GSH.L Regulatory News (GSH)

23 Mar 2007 11:25

GSH Group PLC23 March 2007 23 March 2007 GSH Group plc Interim Results for the six months ended 31 January 2007 Introduction GSH Group plc (AIM: GSH) ("GSH" or "the Group"), the international provider ofbespoke facilities management and energy management solutions, announces interimresults for the six months ended 31 January 2007. Financial Highlights: Turnover increased 11% to £70.2 million (2006: £63.0 million) Profit before tax up 59% to £3.5 million (2006: £2.2 million) Operating margin increased by 1.5 percentage points to 5.0% (2006: 3.5%) Basic earnings per share were 11.8 pence, an increase of 62% (2006: 7.3 pence) Cash reserves at the end of the period of £5.4 million (2006: £2.9 million) The board has approved an interim dividend of 2.6 pence per share (2006: 2.2pence) Operational Highlights: Strong order book at period end of £521 million (2006: £430 million) A further £53 million of contract wins since period end Announced today acquisition of Delta Environmental Services Limited for a totalcash consideration of £4.8 million Bob Gilbert, Chairman of GSH said: "These results reflect another recordperformance and continue to demonstrate our ability to deliver profitable growthin both turnover and operating margin. We look forward to the future withconfidence and further good progress in the second half of the year." For further information, please contact: GSH Group plc 01782 200455Colin Tennent, Chief Executive OfficerDavid Simons, Chief Financial Officer Bell Pottinger Corporate & Financial 020 7861 3232Ann-marie WilkinsonAngus Prentice CHAIRMAN'S STATEMENT Introduction I am pleased to present our interim results for the six months ended 31 January2007 which reflect another record performance and continue to demonstrate ourability to deliver profitable growth in both turnover and operating margin. Financial Review The financial results for the six months to 31 January 2007 show a continuedincrease in turnover of 11% to £70.2 million (2006: £63.0 million) with profitbefore tax up 59% to £3.5 million (2006: £2.2 million). During the period,turnover increased by 11% in the UK and by 16% in our international businesses.All sectors were profitable. The top-line growth has been delivered from a tightly controlled overhead costbase and accordingly the operating margin increased by 1.5 percentage points to5.0% (2006: 3.5%). Basic earnings per share were 11.8 pence, an increase of 62% (2006: 7.3 pence).Diluted earnings per share were 11.6 pence (2006: 7.2 pence). Cash reserves at the end of the period were £5.4 million (2006: £2.9 million). The contracted order book for the Group remains healthy and at the period endwas £521 million (2006: £430 million). Contract wins since the period end haveadded a further £53 million to this figure. The order book is well balanced with31% of the order book relating to contracts within the public sector, 18%financial services, 15% in telecommunications and ICT, 15% real estate, 10%retail and 11% others. Dividend The board has approved an interim dividend of 2.6 pence per share (2006: 2.2pence) which will be paid on 18 May 2007 to all shareholders on the register atclose of business on 13 April 2007. IFRS The Group has continued with its thorough preparation for the conversion to IFRSand expects to adopt IFRS within its financial statements for the year ending 31July 2008. Acquisitions I am pleased to report that today we have announced the acquisition of DeltaEnvironmental Services Limited ("Delta") for a total cash consideration of £4.8million. Delta had turnover of £8.2 million and a profit before tax of £0.8 million forthe year ended 31 October 2006. Founded in 1984, Delta is a UK business that designs, procures, installs andmaintains air-conditioning, refrigeration and heating systems for a variety ofretail and commercial clients including Starbucks, Boots, Clarks and KarenMillen. This acquisition further strengthens our existing specialist air-conditioningcapability and coverage, further consolidating our position as a leadingprovider of all technical facilities management services. Our focus remains to support our ambitious growth targets with continuingorganic growth and through earnings-enhancing, predominantly bolt-onacquisitions both in the UK and overseas. Operational Review We have had a positive start to the year in respect of both new contract winsand extensions. In the UK we have been awarded several new and significant contracts with keyclients for our mechanical and electrical engineering services and ourenergyplus utility consumption reduction programme. New contracts include British Standards Institute, Astra Zeneca, DTZ, The LondonEye with EC Harris and Mountain Developments in the United States. Since the period end we have also won a substantial contract to provide NationalAustralia Bank (Yorkshire and Clydesdale Banks) with engineering, fabric andenergy management services. This contract win reflects our nationwide corporateand high street retail expertise and in all accounts for a 10% increase in ourorder book. In response to the ever-increasing importance of sustainability we have furtherdeveloped our energyplus product into a wider offering branded greensolutionsand we are now able to offer our clients a total energy consumption managementproduct. greensolutions combines our engineering expertise with our energyplusoffering, smartbox technology and a renewable energy total package of services. This offering supports our customers' commitments to their energy reductionprogramme and corporate social responsibility (CSR). Our services are designedindividually with each client and are an integral part of their CSR businessobjectives. Our dedicated Research & Development function works closely with our majorclients in developing new and appropriate technologies. Our smartbox technology,developed over the past two years, reflects this commitment to innovation.Smartbox is a remote, wireless device, developed by us that is used to monitorbuilding and plant conditions such as temperature, humidity, air-conditioningefficiency, energy consumption and plant condition. Together with our recently developed smartbox benchmarking and managementsystem, it can be used to support an energy consumption management contract or acritical maintenance programme. Our innovations in this field have beeninstrumental in our recent contract wins for energy management and are nowbeginning to be used extensively across our contract base. Outlook We enter the second half of the year with a record order book and a very healthybusiness pipeline in all of our markets. Our efforts in working in closepartnership with our customers by identifying future needs and developinginnovative product offerings coupled with the rapidly growing requirement forsustainability, corporate responsibility and regulatory compliance is startingto show real returns. We look forward to the future with confidence and furthergood progress in the second half of the year. Bob Gilbert Chairman 23 March 2007 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 2007. Baker Tilly Chartered Accountants Festival Way Festival Park Stoke-on-Trent Staffordshire ST1 5BB 23 March 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six month period ended 31 January 2007 6 Months to 31 6 Months to 31 12 Months to 31 January 2007 January 2006 July 2006 £000 £000 £000 TURNOVER -CONTINUINGOPERATIONS 70,168 63,044 135,756Cost of sales (51,525) (47,250) (100,861) --- --- ---GROSS PROFIT 18,643 15,794 34,895Administrative expenses (15,162) (13,644) (27,666) --- --- ---OPERATING PROFIT -CONTINUING OPERATIONS 3,481 2,150 7,229Other interest receivable 80 81 105Interest payable andsimilar charges (67) (29) (182) --- --- ---PROFIT ON ORDINARYACTIVITIES BEFORE TAXATION 3,494 2,202 7,152Taxation (1,180) (775) (1,729) --- --- ---PROFIT ON ORDINARYACTIVITIES AFTER TAXATION 2,314 1,427 5,423 === === ===EARNINGS PER ORDINARY SHARE- Basic 11.8p 7.3p 28.0p === === ==- Diluted 11.6p 7.2p 27.4p ==== ==== ==== CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the six month period ended 31 January 2007 6 Months to 31 6 Months to 31 12 months to 31 January 2007 January 2006 July 2006 £000 £000 £000 PROFIT FOR THE FINANCIAL PERIOD 2,314 1,427 5,423Actuarial gain/loss - - (239)Deferred tax on actuarial loss - - 71Exchange differencesarising on theretranslation of overseas undertakings 8 7 75 --- --- ---TOTAL RECOGNISEDGAINS AND LOSSESRELATING TO THE PERIOD 2,322 1,434 5,330 ===== ===== ===== CONSOLIDATED BALANCE SHEETat 31 January 2007 31 January 2007 31 January 2006 31 July 2006 £000 £000 £000 £000 £000 £000FIXED ASSETSIntangible assets 2,795 839 2,909Tangible assets 4,743 4,144 4,631Investments 43 43 43 --- --- --- 7,581 5,026 7,583CURRENT ASSETSStocks 7,355 5,071 6,238Debtors 24,683 19,537 20,797Cash at bank 5,393 2,905 8,200and in hand --- --- --- 37,431 27,513 35,235CREDITORS:Amounts falling due within one year (35,955) (28,201) (34,793) --- --- ---NET CURRENTASSETS/(LIABILITIES) 1,476 (688) 442 --- --- ---TOTAL ASSETS LESSCURRENT LIABILITIES 9,057 4,338 8,025 === === ===CREDITORS: Amountsfalling due in more than one year (83) (7) (105) PROVISIONS FORLIABILITIES AND CHARGES (535) (351) (783) --- --- ---NET ASSETS EXCLUDINGPENSION LIABILITY 8,439 3,980 7,137 PENSION LIABILITY (400) (822) (400) --- --- ---NET ASSETS INCLUDINGPENSION LIABILITY 8,039 3,158 6,737 ===== ===== =====CAPITAL AND RESERVESCalled up share capital 200 200 200Share premium account 89 89 89Capital redemption reserve 682 682 682 Revaluation reserve 1,211 1,211 1,211Investment in own shares (707) (1,250) (913)Profit and loss account 6,564 2,226 5,468 --- --- ---EQUITY SHAREHOLDERS'FUNDS 8,039 3,158 6,737 --- --- ---TOTAL CAPITAL EMPLOYED 8,039 3,158 6,737 ===== ===== ===== CONSOLIDATED CASH FLOW STATEMENTFor the six month period ended 31 January 2007 6 Months to 31 6 Months to 31 12 Months to 31 January 2007 January 2006 July 2006 £000 £000 £000 £000 £000 £000CASH FLOW FROMOPERATING ACTIVITIES (493) 85 8,557 RETURNS ON INVESTMENTSAND SERVICING OF FINANCEInterest received 80 81 105 Interest paid (62) (29) (172)Interest element offinance leaserental payments (5) - (10) --- --- ---NET CASHINFLOW/(OUTFLOW)FOR RETURNSON INVESTMENTSAND SERVICINGOF FINANCE 13 52 (77) TAXATION (772) (875) (2,182) CAPITAL EXPENDITUREPurchase of investments - - (9)Purchase of intangiblefixed assets (14) (71) (84)Purchase of tangible fixedassets (493) (213) (757)Sale of intangiblefixed assets - - 13Sale of tangible fixedassets 20 53 48 --- --- ---NET CASHOUTFLOW FORCAPITALEXPENDITURE (487) (231) (789) ACQUISITONS AND DISPOSALSPurchase ofsubsidiaryundertakings - (816) (1,498)Net overdraftacquired withsubsidiaryundertakings - (339) (195)Purchase ofminorityinterestshares - (9) - --- --- ---NET CASHOUTFLOW FORACQUISITIONSAND DISPOSALS (1,164) (1,693) EQUITYDIVIDENDS PAID (1,030) (1,260) (1,701) --- --- ---NET CASH(OUTFLOW)/INFLOW BEFOREFINANCING (2,769) (3,393) 2,115 FINANCINGIssue ofordinary sharecapital - - 87Investment inown shares (11) (77) (250)Capitalelement offinance leaserentalpayments (49) (21) (60)Exercising ofshare options 22 107 69 --- --- ---NET CASH(OUTFLOW)/INFLOW FROMFINANCING (38) 9 (154) (DECREASE)/INCREASE IN CASHIN THE PERIOD (2,807) (3,384) 1,961 ======= ======= ====== RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDSFor the six month period ended 31 January 2007 6 Months to 31 6 Months to 31 12 Months to 31 January 2007 January 2006 July 2006 £000 £000 £000 PROFIT FOR THEFINANCIAL PERIOD 2,314 1,427 5,423Dividends (1,030) (1,260) (1,701) --- --- --- 1,284 167 3,722Other recognisedgains and lossesrelating to the period 29 7 (93)Investment inown shares (11) (77) (181)Share optionsexercised - 19 -New share capitalsubscribed - 87 87 --- --- ---NET ADDITIONTO SHAREHOLDERS'FUNDS 1,302 203 3,535Openingshareholders'funds 6,737 2,955 3,202 --- --- ---CLOSINGSHAREHOLDERS'FUNDS 8,039 3,158 6,737 ===== ===== ===== NOTES TO THE FINANCIAL STATEMENTSFor the six month period ended 31 January 2007 RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES 31 January 31 January 31 July 2007 2006 2006 £000 £000 £000 Operating profit 3,481 2,150 7,229 Depreciation 341 374 654 Amortisation 99 113 177 Increase in stocks (1,117) (321) (1,299) (Increase)/decrease in debtors (3,892) (620) 436 Increase/(decrease) in creditors 834 (1,596) 1,451 Decrease in provisions (239) (15) (91) --- --- ---CASH FLOW FROM OPERATING ACTIVITES (493) 85 8,557 === === === EARNINGS PER ORDINARY SHARE The calculations of earnings per share are based on the following profits andnumber of shares: 31 January 2007 31 January 2006 31 July 2006 Basic Basic adjusted Diluted Basic Basic adjusted Diluted Basic Basica djusted Diluted £000 £000 £000 £000 £000 £000 £000 £000 £000 Profit forthefinancial period 2,314 2,314 2,314 1,427 1,427 1,427 5,423 5,423 5,423Amortisationof intangible fixed assets - 99 - - 113 - - 177 -Pensionadjustment - - - - - - - (343) - --- --- --- --- --- --- --- --- ---Adjustedprofit forfinancialperiod 2,314 2,413 2,314 1,427 1,540 1,427 5,423 5,257 5,423 ===== ===== ===== ===== ===== ===== ===== ===== ===== EARNINGS PER ORDINARY SHARE (continued) Weighted average number of shares 31 January 2007 31 January 2006 31 July 2006 Number of Number of Number of shares shares shares For basic earnings per share 19,663,672 19,301,349 19,386,320Exercise of share options 310,890 598,189 387,444 ---------- ---------- ---------- For diluted earnings per share 19,974,562 19,899,538 19,773,764 ========== ========== ========== NOTE TO THE FINANCIAL INFORMATION The interim results are unaudited and do not comprise full financial statementswithin the meaning of Section 240 of the Companies Act 1985. The results for theyear ended 31 July 2006 are in abbreviated form and have been extracted from thepublished financial statements. These were audited and reported upon withoutqualification by Baker Tilly and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock Exchange