30 Apr 2009 09:03
30th April 2009
GSH Group PLC
GSH Group plc
Interim Results for the six months ended 31 January 2009
GSH Group plc (AIM: GSH) ("GSH" or "the Group"), the international provider of bespoke facilities management and energy management solutions, announces interim results for the six months ended 31 January 2009.
Financial Highlights:
Turnover increased to £123.3 million (2008: £88.3 million)
Underlying profit of £4.0 million (£4.6 million before change of accounting policy)* (2008: £4.0 million)
Basic adjusted earnings per share were 13.0 pence (17.1 pence before change of accounting policy)* (2008:12.9 pence)
Cash reserves at the end of the period of £15.2 million (2008: £8.8 million)
Order book at period end of £714 million (2008: £609 million)
The board does not recommend the payment of an interim dividend (2008: 2.9 pence)
The Board intends to post a circular relating to the proposed Tender Offer and De-Listing, as requisitioned by the major shareholder, Mr Scarr-Hall, by 14 May 2009 on the terms set out in the announcement on 19 March 2009.
* these numbers are stated before adjustment for the change of accounting policy in respect of revenue and the associated profit recognised on energyplus projects as set out in the announcement on 25 February 2009.
Interim Non-Executive Chairman Rob Painting said:
"During the period the performance of our core facilities management and energy businesses in the UK and Continental Europe was in line with our revised expectations and since the period end the demand for these services has remained strong. Our balance sheet remains strong and we are well placed to cope with the current global uncertainties. We expect to continue to out-perform our competitors over the medium to long term and continue to focus on cash generation. We will continue to focus on what we do best and to provide market leading customer service and the Board looks forward to the future with confidence."
For further information, please contact:
GSH Group plc 01782 200455
Rob Painting, Interim Non-Executive Chairman
Edward Chandler, Group Finance Director
Bell Pottinger Corporate & Financial 020 7861 3932
Ann-marie Wilkinson
Nick Lambert
KBC Peel Hunt 020 7418 8912
Julian Blunt
Daniel Harris
Chairman's Statement
I am pleased to present our interim results for the six months ended 31st January 2009.
Financial Review
Revenue increased to £123.3 million (2008: £88.3 million) with underlying profit before tax of £4.0 million (2008: £4.0million).
Basic adjusted earning per share was 13.0 pence, (2008: 12.9 pence). Diluted adjusted earnings per share were 12.9 pence (2008: 12.6 pence).
Cash reserves at the end of the period were £15.2 million (2008: £8.8million)
The contracted order book for the Group remains healthy and at the period end was £714 million (2008: £609 million).
Dividend
The board does not recommend that an interim dividend is paid.
Operational Review
We continue to invest in both infrastructure and technology to ensure we are constantly ahead in the marketplace. Our UK and Eire and Continental Europe operations are well positioned to support future opportunities. The US business has experienced challenging trading conditions in the period, however, the Group is committed to supporting on-going opportunities in this marketplace.
Outlook
Our core maintenance and energy businesses in the UK and Continental Europe remain strong.
The Board has taken the decision to re-structure a number of divisions created following acquisitions made by the Group in previous financial periods. This will result in a one-off exceptional charge of c. £6.4m in the second half of the year relating to the goodwill arising at the time of acquisition. In addition to the goodwill write-off the Board anticipates that there will be one-off costs of c. £1.5m.
Our balance sheet remains strong and we are well placed to cope with the current global uncertainties. We expect to continue to out-perform our competitors over the medium to long term and continue to focus on cash generation.
We will continue to focus on what we do best and to provide market leading customer service and the Board looks forward to the future with confidence.
Rob Painting
Interim Non-Executive Chairman
30 April 2009
CONSOLIDATED INCOME STATEMENT
For the six month period ended 31 January 2009
| 6 months to 31 January 2009 £000 | 6 months to 31 January 2008 £000 | 12 months to 31 July 2008 £000 | |
| REVENUE - CONTINUING OPERATIONS | 123,250 | 88,285 | 200,434 |
| Direct costs | (97,746) | (67,653) | (153,858) |
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| GROSS PROFIT | 25,504 | 20,632 | 46,576 |
| Administrative expenses | (21,322) | (16,666) | (35,301) |
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| PROFIT FROM OPERATIONS - CONTINUING OPERATIONS | 4,182 | 3,966 | 11,275 |
| Finance income | 174 | 198 | 55 |
| Finance costs | (309) | (178) | (186) |
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| UNDERLYING PROFIT | 4,047 | 3,986 | 11,144 |
| Pension gain | - | - | - |
| Share based payment charge | (266) | (498) | (851) |
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| PROFIT BEFORE TAXATION | 3,781 | 3,488 | 10,293 |
| Tax expense | (1,246) | (1,207) | (3,263) |
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| PROFIT FOR THE FINANCIAL PERIOD | 2,535 | 2,281 | 7,030 |
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| PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | 2,535 | 2,281 | 7,030 |
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| EARNINGS PER ORDINARY SHARE | |||
| - Basic | 11.8p | 10.6p | 32.6p |
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| - Diluted | 11.7p | 10.3p | 31.9p |
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CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the six month period ended 31 January 2009
| | 6 months to 31 January 2009 £000 | 6 months to 31 January 2008 £000 | 12 months to 31 July 2008 £000 |
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| PROFIT FOR THE FINANCIAL PERIOD | 2,535 | 2,281 | 7,030 |
| Actuarial gain on retirement benefit obligations | - | - | (268) |
| Deferred tax on actuarial gain | - | - | 75 |
| Deferred tax on share awards | - | (132) | (36) |
| Exchange differences on the retranslation of overseas undertakings | 60 | 239 | 479 |
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| TOTAL RECOGNISED INCOME AND EXPENSE FOR THE PERIOD | 2,595 | 2,388 | 7,280 |
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| ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | 2,595 | 2,388 | 7,280 |
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CONSOLIDATED BALANCE SHEET
at 31 January 2009
| | 31 January 2009 | 31 January 2008 | 31 July 2008 | |||
| | £000 | £000 | £000 | £000 | £000 | £000 |
| ASSETS | | | | | | |
| NON CURRENT ASSETS | | | | | | |
| Intangible assets | 9,206 | | 7,115 | | 8,662 | |
| Property, plant and equipment | 7,583 | | 5,576 | | 7,053 | |
| Investments | 46 | | 44 | | 44 | |
| Deferred taxation | 231 | | 286 | | 226 | |
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| TOTAL NON CURRENT ASSETS | | 17,066 | | 13,021 | | 15,985 |
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| CURRENT ASSETS | | | | | | |
| Inventories | 7,239 | | 4,463 | | 4,977 | |
| Trade and other receivables | 50,590 | | 35,973 | | 45,082 | |
| Short term investments | 912 | | 494 | | 588 | |
| Cash and cash equivalents | 15,238 | | 8,800 | | 15,022 | |
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| TOTAL CURRENT ASSETS | | 73,979 | | 49,730 | | 65,669 |
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| TOTAL ASSETS | | 91,045 | | 62,751 | | 81,654 |
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| LIABILITIES | | | | | | |
| CURRENT LIABILITIES | | | | | | |
| Trade and other payables | (65,449) | | (42,417) | | (56,835) | |
| Financial liabilities | - | | (50) | | - | |
| Current taxation | (1,271) | | (1,537) | | (1,702) | |
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| TOTAL CURRENT LIABILITIES | | (66,720) | | (44,004) | | (58,537) |
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| NON CURRENT LIABILITIES | | | | | | |
| Financial liabilities | - | | (52) | | - | |
| Provisions | (372) | | (720) | | (385) | |
| Retirement benefit obligations | (475) | | (272) | | (453) | |
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| TOTAL NON CURRENT LIABILITIES | | (847) | | (1,044) | | (838) |
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| TOTAL LIABILITIES | | (67,567) | | (45,048) | | (59,375) |
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| NET ASSETS | | 23,478 | | 17,703 | | 22,279 |
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| EQUITY | | | | | | |
| Share capital | | 216 | | 216 | | 216 |
| Share Premium Account | | 5,364 | | 5,364 | | 5,364 |
| Capital redemption reserve | | 682 | | 682 | | 682 |
| Investment in own shares | | (1,848) | | (1,790) | | (1,880) |
| Share based payment reserve | | 1,380 | | 657 | | 1,178 |
| Translation reserve | | 697 | | 397 | | 637 |
| Retained earnings | | 16,987 | | 12,177 | | 16,082 |
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| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | | 23,478 | | 17,703 | | 22,279 |
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CONSOLIDATED CASH FLOW STATEMENT
For the six month period ended 31 January 2009
| | 6 months to 31 January 2009 | 6 months to 31 January 2008 | 12 months to 31 July 2008 | |||
| | £000 | £000 | £000 | £000 | £000 | £000 |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | |
| Profit before taxation | 3,781 | | 3,488 | | 10,293 | |
| Adjustments for: | | | | | | |
| Depreciation | 569 | | 312 | | 740 | |
| Amortisation of intangibles | 64 | | 56 | | 121 | |
| Profit on sale of property, plant and equipment | - | | - | | (22) | |
| Share based payment charge | 266 | | 498 | | 851 | |
| Finance income | (174) | | (198) | | (55) | |
| Finance costs | 309 | | 178 | | 186 | |
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| CASH FLOWS FROM OPERATIONS BEFORE CHANGES IN WORKING CAPITAL | | 4,815 | | 4,334 | | 12,114 |
| Changes in working capital: | | | | | | |
| Increase in inventories | | (2,262) | | (815) | | (1,650) |
| Increase in trade and other receivables | | (10,466) | | (4,576) | | (10,044) |
| Increase in trade and other payables | | 12,787 | | 2,548 | | 14,276 |
| Increase/(decrease) in provisions | | 4 | | (156) | | (543) |
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| CASH GENERATED FROM OPERATIONS | | 4,878 | | 1,335 | | 14,153 |
| Finance costs | | (309) | | (178) | | (186) |
| Income tax paid | | (1,686) | | (1,040) | | (2,739) |
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| NET CASH GENERATED FROM OPERATING ACTIVITIES | | 2,883 | | 117 | | 11,228 |
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| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | |
| Finance income received | 174 | | 198 | | 55 | |
| Purchase of intangible assets | (13) | | (44) | | (144) | |
| Purchase of property, plant and equipment | (1,000) | | (960) | | (2,764) | |
| Sale of property, plant and equipment | 45 | | 7 | | 130 | |
| Deferred consideration paid | - | | (395) | | (395) | |
| Purchase of subsidiary undertakings | - | | - | | (1,604) | |
| Cash acquired with subsidiary undertakings | - | | - | | 921 | |
| Payments for short term performance bonds and asset funding | (884) | | (724) | | (2,437) | |
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| NET CASH USED IN INVESTING ACTIVITIES | | (1,678) | | (1,918) | | (6,238) |
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| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | |
| Finance lease rental payments | - | | (9) | | - | |
| Equity dividends paid | (1,636) | | (1,337) | | (1,963) | |
| Receipts from exercised share options | - | | 2 | | 1 | |
| Payments to acquire own shares | (50) | | (148) | | (238) | |
| Sale of treasury shares | 7 | | 8 | | 8 | |
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| NET CASH USED IN FINANCING ACTIVITIES | | (1,679) | | (1,484) | | (2,192) |
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| NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | | (474) | | (3,285) | | 2,798 |
| Cash and cash equivalents at start of period | | 15,022 | | 11,890 | | 11,890 |
| Effect of exchange rates on cash and cash equivalents | | 690 | | 195 | | 334 |
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| CASH AND CASH EQUIVALENTS AT END OF PERIOD | | 15,238 | | 8,800 | | 15,022 |
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NOTES TO THE INTERIM REPORT
For the six month period ended 31 January 2009
| REVENUE | 6 months to 31 January 2009 £000 | 6 months to 31 January 2008 £000 | 12 months to 31 July 2008 £000 |
| Facilities management | 77,853 | 63,813 | 140,819 |
| Projects | 11,027 | 8,815 | 14,566 |
| Energyplus | 34,370 | 15,657 | 45,049 |
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| 123,250 | 88,285 | 200,434 | |
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| CHANGES IN SHAREHOLDERS’ EQUITY | ||||||||
| | Share capital £000 | Share premium account £000 | Capital re-demption reserve £000 | Invest-ment in own shares £000 | Share based payment reserve £000 | Trans-lation reserve £000 | Retained earnings £000 | Total £000 |
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| At 31 July 2007 | 216 | 5,364 | 682 | (86) | 363 | 158 | 11,224 | 17,921 |
| Total recognised income and expense | - | - | - | - | (132) | 239 | 2,281 | 2,388 |
| Dividends | - | - | - | - | - | - | (1,314) | (1,314) |
| Reclassification from net assets | - | - | - | (1,730) | - | - | - | (1,730) |
| Investment in own shares | - | - | - | 10 | - | - | - | 10 |
| Reserve transfer | - | - | - | 16 | - | - | (16) | - |
| Expense in relation to share-base payments | - | - | - | - | 426 | - | 2 | 428 |
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| At 31 January 2008 | 216 | 5,364 | 682 | (1,790) | 657 | 397 | 12,177 | 17,703 |
| Total recognised income and expense | - | - | - | - | 96 | 240 | 4,556 | 4,892 |
| Dividends | - | - | - | - | - | - | (614) | (614) |
| Investment in own shares | - | - | - | (91) | - | - | - | (91) |
| Reserve transfer | - | - | - | 1 | - | - | (1) | - |
| Expense in relation to share-base payments | - | - | - | - | 425 | - | (36) | 389 |
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| At 31 July 2008 | 216 | 5,364 | 682 | (1,880) | 1,178 | 637 | 16,082 | 22,279 |
| Total recognised income and expense | - | - | - | - | - | 60 | 2,535 | 2,595 |
| Dividends | - | - | - | - | - | - | (1,636) | (1,636) |
| Investment in own shares | - | - | - | 38 | - | - | - | 38 |
| Reserve transfer | - | - | - | (6) | (64) | - | 6 | (64) |
| Expense in relation to share-base payments | - | - | - | - | 266 | - | - | 266 |
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| At 31 January 2009 | 216 | 5,364 | 682 | (1,848) | 1,380 | 697 | 16,987 | 23,478 |
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The reclassification from net assets in the half year to 31 January 2008 relates to the reclassification of loans relating to one of the group's share option schemes. The directors believe the new presentation to be a fairer representation.
PRINCIPAL EXCHANGE RATES
| 31 January 2009 | 31 January 2008 | 31 July 2008 | ||||
| Average | Period end | Average | Period end | Average | Period end | |
| US $ | 1.6451 | 1.4307 | 2.0226 | 1.9900 | 2.0008 | 1.9805 |
| Euro € | 1.1983 | 1.1114 | 1.4179 | 1.3461 | 1.3486 | 1.2710 |
| EARNINGS PER ORDINARY SHARE |
The calculations of earnings per share are based on the following profits and number of shares:
| 31 January 2009 | 31 January 2008 | 31 July 2008 | |||||||
| Basic £000 | Basic adjusted £000 | Diluted £000 | Basic £000 | Basic adjusted £000 | Diluted £000 | Basic £000 | Basic adjusted £000 | Diluted £000 | |
| Profit for the financial period | 2,535 | 2,535 | 2,535 | 2,281 | 2,281 | 2,281 | 7,030 | 7,030 | 7,030 |
| Pension adjustment | - | - | - | - | - | - | - | - | - |
| Tax on pension adjustment | - | - | - | - | - | - | - | - | - |
| Share-based payments | - | 266 | - | - | 498 | - | - | 851 | - |
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| Adjusted profit for financial period | 2,535 | 2,801 | 2,535 | 2,281 | 2,779 | 2,281 | 7,030 | 7,881 | 7,030 |
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| Weighted average number of shares | 31 January 2009 Number of shares | 31 January 2008 Number of shares | 31 July 2008 Number of shares |
| For basic earnings per share | 21,438,083 | 21,560,542 | 21,557,529 |
| Exercise of share options | 142,908 | 534,736 | 455,877 |
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| For diluted earnings per share | 21,580,991 | 22,095,278 | 22,013,406 |
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| The Group's earnings per share are as follows: |
| 6 months to 31 January 2009 | 6 months to 31 January 2008 | 12 months to 31 July 2008 | |
| - Basic | 11.8p | 10.6p | 32.6p |
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| - Diluted | 11.7p | 10.3p | 31.9p |
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| - Basic adjusted | 13.0p | 12.9p | 36.6p |
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| - Diluted adjusted | 12.9p | 12.6p | 35.8p |
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NOTE TO THE FINANCIAL INFORMATION
The interim results are unaudited and do not comprise full financial statements within the meaning of Section 240 of the Companies Act 1985. The comparative numbers for the year ended 31 July 2008 are in abbreviated form and have been extracted from the published financial statements. These were audited and reported upon without qualification by Baker Tilly UK Audit LLP. These interim results will shortly be available on the Company's website at www.gshgroup.com in accordance with AIM Rule 26.