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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mcalpine (A) | LSE:MCA | London | Ordinary Share | GB0005645394 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 547.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:1653O
McAlpine (Alfred) PLC
31 July 2003
McALPINE REPORTS CONTINUED EARNINGS GROWTH
Alfred McAlpine PLC ("McAlpine"), the infrastructure, construction and business
services group, today announces its interim results for the six months to 30
June 2003.
Highlights
* Pre-tax profits up 23% to #14.8m (2002: #12.0m)
* Earnings per share up 34% to 10.7p (2002: 8.0p)
* Interim dividend up 10% to 4.5p (2002: 4.1p)
Oliver Whitehead, the Chief Executive of McAlpine commented,
" McAlpine is making very encouraging progress. We have had a successful first
half and we remain focused on creating a robust group that operates in markets,
which offer sustainable, long-term growth in earnings.
" Since the start of 2003, McAlpine has been structured into three business
streams which reflect our market sectors. These business streams are: Business
Services for the outsourced management of business support functions; Capital
Projects for design and build of UK civil engineering and accommodation schemes;
and Infrastructure Services for the maintenance and replacement of utility,
local authority and highway assets.
" Looking to the future, the prospects for the Group remain good. We are on
track to deliver a robust performance for the full year in line with
expectations. Overall, our markets remain resilient and offer good prospects for
growth.
-ends-
Date: 31 July 2003
For further information contact:
Alfred McAlpine PLC www.alfred-mcalpine.com
Oliver Whitehead, Chief Executive 020 7930 6255
Ian Grice, Chief Executive Designate
Jeffrey Hume, Finance Director
City Profile
Jonathan Gillen 020 7448 3244
Simon Courtenay
Chairman's Statement
During the first half of 2003, Alfred McAlpine has further benefited from its
strategy of growing a focused infrastructure, construction and business services
group. We are creating a robust group that operates in markets which offer
sustainable, long-term growth in earnings and we concentrate on activities that
will deliver margins of 5% and above.
The demand for our services comes from a broad range of public and private
sector customers, who benefit from our commitment to 'adding value' to their
operations. During the first half of the year, the Group has retained its strong
financial position. The Board is committed to maintaining a strong balance
sheet, growing earnings and delivering growth through organic development and
carefully targeted bolt-on acquisitions in order to deliver improving returns to
our shareholders.
Group structure
Since the start of 2003, McAlpine has been structured into three business
streams, which reflect our market sectors. These business streams are: Business
Services for the outsourced management of business support functions; Capital
Projects for design and build of UK civil engineering and accommodation schemes;
and Infrastructure Services for the maintenance and replacement of utility,
local authority and highway assets.
Strategy
Over the past 18 months we have focused on providing services to markets that
are undergoing long-term structural change, and we have identified those markets
where there are long-term commitments to undertake significant capital spending
programmes. We focus on delivering higher margin activities, which are of a
business-critical nature to our clients and avoid the provision of commoditised
services, where competitive pressures and low barriers to entry often erode
margin potential.
Financial results
I am pleased to report that the Group has delivered its expected performance in
the first half of the year. Profit before tax and goodwill amortisation
increased by 23% from #12.0m to #14.8m. Earnings per share, which has
additionally benefited from the purchase of shares in the market for
cancellation, increased by 34% from 8.0p to 10.7p, before goodwill amortisation.
The Group ended the half year with #75.6m cash (Dec 2002: #114.1m), having spent
#17.1m on share buybacks and the acquisition of AIMS Group Limited and having
spent #14.0m on capital expenditure, interest, tax and dividends. We also
absorbed #6.1m operating cashflow in the period, having invested a further #6.2m
in Capital Projects developments, and the unwinding of #11.0m of advance
payments previously received on construction contracts such as the M6 Toll Road.
Acquisitions
The Board is committed to delivering value to the Group's shareholders by
growing earnings year-on-year, through both organic growth and the acquisition
of businesses that can be bolted-on to our existing operations. We believe that
there are good opportunities in both Business Services and Infrastructure
Services to acquire good quality companies that will improve our skills set, our
customer mix and our geographic footprint over the UK.
We continue to review these acquisition opportunities, however the businesses
that we do acquire must fit well with our existing operations, provide strong
financial returns and offer good growth opportunities. We will maintain our
rigorous assessment of further potential acquisitions during the second half of
the year. In June 2003 we acquired AIMS Group Limited, a specialist advisory,
training and technical services group for #14.4m. AIMS is being integrated
successfully into Business Services and we are confident that it will flourish
as part of the McAlpine Group.
Share re-purchases
Authority was obtained at May's AGM to re-purchase for cancellation up to 10% of
current issued share capital, to enable the Group to retain its flexibility to
continue re-purchases of shares. Since March 2003, McAlpine has acquired 2% of
shares in issue at an average price of 244.5p per share.
Dividend
I am pleased to report that the Board is recommending the payment of an interim
dividend of 4.5p per share which will be paid on 7th November, 2003 to
shareholders on the register on 10th October, 2003. This represents an increase
of 10% on the interim dividend paid in 2002.
Trading
We have made good progress during the first half of 2003. Our markets have
remained robust and we have concentrated on integrating our recent acquisitions
and achieving organic growth at our target margins.
Capital Projects
Capital Projects has delivered solid results in a market where civil engineering
opportunities are very good but, as previously stated, the building sector
remains somewhat depressed. We have maintained our commitment to concentrate on
work that hits our target margins. We have avoided growing turnover at the
expense of margin.
Infrastructure Services
Our utilities business is continuing to deliver an encouraging performance. The
acquisition of Eastern Contracting took place in September 2002. It has
performed well since acquisition, has been fully integrated and adds a full
asset replacement capability for the Regional Electricity Companies.
Our highways maintenance business has secured further orders from Suffolk County
Council and Road Management Group, and there are many good opportunities for the
second half.
Business Services
The market for our Business Services operations offers excellent prospects as it
continues to deliver real value-added solutions for our customers.
Our facilities management business is delivering very encouraging growth in the
provision of a flexible range of support services to a broad range of clients.
Highlights of the first half of the year include the award of new contracts from
Capio Healthcare, EDS, Airbus and Moorfield Group.
In tandem with the organic growth that we are striving for, we have the
potential to grow the scale of our operations by bolt-on acquisitions. In
addition to the acquisition of AIMS Group Limited mentioned above, in December
2002 we acquired Inframan, a specialist provider of facilities management
services to customers in the public sector. The integration of Inframan has been
completed and it has broadened the spread of customers that we serve and the
geographical area that we are able to reach.
Our IT networks business has made an encouraging start to the year and is now
profitable. Prospects are positive for the second half.
In our plant services business we focus on long-term facilities management
contracts in the industrial, landfill and quarrying sectors as well as supplying
temporary accommodation and fleet management of vehicles and plant. It has had a
very good start to the year.
Slate
Our Slate operations continue to perform well and produced a 50% increase in
profits compared with the same period last year. Our architectural and
aggregates businesses are starting to perform well and these complement the
continuing strong performance from our traditional roofing operation.
Pensions
The Group is committed to providing employees with pension benefits that are of
real value, whilst seeking to ensure they are both affordable and sustainable.
During the period, the Group introduced a new defined contribution pension plan
which will be open to all employees from 1st August, 2003. The launch of this
new plan follows a review of all the various pension arrangements within
McAlpine which had multiplied in recent years following the acquisitions which
have been made.
As a result of this review, members of the McAlpine final salary pension plan
will cease to accrue future service in the plan but will instead be offered
membership of the new defined contribution pension plan. The Group contributions
to the new defined contribution pension plan will be broadly comparable to its
historic pension costs. To improve the funding position of the old final salary
plan, the Group will pay an additional #1.7m in the second half and #3.75m
annually thereafter.
Board changes
As highlighted in previous announcements, I shall become non-executive Chairman
on 10th August, 2003 and I am delighted that Ian Grice will be succeeding me as
Chief Executive. Ian has been at the heart of the strategy to re-position the
Group over the last few years and I wish him well in overseeing the next phase
of McAlpine's growth. I am confident that he will continue our recent record of
success. As announced at the Annual General Meeting, Andrew Robb retired as a
non-executive Director on 22nd May, 2003. Robert Hough and Philip Swatman both
joined the Board as non-executive Directors on 13th March, 2003.
Current trading
The Group's order book stands at #2.7bn (Dec 2002: #2.6bn).
Prospects
The prospects for the Group remain good. There is still uncertainty in parts of
the economy, however we retain a positive outlook. Demand for our services is
being driven by structural change, not short-term spending patterns. The mix of
public and private sector work is encouraging and will underpin our performance
for the medium to long term.
We will continue, where appropriate, to follow our successful track record of
adding carefully selected bolt-on acquisitions to our existing operations. We
remain resolute in our focus on pursuing margin over turnover growth and the
Group is on track to deliver a robust performance for the full year in line with
expectations. Overall, our markets remain resilient and offer good prospects for
growth.
Oliver Whitehead
Chairman
31st July, 2003
Group profit & loss account
for the six months ended 30th June 2003
6 months to 6 months to 6 months to 6 months to 6 months to 6 months to
30 June 30 June 30 June 30 June 30 June 30 June
2003 2003 2003 2002 2002 2002
Continuing Goodwill Total Continuing Goodwill Total
operations amortisation operations operations amortisation operations
#m #m #m #m #m #m
________________________________________________________________________________________________________________________
Turnover
Group and share of joint ventures 424.5 - 424.5 347.7 - 347.7
Less: Share of joint ventures' (8.4) - (8.4) (6.7) - (6.7)
turnover
________________________________________________________________________________________________________________________
Group turnover 416.1 - 416.1 341.0 - 341.0
________________________________________________________________________________________________________________________
Group operating profit 11.5 (2.6) 8.9 10.7 (2.7) 8.0
Share of operating profit in joint
ventures and
associated undertakings 5.6 - 5.6 4.8 - 4.8
________________________________________________________________________________________________________________________
Total including joint ventures and
associates 17.1 (2.6) 14.5 15.5 (2.7) 12.8
Business termination costs - - - - - -
________________________________________________________________________________________________________________________
Profit on ordinary activities before
interest 17.1 (2.6) 14.5 15.5 (2.7) 12.8
Net interest payable
Group 1.0 - 1.0 (0.3) - (0.3)
Share of joint ventures (3.3) - (3.3) (3.2) - (3.2)
________________________________________________________________________________________________________________________
(2.3) - (2.3) (3.5) - (3.5)
________________________________________________________________________________________________________________________
Profit on ordinary activities before
taxation 14.8 (2.6) 12.2 12.0 (2.7) 9.3
________________________________________________________________________________________________________________________
Taxation on ordinary activities (3.9) (0.3) (4.2) (3.1) - (3.1)
________________________________________________________________________________________________________________________
Profit on ordinary activities after
taxation 10.9 (2.9) 8.0 8.9 (2.7) 6.2
Dividends (including non-equity) (4.6) (4.7)
______________________________________ __________ _________
Transfer to reserves 3.4 1.5
__________ _________
Earnings per ordinary share
Adjusted - Before goodwill amortisation 10.7p 10.7p 8.0p 8.0p
Basic - After goodwill amortisation 7.8p 5.5p
Dividend per ordinary share 4.5p 4.1p
There is no material difference between the results as shown in the profit and
loss account and the results on an unmodified historical cost basis.
Group profit & loss account
for the year ended 31st December 2002
12 months to 12 months to 12 months to 12 months to 12 months to
31 December 31 December 31 December 31 December 31 December
2002 2002 2002 2002 2002
Total
Continuing Goodwill continuing Discontinued Total
operations amortisation operations operations operations
#m #m #m #m #m
________________________________________________________________________________________________________________________
Turnover
Group and share of joint ventures 783.8 - 783.8 - 783.8
Less: Share of joint ventures'
turnover (15.5) - (15.5) - (15.5)
________________________________________________________________________________________________________________________
Group turnover 768.3 - 768.3 - 768.3
________________________________________________________________________________________________________________________
Group operating profit 25.6 (6.2) 19.4 - 19.4
Share of operating profit in joint
ventures and
associated undertakings 10.1 - 10.1 - 10.1
________________________________________________________________________________________________________________________
Total including joint ventures and 35.7 (6.2) 29.5 - 29.5
associates
Business termination costs - - - (2.3) (2.3)
________________________________________________________________________________________________________________________
Profit on ordinary activities before
interest 35.7 (6.2) 29.5 (2.3) 27.2
Net interest payable
Group 0.8 - 0.8 - 0.8
Share of joint ventures (6.3) - (6.3) - (6.3)
________________________________________________________________________________________________________________________
(5.5) - (5.5) - (5.5)
________________________________________________________________________________________________________________________
Profit on ordinary activities before
taxation 30.2 (6.2) 24.0 (2.3) 21.7
Taxation on ordinary activities (8.0) - (8.0) 0.7 (7.3)
________________________________________________________________________________________________________________________
Profit on ordinary activities after
taxation 22.2 (6.2) 16.0 (1.6) 14.4
Dividends (including non-equity) (10.8)
________________________________________________________________________________________________________________________
Transfer to reserves 3.6
________________________________________________________________________________________________________________________
Earnings per ordinary share
Adjusted - Before goodwill & exceptional items 20.7p 20.7p
Basic - After goodwill & exceptional items 13.3p
Dividend per ordinary share 10.0p
Group balance sheet
at 30 June, 2003
30 June 30 June 31 December
2003 2002 2002
#m #m #m
________________________________________________________________________________________________________________________
Fixed assets
Intangible assets 140.8 119.5 130.3
Tangible assets 46.9 39.0 45.8
Investments in joint ventures and associates 19.1 15.4 17.2
________________________________________________________________________________________________________________________
206.8 173.9 193.3
________________________________________________________________________________________________________________________
Current assets
Stocks 23.1 25.3 22.8
Debtors: due within one year 215.0 337.1 187.7
Debtors: due after one year 42.0 43.0 42.3
Cash at bank and in hand 84.5 43.1 122.6
________________________________________________________________________________________________________________________
364.6 448.5 375.4
Creditors: amounts falling due within one year
Borrowings (1.3) (33.2) (1.9)
Other creditors (233.5) (221.3) (231.0)
________________________________________________________________________________________________________________________
Net current assets 129.8 194.0 142.5
________________________________________________________________________________________________________________________
Total assets less current liabilities 336.6 367.9 335.8
Creditors: amounts falling due after more than one year
Borrowings (7.6) (20.4) (6.6)
Other creditors (8.2) (0.6) (6.8)
________________________________________________________________________________________________________________________
(15.8) (21.0) (13.4)
Provisions for liabilities and charges (11.1) (24.0) (13.1)
________________________________________________________________________________________________________________________
Net assets 309.7 322.9 309.3
________________________________________________________________________________________________________________________
Capital and reserves
Called up share capital 30.0 31.6 30.3
Reserves 279.7 291.3 279.0
________________________________________________________________________________________________________________________
Shareholders' funds
(including #4.5m relating to non-equity interests) 309.7 322.9 309.3
________________________________________________________________________________________________________________________
Statement of total recognised gains and losses
for the 6 months ended 30 June, 2003
6 months to 6 months to 12 months to
30 June 30 June 31 December
2003 2002 2002
#m #m #m
________________________________________________________________________________________________________________________
Profit for the period 8.0 6.2 14.4
Movement in translation of foreign currency investments 0.2 (0.3) (0.1)
________________________________________________________________________________________________________________________
Total recognised gains relating to
the period 8.2 5.9 14.3
Prior year adjustments - 0.4 0.3
________________________________________________________________________________________________________________________
Total gains recognised since last annual report 8.2 6.3 14.6
________________________________________________________________________________________________________________________
Group cash flow statement
for the 6 months ended 30 June, 2003
6 months to 6 months to 12 months to
30 June 30 June 31 December
2003 2002 2002
#m #m #m
Operating activities
Net cash (outflow) / inflow from operating activities (6.1) (2.2) 26.6
Building division termination costs paid (1.3) (0.9) (16.8)
________________________________________________________________________________________________________________________
(7.4) (3.1) 9.8
Dividends received from joint ventures 0.5 - 0.8
Returns on investments and servicing of finance
Net interest received / (paid) 1.0 (0.1) 0.8
Non-equity dividends paid (0.2) (0.2) (0.4)
________________________________________________________________________________________________________________________
0.8 (0.3) 0.4
Taxation paid (4.6) (2.4) (6.8)
Capital expenditure and financial investment
Purchase of tangible fixed assets (4.1) (3.7) (11.8)
Sale of tangible fixed assets 1.6 1.6 1.8
________________________________________________________________________________________________________________________
Capital expenditure (net) (2.5) (2.1) (10.0)
Acquisitions and disposals
Cash consideration paid for subsidiary undertakings (6.4) (39.2) (84.6)
Overdrafts acquired with subsidiary undertakings - (0.8) (1.3)
Proceeds on disposal of subsidiary undertakings - 98.9 260.2
Cash invested in joint ventures and associates (0.8) (3.1) (3.3)
________________________________________________________________________________________________________________________
(7.2) 55.8 171.0
Equity dividends paid (6.0) (6.4) (10.6)
________________________________________________________________________________________________________________________
Cash (outflow) / inflow before management of liquid resources (26.4) 41.5 154.6
and financing
Management of liquid resources
Decrease / (increase) in short-term bank deposits 64.0 6.4 (68.8)
Financing
Issue of ordinary shares 0.3 0.4 0.5
Purchase of ordinary shares (4.8) (7.4) (23.4)
Capital element of finance lease payments (0.6) (1.3) (2.0)
Repayment of debt acquired (5.9) (4.0) (6.4)
Decrease in debt - (33.7) (48.5)
________________________________________________________________________________________________________________________
(11.0) (46.0) (79.8)
________________________________________________________________________________________________________________________
Increase in cash in the period 26.6 1.9 6.0
________________________________________________________________________________________________________________________
Reconciliation of net cash flow to movement in net debt
for the 6 months to 30 June, 2003
6 months to 6 months to 12 months to
30 June 30 June 31 December
2003 2002 2002
#m #m #m
________________________________________________________________________________________________________________________
Increase in cash in the period 26.6 1.9 6.0
Decrease in debt 5.9 37.7 55.0
Borrowings net of overdrafts acquired with subsidiary (5.9) (4.0) (6.4)
undertakings
Increase in loan notes - (31.2) (1.0)
(Decrease) / increase in liquid resources (64.0) (6.4) 68.8
(Increase) / decrease in finance leases (1.1) 1.0 1.2
________________________________________________________________________________________________________________________
(Decrease) / increase in net cash in the period (38.5) (1.0) 123.6
Opening net cash / (debt) 114.1 (9.5) (9.5)
________________________________________________________________________________________________________________________
Closing net cash / (debt) 75.6 (10.5) 114.1
________________________________________________________________________________________________________________________
Segmental analysis
for the 6 months ended 30th June, 2003
Turnover 6 months to 6 months to 12 months to
30 June 30 June 31 December
2003 2002 2002
#m #m #m
Continuing operations
Capital Projects 161.8 159.6 363.8
Infrastructure Services 147.6 119.0 255.8
Business Services 94.2 51.2 126.0
Centre and other businesses 12.5 11.2 22.7
________________________________________________________________________________________________________________________
Group 416.1 341.0 768.3
________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________
Profit 6 months to 6 months to 12 months to
30 June 30 June 31 December
2003 2002 2002
Total Total Total
#m #m #m
________________________________________________________________________________________________________________________
Continuing operations
Capital Projects 7.2 9.0 17.0
Infrastructure Services 5.1 5.0 11.4
Business Services 4.8 2.8 8.1
Centre and other businesses (5.6) (6.1) (10.9)
________________________________________________________________________________________________________________________
Group 11.5 10.7 25.6
Net interest 1.0 (0.3) 0.8
________________________________________________________________________________________________________________________
12.5 10.4 26.4
________________________________________________________________________________________________________________________
Project Investments (joint ventures)
Share of operating profit 5.0 4.7 9.6
Share of interest payable (3.3) (3.2) (6.3)
________________________________________________________________________________________________________________________
1.7 1.5 3.3
________________________________________________________________________________________________________________________
Infrastructure Services (associates) 0.6 0.1 0.5
________________________________________________________________________________________________________________________
Profit before goodwill and tax 14.8 12.0 30.2
________________________________________________________________________________________________________________________
Goodwill amortisation
Infrastructure Services (2.0) (1.6) (3.3)
Business Services (0.6) (1.1) (2.9)
Discontinued operations
Business termination costs - - (2.3)
________________________________________________________________________________________________________________________
Net operating assets 30 June 30 June 31 December
2003 2002 2002
#m #m #m
________________________________________________________________________________________________________________________
Continuing operations
Capital Projects (22.1) (36.3) (42.0)
Infrastructure Services 16.7 21.9 18.8
Business Services 26.7 33.5 25.4
Centre and other businesses 87.6 223.2 81.8
________________________________________________________________________________________________________________________
108.9 242.3 84.0
Goodwill
Infrastructure Services 64.1 51.2 66.0
Business Services 76.7 68.3 64.3
________________________________________________________________________________________________________________________
249.7 361.8 214.3
________________________________________________________________________________________________________________________
Net operating assets exclude provisions for liabilities and charges of #11.1m
(Dec 2002: #13.1m), net cash of #75.6m (Dec 2002: #114.1m) and dividends payable
of #4.5m (Dec 2002: #6.0m) which have not been allocated to operations.
Reconciliation of movements in shareholders' funds
for the 6 months ended 30 June, 2003
30 June 30 June 31 December
2003 2002 2002
#m #m #m
________________________________________________________________________________________________________________________
Profit for the period 8.0 6.2 14.4
Dividends (4.6) (4.7) (10.8)
________________________________________________________________________________________________________________________
Retained profit 3.4 1.5 3.6
Shares issued 1.6 12.7 12.8
Shares cancelled (4.8) (7.4) (23.4)
Movement in translation of foreign currency 0.2 (0.3) (0.1)
investments
________________________________________________________________________________________________________________________
Net increase / (decrease) in shareholders' funds 0.4 6.5 (7.1)
Opening shareholders' funds 309.3 316.4 316.4
________________________________________________________________________________________________________________________
Closing shareholders' funds 309.7 322.9 309.3
________________________________________________________________________________________________________________________
Note to interim accounts
1. Form of Statements
These financial statements do not constitute statutory accounts within the
meaning of the Companies Act 1985 and are unaudited. The figures for the
year to 31 December, 2002 have been extracted from the statutory accounts
for that year which have been delivered to the Registrar of Companies and
contain an unqualified audit report.
2. Accounting policies
The statements have been prepared on the basis of the accounting policies
applied at the year ended 31 December, 2002.
3. Earnings per share
Earnings per share for the six months has been calculated using the profit
attributable to ordinary shareholders before and after amortisation of
#10.8m (2002: #8.6m) and #7.8m respectively divided by the weighted average
number of shares in issue during that period of 100.8m (2002: 107.5m).
4. Interim dividend
An interim dividend of 4.5 pence per ordinary share (2002: 4.1 pence) will
be paid on 7th November, 2003 to holders of ordinary shares on the register
at the close of business on 10th October, 2002.
5. Acquisition of AIMS Group Services Limited
AIMS Group Services Limited was acquired on 6 June, 2003 for a total
enterprise value of #14.4m. Goodwill of #13.0m was acquired and is being
amortised over 20 years on a straight line basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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