2 Mar 2010 09:00
Mortice Plc
("Mortice" or the "Company")
2 March 2010
Trading Update
Mortice Ltd (AIM:MORT), the AIM listed security and facilities management company based in India, announces the following trading update.
Whilst the Company achieved sales growth of 32.3% year-on-year (in INR terms) for the first half of the financial year ending 31 March 2010, the Company anticipates posting a loss for the full financial year due to a combination of several factors. The loss is expected to be smaller than in the last financial year.
Sales growth in the current financial year has been slower than the Directors previously anticipated as cautious customer sentiment in a slow economy has restricted customers from increasing their spend on security and facilities management services. Additionally, the economic downturn has also made it challenging for the Company to collect full payment owed to it from a minority of its clients, increasing provisioning in the current financial year. The Company is continuing to pursue all outstanding debtors and is confident to be able to collect some of these outstanding amounts before the financial year end.
Lower margin levels, caused mainly by the economic environment and continued investment in the FM business, are also expected to impact upon the Company's profitability for the financial year ending 31 March 2010. Revenues in the Company's guarding and FM business's remains in line with management expectations for the full year to 31 March 2010. The Company concentrated on the renewal of expiring contracts and gaining new business in 2009, and with both the guarding and FM sectors in India now looking to return to growth, the Directors of the Company expect margins to reach higher levels in the next financial year.
Overall, although the economic downturn has affected margin levels and profitability in the financial year ending 31 March 2010, with greater stability in the Indian economy, the Directors believe that the Company's subsidiaries, with their solid foundations and growth potential, are well positioned to drive both revenue growth and profitability in the next financial year.
Manjit Rajain, Executive Chairman, commented:
"Whilst we anticipate making a small loss in the current full financial year, the Directors believe that the expected sales growth supports the market's view of our business model. In the coming year, the Directors expect the margins to improve and with the recent positive news surrounding the Indian economy, the Directors believe that the Company will continue its growth going forward."
For further information please contact:
| Mortice Ltd |
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| Manjit Rajain, Executive Chairman | Tel: +91 981 800 0011 |
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| Grant Thornton Corporate Finance (NOMAD) |
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| Fiona Kindness / Robert Beenstock | Tel: +44 207 383 5100 |
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| Seymour Pierce Ltd (Broker) |
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| Nandita Sahgal/Sam Tully | Tel: +44 207 107 8000 |
Notes to Editors
Mortice Limited, the India based security and facilities management company incorporated in Singapore, listed on AIM in May 2008. It is the holding company of Peregrine Guarding Private Limited (Peregrine), Tenon Property Services Private Limited (Tenon) and Rotopower Projects Private Limited (together referred to as the "Group"), an Indian Facilities Management based in Delhi, which was acquired by the Group in June 2009.
Peregrine has been providing security services in India for 15 years, establishing a client base of over 450 customers and developing a strong pan-India presence providing manned guarding in the process. Peregrine Group had opened 51 branches in 23 out of the 28 Indian states and has clients in a range of sectors including ITES, manufacturing, pharmaceutical, banking and healthcare.
Tenon, the facilities management arm of Mortice, was established to provide superior quality FM services to Peregrine client base. Tenon today operates in 16 Indian states and employs 1200 people serving 30 clients.
Rotopower was established 12 year ago and now employees over 1,600 employees servicing over 75 clients across 15 states in India. It provides a range of facilities management services that include mechanical and electrical maintenance services, annual maintenance contracts and housekeeping services to a wide range of customers. Rotopower also provides services to telecom tower companies for the maintenance and running of electrical equipment.