GSH.L Regulatory News (GSH)

31 Mar 2006 07:01

GSH Group PLC31 March 2006 GSH Group plc Interim Results for the 6 months ended 31 January 2006 Introduction GSH Group plc ("GSH" or "the Group"), the international provider of bespokefacilities management and energy management solutions, announces interim resultsfor the 6 months ended 31 January 2006. Operational Highlights: - Strong order book with substantial contract wins during the period and since the half year end - Acquisition of De Jongh Groep in the Netherlands - Growth in energyplus of 21% Financial Highlights: - Turnover of £63.0 million (2005: £57.6 million) - up by 10% - Profit before tax of £2.2 million (2005: £1.9 million) - up by 17% - EBITDA of £2.6 million (2005: 2.3 million) - 16% increase - Basic adjusted earnings per share of 8.0 pence (2005: 6.8 pence) - up by 18% - Adjusted diluted earnings per share of 7.7 pence (2005: 6.7 pence) - up by 15% - Interim dividend of 2.2 pence per share Bob Gilbert, Chairman of GSH said "GSH has had an excellent start to thisfinancial year. These results, our strong order book and the two acquisitionshave confirmed my conviction that the Group is a strong, robust business in agrowing market. I look forward to further good progress in the second half ofthe year". For further information, please contact: GSH Group plc Tel: 01782 200455Colin Tennent, Chief Executive OfficerDavid Simons, Chief Financial Officer Bell Pottinger Corporate & Financial Tel: 020 7861 3232Sarah LandgrebeMarion Boland CHAIRMAN'S STATEMENT Introduction I am pleased to report the Group has started the year with a strong first halfperformance, demonstrating our ability to deliver profitable organic growth fromthe continuing businesses. In addition, we have made two acquisitions, the firstin November 2005 and the second soon after the period end. Financial Review The financial results for the six months to 31 January 2006 show an increase inturnover of 10% to £63.0 million (2005: £57.6 million) with profit before tax up17% to £2.2 million (2005: £1.9 million). EBITDA margins improved to 4.3% (2005: 4.0%) and basic adjusted earnings pershare were 8.0 pence, an increase of 18% (2005: 6.8 pence). Cash reserves at the end of the period were healthy at £2.9 million (2005: £2.2million). These results have been achieved predominantly through organic growth withminimal impact in the first half from the De Jongh Groep acquisition. All areasshowed improvement. Turnover from UK was up 4%, Benelux up 47%, USA up 66% and energyplus up 21% The contracted order book for the Group at the period end was £430 million(2005: £458 million). Contract wins since the period end add a further £55million to this figure. Dividend The Board has recommended an interim dividend of 2.2 pence per share (2005:pre-listing, no interim dividend paid) which will be paid on 12 May 2006 to allshareholders on the register at close of business on 18 April 2006. Acquisitions During the period we made our first acquisition since flotation. We acquired theDe Jongh Groep, a Dutch based installation and maintenance business operatingout of the Hague. This acquisition enhances our project work capability in Benelux through itsinstallation and renovation divisions as well as providing an additionalcustomer base for maintenance work. Integration has progressed well. Since the end of the period we have also acquired a UK based building servicescontractor specialising in fabric maintenance, AF Worxgroup. Building fabric services are complementary to GSH's core activity of mechanicaland electrical maintenance and represent a sector of the market where GSH seesubstantial future growth. AF Worxgroup has a successful track record indelivering complex maintenance and project contracts for blue chip customersincluding Tesco. Operational Review We have had an outstanding start to the year in terms of new contract wins andrenewals. In the UK we have won several new significant contracts with keyclients including Iron Mountain, My Travel and Ikea (energyplus) and alsoretained the T-Mobile contract for a further 5 years. Since the period end wehave also won substantial contracts with Abbey, Tesco, Xerox and also renewedand increased the value of our contract with HBOS, which now runs for a further5 years. In addition to our recognised strength in the corporate market we have developeda strong nation-wide retail and high street presence. We are leading the marketin developing solutions for multi-site environments servicing key contractsincluding HBOS and My Travel. This delivery offering is managed separatelywithin the UK business so that synergy benefits can be derived from improvedlogistics. Utilising innovative technology for management of the workforce, weare already seeing reduced travelling time on call-outs as well as the increasedefficiency from using multi-skilled engineers. Above all, we can deliver anefficient and competitive national solution. energyplus our contract energy management solution has grown 21% in the periodwith key new contract wins including Ikea and NHBC. The introduction of Europeanenergy legislation and the soaring costs of energy are underpinning the successof this service. energyplus is increasingly becoming a core product to GSH bothin terms of new contract wins and as an additional service to existingcustomers. Our international businesses continue to perform well. In October our Beneluxoperations won a major three year hard FM contract for Schiphol airport inAmsterdam reflecting our ability to handle scale and complexity. This, togetherwith the De Jongh acquisition has created a step change in our continentalEuropean business. The position in the US is equally strong with turnoverincreasing 66% in the period and consistent contracted order book growth year onyear. Cutting edge technology remains one of the cornerstones of our success.Handheld, paperless technology is now being used across the Group. Our web basedreporting via an internet portal is now available to all our clients who use ourintegrated contract management system. The on-line statutory logbook forbuildings is also part of our web based product line and we are well prepared toprovide our existing and new clients with solutions for all their futurecompliance needs as the level of relevant legislation increases. Outlook We enter the second half of the year with a good business pipeline in all of ourmarkets. Our product offering is in demand, our management team has a strong blend ofexperience and focus and our processes are robust. We look forward to furthergood progress in the second half of the year. Bob Gilbert Chairman INDEPENDENT REVIEW REPORT BY BAKER TILLY TO GSH Group plc Introduction We have been instructed by the company to review the financial information setout on the following pages and we have read the other information in the interimstatement and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of their interim statement and for no other purpose. Wedo not, therefore, in producing this report, accept or assume responsibility forany other purpose or to any other person to whom this report is shown or intowhose hands it may come save where expressly agreed by our prior consent inwriting. Directors' responsibilities The interim statement, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the Interim Statement in accordance with the AIMMarket Rules which require that the accounting policies and presentation appliedto the interim figures must be consistent with those that will be adopted in thecompany's annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom, as if thatBulletin applied. A review consists principally of making enquiries of groupmanagement and applying analytical procedures to the financial information andunderlying financial data and based thereon, assessing whether the disclosedaccounting policies have been consistently applied unless otherwise disclosed. Areview excludes audit procedures such as tests of controls and verification ofassets, liabilities and transactions. It is substantially less in scope than anaudit and therefore provides a lower level of assurance. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 January 2006. Baker TillyChartered AccountantsFestival WayFestival ParkStoke-on-TrentStaffordshireST1 5BB 31 March 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the six months ended 31 January 2006 6 Months 6 Months 12 Months to 31 to 31 to 31 January January July 2006 2005 2005 (As (As restated) restated) £000 £000 £000 TURNOVER - CONTINUING OPERATIONS 63,044 57,562 118,555Cost of sales (47,250) (42,538) (86,466) -------- -------- -------- GROSS PROFIT 15,794 15,024 32,089Administrative expenses (13,644) (13,182) (28,853) -------- -------- -------- OPERATING PROFIT - CONTINUING OPERATIONS 2,150 1,842 3,236Other interest receivable 81 61 105Interest payable and similar charges (29) (24) (82) ---- ---- ---- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,202 1,879 3,259Taxation (775) (712) (1,441) ----- ----- ------- PROFIT ON ORDINARY ACTIVITIES AFTERTAXATION 1,427 1,167 1,818Equity minority interests - - 1 ----- ----- ----- PROFIT FOR THE PERIOD 1,427 1,167 1,819 ===== ===== ===== EARNINGS PER ORDINARY SHARE- Basic 7.3p 5.8p 9.2p ==== ==== ====- Diluted 7.2p 5.7p 8.9p ==== ==== ==== CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the six months ended 31 January 2006 6 Months 6 Months 12 Months to 31 to 31 to 31 January January July 2006 2005 2005 (As (As restated) restated) £000 £000 £000 PROFIT FOR THE FINANCIAL PERIOD 1,427 1,167 1,819Actuarial loss - (151) (302)Exchange differences arising onthe retranslation of overseasundertakings 7 65 (34)Gain on the revaluation of freehold property - - 400 ------ ----- ----- TOTAL RECOGNISED GAINS AND LOSSESRELATING TO THE PERIOD 1,434 1,081 1,883 ===== ===== Prior year adjustments (affectinghalf year ended 31 January2005) (573)Prior year adjustments (affectingperiod 1 February 2005 to31 July 2005) 1,010 ------- TOTAL GAINS AND LOSSES RECOGNISEDSINCE LAST ANNUAL REPORT 1,871 CONSOLIDATED BALANCE SHEETat 31 January 2006 31 January 2006 31 January 2005 31 July 2005 (As restated) (As restated) £000 £000 £000 £000 £000 £000 FIXED ASSETSIntangible assets 839 524 457Tangible assets 4,144 3,952 4,269Investments 43 43 43 ----- ----- ----- 5,026 4,519 4,769CURRENT ASSETSStocks 5,071 4,418 4,275Debtors 19,537 22,552 18,107Cash at bank and in hand 2,905 2,215 6,314 ------ ----- ----- 27,513 29,185 28,696 CREDITORS: Amountsfalling due within one year (28,201) (28,808) (29,248) -------- -------- -------- NET CURRENT(LIABILITIES)/ ASSETS (688) 377 (552) ----- --- ----- TOTAL ASSETS LESS CURRENT LIABILITIES 4,338 4,896 4,217 CREDITORS:Amounts falling due in more thanone year (7) (21) (65) PROVISIONS FOR LIABILITIESAND CHARGES (351) (331) (366) ----- ----- ----- NET ASSETS EXCLUDING PENSION LIABILITY 3,980 4,544 3,786 PENSION LIABILITY (822) (573) (822) ----- ----- ----- NET ASSETS INCLUDING PENSION LIABILITY 3,158 3,971 2,964 ===== ===== ===== CAPITAL AND RESERVESCalled up share capital 201 50 200Share premium account 88 2 2Capital redemption reserve 682 832 682Revaluation reserve 1,211 811 1,211Investment in own shares (1,250) - (1,470)Profit and loss account 2,226 2,276 2,330 ----- ----- ----- EQUITY SHAREHOLDERS'FUNDS 3,158 3,971 2,955Equity minority interest - - 9 ----- ----- ----- TOTAL CAPITAL EMPLOYED 3,158 3,971 2,964 ===== ===== ===== CONSOLIDATED CASH FLOW STATEMENTFor the six months ended 31 January 2006 6 Months to 6 Months to 12 Months to 31 January 2006 31 January 2005 31 July 2005 (As restated) (As restated) £000 £000 £000 £000 £000 £000 CASH FLOW FROM OPERATINGACTIVITIES 85 (1,642) 6,098 RETURNS ON INVESTMENTS ANDSERVICING OF FINANCE Interest received 81 61 104Interest paid (29) (20) (42)Interest element offinance lease rentalpayments - (1) (33) ---- ------ ------ NET CASH INFLOW FORRETURNS ON INVESTMENTS ANDSERVICING OF FINANCE 52 40 29 TAXATION (875) (157) (1,686) CAPITAL EXPENDITUREPurchase of subsidiary undertakings (816) - - Net overdraft acquired with subsidiary (339) - - Purchase of intangible fixed assets (71) (103) (113) Purchase of tangible fixed assets (213) (270) (548) Sale of tangible fixed assets 53 8 61 Purchase of minority interest shares (9) - - ------ ------ ----- NET CASH OUTFLOW FORCAPITAL EXPENDITURE (1,395) (365) (600) EQUITY DIVIDENDS PAID (1,260) (1,200) (1,200) ------- ------- ------- NET CASH (OUTFLOW)/ INFLOW BEFORE FINANCING (3,393) (3,324) 2,641 FINANCINGInvestment in own shares (77) - (1,850) Capital element of financelease rental payments (21) (7) (101) Exercising of share options 107 - 30 --- --- ---- NET CASH INFLOW/(OUTFLOW)FROM FINANCING 9 (7) (1,921) ---- ------ -------- (DECREASE)/INCREASE IN CASH IN THE PERIOD (3,384) (3,331) 720 ======= ======= ======== RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDSFor the six months ended 31 January 2006 6 Months to 6 Months to 12 Months to 31 January 2006 31 January 2005 31 July 2005 (As restated) (As restated) £000 £000 £000 PROFIT FOR THE FINANCIAL PERIOD 1,427 1,167 1,819Dividends (1,260) (1,200) (1,200) ------- ------- ------- 167 (33) 619 Other recognised gains and losses relating to the period 7 (86) 64Investment in own shares (77) - (1,850) Share options exercised 19 - 32New share capital subscribed 87 - - ------- ----- ------ NET ADDITION TO/(REDUCTION IN)SHAREHOLDERS'FUNDS 203 (119) (1,135) Opening shareholders'funds(originally £3,213,000(January 2005)£3,213,000(July 2005) before addingprior year adjustment of £877,000) 2,955 4,090 4,090 ----- ----- ----- CLOSING SHAREHOLDERS'FUNDS 3,158 3,971 2,955 ===== ===== ===== NOTES 1. Basis of accounting The interim results have been prepared using the accounting policies set out inthe Company's 2005 Report and Accounts except for the adoption of FRS17"Retirement Benefits", FRS21 "Events after the balance sheet date", FRS22"Earnings Per Share", FRS25 "Financial Instruments: Presentation and Disclosure"(presentation requirements only) and FRS28 "Corresponding Amounts". Thecomparative results have been restated, where appropriate, to reflect theadoption of these reporting standards. The interim results are unaudited and do not comprise full accounts within themeaning of Section 240 of the Companies Act 1985. The results for the year ended31 July 2005 are in abbreviated form and have been extracted from the publishedaccounts and restated where appropriate. These were audited and reported uponwithout qualification by Baker Tilly and did not contain a statement underSection 237(2) or (3) of the Companies Act 1985. 2. Dividend An interim dividend of 2.2p per ordinary share will be paid on 12 May 2006 toall shareholders on the register of members at close of business on 18 April2006. 3. Reconciliation of Operating Profit to Net Cash Flow from Operating Activities 31 January 31 January 31 July 2006 2005 2005 (As restated) (As restated) £000 £000 £000 Operating profit 2,150 1,842 3,236 Depreciation 374 340 690 Amortisation 113 101 229 Increase in stocks (321) (1,279) (1,126) Increase in debtors (620) (6,495) (1,989) (Decrease)/increase in creditors (1,596) 3,934 4,999 (Decrease)/increase in provisions (15) (85) 59 ------ ------- ----- CASH FLOW FROM OPERATING ACTIVITES 85 (1,642) 6,098 ====== ======== ====== 4. Earnings per Share The calculations of earnings per share are based on the following profits andnumber of shares: 31 January 2006 31 January 2005 31 July 2005 (As restated) (As restated) Basic Basic Diluted Basic Basic Diluted Basic Basic Diluted adjusted adjusted adjusted £000 £000 £000 £000 £000 £000 £000 £000 £000 Profit for thefinancial period 1,427 1,427 1,427 1,167 1,167 1,167 1,819 1,819 1,819 Flotation costs(net of tax) - - - - - - - 837 - Amortisation ofintangible fixedassets - 113 - - 101 - - 229 - Pension charge - - - - 98 - - 197 - ----- ---- ------ ------ ------ ------ ---- ----- ----- Adjusted profit for financial period 1,427 1,540 1,427 1,167 1,366 1,167 1,819 3,082 1,819 ===== ===== ===== ===== ===== ===== ===== ===== ===== Weighted average number of shares 31 January 31 January 31 July 2006 2005 2005 Number of (As restated) (As restated) shares Number of Number of shares shares For basic earnings per share 19,333,176 20,000,000 19,727,559Exercise of share options 598,188 531,140 629,249 ------- ------- ------- For diluted earnings per share 19,931,364 20,531,140 20,356,808 ========== ========== ========== 5. Availability of Interim Statement The Interim Statement will be posted to shareholders on 7 April 2006. Copies ofthe Interim Statement and Annual Report and Accounts will be available at theCompany's registered office: GSH House, Forge Lane, Stoke on Trent ST1 5PZ. This information is provided by RNS The company news service from the London Stock Exchange