Interim Results
Andrews Sykes Group PLC
28 September 2006
Andrews Sykes Group plc (the 'Company')
28 September 2006
Interim Results for the 26 weeks to 1 July 2006
Chairman's Statement
Overview and financial highlights
I am pleased to report an increase of 60% in the basic earnings per share from
continuing operations due to improved trading performance throughout the first
half of 2006.
The financial highlights of this period compared with the first half of 2005 are
as follows:
- Basic earnings per share from continuing operations increased by 2.8
pence (60%) to 7.46 pence.
- Turnover from Continuing Operations increased by £4.5m (20%) to
£27.6m.
- EBITDA (as reconciled on the face of the profit and loss account)
derived from continuing operations increased by £1.6m (29%) to £7.1m.
- Operating profit increased by £1.4m (35%) to £5.4m.
- Net cash inflow from operating activities increased by £1.0m (24%) to
£5.3m.
The Group's businesses performed well and overall were in line with our
expectations. The hire of heating and portable air conditioning equipment
benefited from the colder winter and warm early summer respectively.
Our continuing endeavours to improve our processes and strategies have
considerably enhanced our business performance during the period and will have a
positive impact on growth going forward. This, together with the measures
introduced to stimulate demand for our product in previous periods, has improved
revenues compared with 2005.
Prospects
Our performance continued well into the second half and I am optimistic for the
result for the full year. I remain confident that the Group is well prepared for
future trading and ready to take advantage of market opportunities as they
arise.
JG Murray
Chairman
27 September 2006
Andrews Sykes Group plc
Consolidated Profit and Loss Account
For the 26 weeks ended 1 July 2006
26 weeks 26 weeks to 52 weeks to
to 1 July 2 July 2005 31 December
2006 2005
Total Continuing Discontinued Total Continuing Discontinued Total
activities activities activities activities activities
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover 27,609 23,077 3,681 26,758 50,673 4,415 55,088
Cost of sales (13,441) (11,597) (2,064) (13,661) (23,675) (2,414) (26,089)
Gross profit 14,168 11,480 1,617 13,097 26,998 2,001 28,999
Distribution costs (4,433) (3,800) (599) (4,399) (8,038) (699) (8,737)
Administrative expenses (4,372) (4,007) (729) (4,736) (7,898) (960) (8,858)
Operating profit 5,363 3,673 289 3,962 11,062 342 11,404
EBITDA * 7,090 5,506 552 6,058 14,747 615 15,362
Depreciation and asset disposals (1,720) (1,826) (263) (2,089) (3,671) (273) (3,944)
Operating profit before goodwill 5,370 3,680 289 3,969 11,076 342 11,418
amortisation
Goodwill amortisation (7) (7) - (7) (14) - (14)
Operating profit 5,363 3,673 289 3,962 11,062 342 11,404
Exceptional profit on the disposal - 6,797 6,404
of a business - discontinued
Profit on ordinary activities 5,363 10,759 17,808
before interest and taxation
Net interest payable (598) (211) (738)
Profit on ordinary activities 4,765 10,548 17,070
before taxation
Tax on profit on ordinary activities (1,440) (868) (2,943)
Profit on ordinary activities after 3,325 9,680 14,127
taxation being profit for the
financial period
Earnings per share from continuing operations:
Basic (pence) 7.46p 4.66p 15.24p
Diluted (pence) 7.46p 4.65p 15.24p
Earnings per share from total operating
results:
Basic (pence) 7.46p 16.70p 28.16p
Diluted (pence) 7.46p 16.69p 28.16p
Dividends paid per equity share 0.0p 14.0p 14.0p
(pence)
All results for the current period derive from continuing operations. There were no material acquisitions in any period.
* Earnings Before Interest, Taxation, Depreciation and Amortisation.
Consolidated Balance Sheet
As at 1 July 2006 1 July 2 July 31 December
2006 2005 2005
£'000 £'000 £'000
Fixed assets
Intangible assets: Goodwill 24 38 31
Tangible assets 12,741 11,940 12,011
Investments 164 164 164
12,929 12,142 12,206
Current assets
Stocks 4,475 4,801 4,532
Debtors 15,886 14,002 13,929
Cash at bank and in hand 11,435 12,308 10,342
31,796 31,111 28,803
Creditors falling due within one year
Loans and overdrafts (5,000) (2,000) (5,000)
Other creditors (8,560) (7,738) (8,627)
Corporation and overseas tax (2,133) (1,267) (1,060)
(15,693) (11,005) (14,687)
Net current assets 16,103 20,106 14,116
Total assets less current liabilities 29,032 32,248 26,322
Creditors falling due after more than one year
Loans (25,000) (9,000) (25,000)
Provisions for liabilities (495) (339) (469)
Net assets excluding pension liability 3,537 22,909 853
Pension Liability (3,902) (6,050) (4,434)
Net (liabilities) / assets including pension liability (365) 16,859 (3,581)
Capital and reserves
Called-up share capital 446 11,598 446
Share premium account - 10,678 -
Revaluation reserve 738 743 741
Other reserves 217 7,395 222
Profit and loss account (1,776) (13,559) (4,994)
ESOP reserve - (6) (6)
(Deficit) / surplus attributable to equity shareholders (375) 16,849 (3,591)
Minority interests 10 10 10
Total capital employed (365) 16,859 (3,581)
Andrews Sykes Group plc
Consolidated Cash Flow Statement
For the 26 weeks ended 1 July 2006 26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
£'000 £'000 £'000
Net cash inflow from operating activities as reconciled in note 4 5,292 4,258 10,196
Returns on investments and servicing of finance
Interest received 164 245 484
Interest paid (877) (353) (946)
Net cash outflow for returns on investments and servicing of finance (713) (108) (462)
Cash outflow for taxation (788) (642) (1,984)
Capital expenditure
Purchase of tangible fixed assets (2,804) (1,856) (4,056)
Sale of tangible fixed assets 342 395 608
Net cash outflow for capital expenditure (2,462) (1,461) (3,448)
Acquisitions and disposals
Cash received on the disposal of subsidiary undertakings - 9,614 10,204
Disposal costs paid less consideration received on prior year disposals (138) - -
Net cash balances disposed of with subsidiary - (439) (214)
Net cash (outflow) / inflow for acquisitions and disposals (138) 9,175 9,990
Equity dividends paid - (8,119) (8,119)
Cash inflow before the use of liquid resources and financing 1,191 3,103 6,173
Management of liquid resources
Movement in bank deposits - (87) 477
Financing
Sale of shares held in ESOP 4 9 9
New loans drawn down - - 30,000
Loan repayments - - (11,000)
Purchase of own shares (16) - (24,168)
Net cash (outflow) / inflow from financing (12) 9 (5,159)
Increase in cash in the period 1,179 3,025 1,491
Analysis of net (debt) / funds
Bank current and deposit accounts and cash in hand 11,435 12,308 10,342
Total loans and overdrafts (30,000) (11,000) (30,000)
Net (debt) / funds as reconciled in note 5 (18,565) 1,308 (19,658)
Andrews Sykes Group plc
Other Consolidated Statements
For the 26 weeks ended 1 July 2006
Consolidated statement of total recognised gains and losses
26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
£'000 £'000 £'000
Profit for the financial period 3,325 9,680 14,127
Currency translation differences on (97) (88) 48
foreign currency net investments
Actual return less expected return on - 419 2,702
pension scheme assets
Experience gains and losses arising on - (38) (4)
the pension scheme liabilities
Changes in assumptions underlying the - - (3,538)
present value of the scheme liabilities
UK deferred tax attributable to the pension scheme - (114) 252
asset and liability adjustments
Total recognised gains and losses 3,228 9,859 13,587
relating to the period
Reconciliation of movement in Group shareholders' funds
26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
£'000 £'000 £'000
Profit for the financial period 3,325 9,680 14,127
Dividends paid - (8,119) (8,119)
Consideration for the purchase of own shares (16) - (24,168)
Sale of own shares by the ESOP trust 4 9 9
Currency translation differences on (97) (88) 48
foreign currency net investments
Actual return less expected return on - 419 2,702
pension scheme assets
Experience gains and losses arising on - (38) (4)
the pension scheme liabilities
Changes in assumptions underlying the - - (3,538)
present value of the scheme liabilities
UK deferred tax attributable to the pension scheme - (114) 252
asset and liability adjustments
Net increase /(decrease) in shareholders' funds 3,216 1,749 (18,691)
Shareholders' (deficit) / funds at the
beginning of the period (3,591) 15,100 15,100
Shareholders' (deficit)/ funds at the end of the period (375) 16,849 (3,591)
Andrews Sykes Group plc
Notes to the accounts
For the 26 weeks ended 1 July 2006
1. Basis of preparation
The interim report for the 26 weeks ended 1 July 2006 was approved by the Board on 27
September 2006. The financial information contained in this interim report does not
constitute statutory accounts for the Group for the relevant periods.
The interim report is neither audited nor reviewed. The results for the 52 weeks
ended 31 December 2005 have been extracted from the audited financial statements that
have been filed with the Registrar of Companies. The report of the auditors was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
The interim statement has been prepared on a consistent basis and in accordance with
the accounting policies set out in the Group's 2005 Annual Report and Financial
Statements.
2. Segmental analysis
The Group's turnover may be analysed between the following principal activities:
26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
Activity: £'000 £'000 £'000
Hire 19,151 17,169 36,389
Sales 4,539 5,331 9,509
Installation 3,919 4,258 9,190
Total 27,609 26,758 55,088
The geographical analysis of the roup's turnover was as follows:
26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
By origination: £'000 £'000 £'000
United Kingdom 22,487 23,574 48,041
Rest of Europe 3,131 1,529 3,674
Middle East and 1,991 1,655 3,373
Africa
27,609 26,758 55,088
26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
By destination: £'000 £'000 £'000
United Kingdom 22,137 23,190 47,612
Rest of Europe 3,180 1,561 3,737
Middle East and 2,027 1,665 3,478
Africa
Rest of World 265 342 261
27,609 26,758 55,088
The analysis of profit before interest and tax and net assets by geographical origin was as follows:
Profit before interest and tax Net assets including pension liability
26 weeks to 26 weeks to 52 weeks to As at As at As at
1 July 2 July 31 December 1 July 2 July 31 December
2006 2005 2005 2006 2005 2005
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 4,006 10,146 16,141 20,174 20,262 17,642
Rest of Europe 1,129 387 1,155 2,051 813 1,785
Middle East and Africa 228 226 512 2,010 1,793 2,144
5,363 10,759 17,808 24,235 22,868 21,571
Net (debt) / cash (18,565) 1,308 (19,658)
Taxation (2,133) (1,267) (1,060)
Pension liability (3,902) (6,050) (4,434)
(365) 16,859 (3,581)
3. Earnings per share
The basic figures have been calculated by reference to the weighted average
number of ordinary shares in issue, excluding those in the ESOP reserve,
during the period of 44,562,701 (26 weeks ended 2 July 2005: 57,976,672).
The calculation of the diluted earnings per ordinary share is based on the
profits as set out in the table below and on 44,565,526 (26 weeks ended 2 July
2005: 57,992,597) ordinary shares. The share options have a dilutive effect
for the period calculated as follows:
26 weeks to 1 July 2006 26 weeks to 2 July 2005
Continuing Total No. of shares Continuing Total No. of
earnings earnings earnings earnings shares
£'000 £'000 £'000 £'000
Basic earnings/weighted 3,325 3,325 44,562,701 2,699 9,680 57,976,672
average number of shares
Weighted average number 16,194 30,000
of shares under option
Number of shares that
would have been issued
at fair value (13,369) (14,075)
Earnings/ diluted 3,325 3,325 44,565,526 2,699 9,680 57,992,597
weighted average number
of shares
Diluted earnings 7.46p 7.46p 4.65p 16.69p
per ordinary share (pence)
Andrews Sykes Group plc
Notes to the accounts
For the 26 weeks ended 1 July 2006
4. Reconciliation of operating profit to net cash inflow from operating activities
26 weeks to 26 weeks to 52 weeks to
1 July 2 July 31 December
2006 2005 2005
£'000 £'000 £'000
Operating profit 5,363 3,962 11,404
Goodwill amortisation 7 7 14
Depreciation 1,963 2,286 4,280
Profit on sale of fixed assets (243) (197) (336)
Decrease in stocks 57 141 37
(Increase) / decrease in debtors (1,252) 20 (591)
Decrease in creditors and provisions (603) (1,961) (4,612)
Net cash inflow from operating activities 5,292 4,258 10,196
5. Analysis of net debt
As at Cash Other non As at
1 July flow cash 31 December
2006 movements 2005
£'000 £'000 £'000 £'000
Cash at bank and in hand 11,435 1,179 (86) 10,342
Debt due in one year (5,000) - - (5,000)
Debt due after one year (25,000) - - (25,000)
Gross debt (30,000) - - (30,000)
Net debt (18,565) 1,179 (86) (19,658)
6. Distribution of interim statement
A copy of this statement will be posted to all shareholders and is available
from the Company's registered office at Premier House, Darlington Street,
Wolverhampton, WV1 4JJ.
END
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