Andrew Sykes Regulatory News (ASY)

26 Apr 2007 12:25

Andrews Sykes Group PLC26 April 2007 Andrews Sykes Group plc 26 April 2007 Preliminary Results Preliminary Announcement For the 52 weeks ended 31 December 2006 SUMMARY OF RESULTS 52 weeks ended 52 weeks ended 31 December 2006 31 December 2005 £'000 £'000 Turnover from continuing operations 59,768 50,673EBITDA* from continuing operations 18,645 14,747Operating profit** from continuing operations 14,907 11,062(Loss) / profit on business disposals (142) 6,404Profit on ordinary activities after taxation 9,661 14,127Basic earnings per share from continuing operations (pence) 22.00p 15.24pNet cash inflow from operating activities 15,804 10,196Net Debt 14,810 19,658 * Earnings before Interest, Taxation, Depreciation and Amortisation asreconciled in the consolidated profit and loss account ** Operating profit as shown on the consolidated profit and loss account Chairman's Statement Overview and financial highlights I am very pleased to be able to report a record group operating profit fromcontinuing operations of £14.9 million for 2006, which compares with £11.1million last year. This improvement in trading is largely due to our dualstrategies of aligning costs with sustainable revenues and focussing on thedevelopment of high margin niche markets thereby enabling the group to deliverexceptionally good results when the opportunities arise. Our principal UK trading subsidiary, Andrews Sykes Hire, performed exceptionallywell returning turnover of £43.0 million, an improvement of 20% compared withlast year. This was due to a combination of favourable weather conditions andbusiness initiatives introduced by management during the year to stimulatedemand. A more detailed review of this year's performance is given in theOperations and Financial Reviews within the Directors' Report. The basic earnings per share from continuing operations increased by over 44%from 15.24 pence last year to 22.00 pence this year - another record for ourgroup. This reflects both the improved trading performance and the benefit ofthe tender offer exercise that was completed in September 2005. I remain confident that the current strategies being followed by management willcontinue to deliver satisfactory profit levels in the future. We will continueto contain our costs, to invest in both traditional and new products and todevelop new market places when the opportunities arise in order to maximise thereturn on capital employed. Management changes On 5 December 2006 Paul Wood was appointed to the Board as Managing Directorhaving previously been Director of Operations. Paul has a vast experience in theindustry having originally joined the group in August 1978. Paul has much tocontribute to the group in terms of his industry experience and managementleadership and I look forward to working with him over the coming years. Also on 5 December 2006 Jean Christophe Pillois was appointed Finance Directorfollowing the resignation of Tony Bourne on 2 October 2006. There have also been some other changes to our non-executive directors. RichardPollard resigned on 5 December 2006 and three new non-executive directors, MarieClaire Leon, Xavier Mignolet and Joel Simmonds were appointed to the Board on 8February 2007. I welcome the new appointees and I am sure that their experiencewill be appreciated by the Board. Net debt Net debt has been reduced by £4.9 million to £14.8 million this year despite thefollowing cash outflows: • Capital expenditure net of disposal proceeds £6.5 million• Corporation tax payments £2.8 million• Net interest payments £1.1 million• Defined benefit pension scheme payments £1.5 million There was a relatively high level of capital expenditure required this year inorder to satisfy increased customer demand and to invest in new products thatwill give returns in future years. The other cash outflows are in line with ourexpectations. Share buy back programme The Board continues to believe that shareholder value will be optimised by thepurchase, when appropriate, of our own shares. The earnings per share this yearhas benefited from the tender offer exercise that was completed in September2005 when the company purchased 13.4 million shares for cancellation. Consequently at the forthcoming AGM, the Board will request that shareholdersvote in favour of a resolution to renew the authority to purchase up to 12.5% ofthe ordinary shares in issue. Dividend The Board is not recommending the payment of a final dividend this year. Futuredividend policy will be reviewed regularly by the Board. Outlook The group's continuing strategy of containing costs and investing in both itstraditional core products and services and new environmentally friendly productsproved to be successful during 2006. Overall trading in the first quarter of2007 was in line with expectations. JG MurrayChairman25 April 2007 Andrews Sykes Group plcConsolidated Profit and Loss AccountFor the 52 weeks ended 31 December 2006 52 weeks 52 weeks ended 31 ended 31 December 2006 December 2005 Total Continuing Discontinued Total activities activities activities activities £'000 £'000 £'000 £'000 Turnover 59,768 50,673 4,415 55,088 Cost of sales (26,932) (23,675) (2,414) (26,089) Gross profit 32,836 26,998 2,001 28,999 Distribution costs (9,471) (8,038) (699) (8,737)Administrative expenses (note 3) (8,458) (7,898) (960) (8,858)Operating profit 14,907 11,062 342 11,404 EBITDA * 18,645 14,747 615 15,362 Depreciation and asset disposals (3,724) (3,671) (273) (3,944) Operating profit before goodwill 14,921 11,076 342 11,418amortisation Goodwill amortisation (14) (14) - (14) Operating profit 14,907 11,062 342 11,404 Profit on the sale of property 206 - Exceptional (loss) / profit on the (142) 6,404disposal of businesses - discontinued (note 5) Profit on ordinary activities before 14,971 17,808interest and taxation Net interest payable (1,174) (738) Profit on ordinary activities before 13,797 17,070taxation Tax on profit on ordinary activities (4,136) (2,943) 9,661 14,127 Profit on ordinary activities aftertaxation being profit for the financialperiod Earnings per share from continuing operations (pence): Basic 22.00p 15.24pFully diluted 22.00p 15.24p Earnings per share from total operating results (pence): Basic 21.68p 28.16pFully diluted 21.68p 28.16p Dividends paid per equity share (pence) _ 14.0p All turnover and operating profit in the current period relates to continuingoperations. There were no material acquisitions in either period. * Earnings before Interest, Taxation, Depreciation and Amortisation Andrews Sykes Group plcConsolidated Balance SheetAs at 31 December 2006 31 December 31 December 2006 2005 £'000 £'000Fixed assetsIntangible assets: Goodwill 17 31Tangible assets 14,599 12,011Investments 164 164 14,780 12,206Current assetsStocks 4,336 4,532Debtors 17,280 13,929Cash at bank and in hand 10,190 10,342 31,806 28,803 Creditors: Amounts falling due within oneyearBank loans (5,000) (5,000)Other creditors (10,108) (8,627)Corporation and overseas tax (2,292) (1,060) (17,400) (14,687) Net current assets 14,406 14,116 Total assets less current liabilities 29,186 26,322 Creditors: Amounts falling due after morethan one yearBank loans (20,000) (25,000) Provisions for liabilities (24) (469) Net assets excluding pension liability 9,162 853 Pension Liability (4,604) (4,434) Net assets / (liabilities) including 4,558 (3,581)pension liability Capital and reservesCalled - up share capital 446 446 Revaluation reserve 736 741Other reserves 213 222Profit and loss account 3,153 (4,994)ESOP reserve - (6)Surplus / (deficit) attributable to equity 4,548 (3,591)shareholders Minority interests (equity) 10 10 Total capital employed 4,558 (3,581) Andrews Sykes Group plcConsolidated Cash Flow StatementFor the 52 weeks ended 31 December 2006 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 Net cash inflow from operating activities 15,804 10,196as reconciled in note 4 Returns on investment and servicing offinanceInterest received 476 484Interest paid (1,591) (946) Net cash outflow for returns on investment (1,115) (462)and servicing of finance Cash outflow for taxation (2,807) (1,984) Capital expenditure and financial investmentPurchase of tangible fixed assets (7,067) (4,056)Sale of tangible fixed assets 526 608 Net cash outflow for capital expenditure (6,541) (3,448)and financial investment Acquisitions and disposalsCash received on the disposal of - 10,204subsidiary undertakingsDisposal costs paid less consideration (183) -received on prior year disposalsNet cash balances disposed of with - (214)subsidiaries Net cash (outflow) / inflow for (183) 9,990acquisitions and disposals Equity dividends paid - (8,119) Cash inflow before the use of liquidresources and financing (5,158 (6,173) Management of liquid resourcesMovement in bank deposits - 477 FinancingSale of own shares by ESOP 4 9Loan repayments (5,000) (11,000)New loans drawn down - 30,000Purchase of own shares (16) (24,168) Net cash outflow from financing (5,012) (5,159) Increase in cash in the period 146 1,491 Analysis of net funds / (debt)Cash at bank and in hand 10,190 10,342Total loans and overdrafts (25,000) (30,000) Net debt as reconciled in note 6 (14,810) (19,658) Andrews Sykes Group plcOther Consolidated StatementsFor the 52 weeks ended 31 December 2006 Consolidated statement of total recognised gains and losses 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 Profit for the financial period 9,661 14,127 Currency translation differences on foreign (321) 48currency net investmentsActual return less expected return on pension 578 2,702scheme assetsExperience gains and losses arising on the (340) (4)pension scheme liabilitiesChanges in assumptions underlying the present (1,937) (3,538)value of the scheme liabilitiesUK deferred tax attributable to the pension 510 252scheme asset and liability adjustments Total recognised gains and losses relating to 8,151 13,587the period transferred to reserves Reconciliation of movement in group shareholders' funds / (deficit) 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 Profit for the financial period 9,661 14,127Dividends paid - (8,119)Consideration for the purchase of own (16) (24,168)sharesSale of own shares by the ESOP trust 4 9Currency translation differences on (321) 48foreign currency net investmentsActual return less expected return on 578 2,702pension scheme assetsExperience gains and losses arising on (340) (4)the pension scheme liabilitiesChanges in assumptions underlying the (1,937) (3,538)present value of the scheme liabilitiesUK deferred tax attributable to the 510 252pension scheme asset and liability adjustments Net increase / (decrease) in 8,139 (18,691)shareholders' funds Shareholders' (deficit) / funds at the (3,591) 15,100beginning of the period Shareholders' funds / (deficit) at the 4,548 (3,591)end of the period Andrews Sykes Group plcNotes to the accountsFor the 52 weeks ended 31 December 2006 1. Segmental analysis The group's turnover may be analysed between the following principalactivities: 52 weeks ended 31 December 52 weeks ended 31 December 2005 2006 Continuing Discontinued Total Continuing activities activities activities activitiesActivity: £'000 £'000 £'000 £'000 Hire 43,088 34,459 1,930 36,389Sales 8,762 7,024 2,485 9,509Installation 7,918 9,190 - 9,190 Total 59,768 50,673 4,415 55,088 The integrated nature of the group's operations does not permit a meaningfulanalysis of profit before interest and tax or net assets by the aboveactivities. The results and net assets are attributable to the group's principal activity,the hire, sale and installation of a range of equipment including pumps,portable heating, air conditioning, drying and ventilation. The impact of discontinued activities on turnover (both by geographical originand destination), profit before interest and tax and net assets in the tablesbelow relates mainly to the United Kingdom. The geographical analysis of the group's turnover was as follows: By origination: 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 United Kingdom 50,254 48,041Rest of Europe 5,435 3,674Middle East and Africa 4,079 3,373 59,768 55,088 By destination: 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 United Kingdom 49,070 47,612Rest of Europe 6,240 3,737Middle East and Africa 4,116 3,478Rest of World 342 261 59,768 55,088 The analysis of profit before interest and tax and net assets / (liabilities)by geographical origin was as follows: Net assets / (liabilities) Profit before interest including pension and tax liability 52 weeks 52 weeks ended ended 31 As at As at 31 December December 31 December 31 December 2006 2005 2006 2005 £'000 £'000 £'000 £'000United Kingdom 12,670 16,141 22,254 17,642 Rest of Europe 1,876 1,155 1,940 1,785Middle East and Africa 425 512 2,070 2,144 14,971 17,808 26,264 21,571 Net debt (14,810) (19,658)Taxation (2,292) (1,060)Pension liability (4,604) (4,434) Net assets/(liabilities) 4,558 (3,581) 2. Earnings per ordinary share The basic figures have been calculated by reference to the weighted averagenumber of ordinary shares in issue, excluding those in the ESOP reserve, duringthe period of 44,557,701 (52 weeks ended 31 December 2005: 50,156,508). The calculation of the diluted earnings per ordinary share is based on theprofits as set out in the table below and on 44,562,172 (52 weeks ended 31December 2005: 50,168,119) ordinary shares. The share options have a dilutiveeffect for the period calculated as follows: 52 weeks ended 31 December 2006 52 weeks ended 31 December 2005 Continuing Total No. of Continuing Total No. of earnings earnings shares earnings earnings shares £'000 £'000 £'000 £'000 Basic earnings/weighted 9,803 9,661 44,557,701 7,646 14,127 50,156,508average number of sharesWeighted average number of 15,603 24,932 shares under optionNumber of shares that would have been issued at fair value (11,132) (13,321) Earnings/ diluted weighted 9,803 9,661 44,562,172 7,646 14,127 50,168,119average number of shares Diluted earnings per 22.00p 21.68p 15.24p 28.16pordinary share (pence) 3. Exceptional administrative expenses Administrative expenses include the following exceptionalcosts: 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 Reorganisation and redundancy payments 656 - The above costs relate to redundancy payments and legal costs incurred followingthe termination of the employment contracts of former Board members and othersenior employees during the period. 4. Reconciliation of operating profit to net cash inflow from operating activities 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 Operating profit 14,907 11,404Goodwill amortisation 14 14Depreciation 4,055 4,280Profit on sale of tangible fixed (332) (336)assets excluding propertyDecrease in stocks 196 37Increase in debtors (2,839) (591)Decrease in creditors and (197) (4,612)provisions Net cash inflow from operating 15,804 10,196activities 5. Exceptional (loss) / profit on the disposal of businesses The exceptional (charges) / credits during the period were as follows: 52 weeks 52 weeks ended ended 31 December 31 December 2006 2005 £'000 £'000 Profit on disposal of subsidiary undertakings - 6,564Adjustments in respect of deferred considerationreceivable and legal costs payable on prior year (27) -disposalsProvisions for onerous lease commitments (115) (160) (142) 6,404 Last year the group sold two subsidiary undertakings, Accommodation Hire Limitedand Engineering Appliances Limited, realising a combined profit on disposal of£6,564,000. This year certain adjustments have been made to both the deferredconsideration receivable and legal costs payable which have resulted in the netcharge of £27,000 as noted above. The group has various onerous property lease commitments inherited from the CoxPlant business which was sold during 2002. During both the current and previousfinancial years the directors have re-assessed the level of provisions requiredin respect of these commitments and have accordingly adjusted the onerous leaseprovision. This has resulted in a charge to the profit and loss account of£115,000 (52 weeks ended 31 December 2005: £160,000). 6. Analysis of net debt As at Cash Other non As at 31 December flow cash 31 December 2006 movements 2005 £'000 £'000 £'000 £'000 Cash at bank and in hand 10,190 146 (298) 10,342Debt due in one year (5,000) 5,000 (5,000) (5,000)Debt due after one year (20,000) - 5,000 (25,000) Gross debt (25,000) 5,000 - (30,000) Net debt (14,810) 5,146 (298) (19,658) 7. The financial information set out above has been prepared in accordance with UK GAAP using accounting policies that are consistent with those adopted in the statutory accounts for the 52 weeks ended 31 December 2005. There have not been any new UK Accounting Standards issued during the period that have an impact on the group. 8. The financial information set out above does not constitute the group's statutory accounts for the 52 weeks ended 31 December 2006 or the 52 weeks ended 31 December 2005 but it is derived from those accounts. The financial statements for the 52 weeks ended 31 December 2005 have been filed and those for the 52 weeks ended 31 December 2006 will be filed with the Registrar of Companies. The company's auditors gave unqualified reports on the accounts for both these periods and the reports did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 9. Copies of the Annual Report and Financial Statements will be circulated to shareholders shortly and will be available from the Registered Office of the Company; Premier House, Darlington Street, Wolverhampton, WV1 4JJ. The Company's Annual General Meeting will be held at 10.30 a.m. on Wednesday 6June 2007 at Floor 5, 10 Bruton Street, London, W1J 6PX. ENDS This information is provided by RNS The company news service from the London Stock Exchange