Trading Update

RNS Number : 3845P

Clarke(T.) PLC

17 November 2016

 

TCLARKE PLC

TRADING UPDATE

TClarke plc ("TClarke" or the "Group"), the building services group, today issues a trading update for the period from 1 July 2016 to date.

Fraud Update

Further to the announcement on 31 October 2016, the Company can report that we have now commenced legal proceedings to recover misappropriated funds. It is too early at this stage to confirm the quantum of what will be recovered, but investigations and proceedings are continuing in conjunction with expert professional advisors to recover as much as practicable.

Trading

The result of the EU referendum and other developments in the wider global environment has led to levels of uncertainty which we are alert to, particularly movements in commodity prices and exchange rate fluctuations which could influence tender pricing. 

Despite these uncertainties, we continue to see steady, but cautious, improvements in our core markets, supported by a strong forward order book that has seen no project cancellations.  The Group's underlying performance for the year continues to be in line with the Board's expectations, with operating cash generation improving year on year.

Order Book

Demand for our services continues to be strong and, through a combination of repeat business and negotiated as well as competitive bidding, we have maintained an enviable committed forward order book in excess of £320 million with visibility now stretching beyond 2019. 

We are pleased to confirm that we have now signed contracts for 22 Bishopsgate, London. This major development scheme, which includes 1.275 million sq. ft. of offices, is being developed by Lipton Rogers in partnership with AXA IM (Investment Managers) and is under construction by Multiplex. Our onsite activities will commence in 2017 for completion in 2019. We have been awarded four key packages valued at £56 million as follows:

·      Electrical, Shell & Core

·      Electrical, Cat "A" Fit Out

·      ELV (Systems Integration) Package, including BMS, ICT and Security

·      Fire Alarm Installation

At Stratford, Lendlease has awarded us a £24 million M&E fit out project at The International Quarter, London. In the South West, our green credentials are being put to good use at Bodmin Road, Plymouth where we are involved with 72 Passivhaus dwellings. Passivhaus is the fastest growing energy performance standard in the world. 

Our specialist Healthcare division has secured projects at several hospitals across the UK including:

·      BMI The Park Hospital - IXR Upgrade, Nottinghamshire 

·      Hinchingbrooke Hospital - MRI Suite, Cambridgeshire 

·      Royal Devon & Exeter Hospital - Catheter Laboratory, Exeter 

In Newcastle, across two new student accommodation projects, we are working to provide over £6 million of electrical services to 1,609 units. At Sunderland University, The Science Complex was handed over in July and the Enterprise Centre is due for completion in December.

In Scotland, 75% of revenues for 2017 have now been secured including the following notable recent wins in the residential sector:

·      Barratt Homes West Scotland, Bonhill, Dumbartonshire

·      Barratt Homes West Scotland, Wallace Fields, Glasgow

·      Cala Homes West Scotland, Dullater Greens, Cumbernauld

·      Robertson Homes, Fair Acres, Dunbar

This success is further underpinned by project wins in the education sector at Easter Bush Campus, University of Edinburgh and St Joseph College, Dumfries. A recent new client is Mitsubishi Electric Air Conditioning Europe where we will be working within specialist Calorimeter Test Rooms at their European Manufacturing Plant in Livingston West Lothian.

Pensions

The period has also seen renewed volatility in corporate bond yields which, although of no direct relevance from a trading perspective, provides the basis of calculation of the Group's pension liabilities. However, our dividend remains secure with corporate bond yields at their current levels.

Outlook

The Board is focused on our twin targets to improve both absolute profitability and operating margin over the short to medium term.  We are very encouraged by the prospects for the Group and are currently enjoying excellent levels of activity within our estimating teams. Several notable schemes are currently being bid across our range of target sectors which, if successful, will boost our short-term order book for 2017 and have the potential to provide additional forward revenue coverage. As part of our strategy we are targeting opportunities in areas of the country where we are underrepresented such as Birmingham, Manchester and at major UK airports.

-ends-

Date: 17^th November 2016

For further information contact:

TClarke plc

Mark Lawrence - Chief Executive

Martin Walton - Finance Director

Alexandra Dent - Company Secretary

Tel: [phone]

www.tclarke.co.uk

N+1 Singer (Financial Adviser and Broker)

Sandy Fraser

Rachel Newton

Tel: [phone]

www.nplus1singer.com

Capital Access Group

Scott Fulton

Tel: [phone]

 

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