TIDMASY
RNS Number : 8448X
Andrews Sykes Group PLC
11 May 2016
Andrews Sykes Group plc
Summary of results
For the 12 months ended 31 December 2015
12 months 12 months
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Revenue from continuing operations 60,058 56,400
EBITDA* from continuing operations 17,701 15,569
Operating profit 13,208 11,311
Profit after tax for the financial
period 10,800 9,311
Basic earnings per share from
total operations (pence) 25.55p 22.03p
Interim and final dividends
paid per equity share (pence) 23.80p 23.80p
Proposed final dividend per
equity share (pence) 11.90p 11.90p
Net cash inflow from operating
activities 12,124 10,621
Total interim and final dividends
paid 10,058 10,058
Net funds 14,558 16,846
* Earnings Before Interest, Taxation, Depreciation, profit on
sale of property, plant and equipment, Amortisation and non-
recurring items as reconciled on the consolidated income
statement.
For further information please contact:
Andrews Sykes Group plc
Paul Wood, Group Managing Director
Andrew Phillips, Chief Financial Officer 01902 328700
Altium Capital Limited (NOMAD)
Paul Lines
Adam Sivner 0845 505 4300
Arden Partners plc (broker)
Steve Douglas 020 7614 5900
Chairman's Statement
Overview and financial highlights
Summary
The group's revenue for the year ended 31 December 2015 was
GBP60.1 million, an increase of GBP3.7 million, or 6.5%, compared
with the same period last year. This increase had a more than
proportionate impact on operating profit which increased by 16.8%,
or GBP1.9 million, from GBP11.3 million last year to GBP13.2
million in the year under review. This increase is primarily due to
strong performances from our hire and sales businesses in Europe
and the Middle East complemented by an improved performance from
our installation business in the UK.
As a consequence of the above, our basic earnings per share
increased by 16.0% from 22.03p last year to 25.55p in the current
period. The basic earnings per share is a positive factor
reflecting the strong trading performance of the group's
businesses.
The group continues to generate strong cash flows. Net cash
inflow from operating activities was GBP12.1 million compared with
GBP10.6 million last year. Net funds decreased, but only by GBP2.3
million from GBP16.8 million last year to GBP14.5 million at 31
December 2015 despite shareholder related cash outflows of GBP10.1
million (2014: GBP10.1 million) on equity dividends. Therefore,
over the last three financial years, the group has returned GBP27.7
million in cash to shareholders. At the same time the level of
external bank borrowings reduced from GBP7 million as at the end of
last year to GBP6 million as at 31 December 2015. The Board is once
again proposing a further final dividend payment totalling GBP5.0
million which, if approved at the forthcoming AGM, would be paid in
June 2016.
Cost control, cash and working capital management continue to be
priorities for the group. Capital expenditure is concentrated on
assets that give a good return and in total GBP5.6 million was
invested in the hire fleet this year, GBP1.2 million more than last
year and significantly more than the wasting depreciation charge of
GBP4.2 million. In addition, the group invested a further GBP1.1
million in property, plant and equipment. These actions will ensure
that the group's infrastructure and revenue generating assets are
sufficient to support future growth and profitability. Hire fleet
utilisation, condition and availability continue to be the subjects
of management focus.
Operating performance
The following table splits the results between the first and
second half years:
Turnover Operating profit
--------------- --------- ------------------
GBP'000 GBP'000
--------------- --------- ------------------
1st half 2015 28,240 4,973
--------------- --------- ------------------
1st half 2014 26,759 4,349
--------------- --------- ------------------
2nd half 2015 31,818 8,235
--------------- --------- ------------------
2nd half 2014 29,641 6,962
--------------- --------- ------------------
Total 2015 60,058 13,208
--------------- --------- ------------------
Total 2014 56,400 11,311
--------------- --------- ------------------
The above table demonstrates that the improved performance in
the first half of the year continued and accelerated into the
second half. Turnover in the first half of the year showed a 5.5%
improvement over the same period in 2014 but, in the second half,
the percentage improvement increased to 7.4%. Similarly with
operating profit, the first half of 2015 showed a 14.3% improvement
compared with the same period in 2014 but this increased to 18.3%
for the second half year. Traditionally the group makes more profit
in the second half year due to the higher profit margins on its air
conditioning products which are hired predominantly in the second
half of the year.
Our main hire and sales business sector in the UK and Europe had
mixed results in the year.
Our air conditioning, ventilation and chiller business in the UK
benefited from a brief hot spell of weather in the early part of
July which stimulated demand for our products. However this was
short lived and the overall cooler conditions this summer compared
to last year had an adverse impact on this business. In contrast
our operations across the rest of Europe enjoyed a hot summer with
prolonged periods of above average temperatures. Our business
across the Benelux region continued to produce significant growth
compared with last year's performance. In particular, the result
produced by our business in The Netherlands showed a marked
improvement compared with 2014, being helped by a gradual
improvement in the construction market as well as the hot summer
conditions, and this was complemented by growth in both Belgium and
Italy. Whilst our newly formed businesses in France, Switzerland
and Luxembourg all returned losses, overall these were much reduced
compared with 2014 and are in line with our expectations in the
development phase of these businesses.
Our UK pump business benefited from the unusually wet weather in
the fourth quarter of the year. This, together with management's
continuing focus on developing non-weather dependent income
streams, enabled the weekly hire rate to return to near to the high
levels achieved at the end of 2014; although the overall
performance of this division was still behind the exceptional level
achieved last year.
Despite the mild weather during the 2015 winter, which had an
adverse impact on our heating businesses in both the UK and Europe,
our heating and boiler hire divisions both performed better than
last year.
Overall, the operating profit of our main business segment
increased from GBP10.5 million last year to GBP11.3 million in the
year under review. This indicates that despite the above mixed
trading conditions, the group's diverse product range is able to
return a robust performance during any weather conditions. This is
supported by the continuing development of non-weather dependent
niche markets which continue to benefit the performance of our
specialist hire divisions. We will continue to invest in and
develop these businesses as well as our traditional core products
and services.
Our hire and sales business in the Middle East had an excellent
trading year. The operating profit for this business segment
increased from GBP1.5 million last year to GBP2.3 million in 2015,
which is even better than the GBP1.8 million operating profit
achieved in 2013. Trading was strong throughout the region,
particularly in Abu Dhabi and Ruwaise, for our traditional
dewatering, sewage and general pump hire activities. Our climate
rental division which was formed in 2012 returned a positive
contribution to the business results.
Our fixed installation business sector in the UK also returned
an improved operating profit of GBP0.4 million, GBP0.2 million
ahead of the result achieved last year due to an improvement in
general trading conditions. However, the market continues to be
fragmented with high levels of price competition which means that
it will be difficult to achieve any significant growth in the
future.
Careful cost control resulted in a GBP0.1 million reduction in
central overheads from GBP0.9 million in 2014 to GBP0.8 million in
the current year.
Profit for the financial year
Profit before tax was GBP13.4 million this year compared with
GBP11.8 million last year. This is mainly attributable to the above
GBP1.9 million increase in operating profit which was partially
offset by the lack of any dividend being received this year (2014:
GBP0.5 million) from Oasis Sykes, our trade investment in Saudi
Arabia. Net finance costs reduced by GBP0.2 million compared with
2014 mainly due to favourable foreign exchange movements.
Despite the GBP1.6 million increase in profit before tax, tax
charges increased only slightly from GBP2.5 million to GBP2.6
million in 2015. The overall effective tax rate reduced from 20.8%
in 2014 to 19.2% primarily due to reductions in the UK corporation
tax rate and an increase in profits earned by our business based in
the Middle East, where corporation tax rates are very low. Profit
for the financial year was GBP10.8 million compared with GBP9.3
million last year.
Equity dividends
The company paid two dividends during the year. On 19 June 2015
a final dividend for the year ended 31 December 2014 of 11.9 pence
per ordinary share was paid and this was followed on 4 November
2015 by the payment of an interim dividend for 2015 also of 11.9
pence per share. Therefore, during 2015, a total of GBP10.1 million
in cash dividends has been returned to our ordinary
shareholders.
I am pleased to announce that, in view of the group's ongoing
profitability and its significant cash resources, the board has
proposed a final dividend for 2015 also of 11.9 pence per ordinary
share. If approved at the forthcoming Annual General Meeting this
dividend, which in total amounts to GBP5.0 million, will be paid on
24 June 2016 to shareholders on the register as at 27 May 2016.
Net funds
At 31 December 2015 the group had net funds of GBP14.5 million
compared with GBP16.8 million last year, a decrease of only GBP2.3
million despite the payment of the above equity dividends totalling
GBP10.1 million during the year.
Share buybacks
During the current year the company did not purchase any
ordinary shares for cancellation. However, in prior periods such
purchases were made and these enhanced earnings per share and were
for the benefit of all shareholders.
The board believes that it is in the best interest of
shareholders if it has this authority in order that market
purchases may be made in the right circumstances if the necessary
funds are available. Accordingly, at the next Annual General
Meeting, shareholders will be asked to vote in favour of a
resolution to renew the general authority to make market purchases
of up to 12.5% of the ordinary share capital in issue.
Outlook
The group's policy to increase investments in new
technologically advanced and environmentally friendly non-seasonal
products will be continued into 2016. Investments will also
continue in our traditional businesses to ensure we are ready to
support our customers in times of extreme weather conditions.
The group continues to face challenges in all of its
geographical markets but our business remains strong, cash
generative and well developed, with positive net funds. The mild
and wet weather in Europe experienced in the fourth quarter of 2015
continued into the first quarter of 2016, thereby presenting both
opportunities and challenges. Our business in the Middle East
continues to perform well but we are mindful of the current
political and economic issues that surround the region. The board
is therefore cautiously optimistic for further success in 2016,
always being mindful of the favourable or adverse impact that the
weather can have on our business.
JG Murray
Chairman
10 May 2016
Andrews Sykes Group plc
Consolidated Income Statement
For the 12 months ended 31 December 2015
12 months 12 months
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Continuing operations
Revenue 60,058 56,400
Cost of Sales (25,284) (24,101)
Gross profit 34,774 32,299
Distribution costs (10,828) (10,410)
Administrative expenses (10,738) (10,578)
Operating profit 13,208 11,311
EBITDA* 17,701 15,569
Depreciation and impairment
losses (4,959) (4,563)
Profit on the sale of plant
and equipment 466 305
------------------------- -------------------------
Operating profit 13,208 11,311
------------------------- -------------------------
Income from trade investments - 517
Finance income 323 342
Finance costs (164) (414)
------------------------- -------------------------
Profit before taxation 13,367 11,756
Taxation (2,567) (2,445)
Profit for the financial period 10,800 9,311
========================= =========================
There were no discontinued operations
in either of the above periods
Earnings per share
Basic (pence) 25.55p 22.03p
Diluted (pence) 25.55p 22.03p
Interim and final dividends
paid per equity share (pence) 23.80p 23.80p
Proposed final dividend per
equity share (pence) 11.90p 11.90p
* Earnings Before Interest, Taxation, Depreciation, profit on
the sale of property, plant and equipment, Amortisation and
non-
recurring items.
Andrews Sykes Group plc
Consolidated Statement of Comprehensive Total Income
For the 12 months ended 31 December 2015
12 months 12 months
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Profit for the financial
period 10,800 9,311
------------------------ ------------------------
Other comprehensive charges
Items that may be reclassified
to profit and loss:
Currency translation differences
on foreign currency net
Investments (175) (312)
Items that will never be
reclassified to profit and
loss:
Remeasurement of defined
benefit assets and liabilities 1,157 (802)
Related deferred tax (207) 160
Other comprehensive income/(charges)
for the period net of tax 775 (954)
------------------------ ------------------------
Total comprehensive income
for the period 11,575 8,357
======================== ========================
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 31 December 2015
31 December 31 December
2015 2014
-------------------------------- ---------------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and
equipment 17,750 16,388
Lease prepayments 50 51
Trade investments 164 164
Deferred tax asset 282 626
Retirement benefit
pension surplus 2,443 1,253
---------------- ----------------
20,689 18,482
Current assets
Stocks 4,199 4,618
Trade and other receivables 16,584 14,348
Overseas tax (denominated
in Euros) 17 133
Cash and cash equivalents 20,715 24,077
-------------- ---------------
41,515 43,176
-------------- ---------------
Current liabilities
Trade and other payables (11,090) (10,963)
Current tax liabilities (1,306) (1,321)
Bank loans (980) (980)
Obligations under
finance leases (101) (114)
Provisions - (9)
-------------- ---------------
(13,477) (13,387)
-------------- ---------------
Net current assets 28,038 29,789
Total assets less
current liabilities 48,727 48,271
Non-current liabilities
Bank loans (4,995) (5,975)
Obligations under
finance leases (81) (162)
(5,076) (6,137)
Net assets 43,651 42,134
================ ================
Equity
Called-up share capital 423 423
Share premium 13 13
Retained earnings 40,987 39,295
Translation reserve 1,973 2,148
Other reserves 245 245
Surplus attributable to equity
holders of the parent 43,641 42,124
Minority interest 10 10
Total equity 43,651 42,134
================ ================
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 12 months ended 31 December 2015
12 months 12 months
ended ended
31 December 31 December
2015 2014
GBP'000 GBP'000
Cash flows from operating
activities
Cash generated from operations 14,623 13,222
Interest paid (155) (166)
Net UK corporation tax paid (1,881) (2,268)
Withholding tax paid - (47)
Overseas tax paid (463) (120)
Net cash flow from operating
activities 12,124 10,621
--------------------------- ---------------------------
Investing activities
Dividends received from
trade investments - 517
Sale of property, plant
and equipment 711 511
Purchase of property, plant
and equipment (5,234) (3,727)
Interest received 197 270
---------------------------
Net cash flow from investing
activities (4,326) (2,429)
--------------------------- ---------------------------
Financing activities
Loan repayments (1,000) (1,000)
Finance lease capital repayments (94) (93)
Equity dividends paid (10,058) (10,058)
Net cash flow from financing
activities (11,152) (11,151)
--------------------------- ---------------------------
Net decrease in cash and
cash equivalents (3,354) (2,959)
Cash and cash equivalents
at the beginning of the
period 24,077 27,417
Effect of foreign exchange
rate changes (8) (381)
Cash and cash equivalents
at the end of the period 20,715 24,077
=========================== ===========================
Reconciliation of net cash
flow to movement in net
funds in the period
Net decrease in cash and
cash equivalents (3,354) (2,959)
Cash outflow from the decrease
in debt 1,094 1,093
Non-cash movement in respect
of raising loan finance (20) (20)
---------------------------
Movement in net funds during
the period (2,280) (1,886)
Opening net funds at the
beginning of the period 16,846 19,113
Effect of foreign exchange
rate changes (8) (381)
--------------------------- ---------------------------
Closing net funds at the
end of the period 14,558 16,846
=========================== ===========================
Andrews Sykes Group plc
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2015
Attributable to equity holders Minority Total
of the parent company interest equity
-------------------------------------------------------------------------------------------------------------
Share Share Retained Translation Other
capital Premium earnings reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2013 423 13 40,684 2,460 245 43,825 10 43,835
Profit for the
financial
period - - 9,311 - - 9,311 - 9,311
Other
comprehensive
charges:
Items that may
be
reclassified
to profit and
loss:
Currency
translation
differences
on foreign
currency
net
investments - - - (312) - (312) - (312)
Items that
will
never be
reclassified
to profit and
loss:
Remeasurement
of defined
benefit
assets and
liabilities - - (802) - - (802) - (802)
Related
deferred
tax - - 160 - - 160 - 160
Total other
comprehensive
charges - - (642) (312) - (954) - (954)
-------------------- ------------------ ---------------- ---------------- --------------- -------------- --------- -----------
Transactions
with owners
recorded
directly
in equity
Dividends paid - - (10,058) - - (10,058) - (10,058)
Total
transactions
with owners - - (10,058) - - (10,058) - (10,058)
-------------------- ------------------ ---------------- ---------------- --------------- -------------- --------- -----------
At 31 December
2014 423 13 39,295 2,148 245 42,124 10 ? 42,134
Profit for the
financial
period - - 10,800 - - 10,800 - 10,800
Other
comprehensive
charges:
Items that may
be
reclassified
to profit and
loss:
Currency
translation
differences
on foreign
currency
net
investments - - - (175) - (175) - (175)
Items that
will
never be
reclassified
to profit and
loss:
Remeasurement
of defined
benefit
assets and
liabilities - - 1,157 - - 1,157 - 1,157
Related
deferred
tax - - (207) - - (207) - (207)
Total other
comprehensive
charges - - 950 (175) - 775 - 775
-------------------- ------------------ ---------------- ---------------- --------------- -------------- --------- -----------
Transactions
with owners
recorded
directly
in equity:
Dividends paid - - (10,058) - - (10,058) - (10,058)
Total
transactions
with owners - - (10,058) - - (10,058) - (10,058)
-------------------- ------------------ ---------------- ---------------- --------------- -------------- --------- -----------
At 31 December
2015 423 13 40,987 1,973 245 43,641 10 ? 43,651
-------------------- ------------------ ---------------- ---------------- --------------- -------------- --------- -----------
Notes
1. Basis of preparation
Whilst the information included in this preliminary announcement
has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards
(IFRSs), this announcement does not itself contain sufficient
information to comply with IFRSs. Therefore the financial
information set out above does not constitute the company's
financial statements for the 12 months ended 31 December 2015 or 31
December 2014 but it is derived from those financial
statements.
2. Going Concern
The board remains satisfied with the group's funding and
liquidity position. The group has operated throughout the 2015
financial year and, until the date of this preliminary
announcement, within its financial covenants as contained in the
bank agreement. Consequently the loans have been analysed between
current and non-current liabilities in accordance with the agreed
repayment profile.
Both loan capital and interest payments have been made in
accordance with the bank agreement. On 30 April 2014 and 30 April
2015 the first and second capital repayments of GBP1 million were
made and these were followed by a further capital payment, also of
GBP1 million, on 30 April 2016. Interest is paid bi-annually at the
end of October and April. The group's profit and cash flow
projections indicate that the financial covenants included within
the new bank loan agreement will be met for the foreseeable
future.
The group continues to have substantial cash resources which at
31 December 2015 amounted to GBP20.7 million compared with GBP24.1
million as at 31 December 2014. Profit and cash flow projections
for 2016 and 2017, which have been prepared on a conservative basis
taking into account reasonably possible changes in trading
performance, indicate that the group will be profitable and
generate positive cash flows after loan repayments. These forecasts
and projections indicate that the group should be able to operate
within the current bank facility agreement and that all associated
covenants will be met.
The board considers that the group has considerable financial
resources and a wide operational base. As a consequence, the board
believes that the group is well placed to manage its business risks
successfully, as demonstrated by the current year's result, despite
some uncertain external influences.
After making enquiries, the board has a reasonable expectation
that the group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the board
continues to adopt the going concern basis when preparing this
preliminary announcement and the Annual Report and Financial
Statements.
3. Distribution of Annual Report and Financial Statements
The group expects to distribute copies of the full Annual Report
and Financial Statements that comply with IFRSs by 20 May 2016
following which copies will be available either from the registered
office of the company; St David's Court, Union Street,
Wolverhampton, WV1 3JE; or from the company's website;
www.andrews-sykes.com. The Annual Report and Financial Statements
for the 12 months ended 31 December 2014 have been delivered to the
Registrar of Companies and those for the 12 months ended 31
December 2015 will be filed at Companies House following the
company's Annual General Meeting. The auditors have reported on
those financial statements; their report was unqualified, did not
draw attention to any matters by way of emphasis without qualifying
their report and did not contain details of any matters on which
they are required to report by exception.
4. Date of Annual General Meeting
The group's Annual General Meeting will be held at 10.30 a.m. on
Tuesday 21 June 2016 at Floor 5, 10 Bruton Street, London, W1J
6PX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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