2 Oct 2017 09:44
PRESS RELEASE
2 October 2017
Lakehouse plc
("Lakehouse" or the "Group")
£12.4m sale of Orchard (Holdings) UK Ltd ("Orchard")
Major contract win with Aberdeenshire Council
Update on trading
Lakehouse, the asset and energy support services group, announces two important strategic developments for the Group, together with a trading update.
Sale of Orchard
Lakehouse announces the disposal of the entire issued share capital of Orchard to World Fuel Services Europe, Ltd ("the Disposal"), for a cash consideration on completion of £12.4m, representing an estimated gain on book value of £5m. A further sum of £1.9m will be held in escrow against potential claims under the Sale and Purchase Agreement, to be released in equal instalments on the first and second anniversaries of Completion. The proceeds from the Disposal will be used to reduce Group indebtedness.
Orchard provides consultancy advice to corporate clients in relation to managing their energy costs, particularly energy procurement and usage. In addition, Orchard provides energy management services to commercial and industrial customers, including brokering supply with utilities firms, managing contracts and advising on energy consumption. Orchard has strong commercial relationships with the leading UK utilities providers. The business employs 72 staff and is based in Elland, West Yorkshire, with offices in Glasgow, Bristol, Newcastle and Northampton.
The sale of Orchard, a white collar business, will allow the Group to concentrate on its operatives-focused activities within its Compliance and Energy Services divisions.
In the financial year ended 30 September 2016, Orchard reported a turnover from continuing activities of £6.3 million and profit before tax of £2.5 million. Orchard is expected to be reported within discontinued activities in the Group's results for the year ended 30 September 2017.
Major contract win with Aberdeenshire Council
The Group is pleased to announce its appointment to a Framework with Aberdeenshire Council from which annual call off contracts will be issued, up to the value of £44m over its four year duration. The project, which will be delivered through its Everwarm subsidiary, will be mobilised during the first half of our year ending 30 September 2018 and will run until late 2021.
The Group will provide services covering every facet of housing improvement upgrades in Aberdeenshire, including external upgrades, internal refurbishments, domestic heating programmes and renewable energy installations.
Trading update
Elsewhere within the Group, the Energy Services division has won its first contract under the Excel energy efficiency framework, with a £4m award from Renfrewshire council for external fabric improvements. After a busy start to the year, the Compliance division has secured a number of contract wins, the most notable being a £600k water compliance contract with Homes For Haringey, a £500k commercial installations contract with Yorkshire Housing Association and winning two places on Sanctuary Housing's commercial heating installations framework, all key and important.
The Group continues to redefine its service offering and the Board has taken the decision to reduce its exposure to risky and unprofitable activities, particularly within Property Services, with the closure and downsizing of non-profitable operations.
As expected, we still have to manage the year end legacy contract closure processes, but expect trading to remain in line with the Board's expectations. Cash performance from trading in the second half of the year was ahead of expectations, with a consequential benefit to net debt.
Bob Holt, Executive Chairman of Lakehouse, said:
"Orchard is an excellent business that I am sure will thrive under the stewardship of World Fuel Services. I would like to record my thanks to the directors and staff of Orchard for their professionalism and dedication during their time within the Lakehouse Group.
The disposal will allow us to focus on our market leading Compliance and Energy Services operations and reduce indebtedness.
We are delighted to announce today the successful award of the significant landmark contract with Aberdeenshire Council, which endorses our strong reputation for delivering excellent service in local council residential property maintenance in Scotland. In addition, we are pleased to be able to update on the continued progress being made in our strategic growth divisions of Energy Services and Compliance. The new contract wins meet our stated objective of focusing on continuing to grow organically the Lakehouse Group.
With a clear growth strategy and enhanced balance sheet, the Group looks forward to the future with considerable confidence."
Enquiries
Lakehouse | Financial Public Relations |
Bob Holt, Chairman, 07778 798816 | Camarco |
Michael McMahon, Chief Operating Officer | Ginny Pulbrook |
Jeremy Simpson, Chief Financial Officer | Tom Huddart |
Telephone: 01708 758 800 | Telephone: 020 3757 4992 |
Stockdale Securities | |
Andy Crossley | |
Antonio Bossi | |
Telephone: 020 7601 6100 |
Notes to editors
Lakehouse is an asset and energy support services group that constructs, improves, maintains and provides services to homes, schools, public and commercial buildings with a focus on clients in the UK public sector and regulated markets. Services are delivered through four divisions: Compliance, Energy Services, Property Services and Construction.
The Group was founded in 1988 and is headquartered in Romford, Essex. It currently employs some 2,100 staff from 28 offices across the UK.