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Share Name | Share Symbol | Market | Type |
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Bioera SPA | BIT:BIE | Italy | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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-0.001 | -1.32% | 0.075 | 0.068 | 0.0784 | 0.0796 | 0.075 | 0.0796 | 39,160 | 16:40:00 |
RNS Number:1244T Birse Group PLC 11 December 2003 Date: Embargoed until 7.00am 11th December 2003 Contact: Peter Watson, Chairman Telephone: 01302 768078 Martin Budden, Group Managing Director Heather Craven, Group Finance Director Birse Group plc Peter Otero Telephone: 0207 831 3113 Financial Dynamics BIRSE GROUP plc - INTERIM ANNOUNCEMENT SIX MONTHS ENDED 31/10/03 Financial Highlights:- * Pre-tax profits increased to #1.8million (2002: pre-tax pre-exceptional profits #1.7million). * Interim dividend maintained at 0.375p per share. Operational Key Points:- * Construction Division increases operating profits to #301,000 (2002: #11,000). Strong performance from Civil Engineering offset by Build. Process Engineering continues to progress successfully its turnaround with return to profitability. * Plant Hire maintains operating profit at #1.7million with crawler cranes improving profits by over 40% largely offset by fall in piling performance. The Cabin Company's sales to customers external to the Group increases to 36% of total turnover (2002: 15%). * Matters relating to the termination of one of Birse Build's larger contracts for CIB Properties Limited, a Citibank Group company referred to adjudication (#16million claim against Birse, #14million claim made by Birse). Half year results reflect a no win no loss position. Birse advised that it has good prospects of defending the claim. Decision expected in January 2004. * Main markets remain steady with good prospects for advancement by the Civil Engineering and Process businesses in the second half. "The Group's main markets have remained steady. In these circumstances the Group has achieved a solid first half performance and prospects for the second half remain encouraging, assuming a satisfactory outcome in relation to the Citibank adjudication. We therefore believe that further progress in the underlying performance of the business will continue." M Budden P G Watson REPORT OF THE DIRECTORS On the results for the six months ended 31 October 2003 Pre-tax profits of #1.8million compare with pre-tax pre-exceptional profits of #1.7million for the corresponding period last year. This reflects a solid effort and provides encouragement for the second half when the collective performance of our more profitable subsidiaries is expected to advance. The Construction Division's activities gave rise to an operating profit of #301,000 (2002/2003: #11,000). Civil Engineering led the way with a profit of #4.5million (2002/2003: #1.5million). Birse Process delivered its first profitable result at #376,000 (2002/2003: loss of #247,000) since its turnaround was initiated and Birse Build, as expected, suffered sizable losses at #4.6million (2002/2003: loss of #1.3million). Plant Hire results were maintained at #1.7million (2002/2003: #1.7million). The Group Centre costs of #250,000 (2002/2003: cost of #240,000) reflect the final positioning of our Head Office function within the Group's corporate structure. The net interest credit of #26,000 (2002/2003: credit of #186,000) is indicative of the positive liquidity position maintained by the Group in the period under review. Construction Six months ended 31 October Year ended 2003 2002 30 April 2003 Turnover Operating Turnover Operating* Turnover Operating* profit/(loss) profit/(loss) profit/(loss) #'000 #'000 #'000 #'000 #'000 #'000 Civil Engineering 114,554 4,521 132,747 1,512 246,232 7,272 Building 62,213 (4,596) 104,704 (1,254) 195,602 (6,430) Process Engineering 20,880 376 8,529 (247) 27,838 (352) 197,647 301 245,980 11 469,672 490 * Before exceptional operating items. Although the Civil Engineering result compares favourably with the result achieved in the corresponding period in the prior year the businesses comprising that Division have to a degree had their performances held back by market factors. In the case of Birse Rail it has suffered from the absence of enhancement projects in the first half and has in the main had to rely upon work arising from its framework arrangements. It has now commenced a number of enhancement contracts which in the aggregate should make a material contribution to results in the second half. The migration by the major spending Government departments from existing procurement arrangements to the 'early contractor involvement route' has delayed contract starts. With work now beginning to be secured under these new initiatives prospects for the second half and thereafter are positive particularly given the target cost/value added nature of these contracts. Similarly Birse Metro (our dedicated London Underground business) has suffered from a lack of market opportunities since the private public partnerships took over responsibility for the maintenance of large parts of the Underground infrastructure. Given that these customers have only taken on these obligations in the last six months a reduction in available workloads in this period was to be expected. Prospects for the longer term therefore remain undiminished provided that Birse Metro properly positions itself given the changing project risk profiles now emerging in this growing sector. In the 2002/2003 Annual Report we stated that despite the actions of management and the more focused market approach adopted that Birse Build was expected to continue to trade at a loss in 2003/2004 albeit at a lower level and that recovery thereafter was still dependent upon an improvement in market conditions. This remains our view. Since that time the management of that company has concentrated on aligning its cost base with its target markets. Turnover has been managed down to an annualized equivalent of around #120million from #246million in 2001/2002 and staff numbers have decreased by approximately two hundred over the same period. This reduction in scale has had to be achieved whilst at the same time maintaining management and business capabilities, critical to which is the retention of key staff. To a certain extent similarities exist between Birse Build and Birse Process's recent history. In the 2001 financial year Birse Process lost #9.5million. In the period under review it has delivered a profit of #376,000, a successful turnaround by any measure reflecting the maturing abilities of the management of that business. With key customer capital and maintenance spending at high levels and with the next water regulatory review likely to increase spending this company and its management are well placed to continue making progress. The number of contracts now the subject of litigation or equivalent proceedings has reduced to one from two following the settlement by way of negotiation at book value of one contract in the period. This leaves a further contract with an aggregate value of #5.0million (2002/2003: two contracts with an aggregate value of #6.2million) still the subject of due process. As described in Note 7 in respect of that contract recoverability of value remains uncertain. Plant Hire Six months ended 31 October Year ended 2003 2002 30 April 2003 Turnover Operating Turnover Operating Turnover Operating profit profit profit #'000 #'000 #'000 #'000 #'000 #'000 Crawler Cranes 2,339 874 1,647 608 3,797 1,364 Piling Equipment 284 61 422 208 883 388 Site Accommodation 2,398 773 2,431 887 4,692 1,815 5,021 1,708 4,500 1,703 9,372 3,567 The high demand for the heavier weight mechanical cranes experienced in the last quarter of 2002/2003 has continued in the first half of the current year. Demand for hydraulic cranes has also been solid. Whilst activity in the winter quarter is expected to fall our traditional market measures are indicating that in the last quarter of the year demand is likely to revert to that experienced in the first half. Demand for vibro hammers has been good with new purchases in this area experiencing high utilization. However in overall terms, the piling sector still awaits the expected surge of spend in the roads market before aggregate demand will improve. We continue with our policy of upgrading and rebalancing both our crawler crane and piling fleets on a selective basis. Expenditure in the short term is likely to focus on heavier hydraulic cranes. However, both the crawler crane and piling markets are mature in nature and therefore growth is limited by way of capital investment if prices are not to be driven down. We are, therefore, reviewing how growth can be better achieved in what are regarded as profitable sectors. The Cabin Company, our site accommodation business, continues its penetration of the external market with thirty six percent (2002/2003: fifteen percent) of its turnover in the period with customers outside the Birse Group. This growth, however, has been almost matched by a fall in internal Group demand, principally from Birse Build, therefore in overall terms its profit performance compared with the corresponding period last year is broadly static. This pattern experienced in the first half is expected to continue into the second half. Commercial Property Six months ended 31 October Year ended 2003 2002 30 April 2003 Turnover Operating Turnover Operating Turnover Operating profit profit profit #'000 #'000 #'000 #'000 #'000 #'000 - - - - 7,953 3,025 Following the sale of our one remaining site, at Warrington, in 2002/2003 property development activities are no longer material to the Group. Citibank Adjudication In late November CIB Properties Limited, a Citibank Group company, referred to adjudication matters relating to the termination of the contract for construction services for its new data centre facility at Riverdale, Lewisham. This is the contract that was referred to in the Group Managing Director's Review and Review of Operations in the 2002/2003 Annual Report when it was stated that:- "A further note of caution is also appropriate in relation to the customer termination of one of Birse Build's larger contracts which was awarded in 2000/ 2001. Whilst we are in a formal dialogue with the customer concerned the financial consequences emanating from that determination at this stage are best estimates only. Until this matter is finally resolved there is therefore added uncertainty over the short term performance of the Build business." The adjudication will determine on an interim basis Citibank's claim for approximately #16million and Birse's claim for approximately #14million. The interim accounts have been prepared on the basis of a no win, no loss position. Formal mediation procedures had only commenced in October of this year and were progressing positively. As a result of the action by Citibank in deciding to commence an adjudication we are now forced to participate in a process that is uncertain. We will, however, be properly prepared and will pursue with determined professionalism our defence in the adjudication process, which we are advised has good prospects of success. The adjudicator is timetabled to publish his decision in January 2004. Dividend An interim dividend of 0.375p per ordinary share (2002: 0.375p) will be paid on 5 May 2004 to shareholders on the register on 2 April 2004. Outlook At the year end we reported that the Group was in a good position to progress further from the solid platform established over the last two years. The Group's main markets have remained steady. In these circumstances the Group has achieved a solid first half performance and prospects for the second half remain encouraging, assuming a satisfactory outcome in relation to the Citibank adjudication. We, therefore, believe that further progress in the underlying performance of the business will continue. CONSOLIDATED RESULTS FOR THE 6 MONTHS ENDED 31 OCTOBER 2003 6 Months 6 Months Year Ended Ended Ended 31.10.03 31.10.02 30.04.03 #'000 #'000 #'000 Note Turnover 2 201,114 248,049 483,312 Operating profit before exceptional operating item 2 1,759 1,474 6,603 Exceptional operating item 3 - (5,500) (5,500) Operating profit/(loss) 2 1,759 (4,026) 1,103 Net interest 26 186 98 Profit/(loss) on ordinary activities before taxation 2 1,785 (3,840) 1,201 Taxation 4 (357) 1,152 (230) Profit/(loss) for the financial period 1,428 (2,688) 971 Dividends on equity shares 5 (721) (721) (1,924) Transferred to/(withdrawn from) reserves 707 (3,409) (953) Earnings/(loss) per ordinary share - basic 6 0.7p (1.4)p 0.5p - diluted 6 0.7p (1.4)p 0.5p Before exceptional item - basic 6 0.7p 0.6p 2.5p - diluted 6 0.7p 0.6p 2.5p The above figures relate exclusively to continuing operations CONSOLIDATED BALANCE SHEET AS AT 31 OCTOBER 2003 As at As at As at 31.10.03 31.10.02 30.04.03 Note #'000 #'000 #'000 Fixed Assets Tangible Assets 17,501 13,789 16,703 Current Assets Property held for resale - 1,685 - Stocks - 3,396 - Debtors 7 123,187 142,209 134,736 Investments 8,102 4,673 5,121 Cash at bank and in hand 12,510 13,103 12,232 143,799 165,066 152,089 Creditors: Amounts falling due within one year Bank loans and overdrafts (862) (600) (772) Other creditors (140,823) (163,533) (149,440) (141,685) (164,133) (150,212) Net Current Assets 2,114 933 1,877 Total Assets less Current Liabilities 19,615 14,722 18,580 Creditors: Amounts falling due after more than one year Bank loans and overdrafts (1,611) (886) (1,172) Other creditors (8,085) (6,526) (8,196) (9,696) (7,412) (9,368) Provisions for Liabilities and Charges - (554) - Net Assets 9,919 6,756 9,212 Capital and Reserves Called up share capital 19,239 19,239 19,239 Share premium account 93 93 93 Special reserve 308 308 308 Revaluation reserve 607 607 607 Profit and loss account (10,328) (13,491) (11,035) Shareholders' Funds - equity interest 9,919 6,756 9,212 CONSOLIDATED CASH FLOW STATEMENT For the 6 months ended 31 October 2003 6 Months 6 Months Year Ended Ended Ended 31.10.03 31.10.02 30.04.03 #'000 #'000 #'000 Net cash inflow from operating activities 5,602 5,268 7,662 Returns on investments and servicing of finance 26 159 50 Taxation (57) 248 243 Capital expenditure and financial investment (5,428) (3,964) (5,898) Dividends paid to equity shareholders (721) (721) (1,924) Cash (outflow)/inflow before management of liquid resources and financing (578) 990 133 Management of liquid resources (126) 416 333 Financing 462 850 1,284 (Decrease)/increase in cash in the period (242) 2,256 1,750 6 Months 6 Months Year Ended Ended Ended 31.10.03 31.10.02 30.04.03 #'000 #'000 #'000 Reconciliation of operating profit/(loss) to net cash inflow from operating activities Operating profit/(loss) 1,759 (4,026) 1,103 Depreciation net of profit on disposal of fixed assets 1,255 1,037 1,742 (Increase)/decrease in stocks - (150) 3,246 Decrease in debtors 11,196 5,407 11,002 (Decrease)/increase in creditors (8,608) 3,000 (9,431) Net cash inflow from operating activities 5,602 5,268 7,662 Analysis of net funds Cash at bank on demand 11,990 12,738 12,232 Cash at bank on short term deposit 520 365 - Cash at bank on deposit with terms in excess of seven days 2,087 2,033 2,481 Debt due within one year (862) (600) (772) Debt due after one year (1,611) (886) (1,172) Finance leases (249) (340) (316) Net funds at 31 October 2003 11,875 13,310 12,453 Reconciliation of cash flows to movements in net funds Increase in cash in the period (242) 2,256 1,750 Cash inflow from financing (462) (850) (1,284) Cash outflow/(inflow) from management of liquid resources 126 (416) (333) Movement in net funds in the period (578) 990 133 Net funds at 1 May 2003 12,453 12,320 12,320 Net funds at 31 October 2003 11,875 13,310 12,453 NOTES TO THE INTERIM ACCOUNTS 1. Preparation of Interim Accounts The interim accounts, which relate exclusively to continuing operations, have been prepared on the basis of the accounting policies set out in the Group's statutory accounts for the year ended 30 April 2003. The Group's auditors, Deloitte & Touche LLP, have carried out a review of the interim accounts, which were approved by the Board of Directors on 11 December 2003, and their report is reproduced on page 15. The financial information presented is unaudited and does not amount to full statutory accounts within the meaning of the Companies Act 1985. Full accounts for the year ended 30 April 2003 upon which Deloitte & Touche gave an unqualified audit report, have been delivered to the Registrar of Companies and a statement under section 237(2) of the Companies Act 1985 was not included. 2. Segment Information 6 Months 6 Months Year Ended Ended Ended 31.10.03 31.10.02 30.04.03 #'000 #'000 #'000 Turnover Contracting 197,647 245,980 469,672 Plant Hire 5,021 4,500 9,372 Commercial Property - - 7,953 Group Centre - - - Intra-group (1,554) (2,431) (3,685) 201,114 248,049 483,312 Results Contracting 301 11 490 Plant Hire 1,708 1,703 3,567 Commercial Property - - 3,025 Group Centre (250) (240) (479) Operating profit before exceptional operating item 1,759 1,474 6,603 Exceptional operating item - Contracting - (5,500) (5,500) Operating profit/(loss) 1,759 (4,026) 1,103 Net interest 26 186 98 Profit/(loss) on ordinary activities before taxation 1,785 (3,840) 1,201 From 1 May 2003 Group Centre includes certain central costs that were previously recharged to operating companies. Consequently the comparative figures have been adjusted as follows:- 6 Months Ended Year Ended 31.10.02 30.04.03 Results Contracting 390 812 Plant Hire 111 203 Group Centre (501) (1,015) - - 3. Exceptional Operating Item 6 Months 6 Months Year Ended Ended Ended 31.10.03 31.10.02 30.04.03 #'000 #'000 #'000 Bad debt in respect of Leicester City plc and its subsidiaries - (5,500) (5,500) This bad debt was recognised in consequence of the insolvency of Leicester City plc and its subsidiaries. The tax credit attributable to this exceptional loss in the six months ended 31 October 2002 and the year ended 30 April 2003 was #1,650,000. 4. Taxation The tax (charge)/credit for the period has been calculated by reference to the projected rate for the full year. 5. Dividends on Equity Shares An interim dividend of 0.375p per ordinary share (2002 : 0.375p) will be paid on 5 May 2004 to shareholders on the register on 2 April 2004. 6. Earnings/(loss) per Ordinary Share 6 Months 6 Months Year Ended Ended Ended 31.10.03 31.10.02 30.04.03 #'000 #'000 #'000 The calculation of earnings/(loss) per ordinary share is based on: Earnings/(loss) for basic and diluted earnings per ordinary share calculation 1,428 (2,688) 971 Exceptional item - 5,500 5,500 Tax on exceptional item - (1,650) (1,650) Earnings before exceptional item per ordinary share calculation 1,428 1,162 4,821 Weighted average number of shares used in earnings /(loss) per ordinary share calculation 192,390 192,390 192,390 Adjustment to reflect dilutive shares under option - - - Weighted average number of shares in diluted earning/(loss) per ordinary share calculation 192,390 192,390 192,390 7. Uncertainties i. Relating to Amounts Recoverable on Contracts Included in debtors is an aggregate value of #5.0million (31 October 2002: #6.2million, 30 April 2003: #5.5million) attributable to contractual amounts relating to one (31 October 2002 and 30 April 2003: two) contract which is the subject of arbitration or equivalent proceedings. In consequence of the losses suffered on contracts subject to litigation in previous years the Directors have reconsidered the recoverability of the amounts attributable to this and other old contracts. Whilst the Directors believe that they are justified in concluding that these amounts will be realised, the Directors acknowledge that there remains uncertainty. However, it is not possible to quantify the effects. ii. Adjudication Effective on 21 November 2003 CIB Properties Limited, a Citibank Group company, referred to adjudication matters relating to the contract for construction services for its new data centre facility at Riverdale, Lewisham. The adjudication will determine on an interim basis Citibank's claim for approximately #16million and Birse's claim for #14million. Adjudication is a process that is uncertain. The Board of Birse Group plc however has been advised that its defence has good prospects of success. These interim accounts have been prepared on the basis that neither a material award against nor a material award in favour of Birse will arise. Independent review report to Birse Group plc Introduction We have been instructed by the company to review the financial information for the six months ended 31 October 2003 which comprises the profit and loss account, the balance sheet, the cash flow statement and related notes 1 to 7. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors. The Directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Uncertainties relating to amounts recoverable on contracts and contract in adjudication In arriving at our review conclusion we have considered the accuracy of disclosures made in Note 7 to the financial information concerning uncertainties relating to amounts recoverable on contracts and adjudication. In view of the significance of these uncertainties, we consider they should be brought to your attention. Our review conclusion is not qualified in either respect. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2003. Deloitte & Touche LLP Chartered Accountants and Registered Auditors Leeds 11 December 2003 This interim report will be posted to shareholders and copies will be made available to the public from: The Secretary, Birse Group plc, Humber Road, Barton on Humber, North Lincolnshire, DN18 5BW. This information is provided by RNS The company news service from the London Stock Exchange END IR TMBPTMMTBBPJ
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