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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tclarke Plc | LSE:CTO | London | Ordinary Share | GB0002015021 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 35.50 | 28.40% | 160.50 | 160.50 | 161.00 | 161.50 | 160.00 | 161.00 | 5,543,559 | 16:15:25 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Special Trade Contractor,nec | 491M | 6.5M | 0.1230 | 13.05 | 84.83M |
From Apr 2019 to Apr 2024
TIDMCTO
RNS Number : 9833W
Clarke(T.) PLC
07 August 2018
TClarke plc
Half Year Results for the six months ended 30th June 2018
TClarke plc ("the Group" or "TClarke"), the Building Services Group, announces its half year results for the six months ended 30th June 2018.
Business Highlights:
-- Delivering against our strategic plan to achieve medium term margins of 3%, underlying operating margin increased to 2.6% from 2.0%.
Hot Features
Premium
-- All regions profitable in the first half of 2018.
-- 7% increase in revenues to GBP153.5 million.
-- Year on year net cash improved from GBP2.4 million to GBP4.7 million.
-- 10% increase in interim dividend to 0.66p per share (30th June 2017: 0.6p per share).
-- GBP370 million forward order book (30th June 2017: GBP392 million).
-- Bank Credit approved terms in place for extension of banking facilities to August 2022.
Financial Highlights: Change 2018 2017
Revenue from continuing operations +7% GBP153.5m GBP142.8m
------ ------------- -----------------
Operating profit - underlying(1) +38% GBP4.0m GBP2.9m
------ ------------- -----------------
Operating profit - reported +83% GBP4.4m GBP2.4m
------ ------------- -----------------
Operating margin - underlying(1) +30% 2.6% 2.0%
------ ------------- -----------------
Profit before tax from continuing +48% GBP3.7m GBP2.5m
operations - underlying(1)
------ ------------- -----------------
Profit before tax from continuing +105% GBP4.1m GBP2.0m
operations - reported
------ ------------- -----------------
Net cash +96% GBP4.7m GBP2.4m
------ ------------- -----------------
Earnings per share - underlying(2) +47% 7.06p 4.80p
------ ------------- -----------------
Earnings per share - underlying (diluted)(2) +47% 6.91p 4.71p
------ ------------- -----------------
Earnings per share - basic +101% 7.83p 3.89p
------ ------------- -----------------
Interim dividend per share +10% 0.66p 0.60p
------ ------------- -----------------
Forward order book -6% GBP370m GBP392m
------ ------------- -----------------
(1) Underlying profit is profit from continuing operations before amortisation of intangible assets and non-underlying items.
(2) Underlying earnings is calculated by dividing underlying profit after tax by the weighted average number of shares in issue.
New contracts secured since our previous announcement include:
-- 1 Triton Square, London, M&E commercial office scheme -- The Crescent, Edinburgh, residential scheme -- Electrical Infrastructure Resilience 2018-2019 (BAE systems) -- Ferry Village, Renfrew, residential scheme -- Whitehall Junior School, Hitchin, heating upgrade -- St Luke's School, St Albans, heating upgrade -- Queens Court, Newcastle, Midrise residential communal area refurbishment -- ITV, Grays Inn Road, London, Project Refresh -- Middlemoor, Exeter, Criminal Justice Centre -- The Minories Hotel, London -- Bank of England, London, LED lighting upgrade project -- One Crown Place, London, residential and commercial office scheme -- LIV Student Accommodation, Ecclesall Road, Sheffield
Mark Lawrence, Chief Executive, commented
"The Board is extremely pleased with these results which demonstrate that TClarke is in excellent shape. The success of our strategy targeting repeat work for blue chip clients, sensible growth, focusing on improving margins and seeking new markets aligned to our core business, is beginning to be reflected in our results.
September will see our annual intake of apprentices commencing their training with TClarke and yet again the business is making this important investment in our future workforce. We wish the 52 apprentices joining us across the UK all the success for their future years with TClarke."
Date: 7(th) August 2018
For further information contact:
TClarke plc
Mark Lawrence Trevor Mitchell David Lanchester Group Chief Executive Finance Director Company Secretary Tel: 020 7997 7400 Tel: 020 7997 7400 Tel: 020 7997 7400
www.tclarke.co.uk
N+1 Singer (Financial Adviser and Broker) RMS Partners
Sandy Fraser Simon Courtenay
Rachel Hayes Tel: 020 3735 6551
Tel: 020 7496 3000
www.nplus1singer.com
Trading
The Group has had a strong first six months of 2018 and the results we have delivered are in line with the Board's expectations for the period.
Underlying operating profit for the six months was GBP4.0 million (2017: GBP2.9 million), with revenues of GBP153.5 million (2017: GBP142.8 million). Underlying operating margin across the Group improved by 30% to 2.6% (2017: 2.0%) driven by the turnaround in Central and South West (2018: 2.2% 2017: -9.3%). London has remained strong during the period, returning an underlying operating margin of 4% (2017: 4.4%). North has had a very good half year delivering 4.7% (2016: 3.8%), whilst Scotland has fallen back to a margin of 2.7% (2017: 3.9%).
The last year has seen the net cash position improve by GBP2.3 million to GBP4.7m (2017: GBP2.4m). The half year net cash position reflects the Group's typical working capital profile, with absorption of cash during the first half of the financial year.
The Board proposes an increased interim dividend of 0.66p (2017: 0.6p). This will be paid on 5th October 2018 to shareholders on the register at 7th September 2018.
Order Book
Our forward order book, which only reflects contracts where we have a firm commitment to proceed, has remained strong and of high quality, standing at GBP370 million (2017: GBP392million). As announced previously all of our planned revenues for this year have been secured. Overall Group revenues for the year are expected to be in line with the Board's expectations for the year.
Non-underlying items
Non-underlying items made a positive contribution of GBP0.4 million comprising a further recovery of monies associated with the misappropriation of funds in 2016 of GBP0.6 million net of legal costs, amortisation of intangibles GBP0.1 million and costs of Eton reorganisation GBP0.1 million.
Operational Review
The Group is managed in four operational areas, London & South East, Central & South West, North and Scotland, providing nationwide coverage from 17 locations across the UK.
We focus on repeat customers and framework contracts in the following key markets
-- Infrastructure -- Residential & Accommodation -- Facilities Management & Frameworks -- Technologies -- M&E Contracting
TClarke - London & South East
30 06 2018 30 06 2017
(GBPm) (GBPm)
Revenue 92.5 81.1
----------- -----------
Underlying operating profit 3.7 3.5
----------- -----------
Underlying operating profit margin 4.0% 4.4%
----------- -----------
Order book 238 260
----------- -----------
London & South East is the most significant of our four operating divisions in terms of size and profitability and incudes our combined M&E London business, our London technology business (Eton and Intelligent Buildings) and our off site prefabrication facility at Stansted. 2018 revenues are secured and 70% of revenues are secured for 2019.
Operating margins were 4.0%, maintaining the significant uplift in margins achieved in 2017. (H1 2016 margin was 1.9%). H1 2017 benefited from a number of final account settlements in the period.
We are on site at a number of high profile London schemes including 22 Bishopsgate, 100 Bishopsgate, Bank underground station, International Quarter London and South Bank Place.
We have recently secured work at Battersea Power Station, 1 Triton Square and Virtus Data Centre.
TClarke - Central & South West
30 06 2018 30 06 2017
(GBPm) (GBPm)
Revenue 35.8 23.7
------------- -----------
Underlying operating profit 0.8 (2.2)
------------- -----------
Underlying operating profit / (loss) margin 2.2% (9.3)%
------------- -----------
Order book 59 70
------------- -----------
The Central and South West region operates from our offices at Derby and our newly opened Birmingham office in the Midlands, Kimbolton and Peterborough in the East and Portishead, Plymouth and St Austell in the West, and is able to target a vast range of construction and facilities management opportunities across the region. We have also recently added a specialist air conditioning capability to our offering. Overall targeted revenues for 2018 are secured along with 34% of revenues for 2019.
The region has returned to profitability as a number of key jobs are now on site and are delivering improving margins.
Current Schemes include:
-- Dyson Technology Centre -- Aspire -- Bath Spa University -- John Lewis, Cheltenham -- Stanmore Hospital -- Illumina Centre -- Aerohub Business Park
TClarke - North
30 06 2018 30 06 2017
(GBPm) (GBPm)
Revenue 16.9 27.5
----------- -----------
Underlying operating profit 0.8 1.1
----------- -----------
Underlying operating profit margin 4.7% 3.8%
----------- -----------
Order book 46 35
----------- -----------
The North division operates from three locations, Chorley, Leeds and Newcastle. 82% of targeted revenues for 2018 for the North are now secured; the shortfall being in Newcastle. The North division is expected to hit its profit target for the year. 42% of targeted revenues for 2019 are secured.
Our Leeds business has had an excellent start to the year which is set to be repeated in the second half, and the office has built strong ongoing relationships with the likes of Bowmer & Kirkland, ISG and Eric Wright.
Current Schemes include:
-- Springfields Nuclear Fuels -- BAE systems at Samlesbury and Warton. -- Park View, Student accommodation -- Stephen Longfellow Academy -- Globe Mills, Slaithwaite, Commercial offices
We are currently working on four separate Rolls Royce sites for J N Bentley Construction, and these are on track to be completed on time and to the agreed budget.
The North West business is strengthening the existing Framework relationships with BAE Systems and Springfields Fuels, and at the same time is expanding its workload in the M&E and FM sectors for a growing number of clients.
TClarke - Scotland
30 06 2018 30 06 2017
(GBPm) (GBPm)
Revenue 11.2 13.0
----------- -----------
Underlying operating profit 0.3 0.5
----------- -----------
Underlying operating profit margin 2.7% 3.9%
----------- -----------
Order book 27 27
----------- -----------
In Scotland, we operate from our main office in Falkirk and regional offices in Aberdeen and Dumfries. 89% of targeted revenues for 2018 are now secured and 51% of revenues are secured for 2019.
Our business in Scotland has successfully secured and will be delivering various projects within the M&E services market by the end of the year.
TClarke Scotland's strong Electrical and Plumbing experience and presence in the Residential market continues to grow positively year on year.
Current Residential Schemes include:
-- Cala Homes, Fentoun Gait, Gullanne -- Cala Homes, The Crescent, Edinburgh -- Miller Homes, East Suffolk Row, Edinburgh -- Stewart Milne, Cathcart -- Robertson Homes, Ferry Village Renfrew
Other current projects include:
-- DG1, Dumfries, Sports and Leisure Complex, large remedial works -- Hilton Campus, Aberdeen -- Rothesay Pavilion, Isle of Bute
TClarke - Group Costs
Group costs were GBP1.6 million (2017 GBP1.2 million) and include the termination payment to the former Finance Director. At half year 2017 these costs were recharged to the operating units.
Pensions
An actuarial gain of GBP3.7 million, net of tax, has been recognised in reserves during the period, with the pension scheme deficit reducing to GBP18.9 million (30th June 2017: GBP22.3 million). Following completion of the triennial valuation as at 31st December 2015, the Group has agreed a revised deficit reduction plan and schedule of contributions which will result in annual deficit reduction contributions of GBP1.25 million in 2018, increasing to GBP1.5 million thereafter.
Banking Facilities
We have Bank Credit approval to extend banking facilities on improved terms. The new facilities will comprise a GBP5 million overdraft facility, repayable on demand, and a GBP15 million revolving credit facility expiring 31st August 2022.
Summary and Outlook
On 31st July 2018 we confirmed the appointment of Trevor Mitchell as the Group's permanent Finance Director. In the short time since joining us, Trevor has demonstrated an excellent knowledge of the industry and its challenges and has made significant contributions to the Group.
TClarke has made a strong start to the year and, as announced previously, overall planned revenues are secured for 2018. Central and South West has returned to profitability and our core London & South East operation remains strong. We are pleased to report that we continue to expect revenues and profits for 2018 to be in line with current market expectations. To put those in context, for the year ending 31st December 2018, these are forecast to be revenues of GBP300 million, underlying operating profit GBP7.8 million, underlying profit after interest, but before tax of GBP7.0 million and underlying EPS of 13.2p.
For 2019 we have already secured 50% of our planned revenues, and our market reputation for operational excellence and successful delivery of the most complex assignments underpins our optimism for the future.
In conclusion, the Board remains cautiously optimistic about the Group's future prospects and we look forward to updating shareholders on the progress that we make during the second half of the financial year.
Condensed consolidated income statement
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Revenue 153.5 142.8 311.2
Cost of sales (136.1) (126.6) (273.0)
----------- ----------- -----------
Gross profit 17.4 16.2 38.2
Other operating income - - 0.1
Administrative expenses:
----------- ----------- -----------
Amortisation of intangible assets (0.1) (0.1) (0.2)
Non-recurring expenses 0.5 (0.4) 0.8
Other administrative expenses (13.4) (13.3) (31.0)
----------- ----------- -----------
Total administrative expenses (13.0) (13.8) (30.4)
Profit from operations 4.4 2.4 7.9
Finance costs (0.3) (0.4) (0.8)
----------- ----------- -----------
Profit before taxation 4.1 2.0 7.1
Taxation (0.8) (0.4) (1.5)
----------- ----------- -----------
Profit from continuing operations 3.3 1.6 5.6
Loss from discontinued operations -
----------- ----------- -----------
Profit for the period 3.3 1.6 5.6
----------- ----------- -----------
Earnings per share from
continuing operations:
Attributable to owners of TClarke
plc:
Basic 7.83p 3.89p 13.44p
Diluted 7.67p 3.81p 13.17p
----------- ----------- -----------
Earnings per share:
Attributable to owners of TClarke
plc:
Basic 7.83p 3.89p 13.44p
Diluted 7.67p 3.81p 13.17p
----------- ----------- -----------
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Profit for the period 3.3 1.6 5.6
Other comprehensive expense:
Items that will not be reclassified
to profit or loss
Actuarial profit/(loss) on defined
benefit pension scheme 3.7 (1.1) (2.3)
Other comprehensive expense for the
period, net of tax 3.7 (1.1) (2.3)
Total comprehensive income for
the period 7.0 0.5 3.3
----------- ----------- -----------
Condensed consolidated statement of financial position
Unaudited Unaudited Audited*
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Non-current assets
Intangible assets 25.8 22.7 25.8
Property, plant and equipment 4.8 4.8 5.0
Deferred taxation 3.1 3.6 3.9
----------- ----------- -----------
33.7 31.1 34.7
----------- ----------- -----------
Current assets
Inventories - 0.6 0.5
Amounts due from customers under construction
contracts 22.5 26.3 26.4
Trade and other receivables 59.0 44.7 67.5
Cash and cash equivalents 9.7 5.4 16.7
----------- ----------- -----------
91.2 77.0 111.1
----------- ----------- -----------
Total assets 124.9 108.1 145.8
----------- ----------- -----------
Current liabilities
Borrowings - - -
Amounts due to customers under construction
contracts (2.7) (3.2) (5.5)
Trade and other payables (75.1) (65.1) (93.9)
Current tax liabilities (0.8) (0.5) (1.5)
Obligations under finance leases (0.1) (0.1) (0.1)
----------- ----------- -----------
(78.7) (69.0) (101.0)
----------- ----------- -----------
Net current assets 12.5 8.1 10.1
----------- ----------- -----------
Non-current liabilities
Bank loans (5.0) (3.0) (5.0)
Retirement benefit obligation (18.9) (22.3) (23.4)
(23.9) (25.3) (28.4)
----------- ----------- -----------
Total liabilities (102.6) (94.2) (129.4)
Net assets 22.3 13.9 16.4
----------- ----------- -----------
Equity attributable to owners of the
parent
Share capital 4.2 4.2 4.2
Share premium 3.1 3.1 3.1
ESOT share reserve (0.8) (0.5) (0.8)
Revaluation reserve 0.5 0.6 0.5
Retained earnings 15.3 6.6 9.4
----------- ----------- -----------
Total equity 22.3 13.9 16.4
----------- ----------- -----------
* Eton acquisition accounting has been finalised in these numbers; the impact detailed in Note 12. The finalisation Eton acquisition accounting is unaudited at 30th June 2018.
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Net cash (used in) / generated by operating
activities (see note 8A) (5.4) (4.8) 6.8
----------- ------------- -----------
Investing activities
Acquisition of subsidiary, net of cash
acquired (0.3) - (1.5)
Purchase of property, plant and equipment (0.1) (1.1) (1.9)
Receipts on disposal of property, plant
and equipment - - 0.3
Net cash generated (used in) / by investing
activities (0.4) (1.1) (3.1)
----------- ------------- -----------
Financing activities
Borrowings - - 2.0
Equity dividends paid (1.2) (1.1) (1.4)
Acquisition of shares by ESOT - (0.1) (0.2)
Disposal of shares by ESOT - 0.2 0.2
Repayment of HP and finance lease obligations - - 0.1
Net cash used in financing activities (1.2) (1.0) 0.7
----------- ------------- -----------
Net (decrease) / increase in cash and
cash equivalents (7.0) (6.9) 4.4
Cash and cash equivalents at beginning
of period 16.7 12.3 12.3
----------- ------------- -----------
Cash and cash equivalents at end of
period (see note 8) 9.7 5.4 16.7
----------- ------------- -----------
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2018
ESOT
Share Share share Revaluation Retained
capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2018 4.2 3.1 (0.8) 0.5 9.4 16.4
---------- ---------- --------- ------------ ----------- --------
Comprehensive income
Profit for the period - - - - 3.3 3.3
Other comprehensive income:
Actuarial loss on retirement
benefit obligation - - - - 4.5 4.5
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - - (0.8) (0.8)
Total other comprehensive
expense - - - - 3.7 3.7
---------- ---------- --------- ------------ ----------- --------
Total comprehensive income - - - - 7.0 7.0
---------- ---------- --------- ------------ ----------- --------
Transactions with owners
Dividends paid - - - - (1.2) (1.2)
Shares based payment credit - - - - 0.1 0.1
Shares acquired by ESOT - - - - - -
Shares distributed by ESOT - - - - - -
--------- ------------
Total transactions with owners - - (0.8) - (1.1) (1.1)
---------- ---------- --------- ------------ ----------- --------
At 30th June 2018 4.2 3.1 (0.8) 0.5 15.3 22.3
---------- ---------- --------- ------------ ----------- --------
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2017
ESOT
Share Share share Revaluation Retained Total
capital premium reserve reserve earnings
GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2017 4.2 3.1 (0.8) 0.5 7.1 14.1
---------- ---------- --------- ------------ ----------- --------
Comprehensive income
Profit for the period - - - - 1.6 1.6
Other comprehensive income:
Actuarial loss on retirement
benefit obligation - - - - (1.3) (1.3)
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - - 0.2 0.2
Total other comprehensive
expense - - - - (1.1) (1.1)
---------- ---------- --------- ------------ ----------- --------
Total comprehensive expense - - - - 0.5 0.5
---------- ---------- --------- ------------ ----------- --------
Transactions with owners
Shares based payment credit - - - - 0.1 0.1
Shares acquired by ESOT - - (0.1) - - (0.1)
Shares distributed by ESOT - - 0.4 - - 0.4
Dividends paid - - - - (1.1) (1.1)
---------- ---------- --------- ------------ -----------
Total transactions with owners - - 0.3 - (1.0) (0.7)
---------- ---------- --------- ------------ ----------- --------
At 30th June 2017 4.2 3.1 (0.5) 0.5 6.6 13.9
---------- ---------- --------- ------------ ----------- --------
Condensed consolidated statement of changes in equity
For the year ended 31st December 2017
ESOT
Share Share share Revaluation Retained
capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
At 1st January 2017 4.2 3.1 (0.8) 0.5 7.1 14.1
---------- ---------- --------- ------------ ----------- --------
Comprehensive income
Profit for the year - - - - 5.6 5.6
Other comprehensive income:
Actuarial loss on retirement
benefit obligation - - - - (2.7) (2.7)
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - - 0.5 0.5
Effect of change in rate - -
of tax - - - -
---------- ---------- --------- ------------ ----------- --------
Total other comprehensive
income - - - - (2.2) (2.2)
---------- ---------- --------- ------------ ----------- --------
Total comprehensive income - - - - 3.4 3.4
---------- ---------- --------- ------------ ----------- --------
Transactions with owners
Share based payment credit - - - - 0.3 0.3
Shares acquired by ESOT - - (0.2) - - (0.2)
Shares distributed to ESOT - - 0.2 - - 0.2
Dividends paid - - - - (1.4) (1.4)
--------- ------------
Total transactions with owners - - - - (1.1) (1.1)
---------- ---------- --------- ------------ ----------- --------
Transfers - - - - - -
--------- ------------
At 31st December 2017 4.2 3.1 (0.8) 0.5 9.4 16.4
---------- ---------- --------- ------------ ----------- --------
Notes to the condensed consolidated financial statements for the six months to 30th June 2018
Note 1 - Basis of preparation
TClarke plc (the 'company') is a company incorporated and domiciled in the United Kingdom. The nature of the Group's operations and its principal activities are set out in Note 2 below and in the interim management report. The consolidated interim financial statements comprise the condensed financial statements of the company and its subsidiaries (together the 'Group').
These condensed interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31st December 2017 were approved by the Board of Directors on 27(th) March 2018 and have been delivered to the Registrar of Companies and a copy has been made available on the company's website at www.tclarke.co.uk. The auditors' report on those accounts was unqualified and did not contain any statement under section 498 of the Companies Act 2006.
These interim financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' ('IAS 34) as adopted by the European Union, and the Disclosure and Transparency Rules ('DTR') of the Financial Conduct Authority. They do not include all the information required for the full annual financial statements and should be read in conjunction with the financial statements of the Group as at and for the year ended 31st December 2017.
The interim financial statements have not been audited or reviewed by the company's auditors.
Accounting policies
Except as described below, the financial statements have been prepared using the accounting policies and presentation that were applied in the audited financial statements for the year ended 31st December 2017.
Taxes on income in the interim periods are accrued using the estimated effective tax rate that would be applicable to expected total annual earnings.
Estimates and financial risk management
The preparation of interim financial statements requires the Directors to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities at the reporting date and the amounts of revenue and expense incurred during the period that may not be readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
In preparing these interim financial statements, the significant judgements made by the Directors in applying the Group's accounting policies and the key sources of uncertainty together with the Group's financial risk management objectives and policies were the same as those that applied to the financial statements as at and for the year ended 31st December 2017. The principal risks and uncertainties continue to be those which are set out on pages 32-35 of the Group's annual report and accounts for the year ended 31st December 2017, under the following headings: Political, economic and market conditions; Financial strength; Reputation; Winning new work; Contract delivery; People and skills; Health and safety; Supply chain; Pensions; and IT Systems.
Going concern
Our banking facilities comprised a GBP10 million revolving credit facility committed to 31st March 2020, of which GBP5m was undrawn at 30 June 2018, and a GBP5 million overdraft facility. The Group has had credit approval to extend the revolving credit facility commitment to August 2022, increasing the facility to GBP15m. The Group draws on the overdraft facility as and when needed to meet working capital requirements. As with all such facilities the overdraft is subject to annual review and is repayable on demand.
To support the Group's operations we also have available bonding facilities of GBP35.0 million, of which GBP12.9 million is currently unutilised.
After making appropriate enquiries, the Directors are satisfied that the Company and Group have adequate resources to continue their operations for the foreseeable future. Accordingly the Directors continue to adopt the going concern basis in preparing the financial statements.
IFRS 15
IFRS 15, which deals with revenue recognition from customers, was adopted from 1st January 2018. The adoption of this standard has had no material impact on the numbers contained within these statements.
Note 2 - Segmental information
The Group provides electrical and mechanical contracting and related services to the construction industry and end users.
For management and internal reporting purposes the Group is organised geographically into four regional divisions; London & South East, Central & South West, North and Scotland, reporting to the Chief Executive, who is the chief operating decision maker.
30th June 2018
London Central
& South & South Group
East West North Scotland GBPm Total
GBPm GBPm GBPm GBPm GBPm
Total revenue 92.5 35.8 16.9 11.2 - 156.4
Inter region
revenue - - (2.0) (0.9) - (2.9)
--------- --------- ----------------- ---------- ------- -------
Revenue from
external
operations 92.5 35.8 14.9 10.2 - 153.5
--------- --------- ----------------- ---------- ------- -------
Underlying
profit
from operations 3.7 0.8 0.8 0.3 (1.6) 4.0
Non-recurring
costs 0.5 - - - - 0.5
Amortisation of
intangibles - - (0.1) - - (0.1)
Profit from
operations 4.2 0.8 0.7 0.3 (1.6) 4.4
Finance costs - - - - (0.3) (0.3)
--------- --------- ----------------- ---------- ------- -------
Profit before
tax 4.2 0.8 0.7 0.3 (1.9) 4.1
--------- --------- ----------------- ---------- -------
Taxation expense (0.8)
-------
Profit for the
period
from
continuing
operations 3.3
-------
30th June 2017
London Central
& South & South Unallocated
East West North Scotland & elimination Total
GBPm GBPm GBPm GBPm GBPm GBPm
Total revenue 81.1 23.9 27.5 13.0 - 145.5
Inter region
revenue - (0.2) (0.3) (2.2) - (2.7)
--------- --------- ------- ---------- --------------- -------
Revenue from
external
operations 81.1 23.7 27.2 10.8 - 142.8
--------- --------- ------- ---------- --------------- -------
Underlying profit
from operations 3.5 (2.2) 1.1 0.5 - 2.9
Non-recurring
costs (0.4) - - - - (0.4)
Amortisation of
intangibles - - (0.1) - - (0.1)
Profit from
operations 3.1 (2.2) 1.0 0.5 - 2.4
Finance costs (0.4) - - - - (0.4)
--------- --------- ------- ---------- --------------- -------
Profit before tax 2.7 (2.2) 1.0 0.5 - 2.0
--------- --------- ------- ---------- ---------------
Taxation expense (0.4)
-------
Profit for the
period
from
continuing
operations 1.6
-------
31st December 2017 London Central
& & South Group
South West North Scotland GBPm Total
East GBPm GBPm GBPm GBPm
GBPm
Total revenue 192.3 63.1 50.8 27.3 - 333.5
Inter region revenue (14.7) (0.5) (2.8) (4.3) - (22.3)
------- -------- ------ --------- -------- -------
Revenue from external
operations 177.6 62.6 48.0 23.0 - 311.2
------- -------- ------ --------- -------- -------
Underlying profit from
operations 8.5 (1.8) 2.4 0.8 (2.6) 7.3
Non-recurring costs 0.8 - 0.8
Amortisation of
intangibles - - (0.2) - - (0.2)
Profit from operations 9.3 (1.8) 2.2 0.8 (2.6) 7.9
Finance income - - - - - -
Finance costs - - - (0.8) (0.8)
------- -------- ------ --------- -------- -------
Profit before tax 9.3 (1.8) 2.2 0.8 (3.4) 7.1
------- -------- ------ --------- --------
Taxation expense (1.5)
-------
Profit for the period
from continuing
operations 5.6
Note 3 - Non-underlying items
Non-underlying items make a positive contribution of GBP0.4 million comprising a further recovery of monies associated with the misappropriation of funds in 2016 of GBP0.6 million net of legal costs; amortisation of intangibles GBP0.1 million; costs of Eton reorganisation GBP0.1 million. Tax on non-underlying items is GBP0.1m.
Note 4 - Taxation expense
The effective income tax rate applied for the period is 20.0% (30th June 2017: 20.0%).
Note 5 - Earnings per share
A. Basic earnings per share
The earnings per share represent the profit for the period divided by the weighted average number of ordinary shares in issue.
Unaudited Unaudited Audited
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Earnings:
Profit attributable to owners of the
Company
Continuing operations 3.3 1.6 5.6
Discontinued operations - - -
------------ ------------ -------------
Profit attributable to equity holders
of the parent 3.3 1.6 5.6
------------ ------------ -------------
Weighted average number of ordinary
shares (000s) 41,542 41,685 41,625
------------ ------------ -------------
B. Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The company has three categories of dilutive potential ordinary shares: share options granted under the Savings Related Share Option Scheme, and conditional share awards and options granted under the Equity Incentive Plan. Further details of these schemes are given in note 20 of the 2017 annual report and financial statements.
Unaudited Unaudited Audited
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Earnings:
Profit attributable to owners of the
Company
Continuing operations 3.3 1.6 5.6
Discontinued operations - - -
3.3 1.6 5.6
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 41,542 41,685 41,625
Adjustments
Savings Related Share Options (000s) 193 209 210
Equity Incentive Plan
Conditional share awards (000s) 666 649 649
Options (000s) - - -
------------ ------------ -------------
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 42,401 42,543 42,475
------------ ------------ -------------
C. Underlying earnings per share
Underlying earnings per share represents the profit for the period from continuing operations adjusted for amortisation of intangible assets and non-recurring costs and the tax effects of these items, divided by the weighted average number of ordinary shares in issue. Underlying earnings is the basis on which the performance of the operating divisions is measured.
The underlying profit for the period is calculated as follows:
Unaudited Unaudited Audited
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Profit from continuing operations attributable
to owners of the company 3.3 1.6 5.6
Adjustments:
Amortisation of intangible assets 0.1 0.1 0.2
Non-recurring costs (0.5) 0.4 (0.8)
Tax effect of adjustments 0.1 (0.1) 0.2
------------ ------------ -------------
Underlying profit after tax from continuing
operations 3.0 2.0 5.2
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 41,542 41,685 41,625
Adjustments
Savings Related Share Options (000s) 193 209 201
Equity Incentive Plan
Conditional share awards (000s) 667 649 649
Options (000s) - - -
------------ ------------ -------------
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 42,401 42,543 42,475
------------ ------------ -------------
Underlying earnings per share 7.06p 4.80p 12.37p
------------ ------------ -------------
Diluted underlying earnings per share 6.91p 4.71p 12.13p
------------ ------------ -------------
Note 7 - Interim dividend
An interim dividend of 0.66p per share (30(th) June 2017: 0.6p) was approved by the board on 6(th) August 2018 and has not been included as a liability as at 30th June 2017. The shares will go ex-dividend on 6th September 2018 and the dividend will be paid on 5th October 2018 to shareholders on the register as at 7th September 2018. A dividend reinvestment plan is available for shareholders. Those shareholders who have not elected to participate in this plan, and who would like to participate with respect to the 2018 interim dividend, may do so by contacting Link Asset Services on 0371 664 0381. The last day for election for the interim dividend reinvestment is 14th September 2018 and any requests should be made in good time ahead of that date.
Unaudited Unaudited Audited
30 06 2018 30 06 2017 31 12 2017
Dividends paid in period GBPm GBPm GBPm
Final dividends in respect of previous
year 1.2 1.1 1.1
Interim dividend in respect of the
current year - - 0.3
------------ ------------ -------------
Dividends recognised in the period 1.2 1.1 1.4
------------ ------------ -------------
Note 8 - Notes to the consolidated statement of cash flows
Unaudited Unaudited Audited
A. - Reconciliation of operating profit 30 06 2018 30 06 2017 31 12 2017
to net cash from operating activities GBPm GBPm GBPm
Profit from operations
Continuing operations 4.4 2.4 7.9
Discontinued operations - - -
Depreciation charges 0.1 0.2 0.6
Profit on sale of property, plant
and equipment - - -
Equity settled share based payment
expense 0.1 0.2 0.3
Amortisation of intangible assets 0.1 0.1 0.2
Defined benefit pension scheme charge
/ (credit) (0.2) 0.1 (0.5)
Operating cash flows before movements
in working capital 4.5 3.0 8.5
Decrease in inventories 0.5 - 0.1
Decrease in contract balances 1.1 0.3 12.6
Decrease / (Increase) in trade and
other receivables 8.6 (2.9) (23.3)
(Decrease) / increase in trade and
other payables (18.5) (4.9) 9.4
------------ ------------ ------------
Cash (used in) / generated by operations (3.8) (4.5) 7.3
Corporation tax paid (1.5) (0.2) (0.3)
Interest paid (0.1) (0.1) (0.2)
------------ ------------ ------------
Net cash (used in) / generated by
operating activities (5.4) (4.8) 6.8
------------ ------------ ------------
B. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments that are readily convertible into cash, less bank overdrafts.
C. Borrowings
At 30th June 2018, the Group had unused overdraft facilities of GBP5 million (2016: GBP5 million) and had drawn down GBP5 million (2017: GBP3 million) of its GBP10 million committed three year Revolving Credit Facility.
Note 9 - Related party transactions
Transactions between the company and its subsidiary undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note. Full disclosure of the Group's other related party transactions is given in Note 23 to the Group's financial statements for the year ended 31st December 2017. There have been no material changes in these relationships in the six months ended 30th June 2018 that have materially affected the financial position or performance of the Group during that period.
Note 10 - Pension commitments
The present value of the defined benefit retirement benefit scheme and the related past and current service costs were measured using the projected unit credit method. The amount included in the statement of financial position arising from the Group's obligations in respect of its defined benefit retirement benefit scheme is as follows:
Unaudited Unaudited Audited
30 06 2018 30 06 2017 31 12 2017
GBPm GBPm GBPm
Present value of defined benefit
obligations 59.2 56.9 53.3
Fair value of scheme assets (40.3) (34.6) (32.7)
------------- ------------- -------------
Deficit in scheme recognised
in the statement of financial
position 18.9 22.3 20.6
Key assumptions used:
Rate of increase in salaries 2.55% 2.70% 2.65%
Rate of increase of pensions
in payment 3.15% 3.10% 3.10%
Discount rate 2.80% 2.75% 2.60%
Inflation assumption 3.25% 3.40% 3.35%
Unaudited Unaudited Audited
Mortality assumptions (years): 30 06 2018 30 06 2017 31 12 2017
Life expectancy at age 65 for
current pensioners:
Men 22.0 21.9 22.0
Women 24.4 23.2 24.4
Life expectancy at age 65 for
future pensioners
(current age 45)
Men 23.3 24.3 23.3
Women 25.8 25.8 25.8
Note 11 - Group reorganisation
On 1(st) May 2018, the Group undertook a regorganisation relating to Eton Associates Limited ('Eton'), a subsidiary acquired on 4th August 2017 which, prior to the regorganisation, had been retained as a separate operating entity. The process was as follows:
-- The businesses and trading assets and liabilities of Eton were transferred to TClarke Contracting Limited at book value.
-- Property, plant and equipment transferred was subsequently transferred to TClarke Services Limited, also at book value.
-- Also on 1st May 2018, the employment contracts of all staff employed by Eton were transferred to TClarke Services Limited.
Note 12 - Business combinations
On 4th August 2017, the Group acquired 100% of the share capital of Eton Associates Limited ('Eton') for an initial cash consideration of GBP1.5 million, with a further deferred consideration of GBP0.5 million being payable in 2018. At the date that these half-year accounts have been approved, the entire GBP2 million of consideration has been paid according to the following time profile:
-- GBP1.5 million was paid in 2017
-- GBP0.3 million was paid in the 6 months to 30th June 2018
-- GBP0.2 million was paid post 30th June 2018
At the time the 2017 year-end financial statements had been approved, the completion accounts for Eton had yet to be approved and, as such, the 2017 year-end financial statements included provisional amounts for the fair value of Eton's net assets. During 2018, the fair value of the net assets of Eton were determined. This has resulted in the following changes to the provisional amounts recognized as at 31st December 2017, which are now reflected in the restated balances in these half-year accounts:
-- A reduction in tax liability of GBP0.1 million -- An increase in accrued income of GBP0.2 million -- An increase in deferred revenue of GBP0.9 million
The reduction in the fair value of net assets by GBP0.6 million results in an increase in the goodwill on the acquisition of Eton by GBP0.6 million.
Statement of Directors' responsibilities
The Directors confirm that the condensed interim financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months 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
-- material related party transactions in the first six months and any material changes in the related party transactions described in the last annual report.
On behalf of the Board
Iain McCusker - Chairman
Mark Lawrence - Chief Executive
Trevor Mitchell - Finance Director
7(th) August 2018
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR PFMFTMBIMBLP
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August 07, 2018 02:00 ET (06:00 GMT)
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