TIDMASY
RNS Number : 4103G
Andrews Sykes Group PLC
07 May 2014
Andrews Sykes Group plc
Summary of results
For the 12 months ended 31 December 2013
12 months 12 months
ended ended
31 December 31 December
2013 2012**
GBP'000 GBP'000
Revenue from continuing operations 61,072 58,380
EBITDA* from continuing operations 18,592 17,825
Operating profit 14,683 14,221
Profit after tax for the financial period 11,518 11,069
Basic earnings per share from total operations
(pence) 27.25p 26.18p
Interim dividends paid per equity share
(pence) 17.80p 7.10p
Proposed final dividend per equity share 11.90p -
(pence)
Net cash inflow from operating activities 14,216 12,768
Total dividends paid 7,523 3,001
Net funds 19,113 15,642
* 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.
** Restated due to the implementation of IAS19 (2011)
For further information please contact:
Andrews Sykes Group plc
Kevin Ford 01902 328700
-------------------------------- --------------
Altium Capital Limited (NOMAD)
Paul Lines
Adam Sivner 0845 505 4307
-------------------------------- --------------
Arden Partners plc (broker)
Adrian Trimmings 020 7614 5920
-------------------------------- --------------
Chairman's Statement
Overview and financial highlights
Summary
The group's revenue for the year ended 31 December 2013 was
GBP61.1 million, an increase of GBP2.7 million, or 4.6%, compared
with the same period last year. This increase had a favourable
impact on operating profit which increased by GBP0.5 million from
GBP14.2 million * last year to GBP14.7 million in the year under
review. This increase is despite the lack of revenue in the current
year from contracts in connection with the Olympic and Paralympic
games which benefited the performance for 2012.
The basic earnings per share increased by 4.1% from 26.18p* last
year to 27.25p in the current period. There were no share buybacks
in the period and this increase reflects the strong trading
performance of the group again this year.
The group continues to generate strong cash flows. Net cash
inflow from operating activities was GBP14.2 million, an
improvement of GBP1.4 million compared with last year. Net funds
increased from GBP15.6 million last year to GBP19.1 million at 31
December 2013 despite shareholder related cash outflows of GBP7.5
million on equity dividends. The level of external bank borrowings
remains unchanged as at 31 December 2013 from the previous year
following the refinancing exercise in April 2013.
Cost control, cash and working capital management continue to be
priorities for the group. Capital expenditure on the hire fleet
increased from GBP4.2 million in 2012 to GBP4.6 million this year
and the group invested a further GBP0.8 million on 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 2013 29,774 6,427
--------------- --------- -------------------
1st half 2012 28,570 6,396
--------------- --------- -------------------
2nd half 2013 31,298 8,256
--------------- --------- -------------------
2nd half 2012 29,810 7,825
--------------- --------- -------------------
Total 2013 61,072 14,683
--------------- --------- -------------------
Total 2012 58,380 14,221
--------------- --------- -------------------
Our main hire and sales business in the UK and Europe has again
faced challenging trading conditions throughout 2013 mainly as a
result of some unhelpful weather conditions but also due to
economic conditions particularly in certain European territories.
Consequently the business segment had mixed fortunes with Andrews
Sykes Hire Limited in the UK performing significantly better than
last year and our subsidiaries in Belgium and Northern Italy also
returning an improved performance. However, after a very successful
year in 2012, Andrews Sykes BV in Holland suffered a reduction in
operating profit and, as expected, our business in France returned
an operating loss in 2013 during its first year of trading.
Overall, the operating profit of this business segment increased
from GBP13.1 million last year to GBP13.5 million in 2013.
The weather at the beginning of the year was relatively cold
thereby helping the performance of our heating division. However
this was short lived and was replaced by much milder conditions
which lasted until the middle of June when a spell of warmer
weather finally arrived giving a boost to our all-important air
conditioning hire and sales business. The autumn and winter that
followed were exceptionally mild and wet which did nothing for our
heating products but which did assist the performance of our UK
pumping business. Improvements were apparent in the UK economy but
less so in our other European territories with a reduction in the
level of construction work throughout Holland.
The performance for the year clearly demonstrates our ability to
deliver acceptable profit levels even in times of unfavourable
external influence and is due, in part, to a diverse product range
that is able to return a robust performance during any extreme
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 a very
successful year with the operating profit for this business segment
improving from GBP1.2 million last year to GBP1.8 million in the
current year. This reflects improved market conditions which had a
positive impact on our traditional dewatering, sewage and general
pump hire activities. In addition our climate rental division which
was formed in 2012 returned a positive contribution to the business
results.
The operating profit for our fixed installation business sector
in the UK fell from nearly GBP1.0 million in 2012 to GBP0.4 million
in the current year. However this was expected as the business had
a successful year in 2012 due to a significant contract for the
supply of equipment in connection with the Olympic and Paralympic
Games. Excluding this contract, the business continues to perform
broadly in line with last year albeit at relatively modest levels
compared with the rest of the group.
Profit for the financial year
Profit before tax was GBP15.0 million this year compared with
GBP14.8 million* last year. This is due to the above GBP0.5 million
improvement in operating profit, a reduction of GBP0.4 million in
dividends received from Oasis Sykes, our trade investment in Saudi
Arabia, from GBP0.6 million last year to GBP0.2 million in 2013,
and a GBP0.1 million reduction in finance costs. Tax charges
amounted to GBP3.5 million, a reduction of GBP0.2 million compared
with 2012, resulting in a profit for the financial year of GBP11.5
million compared with GBP11.1 million* last year.
Equity dividends
The company declared two interim dividends during the year, both
of 8.9 pence per ordinary share. The first was declared on 18 June
2013 and was paid on 24 July 2013; the second was declared on 28
October 2013 and was paid on 3 December 2013. Therefore total
ordinary dividends paid to shareholders in the year were in excess
of GBP7.5 million.
I am pleased to announce that, in view of the group's ongoing
profitability and its significant cash resources, the board has
proposed a 2013 final dividend 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, would be paid on 19 June
2014 to shareholders on the register on 30 May 2014.
Net funds
At 31 December 2013 the group had net funds of GBP19.1 million
compared with GBP15.6 million last year, an increase of GBP3.5
million despite the payment of the above two interim dividends
totalling GBP7.5 million
Renewal of bank loan facilities
The group's previous bank loan agreements expired on 30 April
2013. In order to safeguard the group's cash position and to ensure
that the group has adequate liquid resources available to finance
any business opportunities that may arise, a new loan of GBP8.0
million was taken out on the same day to finance the loan
repayment. This new loan is for four years with annual repayments
of GBP1.0 million commencing on 30 April 2014 and a final balloon
payment of GBP5.0 million due on 30 April 2017. Interest is charged
based on LIBOR plus a fixed margin of 1.2% and mandatory costs.
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 they have 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 2014. 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.
Improvements have been seen in the UK, especially the pumping
business, and the Middle East business sector during 2013 but these
have been partially offset by a downturn in trading in Holland.
Management is currently addressing this issue and the board is
therefore cautiously optimistic for further success in 2014.
JG Murray
Chairman
6 May 2014
* Restated due to the implementation of IAS19 (2011)
Andrews Sykes Group plc
Consolidated Income Statement
For the 12 months ended 31 December 2013
12 months 12 months
ended ended
31 December 31 December
2013 2012**
GBP'000 GBP'000
Continuing operations
Revenue 61,072 58,380
Cost of Sales (25,318) (25,455)
Gross profit 35,754 32,925
Distribution costs (10,994) (10,088)
Administrative expenses (10,077) (8,616)
Operating profit 14,683 14,221
EBITDA* 18,592 17,825
Depreciation and impairment losses (4,459) (4,006)
Profit on the sale of plant and equipment 550 402
--------------------------- ----------------------
Operating profit 14,683 14,221
--------------------------- ----------------------
Income from trade investments 194 592
Finance income 1,730 1,723
Finance costs (1,643) (1,782)
--------------------------- ----------------------
Profit before taxation 14,964 14,754
Taxation (3,446) (3,685)
11,518 11,069
=========================== ======================
There were no discontinued operations
in either of the above periods
Earnings per share
Basic (pence) 27.25p 26.18p
Diluted (pence) 27.25p 26.18p
Interim dividends paid per equity share
(pence) 17.80p 7.10p
Proposed final dividend per equity share 11.90p -
(pence)
* Earnings Before Interest, Taxation, Depreciation, profit on
the sale of property, plant and equipment, Amortisation and
non-
recurring items.
** Restated due to implementation of IAS19 (2011).
Andrews Sykes Group plc
Consolidated Statement of Comprehensive Total Income
For the 12 months ended 31 December 2013
12 months 12 months
ended ended
31 December 31 December
2013 2012*
GBP'000 GBP'000
Profit for the financial period 11,518 11,069
----------------------- ------------------------
Other comprehensive charges
Items that may be reclassified to
profit and loss:
Currency translation differences
on foreign currency net
Investments 137 (335)
Items that will never be reclassified
to profit and loss:
Remeasurement of defined benefit
assets and liabilities (1,524) (667)
Related deferred tax 388 204
----------------------- ------------------------
Other comprehensive charges for the
period net of tax (999) (798)
----------------------- ------------------------
Total comprehensive income for the
period 10,519 10,271
======================= ========================
* Restated due to the implementation of IAS19 (2011)
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 31 December 2013
31 December 2013 31 December 2012
--------------------------------- ---------------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 16,432 15,522
Lease prepayments 53 55
Trade investments 164 164
Deferred tax asset 618 609
Retirement benefit pension
surplus 1,204 1,809
---------------- ----------------
18,471 18,159
Current assets
Stocks 3,231 3,197
Trade and other receivables 14,631 15,248
Overseas tax (denominated 280 -
in Euros)
Cash and cash equivalents 27,417 24,108
--------------- ---------------
45,559 42,553
--------------- ---------------
Current liabilities
Trade and other payables (10,271) (9,881)
Current tax liabilities (1,599) (1,492)
Bank loans (980) (8,000)
Obligations under finance
leases (114) (124)
Provisions (13) (13)
--------------- ---------------
(12,977) (19,510)
--------------- ---------------
Net current assets 32,582 23,043
Total assets less current
liabilities 51,053 41,202
Non-current liabilities
Bank loans (6,955) -
Obligations under finance
leases (255) (342)
Provisions (8) (21)
(7,218) (363)
Net assets 43,835 40,839
================ ================
Equity
Called-up share capital 423 423
Share premium 13 13
Retained earnings 40,684 37,825
Translation reserve 2,460 2,323
Other reserves 245 245
Surplus attributable to equity holders
of the parent 43,825 40,829
Minority interest 10 10
Total equity 43,835 40,839
================ ================
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 12 months ended 31 December 2013
12 months 12 months
ended ended
31 December 31 December
2013 2012
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 17,689 16,602
Interest paid (243) (326)
Net UK corporation tax paid (2,340) (2,543)
Withholding tax paid (39) (140)
Overseas tax paid (851) (825)
Net cash flow from operating activities 14,216 12,768
----------------------------- --------------------------------
Investing activities
Dividends received from trade investments 194 592
Sale of property, plant and equipment 706 559
Purchase of property, plant and
equipment (4,392) (4,715)
Interest received 281 193
Net cash flow from investing activities (3,211) (3,371)
----------------------------- --------------------------------
Financing activities
Loan repayments (8,000) (6,000)
New loans raised 8,000 -
Finance lease capital repayments (97) (132)
Equity dividends paid (7,523) (3,001)
Purchase of own shares - (825)
Net cash flow from financing activities (7,620) (9,958)
----------------------------- --------------------------------
Net increase / (decrease) in cash
and cash equivalents 3,385 (561)
Cash and cash equivalents at the
beginning of the period 24,108 24,986
Effect of foreign exchange rate
changes (76) (317)
Cash and cash equivalents at end
of the period 27,417 24,108
============================= ================================
Reconciliation of net cash flow
to movement in net funds in the
period
Net increase / (decrease) in cash
and cash equivalents 3,385 (561)
Cash outflow from the decrease in
debt 8,097 6,132
Cash inflow from the increase in (8,000) -
loans
Non-cash movement in respect of 65 -
raising loan finance
Non-cash movement in the fair value
of derivative instruments - 23
----------------------------- --------------------------------
Movement in net funds during the
period 3,547 5,594
Opening net funds at the beginning
of the period 15,642 10,365
Effect of foreign exchange rate
changes (76) (317)
----------------------------- --------------------------------
Closing net funds at the end of
the period 19,113 15,642
============================= ================================
Andrews Sykes Group plc
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2013
Attributable to equity holders of Minority Total
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
2011 427 13 31,035 2,658 241 34,374 10 34,384
Profit for the
financial
period* - - 11,069 - - 11,069 - 11,069
Other
comprehensive
charges:
Items that may
be
reclassified
to
profit and
loss:
Currency
translation
differences
on foreign
currency net
investments - - - (335) - (335) - (335)
Items that
will
never be
reclassified
to profit and
loss:
Remeasurement
of
defined
benefit
assets and
liabilities - - (667) - - (667) - (667)
Related
deferred
tax - - 204 - - 204 - 204
Total other
comprehensive
charges - - (463) (335) - (798) - (798)
-------------------- ------------------ ------------------ ---------------- --------- -------------------- --------- ----------------
Transactions
with
owners
recorded
directly in
equity:
Purchase of
own
shares (4) - (815) - 4 (815) - (815)
Dividends paid - - (3,001) - - (3,001) - (3,001)
Total
transactions
with owners (4) - (3,816) - 4 (3,816) - (3,816)
-------------------- ------------------ ------------------ ---------------- --------- -------------------- --------- ----------------
At 31 December
2012 423 13 37,825 2,323 245 40,829 10 40,839
Profit for the
financial
period - - 11,518 - - 11,518 - 11,518
Other
comprehensive
charges:
Items that may
be
reclassified
to
profit and
loss:
Currency
translation
differences
on foreign
currency net
investments - - - 137 - 137 - 137
Items that
will
never be
reclassified
to profit and
loss:
Remeasurement
of
defined
benefit
assets and
liabilities - - (1,524) - - (1,524) - (1,524)
Related
deferred
tax - - 388 - - 388 - 388
Total other
comprehensive
charges - - (1,136) 137 - (999) - (999)
-------------------- ------------------ ------------------ ---------------- --------- -------------------- --------- ----------------
Transactions
with
owners
recorded
directly in
equity
Dividends paid - - (7,523) - - (7,523) - (7,523)
Total
transactions
with owners - - (7,523) - - (7,523) - (7,523)
-------------------- ------------------ ------------------ ---------------- --------- -------------------- --------- ----------------
At 31 December
2013 423 13 40,684 2,460 245 43,825 10 43,835
==================== ================== ================== ================ ========= ==================== ========= ================
*Restated due to the implementation of IAS19 (2011)
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 2013 or 31
December 2012 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 2013
financial year and until the date of signing these accounts 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 2013 the previous
bank loan agreement terminated and, in accordance with that
agreement, the outstanding loan of GBP8.0 million plus interest was
repaid to the bank. A new loan agreement was taken out for GBP8.0
million on the same day and the first capital repayment of GBP1
million was made at the end of April 2014. 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 2013 amounted to GBP27.4 million compared with GBP24.1
million as at 31 December 2012. Profit and cash flow projections
for 2014 and 2015, 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 entered and 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
uncertain external influences and the current uncertain economic
outlook for certain of our trading territories in Europe.
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
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 16 May 2014
following which copies will be available either from the registered
office of the company; Premier House, Darlington Street,
Wolverhampton, WV1 4JJ; or from the company's website;
www.andrews-sykes.com. The Annual Report and Financial Statements
for the 12 months ended 31 December 2012 have been delivered to the
Registrar of Companies and those for the 12 months ended 31
December 2013 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 17(th) June 2014 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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