VHE Holdings PLC
13 June 2000
VHE HOLDINGS PLC
2000 PRELIMINARY RESULTS
VHE Holdings plc, the Yorkshire-based specialist land remediation and
engineering group, announces Preliminary Results for the year to 31st March
2000.
Highlights
* Results in line with expectations set out in the interim statement
* Pre-tax loss for the year was £7.820m (1999 : £135,000)
- Pre-tax loss in first half of £7.875m
- Profit second half of £55,000
* Underlying operating profit performance improved first half loss of
£707,000 to second half profit of £110,000
* Group turnover of £45.70m (1999 : £59.40m)
* Reduction in uncertified work-in-progress from £12.19m to £2.35m
* No dividend
* Improved performance at two Cumbrian-based engineering companies; start
new financial year with reasonable order books, good prospects
* 2000/1 order book at core VHE Construction significantly better than last
year
Regarding Prospects, John Parkinson, Chairman, said:
'We enter the current financial year with a higher than usual proportion of
this year's budget covered by orders on hand .'
'The Board is acutely aware of the recent disappointing performance of the
company and is actively reviewing all its options to enhance shareholder
value.'
'On the operational front our budgets reflect continued progress building from
the change of fortune recorded in the second half.'
Contact:
VHE Holdings plc 01226 715666
John Parkinson, Chairman
Philip Underwood, Chief Executive
Richard Littlehales, Finance Director
Binns & Co PR Ltd. 020 7786 9600
Peter Binns, Simon Ellis, Jane Mallinson
Chairman's Statement
Results
The results for the year to 31st March 2000 are in line with the expectations
set out in the interim statement.
The pre-tax loss for the year was £7.820m (£135,000 profit). This was made up
of a pre-tax loss in the first half of £7.875m and a recovery to profitability
of £55,000 in the second half.
The first half loss included a net loss of £6.232m in respect of Leabrook Road
and an exceptional plant restructuring provision of £0.645m, and exceptional
total of £6.877m. The underlying operating profit performance has progressed
from a loss of £707,000 in the first half to a profit of £110,000 in the
second.
Balance Sheet
At the year end we had cash of £1.129m and net borrowings (adjusted for long
term loans and other financial obligations) of £0.934m. The year end figure
was boosted by the receipt of the Leabrook settlement, but nevertheless cash
management was good in the second half.
Creditor days were 86 (91) and debtor days 66 (88). The key issue from which
shareholders should take comfort is the substantial reduction in uncertified
work-in-progress from £12.190m, (£3.335m net of Leabrook Road) to £2.305m,
which is a reflection of the Board's progressively prudent approach to profit
recognition.
Dividend
In view of the disappointing results for the year, the Board does not
recommend the payment of a dividend.
Operating Performance
The main Cumbrian sited companies, Shepley Engineers Limited and West
Cumberland Engineering Limited, improved performance progressively and have
gone into the current financial year with reasonable order books and good
prospects.
VHE Construction plc suffered a downturn in turnover from £49.408m to
£35.325m, and an erosion of gross margin. We enter the current financial year
with a higher than usual proportion of this year's budget covered by orders on
hand and management is confident that the quality of that order book is
significantly better than last year.
Employees
It has been a very tough year and I should like to record my thanks to our
employees for their loyalty and commitment.
Prospects
The Board is acutely aware of the recent disappointing performance of the
company and is actively reviewing all its options to enhance shareholder
value.
On the operational front our budgets reflect continued progress building from
the change of fortune recorded in the second half.
John Parkinson
Chairman
GROUP PROFIT AND LOSS ACCOUNT
For the Year Ended 31 March 2000
2000 1999
Notes £'000 £'000
Turnover 45,703 59,401
Cost of sales (41,336) (51,629)
---------- ----------
Gross profit 4,367 7,772
---------- ----------
Net operating expenses (4,964) (5,425)
Operating (loss)/profit before
exceptional items (597) 2,347
Exceptional items
Costs associated with 2
Leabrook settlement (6,294) (1,743)
Costs associated with 3
Shafton re-organisation (434) -
---------- ----------
Operating (loss)/profit (7,325) 604
Interest receivable and
similar income 49 109
Interest payable and
similar charges (544) (578)
---------- ----------
(Loss)/profit on ordinary
activities before taxation (7,820) 135
Tax on profit on ordinary 4
activities 468 (101)
---------- ----------
(Loss)/profit for the financial year (7,352) 34
Dividends - -
---------- ----------
Retained (loss)/profit for the year (7,352) 34
---------- ----------
Basic and fully diluted (loss)/
earnings per ordinary share 5 (22.9p) 0.1p
---------- ----------
Dividend per ordinary share Nil Nil
---------- ----------
All activities relate to continuing operations.
The Group has no recognised gains and losses other than the losses above and
therefore no separate statement of total recognised gains and losses has been
presented.
There is no difference between the loss on ordinary activities before taxation
and the retained loss for the year stated above and their historical cost
equivalents.
GROUP BALANCE SHEET
At 31 March 2000
2000 1999
(as
Notes £'000 restated)
£'000
Fixed assets
Tangible assets 6 5,114 7,274
---------- ----------
5,114 7,274
---------- ----------
Current assets
Stock 1,077 623
Debtors: amounts falling due
after more than one year 979 603
Debtors: amounts falling
due within one year 9,930 20,518
Cash at bank and in hand 1,129 234
---------- ----------
13,115 21,978
Creditors: Amounts falling
due within one year (12,565) (15,216)
---------- ----------
Net current assets 550 6,762
---------- ----------
Total assets less current liabilities 5,664 14,036
---------- ----------
Creditors: amounts falling due
after more than one year (947) (1,781)
Provisions for liabilities
and charges (840) (1,000)
Accruals and deferred income (180) (206)
---------- ----------
(1,967) (2,987)
---------- ----------
Net assets 3,697 11,049
---------- ----------
Capital and reserves
Called up share capital 3,210 3,210
Profit and loss account 487 7,839
---------- ----------
Equity shareholders' funds 3,697 11,049
---------- ----------
GROUP CASH FLOW STATEMENT
For the Year Ended 31 March 2000
2000 1999
£'000 £'000
Net cash inflow/(outflow) from operating activities 4,011 (615)
---------- ----------
Returns on investments and servicing of finance
Bank interest received 49 109
Interest paid on Bank and other loans (475) (460)
Interest paid on finance leases
and hire purchase agreements (69) (118)
---------- ----------
Net cash outflow on investments
and servicing of finance (495) (469)
---------- ----------
Taxation
UK corporation tax paid (292) (859)
---------- ----------
Capital expenditure
Purchase of tangible fixed assets (126) (1,005)
Sale of tangible fixed assets 892 957
---------- ----------
766 (48)
---------- ----------
Acquisitions
Purchase of Business - (614)
---------- ----------
Equity dividends paid - (321)
---------- ----------
Net cash inflow/(outflow) before financing 3,990 (2,926)
---------- ----------
Financing
Receipt of grants - 75
Repayment of loans (629) (810)
Repayment of principal under finance leases
and hire purchase agreements (813) (869)
---------- ----------
Net cash (outflow) from financing (1,442) (1,604)
---------- ----------
Increase/(decrease) in cash 2,548 (4,530)
---------- ----------
Reconciliation of operating (loss)/profit to net cash inflow
from operating activities
Year Year
ended ended
31 March 31 March
2000 1999
£'000 £'000
---------- ----------
Operating (loss)/profit (7,325) 604
Depreciation, Amortisation of grants and profit on
sales of tangible fixed assets 1,055 1,403
Decrease/(Increase) in stocks 235 (5)
Decrease/(Increase) in debtors 214 (140)
Decrease in amounts recoverable on contracts 10,006 294
(Decrease) in creditors (174) (2,771)
---------- ----------
Net cash inflow/(outflow)from operating activities 4,011 (615)
---------- ----------
At Cash Other At
1 April Flow non-cash 31 March
1999 changes 2000
Analysis of net debt £'000 £'000 £'000 £'000
---------- ---------- ---------- ----------
Cash at bank and in hand (1,419) 2,548 - 1,129
Debt due after one year (1,400) - 600 (800)
Debt due within one year (636) 629 (600) (607)
Finance leases and hire
purchase agreements (1,093) 813 (376) (656)
---------- ---------- ---------- ----------
Net Debt (4,548) 3,990 (376) (934)
---------- ---------- ---------- ----------
Reconciliation of net cashflow to movement in net debt
Year Year
ended ended
31 March 31 March
2000 1999
£'000 £'000
----------- ----------
Increase/(Decrease) in cash in the period 2,548 (4,530)
Cash outflow from a decrease in debt 1,442 1,679
---------- ----------
Change in net debt resulting from cashflows 3,990 (2,851)
Other non-cash items:
New finance leases (376) (199)
---------- ----------
Movement in net debt in the period 3,614 (3,050)
Net debt at beginning of period (4,548) (1,498)
---------- ----------
Net debt at end of period (934) (4,548)
---------- ----------
NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTS
For the Year Ended 31 March 2000
1 The unaudited preliminary consolidated financial statements are prepared
under the historical cost convention. The unaudited preliminary
consolidated financial statements comply with relevant accounting
standards (UK GAPP) and have been prepared using accounting policies set
out on pages 23 to 25 of the Group's 1999 Annual Report and Accounts.
The above financial information does not constitute statutory accounts as
defined be section 240 of the Companies Act 1985. The comparative
information is an extract from the statutory accounts for the financial
year ended 31 March 1999 restated as per note 6 below. Those accounts,
upon which the auditors issued an unqualified opinion which did not
contain a statement under either section 237(2) or (3) of the Companies
Act 1985, have been delivered to the Registrar of Companies.
2 Settlement cost of the Leabrook settlement are:
2000 1999
£'000 £'000
Legal and professional charges 1,739 1,743
Write down of value and cost provisions 4,555 -
---------- ----------
6,294 1,743
---------- ----------
3 Shafton Engineering Services Limited
Re-organisation costs include provisions for plant and stock write downs
and redundance costs.
4 The taxation credit for the year reflects tax recoverable from the carry
back of losses, overprovisions of prior years, and the release of
deferred tax. There are tax losses carried forward for which relief will
only be available against future trading profits.
5 The calculations of earnings per share is based on a loss of £7.352m
(1999: profit of £34,000) and 32,102,727 shares (1999: 32,102,727 shares)
in issue during the period. The fully diluted earnings per share
calculation takes into account any potentially dilutive future share
issues, which, at the balance sheet date, could be anticipated. There is
no difference between the basic and fully diluted earnings per share.
6 In the light of developing experience with the application of FRS 12 the
company has restated the figures in the balance sheet at 31 March 1999 to
include the asset in respect of landfill restoration costs of £340,000
(less depreciation of £38,000) previously shown as an intangible fixed
asset within the cost of landfill sites included in tangible fixed
assets.