Driver Grp Regulatory News (DRV)

12 Jan 2006 07:01

Driver Group plc12 January 2006 DRIVER GROUP PLC ("Driver Group" or "the Group") Maiden Preliminary Results For the Year ended 30 September 2005 Driver Group provides specialist commercial and dispute resolution services to the construction industry and was admitted to AIM in October 2005. HIGHLIGHTS • Admitted to AIM in October 2005 • Record results for the Group • Turnover on continuing operations up 6% from £7.60m to £8.06m • Operating profit before tax and exceptional items increased by 28% from £1.29m to £1.65m • Earnings per share before exceptional items up by 48% to 7.4p (2004: 5.0p) • Expansion into major market of United Arab Emirates - first offices in Abu Dhabi and Dubai opened • Outlook very encouraging with major consultancy contract secured in UAE - see announcement issued today Enquiries: Driver Group plc Steve Driver, CEO T: 01706 244 172 WH Ireland David Youngman T: 0161 832 2174 Biddicks Katie Tzouliadis T: 020 7448 1000 CHAIRMAN'S STATEMENT Introduction Having joined the Board as part of the preparations for the admission of theDriver Group's share capital to trading on AIM (a market operated by the LondonStock Exchange plc), this is my first Chairman's report for the Group as well asthe Group's maiden financial statement and I am delighted to announce excellentresults. During the financial year ending 30 September 2005, Driver Group was privatelyowned, converting to PLC status in September 2005 and gaining admission to AIMon 13 October 2005. At the same time as the Group's shares were admitted to AIM, the Company raised£2.0m before expenses in an institutional Placing at 73p per share. The proceedswill be used to provide additional working capital and to fund the Group'sfurther expansion. Financial Results The performance of the Group has exceeded our expectations and has delivered anoperating profit from continuing operations before exceptional items of £1.65million and earnings per share before exceptional items of 7.4p. These representincreases respectively of 27% and 48% on the same period last year. Turnover oncontinuing operations rose by 6% to £8.1m from £7.6m last year. The exceptional items relate principally to the Group's historical practice as aprivate company of paying surplus profits as bonuses. As a result, profit onordinary activities after exceptional items and before taxation wasapproximately break-even, as anticipated in the Admission Document. Following admission to AIM, surplus profit bonuses will not be paid and theDirectors have committed to a progressive dividend policy consistent withmaintaining an appropriate level of dividend cover. Trading Overview During the year, the Group continued to focus on working with largerconstruction contractors. The Group has carried out work for six out of the 10largest construction companies in the UK by turnover according to statisticspublished in the Building Magazine in 2004. Our appointments related to majorcivil and heavy engineering projects, multi-storey buildings and Private FinanceInitiative/Design Build and Operate assignments. I am pleased to record thatover 80% of Driver Group's turnover during the year was derived from repeatbusiness and/or continuing projects, testimony to the high quality of service wedeliver to our clients. A major initiative during the year was the opening of our first offices in theUnited Arab Emirates. Supporting one of the most active construction sectors inthe world, the region offers exciting growth opportunities and today, we aredelighted to announce that we have signed a significant agreement in Abu Dhabiwith an international Engineering Consultancy to provide commercial and projectplanning services on one of the largest construction projects in the world. Thecontract is for an initial three years and will support a minimum of sixconsultants, potentially increasing to fifteen consultants over the term of theagreement. With the minimum resource level of six consultants, this projectshould make a significant contribution to securing Driver Group's forecastprofitfor its operations in the United Arab Emirates for the financial year to30 September 2006. This contract and other opportunities we have identified makethe UAE an important area for growth for us in 2006. In September 2005, the Group launched Adjudication Toolkit in which it has a 51%interest. The toolkit is an online programme aimed at enabling users to runminor or less complex disputes (where it would not be cost effective to engageexternal solicitors or consultants) to adjudication. The product is still in theearly stage of marketing. Prospects The Group's profile has increased significantly following its admission to AIMin October 2005. Our enhanced profile is already providing benefits inattracting additional clients and staff. The prospects for growth in the UK andEuropean divisions are good and, in the UAE, there are significant opportunitiesemerging, not least those associated with today's major contract announcement.The Directors believe that we are embarking upon an exciting period in theDriver Group's development and view the financial year ending 30 September 2006with confidence. Michael DavisChairman CHIEF EXECUTIVE'S REPORT The operations of the Group's principal subsidiary company, Driver ConsultLimited, are divided into four geographic regions: •Northern UK •Southern UK •Europe •UAE It is on this basis that the Group's performance has been reviewed. Northern Region The Northern Region provides its services through a network of offices inGlasgow, Teesside, Rossendale and Liverpool. The provision of commercial anddispute resolution services to major contractors during the year has includedinvolvement in several high profile building and civil engineering projects. Theoverall performance of the Northern Region was good and in line withexpectations. Southern Region The Southern Region is covered through our offices in Northampton and London.Results for this Region were very strong and substantially higher than budget.In addition to providing commercial and dispute resolution services tocontractors, we were engaged to provide expert witness services on majorinternational arbitrations on behalf of Government departments and thisaccounted for the stronger than expected performance from this Region. Over thecoming year, we have plans to strengthen the London office and open offices inthe South West to service existing contractor clients. European Region The European Region is serviced from the company's Northampton office. Thisdivision has traditionally provided seconded personnel to internationalcontractors throughout Europe however during the year, we refocused the businessonto the provision of highermargin commercial and dispute resolution services.The change in strategy has seen increased margins in the second half of thefinancial year. United Arab Emirates As planned, during the year there was significant investment in developingbusiness opportunities in this region and we opened offices in the UAE. Inestablishing our presence in the UAE, we are focusing on providing commercialand planning management services for major projects, with a view to offering ourdispute resolutions services as we become more established and as constructionprojects mature. We have announced today that we have concluded a significant agreement with aninternational Engineering Consultancy to provide commercial and planningservices on a US$14.7bn property development in Abu Dhabi. The contract is foran initial three years and we anticipate further appointments in the UAE. Giventhis major win, we expect our UAE operations to make a significant contributionto revenues in the current financial year and beyond. Steve DriverChief Executive Officer CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 30 SEPTEMBER 2005 NOTE 2005 2004 2004 Continuing Continuing Discontinued 2004 operations operations operations Total (Note 2) £ £ £ £TURNOVER 4 8,059,128 7,596,248 5,041,082 12,637,330Cost of sales (including exceptional items) 3,953,493 3,662,355 4,440,980 8,103,335 _________ _________ _________ _________ GROSS PROFIT 4,105,635 3,933,893 600,102 4,533,995Administrative expenses(including exceptional items) 4,075,662 3,563,585 504,093 4,067,678 _________ _________ _________ _________ OPERATING PROFIT BEFOREEXCEPTIONAL ITEMS 1,649,858 1,290,311 96,009 1,386,320Exceptional items 1,619,885 920,003 - 920,003 _________ _________ _________ _________ OPERATING PROFIT 29,973 370,308 96,009 466,317Profit/(loss) on sale of tangible fixed assets 3,805 (6,112) - (6,112)Profit on sale of fixed asset investments 4,615 11,577 - 11,577 _________ _________ _________ _________ 38,393 375,773 96,009 471,782 ========= ========= Interest receivable and similar income 22,812 2,923Amounts written off investments - (895)Interest payable and similar charges (61,131) (49,467) _________ _________ PROFIT ON ORDINARY ACTIVITIESBEFORE TAXATION 74 424,343Tax on profit on ordinary activities 103,047 (166,990) __________ _________ PROFIT ON ORDINARY ACTIVITIESAFTER TAXATION 103,121 257,353Minority interests - equity 9,958 - _________ _________ PROFIT FOR THE FINANCIAL YEAR 113,079 257,353Dividends 2 (195,022) - _________ _________ RETAINED (LOSS)/PROFIT FOR THE YEAR (81,943) 257,353 ========= ========= Basic earnings per sharebefore exceptional items (pence) 3 7.4 5.0 ========= ========= Basic earnings per shareafter exceptional items (pence) 0.7 1.4 ========= ========= Diluted earnings per share afterexceptional items (pence) 0.6 1.3 ========= ========= CONSOLIDATED BALANCE SHEET30 SEPTEMBER 2005 NOTE 2005 2004 £ £ £ £FIXED ASSETSTangible assets 1,734,235 1,759,251Investments - 394,446 ---------- --------- 1,734,235 2,153,697 CURRENT ASSETSDebtors 1,996,863 2,908,961Cash at bank and in hand 427,995 555,105 ---------- --------- 2,424,858 3,464,066CREDITORSAmounts falling due within one year 1,190,790 2,358,523 ---------- --------- NET CURRENT ASSETS 1,234,068 1,105,543 --------- ---------TOTAL ASSETS LESS CURRENTLIABILITIES 2,968,303 3,259,240 CREDITORSAmounts falling due after more than one year (574,293) (764,447) PROVISIONS FOR LIABILITIESAND CHARGES (4,844) (13,775) --------- ---------NET ASSETS 2,389,166 2,481,018 ========= ========= CAPITAL AND RESERVESCalled up share capital 81,863 100,000Revaluation reserve 722,954 722,954Capital redemption reserve 18,137 -Profit and loss account 1,576,121 1,658,064 --------- --------- EQUITY SHAREHOLDERS' FUNDS 5 2,399,075 2,481,018 MINORITY INTERESTS (9,909) - --------- --------- 2,389,166 2,481,018 ========= ========= CONSOLIDATED CASH FLOW STATEMENTFOR THE YEAR ENDED 30 SEPTEMBER 2005 2005 2004 £ £ £ £ Net cash inflow from operating 138,604 536,422activities Returns on investment and servicingof financeInterest received 22,812 2,923Interest paid (61,131) (49,467) -------- --------Net cash outflow from returns oninvestment and servicing of finance (38,319) (46,544) Taxation (139,973) (49,237) Capital expenditure and financialinvestmentPurchase of tangible fixed assets (62,296) (244,317)Purchase of fixed asset investments - (77,600)Sale of tangible fixed assets 9,701 -Sale of fixed asset investments 399,061 96,352 ------- -------Net cash inflow / (outflow) forcapital expenditure and financial investment 346,466 (225,565) Acquisitions and disposals Demerger of subsidiary undertaking (112,820) - --------- -------Net cash outflow from acquisitions and disposals (112,820) - --------- ---------Net cash inflow before financing 193,958 215,076 Financing New loans - 600,000Loan repayments (177,814) (130,568) --------- ---------Net cash (outflow) / inflow from financing (177,814) 469,432 --------- --------Increase in cash 16,144 684,508 ========= ======== NOTES 1. The financial information set out above does not constitute statutoryaccounts as defined in s.240 of the Companies Act 1985. The auditors have issuedan unqualified opinion on the statutory financial statements for 2005 under UKGAAP for the year ended 30 September 2005, which will be delivered to theRegistrar of Companies following the Company's Annual General Meeting. 2. Discontinued Activities On 1 October 2004 the entire share capital of the Group's investment in a whollyowned subsidiary, BWS International Limited, was distributed in specie by way ofdividend, effectively in exchange for 18.137% of the Group's issued sharecapital. The discontinued activities relate to the trading activities of BWSInternational Limited and its wholly owned subsidiary BWS International (USA)Inc. The amount of the distribution in specie has been accounted for as an amountequal to the book value of the assets transferred. In the group accounts thisamounts to £195,022, being the group's share of the subsidiary's net assets atthe date of demerger. 3. Earnings per share The calculation of earnings per share before and after exceptional items isbased on the earnings of £1,246,999 and £113,079 respectively and the basic anddiluted weighted average number of shares in issue for the period of 16,760,832and 18,667,602 respectively (2004: £901,355 and £257,353, and 18,175,758 and19,151,918). 4. Segmental analysis The table below sets out turnover for each geographic area of operation byorigin. 2005 2004 £ £United Kingdom 7,584,644 12,266,315Overseas 474,484 371,015 _________ __________ 8,059,128 12,637,330 Turnover by geographical destination is significantly different from turnover byorigin and is as follows: 2005 2004 £ £ United Kingdom 5,864,970 6,054,345Overseas 2,194,158 6,582,985 _________ __________ 8,059,128 12,637,330 5. Reconciliation of movement in shareholders' funds 2005 2004 £ £Profit for the financial year 113,079 257,353Dividends (195,022) - ------- ------- (81,943) 257,353Other recognised gains and losses relating to the year - 722,954 ------- -------Net (reduction)/addition to Shareholders' funds (81,943) 980,307Opening shareholders' funds - equity 2,481,018 1,500,711 --------- ---------Closing shareholders' funds - equity 2,399,075 2,481,018 ========= ========= 6. Consolidated cash flow statement a) Reconciliation of operating profit to net cash inflow from operatingactivities 2005 2004 £ £ Operating profit 29,973 466,317Amount written off investments - (895)Depreciation charges 81,416 67,827Increase in debtors (187,967) (570,952)Increase/(decrease) in creditors 215,182 574,125 _______ _______Net cash inflow/(outflow) fromoperating activities 138,604 536,422 b) Reconciliation of net cash flow to movement in net funds / (debt) 2005 2004 £ £ Increase in cash in the period 16,144 684,508Cash outflow (inflow) from decrease / (increase) indebt 177,814 (469,432) -------- --------Movement in net debt in the period 193,958 215,076Net debt at 1 October (568,416) (783,492)Net debt at 30 September (374,458) (568,416) 7. Copies of annual report and financial statements The Annual Report and Financial Statements will be sent to shareholders in earlyFebruary. Further copies will be available to the public, free of charge at thecompany's registered office, Driver House, 4 St Crispin Way, Haslingden,Rossendale, Lancashire, BB4 4PW. This information is provided by RNS The company news service from the London Stock Exchange