RNS Number:4654D
Hacas Group PLC
10 January 2000
HACAS Group PLC ("HACAS")
(The leading UK social housing consultancy with offices in
London and Edinburgh)
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1999
HIGHLIGHTS
1999 1998 Change
Turnover #4.74m #3.46m +38%
Profit before tax** #1,127,643 #640,407 +76%
Earnings per share 2.90p 1.76p +65%
(basic)
Dividend 1.10p - -
** As HACAS Group PLC traded for less than three months before
its financial year end in 1998, the figures set out above for
that year are annualised full year figures for the main
operational company HACAS Ltd combined with The Royal Borough
of Kensington and Chelsea Assured Homes PLC. The figures are
taken from the accounts of both companies for 1998.
* 600 projects completed for 275 clients during the year
* Significant growth in all sectors
* Core consultancy business shows steady underlying growth
* HACAS Exchequer Services consolidates its postion as a
leading funding adviser
* Good start for HACAS Asset Management Services
* Successfully advised Glasgow City Council (the largest
housing authority in Scotland)
* Appointed to advise Birmingham City Council (the largest
housing authority in England)
* Operating margins being maintained
* Cash balances increased to #2.8 million
* Trading in first three months ahead of the similar period
last year
* Confident that the Group will be able to maintain good
progress
For further information:
Julian Ashby (Chairman) 020 7609 9491
Brian Coleman-Smith / Bruce Croxford 020 7786 9600
Binns & Co Public Relations
Background note:
The Market
The social housing sector is the Group's primary operating
market. The sector comprises housing associations, local
authority and other public sector housing providers together
with the related government departments, regulators, trade
bodies, suppliers and funders. This sector owns over 25% of
the UK housing stock.
The HACAS group advises some of the largest local authorities
(such as Birmingham City Council) and a majority of the
largest housing associations. The 500 most regular housing
association clients hold assets ranging between #50 million
and #1.4 billion. Other clients include government
departments, Housing Corporation, Scottish Homes, National
Audit Office and the Audit Commission.
Government policy encourages area regeneration and substantial
investment in repairing and modernising local authority
housing. This often involves the transfer of the local
authority's housing stock to a housing association and
substantial funding from the commercial loans market. It is
anticipated that some #13 billion of such funding will be
required over the next ten years. This is a key area of the
Group's work.
HACAS carries out research for government departments and
regulators and also advises financial institutions, commercial
companies involved in the social housing sector as well as
Eastern European governments.
HACAS Group PLC
(The leading UK social housing consultancy with offices in
London and Edinburgh)
PRELIMINARY RESULTS FOR THE YEAR ENDED
30 SEPTEMBER 1999
CHAIRMAN'S STATEMENT
We have now completed our first full year of operations since
HACAS Ltd reversed into General Industries to create HACAS
Group PLC in July 1998. In order to provide a meaningful
comparison with 1997/98 we have used the pro-forma unaudited
financial statement included in last year's Annual Report.
Results
We are happy to report excellent results for the year to 30
September 1999. All parts of the Group have exceeded
expectations. Group turnover has increased by 38% to #4.74
million. Profits before tax are up 76% to #1.13 million and
earnings per share are up 65% to 2.9p per share. The results
have benefited from The Royal Borough of Kensington and
Chelsea Assured Homes PLC's property disposals programme and
increased billing in the last quarter. Nevertheless, there
has also been steady underlying growth in the core business
and HACAS Exchequer Services has consolidated its position as
a leading funding adviser.
Dividends
We declared an interim dividend of 0.5p per share in May 1999
and propose a final dividend of 0.6p per share payable on 12
April 2000 to shareholders in the register at 21 January 2000.
This will make a total dividend for the year of 1.1p.
Growth, Acquisitions and New Ventures
We continue to expand through organic growth and have welcomed
a number of excellent consultants into the Group. The social
housing sector (providing around 25% of UK housing) has many
small consultancy and service company providers of which we
are one of the largest. We are in discussions with several
smaller consultancies which could extend the work of the
Group. The establishment of HACAS Asset Management Services
has brought one such set of negotiations to a successful
conclusion and is generating significant additional business.
Staffing
Consultancy is a people business and our outstanding
performance in the year has been due to the skill and
commitment of our staff team. We are pleased that so many are
also shareholders and this long term interest in the Group's
future is being strengthened by the operation of our share
option scheme. We thank them all for their contribution.
Outlook
The government's regeneration objectives mean that stock
transfers and private funding will continue and increase. In
addition, radical changes to the local authority financial
framework are taking place. Both of these are key areas of
growth for the Group. We are at the forefront of a range of
regeneration and Private Finance Initiative schemes and advise
many authorities on the impact of resource accounting. In the
first three months of the current financial year trading is
ahead of the same period last year and all parts of the Group
are operating profitably. I am confident that we will be able
to maintain good progress through the year.
Julian Ashby
Chairman
MANAGING DIRECTOR'S REPORT
This is my second review as Managing Director of HACAS Group
PLC since the successful completion of the reverse takeover of
General Industries PLC in July 1998 and the acquisition of The
Royal Borough of Kensington and Chelsea Assured Homes PLC in
August 1998.
Operations
Throughout 1999 we have had sustained growth in all our main
operating areas and consolidated our expansion with local
authority clients. We have continued to broaden our client
base and take on additional consultants with an established
track record and profile within the sector. The establishment
of HACAS Asset Management Services has been successfully
completed and it extends our services into the area of housing
stock condition management and forecasting for local
authorities and housing associations.
We were delighted to follow our success in advising Glasgow
City Council (the largest housing authority in Scotland) by
being appointed to advise Birmingham City Council (the largest
housing authority in England) on its stock reinvestment
proposals. We have been taking a lead in the development of
innovative approaches to regeneration. We are involved with
all four of London's New Deal for Communities schemes, are
advising on three of the housing "pathfinder" PFI schemes and
have helped to establish an innovative approach to
regeneration through the Forest Gate Community Company.
We have undertaken flagship research work for the Department
of Environment, Transport & the Regions on stock condition
strategic financial projections and rent issues which has
enhanced our status in the sector. Another key area of growth
has been in our specialist recruitment division. This good
progress has continued in the current year.
During the year, The Royal Borough of Kensington and Chelsea
Assured Homes PLC sold four properties and has subsequently
sold a further three. The disposal of our residential
investment portfolio is on target. This contributed usefully
to profits in the past year and will make a further
contribution this year.
Operating margins are being maintained or improved over all
our areas of activity. Together with a broadening client
base, this makes us well placed to increase turnover and
profits. The business generates a strong cashflow and we now
have available balances of around #2.8m. The Group has no
borrowings and bad debts continue at minimal levels.
Range of work
The range of work we undertake within the social housing
sector is continuing to broaden.
While housing associations account for around 54% of our work,
we have experienced significant growth in every sector shown.
During the year we completed over 600 projects for 275
clients.
We consider that the diversity of clients within this niche
sector is a source of strength to the Group. Many of the
Group's clients that are not either housing associations or
local authorities are high profile and include the Department
of Environment, Transport and the Regions, Audit Commission,
National Audit Office, Housing Corporation and major financial
institutions such as Halifax PLC.
Information Technology
Our information technology arrangements enable our consultants
and admin staff to access our network from home or when they
are on the move. This has contributed to increased
productivity. We have also successfully upgraded our
accounting and billing software during the year. We continue
to develop our use of new technology and you are welcome to
visit our web site at hacas.co.uk.
Marketing
During the year we have exhibited at the two main housing
sector conferences and been guest speakers at many others. We
continue to be in demand to provide articles for the trade
press. Our expanding senior executive recruitment work gets
our name in front of the key decision makers on a regular
basis and our web site at hacas.co.uk has provided an extra
source of business.
We have authored a number of key specialist publications which
have sold well and demonstrate our special expertise in the
sector. These include Housing associations: a viable
financial future for the Chartered Institute of Housing,
Learning from problem cases for the Housing Corporation,
Flexible tenure schemes for Scotland for Scottish Homes,
Partnerships and Practicalities for the National Housing
Federation. Effective and protected housing investment for
the Joseph Rowntree Foundation.
Derek Joseph
Managing Director
Pro Forma Unaudited Profit and Loss Account
for the 12 months ended 30 September 1999
Year ended Year ended
30 September 30 September
1999 1998
Turnover 4,597,608 3,324,483
Rental Income 140,015 141,718
Net Operating Expenses (3,747,711) (2,973,853)
Expenses Attributable to Offer - (54,407)
(not written off to Share Premium
Account)
------------- -------------
Operating Profit 989,912 437,941
Interest Receivable 93,841 147,949
Profit on property disposals 43,890 -
------------- -------------
Profit on ordinary activities 1,127,643 585,890
before taxation
Tax on ordinary activities (378,241) (190,414)
------------- -------------
Profit on ordinary activities 749,402 395,476
after taxation
------------- -------------
Dividends (283,926) -
------------- -------------
Profit retained 465,476 395,476
============= =============
Earnings per share based on 25,824,932 (1998 - 25,542,782)
shares in issue and in 1998 excluding operating expenses
attributable to the offer were 2.90p (1998 - 1.76p).
Earnings per share based on 27,124,832 (1998 - 26,842,782)
shares in issue and in 1998 excluding operating expenses
attributable to the offer (fully diluted) were 3.06p (1998 -
1.73p).
The figures for all three companies for the twelve months ended
30 September 1999 are drawn from the published accounts for the
period, however, the comparators for 1998 are calculated on the
following basis:-
I. The 1998 figures for HACAS Limited are based on audited
accounts for the 9 months to 30 September 1998 and for the three
months to 31 December 1997 pro rata for the audited accounts
from the 12 months to 31 December 1997.
II. The 1998 figures for the Royal Borough of Kensington and
Chelsea Assured Homes PLC are based on the audited accounts for
the 10 months ended 30 September 1998 and for the 2 months to 30
November 1997 pro rata from the audited accounts for the 12
months to 30 November 1997.
III. The 1998 figures for HACAS Group PLC are 12 months figures
pro rata taken from the audited accounts for the period of 14
months and 19 days ended 30 September 1998.
IV. The 1998 and 1999 figures for turnover - continuing o
perations and net operating expenses - for HACAS Limited and The
Royal Borough of Kensington and Chelsea Assured Homes PLC
include an amount of inter-group turnover.
In the opinion of the directors of HACAS Group PLC these amounts
are not material and do not affect the operating profit shown in
the unaudited profit and loss account for the 12 months ended 30
September 1998.
HACAS GROUP PLC
Consolidated Profit and Loss Account
for the year ended 30 September 1999
1999 1998
# #
TURNOVER
Rental income 140,015 20,316
Fees receivable 4,597,608 803,909
------------ -------
4,737,623 824,225
------------ -------
Administrative expenses 3,747,711 726,906
------------ -------
OPERATING PROFIT 989,912 97,319
Investment income 93,841 84,831
Profit on disposal of investment properties 43,890 -
------------ -------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 1,127,643 182,150
Taxation (378,241) (56,614)
Dividends (283,926) -
------------ --------
RETAINED PROFIT FOR THE PERIOD 465,476 125,536
============ ========
Earnings per share (Basic) 2.900p 1.761p
============ ========
Earnings per share(Diluted) 2.763p 1.728p
============ ========
The turnover for the period arises from the Group's continuing
operations
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
1999 1998
# #
Profit for the financial year 709,402 125,536
Unrealised surplus on the revaluation of 498,131
investment properties -
------------ -------
Total gains and losses since last annual 1,247,533 125,536
report
============ =======
HACAS GROUP PLC
GROUP BALANCE SHEET
30 September 1999
1999 1998
# #
FIXED ASSETS
Investments 50,004 10,004
Tangible assets 1,971,785 1,702,497
Intangible assets (795,785) (842,461)
--------- --------
1,226,004 870,040
CURRENT ASSETS --------- --------
Work in progress 293,376 285,190
Debtors 996,971 751,080
Cash at bank and in hand 2,828,580 2,283,207
--------- --------
4,118,927 3,319,677
CREDITORS: Amount falling due within one 1,117,842 861,214
year
--------- --------
NET CURRENT ASSETS 3,001,085 2,458,263
--------- --------
TOTAL ASSET LESS CURRENT LIABILITIES 4,227,089 3,328,303
PROVISIONS FOR LIABILITIES AND CHARGES 72,000 -
--------- --------
4,155,089 3,328,303
========= ========
CAPITAL AND RESERVES
Called up share capital 2,582,493 2,554,278
Share premium account 483,453 483,453
Profit and loss account 591,012 125,536
Revaluation reserve 498,131 -
--------- --------
Shareholders' funds 4,155,089 3,163,267
Minority interests - 165,036
--------- --------
4,155,089 3,328,303
========= ========
HACAS GROUP PLC
Cash Flow Statement
for the year ended 30 September 1999
1999 1998
# #
Cash flow from operating activities 725,847 655,150
Returns on investments and servicing of
finance (34,775) 84,831
Taxation (165,156) (46,711)
Capital expenditure and financial
investment 124,239 -
Acquisitions and disposals (132,997) 501,683
--------- -------
CASH FLOW BEFORE FINANCING 517,158 1,194,953
Financing 28,215 1,088,254
--------- --------
INCREASE IN CASH IN THE PERIOD 545,373 2,283,207
========= ========
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET DEBT
#
Increase in cash in the period 545,373
Net cash at 1 October 1998 2,283,207
---------
Net cash at 30 September 1999 2,828,580
=========
END
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