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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Renew Holdings Plc | LSE:RNWH | London | Ordinary Share | GB0005359004 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -4.00 | -0.42% | 940.00 | 940.00 | 944.00 | 946.00 | 935.00 | 940.00 | 293,887 | 16:29:55 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contractor-oth Residentl | 921.55M | 43.38M | 0.5482 | 17.15 | 743.86M |
From Apr 2019 to Apr 2024
TIDMRNWH
RNS Number : 8804F
Renew Holdings PLC
23 May 2017
Renew Holdings plc
("Renew" or the "Group" or the "Company")
Interim Results
Renew (AIM: RNWH), the Engineering Services Group supporting UK infrastructure, announces another set of record interim results for the six months ended 31 March 2017. With a strong order book and growth in both revenue and operating profit, the Board is increasing its interim dividend in line with its progressive policy by 13% to 3.00p.
Financial Highlights
Hot Features
Premium
H1 2017 H1 2016
------------------------------ ---------- ---------- -----
Revenue GBP289.4m GBP265.1m +9%
------------------------------ ---------- ---------- -----
Adjusted operating profit* GBP12.1m GBP10.5m +15%
------------------------------ ---------- ---------- -----
Adjusted operating margin* 4.2% 4.0% +5%
------------------------------ ---------- ---------- -----
Adjusted profit before tax* GBP12.0m GBP10.3m +11%
------------------------------ ---------- ---------- -----
Adjusted earnings per share* 15.49p 13.31p +16%
------------------------------ ---------- ---------- -----
Interim dividend per share 3.00p 2.65p +13%
------------------------------ ---------- ---------- -----
*Adjusted results are stated prior to exceptional items and amortisation charges
Operational Highlights
-- Engineering Services revenue up 6% to GBP234.3m (H1 2016: GBP221.3m)
-- Engineering Services operating profit* up 14% to GBP11.9m (H1 2016: GBP10.4m)
-- 5% increase in Engineering Services order book to GBP435m (H1 2016: GBP416m)
-- Group expected revenue for H2 fully secured
-- After the GBP7m acquisition of Giffen, net debt GBP3.5m (H1 2016: GBP4.2m)
o The Board expects to report net cash at the end of this financial year
-- Interim dividend increased by 13% to 3.00p per share (H1 2016: 2.65p)
R J Harrison OBE, Chairman said: "Our established strategy of providing engineering services in regulated UK infrastructure markets continues to deliver positive results for Renew. This has been another record half year, with strong growth in both revenue and operating profit. I am particularly pleased with the improvement in Group operating margin to 4.2%, on track to meet our target of 4.5% for the year. As a result, the Board has increased the interim dividend by 13% and we are confident of delivering full year results in line with market expectations."
Renew Holdings plc Tel: 0113 281 4200 Paul Scott, Chief Executive John Samuel, Group Finance Director Numis Securities Limited Tel: 020 7260 1000 Stuart Skinner/Kevin Cruickshank (Nominated Adviser) Michael Burke (Corporate Broker) Walbrook PR Tel: 020 7933 8780 or renew@walbrookpr.com Paul McManus Mob: 07980 541 893 Nick Rome Mob: 07748 325 236 Lianne Cawthorne Mob: 07584 391 303
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
About Renew Holdings plc
Engineering Services, which accounts for over 80% 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
Renew has again delivered record interim results with strong growth in both operating profit and revenue.
Our established strategy of providing engineering services in regulated UK infrastructure markets continues to deliver positive results. The Group focuses on directly delivering essential works to critical infrastructure which are mainly funded through our clients' operational expenditure budgets.
Results
Group operating profit, prior to exceptional items and amortisation charges, increased by 15% to GBP12.1m (2016: GBP10.5m), on revenue up 9% to GBP289.4m (2016: GBP265.1m). Operating margin increased to 4.2% (2016: 4.0%) with earnings per share prior to exceptional items and amortisation charges increasing by 16% to 15.49p (2016: 13.31p). After the GBP5.8m exceptional impairment charge detailed below, profit before income tax was GBP4.8m (2016: GBP8.8m).
In Engineering Services, revenue grew by 6% to GBP234.3m (2016: GBP221.3m), representing 81% (2016: 84%) of Group revenue with operating profit prior to exceptional items and amortisation charges increasing by 14% to GBP11.9m (2016: GBP10.4m), giving an improved operating margin of 5.1% (2016: 4.7%).
In Specialist Building, the Group remains focused on contract selectivity and risk management within the High Quality Residential market in London and the Home Counties which has been particularly strong. Operating profit was GBP1.2m (2016: GBP1.1m) on revenue of GBP53.6m (2016: GBP44.4m).
Exceptional items
At the end of April 2017, the Group decided to withdraw from its loss-making low pressure, small diameter gas pipe replacement activities and as a result has reviewed the carrying value of its investment in that business. The Board has determined that a non-cash impairment charge of GBP5.8m should be made which is included within exceptional items. Our gas operations are now completely focused on medium pressure activities which will result in lower revenue but which have been consistently profitable. This restructuring will result in up to GBP0.5m of exceptional charges relating to redundancy and other costs which will be recorded in the second half of this financial year. Following these actions, the Board expects that its gas business will return to profitability in the financial year ending 30 September 2018.
Dividend
In line with its progressive policy, the Board is increasing the interim dividend by 13% to 3.00p (2016: 2.65p) per share which will be paid on 3 July 2017 to shareholders on the register at 2 June 2017.
Order book
The Group's order book at 31 March 2017 was GBP517m (2016: GBP515m). The Group's expected revenue for the second half of the financial year is fully secured.
Cash
At 31 March 2017, the Group had net debt of GBP3.5m (2016: GBP4.2m). The Board expects to report a net cash position at the end of the financial year.
Acquisition
In November 2016, Renew acquired Giffen Holdings Ltd, a specialist mechanical, electrical and power services provider for GBP7m which broadens the Group's offering within the railway environment. The integration of Giffen is progressing well.
Board changes
On 3 April 2017, the Group appointed David Brown to the Board as a Non-Executive Director. David is Group Chief Executive of The Go-Ahead Group Plc, a position he has held since 2011. I welcome David to our Board.
Outlook
Renew is a leading provider of engineering support services to the UK's critical Energy, Environmental and Infrastructure markets, where ongoing engineering maintenance requirements provide long-term, sustainable opportunities. Our expertise in these target markets and our direct delivery model positions us to provide our clients with an integrated and responsive service.
It remains the Board's strategy to grow our Engineering Services business both organically and through selective, earnings enhancing acquisitions. The Board is confident that Renew will achieve its financial target of a 4.5% Group operating margin and report results in line with market expectations for the year ending 30 September 2017.
R J Harrison OBE
Chairman
23 May 2017
Chief Executive's Review
Renew is a leading engineering services provider supporting critical UK infrastructure across the Energy, Environmental and Infrastructure markets.
The Group provides integrated engineering services to support a wide range of assets which include nuclear and traditional power sites, water, flood alleviation and gas infrastructure, rail and wireless telecoms networks. We provide long-term asset care and maintenance services as well as emergency reactive works.
Engineering Services
Engineering Services revenue grew by 6% to GBP234.3m (2016: GBP221.3m). Operating profit prior to exceptional items and amortisation grew 14% to GBP11.9m (2016: GBP10.4m), increasing the operating margin to 5.1% (2016: 4.7%) and representing 91% (2016: 91%) of segment operating profit.
At 31 March 2017, the Engineering Services order book increased by 5% to GBP435m (2016: GBP416m).
Energy
Renew provides engineering support services to assets across the nuclear, fossil and renewable energy markets.
We operate at 12 of the Nuclear Decommissioning Authority's ("NDA") 17 nuclear licenced sites in the UK. The investment required to clean up the UK's nuclear legacy is estimated at GBP70bn and will take over 120 years to complete. The largest of the sites on the NDA's decommissioning programme is Sellafield, which is currently allocated 73% of this expenditure. The scale of the decommissioning challenge there requires much of the work to be delivered through long-term programmes of work.
As the largest mechanical and electrical contractor at Sellafield, the Group supports long-term programmes associated with new and existing operational plant in the waste treatment, reprocessing, decontamination, decommissioning and clean up operations. We are strongly positioned on the 10-year Decommissioning Delivery Partnership Framework which is estimated at GBP500m with head room to increase expenditure to GBP1.5bn over the term to 2025. We are also engaged across numerous other long-term, high priority programmes at Sellafield including; Magnox Swarf Storage Silo, Bulk Sludge Retrieval, Site Remediation & Decommissioning, Box Encapsulation Plant, Pile Fuel Cladding Silo, the Bundling Spares Framework and the Tanks and Vessels Framework.
Elsewhere, our established relationship with Magnox as sole provider on the national Electrical, Controls and Instrumentation Framework runs to 2021. In the period, we were also engaged through a new contract at the Drigg Low Level Waste Repository.
We have repositioned the gas business which is now focused exclusively on medium pressure and larger diameter gas activities in London and the South East. This market is driven by the long-term 30/30 Iron Mains Replacement Programme which gives good visibility to 2032. A key factor going forward is our exclusive regional position on the medium pressure framework for Southern Gas Networks which is gaining momentum.
Environmental
Renew provides engineering support services to the UK's water and sewer infrastructure networks as well as to flood alleviation and coastal protection programmes.
For Northumbrian Water, we undertake a range of tasks on the AMP 6 Sewerage Repair and Maintenance Framework. We are engaged by Wessex Water on the AMP 6 Civils & EMI Delivery Partners Framework, where work levels have increased as the AMP 6 programme accelerates. We have also experienced high demand on Welsh Water's Pressurised Pipelines Framework, with work also undertaken on the Major and Minor Civils and the Emergency Reactive frameworks.
As sole provider on the Environment Agency's MEICA Framework to 2019, we support around 600 flood and water management sites throughout the Northern Region. Work is also undertaken nationally for the Environment Agency on four minor works frameworks.
During the period, we were appointed as sole supplier on the national Canal & River Trust MEICA Framework. Work includes maintenance, renewal and emergency reactive tasks on around 1,000 of the Trust's assets across England and Wales over the seven-year term. These assets include swing bridges, lock gates, sluices, water level and flow monitoring systems and pumping stations.
In addition to our ongoing work under several frameworks for National Grid, our land remediation activities include a major scheme at Sighthill for Glasgow City Council.
At the Palace of Westminster, where we have long-term contracted work associated with the Cast Iron Roof programme and the Courtyards Conservation Framework, we anticipate further growth opportunities.
Infrastructure
As a major provider of infrastructure services to Network Rail, we undertake a wide range of planned maintenance and renewals tasks alongside a 24/7 emergency reactive service across the rail network.
We are sole provider on seven Infrastructure Projects frameworks over the current CP5 investment period, delivering renewal schemes nationally on assets including bridges, viaducts and specialist tunnel refurbishments. We deliver a high volume of maintenance tasks through six Asset Management frameworks and are the major structures renewals and sole maintenance contractor in Scotland.
The acquisition of Giffen Holdings Ltd ("Giffen") broadens the Group's offering to Network Rail and creates opportunities for the Group with London Underground Limited and Train Operating Companies.
In wireless telecoms, we work for all of the UK's major cellular network operators and several original equipment manufacturers. Work is concentrated on the 4G roll out programmes, which are driven by increasing consumer demand.
Specialist Building
The Group's Specialist Building operations focus on the High Quality Residential market in London and the Home Counties where we specialise in major structural engineering works.
This market is robust and continues to provide stable earnings. Specialist Building revenue grew by 21% to GBP53.6m (2016: GBP44.4m), with an operating profit of GBP1.2m (2016: GBP1.1m). The forward order book was GBP82m (2016: GBP99m). Expected revenue for the year is fully secured.
Strategy
We remain committed to developing our engineering services business in our existing infrastructure markets both organically and through selective acquisitions to build on our integrated service offering.
The Group focuses on developing long-term relationships with its clients for whom we directly deliver day-to-day maintenance and renewal services alongside emergency reactive works to the country's key infrastructure assets.
Paul Scott
Chief Executive
23 May 2017
Condensed consolidated income statement
for the six months ended 31 March 2017
Exceptional
items
Before and
exceptional amortisation
items of
and intangible Before
amortisation assets amortisation Amortisation Year
of (see Six months of of ended
intangible Note ended intangible intangible 30
assets 3) 31 March assets assets September
2017 2017 2017 2016 2016 2016 2016
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Group revenue
from
continuing
activities 2 289,404 - 289,404 265,079 525,737 - 525,737
Cost of sales (259,180) - (259,180) (237,763) (469,180) - (469,180)
-------------- ------------- ----------- ----------- ------------- -------------- ----------
Gross profit 30,224 - 30,224 27,316 56,557 - 56,557
Administrative
expenses (18,113) (7,149) (25,262) (18,315) (34,603) (2,954) (37,557)
-------------- ------------- ----------- ----------- ------------- -------------- ----------
Operating
profit 2 12,111 (7,149) 4,962 9,001 21,954 (2,954) 19,000
Finance income 81 - 81 131 373 - 373
Finance costs (216) - (216) (333) (624) - (624)
Other finance
income
- defined
benefit
pension
schemes - - - - 625 - 625
-------------- ------------- ----------- ----------- ------------- -------------- ----------
Profit before
income
tax 2 11,976 (7,149) 4,827 8,799 22,328 (2,954) 19,374
Income tax
expense 5 (2,315) 243 (2,072) (1,760) (5,268) 532 (4,736)
-------------- ------------- ----------- ----------- ------------- -------------- ----------
Profit for the
period
from
continuing
activities 9,661 (6,906) 2,755 7,039 17,060 (2,422) 14,638
Loss for the
period
from
discontinued
operation 4 - - (4,026)
----------- ----------- ----------
Profit for the
period
attributable
to equity
holders of the
parent
company 2,755 7,039 10,612
----------- ----------- ----------
Basic earnings
per share
from
continuing
activities 6 4.42p 11.35p 23.53p
Diluted
earnings per
share from
continuing
activities 6 4.38p 11.26p 23.33p
----------- ----------- ----------
Basic earnings
per share 6 4.42p 11.35p 17.06p
Diluted
earnings per
share 6 4.38p 11.26p 16.91p
----------- ----------- ----------
Proposed
dividend 7 3.00p 2.65p 8.00p
----------- ----------- ----------
Operating profit for the six months ended 31 March 2016 is stated after charging GBP1,477,000 of amortisation cost.
Condensed consolidated statement of comprehensive income
for the six months ended 31 March 2017
Six months ended Year ended
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period attributable
to equity holders of the parent company 2,755 7,039 10,612
Items that will not be reclassified
to profit or loss:
Movement in actuarial valuation of
the defined benefit pension schemes - - (14,229)
Movement on deferred tax relating
to the defined benefit pension schemes - - 2,561
Total items that will not be reclassified
to profit or loss - - (11,668)
Items that are or may be reclassified
subsequently to profit or loss:
Exchange movement in reserves 84 135 291
Total items that are or may be reclassified
subsequently to profit or loss 84 135 291
Total comprehensive income for the
period attributable to equity holders
of the parent company 2,839 7,174 (765)
Condensed consolidated statement of changes in equity
for the six months ended 31 March 2017
Called Share Capital Cumulative Share Total
up based
share premium redemption translation payments Retained equity
capital account reserve adjustment reserve earnings Unaudited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2015 6,192 6,989 3,896 1,056 327 6,509 24,969
Transfer from income
statement for the period 7,039 7,039
Dividends paid (2,960) (2,960)
New shares issued 40 1,492 1,532
Recognition of share
based payments 11 11
Exchange differences 135 135
At 31 March 2016 6,232 8,481 3,896 1,191 338 10,588 30,726
Transfer from income
statement for the period 3,573 3,573
Dividends paid (1,651) (1,651)
Recognition of share
based payments 233 233
Exchange differences 156 156
Actuarial movement recognised
in the pension schemes (14,229) (14,229)
Movement on deferred
tax relating to the pension
schemes 2,561 2,561
-------- -------- ----------- ------------ --------- --------- ----------
At 30 September 2016 6,232 8,481 3,896 1,347 571 842 21,369
Transfer from income
statement for the period 2,755 2,755
Dividends paid (3,349) (3,349)
New shares issued 27 1,154 1,181
Recognition of share
based payments 1 1
Exchange differences 84 84
-------- -------- ----------- ------------ --------- --------- ----------
At 31 March 2017 6,259 9,635 3,896 1,431 572 248 22,041
-------- -------- ----------- ------------ --------- --------- ----------
Condensed consolidated balance sheet
at 31 March 2017
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Non-current assets
Intangible assets
- goodwill 58,505 56,259 56,259
- other 3,819 2,757 1,280
Property, plant and
equipment 13,188 14,095 13,673
Retirement benefit
assets 9,834 17,284 7,704
Deferred tax assets 2,355 1,674 1,581
------------------------- ---------- -------------
87,701 92,069 80,497
------------------------- ---------- -------------
Current assets
Inventories 5,032 5,077 5,362
Assets held for resale 1,500 1,567 1,500
Trade and other receivables 92,973 94,452 93,520
Current tax assets - 1,389 -
Cash and cash equivalents 2,671 8,192 14,084
102,176 110,677 114,466
------------------------- ---------- -------------
Total assets 189,877 202,746 194,963
------------------------- ---------- -------------
Non-current liabilities
Borrowings - (6,200) (3,100)
Obligations under
finance leases (2,569) (2,134) (3,030)
Retirement benefit
obligations (1,918) (407) (2,110)
Deferred tax liabilities (2,504) (3,654) (1,664)
Provisions (312) (580) (312)
------------------------- ---------- -------------
(7,303) (12,975) (10,216)
------------------------- ---------- -------------
Current liabilities
Borrowings (6,200) (6,200) (6,200)
Trade and other payables (148,946) (149,881) (153,472)
Obligations under
finance leases (2,426) (2,944) (2,623)
Current tax liabilities (2,741) - (863)
Provisions (220) (20) (220)
(160,533) (159,045) (163,378)
------------------------- ---------- -------------
Total liabilities (167,836) (172,020) (173,594)
Net assets 22,041 30,726 21,369
------------------------- ---------- -------------
Share capital 6,259 6,232 6,232
Share premium account 9,635 8,481 8,481
Capital redemption
reserve 3,896 3,896 3,896
Cumulative translation
adjustment 1,431 1,191 1,347
Share based payments
reserve 572 338 571
Retained earnings 248 10,588 842
------------------------- ---------- -------------
Total equity 22,041 30,726 21,369
------------------------- ---------- -------------
Condensed consolidated cashflow statement
for the six months ended 31 March 2017
Six months ended Year ended
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period from continuing
operations 2,755 7,039 14,638
Amortisation of intangible assets 1,140 1,477 2,954
Goodwill impairment 5,800 - -
Depreciation 2,080 1,968 4,036
Profit on sale of property, plant and
equipment (328) (275) (569)
Charge in respect of share option exercise 1,181 1,532 1,532
Decrease/(increase) in inventories 530 (91) 60
Decrease/(increase) in receivables 5,252 (2,063) (63)
(Decrease)/increase in payables (12,952) 253 2,609
Current service cost in respect of defined
benefit pension scheme 29 29 47
Cash contribution to defined benefit
schemes (2,322) (2,322) (4,701)
Charge in respect of share options 1 11 244
Finance income (81) (131) (373)
Finance costs/(other income) 216 333 (1)
Interest paid (216) (333) (624)
Income taxes paid - (800) (863)
Income tax expense 2,072 1,760 4,736
Net cash inflow from continuing operating
activities 5,157 8,387 23,662
Net cash outflow from discontinued operating
activities (1,525) (2,003) (6,109)
-------------------- -------------------- -------------
Net cash inflow from operating activities 3,632 6,384 17,553
-------------------- -------------------- -------------
Investing activities
Interest received 81 131 373
Proceeds on disposal of property, plant
and equipment 381 359 1,020
Purchases of property, plant and equipment (698) (1,471) (1,304)
Acquisition of subsidiaries net of cash
acquired (7,014) (208) (208)
-------------------- -------------------- -------------
Net cash outflow from investing activities (7,250) (1,189) (119)
-------------------- -------------------- -------------
Financing activities
Dividends paid (3,349) (2,960) (4,611)
Loan repayments (3,100) (3,100) (6,200)
Repayment of obligations under finance
leases (1,347) (1,620) (3,225)
-------------------- -------------------- -------------
Net cash outflow from financing activities (7,796) (7,680) (14,036)
-------------------- -------------------- -------------
Net (decrease)/increase in continuing
cash and cash equivalents (9,889) (482) 9,507
Net (decrease) in discontinued cash and
cash equivalents (1,525) (2,003) (6,109)
-------------------- -------------------- -------------
Net (decrease)/increase in cash and cash
equivalents (11,414) (2,485) 3,398
Cash and cash equivalents at the beginning
of the period 14,084 10,662 10,662
Effect of foreign exchange rate changes 1 15 24
Cash and cash equivalents at the end
of the period 2,671 8,192 14,084
-------------------- -------------------- -------------
Bank balances and cash 2,671 8,192 14,084
-------------------- -------------------- -------------
Notes to the condensed consolidated accounts
1 - Basis of preparation
(a) The condensed consolidated interim financial report for the six months ended 31 March 2017 and the equivalent period in 2016 has not been audited or reviewed by the Group's auditor. It does not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. It has been prepared under the historical cost convention and on a going concern basis in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The report does not comply with IAS34 "Interim Financial Reporting", which is not currently required to be applied for AIM companies and it was approved by the Directors on 23 May 2017.
(b) The accounts for the year ended 30 September 2016 were prepared under IFRS and have been delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498(2) or (3) of the Companies Act 2006. In this report, the comparative figures for the year ended 30 September 2016 have been audited. The comparative figures for the period ended 31 March 2016 are unaudited.
(c) For the year ending 30 September 2017, there are no new accounting standards, which have been adopted by the EU, applied and implemented for the condensed consolidated interim financial report. The accounting policies adopted in the preparation of the condensed consolidated interim financial report are consistent with those adopted in the Group's accounts for the year ended 30 September 2016.
(d) On 31 October 2014 Places for People Group Limited ("PFP") acquired 50% of the ordinary share capital of Allenbuild Ltd, a Specialist Building subsidiary. PFP acquired the remaining 50% on 31 January 2016. Consequently, Allenbuild Ltd has been treated as a discontinued operation.
(e) The principal risks and uncertainties affecting the Group are unchanged from those set out in the Group's accounts for the year ended 30 September 2016. The Directors have reviewed financial forecasts and are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparing the condensed consolidated interim financial report.
This condensed consolidated interim financial report is being sent to all shareholders and is also available upon request from the Company Secretary, Renew Holdings plc, Yew Trees, Main Street North, Aberford, West Yorkshire LS25 3AA, or via the website www.renewholdings.com.
2 - Segmental analysis
Operating segments have been identified based on the internal reporting information provided to the Group's Chief Operating Decision Maker. From such information, Engineering Services and Specialist Building have been determined to represent operating segments.
Six months ended Year ended
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
Revenue is analysed as follows: GBP000 GBP000 GBP000
Engineering Services 234,263 221,345 436,213
Specialist Building 53,573 44,375 90,503
Inter segment revenue (399) (641) (983)
---------- -------------------------- -------------
Segment revenue 287,437 265,079 525,733
Central activities 1,967 - 4
---------- -------------------------- -------------
Group revenue from continuing
operations 289,404 265,079 525,737
---------- -------------------------- -------------
Six months ended
31 March
Before
exceptional Exceptional
items items
and and Before
amortisation amortisation amortisation Amortisation
of of of of Year Ended
intangible intangible intangible intangible 30
assets assets assets assets September
2017 2017 2017 2016 2016 2016 2016
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
operating
profit
Engineering
Services 11,939 (7,149) 4,790 8,929 21,541 (2,954) 18,587
Specialist
Building 1,158 - 1,158 1,054 2,334 - 2,334
Segment
operating
profit 13,097 (7,149) 5,948 9,983 23,875 (2,954) 20,921
Central
activities (986) - (986) (982) (1,921) - (1,921)
------------- ------------- ---------- ----------- ------------- ------------- -----------
Operating
profit 12,111 (7,149) 4,962 9,001 21,954 (2,954) 19,000
Net finance
(costs)/other
income (135) - (135) (202) 374 - 374
------------- ------------- ---------- ----------- ------------- ------------- -----------
Profit before
income tax 11,976 (7,149) 4,827 8,799 22,328 (2,954) 19,374
------------- ------------- ---------- ----------- ------------- ------------- -----------
Operating profit for the six months ended 31 March 2016 is stated after charging GBP1,477,000 of amortisation cost.
3 - Exceptional items and amortisation of intangible assets
Six months ended Year ended
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Acquisition costs re Giffen
Holdings Ltd 209 - -
Impairment of goodwill 5,800 - -
---------- ---------- -------------
Total charges arising from
exceptional items 6,009 - -
Amortisation of intangible
assets 1,140 1,477 2,954
---------- ---------- -------------
7,149 1,477 2,954
---------- ---------- -------------
Following the decision in April 2017 to withdraw from the loss-making low pressure, small diameter gas pipe replacement activities of Forefront Utilities Ltd, the Board has carried out a review of the carrying value of goodwill attributable to that cash generating unit which has resulted in an impairment charge of GBP5,800,000.
4 - Discontinued operation analysis
Six months ended Year ended
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Revenue 147 4,876 7,500
Expenses (147) (4,876) (11,493)
---------- ---------- -------------
Loss before income tax - - (3,993)
Income tax credit - benefit
of tax losses - - 785
Income tax charge - adjustment
in respect
of previous period - - (818)
---------- ---------- -------------
Loss for the period from
discontinued operation - - (4,026)
---------- ---------- -------------
5 - Income tax expense
Six months ended Year ended
31 March 30 September
2017 2016 2016
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Current tax:
UK corporation tax on profits
for the period (1,877) (1,598) (3,742)
Adjustments in respect of previous
periods - - (171)
---------- ---------- -------------
Total current tax (1,877) (1,598) (3,913)
Deferred tax (195) (162) (823)
---------- ---------- -------------
Income tax expense (2,072) (1,760) (4,736)
---------- ---------- -------------
6 - Earnings per share
Six months ended 31
March Year ended 30 September
2017 2016 2016
Unaudited Unaudited Audited
Earnings EPS DEPS Earnings EPS DEPS Earnings EPS DEPS
GBP000 Pence Pence GBP000 Pence Pence GBP000 Pence Pence
Earnings
before
exceptional
items
and
amortisation 9,661 15.49 15.37 8,250 13.31 13.20 17,060 27.43 27.19
Exceptional
items
and
amortisation (6,906) (11.07) (10.99) (1,211) (1.96) (1.94) (2,422) (3.90) (3.86)
----------- ----------- --------- ---------- ----------- ------- --------- ------------------ -------
Basic earnings
per share -
continuing
operations 2,755 4.42 4.38 7,039 11.35 11.26 14,638 23.53 23.33
Loss for the
period from
discontinued
operation - - - - - - (4,026) (6.47) (6.42)
----------- ----------- --------- ---------- ----------- ------- --------- ------------------ -------
Basic earnings
per share 2,755 4.42 4.38 7,039 11.35 11.26 10,612 17.06 16.91
----------- ----------- --------- ---------- ----------- ------- --------- ------------------ -------
Weighted
average
number of
shares 62,376 62,860 62,001 62,524 62,201 62,739
----------- --------- ----------- ------- ------------------ -------
The dilutive effect of share options is to increase the number of shares by 484,000 (March 2016: 523,000; September 2016: 538,000) and reduce the basic earnings per share by 0.04p (March 2016: 0.09p; September 2016: 0.15p). On 13 January 2017 273,503 new Ordinary shares of 10p each were issued following the exercise of share options bringing the total number in issue to 62,591,451.
7 - Dividends
The proposed interim dividend is 3.00p per share (2016: 2.65p). This will be paid out of the Company's available distributable reserves to shareholders on the register on 2 June 2017, payable on 3 July 2017. In accordance with IAS 1, dividends are recorded only when paid and are shown as a movement in equity rather than as a charge in the income statement.
8 - Intangible assets
Contractual
rights and
customer
Goodwill relationships
GBP000 GBP000
Cost:
At 1 April 2016 57,067 12,323
Addition - -
--------- ---------------
At 1 October 2016 57,067 12,323
Addition 8,046 3,679
--------- ---------------
At 31 March 2017 65,113 16,002
--------- ---------------
Impairment losses/amortisation:
At 1 April 2016 (808) (9,566)
Amortisation - (1,477)
--------- ---------------
At 1 October 2016 (808) (11,043)
Amortisation - (1,140)
Impairment (5,800) -
At 31 March 2017 (6,608) (12,183)
--------- ---------------
Carrying amount:
At 1 April 2016 (unaudited) 56,259 2,757
--------- ---------------
At 1 October 2016
(audited) 56,259 1,280
At 31 March 2017
(unaudited) 58,505 3,819
--------- ---------------
On 31 October 2016, the Group acquired the whole of the issued share capital of Giffen Holdings Ltd ("Giffen") for a cash consideration of GBP5m with a further GBP2m payment to redeem loans.
The Board's preliminary estimate is that goodwill of GBP8m arises on acquisition which will be reviewed for impairment one year after the acquisition as permitted by IFRS 3. Goodwill will be finally determined following the completion of the audit of the accounts of Giffen for the year ended 30 September 2016. The goodwill is attributable to the expertise and workforce of the acquired business.
Other intangible assets, provisionally valued at GBP3.7m, representing contractual rights and customer relationships, were also acquired and will be amortised over their useful economic lives, which range from two to five years, in accordance with IFRS 3. Deferred tax has been provided on this amount. Amortisation of this intangible asset commenced in November 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEEFIEFWSEEI
(END) Dow Jones Newswires
May 23, 2017 02:00 ET (06:00 GMT)
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