Final Results - Pre-tax Profit Up 12.64%

Allen PLC 29 November 1999 ALLEN PLC (Hire Services, Housebuilding, Civil Engineering Contracting, Building Contracting, Property Development & Investment) Interim results for six months ended 3 October 1999 Main Points 1999 1998 Change (27 Weeks) (26 Weeks) Turnover £170.77m £166.63m +2.48% EBITDA £17.37m £15.30m +13.56% Operating profit £11.52m £10.56m +9.09% Pre-tax profit £10.07m £8.94m +12.64% Earnings per share (pence) 16.92p 15.01p +12.72% Dividends per share (pence) 5.60p 5.10p +9.80% Net assets per share (pence) 173.17p 153.47p +12.84% Gearing (%) 59.5% 57.0% +4.38% Interest cover (times) 7.95 6.52 +21.93% * Hire Services Speedy Hire Centres - Adjusted 'like for like' turnover up 13% - 'Like for like' margins maintained - 7 'greenfield' sites opened, increasing depots to 139 Speedy Space - Fleet increased to 8,847 cabins * Housebuilding - Completions up by 7.7% to 239 - Average selling prices up 21.3% to £82,264 - 525 budgeted completions for the year * Civil Engineering Contracting - Utility contracting continues to grow - Outlook remains good * Building Contracting - Margins improve - Work in hand £91 million - Further margin improvement expected * Outlook - Expect 14th successive rise in half yearly profits, resulting in yet another record year Contact: Donald Greenhalgh (Chairman) 0171 786 9600 (Monday only) Ken Fox (Chief Executive) 01204 699277 (Tuesday onwards) Neil O'Brien (Finance Director) Brian Coleman-Smith / Simon Ellis 0171 786 9600 Binns and Company ALLEN PLC (Hire Services, Housebuilding, Civil Engineering Contracting, Building Contracting, Property Development & Investment) Interim results for the six months ended 3 October 1999 CHAIRMAN'S STATEMENT Donald Greenhalgh, the Chairman, made the following comments on the results: Results This is our 13th successive rise in half year profits before tax and is another record for half a year at £10.07 million (1998: £8.94 million) - an increase of 12.6%. We have seen a healthy increase in operating margins to 6.75% from 6.34% last year. Earnings per share was 16.92p (1998: 15.01p) - an increase of 12.7%. I thank all of our staff for their contribution to this excellent result. There were 27 weeks in this half year compared to 26 weeks in the first half of the last year. Financial Gearing at the half year end was 59.5% (1998: 57.0%) and interest was covered nearly 8 times compared with 6.5 times in the first half of last year. Both measures were well within our internal criteria and the Board therefore, considers them to be most satisfactory. Dividend Your Board has decided to increase the interim dividend by 9.8% from 5.10p per share to 5.60p per share. This is our 6th successive increase in interim dividend. The dividend is covered 3 times by earnings per share. Our stated policy is to aim to achieve an annual dividend cover of 2.5 times. Acquisitions We did not make any acquisitions in the half year, because we still believed that asking prices were too high to achieve our minimum returns. In the Hire Services Division we countered this by opening 'greenfield' depots as mentioned in the Managing Director's Review. However, there are now signs of more sensible asking prices appearing and I expect that we will acquire hire depots in the second half of the year. Outlook I expect that in the second half we will achieve our 14th successive rise in half yearly pre-tax profits resulting in yet another record for the full year, and this ought to increase our share price from its current disappointing level. D GREENHALGH CHAIRMAN CHIEF EXECUTIVE'S REVIEW Ken Fox, the Group Chief Executive, reviewing the Group's activities said: Hire Services 1999 has seen the ongoing implementation of our twin objectives to achieve growth in Hire Centres through 'greenfield' openings and also to increase sales through our existing branch network. This strategy has again proved to be very successful as 'like for like' sales were up 13% and margins in these depots have been maintained. We achieved seven 'greenfield' openings taking the number of depots to 139 at the end of September. This pace has continued with a further five branch openings since the start of October. In Speedy Space the cabin fleet has increased from 8,522 units in March to 8,847 units at the end of September, with utilisation remaining at 90%. As expected the division has reported a small drop in overall margins because of the investment in 'greenfield' depots, but this should lead to higher profits next year. At the half year end, there were 153 outlets trading nationally under the Speedy brand. In the year, we aim to achieve the same level of capital expenditure as last year to boost volumes in our established depots. We also aim to extend our branch network through 'greenfield' openings and, if appropriate, acquisitions and to develop depots for niche markets. We expect the excellent progress to continue, and the outlook is extremely promising for the full year. Housebuilding Progress has continued with operating margins remaining over 10% notwithstanding the fact that our operations which are in the Midlands and North, have not seen the rates of price inflation experienced in the South and South East. Completions increased by 8% to 239 and the average selling price rose from £67,829 to £82,264 mainly as a result of the change in mix of house types sold. Our landbank of 889 plots is at a similar level to the start of the year and we expect completions in the second half to improve to 286, to give an annual total of 525 completions. One of our strategic sites on which we have had an option since 1989 has been recently purchased following planning approval for 73 houses. The value of this site is considerably in excess of the £4.5 million paid and we are appraising alternatives to sell the whole or part of the site for a substantial profit. Civil Engineering Contracting Another excellent result has been produced. Ryan the main contributor to profit has performed well. It has recently received a boost to its' utility contracting activities after winning a term contract award by Transco valued at £40 million over 5 years. This extends Ryan's regional presence in the North West. Pearce produced a good result from the civil engineering works undertaken from their Wiltshire base. The margin in Sheet Piling fell because activity was lower than in the corresponding period last year which has reduced the overall margin for the division. Work in hand remains satisfactory in all three companies and we expect the sound progress to continue in our second half. For the longer term we are optimistic that we will see considerable expansion from our utility activities and we are investigating partnership opportunities with clients which should extend our geographic presence and range of services offered. Building Contracting We have seen the expected improvement in our building results with margins rising to 1.3%. Turnover reduced by 16% on the similar period last year with management focusing on margin improvement and a move towards more partnered or negotiated contracts. Work in hand stands at a healthy £91 million. We expect to see some further margin improvement in the second half of the year. Property Development & Investment There has been little activity from development projects as the capital allocated has been restricted in favour of investment in other divisions where returns are greater. Our one ongoing development site at Penrith is still attracting interest because of its strategic location and negotiations are in hand which should secure the commencement of a further 6,000 sq.ft. office development in our second half. We are continuing to appraise low risk propositions, which may also bring negotiated opportunities for our building companies KEN FOX CHIEF EXECUTIVE ALLEN PLC UNAUDITED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 3 OCTOBER 1999 27 Weeks 26 Weeks Year to to 3 to 27 28 October Sept 1998 March 1999 £'000 1999 £'000 £'000 TURNOVER Continuing operations 170,773 166,629 321,095 OPERATING PROFIT Continuing operations 11,521 10,560 21,285 Interest payable (1,450) (1,619) (3,276) ------- ------- ------- Profit on ordinary 10,071 8,941 18,009 activities before taxation Taxation (3,030) (2,682) (5,419) ------- ------- ------- Profit on ordinary activities 7,041 6,259 12,590 after taxation Equity minority interests (13) (25) (39) ------- ------- ------- - Profit for the period 7,028 6,234 12,551 attributable to the group Dividends (2,326) (2,128) (5,026) ------- ------- ------- Retained profit for the 4,702 4,106 7,525 period ------- ------ ------ Earnings per share (pence) 16.92 15.01 30.22 ------- ------- ------- Dividends per share (pence) 5.60 5.10 12.10 ------- ------- ------- ALLEN PLC UNAUDITED BALANCE SHEET AS AT 3 OCTOBER 1999 As at As at As at 3 October 27 Sept 28 March 1999 1998 1999 £'000 £'000 £'000 Fixed assets Intangible assets 222 207 234 Tangible assets 82,456 72,274 76,096 ------- ------- --------- 82,678 72,481 76,330 ------- ------- -------- Current assets Stocks and work in progress 41,712 36,119 37,632 Debtors 74,527 72,388 66,728 Cash at bank and in hand - 3,569 7,521 ------- ------- ------- 116,239 112,076 111,881 Creditors: amounts falling due in less than one year (97,665) (91,115) (91,959) ------- ------- ------- Net current assets 18,574 20,961 19,922 ------- ------- --------- Total assets less current liabilities 101,252 93,442 96,252 Creditors: amounts falling due after more than one year (24,966) (27,540) (24,681) Provisions for liabilities and charges (4,360) (2,154) (4,360) ------- ------- ------- 71,926 63,748 67,211 ------- ------ ------ Capital and reserves Called-up share capital 2,077 2,077 2,077 Share premium 30,119 30,119 30,119 Merger reserve 3,660 3,660 3,660 Revaluation reserve 390 390 390 Investment property revaluation reserve 675 645 675 Capital redemption reserve 26 26 26 Profit and loss account 34,842 26,721 30,140 ------- ------- --------- Equity shareholders' funds 71,789 63,638 67,087 Equity minority interests 137 110 124 ------- ------- --------- 71,926 63,748 67,211 ------- ------- --------- ALLEN PLC UNAUDITED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 3 OCTOBER 1999 27 Weeks 26 Weeks Year to to to 3 October 27 Sept 28 March 1999 1998 1999 £'000 £'000 £'000 Cash flow from operating 7,024 10,694 28,455 activities --------- ------- ------- Returns on investments and servicing of finance Interest received - - 13 Interest paid (86) (360) (629) Interest element of hire- purchase and finance lease rental payments (1,364) (1,259) (2,660) -------- ------- ------- Net cash outflow from returns on investments and servicing of finance (1,450) (1,619) (3,276) -------- ------- ------- Taxation - - (4,053) -------- ------- ------- Capital expenditure and financial investment Purchase of tangible fixed assets (6,864) (2,390) (4,698) Sale of tangible fixed assets 3,428 3,184 7,222 -------- ------- ------- Net cash (outflow)/inflow for capital expenditure and financial investment (3,436) 794 2,524 -------- ------- ------- Acquisitions and disposals Purchase of businesses - (1,426) (1,386) -------- ------- ------- Net cash outflow from acquisitions and disposals - (1,426) (1,386) -------- ------- ------- Equity dividends paid (2,908) (2,762) (4,880) --------- ------- ------- Financing Decrease in debt due within one year - repayments of amounts borrowed (715) (715) (1,447) Capital elements of hire- purchase and finance lease rental payments (8,120) (5,501) (12,520) --------- ------- ------- Net cash outflow from financing (8,835) (6,216) (13,967) --------- ------- ------- (Decrease)/increase in cash in the period (9,605) (535) 3,417 --------- ------- ------- NOTES 1. Turnover and Operating Profit 27 Weeks 26 Weeks Year to to to 3 October 27 Sept 28 March 1999 1998 1999 £'000 £'000 £'000 Turnover Hire Services 40,528 32,629 68,848 Housebuilding 19,661 15,058 37,536 Civil engineering contracting 29,356 22,046 48,353 Building contracting 79,615 94,308 162,289 Property 1,613 2,588 4,069 -------- ------- --------- 170,773 166,629 321,095 -------- ------- --------- Operating profit Hire Services 7,384 6,694 13,464 Housebuilding 1,993 1,621 3,863 Civil engineering contracting 1,241 1,101 2,440 Building contracting 1,027 1,006 1,725 Property 344 499 770 -------- ------- ------- 11,989 10,921 22,262 Unrecovered central (468) (361) (977) overhead -------- ------- --------- 11,521 10,560 21,285 -------- ------- -------- 2. Movement in shareholders' funds 27 Weeks 26 Weeks Year to to to 3 October 27 Sept 28 March 1999 1998 1999 £'000 £'000 £'000 Profit for the period attributable to the group 7,028 6,234 12,551 Dividends (2,326) (2,128) (5,026) ------- ------- -------- 4,702 4,106 7,525 Other recognised gains and losses relating to the period - - 30 ------ ------ ------- Net increase in shareholders' funds 4,702 4,106 7,555 Opening shareholders' 67,087 59,532 59,532 funds ------ ------ ------- Closing shareholders' 71,789 63,638 67,087 funds -------- ------- -------- - 3. Reconciliation of operating profit to net cash flow from operating activities 27 Weeks 26 Weeks Year to to 3 to 27 28 March October Sept 1999 1999 1998 £'000 £'000 £'000 Operating profit 11,521 10,560 21,285 Depreciation 5,839 4,738 9,913 Amortisation 12 - 19 Profit on sale of tangible fixed assets (839) (719) (1,861) (Increase)/decrease in stocks (4,080) 145 (1,268) Increase in debtors (7,799) (13,727) (3,137) Increase in creditors 2,370 9,697 3,504 -------- ------- ------- 7,024 10,694 28,455 -------- ------- ------- 4. Reconciliation of net cash flow to movement in net debt 27 Weeks 26 Weeks Year to to to 3 October 27 Sept 28 March 1999 1998 1999 £'000 £'000 £'000 (Decrease)/increase in cash in the period (9,605) (535) 3,417 Cash outflow from decrease in debt and hire-purchase and lease financing 8,835 6,216 13,967 ------- ------- -------- Change in net debt resulting from cash flows (770) 5,681 17,384 New hire-purchase and finance lease contracts (7,924) (13,270) (22,715) -------- ------- ------- Movement in net debt in the period (8,694) (7,589) (5,331) Net debt at the start of the period (34,080) (28,749) (28,749) -------- ------- ------- Net debt at the end of the period (42,774) (36,338) (34,080) -------- ------- ------- 5. The charge for taxation for the period is based on the estimated effective rate for the year of 30%. 6. The calculation of earnings per share is based upon earnings of £7,028,000 (1998: £6,234,000) and on the time weighted average number of shares in issue during the period of 41,535,835 (1998: 41,535,835). 7. The Board has declared an interim dividend of 5.60 pence per share to be paid on Friday 28 January 2000 to shareholders on the register on Thursday 6 January 2000. 8. The results for the year ended 28 March 1999 are extracts from the Annual Report and Accounts as filed with the Registrar of Companies. These were audited and reported upon without qualification by Lathams and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 9. The interim report will be posted to all shareholders on or about 1 December 1999 and copies of this and the last published Annual Report and Accounts are available from the Secretary, Allen Plc, Northern House, 24/26 Chorley Road, Blackrod, Bolton BL6 5JS. 10.Approval The interim statement for the six months ended 3 October 1999 was approved by the Board of Directors on 11 November 1999 and has been prepared on the basis of the accounting policies as set out in the financial statements for the year ended 28 March 1999. The financial information contained in this interim report does not constitute statutory accounts for the Group for the relevant periods.

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