RNS Number:9487Z
KBC Advanced Technologies PLC
6 March 2001
Embargoed until 07:00 6 March 2001
KBC Advanced Technologies plc
("KBC" or "the Group")
Preliminary Results for the Year Ended 31 December 2000 and Announcement of
Board Changes
FINANCIAL HIGHLIGHTS
2000 1999 Change
Turnover #35.5 m #36.7 m (3)%
Operating profit #2.7 m #3.9 m (31)%
Profit before tax #3.4 m #7.3 m (54)%
Earnings per share 4.65 p 10.50 p (56)%
Normalised IIMR earnings per share 4.65 p 6.36 p (27)%
* Improved trading conditions underpin results which are in line with
market expectations
* Don Romano who joined KBC as Operations Director in August 2000 has
been appointed as Chief Executive, succeeding Michael Press
* Strong growth in PIP awards to more than double that of last year -
providing a firm foundation for future growth
* New fee at risk contract structure proving successful
* Order levels at year end ahead of same time last year
Philip Rogerson, Chairman, KBC Advanced Technologies plc, commented: "The
Board would like to thank Michael for his contribution and wish him all the
best for the future. We believe that Don Romano brings a great deal of
industry experience to the role that will be critical as KBC accelerates the
implementation of its strategy for growth.
We start 2001 with a stronger order book than we had as we entered 2000 and
with a brighter outlook for our clients in the downstream oil and gas
industry. Notwithstanding the strong growth in PIP sales in 2000, growth in
Continuing Services will remain subdued as a result of the impact of low PIP
sales in 1999.
We are building a strong senior management team and are confident that the
decision to retain the skills and expertise of our talented consulting and
software staff through the last two years of difficult trading conditions has
positioned us to respond positively to the opportunities for future growth."
- Ends -
Enquiries:
KBC Advanced Technologies plc 01932 856 622
Philip Rogerson, Chairman
Square Mile Communications Ltd
Tim Jackaman / Kirsty Hall 020 7601 1000
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. Through its Profit Improvement Program (PIP) KBC analyses
refinery operations and recommends changes that deliver material and
measurable improvements in profitability. KBC has a broad spread of clients
ranging from large integrated oil companies to small independent refiners.
Embargoed until 07:00 6 March 2001
KBC Advanced Technologies plc
("KBC" or "the Group")
Preliminary Results for the Year Ended 31 December 2000 and Announcement of
Board Changes
Chairman's Statement
Michael Press has informed the Board of his decision to step down from his
role as Director and Chief Executive of KBC Advanced Technologies plc with
effect from 6 March 2001 in order to pursue other interests. Michael joined
KBC as Non-Executive Director in 1997 after holding senior positions in BP and
Amerada Hess. The Board would like to thank Michael for his contribution and
wish him all the best for the future.
Michael will be succeeded by Don J Romano who joined the Board in August 2000
as Executive Director, Operations. Don has considerable refining operations
experience following his 25 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.
Iain McIntosh informed the Board in December of his intention to resign as a
Director with effect from 9 March 2001 to take up the position of Chief
Financial Officer with a large private company. Iain has strengthened the
Group's finance and control functions and built a strong team in the finance
department, which will ensure that the transition can be managed seamlessly.
Recruitment of a new Finance Director for the Group is in progress.
Trading conditions improved in 2000 from the difficult environment that we
faced in 1999. Whilst we entered the year with a low level of contracted first
year Profit Improvement Program (PIP) work, reflecting low contract awards in
1999, we signed more than twice as many PIPs in 2000 as we did in 1999.
Continuing Services revenues are heavily dependent on the number of PIPs which
can be migrated to implementation following the completion of the initial
phase of work. Hence this part of our business was also held back in 2000.
Excluding the contribution from Sigmafine, which was sold in 1999,
utilisation was lower than we would have liked, though we ended the year with
a stronger order book than at the same time last year.
Results
Group turnover declined by #1.2 million to #35.5 million. The majority (#1.0
million) of the decrease was due to the sale in 1999 of the Sigmafine
business. Staff numbers fell 8% while staff costs reduced by 2%, reflecting
the impact of the bonus plan for all staff below director level which was
introduced in 2000. Other costs were tightly managed, rising only 1%.
Operating profit declined 31% to #2.7 million. Profit before tax declined from
#7.3 million to #3.4 million in part due to the exceptional profit of #2.8
million in 1999 on the sale of Sigmafine. Earnings per share fell from 10.50p
to 4.65p, but from 6.36p to 4.65p if the Sigmafine sale is excluded.
The dividend is being maintained, with a 2.6p final dividend proposed, the
same as the second interim dividend last year, resulting in an unchanged full
year dividend of 3.9p per share. Subject to shareholder approval, the final
dividend will be paid on 26 April 2001 to those shareholders on the register
at 6 April 2001.
Operational Review
Whilst there have been significant swings in the oil price during 2000, with
oil companies generally making planning decisions on oil prices below current
levels, these fluctuations have not had a material impact on our operations in
2000.
As we indicated in 1999, we have introduced more innovative commercial terms
on some contracts linking our fees, in part, to the benefits we deliver to our
clients. The overall results from these contracts have been good. As
expected, this type of contract, which includes later payment than under
traditional contracts, is increasing the working capital requirements of the
Group.
In order to improve operational efficiency further, we took the decision in
2000 to rationalise our office locations. In 2001 we will move from three UK
office buildings to one new building, while in the US we will combine the New
Orleans operations into the Houston office.
Although the North American market is still proving difficult, sales of first
year PIPs have been strong, with successes in the Indian sub-continent, China
and South America. We have had sustained success at converting PIPs to
Continuing Services, with many contracts being signed up as multi-year
contracts right from the start. We are also succeeding in extending the
duration of many Continuing Services contracts.
In March 2000 KBC and AEA Technology plc announced the launch of
HYSYS.Refinery, the first joint product to be generated from our cross
licensing arrangement concluded in 1999. Early market reaction has been
encouraging with the first modest sales of the product made in 2000. We expect
more significant revenues in 2001.
Strategic development
In May we 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 our reliability and maintenance consulting to the refining
industry.
In December 2000 KBC agreed the acquisition of the assets of Risk Solutions, a
small Houston-based consultancy business with an established market position
in quantitative risk analysis in the upstream oil and gas sector. The
transaction was completed on 1 January 2001. In addition to providing KBC with
specific skills in the expanding market for quantitative risk assessment, it
also broadens KBC's coverage into the upstream sector.
Outlook
As a result of the progress in PIP sales during 2000, we start 2001 with a
stronger order book than we had as we entered 2000. Whilst growth in
Continuing Services will remain subdued by the knock-on effect of low PIP
sales in 1999, we expect to see progress in PIP sales during 2001. We are
confident, therefore, that our decision to retain the pool of KBC's talented
consulting and software staff through the last two years of tougher trading
conditions has positioned us to respond positively to the opportunities for
future growth.
- Ends -
Enquiries:
KBC Advanced Technologies plc 01932 856 622
Philip Rogerson, Chairman
Square Mile Communications Ltd
Tim Jackaman / Kirsty Hall 020 7601 1000
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. Through its Profit Improvement Program (PIP) KBC analyses
refinery operations and recommends changes that deliver material and
measurable improvements in 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 year ended 31 December 2000
Year Year
ended ended
31 31
December
December
2000
1999
#'000
#'000
TURNOVER 35,460 36,709
Staff costs (15,019) (15,272)
Depreciation and amortisation (1,285) (1,317)
Other operating charges (16,487) (16,257)
OPERATING PROFIT 2,669 3,863
Profit on sale of business - 2,811
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST
AND TAXATION 2,669 6,674
Interest receivable 687 607
Interest payable - (1)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
3,356 7,280
Taxation on profit on ordinary activities (1,146) (2,291)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 2,210 4,989
Dividends - equity interests (1,869) (1,871)
RETAINED PROFIT FOR THE PERIOD 341 3,118
Earnings per share - basic 4.65 p 10.50 p
- diluted 4.58 p 10.17 p
- Normalised IIMR basic 4.65 p 6.36 p
KBC Advanced Technologies plc
Group Balance Sheet
as at 31 December 2000
31 December 31 December
2000 1999
#'000 #'000 #'000 #'000
FIXED ASSETS
Intangible assets 1,402 1,625
Tangible assets 1,455 1,681
Investments 2,138 1,094
4,995 4,400
CURRENT ASSETS
Debtors 12,846 9,552
Cash at bank and in hand 11,758 14,741
24,604 24,293
CREDITORS: amounts falling
Due within one year (6,919) (8,009)
NET CURRENT ASSETS 17,685 16,284
TOTAL ASSETS LESS CURRENT
LIABILITIES 22,680 20,684
CREDITORS: amounts falling due
after
More than one year - (2)
PROVISION FOR LIABILITIES AND
CHARGES (1,022) -
21,658 20,682
CAPITAL AND RESERVES
Called up share capital 1,240 1,217
Share premium account 5,892 5,694
Capital reserve 24 24
Merger reserve 147 147
Profit and loss account 14,355 13,600
SHAREHOLDERS' FUNDS - equity
interests 21,658 20,682
KBC Advanced Technologies plc
Group Cash Flow Statement
for the year ended 31 December 2000
2000 1999
#'000 #'000
Operating profit 2,669 3,863
Depreciation and amortisation 1,285 1,317
Increase in provisions 1,022 -
(Increase)/decrease in debtors (2,623) 512
(Decrease)/increase in creditors (1,001) 286
Exchange differences 150 93
Net cash from operations 1,502 6,071
Returns on investments and servicing of finance
Interest received 687 607
Interest paid - (1)
687 606
Taxation (1,902) (3,434)
Capital expenditure (781) (435)
Acquisitions and disposals
Sale of business - 3,038
Equity dividends paid (1,873) (1,853)
Management of liquid resources
Increase in short term deposits (522) (2,466)
Financing
Repayments of capital element of finance lease (2) -
rentals
Net proceeds from issue of shares 221 137
Purchase of own shares (1,044) - -
Net cash (outflow)/inflow from financing (825) 137
(Decrease)/increase in cash in the period (3,714) 1,664
Reconciliation of net cash flows to movements in
net funds
(Decrease)/increase in cash in the year (3,714) 1,664
Cash outflow from the decrease in lease 2 -
financing
Cash used to increase liquid resources 522 2,466
Change in net funds resulting from cash flow (3,190) 4,130
Translation difference 209 24
Movement in net funds in the period (2,981) 4,154
Net funds at 1 January 14,739 10,585
Net funds at 31 December 11,758 14,739
KBC Advanced Technologies plc
Notes
1. Basis of preparation
The above financial information does not constitute statutory accounts as
defined by section 240 of the Companies Act 1985. The results for the year
ended 31 December 2000 and the balance sheet at that date are extracted from
the statutory accounts (on which the auditors have given an unqualified
opinion), which will be filed with the Registrar of Companies. The
comparative financial information is extracted from the statutory accounts for
the year ended 31 December 1999 (on which the auditors gave an unqualified
opinion), which have already been sent to shareholders and filed with the
Registrar of Companies.
2. Tax on profit on ordinary activities
The Group tax charge was reduced by a #130,000 (1999: #223,000) tax credit
arising in the US company. During the year certain employees in the US
exercised share options over the ordinary shares of the holding company which,
in the circumstances of the exercises, gave rise to a tax deduction in the US
company's tax computation after excluding the shares owned by the KBC Advanced
Technologies plc Employee Trust.
3. Earnings per share
The calculation of earnings per share is based upon earnings of #2,210,000
(1999: #4,989,000) and on 47,573,000 (1999: 47,535,000) ordinary shares, being
the weighted average number of ordinary shares in issue during the period.
The IIMR earnings per share for 1999 excludes profit made on sale of the
Sigmafine business of #1,968,000 million after tax.
4. Copies of the Annual 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.
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