AGM Statement

RNS Number : 7807F

Driver Group plc

25 February 2015

 

25 February 2015

Driver Group plc

("Driver", the "Group" or the "Company")

AGM STATEMENT

BOARD CHANGES

Driver, the global consultancy to the construction and engineering industries, is holding its Annual General Meeting later today.  At the meeting Non-Executive Chairman Alan McClue will make the following statement:

"At the time of the announcement of Driver's Preliminary Results, the Company stated that this coming year would be one in which we would invest in both the structure of the Group and the recruitment of key fee earning staff particularly in the Middle East and Asia.  The result of this investment would inevitably mean that, as with last year, our revenue, profits and cash inflow would be weighted towards the second half.  We also commented that we believed that further opportunities for growth would present themselves and we would invest further where this would enable us to deliver our aspiration of doubling the size of the business, whilst generating material growth in profit levels over the longer term.

We have increased our central overheads to facilitate this future growth with the appointment of a Group Business Development Director and continue to invest in our business development and client relationship management tools.

On the 9 December 2014, we announced the acquisition of initiate Consulting Limited ("Initiate") and I am very pleased with its performance to date. I am delighted to report that the Initiate management team is performing in line with both our financial and development expectations.

The Group is now managed in two regions.  The region consisting of the Americas, Europe & UK is performing in line with our expectations with a particularly strong performance in the UK dispute and advisory business of DriverTrett.  The performance of the newly opened Canada office, which commenced trading at the start of the financial year, is also particularly pleasing.

In mainland Europe we are actively looking at organically growing our geographical presence in order to strengthen our European offering.

In the second region consisting of Africa, Asia & Middle East we appointed a Chief Operating Officer who commenced in mid-November. Since his appointment a thorough review of this region has been undertaken. This review has been completed and we are in the process of strengthening the business support functions, restructuring our regional offices, redefining our approach to business development and client relationship management and increasing headcount. It is necessary to implement these plans now in order to correctly position our business in this region as we look to transition from a relatively small enterprise to a substantial business. As part of this growth plan, we have now opened an office and commenced trading in Kuwait. I am very pleased with the plan we have in place and the progress that is already being made.

As we have previously stated, this phase of our development comes with a monetary cost and also a redirection of management time. Our costs in this region in this half year are expected to be approximately £0.85 million higher than in the second half of 2014. These additional costs are considered necessary in order to support the COO's long term strategic plans. In addition, the Company has experienced a slight delay in a number of anticipated projects. Certain projects, particularly in the Middle East (Oman), but also to a lesser extent in Asia (Hong Kong and Singapore), were delayed or suspended and in a small number of instances, cancelled. At this time, most of the delayed projects have now commenced with management predicting revenue growth through the second half of the current financial year and in to next year. In contrast, Africa is performing towards the top end of our expectations.

However, in the short term, given the combination of increased costs and the delay in the commencement in certain projects, it seems sensible to carefully manage expectations and take a more prudent approach to the expected performance of our business in the Africa, Asia & Middle East region and the Group for the current financial year which the board now expects to be below management expectations.   

Going forward, our CEO, David Webster, has previously stated that he believed that the appointment of Steve Norris to the Board following the acquisition of Initiate would provide the opportunity for material business development in the infrastructure sector.  This is starting to take shape and as a consequence the Group Board has decided that it will best serve the shareholders by focusing on the growth of the business through the opportunities in this sector.

Consequently it is now time for me to hand over the Chair to somebody who can assist our CEO in growing the business through strong relationships and knowledge of the markets in which Driver operates.  Therefore, with effect from the end of the AGM I will resign as a director of the Company.

Steve Norris, who was appointed to the Board on 8 December 2014 following the acquisition of Initiate, will take up the appointment of Non-Executive Chairman immediately following the end of the AGM and I wish him well in his new role at the Company."

Enquiries:

Driver Group plc
David Webster, Chief Executive		Tel: [phone]
Damien McDonald, Group Finance Director
Alan McClue, Non-Executive Chairman
Steve Norris, Non-Executive Chairman (elect)		Tel: [phone]
Charles Stanley Securities Nominated Adviser & Broker
Marc Milmo / Carl Holmes	Tel: [phone]

 

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