exceptional operating item, as announced on 21 October 2002,
relates to the write off of all amounts owed to Birse Construction Limited by
the Leicester City Group of Companies following the appointment of an
administrator to run the affairs of each of the operating companies comprising
that Group. At the time of writing no proposals have been forthcoming as to how
those businesses will exit administration hence the full write down stance
taken.
Birse Construction's activities gave rise to a pre-exceptional operating loss of
#379,000 (2001/2002: operating loss of #412,000). The expected losses in its
build and process engineering subsidiaries outweighed the profits generated by
its civil engineering business. For the third year in succession Plant Hire
improved its results, increasing operating profits by almost a third to
#1.6million (2001/2002: #1.2million). The absence of contracted transactions
meant that the Group's Commercial Property activities traded at break-even (2001
/2002: profit of #114,000). The Group Centre credit of #261,000 reflects almost
a repeat of the performance achieved by those underlying operations in the six
months to 31 October 2001 when the credit reported was #249,000.
The net interest credit of #186,000 (2001/2002: credit of #25,000) reflects an
improving liquidity position despite the Leicester City bad debt. At 31 October
2002 the Group had a net cash position of #13.7 million including amounts held
on deposit as investments (31 October 2001: #9.2million).
Construction
Six months ended 31 October Year ended
2002 2001 30 April 2002
Turnover Operating Turnover Operating Turnover Operating
(loss)/profit* (loss)/profit profit/(loss)
#'000 #'000 #'000 #'000 #'000 #'000
(As restated) (As restated)
Civil Engineering 132,747 1,356 103,190 2,172 214,868 4,394
Building 104,704 (1,410) 132,221 (375) 246,127 (225)
Process Engineering 8,529 (325) 8,852 (2,209) 20,837 (2,765)
245,980 (379) 244,263 (412) 481,832 1,404
* Before exceptional operating item.
The prospects for increased losses relating to Birse Build and the reduced
losses incurred by Birse Process Engineering were documented in the Group's
annual report for 2002. The construction results before the exceptional
operating item are, therefore, in line with expectations.
Secured workload on a consolidated level at the end of October 2002 stood at
#360million (31 October 2001: #425million). The reduction compared with 2001
relates mainly to the decreasing activity in the sports stadia sector of the
Building market. We continue to experience relatively strong demand in the
Civil Engineering and Process Engineering markets. Excluding sports stadia
orders, secured workload at the end of October 2002 stood at #356million (31
October 2001: #363 million).
The Civil Engineering result was again underpinned by robust performances from
Birse Metro and Birse Rail, respectively our London Underground and rail
businesses. With the major spending Government departments now procuring via
the "early contractor involvement route" the majority of our work is secured on
a target cost/cost reimbursable basis. This approach allows our creative
engineering and project management skills to deliver significant added value for
our customers therefore enhancing our competitive edge.
Moving forward, however, it is important that our civil engineering businesses
remain focused on these customer needs and that in particular caution is
exercised on any involvement in the fixed price competitive tendering sector.
The challenges facing our Building company were well documented at the time we
announced the Group's annual results. There has been no material change in
those circumstances since that time and the margins available remain low.
Mitigating actions taken by management to date include a downsizing of its
stadia business, reducing exposure to the volatile south east developer market
and a re-alignment of ongoing workload with core competencies. However, all
these actions require a reasonable period of time to elapse before a positive
profit and loss account benefit is felt, therefore, this business is expected to
incur further losses in the remainder of the year under review. In addition,
the financial consequences emanating from the customer determination of one of
the company's larger contracts in the last year remain to be quantified. Hence
there is a degree of uncertainty over and above normal trading conditions over
the short term performance of our building business.
The turnaround of operations in the Process Engineering company continues to be
reflected in its results. With its customer capital and maintenance spending
patterns on the increase market conditions will support further improvements.
The company is also developing certain specialised skills which are being
recognised within that market which as a result differentiate the business from
its competitors. As work of this more specialised nature increases results will
improve.
The aggregate value of debtors attributable to the two contracts which are the
subject of arbitration or equivalent proceedings remains unchanged from the year
end at #6.2million. The two cases concerned continue to be subjects of due
process. Consequently as described in Note 8 recoverability of value is
uncertain.
Plant Hire
Six months ended 31 October Year ended
2002 2001 30 April 2002
Turnover Operating Turnover Operating Turnover Operating
profit profit profit
#'000 #'000 #'000 #'000 #'000 #'000
Crawler Cranes 1,647 563 1,780 501 3,508 849
Piling Equipment 422 197 457 147 942 259
Site Accommodation 2,431 832 1,920 567 4,142 1,277
4,500 1,592 4,157 1,215 8,592 2,385
The upgrading of our crawler crane fleet towards hydraulic machines has
continued since the year end with the acquisition of three new hydraulic
machines and the sale of four mechanical cranes. The only mechanical cranes
that we intend to keep in the fleet are the heavier machines which perform more
efficiently than their hydraulic counterparts and, therefore, represent a more
profitable proposition for customers. The predicted upturn in the number of
major construction contract starts has fed through to the Piling business with
orders on the increase. Not only do these projects benefit our Piling
activities but they also present an opportunity for the combined hire of cranes
and piling hammers. Historically, combined hires have produced higher returns.
Our site accommodation business, which trades under the name of The Cabin
Company Limited, has had a particularly satisfying first half. Penetration of
the external market is ahead of schedule with fifteen per cent of turnover now
with customers external to the Group. From a standing start going into the year
this represents encouraging progress which bodes well for future expansion.
Commercial Property
Six months ended 31 October Year ended
2002 2001 30 April 2002
Turnover Operating Turnover Operating Turnover Operating
profit profit profit
#'000 #'000 #'000 #'000 #'000 #'000
- - - 114 1,217 762
As was the case in 2001/2002 no contracted sales were completed in the first
half. Fourteen acres of land remain to be sold or developed all of which are
currently attracting interest. Prospects for sales in the second half are
therefore improved.
Dividend
An interim dividend of 0.375p per ordinary share (2001: 0.375p) will be paid on
6 May 2003 to shareholders on the register on 4 April 2003.
Outlook
At the year end we reported that the Group was in position to progress further.
In October when announcing the Leicester City bad debt we said that the Group's
main markets were expected to remain steady. This continues to be the case and
therefore we believe that further progress in the underlying performance of the
business will continue.
CONSOLIDATED RESULTS
FOR THE 6 MONTHS ENDED 31 OCTOBER 2002
6 Months 6 Months Year
Ended Ended Ended
31.10.02 31.10.01 30.04.02
Note #'000 #'000 #'000
Turnover 2 248,049 246,203 487,238
Operating profit before exceptional operating
item 2 1,474 1,166 5,051
Exceptional operating item 3 (5,500) - -
Operating (loss)/profit 2 (4,026) 1,166 5,051
Profit on disposal of subsidiary undertaking 4 - - 1,499
Net interest 186 25 179
(Loss)/profit on ordinary activities before
taxation 2 (3,840) 1,191 6,729
Taxation 5 1,152 (262) (400)
(Loss)/profit for the financial period (2,688) 929 6,329
Dividends on equity shares 6 (721) (721) (1,924)
(Withdrawn from)/transferred to reserves (3,409) 208 4,405
(Loss)/earnings per ordinary share
- basic 7 (1.4)p 0.5p 3.3p
- diluted 7 (1.4)p 0.5p 3.3p
Before exceptional item - basic 7 0.6p 0.5p 2.5p
- diluted 7 0.6p 0.5p 2.5p
The above figures relate exclusively to continuing operations except for the
profit on disposal of subsidiary undertaking in the year ended 30 April 2002
(see Note 4).
CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2002
As at As at As at
31.10.02 31.10.01 30.04.02
Note #'000 #'000 #'000
Fixed Assets
Tangible Assets 13,789 12,697 14,187
Current Assets
Property held for resale 1,685 - -
Stocks 3,396 3,510 3,246
Debtors 8 142,209 137,164 146,712
Investments 4,673 3,816 3,814
Cash at bank and in hand 13,103 7,268 10,482
165,066 151,758 164,254
Creditors: Amounts falling due within one year
Bank loans and overdrafts (600) (400) (378)
Other creditors (163,533) (151,312) (161,289)
(164,133) (151,712) (161,667)
Net Current Assets 933 46 2,587
Total Assets less Current Liabilities 14,722 12,743 16,774
Creditors: Amounts falling due after more than
one year
Bank loans and overdrafts (886) (526) (200)
Other creditors (6,526) (6,249) (5,855)
(7,412) (6,775) (6,055)
Provisions for Liabilities and Charges (554) - (554)
Net Assets 6,756 5,968 10,165
Capital and Reserves
Called up share capital 19,239 19,239 19,239
Share premium account 93 93 93
Special reserve 308 308 308
Revaluation reserve 607 607 607
Profit and loss account (13,491) (14,279) (10,082)
Shareholders' Funds - equity interest 6,756 5,968 10,165
CONSOLIDATED CASH FLOW STATEMENT
For the 6 months ended 31 October 2002
6 Months 6 Months Year
Ended Ended Ended
31.10.02 31.10.01 30.04.02
#'000 #'000 #'000
Net cash inflow from operating activities 5,268 1,850 7,419
Returns on investments and servicing of finance 159 83 167
Taxation 248 - 2
Capital expenditure and financial investment (3,964) (1,135) (3,454)
Disposal of subsidiary undertaking - - 1,499
Dividends paid to equity shareholders (721) (721) (1,924)
Cash inflow before management of liquid resources and
financing 990 77 3,709
Management of liquid resources 416 11,946 12,437
Financing 850 374 (46)
Increase in cash in the period 2,256 12,397 16,100
CONSOLIDATED CASH FLOW STATEMENT
For the 6 months ended 31 October 2002
6 Months 6 Months Year
Ended Ended Ended
31.10.02 31.10.01 30.04.02
#'000 #'000 #'000
Reconciliation of operating (loss)/profit to net cash
inflow from operating activities
Operating (loss)/profit (4,026) 1,166 5,051
Depreciation net of profit on disposal of fixed assets 1,037 852 1,732
(Increase) in stocks (150) (796) (532)
Decrease/(increase) in debtors 5,407 (9,637) (18,771)
Increase in creditors 3,000 10,265 19,939
Net cash inflow from operating activities 5,268 1,850 7,419
Analysis of net funds
Cash at bank on demand 12,738 6,779 10,482
Cash at bank on short term deposit 365 489 -
Cash at bank on deposit with terms in excess of seven
days 2,033 2,816 2,814
Debt due within one year (600) (400) (200)
Debt due after one year (886) (526) (378)
Finance leases (340) (419) (398)
Net funds at 31 October 2002 13,310 8,739 12,320
Reconciliation of cash flows to movements in net funds
Increase in cash in the period 2,256 12,397 16,100
Cash (inflow)/outflow from financing (850) (374) 46
Cash inflow from management of liquid resources (416) (11,946) (12,437)
New finance leases and hire purchase contracts - (173) (224)
Movement in net funds in the period 990 (96) 3,485
Net funds at 1 May 2002 12,320 8,835 8,835
Net funds at 31 October 2002 13,310 8,739 12,320
NOTES TO THE INTERIM ACCOUNTS
1. Preparation of Interim Accounts
The interim accounts, which relate exclusively to continuing operations, have
been prepared on the basis of the accounting policies set out in the Group's
statutory accounts for the year ended 30 April 2002.
The Group's auditors, Deloitte & Touche, have carried out a review of the
interim accounts, which were approved by the Board of Directors on 12 December
2002, and their report is reproduced on page 14.
The financial information presented is unaudited and does not amount to full
statutory accounts within the meaning of the Companies Act 1985. Full accounts
for the year ended 30 April 2002 upon which Deloitte & Touche gave an
unqualified audit report, have been delivered to the Registrar of Companies.
2. Segment Information
6 Months 6 Months Year
Ended 31.10.02 Ended Ended
#'000 31.10.01 30.04.02
#'000 #'000
(As restated) (As restated)
Turnover
Contracting 245,980 244,263 481,832
Plant Hire 4,500 4,157 8,592
Commercial Property - - 1,217
Group Centre - - -
Intra-group (2,431) (2,217) (4,403)
248,049 246,203 487,238
Results
Contracting (379) (412) 1,404
Plant Hire 1,592 1,215 2,385
Commercial Property - 114 762
Group Centre 261 249 500
Operating profit before exceptional
operating item 1,474 1,166 5,051
Exceptional operating item - Contracting (5,500) - -
Operating (loss)/profit (4,026) 1,166 5,051
Profit on disposal of subsidiary
undertaking - - 1,499
Net interest 186 25 179
(Loss)/profit on ordinary activities
before taxation (3,840) 1,191 6,729
From 1 May 2002 Group Centre includes the results of three newly incorporated
businesses that principally provide services to other Group companies. In
consequence profits of #567,000 and #1,008,000 how been reclassified as Group
Centre from Contracting in the periods to 31 October 2001 and 30 April 2002
respectively.
NOTES TO THE INTERIM ACCOUNTS
3. Exceptional Operating Item
6 Months 6 Months Year
Ended 31.10.02 Ended Ended
#'000 31.10.01 30.04.02
#'000 #'000
Bad debt write off in respect of Leicester City plc
and its subsidiaries (5,500) - -
This bad debt has been recognised in consequence of Leicester City
plc and its subsidiaries being placed into administration. The amount of the
tax credit attributable to this exceptional loss is #1,650,000.
4. Profit on Disposal of Subsidiary Undertaking
On 24 April 1995 the Company sold its entire shareholding in Birse Homes
Limited. In the year to 30 April 2002, under the terms of the sale agreement
the Company received deferred consideration net of related costs of #1,499,000.
There are no further amounts due. There is no tax charge in respect of this
exceptional receipt.
5. Taxation
The tax credit for the period has been calculated by reference to the projected
rate for the full year.
6. Dividends on Equity Shares
An interim dividend of 0.375p per ordinary share (2001 - 0.375p) will be paid
on 6 May 2003 to shareholders on the register on 4 April 2003.
NOTES TO THE INTERIM ACCOUNTS
7. (Loss)/Earnings per Ordinary Share
6 Months 6 Months Year
Ended 31.10.02 Ended Ended
#'000 31.10.01 30.04.02
#'000 #'000
The calculation of (loss)/earnings per ordinary
share is based on:
(Loss)/earnings for basic and diluted earnings per
ordinary share calculation (2,688) 929 6,329
Exceptional item 5,500 - (1,499)
Tax on exceptional item (1,650) - -
Earnings before exceptional item per ordinary
share calculation 1,162 929 4,830
Weighted average number of shares used in (loss)/
earnings per ordinary share calculation 192,390 192,390 192,390
Adjustment to reflect dilutive shares under option - - -
Weighted average number of shares in diluted
(loss)/earnings per ordinary share calculation 192,390 192,390 192,390
8. Debtors; Uncertainty Relating to Amounts on Contracts
Included in debtors is an aggregate value of #6.2million attributable to
contractual amounts relating to two contracts which are the subject of
arbitration or equivalent proceedings.
In consequence of the losses suffered on contracts subject to litigation in
previous years the Directors have reconsidered the recoverability of the amounts
attributable to these and other old contracts. Whilst the Directors believe
that they are justified in concluding that these amounts will be realised, the
Directors acknowledge that there remains significant uncertainty. However, it
is not possible to quantify the effects.
Independent review report to Birse Group plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 October 2002 which comprises the profit and loss
account, the balance sheet, the cash flow statement and related notes 1 to 8.
We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the Directors. The Directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Uncertainty relating to amounts on contracts
In arriving at our review conclusion we have considered the accuracy of
disclosure made in Note 8 to the financial information concerning uncertainty
relating to amounts on contracts. In view of the significance of this
uncertainty, we consider it should be brought to your attention. Our review
conclusion is not qualified in this respect.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2002.
Deloitte & Touche
Chartered Accountants
Leeds
12 December 2002
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR TBBRTMMJBBAT
Birse (LSE:BIE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Birse (LSE:BIE)
Historical Stock Chart
From Jul 2023 to Jul 2024
