CSG.L Regulatory News (CSG)

6 November 2014

Sweett Group plc

("Sweett Group", the "Group" or the "Company")

Trading Update

Sweett Group (AIM: CSG), the international construction and property consultancy, provides the following trading update in advance of publication of its unaudited half-year results for the six months ended 30 September 2014.

Trading in the first half of the financial year has reflected good progress in our UK market which accounts for over half of the Group's turnover and mixed trading in our overseas businesses. Following a recent review, the Board has identified challenges in certain overseas operations and the Board now expects that the Group's results for the year ending 31 March 2015 will be materially below market expectations.

The Group's order book remains at approximately £107 million.

The recovery in the UK market has continued during the first half with strong growth being seen across a number of sectors with significant appointments for Jaguar Land Rover, the BBC and schemes at both Manchester and Liverpool universities. In addition we have secured a series of infrastructure appointments with HS2 and Battersea Power Station.

In APAC, the Group has seen a mixed performance in the first half with continued growth in China where we were pleased to secure Alibaba's 110,000m² commercial development, however, trading in Hong Kong has been disappointing. The Board continues to monitor closely our Australia business where, without a significant improvement in trading over the second half of the year, it is likely that an impairment will have to be made in the Group's results for the year ending 31 March 2015 against the carrying value of £3.0 million of goodwill.

The Middle East remains a challenging market for the Group and we remain committed to the previously announced strategy of reducing and restricting our exposure to the region.

The JV partnership in the US continues to make progress with Primark's flagship store in Boston being the most recent success.

The Group will now report net debt such that it no longer includes funds being held on behalf of clients. As a result, and accounting for the working capital requirements of the continued growth in the UK and China, net debt at 30 September 2014 is likely to be approximately £10.0 million versus a reclassified figure at 31 March 2014 of £8.1 million. Improving working capital management is the Group's key focus during the second half of the year.

The current stage of the independent investigation commissioned by the Board into the allegations made in the Wall Street Journal in 2013 is nearing completion. The Group's unaudited interim results for the six months ended 30 September 2014 will include a material charge within exceptional items reflecting the costs of the investigation to date. The Group continues to cooperate with the SFO.

The Group expects to release its interim results for the year six months ended 30 September 2014 on 2 December 2014. 

John Dodds, Chairman of Sweett Group, commented:

"Since becoming Chairman in August, I have conducted a thorough review of the Group's business, the outcome of which is set out in today's announcement. I am looking forward to taking the business forward with a greater focus on profitability and cashflow."

ENDS

For further information, call:

Sweett Group plc: +44 (0)20 7061 9000

John Dodds, Chairman

Patrick Sinclair, Chief Financial Officer

Westhouse Securities Limited: +44 (0)20 7601 6100

Tom Griffiths

Camarco: +44 (0)20 3757 4980

Billy Clegg

Georgia Mann

About Sweett Group

Sweett Group is a global provider of professional services for the construction and management of building and infrastructure projects.

We have an integrated network of 58 offices in 18 countries across five continents offering cost consulting and project management. Our service supports clients through every stage of the project life cycle based upon our international expertise and local knowledge. Our strength is our people's world-class talent and expertise through which, we have time and again delivered exceptional results. The strategy builds on these key strengths.

A modern, progressive company, Sweett Group sets itself apart through people, culture and aptitude to change. By collaborative practices and innovative thinking - supported at all levels - our clients receive an offering that is constantly evolving and improving in response to project needs.