Final Results-Replacement
Aukett Group PLC
11 December 2003
CORRECTION
The following replaces the Final Results announcement released today at 7:00
under RNS number 1268T.
In the Financial Highlights, 'Profit/(loss) before tax and exceptional items',
the figure for 2002 should be (2,114) and not 2,110 as previously stated.
All other details remain the same, the full amended text appears below
For Release 11th December 2003
AUKETT GROUP PLC
2003 PRELIMINARY RESULTS ANNOUNCEMENT
Return to profitability sustained; Improving Outlook
Aukett Group Plc ('Aukett'), the international group of architects, designers
and engineers, announces its Preliminary Results for the 12 months ended 30
September 2003. Aukett provides creative design consultancy in a diverse range
of sectors including: retail, commercial property, urban leisure, hotels,
interior design, healthcare, education, technical support facilities and
transportation.
In the UK significant new projects during the year were undertaken in London,
Manchester, Leeds, Cambridge and in the South of England. These include:
residential, retail and commercial complexes in Folkestone and the Isle of Dogs,
East London; a new Fujitsu facility in Manchester; a new Palestra office
development in Southwark; Sky Sports facilities at BsB's West London HQ; new
office buildings at Leeds Valley Business Park; master plans for mixed use
developments in Brentford, West London and Northfleet, Kent; interior design for
the Independent Police Complaints Commission; new offices for the DVLA in
Swansea; a retail park in Swindon; and the fit-out for the Diageo HQ Building.
In addition, Government funded projects were undertaken for Brunel University,
the Institute of Education, Birkbeck College, University of London and
Addenbrookes Hospital, Cambridge.
Overseas, commercial schemes were undertaken for Habitat Grupo Inmobaliario, in
Barcelona, for a new town in Kozino, Russia, for General Electric Global
Research in Munich and for a new HQ for Microsoft in Athens.
Financial Highlights
Year ended 30 September 2003 2003 2002
£000 £000
Turnover 14,032 13,677
Group work done 13,555 13,102
Operating profit/(loss) 530 (1,337)
Profit/(loss) before tax and exceptional items 308 (2,114)
Basic and diluted loss per share (0.13p) (3.27p)
Dividends per share Nil Nil
Net assets(compared with 30 September 2003) 1,493 1,102
Gearing(compared with 30 September 2003) 128% 217%
Key Points of Statement
* Return to profitability from final quarter last year sustained.
* Progress towards strengthening group's financial and commercial position.
* Effective disposal of two unprofitable European joint ventures.
* Positive cash inflow generated of £1.3m before financing and creditor
movement.
* Net borrowings down by 20.8%, creditors reduced.
* Three board appointments from within company.
* Six major industry awards won for various UK projects.
* UK business improving, working towards long term growth.
* European schemes underway for Proctor & Gamble in Moscow, BT in Munich, Royal
Bank of Scotland across Europe, and master planning for a new town in Kozino,
Russia.
* On going framework agreements with the Department of Transport, MoD and
Asda.
Chairman Ian Mavor said:
'I am pleased that the Group's turnaround has been effected with the resultant
small improvements in the Group's balance sheet, led by an improved UK
performance. The improvement in cash flow should continue next year. The Board
believes that it will be sufficient to support a modest infrastructure
investment programme, necessary to enhance the Group's competitive advantage, as
well as a further reduction in gearing. The Board believes that the Group's
profitability will be sustained in 2003/04 but remains cautious about the pace
of growth.'
Enquiries:
Aukett Group Plc www.aukett.com
Ian Mavor, Chairman Tel: 020 7924 4949
Patrick Carter, Group Finance Director
Binns & Co PR Ltd
Peter Binns, Sam Allen, Victoria Stephens Tel: 020 7786 9600
Results for the twelve months ended 30 September 2003
Introduction
I am pleased to report on a year in which progress has been made towards
strengthening the Group's financial and commercial position against the
background of challenging trading conditions. The return to profitability of the
Group as a whole, achieved in the final quarter of last year, has been
sustained. Profit on ordinary activities before exceptional write-offs was
£308,000 (2002: loss £2,114,000). Decision makers in our sectors remained
cautious and, as a result, a significant increase in the volume of business for
the Group as a whole did not materialise. Turnover increased marginally to
£14.03m (2002: £13.68m). Although results from Europe are poor, positive
progress has been made in implementing changes in those operations. At the
half-year we indicated our intention to revise the arrangements for the
provision of services in Europe. The exceptional losses from subsequent
disposals of our interests in certain joint ventures were £465,000 (2002:
impairment of goodwill £333,000). The remaining joint ventures are better than
break-even. The business has generated a positive cash inflow of £1.3m before
financing and movement in creditors. This has been applied to reduce both
creditors and bank borrowings resulting in net borrowings falling to £1.911m
(2002: £2.390m) and gearing reducing to 128% (2002: 217%). Trade debtor days
deteriorated during the year but have improved since the year-end. The bank
facility has been renewed for the forthcoming 12 months at a level which the
directors believe continues to give the Company sufficient flexibility to
address the business needs over that period.
Board Changes
In June 2003 three executives joined the Board. Stuart McLarty was appointed
Director responsible for group marketing, Paul Newman was appointed Director
responsible for group project performance and Stephen Embley was appointed
Director responsible for group resource co-ordination. All three are qualified
design professionals who have been with the Company for over ten years. Together
they are responsible for the formulation and implementation of initiatives to
utilise across the Group the range of skill sets and client sector knowledge in
marketing, sales support and project management. Andrew Lett resigned from the
Board in August 2003 and left the Company on 30 September 2003. We appreciate
and thank him for his many years of loyal service to the Group.
Review of Operations
As stated in our half-year results we experienced a slow down in work levels in
early spring. This continued through the second half of the year. Costs were
trimmed accordingly to ensure that the Group as a whole remained profitable but
market research and marketing spend were maintained throughout to develop the
opportunities that ultimately will deliver the required long-term growth in both
turnover and profit.
UK operations
In the UK the business unit organisation began to make an impact in accessing
new business. The retail sector has had an inconsistent year. As retail is often
the driver for mixed use developments, Aukett's expertise has brought success in
winning two major new commissions during the year in Folkestone and the Isle of
Dogs, East London. They both include approximately 600 apartments as well as
retail and commercial elements thus extending our sector coverage into
residential. They are currently progressing through planning stages.
The corporate office sector has had a difficult year with a significant decline
in activity across the industry. Nevertheless major projects have been won and
work has started on a new facility for Fujitsu in Manchester, the mechanical and
electrical engineering services for the 20,000 sq. metre Palestra office
development in Southwark, new office buildings at Leeds Valley Business Park and
the office and studio facilities for Sky Sports at the British Sky Broadcasting
HQ site in West London.
Urban planning in towns and cities and master planning of large greenfield sites
have been buoyant and furthermore have opened up major project opportunities. We
have received a number of important appointments including a high density mixed
use master plan in Brentford, West London, which has been completed, and an
on-going 90 acre mixed use master planning project at Northfleet, Kent, which
combines commercial, retail, educational, leisure and hotel elements. Our
success is not limited to the UK. Inter alia, we have secured and completed a
commercial site master plan in Barcelona for Habitat Grupo Inmobiliario and are
now working on a 505 hectare master plan for a new town in Kozino, Russia.
Interior design has also been increasingly active. A commission for the
Independent Police Complaints Commission was completed this year and the Company
has projects for new offices for the Driver and Vehicle Licensing Agency in
Swansea and a new HQ for Microsoft in Athens. These are supplemented by regular
projects arising under existing framework agreements with BT, The Royal Bank of
Scotland and the Office of the Deputy Prime Minister.
We have been active in pursuing Government funded programmes in health and
education. These types of projects will take some time to crystallise.
Nevetheless we have completed a master plan for Brunel University during the
year and are currently involved in the design of a knowledge laboratory for a
collaboration between the Institute of Education and Birkbeck College,
University of London. We have also substantially completed a master planning
study for Addenbrookes Hospital, Cambridge and a strategic master plan for the
adjacent research & development campus.
In the UK, the Company has won six major industry awards including the 'Retail
Property Award' for the best retail park for the Orbital Shopping Park, Swindon,
and from the British Council for Offices their National award for the fit-out of
the new headquarters for BT Wholesale Markets Division near Gatwick and their
London region award for the fit-out of the Diageo GB headquarters building.
European operations
Consistency of quality in our design and delivery are the key factors which
international clients require in Europe. Aukett's brand concentrates on the
integration of marketing and sales and the effective use of our skills and
knowledge. There are signs that this approach is bringing some success. We are
now undertaking the Moscow HQ for Proctor & Gamble and a refurbishment of BT's
office space in Munich. Both of these projects will be ongoing in 2004. The
Royal Bank of Scotland has awarded us further project work on their facilities
across Europe. Furthermore we have also substantially completed a major new
research facility for General Electric Global Research in Munich with the
Facilities Group. We intend to continue this drive and our offices in Warsaw and
Prague are well placed to market our services as the European Union welcomes new
Eastern European member states in 2004.
As announced in our Interim Report in June 2003, we were taking action to
rationalise our overseas operations. We have now disposed of our interest in our
Spanish joint venture which made significant losses over the past few years. In
addition we have withdrawn from the management of the Paris based joint venture
and as a result we have written off our investment
Management and staff
The progress the Group has made during the year is in no small way thanks to the
skill and enthusiasm of our staff. They have continued to maintain the high
standards set both by us and our clients in what is a very demanding and
competitive market. We do understand that financial restraints have put
increased pressure on management and staff. I am delighted to report that they
responded positively to the challenge and made a significant contribution to the
changes that have reversed last year's performance. The fact that the Group has
won a number of industry awards and many new appointments this year is evidence
of their professionalism and quality of work. On behalf of the Board I would
like to thank all our employees for their hard work and dedication throughout
the year.
Summary
I am pleased that the turnaround outlined in this report has been effected with
the resultant small improvement in the Group's balance sheet. This has been led
by an improved UK performance. We have dealt with the two badly performing joint
ventures. Our remaining European operations are in fragile local markets but
they remain an important conduit for delivering services under the Aukett brand
to international clients. There has been a modest improvement in net borrowings.
The improvement in cash flow should continue next year and the Board believes
that it will be sufficient to support a modest infrastructure investment
programme, necessary to enhance the Group's competitive advantage, as well as a
further reduction in gearing. The Board believes that the Group's profitability
will be sustained in 2003/04 but remains cautious about the pace of growth.
IGF Mavor
Chairman
Consolidated profit and loss account
For the year ended 30 September 2003
2003 2002
£000 £000
Group turnover (note 1) 14,032 13,677
Movement in amounts recoverable
on contracts (477) (575)
-------- --------
Group work done (note 1) 13,555 13,102
------- -------
Group operating profit/(loss) (note 2) 530 (1,337)
Share of operating loss in joint ventures and
associate (3) (568)
Exceptional charges:
Impairment of goodwill in joint venture - (333)
Loss on disposal of joint ventures (note 6) (465) -
-------- --------
Profit/(loss) on ordinary activities before tax 62 (2,238)
-------- --------
Net interest payable by Group (219) (209)
-------- --------
Loss on ordinary activities before tax (note 3) (157) (2,447)
Tax credit on loss on ordinary activities 62 77
-------- --------
Loss on ordinary activities after tax (95) (2,370)
Dividends - -
-------- --------
Retained loss for the year (95) (2,370)
-------- --------
Basic and diluted loss per share (0.13p) (3.27p)
Consolidated Balance Sheet
At 30 September 2003
2003 2002
£000 £000 £000 £000
Fixed assets
Intangible assets 503 595
Tangible assets 679 1,120
Investments in joint ventures:
Share of gross assets 349 242
Share of gross liabilities (311) (213)
-------- -------
38 29
Investment in associate 28 25
--------- ------
1,248 1,769
Current assets
Debtors 6,239 6,624
Cash at bank and in hand 246 429
-------- -------
6,485 7,053
Creditors falling due within one year (6,092) (7,488)
-------- -------
Net current assets/(liabilities) 393 (435)
--------- ------
Total assets less current liabilities 1,641 1,334
Creditors falling due after one year (148) (232)
--------- ------
Net assets 1,493 1,102
--------- ------
Capital and reserves
Called up share capital 724 724
Share premium account 1,794 1,794
Profit and loss account (1,025) (1,416)
--------- ------
Equity shareholders' funds 1,493 1,102
--------- ------
Statement of total recognised gains and losses
For the year ended 30 September 2003
2003 2002
£000 £000
Loss for the financial year (95) (2,370)
Foreign exchange differences 69 -
------- -------
Total gains and losses recognised in the year (26) (2,370)
------- -------
Reconciliation of movements in shareholders' funds
For the year ended 30 September 2003
2003 2002
£000 £000
Opening shareholders' funds 1,102 3,472
Exchange movement 69 -
Reinstatement of goodwill written off to reserves 417 -
Loss attributable to shareholders (95) (2,370)
------- -------
Shareholders' funds at 30 September 1,493 1,102
------- -------
Consolidated Cash Flow Statement
For the year ended 30 September 2003
2003 2002
£000 £000 £000 £000
Net cash inflow/ (outflow) from
operating activities 746 (205)
Returns on investments and
servicing of finance (218) (198)
Tax paid (9) (286)
Capital expenditure
Purchase of tangible fixed assets (9) (91)
Acquisitions and disposals
Investment in subsidiary
undertakings - (3)
Investment in joint ventures - (2)
Disposal of investment in joint
ventures 28 -
------- ------
28 (5)
-------- ------
Net cash inflow/(outflow) before
financing 538 (785)
Financing
Repayment of loans (120) (80)
------- ------
Principal repayments under hire
purchase contracts and finance
leases (328) (460)
------- ------
Net cash outflow from
financing (448) (540)
-------- ------
Increase/(decrease) in cash 90 (1,325)
-------- --------
Reconciliation of net cash flow to
movement in net debt
Increase/(decrease) in cash for
the year 90 (1,325)
Cash outflow from decrease in debt 448 540
New finance leases (59) (283)
-------- ------
Movement in net debt during the 479 (1,068)
Net debt at 1 October 2002 (2,390) (1,322)
-------- -------
Net debt at 30 September 2003 (1,911) (2,390)
========= ========
NOTES
1 Turnover and work done
An analysis of turnover and work done by geographical area of destination is as
follows:
2003 2002
United Rest of United Rest of
Kingdom Europe Total Kingdom Europe Total
£000 £000 £000 £000 £000 £000
Turnover
Gross turnover 12,152 3,484 15,636 11,055 4,544 15,599
Less: Share of
joint ventures - (1,204) (1,204) - (1,738) (1,738)
Share of
associate - (400) (400) - (184) (184)
------- ------ ------ -------- ------- -------
Group turnover 12,152 1,880 14,032 11,055 2,622 13,677
Movement in amounts
recoverable on contracts
Gross movement (535) 27 (508) (1,159) 303 (856)
Less: Share of
joint ventures - 37 37 - 262 262
Share of
associate - (6) (6) - 19 19
------- ------ ------ -------- ------- -------
Group movement
in amounts recoverable
on contracts
(535) 58 (477) (1,159) 584 (575)
Work done
Gross work done 11,617 3,511 15,128 9,896 4,847 14,743
Less: Share of
joint ventures - (1,167) (1,167) - (1,476) (1,476)
Share of
associate - (406) (406) - (165) (165)
------- ------ ------ -------- ------- -------
Group work done 11,617 1,938 13,555 9.896 3,206 13,102
------- ------ ------ -------- ------- -------
2 Group operating profit/(loss)
2003 2002
£000 £000
Group work done 13,555 13,102
Staff costs (7,342) (7,471)
Amortisation of goodwill (92) (29)
Depreciation (509) (651)
Other operating charges (5,082) (6,288)
-------- -------
Group operating profit/(loss) 530 (1,337)
========= =======
3 (Loss)/profit on ordinary activities before taxation
An analysis of (loss)/profit on ordinary activities before taxation by
geographical area is as follows:
2003 2002
United Rest of United Kingdom Rest of
Kingdom Europe Total £000 Europe Total
£000 £000 £000 £000 £000
Company and
subsidiaries 183 (337) (154) (1,660) (219) (1,879)
Share of joint
ventures - (4) (4) - (529) (529)
Share of
associate - 1 1 - (39) (39)
-------- ------- ------- ------- ------- -------
Group total 183 (340) (157) (1,660) (787) (2,447)
======== ======= ======= ======= ======= =======
4 Loss per share
The loss per share is calculated on the loss attributable to shareholders of
£95,000 for the year ended 30 September 2003 (2002: loss £2,370,000) and on
72,421,394 (2002: 72,421,394) ordinary shares, being the weighted average number
of shares in issue during the year. There is no additional dilution to the
report in either year in accordance with FRS 14, Earnings per Share.
5 Amounts recoverable on contracts
Payments on account, as included in creditors, exceeded amounts recoverable on
contracts, as included in debtors, by £1,011,000 at 30 September 2003 (2002:
£534,000). These amounts comprise:
2003 2002
Amounts Payments on Amounts Payments on
recoverable on account recoverable account
contracts on contracts
£000 £000 £000 £000
Value of work done 18,090 5,006 19,285 7,724
Fees rendered on
account (17,655) (6,452) (18,590) (8,953)
----------- ----------- ----------- -----------
435 (1,446) 695 (1,229)
========== ========= ========= ==========
6 Disposal of joint ventures
Spain : Aukett Imagina SL
On 16th July 2003 the Group sold its 50% interest in the ordinary share capital
of Aukett Imagina SL to its joint venture partner in Spain, Imagina Management
Limited, for cash consideration of €40,000 (£28,000) and the assumption by
Imagina Management Limited of all liabilities. At the date of the disposal, the
share of the cumulative losses of the undertaking recorded in the Group's books
amounted to £168,000.
Goodwill of £417,000, which relates to the acquisition of the first tranche of
Aukett Imagina SL, was eliminated against reserves in accordance with SSAP 22 in
the financial year ended 30 September 1998. On disposal of the Group's interest
in Aukett Imagina SL, FRS 10 Accounting for Goodwill, requires that goodwill
previously eliminated directly against reserves is brought into the profit and
loss account as a component of the profit or loss on disposal. This has given
rise to an exceptional loss on disposal which is offset against a corresponding
movement in reserves.
France: Aukett Art & Build SELARL
The Group no longer exercises either joint control or significant influence over
Aukett Art & Build SELARL. In accordance with FRS 9, it is no longer appropriate
to treat the entity as either a joint venture or as an associate. Consequently,
the entity has been accounted for as a simple investment and all liabilities, to
the extent that the Group is obliged to pay, have been provided. At the
effective date of the loss of influence, share of the cumulative losses of the
undertaking recorded in the Group's books amounted to £282,000. The exceptional
loss arising on the effective disposal was £48,000.
7 Statutory accounts
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 30 September 2003 or 2002 but
is derived from those accounts. Statutory accounts for 2002 have been delivered
to the Registrar of Companies and those for 2003 will be delivered following the
Company's annual general meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under section 237
(2) or (3) of the Companies Act 1985.
The Company's statutory accounts for 2003 will include the following
note in respect of their basis of preparation:
'The Group meets its day to day working capital requirements through an
overdraft facility which is repayable on demand. The nature of the Group's
business is such that there can be considerable uncertainty over the timing of
major projects and the commencement of cash flows arising therefrom. The
directors have prepared projected cash flow information for the next twelve
months and they consider that the Group will continue to operate within the
overdraft facility recently agreed, which expires on 30 November 2004. On this
basis, the directors consider it appropriate to prepare the financial statements
on the going concern basis. However, the margin of facilities over requirements
is not large and inherently there can be no certainty as to these matters and,
in the event that projects are delayed or expectations included in the
directors' projections are otherwise not met, the Group may need to renegotiate
its banking facilities. The financial statements do not include any adjustments
that would result from a failure by the Group to obtain adequate future
funding.'
8 Annual Report
The Annual Report and Accounts is expected to be mailed to
shareholders on or before 29 December 2003. Further copies will be available
from the registered office of the Company, 2 Great Eastern Wharf, Parkgate Road,
London SW11 4TT, or will be accessible via the Company's website at
www.aukett.com.
This information is provided by RNS
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