Interim Results

Scott Wilson Group plc 16 January 2007 Tuesday, 16 January 2007 SCOTT WILSON GROUP PLC Interim Results for the 26 week period ended 29 October 2006 Scott Wilson Group plc, ("Scott Wilson" or "the Group"), the international consultancy offering integrated professional services in the transportation, property, environmental and natural resources sectors, today reports its interim results for the 26 week period ended 29 October 2006. Financial highlights • Revenues including share of joint ventures rose by 22.8% to £113.2m (2005: £92.1m) • Underlying* operating profit increased by 23.9% to £7.1m (2005: £5.8m) • Profit before tax increased to £8.0m (2005: £3.6m) • Basic earnings per share of 7.60p • Diluted earnings per share of 7.42p • Interim dividend of 1.0p per share, the first as a listed company Operating highlights • Recent key contract wins include the East London Line, London Crossrail, Edinburgh Airport Rail Link, Greece Ionia Odos Motorway, Bahrain Islands Developments and Bath: Combe Down Mine Stabilisation • Significant acquisitions during and after the period have enhanced expertise and coverage in target sectors Prospects • Record order book of £250m following major contract wins • Trading remains strong in buoyant market conditions • Upgraded medium term targets including organic turnover growth of at least 10% per annum and operating margins of 8%. Substantial progress has been made towards achieving these objectives * The Directors believe that the presentation of underlying operating profit and underlying earnings per share, being these line items within the Group results adjusted for the impact in the comparative periods of restructuring costs, the non-recurring loss relating to Basing View Investments Ltd, the gain arising on retirement benefit plan changes and costs relating to Admission, assists with the understanding of the underlying results of the Group. A reconciliation of these measures to Group operating profit and basic and diluted earnings per share is included in notes 6 and 14 to this interim announcement. Geoff French, Chairman of Scott Wilson commented: "The strength of our markets combined with our record order book allows us to look forward to the future with confidence. We now expect results for this financial year to exceed current market expectations. Our recent acquisitions have broadened the Group's presence in strategically key market sectors in line with our stated strategy. The integration of these acquisitions is now well under way and it is expected that they will help us realise significant operating synergies." For further information please contact: Scott Wilson Group plc www.scottwilson.com Geoff French, Chairman 01256 310 200 Stephen Kimmett, Finance Director Smithfield Consultants 020 7360 4900 Reg Hoare/George Hudson/Will Henderson Print resolution images are available for the media to view and download from www.vismedia.co.uk Notes to editors: Scott Wilson is an international consultancy group providing expert, sustainable, integrated solutions to meet the planning, engineering, management and environmental needs of four principal market sectors: transportation, property, environment and natural resources. It was ranked as the ninth largest UK-owned engineering consultant by fee income for the calendar year 2005 in the New Civil Engineer 2006 annual survey. Scott Wilson has demonstrated strong and sustained growth and now has a global network of offices in 78 locations, of which 39 are in the UK, employing a total of 5,215 members of staff with 3,659 based in the UK. The remainder are mainly located at Scott Wilson regional centres in China/Hong Kong, Dubai, India, Poland, South Africa and Thailand. On 15 March 2006 Scott Wilson Group plc was admitted to the Official List and to trading on the London Stock Exchange. Post flotation, the Group has made considerable progress with several high profile contract wins - the most recent being the East London Line with fees of £14m, as well as the Edinburgh Airport Rail Link with fees of £18m, London Crossrail with fees of £12m, Greece Ionia Odos Motorway with fees of £12m and Bahrain Islands Developments with fees of £10m. Scott Wilson has strong relationships with national governments, non-governmental agencies, multinational companies and supranational funding bodies. In the financial year ended 30 April 2006, 30 of the Company's clients were billed over £1 million and the top 50 of the Group's clients accounted for aggregate fees of some £100 million. www.scottwilson.com CHAIRMAN'S STATEMENT Introduction At the time of our flotation the Board set out a clear strategy for achieving sustained growth in revenue, margins and shareholder returns, both organically and by acquisition. We were also seeking a better balance across our market sectors to avoid over-dependence on any single sector. These interim results give a clear indication of the good progress we have made in delivering this strategy. Results Revenue, including our share of joint ventures, increased by 22.8% to £113.2m (2005: £92.1m). Group operating profit increased from £4.9m to £7.1m with the underlying* operating margin remaining at 6.3% and underlying* operating profit increasing by 23.9% to £7.1m (2005: £5.8m). This result was achieved in spite of trading losses and restructuring costs of £0.8m incurred in the period in respect of the Group's businesses in Southern Africa. Profit before tax was £8.0m (2005: £3.6m) giving basic earnings and diluted earnings per share of 7.60p and 7.42p respectively. On 29 October 2006, net cash and cash equivalents stood at £17.3m, down from £33.1m at 30 April 2006. This reduction is principally the result of special pension contributions of £16.6m and the funding of continuing growth, partly offset by the timing of payroll costs. Dividend The Board has declared an interim dividend of 1.0p per share to be paid on 23 February 2007 to ordinary shareholders on the register on 26 January 2007. Pensions The Group has completed all the actions disclosed in the Prospectus, with the exception of a final payment of £0.7m to the Railways Pension Scheme to be made in early May 2007. The gross deficit reduced in the period from £33.6m to £24.4m. This was less than anticipated as external factors (inflation and discount rates) moved unfavourably, partially offsetting the special pension payment of £16.6m. Acquisitions In May 2006, we acquired the 30% minority interest in Scott Wilson Pavement Engineering Ltd, a leading UK consultancy in the evaluation of highways, runway pavements and rail track beds. In June 2006, the acquisition of Roscoe Postle Associates Inc of Canada significantly enhanced our position, client base and geographical coverage in the mining sub-sector of natural resources. Since the period end we have acquired the following three businesses, at a maximum expected consideration of £41.0m: • Ferguson Mcllveen LLP, a leading Northern Ireland consultancy providing design consultancy services for the property, environment and transport sectors; • Cameron Taylor Group Limited, which has significantly enhanced the Group's presence in the UK property sector; and • DGP International Limited, which has brought new skills within the nuclear, petrochemical and pharmaceuticals sectors. Employees We now have over 5,200 staff in total, up from 3,800 over the last 12 months. My thanks go to all members of staff for their continuing efforts on behalf of Scott Wilson. They remain critical to the Group's reputation, its continuing innovation and to the delivery of these record results. Outlook The strength of our markets combined with our record order book means we look forward to the year with confidence. We now expect results for this financial year to exceed current market expectations. Our recent acquisitions have broadened the Group's presence in strategically important market segments in keeping with our stated strategy. The integration of these acquisitions is now well under way and it is expected that they will help us realise significant operating synergies as with previous acquisitions. The Group has renegotiated and increased its existing banking facilities and thus has significant capacity to finance both continued organic growth and further selective acquisitions. REVIEW OF OPERATIONS United Kingdom & Ireland Performance of the UK businesses in the period has been strong, with all Divisions exceeding expectations. Revenues including share of joint ventures are 21.2% up on last year with significant growth in UK Central, Scotland & Ireland and UK Railways. Underlying* operating profit was up 21.7% with underlying* margins across the Divisions converging towards the upgraded Group benchmark of 8%. Of particular note was the underlying* margin improvement in UK South from 4.8% to 7.0%. The markets across the four principal sectors continue to be buoyant and this is particularly evident in Transportation and Property, both public and private sector. The Divisions have been successful in securing several major projects including London Crossrail, Edinburgh Airport Rail Link, Highways Agency National Framework, Bath: Combe Down Stabilisation and the East London Line upgrade. Within UK Railways, this has had the effect of boosting revenue by 40% above last year and means that the Division will be sharply focussed on project delivery during the second half. The outlook for the remainder of the year is for continued progress, with a focus on delivering added value from acquisitions and ensuring integration is achieved efficiently and smoothly whilst maintaining and sustaining improvements to performance across the Divisions. International Revenues including share of joint ventures were up 27.4% on last year at £30.7m. A new integrated network of six regional businesses is being established which allows a unified global strategy, improved financial control and the sharing of knowledge, resources and clients. Underlying* operating profit increased by 79.4% to £0.4m, a particularly pleasing result as it includes trading losses and the cost of restructuring in Southern Africa. Resident businesses have been closed in Zimbabwe, Malawi, Botswana and Mozambique and re-focused on a single regional business in Johannesburg. All other regional businesses demonstrated a gradual improvement in performance. The new business model is expected to result in improved margins. Major new commissions were awarded including PPP toll road projects in Greece, master planning and infrastructure projects in the Middle East and power projects in Africa and South East Asia. Port work continues to expand in India and the UAE and mining advisory projects have been secured in Chile, Colombia, Australia and Mongolia. The RPA acquisition has given the Group access to over 80 global clients for due diligence and investment advisory services with prospects for downstream cross-selling of engineering. The China business continues to expand with improved margins and is benefiting from a recent upsurge in activity in Hong Kong. A particular feature is the increasing workload in supporting Chinese clients with international infrastructure investment programmes outside China, particularly in Africa and South America. Overall, the first half of the year has been positive for the International Division despite having to absorb trading losses and restructuring costs in Southern Africa. The underlying improvement in performance is encouraging. CONSOLIDATED INCOME STATEMENT 26 weeks ended 29 October 2006 26 weeks ended 30 October 2005 52 weeks ended 30 April 2006 Unaudited unaudited audited Before Before Before Non-re Non-re Non-re Non-re Non-re Non-re curring curring curring curring curring curring items items items items items items and and and and and and restruct- restruct- restruct- restruct- restruct- restruct- uring uring uring uring uring uring costs costs Total Costs costs Total costs costs Total Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ---------- ---- ------ ---- ------ ------ ----- ------ ------- ------ ------- CONTINUING OPERATIONS: ---------- ---- ------ ---- ------ ------ ----- ------ ------- ------ ------- REVENUE INCLUDING SHARE OF JOINT VENTURES REVENUES 113,194 - 113,194 92,148 - 92,148 197,765 - 197,765 Less: share of joint venture revenues (4,611) - (4,611) (5,772) - (5,772) (11,841) - (11,841) -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- GROUP REVENUE 108,583 - 108,583 86,376 - 86,376 185,924 - 185,924 Cost of sales (69,205) - (69,205) (54,938) - (54,938) (117,964) - (117,964) -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- GROSS PROFIT 39,378 - 39,378 31,438 - 31,438 67,960 - 67,960 Administrative expenses 3 (32,491) - (32,491) (26,332) (908) (27,240) (58,843) 10,977 (47,866) Share of result of joint ventures 254 - 254 657 - 657 1,289 - 1,289 -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- OPERATING PROFIT 7,141 - 7,141 5,763 (908) 4,855 10,406 10,977 21,383 Finance income 4 5,948 3,972 8,283 Finance costs 5 (5,068) (5,237) (10,400) -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- PROFIT BEFORE TAXATION 8,021 3,590 19,266 Taxation (2,671) (1,685) (6,325) -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- PROFIT FOT THE PERIOD 5,350 1,905 12,941 -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- ATTRIBUTABLE TO: Equity holders of the Company 5,351 1,748 12,527 Minority interests (1) 157 414 -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- 5,350 1,905 12,941 -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- EARNINGS PER SHARE: Basic 6 7.60p 6.55p 38.90p Diluted 6 7.42p 6.55p 37.70p -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- DIVIDENDS DECLARED: Amount per share - 2.50p 5.00p Total amount absorbed (£'000) - 667 1,334 -------- ---- ------ -------- ------ ------ -------- ------ ------- -------- ------- There were no discontinued operations in any period. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Currency translation differences on translation of foreign operations (342) (314) (381) Actuarial gains and losses on defined benefit pension schemes (9,105) (11,346) (4,376) Tax on items recognised directly in equity 2,834 3,498 1,427 --------------------------- --------- --------- --------- EXPENSE RECOGNISED DIRECTLY IN EQUITY (6,613) (8,162) (3,330) Profit for the period 5,350 1,905 12,941 --------------------------- --------- --------- --------- TOTAL RECOGNISED (EXPENSE)/INCOME FOR THE PERIOD (1,263) (6,257) 9,611 --------------------------- --------- --------- --------- ATTRIBUTABLE TO: Equity holders of the Company (1,262) (6,368) 9,221 Minority interests (1) 111 390 --------------------------- --------- --------- --------- (1,263) (6,257) 9,611 --------------------------- --------- --------- --------- CONSOLIDATED BALANCE SHEET 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited Notes £'000 £'000 £'000 ----------------------- ------ --------- --------- --------- ASSETS NON-CURRENT ASSETS Tangible fixed assets 14,192 9,246 13,847 Goodwill 8,820 5,839 6,864 Other intangible assets 1,546 1,022 1,333 Investments in joint ventures 204 457 680 Deferred tax assets 12,260 17,901 11,897 ----------------------- ------ --------- --------- --------- 37,022 34,465 34,621 ----------------------- ------ --------- --------- --------- CURRENT ASSETS Trade and other receivables 76,818 61,486 65,483 Current tax assets 938 - 1,089 Cash and cash equivalents 17,366 5,043 33,067 ----------------------- ------ --------- --------- --------- 95,122 66,529 99,639 ----------------------- ------ --------- --------- --------- TOTAL ASSETS 132,144 100,994 134,260 ----------------------- ------ --------- --------- --------- EQUITY AND LIABILITIES EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY Issued capital 7 86,291 21,950 86,277 Shares to be issued 7 481 - - Other reserves 7 (6,313) (6,479) (6,074) Retained earnings 7 (29,138) (43,136) (28,426) ----------------------- ------ --------- --------- --------- 51,321 (27,665) 51,777 Minority interests 130 725 971 ----------------------- ------ --------- --------- --------- TOTAL EQUITY/(DEFICIT) 51,451 (26,940) 52,748 ----------------------- ------ --------- --------- --------- NON-CURRENT LIABILITIES Borrowings 2,429 12,863 2,304 Provisions 570 - - Retirement benefit obligations 24,459 60,333 33,577 ----------------------- ------ --------- --------- --------- 27,458 73,196 35,881 ----------------------- ------ --------- --------- --------- CURRENT LIABILITIES Trade and other payables 47,499 35,907 40,531 Current tax liabilities 161 543 474 Borrowings 3,867 18,288 3,813 Provisions 1,708 - 813 ----------------------- ------ --------- --------- --------- 53,235 54,738 45,631 ----------------------- ------ --------- --------- --------- TOTAL LIABILITIES 80,693 127,934 81,512 ----------------------- ------ --------- --------- --------- TOTAL EQUITY AND LIABILITIES 132,144 100,994 134,260 ----------------------- ------ --------- --------- --------- CONSOLIDATED CASH FLOW STATEMENT 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited Notes £'000 £'000 £'000 ----------------------- ------ --------- --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations 8 7,503 5,488 12,629 Defined benefit pension plan contributions (20,143) (3,375) (12,069) Dividends received from joint ventures 694 1,164 1,575 Tax paid (197) (908) (2,510) ----------------------- ------ --------- --------- --------- NET CASH FLOWS FROM OPERATING ACTIVITIES (12,143) 2,369 (375) ----------------------- ------ --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of tangible fixed assets (1,646) (1,264) (6,946) Purchase of intangible assets (641) (352) (995) Proceeds from sale of tangible fixed assets - 1 6 Acquisition of subsidiaries, net of cash and cash equivalents acquired (1,621) - (606) ----------------------- ------ --------- --------- --------- NET CASH FLOWS FROM INVESTING ACTIVITIES (3,908) (1,615) (8,541) ----------------------- ------ --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Interest received 513 389 154 Interest and finance charges paid (281) (703) (1,780) Proceeds from issue of Ordinary Shares, net of issue costs of £nil (October 2005: £nil, April 2006: £5.9m) 14 - 62,122 Receipt of new loans and finance lease advances 2,005 1,606 5,831 Repayment of loans and finance leases (1,833) (1,140) (18,871) Dividends paid to equity shareholders - - (1,334) ----------------------- ------ --------- --------- --------- NET CASH FLOWS FROM FINANCING ACTIVITIES 418 152 46,122 ----------------------- ------ --------- --------- --------- NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (15,633) 906 37,206 Cash and cash equivalents at start of period 33,067 (4,154) (4,154) Foreign exchange (87) (82) 15 ----------------------- ------ --------- --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 9 17,347 (3,330) 33,067 ----------------------- ------ --------- --------- --------- NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1 GENERAL INFORMATION The basis of preparation, methods of computation and accounting policies used in the interim financial statements are consistent with International Financial Reporting Standards (IFRS) and those followed in the preparation of the Group's financial statements for the year ended 30 April 2006. With effect from 1 May 2006, the Group's annual financial statements will be prepared for 52 or 53 week periods, in order to align them with the operating periods for management reporting purposes. Accordingly, the Interim Report covers the 26 weeks ended 29 October 2006, with comparative information for the 26 weeks ended 30 October 2005 and for the 52 weeks ended 30 April 2006. The financial information in the Interim Report relating to the 52 weeks ended 30 April 2006 does not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. The statutory accounts of the Group for the year ended 30 April 2006 have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified and did not contain a statement made under s237(2) or s237(3) of the Companies Act 1985. 2 SEGMENT ANALYSIS The trading activities and performance of the Group continue to be managed through five geographical divisions: UK Central, UK South, Scotland & Ireland, UK Railways and International. Segment revenue and results for the 26 weeks ended 29 October 2006 (unaudited): UK UK Scotland UK Central South & Ireland Railways International Core Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 ----------------- ------ ------ ------ ------ ------- ------ ------ Revenue including share of joint venture revenues 32,593 21,576 8,047 20,260 30,718 - 113,194 ----------------- ------ ------ ------ ------ ------- ------ ------ Group revenue 28,469 21,576 8,047 20,260 30,231 - 108,583 ----------------- ------ ------ ------ ------ ------- ------ ------ Operating profit before restructuring and non-recurring items 2,920 1,520 675 1,626 400 - 7,141 ----------------- ------ ------ ------ ------ ------- ------ ------ Operating profit - segment result 2,920 1,520 675 1,626 400 - 7,141 ----------------- ------ ------ ------ ------ ------- ------ ------ Segment revenue and results for the 26 weeks ended 30 October 2005 (unaudited): UK UK Scotland UK Central South & Ireland Railways International Core Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 ---------------- ------- ------ ------- -------- --------- ------ ------ Revenue including share of joint venture revenues 27,308 19,781 6,507 14,449 24,103 - 92,148 -------------- ------- ------ ------- -------- --------- ------ ------ Group revenue 22,502 19,781 6,507 14,449 23,137 - 86,376 ------------ ------- ------- ------- -------- --------- ------ ------- Operating profit before restructuring and non-recurring items 2,336 952 731 1,521 223 - 5,763 ------------ ------- ------- ------- -------- --------- ------ ------- Operating profit - segment result 2,336 739 731 1,521 220 (692) 4,855 ------------ ------- ------- ------- -------- --------- ------ ------- 2 SEGMENT ANALYSIS (continued) Segment revenue and results for the 52 weeks ended 30 April 2006 (audited, restated): UK UK Scotland UK Central South & Ireland Railways International Core Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 -------------- ------- ------ ------- -------- --------- ------ ------- Revenue including share of joint venture revenues 56,679 40,029 13,342 35,144 52,571 - 197,765 -------------- ------- ------ ------- -------- --------- ------ ------- Group revenue 46,709 40,029 13,342 35,144 50,700 - 185,924 ------------ ------- ------- ------- -------- --------- ------ -------- Operating profit before restructuring and non-recurring items 4,354 1,382 1,112 2,831 727 - 10,406 ------------ ------- ------- ------- -------- --------- ------ -------- Operating profit - segment result 4,354 911 1,112 2,831 507 11,668 21,383 ------------ ------- ------- ------- -------- --------- ------ -------- The segment revenue and results for the 52 weeks ended 30 April 2006 have been restated to reflect the transfer of certain operations between segments with effect from 1 May 2006. The transfers were made in order to better align those operations with the Group's geographical divisions. The restatements are as follows: Revenue of £5,325,000 and operating profit of £508,000 have been transferred from UK South to UK Central; and Revenue of £1,179,000 and operating profit of £160,000 have been transferred from UK South to International. 3 Non-recurring items and restructuring costs 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Restructuring costs - (216) (691) Operating loss relating to Basing View Investments Ltd - (692) (780) Gain arising on retirement benefit plan changes - - 13,546 Costs relating to Admission - - (1,098) --------------------------- --------- --------- --------- Total - (908) 10,977 --------------------------- --------- --------- --------- RESTRUCTURING COSTS In the 52 weeks ended 30 April 2006, the Group incurred £0.7m of redundancy costs resulting from restructuring in the UK South (£0.5m) and International (£0.2m) divisions. OPERATING LOSS RELATING TO BASING VIEW INVESTMENTS LTD On 15 March 2006, the Company acquired Basing View Investments Ltd (BVI), which held the 34.34% interest in Scott Wilson Holdings Ltd not then held by the Company and liabilities under various loan and redeemable share instruments. The Company immediately purchased, or funded the settlement of, all those liabilities. The interim financial statements of the Group consolidate the revenues, costs, assets, liabilities and cash flows of BVI and its subsidiaries throughout both the period for which they are prepared and the comparative prior periods. 3 NON-RECURRING ITEMS AND RESTRUCTURING COSTS (continued) GAIN ARISING ON RETIREMENT BENEFIT PLAN CHANGES In March 2006, the trustees and substantially all of the members of the Scott Wilson Pension Scheme (SWPS), a defined benefit arrangement, agreed, conditional on the Company's Admission to the Official List and the payment of a minimum £16.0m special cash contribution into SWPS, to break the link from 1 October 2006 between accrued pensionable service up to that date and future salary increases. Additionally, they agreed that from 1 October 2006 active members would either pay increased contributions, accrue pension benefit at a reduced rate or switch into the Group's money purchase (defined contribution) section. Also in March 2006, the trustees and substantially all of the members of the Scott Wilson Shared Cost Section of the industry-wide Railways Pension Scheme (SWRPS), a defined benefit arrangement, agreed, conditional on the Company's Admission to the Official List and the payment of a £2.0m special cash contribution into SWRPS, to break the link from 1 October 2006 between accrued pensionable service up to that date and future salary increases. The impact of these changes was to reduce the overall gross deficit on these schemes by £13.5m. COSTS RELATING TO ADMISSION During the 52 weeks ended 30 April 2006, costs of £1.1m were incurred in relation to the Admission of the Company to the Official List. Additionally, costs of £4.8m were incurred in relation to the issue of additional Ordinary Shares at the time of Admission, which were charged against the share premium. 4 FINANCE INCOME 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Interest income on bank deposits 471 64 345 Expected return on pension plan assets 5,477 3,908 7,938 --------------------------- --------- --------- --------- 5,948 3,972 8,283 --------------------------- --------- --------- --------- 5 FINANCE COSTS 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Interest on bank loans and overdrafts 93 436 723 Interest on other loans 59 121 489 Finance lease charges 198 110 264 Preference shares redemption premium - 316 304 Unwind of discount on deferred consideration 22 - - Interest on retirement benefit obligations 4,696 4,254 8,620 --------------------------- --------- --------- --------- 5,068 5,237 10,400 --------------------------- --------- --------- --------- 6 EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period, excluding Ordinary Shares held by the Scott Wilson Holdings Ltd Employee Share Ownership Trust. 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Profit attributable to equity holders of the Company 5,351 1,748 12,527 --------------------------- --------- --------- --------- Weighted average number of Ordinary Shares in issue (thousands) 70,448 26,689 32,203 --------------------------- --------- --------- --------- Basic earnings per share (p) 7.60p 6.55p 38.90p --------------------------- --------- --------- --------- Weighted average number of Ordinary Shares in issue (thousands) 70,448 26,689 32,203 Dilutive effect of share options (thousands) 1,694 - 1,025 --------------------------- --------- --------- --------- Diluted weighted average number of Ordinary Shares in issue (thousands) 72,142 26,689 33,228 --------------------------- --------- --------- --------- Diluted earnings per share (p) 7.42p 6.55p 37.70p --------------------------- --------- --------- --------- 6 EARNINGS PER SHARE (continued) UNDERLYING* EARNINGS PER SHARE Underlying* earnings per share is calculated by dividing the profit attributable to equity holders of the Company, after adding back non-recurring items and restructuring costs, by the weighted average number of Ordinary Shares in issue during the period, excluding Ordinary Shares held by the Scott Wilson Holdings Ltd Employee Share Ownership Trust. 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Profit attributable to equity holders of the Company 5,351 1,748 12,527 Restructuring costs - 216 691 Operating loss relating to Basing View Investments Ltd - 692 780 Gain arising on retirement benefit plan changes - - (13,546) Costs relating to Admission - - 1,098 Tax relating to non-recurring items and restructuring costs - (147) 3,623 --------------------------- --------- --------- --------- Underlying* profit attributable to equity holders of the Company 5,351 2,509 5,173 --------------------------- --------- --------- --------- Weighted average number of Ordinary Shares in issue (thousands) 70,448 26,689 32,203 --------------------------- --------- --------- --------- Underlying* basic earnings per share (p) 7.60p 9.40p 16.06p --------------------------- --------- --------- --------- Weighted average number of Ordinary Shares in issue (thousands) 70,448 26,689 32,203 --------------------------- --------- --------- --------- Dilutive effect of share options (thousands) 1,694 - 1,025 --------------------------- --------- --------- --------- Diluted weighted average number of Ordinary Shares in issue (thousands) 72,142 26,689 33,228 --------------------------- --------- --------- --------- Underlying* diluted earnings per share(p) 7.42p 9.40p 15.57p --------------------------- --------- --------- --------- No options over Ordinary Shares have been awarded since 29 October 2006. 7 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Issued Shares to Retained Other capital be issued Earnings reserves Total £'000 £'000 £'000 £'000 £'000 --------------------- ------- ------- ------- ------- ------- At 1 May 2006 86,277 - (28,426) (6,074) 51,777 Shares issued under share option schemes 14 - - - 14 Contingently issuable shares relating to business acquisitions - 481 - - 481 Expense recognised directly in equity - - (6,374) - (6,374) Profit for the period - - 5,351 - 5,351 Equity-settled share-based compensation expense - - 217 - 217 Fair value adjustments on acquisition of minority interests - - 94 - 94 Translation differences (net of tax) - - - (239) (239) --------------------- ------- ------- ------- ------- ------- At 29 October 2006 86,291 481 (29,138) (6,313) 51,321 --------------------- ------- ------- ------- ------- ------- 8 CASH GENERATED FROM OPERATIONS 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Operating profit 7,141 4,855 21,383 Gain arising on retirement benefit plan changes - - (13,546) Costs of Admission recognised in the Income Statement - - 1,098 Share of result of joint ventures (254) (657) (1,289) Movement on acquisition of minority interests (117) - - Defined benefit pension plan current service cost 2,700 2,641 4,757 Depreciation and amortisation 1,655 1,271 2,832 Share-based compensation expense 230 - 51 Increase in receivables and prepayments (10,788) (14,240) (14,722) Increase in payables and accruals 6,378 11,618 11,433 Increase in provisions 558 - 632 --------------------------- --------- --------- --------- Cash generated from operations 7,503 5,488 12,629 --------------------------- --------- --------- --------- 9 Analysis of net cash/(debt) 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 --------------------------- --------- --------- --------- Cash and cash equivalents 17,366 5,043 33,067 Bank overdrafts (19) (8,373) - --------------------------- --------- --------- --------- Net cash and cash equivalents 17,347 (3,330) 33,067 Bank loans (7) (3,764) (232) Other loans (1,631) (7,135) (1,849) Obligations under finance leases (4,329) (3,160) (3,726) Preference shares (310) (8,719) (310) --------------------------- --------- --------- --------- Net cash/(debt) 11,070 (26,108) 26,950 --------------------------- --------- --------- --------- 10 CONTINGENT LIABILITIES The Group has issued guarantees in the normal course of business to secure advance payments on contracts and to meet contractual bid and performance bond obligations. The amount of all such guarantees at 29 October 2006 was £6.7m (30 October 2005: £9.5m, 30 April 2006: £10.9m). 11 BUSINESS COMBINATIONS On 1 June 2006, the Group acquired the entire share capital of Roscoe Postle Associates Inc (RPA), a Toronto-based mining consultancy business, for a total potential consideration of C$5.2m (inclusive of net asset adjustment of C$0.2m). The provisional goodwill arising on the acquisition is £2.1m. RPA contributed revenue of £1.4m and profit before taxation of £0.3m to the Group's results for the 26 weeks ended 29 October 2006. 12 INTERIM DIVIDEND The Directors have declared an interim dividend for the 52 week period ending 29 April 2007 of 1.0p per Ordinary Share to be paid on 23 February 2007 to shareholders on the register at 26 January 2007. In accordance with IAS 10, this interim dividend has not been recognised in the Interim Report. 13 POST BALANCE SHEET EVENTS ACQUISITION OF FERGUSON MCILVEEN On 1 November 2006, the Group acquired the business and assets of Ferguson McIlveen LLP, a Northern Ireland based consultancy business providing design services for the property, environment and infrastructure sectors, for a total consideration of £10.8m. The consideration comprises an initial cash payment of £3.7m and Ordinary Shares in Scott Wilson Group plc to the value of £1.85m, together with deferred cash consideration of £4.05m payable over two years and deferred consideration to be settled by Ordinary Shares in Scott Wilson Group plc one year after completion to the value of £1.2m. Scott Wilson Ltd became the principal employer of the Ferguson McIlveen final salary pension scheme, which as at October 2006 had an estimated deficit (net of related deferred tax) of £1.8m. The estimated goodwill/intangibles arising on the acquisition is £10.0m. ACQUISITION OF CAMERON TAYLOR On 7 December 2006, the Group acquired the entire share capital of Cameron Taylor Group Limited (Cameron Taylor), a London-based consultancy business with particular expertise in the property sector, for a total consideration of £15.6m. The consideration comprises an initial cash payment of £9.9m, the issue of loan notes of £1.0m and Ordinary Shares in Scott Wilson Group plc to the value of £3.5m, together with deferred consideration to be settled one year from completion by further Ordinary Shares in Scott Wilson Group plc to the value of £1.2m. The estimated goodwill/intangibles arising on the acquisition is £10.1m. ACQUISITION OF DGP On 7 December 2006, the Group acquired the entire share capital of DGP International Limited (DGP), a Manchester-based consultancy business with particular expertise in the nuclear, petrochemical, pharmaceutical, water and waste management sectors, for a maximum expected consideration of £14.6m. The consideration comprises an initial cash payment of £8.6m and Ordinary Shares in Scott Wilson Group plc to the value of £3.5m, together with deferred cash consideration of up to £2.5m, contingent upon DGP's financial performance in the year ended 31 December 2006. The estimated goodwill/intangibles arising on the acquisition is £12.9m. 14 RECONCILIATION OF UNDERLYING GROUP RESULTS The Directors believe that the presentation of underlying operating profit, underlying operating margin and underlying earnings per share for the comparative periods, assists with the understanding of the results of the Group. A reconciliation of underlying operating profit to Group operating profit is given below. A reconciliation of underlying basic and diluted earnings per share is set out in note 6. Underlying operating margin is calculated as a percentage of Group revenue including share of joint venture revenues. UNDERLYING* OPERATING PROFIT 26 weeks 26 weeks 52 weeks ended ended ended 29 October 30 October 30 April 2006 2005 2006 unaudited unaudited audited £'000 £'000 £'000 ------------------------ ---------- ---------- ---------- Operating profit per Income Statement 7,141 4,855 21,383 Restructuring costs - 216 691 Non-recurring loss relating to BVI - 692 780 Gain arising on retirement benefit plan changes - - (13,546) Costs relating to Admission - - 1,098 ------------------------ ---------- ---------- ---------- Underlying* operating profit 7,141 5,763 10,406 ------------------------ ---------- ---------- ---------- Underlying* operating margin 6.3% 6.3% 5.3% ------------------------ ---------- ---------- ---------- INDEPENDENT REVIEW REPORT TO SCOTT WILSON GROUP PLC Introduction We have been instructed by the company to review the financial information for the 26 weeks ended 29 October 2006 which comprise the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, the consolidated cash flow statement and related notes 1 to 14. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the 26 weeks ended 29 October 2006. Deloitte & Touche LLP Chartered Accountants London 15 January 2007 This information is provided by RNS The company news service from the London Stock Exchange ELF

Companies

Shearwater Group (SWG)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today