(Alliance News) - RPS Group PLC said Wednesday its fee revenue in the fourth quarter was down on the year before, but the company has experienced sequential improvement throughout 2020.
In the final three months of 2020, the professional services firm recorded fee revenue of GBP115.8 million, down from GBP130.3 million a year before.
RPS defines, designs and manages projects in the six sectors: property, energy, transport, water, resources, and defence & government services.
RPS noted there was a sequential improvement in revenue, at constant currency, in the fourth quarter, with third quarter revenue at GBP109.0 million - 16% below the prior year - and the second quarter at GBP107.0 million - 18% down annually. First quarter revenue was GBP125.4 million, 4.1% below the prior year, having seen only some early impact of Covid-19.
"Fee revenue improved in the quarter as individuals continued to return from furlough and from reduced working hours. With lockdowns continuing across Europe, we continue to match capacity to market activity while ensuring the safety and welfare of our people," RPS said.
It continued: "Strong exposure to government and quasi-government organisations continues to provide some resilience to the impact of Covid-19. This can be seen in Australia Asia Pacific, which has generated growth in 2020, in Services UK & Netherlands, where fee revenue grew in the fourth quarter as the AMP cycle continued to ramp up, and in Norway, which has a significant exposure to government, delivering growth in the fourth quarter."
RPS noted its Energy unit saw its trajectory improve the final quarter of 2020.
"As a result of the improving fee performance and proactive actions taken in 2020 to manage costs across the group, draft adjusted pretax profit is currently expected to be in line with the average of analysts' forecasts," RPS added.
In 2019, RPS reported adjusted operating profit of GBP43.4 million.
Chief Executive John Douglas said: "Our strategic exposure to government sector work is continuing to benefit the group. Our improved fourth quarter trading performance was in line with our expectations, with some areas of the business pleasingly showing year-on-year growth.
"We continued to make strong progress in significantly reducing net debt and de-risking the balance sheet, providing a strong platform for the year ahead. Management's continued focus in improving lock up days, combined with the proactive actions and cash management measures taken in response to the pandemic, have contributed to the group's improved financial profile."
Turning to shareholder returns, RPS said it has decided against paying a dividend in 2020, but plans on resuming dividends in 2021.
"Our fourth-quarter performance, along with efforts in the preceding periods, have put RPS in a strong position for when market conditions improve in 2021. We look forward to updating the market further when we report our full year results in early March," Douglas added.
Shares in RPS Group were 0.5% higher in London on Wednesday at 78.20 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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