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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Nth.Mid.Cons | LSE:NMD | London | Ordinary Share | GB0006452857 | 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% | 530.00 | 510.00 | 550.00 | 0.00 | 00:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMNMD
RNS Number : 5840N
North Midland Construction PLC
10 August 2017
10 August 2017
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
NORTH MIDLAND CONSTRUCTION PLC
UNAUDITED CONDENSED GROUP HALF YEARLY FINANCIAL STATEMENTS
North Midland Construction PLC (the "Company"), the UK provider of Power, Construction, mechanical and electrical services to public and private organisations, announces interim results for the six months ended 30 June 2017.
Highlights:-
Six Months Six Months Ended Ended 30 June 30 June 2017 2016 GBP'000 GBP'000 Revenue 135,134 129,580 ----------- ----------- Profit Before Tax 1,220 512 Total Comprehensive Income 982 476 ----------- ----------- Earnings per Share 9.67p 4.69p ----------- ----------- Proposed Dividends 3.0p 1.5p ----------- -----------
o Revenue increased by 4.3% compared with H1 2016.
o Profit before tax increased by 138.3% to GBP1.22 million (H1 FY16: GBP0.51 million).
o Return to profitability of GBP0.03 million in the Telecommunications division (H1 FY16: loss of GBP1.56 million).
o Cash of GBP7.93 million an increase of 175.4% (H1 FY16: GBP2.88 million), inclusive of one off early receipt of GBP1.63 million (H1 FY16: GBPNIL).
o Increased proposed dividend to 3.0p (H1 FY16: 1.5p)
John Homer - Chief Executive - Commented:
"These results demonstrate the continued strategic advancement made in the business during the trading period. Our focus on enhanced margins and cash generation is beginning to become apparent and is anticipated to continue going forwards.
We continue to invest significantly in the development of our talent pool as we believe that our people are the overarching differentiator and the driver for our continued success.
The outlook for our future trading remains positive and provides the opportunity to further improve the earnings from our operations. The Board is anticipating enhanced like-for-like revenue growth in the second half of the year, coupled with an enhanced operating margin percentage."
For further information:- John Homer, Chief Executive Daniel Taylor, Group Finance Director 01623 518008 North Midland Construction PLC
CHAIRMAN'S STATEMENT
It is pleasing to report that the momentum generated in the first quarter, reported at the Annual General Meeting on 18 May 2017 has been maintained. A half-year profit before tax of GBP1.22 million (H1 FY16: GBP0.51 million) was generated from revenues which increased by 4.3% to GBP135.13 million (H1 FY16: GBP129.58 million).
The half-year result for Construction was affected by delays in secured projects getting underway, so both revenue and profitability were impacted. Revenue declined by 3.4% to GBP11.20 million (H1 FY16: GBP11.59 million) and profitability by 68.5% to GBP78,000 (H1 FY16: GBP248,000). The aforementioned projects are now well underway and the remaining order book to be completed this year currently stands at GBP23.50 million giving confidence that the full year's targets will be achieved. Secured revenues for 2018 currently are GBP15.00 million.
Power has suffered from a shortage of orders with revenues in the period declining by 46.0% to GBP7.47 million (H1 FY16: GBP13.83 million) and has consequently produced a loss of GBP151,000 (H1 FY16: GBP127,000 profit). A return to profitability is forecast for the second half-year.
Highways, on the back of resilient infrastructure expenditure, has increased revenues by 6.3% to GBP21.30 million (H1 FY16: GBP20.04 million) and profitability by 18.8% to GBP0.26 million (H1 FY16: GBP0.22 million). Secured workload to date for the remainder of the year is circa GBP16 million.
The Telecommunications market remains buoyant and revenues increased by 16.6% to GBP18.04 million (H1 FY16: GBP15.47 million) and a return to profitability was achieved, amounting to GBP32,000 (H1 FY16: GBP1.56 million loss). The return to profitability is encouraging, but the turnaround and reorganisation is not yet complete. A cautious perspective to the year-end out-turn is being adopted.
The Water sector continues to be a major market for the Group and several major projects are currently being undertaken either directly or in collaboration with partners. The most recent being the award of a new joint venture infrastructure contract for Severn Trent Water on the Birmingham Resilience Project worth in excess of GBP100 million. The AMP6 cycle is now well underway and consequently revenues escalated by 12.3% to GBP77.13 million (H1 FY16: GBP68.65 million). However, due to a cautious perspective being adopted on the out-turn of several newly commenced projects combined with the initial start-up costs of these projects, profitability declined by 30.3% to GBP1.11 million (H1 FY16: GBP1.59 million). Confidence is high that our internal forecast for the year will be achieved.
The resolution of the outstanding legacy contract is still ongoing, but progressing slowly. The Directors are striving to seek a satisfactory resolution.
The improved performance has resulted in a significant enhancement of the half-year bank position, albeit that this has been inflated due to a major one-off early receipt. Current cash at 30 June 2017 was GBP7.93 million (H1 FY16: GBP2.88 million).
As a result of increased revenues emanating from both the Birmingham Resilience Project award and a robust construction market, the results for the year to 31 December 2017 are expected to be ahead of management expectations. The Board has the confidence, therefore, to propose a doubling of the interim dividend to 3.0p per share (H1 FY16: 1.5p per share). The dividend will be paid on 15 September 2017 to shareholders on the register at 18 August 2017.
Robert Moyle
Chairman
North Midland Construction PLC
10 August 2017
UNAUDITED CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
The unaudited condensed Group results for the half year ended 30 June 2017 are shown below together with the unaudited Group results for the half year ended 30 June 2016 and the audited Group results for the year ended 31 December 2016.
Six Months Ended 30 June Year Ended 31 December 2017 2016 2016 GBP'000 GBP'000 GBP'000 Revenue 135,134 129,580 250,489 Other operating income 133 219 325 --------- --------- ------------ 135,267 129,799 250,814 Raw material and consumables (22,838) (22,007) (39,291) Other external charges (73,048) (75,286) (143,564) Employee costs (33,799) (28,403) (58,738) Depreciation of property, plant & equipment (1,489) (1,186) (2,400) Other operating charges (2,768) (2,294) (4,580) --------- --------- ------------ Operating profit 1,325 623 2,241 Finance costs (105) (111) (179) --------- --------- ------------ Profit before tax 1,220 512 2,062 Tax (Note 4) (238) (36) 572 --------- --------- ------------ Profit for the period 982 476 2,634 Other comprehensive income - - - --------- --------- ------------ Total comprehensive income for the period 982 476 2,634 ========= ========= ============ Attributed to:- Equity holders of the parent 982 476 2,634 --------- --------- ------------ 982 476 2,634 ========= ========= ============ Earnings per share basic and diluted (Note 3) 9.67p 4.69p 25.95p Dividend per share (Note 5) 3.0p 1.5p 1.5p
UNAUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Capital Share Merger Redemption Retained Capital Reserve Reserve Earnings Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 2016 1,015 455 20 8,727 10,217 Profit and total comprehensive income for the period - - - 476 476 Dividends paid - - - - - -------- -------- ----------- --------- -------- Balance at 30 June 2016 1,015 455 20 9,203 10,693 Profit and total comprehensive income for the period - - - 2,158 2,158 Dividends paid - - - (152) (152) Balance at 31 December 2016 1,015 455 20 11,209 12,699 Profit and total comprehensive income for the
period - - - 982 982 Dividends paid - - - (303) (303) -------- -------- ----------- --------- -------- Balance at 30 June 2017 1,015 455 20 11,888 13,378 ======== ======== =========== ========= ========
UNAUDITED CONDENSED GROUP BALANCE SHEET
The unaudited condensed Group Balance Sheets as at 30 June 2017 and 30 June 2016 are shown below together with the audited Group Balance Sheet as at 31 December 2016.
30 June 31 December 2017 2016 2016 GBP'000 GBP'000 GBP'000 Assets Non-Current Assets Property, plant and equipment 14,975 13,011 13,651 Deferred tax asset 1,201 705 1,411 16,176 13,716 15,062 -------- -------- ------------ Current Assets Inventories 1,950 1,964 2,065 Construction contracts 18,048 15,801 19,165 Trade and other receivables 40,943 39,433 30,705 Cash and cash equivalents 7,925 2,878 11,405 -------- -------- ------------ 68,866 60,076 63,340 -------- -------- ------------ Total Assets 85,042 73,792 78,402 ======== ======== ============ Equity & Liabilities Capital & Reserves attributable to equity holders of the Parent Share capital 1,015 1,015 1,015 Merger reserve 455 455 455 Capital redemption reserve 20 20 20 Retained earnings 11,888 9,203 11,209 -------- -------- ------------ Total Equity 13,378 10,693 12,699 ======== ======== ============ Liabilities Non-current Liabilities Obligation under finance leases - due after one year 2,703 2,004 1,785 Provisions 394 394 394 3,097 2,398 2,179 -------- -------- ------------ Current Liabilities Trade & other payables 66,048 58,626 61,145 Current income tax payable 219 54 194 Obligations under finance leases - due within one year 2,300 2,021 2,185 68,567 60,701 63,524 -------- -------- ------------ Total Liabilities 71,664 63,099 65,703 -------- -------- ------------ Total Equity & Liabilities 85,042 73,792 78,402 ======== ======== ============
UNAUDITED CONDENSED GROUP STATEMENT OF CASH FLOWS
The unaudited condensed Group statement of cash flows for the periods ended 30 June 2017 and 30 June 2016 are shown below together with the audited Group statement of cash flows for the year ended 31 December 2016.
Six Months Ended Year 30 June Ended 31 December 2017 2016 2016 GBP'000 GBP'000 GBP'000 Cash flows from operating activities Operating profit 1,325 623 2,241 Adjustments for: Depreciation of property, plant and equipment 1,489 1,185 2,400 Gain on disposal of property, plant and equipment (130) (215) (317) Increase in provisions - 33 33 Operating cash flows before movements in working capital 2,684 1,626 4,357 Decrease in inventories 115 371 270 Decrease/(increase) in construction contracts 1,117 1,736 (1,628) (Increase)/decrease in receivables (10,238) (8,039) 690 Increase in payables 4,903 2,040 4,557 Cash (used in)/generated from operations (1,419) (2,266) 8,246 Income tax received - 21 78 Interest paid (105) (111) (61) --------- -------- ------------ Net cash (used in)/generated from operating activities (1,524) (2,356) 8,263 --------- -------- ------------ Cash flows from investing activities Purchase of property, plant and equipment (444) (477) (1,303) Proceeds on disposal of property, plant and equipment 132 353 475 Net cash used in financing activities (312) (124) (828) --------- -------- ------------ Cash flows from financing activities Equity dividends paid (303) - (152) Repayments of obligations under finance leases (1,341) (1,263) (2,381) Interest payable under finance leases - - (118) --------- -------- ------------ Net cash used in financing activities (1,644) (1,263) (2,651) Net (decrease)/increase in cash and cash equivalents (3,480) (3,743) 4,784 Cash and cash equivalents at 1 January 2017 11,405 6,621 6,621 --------- -------- ------------ Cash and cash equivalents at 30 June 2017 7,925 2,878 11,405 ========= ======== ============ 1. Basis of preparation The unaudited condensed Group half-yearly financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, and have been prepared on the basis of International Financial Reporting Standards (IFRSs) as adopted by the European Union that are effective for the full year ending 31 December 2016. They do not include all of the information required for full annual financial statements. These condensed consolidated half-yearly financial statements have not been subject to audit or review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 by the company's auditor, do not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006, and should be read in conjunction with the Annual Report 2016. The comparative figures for the year ended 31 December 2016 are not the Group's statutory accounts for that financial year. Those accounts have been reported upon by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain statements under Section 435 and 498 (2) or (3) respectively of the Companies Act 2006. The Board regularly reviews financial statements, cash balances and forecasts and the Directors confirm that they consider the Group has adequate resources to continue to operate for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the unaudited condensed Group half yearly financial statements. The accounting policies adopted in the preparation of the unaudited condensed Group half-yearly financial statements to 30 June 2017 are consistent with the policies applied by the Group in its consolidated financial statements as at, and for the year ended 31 December 2016. The Group has considered amendments to existing standards and interpretations that are effective for the year ending 31 December 2017 and is of the view that they have no impact on the unaudited condensed Group half-yearly accounts, except for as noted below with IFRS 15 'Revenue from Contracts with Customers'. The preparation of unaudited condensed Group half-yearly financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these unaudited condensed Group half-yearly financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2016.
The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2016. IFRS 15 'Revenue from Contracts with Customers' IFRS 15 introduces a single, principles based, five-step model to measuring and recognising revenue from contracts with customers, based on the transfer of control of goods and services to customers. It replaces the separate models for goods, services and construction contracts currently included in IAS 18 'Revenue', IAS 11 'Construction Contracts', and several revenue-related interpretations. IFRS 15 will be adopted by the Group with effect from 1 January 2018. The Group is continuing to undertake its assessment of the impact of IFRS 15, through a review of existing major contracts. The quantitative impact of the initial application of IFRS 15 is not known or reasonably estimable at the time of preparation of these interim financial statements. 2. Segment reporting Business segments The Group is composed of the following operating markets which are conducted in the UK and are effectively market sectors: -- Construction -- Power -- Highways -- Water -- Telecommunications The Group manages its operating segments' trading performance and working capital by monitoring operating profit and centrally manages Group taxation, capital structure and expenditure including net equity and net debt. Segment revenue and profit Six Months Ended 30 June 2017 Construction Power Highways Telecoms Water Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue External sales 11,201 7,468 21,297 18,039 77,129 135,134 ============= ======== ========= ========= ======== ======== Result before corporate expenses 699 409 1,234 943 5,811 9,096 Corporate expenses (621) (560) (975) (911) (4,704) (7,771) Operating profit/(loss) 78 (151) 259 32 1,107 1,325 ============= ======== ========= ========= ======== Net finance costs (105) -------- Profit before tax 1,220 Tax (238) -------- Total comprehensive income for the period 982 ======== Six Months Ended 30 June 2016 Construction Power Highways Telecoms Water Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Revenue External sales 11,593 13,827 20,038 15,469 68,653 129,580 ============= ======== ========= ========= ======== ======== Result before corporate expenses 910 640 821 (852) 5,323 6,842 Corporate expenses (662) (513) (603) (707) (3,734) (6,219) Operating profit/(loss) 248 127 218 (1,559) 1,589 623 ============= ======== ========= ========= ======== Net finance costs (111) -------- Profit before tax 512 Tax (36) -------- Total comprehensive income for the period 476 ======== Segment assets 30 June 2017 2016 GBP'000 GBP'000 Construction 8,765 11,464 Power 12,261 6,703 Highways 14,714 15,048 Telecommunications 21,911 17,081 Water 27,391 23,496 Total segment assets and consolidated total assets 85,042 73,792 ======== ======== For the purpose of monitoring segment performance and allocating resources between segments, the Group's Chief Executive monitors the tangible and financial assets attributable to each segment. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments. Other segment information Depreciation Additions and to amortisation non-current assets 30 June 30 June 2017 2016 2017 2016 GBP'000 GBP'000 GBP'000 GBP'000 Construction 154 124 290 163 Power 103 148 194 194 Highways 293 215 552 281 Telecommunications 248 166 467 217 Water 691 532 1,300 696 1,489 1,185 2,803 1,551 ========= ======== ======== ======== There were no impairment losses recognised in respect of property, plant and equipment. All of the above relates to continuing operations and arose in the United Kingdom. Information about major customer Revenues of approximately GBP52,346,000 (2016: GBP55,483,000) were derived from a single external customer. These revenues are attributable to the Power and Water segments. 3. Earnings per share The basic and diluted earnings per share are the same and have been calculated on profits of GBP982,000 (2016: profits of GBP476,000) and a weighted average number of shares in issue of 10,150,000 (2016: 10,150,000). 4. Taxation In respect of the six months ended 30 June 2017, the corporation tax effective rate was 19.5% (2016: 20%). A corporation tax provision has been included in relation to the taxable profits of the company. 5. Dividends Amounts recognised as distributions to equity holders in the half year:- Six Months to June 2017 2016 GBP'000 GBP'000 Final dividend for the year ended 31 303 - December 2016 of GBP3.0p (2015: GBPNil) per share. ======== ======== The Directors propose an interim dividend of 3.0p (2016: 1.5p) per share, total GBP305,000 (2016: GBP152,000), which will be paid on 15 September 2017 to the shareholders on the register at 18 August 2017. 6. Related parties The Group's related parties are key management personnel who are the executive directors, non-executive directors and divisional managers. The Company previously advised that on 29 March 2017, SPARK Advisory Partners Limited ("SPARK"), the Company's sponsor (in respect of this matter only), notified the Financial Conduct Authority (the "FCA") of a breach of the Listing Rules in relation to the related party transactions. SPARK also notified the FCA that the Company has a "controlling shareholder" (being the Moyle family and its associates) for the purposes of the Listing Rules in respect of which there is no agreement in place as required by Listing Rule 9. The Company has now received a formal response from the FCA in respect of these breaches of the Listing Rules. The FCA's review has now been concluded and they do not intend to take any further action in relation to these matters at the present time. The basis of the FCA's decision was due to the following confirmations having been made: 1. SPARK has confirmed to the FCA that the transactions entered into between the Company and Mr R Moyle were fair and reasonable as far as the shareholders of the Company were concerned; and 2. SPARK has confirmed to the FCA that agreements, as required by LR 9.2.2AR(2)(a), have been put in place between the Company, Mr R Moyle and the Moyle family trusts
7. Contingent liabilities Lloyds Bank PLC, Aviva Insurance Limited and HCC International Insurance Co. Ltd have given Performance Bonds to a value of GBP9,360,000 (2016 : GBP6,521,000) on the Group's behalf. These bonds have been made with recourse to the Group. 8. Seasonality The Group's activities are not subject to significant seasonal variations. 9. Principal risks and uncertainties The Board consider the principal risks and uncertainties relating to the Group for the next six months to be the same as detailed in the last Annual Report and Accounts to 31 December 2016. 10. Responsibility Statement of the Directors in respect of the half-yearly financial report We confirm that to the best of our knowledge: -- the condensed set of financial statements, which has been prepared in accordance with IAS 34 and the ASB's 2007 statement of Half Year Reports, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; -- the interim management report includes a fair review of the information required by: (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and (b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so. J Homer Chief Executive D A Taylor Group Finance Director
10 August 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QKLFBDVFZBBQ
(END) Dow Jones Newswires
August 10, 2017 02:00 ET (06:00 GMT)
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