TIDMASY
RNS Number : 2699M
Andrews Sykes Group PLC
06 May 2015
Andrews Sykes Group plc
Summary of results
For the 12 months ended 31 December 2014
12 months 12 months
ended ended
31 December 31 December
2014 2013
GBP'000 GBP'000
Revenue from continuing operations 56,400 61,072
EBITDA* from continuing operations 15,569 18,592
Operating profit 11,311 14,683
Profit after tax for the financial period 9,311 11,518
Basic earnings per share from total operations
(pence) 22.03p 27.25p
Interim and final dividends paid per
equity share (pence) 23.80p 17.80p
Proposed final dividend per equity share
(pence) 11.90p 11.90p
Net cash inflow from operating activities 10,621 14,216
Total interim and final dividends paid 10,058 7,523
Net funds 16,846 19,113
* 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
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Altium Capital Limited (NOMAD)
Paul Lines
Adam Sivner 0845 505 4300
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Arden Partners plc (broker)
Steve Douglas 020 7614 5900
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Chairman's Statement
Overview and financial highlights
Summary
The group's revenue for the year ended 31 December 2014 was
GBP56.4 million, a decrease of GBP4.7 million, or 7.6%, compared
with the same period last year. This decrease had an adverse impact
on operating profit which fell by GBP3.4 million from GBP14.7
million last year to GBP11.3 million in the year under review. This
decrease is primarily due to two factors: the under-performance of
our operations in the Benelux region and our heating business in
the UK: both of which mainly impacted the group's performance in
the first half of the year and had been largely addressed by the
end of the fourth quarter.
As a consequence of the above, our basic earnings per share
decreased from 27.25p last year to 22.03p in the current period.
Although lower than in the previous year, the basic earnings per
share is still considered to be a positive factor reflecting once
again the strong trading performance of the majority of the group's
businesses.
The group continues to generate strong cash flows. Net cash
inflow from operating activities was GBP10.6 million compared with
GBP14.2 million last year. Net funds only decreased by GBP2.3
million from GBP19.1 million last year to GBP16.8 million at 31
December 2014 despite shareholder related cash outflows of GBP10.1
million (2013: GBP7.5 million) on equity dividends. Therefore, over
the last two financial years, the group has returned GBP17.6
million in cash to shareholders. At the same time the level of
external bank borrowings reduced from GBP8 million as at the end of
last year to GBP7 million as at 31 December 2014. The Board is now
proposing a further final dividend totalling GBP5.0 million payable
in June 2015.
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 GBP4.4 million was
invested in the hire fleet this year, a level very similar to last
year's expenditure of GBP4.6 million. In addition, the group
invested a further GBP0.5 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 2014 26,759 4,349
--------------- --------- ------------------
1st half 2013 29,774 6,427
--------------- --------- ------------------
2nd half 2014 29,641 6,962
--------------- --------- ------------------
2nd half 2013 31,298 8,256
--------------- --------- ------------------
Total 2014 56,400 11,311
--------------- --------- ------------------
Total 2013 61,072 14,683
--------------- --------- ------------------
The above table demonstrates that the majority of the trading
shortfall compared with last year occurred in the first half of the
year. Turnover in that period was 10.1% lower than in the same
period in 2013 resulting in a reduction in operating profit of
32.3%. However, the group's trading results improved in the second
half of the year. Whilst still behind last year's levels, the
percentage shortfall in turnover and operating profit compared to
2013 both significantly reduced, to 5.3% and 15.6% respectively,
compared with the first half year. The majority of the shortfall in
the second half occurred in the third quarter; by the end of the
fourth quarter trading had nearly recovered to the previous year's
levels.
Once again our main hire and sales business sector in the UK and
Europe faced challenging trading conditions throughout the year.
Our UK pump business performed well and made a significant
contribution to the group's operating profit. Similarly our
specialist chiller and boiler hire divisions both traded ahead of
last year as did our air conditioning and ventilation business.
However, overall, the operating profit of this business segment
fell from GBP13.5 million last year to GBP10.5 million in 2014
which is the main reason for the decline in the group's overall
performance this year.
The fall in profitability of this business sector was mainly due
to two factors: a sharp decline in trading in the Benelux region
and a disappointing performance from our UK heating business. The
poor trading performance in the Benelux region was due to a
combination of two factors: a decline in the construction sector in
the Netherlands and a mild winter throughout the region which
failed to stimulate demand for our heating products. This also had
an adverse impact on our heating business in the UK which was
responsible for the majority of the shortfall in turnover of our
main UK trading subsidiary, Andrews Sykes Hire Limited.
Nevertheless, by the end of 2014, economic trading conditions
throughout Europe had improved significantly and weather conditions
had returned to seasonal normality. Consequently, we are now able
to look forward to 2015 with a more optimistic outlook.
Despite the above adverse 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 a successful
year. Nevertheless the operating profit for this business segment
fell from GBP1.8 million in 2013 when trading was particularly good
to GBP1.5 million in 2014. Our climate rental division which was
formed in 2012 continues to expand and returned a positive
contribution to the business results.
Turnover of our fixed installation business sector in the UK was
GBP0.1 million ahead of 2013 at GBP4.0 million but due to price
competition and a change in mix in this fragmented market,
operating margins were reduced. Consequently operating profit for
this business sector fell from GBP0.4 million in 2013 to just over
GBP0.2 million in the current year.
Careful cost control resulted in a GBP0.1 million reduction in
central overheads from GBP1.0 million in 2013 to GBP0.9 million in
the current year.
Profit for the financial year
Profit before tax was GBP11.8 million this year compared with
GBP15.0 million last year. This is mainly attributable to the above
GBP3.4 million reduction in operating profit which has been
slightly offset by an increase in dividends received from Oasis
Sykes, our trade investment in Saudi Arabia. Net finance costs
increased by GBP0.1 million compared with 2013.
Tax charges reduced from GBP3.5 million to GBP2.5 million in
2014 due to a combination of the decrease in profits before tax and
a fall in the overall effective tax rate from 23.0% in 2013 to
20.8% in 2014. Profit for the financial year was GBP9.3 million
compared with GBP11.5 million last year.
Equity dividends
The company paid two dividends during the year. On 19 June 2014
a final dividend for the year ended 31 December 2013 of 11.9 pence
per ordinary share was paid and this was followed on 2 December
2014 by the payment of an interim dividend for 2014 also of 11.9
pence per share. Therefore, during 2014, 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 2014 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
19 June 2015 to shareholders on the register on 29 May 2015.
Net funds
At 31 December 2014 the group had net funds of GBP16.8 million
compared with GBP19.1 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 2015. 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 already been seen in the Benelux region and we
anticipate improved performances from our newly established, but
currently small, businesses in France, Switzerland and Luxembourg.
The board is therefore cautiously optimistic for further success in
2015 always being mindful of the favourable or adverse impact that
the weather can have on our business.
JG Murray
Chairman
5 May 2015
Andrews Sykes Group plc
Consolidated Income Statement
For the 12 months ended 31 December 2014
12 months 12 months
ended ended
31 December 31 December
2014 2013
GBP'000 GBP'000
Continuing operations
Revenue 56,400 61,072
Cost of Sales (24,101) (25,318)
Gross profit 32,299 35,754
Distribution costs (10,410) (10,994)
Administrative expenses (10,578) (10,077)
Operating profit 11,311 14,683
EBITDA* 15,569 18,592
Depreciation and impairment losses (4,563) (4,459)
Profit on the sale of plant and equipment 305 550
------------------------- ---------------------------
Operating profit 11,311 14,683
------------------------- ---------------------------
Income from trade investments 517 194
Finance income(+) 342 1,730
Finance costs(+) (414) (1,643)
------------------------- ---------------------------
Profit before taxation 11,756 14,964
Taxation (2,445) (3,446)
Profit for the financial period 9,311 11,518
========================= ===========================
There were no discontinued operations
in either of the above periods
Earnings per share
Basic (pence) 22.03p 27.25p
Diluted (pence) 22.03p 27.25p
Interim and final dividends paid per
equity share (pence) 23.80p 17.80p
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.
(+) Restated in accordance with IAS19 (2011).
Andrews Sykes Group plc
Consolidated Statement of Comprehensive Total Income
For the 12 months ended 31 December 2014
12 months 12 months
ended ended
31 December 31 December
2014 2013
GBP'000 GBP'000
Profit for the financial period 9,311 11,518
------------------------ -----------------------
Other comprehensive charges
Items that may be reclassified to
profit and loss:
Currency translation differences
on foreign currency net
Investments (312) 137
Items that will never be reclassified
to profit and loss:
Remeasurement of defined benefit
assets and liabilities (802) (1,524)
Related deferred tax 160 388
------------------------ -----------------------
Other comprehensive charges for the
period net of tax (954) (999)
------------------------ -----------------------
Total comprehensive income for the
period 8,357 10,519
======================== =======================
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 31 December 2014
31 December 2014 31 December 2013
--------------------------------- ---------------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 16,388 16,432
Lease prepayments 51 53
Trade investments 164 164
Deferred tax asset 626 618
Retirement benefit pension
surplus 1,253 1,204
---------------- ----------------
18,482 18,471
Current assets
Stocks 4,618 3,231
Trade and other receivables 14,348 14,631
Overseas tax (denominated
in Euros) 133 280
Cash and cash equivalents 24,077 27,417
--------------- ---------------
43,176 45,559
--------------- ---------------
Current liabilities
Trade and other payables (10,963) (10,271)
Current tax liabilities (1,321) (1,599)
Bank loans (980) (980)
Obligations under finance
leases (114) (114)
Provisions (9) (13)
--------------- ---------------
(13,387) (12,977)
--------------- ---------------
Net current assets 29,789 32,582
Total assets less current
liabilities 48,271 51,053
Non-current liabilities
Bank loans (5,975) (6,955)
Obligations under finance
leases (162) (255)
Provisions - (8)
(6,137) (7,218)
Net assets 42,134 43,835
================ ================
Equity
Called-up share capital 423 423
Share premium 13 13
Retained earnings 39,295 40,684
Translation reserve 2,148 2,460
Other reserves 245 245
Surplus attributable to equity holders
of the parent 42,124 43,825
Minority interest 10 10
Total equity 42,134 43,835
================ ================
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 12 months ended 31 December 2014
12 months 12 months
ended ended
31 December 31 December
2014 2013
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 13,222 17,689
Interest paid (166) (243)
Net UK corporation tax paid (2,268) (2,340)
Withholding tax paid (47) (39)
Overseas tax paid (120) (851)
Net cash flow from operating activities 10,621 14,216
----------------------------- -----------------------------
Investing activities
Dividends received from trade investments 517 194
Sale of property, plant and equipment 511 706
Purchase of property, plant and
equipment (3,727) (4,392)
Interest received 270 281
-----------------------------
Net cash flow from investing activities (2,429) (3,211)
----------------------------- -----------------------------
Financing activities
Loan repayments (1,000) (8,000)
New loans raised - 8,000
Finance lease capital repayments (93) (97)
Equity dividends paid (10,058) (7,523)
Net cash flow from financing activities (11,151) (7,620)
----------------------------- -----------------------------
Net (decrease) / increase in cash
and cash equivalents (2,959) 3,385
Cash and cash equivalents at the
beginning of the period 27,417 24,108
Effect of foreign exchange rate
changes (381) (76)
Cash and cash equivalents at end
of the period 24,077 27,417
============================= =============================
Reconciliation of net cash flow
to movement in net funds in the
period
Net (decrease) / increase in cash
and cash equivalents (2,959) 3,385
Cash outflow from the decrease in
debt 1,093 8,097
Cash inflow from the increase in
loans - (8,000)
Non-cash movement in respect of
raising loan finance (20) 65
-----------------------------
Movement in net funds during the
period (1,886) 3,547
Opening net funds at the beginning
of the period 19,113 15,642
Effect of foreign exchange rate
changes (381) (76)
----------------------------- -----------------------------
Closing net funds at the end of
the period 16,846 19,113
============================= =============================
Andrews Sykes Group plc
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2014
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
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
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
--------- ------------- ------------- ---------------- --------------- ---------- --------- -----------
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 2014 or 31
December 2013 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 2014
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 2014 the first
capital repayment of GBP1 million was made and this was followed by
a further capital payment, also of GBP1 million on 30 April 2015.
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 2014 amounted to GBP24.1 million compared with GBP27.4
million as at 31 December 2013. Profit and cash flow projections
for 2015 and 2016, 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 15 May 2015
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 2013 have been delivered to the
Registrar of Companies and those for the 12 months ended 31
December 2014 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 16 June 2015 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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