TIDMASY
RNS Number : 6844D
Andrews Sykes Group PLC
01 May 2013
Andrews Sykes Group plc
Summary of results
For the 12 months ended 31 December 2012
12 months 12 months
ended ended
31 December 31 December
2012 2011
GBP'000 GBP'000
Revenue from continuing operations 58,380 53,838
Normalised EBITDA* from continuing operations 17,916 15,387
Normalised operating profit ** 14,312 11,882
Profit on the sale of property - 3,113
Profit after tax for the financial period 11,158 11,566
Basic earnings per share from total operations
(pence) 26.39p 27.05p
Dividend paid per equity share (pence) 7.10p 6.60p
Net cash inflow from operating activities 12,768 11,606
Total dividends paid 3,001 2,818
Net funds 15,642 10,365
* 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.
** Normalised operating profit, being operating profit before
non-recurring items as reconciled on the consolidated income
statement.
For further information, please contact:
Andrews Sykes Group plc
Kevin Ford 01902 328700
WH Ireland Limited
Andrew Kitchingman 0113 394 6619
Nick Field 0207 220 1658
Chairman's Statement
Overview and financial highlights
Summary
The group's revenue for the year ended 31 December 2012 was
GBP58.4 million, an increase of GBP4.6 million, or 8.4%, compared
with the same period last year. This increase had a significant
impact on normalised operating profit* which increased by GBP2.4
million from GBP11.9 million last year to GBP14.3 million in the
year under review.
Last year's results benefitted from a non-recurring profit of
GBP3.1 million on the sale of a freehold property. Consequently the
basic earnings per share decreased slightly from 27.05p last year
to 26.39p in the current period. Excluding the effect of this
one-off sale the basic earnings per share would have shown an
improvement of 6.15p, or approximately 30%, from last year's
adjusted figure of 20.24p to this year's figure of 26.39p. This
reflects the strong trading performance of the group this year.
The group continues to generate strong cash flows. Net cash
inflow from operating activities was GBP12.8 million, an
improvement of GBP1.2 million compared with last year. Net funds
increased from GBP10.4 million last year to GBP15.6 million at 31
December 2012 despite shareholder related cash outflows of GBP3.8
million on dividends and the purchase of own shares. External bank
borrowings have been reduced by GBP6.0 million from GBP14.0 million
at the start of the year to GBP8.0 million by the year end.
Cost control, cash and working capital management continue to be
priorities for the group. Capital expenditure on the hire fleet
increased slightly from GBP4.1 million in 2011 to GBP4.2 million
this year and the group invested a further GBP1.1 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 Normalised Operating
profit*
------------------- ------------- -------------------------
GBP'000 GBP'000
------------------- ------------- -------------------------
1st half 2012 28,570 6,448
------------------- ------------- -------------------------
1st half 2011 27,717 5,930
------------------- ------------- -------------------------
2nd half 2012 29,810 7,864
------------------- ------------- -------------------------
2nd half 2011 26,121 5,952
------------------- ------------- -------------------------
Total 2012 58,380 14,312
------------------- ------------- -------------------------
Total 2011 53,838 11,882
------------------- ------------- -------------------------
Our main hire and sales business in the UK and Europe has again
faced challenging trading conditions throughout 2012 mainly as a
result of unhelpful weather conditions but also due to the current
economic conditions. Despite these factors, the operating profit of
this business segment, excluding the non-recurring profit on the
sale of property last year, increased from GBP12.0 million last
year to GBP13.1 million in 2012.
The weather at the start of the year was mild but that was soon
replaced by the arrival of a cold spell of weather in February and
March which stimulated the demand for our heating products. The
summer was one of the wettest on record which did not stimulate
demand for our air conditioning business. However it did help our
UK pumping business which saw turnover return to a more normal
level. This improvement in performance in the second half continued
through the remainder of the year and into the start of 2013. Our
long-established HVAC business in the Netherlands had a very
successful year returning a record performance in 2012.
The above again clearly demonstrates our ability to deliver
acceptable profit levels even in times of unfavourable external
influence and is due, in part, to 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.
Despite difficult trading conditions for our Middle East hire
and sales business sector, operating profit doubled from GBP0.6
million last year to GBP1.2 million in the year under review. This
improvement, which occurred largely in the second half of the year,
reflects improved trading conditions in the UAE as well as the
development of additional income streams in the region.
Our fixed installation business sector had a very successful
year mainly due to a significant contract for the supply of
equipment in connection with the Olympic and Paralympic Games. The
operating profit increased by GBP0.6 million from GBP0.3 million
last year to GBP0.9 million in the current year. 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
Excluding the one off benefit of the sale of property last year,
the profit for this financial year of GBP11.2 million would have
been GBP2.5 million higher than the equivalent figure of GBP8.7
million last year. This reflects the GBP2.4 million increase in
normalised operating profit*, receipts of dividends from Oasis
Sykes, our trade investment in Saudi Arabia, of GBP0.6 million, an
increase in the tax charge of GBP0.6 million and a reduction in net
interest payable of GBP0.1 million.
Equity dividends paid
The company declared an interim dividend of GBP3.0 million on 29
October 2012 and this was paid on 3 December 2012. The board
continues the policy of returning value to shareholders whenever
possible and accordingly the decision regarding an interim dividend
for 2013 will be taken later in the year in the light of
profitability and available cash resources.
Net funds
At 31 December 2012 the group had net funds of GBP15.6 million
compared with GBP10.4 million last year, an increase of GBP5.2
million despite a dividend of GBP3.0 million and cash outflows on
share buybacks of GBP0.8 million.
Renewal of bank loan facilities
The group's existing 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.
Share buybacks
During the current year the company purchased 426,506 ordinary
shares for cancellation for a total consideration of GBP814,934.
These purchases 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 of reducing its reliance on its traditional
core products and services together with the increase in
non-seasonal business and investment in new technologically
advanced and environmentally friendly products will be continued
into 2013.
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 both the UK pumping business and the
Middle East business sector but the one off benefit of the Olympic
Games will be difficult to replace. The board is therefore
cautiously optimistic for further success in 2013.
JG Murray
Chairman
30 April 2013
* Operating profit before non-recurring items as reconciled on
the consolidated income statement.
Andrews Sykes Group plc
Consolidated Income Statement
For the 12 months ended 31 December 2012
12 months 12 months
ended ended
31 December 31 December
2012 2011
GBP'000 GBP'000
Continuing operations
Revenue 58,380 53,838
Cost of Sales (25,455) (23,873)
Gross profit 32,925 29,965
Distribution costs (10,088) (9,317)
Administrative expenses - Recurring (8,525) (8,766)
* Non-recurring - 3,113
--------------------------------------------------------------------------- -------------------- ------ -------------------------
Total administrative expenses (8,525) (5,653)
Operating profit 14,312 14,995
Normalised EBITDA* 17,916 15,387
Depreciation and impairment losses (4,006) (3,911)
Profit on the sale of plant and equipment 402 406
-------------------- -------------------------
Normalised operating profit 14,312 11,882
Profit on the sale of property - 3,113
-------------------- -------------------------
Operating profit 14,312 14,995
-------------------- -------------------------
Income from trade investments 592 -
Finance income 1,750 1,850
Finance costs (1,782) (1,942)
-------------------- -------------------------
Profit before taxation 14,872 14,903
Taxation (3,714) (3,337)
11,158 11,566
==================== =========================
There were no discontinued operations
in either of the above periods
Basic (pence) 26.39p 27.05p
Diluted (pence) 26.39p 27.05p
Dividends paid per equity share (pence) 7.10p 6.60p
* 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 2012
12 months 12 months
ended ended
31 December 31 December
2012 2011
GBP'000 GBP'000
Profit for the financial period 11,158 11,566
Other comprehensive charges:
Currency translation differences
on foreign currency net (335) (184)
investments
Defined benefit plan actuarial gains
and losses (785) (559)
Deferred tax on other comprehensive
charges 233 184
Other comprehensive charges for the
period net of tax (887) (559)
----------------- -----------------
Total comprehensive income for the
period 10,271 11,007
================= =================
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 31 December 2012
31 December 2012 31 December 2011
--------------------------- ---------------------------
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 15,522 14,486
Lease prepayments 55 57
Trade investments 164 164
Deferred tax asset 609 760
Retirement benefit pension
surplus 1,809 1,629
------------ ------------
18,159 17,096
Current assets
Stocks 3,197 3,561
Trade and other receivables 15,248 14,775
Overseas tax (denominated
in Euros) - 19
Cash and cash equivalents 24,108 24,986
------------- -------------
42,553 43,341
------------- -------------
Current liabilities
Trade and other payables (9,881) (9,696)
Current tax liabilities (1,492) (1,689)
Bank loans (8,000) (6,000)
Obligations under finance
leases (124) (203)
Provisions (13) (13)
------------- -------------
(19,510) (17,601)
------------- -------------
Net current assets 23,043 25,740
Total assets less current
liabilities 41,202 42,836
Non-current liabilities
Bank loans - (8,000)
Obligations under finance
leases (342) (395)
Provisions (21) (34)
Derivative financial instruments - (23)
------------- -------------
(363) (8,452)
Net assets 40,839 34,384
============ ============
Equity
Called-up share capital 423 427
Share premium 13 13
Retained earnings 37,825 31,035
Translation reserve 2,323 2,658
Other reserves 245 241
Surplus attributable to equity holders
of the parent 40,829 34,374
Minority interest 10 10
Total equity 40,839 34,384
============ ============
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 12 months ended 31 December 2012
12 months 12 months
ended ended
31 December 31 December
2012 2011
GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 16,602 15,766
Interest paid (326) (385)
Net UK corporation tax paid (2,543) (3,191)
Withholding tax paid (140) -
Overseas tax paid (825) (584)
Net cash flow from operating activities 12,768 11,606
----------------- -----------------
Investing activities
Dividends received from trade investments 592 -
Sale of property, plant and equipment 559 4,221
Purchase of property, plant and
equipment (4,715) (6,582)
Interest received 193 311
Net cash flow from investing activities (3,371) (2,050)
----------------- -----------------
Financing activities
Loan repayments (6,000) (6,000)
Finance lease capital repayments (132) (158)
Equity dividends paid (3,001) (2,818)
Purchase of own shares (825) (1,121)
Issue of new shares - 13
Net cash flow from financing activities (9,958) (10,084)
----------------- -----------------
Net decrease in cash and cash equivalents (561) (528)
Cash and cash equivalents at the
beginning of the period 24,986 25,709
Effect of foreign exchange rate
changes (317) (195)
Cash and cash equivalents at end
of the period 24,108 24,986
================= =================
Reconciliation of net cash flow
to movement in net funds in the
period
Net decrease in cash and cash equivalents (561) (528)
Cash outflow from the decrease in
debt 6,132 6,158
Non-cash movements in the fair value
of derivative instruments 23 25
----------------- -----------------
Movement in net funds during the
period 5,594 5,655
Opening net funds at the beginning
of the period 10,365 4,905
Effect of foreign exchange rate
changes (317) (195)
----------------- -----------------
Closing net funds at the end of
the period 15,642 10,365
================= =================
Andrews Sykes Group plc
Consolidated Statement of Changes in Equity
For the 12 months ended 31 December 2012
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
2010 431 - 23,607 2,842 237 27,117 10 27,127
Profit for the
financial
period - - 11,566 - - 11,566 - 11,566
Other
comprehensive
charges:
Currency
translation
differences
on foreign
currency net
investments - - - (184) - (184) - (184)
Defined
benefit plan
actuarial
gains
and losses
net of tax - - (375) - - (375) - (375)
Total other
comprehensive
charges - - (375) (184) - (559) - (559)
------------ ------------ ------------- ---------------- ------------- -------------- ------------- -------------
Transactions
with owners
recorded
directly in
equity:
Purchase of
own shares (4) - (945) - 4 (945) - (945)
Issue of
shares - 13 - - - 13 - 13
Dividends paid - - (2,818) - - (2,818) - (2,818)
Total
transactions
with owners (4) 13 (3,763) - 4 (3,750) - (3,750)
------------ ------------ ------------- ---------------- ------------- -------------- ------------- -------------
At 31 December
2011 427 13 31,035 2,658 241 34,374 10 34,384
Profit for the
financial
period - 11,158 - - 11,158 - 11,158
Other
comprehensive
charges:
Currency
translation
differences
on foreign
currency net
investments - - - (335) - (335) - (335)
Defined
benefit plan
actuarial
gains
and losses
net of tax - - (552) - - (552) - (552)
Total other
comprehensive
charges - - (552) (335) - (887) - (887)
------------ ------------ ------------- ---------------- ------------- -------------- ------------- -------------
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
============ ============ ============= ================ ============= ============== ============= =============
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 2012 or 31
December 2011 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 2011 and
2012 financial years and until the date of signing these accounts
within its financial covenants. 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. In April 2012 the group made
the agreed bank loan repayment of GBP6.0 million and accordingly
total bank loans have been reduced from GBP14.0 million at the
beginning of the year to GBP8.0 million as at 31 December 2012. In
April 2013 the final loan repayment under the existing loans of
GBP8.0 million was made and this was financed by a new loan from
the group's existing bankers of the same amount. Details of the new
loan are set out above and the group's profit and cash flow
projections indicate that the financial covenants included within
the new loan agreement will be met for the foreseeable future.
The group continues to have substantial cash resources which at
31 December 2012 amounted to GBP24.1 million compared with GBP25.0
million as at 31 December 2011. Profit and cash flow projections
for 2013 and 2014, 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 new bank facility agreement entered into in April 2013
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
the current uncertain economic outlook.
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 and this preliminary
announcement.
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 13 May 2013
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 2011 have been delivered to the
Registrar of Companies and those for the 12 months ended 31
December 2012 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 18(th) June 2013 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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