CTO.L Regulatory News (CTO)

1 Dec 2006 11:00

Clarke(T.) PLC01 December 2006 T Clarke plc TRADING STATEMENT The Directors of T. Clarke plc, ("T. Clarke") the Electrical engineering andcontracting Group, are today updating shareholders on recent trading. The Boardhas concluded that a combination of adverse factors will mean that the resultsfor the financial year to 31 December 2006, will fall short of marketexpectations. The Company stated in its Operations Review in its Interim Results announcementmade in August that its core operations, although key to the Group's growth,were operating at only around 75% of capacity. It added that at the time, it wasreluctant to make reductions to its skilled workforce. The Group also made reference to slippage in the timing of two major projects.The Board is disappointed to report that the Group has recently experiencedfurther programme amendments to certain projects and it has therefore beennecessary to make a number of redundancies in the period since August. Turnovercontribution for these projects is now focused on 2007-2008. Furthermore, the Group has identified a number of issues in the management ofsome of its regional businesses, which has caused the Board to review itsexpectations for these businesses. Remedial action is being taken in the form ofmanagement changes, the introduction of additional reporting systems and thestrengthening of the role of the Regional Board. Profits in 2006 will also be affected by costs of £400,000 incurred in respectof an investigation by HM Revenue and Customs into the affairs of the businessof Smith Contracting Services Ltd. ("SCS") relating to the period before it wasacquired by T Clarke on 7th January 2005 and other matters concerning SCSincluding the termination of employment of Mr AJ Smith its Managing Director.Mr. Smith has appealed to the Employment Tribunal and the hearing has yet to becompleted. Looking forward, the medium term prospects for the Group remain encouraging.Work in Hand for 2007 and 2008 currently stands at around £150m and prospectsfor continuing the momentum of new business remains good, particularly in theGroup's core operations. The Directors are confident that the actions taken willenable the Group resume a more stable performance in 2007 and beyond.Accordingly, it is the Directors' intention to propose a 5% increase in thefinal dividend for 2006, which will be paid to shareholders in May 2007. -ends- Date: 1 December 2006For further information contact: T. Clarke plc cityPROFILEPat Stanborough, Chief Executive Simon CourtenayJohn Daly, Finance Director Tel: 020-7448-3244Tel: 020-7358-5000Web: www.tclarke.co.uk This information is provided by RNS The company news service from the London Stock Exchange