CSG.L Regulatory News (CSG)

15 April 2014

Sweett Group plc

("Sweett Group" or "the Group")

Trading Update

Sweett Group (AIM CSG.L), the international property and infrastructure consultancy, provides the following trading update following the completion of its financial year ended 31 March 2014.

The Group traded well through the fourth quarter of its financial year and it expects to report results for the year ended 31 March 2014 slightly ahead of market expectations.

The Group has now moved into the third year of the three year strategic plan. This strategic plan has been rolled forward for a further year to respond to changes in the Group's market environment. Notably the Group is experiencing a recovery in its traditional markets in the UK, in addition to the success achieved from the investments made to access the energy and infrastructure markets. The cornerstones of the Group's strategy continue to be controlled growth, staff retention and margin improvement. Overseas, the Group will continue to target growth through developing its network and revenues in Asia Pacific and India, with an increased focus on greater working capital efficiency. With regard to the Middle East, the Group will maintain its policy to be highly selective in its end markets and limit revenues in this region to no more than 10% of Group income. The Group's efforts to enter the US market with its JV partner continue to develop steadily. The Group continues to invest in its staff, who now number over 1,500 (up 9.5% on the previous year), and is continuing to make senior appointments in all regions.

At the year end, the Group's order book had risen to £105m, an increase of £6m during the year. This improvement is after a reduction of approximately 5% over the period as a result of foreign exchange impact.

Net debt at 31 March 2014 was approximately £6.2m, which compares to £7.1m at the end of the previous year. The Group will continue to focus on further reductions in net debt primarily through improvements in working capital management.

The preliminary results for the year ended 31 March 2014 are expected to include material charges for exceptional administrative expenses, including the costs associated with investigating the Wall Street Journal allegations and restructuring costs incurred largely in Australia. The Group will also be taking a full year charge for the Performance Share Plan (PSP) for the first time of approximately £0.6m. Due to the unpredictable nature of this charge, this will be disclosed separately going forward. Other material non-recurring items included within the preliminary results will be the profit on the unwinding of the Australian dollar derivative contract (£1.0m) and the profit on the financial close of the Leeds Social Housing project (£1.1m).

As previously announced, Mike Henderson will be retiring from the Board this year. The search process for his successor is underway and a further announcement will be made in due course. Having regard to a suitable handover period it is likely that Mike Henderson's effective retirement date will be later than previously indicated.

The Group's preliminary results for the year ended 31 March 2014 are scheduled to be announced in early July. 

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About Sweett Group

Sweett Group plc is a global business with expertise in property and infrastructure professional services. Our services include programme and project management, cost management, advisory and PPP/PFI investment.

We aim to forge long term, successful relationships with all stakeholders in the property and infrastructure industry. "Global knowhow, local delivery" is the essence of our business and our reach enables us to put global best practice to use in the local markets we serve.