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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 |
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0 | 0 | N/A | 0 |
RNS Number:9963E Birse Group PLC 12 December 2002 Date: Embargoed until 7.00am 12th December 2002 Contact: Peter Watson, Chairman Telephone: 01652 633222 Martin Budden, Group Managing Director Heather Appleford, Group Finance Director Birse Group plc Peter Otero Telephone: 0207 831 3113 Financial Dynamics BIRSE GROUP plc - INTERIM ANNOUNCEMENT Birse Group plc, the construction, plant hire and property group today announces preliminary results for the six months ended 31 October 2002. Highlights:- * Pre-tax pre-exceptional profits increased to #1.7million (2001: #1.2million) reflecting underlying improvement in the business. * Exceptional operating loss relates to the full write-down taken in respect of Leicester City debt at #5.5million. * Construction operating losses before exceptionals reduced to #379,000 (2001: losses of #412,000). * Plant Hire increased profit to #1.6million (2002: #1.2million). * Solid Construction order book (excluding sports stadia) totalling #356million at 31 October 2002 (2001: #363million). * Net cash at #13.7million (2001: #9.2million). * Interim dividend maintained at 0.375p per share. "Birse is in a stronger trading position than in previous years. The Leicester City bad debt is regrettable, however, with all our main markets expected to remain steady we believe that further progress in the underlying performance of the business will continue." M Budden P G Watson REPORT OF THE DIRECTORS On the results for the six months ended 31 October 2002 Pre-tax profits, before the exceptional operating item, of #1.7million compare with pre-tax profits of #1.2million for the corresponding period last year reflecting the underlying progress that your Group continues to make. The #5.5million exceptional operating item, as announced on 21 October 2002, relates to the write off of all amounts owed to Birse Construction Limited by the Leicester City Group of Companies following the appointment of an administrator to run the affairs of each of the operating companies comprising that Group. At the time of writing no proposals have been forthcoming as to how those businesses will exit administration hence the full write down stance taken. Birse Construction's activities gave rise to a pre-exceptional operating loss of #379,000 (2001/2002: operating loss of #412,000). The expected losses in its build and process engineering subsidiaries outweighed the profits generated by its civil engineering business. For the third year in succession Plant Hire improved its results, increasing operating profits by almost a third to #1.6million (2001/2002: #1.2million). The absence of contracted transactions meant that the Group's Commercial Property activities traded at break-even (2001 /2002: profit of #114,000). The Group Centre credit of #261,000 reflects almost a repeat of the performance achieved by those underlying operations in the six months to 31 October 2001 when the credit reported was #249,000. The net interest credit of #186,000 (2001/2002: credit of #25,000) reflects an improving liquidity position despite the Leicester City bad debt. At 31 October 2002 the Group had a net cash position of #13.7 million including amounts held on deposit as investments (31 October 2001: #9.2million). Construction Six months ended 31 October Year ended 2002 2001 30 April 2002 Turnover Operating Turnover Operating Turnover Operating (loss)/profit* (loss)/profit profit/(loss) #'000 #'000 #'000 #'000 #'000 #'000 (As restated) (As restated) Civil Engineering 132,747 1,356 103,190 2,172 214,868 4,394 Building 104,704 (1,410) 132,221 (375) 246,127 (225) Process Engineering 8,529 (325) 8,852 (2,209) 20,837 (2,765) 245,980 (379) 244,263 (412) 481,832 1,404 * Before exceptional operating item. The prospects for increased losses relating to Birse Build and the reduced losses incurred by Birse Process Engineering were documented in the Group's annual report for 2002. The construction results before the exceptional operating item are, therefore, in line with expectations. Secured workload on a consolidated level at the end of October 2002 stood at #360million (31 October 2001: #425million). The reduction compared with 2001 relates mainly to the decreasing activity in the sports stadia sector of the Building market. We continue to experience relatively strong demand in the Civil Engineering and Process Engineering markets. Excluding sports stadia orders, secured workload at the end of October 2002 stood at #356million (31 October 2001: #363 million). The Civil Engineering result was again underpinned by robust performances from Birse Metro and Birse Rail, respectively our London Underground and rail businesses. With the major spending Government departments now procuring via the "early contractor involvement route" the majority of our work is secured on a target cost/cost reimbursable basis. This approach allows our creative engineering and project management skills to deliver significant added value for our customers therefore enhancing our competitive edge. Moving forward, however, it is important that our civil engineering businesses remain focused on these customer needs and that in particular caution is exercised on any involvement in the fixed price competitive tendering sector. The challenges facing our Building company were well documented at the time we announced the Group's annual results. There has been no material change in those circumstances since that time and the margins available remain low. Mitigating actions taken by management to date include a downsizing of its stadia business, reducing exposure to the volatile south east developer market and a re-alignment of ongoing workload with core competencies. However, all these actions require a reasonable period of time to elapse before a positive profit and loss account benefit is felt, therefore, this business is expected to incur further losses in the remainder of the year under review. In addition, the financial consequences emanating from the customer determination of one of the company's larger contracts in the last year remain to be quantified. Hence there is a degree of uncertainty over and above normal trading conditions over the short term performance of our building business. The turnaround of operations in the Process Engineering company continues to be reflected in its results. With its customer capital and maintenance spending patterns on the increase market conditions will support further improvements. The company is also developing certain specialised skills which are being recognised within that market which as a result differentiate the business from its competitors. As work of this more specialised nature increases results will improve. The aggregate value of debtors attributable to the two contracts which are the subject of arbitration or equivalent proceedings remains unchanged from the year end at #6.2million. The two cases concerned continue to be subjects of due process. Consequently as described in Note 8 recoverability of value is uncertain. Plant Hire Six months ended 31 October Year ended 2002 2001 30 April 2002 Turnover Operating Turnover Operating Turnover Operating profit profit profit #'000 #'000 #'000 #'000 #'000 #'000 Crawler Cranes 1,647 563 1,780 501 3,508 849 Piling Equipment 422 197 457 147 942 259 Site Accommodation 2,431 832 1,920 567 4,142 1,277 4,500 1,592 4,157 1,215 8,592 2,385 The upgrading of our crawler crane fleet towards hydraulic machines has continued since the year end with the acquisition of three new hydraulic machines and the sale of four mechanical cranes. The only mechanical cranes that we intend to keep in the fleet are the heavier machines which perform more efficiently than their hydraulic counterparts and, therefore, represent a more profitable proposition for customers. The predicted upturn in the number of major construction contract starts has fed through to the Piling business with orders on the increase. Not only do these projects benefit our Piling activities but they also present an opportunity for the combined hire of cranes and piling hammers. Historically, combined hires have produced higher returns. Our site accommodation business, which trades under the name of The Cabin Company Limited, has had a particularly satisfying first half. Penetration of the external market is ahead of schedule with fifteen per cent of turnover now with customers external to the Group. From a standing start going into the year this represents encouraging progress which bodes well for future expansion. Commercial Property Six months ended 31 October Year ended 2002 2001 30 April 2002 Turnover Operating Turnover Operating Turnover Operating profit profit profit #'000 #'000 #'000 #'000 #'000 #'000 - - - 114 1,217 762 As was the case in 2001/2002 no contracted sales were completed in the first half. Fourteen acres of land remain to be sold or developed all of which are currently attracting interest. Prospects for sales in the second half are therefore improved. Dividend An interim dividend of 0.375p per ordinary share (2001: 0.375p) will be paid on 6 May 2003 to shareholders on the register on 4 April 2003. Outlook At the year end we reported that the Group was in position to progress further. In October when announcing the Leicester City bad debt we said that the Group's main markets were expected to remain steady. This continues to be the case and therefore we believe that further progress in the underlying performance of the business will continue. CONSOLIDATED RESULTS FOR THE 6 MONTHS ENDED 31 OCTOBER 2002 6 Months 6 Months Year Ended Ended Ended 31.10.02 31.10.01 30.04.02 Note #'000 #'000 #'000 Turnover 2 248,049 246,203 487,238 Operating profit before exceptional operating item 2 1,474 1,166 5,051 Exceptional operating item 3 (5,500) - - Operating (loss)/profit 2 (4,026) 1,166 5,051 Profit on disposal of subsidiary undertaking 4 - - 1,499 Net interest 186 25 179 (Loss)/profit on ordinary activities before taxation 2 (3,840) 1,191 6,729 Taxation 5 1,152 (262) (400) (Loss)/profit for the financial period (2,688) 929 6,329 Dividends on equity shares 6 (721) (721) (1,924) (Withdrawn from)/transferred to reserves (3,409) 208 4,405 (Loss)/earnings per ordinary share - basic 7 (1.4)p 0.5p 3.3p - diluted 7 (1.4)p 0.5p 3.3p Before exceptional item - basic 7 0.6p 0.5p 2.5p - diluted 7 0.6p 0.5p 2.5p The above figures relate exclusively to continuing operations except for the profit on disposal of subsidiary undertaking in the year ended 30 April 2002 (see Note 4). CONSOLIDATED BALANCE SHEET AS AT 31 OCTOBER 2002 As at As at As at 31.10.02 31.10.01 30.04.02 Note #'000 #'000 #'000 Fixed Assets Tangible Assets 13,789 12,697 14,187 Current Assets Property held for resale 1,685 - - Stocks 3,396 3,510 3,246 Debtors 8 142,209 137,164 146,712 Investments 4,673 3,816 3,814 Cash at bank and in hand 13,103 7,268 10,482 165,066 151,758 164,254 Creditors: Amounts falling due within one year Bank loans and overdrafts (600) (400) (378) Other creditors (163,533) (151,312) (161,289) (164,133) (151,712) (161,667) Net Current Assets 933 46 2,587 Total Assets less Current Liabilities 14,722 12,743 16,774 Creditors: Amounts falling due after more than one year Bank loans and overdrafts (886) (526) (200) Other creditors (6,526) (6,249) (5,855) (7,412) (6,775) (6,055) Provisions for Liabilities and Charges (554) - (554) Net Assets 6,756 5,968 10,165 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 (13,491) (14,279) (10,082) Shareholders' Funds - equity interest 6,756 5,968 10,165 CONSOLIDATED CASH FLOW STATEMENT For the 6 months ended 31 October 2002 6 Months 6 Months Year Ended Ended Ended 31.10.02 31.10.01 30.04.02 #'000 #'000 #'000 Net cash inflow from operating activities 5,268 1,850 7,419 Returns on investments and servicing of finance 159 83 167 Taxation 248 - 2 Capital expenditure and financial investment (3,964) (1,135) (3,454) Disposal of subsidiary undertaking - - 1,499 Dividends paid to equity shareholders (721) (721) (1,924) Cash inflow before management of liquid resources and financing 990 77 3,709 Management of liquid resources 416 11,946 12,437 Financing 850 374 (46) Increase in cash in the period 2,256 12,397 16,100 CONSOLIDATED CASH FLOW STATEMENT For the 6 months ended 31 October 2002 6 Months 6 Months Year Ended Ended Ended 31.10.02 31.10.01 30.04.02 #'000 #'000 #'000 Reconciliation of operating (loss)/profit to net cash inflow from operating activities Operating (loss)/profit (4,026) 1,166 5,051 Depreciation net of profit on disposal of fixed assets 1,037 852 1,732 (Increase) in stocks (150) (796) (532) Decrease/(increase) in debtors 5,407 (9,637) (18,771) Increase in creditors 3,000 10,265 19,939 Net cash inflow from operating activities 5,268 1,850 7,419 Analysis of net funds Cash at bank on demand 12,738 6,779 10,482 Cash at bank on short term deposit 365 489 - Cash at bank on deposit with terms in excess of seven days 2,033 2,816 2,814 Debt due within one year (600) (400) (200) Debt due after one year (886) (526) (378) Finance leases (340) (419) (398) Net funds at 31 October 2002 13,310 8,739 12,320 Reconciliation of cash flows to movements in net funds Increase in cash in the period 2,256 12,397 16,100 Cash (inflow)/outflow from financing (850) (374) 46 Cash inflow from management of liquid resources (416) (11,946) (12,437) New finance leases and hire purchase contracts - (173) (224) Movement in net funds in the period 990 (96) 3,485 Net funds at 1 May 2002 12,320 8,835 8,835 Net funds at 31 October 2002 13,310 8,739 12,320 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 2002. The Group's auditors, Deloitte & Touche, have carried out a review of the interim accounts, which were approved by the Board of Directors on 12 December 2002, and their report is reproduced on page 14. 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 2002 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 31.10.02 Ended Ended #'000 31.10.01 30.04.02 #'000 #'000 (As restated) (As restated) Turnover Contracting 245,980 244,263 481,832 Plant Hire 4,500 4,157 8,592 Commercial Property - - 1,217 Group Centre - - - Intra-group (2,431) (2,217) (4,403) 248,049 246,203 487,238 Results Contracting (379) (412) 1,404 Plant Hire 1,592 1,215 2,385 Commercial Property - 114 762 Group Centre 261 249 500 Operating profit before exceptional operating item 1,474 1,166 5,051 Exceptional operating item - Contracting (5,500) - - Operating (loss)/profit (4,026) 1,166 5,051 Profit on disposal of subsidiary undertaking - - 1,499 Net interest 186 25 179 (Loss)/profit on ordinary activities before taxation (3,840) 1,191 6,729 From 1 May 2002 Group Centre includes the results of three newly incorporated businesses that principally provide services to other Group companies. In consequence profits of #567,000 and #1,008,000 how been reclassified as Group Centre from Contracting in the periods to 31 October 2001 and 30 April 2002 respectively. NOTES TO THE INTERIM ACCOUNTS 3. Exceptional Operating Item 6 Months 6 Months Year Ended 31.10.02 Ended Ended #'000 31.10.01 30.04.02 #'000 #'000 Bad debt write off in respect of Leicester City plc and its subsidiaries (5,500) - - This bad debt has been recognised in consequence of Leicester City plc and its subsidiaries being placed into administration. The amount of the tax credit attributable to this exceptional loss is #1,650,000. 4. Profit on Disposal of Subsidiary Undertaking On 24 April 1995 the Company sold its entire shareholding in Birse Homes Limited. In the year to 30 April 2002, under the terms of the sale agreement the Company received deferred consideration net of related costs of #1,499,000. There are no further amounts due. There is no tax charge in respect of this exceptional receipt. 5. Taxation The tax credit for the period has been calculated by reference to the projected rate for the full year. 6. Dividends on Equity Shares An interim dividend of 0.375p per ordinary share (2001 - 0.375p) will be paid on 6 May 2003 to shareholders on the register on 4 April 2003. NOTES TO THE INTERIM ACCOUNTS 7. (Loss)/Earnings per Ordinary Share 6 Months 6 Months Year Ended 31.10.02 Ended Ended #'000 31.10.01 30.04.02 #'000 #'000 The calculation of (loss)/earnings per ordinary share is based on: (Loss)/earnings for basic and diluted earnings per ordinary share calculation (2,688) 929 6,329 Exceptional item 5,500 - (1,499) Tax on exceptional item (1,650) - - Earnings before exceptional item per ordinary share calculation 1,162 929 4,830 Weighted average number of shares used in (loss)/ earnings per ordinary share calculation 192,390 192,390 192,390 Adjustment to reflect dilutive shares under option - - - Weighted average number of shares in diluted (loss)/earnings per ordinary share calculation 192,390 192,390 192,390 8. Debtors; Uncertainty Relating to Amounts on Contracts Included in debtors is an aggregate value of #6.2million 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 previous years 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 2002 which comprises the profit and loss account, the balance sheet, the cash flow statement and related notes 1 to 8. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors. The Directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Uncertainty relating to amounts on contracts In arriving at our review conclusion we have considered the accuracy of disclosure made in Note 8 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 2002. Deloitte & Touche Chartered Accountants Leeds 12 December 2002 This information is provided by RNS The company news service from the London Stock Exchange END IR TBBRTMMJBBAT
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