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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Integra Resources Corp | TG:IRV | Tradegate | 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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| 0.02 | 2.38% | 0.862 | 0.834 | 0.862 | 0.864 | 0.862 | 0.864 | 3,850 | 12:18:31 |
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RNS Number:7665P
Interserve PLC
16 September 2003
Embargoed until 7.00 am 16.9.2003
INTERIM RESULTS FOR
THE SIX MONTHS ENDED 30 JUNE 2003
* Turnover from core continuing operations*: #538 million
(H1 2002: #533 million)
* Underlying profit before tax**: #22.1 million (H1 2002: #25.0 million)
* New contracts won in the period worth over #700 million
* Future workload at record #3.9 billion
* Interim dividend up 5% to 4.2p
* Board succession implemented
Mike Bottjer, Interserve's Chairman, remarked:
"We have achieved a great deal of success in the first six months of 2003 in
winning important new contracts in both the public and private sectors. As a
result our forward order book now stands at a record level, which represents a
significant future revenue stream and is a strong indicator that we are well
positioned for long-term growth."
- Ends -
For further information please contact:
Adrian Ringrose, Chief Executive 0118 932 0123
Tim Jones, Group Finance Director 0118 932 0123
Giles Scott, Head of Corporate Communications 0118 960 2307
giles.scott@interserveplc.co.uk
---------------------------------
About Interserve
Interserve (www.interserveplc.co.uk) delivers a comprehensive and integrated
range of services to the public and private sectors in support of their core
operations. The company operates through five divisions: Facilities Services,
Industrial Services, Project Services, Equipment Services and PFI Investments.
Interserve is based in the UK and is listed on the London Stock Exchange (LSE:
IRV). It trades in the FTSE 250 index and had a 2002 turnover of over #1.1
billion.
* Turnover from core continuing operations comprises Group turnover of #557.4
million (H1 2002: #568.9 million) less turnover from discontinuing operations of
#19.5 million (H1 2002: #28.8 million) and from discontinued operations of #nil
(H1 2002: #6.8 million).
** Throughout this report, where reference is made to underlying or operating
figures this is before the impact of operating losses from discontinuing
operations of #2.1 million (H1 2002: #0.4 million) and discontinued operations
of #nil (H1 2002: #0.1 million), goodwill amortisation of #4.7 million (H1 2002:
#4.8 million) and the SSAP 24 charge of #4.2 million (H1 2002: #nil).
Chairman's Statement
At the interim stage the trading position and progress of the Group is in line
with expectations. With a record order book and improving trends in the market,
we are well placed for sustained long-term growth.
As shown below, underlying profit before tax for the first half-year amounted to
#22.1 million (H1 2002: #25.0 million). Resultant earnings per share were 13.5p
(H1 2002: 14.7p), assuming a tax rate of 31% (H1 2002: 32%).
2003 H1 2002 H1
Profit before tax and goodwill amortisation #15.8 m #24.7 m
Add back the following:
Losses from: discontinuing operations #2.1 m #0.4 m
discontinued operations - #0.1 m
Prior year exceptional item: - (#0.2m)
--------- ---------
#17.9m #25.0m
SSAP24 pension charge (no charge in H1 2002) #4.2 m -
--------- ---------
Underlying profit before tax #22.1 m #25.0m
--------- ---------
Overall, turnover for core continuing operations at #538 million remained, as
expected, much in line with last year.
Our balance sheet remains strong, with net debt at the half-year of #62.9
million (H1 2002: #65.9 million), representing gearing of 30%. Net interest
payable of #1.6 million (H1 2002: #2.1 million) was covered over 10 times by
operating profit. In June we successfully renewed and extended the Group's
revolving credit facility to #165 million with a five-year term.
The directors have approved an interim dividend of 4.2p (H1 2002: 4.0p), which
will be paid on 3 November 2003 to shareholders on the register at the close of
business on 26 September 2003.
We have made a number of changes to the board this year brought about primarily
by the splitting of the roles of Chairman and Chief Executive and succession
planning. The changes have taken place smoothly and the Group now has a new
Chief Executive, Adrian Ringrose, a new Group Finance Director, Tim Jones, a new
Deputy Chairman and Senior Non-Executive Director, John Padovan, and three new
Non-Executive Directors, Patrick Balfour, David Trapnell and Nicholas Keegan.
This composition provides a well-balanced board to take the Group forward into
its next stage of development and growth.
Proposals to exit certain non-core operations, as announced in our July trading
update, have been started and are proceeding according to plan. Action to exit
non-core operations this year will strengthen the long-term earnings platform
and growth potential for the business as the Group continues its successful
strategy of development as an integrated service provider. The board expects
this exit plan ultimately to yield a positive net cash inflow of some #10
million.
There continues to be a significant flow of attractive opportunities in our
chosen areas of operation, particularly in the public and privatised sectors,
which provide some two-thirds of our workload. The main thrust of the Group's
energy and resources is directed to the provision of a wide range of integrated
services in such market sectors as health, education, prison service, defence,
infrastructure and industry, all of which offer considerable potential for
long-term growth. In all of these sectors we work closely with our clients to
meet their specific needs and further develop the specialist expertise and
knowledge that exists within the Group. Our overall client retention rate on
relevant services/maintenance contracts continues to exceed 90%.
We have secured over #700 million of contracts in the first half of the year.
Notable amongst these are the PPP joint venture for the Army Training Estate,
two PFI projects for the Defence Sixth Form College and Peterborough Prison, and
a contract for major road improvements on the A5. In the private sector we have
won new work from clients including BP, Texaco, BAE Systems, National Grid and
BNFL. We have also been named preferred bidder on the MOD's Armada PFI project
for the fleet accommodation centre at Plymouth, which will be worth a further
#200 million in services for the Group. Enquiry levels are strong and we have
excellent bidding opportunities in all of the sectors in which we operate.
Prospects
We are now seeing an improving trading environment, with future revenue
underpinned by a record forward order book and pipeline of some #3.9 billion
(2002 H1: #3.4 billion). The board remains very positive as to the long-term
growth prospects for the Group as an integrated services provider.
Mike Bottjer
Chairman
15th September 2003
Chief Executive's Overview
Operating profit from core continuing operations(1) was in line with
expectations at #23.7 million (2002 H1: #27.1 million). Absorbed within this
result was the impact of over #2 million additional general insurance and
National Insurance costs. The associated turnover amounted to #538 million
(2002 H1: #533 million).
In July the Group announced the proposed closure of three non-core operations in
tube & fitting townwork scaffolding, low voltage power distribution and rail
signalling. These businesses contributed an operating loss of #2.1 million
(2002 H1: #0.4 million loss) and a deteriorating cash performance and showed no
prospects for sustained profitable growth. The exit programme is proceeding to
plan.
The Group reports operations under six main headings: Facilities Services,
Industrial Services, Project Services, Equipment Services, PFI Investments and
Group Services.
Facilities Services performed well, increasing operating profit by 7% to #7.8
million on turnover increased by 6% to #217.6 million. The margin on turnover
excluding the works bills element of MOD contracts, on which no margin is
earned, increased to 5.4% (2002 H1: 5.3%). This division focuses on long-term,
multi-service contracts, predominantly with public sector clients in health,
defence and local authorities. Continued focus on service delivery improvements
has resulted in contract extensions in this period with Network Rail, Royal &
Sun Alliance and Defence Estates. The forward order book for this division, at
the half-year, grew to some #2.24 billion (2002 H1: #2.17 billion), with a
further #220 million in the pipeline.
Industrial Services' operating profit from continuing businesses was #4.7
million (2002 H1: #5.6 million). Turnover increased to #64.7 million (2002 H1:
#50.8 million) emanating from renewals and new contracts with clients including
BAE Systems, BP Chemicals, Texaco, Urenco, BNFL, Lubrizol and Foster Wheeler.
Margins were affected in the short term by front-end mobilisation costs
associated with the new contracts mentioned above. This division provides a
wide range of integrated services to industrial clients mainly in the
petrochemical, pharmaceutical, power and manufacturing sectors. During the
first half, significant contract awards have extended the client base into the
defence and nuclear plant decommissioning sectors, where prospects are
encouraging for the long term. Following the decision to discontinue non-core
operations, the division is now focused on developing through maintenance-led
activities and on broadening the range of services offered to existing clients
on industrial fixed sites. The forward order book for the division grew to #574
million (2002 H1: #566 million), with around #20 million in the pipeline,
together with encouraging levels of enquiries and bidding opportunities.
Project Services delivered operating profit of #7.0 million (2002 H1: #8.0
million). Following a particularly impressive result in 2002 this is a strong
performance in line with the underlying trend. Margins remained stable at 3.4%
(2002 H1: 3.5%) despite an adverse impact from foreign exchange rates in
overseas operations. Turnover was #207 million (2002 H1: #230 million),
reflecting the phasing of work within the year. The division's focus is on
framework agreements, PFI projects and long-term maintenance contracts and
further progress was made in all areas. New work secured included a framework
agreement with the Department of Work & Pensions and new PFI contracts for
Peterborough Prison, the Defence Sixth Form College in Loughborough and, in
August, at the Inland Revenue project in Newcastle. In infrastructure, the
focused strategy on highways resulted in the award of the A5 Weeford bypass and,
latterly, the Peterborough-Blyth improvements on the A1. The latter project was
awarded purely on the basis of quality and track record. Internationally,
performance in the Middle East was mixed. The Iraq war affected confidence in
Dubai but contributed to Qatar remaining buoyant. The forward order book for
the division grew to #718 million at the half-year (2002 H1: #675 million), with
around #90 million in the pipeline.
Equipment Services' operating profit was #6.1 million (2002 H1: #6.8 million).
At 16.5% (2002 H1: 19.4%), the first-half margin is below our expectations for
this business. Causal factors were continuing quiet market conditions in the Far
East and a lull in the UK market, compensated to some extent by strong trading
in Australia and New Zealand and by sustained growth in Spain and in the Middle
East, despite a temporary dip during the Iraq war. With indications of increased
levels of activity in the UK and some recovery in the Far East, margins are
expected to improve. This division provides a comprehensive design, hire and
sale service for formwork and falsework equipment, which is used particularly on
complex infrastructure projects.
Operating profit from investments in PFI projects was #0.9 million (2002 H1:
#1.6 million). On a pre-tax basis profit was #0.4 million less than the first
half of 2002 due to the recognition of a prior-year credit in that period.
During the first half we added three new PFI/PPP contracts to the portfolio, two
of which (Peterborough Prison and the Army Training Estate) were at preferred
bidder stage at the end of 2002. The third (Defence Sixth Form College)
progressed rapidly from preferred bidder to contract signature and is now well
into the construction phase. At the end of the period we had a portfolio of 18
investments and a total commitment of #33 million (2002 H1: #27 million), of
which about half had already been invested. In addition Armada and the two
Tyrone Colleges projects were at preferred bidder stage. In September we reached
financial close on the Tyrone projects, taking our total to 20 secured and one
at preferred bidder.
Group Services costs were #2.8 million (2002 H1: #2.2 million). These comprise
the cost of centrally-provided services, PFI portfolio management and bidding
costs.
Adrian Ringrose
Chief Executive
15th September 2003
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT
For the six months ended 30 June 2003
Six months ended 30 June 2003
Before exceptional Exceptional Total
items items
and goodwill and goodwill
amortisation amortisation
# million # million # million
TURNOVER
Core continuing operations 537.9 - 537.9
Discontinuing operations 19.5 - 19.5
Continuing operations * 557.4 - 557.4
Discontinued operations** - - -
557.4 - 557.4
Less: Share of joint
ventures-PFI investments (11.9) - (11.9)
545.5 - 545.5
OPERATING PROFIT
Group
Continuing operations *
Before exceptional items and
goodwill amortisation 14.9 - 14.9
Exceptional items - - -
Goodwill amortisation - (4.7) (4.7)
14.9 (4.7) 10.2
Discontinued operations** - - -
14.9 (4.7) 10.2
Share of joint ventures
and associated undertakings
(continuing operations) 2.5 - 2.5
TOTAL OPERATING PROFIT 17.4 (4.7) 12.7
Attributable to:
Core continuing operations 19.5 (4.7) 14.8
Discontinuing operations (2.1) - (2.1)
Discontinued operations - - -
TOTAL OPERATING PROFIT 17.4 (4.7) 12.7
Exceptional items
Net profit (loss) on sale or
termination of discontinued
operations (note 2) - - -
Net interest payable (note 3) (1.6) - (1.6)
PROFIT BEFORE TAXATION 15.8 (4.7) 11.1
Taxation (note 4) (5.0) - (5.0)
PROFIT AFTER TAXATION 10.8 (4.7) 6.1
Dividends (4.8) - (4.8)
PROFIT RETAINED 6.0 (4.7) 1.3
p p p
BASIC EARNINGS PER
SHARE (note 5) 5.4
Adjust for exclusion of:
Effect of exceptional items and
goodwill amortisation 4.2
ADJUSTED EARNINGS PER SHARE 9.6
Analysis of adjusted earnings
per share:
Continuing operations 12.2
Discontinued operations -
SSAP 24 (2.6)
DILUTED EARNINGS PER SHARE 5.4
DIVIDENDS PER SHARE 4.2 - 4.2
* Included in continuing operations are discontinuing operations which represent
the results of tube and fittings townwork scaffolding, low voltage electricity
distribution lines and rail cabling and signalling businesses, three non-core
operations, the proposed closure of which was announced in the Trading update on
14 July 2003. Earnings per share for continuing operations prior to the losses
arising from these operations is 13.5p (30 June 2002 14.7p; 31 December 2002
32.7p).
** Discontinued operations represent the results of West's Engineering Design,
Tilbury Phoenix and Climate Equipment which were sold with effect from 11
January 2002, 25 March 2002 and 4 October 2002 respectively.
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT - continued
For the six months ended 30 June 2003
Six months ended 30 June 2002
Before exceptional Exceptional Total
items items
and goodwill and goodwill
amortisation amortisation
# million # million # million
TURNOVER
Core continuing operations 533.3 - 533.3
Discontinuing operations 28.8 - 28.8
Continuing operations * 562.1 - 562.1
Discontinued operations ** 6.8 - 6.8
568.9 - 568.9
Less: Share of joint
ventures-PFI investments (11.7) - (11.7)
557.2 - 557.2
OPERATING PROFIT
Group
Continuing operations *
Before exceptional items and
goodwill amortisation 23.5 - 23.5
Exceptional items - - -
Goodwill amortisation - (4.8) (4.8)
23.5 (4.8) 18.7
Discontinued operations ** (0.1) - (0.1)
23.4 (4.8) 18.6
Share of joint ventures and
associated undertakings
(continuing operations) 3.2 - 3.2
TOTAL OPERATING PROFIT 26.6 (4.8) 21.8
Attributable to:
Core continuing operations 27.1 (4.8) 22.3
Discontinuing operations (0.4) - (0.4)
Discontinued operations (0.1) - (0.1)
TOTAL OPERATING PROFIT 26.6 (4.8) 21.8
Exceptional items
Net profit (loss) on sale or
termination of discontinued
operations (note 2) - 0.2 0.2
Net interest payable (note 3) (2.1) - (2.1)
PROFIT BEFORE TAXATION 24.5 (4.6) 19.9
Taxation (note 4) (7.9) - (7.9)
PROFIT AFTER TAXATION 16.6 (4.6) 12.0
Dividends (4.5) - (4.5)
PROFIT RETAINED 12.1 (4.6) 7.5
p p p
BASIC EARNINGS PER
SHARE (note 5) 10.6
Adjust for exclusion of:
Effect of exceptional items
and goodwill amortisation 4.0
ADJUSTED EARNINGS PER SHARE 14.6
Analysis of adjusted
earnings per share:
Continuing operations 14.4
Discontinued operations 0.2
SSAP 24 -
DILUTED EARNINGS PER SHARE 10.4
DIVIDENDS PER SHARE 4.0 - 4.0
* Included in continuing operations are discontinuing operations which represent
the results of tube and fittings townwork scaffolding, low voltage electricity
distribution lines and rail cabling and signalling businesses, three non-core
operations, the proposed closure of which was announced in the Trading update on
14 July 2003. Earnings per share for continuing operations prior to the losses
arising from these operations is 13.5p (30 June 2002 14.7p; 31 December 2002
32.7p).
** Discontinued operations represent the results of West's Engineering Design,
Tilbury Phoenix and Climate Equipment which were sold with effect from 11
January 2002, 25 March 2002 and 4 October 2002 respectively.
UNAUDITED GROUP PROFIT AND LOSS ACCOUNT - continued
For the six months ended 30 June 2003
Year ended 31 December 2002
Before exceptional Exceptional Total
items items
and goodwill and goodwill
amortisation amortisation
# million # million # million
TURNOVER
Core continuing operations 1,052.4 - 1,052.4
Discontinuing operations 58.9 - 58.9
Continuing operations * 1,111.3 - 1,111.3
Discontinued operations ** 11.6 - 11.6
1,122.9 - 1,122.9
Less: Share of
joint ventures-PFI investments (23.7) - (23.7)
1,099.2 - 1,099.2
OPERATING PROFIT
Group
Continuing operations *
Before exceptional items and
goodwill amortisation 47.0 - 47.0
Exceptional items - (1.0) (1.0)
Goodwill amortisation - (9.6) (9.6)
47.0 (10.6) 36.4
Discontinued operations ** - - -
47.0 (10.6) 36.4
Share of joint ventures and
associated undertakings
(continuing operations) 6.1 (0.1) 6.0
TOTAL OPERATING PROFIT 53.1 (10.7) 42.4
Attributable to:
Core continuing operations 55.1 (10.7) 44.4
Discontinuing operations (2.0) - (2.0)
Discontinued operations - - -
TOTAL OPERATING PROFIT 53.1 (10.7) 42.4
Exceptional items
Net profit (loss) on
sale or termination of
discontinued operations (note 2) - (1.2) (1.2)
Net interest payable (note 3) (4.0) - (4.0)
PROFIT BEFORE TAXATION 49.1 (11.9) 37.2
Taxation (note 4) (13.1) 0.5 (12.6)
PROFIT AFTER TAXATION 36.0 (11.4) 24.6
Dividends (14.7) - (14.7)
PROFIT RETAINED 21.3 (11.4) 9.9
p p p
BASIC EARNINGS PER SHARE
(note 5) 21.6
Adjust for exclusion of:
Effect of exceptional items
and goodwill amortisation 10.1
ADJUSTED EARNINGS PER SHARE 31.7
Analysis of adjusted
earnings per share:
Continuing operations 31.5
Discontinued operations 0.2
SSAP 24 -
DILUTED EARNINGS PER SHARE 21.5
DIVIDENDS PER SHARE 13.0 - 13.0
* Included in continuing operations are discontinuing operations which represent
the results of tube and fittings townwork scaffolding, low voltage electricity
distribution lines and rail cabling and signalling businesses, three non-core
operations, the proposed closure of which was announced in the Trading update on
14 July 2003. Earnings per share for continuing operations prior to the losses
arising from these operations is 13.5p (30 June 2002 14.7p; 31 December 2002
32.7p).
** Discontinued operations represent the results of West's Engineering Design,
Tilbury Phoenix and Climate Equipment which were sold with effect from 11
January 2002, 25 March 2002 and 4 October 2002 respectively.
UNAUDITED GROUP BALANCE SHEET
At 30 June 2003
30.06.03 30.06.02 31.12.02
# million # million # million
Fixed assets
Intangible fixed assets - goodwill 159.2 168.8 163.9
Tangible assets 97.7 103.0 100.7
Investment in joint ventures and
associated
undertakings 29.6 22.4 26.2
286.5 294.2 290.8
Current assets
Stocks and work in progress 11.8 19.9 14.9
Debtors 259.3 270.6 235.6
Pension scheme prepayment 32.3 32.0 32.3
Investments 0.5 0.6 0.5
Short term deposits 12.2 6.7 6.4
Cash at bank and in hand 4.6 5.7 7.0
320.7 335.5 296.7
Creditors falling due within one year
Bank loans - 0.6 0.4
Bank overdraft 1.0 0.4 4.0
Unsecured loan notes 6.3 21.1 16.0
Trade creditors 156.9 174.2 158.6
Other creditors 130.1 143.3 137.9
294.3 339.6 316.9
Net current assets (liabilities) 26.4 (4.1) (20.2)
Total assets less current liabilities 312.9 290.1 270.6
Creditors falling due after more than one
year
Bank and other loans (71.8) (56.0) (35.1)
Other creditors (2.3) (2.0) (2.4)
Provisions for liabilities and charges (31.3) (28.7) (29.4)
Net assets 207.5 203.4 203.7
Capital and reserves
Called up share capital 11.4 11.4 11.3
Share premium account 107.7 106.4 106.4
Capital redemption reserve 0.1 - 0.1
Acquisition reserve 16.4 16.4 16.4
Profit and loss account 71.8 69.1 69.4
Shareholders' funds - equity interest 207.4 203.3 203.6
Minority interest - equity interest 0.1 0.1 0.1
207.5 203.4 203.7
UNAUDITED RECONCILIATION OF MOVEMENT IN
SHAREHOLDERS' FUNDS
30.06.03 30.06.02 31.12.02
# million # million # million
Profit retained 1.3 7.5 9.9
Currency translation differences on
foreign
currency net investments 1.1 (0.5) (0.9)
New share capital subscribed 1.4 0.3 0.3
Repurchase of Company shares - - (1.7)
Net addition to shareholders' funds 3.8 7.3 7.6
Opening shareholders' funds - equity
interest 203.6 196.0 196.0
Shareholders' funds - equity interest 207.4 203.3 203.6
Minority interest - equity interest 0.1 0.1 0.1
207.5 203.4 203.7
UNAUDITED CONSOLIDATED STATEMENT OF TOTAL
RECOGNISED GAINS AND LOSSES
30.06.03 30.06.02 31.12.02
# million # million # million
Profit for the financial period/year
attributable to the members of
Interserve Plc 6.1 12.0 24.3
Currency translation differences on
foreign
current net investments 1.1 (0.5) (0.9)
Total recognised gains and losses in the
period/year 7.2 11.5 23.7
UNAUDITED GROUP CASH FLOW STATEMENT
For the six months ended 30 June 2003
Six months Six months Year ended
ended ended 31.12.02
30.06.03 30.06.02
#million #million #million
Reconciliation of operating profit to net
cash (outflow) inflow from operating
activities
Operating profit before exceptional items
and goodwill amortisation and excluding
share of joint ventures and associated
undertakings 14.9 23.4 47.0
Exceptional items - - (2.3)
Depreciation 7.6 7.1 14.8
Profit on sale of fixed assets (4.3) (3.2) (6.2)
(Increase) in working capital (36.3) (30.0) (0.2)
Net cash (outflow) inflow from
operating activities (18.1) (2.7) 53.1
Dividends received from associated
undertakings 1.2 1.3 2.1
Return on investments and servicing of
finance
Net interest paid (1.8) (1.5) (2.5)
Taxation
UK and overseas tax paid (3.6) (6.7) (15.5)
Capital expenditure
Purchase of tangible fixed assets (7.9) (11.8) (28.3)
Sale of tangible fixed assets 10.9 7.8 18.7
3.0 (4.0) (9.6)
Acquisitions and disposals
Investment in joint ventures - PFI
investments (2.2) (0.3) (3.0)
Sale of subsidiary undertaking net of
costs - 9.7 11.4
(2.2) 9.4 8.4
Equity dividends paid - - (14.1)
Cash (outflow) inflow before management
of liquid resources and financing (21.5) (4.2) 21.9
Management of liquid resources (5.8) (5.4) (4.9)
Financing
Issue (redemption) of shares 1.4 0.3 (1.5)
Net increase (decrease) in debt, loan
notes and finance leases 26.5 6.2 (19.9)
27.9 6.5 (21.4)
Increase (decrease) in cash in the
period/year 0.6 (3.1) (4.4)
Reconciliation of net cash flow to
movement in net debt
Increase (decrease) in cash in the
period/year 0.6 (3.1) (4.4)
Cash flow from increase in liquid
resources 5.8 5.4 4.9
Cash flow from (increase) decrease in
debt (36.3) (7.0) 13.9
Net repayment of unsecured loan notes 9.7 0.7 5.8
Cash flow from finance lease rentals 0.1 0.1 0.2
Change in net debt resulting from cash
flows (20.1) (3.9) 20.4
Inception of new finance leases - - (0.6)
Effect of foreign exchange rate changes - 0.8 0.2
(20.1) (3.1) 20.0
Net debt - opening (42.8) (62.8) (62.8)
Net debt - closing (62.9) (65.9) (42.8)
SEGMENTAL ANALYSIS
For the six months ended 30 June 2003
The turnover, total operating profit (excluding exceptions items and goodwill
amortisation) and net assets attributable to the difference classes of the
Group's business are:
Turnover (external)
Six months ended Year ended
30.06.03 30.06.02 31.12.02
#million #million #million
By business segment:
Facilities services (note i) 217.6 205.5 396.0
Industrial services 64.7 50.8 110.1
Project services (note ii) 206.6 229.9 447.4
Equipment services 36.9 35.0 74.5
525.8 521.2 1,028.0
Joint venture-PFI investments 11.9 11.7 23.7
Group services 0.2 0.4 0.7
537.9 533.3 1,052.4
SSAP 24 (note iii) - - -
537.9 533.3 1,052.4
Discontinuing operations (note iv) 19.5 28.8 58.9
557.4 562.1 1,111.3
Discontinued operations (note v) - 6.8 11.6
557.4 568.9 1,122.9
By geographic area:
United Kingdom 500.2 497.0 973.1
Rest of Europe 8.8 7.4 14.6
Middle East & Africa 2.5 2.3 4.8
Australasia 9.9 7.0 15.3
Far East 4.0 6.8 18.7
South America 0.4 0.7 1.5
525.8 521.2 1,028.0
Joint venture-PFI investments 11.9 11.7 23.7
Group services 0.2 0.4 0.7
537.9 533.3 1,052.4
SSAP 24 (note iii) - - -
537.9 533.3 1,052.4
Discontinuing operations (note iv) 19.5 28.8 58.9
557.4 562.1 1,111.3
Discontinued operations (note v) - 6.8 11.6
557.4 568.9 1,122.9
(i) Facilities services turnover includes #73.5 million in respect of works
bills (30.6.02 #67.9 million; 31.12.02 #118.0 million). Works bills are costs
relating to services and materials procured on behalf of the Ministry of Defence
on which no margin is allowed but for which a management fee is received.
(ii) Project services profit disclosed above is before taking account of net
interest received of #1.7 million (30.6.02 #2.0 million; 31.12.02 #3.7
million).
(iii) SSAP 24 refers to the Net Pension Scheme charge on the UK Defined Benefit
Scheme and the related pension scheme prepayment.
(iv) Discontinuing operations represent the results of tube and fittings
townwork scaffolding, low voltage electricity distribution lines and rail
cabling and signalling businesses, three non-core operations, the proposed
closure of which was announced in the Trading update on 14 July 2003.
(v) Discontinued operations represent the results of West's Engineering Design,
Tilbury Phoenix and Climate Equipment which were sold with effect from 11
January 2002, 25 March 2002 and 4 October 2002 respectively.
(vi) Inter segment turnover is not material and has been excluded from the above
figures. The segmental analyses of turnover are stated by source and there is
no material difference from analyses by destination.
SEGMENTAL ANALYSIS - continued
For the six months ended 30 June 2003
The turnover, total operating profit (excluding exceptions items and goodwill
amortisation) and net assets attributable to the difference classes of the
Group's business are:
Total operating profit (excluding exceptional
items and goodwill amortisation)
Six months ended Year ended
30.06.03 30.06.02 31.12.02
#million #million #million
By business segment:
Facilities services (note i) 7.8 7.3 15.8
Industrial services 4.7 5.6 11.6
Project services (note ii) 7.0 8.0 18.4
Equipment services 6.1 6.8 13.6
25.6 27.7 59.4
Joint venture-PFI investments 0.9 1.6 2.4
Group services (2.8) (2.2) (6.7)
23.7 27.1 55.1
SSAP 24 (note iii) (4.2) - -
19.5 27.1 55.1
Discontinuing operations
(note iv) (2.1) (0.4) (2.0)
17.4 26.7 53.1
Discontinued operations
(note v) - (0.1) -
17.4 26.6 53.1
By geographic area:
United Kingdom 19.7 21.7 47.1
Rest of Europe 1.6 1.8 2.9
Middle East & Africa 2.1 2.1 3.9
Australasia 3.2 1.7 4.0
Far East (0.9) 0.1 1.0
South America (0.1) 0.3 0.5
25.6 27.7 59.4
Joint venture-PFI investments 0.9 1.6 2.4
Group services (2.8) (2.2) (6.7)
23.7 27.1 55.1
SSAP 24 (note iii) (4.2) - -
19.5 27.1 55.1
Discontinuing operations (note (2.1) (0.4) (2.0)
iv)
17.4 26.7 53.1
Discontinued operations (note - (0.1) -
v)
17.4 26.6 53.1
(i) Facilities services turnover includes #73.5 million in respect of works
bills (30.6.02 #67.9 million; 31.12.02 #118.0 million). Works bills are costs
relating to services and materials procured on behalf of the Ministry of Defence
on which no margin is allowed but for which a management fee is received.
(ii) Project services profit disclosed above is before taking account of net
interest received of #1.7 million (30.6.02 #2.0 million; 31.12.02 #3.7
million).
(iii) SSAP 24 refers to the Net Pension Scheme charge on the UK Defined Benefit
Scheme and the related pension scheme prepayment.
(iv) Discontinuing operations represent the results of tube and fittings
townwork scaffolding, low voltage electricity distribution lines and rail
cabling and signalling businesses, three non-core operations, the proposed
closure of which was announced in the Trading update on 14 July 2003.
(v) Discontinued operations represent the results of West's Engineering Design,
Tilbury Phoenix and Climate Equipment which were sold with effect from 11
January 2002, 25 March 2002 and 4 October 2002 respectively.
(vi) Inter segment turnover is not material and has been excluded from the above
figures. The segmental analyses of turnover are stated by source and there is
no material difference from analyses by destination.
SEGMENTAL ANALYSIS - continued
For the six months ended 30 June 2003
The turnover, total operating profit (excluding exceptions items and goodwill
amortisation) and net assets attributable to the difference classes of the
Group's business are:
Net Assets (less minority interest)
30.06.03 30.06.02 31.12.02
#million #million #million
By business segment:
Facilities services (note i) (11.2) (18.5) (34.0)
Industrial services 47.6 34.6 36.8
Project services (note ii) (48.0) (52.6) (57.4)
Equipment services 67.5 63.2 68.6
55.9 26.7 14.0
Joint venture-PFI investments 18.3 12.3 15.3
Group services (16.7) 8.9 (2.7)
57.5 47.9 26.6
SSAP 24 (note iii) 32.3 32.0 32.3
89.8 79.9 58.9
Discontinuing operations (note iv) 21.3 18.7 23.6
111.1 98.6 82.5
Discontinued operations (note v) - 1.8 -
111.1 100.4 82.5
Goodwill 159.2 168.8 163.9
Net debt (62.9) (65.9) (42.8)
207.4 203.3 203.6
By geographic area:
United Kingdom - (27.9) (47.1)
Rest of Europe 12.3 11.3 12.7
Middle East & Africa 10.2 9.6 10.6
Australasia 13.8 10.4 12.8
Far East 17.2 19.6 21.1
South America 2.4 3.7 3.9
55.9 26.7 14.0
Joint venture-PFI investments 18.3 12.3 15.3
Group services (16.7) 8.9 (2.7)
57.5 47.9 26.6
SSAP 24 (note iii) 32.3 32.0 32.3
89.8 79.9 58.9
Discontinuing operations (note iv) 21.3 18.7 23.6
111.1 98.6 82.5
Discontinued operations (note v) - 1.8 -
111.1 100.4 82.5
Goodwill 159.2 168.8 163.9
Net debt (62.9) (65.9) (42.8)
207.4 203.3 203.6
(i) Facilities services turnover includes #73.5 million in respect of works
bills (30.6.02 #67.9 million; 31.12.02 #118.0 million). Works bills are costs
relating to services and materials procured on behalf of the Ministry of
Defence on which no margin is allowed but for which a management fee is
received.
(ii) Project services profit disclosed above is before taking account of net
interest received of #1.7 million (30.6.02 #2.0 million; 31.12.02 #3.7
million).
(iii) SSAP 24 refers to the Net Pension Scheme charge on the UK Defined Benefit
Scheme and the related pension scheme prepayment.
(iv) Discontinuing operations represent the results of tube and fittings
townwork scaffolding, low voltage electricity distribution lines and rail
cabling and signalling businesses, three non-core operations, the proposed
closure of which was announced in the Trading update on 14 July 2003.
(v) Discontinued operations represent the results of West's Engineering Design,
Tilbury Phoenix and Climate Equipment which were sold with effect from 11
January 2002, 25 March 2002 and 4 October 2002 respectively.
(vi) Inter segment turnover is not material and has been excluded from the
above figures. The segmental analyses of turnover are stated by source and
there is no material difference from analyses by destination.
NOTES TO THE UNAUDITED INTERIM RESULTS
For the six months ended 30 June 2003
1 Accounting policies
The interim results have been prepared on the basis of the accounting
policies set out in the Group's 2002 statutory accounts.
2 Net profit (loss) on sale or termination
of discontinued operations
30.6.03 30.6.02 31.12.02
#million #million #million
Profit on sale of West's Engineering
Design/Tilbury Phoenix/Climate Equipment
in 2002 - discontinued
Profit before goodwill write off - 0.2 0.3
Goodwill write off - - (0.1)
- 0.2 0.2
Net loss on sale or termination of
discontinued operations - - (1.4)
- 0.2 (1.2)
3 Net interest payable includes share of Joint Venture and Associated
Undertakings net interest payable of #0.8 million (30.6.02 #1.0 million;
31.12.02 #1.7 million).
4 Taxation
30.06.03 30.06.02 31.12.02
#million #million #million
UK and overseas taxation 4.8 7.9 10.7
Deferred taxation 0.2 - 1.9
5.0 7.9 12.6
The standard rate of tax for the period based on the UK standard rate of
corporation tax is 30%. The actual tax charge for the current and previous
period/year exceeds/is less than the standard rate for the reasons set out
in the following reconciliation:
30.06.03 30.06.02 31.12.02
#million #million #million
Profit on ordinary activities before
tax 11.1 19.9 37.2
Tax on profit on ordinary activities
at
standard rate 3.3 6.0 11.2
Expenses not deductible for tax
purposes (primarily goodwill
amortisation) 1.6 1.4 3.3
Unrelieved losses in foreign
subsidiaries 0.2 0.4 -
Sale of subsidiaries - - 0.2
Indexation allowance (0.1) - (0.6)
Capital allowances and other timing
differences (0.2) - (2.6)
Adjustments in respect of prior
periods - - (0.4)
Other - 0.1 (0.4)
4.8 7.9 10.7
5 The calculation of adjusted earnings per share is based on the weighted
average number of shares of 113,071,568 (30 June 2002 113,601,429; 31
December 2002 113,473,523) and a profit after tax and minority interest
excluding exceptional items and goodwill amortisation of #10.8 million (30
June 2002 #16.6 million; 31 December 2002 #36.0 million). Basic earnings
per share is calculated on attributable profit after exception items and
goodwill amortisation of #6.1 million (30 June 2002 #12.0 million; 31
December 2002 #24.6 million).
Diluted earnings per share is based on weighted average number of shares,
including dilutive potential shares relating to option schemes, which
totalled 113,117,065 (30 June 2002 115,005,256; 31 December 2002
114,230,394), and a profit after tax and minority interest of #6.1 million
(30 June 2002 #12.0 million; 31 December 2002 #24.6 million).
6 The interim statement is being sent to all shareholders and copies will be
available for members of the public at the Company's registered office.
7 The figures for the year ended 31 December 2002 do not constitute the
company's statutory accounts for that period but have been extracted from
the statutory accounts, which have been filed with the Registrar of
Companies. The auditors' report on those accounts was unqualified and did
not contain statements under section 237(2) or (3) of the Companies Act
1985. The interim results for the six months ended 30 June 2003 have been
reviewed but have not been audited. The accounts for the equivalent period
in 2002 were neither audited nor reviewed, and the financial information
set out above does not constitute full accounts as defined by section 240
of the Companies Act 1985.
Independent review report to Interserve Plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2003 which comprises the profit and loss account,
the reconciliation of movements in shareholders' funds, the statement of total
recognised gains and losses, the balance sheet, the cash flow statement, the
segmental analysis and the 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.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
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
polices and presentation applied to the interim figures are 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 the 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.
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 30 June 2003.
Deloitte & Touche LLP
Chartered Accountants
London
15 September 2003
--------------------------
(1) Before interest, SSAP24, goodwill, taxation and losses from discontinuing
and discontinued operations
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EALNSFLEDEFE
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