RNS Number:5535S
Hyder Consulting PLC
27 November 2003
Hyder Consulting PLC (HYC.L)
Interim Results for the six months ended 30 September 2003
(Hyder Consulting is an international engineering design, advisory and
specialist management consultancy)
Key points
* Results in line with expectations
* Turnover increased by 9% to #60.2m (2002 non-statutory #55.0m)
* Operating profit before goodwill and exceptionals #0.9m (2002
non-statutory loss #0.5m)
* Order book increased by 10% to #174m (March 2003: #158m)
* Further progress expected in second half
Sir Alan Thomas, Chairman of Hyder Consulting PLC commented:
"We continue to make good progress on the turnaround: our order book has
strengthened and margins have improved. We expect a stronger second half due to
seasonal spending patterns and better performance in the Asia Pacific. The
re-structuring of our balance sheets is well advanced so that dividends can be
paid in the future."
Press contacts:
Tim Wade, Chief Executive
Hyder Consulting PLC Tel: +44 (0)20 7904 9011
Simon Hamilton-Eddy, Financial and Commercial Director
Hyder Consulting PLC Tel: +44 (0)20 7904 9011
Shane Dolan
Biddicks Tel: +44 (0)20 7448 1000
Chairman's Statement
I am pleased to report that Hyder Consulting PLC has made good progress in the
six months to 30 September 2003. The results are in line with the Board's
expectations and well ahead of the same period last year.
Results
The statutory figures for the comparative period last year as set out in the
profit and loss account apply to Firth Holdings PLC when it was a non-trading
cash shell and prior to its acquisition of Hyder Consulting Holdings Limited
(HCHL) in October 2002.
In order to aid comparison to results as disclosed in the Listing Particulars
dated 27 September 2002, non-statutory information is set out for the period
ended 30 September 2002 as if the acquisition had taken place on 1 April 2002.
Turnover for the period increased to #60.2m (2002/03 non-statutory #55.0m;
statutory #nil).
Operating profit before goodwill and exceptionals amounted to #0.9m (2002/03
non-statutory #0.5m loss; statutory #0.4m loss).
Adjusted earnings per share rose to 1.96p (2002/03 non-statutory loss per share
(1.97p); statutory 0.53p).
Overall, most sectors in most territories have remained firm in the period.
This is reflected in the order intake and turnover growth. Profit margins have
also improved despite the general increase in professional indemnity insurance
premiums, which have increased our costs by #0.4m for the half-year. Since more
than two-thirds of our business is currently in the public sector, the second
half is expected to be stronger than the first, reflecting the public sector
spending pattern.
We are keenly aware of the importance of managing our working capital in order
to minimise net debt, which stood at #2.8m at 30 September 2003. Interest cover
was 3.3 times, which was in line with plan. Cash balances over the six-month
period decreased by #7.8m, primarily as a result of the repayment of #6m in loan
notes issued to HCHL shareholders as part of the acquisition of that company.
Taxation
The effective tax rate is currently 13%, which is significantly lower than the
UK tax rate of 30%. The reasons for this are primarily tax credits arising in
UK and Germany, profits in the Middle East not being subject to tax and brought
forward tax losses in other jurisdictions. If tax credits were excluded the
current average rate would be 25%.
Dividend
No interim dividend is proposed but the re-structuring of our balance sheet is
well advanced so that dividends can be paid in future.
Strategy
Our primary objective is to improve margins and there are a number of elements
to our strategy for achieving this. We are implementing a programme of
continuous business improvement which is beginning to show tangible results; we
have closed loss making offices and activities where there is no prospect of
turning them round; we are seeking progressively to migrate more of our
operations to high added value advisory services; and we are optimising capacity
through a combination of organic growth and in-fill acquisitions.
We raised #1.1m through the issue of 1,299,945 shares in July 2003 and issued a
further 135,982 shares to help us fund small in-fill acquisitions and buy out
some minority interests in Acerplan Planungsgellschaft GmbH, our German
subsidiary. In October 2003 we completed the acquisition of a land development
consultancy in Sydney for an initial consideration of #0.5m, and a potential
maximum consideration of #1.0m subject to its profit performance. The
transaction is expected to be earnings enhancing and to generate synergy with
our own property consulting business in New South Wales.
We are looking at a number of other potential acquisitions in targeted sectors
and territories to help us attain critical mass and to improve our market
position and profit margins, but we are being highly selective.
Regional Review
UK / Europe
Turnover increased to #36.3m (2002/03 non-statutory #34.5m) and operating profit
to #2.1m (2002/03 non-statutory #1.2m).
Significant project wins in the period included the award of a third PSP
(Principal Support Provider) contract from Defence Estates for U.S. Air Force
bases in the UK; the Glasgow strategic drainage plan; a number of route
management strategy commissions from the Highways Agency; and, again from the
Highways Agency, our third ECI (Early Contractor Involvement) road scheme,
junction 4 of the M40.
Our German operations have performed well in a weak market. The business has
been successful in securing more projects in the rail sector. Elsewhere, we
selectively pursued opportunities in central Europe, focusing on the EU
accession states.
Middle East
Turnover was up to #10.8m (2002/03 non-statutory #7.7m), though there was a
higher than normal sub-contracted element. Operating profit was maintained at
#0.5m (2002/03 non-statutory #0.5m).
Our Abu Dhabi operation continues to perform well. In Dubai the market is
robust and the property sector in particular is providing excellent
opportunities. Major project wins include the Jumeirah Beach residential
development; access roads for Bahrain's new Grand Prix race circuit; a new
Central Bank of Kuwait headquarters building; and the Dubai Festival City
development. We also won a major commission for the improvement of water
distribution and treatment facilities in the Al Ain region.
Asia Pacific
The business has improved its performance compared to last year. Turnover
increased to #13.1m (2002/03 non-statutory #12.8m). Operating losses were
reduced to #0.7m (2002/03 non-statutory #1.0m).
In Hong Kong the market remains depressed and, in the short-term, our goal is to
eliminate losses there. Costs have been cut and the sales effort is sharply
focused. We are, of course, mindful of the prospects in China itself, which are
huge in the long-term and we have been encouraged by the increasing orders
there.
We are in the process of scaling down our operations in South East Asia whilst
building up our business in Australia which is now moving into profit. Our New
South Wales operations are performing well and in Victoria are moving in the
right direction. Significant project wins include a residential tower on the
Gold Coast in Queensland and a major bridge project in Melbourne. Our Property
Development Centre in Sydney has made an important contribution to our
international project wins, especially in the Middle East.
Corporate overheads
Corporate overheads have increased to #1.0m (2002/03 non-statutory #0.9m). This
is partly as a result of corporate governance requirements arising from the
company becoming a fully quoted company that is now trading. In addition, we
are increasing our investment in risk management including setting up a captive
insurer to address, amongst other things, the industry wide increases in
professional indemnity insurance premiums and higher excess levels.
Outlook
Our order book has continued to improve and currently stands at #174m (March
2003: #158m). We expect a stronger second half due to the calendar phasing
referred to earlier and to performance improvement in Asia Pacific.
As a professional services business, staff recruitment, training, development
and retention are key to our success and we invest heavily in them. In the UK
we have started out on the process to achieve Investor in People accreditation.
I would like to thank our staff in all our operating regions for their
professionalism and dedication which have again been recognised by a number of
industry awards.
Sir Alan Thomas
Chairman
26 November 2003
Consolidated profit and loss account for the six months ended 30 September 2003
(A) (B) (C)
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
Note #'000 #'000 #'000
Turnover including share of joint 60,224 - 50,525
venture:
Less; Share of joint venture - - (64)
Turnover
Continuing operations (year ended 31
March 2003 - 5 months trading) 2a&b 60,224 - 50,461
60,224 - 50,461
Amortisation of positive goodwill (34) - (11)
Amortisation of negative goodwill 75 - 332
Other operating costs (before
exceptional items) (59,285) (360) (49,007)
Exceptional items (177) 307 307
Net operating costs (59,421) (53) (48,379)
Group operating profit
Continuing operations (year ended 31
March 2003 - 5 months trading) 803 (53) 2,082
Share of joint venture - - 1
Operating profit including share of
joint venture 803 (53) 2,083
Interest receivable 68 104 485
Interest payable (312) - (377)
Profit on ordinary activities before
taxation 2c 559 51 2,191
Taxation (74) (8) (514)
Profit on ordinary activities after
taxation 485 43 1,677
Minority interests (25) - (95)
Retained profit for the financial 460 43 1,582
period
Earnings per share (undiluted) 3 1.96p 0.53p 10.78p
Earnings per share (diluted) 3 1.95p 0.53p 10.76p
Earnings per share before exceptional
items and goodwill (undiluted) 3 2.54p 0.53p 6.50p
Earnings per share before exceptional
items and goodwill (diluted) 3 2.53p 0.53p 6.49p
There is no difference between the profit on ordinary activities before taxation
and the retained profit for the year stated above, and their historical cost
equivalents.
Column 'A' reflects a full 6 months trading for the business to 30 September
2003.
Column 'B' reflects 6 months to 30 September 2002 when Firth Holdings PLC
(Firth) was a non-trading cash shell.
Column 'C' covers the 12 months to 31 March 2003 including Firth as a cash shell
up to 23 October 2002 when it acquired Hyder Consulting Holdings Limited and its
subsidiaries from which point the trading of that business is included.
Statement of group total recognised gains and losses
Six months Six months
ended 30 ended 30 Year ended 31
September 2003 September 2002 March 2003
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Profit for the financial period 460 43 1,582
Currency translation differences on foreign
currency net investments (383) - 206
Total gains for the financial period 77 43 1,788
Reconciliation of movements in group shareholders' funds
Six months Six months
ended 30 ended 30 Year ended 31
September 2003 September 2002 March 2003
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Issue of ordinary share capital for the
acquisition of Hyder Consulting Holdings Ltd
(HCHL) - - 1,458
Premium on ordinary shares issued for the
acquisition of HCHL - - 4,310
Proceeds of ordinary shares issued for cash 956 - 138
Issue of ordinary shares for acquisition of German
minority interests 246 - -
Shares to be issued from the acquisition of HCHL - - 17
Total recognised gain for the period (see above) 77 43 1,788
Net increase in shareholders' funds 1,279 43 7,711
Shareholders' funds at 1 April 13,508 5,797 5,797
Total shareholders' funds at end of period 14,787 5,840 13,508
Consolidated balance sheet as at 30 September 2003
As at As at As at
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed assets
Intangible assets
- Goodwill 159 - 181
- Negative Goodwill (914) - (980)
Tangible assets 8,624 - 9,063
Fixed asset investments 220 - 220
Investment in joint ventures
- Share of gross liabilities (240) - (421)
- Transfer to provisions 240 - 421
8,089 - 8,484
Current assets
Debtors 56,604 211 53,103
Cash at bank and in hand 6,024 5,721 13,825
62,628 5,932 66,928
Current liabilities
Creditors : amounts falling due within
one year (41,841) (92) (46,536)
Net current assets 20,787 5,840 20,392
Total assets less current liabilities 28,876 5,840 28,876
Creditors : amounts falling due after
more than one year (3,300) - (3,779)
Provisions for liabilities and charges (9,797) - (10,391)
Net assets 15,779 5,840 14,706
Capital and reserves
Called up share capital 9,778 8,147 9,628
Share Premium 8,762 3,269 7,694
Shares to be issued - - 17
Capital Redemption reserve 80 80 80
Profit and loss account (3,833) (5,656) (3,911)
Shareholders' funds (including
non-equity interests) 14,787 5,840 13,508
Equity minority interests 886 - 1,095
Non-equity minority interests 106 - 103
Total shareholders' funds 15,779 5,840 14,706
Equity interest 15,673 5,840 14,603
Non-equity interest 106 - 103
15,779 5,840 14,706
Consolidated cash flow statement
Six months Six months Year
ended 30 ended 30 ended
September 2003 September 2002 31 March 2003
(Unaudited) (Unaudited) (Audited)
Note #'000 #'000 #'000
Net cash inflow / (outflow) from operating
activities 4a (1,936) - 7,512
Returns on investment and servicing of finance 4b (244) 104 108
Taxation received / (paid) 530 (8) (510)
Capital expenditure and financial investment 4c (319) - (34)
Acquisitions and disposals 4d (128) - 1,402
Cash flow before financing (2,097) 96 8,478
Financing 4e (5,684) - (639)
Increase / (decrease) in cash during the period (7,781) 96 7,839
Reconciliation of net cash flow to movement in
net funds
Net (debt) / cash at start of period (1,367) 5,625 5,625
Increase / (decrease) in cash in the period (7,781) 96 7,839
Cash outflow from decrease in debt 6,768 - 777
Other non cash movements
Loan notes issued - - (6,000)
Finance leases (363) - (446)
(2,743) 5,721 7,795
Loan and finance leases acquired with
acquisition - - (8,982)
Exchange difference (104) - (180)
Net (debt) / funds at end of period 4f (2,847) 5,721 (1,367)
Deferred consideration of #1,816,000 included in net debt at 31 March 2003 has
been reclassified as an external creditor.
Notes to the financial statements
1. Basis of Preparation
The financial statements are prepared under the historical cost basis of
accounting as adjusted for the revaluation of freehold property and have been
prepared in accordance with applicable United Kingdom accounting standards.
Accounting policies applied are as stated in the financial statements for the
year ended 31 March 2003.
The interim financial statements, which are abridged and unaudited, have been
prepared in accordance with the guidelines published by the Accounting Standards
Board and are prepared on a consistent basis using the accounting policies set
out in the 2003 Annual Report. The balance sheet as at 31 March 2003 and the
results for the year then ended have been abridged from the Group's 2003
statutory accounts which have been filed with the Registrar of Companies. The
auditors reported on those accounts; their report was unqualified and did not
include a statement under Section 237 (2) and (3) of the Companies Act 1985. The
interim statement does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985.
2. Segmental analysis by geographical area
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
(a) Turnover by origin
Continuing operations
UK and Continental Europe 36,340 - 32,734
Middle East 10,783 - 7,126
Asia Pacific 13,101 - 10,665
Share of joint venture - - (64)
60,224 - 50,461
(b) Turnover by destination
Continuing operations
UK and Continental Europe 35,130 - 28,142
Middle East 11,617 - 6,895
Asia Pacific 13,477 - 15,488
Share of joint venture - - (64)
60,224 - 50,461
(c) Profit on ordinary activities before taxation
Continuing operations
UK and Continental Europe 2,097 (360) 2,235
Middle East 540 - 387
Asia Pacific (753) - (721)
Share of joint venture - - 1
1,884 (360) 1,902
Pre-operating profit exceptionals (177) 307 307
Amortisation of positive goodwill (34) - (11)
Amortisation of negative goodwill 75 - 332
Corporate overheads (945) - (447)
Net interest (payable) / receivable (244) 104 108
Profit on ordinary activities before taxation 559 51 2,191
The figures shown for the year ended 31 March 2003 represent five-months trading
only.
3. Earnings per ordinary share
Before
exceptional
Six months Exceptional items and Six months Year ended
ended items and goodwill ended 31 March
30 September goodwill amortisation 30 September 2003
2003 amortisation 2002 (Audited)
(Unaudited) (Unaudited)
#'000 #'000 #'000 #'000 #'000
Profit after tax and
minority interests 460 (136) 596 43 1,582
Basic diluted and adjusted
earnings attributable to
shareholders 460 (136) 596 43 1,582
Basic earnings per share 1.96p (0.58p) 2.54p 0.53p 10.78p
Diluted earnings per share 1.95p (0.58p) 2.53p 0.53p 10.76p
Number at
Number at 30 September Number at
30 September 2002 31 March
2003 (restated) 2003
Weighted average number of
ordinary shares 23,449,537 8,146,966 14,680,714
Dilutive shares to be issued 75,484 - 26,202
Diluted weighted average number of
ordinary shares 23,525,021 8,146,966 14,706,916
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of shares during the year.
In order to show earnings per share on a consistent basis the 2002 comparatives
have been restated following the capital reorganisation that took place on 22
October 2002.
Diluted earnings per share is calculated by adjusting earnings attributable to
ordinary shareholders and the weighted average number of ordinary shares in
issue on the assumption of conversion of all dilutive share options in issue.
Supplementary basic and diluted earnings per share have been calculated to
exclude the effect of exceptional items and goodwill amortisation in respect of
subsidiaries acquired in the prior year. The adjusted numbers have been provided
in order that the effects of these items on reported earnings can be fully
appreciated.
4. Analysis of cash flows for headings netted in the cash flow statement
a)Net cash flow from operating activities
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Operating profit / (loss) 803 (53) 2,083
Net amortisation of intangible fixed assets (41) - (321)
Depreciation of tangible fixed assets 1,159 - 691
Profit on sale of tangible fixed assets (16) - (64)
(Increase) / decrease in amounts recoverable on
contracts (1,317) - 1,798
(Increase) / decrease in external debtors (1,702) 148 3,015
Increase / (decrease) in external creditors (228) (95) 1,588
Decrease in provisions (594) - (1,278)
Net cash flow from operating activities (1,936) - 7,512
b)Returns on investment and servicing of finance
Interest received 68 104 485
Interest paid (273) - (342)
Interest on finance leases (39) - (35)
(244) 104 108
c) Capital expenditure and financial investment
Purchase of tangible fixed assets (413) - (281)
Proceeds from sale of fixed assets 94 - 247
(319) - (34)
d)Acquisitions and disposals
Purchase of subsidiary undertaking - - (1,231)
Cash in business acquired at acquisition - - 2,633
Purchase of minority interests (128) - -
(128) - 1,402
e) Financing
Loan notes repaid (5,987) - -
Loans repaid (414) - (555)
Capital payments under finance leases (367) - (222)
Cash received for 230,189 shares re: capital
reorganisation
- - 138
Cash received for issue of new ordinary shares 1,084 - -
(5,684) - (639)
f) Reconciliation of movement in net debt
At At 30
31 March 2003 Cash flow Non cash Exchange September
movement movement 2003
#'000 #'000 #'000 #'000 #'000
Cash at bank 13,825 (7,726) - (75) 6,024
Overdraft (261) (55) - 15 (301)
13,564 (7,781) - (60) 5,723
Loan Notes (6,000) 5,987 - - (13)
Debt due within 1 year (5,116) 27 - (7) (5,096)
Debt due after 1 year (2,772) 387 - (35) (2,420)
Finance leases due within 1 year (622) 367 (291) (1) (547)
Finance leases due after 1 year (421) - (72) (1) (494)
(14,931) 6,768 (363) (44) (8,570)
(1,367) (1,013) (363) (104) (2,847)
g) Acquisition issue of shares
Part of the consideration for the purchase of minority interest in Acerplan
Planungsgesellschaft GmbH comprised the issue of 135,982 shares. The remaining
consideration of #123,239 was funded through the placing of 148,945 shares at a
price of 86p per share.
5. Further information
The interim statement is unaudited but has been reviewed by the auditors.
Copies of the Interim Statement have been sent to shareholders. Further copies
are available from the Company's registered office at 29 Bressenden Place,
London SW1E 5DZ. In addition, an electronic version of the interim statement
and 31 March 2003 financial statements can be viewed on the corporate web site:
www.hyder-consulting.com.
Summary of trading results (Unaudited)
The following tables contain the profit and loss account of Hyder Consulting
Group as would have been presented if the acquisition of HCHL had taken place on
1 April 2002. The information is illustrative only and does not form part of the
financial statements.
Six months to Six months to Year to
30 September 03 30 September 02 31 March 03
#'000 #'000 #'000
Turnover - HCHL
UK and Continental Europe 36,340 34,536 71,552
Middle East 10,783 7,654 16,443
Asia Pacific 13,101 12,790 27,212
Turnover - Firth
UK and Continental Europe - - -
Middle East - - -
Asia Pacific - - -
Total turnover 60,224 54,980 115,207
Operating profit - HCHL
UK and Continental Europe 2,121 1,187 3,849
Middle East 540 531 996
Asia Pacific (753) (992) (1,912)
Operating loss - Firth
UK and Continental Europe (24) (360) (403)
Middle East - - -
Asia Pacific - - -
Corporate overhead - HCHL (945) (877) (1,386)
Operating profit / (loss) before goodwill
amortisation 939 (511) 1,144
Net goodwill amortisation 41 160 321
Exceptional items (177) 307 307
Operating profit / (loss) after goodwill
amortisation and exceptionals 803 (44) 1,772
Net interest payable (244) (263) (288)
Profit / (loss) before taxation 559 (307) 1,484
Taxation (74) (115) (514)
Profit / (loss) after taxation 485 (422) 970
Minority interests (25) (30) (104)
Profit / (loss) attributable to 460 (452) 866
shareholders
EPS
No. of shares - basic (m) 23.4 23.0 23.0
No. of shares - diluted (m) 23.5 23.0 23.0
EPS - basic 1.96p (1.97p) 3.77p
EPS - diluted 1.95p (1.97p) 3.76p
EPS - Excluding exceptionals and
negative goodwill
EPS - basic 2.54p (4.00p) 1.04p
EPS - diluted 2.53p (4.00p) 1.03p
This information is provided by RNS
The company news service from the London Stock Exchange
END
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