NMCN.L Regulatory News (NMCN)

30 Mar 2007 07:00

North Midland Construction PLC30 March 2007 NORTH MIDLAND CONSTRUCTION PLC 2006 PRELIMINARY RESULTS North Midland Construction PLC ("the Company") the UK provider of civilengineering, building, mechanical and electrical services to public and privateorganisations, announces preliminary results for the year ended 31 December2006. Highlights from the results and the Chairman's Statement:- Year ended Year ended 31 December 2006 31 December 2005 £'000 £'000 Revenue 175,543 153,123 Profit before Tax 5,497 3,945 Profit for the Year 3,781 2,751 Earnings per Share 33.38p 25.12p Dividends 8.5p 7.0p • Another record year in terms of Revenue and Profitability • North Midland Building has achieved excellent results • All areas of the business profitable • Excellent workload being carried forward into the New Year • Proposed final dividend of 6.0p (2005 : 5.0p) For further information:- Robert Moyle, ChairmanNorth Midland Construction PLC - 01623 518812 Mike Garratt, Finance DirectorNorth Midland Construction PLC - 01623 518816 Chairman's Statement This year has witnessed several significant milestones for the Group. I amdelighted, therefore, to be able to announce in this 60th anniversary year, bothrecord revenue and profit before tax levels of £175.5million and £5.497millionrespectively. Also, the Group was the recipient of the prestigiousNottinghamshire Company of the Year award, which has significantly boosted itsprofile in the Midlands area. Structurally, the Group has not altered from last year and the concentration hasbeen maintained on organic growth being achieved through greater marketpenetration in the core business areas and some diversification geographicallyand into related products. The Civil Engineering division still remains the largest constituent within theGroup and, in partnership with Nomenca, continues to be a key player within theWater Industry. Revenue escalated to £59million and profits exceeded budget.All business streams performed credibly and the expansion in the power divisionwas particularly heartening, culminating in the award of two desulphurisationschemes for Lentjes at Fiddlers Ferry and Ferrybridge. The Highways market experienced an upturn last year and the division delivered arecord performance with revenue climbing to £14.5million. Several new clientswere secured, including Sandwell M B C, for whom "The pUBLIC" scheme wasundertaken. This project incorporated a very complex design of granite pavingand landscaping delivered to very fine tolerances. The Utilities division suffered a year of fluctuating demand, which adverselyaffected profitability, as the nature of the business demands high fixed costs.However, the results were comparable to those of the previous year on a revenueof £31million. North Midland Building Ltd delivered excellent results, with revenue climbing to£36million, aligned with a significant increase in profitability emanating froma burgeoning workload with several blue chip clients. The largest everindividual contract undertaken for student accommodation in Lincoln, valued at£27million, was successfully delivered on time and on budget during the year.The success of this project has not only led to the next phase on the same sitebeing secured at a value of £10million, but also opened the door for furthertendering opportunities on larger schemes. Revenue at Nomenca surged to £36.5million, with a comparable increase inprofitability. The company was particularly successful during the AMP4procurement process and as the water companies expenditure has started toescalate, volumes have increased. A key strategy for the company is to developa workload from outside the water industry and progress was achieved during theyear, with revenue being secured in rail, the housing and defence sectors. Health & safety and quality environmental performance are of paramountimportance and it is very gratifying to report that there was a significantimprovement in the accident rate and the Group delivered statistics that werefar superior in quality to the industry averages. This has been achieved byfocused management and a well trained and educated workforce. A record numberof training days per employee were provided during the year, coupled withembracing the supply chain to absorb the Group's objectives and improve itsperformance. Engineering, sadly, still seems to be an unattractive career for the young. Inan attempt to correct this trend and attract more recruits into the Group, whichis essential if the growth targets are to be obtained; closer relationships arebeing forged with schools and universities. Under-graduates are being sponsoredthrough university and other employees are engaged in higher education throughrelease schemes. The quality and retention of its workforce has been the driverof the Group's success and it is essential that this momentum is maintained. To improve both efficiency and working conditions, new workshop and amenityfacilities at the Head Office site have recently been completed for both theTransport and Plant departments, at a cost of £1.7million. Refurbishment hasalso been undertaken to the offices and workshops at the recently purchasedWarrington site. At the Head Office site, recently purchased buildings havebeen demolished and a new office complex is under construction. All of theabove have been designed with improved environmental and operational efficiencyin mind. The share price has continued to rise to unsurpassed levels during the year andit is particularly gratifying for all the long term shareholders, of whom thereare many, and the employees who have invested in their future through the ShareScheme. The mission is to achieve a 10% year on year growth and financialtargets have been designated to deliver this objective. The current securedworkload stands at record levels and the prospects for further supplementationare very favourable. This provides your Board, allied with the desire tomaintain an acceptable yield, with the confidence to recommend an increase inthe final dividend of 1.0p, making a total of 8.5p for the year. R MoyleChairman Consolidated Income Statement for the Year Ended 31 December 2006 Year ended Year ended 31 December 2006 31 December 2005 £'000 £'000 Revenue 175,543 153,123 Operating Profit 5,591 4,087 Finance Costs (94) (142) Profit before Tax 5,497 3,945 Tax (1,716) (1,194) Profit for the Year 3,781 2,751 Attributed to: Minority Interest 510 289 Equity Holders of the Parent 3,271 2,462 Earnings per share 33.38p 25.12p Amount of actual final dividend on ordinary sharesproposed to the Shareholders on the register at theclose of business on 4 May 2007, which will be paidon 25 May 2007. 6.00p 5.00p The calculation of earnings per share is based on 9,800,000 shares (2005 :9,800,000) being the number of shares in issue throughout the period and on aprofit of £3,271,000 (2005 : £2,462,000). Consolidated Statement of Changes in Equity for the Year Ended 31 December 2006 Total Attributable to Minority Total Equity Holders of the Parent Interest Equity £'000 £000 £'000 Balance at 31 December 2005 14,486 603 15,089 Profit for the year 3,271 510 3,781 Dividends Paid (735) (200) (935) Balance at 31 December 2006 17,022 913 17,935 Consolidated Balance Sheet as at 31 December 2006 2006 2005 £'000 £'000ASSETS Non-current AssetsProperty, Plant and Equipment 8,534 5,992Goodwill 106 106 8,640 6,098Current AssetsInventories 1,046 870Construction Contracts 7,009 6,461Trade and Other Receivables 32,845 33,306Cash and Cash Equivalents 8,652 6,870 49,552 47,507 TOTAL ASSETS 58,192 53,605 EQUITY AND LIABILITIES Equity Attributable to Equity Holders of the Parent Share Capital 980 980 Capital Redemption Reserve 20 20Retained Earnings 16,022 13,486 17,022 14,486 Minority Interest 913 603 Total Equity 17,935 15,089 Non-current LiabilitiesObligations Under Finance Leases -Due after One Year 735 1,018Provisions 531 384 1,266 1,402 Current LiabilitiesTrade and Other Payables 36,999 35,345Current Tax Payable 970 808Obligations Under Finance Lease -Due within One Year 1,022 961 38,991 37,114 Total Liabilities 40,257 38,516 TOTAL EQUITY AND LIABILITIES 58,192 53,605 Consolidated Cash Flow for the Year Ended 31 December 2006 2006 2005 £'000 £'000Cash Flows from Operating Activities Operating Profit 5,591 4,087 Adjustments for:Depreciation of Property, Plant & Equipment 1,430 1,253(Gain) on Disposal of Property, Plant & Equipment (117) (102)Increase in Reinstatement Reserve 77 187 Operating Cash Flows before Movement in Working Capital(Increase)/Decrease in Inventories 6,981 5,425(Increase) in Construction Contracts (176) 89Decrease/(Increase) in Receivables (548) (140)Increase in Payables 461 (9,370) 1,654 10,172 Cash Generated from Operations 8,372 6,176Tax Paid (1,484) (1,202)Interest Paid (94) (142) Net Cash from Operating Activities 6,794 4,832 Cash Flows from Investing Activities Purchase of Property, Plant & Equipment (3,173) (650)Proceeds on disposal of Property, Plant & Equipment 133 133 Net Cash (used in) Investing Activities (3,040) (517) Cash Flows from Financing Activities Equity Dividends Paid (735) (588)Dividends Paid to Minority Interests (200) (73)Repayment of Obligations Under Finance Leases (1,037) (935) Net cash (used in) Financing Activities (1,972) (1,596) Net Increase in Cash and Cash Equivalents 1,782 2,719 Cash and Cash Equivalents at 1 January 2006 6,870 4,151 Cash and Cash Equivalents at 31 December 2006 8,652 6,870 The accounts have been prepared in accordance with International FinancialReporting Standards (IFRSs) and are presented in sterling. The abridged financial information presented is based on the full accounts ofthe Group for the year ended 31December 2006, on which the auditors have givenan unqualified report. The accounts have yet to be filed with the Registrar of Companies. The Annual report and Accounts for the year ended 31December 2006 will bedespatched to the Shareholders on 1 May 2007. The Annual General meeting will be held on 25 May 2007 at 12 noon. This information is provided by RNS The company news service from the London Stock Exchange