Interim Results
Aukett Group PLC
24 June 2003
For Immediate Release, 7:00am , 24th June 2003
AUKETT GROUP PLC
2003 INTERIM RESULTS ANNOUNCEMENT
Aukett Group Plc ('Aukett'), the international group of architects, designers
and engineers, announces its Interim Results for the six months ended 31 March
2003. Aukett provides creative design consultancy in offices, workplaces,
business parks, retail services and outlets, hotels, education, transport, IT,
industry, urban regeneration, healthcare, and technical support facilities.
Significant new projects included participation in Defence Estates' SLAM
projects; London Underground's Camden Town Station redevelopment; expansion of
activities with the Royal Bank of Scotland; Clerical Medical's new Bristol HQ;
LE Group's new central London HQ; and the new Daimler Chrysler Heritage and
Technology Centre.
Financial Highlights
Six months ended 31 March 2003 2002
unaudited unaudited
Group work done £7.40m £6.58m
Operating Profit
• UK £0.44m (£0.74m)
• European Subsidiaries (£0.17m) (£0.08m)
Total £0.27m (£0.82m)
Contribution from Joint Ventures (£0.07m) (£0.38m)
Profit/(loss) before tax:
- UK £0.35m (£1.16m)
- Rest of Europe (£0.24m) (£0.48m)
- Total £0.11m (£1.64m)
Basic and diluted earnings/(loss) per share 0.11p (2.03p)
Dividends per share Nil Nil
Net assets(compared with 30 September 2002) £1.22m £1.10m
Gearing(compared with 30 September 2002) 195% 217%
Key Points of Statement
* Return to profitability sustained in UK
* Rationalisation of European operations on going
* Focus on brand development and protection
* Development of healthcare sector with US design company, The Ritchie Organisation
* Net debt stable, creditors reduced
* Uncertain market prospects will continue to impede progress
Chairman Ian Mavor said:
'I am pleased with progress so far. Clients are showing confidence in the
Aukett brand, its products and services. They recognise that Aukett's high
standards of service and professionalism are now underpinned by efficient
processes and commercial realism. This is a tribute to the new management team
under the leadership of Geoff Harwood. This same management approach,
implemented successfully in the UK, is being extended to European operations in
the second half of the year. I am confident that, as their markets recover,
they will deliver improved returns to the Group'
Enquiries:
Aukett Group Plc www.aukett.com
Ian Mavor, Chairman Tel: 020 7924 4949
Binns & Co PR Ltd
Peter Binns, Sam Allen, Emma-Jayne Peryer Tel: 020 7786 9600
AUKETT GROUP PLC
Interim Statement for the six months ended 31 March 2003
Summary of results
The unaudited results for the first half of the current financial year show a
significant improvement on the 6 months to March 2002 with an operating profit
before exceptional charges and interest of £270,000 (2002: loss of £832,000).
The losses from Joint ventures have been reduced to £68,000 (2002: loss
£381,000) giving a profit on ordinary activities before interest and tax of
£202,000 (2002: loss £1,546,000). After interest of £93,000 and a tax charge of
£26,000 (2002: £90,000 and tax credit of £168,000 respectively) the Group has
produced a Profit after tax of £83,000 (2002: Loss £1,468,000).
Overview of trading
The key factors are (a) the performance of the UK operation; (b) the first steps
to reorganise the arrangements with joint venture partners and (c) the trading
of our European subsidiaries.
We reported in our January Statement that the Group had returned to profit. This
has been sustained in the first half of this financial year despite uncertain
market conditions. The principal uncertainties in the UK relate to the
Government's plans for infrastructure projects in particular rail transport and
corporate clients delaying or downsizing the scope of projects. As a result we
experienced a slow down in work levels towards the end of the first six months.
Corrective action has been taken to bring the cost base into line with the
anticipated level of work.
The task of overhauling the arrangements with our joint venture partners is
progressing. We are currently in discussions with two of our joint venture
partners with a view to limiting our exposure, either by disposing of our
interests or closure. These joint ventures are loss making and have limited
prospects for improvement in the foreseeable future. We are satisfied that our
remaining joint venture operations are sound. We intend to protect the Aukett
brand by ensuring a greater focus on direct input and control from our market
sector specialists. We see this as a basis for growth and improving the service
provided to the joint ventures and our international clients.
Our European subsidiaries have made an operating loss in the six-month period of
£174,000 after management charges (2002: loss £85,000). We reported in January
that trading conditions had deteriorated towards the end of 2002 and this has
continued with major projects being subject to further delays. However, the
results also reflect the impact of a number of one-off costs arising from
rationalising the cost base to reflect the anticipated lower level of business
and prospects.
Financial Summary
Group operating profit has improved to £270,000 for the first six months, from a
loss of £832,000 in the corresponding period last year. The principal reasons
are increased work done and improved utilisation rates.
Results from European activities have historically been inconsistent. As a
result, the Board has decided to adopt a more prudent treatment of the goodwill
carried on the balance sheet in respect to Aukett SRO and Aukett BV. Goodwill
for these entities will now be written off over 10 years (previously 20 years)
from the date of acquisition. Consequently the amortisation charge has been
increased from £36,000 per annum to £92,000 per annum.
Net debt has remained stable over the last six months at £2.38 million but
creditors (comprising trade creditors, tax creditors and accruals) have been
reduced from £3.1 million at 31 December 2002 to £2.3 million at 31 March 2003.
The Group has continued to trade within the bank facilities agreed in January
2003 and management expect this to remain the case. The gearing ratio has fallen
to 195% compared to 217% at the year-end.
The tax charge principally relates to the unwinding of the tax asset shown in
the balance sheet in proportion to utilisation of the remaining tax losses.
The earnings per share are 0.11p (2002: loss 2.03p). The Board is not
recommending the payment of a dividend (2002: £nil)
Significant projects and developments
Underpinning the results for the first six months were a number of significant
projects including:
• Architectural services for Defence Estates (MOD) SLAM
project, which will provide new accommodation modules for all armed services
personnel and should represent a minimum programme of 5 years work for Aukett;
• Design services for London Underground's redevelopment of
Camden Town Station;
• The Royal Bank of Scotland framework agreement for
architectural services for the South East of England has now been extended to
the Channel Isles, Isle of Man and continental Europe;
• Clerical Medical Investment Group's strategic space
planning and interior design for their new 16,000 sq m headquarters building in
Bristol;
• LE Group, the UK energy suppliers, strategic space
planning and interior design for their new London headquarters in Grosvenor
Place providing workplaces for 350 staff; and
• Architectural and masterplanning services for Mercedes
Benz's Heritage and Technology Centre at Brooklands for Daimler Chrysler UK.
For the medium to longer term we are developing our Healthcare business sector
both organically and by means of a major strategic alliance with The Ritchie
Organisation (TRO). Based in Boston, TRO are one of the top healthcare facility
design firms in the US. We believe that our combined skills and respective
experience will put Aukett at the forefront of healthcare and life-science
design. The target markets are the UK and Europe where healthcare and
life-science facilities are set to continue as a priority for most governments.
We reported last year on the establishment of business units focused on specific
markets. This was followed by a detailed review of how projects and skill sets
are managed in the UK and Europe. The management team are now in the process of
implementing arrangements to bring about a closer integration of marketing,
sales support, knowledge base and skill sets across the Group. The object is to
provide a more flexible and efficient use of skills and manpower within the
Group's overall policy of developing its business unit specialisation and
knowledge based expertise.
Prospects
The Board's confidence in the ability of the new management team to turn things
round has been justified in particular with our UK operations. This has been
achieved in spite of the recent slow down in new projects.
It remains a real task to finalise the revised arrangements to support and
revitalise the Aukett brand in Europe. This task will impact on both the joint
venture operations and the wholly owned subsidiaries. We believe that profitable
European operations can be achieved with more direct control and input from the
London based specialists in the targeted markets.
This rationalisation of the way Aukett wants to conduct its operations together
with the development and protection of the Aukett brand are the keys to our
future success in Europe. However, trading in our subsidiaries will continue to
be difficult in the short term, but the lower cost base and a new focus on
marketing and sales should enable them to make a significant improvement.
The Board believe that the market uncertainties which we have referred to will
continue. In view of this the Board do not expect the second six months to be as
strong in the UK as the first six were and it will take some time for the plan
for Europe to deliver results. Action has been taken to keep the cost base tuned
to the forecast sales revenues. Subject to projects proceeding in line with
time scales indicated by our clients, the Board expect the Group to be
profitable before exceptional items.
24 June 2003
Aukett Group Plc
2 Great Eastern Wharf
Parkgate Road
London SW11 4TT
Consolidated profit and loss account
for the six months ended 31 March 2003
Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
Unaudited unaudited audited
£000 £000 £000
Turnover: Group and share of joint ventures (note 1) 8,522 6,762 15,415
Less: share of joint ventures' turnover (652) (843) (1,738)
--------- ------------ ------------
Group turnover 7,870 5,919 13,677
Movement in amounts recoverable on contracts (469) 659 (575)
--------- ------------ ------------
Group work done 7,401 6,578 13,102
--------- ------------ ------------
Group operating profit/(loss) (note 2) 270 (832) (1,337)
Share operating loss in joint ventures and associate (68) (381) (568)
Exceptional charge relating to impairment of goodwill
in joint venture - (333) (333)
-------- ----------- ------------
Profit/(loss) on ordinary activities before interest 202 (1,546) (2,238)
Net interest payable by Group (93) (90) (209)
--------- ------------ ------------
Profit/(loss) on ordinary activities before tax (note
3) 109 (1,636) (2,447)
Tax on profit/(loss) on ordinary activities (note 4) (26) 168 77
--------- ------------ ------------
Retained profit/(loss) of the Group and its share of
joint ventures and associate 83 (1,468) (2,370)
===== ======= =======
Earnings/(loss) per share (note 5):
Basic and diluted 0.11p (2.03)p (3.27)p
Summarised consolidated balance sheet
at 31 March 2003
31 March 2003 30 September 2002
unaudited unaudited audited audited
£000 £000 £000 £000
Fixed assets
Intangible assets 550 595
Tangible assets 873 1,120
Investments in joint ventures:
Share of gross assets 253 242
Share of gross liabilities (240) (213)
------------- -------------
13 29
Investment in associate 23 25
------------- ------------
1,459 1,769
Current assets
Debtors 6,783 6,624
Cash at bank and in hand 228 429
------------- -------------
7,011 7,053
Creditors falling due within one year (7,081) (7,488)
------------- -------------
Net current liabilities (70) (435)
------------- ------------
Total assets less current liabilities 1,389 1,334
Creditors falling due after one year (169) (232)
------------- ------------
Net assets 1,220 1,102
======= =======
Capital and reserves
Share capital 724 724
Share premium account 1,794 1,794
Profit and loss account (1,298) (1,416)
------------- ------------
Equity shareholders' funds 1,220 1,102
======= =======
Summarised consolidated cash flow statement
for the six months ended 31 March 2003
Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
unaudited unaudited audited
£000 £000 £000
Net cash flow from operating activities 165 (857) (205)
Returns on investments and servicing of finance (116) (90) (198)
Tax paid (22) (353) (286)
Capital expenditure (20) (59) (91)
Acquisitions - - (5)
Equity dividends paid - - -
_______ _______ _______
Net cash inflow/(outflow) before financing 7 (1,359) (785)
Net cash outflow from financing (203) (291) (540)
_______ _______ _______
Decrease in cash during the period (196) (1,650) (1,325)
_______ _______ _______
Reconciliation of operating profit/(loss) to
net cash flow from operating activities
Group operating profit/(loss) 270 (832) (1,337)
Depreciation and amortisation of fixed assets 314 346 680
(Increase)/decrease in debtors (239) 809 286
(Decrease)/increase in creditors (180) (1,180) 166
_______ _______ _______
Net cash flow from operating activities 165 (857) (205)
_______ _______ _______
Statement of total recognised gains and losses
for the six months ended 31 March 2003
Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
unaudited unaudited audited
£000 £000 £000
Profit/(loss) for the financial period 83 (1,468) (2,370)
Currency translation differences 35 1 -
_______ _______ _______
Total recognised gains and losses since last
annual report 118 (1,467) (2,370)
_______ _______ _______
Reconciliation of movements in shareholders' funds
for six months ended 31 March 2003
31 March 2003 30 September 2002
unaudited audited
£000 £000
Opening shareholders' funds 1,102 3,472
Foreign exchange gain 35 -
Profit/(loss) attributable to shareholders 83 (2,370)
_______ _______
Closing shareholders' funds 1,220 1,102
_______ _______
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:
Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
unaudited unaudited audited
Turnover
£000 £000 £000
United Kingdom 6,838 4,884 11,055
Rest of Europe 1,684 1,878 4,360
_______ ______ _______
Total 8,522 6,762 15,415
_______ _______ _______
Movements in amounts recoverable on contracts
United Kingdom (592) 114 (1,159)
Rest of Europe 165 348 303
_______ _______ _______
Total (427) 462 (856)
_______ _______ _______
Work done
United Kingdom 6,246 4,998 9,896
Rest of Europe 1,849 2,226 4,663
_______ _______ _______
Total 8,095 7,224 14,559
_______ _______ _______
2 Group operating profit/(loss) Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
unaudited unaudited audited
£000 £000 £000
Group work done 7,401 6,578 13,102
Staff costs (3,759) (4,205) (7,471)
Amortisation of goodwill (46) (27) (29)
Depreciation (268) (352) (651)
Other operating charges (3,058) (2,826) (6,288)
_______ _______ _______
Group operating profit/(loss) 270 (832) (1,337)
_______ _______ _______
3 Profit/(loss) on ordinary activities before tax
An analysis of profit/(loss) on ordinary activities before tax by geographical
area is as follows:
Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
unaudited unaudited audited
£000 £000 £000
United Kingdom 351 (1,161) (1,660)
Rest of Europe (242) (475) (787)
_______ _______ _______
Total 109 (1,636) (2,447)
_______ _______ _______
4 Tax (charge)/credit on profit/(loss) on ordinary activities
Six months ended Six months ended Year ended
31 March 2003 31 March 2002 30 September 2002
unaudited unaudited audited
£000 £000 £000
United Kingdom corporation tax at 30% - 185 64
Overseas tax 17 (7) (23)
Adjustments in respect to prior years - - (84)
Share of tax from joint ventures and associate (6) (10) 10
_______ _______ _______
Tax credit/ (charge) on profit/(loss) for period 11 168 (33)
Deferred tax (37) - 110
_______ _______ _______
(26) 168 77
5 Earnings/(loss) per share
The earnings/(loss) per share are calculated on the profit attributable to
shareholders of £83,000 for the six months ended 31 March 2003 (2002 interim:
loss £1,468,000 2002 final: loss £2,370,000) and on 72,421,394 (2002 interim
and final:72,421,394) ordinary shares, being the weighted average number of
shares in issue during the period. Diluted earnings/(loss) per share are
calculated on 72,711,372 ordinary shares. There is no additional dilution to
the loss per share for 2002 interim or final as a result of taking account of
dilutive potential ordinary shares in accordance with FRS 14, Earnings per
Share.
6 Analysis of net debt
An analysis of the movement in net debt during the period is as follows:
At 1 October Cashflow Non-cash At 31 March
2002 movements 2003
£000 £000 £000 £000
Cash at bank and in hand 429 (201) - 228
Overdrafts repayable on demand (2,104) 5 - (2,099)
_____ _____ _____ _____
(1,675) (196) - (1,871)
_____ _____ _____ _____
Bank and other loans repayable in:
Less than one year (160) 40 - (120)
Hire purchase and finance
lease creditors (555) 163 - (392)
_____ _____ _____ _____
(715) 203 - (512)
_____ _____ _____ _____
Net debt (2,390) 7 - (2,383)
===== ===== ===== =====
7 Statutory accounts
The comparative figures for the year ended 30 September 2002 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 Basis of preparation
The Company meets its day to day working capital requirements through an
overdraft facility, which is repayable on demand. The nature of the Company'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. They consider that the Company will continue to operate within the
existing overdraft facilities, which expire on 22 January 2004 when it is
anticipated that suitable facilities will be renewed or replaced. 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. 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.
9 Further information
Further information about the Group, including copies of the 2002 annual report,
additional copies of this interim report and recent press releases sent to the
London Stock Exchange, may be obtained from the Company's registered office at 2
Great Eastern Wharf, Parkgate Road, London SW11 4TT. Such information may also
be obtained through the Company's website at www.aukett.com. Details of our
Healthcare alliance are available through our dedicated website at
www.aukett-tro.com. In addition, the Company Secretary may be contacted by
email at cosec@aukett.com. The interim report is expected to be mailed to
shareholders on or before 15 July 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
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