Final Results
Andrews Sykes Group PLC
01 May 2008
Andrews Sykes Group plc
1 May 2008
Final Results
Preliminary announcement
For the 52 weeks ended 29 December 2007
Summary of Results
52 weeks ended 52 weeks ended
29 December 2007 31 December 2006
£000 £000
Revenue from continuing operations 57,846 59,768
Normalised EBITDA* from continuing operations 18,173 18,887
Adjusted operating profit** 14,184 15,272
Profit for the financial period 8,549 9,708
Basic earnings per share from continuing operations (pence) 19.19p 22.11p
Adjusted basic earnings per share from continuing operations 20.62p 22.11p
excluding pension curtailment charge
Net Cash inflow from operating activities 7,067 11,537
Net Debt 12,344 16,167
* Earnings Before Interest, Taxation, Depreciation, profit on sale
of fixed assets, Amortisation and impairment charges as reconciled on the
consolidated income statement.
** Normalised operating profit before pension curtailment charge
Chairman's Statement
Overview and financial highlights
The group achieved an adjusted operating profit * of £14.2 million for 2007
which compares with £15.3 million in 2006, our record year. Therefore although
these profits are lower than 2006 I still consider that this is an extremely
good performance, particularly considering we did not experience the very hot
and favourable weather conditions of the summer of 2006 which contributed to a
£2 million decrease in revenue to £57.8 million.
More importantly, this result highlights the fact that the group is now less
weather dependent than ever before. It has been our strategy for some time to
move away from this dependency and our group now has a diverse range of income
streams thereby providing a solid base of revenue underpinning the business.
This, combined with our ongoing strict cost control policy, ensures that we are
able to deliver satisfactory results even in the face of less than favourable
climatic conditions.
Our main trading subsidiary, Andrews Sykes Hire continues to perform well. It
continues to expand its business in non-seasonal hire markets, particularly
through its specialist hire division. It has continued to expand its presence in
niche markets and these non-traditional businesses operate without undue
influence from seasonal weather patterns.
We have, of course, continued to support our traditional business roots. The
pumping division performed extremely well in 2007, taking advantage of the
opportunities presented. We will invest more in this business, as well as in our
profitable air conditioning and heating divisions, in order that we are well
placed to satisfy our customers' demands whenever they arise.
Pension curtailment offer
As I reported at the half year, an offer was made to all deferred members of our
defined benefit pension scheme giving them the opportunity to transfer their
accrued rights to an alternative pension provider.
The offer, which was substantially completed in 2007, has resulted in a
reduction of the pension scheme deficit of £3.5 million, a charge to the income
statement of £0.9 million and a cash outflow of £4.3 million. This was mainly
financed by an agreed reduction in the July 2007 loan repayment from £5 million
to £1 million.
Net Debt
Net debt has been reduced by £3.9 million from £16.2 million to £12.3 million
this year despite the following significant cash outflows:
£m
Capital expenditure net of disposal proceeds 4.6
Pension curtailment offer 4.3
Corporation tax payments 3.0
Regular defined benefit pension scheme payments 1.5
13.4
This reflects the strong cash generating ability of the group.
* Normalised operating profit before pension curtailment charge
Share buyback programme
The board continues to believe that shareholder value will be optimised by the
purchase, where appropriate, of our own shares. Consequently at the forthcoming
AGM, the board will request that shareholders vote in favour of a resolution to
renew the authority to purchase up to 12.5% of the ordinary shares in issue.
Subsequent events
Recognising the fact that no interim or final dividends were declared or paid
during either the current or previous financial period, I am pleased to report
that the board has announced two interim dividends for the 2008 financial year
amounting to approximately £15.0 million since the year-end. This continues the
board's policy of returning value to shareholders wherever possible.
Prior to the payment of the above dividends the company consulted with the
Andrews Sykes Defined Benefit Pension Scheme trustees and the pension regulator
and agreed to pay an additional one-off contribution of £1.7million into the
scheme as well as maintaining the regular monthly payment of £125,000.
The above payments will be mainly financed by additional borrowings of £10
million.
Outlook
The group's continuing strategy of investing in its traditional core products
and services, the increase in non-seasonal business and investment in new
technically advanced and environmentally friendly products proved to be
successful in 2007 and will therefore be continued into 2008. Overall trading in
the first quarter of 2008 was in line with expectations.
J G Murray
Chairman
30 April 2008
Andrews Sykes Group plc
Consolidated Income Statement
For the 52 weeks ended 29 December 2007
52 weeks ended 29 December 2007 52 weeks
Pension ended
curtailment 31 December
Normalised charge Total 2006
£'000 £'000 £'000 £'000
Continuing operations
Revenue 57,846 - 57,846 59,768
Cost of sales (25,816) - (25,816) (26,918)
Gross profit 32,030 - 32,030 32,850
Distribution costs (9,751) - (9,751) (9,471)
Administrative expenses (8,095) (911) (9,006) (8,107)
Operating profit 14,184 (911) 13,273 15,272
EBITDA* 18,173 (911) 17,262 18,887
Depreciation and impairment charges (4,463) - (4,463) (4,153)
Profit on the sale of property, plant and equipment 474 - 474 538
Operating profit 14,184 (911) 13,273 15,272
Income from other participating interests 209 -
Finance income 624 500
Finance costs (1,728) (1,772)
Profit before taxation 12,378 14,000
Taxation (3,829) (4,150)
Profit for the period from continuing operations 8,549 9,850
Discontinued operations
Loss for the period from discontinued operations - (142)
Profit for the financial period attributable to equity holders of 8,549 9,708
the parent
Earnings per share from continuing operations
Basic (pence) 19.19p 22.11p
Diluted (pence) 19.19p 22.10p
Earnings per share from total operations
Basic (pence) 19.19p 21.79p
Diluted (pence) 19.19p 21.79p
Dividends paid per equity share (pence) 0.0 p 0.0p
* Earnings Before Interest, Taxation, Depreciation, profit on sale of fixed
assets, Amortisation and impairment charges.
Andrews Sykes Group plc
Consolidated Balance Sheet
As at 29 December 2007
29 December 2007 31 December 2006
£'000 £'000 £'000 £'000
Non-current assets
Goodwill - 31
Property, plant and equipment 15,668 15,201
Lease prepayments 96 229
Trade investments 164 164
Deferred tax asset 1,404 3,201
Derivative financial instruments 13 23
17,345 18,849
Current assets
Stocks 5,742 4,336
Trade and other receivables 16,317 16,217
Cash and cash equivalents 13,102 10,190
Assets held for sale 494 -
35,655 30,743
Current liabilities
Trade and other payables (11,371) (10,108)
Current tax liabilities (1,370) (2,292)
Bank loans (5,000) (5,000)
Obligations under finance leases (415) (233)
Provisions (15) (24)
(18,171) (17,657)
Net current assets 17,484 13,086
Total assets less current liabilities 34,829 31,935
Non-current liabilities
Bank loans (19,000) (20,000)
Obligations under finance leases (1,006) (1,147)
Retirement benefit obligations (1,238) (6,577)
Derivative financial instruments (38) -
(21,282) (27,724)
Net assets 13,547 4,211
Equity
Called-up share capital 446 446
ESOP reserve - -
Retained earnings 12,595 3,854
Translation reserve 274 (321)
Other reserves 222 222
Surplus attributable to equity holders of the parent 13,537 4,201
Minority interest 10 10
Total equity 13,547 4,211
Andrews Sykes Group plc 52 weeks 52 weeks
Consolidated Cash Flow Statement ended ended
For the 52 weeks ended 29 December 2007 29 December 31 December
2007 2006
£'000 £'000
Cash flows from operating activities
Cash generated from operations 11,211 15,935
Interest paid (1,115) (1,591)
Net UK corporation tax paid (2,202) (2,465)
Withholding tax recovered / (paid) 50 (52)
Overseas tax paid (877) (290)
Net cash flow from operating activities 7,067 11,537
Investing activities
Dividends received from participating interests (trade investments) 209 -
Disposal costs paid less consideration received on prior year disposals 295 (183)
Sale of property, plant and equipment 778 526
Purchase of property, plant & equipment (5,346) (7,067)
Interest received 440 476
Net cash flow from investing activities (3,624) (6,248)
Financing activities
Loan repayments (1,000) (5,000)
Finance lease capital repayments (141) (131)
Purchase of own shares - (16)
Sale of own shares by ESOP - 4
Net cash flow from financing activities (1,141) (5,143)
Net increase in cash and cash equivalents 2,302 146
Cash and cash equivalents at the beginning of the year 10,190 10,342
Effect of foreign exchange rate changes 610 (298)
Cash and cash equivalents at end of the year 13,102 10,190
Reconciliation of net cash flow to movement in net debt in the period
Net increase in cash and cash equivalents 2,302 146
Cash outflow from the decrease in debt 1,141 5,131
Non cash movements in respect of new finance leases (182) -
Non cash movements in the fair value of derivative instruments (48) 23
Movement in net debt during the period 3,213 5,300
Opening net debt at the beginning of the year (16,167) (21,169)
Effect of foreign exchange rate changes 610 (298)
Closing net debt at the end of the year (12,344) (16,167)
Andrews Sykes Group plc
Consolidated Statement of Recognised Income and Expense
For the 52 weeks ended 29 December 2007
52 weeks 52 weeks
ended ended
29 December 31 December
2007 2006
£'000 £'000
Actual return less expected return on pension scheme 154 636
assets
Experience gains and losses arising on plan obligation 424 (340)
Changes in demographic and financial assumptions underlying the present
value of plan obligations (279) (1,937)
Currency translation differences on foreign currency net investments 595 (321)
Deferred tax on items posted directly to equity (107) 493
Net income / (expense) recognised directly in equity 787 (1,469)
Profit for the period attributable to parent's shareholders 8,549 9,708
Total recognised income and expense for the period attributable to equity
holders of the parent 9,336 8,239
Movement on share capital and reserves
Share ESOP Retained Translation Other Total
capital reserve earnings reserve reserves 0
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2006 446 (6) (4,688) - 222 (4,026)
Total recognised income and expense - - 8,560 (321) - 8,239
Purchase of own shares - - (16) - - (16)
Sale of shares by the ESOP - 6 (2) - - 4
At 31 December 2006 446 - 3,854 (321) 222 4,201
Total recognised income and expense - - 8,741 595 - 9,336
At 29 December 2007 446 - 12,595 274 222 13,537
Notes
1. Whilst the financial information included in this preliminary
announcement has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards (IFRSs),
this announcement does not itself contain sufficient information to comply with
IFRSs. The group expects to distribute copies of the full Annual Report and
Financial Statements that comply with IFRSs by the middle of May 2008 following
which copies will be available from the registered office of the Company;
Premier House, Darlington Street, Wolverhampton, WV1 4JJ.
2. The Company's Annual General Meeting will be held at 10.30 a.m. on
Wednesday 11 June 2008 at Floor 5, 10 Bruton Street, London, W1J 6PX.
ENDS
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