Interim Results

Aukett Group PLC 1 June 2001 1 June 2001 AUKETT GROUP PLC 2001 INTERIM RESULTS ANNOUNCEMENT Results in line with recent Trading Statement: interim dividend maintained Aukett Group Plc ('Aukett'), one of Europe's leading building design practices, with offices in 14 cities in ten countries, announces Interim Results for the six months ended 31 March 2001. UK offices are in London, Glasgow and Manchester. Financial Highlights Six months ended 31 March 2001 2000 change Turnover, including share of JV's £11.20m £9.16m +22% Group work done £9.44m £9.09m +4% Profit before tax: - UK £0.18m £0.72m -75% - Rest of Europe £0.28m £0.23m +22% - Total £0.46m £0.95m -52% Earnings per share 0.39p 1.05p -63% Dividends per share 0.15p 0.15p Net assets (compared with 30 September 2000) £3.85m £3.67m +5% Gearing (compared with 30 September 2000) 46% 32% Key Points of Statement * Business volume maintained * UK margins eroded in the short term, in line with recent Trading Statement * UK contract gains from Akeler, BT, Guinness, Development Securities, The Economist Group, Arlington Securities, Cap Gemini, WorldCom * Increased turnover and profit from European operations * European contract gains from Motorola, Lovells, Giorgio Armani, Doughty Hanson * Interim dividend maintained Regarding Prospects, Chairman Andrew Lett said: 'The Board remains committed to its strategy of geographical and sector spread and there is scope for good growth particularly from the newer offices, as the Group continues to evolve in the markets and regions in which it operates.' Enquiries: Aukett Group Plc Andrew Lett, Executive chairman Robert Warner, Finance director Tel: 020 7924 4949 Binns & Co PR Ltd Peter Binns, Simon Ellis, Carole Butcher Tel: 020 7786 9600 AUKETT GROUP PLC Interim Statement for the six months ended 31 March 2001 Overview The first half of the current financial year has been disappointing. Despite an increase in turnover, margins have been eroded in the UK. There is little doubt that the slow-down in the US economy has in turn affected the start up of new projects, particularly in the IT sector and related business areas. The implementation of the Group's strategy for expansion has also had an impact on margins in the short term, as the level of growth anticipated at the end of 2000 has not been realised. Operations across Europe, however, continue to progress with an increased contribution to both turnover and profit. Results Group work done in the six months ended 31 March 2001 amounted to £9.44 million, compared with £9.09 million in the same period last year, an increase of four per cent. Operating margins suffered from the unexpected slow-down in growth, combined with the increased costs arising mainly from the investment made last year. As a consequence, Group operating profit decreased by 48% to £461,000 (2000: £ 883,000). The profit before tax amounted to £461,000 (2000: £953,000). The contribution made to this by our activities in mainland Europe increased by 23% to £285,000 (2000: £231,000). Net interest of £86,000 was paid during the period (2000: net received of £28,000), reflecting the higher levels of borrowings arising primarily from the investments made during the last financial year. Earnings per share were 0.39p (2000: 1.05p), down by 63%. The corporation tax charge for the current financial year is expected to be at a significantly higher overall rate to that of last year, which benefited from some large positive adjustments relating to prior years. The tax rate used for these half-year results has increased accordingly. Dividend The Board now declares an interim dividend of 0.15p per share (2000: 0.15p). This will be paid on 14 September 2001 to shareholders on the register on 17 August 2001. United Kingdom Operations Whilst operations in the United Kingdom continue to generate the major share of Group turnover, margins in the UK have not matched expectations. This has been partly due to investment in new premises and equipment as part of the expansion strategy, and partly due to the slow-down caused by the global economic situation. Our cost base has now been adjusted in response to this factor without compromising our long term strategy for UK development and support of the Group as a whole. The decision to develop our operations in Glasgow, Manchester and the City of London recognises regional and local potential that exists within the UK. However these offices are at an early stage of development and need further growth before they can contribute significantly to Group performance. Recent commissions in the UK include new projects from existing clients such as Akeler, BT, Guinness and Development Securities. Commissions from new clients include companies such as The Economist Group, Arlington Securities, Cap Gemini and WorldCom. Operations in Mainland Europe Amsterdam continues to perform well, justifying the Board's decision last year to purchase the 50 per cent of the Company not already owned. Prague, another wholly owned subsidiary, also continues to do well. The progress made in just one year by our subsidiary in Warsaw is particularly encouraging. It has established its presence as an international office with a growing list of commissions, including a major commercial development in central Warsaw. Elsewhere, our new joint venture office in Milan has started very strongly with a busy workload for companies such as Motorola, Lovells and Giorgio Armani, together with a significant urban regeneration project for the Doughty Hanson Group. Madrid has suffered from the slow-down in the IT and telecoms sectors and Berlin has experienced a similar down-turn reflecting the current economic climate in that particular city. The Frankfurt office, another joint venture with our German partner, has only recently been established, although we have strong expectations for that city and region. Work done by the Group on projects outside the United Kingdom, including its share of work done by joint ventures, was £3.40 million (2000: £2.92million), representing 31 per cent of the total such figure for the Group (2000: 29 per cent). Profit contribution from this work was 62 per cent of Group profit and is the first occasion on which this percentage has been ahead of that achieved by the UK. Balance Sheet and Cashflow Shareholders' funds have increased to £3.85 million at 31 March 2001 from £ 3.67 million at the end of last year. The Group balance sheet showed net borrowings of £1.74 million against net borrowings of £1.18 million at 30 September 2000. As a result, gearing has increased to 46 per cent (30 September 2000: 32 per cent). Summary and Prospects Whilst the performance of the UK in the first half was disappointing in terms of margin, business volume has been maintained, despite the slow-downs that have been experienced. Our operations in Europe, although liable to local or regional economic variation, continue to develop in a manner that supports the concept of a Pan European business. In the shorter term, the current global uncertainties will continue to affect the business. Recent investment, whilst affecting current performance is part of a longer term policy to enhance the group's sectoral and geographic spread. The Board remains committed to this strategy, which will provide scope for good growth, particularly from the newer offices, as the Group continues to evolve in the markets and regions in which it operates. 1 June 2001 Aukett Group Plc 2 Great Eastern Wharf Parkgate Road London SW11 4TT Consolidated profit and loss account for the six months ended 31 March 2001 Six months ended Six months Year ended ended 30 31 March 2001 31 March September 2000 2000 unaudited unaudited audited £000 £000 £000 Turnover: Group and share of joint 11,198 9,155 19,965 ventures (note 1) Less: share of joint ventures' (1,383) (469) (1,592) turnover --------- ---------- ------------ Group turnover 9,815 8,686 18,373 Movement in amounts recoverable on (380) 404 494 contracts --------- ------------ ----------Group work done 9,435 9,090 18,867 --------- ------------ ----------Group operating profit (note 2) 461 883 1,931 Share of operating profit in joint ventures 86 42 188 and associate Net interest receivable/(payable) (86) 28 (67) by Group --------- ------------ ----------Profit on ordinary activities 461 953 2,052 before tax (note 3) Tax on profit on ordinary (186) (219) (541) activities --------- ------------ ----------Profit on ordinary activities 275 734 1,511 after tax Dividends (109) (125) (306) --------- ------------ ----------Retained profit of the Group and its share 166 609 1,205 of joint ventures and associate ===== ======= ======= Earnings per share (note 4): Basic 0.39p 1.05p 2.13p Diluted 0.38p 1.02p 2.07p --------- ------------ ----------Summarised consolidated balance sheet at 31 March 2001 31 March 2001 30 September 2000 unaudited unaudited audited audited £000 £000 £000 £000 Fixed assets Intangible assets 978 1,011 Tangible assets 1,717 1,530 Investments in joint ventures: Share of gross assets 1,144 854 Share of gross (932) (703) liabilities ------------- ------------- 212 151 Investment in associate 97 102 ------------- ----------- Current assets 3,004 2,794 Debtors 7,331 7,351 Cash at bank and in hand 696 553 ------------- ------------- 8,027 7,904 Creditors falling due within (6,460) (6,393) one year ------------- ------------- Net current assets 1,567 1,511 ------------- -----------Total assets less current 4,571 4,305 liabilities Creditors falling due after (726) (639) one year Provisions for liabilities and - - charges ------------- -----------Net assets 3,845 3,666 ======= ======= Capital and reserves Share capital 724 722 Share premium account 1,765 1,758 Profit and loss account 1,356 1,186 ------------- -----------Equity shareholders' funds 3,845 3,666 (note 5) ======= ======= Summarised consolidated cash flow statement for the six months ended 31 March 2001 Six months Six months Year ended ended ended 30 31 March 31 March September 2001 2000 2000 unaudited unaudited audited £000 £000 £000 Net cash flow from operating activities 434 579 1,689 Returns on investments and servicing of finance (86) 25 (63) Tax paid (262) - (444) Capital expenditure (164) (112) (385) Acquisitions (2) (404) (428) Equity dividends paid (181) (217) (324) -------- ------- ------- Net cash (outflow)/inflow before financing (261) (129) 45 Net cash outflow from financing (279) (206) (321) _______ _______ _______ Decrease in cash during the period (540) (335) (276) _______ _______ _______ Reconciliation of operating profit to net cash flow from operating activities Group operating profit 461 883 1,931 Depreciation and amortisation of fixed assets 315 176 424 Decrease/(increase) in debtors 19 555 (1,588) (Decrease)/increase in creditors (361) (1,035) 922 _______ _______ _______ Net cash flow from operating activities 434 579 1,689 _______ _______ _______ 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 Six months Year ended ended ended 30 September 31 March 2001 31 March 2000 2000 unaudited unaudited audited Turnover £000 £000 £000 United Kingdom 7,898 6,143 14,317 Rest of Europe 3,300 3,012 5,648 _______ ______ _______ Total 11,198 9,155 19,965 _______ _______ _______ Movements in amounts recoverable on contracts United Kingdom (300) 613 436 Rest of Europe (66) (220) 138 _______ _______ _______ Total (366) 393 574 _______ _______ _______ Work done United Kingdom 7,598 6,756 14,753 Rest of Europe 3,234 2,792 5,786 _______ _______ _______ Total 10,832 9,548 20,539 _______ _______ _______ 2 Group operating profit Group work done 9,435 9,090 18,867 Staff costs (5,145) (4,575) (10,099) Amortisation of goodwill (27) (29) (53) Depreciation (288) (147) (371) Other operating charges (3,514) (3,456) (6,413) _______ _______ _______ Group operating profit 461 883 1,931 _______ _______ _______ 3 Profit on ordinary activities before tax An analysis of profit on ordinary activities before tax by geographical area is as follows: Six months ended Six months ended Year ended 31 March 2001 31 March 2000 30 September 2000 unaudited unaudited audited £000 £000 £000 United Kingdom 176 722 1,445 Rest of Europe 285 231 607 _______ _______ _______ Total 461 953 2,052 _______ _______ _______ 4 Earnings per share The earnings per share are calculated on the profit attributable to shareholders of £275,000 for the six months ended 31 March 2001 and on 72,294,554 (2000: 69,608,940) ordinary shares, being the weighted average number of shares in issue during the period. Diluted earnings per share are calculated on 73,886,036 (2000: 72,171,244) ordinary shares. 5 Reconciliation of movements in shareholders' funds 31 March 2001 30 September 2000 unaudited audited £000 £000 Opening shareholders' funds 3,666 2,502 New shares issued in respect of share options 9 25 Foreign exchange gain/(loss) 4 (66) Profit attributable to shareholders 275 1,511 Dividends proposed or declared (109) (306) _______ _______ Closing shareholders' funds 3,845 3,666 _______ _______ 6 Analysis of net debt An analysis of the movement in net debt during the period is as follows: At 1 Cashflow Non-cash At 31 October movements March 2000 2001 £000 £000 £000 £000 Cash at bank and in 553 143 - 696 hand Overdrafts repayable (553) (683) - (1,236) on demand Bank and other loans repayable in: Less than (200) 80 (80) (200) one year More than (200) - 80 (120) one year Hire purchase and finance Lease creditors (784) 208 (308) (884) _____ _____ _____ _____ Net debt (1,184) (252) (308) (1,744) ===== ===== ===== ===== 7 Statutory accounts The comparative figures for the year ended 30 September 2000 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 Further information Further information about the Group, including copies of the 2000 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. 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 June 2001.

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