Tclarke Regulatory News (CTO)

28 Mar 2008 07:01

Clarke(T.) PLC28 March 2008 Preliminary Results for the year ended 31 December 2007 T CLARKE LOOKS TO THE FUTURE WITH CONFIDENCE AS OUTLOOK REMAINS POSITIVE T. Clarke plc, the electrical engineering and contracting company, has announcedits preliminary results for the year to 31 December 2007. • Profit Before Tax up 24.2% to £8.2m (2006: £6.6m) • Group Turnover up 4% to £193.8m (2006: £186.3m) • Basic EPS up 26.8% to 14.33p (2006: 11.30p) • Final Dividend up 10.2% to 8.10p (2006: 7.35p) • Total Dividend for the year up 8.8% to 12p (2006: 11.025p) Contracts completed during the year included: 02 Arena; RBS, Aldgate Union; LULsidings, White City; Golden Jubilee National Hospital, Glasgow; Marks andSpencer, Cheshunt; Bishop Auckland College; Huddersfield Media Centre; andWaitrose stores at Rickmansworth, Maidstone and Sandhurst. Contracts in progress during the year included: Westfield Shopping Development,White City; BP2 Tower, Canary Wharf; Grand Arcade Shopping Centre, Cambridge;Excelsior Academy, Newcastle and Kent International Airport. New contracts secured include: Ropemaker Place, London; Central St Giles, London; Gloucester Quays; CSA HQ Falkirk; Aspire Defence, Tidworth Garrison; Medway Council Offices, Chatham and Waitrose stores at Kenilworth and St. Neots. Pat Stanborough, Chief Executive commented: " The Group is in good shape. We have a broad spread of businesses across the UKwhich are trading well. Despite the wider turbulence in the financial markets,we remain encouraged about the strength of the order book and the opportunitiesfor future work. We can see many opportunities and as the Olympic Gamesdevelopment programme accelerates, we remain confident that this will lead tofurther projects. Additionally, as we build the scale of our regionaloperations, the group is benefiting from having a broader spread of ouractivities by both sector and location. This is a positive feature as we are notover reliant on any one client or particular sector. " The trading result for 2007 is encouraging and, once again, we have increasedthe dividend. We have taken action to turn round the small number ofunderperforming businesses in the Group. We remain the market leader in oursector and looking forward, the prospects for the whole Group remainencouraging." -ends- Date: 28 March 2008 For further information contact: T. Clarke plc City ProfilePat Stanborough, Chief Executive Simon CourtenayVictoria French, Finance Director Tel: 020-7448-3244Tel: 020-7358-5000web: www.tclarke.co.uk PRELIMINARY STATEMENT The group made strong progress in 2007. The core London operations performedvery well and the improvements achieved in certain regional companies wereparticularly pleasing. In light of this, we are able to report an advance of 4%in group turnover to £193.8m (2006: £186.3m) and a 24.2% growth in pre-taxprofits to £8.2m (2006: £6.6m). Earnings per share increased by 26.8% to 14.33p(2006: 11.30p). In view of the strong results and the board's confidence, we are proposing afinal dividend of 8.10p per ordinary share making a total for the year of 12p.This represents an increase of 8.8% over the previous year. The increase individend is in line with our positive outlook. The underlying organic growth confirms the group is in excellent shape. We areexperiencing strong demand for our services and our reputation remains firstclass. There are a range of very good opportunities for future work with demandfrom a variety of sectors, including the Olympic development programme that isgathering momentum. We believe that the future prospects for the group remainstrong in spite of the current state of the UK financial markets. MARKET DEVELOPMENT Despite the recent banking credit crunch, we are not seeing any immediateslowdown in demand for high density office space in the City of London andCanary Wharf. We are reliably informed from our industry contacts and the majordevelopers that the new buildings, with which we are involved, either incontract or early discussions, are fully funded and committed for development.Many of the financial institutions continue to be busy in upgrading tradingspace, enhancing their data centre capabilities (throughout the UK), andupdating the resilience of their electrical networks, all of which are importantparts of our London operations. There has been some slowing in new buildresidential homes, particularly in Scotland, however our London and regionalbusinesses are still experiencing strong demand in the retail, leisure andeducational facilities sectors. We are also in early discussions with regard toprojects associated with the 2012 Olympics and other directly related work. OPERATIONAL REVIEW Although operating at 80% of capacity, due in the main to the slippage onthe White City Shopping Centre development, our London operations contributed a very strong performance as a result of successful completions and a better quality order book. In the regions most companies performed well. The problems in two regions (Preston and King's Lynn), which we referred to at the interim stage, have since been addressed by management changes, the strengthening of reporting procedures and controls and the close supervision of specific contracts. The board is confident that all regions will show positive results going forward. BOARD CHANGES During 2007, Mike Crowder was appointed as an Executive Director on 1st January2007, John Daly stood down from the board on 31st July 2007 and Victoria Frenchwas appointed as Finance Director and Company Secretary on 1st August 2007. Bob Campbell, formerly Managing Director of Waterman Group Plc (a leading quotedengineering consultancy), was appointed as an additional IndependentNon-Executive Director on 1st January 2008. Len Arnold, having served a term of10 years as an Independent Non-Executive Director, will stand down from theboard on 31st July 2008. It is the board's intention to appoint an additionalIndependent Non-Executive Director during this year. Pat Stanborough has previously announced his intention to retire from the board.It is now his intention to retire at the end of 2009. The board is in theprocess of considering succession plans and is currently of the opinion that anappointment from within the company is most likely to best suit shareholders'interests, as it will ensure a smooth handover. A further announcement will bemade in due course. It is not currently the board's intention to appoint anotherexecutive director upon Pat Stanborough's retirement. SUMMARY 2007 was a year of good progress. Our core London operations turned in anexcellent performance with several successful completions and a better qualityof business during the year. The underperforming businesses in 2006 (Derby andScotland) were successfully 'turned around' and both contributed good results.The legacy issues and problem contracts in Preston and King's Lynn, referred towhen we announced our interim results, have been addressed and we are confidentthat these businesses will show steady improvement going forward. LONDON OPERATIONS Revenue £77.2m (2006: £80.4m)Profit from operations £5.15m (2006: £3.7m)Operating Margin % 6.7% (2006: 4.6%)Order Book as at £105m (2006: £110m)31.12.07 Completions during the year included: 02 Arena; RBS, Aldgate Union; LUL sidings, White City Current projects include: Westfield Shopping Development, White City; BP2 Tower, Canary Wharf Recently won contracts include: Ropemaker Place, London; Central St Giles, London UK REGIONAL BUSINESSES Revenue £116.6m (2006: £105.9m)Profit from operations £2.5m (2006: £2.5m)Operating Margin % 2.1% (2006: 2.4%)Order Book as at £110m (2006: £100m)31.12.07 Completions during the year included: Golden Jubilee National Hospital, Glasgow; Marks and Spencer, Cheshunt; BishopAuckland College; Huddersfield Media Centre; and Waitrose stores atRickmansworth, Maidstone and Sandhurst. Current projects include: Grand Arcade Shopping Centre, Cambridge; Excelsior Academy, Newcastle and KentInternational Airport. Recently won contracts include: Gloucester Quays; CSA HQ Falkirk; Aspire Defence, Tidworth Garrison; MedwayCouncil Offices, Chatham and Waitrose stores at Kenilworth and St. Neots. PROPERTIES Rental Income £0.61m (2006: £0.66m)Profit from operations £0.46m (2006: £0.51m)Freehold Property (Book Values) £5.7m (2006: £5.8m) All properties are currently leased to group companies. FINANCIAL REVIEW Revenue and Operating Profit The Group's revenue increased in 2007 by 4% to £193.8m (2006: £186.3m). Turnoverin the London business decreased to £77.2m (2006: £80.4m) as a result of someslippage on major projects, but revenue in the UK regional businesses increasedto £116.6m (2006: £105.9m). Group operating profit increased by 20.8% to £8.1m (2006: £6.7m) and operatingmargin increased to 4.2% from 3.6% in 2006. The London business achieved a 6.7%operating margin (2006: 4.6%) and showed a 39% increase in operating profit to£5.2m (2006: £3.7m) due to favourable final account completions and animprovement in margins. Regional operating profit was flat at £2.5m (2006:£2.5m) due to the problems flagged at the half year in two regional companies(Anglia Electrical Services Limited and J.J. Cross Limited). As a result,regional operating margins decreased slightly from 2.4% to 2.1% in 2007 andmanagement changes and closer monitoring of specific projects were put in placeto address the problems. Group administrative expenses were broadly staticcompared with 2006. Profit Before and After Tax Group profit before tax was £8.2m (2006: £6.6m), a 24.2% increase from prioryear. Group profit after tax increased £1.2m (26.8%) to £5.7m (2006: £4.5m)after taxation of £2.4m (2006: £2.1m). The effective tax rate was 30% (2006:31%). Net profit margin was 2.95% in 2007 compared with 2.42% in the prior year. Earnings per Share and Dividends Earnings per share increased 3.03p (26.8%) to 14.33 pence per share (2006:11.30p) in 2007. The board has taken into consideration the increased earningsand improved cash position of the group and proposes a final dividend of 8.10p(2006: 7.35p). This brings the total dividend in 2007 to 12p (2006: 11.025p), an8.84% increase from 2006. The dividend per share is covered 1.2 times byearnings per share (2006: 1 times). The final dividend will be paid, subject toshareholder approval, on 9th May 2008 in respect of shareholders on the registeras at 11th April 2008. Further information regarding a dividend reinvestmentplan (DRIP) which is available to shareholders is included in Note 5. Cash flow Cash generation is improved, with net cash from operating activities generatedduring the year increasing £5.8m to £11m for the year ended 31st December 2007.Cash and cash equivalents as at 31st December 2007 were £9.0m compared with £2.9m net of overdrafts as at 31st December 2006. Equity and Capital Structure Equity was £26.2m (2006: £22.8m) with £2.2m of the £3.4m increase in total equity as at 31st December 2007 due to the actuarial gain on the defined benefitpension scheme, net of deferred tax. The number of shares in issue at 31stDecember 2007 was 39,947,889 (2006: 39,947,889). Consolidated income statementfor the year ended 31st December 2007 2007 2006 £000 £000--------------------------------------------------------------------------Revenue 193,845 186,334Cost of sales (165,326) (159,217)--------------------------------------------------------------------------Gross profit 28,519 27,117Other operating income 90 17Administrative expenses (20,493) (20,411)--------------------------------------------------------------------------Profit from operations 8,116 6,723Investment income 266 114Finance costs (216) (261)--------------------------------------------------------------------------Profit before taxation 8,166 6,576--------------------------------------------------------------------------Taxation (2,441) (2,063)--------------------------------------------------------------------------Profit for the period from continuing operations 5,725 4,513--------------------------------------------------------------------------Earnings per share 14.33 pence 11.30 pence--------------------------------------------------------------------------All the revenue & profit arose from continuing operations. Group statement of recognised income & expensefor the year ended 31st December 2007 2007 2006 £000 £000--------------------------------------------------------------------------Actuarial gains/ (losses) on definedbenefit pension scheme 3,173 (85)--------------------------------------------------------------------------Tax on items taken directly to equity (1,006) 25--------------------------------------------------------------------------Net income/ (expense) recognised directly in equity 2,167 (60)--------------------------------------------------------------------------Profit for the period 5,725 4,513--------------------------------------------------------------------------Total recognised income & expenses for the period 7,892 4,453-------------------------------------------------------------------------- Consolidated balance sheetat 31st December 2007 2007 2006 £000 £000--------------------------------------------------------------------------Non current assets Goodwill 14,385 14,385Tangible fixed assets 7,768 7,965Deferred taxation 88 66-------------------------------------------------------------------------- 22,241 22,416--------------------------------------------------------------------------Current assets Inventories 287 370Construction contracts 11,096 14,001Debtors 25,072 23,025Cash and cash equivalents 10,762 5,182-------------------------------------------------------------------------- 47,217 42,578--------------------------------------------------------------------------Total assets 69,458 64,994--------------------------------------------------------------------------Current liabilities--------------------------------------------------------------------------Bank overdraft and loans 1,811 2,274Creditors and accruals 36,934 33,127Corporation tax liabilities 1,660 1,768Obligations under finance leases 259 311-------------------------------------------------------------------------- 40,664 37,480--------------------------------------------------------------------------Net current assets 6,553 5,098--------------------------------------------------------------------------Non current liabilities Retirement benefit obligation 2,395 4,441Deferred taxation - 74Obligations under finance leases 222 220-------------------------------------------------------------------------- 2,617 4,735--------------------------------------------------------------------------Total liabilities 43,281 42,215--------------------------------------------------------------------------Net assets 26,177 22,779--------------------------------------------------------------------------Equity Share capital 3,995 3,995Share premium 1,234 1,234Revaluation reserve - 32Profit and loss account 20,948 17,518--------------------------------------------------------------------------Total equity 26,177 22,779-------------------------------------------------------------------------- Consolidated cash flow statementfor the year ended 31st December 2007 2007 2006 £000 £000--------------------------------------------------------------------------Net cash from operating activities 10,998 5,201--------------------------------------------------------------------------Investing activities Interest received 266 115Purchase of tangible fixed assets (595) (471)Receipts on disposal of fixed assets 122 195--------------------------------------------------------------------------Net cash used in investing activities (207) (161)--------------------------------------------------------------------------Financing activities Equity dividends paid (4,494) (4,264)Repayments of obligations under finance leases (254) (385)--------------------------------------------------------------------------Net cash used in financing activities (4,748) (4,649)--------------------------------------------------------------------------Net increase in cash and cash equivalents 6,043 391Cash and cash equivalents at beginning of period 2,908 2,517--------------------------------------------------------------------------Cash and cash equivalents at end of period 8,951 2,908--------------------------------------------------------------------------Cash and cash equivalents comprise: Cash and cash equivalents 10,762 5,182Bank overdrafts (1,811) (2,274) -------------------------------------------------------------------------- 8,951 2,908-------------------------------------------------------------------------- Consolidated statement of changes in equityfor the year ended 31st December 2007 2007 2006 £000 £000--------------------------------------------------------------------------Balance at start of period 22,779 22,590Profit for period 5,725 4,513Interim dividend paid (1,558) (1,468)Prior year final dividend paid (2,936) (2,796)Actuarial gain / (loss) on defined benefit pension scheme 3,173 (85) Corporation tax provision on pension benefits (888) 25Effect of change in tax rate on deferred tax recognised through equity (118) ---------------------------------------------------------------------------Balance at end of period 26,177 22,779-------------------------------------------------------------------------- Notes :- 1. The earnings per share figure represents the profit for the year on ordinaryactivities after taxation divided by the number of ordinary shares in issue. Thenumbers of ordinary shares, being a weighted average, for the purpose of thiscalculation, is 39,947,889 (2006: 39,947,889). 2. The figures for the year ended 31 December 2007 have been extracted from theunaudited financial statements of T. Clarke plc for the year ended 31st December2007 which will be delivered to the Registrar of Companies in due course. Theauditors expect to give an unqualified opinion on the financial statements of T.Clarke plc for the year ended 31 December 2007. The figures have been preparedand compiled in accordance with International Financial Reporting Standards. Thecomparative figures for the year ended 31 December 2006 have been taken from,but do not constitute, the group's statutory accounts for the year. Thosestatutory accounts have been reported on by the group's auditors and have beendelivered to the Registrar of Companies. The report of the auditors wasunqualified and did not contain a statement under section 237 (2) or (3) of theCompanies Act 1985. 3. Copies of the annual report and accounts will be posted to shareholdersshortly. Further copies can be obtained from the Company's registered office:Stanhope House, 116-118 Walworth Road, London, SE17 1JY. 4. The Company's Annual General Meeting will be held at Savoy Place, 2Savoy Place, London WC2R 0BL on Friday 2nd May 2008 at 12 noon. 5. Subject to the approval of shareholders the final dividend of 8.10pence per share will be paid on 9th May 2008. The shares will go ex-dividend on9th April 2008. The records will close on 11th April 2008. A dividendreinvestment plan is available to shareholders. Those shareholders who have notelected to participate in the plan, and who would like to do so in respect ofthe 2007 final payment, may do so by contacting Capita Registrars on 0875 1623151 (calls cost 10 p per minute plus network charges). The last day for thefinal dividend reinvestment election is 14th April 2008 and any requests shouldbe made in good time ahead of that date. This information is provided by RNS The company news service from the London Stock Exchange