TIDMMRS
RNS Number : 3561R
Management Resource Solutions PLC
28 February 2019
28 February 2019
Management Resource Solutions PLC
("MRS" the "Company" or the "Group")
Half Year Results
A solid first half with growth delivered across the business
Management Resource Solutions PLC, a leading Maintenance,
Fabrication, Civil and Earthworks company, announces its Half Year
Results for the six months ended 31 December 2018 ("1H19" or "half
year").
Half Year Financial Highlights*
-- Trading performance in line with expectations
-- Revenue up 3.6% to $34.8m (1H18: $33.6m)
-- Profit before Tax up 39.0% to $3.51m (1H18: $2.52m)
-- Basic EPS of 1.35c (1H18: 1.43c)
-- Debt restructuring progressing well with further announcement
expected by the end of March 2019
* All references to dollars or $ relate to Australian dollars,
the Group's presentational currency
Half Year Operational Highlights
-- Strong profit delivered at MRS Services Group ("MRSSG")
through a continued focus on minimising operating costs and
leveraging the Group's central processes
-- Bachmann Plant Hire ("BPH") produced a solid result despite
extended rain periods during October to December
-- Construction progressing well and to budget on MRSSG
buildings in the Hunter Valley purchased in FY18, with an
anticipated completion in Q4 2019
Paul Brenton, CEO of MRS, commented:
"I am pleased to report that the first half of the Group's
financial year has been another busy period with growth delivered
across the business. This performance reflects the significant
restructuring that has been executed within the MRS Group and the
strength of the BPH and MRSSG businesses. The project pipeline for
BPH remains steady for the foreseeable future and MRSSG remains
focused on the low risk, hourly rate work in the Hunter Valley.
"The second half has started well and I look forward to updating
shareholders on further progress later in the financial year. The
outlook for the Group remains strong and the Board looks to the
future with confidence."
Management will host a presentation for retail investors in
London at the end of March/early April, details of which will be
released via RNS once finalised.
Enquiries:
Management Resource Solutions PLC via FTI Consulting
John Zorbas, Chairman Tel: +44 (0) 20 3727 1000
Paul Brenton, CEO
Tim Jones, Finance Director
Arden Partners plc (NOMAD & Broker) Tel: +44 (0) 20 37614 5900
Tom Price
Alex Penney
Maria Gomez de Olea
Fraser Marshall, Corporate Broking
FTI Consulting (Financial PR) Tel: +44 (0) 20 3727 1000
Alex Beagley
James Styles
Laura Saraby
Notes to Editors
Management Resource Solutions PLC (MRS), through its
subsidiaries Bachmann Plant Hire and MRS Services Group, offers
plant hire, equipment repair, refurbishment and fabrication, mine
rehabilitation, earthmoving, road construction and other support
services to a wide base of private and public sector clients in
Australia. MRS caters predominately for the mining, civil
engineering, construction and infrastructure industries.
Further information on the Company can be found at
http://www.mrsplc.info.
Chief Executive's Review
Bachmann Plant Hire Pty Ltd ("BPH")
Bachmann Plant Hire Pty Ltd is based in Ipswich, approximately
40km west of Brisbane (Queensland), and specialises in providing
bulk earthworks to the construction and infrastructure sectors,
generally throughout South East Queensland. BPH delivers wet hire
services (plant is accompanied by operators) which is completed
through either an hourly wet hire arrangement or performed at a
bulk cubic metre rate, which is often referred to as contract
work.
The Ipswich Economic Development Plan 2016 to 2031, enacted by
the Queensland Government, is an ambitious plan to attract 292,000
people to 20 employment and population growth areas in the vicinity
of Ipswich. More than 500 new residential dwellings are required to
be completed every month to achieve the plan, resulting in the
fastest growing residential growth corridor in Australia.
BPH has a 50-year history and an experienced workforce of
long-term employees and is perfectly located to benefit from the
current opportunities. The majority of BPH's contracts are based on
bulk earthworks within a small, well defined area of a residential
or commercial sub-division to a final level finish of +/- 50mm.
Although operations can be hampered by excessive rainfall, overall
BPH operates in a relatively low risk contracting environment.
Whilst contracts are generally relatively short (two to six months
in length), there is a steady pipeline of work for the foreseeable
future.
BPH's 1H19 contribution was an Operating Profit of $1.5m (1H18:
$1.8m) on revenue of $10.3m (1H17: $10.5m). The first half revenue
and profit contribution is slightly lower than the comparative year
due to extended rain periods during the October to December
period.
MRS Services Group Pty Ltd ("MRSSG")
MRS Services Group Pty Ltd is strategically located in the heart
of the coal mining region of the Hunter Valley in New South Wales,
approximately 125km north west of the coal exporting port of
Newcastle and approximately 240km north of Sydney. Some 90% of
revenues are derived from blue chip mining companies including
Yancoal, New Hope, BHP and Glencore. Demand for high quality coal
(containing high energy content with low ash and pollutants) from
the Hunter Valley remains strong, in particular for export to China
and East Asia where over 1,000 new High Energy Low Emissions
Ultra-Supercritical Coal Fired Power Stations are planned or under
construction.
The majority of MRSSG's work in the Hunter Valley is low risk,
derived from selling trade labour at hourly rates. The fabrication
and mine rehabilitation businesses are based on longer-term
contracts in well-established work relationships and well
understood risk profiles.
MRSSG's 1H19 contribution was an Operating Profit of $4.0m
(1H19: $2.8m) on revenue of A$24.5m (1H18: $23.3m). This strong
profit performance was delivered through a continued focus on
minimising MRSSG operating costs and leveraging the Group's central
processes. This was helped by the reduction in distractions and
unnecessary costs associated with the discontinued operations from
FY17.
MRS Property No1 Pty Ltd
During FY18, MRS Property No1 Pty Ltd purchased the land and the
partially completed buildings from which MRSSG operates in the
Hunter Valley for $3.0m. At the time of acquisition, the land and
buildings had a valuation of $4.8m. The cost to complete the
building is approximately $2.0m, which is fully funded through a
construction facility. Construction is progressing well and to
budget with an anticipated completion in Q4 2019. Management's
estimated valuation of the completed facility is approximately
$9.0m to $10.0m.
Financial Review
All references to dollars or $ relate to Australian dollars, the
Group's presentational currency.
The results for the half year ended 31 December 2018 are a net
profit after tax of $2.6m (1H18: net profit after tax $2.5m) on
revenue of $34.8m (1H18: $33.6m), reflecting the significant
restructuring that has been executed within the MRS Group and the
strength of the Bachmann Plant Hire and MRS Services Group
businesses.
As a result, there is a significant change in the operational
results compared to 1H18 as set out in the table below:
Profit and Loss 1H19 1H18
$'000 $'000
Operating Profit
* BPH 1,606 1,836
* MRSSG 3,984 2,812
* Overheads (974) (968)
----------------------- ------------------
Total Operating Profit 4,616 3,680
Interest (1,107) (1,156)
----------------------- ------------------
Profit before Tax 3,509 2,524
Tax (865) -
----------------------- ------------------
Net Profit after Tax 2,644 2,524
======================= ==================
Prior year tax losses only partially offset the 1H19 operating
profit, the net result is a tax expense for 1H19 of $865k (1H18:
Nil). Profit before tax in 1H19 was $3.51m which has increased
$985k (39%) on the prior year comparative of $2.52m,
Property, Plant & Equipment
During 1H19, the Group invested $7.1m in Property, Plant &
Equipment, with $1.7m in Capital Work In Progress. The majority of
the capital expenditure (CAPEX) has been funded through free cash
flow. New debt contributed $2.1m, with $0.7m equipment finance and
$1.4m property and construction finance. During 1H19 the Company
has continued to invest in CAPEX, extending the life of the capital
equipment and supporting the Group's sustainable growth.
Cash and Borrowings
The cash balance of the MRS Group varies significantly on a day
to day basis. The MRS Group utilises a Debtor finance facility, and
only the cash required to service the business in the very short
term (i.e. the next week) is drawn down through the debtor finance
facility which minimises the interest cost to the business. The
available capacity of the debtor finance facility at 31 December is
$2.6m in addition to the closing cash balance at 31 December 2018
of $768k.
The restructure of the debt is progressing well and will be
announced during Q3.
There are five current core debt facilities:
1) Debtor Finance - BPH has a $2.6m facility, and MRSSG has a $7.0m facility
2) Commercial Bills - The commercial bills were established with
the restructure of the Group in FY17.
3) Equipment Finance -There are two equipment finance loans and
the "Rent to buy" loan in BPH
4) Property Finance
5) Property Construction Finance
Current Trading and Outlook
The Directors believe the markets which BPH and MRSSG service
continue to be strongest they have been in years and trading during
the first half of our 2019 financial year has been in line with
expectations. BPH is currently working close to full capacity and
has a strong pipeline of work to complete. MRSSG is experiencing
strong end market demand. The Hunter Valley thermal coal price has
been strong and stable providing confidence for the coal mines to
commit to repairs and maintenance.
1H19 has set up the MRS Group for another successful year and on
behalf of the Board, I'd like to thank all employees for their
continued commitment to working safely and to all stakeholders of
MRS including our customers, suppliers, funders and shareholders
for maintaining their support of the Company
On behalf of the board, I'd like to thank all employees for
their continued commitment to working safely and to all
stakeholders of MRS including employees, customers, suppliers,
funders and shareholders for maintaining their support for the
Company.
Paul Brenton
Chief Executive Officer
Consolidated Statement of Profit and Loss and Other
Comprehensive Income for the period ended 31 December 2018
6 months ended 6 months ended Year ended
31 December 31 December
2018 2017 30 June 2018
(Unaudited) (Unaudited) (Audited)
Note $'000 $'000 $'000
Revenue 3 34,830 33,561 69,075
Cost of sales (21,223) (22,703) (45,969)
--------------- --------------- -------------
Gross profit 13,607 10,858 23,106
Recurring administrative
expenses (8,745) (7,018) (14,423)
--------------- --------------- -------------
Profit before non-recurring
costs and finance charges 4,862 3,840 8,683
Non-recurring administrative
expenses:
Share based payment charges (246) (160) (370)
Operating profit 4,616 3,680 8,313
Finance costs - interest (1,107) (1,156) (2,281)
Profit before tax 3,509 2,524 6,032
Tax expense (865) - (609)
--------------- --------------- -------------
Profit for the year attributable
to equity holders of the
parent company 2,644 2,524 5,423
=============== =============== =============
Earnings per share 2
Continuing Operations
Basic 1.35c 1.43c 3.02c
Diluted 1.18c 1.28c 2.62c
Consolidated Balance Sheet
as at 31 December 2018
As at As at As at
31 December 31 December
2018 2017 30 June 2018
(Unaudited) (Unaudited) (Audited)
Note $'000 $'000 $'000
Assets
Non-current assets
Property, plant and equipment 4 35,763 17,981 29,114
Deferred Tax 1,613 - 1,613
37,376 17,981 30,727
Current assets
Trade and other receivables 5 15,561 17,579 16,725
Cash and cash equivalents 768 2,172 50
Inventories 1,829 962 1,968
18,158 20,713 18,743
Total assets 55,534 38,694 49,470
------------ ------------ -------------
Liabilities
Current liabilities
Trade and other payables 6 17,664 13,899 16,125
Tax 522 (249) -
Borrowings 7 17,477 10,142 16,025
35,663 23,792 32,150
Non-current liabilities
Borrowings 7 2,491 7,597 4,522
Other non-current liabilities 365 314 2,521
Deferred tax 2,222 - -
5,078 7,911 7,043
Total liabilities 40,741 31,703 39,193
------------ ------------ -------------
Net assets 14,793 6,991 10,277
============ ============ =============
Equity attributable to
equity holders of the
parent
Share capital 39,061 38,810 38,840
Share premium 18,847 17,294 17,442
Issue costs reserve (332) (332) (332)
Reorganisation reserve (36,032) (36,032) (36,032)
Retained earnings (6,751) (12,749) (9,641)
------------ ------------ -------------
Total equity attributable
to equity holders of the
parent 14,793 6,991 10,277
============ ============ =============
Consolidated Statement of Changes in Equity
for the period ended 31 December 2018
Issue costs Reorganisation Retained
Share Capital Share Premium reserve reserve earnings Total equity
$'000 $'000 $'000 $'000 $'000 $'000
At 1 July 2017 38,711 16,808 (332) (36,032) (15,433) 3,722
Profit for the
period - - - - 2,524 2,524
Total comprehensive
income - - - - 2,524 2,524
-------------- -------------- ------------ --------------- ---------- -------------
Other Movements
Issue of Shares 99 486 - - - 585
Share based
payments charge - - - - 160 160
-------------- -------------- ------------ --------------- ---------- -------------
Total other
movements 99 486 - - 160 745
As at 31 December
2017 38,810 17,294 (332) (36,032) (12,749) 6,991
-------------- -------------- ------------ --------------- ---------- -------------
Profit for the
period - - - - 2,899 2,899
Total comprehensive
income - - - - 2,899 2,899
-------------- -------------- ------------ --------------- ---------- -------------
Other Movements
Issue of Shares 30 148 - - - 178
Share based
payments charge - - - - 209 209
-------------- -------------- ------------ --------------- ---------- -------------
Total other
movements 30 148 - - 209 387
As at 30 June
2018 38,840 17,442 (332) (36,032) (9,641) 10,277
-------------- -------------- ------------ --------------- ---------- -------------
Profit for the
period - - - - 2,645 2,645
Total comprehensive
income - - - - 2,645 2,645
-------------- -------------- ------------ --------------- ---------- -------------
Other Movements
Issue of Shares 221 1,405 - - - 1,626
Share based
payments charge - - - - 245 245
-------------- -------------- ------------ --------------- ---------- -------------
Total other
movements 221 1,405 - - 245 1,871
As at 31 December
2018 39,061 18,847 (332) (36,032) (6,751) 14,793
============== ============== ============ =============== ========== =============
Consolidated Statement of Cash Flow
for the period ended 31 December 2018
6 months ended 6 months ended Year ended
31 December 31 December
2018 2017 30 June 2018
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
Cash flow from operating activities
Receipts from customers 35,640 31,392 77,741
Payments to suppliers and
employees (25,869) (26,467) (63,523)
Finance costs (1,106) (1,156) (2,281)
Tax paid - (121) -
--------------- --------------- -------------
Net cash flow from operating
activities 8,664 3,648 11,937
--------------- --------------- -------------
Cash flow from investing activities
Net purchase of non-current
assets (8,222) (2,399) (10,654)
--------------- --------------- -------------
Net cash flow from investing
activities (8,222) (2,399) (10,654)
--------------- --------------- -------------
Cash flow from financing activities
Net repayment of borrowings (1,493) (2,556) (5,038)
(Repayment)/proceeds from
debtor finance (105) 704 1,013
Proceeds from issue of shares
net of costs 1,872 746 763
--------------- --------------- -------------
Net cash flow from financing
activities 275 (1,106) (3,262)
--------------- --------------- -------------
Net increase/(decrease) in
cash held 718 143 (1,979)
Cash and cash equivalents
at beginning of the period 50 2,029 2,029
--------------- --------------- -------------
Cash and cash equivalents
at the end of the period 768 2,172 50
=============== =============== =============
Notes to the Consolidated Financial Statements for the period
ended 31 December 2018
1. Accounting policies Basis of preparation
The condensed consolidated unaudited six months ended 31
December 2018 financial information set out in this report is based
on the financial statements of Management Resource Solutions plc
("MRS") and its controlled entities (the "Group").
The condensed financial information should be read in
conjunction with the annual financial statements for the year ended
30 June 2018, which were prepared in accordance with International
Financial Reporting Standards. The financial statements for the
Group for the six months ended 31 December 2018 were approved and
authorised for issue by the Board on 28 February 2019.
These financial statements have been prepared in accordance with
the accounting policies that are expected to be applied in the
Report and Accounts of the Group for the year ending 30 June 2019
and are consistent with International Financial Reporting Standards
adopted for use in the European Union.
The financial information for the six months ended 31 December
2018 (and 31 December 2017) is unaudited and does not constitute
the Company's statutory financial statements for those periods. The
comparative financial information for the full year ended 30 June
2018 has been derived from the statutory financial statements for
that period. The statutory accounts for the year ended 30 June 2018
have been filed with the Registrar of Companies. The auditors'
report on those accounts was unqualified.
The financial information is presented in Australian Dollars and
all values are rounded to the nearest thousand dollars ($'000)
except where otherwise indicated.
Going concern
The financial statements have been prepared on the going concern
basis as, in the opinion of the Directors, at the time of approving
the financial statements, there is a reasonable expectation that
the Group will continue in operational existence for the
foreseeable future.
Basis of consolidation
Where the Group has control over an investee, it is classified
as a subsidiary. The Group controls an investee if all three of the
following elements are present: power over an investee, exposure to
variable returns from the investee, and the ability of the investor
to use its power of affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may
be a change in any of these elements of control. Subsidiaries are
fully consolidated from the date that control commences until the
date that control ceases. The consolidated financial statements
present the results of the Company and its subsidiaries ("the
Group") as if they formed a single entity. Intercompany
transactions and balances between Group companies are therefore
eliminated in full.
Goods and Services Tax (GST), Value Added Tax (VAT) and
equivalent taxes
Revenues, expenses and assets are recognised net of the amount
of GST and VAT, except where the amount of GST or VAT incurred is
not recoverable.
2. Earnings per share
Earnings per share is calculated on the reported profit for the
period of $3,509,358 and on 196,104,472 ordinary shares, being the
weighted average number of shares in issue throughout the period
ended 31 December 2018.
For diluted earnings per share, the weighted average number of
ordinary shares in issue has been adjusted to assume conversion of
all dilutive potential ordinary shares. The Company has two classes
of dilutive potential ordinary shares, being share options granted
to directors and employees and warrants to subscribe for ordinary
shares.
3. Operating Segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker has been identified as the Board
of Directors.
Segmental information is as follows:
As at 31 December 2018 Australian Australian Corporate Total
Plant Hire Mining Contracting
$'000 $'000 $'000 $'000
Revenue 10,324 24,505 - 34,830
Cost of sales (6,720) (14,503) - (21,223)
Administrative expenses (692) (5,905) (1,061) (7,659)
Depreciation (1,437) (972) (30) (2,439)
Operating profit/(loss)
before tax 1,476 3,124 (1,091) 3,509
------------ -------------------- ---------- ---------
Income tax expense - - (865) (865)
------------ -------------------- ---------- ---------
Operating profit/(loss)
after tax 1,476 3,124 (1,956) 2,644
============ ==================== ========== =========
Capital Expenditure 1,417 6,224 1,512 9,153
Segment assets 24,645 22,431 8,458 55,534
Segment liabilities (8,306) (21,979) (10,456) (40,741)
------------ -------------------- ---------- ---------
As at 31 December 2017 Australian Australian Corporate Total
Plant Hire Mining Contracting
$'000 $'000 $'000 $'000
Revenue 10,423 23,138 - 33,561
Cost of sales (6,611) (16,092) - (22,703)
Administrative expenses (497) (4,872) (973) (6,342)
Depreciation (1,588) (404) - (1,992)
Operating profit/(loss)
before tax 1,757 1,892 (1,125) 2,524
------------ -------------------- ---------- ---------
Income tax expense - - - -
------------ -------------------- ---------- ---------
Operating profit/(loss)
after tax 1,757 1,892 (1,125) 2,524
============ ==================== ========== =========
Capital Expenditure 673 1,675 - 2,348
Segment assets 22,557 15,124 1,013 38,694
Segment liabilities (8,784) (18,195) (4,724) (31,703)
------------ -------------------- ---------- ---------
4. Property, Plant and Equipment
Plant & equipment Land & Buildings Total
$'000 $'000 $'000
Cost
At 1 July 2018 35,636 3,370 39,006
Additions 7,123 361 7,484
Disposals (114) - (114)
Capital WIP 1,669 1,669
At 31 December 2018 44,314 3,731 48,045
------------------ ----------------- -------
Depreciation
At 1 July 2018 9,884 9 9,893
------------------ ----------------- -------
Charge for the year 2,361 28 2,389
Eliminated on disposals - - -
At 31 December 2018 12,245 37 12,282
------------------ ----------------- -------
Net book value
----------------- -------
As at 1 July 2018 25,753 3,361 29,114
------------------ ----------------- -------
As at 31 December 2018 32,069 3,694 35,763
================== ================= =======
5. Trade and other receivables
As at As at As at
31 December 31 December 30 June 2018
2018 2017
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
Trade receivables 12,046 13,609 12,856
Prepayments 82 643 307
Accrued Income 1,217 1,084 1,721
Other receivables 2,216 2,243 1,841
-------------
15,561 17,579 16,725
------------- ------------- -------------
The Company's ageing of trade receivables is as follows:
6 months ended 6 months ended Year ended
31 Dec 2018 31 Dec 2017 30 June 2018
$'000 $'000 $'000
Current 5,874 5,158 7,849
1 - 30 days 2,324 4,844 3,123
31 - 60 days 2,312 2,135 1,070
61 - 90 days 494 508 255
> 90 days 907 1,020 494
Retentions 362 114 299
Provision for bad and
doubtful debts (227) (170) (234)
--------------- -------------
12,046 13,609 12,856
--------------- --------------- -------------
6. Trade and other payables (current)
As at As at As at
31 December 31 December 30 June 2018
2018 2017
(Unaudited) (Unaudited) (Audited)
$'000 $'000 $'000
Trade creditors and
accruals 5,042 2,072 4,338
Other creditors 9,684 8,919 8,647
Provisions 1,451 1,195 1,502
Greg Bachmann - Working
Capital Loan 1,487 1,713 1,638
17,664 13,899 16,125
------------- ------------- -------------
7. Borrowings
6 months ended 6 months ended Year ended
31 Dec 2018 31 Dec 2017 30 June 2018
$'000 $'000 $'000
Current
Lease liability secured 5,107 2,406 4,905
Debtor Financing 6,983 6,778 7,087
Bank loans 3,938 958 4,033
Construction loans 1,449 - -
Total current borrowings 17,477 10,142 16,025
--------------- --------------- -------------
Non-Current
Lease liability secured 2,200 5,717 3,717
Bank loans 291 1,880 805
Total non-current borrowings 2,491 7,597 4,522
--------------- --------------- -------------
Total Borrowings 19,968 17,739 20,547
=============== =============== =============
8. Interim Statement
Copies of this Interim report for the six months ended 31
December 2018 will be available on the company's website
www.mrsplc.net.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LFFSVFVIDFIA
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