Pre-close trading update (2987Z)
January 12 2011 - 2:00AM
UK Regulatory
TIDMKBC
RNS Number : 2987Z
KBC Advanced Technologies plc
12 January 2011
12 January 2011
KBC Advanced Technologies plc
("KBC" or "the Group")
Pre-close Trading Update
The last quarter of 2010 was a strong one for KBC, as we
expected, with the highest man-hour utilisation for the year and
what has now become a regular seasonal trend of high software
awards. As a result we are pleased to confirm that results for the
year ended 31 December 2010 are expected to be in line with market
expectations.
Sales awards for the year were GBP68m, an increase of 22% on
2009, and the consequent workload backlog at the year end is
expected to be around GBP58m. This is up 42% on the GBP41m at 31
December 2009 and 45% on the GBP40m at 30 June 2010. The Group's
net cash position is expected to be around GBP4.5m at the year end
up from the GBP1.7m held at 30 June 2010 as a result of strong cash
generation in the second half of the year. The comparable figure at
31 December 2009 was GBP4m.
The largest single item contributing to the awards and backlog
growth is the six site US$42m Profit Improvement Program awarded to
us, subject to final contract, by Pemex Refinacion in Mexico in
October 2010. Contracts have been executed for the first two sites
and the program is successfully underway, with the first payments
received in December 2010. The next two sites will commence in
April 2011 and contracts are expected to be executed shortly.
As noted above, software sales were strong in the last quarter
of 2010, with further large licence sales to existing clients,
Sinopec in China and Reliance Industries in India. We are pleased
to report that for the first time since 2008 material operational
improvement projects commenced in Europe, including an onsite
operational improvement programme with Petroplus and an energy
management programme with Total. Significant organisational
improvement work continued elsewhere, which included a number of
clients in the Middle East and BP in North America.
The EU sanctions relating to the refining industry in Iran that
we referred to in our half-year results in September 2010 have been
published. As a result, and as we anticipated, we can no longer
commence new projects in Iran and we have therefore been winding up
the existing contracted work during the second half of 2010. No new
work is included in our plans for 2011. We believe it is unlikely
that we will be able to collect all outstanding payments and that
it would therefore be prudent to make a one-off provision in our
2010 accounts against receivables of up to GBP1m.
In the September 2010 results statement, we referred to
allegations made by a software competitor concerning the
infringement of its rights in certain software code. All of the
allegations have been refuted absolutely but certain of them are
now subject to a UK arbitration process that is expected to be
concluded by the middle of this year. As is evident from the
software sales made in the last quarter of 2010, this process is
not having any adverse impact on our business, either externally or
internally.
As we start 2011 our consulting resources are highly utilised in
each of our three operating regions. The refining industry is still
in a state of transition with markedly varying economic drivers in
different parts of the world, the interaction of which is
generating consulting opportunities. Other markets in which we
operate, such as petrochemicals and gas processing, are buoyant and
will also provide additional opportunities in 2011. The backlog as
we start the year is the highest we have ever seen and provides
greater visibility than in recent years. As a result we now expect
that the improved trading we experienced in the last quarter will
continue into the current year and deliver an operating performance
in 2011 ahead of management's previous expectations.
-Ends-
KBC Advanced Technologies plc
George Bright, Chief Executive
Nicholas Stone, Operations and Finance Director 01932 236314
Weber Shandwick Financial
Nick Oborne/Clare Thomas 020 7067 0700
Cenkos Securities plc
Jon Fitzpatrick 020 7397 8900
Beth McKiernan 0131 220 6939
About KBC:
For 30 years KBC's consultants have provided independent
strategic and engineering expertise to enable leading companies in
the global energy business and other process industries to manage
risk while maximising value from their assets. In times of economic
uncertainty and increasing environmental pressure, KBC's
proprietary methodologies and innovative tools guide its clients'
key strategic decisions, enabling them to prioritise and implement
initiatives that maximise return on investment, and improve
operational performance. KBC offers Strategic and Market, Capital
Investment, Operating, Organisational, and Environmental Solutions.
For more information, visit www.kbcat.com
This information is provided by RNS
The company news service from the London Stock Exchange
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