TIDMRNWH
RNS Number : 6745G
Renew Holdings PLC
24 November 2015
24 November 2015
Renew Holdings plc
("Renew" or the "Group")
Preliminary results
Renew (AIM: RNWH), the Engineering Services Group supporting
critical UK infrastructure, announces record preliminary results
for the year ended 30 September 2015. The Company continues to
demonstrate strong cash generation and has increased the full year
dividend by 40%.
Financial Highlights
2015 2014
Revenue GBP519.6m GBP464.5m +12%
Adjusted operating profit GBP20.4m GBP16.4m +24%
Adjusted operating margin 3.9% 3.5% +11%
Adjusted profit before
tax GBP19.6m GBP16.1m +22%
Adjusted earnings per
share 26.03p 20.80p +25%
Basic earnings per share 21.34p 16.83p +27%
Dividend per share 7.0p 5.0p +40%
Adjusted results are shown prior to exceptional items,
amortisation and discontinued operations.
Operational Highlights
-- Engineering Services revenue up 15% to GBP440.5m (2014: GBP382.5m)
-- 22% underlying organic growth excluding the effect of
acquisitions and non-recurring revenue
-- Engineering Services adjusted operating profit up 23% to GBP20.1m (2014: GBP16.3m)
-- Engineering Services operating margin now 4.6% (2014:
4.3%)
-- Order book up 14% to GBP502m (2014: GBP439m)
-- Substantial reduction in net debt to GBP4.8m (2014: GBP16.1m)
-- Expected net cash position by the end of 2015/16 financial
year
R J Harrison OBE, Chairman said: "These results highlight
another record year for Renew as a leading provider of engineering
services supporting critical infrastructure within the UK.
In 2014 we set our 2017 targets of total revenues of over
GBP500m, a Group operating margin of 4.5% and growth in adjusted
earnings per share of at least 40% from the 20.8p reported last
year. We have achieved our revenue target ahead of schedule. With
an 11% improvement in adjusted Group operating margin to 3.9% and a
25% increase in adjusted EPS in these results, the Board is
confident that Renew is on track to deliver these strategic targets
by 2017."
Renew Holdings plc Tel: 0113 281 4200
Brian May, Chief Executive
John Samuel, Group Finance Director
Numis Securities Limited Tel: 020 7260 1000
Stuart Skinner (Nominated Adviser)
James Serjeant (Corporate Broker)
Walbrook PR Tel: 020 7933 8780 or renew@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
About Renew Holdings plc
Engineering Services, which accounts for 85% of Group revenue
and 90% of operating profit, focuses on the key markets of Energy
(including Nuclear), Environmental and Infrastructure, which are
largely governed by regulation and benefit from non-discretionary
spend with long-term visibility of committed funding.
Specialist Building focuses on the High Quality Residential
market in London and the Home Counties.
For more information please visit the Renew Holdings plc
website: www.renewholdings.com
Chairman's Statement
Results
Record results for the year ended 30 September 2015 demonstrate
that the Group continues to progress as a leading provider of
engineering services, supporting critical UK infrastructure.
Group revenue increased by 12% to GBP519.6m (2014: GBP464.5m)
with operating profit prior to exceptional items and amortisation
increasing by 24% to GBP20.4m (2014: GBP16.4m). Earnings per share
on this basis increased by 25% to 26.03p (2014: 20.80p) with basic
earnings per share on continuing activities up 27% to 21.34p (2014:
16.83p).
The Engineering Services business has seen growth of 15% across
its Energy, Environmental and Infrastructure markets with revenue
of GBP440.5m (2014: GBP382.5m). When the effect of acquisitions and
non-recurring Rail revenue is eliminated, the underlying organic
growth in Engineering Services is 22%.
Engineering Services now accounts for 85% of Group revenue
(2014: 82%). Engineering Services operating profit was up 23% to
GBP20.1m (2014: GBP16.3m) with a margin of 4.6% (2014: 4.3%).
Specialist Building remains focused on the High Quality
Residential market in London and the Home Counties. Revenue was
GBP79.5m (2014: GBP82.1m) with an operating profit of GBP2.3m
(2014: GBP2.2m) resulting in an improved margin of 2.9% (2014:
2.6%).
Dividend
The Board is proposing a final dividend of 4.75p per share,
increasing the full year dividend by 40% to 7.0p (2014: 5.0p). The
dividend will be paid on 1 March 2016 to shareholders on the
register as at 29 January 2016. The Board continues to grow
dividends progressively.
Order Book
The Group's contracted order book at 30 September 2015 stood at
GBP502m (2014: GBP439m), a 14% increase, with the Engineering
Services order book up 11% to GBP400m (2014: GBP361m). The order
book reflects our established position in attractive markets with
long-term visibility of revenue.
Cash
Cash generation has been good with a year-end cash position of
GBP10.7m (2014: GBP5.6m) giving a net debt of GBP4.8m (2014:
GBP16.1m). The Board expects the Group to report a net cash
position by the end of the 2015/16 financial year.
People
We are pleased to report our commitment to providing a safe
working environment which has seen the Group continue to record an
Accident Incidence Rate substantially lower than the industry
average. These results and the success of the Group demonstrate the
skills and commitment of all our employees for which the Board
would like to extend its gratitude.
Strategy
In Specialist Building, the Group concentrates on the High
Quality Residential market in London and the Home Counties. Our
expertise is in refurbishment of prestigious private residential
projects where we specialise in engineering solutions for major
structural alterations.
In Engineering Services, the Group continues to develop its
position as a leading provider of engineering services to support
critical UK assets in the Energy, Environmental and Infrastructure
markets. The markets we operate in are mainly governed by
regulation. Our operations focus on the long-term programmes of
essential maintenance spending in these markets, which provide good
visibility of future opportunities and more sustainable earnings
streams.
It remains the Board's strategy to continue the growth of its
Engineering Services business, both organically and through
selective acquisitions. Over the last nine years, Renew has
completed six major acquisitions without recourse to shareholders
for funding. Substantial, profitable growth has been generated from
this strategy which, complemented by organic growth, has enabled
the Board to deliver a six fold increase in market capitalisation
since 2006. In recent weeks, the Board has seen a number of good
quality, potential acquisitions across all market sectors of our
Engineering Services business and we continue to pursue appropriate
earnings enhancing additions to the Group.
Outlook
The Group enters the 2015/16 financial year in a strong
position.
The Board previously published targets for 2017 of Group revenue
in excess of GBP500m, Group operating profit margin prior to
exceptional items and amortisation of 4.5% and growth in EPS on
that basis of at least 40% from the reported level of 20.8p in
2014. The Group revenue target has been achieved with these
results. The Group has also delivered an 11% improvement in Group
operating margin to 3.9% and a 25% increase in EPS giving the Board
confidence that the Group is on track to deliver on these strategic
targets.
R J Harrison OBE
Chairman
24 November 2015
Chief Executive's Review
Renew delivers engineering support services to the UK's critical
infrastructure assets. The Group has strong, long-term
relationships built on responsiveness with a range of clients in
the Energy, Environmental and Infrastructure markets. The Group
operates in mainly regulated markets which have high barriers to
entry. Integrated engineering services are delivered through our
strong, independently branded UK subsidiary businesses which
directly employ a highly skilled workforce. Our operations support
the day-to-day running of key operational assets including nuclear
and traditional power generation sites, water and gas pipes along
with the rail and wireless telecoms networks. The Group also has a
Specialist Building operation focusing on the High Quality
Residential market in London and the Home Counties.
Engineering Services
Revenue in Engineering Services increased by 15% to GBP440.5m
(2014: GBP382.5m) and accounted for 85% (2014: 82%) of Group
revenue and 90% (2014: 88%) of Group operating profit prior to
exceptional items, amortisation and central activities. This
generated an improved margin of 4.6% (2014: 4.3%). The Engineering
Services order book has grown 11% to GBP400m (2014: GBP361m).
Energy
In Energy, the Group provides integrated engineering support to
assets in the nuclear, traditional and renewable energy markets and
in the gas infrastructure market.
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During the year, we were appointed by the UK's largest nuclear
decommissioning company, Magnox, as the sole provider on the GBP30m
Electrical, Controls & Instrumentation framework, which runs to
2019, across 10 UK sites. The Group now delivers multidisciplinary
engineering services at 15 nuclear licenced sites, where we support
operational plant associated with long-term waste treatment and
processing, decommissioning and the clean-up of redundant
facilities. The Nuclear Decommissioning Authority's expenditure
continues at approximately GBP3bn per year, of which 67% is
allocated to the Sellafield site in Cumbria where the majority of
our work is undertaken. The Group has operated at Sellafield for
over 70 years and remains the largest mechanical, electrical and
instrumentation employer on site.
As part of the high hazard risk reduction programme at
Sellafield, work on the Evaporator D project has again grown
materially ahead of expectation. During the year, the Group
increased its resources to complete critical milestones as the
project moves towards commissioning. This increased scope is now
expected to deliver up to GBP100m of work over the duration of the
project.
Work on the Multi Discipline Site Works ("MDSW") framework
continues and our operations remain focused on the largest scope of
work, Production Operations Support. The MDSW framework, where we
operate as one of three participants, has been extended for two
years to early 2017 and is advertised to deliver GBP70m annually.
Other framework extensions during the year include the Bundling
Spares, Site Remediation & Decommissioning Project and Bulk
Sludge Retrievals Facility frameworks.
The Group also operates in the traditional and renewable energy
markets for clients including E.ON, SSE, Scottish Water and Dwr
Cymru Welsh Water ("DCWW") where work includes long-term
maintenance and asset renewal services. Achievements in the year
include good progress on the hydroelectric scheme at Tyn Y Waun
Water Treatment Works for DCWW, reappointment to the maintenance
framework at Deucheran Hill Wind Farm by E.ON and the refurbishment
of the Cuaich Aqueduct on the Tummel hydroelectric scheme for
SSE.
In the gas infrastructure market work continues for National
Grid and Southern Gas Networks on the 30/30 Iron Mains Replacement
programme as well as on the London Medium Pressure Strategic Gas
Mains Replacement programme. New frameworks for the delivery of
these programmes have been slow to gain momentum and as a result
this business has not performed to our expectations, however the
addressable market is both substantial and visible with the
national programme for iron mains replacement running to 2032 with
an estimated value of GBP1bn per annum.
Environmental
The Group provides operational support to the water industry
where the focus remains on maintaining and renewing infrastructure
assets as well as the flood alleviation and river and coastal
defence programmes.
In the year, we continued our long-standing relationships with
our clients Northumbrian Water, Wessex Water and Welsh Water.
Awards included Northumbrian Water's AMP6 Sewerage Repairs and
Maintenance Framework where we operate as one of two suppliers; the
framework has an advertised value of over GBP14m per annum to
2024.
Work for Wessex Water continued on the Workstream framework
during the year with new awards including the AMP6 Minor Civils
framework. Major projects completed included the Taunton Grid
Scheme.
Revenue for the Environment Agency has doubled in the year where
our relationship was extended with the award of a GBP10m MEICA
framework in 2014. This exclusive framework, which runs to March
2018, covers flood and water management sites throughout the
Northern region. The appointment follows our success on the
existing four Minor Works frameworks which were extended for a
further two years.
In Land Remediation, we operate for National Grid on a number of
frameworks nationally. Other frameworks include the Land Quality
Services framework with Magnox to remediate the sites of former
nuclear power generation across the UK and a new Landfill
Engineering framework with Viridor for the North of England and
Scotland regions.
Infrastructure
The Group delivers nationally a wide range of off-track asset
renewal and maintenance engineering services as well as providing a
24/7 emergency service to the rail network. These services are
provided through Infrastructure Projects and Asset Management
support for Network Rail where we are a top four supplier.
Following the award in 2014 of a number of infrastructure
renewal frameworks for Network Rail, which run to 2019, we have
good visibility of future workflow. During the year, works were
undertaken to enhance the Dawlish lower sea wall following our
successful operation in 2014 to reinstate the wall after severe
storms. Further to our work at Dawlish we have been appointed to
undertake another coastal line protection scheme at Saltcoats in
Scotland. We are now established as the major structures renewals
& maintenance contractor in Scotland.
In Asset Management our frameworks have been extended by two
years to 2017. We carry out infrastructure maintenance works to
bridges, viaducts, tunnels, culverts, embankments, level crossings
and line side structures. During the year, we have delivered over
5,000 individual schemes ranging from minor brickwork repairs to
major sea defence works and our responsiveness was recognised at
the National Rail Awards where we were presented with "Maintenance
Team of the Year".
In the wireless telecoms infrastructure delivery market, the
Group works for the major cellular network operators and original
equipment manufacturers. This market has seen major corporate
M&A activity during the year which has caused volatility and a
performance below our expectations. The attraction of this market
remains as demand for 4G mobile internet access and communications
is outstripping current capacity, requiring additional
infrastructure, upgrading of existing networks and decommissioning
of redundant assets.
Specialist Building
In Specialist Building revenue of GBP79.5m (2014: GBP82.1m) and
an operating profit of GBP2.3m (2014: GBP2.2m) generated an
improved margin of 2.9% (2014: 2.6%). Our Specialist Building order
book stands at GBP102m (2014: GBP78m). In the High Quality
Residential market in London and the Home Counties our subsidiary,
Walter Lilly, is a market leading luxury brand. It focuses on major
structural engineering works including extending properties below
ground. In excess of GBP85m of new projects has been secured in the
period.
Discontinued Operation
On 31 October 2014, the Board reached an agreement to sell
Allenbuild Ltd to Places for People Group Ltd ("PFP") for a total
consideration of GBP2.75m payable in cash. PFP paid the initial 50%
of the consideration on 31 October 2014 and will pay the balance on
31 January 2016. Allenbuild Ltd is a business focused on the new
build affordable housing market and as such was not core to the
Group's strategy to develop its Engineering Services business. In
accordance with IFRS 5, the results of Allenbuild Ltd have been
treated as a discontinued business. During the transition period,
Renew retains the cost and benefit of certain contracts. These were
secured during the recession and subsequently supply chain prices
have risen markedly resulting in post-tax losses of GBP7.3m in the
discontinued business.
Summary
In Specialist Building, our business operates in the
consistently robust High Quality Residential market and continues
to improve its quality of earnings with an emphasis on risk
mitigation.
In Engineering Services, we have strengthened our position in
our chosen, mainly regulated markets, undertaking essential work on
critical assets where funding is derived from clients' operational
expenditure budgets. Our key markets' characteristics combined with
the Group's integrated engineering support services model will
continue to provide opportunities for further profitable
growth.
B W May
Chief Executive
24 November 2015
Group income statement
For the year ended 30 September 2015
Before
exceptional
items and Amortisation
amortisation of
intangible
of assets
intangible
Note assets (see Note Total Total
3)
2015 2015 2015 2014
GBP000 GBP000 GBP000 GBP000
Group revenue from
continuing
activities 2 519,645 - 519,645 464,474
Cost of sales (462,154) - (462,154) (411,413)
------------- ------------- ----------- -----------
Gross profit 57,491 - 57,491 53,061
Administrative
expenses (37,121) (3,536) (40,657) (39,678)
------------- ------------- ----------- -----------
Operating profit 2 20,370 (3,536) 16,834 13,383
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Finance income 27 - 27 182
Finance costs (939) - (939) (427)
Other finance income/(expense) - defined
benefit pension schemes 189 - 189 (87)
------------- ------------- ----------- -----------
Profit before income
tax 19,647 (3,536) 16,111 13,051
Income tax
expense 4 (3,579) 636 (2,943) (2,714)
------------- ------------- ----------- -----------
Profit for the year from continuing activities 16,068 (2,900) 13,168 10,337
------------- -------------
Loss for the year from discontinued operation
3 (7,263) (5,155)
----------- -----------
Profit for the year attributable to equity
holders of the parent company 5,905 5,182
----------- -----------
Basic earnings per share from continuing
activities 6 21.3p 16.8p
Diluted earnings per share from
continuing operations 6 21.0p 16.6p
----------- -----------
Basic earnings per share 6 9.6p 8.4p
Diluted earnings per share 6 9.4p 8.3p
----------- -----------
Prior year operating profit of GBP13.4m is stated after charging GBP3.1m
of exceptional items and amortisation (See Note 3).
Group statement of comprehensive
income
For the year ended 30 September 2015 2014
2015
GBP000 GBP000
Profit for the year attributable to equity
holders of the parent company 5,905 5,182
----------- -----------
Items that will not be reclassified to profit
or loss:
Movement in actuarial valuation of the defined
benefit pension schemes 8,880 1,068
Movement on deferred tax relating to the
defined benefit pension schemes (1,570) (214)
----------- -----------
Total items that will not be reclassified
to profit or loss 7,310 854
----------- -----------
Items that are or may be reclassified subsequently
to profit or loss:
Exchange movements in reserves 304 1
----------- -----------
Total items that are or may be reclassified
subsequently to profit or loss 304 1
----------- -----------
Total comprehensive income for the year attributable
to equity holders of the parent company 13,519 6,037
----------- -----------
Group statement of changes in equity
Called Share Capital Cumulative Share Retained Total
up based
share premium redemption translation payments earnings equity
capital account reserve adjustment reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2013 6,140 5,893 3,896 751 390 (6,735) 10,335
Transfer from
income
statement for the
year 5,182 5,182
Dividends paid (2,461) (2,461)
New shares issued 12 49 61
Recognition of
share
based payments (98) (98)
Exchange
differences 1 1
Actuarial gains
recognised
in pension
schemes 1,068 1,068
Movement on
deferred
tax relating to
the
pension schemes (214) (214)
------------ ------------ ----------- ------------- ------------- ----------- -----------
At 30 September
2014 6,152 5,942 3,896 752 292 (3,160) 13,874
Transfer from
income
statement for the
year 5,905 5,905
Dividends paid (3,546) (3,546)
New shares issued 40 1,047 1,087
Recognition of
share
based payments 35 35
Exchange
differences 304 304
Actuarial gains
recognised
in pension
schemes 8,880 8,880
Movement on
deferred
tax relating to
the
pension schemes (1,570) (1,570)
------------ ------------ ----------- ------------- ------------- ----------- -----------
At 30 September
2015 6,192 6,989 3,896 1,056 327 6,509 24,969
------------ ------------ ----------- ------------- ------------- ----------- -----------
Group balance sheet
At 30 September 2015
2014
2015 (restated*)
GBP000 GBP000
Non-current assets
Intangible assets - goodwill 56,060 56,060
- other 4,234 7,770
Property, plant and equipment 13,101 14,143
Retirement benefit assets 15,154 1,456
Deferred tax assets 1,718 2,741
90,267 82,170
---------- ------------
Current assets
Inventories 4,864 4,068
Trade and other receivables 96,960 85,319
Assets held for resale - 1,250
Current tax assets 2,187 -
Cash and cash equivalents 10,662 5,586
---------- ------------
114,673 96,223
---------- ------------
Total assets 204,940 178,393
---------- ------------
Non-current liabilities
Borrowings (9,300) (15,500)
Obligations under finance leases (2,514) (3,575)
Retirement benefit obligations (599) -
Deferred tax liabilities (3,537) (1,056)
Provisions (1,232) (1,232)
---------- ------------
(17,182) (21,363)
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---------- ------------
Current liabilities
Borrowings (6,200) (6,200)
Trade and other payables (153,612) (133,130)
Obligations under finance leases (2,609) (2,764)
Current tax liabilities - (694)
Provisions (368) (368)
---------- ------------
(162,789) (143,156)
---------- ------------
Total liabilities (179,971) (164,519)
---------- ------------
Net assets 24,969 13,874
---------- ------------
Share capital 6,192 6,152
Share premium account 6,989 5,942
Capital redemption reserve 3,896 3,896
Cumulative translation reserve 1,056 752
Share based payments reserve 327 292
Retained earnings 6,509 (3,160)
---------- ------------
Total equity 24,969 13,874
---------- ------------
*See Note 7
Group cash flow statement
For the year ended 30 September
2015 2014
GBP000 GBP000
Profit for the year from continuing
activities 13,168 10,337
Amortisation of intangible assets 3,536 2,231
Depreciation 3,927 2,893
Profit on sale of property, plant and equipment (278) (435)
Expense in respect of share 1,087 -
option exercise
(Increase) in inventories (586) (323)
(Increase)/decrease in receivables (14,191) 1,324
Increase in payables 18,741 9,630
Current and past service cost in respect of defined
benefit pension scheme 248 59
Cash contribution to defined benefit pension
schemes (4,279) (3,117)
Expense/(credit) in respect of share
options 35 (98)
Finance income (27) (182)
Finance expenses 750 514
Interest paid (939) (427)
Income taxes paid (3,066) (1,926)
Income tax expense 2,943 2,714
--------- -----------
Net cash inflow from continuing operating activities 21,069 23,194
Net cash outflow from discontinued operating
activities (3,590) (4,691)
--------- -----------
Net cash inflow from operating activities 17,479 18,503
--------- -----------
Investing activities
Interest received 27 182
Proceeds on disposal of property, plant and
equipment 530 647
Purchases of property, plant and equipment (1,454) (1,559)
Disposal/(acquisition) of subsidiaries net
of cash acquired 1,135 (32,132)
--------- -----------
Net cash inflow/(outflow) from continuing investing
activities 238 (32,862)
Net cash inflow/(outflow) from discontinued
investing activities 162 (106)
--------- -----------
Net cash inflow/(outflow) from investing activities 400 (32,968)
--------- -----------
Financing activities
Dividends paid (3,546) (2,461)
Issue of Ordinary Shares - 61
New loan - 24,000
Loan repayments (6,200) (4,800)
Repayments of obligations under finance leases (3,067) (2,096)
--------- -----------
Net cash (outflow)/inflow from financing activities (12,813) 14,704
--------- -----------
Net increase in continuing cash and cash equivalents 8,494 5,036
Net decrease in discontinued cash and cash
equivalents (3,428) (4,797)
--------- -----------
Net increase in cash and cash equivalents 5,066 239
Cash and cash equivalents at beginning of year 5,586 5,348
Effect of foreign exchange rate changes on cash and
cash equivalents 10 (1)
--------- -----------
Cash and cash equivalents at end of year 10,662 5,586
-----------
Bank balances and cash 10,662 5,586
--------- -----------
Notes
1 International Financial Reporting Standards
The consolidated financial statements for the year ended 30
September 2015 have been prepared in accordance with International
Financial Reporting Standards ("IFRS"). These preliminary results
are extracted from those financial statements.
2 Segmental analysis
The Group is organised into two operating business segments plus
central activities which form the basis of the segment information
reported below. These segments are:
Engineering Services, which comprises the Group's engineering
activities which are characterised by the use of the Group's
skilled engineering workforce, supplemented by specialist
subcontractors where appropriate, in a range of civil, mechanical
and electrical engineering applications and:
Specialist Building, which comprises the Group's building
activities which are characterised by the use of a supply chain of
subcontractors to carry out building works under the control of the
Group as principal contractor and;
Central activities, which include the sale of land for
development, the leasing and sub-leasing of some UK properties and
the provision of central services to the operating
subsidiaries.
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On 31 October 2014, the Group entered into a contract to dispose
of part of its Specialist Building segment.
The results of that business are shown as a discontinued
operation.
2015 2014
Revenue is analysed as follows: GBP000 GBP000
Engineering Services 440,502 382,467
Specialist Building 79,492 82,112
Inter segment revenue (380) (105)
-------- --------
Segment revenue 519,614 464,474
Central activities 31 -
-------- --------
Group revenue from continuing
activities 519,645 464,474
-------- --------
Before
exceptional Exceptional
items and items and
amortisation amortisation
charges charges 2015 2014
Analysis of operating profit GBP000 GBP000 GBP000 GBP000
from continuing activities
Engineering Services 20,055 (3,536) 16,519 14,049
Specialist Building 2,274 - 2,274 2,157
Segment operating profit 22,329 (3,536) 18,793 16,206
Central activities (1,959) - (1,959) (2,823)
------------- ------------- ------------------------ ----------
Operating profit 20,370 (3,536) 16,834 13,383
Net financing expense (723) - (723) (332)
------------- ------------- ------------------------ ----------
Profit on ordinary activities
before income tax 19,647 (3,536) 16,111 13,051
------------- ------------- ------------------------ ----------
Segment operating profit for the year ended 30 September 2014 is
stated after charging exceptional items and amortisation charges
totaling GBP3,055,000.
3 Exceptional items and amortisation of intangible assets
2015 2014
GBP000 GBP000
Acquisition costs - 824
Total losses arising from exceptional
items - 824
Amortisation of intangible assets 3,536 2,231
------- -------
3,536 3,055
------- -------
The Board has determined that certain charges to the income
statement should be separately identified for better understanding
of the Group's results. In 2014 the Company acquired Forefront
Group Ltd and Clarke Telecom Ltd and incurred GBP824,000 of costs
associated with the acquisitions.
The Board has also separately identified the charge of
GBP3,536,000 (2014: GBP2,231,000) for the amortisation of the fair
value ascribed to certain intangible assets other than goodwill
arising from the acquisitions of Amco Group Holdings Ltd, Lewis
Civil Engineering Ltd, Clarke Telecom Ltd and Forefront Group
Ltd.
Discontinued operation analysis
2015 2014
GBP000 GBP000
Revenue 31,947 49,992
Expenses (41,278) (54,124)
Profit on disposal 1,250 -
Loss before income tax (8,081) (4,132)
Income tax credit - benefit of 818 -
tax losses
Income tax expense - deferred
tax - (1,023)
--------- ---------
Loss for the year from discontinued
operation (7,263) (5,155)
--------- ---------
On 31 October 2014, the Board reached an agreement to sell
Allenbuild Ltd to Places for People Group Ltd ("PFP") for a total
consideration of GBP2.75m payable in cash. PFP paid the initial 50%
of the consideration on 31 October 2014 and will pay the balance on
31 January 2016. The trading result for this business has therefore
been included within the loss for the year from discontinued
operations.
Discontinued expenses include the following exceptional
items:
2015 2014
GBP000 GBP000
Provision against amounts recoverable
on old
Building contracts 1,755 2,528
Costs related to exceptional storm
damage on a Building contract 800 1,500
2,555 4,028
-------- --------
The provision of GBP1,755,000 (2014:GBP2,528,000) relates to
settling final accounts and contractual issues on old
contracts.
A further GBP800,000 (2014:GBP1,500,000) of costs have been
recognised following the exceptional storm damage experienced in
2013.
4 Income tax expense
Analysis of expense in year 2015 2014
GBP000 GBP000
Current tax:
UK corporation tax on profits of the year (2,360) (2,265)
Adjustments in respect of previous periods 1,359 (227)
----------------- ---------------
Total current tax (1,001) (2,492)
----------------- ---------------
Deferred tax - defined benefit pension schemes (760) (594)
Deferred tax - other timing differences (1,182) (651)
----------------- ---------------
Total deferred tax (1,942) (1,245)
----------------- ---------------
Income tax expense (2,943) (3,737)
Deferred tax in respect of discontinued operation - 1,023
----------------- ---------------
Income tax expense in respect of continuing
activities (2,943) (2,714)
----------------- ---------------
5 Dividends 2015 2014
Pence/share Pence/share
Interim (related to the year ended 30
September 2015) 2.25 1.50
Final (related to the year ended 30 September
2014) 3.50 2.50
----------------- -------------
Total dividend paid 5.75 4.00
----------------- -------------
GBP000 GBP000
Interim (related to the year ended 30
September 2015) 1,393 923
Final (related to the year ended 30 September
2014) 2,153 1,538
----------------- -------------
Total dividend paid 3,546 2,461
----------------- -------------
Dividends are recorded only when authorised and are shown as a
movement in equity rather than as a charge in the income statement.
The Directors are proposing that a final dividend of 4.75p per
Ordinary Share be paid in respect of the year ended 30 September
2015. This will be accounted for in the 2015/16 financial year.
6 Earnings per share
2015 2014
Earnings EPS DEPS Earnings EPS DEPS
GBP000 Pence Pence GBP000 Pence Pence
Earnings before
exceptional items
& amortisation
charges 16,068 26.03 25.70 12,781 20.80 20.51
Exceptional items
& amortisation
charges (2,900) (4.69) (4.64) (2,444) (3.97) (3.92)
-------------- -------- -------- ----------------- ------- -------
Basic earnings
per share - continuing
activities 13,168 21.34 21.06 10,337 16.83 16.59
Loss for the
year from discontinued
operation (7,263) (11.77) (11.62) (5,155) (8.39) (8.27)
-------------- -------- -------- ----------------- ------- -------
Basic earnings
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