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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:4735O Birse Group PLC 11 December 2001 Date Embargoed until 7.00am 11 December 2001 Contact Peter Watson, Chairman Telephone 01652 633 222 Martin Budden, Group Managing Director Heather Appleford, Group Finance Director Birse Group plc Scott Fulton Telephone 0207 831 3113 Financial Dynamics BIRSE GROUP plc - INTERIM RESULTS Birse Group plc, the UK construction, plant hire and property group, today announces results for the half year ended 31 October 2001. These may be summarised as follows:- - Pre-tax profits of #1.2million (2000: loss of #6.7million before exceptional operating items). - Improvement led by Birse Construction - operating profit of #154,000 (2000: loss of #8.1million before exceptional operating items). - Plant Hire increases profit to #1.2million (2000: #1.0million). - No exceptional items (2000: loss of #24million). - Record Construction order book; #425million at 31 October 2001 (2000: #362million). - Net cash at #9.2million (2000: #7.5million). - Dividend held at 0.375p per share. Commenting on the results, the Directors said: "It is pleasing to report that your Group continues to make progress. We believe that with each of the Group's areas of operation set to benefit from strong construction orders, government spending targeted at its key markets, growing capital spend by the water industry, low inflation and low interest rates, your Group is in a position to build positively on the solid start made to the year." REPORT OF THE DIRECTORS On the results for the six months ended 31 October 2001 It is pleasing to report that your Group continued the good progress seen in the second half of 2000/2001. Pre-tax profits of #1.2million compare with pre-tax losses, before exceptional operating items, of #6.7million for the corresponding period last year. Birse Construction was the main driver behind that improvement delivering an operating profit of #154,000 (2000/2001: loss of #8.1million before exceptional operating items) despite losses in its Process Engineering Division of #2.2million. Plant Hire improved results increasing operating profits by eighteen per cent to #1.2million. The absence of contracted transactions meant that the Group's Commercial Property activities reported a profit of #114,000 (2000/2001: profit of #793,000) in effect representing the rental income net of overhead costs attributable to that business. The net interest credit of #25,000 (2000/2001: charge of #133,000) reflects the trend established by the Group over the last six years in managing a reduction of its net borrowings. It is the first time in ten years that the Group has reported a net interest credit. At 31 October 2001 the Group had a net cash position of #9.2million including amounts held on deposit as investments (31 October 2000: #7.5million). Construction Six months ended 31 October Year Ended 2001 2000 30 April 2001 Turnover Operating Turnover Operating Turnover Operating profit/ (loss)/profit* (loss)/profit* (loss) #'000 #'000 #'000 #'000 #'000 #'000 Civil Engineering 103,190 2,446 93,258 (77) 168,646 528 Building 132,221 (102) 82,920 (2,032) 221,626 3,643 Process Engineering 8,852 (2,190) 14,205 (5,976) 24,647 (9,494) 244,263 154 190,383 (8,085) 414,919 (5,323) * Before exceptional operating items. Birse Construction has traded broadly in line with expectations albeit that the Civil Engineering Division has performed ahead of plan whilst the Building business has under achieved. The rate of losses incurred by the Process Engineering Division continued to slow down and progress has been made in securing the critical mass of turnover needed to effect fully the turnaround of that business. Secured workload for the company as a whole at the end of October 2001 stood at #425million (31 October 2000: #362million). The improved performance achieved by the Civil Engineering Division reflects the increase in the number of available infrastructure opportunities. Demand in all its major sectors namely rail, London Underground, roads, flood defences and water has been robust. Provided the Government's published spending plans are implemented and orders for the enhancement of the rail network continue to be placed by Railtrack (in Railway Administration) demand in this sector should remain strong for the foreseeable future. In pursuance of our objective for each of our operating businesses to get significantly closer to and better understand the needs of their customers our London Underground and rail businesses, Birse Metro and Birse Rail respectively, will be established as incorporated entities with effect from 1 May 2002. As trading companies independent of the Civil Engineering business, incorporation will engender greater customer attention and enable the directors of those businesses to build upon the increased number of market opportunities that focus brings. The results reported by the Building Division have been depressed by:- i. poor returns on two of its larger projects which together contributed #13million of turnover in the period; and ii. a negative contribution of #335,000 arising in relation to an under-priced contract. Once below average returns are experienced in the Building sector there is limited opportunity to make up such shortfalls with higher than average margins on other contracts. In recent months the Building Division has experienced a fall off in the level of enquiries received with throughput in September and October being around fifty per cent of those experienced in the earlier months of the year. This is a set of circumstances with which we are very familiar in that the Building market, particularly the developer led sector, is very sensitive to macro economic sentiment. Any general economic uncertainty leads to an almost immediate postponement of investment decisions. Likewise sentiment is just as quickly reversed with investment reinstated once that uncertainty diminishes. Some signs of a reversal were seen in the month of November when business leads exceeded #200million. Whilst an element of uncertainty persists in respect of the Building market its fundamentals remain strong given low inflation, low interest rates and relatively high consumer spending. Losses in the Process Engineering Division diminished reflecting the progress made in turning that business around. Losses of #6million and #3.5million in the first and second half respectively of 2000/2001 compare with the #2.2million lost in the six months to 31 October 2001. Further progress has been made in securing a critical mass of business with enquiries in the period up from #26million to #40million with the majority of those enquiries coming in the second quarter. Secured orders at the end of October 2001 amounted to #13 million (31 October 2000: #11million). With the water industry about to enter a period of high spend on capital projects, market conditions are expected to become more favourable. Included in debtors at 31 October 2001 is an aggregate value of #6.1million (31 October 2000: #15.6million) attributable to two (31 October 2000: seven) old contracts which remain the subject of arbitration or equivalent proceedings. Since 31 October 2000 five cases have been settled by way of negotiation, four in the second half of 2000/2001 and one in the period under review. Plant Hire Six months ended 31 October Year Ended 2001 2000 30 April 2001 Turnover Operating Turnover Operating Turnover Operating profit profit profit #'000 #'000 #'000 #'000 #'000 #'000 Crawler Cranes 1,780 501 1,911 517 3,554 890 Piling Equipment 457 147 556 200 1,077 443 Site Accommodation 1,920 567 637 309 1,263 716 4,157 1,215 3,104 1,026 5,894 2,049 With effect from 1 May 2001 the Group's internal Site Accommodation Division was incorporated and commenced trading as an independent operating unit under the name The Cabin Company Limited. Whilst in the period under review all its turnover was transacted with other members of the Group, it will commence trading with external customers in the second half of the year. It was with a view to servicing this external market that the business was formed. All comparative figures have been restated on a pro-forma basis as though The Cabin Company Limited had operated independently from 1 May 2000. The Crawler Cranes and Piling Equipment operations continue to trade as divisions of BPH Equipment. Whilst the results of the Crawler Crane Division compare with those achieved in the corresponding period in 2000/2001, demand for its mechanical cranes has fallen whilst demand for its hydraulic machines has increased. It is a medium term objective to build up a fleet comprising exclusively of hydraulic machines. The Piling business suffered from a lack of orders for its larger hammers. Given the expected increase in the incidence of major road and marine projects prospects should improve. Traditionally the performance of BPH is not as strong in the second half of the year due to the reduction of available hires in and around the Christmas and New Year holiday period. Commercial Property Six months ended 31 October Year Ended 2001 2000 30 April 2001 Turnover Operating Turnover Operating Turnover Operating profit profit profit #'000 #'000 #'000 #'000 #'000 #'000 - 114 1,696 793 4,409 1,965 During the period no contracted sales were completed (2000/2001: 2.9acres). Whilst interest in the Warrington site remains strong we have adopted a selective approach to sales with a view to optimising prices received and maximising future development opportunities. During the period five acres of land adjacent to the existing site were acquired giving rise to a land bank of fifteen acres. Dividend An interim dividend of 0.375p per ordinary share (2000: 0.375p) will be paid on 3 May 2002 to shareholders on the register on 5 April 2002. Outlook At the year end it was reported that we had a platform for positive progress. Since that time uncertainties in relation to the macro economic picture and the future ownership of Railtrack (in Railway Administration) have emerged. Those uncertainties are however balanced by a strong construction order book, government spending plans targeted at our key markets, a growing capital spend by the water industry, low inflation and low interest rates. We believe that each of our areas of operation will benefit from these factors leaving the Group in a position to build positively on the solid start made to the year. CONSOLIDATED RESULTS FOR THE 6 MONTHS ENDED 31 OCTOBER 2001 6 Months 6 Months Year Ended Ended Ended 31.10.01 31.10.00 30.04.01 Note #'000 #'000 #'000 Turnover 2 246,203 194,242 423,423 Operating profit/(loss) before exceptional operating items 2 1,166 (6,522) (1,911) Exceptional operating items 3 - (23,994) (27,663) Operating profit/(loss) 2 1,166 (30,516) (29,574) Net interest 25 (133) (159) Profit/(loss) on ordinary activities before taxation 2 1,191 (30,649) (29,733) Taxation 4 (262) 1,006 3,525 Profit/(loss) for the financial period 929 (29,643) (26,208) Dividends on equity shares 5 (721) (721) (1,924) Transferred to/(withdrawn from) reserves 208 (30,364) (28,132) Earnings/(loss) per ordinary share - basic 6 0.5p (15.4)p (13.6)p - diluted 6 0.5p (15.6)p (13.8)p - before exceptional items - basic 6 0.5p (2.9)p 0.2p - diluted 6 0.5p (3.0)p 0.2p The above figures relate exclusively to continuing operations. CONSOLIDATED BALANCE SHEET AS AT 31 OCTOBER 2001 As at As at As at 31.10.01 31.10.00 30.04.01 Note #'000 #'000 #'000 Fixed Assets Tangible Assets 12,697 12,127 12,241 Current Assets Stocks 3,510 3,825 2,714 Debtors 7 137,164 128,131 127,789 Investments 3,816 3,663 3,743 Cash at bank and in hand 7,268 5,532 6,890 151,758 141,151 141,136 Creditors: Amounts falling due within one year Bank loans and overdrafts (400) (700) (400) Other creditors (151,312) (144,596) (142,061) (151,712) (145,296) (142,461) Net Current Assets/(Liabilities) 46 (4,145) (1,325) Total Assets less Current Liabilities 12,743 7,982 10,916 Creditors: Amount falling due after more than one year Bank loans and overdrafts (526) - (100) Other creditors (6,249) (4,544) (5,056) (6,775) (4,544) (5,156) Net Assets 5,968 3,438 5,760 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 (14,279) (16,809) (14,487) Shareholders' Funds - equity interest 5,968 3,438 5,760 CONSOLIDATED CASH FLOW STATEMENT For the 6 months ended 31 October 2001 6 Months Ended 6 Months Ended Year Ended 31.10.01 31.10.00 30.04.01 #'000 #'000 #'000 Net cash inflow from operating activities 1,850 2,289 5,591 Returns on investments and servicing of finance 83 (120) (194) Taxation - (327) (90) Capital expenditure and financial investment (1,135) (2,389) (3,131) Acquisitions and disposals - - 150 Dividends paid to equity shareholders (721) (722) (1,924) Cash inflow/(outflow) before management of liquid resources and financing 77 (1,269) 402 Management of liquid resources 11,946 3,536 (7,532) Financing 374 677 444 Increase/(decrease) in cash in the 12,397 2,944 (6,686) period CONSOLIDATED CASH FLOW STATEMENT For the 6 months ended 31 October 2001 6 Months 6 Months Year Ended Ended Ended 31.10.01 31.10.00 30.04.01 #'000 #'000 #'000 Reconciliation of operating profit/ (loss) to net cash inflow from operating activities Operating profit/(loss) 1,166 (30,516) (29,574) Depreciation net of profit on disposal of fixed assets 852 860 1,704 (Increase)/decrease in stocks (796) 581 1,692 (Increase)/decrease in debtors (9,637) 19,386 22,448 Increase in creditors 10,265 11,978 9,321 Net cash inflow from operating 1,850 2,289 5,591 activities Analysis of net funds Cash at bank on demand 6,779 4,012 (5,618) Cash at bank on short term deposit 489 1,520 12,508 Cash at bank on deposit with terms in excess of seven days 2,816 2,663 2,743 Debt due within one year (400) (700) (400) Debt due after one year (526) - (100) Finance leases (419) (115) (298) 8,739 7,380 8,835 Reconciliation of cash flows to movements in net funds Increase/(decrease) in cash in the 12,397 2,944 (6,686) period Cash inflow from financing (374) (677) (444) Cash (inflow)/outflow from management of liquid resources (11,946) (3,536) 7,532 New finance leases and hire purchase contracts (173) - (216) Movement in net funds in the period (96) (1,269) 186 Net funds at 1 May 2001 8,835 8,649 8,649 Net funds at 31 October 2001 8,739 7,380 8,835 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 2001. The Group's auditors, Deloitte & Touche, have carried out a review of the interim accounts, which were approved by the Board of Directors on 11 December 2001, and their report is reproduced on page 13. 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 2001, 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 31.10.01 31.10.00 30.04.01 #'000 #'000 #'000 (As restated) (As restated) Turnover Contracting 244,263 190,383 414,919 Plant Hire 4,157 3,104 5,894 Commercial Property - 1,696 4,409 Intra-group (2,217) (941) (1,799) 246,203 194,242 423,423 Results Contracting 154 (8,085) (5,323) Plant Hire 1,215 1,026 2,049 Commercial Property 114 793 1,965 Group Centre (317) (256) (602) Operating profit/(loss) before exceptional operating items 1,166 (6,522) (1,911) Exceptional operating items - - (23,994) (27,663) Contracting Operating profit/(loss) 1,166 (30,516) (29,574) Net interest 25 (133) (159) Profit/(loss) on ordinary activities before taxation 1,191 (30,649) (29,733) NOTES TO THE INTERIM ACCOUNTS With effect from 1 May 2001 the Group's internal site accommodation hire division was incorporated as an independent operation trading under the name of The Cabin Company Limited. Its results are reported as part of the plant hire sector with prior period results restated accordingly. In consequence, plant hire and intra-group turnover have been increased by #637,000 and # 1,263,000 in the periods to 31 October 2000 and 30 April 2001 respectively and profits of #309,000 and #716,000 have been reclassified as plant hire from contracting in the same periods. 3. Exceptional Operating Items 6 Months Ended 6 Months Ended Year Ended 31.10.01 31.10.00 30.04.01 #'000 #'000 #'000 Losses on contracts subject to - (23,994) (27,663) litigation 4. Taxation The tax charge 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 (2000 - 0.375p) will be paid on 3 May 2002 to shareholders on the register on 5 April 2002. NOTES TO THE INTERIM ACCOUNTS 6. Earnings/(Loss) per ordinary share 6 Months Ended 6 Months Ended Year Ended 31.10.01 31.10.00 30.04.01 #'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 929 (29,643) (26,208) Exceptional items - 23,994 27,663 Tax on exceptional items - - (1,000) Earnings/(loss) before exceptional items per ordinary share calculation 929 (5,649) 455 Thousands Thousands Thousands Weighted average number of shares used in earnings/(loss) per ordinary share calculations 192,390 192,390 192,390 Adjustment to reflect dilutive shares under options - (2,840) (2,470) Weighted average number of shares used in diluted earnings/(loss) per ordinary share calculation 192,390 189,550 189,920 7. Debtors; Uncertainty Relating to Amounts on Contracts Included in debtors is an aggregate value of #6.1million attributable to contractual amounts relating to two contracts which are the subject of arbitration or equivalent proceedings. In consequence of the losses suffered on contracts subject to litigation in the previous year the Directors have reconsidered the recoverability of the amounts attributable to these 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 significant uncertainty. However, it is not possible to quantify the effects. 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 2001 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 Listing Rules of the Financial Services Authority 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 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. Uncertainty relating to amounts on contracts In arriving at our review conclusion we have considered the accuracy of disclosure made in Note 7 to the financial information concerning uncertainty relating to amounts on contracts. In view of the significance of this uncertainty, we consider it should be brought to your attention. Our review conclusion is not qualified in this 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 2001. Deloitte & Touche Chartered Accountants 10-12 East Parade Leeds LS1 2AJ 11 December 2001
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