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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Engage Xr Holdings Plc | LSE:EXR | London | Ordinary Share | IE00BG0HDR01 | ORD EUR0.001 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.175 | 1.10 | 1.25 | 1.175 | 1.175 | 1.175 | 794,083 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:7894S
Expro International Group PLC
03 December 2003
For Immediate Release
3 December 2003
EXPRO INTERNATIONAL GROUP PLC
("Expro" or "the group")
Interim results for the six months ending 30 September 2003
Expro International Group PLC, the oil field services company, today announces
interim results for the six months ending 30 September 2003.
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 March
September 2003 September 2002 2003
Turnover* #97.6m #111.4m #209.2m
Operating profit* #6.9m #14.1m #22.4m
EBITDA** before exceptional items #17.1m #24.2m #43.4m
EBITDA margin*** 17.5% 21.7% 20.7%
Profit on ordinary
activities before taxation #5.6m #11.8m #34.4m
Pre-tax profits before
goodwill amortisation and
exceptional items**** #6.7m #12.8m #20.0m
Basic EPS 4.7p 12.3p 37.8p
Basic EPS before goodwill
amortisation and exceptional items 6.5p 13.8p 22.1p
* Group and share of joint ventures, as extracted from the profit and loss
account.
** Represented by operating profit for the group of #5,877,000 (six months
ended 30 September 2002 #13,819,000; year ended 31 March 2003 #21,660,000),
plus group goodwill amortisation and depreciation of #9,472,000 (six months
ended 30 September 2002 #9,377,000; year ended 31 March 2003 #19,933,000)
and EBITDA from the joint ventures of #1,709,000 (six months ended 30
September 2002 #976,000; year ended 31 March 2003 #1,763,000).
*** EBITDA** before exceptional items expressed against turnover*.
**** Represented by operating profit for the group and share of joint ventures
of #6,883,000 (six months ended 30 September 2002 #14,129,000; year ended
31 March 2003 #22,382,000), plus goodwill amortisation of #1,144,000 (six
months ended 30 September 2002 #1,242,000; year ended 31 March 2003
#2,388,000) less finance charges of #1,312,000 (six months ended 30
September 2002 #2,615,000; year ended 31 March 2003 #4,794,000).
* A challenging period for the group with generally weak trading
conditions particularly in the Americas and Asia Pacific
* These trading conditions have continued since the period end and as
indicated in the trading update in November, we currently anticipate that
the second half will not see an improvement on the first half
* Management has taken decisive action to reposition the group for growth
in the major markets. The benefits are expected to become evident in the
year to 31 March 2005
* Interim dividend maintained and, in the absence of unforeseen
circumstances the Board will recommend the payment of a maintained final
dividend for the year to 31 March 2004
Commenting on these results, Graeme Coutts, Chief Executive, said: "The
management is clear about the challenges it faces. We have critically reviewed
our strategic direction with regards to geographic structure, technology and
sales and marketing, with an aggressive implementation plan underway. The
changes being put in place will provide a strong platform from which to respond
to these challenges and to profitably grow the business through the cycle."
- Ends -
For further information please contact:
Expro International Group PLC On 3 December: 020 7067 0700
Graeme Coutts, Chief Executive Thereafter: 01189 591 341
Colin Ainger, Interim Finance Director
Weber Shandwick Square Mile 020 7067 0700
Tim Jackaman, Mike Kirk, Rachel Taylor
An analyst meeting will be held at 09.30 this morning at the offices of Weber
Shandwick Square Mile, Fox Court, 14 Gray's Inn Road, London, WC1X 8WS
EXPRO INTERNATIONAL GROUP PLC
("Expro" or "the group")
Interim results for the six months ended 30 September 2003
Chairman's & Chief Executive's Statement
Further to our pre-close trading statement on 29 September 2003, and as we
updated the market on 18 November 2003, generally weak trading conditions in the
Americas and Asia Pacific continued, and provided a tough background from which
to implement the important changes underway in the business. Relative to the
same period last year, revenues of the group and share of joint ventures for the
first half were reduced by 12%, broadly in line with management's expectations.
Given our high operational gearing created by what is essentially a fixed
operating cost base, the impact of reduced turnover on operating profit is
amplified. However, as is highlighted in more detail below, we are making
important changes to our operating structure which are designed to focus our
cost base on large markets with significant growth potential. With continued
adverse market conditions in the Americas expected to continue during the second
half, we currently anticipate that the second half will not see an improvement
on the first half results.
Dividend
The group's dividend policy remains focused on rewarding shareholders at an
earnings and cash cover that is prudent and consistent with the long term
earnings profile of the business. On this basis the board is proposing to pay a
maintained interim dividend of 3.8p per share. This will be payable on 30
January 2004 to shareholders on the register at 30 December 2003. In the absence
of unforeseen circumstances, the Board will recommend the payment of a
maintained final dividend for the year ended 31 March 2004.
Tax Position
The effective tax rate for the group for the year is likely to be higher than
anticipated at 43.4%, up from 30.4% (effective current tax rate for the prior
year 33%). This rate has arisen from changes to Expro's geographic mix of
business and gives a fair guide as to the likely full year rate for the group.
The magnitude of the change is influenced not only by the different geographic
tax rates, but also the leveraged input of non deductible items (such as
goodwill amortisation) at lower profitability.
Overview
Cased Hole Services remains a relatively resilient part of the group's
portfolio. Turnover in this segment was virtually unchanged from the same period
last year at #41.3m. This reflects the continued demand for our well performance
technologies. Highlights for the period include growth in the UK continental
shelf where EGIS, our integrated well management arm, increased market share,
primarily with Shell, and further reinforced our position in the changing North
Sea market. In China, an increasingly important market, we successfully
introduced our well perforating technology for CNOOC in their ongoing Bohai Bay
development. However, in the shallow water US Gulf of Mexico market, we have
been impacted by continued low levels of capital spend from our clients relating
to new wells. This is in line with many other service providers in this market.
Subsurface Systems, our deepwater field development business, was down some 34%
in turnover for the group and share of joint ventures to #20.8m, compared to the
same period in the prior year. This was partly due to the loss of income from
our former permanent monitoring business; the 50% retained is now reported in
the QuantX joint venture. The main fall was related to Tronic, our connector
business, reflecting the impact of phasing in global deepwater developments with
revenues tied to the procurement phase of field development hardware. Tronic
continues to enjoy an outstanding industry position both in market share terms
and in technological leadership. Demand for our deepwater subsea safety tools
varied by geographic market. In the UKCS and Norway, income grew despite a
generally poor industry outlook, confirming our strong position in the mid-water
segment. However, in the ultra deepwater markets of West Africa and the Gulf of
Mexico, where we recognised we had a technology shortfall, activity was slower.
We have since been actively introducing our new generation systems with great
success. The recently completed Conoco Magnolia project and the subsequent
follow-on campaign for Pioneer Natural Resources, both in the Gulf of Mexico,
have given us rapid client acceptance for our latest technology in this
important market segment.
In our Surface and Environmental business, where we provide production
solutions, well clean-up and reservoir characterisation services, turnover of
the group and share of joint ventures reduced by 7% to #35.4m, compared to the
same period last year. This partly reflected the conclusion of two major
projects included in the prior year, the first being Shell's highly successful
Malampaya project in Asia, and the second was the Gaggiano field development in
Italy. On a positive note both the UKCS and Americas showed progress. The recent
commencement of operations for Tuscan on the Ardmore field in the North Sea, and
the start of our field development contract for BHP in Trinidad will benefit the
second half of this year. Significantly, enquiry levels for our marginal field
development capability have recovered after a slow period, indicating increased
confidence and renewed interest within our clients.
Strategic direction
Expro has an international reputation for quality and service. Our global
operating footprint allows us to perform our activities throughout most of the
hydrocarbon regions of the world. However, this widespread capability leads to a
relatively high cost base from which we aim to generate increasing returns by
delivering revenue growth. With this as a key objective, we have critically
reviewed our strategic direction in the following three areas with aggressive
implementation already underway, to ensure that we are able to leverage the
maximum capability from our assets.
Geographic restructuring: Close examination of Expro's geographic structure has
highlighted the opportunity to realign our efforts towards large markets with
material growth prospects. Consequently, in October 2003 we made significant
structural adjustments to enable Expro to address markets in the Former Soviet
Union (FSU) and the Middle East (ME). This was achieved with minimal disruption
and negligible cost by focusing available management capacity through the
restructuring of existing geographic regions.
First, our European region, with over 1,000 employees, will now extend its
considerable capabilities to developing the emerging FSU market. The new Europe/
FSU region will assist our clients in establishing their positions within this
technology hungry market, as well as focus on the wider North Sea opportunities
arising from the changing client base. Both areas share common requirements for
field rejuvenation where we have continually demonstrated the ability to deliver
value to our clients.
Secondly, in recognition of the potential of the changing Middle East market, we
will significantly increase our focus in this area while adding our relatively
fragmented Asia business to create an Africa/Asia/ME region under a single
management structure.
Finally, the strategically important Americas region, based in Houston, is set
to benefit from our efforts to reduce our dependence on the shallow Gulf of
Mexico market through a combination of new technology and market focus. We
believe that the shallow offshore market will continue to be subdued, so we have
re-engineered our portfolio with the introduction, and exploitation, of our
advanced cased hole perforation technology EXcapeTM. This unique system is aimed
at the mass land markets where it is rapidly gaining acceptance as a leading
technique for the development of gas wells in hard rock areas. We believe there
is significant market potential for this new product.
We continue to participate in the highly influential deepwater Gulf of Mexico
where clients view local performance as a key requirement for acceptance on
their global deepwater projects. The successful introduction of our ultra
deepwater Electro-hydraulic tools has allowed us to access projects previously
beyond our technical capability. This will assist us in other key ultra
deepwater markets such as West Africa.
Technology introduction: Expro has always enjoyed a reputation for introducing
high value technology. The aforementioned EXcapeTM and our ultra deepwater
subsea tools are current examples which have further applications beyond the
domestic United States. Maintaining our technological leadership will be key to
improving margins within the business. A recently agreed Joint Industry Project
between Expro, bp and ChevronTexaco to fully determine the feasibility of our
unique Rigless subsea well intervention system is evidence of our continued
industry leading position. This system has the theoretical capability to
transform the economics of deepwater field developments. This joint funded
project will determine capability, economics and time to market. Expro will
continue to focus its expertise and efforts on technology development which
delivers significant value to our clients, providing us with a sustainable
growth profile and competitive advantage within our chosen markets.
Effective Sales and Marketing remain key to the successful exploitation of our
product portfolio. Dynamic sales and focused marketing are not to be
underestimated in our sector. In this area we are already making positive
changes to better address the needs of our clients. The introduction of a global
client intelligence system, tracking and transferring knowledge through the
group, has been introduced under the direction of our first Sales Director. The
benefit to our operating regions will follow as we populate the system and
enable increased knowledge transfer across the group.
Outlook
The management remain focused on enhancing the position of the group for the
longer term. In particular, the group's larger clients are now more focused on
well activities following a relatively inactive period dominated by political
uncertainty, mergers and consolidation. In the North Sea, the new breed of
independents is becoming increasingly active, requiring assistance and offering
a very broad scope of opportunity for Expro. These changes to our markets demand
changes to our approach and position in the industry.
The management is clear about the challenges it faces. We have critically
reviewed our strategic direction with regards to geographic structure,
technology and sales and marketing, with an aggressive implementation plan
underway. The changes being put in place will provide a strong platform from
which to respond to these challenges and to profitably grow the business through
the cycle.
Dr Chris Fay, CBE Graeme Coutts
Chairman Chief Executive Officer 2 December 2003
Group Profit and Loss Account
for the six months ended 30 September 2003
Unaudited Unaudited
Six months Six months Audited
ended 30 ended 30 Year ended 31
September September March
2003 2002 2003
Note #000's #000's #000's
Turnover:
Group and share of joint ventures 97,556 111,416 209,232
Less: share of joint ventures (6,367) (2,987) (5,743)
-------- -------- --------
Group turnover 2 91,189 108,429 203,489
-------- -------- --------
Operating profit before goodwill
amortisation 8,027 15,371 24,770
Goodwill amortisation (1,144) (1,242) (2,388)
-------- -------- --------
Operating profit 6,883 14,129 22,382
Operating profit:
Group 5,877 13,819 21,660
Share of joint ventures 1,006 310 722
-------- -------- --------
Total 6,883 14,129 22,382
Exceptional gain on partial sale
of interest in business on formation
of joint venture 6a - - 16,550
Exceptional loss on termination of
discontinued operations 6b - (472) (489)
Less: prior year provision 6b - 718 735
-------- -------- --------
Profit on ordinary activities
before finance charges 6,883 14,375 39,178
Finance charges (net) (1,312) (2,615) (4,794)
-------- -------- --------
Profit on ordinary activities
before tax 5,571 11,760 34,384
Tax on profit on ordinary
activities 3 (2,418) (3,627) (9,390)
-------- -------- --------
Profit on ordinary activities
after tax 3,153 8,133 24,994
Minority equity interests (17) (45) (20)
-------- -------- --------
Profit for the period 3,136 8,088 24,974
Dividends paid and proposed 4 (2,511) (2,514) (7,210)
-------- -------- --------
Retained profit for the period 625 5,574 17,764
-------- -------- --------
Earnings per ordinary share:
Basic 5 4.7p 12.3p 37.8p
Diluted 5 4.7p 12.2p 37.7p
Basic before goodwill amortisation
and exceptional items 5 6.5p 13.8p 22.1p
Total recognised gains and losses for the six months ended 30 September 2003
comprise the profit for the period of #3,136,000 and a net loss of #1,375,000 on
foreign currency translation and overseas borrowings (six months ended 30
September 2002 loss of #3,123,000; year ended 31 March 2003 loss of #2,784,000).
Group Balance Sheet
at 30 September 2003
Unaudited Unaudited Audited
30 September 30 September 31 March
2003 2002 2003
#000's #000's #000's
Intangible fixed assets and goodwill 36,897 40,215 39,114
Tangible fixed assets and investments 71,295 74,908 71,842
Investments in joint ventures:
- share of gross assets 18,970 12,875 12,474
- share of gross liabilities (14,140) (10,478) (8,392)
- goodwill 863 963 932
--------- --------- ---------
5,693 3,360 5,014
--------- --------- ---------
Fixed assets 113,885 118,483 115,970
--------- --------- ---------
Stocks and work-in-progress 11,316 11,818 10,392
Debtors - due within one year 74,047 68,751 61,402
- due after one year - 8,775 8,775
Cash at bank and in hand 16,082 4,514 28,104
--------- --------- ---------
Current assets 101,445 93,858 108,673
Creditors due within one year (50,103) (46,020) (52,314)
--------- --------- ---------
Net current assets 51,342 47,838 56,359
--------- --------- ---------
Total assets less current liabilities 165,227 166,321 172,329
Creditors due after more than one year (64,846) (77,585) (70,844)
Provisions for liabilities and charges (2,668) (2,827) (3,039)
--------- --------- ---------
Net assets 97,713 85,909 98,446
--------- --------- ---------
Called-up share capital 6,615 6,613 6,615
Share premium account and capital reserve 61,674 61,643 61,674
Profit and loss account 29,384 17,605 30,134
--------- --------- ---------
Shareholders' funds being equity interests 97,673 85,861 98,423
Minority equity interests 40 48 23
--------- --------- ---------
Total capital and reserves 97,713 85,909 98,446
--------- --------- ---------
Group Cash Flow Statement
for the six months ended 30 September 2003
Unaudited Unaudited
Six months Six months
ended ended Audited
30 September 30 September 31 March
2003 2002 2003
Note #000's #000's #000's
Net cash inflow from operating
activities 7 11,831 23,257 53,129
Finance charges (net) (1,692) (3,044) (5,352)
Taxation (5,440) (3,368) (6,993)
Capital expenditure and financial
investment (8,021) (8,841) (12,874)
Acquisitions and disposals - - 18,979
Equity dividends paid (4,700) (4,685) (7,197)
--------- --------- --------
Net cash (outflow)/inflow before
financing (8,022) 3,319 39,692
Financing (4,000) 1,867 (5,320)
--------- --------- --------
(Decrease)/increase in cash in the
period (12,022) 5,186 34,372
--------- --------- --------
Notes to the Interim Results
1. The results for the six months to 30 September 2003 and the comparative
results for the six months to 30 September 2002 have not been audited by the
company's auditors or reviewed in accordance with APB Bulletin 1999/4. They
have been prepared on a basis consistent with the accounting policies set out
in the statutory accounts for the year ended 31 March 2003. The comparative
figures for the year ended 31 March 2003 do not constitute statutory accounts
for the purpose of Section 240 of the Companies Act 1985 and have been extracted
from the company's published accounts, a copy of which has been delivered to
the Registrar of Companies and on which an unqualified audit report has been
made by the auditors under Section 235 of the Companies Act 1985.
2. Segmental Information
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 March
September 2003 September 2002 2003
Business Stream #000's #000's #000's
Cased Hole Services 41,307 41,493 77,614
Subsurface Systems 17,569 31,642 56,786
Surface & Environmental Systems 32,313 35,294 69,089
----------- ---------- --------
Group turnover 91,189 108,429 203,489
Subsurface Systems joint ventures 3,261 - -
Surface & Environmental Systems joint
ventures 3,106 2,987 5,743
----------- ---------- --------
Total turnover 97,556 111,416 209,232
----------- ---------- --------
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 March
September 2003 September 2002 2003
Geographical area #000's #000's #000's
Europe/FSUa 42,953 50,650 88,121
----------- ---------- --------
Africa/MEb 23,504 24,885 50,604
Asia Pacific 10,663 13,102 25,975
----------- ---------- --------
Africa/Asia/MEb 34,167 37,987 76,579
----------- ---------- --------
Americas 20,436 22,779 44,532
----------- ---------- --------
Total turnover 97,556 111,416 209,232
Share of joint ventures (6,367) (2,987) (5,743)
----------- ---------- --------
Group turnover 91,189 108,429 203,489
----------- ---------- --------
a FSU - Former Soviet Union
b ME - Middle East
The geographical segments have been revised from those presented in the audited
financial statements for the year ended 31 March 2003 as a result of the
geographic repositioning of the group as explained in the Chairman's and Chief
Executive's statement.
3. Tax on profit on ordinary activities
Tax on profits on ordinary activities has been calculated based on an estimated
weighted average tax rate for the year ended 31 March 2004 and includes foreign
tax of #1,934,000 (six months ended 30 September 2002 #3,193,000; year ended 31
March 2003 #8,384,000). The weighted average tax charge for the period on profit
on ordinary activities is 43.4%. This is compared to the weighted average
standard rate of UK and foreign tax of 28.9% with the difference largely
attributable to expenses not deductible for tax purposes and the impact of
unrelieved foreign losses in locations where the future utilisation of those
losses is not sufficiently certain as to justify their recognition.
Tax on profits on ordinary activities includes tax on profits of joint ventures
of #42,000 (six months ended 30 September 2002 #nil; year ended 31 March 2003
#nil)
4. Dividends paid and proposed
An interim dividend of 3.8 pence per ordinary share is declared for payment on
30 January 2004 (six months ended 30 September 2002, 3.8p; year ended 31 March
2003, 10.9p).
5. Earnings per ordinary share
The calculations of earnings per share are based on the following profits and
numbers of shares.
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 March
September 2003 September 2002 2003
#'000s #'000s #000's
Profit for the period for Basic and
Diluted earnings per share 3,136 8,088 24,974
Goodwill amortisation 1,144 1,242 2,388
Exceptional gain after tax on partial
sale of interest in business on
formation of joint venture - - (12,514)
Exceptional gain on discontinued
operations - (246) (246)
----------- ---------- --------
Earnings before goodwill and
exceptional items 4,280 9,084 14,602
----------- ---------- --------
Number of Number of Number of
shares shares shares
30 September 30 September 31 March
2003 2002 2003
Weighted average number of shares
ranking for dividend used for Basic
earnings per share 66,075,394 65,994,894 66,034,624
Dilutive effect of share options:
- Executive Share Scheme 24,628 34,633 88,222
- Employee Share Scheme - 161,613 41,254
---------- ---------- ----------
Weighted average number of shares
used for Diluted earnings per share 66,100,022 66,191,140 66,164,100
---------- ---------- ----------
The directors believe that the presentation of basic earnings per share before
goodwill amortisation and exceptional items assists with understanding the
underlying performance of the group.
6. Exceptional items
a. Exceptional gain on partial sale of interest in business on formation of
joint venture
During the prior year the group transferred its permanent monitoring business
into a newly formed joint venture enterprise, QuantX Wellbore Instrumentation
comprising three joint venture companies. In consideration for a 50% holding in
the joint venture companies, Baker Hughes Inc. paid the group #18,979,000 cash
which resulted in a realised exceptional gain before tax of #16,550,000. Tax on
the exceptional gain was #4,036,000. As a result of this transaction, the group
and Baker Hughes Inc. each hold 50% in each of the joint venture companies. At
any time after 31 March 2004, the group has the option to sell to Baker Hughes
Inc., and Baker Hughes Inc. has the option to purchase from the group, all of
the group's remaining equity interests in the joint venture companies at a price
based on the adjusted earnings for the year immediately prior to the exercise of
the option.
b. Exceptional profit/(loss) on termination of discontinued operations
During the prior year the group completed the closure of its cased hole services
business in Venezuela with the final charges and associated provisions recorded
resulting in an exceptional profit from the release of excess provisions.
7. Cash flow information
Reconciliation of operating profit to net operating cash inflow
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 March
September 2003 September 2002 2003
#000's #000's #000's
Operating profit 5,877 13,819 21,660
Depreciation and amortisation 9,472 9,377 19,933
(Profit)/loss on sale of tangible fixed
assets (28) 21 133
(Increase)/decrease in stocks and
work-in-progress (924) 255 (437)
(Increase)/decrease in debtors (3,940) 6,889 15,809
Increase/(decrease) in creditors and
provisions 1,374 (7,193) (4,058)
Exceptional cash inflow related to
termination of discontinued operations
(note 6b) - 89 89
----------- ---------- --------
Net cash inflow from operating
activities 11,831 23,257 53,129
----------- ---------- --------
Analysis of net debt
Other Unaudited
Audited non-cash 30 September
1 April 2003 Cash flow changes 2003
#000's #000's #000's #000's
Cash at bank and in hand 28,104 (12,022) - 16,082
Debt due after one year (70,528) 4,000 1,983 (64,545)
--------- -------- -------- ---------
(42,424) (8,022) 1,983 (48,463)
--------- -------- -------- ---------
Other non-cash changes represent foreign exchange revaluations of foreign
currency loans.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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