Interim Results

Aukett Associates PLC 18 May 2000 AUKETT ASSOCIATES PLC 2000 INTERIM RESULTS ANNOUNCEMENT PTP up 55% at £0.95m; EPS up 59%; Interim dividend restored Strong order book; Continuing expansion across Europe Aukett Associates PLC ('Aukett'), one of Europe's leading building design practices, with offices in twelve cities in ten countries, announces Interim Results for the six months ended 31 March 2000. Financial Highlights Six months ended 31 March 2000 1999 Increase Turnover, including share of JV's £9.16m £8.08m 13% Group work done £9.09m £6.27m 45% Operating profit £0.88m £0.51m 73% Profit before tax £0.95m £0.61m 55% Earnings per share 1.05p 0.66p 59% Dividends per share 0.15p - Net assets £3.09m £2.50m 23% Gearing 32% 30% Key Points of Chairman's Statement * Trading levels and margins well ahead of last year * Group re-branded as Aukett Europe * Growth both organic and from acquisition * Increased proportion of work done from outside UK * New office in Warsaw * Guinness, IBM, Clientlogic among new clients * Repeat business still at 80%; Order book remains strong Regarding Prospects, Chairman Andrew Lett said: 'The strategy of geographical and sector spread, coupled with the continuing strength of repeat business, gives the Directors confidence that another successful year can be achieved.' Enquiries: Aukett Associate PLC Andrew Lett, Executive Chairman John Thake, Managing Director Robert Warner, Finance Director Tel: 020 7924 4949 Binns & Co PR Ltd Peter Binns, Jane Mallinson Tel: 020 7786 9600 AUKETT ASSOCIATES PLC Interim Statement for the six months ended 31 March 2000 Overview The Directors are pleased to report that the business continues to grow, with trading levels and margins well ahead of the comparable period last year. The level of business experienced in the United Kingdom last year has been more than maintained and positive progress has also been made in mainland Europe. The Group's trading name has now been re-branded as Aukett Europe, thus creating a simpler message and a common identity for all our 12 offices. This has been an important strategic step in developing our concept of a single European architecture, design and engineering business. Results Group work done in the six months ended 31 March 2000 amounted to £9.09 million compared with £6.27 million in the same period last year, an increase of 45 per cent. Operating margins have continued to rise with this growth and Group operating profit increased by 73 per cent to £883,000 (1999: £510,000). The share of operating profit in joint ventures has fallen, mainly as a result of the acquisition of the balance of the Dutch joint venture, which is now fully consolidated. The profit before tax increased by 55% to £953,000 (1999: £614,000). The contribution made by our activities in mainland Europe increased to £231,000 (1999: £154,000). Net interest of £28,000 was earned during the period (1999: net charge of £13,000) on cash balances generated last year. The corporation tax charge for the current financial year is expected to benefit from tax relief on the major part of last year's exceptional charge in the accounts. The tax rate used for these half-year results has reduced accordingly. Earnings per share were 1.05p (1999: 0.66p), up by 59%. Dividend Following the Company's return to the dividend list last year, the Board now declares an interim dividend of 0.15p per share (1999: nil). This will be paid on 8 September 2000 to shareholders on the register on 11 August 2000. United Kingdom Operations Operations in the United Kingdom have continued to build on the substantial progress made during the previous financial year. In London, the office has been intensely productive not only with the high volume of UK projects either at design or construction stage but also with support to our European operations where our specialist skills in London add value to our service around Europe. The office in Glasgow has experienced a major increase in workload during the last 12 months and has demonstrated that there is good growth potential in the regional areas of the UK. We continue to obtain new projects from existing clients such as Akeler, ASDA, Royal & Sun Alliance, BT, Development Securities and Glaxo Wellcome and repeat business at around 80 per cent remains a strong feature of our workload. In addition, recent commissions have been received from new clients such as Guinness, IBM and Clientlogic, the US call and data operator, and our involvement in sectors such as IT-related infrastructure and hotels has increased satisfactorily over the period. Operations in Mainland Europe The Group's expansion outside the United Kingdom has continued during the period. In The Netherlands, acquisition of the 50 per cent of the Group's operation in Amsterdam not already owned was completed in October 1999, as previously reported. The consideration was £580,000 in cash and goodwill arising of £350,000 is being written off over 20 years. This business continues to perform well and has recently moved into new premises, which will allow room for expansion opportunities envisaged over the next few years. Trading by our Spanish joint venture has emerged from the downturn experienced last year and it is now making an improved contribution to Group profits. In addition this business has extended its sphere of operations to Morocco, where it has formed a 75 per cent subsidiary with a new partner, on the strength of new projects won from existing international clients in the telecommunications field. The Berlin office has had a disappointing six months, although it has remained profitable. Prospects for the second half are significantly better with a number of new projects now progressing positively. The performance of the Prague operation has been very satisfactory, with trading and profitability ahead of the same period last year. The office is opening up project opportunities across eastern Europe and this has supported our decision to expand further in this area with the formation of a new company in Warsaw. The work done by the Group on projects outside the United Kingdom, including its share of work done by joint ventures, was £2.79 million (1999: £1.28 million), representing 29 per cent of the total such figure for the Group (1999: 19 per cent). Balance Sheet and Cashflow Shareholders' funds have increased to £3.09 million at 31 March 2000 from £2.50 million at the end of last year. The Group balance sheet showed net borrowings of £982,000 against net borrowings of £751,000 at 30 September 1999. Although operating cashflow has remained positive during the period, the investment activity mentioned above has resulted in a modest net cash outflow from the Group and gearing has increased slightly to 32% (30 September 1999: 30%). Summary and Prospects The Group's order book remains strong. Within the United Kingdom, the market continues to be both stable and active, with encouraging signs that sustainable growth can be maintained. The ongoing investment in European operations should underpin our development and progress outside the UK. The re-branding of the Group as Aukett Europe has been a significant step in the creation of a single European design business. The strategy of geographical and sector spread, coupled with the continuing strength of repeat business, gives the Directors confidence that another successful year can be achieved. 18 May 2000 Aukett Associates PLC 2 Great Eastern Wharf Parkgate Road London, SW11 4TT Consolidated profit and loss account Six months ended 31 March 2000 Six months Year ended Acquisitions Continuing Total ended 30 31 March September 1999 1999 unaudited unaudited unaudited unaudited audited £000 £000 £000 £000 £000 Turnover: Group and share of joint ventures (note 1) 442 8,713 9,155 8,083 15,088 Less: share of joint ventures' turnover -- -- (469) (573) (1,112) ---------- ---------- -------- ---------- ---------- Group Turnover 8,686 7,510 13,976 Movement in amounts recoverable on contracts 404 (1,245) (127) ---------- ---------- -------- ---------- ---------- Group work done 9,090 6,265 13,849 ---------- ---------- -------- --------- --------- Group operating profit before exceptional item 94 789 883 510 1,307 Exceptional item - - - - (450) ---------- ---------- ------- ---------- ---------- Group operating profit (note 2) 94 789 883 510 857 Share of operating profit in joint ventures and associate 42 117 235 Net interest receivable/(payable) by Group 28 (13) (70) -------- ---------- ---------- Profit on ordinary activities before tax (note 3) 953 614 1,022 Tax on profit on ordinary activities (219) (180) (380) --------- --------- --------- Profit on ordinary activities after tax 734 434 642 Dividends (125) - (199) --------- ---------- ---------- Retained profit of the Group and its share of joint ventures and associate 609 434 443 ===== ===== ===== Earnings per share (note 5): Basic before exceptional item 1.05p 0.66p 1.60p Basic 1.05p 0.66p 0.97p Diluted before exceptional item 1.02p 0.64p 1.56p Diluted 1.02p 0.64p 0.95p --------- --------- --------- Summarised Consolidated Balance Sheet 31 March 2000 30 September 1999 £000 £000 £000 £000 unaudited unaudited audited audited Fixed assets Intangible assets 1,009 675 Tangible assets 1,008 956 Investments in joint ventures 151 269 Investment in associate 75 69 ---------- --------- 2,243 1,969 Current assets Debtors 5,112 5,828 Cash at bank and in hand 534 454 ---------- ---------- 5,646 6,282 Creditors falling due within one year (4,242) (5,042) ---------- ---------- Net current assets 1,404 1,240 ---------- ---------- Total assets less current liabilities 3,647 3,209 Creditors falling due after one year (558) (703) Provisions for liabilities and charges (4) (4) ---------- ---------- Net assets 3,085 2,502 ===== ===== Capital and reserves Share capital 722 661 Share premium account 1,755 1,458 Profit and loss account 608 383 ----------- ----------- Equity shareholders' funds (note 5) 3,085 2,502 ====== ====== Summarised Consolidated Cash Flow Statement Six months Six months Year ended ended ended 30 September 31 March 2000 31 March 1999 1999 unaudited unaudited audited £000 £000 £000 Net cash flow from operating activities 579 1,838 1,596 Returns on investments and servicing of finance 25 (13) (71) Taxation - - (56) Capital expenditure (112) (180) (289) Acquisitions (404) (607) (719) Equity dividends paid (217) - (99) ----------- ---------- ---------- Net cash (outflow)/inflow before financing (129) 1,038 362 Net cash outflow from financing (206) (78) (209) ---------- ---------- ---------- (Decrease)/increase in cash during the period (335) 960 153 ===== ===== ===== Reconciliation of operating profit to net cash flow from operating activities Group operating profit 883 510 857 Exceptional UITF 17 charge - - 450 Depreciation and amortisation of fixed assets 176 77 215 Decrease/(increase) in debtors 555 (58) (1,468) (Decrease)/increase in creditors (1,035) 1,309 1,542 ----------- ---------- ---------- Net cash flow from operating activities 579 1,838 1,596 ====== ===== ===== NOTES 1. Turnover and work done An analysis of turnover and work done of the Group, including its share of joint ventures, by geographical area of destination is as follows: Turnover Six months Six months ended ended Year ended 31 March 31 March 30 September 2000 1999 1999 unaudited unaudited audited £000 £000 £000 United Kingdom 6,143 6,813 12,658 Rest of Europe 3,012 1,270 2,430 _____ _____ ______ Total 9,155 8,083 15,088 ==== ==== ===== Movement in amounts recoverable on contracts United Kingdom 613 (1,250) (212) Rest of Europe (220) 7 103 _____ _____ ______ Total 393 (1,243) (109) ===== ===== ===== Work done United Kingdom 6,756 5,563 12,446 Rest of Europe 2,792 1,277 2,533 _____ _____ ______ Total 9,548 6,840 14,979 ==== ==== ===== 2. Group operating profit Six months Six months ended ended Year ended 31 March 31 March 30 September 2000 1999 1999 unaudited unaudited audited £000 £000 £000 Group work done 9,090 6,265 13,849 Staff costs (4,575) (3,542) (7,211) Exceptional UITF 17 charge - - (450) Amortisation of goodwill (29) (9) (29) Depreciation (147) (77) (203) Other operating charges (3,456) (2,127) (5,099) _____ _____ ______ Total 883 510 857 ==== ===== ===== 3.Profit on ordinary activities before taxation An analysis of profit on ordinary activities before taxation by geographical area is as follows: Six months Six months ended ended Year ended 31 March 31 March 30 September 2000 1999 1999 unaudited unaudited audited £000 £000 £000 United Kingdom 722 460 692 Rest of Europe 231 154 330 _____ _____ _____ Total 953 614 1,022 ==== ===== ===== 4.Earnings per share The earnings per share are calculated on the profit attributable to shareholders of £734,000 for the six months ended 31 March 2000 and on 69,608,940 (1999: 66,061,666) ordinary shares, being the weighted average number of shares in issue during the period. Diluted earnings per share are calculated on 72,171,244 (1999: 67,716,294) ordinary shares. 5.Reconciliation of movements in shareholders' finds 31 March 200 30 September unaudited 1999 £000 audited £000 Opening shareholders' funds 2,502 1,720 Reserves movement relating to UITF 17 charge in 1999 (336) 336 Issue of shares relating to Directors' 1999 share award 336 - New shares issued in respect of share options 21 3 Foreign exchange loss (47) - Profit attributable to shareholders 734 642 Dividends proposed or declared (125) (199) ______ ______ Closing shareholders' funds 3,085 2,502 ===== ====== 6.Year 2000 issues Although we are now in the year 2000, the generic issue remains. Since 31 December 1999 the Group has encountered no significant problems as a result of the Year 2000 Issue and has not incurred any additional costs. 7.Statutory accounts The comparative figures for the year ended 30 September 1999 are not the Company's statutory accounts for that financial year. Statutory accounts for that financial year have been reported on by the Company's auditors and delivered to 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. 8.Interim Report The Interim Report and is expected to be mailed to shareholders on or before 30 May 2000. Further copies will be available from the registered office of the Company, 2 Great Eastern Wharf, Parkgate Road, London SW11 4TT, or will be accessable via the Company's website at www.aukett.com.

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