RNS Number:2544P
KBC Advanced Technologies PLC
10 August 2000
KBC Advanced Technologies plc
("KBC" or "the Group")
Interim Results for the Six Months to 30 June 2000
FINANCIAL HIGHLIGHTS
6 months to 6 months to 12 months to
30.6.00 30.6.99 30.12.99
Unaudited Unaudited Audited
Turnover #17.5m #19.7m #36.7m
Operating profit #1.3m #2.6m* #3.9m*
Profit before tax #1.6m #5.6m #7.3m
Earnings per share 2.17p 3.71p* 6.36p*
Dividend per share 1.3p 1.3p 3.9p
* excluding exceptional gain of #2.8m relating to sale of Sigmafine
> Results held back by low order intake last year
> Trading conditions improving - starting to secure higher
contract awards
> Ongoing investment to strengthen product offering
- HYSYS.Refinery launched
- alliance secured with Clockwork Solutions
> Geographical expansion - first PIPs secured in China and
Indian subcontinent
> Board strengthened with appointment of new Operations
Director
Commenting on the results Michael Press, Chief Executive of
KBC, said: "It is pleasing to note that trading conditions have
improved somewhat from those which were prevalent during 1999.
This has been reflected in an increase in contract awards for
new Profit Improvement Programs (PIPs). During the first six
months of this year we have signed as many PIPs as we had
during the whole of 1999. However, as we said in March 2000 in
our 1999 preliminary results statement, this year's results
will be adversely impacted as a result of the low level of new
orders secured in 1999."
"Refiners will, we believe, remain under pressure to deliver
higher profits and to do so without additional capital
investment. KBC remains well positioned to ensure that our
clients are able to meet these demands."
Enquiries:
KBC Advanced Technologies plc 01932 856622
Michael W Press, Chief Executive
Iain P McIntosh, Finance Director
Square Mile Communications Ltd 020 7601 1000
Tim Jackaman/Kirsty Hall
Notes to Editors: KBC Advanced Technologies plc is a leading
independent process engineering group, providing specialised
consultancy and support services to enable oil refiners to
improve operational efficiency and profitability. KBC has a
broad spread of clients ranging from large integrated oil
companies to small independent refiners.
KBC Advanced Technologies plc
("KBC" or "the Group")
Interim Results for the Six Months to 30 June 2000
Results
It is pleasing to note that trading conditions have improved
somewhat from those which were prevalent during 1999. This has
been reflected in an increase in contract awards for new Profit
Improvement Programs (PIPs). During the first six months of
this year we have signed as many PIPs as we had during the
whole of 1999.
However, as we said in March 2000 in our 1999 preliminary
results statement, this year's results will be adversely
impacted as a result of the low level of new orders secured in
1999. We started the year with a low level of PIPs in progress
and consequently there will be fewer opportunities for
converting PIPs to Continuing Services during the current year.
Turnover of #17.5 million during the first half was down 11%
compared with the same period last year (1999: #19.7 million).
The largest element of the decline is a result of the sale of
the Sigmafine business in June 1999. Relative to the prior
year, revenues from first year PIPs were significantly lower
while revenues from Continuing Services were higher.
Group costs overall were 6% lower than the same period last
year. Staff costs were lower by 7%, with the significant
reduction in headcount being partially offset by wage inflation
and the higher on-site cost of more employees working on an
expatriate basis. Non-staff costs were lower by 4%.
Operating profit halved to #1.3 million (1999: #2.6 million)
and operating margin decreased to 7% (1999: 13%). Profit
before taxation fell to #1.6 million from #2.8 million in the
same period last year, after adjusting for the one-off gain of
#2.8 million on the sale of Sigmafine. Earnings per share
decreased to 2.17p (1999: 3.71p excluding the Sigmafine sale).
The Group was cash negative during the first six months of
2000. This was a result of the purchase of shares into the
employee trust to cover share options, increased tax payments,
and an increase in both trade debtors and work in progress.
The Group continues to utilise innovative commercial terms in
order to respond to trends in the market place and to
differentiate KBC from its competitors. Generally, these
involve the use of performance-based contracts in which a
portion of KBC's fees are linked to the profit improvement
opportunities which we identify and assist in implementation at
the clients' site.
Dividend
Reflecting the Board's continued confidence in the Group's long
term potential, the interim dividend has been held at 1.3p per
share and will be paid on 29 September 2000 to shareholders on
the register at the close of business on 8 September 2000.
Operational review
In March KBC and AEA Technology plc jointly announced
HYSYS.Refinery, the product created as a result of the cross
licensing arrangement finalised in 1999. HYSYS. Refinery is a
unique proprietary refinery-wide simulation tool that will be
used by KBC's consultants and licensed to refinery owners.
Revenues from the new product are expected to begin in 2001.
In May KBC announced an alliance with Clockwork Solutions, a
leading developer of asset management simulation software and
services, which provides KBC with exclusive rights to use
Clockwork Solutions' proprietary quantitative modelling tools
in its reliability and maintenance consulting to the refining
industry.
The Group continues to make progress on expanding its
geographical presence and customer base. As announced in
January, two contracts were signed with a major oil company
located in the Arabian Gulf area. Since that time KBC is
pleased to have been awarded its first PIPs in both China and
the Indian subcontinent.
The Group continues to experience a high rate of conversion
from first year PIPs to implementation and other continuing
services. We also continue to achieve success at signing
multiyear contracts, with the majority of PIP contracts signed
in 2000 extending for more than one year. Such contracts
provide for a seamless transition from the PIP into
implementation and other follow-on services. This should over
time lead to improved revenue visibility.
Board changes
Don J Romano joins the Board as an Executive Director
Operations, effective today. Don brings considerable refining
operations experience following his 22-year career at Caltex.
Don's most recent role was President and Representative
Director of KOA Oil Company Ltd in Japan. Prior to that he was
Managing Director of Star Petroleum Refining Company in
Thailand. Don's role at KBC will be to manage the Operations
group which includes most of KBC's consultants.
2000 Outlook
Our view of the outlook for this year has not changed. The
business environment has improved and we are beginning to
secure higher contract awards with new customers. However,
operating profits for the year ended 31 December 2000 will be
significantly below 1999 levels due to the continuing impact of
the low number of PIPs secured last year.
Despite some evidence of increased competition we continue to
believe that the breadth and experience of our consultancy
team, coupled with our proprietary software capability, will
enable KBC to maintain a leading position in its specialised
field. Priorities for the remainder of the year include
continuing to win contracts with new customers and effective
execution of our performance-based contracts.
Refiners will, we believe, remain under pressure to deliver
higher profits and to do so without additional capital
investment. KBC remains well positioned to ensure that our
clients are able to meet these demands.
Philip Rogerson, Chairman
10 August 1999
Enquiries:
KBC Advanced Technologies plc 01932 856622
Michael W Press, Chief Executive
Iain P McIntosh, Finance Director
Square Mile Communications Ltd 020 7601 1000
Tim Jackaman/Kirsty Hall
Notes to Editors: KBC Advanced Technologies plc is a leading
independent process engineering group, providing specialised
consultancy and support services to enable oil refiners to
improve operational efficiency and profitability. KBC has a
broad spread of clients ranging from large integrated oil
companies to small independent refiners.
KBC Advanced Technologies plc
Group Profit and Loss Account
for the Six Months to 30 June 2000
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2000 1999 1999
#'000 #'000 #'000
TURNOVER 17,461 19,687 36,709
Staff costs (7,617) (8,170) (15,272)
Depreciation (640) (687) (1,317)
Other operating charges (7,912) (8,264) (16,257)
--------- --------- ---------
OPERATING PROFIT 1,292 2,566 3,863
Profit on sale of business - 2,811 2,811
--------- --------- ---------
PROFIT ON ORDINARY ACTIVITIES
BEFORE INTEREST AND TAXATION 1,292 5,377 6,674
Interest receivable 308 256 607
Interest payable - - (1)
--------- --------- ---------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 1,600 5,633 7,280
Taxation on profit on
ordinary activities (576) (1,915) (2,291)
---------- ---------- ---------
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 1,024 3,718 4,989
Dividends - equity interests (618) (615) (1,871)
---------- ---------- ---------
RETAINED PROFIT FOR THE PERIOD 406 3,103 3,118
========== ========== =========
Earnings per share
- basic 2.17p 7.88p 10.50p
- diluted 2.12p 7.51p 10.17p
- basic on IIMR earnings 2.17p 3.71p 6.36p
KBC Advanced Technologies plc
Group Balance Sheet
as at 30 June 2000
Unaudited Unaudited Audited
At 30 June at 30 June at 31 December
2000 1999 1999
#'000 #'000 #'000 #'000 #'000 #'000
FIXED ASSETS
Intangible assets 1,620 1,760 1,625
Tangible assets 1,563 2,104 1,681
Investments 2,139 1,094 1,094
-------- -------- --------
5,322 4,958 4,400
CURRENT ASSETS
Debtors 13,056 10,528 9,552
Cash at bank and in hand 11,056 15,565 14,741
--------- --------- ---------
24,112 26,093 24,293
CREDITORS: amounts
falling due withinone year 7,707) (10,253) (8,009)
NET CURRENT ASSETS 16,405 15,840 16,284
--------- --------- ---------
TOTAL ASSETS LESS
CURRENT LIABILITIES 21,727 20,798 20,684
CREDITORS: amounts falling
due after more than one year (1) (1) (2)
--------- --------- ---------
21,726 20,797 20,682
========= ========= =========
CAPITAL AND RESERVES
Called up share capital 1,229 1,197 1,217
Share premium account 5,811 5,652 5,694
Capital reserve 24 24 24
Merger reserve 147 147 147
Profit and loss account 14,515 13,777 13,600
--------- --------- ---------
SHAREHOLDERS' FUNDS
- equity interests 21,726 20,797 20,682
========= ========= =========
KBC Advanced Technologies plc
Group Cash Flow Statement
for the Six Months to 30 June 2000
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2000 1999 1999
#'000 #'000 #'000
Operating profit 1,292 2,566 3,863
Depreciation and amortisation 640 687 1,317
(Increase)/decrease in debtors (3,516) (242) 512
Increase/(decrease) in creditors 794 (52) 286
Exchange differences 171 424 93
--------- --------- ---------
(1,911) 817 2,208
========= ========= =========
Net cash (outflow)/inflow
from operations (619) 3,383 6,071
--------- --------- ---------
Returns on investments
and servicing of finance
Interest received 308 256 607
Interest paid - - (1)
--------- --------- ---------
308 256 606
--------- --------- ---------
Taxation (1,026) (335) (3,434)
--------- --------- ---------
Capital expenditure and
financial investment
Payments to acquire fixed assets (374) (344) (435)
--------- --------- ---------
Acquisitions and disposals
Net cash flow from
sale of business - 3,111 3,038
--------- --------- ---------
Equity dividends paid (1,253) (1,235) (1,853)
--------- --------- ---------
Management of liquid resources 2,208 (4,812) (2,466)
--------- --------- ---------
Financing
HP paid - (1) -
Shares issued 129 75 137
Purchase of own shares (1,045) - -
--------- --------- ---------
(916) 74 137
--------- --------- ---------
(Decrease)/increase in
cash in the period (1,672) 98 1,664
========= ========= =========
Reconciliation of Net Funds
(Decrease)/increase in
cash in the period (1,672) 98 1,664
Translation difference 196 68 24
--------- --------- ---------
Movement in net funds in
the period 1,476 166 1,688
Cash outflow from decrease
in lease financing - 1 -
Investment in short term deposits (2,208) 4,812 2,466
Net funds at start of period 14,739 10,585 10,585
--------- --------- ---------
Net funds at end of period 11,055 15,564 14,739
========= ========= =========
KBC Advanced Technologies plc
Notes
1. Basis of preparation
These unaudited interim financial statements, which do not
constitute statutory accounts within the meaning of section
240 of the Companies Act 1985, have been prepared using the
accounting policies set out in the Group's 1999 Statutory
Accounts.
The Statutory Accounts for the year ended 31 December 1999
received an unqualified auditor's report and have been
delivered to the Registrar of Companies.
The interim report will be sent to shareholders. Further
copies may be obtained from the Company Secretary, KBC
Advanced Technologies plc, KBC House, Churchfield Road,
Weybridge, Surrey, KT13 8DB.
2. Earnings per share
The calculation of earnings per share is based upon earnings
of #1,024,000 (1999: #3,718,000) and on 47,224,625 (1999:
47,199,396) ordinary shares, being the weighted average number
of ordinary shares in issue during the period after excluding
the shares owned by the KBC Advanced Technologies plc Employee
Trust.
The diluted earnings per share is based upon 48,285,357 (1999:
49,521,725) ordinary shares allowing for the full exercise of
outstanding purchase options, and adjusted earnings of
#1,024,000 (1999: #3,718,000).
The basic IIMR (Institute of Investment Management and
Research) earnings per share excludes profit made on the sale
of a business, and is based on a profit of #1,024,000 (1999:
1,750,000), and on 47,224,625 (1999: 47,199,396) ordinary
shares.
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