Tclarke Regulatory News (CTO)

17 Aug 2007 07:01

Clarke(T.) PLC17 August 2007 T Clarke plc Interim Results for the six months to 30 June 2007 T CLARKE INCREASES DIVIDEND AT INTERIM STAGE T. Clarke plc, the electrical engineering and contracting company, has announcedits interim results for the six months to 30 June 2007. • Profit Before Tax £3.9m (2006: £4.0m) • Turnover £96m (2006: £100m) • Basic EPS 6.55p (2006: 6.76p) • Interim dividend up 6% to 3.9p (2006: 3.675p) • Order book increased to £205m (2006: £175m) Major completions include: - 02 Arena, Greenwich, London- Unilever Building, Blackfriars, London- Allen & Overy, Bishopsgate, London- Maidstone PPP Hospital Current projects include: - Westfield, London- 201 Bishopsgate and Broadgate Tower, London- RBS, Aldgate Union, London- ABN Amro Bank, London- HMP Lindholme- St Johns College, Cambridge Major projects won include: - Ropemaker Place, London, EC2- BP 2, Canary Wharf- Kent International Airport- MOD Tidworth Garrison- Shires, Leicester- Gloucester Quays Repeat business won with range of clients including; Credit Suisse; Bank ofAmerica; Deutsche Bank, Waitrose Stores, JD Sports, McCarthy & Stone; and GreggsBakeries. Pat Stanborough, Chief Executive commented: " Despite the recent difficulties the group has faced, the outlook isencouraging. Whilst there are challenges ahead of us, our market is growing inall sectors. We are confident that following the expected improvement in theperformance of our regional businesses, the group going forward will achievethe desired revenues and margins. " We have won a number of important new projects and our forward order book hasgrown to £205m, of which £105m is scheduled for completion this year. " -ends- Date: 17 August 2007 For further information contact: T. Clarke plc cityPROFILEPat Stanborough, Chief Executive Simon CourtenayVictoria French, Finance Director William AttwellTel: 020-7358-5000 Tel: 020-7448-3244web: www.tclarke.co.uk CHAIRMAN'S STATEMENT INTERIM RESULTS FOR THE HALF YEAR TO 30 JUNE 2007 The interim results are in line with management expectations and are made up ofan improving situation in our London operations offset by specific difficultiesat two of our regional companies. As outlined in the Operations Review, rigorousaction has been taken to address these specific problems, although the fullbenefits from this are unlikely to show through until 2008. We are encouraged by the good performances of the other regional businesses andby the uplift in activity evident in our core operations which will begin tocome through in the second half of this year and into 2008. A small decrease in overall turnover in the first half reflects the stage in ourcompletion cycle, whilst for the group as a whole net margins were broadlyunchanged from the first half of 2006 figure. Cost control and cash generation,together with the optimization of profits from our regional companies, continueto be the key objectives for the group over the next year. Our outlook for the full year is unchanged, and with the excellent prospects forconstruction activity country wide, and especially in the South-East leading upto the London Olympics in 2012, the Board is increasing the interim dividend by6.12% to 3.9p per share. At the end of July our Finance Director and Company Secretary, John Daly, leftus to pursue other interests and we wish him well for the future. In John'splace we welcome Victoria French who I am sure will make a major contribution tothe T. Clarke Group. We can look forward to building upon long term relationships with our clients,delivering successful projects and a brighter future ahead of us. R.J.Race Chairman 17th August 2007 BUSINESS REVIEW OPERATIONS REVIEW Our core operations in London and the South East are currently operating ataround 80% of capacity and we are expecting to report a turnover of £90m fromthis division for this year. We are confident that the business will continue togrow and, we are taking steps to increase our capacity in anticipation of asignificant increase in our workload. We are continuing our apprentice intakeand we expect to have over 100 apprentices in various stages of training by theyear end. The core operations are in excellent shape and we are well positioned to take onthe challenging demands of the current commercial property development boom andin the run-up to the London Olympics in 2012. Despite a small fall in revenuesin the first six months compared to the same period in 2006, a steadyimprovement in margins was achieved as a result of successful projectcompletions during the period. The forward order book stands at £115m of which£50m is scheduled for completion this year. Whilst most of our regional businesses are performing well, we are stillexperiencing difficulties in two specific businesses. Senior management changeshave taken place and we will continue to support the new team and review theperformance of these operations. We are confident that these problems will beovercome and overall our regional business revenues and margins will be muchstronger going forward. Turnover from our regional businesses for this year isexpected to be around £110m. The forward order book is £90m of which £55m isscheduled for completion this year. Completions Completions during the period under review include; 02 arena, Greenwich;Unilever Building, Blackfriars, EC4; Allen & Overy, Bishopsgate, EC2; MaidstonePPP Hospital; Huddersfield Media Centre; Liberty Village, Phase I, Lakenheath;Strodes College, Egham, Surrey; HOPPS (Home Office) Liverpool; Homerton College,Cambridge; and Garden Jubilee Hospital, Glasgow. Current Major Projects Westfield London; 201 Bishopsgate and Broadgate Tower,EC2; RBS AldgateUnion,EC3; ABN Amro Bank, EC2; HMP Lindholme; South Lynn Millenium Village;Grand Arcade, Cambridge; Victoria Building, Liverpool; St Johns College,Cambridge; and Bellsdyke Hospital, Stirlingshire. Recently Won Contracts Ropemaker Place, EC2; BP2 Canary Wharf; DLR 3 Car Upgrade; Kent InternationalAirport; Prince Henry's School, Leeds; MOD Tidworth Garrison; Shires, Leicester;Barratt Homes, Edinburgh; and Gloucester Quays. We continue to receive repeat business from; Credit Suisse; Bank of America;Deutsche Bank, Waitrose Stores, JD Sports, McCarthy & Stone; and GreggsBakeries. Outlook Whilst still challenging, our market is growing in all sectors, and there aremany opportunities ahead of us. Following the expected improvement in theperformance of our regional businesses, we are confident that the group goingforward will achieve the desired revenues and margins. The group's forward orderbook stands at £205m (2006: £175m), of which £105m is scheduled for completionthis year. Financial Review Turnover and operating profit Turnover for the half year decreased by 3.7% to £96.5m (2006: £100.2m). Turnoverin London was £40.8m (2006: £42.4m) and turnover in the regions decreased by3.5% to £55.7m (2006: £57.8m). Group operating profit decreased by 4.4% to £3.9m (2006: £4.1m) and operatingmargin was static from the same period last year at 4.1%. Administrativeexpenses decreased by 11% to £10.3m partly due to a reduction in staff costs anda reduction in one-off bad debts. Group operating profit in the core operations in London was £2.3m (2006: £2.1m)representing an 11% increase from prior year. Operating margin increased to 5.6%in London (2006: 4.9%) mainly due to favourable completions in the period,however, it is expected to reduce in the second half of the year as new projectscommence. Group operating profit in the regional operations was £1.4m (2006: £1.8m), adecrease of 23% as a result of problems experienced in two subsidiary companies.As a result, regional operating margin decreased to 2.5% (2006: 3.1%). Group operating profit from property rental was £0.2m (2006: £0.2m). Profit before tax Group profit before tax was £3.9m (2006: £4.0m) which represents a 3.6% decreasefrom prior year. Profit after tax Group profit after tax was down 3% to £2.6m (2006: £2.7m) after taxation of£1.3m (2006: £1.3m). The effective tax rate was 33% (2006: 33%). Net profit margin was static at 2.7% compared to the same period last year. Earnings per share and dividends Earnings per share decreased 0.2p or 3% to 6.55p (2006: 6.76p). However, the interim dividend will be increased by 6.12% to 3.9p per share(2006: 3.675p) as a measure of the confidence that management have in thebusiness going forward. The dividend will be paid on 28th September to thoseshareholders on the register as at 31st August. Cash flow Net cash generated from operating activities was £3m compared with net cashabsorbed of £0.5m in 2006. After the final dividend payment of £2.9m (2006:£2.8m), net capital expenditure of £0.2m (2006: £0.3m) and payments for tax andfinance costs, there was a net increase of cash and cash equivalents of £1m(2006: decrease of £2.8m). The improved cash position is mainly due to animprovement in the cash cycle in our core London operations and due to theregional companies pursuing debt collection. Pension obligations The actuarial gain on the defined benefit scheme of £3.4m (2006: £1.9m) has beenrecognised in reserves on the balance sheet and reflects an increase in thediscount rate (from 5.2% to 5.8%). As a result the pension scheme deficit aftertaxation has reduced to £2.1m (2006: £3m). Pat Stanborough Victoria FrenchChief Executive Finance Director17th August 2007 17th August 2007 CONSOLIDATED INCOME STATEMENT Unaudited Unaudited Audited 6 Months to 6 Months to 12 Months to 30 06 2007 30 06 2006 31 12 2006 £'000 £'000 £'000 Revenue 96,489 100,197 186,334Cost of Sales 82,239 84,416 159,217 -------- -------- -------- Gross Profit 14,250 15,781 27,117Administrative Expenses 10,335 11,684 20,394 -------- -------- -------- Profit from Operations 3,915 4,097 6,723Finance Cost (31) (69) (146) -------- -------- -------- Profit Before Taxation 3,884 4,028 6,577Taxation 1,267 1,329 2,063 -------- -------- -------- Profit for the period from continuing operations 2,617 2,699 4,514Earnings per share 6.55p 6.76p 11.30p ======== ======== ======== GROUP STATEMENT OF RECOGNISED INCOME & EXPENSE Actuarial gains/(losses) on pension scheme 3,394 1,893 (85) -------- -------- ------- Tax on items taken directly to equity (1,018) (568) 25 -------- -------- ------- Net income recognised directly in equity 2,376 1,325 (60) -------- -------- ------- Profit for the period 2,617 2,699 4,514 -------- -------- ------- Total recognised income & expense for the period 4,993 4,024 4,454 ======== ======== ======= CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 6 months to 6 months to 12 Months to 30 06 2007 30 06 2006 31 12 2006 £'000 £'000 £'000Non current assetsGoodwill 14,385 14,385 14,385Tangible fixed assets 7,864 8,335 7,965Deferred taxation 23 61 66 -------- -------- -------- 22,272 22,781 22,416 -------- -------- -------- Current assets Construction contracts inventories 9,843 15,373 14,371Debtors 29,500 28,836 23,025Cash and cash equivalents 6,143 2,039 5,182 -------- -------- -------- 45,486 46,248 42,578 -------- -------- -------- Total assets 67,758 69,029 64,994 ======== ======== ======== Current liabilitiesBank overdraft 3,489 3,238 2,274Corporation tax liabilities 1,256 1,427 1,769Creditors and accruals 35,835 37,154 33,437 -------- -------- -------- 40,580 41,819 37,480Net current assets 4,906 4,429 5,098 -------- -------- -------- Non current liabilitiesRetirement benefit obligation 2,088 3,004 4,441Other 254 388 294 -------- -------- -------- 2,342 3,392 4,735 -------- -------- -------- Total liabilities 42,922 45,211 42,215 -------- -------- -------- Net assets 24,836 23,818 22,779 ======== ======== ========EquityShare capital 3,995 3,995 3,995Share premium 1,234 1,234 1,234Profit and loss account 19,575 18,556 17,518Revaluation reserve 32 33 32 -------- -------- -------- Total equity 24,836 23,818 22,779 ======== ======== ======== CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited Audited 6 Months to 6 Months to 12 Months to 30 06 2007 30 06 2006 31 12 2006 £'000 £'000 £'000 Net cash from operating activities (see note 5) 3,005 (556) 5,201 ====== ====== ======Investing activitiesInterest received 58 75 114Purchase of tangible fixed assets (267) (287) (471)Receipts on disposal of fixed assets 68 12 196 ------ ------ ------Net cash used in investing activities (141) (200) (161) ====== ====== ====== Financing activitiesEquity dividends paid (2,936) (2,796) (4,264)Repayments of obligations under finance leases (182) (164) (385)Increase/(decrease) in bank overdrafts 1,215 927 (37) ------ ------ ------Net cash (used in)/from financing activities (1,903) (2,033) (4,686) ======= ======= =======Net increase/(decrease) in cash and cash equivalents 961 (2,789) 354 Cash and cash equivalents at beginning of period 5,182 4,828 4,828 ------ ------ ------Cash and cash equivalents at end of period 6,143 2,039 5,182 ======= ======= ======= CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Unaudited Unaudited Audited 6 months to 6 months to 12 Months to 30 06 2007 30 06 2006 31 12 2006 £'000 £'000 £'000 Balance at start of 22,779 22,590 22,590period Profit for period 2,617 2,699 4,513Interim dividend paid - - (1,468)Prior year final dividend paid (2,936) (2,796) (2,796)Actuarial gains/(losses)on defined benefit pension scheme 3,394 1,893 (85)Corporation tax provision on pension benefits. (1,018) (568) 25 -------- ------- -------Balance at end of period 24,836 23,818 22,779 ======== ======= ======= Notes to the interim financial statements 1. Accounting policy The financial statements have been prepared using accounting policies consistentwith those adopted for the year ended 31st December 2006. The results for thehalf year are unaudited. 2. Earnings per share Earnings per share are calculated on the basis of the weighted average of39,947,889 ordinary shares in issue (2006: 39,947,889) and profit attributableto shareholders of £2,617,000 (2006: £2,699,000). 3. Interim Dividend An interim dividend of 3.9p per share (2006: 3.675p) was approved by the boardon 16th August 2007 and has not been included as a liability as at 30 June 2007.The shares will go ex-dividend on 29th August 2007 and the dividend will be paidon 28th September 2007 to shareholders on the register as at 31st August 2007. Adividend reinvestment plan is available for shareholders. Those shareholders whohave not elected to participate in this plan, and who would like to participatewith respect to the 2007 interim dividend, may do so by contacting CapitaRegistrars on 0870 162 3131. The last day for election for the interim dividendreinvestment is 31 August 2007 and any requests should be made in good timeahead of that date. 4. Pension commitments The present value of the defined benefit pension scheme, the related past andcurrent service costs were measured using the projected unit credit method. Theamount included in the balance sheet arising from the group's obligations inrespect of its defined benefit retirement scheme is as follows: June 2007 June 2006 Dec 2006 £'000 £'000 £'000 Present value of defined benefit obligations (21,925) (21,102) (24,035) Fair values of assets 18,942 16,810 17,692 -------- -------- --------Deficit in scheme (2,983) (4,292) (6,343) -------- -------- --------Related deferred tax asset 895 1,288 1,902 -------- -------- --------Liability recognised in the balance sheet (2,088) (3,004) (4,441) -------- -------- --------The key assumptions used: Rate of increase in salaries 4.50% 4.10% 4.25%Rate of increase in pensions in payment 3.10% 2.70% 2.90%Discount rate 5.80% 5.20% 5.10%Inflation assumption 3.50% 3.10% 3.25%Expected return on scheme assets 7.40% 6.80% 6.70% -------- -------- -------- 5. Reconciliation of Operating Profit to Net Cash from Operating Activities: Unaudited Unaudited Audited 6 Months 6 Months Year Ended Ended Ended 30 06 2007 30 06 2006 31 12 2006 £'000 £'000 £'000 Profit from operations 3,915 4,097 6,723Depreciation charges 450 478 939Increase / (decrease) in provisions 5 45 (5)Loss / (profit) on sale of fixed assets 33 4 (5) ------- ------- -------Operating cash flow before 4,403 4,624 7,652movements in working capitalIncrease in debtors (6,475) (6,882) (1,071)Decrease in work in progress 4,528 2,342 3,344Increase / (decrease) in creditors 2,398 1,669 (1,999) Cash generated by operations 4,854 1,753 7,926Corporation tax paid (1,766) (2,195) (2,527)Interest paid (83) (114) (198) ------- ------- -------Net cash from operating activities 3,005 (556) 5,201 ======= ======= ======= 6. The interim report will be circulated to members on 22 August 2007, fromwhich date copies will be available at or on application to the CompanySecretary at the Company's registered office: T. Clarke Plc, Stanhope House,116-118 Walworth Road, London, SE17 1JY, or via the Company's website,www.tclarke.co.uk or telephone: 020-7358-5000. This information is provided by RNS The company news service from the London Stock Exchange