Interim Results

Clarke(T.) PLC 19 August 2005 Interim Results for the six months to 30 June 2005 T. CLARKE CONFIDENT AS NEW CONTRACTS UNDERLINE REGIONAL EXPANSION T. Clarke plc, the electrical engineering and contracting company, has announced its interim results for the six months to 30 June 2005. Highlights: 2005 2004 â€¢ Profit before Tax Â£3.65m Â£3.45m â€¢ Turnover Â£91.6m Â£71.2m â€¢ Earnings per Share* 6.14p 5.93p â€¢ Interim dividend* 3.5p 3.33p â€¢ Smith Contracting Services Limited acquired for Â£4.1 m â€¢ Waldon Electrical Contractors Limited acquired for Â£1.7 m * Adjusted for Bonus Issue of May 2005 Major completions include: - Bishops Square, Bishopsgate Near completion - BBC West One, - Cardinal Place, Victoria - BP International, Canary Wharf Major projects won include: - White City Shopping Centre, London - Allen and Overy Offices, London - Grand Arcade Shopping Centre, Cambridge - Grand Theatre, Leeds Pat Stanborough, Chief Executive commented: ' I am pleased with the performance of the Group. Despite pressure on margins within our core operations, the Group has delivered a very solid set of results. The acquisitions of Smith Contracting Services Ltd and Waldon Electrical Contractors Ltd reinforce our aim of increasing regional coverage and focussing on specialist markets. I am delighted with the success of our regional businesses in securing a number of significant projects. ' The upturn in the London commercial property market is continuing and the Group has won a number of major projects. We have an excellent pipeline of work both in London and the regions and our order book currently stands at Â£170 million. We can approach 2006 and 2007 with increasing confidence. -ends- Date: 19 August 2005 For further information, please contact: T. Clarke plc City Profile Group Pat Stanborough, Chief Executive Simon Courtenay John Daly, Finance Director Oliver Winters Tel: 020-7358-5000 Tel: 020-7448-3244 web: www.tclarke.co.uk CHAIRMAN'S STATEMENT Turnover in the first half was 29% up at Â£91.6m (2004 : Â£71.2m) whilst on a like-for-like basis it rose by 14%. Although it proved to be a challenging period for the group profit before tax was up 9% to Â£3.6m (2004 : Â£3.3m). Earnings per share for the period (adjusted for the bonus issue) were 6.14p (2004 : 5.93p) and the Board has declared an increased interim dividend of 3.50p (2004 : 3.33p). During this period we acquired Smith Contracting Services Ltd., based in Falkirk, Scotland for Â£4.1m, and Waldon Electrical Contractors Ltd, in St. Austell, Cornwall for Â£1.7m. Cash at 30th June 2005 was Â£5.6m (Â£11.2m at 31 December 2004) with the movement in the period reflecting investment in acquisitions and work in progress. Current Trading Margins during this period were under considerable pressure, particularly in our core operations. However, we are now experiencing an upturn in the London commercial market, in both new build and fit out. We have secured orders for three new build projects on More London, at Tower Bridge, also secured White City Shopping Centre and fit outs for Allen and Overy, Bishopsgate, DrKW, Gresham Street, and Unilever, Blackfriars. We have recently completed Bishops Square, Bishopsgate, and are close to completion of BBC West One; Cardinal Place, Victoria and BP International, Canary Wharf. Our Regional businesses have been successful in securing a wide range of projects which include: Grand Arcade Shopping Centre, Cambridge; Grand Theatre, Leeds; Barry Town Hall; Donnington Valley Hotel; BST Newcastle College; 16 Waitrose supermarkets and Liberty Village, RAF Lakenheath. Outlook We are building a strong pipeline of work and our current order book is around Â£170m (not including framework agreements and term contracts). The full year outturn is likely to be in line with current market expectations. An improvement in margins will show through in 2006 and the Company is in excellent shape and looking forward to the exciting challenges ahead of us. Russell Race Chairman 19th August 2005 CONSOLIDATED INCOME STATEMENT Unaudited Audited Unaudited 6 Months to 12 Months to 6 Months to 30 June 2004 31 December 2004 30 June 2005 (restated) (restated) Â£,000 Â£,000 Â£,000 Revenue 91,646 71,235 156,627 Cost of Sales 78,168 60,906 134,470 ----------- ----------- ----------- Gross Profit 13,478 10,329 22,157 Administration Expenses 9,850 6,996 14,563 ----------- ----------- ----------- Profit from Operations 3,628 3,333 7,594 Investment Income/Finance Cost 26 115 193 ----------- ----------- ----------- Profit Before 3,654 3,448 7,787 Taxation Taxation 1,204 1,139 2,547 ----------- ----------- ----------- Profit for the period from continuing operations 2,450 2,309 5,240 ----------- ----------- ----------- Earnings per Share (adjusted for bonus issue) 6.14p 5.93p 13.39p ----------- ----------- ----------- GROUP STATEMENT OF RECOGNISED INCOME & EXPENSE Actuarial gains/(losses) on defined benefit pension scheme. (33) (639) (1,277) Tax on items taken direct to equity 9 191 383 ----------- ----------- ----------- Net income recognised directly in equity (24) (448) (894) Profit for the period 2,450 2,309 5,240 ----------- ----------- ----------- Total recognised income & expense for the period 2,426 1,861 4,346 ----------- ----------- ----------- CONSOLIDATED BALANCE SHEET Audited Unaudited at 12 Months to Unaudited at 30 June 2004 31 December 2004 30 June 2005 (restated) (restated) Â£'000 Â£'000 Â£'000 Non Current Assets Goodwill 14,358 9,703 10,538 Tangible Fixed Assets 7,921 6,450 6,903 Deferred Taxation 36 43 21 ---------------- ----------------- ---------------- 22,315 16,196 17,462 ---------------- ----------------- ---------------- Current Assets Work in Progress 14,394 12,703 4,981 Debtors 22,304 17,248 25,289 Cash and Cash Equivalents 5,562 5,368 11,211 ---------------- ----------------- ---------------- 42,260 35,319 41,481 ---------------- ----------------- ---------------- Total Assets 64,575 51,515 58,943 ---------------- ----------------- ---------------- Current Liabilities Bank Overdraft 2,786 1,700 2,603 Creditors and 36,145 27,508 31,927 Accruals ---------------- ----------------- ---------------- 38,931 29,208 34,530 ---------------- ----------------- ---------------- Net Current Assets 3,329 6,111 6,951 ---------------- ----------------- ---------------- Non Current Liabilities Retirement Benefit Obligation 3,885 3,326 3,830 Other 676 240 264 ---------------- ----------------- ---------------- 4,561 3,566 4,094 ---------------- ----------------- ---------------- Total Liabilities 43,492 32,774 38,624 ---------------- ----------------- ---------------- Net 21,083 18,741 20,319 ---------------- ----------------- ---------------- Assets Equity Share Capital 3,995 1,307 1,315 Share Premium 1,234 2,473 2,914 Profit and Loss Account 15,820 14,924 16,055 Revaluation Reserve 34 37 35 ---------------- ----------------- ---------------- Total Equity 21,083 18,741 20,319 ---------------- ----------------- ---------------- CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited Six Months Audited Six Months Ended Year Ended Ended 30 June 2004 31 December 2004 30 June 2005 (restated) (restated) Â£,000 Â£,000 Â£,000 Â£,000 Â£,000 Â£,000 Net Cash from Operating Activities (see note 4) 2,291 (3,108) 4,154 ----------- ----------- ----------- Investing Activities Interest received 130 191 383 Purchase of Tangible Fixed Assets (263) (1,489) (2,113) Receipts on Disposal of Fixed Assets 72 160 Purchase of Subsidiary Undertakings (4,847) (3,867) (4,993) Net Cash Acquired with Subsidiaries 171 (4,676) 413 (3,454) 711 (4,282) ------------------------------------------- ------------------- Net Cash used in Investing Activities (4,809) (4,680) (5,852) ----------- ----------- ----------- Financing Activities Equity Dividends Paid (2,663) (2,483) (3,791) Repayments of obligations under finance leases (205) (107) 51 Increase/(decrease) in bank overdrafts (263) (1,318) (415) Net Cash (used in)/from Financing Activities (3,131) (3,908) (4,155) ----------- ----------- ----------- Net Increase/(Decrease) in cash and cash equivalents (5,649) (11,696) (5,853) Cash and Cash Equivalents at beginning of period 11,211 17,064 17,064 ----------- ----------- ----------- Cash and Cash Equivalents at end of period 5,562 5,368 11,211 =========== =========== =========== CONSOLIDATED STATEMENT of CHANGES in EQUITY Audited Unaudited at 12 Months to Unaudited at 30 June 2004 31 December 2004 30 June 2005 (restated) (restated) Â£'000 Â£'000 Â£'000 Balance at start of period 20,319 17,864 17,864 Profit for period 2,450 2,309 5,240 Interim dividend paid (1,308) Prior year final dividend paid (2,663) (2,483) (2,483) Actuarial gains/ (losses) on defined benefit pension scheme. (33) (639) (1,277) Corporation tax provision on pension benefits. 9 191 383 Shares issued on acquisition 18 25 33 Premium on shares issued 983 1,474 1,867 ------------- -------------- ------------- Balance at end of period 21,083 18,741 20,319 ------------- -------------- ------------- Notes to the interim financial statements (unaudited) 1. Key changes in accounting policy Pensions The expense of the defined benefit pension scheme is determined using the projected unit method and charged to the income statement based on actuarial assumptions at the beginning of the year. Actuarial gains and losses are recognised in full in the statement of recognised income and expense in the period in which they occur. Net pension obligations are included in the balance sheet at the present value of the scheme liabilities, less the fair value of the scheme assets. Acquisitions In accordance with IFRS3 'Business Combinations', goodwill is no longer amortised but stated at cost less any provision for impairment in value. Goodwill will be reviewed at least annually. Dividends Under IAS 10 'Events after the Balance Sheet Date' a liability should only be recognised once there is an obligation to pay. As a result the dividend will only be recognised once the shareholders approve it or in the case of interim dividends when the directors approve it at a board meeting (see note 4). 2. Earnings per share are calculated on the basis of the weighted average of 39,928,297 ordinary shares in issue. (2004: 38,922,114 after adjusting for bonus issue) and profit attributable to shareholders of Â£2,450,000 (2004: Â£2,309,000 after adjusting for changes in accounting practice) 3. An interim dividend of 3.50p per share (2004 : 3.33p after adjusting for bonus issue) was approved by the board on 18th August 2005 and has not been included as a liability at 30 June 2005. This dividend will be payable on 21st September 2005 to shareholders on the register on 2nd September 2005. The shares will go ex-dividend on 31st August 2005. 4. Reconciliation of Operating Profit to Net Cash from Operating Activities:- Unaudited Unaudited Six Months Audited Six Months Ended Year Ended Ended 30 June 2004 31 December 2004 30 June 2005 (restated) (restated) Â£,000 Â£,000 Â£,000 Profit from Operations 3,628 3,333 7,594 Depreciation Charges 418 336 776 Increase in Provisions (5) 47 94 Profit on Sale of Fixed Assets 1 3 ---------- ---------- ---------- Operating cash flows before movements in working capital 4,041 3,717 8,467 (Increase) Decrease in Debtors 6,703 473 (6,564) (Increase) Decrease in Work in Progress (8,867) (8036) (243) Increase (Decrease) in Creditors 1,782 1,819 5,078 ---------- ---------- ---------- Cash generated by operations 3,659 (2,027) 6,738 Corporation tax paid (1,314) (1,041) (2,466) Interest Paid (54) (40) (118) ---------- ---------- ---------- Net cash from operating activities 2,291 (3,108) 4,154 ========== ========== ========== 5. Acquisition of businesses On 7th January 2005 T Clarke plc acquired 100% of the share capital of Smith Contracting Services Ltd. The final consideration was Â£4,147,000 and the net assets acquired were Â£1,627,000 and the resultant goodwill was Â£2,520,000. On 4th May 2005 T Clarke plc acquired 100% of the share capital of Waldon Electrical Contractors Ltd for a consideration of Â£1,700,000. The net assets currently recognised are Â£400,000 and therefore the resultant goodwill currently stands at Â£1,300,000. 6. This interim report will be circulated to members on 23rd August 2005 from which date copies will be available to the public at or on application to the company's registered office: T Clarke plc, Stanhope House, 116-118 Walworth Road, London SE17 1JY, telephone number 020-7358-5000 (Ext 211) or e-mail: info@tclarke.co.uk Reporting under International Financial Reporting Standards (IFRS) T Clarke plc will produce its consolidated report and accounts in accordance with IFRS with effect from 1 January 2005, where previously the group had reported under UK Generally Accepted Accounting Practice UK GAAP). The group's date of transition to IFRS is 1 January 2004, which is the beginning of the comparative period for the 2005 financial year. This will mean that the opening balance sheet for IFRS purposes is that reported at 31 December 2003 as amended for IFRS. This interim financial report is the first to be prepared under IFRS, and the comparatives have been prepared on the same basis and therefore restated from those previously reported under UK GAAP. In order to assist in understanding the impact of this change reconciliations have been produced to show the changes made to statements previously reported under UK GAAP in arriving at the equivalent statements under IFRS and are included in the notes to these financial statements along with details of the key accounting policy changes. Transition to IFRSs The unaudited reconciliation of equity at 1 January 2004 (date of transition to IFRS), at 30 June 2004, and at 31 December 2003 (date of the last UK GAAP financial statements) and the unaudited reconciliation of profit for 2004 (both interim and final) are published below. Audited reconciliations will be included in the published financial statements for 2005. Unaudited reconciliation of equity at 31 December 2003 Effect of transition UK GAAP to IFRSs IFRSs Â£000s Â£000s Â£000s Non Current Assets Goodwill 5,654 5,654 Tangible Fixed Assets 4,685 4,685 Deferred Taxation 40 40 -------- -------- -------- 10,379 - 10,379 -------- -------- -------- Current Assets Work in Progress 4,617 4,617 Debtors 14,738 14,738 Cash and cash equivalents 17,064 17,064 -------- -------- -------- 36,419 - 36,419 -------- -------- -------- Total Assets 46,798 46,798 Current Liabilities Bank Overdraft 3,018 3,018 Creditors and Accruals 25,434 - 2,436 22,998 -------- -------- -------- 28,452 - 2,436 26,016 -------- -------- -------- Net Current Assets 7,967 2,436 10,403 -------- -------- -------- -------- -------- -------- Non Current Liabilities 98 2,820 2,918 -------- -------- -------- Total Liabilities 28,550 384 28,934 Net Assets 18,248 - 384 17,864 -------- -------- -------- Equity Share Capital 1,282 1,282 Share Premium 1,046 1,046 Profit & Loss Account 15,884 - 384 15,500 Revaluation Reserve 36 36 -------- -------- -------- Total Equity 18,248 - 384 17,864 -------- -------- -------- Notes to Reconciliation of Equity at 31 December 2003. There are only three elements that materially effect the transition of the group accounts from UK GAAP to IFRSs and they are: Amortisation of Goodwill - There will be no amortisation of goodwill after the 1st January 2004 and goodwill provided after that date will be written back. Pension Commitments - The company will adopt IAS 19 arrangements for the reporting of its pension commitments with effect from 1 January 2004. The opening pension fund deficit was 2,820,000 at 1 January 2004. Dividends - Dividends are reported on a dividends paid basis rather than on an accruals basis and the accrual at 1 January 2004 (Â£2,436,000) has been written back. Unaudited reconciliation of equity at 30 June 2004 Effect of transition UK GAAP to IFRSs IFRSs Â£000s Â£000s Â£000s Non Current Assets Goodwill 9,213 490 9,703 Tangible Fixed Assets 6,450 6,450 Deferred Taxation 43 43 -------- -------- -------- 15,706 490 16,196 -------- -------- -------- Current Assets Work in Progress 12,703 12,703 Debtors 17,248 17,248 Cash at Bank and in Hand 5,368 5,368 -------- -------- -------- 35,319 - 35,319 -------- -------- -------- Total Assets 51,025 490 51,515 -------- -------- -------- Current Liabilities Bank Overdraft 1,700 1,700 Creditors and Accruals 28,815 - 1,307 27,508 -------- -------- -------- 30,515 - 1,307 29,208 -------- -------- -------- Net Current Assets 4,804 1,307 6,111 -------- -------- -------- Non Current Liabilities 240 3,326 3,566 -------- -------- -------- Total Liabilities 30,755 2,019 32,774 Net Assets 20,270 - 1,529 18,741 -------- -------- -------- Equity Share Capital 1,307 1,307 Share Premium 2,473 2,473 Profit & Loss Account 16,453 - 1,529 14,924 Revaluation Reserve 37 37 -------- -------- -------- Total Equity 20,270 - 1,529 18,741 -------- -------- -------- Notes to Reconciliation of Equity at 30 June 2004 There are only three elements that materially effect the transition of the group accounts from UK GAAP to IFRSs and they are: Amortisation of Goodwill - There will be no amortisation of goodwill after the 1st January 2004 and goodwill provided after that date (Â£490,000) has been written back. Pension Commitments - The company will adopt IAS 19 arrangements for the reporting of its pension commitments with effect from 1 January 2004. The opening pension fund deficit was 2,820,000 at 1 January 2004, and was estimated at Â£3,326,000 at 30 June 2004. Dividends - Dividends are reported on a dividends paid basis rather than on an accruals basis and the accrual at 1 July 2004 (Â£1,307,000) has been written back. Unaudited reconciliation of profit for six months ended 30 June 2004 Effect of transition UK GAAP to IFRSs IFRSs Â£000s Â£000s Â£000s Revenue 71,235 71,235 Cost of Sales 60,906 60,906 -------- -------- -------- Gross Profit 10,329 10,329 Administration Expenses 7,439 - 443 6,996 -------- -------- -------- Profit from Operations 2,890 - 443 3,333 Investment Income/Finance Cost 151 - 36 115 -------- -------- -------- Profit before Taxation 3,041 - 407 3,448 Taxation 1,164 - 25 1,139 -------- -------- -------- Profit for the period 1,877 - 382 2,309 -------- -------- -------- Notes to Reconciliation of Profit at 30 June 2004 The items that materially effect the transition of the group accounts from UK GAPP to IFRSs are the following: Pension Commitments a) The provision within administration expenses for current service cost in excess of contributions made. (Â£47,000) b) The provision within investment income/finance cost for interest on pension liabilities offset by the expected return on pension fund assets. (Â£36,000) c) The adjustment of the provision for taxation for the above. Amortisation of Goodwill - No amortisation of goodwill is provided after 1 January 2004, and the provision at 30 June 2004 of Â£490,000 shown in administration expenses is written back. Unaudited reconciliation of equity at 31 December 2004 Effect of transition UK GAAP to IFRSs IFRSs Â£000s Â£000s Â£000s Non Current Assets Goodwill 9,469 1,070 10,539 Tangible Fixed Assets 6,903 6,903 Deferred Taxation 21 21 -------- -------- -------- 16,393 1,070 17,463 -------- -------- -------- Current Assets Work in Progress 4,981 4,981 Debtors 25,289 25,289 Cash at Bank and in Hand 11,211 11,211 -------- -------- -------- 41,481 - 41,481 -------- -------- -------- Total Assets 57,874 1,070 58,944 -------- -------- -------- Current Liabilities Bank Overdraft 2,603 2,603 Creditors and Accruals 34,557 - 2,629 31,928 -------- -------- -------- 37,160 - 2,629 34,531 -------- -------- -------- Net Current Assets 4,321 2,629 6,950 -------- -------- -------- Non Current Liabilities 264 3,830 4,094 -------- -------- -------- Total Liabilities 37,424 1,201 38,625 Net Assets 20,450 - 131 20,319 -------- -------- -------- Equity Share Capital 1,315 1,315 Share Premium 2,914 2,914 Profit & Loss Account 16,186 - 131 16,055 Revaluation Reserve 35 35 -------- -------- -------- Total Equity 20,450 - 131 20,319 -------- -------- -------- Notes to Reconciliation of Equity at 31 December 2004 There are only three elements that materially effect the transition of the group accounts from UK GAAP to IFRSs and they are: Amortisation of Goodwill - There will be no amortisation of goodwill after the 1st January 2004 and goodwill provided after that date (Â£1,070,000) has been written back. Pension Commitments - The company will adopt IAS 19 arrangements for the reporting of its pension commitments with effect from 1 January 2004. The opening pension fund deficit was Â£2,820,000 at 1 January 2004, and the deficit at 31 December 2004 was 3,830,000. Dividends - Dividends are reported on a dividends paid basis rather than on an accruals basis and the accrual at 1 January 2005 (Â£2,629,000) has been written back. Unaudited reconciliation of profit for year ended 31 December 2004 Effect of transition UK GAAP to IFRSs IFRSs Â£000s Â£000s Â£000s Revenue 156,627 71,235 Cost of Sales 134,470 60,906 -------- -------- -------- Gross Profit 22,157 10,329 Administration Expenses 15,539 - 976 14,563 -------- -------- -------- Profit from Operations 6,618 976 7,594 Investment Income/Finance Cost 265 - 72 193 -------- -------- -------- Profit before 6,883 904 7,787 Taxation Taxation 2,598 - 51 2,547 -------- -------- -------- Profit for the period 4,285 955 5,240 -------- -------- -------- Notes to Reconciliation of Profit at 31 December 2004 The items that materially effect the transition of the group accounts from UK GAPP to IFRSs are the following: Pension Commitments a) The provision within administration expenses for current service cost in excess of contributions made. (Â£94,000) b) The provision within investment income/finance cost for interest on pension liabilities offset by the expected return on pension fund assets. (Â£72,000) c) The adjustment of the provision for taxation for the above. Amortisation of Goodwill - No amortisation of goodwill is provided after 1 January 2004, and the provision at 31 December 2004 of Â£1,070,000 shown in administration expenses is written back. This information is provided by RNS The company news service from the London Stock Exchange

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