19 Aug 2010 07:00
WATERMAn group plc management update
Waterman Group plc ("Waterman" or "the Group"), the international engineering and environmental consultant, today provides the following management update in advance of its preliminary announcement to be made in October 2010.
As anticipated in the Interim Management Statement in May 2010, the Group is likely to report profits for the year ended 30 June 2010 at the lower end of expectations prior to certain exceptional items detailed below and redundancy costs incurred during the period.
Following the lack of progress with the release of NAMA funding to support developers in Ireland, Waterman is re-assessing the recoverability of trade receivables and unbilled amounts due on contracts with clients.
The rationalisation of the Group's office accommodation has continued to progress well. This follows the end of the three year earn out in April 2010 of Boreham Consulting Engineers which was acquired in 2007. Where possible we are consolidating our UK and Irish teams together into a smaller number of multidisciplinary offices. This will enable us to benefit from greater utilisation of resources and maximisation of opportunities and client relationships. It is our intention to make an exceptional provision for the costs up to the end of the leases for the unoccupied office space.
In Central Europe, Waterman has offices in Poland, Belgium and Romania which predominantly work in the private development sector. Following the recent concerns about the speed of economic recovery in the region, we are re-assessing the recoverability of trade receivables and unbilled amounts on contracts with clients in Poland, Belgium and Romania. As part of this review we will also be making a provision for the write off of goodwill, assets and unused office costs over the remaining terms of the leases for our operations in these countries.
To summarise, we anticipate that a provision for the above mentioned exceptional items of up to a maximum of £5.7m may be required for the financial year ended 30th June 2010. A final decision will not be made in this regard until the full year results and the amount will be reviewed during the normal year end audit process.
Our bankers, HSBC, have been very supportive and have agreed that our loan covenants will exclude the agreed final provision for these exceptional items.
The net debt at the year end is anticipated to be no greater than £7.5m which has reduced from £10.2m on 30th June 2009.
During the last six months to June 2010 our staff numbers have reduced by a further 73 to 1,216 which has resulted in additional redundancy costs being incurred during this period.
The United Kingdom provides approximately two thirds of the Group revenue and the property sector has historically been a core market for Waterman. We welcome the recent announcement by Land Securities Plc to proceed with the £350m Trinity retail development in Leeds previously designed by Waterman. The c.1,000,000 sq ft scheme is the first major retail-led development in the UK to get the go ahead in recent times. We are currently working on the design of several London office buildings located in the City and West End which are also anticipated to progress to construction within the next twelve months.
In the preliminary announcement to be made in October 2010 the Board of Waterman Group is intending, subject to audit, to recommend to the shareholders that a dividend of 0.9 pence per share is maintained giving a total dividend for the year of 1.8 pence per share.
-ENDS-
Date: 19th August 2010
For further information please contact:
Waterman Group plc City Profile
Nick Taylor, Chief Executive Simon Courtenay
Alex Steele, Finance Director 020-7448-3244
020-7928-7888
Web: www.watermangroup.com