RNS Number:7089I
KBC Advanced Technologies PLC
20 August 2001
KBC Advanced Technologies plc
("KBC" or "the Group")
Interim Results for the Six Months to 30 June 2001
FINANCIAL HIGHLIGHTS
6 months to 6 months to 12 months to
30.6.01 30.6.00 30.12.00
Unaudited Unaudited Audited
Turnover #19.3m #17.5m #35.5m
Operating profit- before
exceptional income #1.9m #1.3m #2.7m
Profit before tax #9.6m #1.6m #3.4m
Earnings per share - before
exceptional income 2.90p 2.17p 4.65p
Dividend per share 1.3p 1.3p 3.9p
* Good first half performance with operating profits up 45%
on sales up 11%
- continued expansion of customer base and geographic
presence
- successfully converting PIPs into Continuing Services
contracts
- move into petrochemical sector yielding benefits in Japan
* Order book up 50% on last year and visibility improving
* Pressures of globalisation, deregulation and clean fuel
specifications expected to drive demand for the Group's value
added services
* Board strengthened with appointment of new Finance
Director
Commenting on the results, Don J Romano, Chief Executive of
KBC, said: "The business environment continues to be good,
consistent with higher oil prices and improved refining
margins. We anticipate continuing demand for multi-year
contracts for both new and existing customers and we are
confident that we will continue to deliver strong growth
during the second half of the year."
Enquiries:
KBC Advanced Technologies plc 20/08/01: 020 7601 1000
Don J Romano, Chief Executive Thereafter: 01932 242 424
Square Mile BSMG Worldwide 020 7601 1000
Kirsty Hall/Christian Taylor-Wilkinson info@sq-mile.com
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
("KBC" or "the Group")
Interim Results for the Six Months to 30 June 2001
KBC has made a good start to the year, with the steady
improvement in trading conditions experienced during 2000
continuing into 2001. This has enabled KBC to build on the
strong contract award levels achieved during 2000. The value
of the order book at 30 June 2001 was more than 50% higher
than the same period last year. Order levels have improved in
both Profit Improvement Programs (PIPs) and KBC's other
consulting services.
Results
Turnover of #19.3 million during the first half of 2001 was
11% higher than the same period last year (2000: #17.5
million). Revenues from PIPs grew by 40%, with significant
growth in software sales and other consulting services.
Continuing Services revenues were somewhat lower than in the
first half of last year, reflecting the impact of the low
level of PIP awards in 1999, and hence the opportunity to sell
Continuing Services. This trend will reverse during the second
half of 2001 as new PIPs awarded in 2000 convert into
Continuing Services contracts.
Operating costs were 8% higher than the same period last year,
partly due to a compensation payment of #290,000 to Michael
Press. Staff costs excluding this payment rose by 9%, while
other operating costs were 6% higher than in the first half of
2000, mainly reflecting changes to sales and marketing
activities to accelerate future growth.
Operating profit, prior to exceptional other operating income,
increased by 45% to #1.9 million (2000: #1.3 million). The
exceptional other operating income represents the proceeds of
an out of court settlement following legal action initiated by
KBC and is described in more detail in note 4. Before the
impact of this item, earnings per share increased by 34% to
2.90p (2000: 2.17p).
The Group generated #8.4 million of cash in the first half of
2001. This was due to the out of court settlement and strong
operating cash flow in the underlying business.
Dividend
The interim dividend has been held at 1.3p per share (2000:
1.3p) and will be paid on 28 September 2001 to shareholders on
the register at the close of business on 7 September 2001.
Operational review
The Group continues to make progress in expanding its customer
base and geographical presence, with significant projects
being signed for major oil companies in the United Arab
Emirates, Turkey, Kazakhstan, Greece, Japan and North America.
The Group's success in converting PIPs to Continuing Services
has continued, with the majority of contracts being sold on a
multi-year basis right from the start. The duration of many of
the Group's Continuing Services contracts continues to be
extended. Overall, this is leading to a material improvement
in order book visibility.
Responding to the changes in the competitive environment, KBC
introduced, in 2000, innovative commercial terms on some
contracts linking fees, in part, to the benefits KBC delivers
to its clients. The results of these contracts have been good
for both KBC and the clients. However there has recently been
a reduction in demand for this type of contract, with few of
the recent contract awards having any element of contingent
fees.
The Group has often carried out work in petrochemical plants
within refineries. However, in late 2000 KBC initiated a
program selling PIPs to independent petrochemical companies
where KBC's expertise and experience is directly relevant.
This initiative has resulted in a major sale in Japan of a
petrochemical PIP.
As part of the Group's e-business strategy a remote monitoring
service has been developed. This service, incorporating
technology and services provided by Industrial Evolution Inc,
will allow KBC's consultants to access the customer's plant
data via the Internet and offer consulting services remotely.
The Group has now completed its rationalisation of office
locations with the three UK offices moving into one new
building in Walton on Thames and the combining of the New
Orleans operations into the Houston office.
Board changes
Don J Romano, who joined the Board in August 2000, was
appointed Chief Executive on 6 March 2001 when Michael Press
stepped down from this role.
Nicholas Stone joins the Board today as Finance Director to
succeed Iain McIntosh who resigned on 9 March 2001. Mr Stone's
most recent role was as Finance Director for Accidentcare
Group PLC and prior to that he held various senior financial
roles at Lambert Fenchurch Group PLC and Mobil UK.
2001 outlook
The business environment continues to be good, consistent with
higher oil prices and improved refining margins. We anticipate
continuing demand for multi-year contracts from both new and
existing customers. Even though demand for PIPs is high, the
Group continues to diversify its product offerings to meet the
wider range of high-value services required by the oil
industry.
While the industry business environment has recently improved,
consolidation within the industry is expected to continue. We
believe that the competitive pressures of globalization,
deregulation and clean fuel specifications will drive demand
for the value added services the Group provides.
As a result of the continued strong progress in PIP sales
during the first half of 2001, we are confident that we will
continue to deliver strong growth during the second half of
the year.
Enquiries:
KBC Advanced Technologies plc 20/08/01: 020 7601 1000
Don J Romano, Chief Executive Thereafter: 01932 242 424
Square Mile BSMG Worldwide 020 7601 1000
Kirsty Hall/Christian Taylor-Wilkinson info@sq-mile.com
KBC Advanced Technologies plc
Group Profit and Loss Account
For the six months to 30 June 2001
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
Notes 30 June 30 June 31 December
2001 2000 2000
#000 #000 #000
------------------------------------------------------------------------------
Turnover 19,347 17,461 35,460
Staff costs (8,582) (7,617) (15,019)
Depreciation and amortisation (529) (640) (1,285)
Other operating charges (8,364) (7,912) (16,487)
------------------------------------------------------------------------------
1,872 1,292 2,669
------------------------------------------------------------------------------
Other operating income
- exceptional item 4 7,414 - -
Operating profit 9,286 1,292 2,669
Interest receivable 315 308 687
------------------------------------------------------------------------------
Profit on ordinary activities
before taxation 9,601 1,600 3,356
Taxation on profit on ordinary
activities (3,011) (576) (1,146)
------------------------------------------------------------------------------
Profit on ordinary activities
after taxation 6,590 1,024 2,210
Dividends - equity interests (620) (618) (1,869)
------------------------------------------------------------------------------
Retained profit for the period 5,970 406 341
______________________________________________________________________________
Earnings per share(pence)
- basic 2 13.67 2.17 4.65
- diluted 2 13.58 2.12 4.58
- basic on IIMR earnings 2 2.90 2.17 4.65
KBC Advanced Technologies plc
Group Balance Sheet
As at 30 June 2001
Unaudited Unaudited Audited
at 30 June at 30 June at 31 December
2001 2000 2000
#000 #000 #000 #000 #000 #000
Fixed assets
Intangible assets 1,324 1,620 1,402
Tangible assets 2,896 1,563 1,455
Investments 2,138 2,138 2,138
------------------------------------------------------------------------------
6,358 5,321 4,995
Current assets
Debtors 11,063 13,057 12,846
Cash at bank and in hand 20,158 11,056 11,758
------------------------------------------------------------------------------
31,221 24,113 24,604
Creditors: amounts falling
due within one year (8,637) (7,707) (6,919)
------------------------------------------------------------------------------
Net current assets 22,584 16,406 17,685
------------------------------------------------------------------------------
Total assets less current
liabilities 28,942 21,727 22,680
Creditors: amounts falling
due after one year - (1) -
Provision for liabilities
and charges (804) - (1,022)
------------------------------------------------------------------------------
28, 138 21,726 21,658
______________________________________________________________________________
Capital and reserves
Called up share capital 1,251 1,229 1,240
Share premium account 6,002 5,811 5,892
Capital reserve 24 24 24
Merger reserve 147 147 147
Profit and loss account 20,714 14,515 14,355
------------------------------------------------------------------------------
Shareholders' funds: equity
interests 28,138 21,726 21,658
______________________________________________________________________________
KBC Advanced Technologies plc
Group Statement of Cash Flows
For the six months to 30 June 2001
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2001 2000 2000
#000 #000 #000
------------------------------------------------------------------------------
Net cash inflows / (outflows)from
operations 12,006 (619) 1,502
______________________________________________________________________________
Returns on investments and servicing
of finance
Interest received 315 308 687
______________________________________________________________________________
Taxation (1,000) (1,026) (1,902)
------------------------------------------------------------------------------
Capital expenditure and financial
investment
Payments to acquire tangible fixed
assets (1,851) (374) (781)
------------------------------------------------------------------------------
Equity dividends paid (1,249) (1,253) (1,873)
------------------------------------------------------------------------------
Management of liquid resources
(Increase) / decrease in short term
deposits (7,223) 2,208 (522)
-----------------------------------------------------------------------------
Financing
Repayments of capital elements of
finance lease rentals - - (2)
Shares issued 121 129 221
Purchase of own shares (0) (1,044) (1,044)
------------------------------------------------------------------------------
Net cash inflow / (outflow)from
financing 121 (915) (825)
------------------------------------------------------------------------------
Increase / (decrease) in cash in the
period 1,119 (1,671) (3,714)
______________________________________________________________________________
Reconciliation of net cash flows to
movements in net funds
Increase / (decrease) in cash in the
period 1,119 (1,671) (3,714)
Cash outflow from the decrease in
lease financing - - 2
Cash used to increase / (decrease)
liquid resources 7,223 (2,208) 522
------------------------------------------------------------------------------
Change in net funds resulting from
cash flow 8,342 (3,879) (3,190)
Translation difference 58 196 209
------------------------------------------------------------------------------
Movement in net funds in the period 8,400 (3,683) (2,981)
Net funds at start of period 11,758 14,739 14,739
Net funds at end of period 20,158 11,056 11,758
______________________________________________________________________________
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 2000 statutory
accounts.
The Statutory accounts for the year ended 31 December 2000 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, 42-50 Hersham Road, Walton on
Thames, Surrey, KT12 1RZ.
2 Earnings per share
The calculation of basic earnings per share is based upon earnings
of #6,590,000 (2000: #1,024,000) and on 48,205,308 (2000:
47,224,625) 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 48,524,265 (2000:
48,285,357) Ordinary Shares allowing for the full exercise of
outstanding purchase options, and adjusted earnings of
#6,590,000 (2000: #1,024,000).
The basic IIMR (Institute of Investment Management and Research)
earnings per share excludes income from the exceptional item
disclosed in note 4, and is based on adjusted earnings of
#1,400,000 (2000: #1,024,000), and on 48,205,308 (2000:
47,224,625) Ordinary Shares.
3 Reconciliation of operating profit to net cash inflow from operations
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 December
2001 2000 2000
#000 #000 #000
------------------------------------------------------------------------------
Operating profit 9,286 1,292 2,669
Depreciation and amortisation 529 640 1,285
Decrease / (increase) in debtors 774 (3,516) (2,623)
Increase / (decrease) in creditors 1,346 794 (1,001)
Exchange differences 289 171 150
(Decrease) / increase in provisions (218) - 1,022
------------------------------------------------------------------------------
12,006 (619) 1,502
______________________________________________________________________________
4 Operating exceptional items
The exceptional income represents the proceeds of an out of court
settlement agreed following a legal action initiated by KBC.
KBC has, in connection with these agreements received $12.5 million
(#8.6 million). After deducting costs of #1.2 million, this
exceptional item has increased profit before tax by #7.4
million and profit after tax by #5.2 million.
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