RNS Number:6087A
Birse Group PLC
08 July 2004
Date: Embargoed until 7.00am 8th July 2004
Contact: Peter Watson, Chairman Telephone: 01302 768 078
Martin Budden, Group Managing Director
Heather Craven, Group Finance Director
Birse Group plc
Sally Lewis Telephone: 0207 831 3113
Financial Dynamics
BIRSE GROUP plc - PRELIMINARY ANNOUNCEMENT
Birse Group plc, the construction and plant hire group today announces
preliminary results for the year ended 30 April 2004.
Financial Highlights:-
* Pre-tax profits increased to #2.0million (2003: #1.2million).
* Pre-tax pre-exceptional profits #6.6million (2003: #6.7million).
* Net cash at #9.5million (2003: #12.8million).
* Total dividend 1p per share (2003: 1p per share).
Operational Highlights:-
* Progress in core businesses maintained. Excluding effect of curtailed
property development activities (2004: #207,000, 2003: #3million) core
businesses deliver #6.4million pre-tax pre-exceptional profit compared with
#3.7million in 2003.
* Construction leads the way with pre-exceptional operating profit at
#4.4million (2003: #490,000).
* Although uncertainties remain in respect of the re-shaping of Birse Build
the de-risking of the Group continues with reduced exposure to highly
competitive build markets.
* Plant Hire delivers #2.5million operating profit (2003: #3.6million)
despite reduction in intra-group site accommodation hire opportunities.
* Results delivered in spite of distraction of Citibank Adjudication.
Adjudication award and related costs give rise to #4.6million exceptional
operating charge but short term uncertainties removed.
* Solid Construction order book (excluding build markets) totalling
#400million at 31 May 2004 (31 May 2003: #259million).
"With a greater proportion of its activities focused upon its markets of choice
the Group is in a position to continue to improve its underlying performance."
M Budden P G Watson
CHAIRMAN'S STATEMENT
Results
Pre-tax profits totalling #2.0million compare with #1.2million achieved in 2002/
2003. The former figure is after charging an exceptional operating item of
#4.6million relating to the Citibank Adjudication; the comparative figure is
after charging an exceptional operating item of #5.5million. Eliminating the
effects of these one off costs gives rise to a pre-tax pre exceptional profit of
#6.6million in the year under review compared with a corresponding profit of
#6.7million in the preceding year. Given that the 2002/2003 figure incorporates
a contribution of #3million from the Group's curtailed Commercial Property
activities the result for the year is indicative of the positive progress made
by its core businesses.
Birse Construction led the way reporting a pre-exceptional operating profit of
#4.4million (2002/2003: #490,000). A strong second half performance from its
Civil Engineering business led to full year results increasing from #7.3million
to #12.6million at the operating profit level. Birse Process delivered its
first profitable full year result at #493,000 (2002/2003 operating loss of
#352,000) since its turnaround was initiated. Birse Build as expected suffered
significant pre-exceptional losses at #8.7million (2002/2003 operating loss of
#6.4million) as it continues to downsize with a view to reducing its exposure to
the less profitable sectors of the market. The Cabin Company, the Group's site
accommodation business also suffered at the expense of Birse Build's shrinkage
which is the main factor behind the fall in operating profits from Plant Hire
from #3.6million in 2002/2003 to the #2.5million delivered in 2003/2004. As
reported previously following the sale in the previous year of the remaining
land at its Warrington site the Group's Commercial Property returns are
insignificant (#207,000 operating profit in 2003/2004 compared with #3million in
2002/2003). The Group Centre costs of #521,000 (2002/2003: cost of #479,000)
reflect the re-positioning of the Head Office function within the Group's
corporate structure.
The #4.6million exceptional operating item relates to the Citibank Adjudication.
Details of this adjudication were published in the Group's half year
statement. In summary, the adjudication was to determine on an interim basis
Citibank's claim for approximately #16million and Birse Construction's claim for
approximately #14million. By way of a decision published on 24 February 2004
the adjudicator determined that Birse Construction should pay Citibank
approximately #2.1million. The exceptional operating item referred to comprises
that award together with the ongoing costs associated with defending the action.
Details of the adjudicator's decision were announced to the Stock Exchange at
start of business on 25 February 2004. As stated in that announcement the
adjudicator's decision awarded only a fraction of the amount claimed by Citibank
and removed a high degree of uncertainty hanging over the business at that time.
It is important to emphasise however that the adjudication was an interim
decision only and that litigation with Citibank continues as more fully
explained in the Review of Operations.
The small net interest charge (2002/2003: credit of #98,000) reflects mainly the
negative impact upon cash flows resulting from the working capital effects of
reducing the level of turnover undertaken by Birse Build and the costs relating
to the Citibank Adjudication. At 30 April 2004 the Group had a net cash
position of #9.5million including amounts held on deposit as investments (30
April 2003: #12.8million).
Dividend
The Board is recommending a final dividend of 0.625p per ordinary share (2002/
2003: 0.625p) maintaining the total dividend for the year at 1p per ordinary
share. Subject to the approval of shareholders at the Annual General Meeting
the final dividend is payable on 1 November 2004 to shareholders appearing on
the register at the close of business on 1 October 2004.
Outlook
At the half year it was reported that the Group was in a good position to
progress further from the solid platform established over the last two years,
that its main markets remained steady and that assuming a satisfactory outcome
in relation to the Citibank Adjudication that further progress in the underlying
performance of the Group would continue. Litigation issues still remain to be
resolved in respect of Citibank but the adjudicator's decision has removed the
uncertainties to which the business was exposed at that time in respect of that
matter. Although uncertainties will remain for the Group in respect of the
Build business the Group's withdrawal from the loss making sectors of that
market is expected to be substantially completed in the current year. Therefore
with a greater proportion of its activities focused upon its markets of choice
the Group is in a position to continue to improve its underlying performance.
GROUP MANAGING DIRECTOR'S REVIEW AND REVIEW OF OPERATIONS
Overview
In a year when senior management had the distraction of the Citibank
Adjudication it is encouraging that the Group's core businesses continued
collectively to make positive progress. It is a reflection of their quality and
a credit to the directors and management now leading those subsidiaries that
progress could be made in these circumstances. We have stated in the past that
it is the development of these autonomous businesses and the managers who run
them that will drive forward Group performance, and it is encouraging to see
evidence of that development in underlying profits.
In the year under review pre-tax pre-exceptional profits amounted to #6.6million
compared with #6.7million in 2002/2003. However the results in the prior year
include a #3million contribution from property development activities compared
with #207,000 in 2003/2004. That #3million profit arose from the sale of all of
the remaining land at Warrington, the Group's only development site, signalling
the end of the Group's involvement in property development. Excluding the
effects of the contribution from these curtailed activities gives rise to a
#6.4million pre-tax pre-exceptional profit in 2003/2004 compared with
#3.7million in the previous year, reflecting the progress made in the core
businesses.
That progress was led by Birse Construction Limited reporting a pre-exceptional
operating profit of #4.4million up from #490,000 in 2002/2003. A strong
performance from its Civil Engineering business (operating profit of
#12.6million; 2002/2003 #7.3million) combined with a return to profitability in
its Process Engineering subsidiary (operating profit of #493,000: 2002/2003 loss
of #352,000) offset the expected pre-exceptional losses of #8.7million (2002/
2003 loss of #6.4million) incurred by Birse Build Limited. The Group's
exposure to the very competitive Build market continued to reduce as turnover
fell from #196million in 2002/2003 to #110million in 2003/2004. Further
reductions will occur in the current year. This contraction of Build turnover
adversely affected the Group's site accommodation business particularly in the
second half. The pace at which intra-group build hire business was lost
exceeded the pace at which replacement hires could be secured from the external
market. This change in sales mix is the main factor behind the fall in Plant
Hire profits from #3.6million in the previous year to the #2.5million operating
profit now reported. However, with customers external to the Group representing
a growing forty four percent of aggregate site accommodation hire turnover
prospects for a recovery in 2004/2005 are realistic.
The conclusion of the Citibank Adjudication gave rise to the exceptional
operating item of #4.6million. A more detailed narrative upon the current
status of that dispute is provided subsequently. It is important to emphasize
that the adjudication was an interim decision only. Unless a final negotiated
resolution can be reached with the customer concerned, which is our preferred
option, litigation of a longer term nature will continue into the foreseeable
future.
The Group has always had at its core its fundamental value that all business
should be undertaken in a manner that protects the safety of everyone associated
with our operations whether this be our customers, suppliers or our own staff.
As we have repeatedly stated our attitude is that one accident is one too many.
Consequently we will continue supporting our supply chain through training and
audits with a view to achieving alignment with our own practice, processes and
compliance procedures. In addition we are starting to turn our attentions to
the behavioural aspects of safety management and in the coming year are likely
to be pioneering the application of leading edge practices adopted in this area
by other industries.
It is now some three years ago that we embarked upon directing the Group in
accordance with our determined strategy which simply stated is to:-
"Leverage a group of construction related autonomous businesses each focused on
the customer and its core competencies, operating safely and self funded run by
directors who think and behave like owners."
This strategic intent has driven many changes. The Group structure has moved
from a centrally controlled organisation to one based around autonomous
subsidiaries run by directors empowered to make decisions best for their own
business albeit within clear lines of accountability. Competencies have been
identified and matched with market opportunities. Customers are now put first.
Systematic management procedures ensure that this happens. Director and
management development and succession is embedded in each subsidiary business.
However strategy is ten percent design and ninety percent implementation. There
remains much implementation to do and therefore much more potential to realise
given that businesses and particularly construction led groups do not become
transformed overnight.
Financial results have improved (despite the ongoing problems with the Group's
Build subsidiary and exceptional charges mainly relating to legacy contracts).
It is however the determined application of our strategy that is reducing
materially the Group's exposure to the loss making Build market and decreasing
the risk of future exceptional charges emerging from current activities. Whilst
there will always be challenges to overcome it is in the knowledge of our
advancements to date combined with the emerging improvement in the delivery of
results that lead us to view the future with increasing optimism.
CONSTRUCTION
2004 2003
Turnover Operating profit* Turnover Operating profit*
#'000 #'000 #'000 #'000
Civil Engineering 241,388 12,601 246,232 7,272
Building 109,583 (8,719) 195,602 (6,430)
Process Engineering 60,629 493 27,838 (352)
411,600 4,375 469,672 490
Analysed between:-
First Half 197,647 301 245,980 11
Second Half 213,953 4,074 223,692 479
411,600 4,375 469,672 490
* Before exceptional operating item.
Civil Engineering
Birse Rail Limited, Birse Metro Limited (a dedicated London Underground
business) and Birse Civils Limited collectively comprise the Civil Engineering
Division. At the half year stage we reported that the performance of Civil
Engineering had been held back by market factors and that results in the second
half were therefore expected to advance. This proved to be the case as major
enhancement projects within Birse Rail and Government projects under the early
contractor involvement protocol commenced pushing operating profits in the
second six months of 2003/2004 to #8.1million compared with #4.5million in the
first six months.
Birse Civils Limited continues to adapt to a market place where customers are
becoming increasingly sophisticated and more demanding of the contractor, not
only at the project delivery level but also at a business level. Customers
require a contractor to align with their own business objectives and deliver
projects in a corresponding manner. Assessment and qualification procedures are
structured accordingly. The Highways Agency's audit of a self assessed
capability process compiled by way of a specifically designed contractor
assessment toolkit ("CAT") is indicative of the leading edge procurement
techniques now employed. It is our view that increasing customer demands create
opportunity. To pursue such opportunities Birse Civils Limited has strengthened
its senior management team through the internal appointment of Mark Farrah to
the role of corporate development director and the recruitment of Gary Wright.
Gary was a leading visionary with the Highways Agency in developing and
promoting the CAT procurement techniques.
The flow of work within Birse Rail's market remains unpredictable particularly
in relation to enhancement projects. Whilst its order book for the first half
of the current year is solid thereafter indications are that the industry will
focus on the renewal of long term structures framework arrangements. Birse Rail
will be seeking to secure a renewal of its framework in the Midlands Region of
Network Rail as well as targeting awards in respect of other regions.
Significant management resources will be dedicated to winning this work given
the long term nature (five to ten years) of the contracts concerned. It is
important for the business that its high levels of customer service are
maintained and that it is not deflected away from its customer first approach
whilst competing for these long term awards.
At the interim stage it was reported that Birse Metro had suffered from a lack
of market opportunities since the private public partnerships took over
responsibility for the maintenance of large parts of the London Underground
infrastructure. Although its order book remains at a low point the last three
months has seen an upsurge in enquiries. By reference to historic trends this
should produce an upturn in work in the second six months of the current year in
line with our expectations. However, Birse Metro is still faced not only with
the challenge of securing projects but also with the task of delivering
operating margins under different contract arrangements from those previously
adopted by London Underground.
Building
We continue to reduce turnover in this division (2003/2004 #110million: 2002/
2003 #196million) as we pursue our withdrawal from the market mainly the
property developer led sectors, where Birse Build is unable to generate reliable
returns. Further contraction of activities will occur in the current year. We
will focus the remaining business substantially upon the local authority
education sector, where customer preference is to procure by way of value added
principles as opposed to the lowest cost option. To support this market driven
focus we have transferred Birse Build's head office to the North West from
Northampton and closed its Midlands and Southern regional operations. By the
end of the 2004/2005 financial year monthly turnover in the restructured
business is expected to be in the region of #3million with a cost base to
match. However the costs associated with this reorganisation, combined with the
work out to completion of low margin and other legacy contracts in the Midlands
and the South lead us to conclude that Birse Build will continue to incur
material losses in 2004/2005. Until therefore those legacy issues have been
resolved and the re-shaping of the business completed there is further
uncertainty for the Group over the performance of the Build business. On the
other hand the positive impact upon the Group's risk profile has and will
continue to occur as turnover falls. In the last five years the Group has
incurred exceptional operating losses relating to legacy contracts undertaken by
the Build business amounting in the aggregate to around #30million. Not one of
these contracts was awarded in the last three years the period during which we
have pursued our downsizing policy.
Process Engineering
In contrast to Birse Build our Process Engineering business continues to
flourish to the extent where it can now regard itself as having put its
turnaround behind it. Turnover increased by #33million giving rise to an
operating profit of #493,000.
The figures however understate the transformation of this company. It is now a
truly engineering led customer focused business that operates in sectors where
delivery is critical. Blue chip customers have repeatedly engaged the business
in situations that have been high risk to their own operations. Birse Process
is therefore well placed to pursue market opportunities particularly in its
specialist area of odour control systems where there are encouraging signs that
this market may increase substantially in size.
Although its activity levels may fall in 2004/2005 because of the cyclical
impact of regulatory price reviews within the UK Water Industry the company's
longer terms prospects are very encouraging.
Order Book
At the end of May 2004 secured workload on a consolidated basis stood at
#467million (31 May 2003: #382million). Excluding Build orders secured workload
at the same date was #400million (31 May 2003: #259million) which further
illustrates the progress made by our core construction business.
Amounts Recoverable on Contracts
Included in debtors at 30 April 2004 is an aggregate value, before provisions,
of #7.1million (2003: #5.5million) attributable to two (2003: two) contracts
which at that time remained the subject of arbitration or equivalent
proceedings. As described in Note 7 in respect of those contracts
recoverability of value remains uncertain.
Citibank Adjudication
In the Group's interim statement we reported that in late November 2003 CIB
Properties Limited, a Citibank Group company, referred to adjudication matters
relating to the termination of the contract for construction services for its
new data centre facility at Riverdale, Lewisham.
We further reported that the adjudication would determine on an interim basis
Citibank's claim for approximately #16million and Birse's claim for
approximately #14million and that adjudication is a process that is uncertain.
By way of a decision published late into the evening on 24 February 2004 the
adjudicator determined that Birse Construction should pay Citibank approximately
#2.1million which together with the costs of defending this action comprise the
#4.6million exceptional operating item now reported.
Further details of the adjudicator's decision were published by way of a Stock
Exchange announcement at start of business on 25 February 2004. That
announcement also stated that the adjudicator's decision was open to challenge
but only by reference to arbitration or litigation.
That challenge has been lodged with the Technology and Construction Court giving
rise to a litigation action which is unlikely to lead to a final hearing before
the 2005/2006 financial year with a decision thereafter. The Board of Birse
Group plc has been advised that it has realistic prospects in the litigation of
reducing the award made by the adjudicator in the adjudication.
We also await the enforcement of the adjudication award by the same court.
Enforcement of the award has been challenged largely on the grounds of fairness
and natural justice. A decision is expected at the end of July 2004. Payment
of the #2.1million to Citibank is withheld pending that decision.
It is the costs associated with these ongoing actions that has increased the
costs of defending the adjudication over and above the indications contained
within the related Stock Exchange announcement. Costs incurred into the future,
where appropriate, will continue to be written off and charged as exceptional
operating items.
We stress however that regardless of the formal legal and associated proceedings
our preferred option is to secure a negotiated full and final settlement. To
this extent a dialogue is ongoing with Citibank. However this case has a number
of highly complex features. Whilst settlement is the preferred approach we must
be aware of the consequences of these complexities and respectful of the issues
that they raise for Citibank. It is therefore important that we continue to
take actions that we consider best protect the position of the Group.
PLANT HIRE
2004 2003
Turnover Operating profit Turnover Operating profit
#'000 #'000 #'000 #'000
Crawler Cranes 4,183 1,480 3,797 1,364
Piling Equipment 612 172 883 388
Site Accommodation 4,793 884 4,692 1,815
9,588 2,536 9,372 3,567
Analysed between:-
First Half 5,021 1,708 4,500 1,703
Second Half 4,567 828 4,872 1,864
9,588 2,536 9,372 3,567
The Crawler Crane and Piling Equipment operations trade as divisions of BPH
Equipment Limited, and our Site Accommodation business operates as The Cabin
Company Limited.
Crawler Cranes and Piling Equipment
The high demand for the heavier weight mechanical cranes experienced in the
first half of the year subsided in the second half. Demand for the more modern
hydraulic cranes in contrast although solid in the first half moved forward in
the second six months. Overall this enabled crawler cranes to increase profits
by #116,000. Return on capital employed improved from the twenty three percent
experienced in the prior year to twenty four percent.
The trend of shrinking market opportunities for mechanical cranes and greater
scope for their hydraulic counter-parts is expected to continue. We, therefore,
continue to structure our investment plans accordingly. The objective is to
balance asset disposals with acquisitions whilst at the same time improving the
return on capital employed.
Whilst piling returns fell compared to 2002/2003 BPH still retains a pre-eminent
position in the marine engineering sector. This is the sector that also
presents the best opportunities for combined crawler crane and piling hammer
hires. BPH remains the only operator in the market able to supply this
combination. The piling market is a mature market serviced by a small number of
hirers. We have yet to make a final decision as to how growth can be best
achieved in this sector. Until a final decision is reached capital expenditure
will be limited to essential replacement items.
Site Accommodation
Intra-group sales fell by almost #1million in the year, mainly in the second
half and primarily in relation to Birse Build. Sales to customers external to
the Group increased by broadly the same amount. Sales to external customers in
the aggregate amounted to #2.1million (2002/2003: #1.1million) representing
forty four percent of total turnover (2002/2003: twenty three percent).
The change in sales mix had a detrimental impact on margins. Firstly transport
costs were adversely affected in that more one-way load trips were undertaken
the effect of which was to increase costs by around #200,000. Secondly the
external market does not purchase add on services at the same rate as
intra-group customers.
The focus for 2004/2005 given the changing mix of external and internal
customers will be to secure more efficient transport programming and to develop
the external market beyond pure asset hires. Both areas are viewed as a natural
progression for what is a fledgling business.
COMMERCIAL PROPERTY
2004 2003
Turnover Operating profit Turnover Operating profit
#'000 #'000 #'000 #'000
305 207 7,953 3,025
Analysed between:-
First Half - - - -
Second Half 305 207 7,953 3,025
305 207 7,953 3,025
Turnover and profit in the year reflects the crystallisation of contingent
consideration arising in respect of contracted sales in prior years. Following
the sale of all of the company's remaining land in 2002/2003 returns from this
aspect of the Group's activities will continue to be insignificant being
restricted exclusively to the type of income recognised in the year under
review.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the Year Ended 30 April 2004
2004 2003
#'000 #'000
Note
Turnover 1 417,355 483,312
Cost of sales:
Ordinary trading (384,140) (446,614)
Exceptional operating item 2 (4,600) (5,500)
(388,740) (452,114)
Gross profit 28,615 31,198
Administrative expenses (26,618) (30,095)
Operating profit 1 1,997 1,103
Net interest (36) 98
Profit on ordinary activities before
taxation 1 1,961 1,201
Taxation 3 912 (230)
Profit for the financial year 2,873 971
Dividends on equity shares 4 (1,924) (1,924)
Transferred to/(withdrawn from) reserves 949 (953)
Earnings per ordinary share
- basic 5 1.5p 0.5p
- diluted 5 1.5p 0.5p
- before exceptional items
- basic 5 3.2p 2.5p
- diluted 5 3.2p 2.5p
The above figures relate exclusively to continuing operations.
There is no material difference between the results disclosed and the results on
an unmodified historical cost basis.
CONSOLIDATED BALANCE SHEET
As at 30 April 2004
2004 2003
Note #'000 #'000
Fixed Assets
Tangible assets 16,285 16,703
Current Assets
Debtors 7 139,180 134,736
Investments 8,620 5,121
Cash at bank and in hand 9,171 12,232
156,971 152,089
Creditors: Amounts falling due within one year 154,574 150,212
Net Current Assets 2,397 1,877
Total Assets Less Current Liabilities 18,682 18,580
Creditors: Amounts falling due after more than one year (8,521) (9,368)
Net Assets 10,161 9,212
Capital and Reserves
Called up share capital 19,239 19,239
Share premium account 93 93
Special reserve 308 308
Revaluation reserve 607 607
Profit and loss account (10,086) (11,035)
Shareholders' Funds - equity interest 10,161 9,212
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 April 2004
2004 2004 2003 2003
#'000 #'000 #'000 #'000
Net cash inflow from operating activities 5,936 7,662
Returns on investments and servicing of finance
Interest received 206 347
Interest paid (185) (253)
Interest element of finance lease rentals and
hire purchase contracts (57) (44)
Net cash (outflow)/inflow from returns on investments
and servicing of finance (36) 50
Taxation
UK Corporation tax (paid)/received (58) 243
Capital expenditure and financial investment
Purchase of tangible fixed assets (3,841) (5,162)
Increase in current asset investments (3,374) (1,640)
Sale of tangible fixed assets 183 904
Net cash outflow from investment activities (7,032) (5,898)
Dividends paid to equity shareholders (1,924) (1,924)
Cash (outflow)/inflow before management of liquid
resources and financing (3,114) 133
Management of liquid resources
Movements in cash deposits with terms in excess of seven
days (125) 333
Net cash (outflow)/inflow from management of liquid
resources (125) 333
Financing
Loan advances 1,224 1,983
Loan repayments (901) (617)
Capital element of finance lease rentals and hire
purchase contracts (145) (82)
Net cash inflow from financing 178 1,284
(Decrease)/increase in cash in the year (3,061) 1,750
NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTS
For the year ended 30 April 2004
1. Segment information
(a) Turnover and results: Turnover Operating profit
2004 2003 2004 2003
#'000 #'000 #'000 #'000
(As restated)
Contracting 411,600 469,672 4,375 490
Plant Hire 9,588 9,372 2,536 3,567
Commercial Property 305 7,953 207 3,025
Group Centre - - (521) (479)
Intra-group (4,138) (3,685) - -
417,355 483,312 6,597 6,603
Exceptional operating item - Contracting (4,600) (5,500)
Operating profit 1,997 1,103
Net interest (36) 98
Profit on ordinary activities before taxation 1,961 1,201
(b) Net assets: 2004 2003
#'000 #'000
Contracting (19,207) (23,884)
Plant Hire 11,978 11,416
Commercial Property 1,383 6,520
Group Centre (210) (4)
(6,056) (5,952)
Unallocated net assets 16,217 15,164
10,161 9,212
The above analysis reflects the segments by which the Group is managed. All
turnover arises from work performed within the United Kingdom.
2004 2003
#'000 #'000
Unallocated net assets comprise:
Current asset investments 8,620 5,121
Cash at bank and bank loans 6,904 10,288
Obligations under finance leases and hire purchase contracts (348) (316)
Corporation tax (40) (53)
Deferred taxation 3,005 2,048
Dividends payable on equity shares (1,924) (1,924)
16,217 15,164
Cash at bank excludes bank deposits with terms in excess of seven days. Those
balances are included as current asset investments.
Net assets for each segment represents non-interest bearing operating assets
less non-interest bearing operating liabilities.
From 1 May 2003 Group Centre includes certain central costs that were previously
recharged to operating companies.
The adjustments made to the comparative segmental analysis are summarised
below:-
Operating profit
#'000
Contracting 812
Plant Hire 203
Group Centre (1,015)
-
2. Exceptional operating items
2004 2003
#'000 #'000
Adjudication costs (4,600) -
Bad debt in respect of Leicester City plc and its subsidiaries - (5,500)
(4,600) (5,500)
Adjudication costs comprise a provision of #2.1million in respect of the
adjudicator's award in the Citibank Adjudication together with the related legal
and associated costs of #2.5million.
The tax credits attributable to these exceptional items are #1,380,000 (2003:
#1,650,000).
3. Taxation 2004 2003
#'000 #'000
Corporation tax
United Kingdom corporation tax at 30% on profits of
the year (40) -
Under provision for prior years (5) (48)
(45) (48)
Deferred tax
Timing differences, origination and reversal 964 (420)
Adjustments to estimated recoverable amounts of
deferred tax assets arising in previous years (7) 238
957 (182)
Tax credit/(charge) on profit on ordinary
activities 912 (230)
The corporation tax charge for the year is below the expected rate of 30% - the
differences are explained below:
2004 2003
#'000 #'000
Profit on ordinary activities before tax 1,961 1,201
Expected tax charge at 30% (588) (360)
Expenses not deductible for tax purposes (128) (155)
Tax losses 432 790
Capital allowances in excess of depreciation (782) (180)
Other timing differences 1,026 (95)
Current year corporation tax (40) -
Deferred taxation #'000
At 1 May 2003 2,048
Profit and loss account 957
At 30 April 2004 3,005
The amounts of deferred taxation assets provided and unprovided in the accounts
at the rate of 30% (2003: 30%) are: -
Provided Unprovided
2004 2003 2004 2003
#'000 #'000 #'000 #'000
Tax losses 1,500 360 4,043 5,185
Capital allowances 1,324 545 - -
Other short term timing differences 181 1,143 - -
3,005 2,048 4,043 5,185
The deferred tax assets recognised are based upon an estimate of timing
differences that will reverse in the foreseeable future after taking into
account the historical performance of group businesses.
4. Dividends on equity shares 2004 2003
#'000 #'000
Interim: 0.375p per ordinary share (2003: 0.375p) 721 721
Final proposed: 0.625p per ordinary share (2003: 0.625p) 1,203 1,203
1,924 1,924
The interim dividend was paid on 5 May 2004. Subject to the approval of
shareholders at the Annual General Meeting the final dividend will be paid on 1
November 2004 to shareholders appearing on the register at the close of business
on 1 October 2004.
2004 2003
5. Earnings per ordinary share #'000 #'000
The calculation of earnings per ordinary share is based on:
Earnings for basic and diluted earnings per ordinary share calculation 2,873 971
Exceptional item 4,600 5,500
Tax on exceptional item (1,380) (1,650)
Earnings before exceptional item per ordinary share calculation 6,093 4,821
2004 2003
Thousands Thousands
Weighted average number of shares used in basic earnings per ordinary share
calculation 192,390 192,390
Dilutive effect of options - -
Weighted average number of shares used in diluted earnings per ordinary
share calculation 192,390 192,390
6. Net cash at bank 2004 2003
#'000 #'000
Net cash at bank comprises:
Cash at bank - on demand 9,171 12,232
- on deposit with terms in excess of seven days 2,606 2,481
Bank loans:
Due within one year (1,013) (772)
Due after one year (1,254) (1,172)
9,510 12,769
7. Debtors; uncertainty relating to amounts recoverable on contracts
Included in debtors is an aggregate value, before provisions, of #7.1million
(2003: #5.5million) attributable to contractual amounts relating to two (2003:
two) contracts which at that time remained 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 uncertainty. However, it is not
possible to quantify the effects.
8. Financial information
The financial information incorporated in this announcement does not constitute
full statutory accounts within the meaning of the Companies Act 1985. Full
accounts for the year ended 30 April 2003 upon which Deloitte & Touche have
given an unqualified audit report have been filed with the Registrar of
Companies. Full accounts for the year ended 30 April 2004 upon which Deloitte &
Touche LLP have given an unqualified audit report will be filed with the
Registrar of Companies in due course. Neither report contained statements under
Section 237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UUUAGMUPCGQM
Birse (LSE:BIE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Birse (LSE:BIE)
Historical Stock Chart
From Jul 2023 to Jul 2024
