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VHE Holdings PLC (VHE)

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Tuesday 12 June, 2001

VHE Holdings PLC

Preliminary Results - Part 1

VHE Holdings PLC
12 June 2001

Part 1

                               VHE HOLDINGS PLC                               
                           2001 Preliminary results                           

VHE Holdings plc, the Yorkshire-based specialist land remediation and
engineering group, announces Preliminary Results for the year to 31st March
2001.

Highlights

- Return to profitability
- Pre-tax profits £1.037m (2000: loss of £7.820m)
- Group turnover up 4.8% at £47.9m (2000: £45.7m)
- Excellent performance from Cumbrian based Shepley Engineers
- Shareholder values increase by 28%
- Order book position for core businesses strong for 2001/2002
- No dividend

Regarding results, Mike Laycock, Chairman, said:

'The results for the year to 31st March 2001 show an encouraging return to
profitability achieved in spite of one of the wettest winters on record and
the added disruption of the fuel crisis.'

Regarding prospects, Mike Laycock, Chairman, said:

'I have already referred to our strong order book position and from such a
sound base look forward with confidence to the current financial year.'


Contact:
VHE Holdings plc                                   01226 715666
Philip Underwood, Chief Executive
Roger Barker, Company Secretary


                             CHAIRMAN'S STATEMENT                             

RESULTS                                    

I am pleased to announce the results for the year to 31st March 2001 which
show an encouraging return to profitability achieved in spite of one of the
wettest winters on record and the added disruption of the fuel crisis.

Turnover was up 4.8% at £47.911m (2000: £45.703m) and operating profits of
£1.285m compare with an operating loss of £0.597m last year (both stated
before exceptional items).

Pre-tax profits of £1.037m compare with pre-tax losses of £7.820m last year
and earnings per share amounted to 3.2p compared to a loss per share of 1.9p
(before exceptional items) in the previous year.  Post tax profits of £1.042m
(2000: loss £7.352m) are after a tax credit of £5k (2000: £468k).  

BALANCE SHEET

Net debt at the year end was £1.692m, an increase of £0.758m.  As indicated in
my interim statement net debt reduced in the second half of the year by
£1.523m as a result of the settlement of contractual issues on the contracts
at Manchester Airport and Hawthorn Colliery.

Gearing at the year end was 35.7% (2000: 25.3%) reflecting the movement in
working capital.

Creditor days at 79 (2000: 86) are indicative of both the recovery in our
trading position and our policy of improving the payment profile with
suppliers and sub-contractors.

The increase in debtor days to 79 (2000: 66) was due to the significant
advance payments received in March 2000 rather than to any deterioration in
cash performance during the year.  Shareholders' funds increased by 28% in the
year to £4,739m (2000: £3.697m) giving a value per ordinary share of 14.8p
(2000: 11.5p).  The balance sheet position does not reflect the potential
uplift available from the further utilisation of accumulated tax losses. 
Furthermore, the directors believe that the current market values of the
Group's property holdings are in excess of their book value.

DIVIDEND

At this stage of the Group's recovery your Board considers it prudent not to
make a dividend payment.

REVIEW OF OPERATIONS

VHE Construction plc, despite the climatic and fuel problems I referred to
earlier in this statement, was able to maintain profitability in the second
half of the year.  The company has already secured orders in excess of last
year's turnover and is satisfied with the quality of these contracts.

Shepley Engineers Limited had an excellent year and contributed substantially
to the Group's profit and cash flow.  It is maintaining its momentum into the
current year with the opportunity to continue last year's performance levels.

West Cumberland Insulation (1997) Limited has suffered from difficult trading
conditions and the Board terminated its operations in February this year.

EMPLOYEES

On a personal note, I continue to be delighted with the enthusiastic and
effective performance of the management teams and look forward to their
contribution to progressively increasing profits.

PROSPECTS

I have already referred to our strong order book position and from such a
sound base look forward with confidence to the current financial year. 

Our fundamental strategy is to invest in people and technology that will
reinforce our position as the UK's leading land remediation specialist, will
consolidate our nuclear engineering capability and will further develop our
historical structure restoration market.  Our expertise in these areas enables
us deservedly to win work at better margins than would otherwise be the case. 
Our long-term objective is to invest and maintain our position ahead of all
our competitors and to continue to benefit therefrom.


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