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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Birse Grp. | LSE:BIE | London | Ordinary Share | GB0001005684 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.40 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:9776E Birse Group PLC 4 February 2000 BIRSE GROUP plc INTERIM RESULTS Birse Group plc, the leading UK construction group, today announces results for the six months ended 31 October 1999. Highlights: - Pre-tax profits up to #2.4 million (1998 loss: #1.9 million) - Net construction margin doubled to 1% - Earnings per ordinary share of 0.9 pence (1998 loss: 0.8 pence) - Separate disposals of BPH Aberdeen based division and Epping investment property, raising #7.6 million cash - Strengthened balance sheet with net cash of #5.5 million (30 April 1999 net debt: #5.4 million) - Dividend increased to 0.375p per share (1998: 0.3p) Commenting of the results, Chief Executive Peter Watson said: "These results reflect the success with which we have pursued better quality work and improved margins. I am fully confident that by continuing to concentrate on client relationships and operational efficiencies we can continue to generate improving returns for shareholders." Contacts: Birse Group plc 01652 633222 Peter Watson, Chief Executive Martin Budden, Finance Director Financial Dynamics 020 7831 3113 Tom Baldock Chief Executive's Statement I am pleased to report that your Group continued the good progress seen in the second half of 1998/99. Pre-tax profits of #2.4million compare with losses for the corresponding period last year of #1.9millon. The profits for the 1998/99 full year were #2.2millon. Earnings per ordinary share at 0.9p represent the best half year result achieved since 1991. Group turnover fell by #13million to #181million mainly due to reduced activities in the Construction business as a result of that company's pursuit of better quality margins. Net construction margins of 1% delivered in the period under review compare with corresponding margins of 0.5% achieved in the 1998/99 full year. Plant Hire also produced improved results, increasing profits to #627,000 compared with #463,000 earned in the six months ended 31 October 1998. The loss of rental income from properties disposed of has given rise to the lower level of profits produced from the Group's Commercial Property activities. The reported results also benefit from the #300,000 profit on the disposal by BPH of its offshore equipment hire and diesel engine refurbishment division at Aberdeen, completion of which took place on 31 October 1999. The net interest charge for the period fell by #121,000 to #449,000 mainly as a result of lower average borrowings. Given that the #2.5million proceeds from the BPH disposal were only received on the last day of the period prospects for even lower charges in the second half are encouraging. The Group has moved to a net cash position of #5.5million from net debt of #5.4million at 30 April 1999. This is due to property sales proceeds of #6.3million, the BPH Aberdeen disposal which raised #2.5million plus profits generated in the period after allowing for working capital requirements. Although there is still some way to go before a net interest charge is eliminated I am satisfied with the progress towards the achievement of this stated objective. Construction Birse Construction continues to focus upon those client relationships offering acceptable margins and reliable cash flows. In the main this means targeting projects where competition is restricted and where competitors have a similar cost base. Inevitably this leads to a concentration upon partnering and negotiated forms of working where opportunities can only be secured through consistent delivery of operational efficiencies which are achieved increasingly by way of innovative technical solutions. To enhance the focus upon client relationships and production efficiencies Birse Construction will be organised into three distinct operating divisions; Civil Engineering (to include Birse Rail), Building and Process Engineering. Much of the groundwork to effect this structure has already been completed with a view to full implementation by the beginning of the 2000/2001 financial year. This divisionalisation will not only bring the added benefits of market and client specialisation but will also facilitate a more structured development of senior management. Progress continues to be made towards the recovery of amounts owed to the company on long term contracts. However, where resolution is subject to a formal legal process the settlement timetable is largely outside the company's control and in such circumstances it is imprudent to make predictions as to when or how such matters will be concluded. On a more positive note it is always pleasing to have our efforts recognised by our contemporaries. I was therefore delighted when the results of the 1999 Contract Journal Construction Industry awards were published. Not only was Birse Construction the winner of the Building Contractor of the Year Award but the company also won nominations for the Civil Engineering Contractor of the Year Award and the Long Term Partnering Award. My congratulations go out to all those staff involved with the projects associated with these awards. Plant Hire The improvement in BPH's performance is derived from its mainstay crawler crane and piling divisions where annual returns on capital employed now exceed 20%. Our objective is to focus the company on those activities earning an acceptable return. This was the driving force behind the sale of the Aberdeen based offshore equipment hire and diesel engine refurbishment division. Property The Group's property activities are now confined to the optimum realisation of the profit inherent in its Warrington based business park. During the period sales of 2.5 acres were completed which when combined with deferred consideration received in respect of earlier completions gave rise to sales of #1.2million. Having successfully developed over two thirds of the site there now remains only 19 acres undeveloped. Interest and enquiry levels for both joint venture and owner occupied developments are positive and a number of proposals have been received the viability of which are currently under evaluation. Management I would like to take this opportunity to acknowledge and thank Peter Birse for his help and support following my appointment as Group Chief Executive and his simultaneous withdrawal from the day to day activities of the Group. The benefit of his counsel has enabled us to reap the positive aspects of such a change. It is our intention to strengthen the Board with the appointment of at least one additional Non-Executive Director before the end of the current financial year. Dividend An increased interim dividend of 0.375p per ordinary share will be paid on 4 May 2000 to shareholders on the register on 7 April 2000. Prospects In pursuit of further margin growth Birse Construction is now positioned to exploit better the market sectors within which the company has a track record of delivery and where demand remains buoyant. It is important to create these new opportunities to safeguard against the reduced level of capital spend on new build forecast by the Water Industry. BPH will continue to concentrate on those activities with the potential for earning strong returns on capital employed. Sales at Warrington should continue at a rate corresponding with the rate of disposals completed in the last year. I am, therefore, cautiously encouraged at the possibilities for further growth, improved performance and consequently the prospects for shareholders. Consolidated Results for the 6 months ended 31 October 1999 6 months 6 months Year Ended Ended Ended 31.10.99 31.10.98 30.4.99 Note #'000 #'000 #'000 Turnover 2 181,105 193,718 357,525 Operating profit/(loss) 2 2,572 (1,291) 3,682 Profit on disposal of business 3 300 - - Profit/(loss) before interest 2,872 (1,291) 3,682 Net interest (449) (570) (1,493) Profit/(loss) on ordinary activities before taxation 2 2,423 (1,861) 2,189 Taxation 4 (600) 372 (158) Profit/(loss) for the financial period 1,823 (1,489) 2,031 Dividends on equity shares 5 (721) (577) (1,542) Transferred to/(withdrawn from) reserves 1,102 (2,066) 489 Earnings/(loss) per ordinary share - basic 0.9p (0.8)p 1.1p - diluted 0.9p (0.8)p 1.1p The above figures relate exclusively to continuing operations. Consolidated Balance Sheet as at 31 October 1999 As at As at As at 31.10.99 31.10.98 30.4.99 #'000 #'000 #'000 Fixed Assets Tangible assets 14,249 16,611 16,469 Investments - 6,659 5,091 14,249 23,270 21,560 Current Assets Stocks 3,826 5,343 4,415 Debtors 144,413 130,880 125,137 Cash at bank and in hand 6,774 3,657 3,856 155,013 139,880 133,408 Creditors: Amounts falling due within one year Bank loans and overdrafts (534) (12,919) (8,338) Other creditors (129, 866) (114,519) (109,150) (130,400) (127,438) (117,488) Net Current Assets 24,613 12,442 15,920 Total Assets Less Current Liabilities 38,862 35,712 37,480 Creditors: Amounts falling due after more than one year Bank loans and overdrafts (534) (1,067) (802) Other creditors (4,344) (4,668) (4,046) (4,878) (5,735) (4,848) Provisions for Liabilities and Charges (350) - (100) Net Assets 33,634 29,977 32,532 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 13,387 9,730 12,285 Shareholders' Funds - equity interest 33,634 29,977 32,532 Consolidated Cash Flow Statement for the 6 months ended 31 October 1999 6 months 6 months Year Ended Ended Ended 31.10.99 31.10.98 30.4.99 #'000 #'000 #'000 Net cash inflow/(outflow) from 5,589 (13,555) (6,755) operating activities Returns on investments and servicing of finance (522) (468) (1,320) Taxation - (144) (803) Capital expenditure and financial investment 4,368 (3,130) (2,431) Acquisitions and disposals 2,119 - - Dividends paid to equity shareholders (577) (575) (1,537) Cash inflow/(outflow) before management of liquid resources and financing 10,977 (17,872) (12,846) Management of liquid resources (3,564) (79) 742 Financing (8,059) 1,393 (2,761) Decrease in cash in the period (646) (16,558) (14,865) Consolidated Cash Flow Statement for the 6 months ended 31 October 1999 6 months 6 months Year Ended Ended Ended 31.10.99 31.10.98 30.4.99 #'000 #'000 #'000 Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from operating activities Operating profit/(loss) 2,572 (1,291) 3,682 Depreciation net of profit on disposal of fixed assets 1,224 1,354 2,365 Decrease/(increase) in stocks 589 (331) 597 (Increase)/decrease in debtors (19,376) 9,938 15,297 Increase/(decrease) in creditors 20,580 (23,225) (28,696) Net cash inflow/(outflow) from operating activities 5,589 (13,555) (6,755) Analysis of net funds/(debt) Cash at bank on demand/(bank overdraft) 374 (673) 1,020 Cash at bank on short term deposit 6,400 3,657 2,836 Debt due within one year (534) (12,246) (8,338) Debt due after one year (534) (1,067) (802) Finance leases (163) (131) (150) Net funds/(debt) at 31 October 1999 5,543 (10,460) (5,434) Reconciliation of cash flows to movements in net funds/(debt) Decrease in cash in the period (646) (16,558) (14,865) Cash outflows from reduction in debt and lease financing 8,059 319 4,473 Cash outflow/(inflow) from management of liquid resources 3,564 79 (742) Loan advances - (1,600) (1,600) Movement in net debt in the period 10,977 (17,760) (12,734) Net (debt)/funds at 1 May 1999 (5,434) 7,300 7,300 Net funds/(debt) at 31 October 1999 5,543 (10,460) (5,434) 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 1999. Financial Reporting Standard 15: Tangible Fixed Assets ("FRS 15") has been adopted during the period, but has not resulted in any changes to the accounts. Existing revalued assets have been frozen at book values prevailing at the time of adoption of FRS 15. The Group's auditors, Deloitte & Touche, have carried out a review of the interim accounts, which were approved by the Board of Directors on 4 February 2000, and their report is reproduced on page 11. 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 1999, upon which Deloitte & Touche gave an unqualified audit report, have been delivered to the Registrar of Companies. 2.Segment Information 6 months 6 months Year Ended Ended Ended 31.10.99 31.10.98 30.4.99 #'000 #'000 #'000 Turnover Contracting 176,287 189,445 346,386 Plant Hire 7,132 7,631 14,331 Commercial Property 1,177 221 3,582 Housing - - 41 Intra-group (3,491) (3,579) (6,815) 181,105 193,718 357,525 Results Contracting 1,713 (2,424) 1,877 Plant Hire 627 463 472 Commercial Property 401 736 1,479 Housing - - - Group Centre (169) (66) (146) Operating profit/(loss) 2,572 (1,291) 3,682 Profit on disposal of 300 - - business Profit/(loss) before interest 2,872 (1,291) 3,682 Net interest (449) (570) (1,493) Profit/(loss) on ordinary activities before taxation 2,423 (1,861) 2,189 3.Disposal of Business On 31 October 1999 BPH Equipment Limited disposed of its offshore equipment hire and diesel engine refurbishment division, based at Aberdeen for a gross consideration of #2,500,000. The amount of corporation tax attributable to the profit on disposal of #300,000 is #90,000. 4.Taxation The tax charge for the period is based upon an effective rate of 25 per cent which 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 (1998 - 0.3p) will be paid on 4 May 2000 to shareholders on the register on 7 April 2000. 6.Earnings/(Loss) per Ordinary Share 6 months 6 months Year Ended Ended Ended 31.10.99 31.10.98 30.4.99 #'000 #'000 #'000 The calculation of basic earnings/(loss) per ordinary share is based on: Earnings/(loss) for basic and diluted earnings per ordinary share calculation 1,823 (1,489) 2,031 6 months 6 months Year Ended Ended Ended 31.10.99 31.10.98 30.4.99 Thousands Thousands Thousands Weighted average number of shares used in basic earnings/(loss) per ordinary share calculation 192,390 192,256 192,322 Dilutive effect of options - 4 - Weighted average number of shares used in fully diluted earnings/(loss) per ordinary share calculation 192,390 192,260 192,322 7.Year 2000 Computerisation Following their initial review, the Directors continue to be alert to the potential risks and uncertainties surrounding the year 2000 issue. As at the date of this report the Directors are not aware of any significant factors which have arisen, or that may arise, which will affect the activities of the business. However, at this stage there can be no guarantee that all issues have been identified due to the complexity of the problem and the Group's reliance upon customers' and suppliers' own compliance procedures being effective. Any future costs associated with this issue are not anticipated to have a material impact upon Group profitability. Independent review report to Birse Group plc Introduction We have been instructed by the company to review the financial information set out on pages 5 to 10, excluding note 7 in relation to Year 2000 computerisation, and 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 Listing Rules of the London Stock Exchange 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. 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 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 31 October 1999. Deloitte & Touche Chartered Accountants 10 - 12 East Parade Leeds LS1 2AJ END IR TJMFTMMIMBMM
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