Final Results

Aukett Group PLC 28 January 2002 AUKETT GROUP PLC 2001 PRELIMINARY RESULTS ANNOUNCEMENT Pre-tax profits in line with expectations at £917,000 Aukett Group Plc ('Aukett'), one of Europe's leading building design practices, with offices in 14 cities in 10 countries, announces Preliminary Results for the year ended 30 September 2001. Financial Highlights Year ended 30 September 2001 2000 change Work done, including share of JV's and associate £22.66m £20.87m + 9% Group work done £19.43m £18.87m + 3% Profit before tax £0.92m £2.05m - 55% Earnings per share 0.64p 2.13p - 70% Dividends per share 0.15p 0.40p - 63% Net assets £4.06 £3.67m + 11% Net gearing 33% 32% Commenting on the results, Chairman Andrew Lett said: 'Whilst results for the year are broadly in line with revised expectation, overall the year has been disappointing. The slowdown and deferral of major projects, particularly in the UK, which was reported in our interim results, has continued throughout the second half of the year. European operations, however, have continued to progress overall this year, both in terms of increased turnover and contribution to Group profit.' Other Key Points * Proportion of work done outside the UK increased to 31% (2000: 29%) * Share of profit generated from outside the UK increased to 40% of total (2000: 30%) * No final dividend, after interim dividend of 0.15p * Projected order book more solid towards second half of 2002 Regarding future prospects, Andrew Lett said: 'The year 2001/02 will be one of consolidation of existing operations and close control of the debtor and cash position, with the tough trading conditions experienced during the first quarter of this financial year likely to continue for some time. The projected order book looks more solid towards the second half of the year, by which time there may be a more confident general economic climate on which to build. However, whilst the immediate future will be much influenced by the timing of any general economic upturn, the Company will continue with its strategy to develop as a major international provider of design consultancy services.' Enquiries: Aukett Group Plc (website: www.aukett.com) Tel: 0207 924 4949 Andrew Lett, Executive Chairman Robert Warner, Finance Director (mobile: 07831 685500) Binns & Co PR Ltd Peter Binns, Simon Ellis, Carole Butcher Tel: 020 7786 9600 Introduction This has been a year of mixed fortune for Aukett Group Plc. Whilst results for the year are broadly in line with revised expectation, overall the year has been disappointing. The Company issued a trading statement in March 2001, when it became clear that the downturn in the IT sector, and the recessionary trend that subsequently affected the US economy, would adversely impact the Group's growth projections and profit for the year. The slowdown and deferral of major projects, particularly in the UK, which was reported in our interim results, has continued throughout the second half of the year. European operations however have continued to progress overall this year, both in terms of increased turnover and contribution to Group profit. Investment was made during 1999/2000 in new offices, both overseas and in the UK, in anticipation of continued growth. This preceded the general decline in business confidence we have experienced this year in the UK and the costs associated with this expansion have contributed to a reduction in profit levels compared with previous years. The Board believes however that the investment undertaken will provide a valuable platform for future growth. The tough business climate, as evidenced throughout the year, was not improved by the events of 11th September 2001. Confidence has remained low and predictions for the global economy, particularly in the USA, have remained uncertain. During this period we have continued to experience delays in the commissioning of new projects and the generally adverse business climate has led to slower debtor collection and increased pressure on cash flow, which has continued since the financial year end. As a result the Company has been required to seek an increased level of support in its banking facilities. I am pleased to report that additional facilities have now been agreed with our bankers which will allow the Company to respond to the current climate, without compromising the strategy that has been put in place for the future. Results Work done, including share of joint ventures and associate increased by 9% to £22.66million (2000: £20.87 million). Profit before tax decreased to £0.92million (2000: £2.05million). Earnings per share fell to 0.64p (2000: 2.13p) and gearing has risen slightly to 33% (2000:32%). An interim dividend of 0.15p per share was paid during the year. The Board is not recommending the payment of a final dividend. Strategic review The Group has sought during the year 2001 to consolidate its existing activities. European offices, which have been the focus of recent investment, are still relatively 'new' and are inevitably at the beginning of their development process. However, there are encouraging signs that future levels of business can be both significant and profitable and we already have an indication of the potential of these economic regions of Europe. Whilst progress has been made in our European operations, strategically the UK remains important for the Group as a whole. Approximately half the resources of the business are based in the London office and the critical mass and range of skills available underpin the Group's operations. In this context, performance in the UK this year has been unsatisfactory with minimal growth in turnover and lower margins compared with the previous year. However, during the year the cost base in the UK was reduced and is now commensurate with the level of business that can be anticipated for the coming year. This inevitably has meant a reduction in staff numbers, which regrettably has been necessary. Employees Consultancy is a people business and the skill, drive and enthusiasm of individuals and teams is critical to the on going success of the Group. We will continue to encourage more ownership of the Company by individuals and to this effect a new all employee share option scheme is being implemented in addition to our existing executive share option scheme for senior staff. The Group continues to deliver work of an extremely high quality, which is much valued by our clients and in turn helps to strengthen our reputation for creative design, proactive dialogue and effective delivery. The achievement of such high standards should be acknowledged, and on behalf of the Board I would like to thank our professional colleagues for their hard work and dedication throughout the year. New Board appointments I am delighted to welcome Mr Ian McQuattie to the Board. Mr McQuattie was appointed a non-executive director of the Company on 1st July 2001. Mr McQuattie, a chartered accountant, is chairman of Stanco Exhibitions, a major UK exhibition contractor, and a non-executive director of Paradigm Technology Limited, which provides computer based solutions for the logistics market. Until recently he was chairman of Noble Denton Holdings Limited, an offshore gas and engineering consultancy. Mr McQuattie brings to the Board a broad range of experience in corporate finance and management, working with both large and small companies in the UK and abroad. Mr Alan Brooker will be retiring as senior non-executive director at the forthcoming AGM. His place as senior non-executive director will be taken by Mr Ian Mavor. Mr Brooker was appointed to the Board at the flotation of the Company in February 1988. He has been of invaluable assistance to the Board during his time with us and on a personal note I would like to express my thanks for his help, support and good counsel. The Future The year 2001/02 will be one of consolidation of existing operations and close control of the debtor and cash position, with the tough trading conditions experienced during the first quarter of this financial year likely to continue for some time. The projected order book looks more solid towards the second half of the year, by which time there may be a more confident general economic climate on which to build. However, whilst the immediate future will be much influenced by the timing of any general economic upturn, the Company will continue with its strategy to develop as a major international provider of design consultancy services. The Board will be seeking to expand the sector expertise of the Group in order to generate future growth, and opportunities will be actively sought with a view to increasing the scale and market value of the Company, which the Board believes will lead to a more resilient business in the longer term. Andrew Lett Chairman 28 January 2002 Consolidated profit and loss account For the year ended 30 September 2001 2001 2000 £000 £000 Turnover: Group and share of joint 21,518 19,965 ventures Less: share of joint ventures' turnover (2,739) (1,592) Group turnover (note 1) 18,779 18,373 Movement in amounts 647 494 recoverable on contracts Group work done (note 1) 19,426 18,867 Group operating profit (note 2) 1,200 1,931 Share of operating (loss)/profit in joint (103) 188 ventures and associate Net interest payable by Group (180) (67) Profit on ordinary activities before tax (note 3) 917 2,052 Tax on profit on ordinary activities (454) (541) Profit on ordinary activities after tax 463 1,511 Dividends (109) (306) Retained profit for the year 354 1,205 Earnings per share: Basic 0.64p 2.13p Diluted 0.63p 2.07p Consolidated Balance Sheet At 30 September 2001 2001 2000 £000 £000 £000 £000 Fixed assets Intangible assets 957 1,011 Tangible assets 1,438 1,530 Investments in joint ventures: Share of gross assets 2,910 854 Share of gross liabilities (2,872) (703) 38 151 Investment in associate 74 102 2,507 2,794 Current assets Debtors 7,632 7,351 Cash at bank and in hand 488 553 8,120 7,904 Creditors falling due within one year (6,136) (6,393) Net current assets 1,984 1,511 Total assets less current liabilities 4,491 4,305 Creditors falling due after one year (431) (639) Provisions for liabilities and charges - - Net assets 4,060 3,666 Capital and reserves Share capital 724 722 Share premium account 1,794 1,758 Profit and loss account 1,542 1,186 Equity shareholders' funds 4,060 3,666 Statement of total recognised gains and losses For the year ended 30 September 2001 2001 2000 £000 £000 Profit for the financial year 463 1,511 Foreign exchange differences 31 (66) Total gains and losses recognised in the year 494 1,445 Reconciliation of movements in shareholders' funds For the year ended 30 September 2001 2001 2000 £000 £000 Shareholders' funds at 1 October 3,666 2,502 Exercise of share options 38 25 Capitalisation of ESOT contributions (29) - Exchange movement 31 (66) Profit attributable to shareholders 463 1,511 Dividends paid and proposed (109) (306) Shareholders' funds at 30 September 2001 4,060 3,666 Consolidated Cash Flow Statement For the year ended 30 September 2001 2001 2000 £000 £000 £000 £000 Net cash inflow from operating activities 1,379 1,689 Returns on investments and servicing of (180) (63) finance Tax paid (427) (444) Capital expenditure Purchase of tangible fixed assets (216) (385) Acquisitions Investment in subsidiary undertakings - (394) Investment in joint ventures (21) (34) (21) (428) Equity dividends paid (290) (324) Net cash inflow before financing 245 45 Financing Issue of ordinary shares 9 25 Repayment of loans (160) (120) Principal repayments under hire purchase contracts and finance leases (444) (226) Net cash outflow from financing (595) (321) Decrease in cash (350) (276) Reconciliation of net cash flow to movement in net debt Decrease in cash for the year (350) (276) Cash outflow from decrease in debt 604 346 New finance leases (392) (503) Movement in net debt during the year (138) (433) Net debt at 1 October 2000 (1,184) (751) Net debt at 30 September 2001 (1,322) (1,184) NOTES 1 Turnover and work done An analysis of turnover and work done by geographical area of destination is as follows: 2001 2000 United Rest of United Rest of Kingdom Europe Total Kingdom Europe Total £000 £000 £000 £000 £000 £000 Turnover Group 14,476 4,303 18,779 13,941 4,432 18,373 Share of joint ventures - 2,739 2,739 376 1,216 1,592 14,476 7,042 21,518 14,317 5,648 19,965 Share of associate - 230 230 - 370 370 Total 14,476 7,272 21,748 14,317 6,018 20,335 Movement in amounts recoverable on contracts Group 1,063 (416) 647 436 58 494 Share of joint ventures - 262 262 - 80 80 Share of associate - 2 2 - (37) (37) Total 1,063 (152) 911 436 101 537 Work done Group 15,539 3,887 19,426 14,377 4,490 18,867 Share of joint ventures - 3,001 3,001 376 1,296 1,672 Share of associate - 232 232 - 333 333 Total 15,539 7,120 22,659 14,753 6,119 20,872 2 Group operating profit 2001 2000 £000 £000 Group work done 19,426 18,867 Staff costs (9,816) (10,099) Amortisation of goodwill (54) (53) Depreciation (670) (371) Other operating charges (7,686) (6,413) Group operating profit 1,200 1,931 3 Profit on ordinary activities before taxation An analysis of profit on ordinary activities before taxation by geographical area is as follows: 2001 2000 United Rest of United Rest of Kingdom Europe Total Kingdom Europe Total £000 £000 £000 £000 £000 £000 Company and subsidiaries 546 474 1,020 1,378 490 1,868 Share of joint ventures - (80) (80) 67 66 133 Share of associate - (23) (23) - 51 51 Group total 546 371 917 1,445 607 2,052 4 Earnings per share The earnings per share are calculated on the profit attributable to shareholders of £463,000 for the year ended 30 September 2001 (2000: £1,511,000) and on 72,356,065 (2000: 70,905,936), being the weighted average number of shares in issue during the year. 5 Amounts recoverable on contracts Amounts recoverable on contracts, as included in debtors, exceeded payments on account, as included in creditors by £873,000 at 30 September 2001 (2000: £226,000). These amounts comprise: 2001 2000 Amounts recoverable on Payments on Amounts recoverable on Payments on contracts account contracts account £000 £000 £000 £000 Value of work done 20,618 14,326 20,160 7,276 Fees rendered on account (18,654) (15,417) (18,527) (8,683) 1,964 (1,091) 1,633 (1,407) ====== ===== ===== ===== 6 Statutory accounts The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 September 2001 or 2000 but is derived from those accounts. Statutory accounts for 2000 have been delivered to the Registrar of Companies and those for 2001 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. The Company's statutory accounts for 2001 will include the following note in respect of their 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 and they consider that the Company will continue to operate within the overdraft facility recently agreed, which expires in January 2003. 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 and, 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.' 7 Annual Report The Annual Report and Accounts is expected to be mailed to shareholders on or before 22 February 2002. Further copies will be available from the registered office of the Company, 2 Great Eastern Wharf, Parkgate Road, London SW11 4TT, or will be accessible via the Company's website at www.aukett.com. This information is provided by RNS The company news service from the London Stock Exchange

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