NMCN PLC AGM Statement & Trading Update (1835Z)
16 Mayo 2019 - 1:01AM
UK Regulatory
TIDMNMCN
RNS Number : 1835Z
NMCN PLC
16 May 2019
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
nmcn PLC
AGM Statement & Trading Update
nmcn PLC ("the Company" or "the Group" or "nmcn"), a leading
engineering and construction company, delivering major water, built
environment and critical national infrastructure projects across
the UK, announces a trading update for the first quarter of its
financial year which will be given to shareholders by the Chairman
during its Annual General meeting today. All numbers presented in
this statement and trading update are unaudited.
Trading Update
The Board is pleased to be able to report that the Group has
made a good start to 2019. For the first quarter, revenue increased
by 27% to GBP94.4 million and profitability by circa 170% to
GBP1.75 million. Net margin for the quarter returned to a more
satisfactory level at 1.85%.
Built Environment Segment
The Built Environment business has returned to profitability,
generating profits of GBP0.22 million (Q1 2018: GBP0.10 million
loss). The main driver being a significant turnaround within the
Telecom's unit, which made a modest profit for the quarter (Q1
2018: GBP0.7 million loss). Revenue overall for Built Environment
declined by 2.5% to GBP24.2 million (Q1 2018: GBP24.8 million) and
this has offset some of the profit gain from Telecoms. The
reduction in revenues largely reflects delays in the commencement
of several construction projects, albeit these are expected to
start imminently. Key contracts, within Construction, include 3 No.
secured frameworks for Leicester City Council, Efficiency East
Midlands and Pagabo which will provide a firm foundation for growth
going forward. Student accommodation has been a good market, but a
broader range of opportunities is now being successfully
pursued.
The Highways unit also experienced a slow start to the year due
to an up-front investment in the Regional Delivery Partnership
framework for Highways England, with commencement on site not being
due until next year. Highways is currently actively engaged on 15
No. frameworks and 20 No. live sites.
On the back of the improved performance within Telecoms,
negotiations for the one-year extension to the existing Virgin
Media term contract have now been successfully concluded and this,
coupled with the profitable network expansion opportunities for
Virgin Media and the existing frameworks for Telent, Centro and BT,
will provide a solid foundation going forward.
Water Segment
The Water business has continued to perform strongly. Revenues
were up by 41.1% to GBP70.2 million (Q1 2018: GBP49.8 million) and
profitability doubled to GBP1.53 million (Q1 2018: GBP0.7 million).
Both nmcn sustainable solutions ("nmcn SS"), formerly known as
Nomenca, and NMC Nomenca have continued to grow on the back of
robust expenditure by the water companies towards the end of the
AMP6 cycle.
NMC Nomenca has successfully made a further incursion into the
clean water sector for Severn Trent Water and this has contributed
to the increased revenue. As previously informed, it is also
engaged on 5 No. joint venture projects, the Ambergate reservoirs
having been successfully delivered. The major infrastructure works
on both Newark and Elan Valley Aqueduct are now complete, thus
significantly reducing the risk profile. The Birmingham Resilience
project at Frankley is the largest single contract that the segment
has ever undertaken and is a testament to the trust in its ability
to deliver large complex schemes that the water business has
engendered with its customers. The scheme is progressing well and
at an extremely fast pace with over 400 people on site engaged in
ensuring that the ODI date is achieved. The Bellozanne contract is
Jersey has been fully resourced and continues to progress well.
We are delighted to have been awarded Lots 1 and 2 by Severn
Trent Water for their AMP7 programme and this maintains a
collaborative relationship of over forty years, whilst providing a
solid foundation of revenue for the water business going forward
and safeguarding the futures of the talented and dedicated
team.
nmcn SS has continued its expansion in its chosen markets and to
maximise the potential of its full turnkey offering of design,
construction and off-site manufacture. The award of the Civil
Engineering K7 Capital Works Contract for South West Water to
complement the existing MEICA Capital Works Framework is a major
success and will truly consolidate our presence in the South West.
Some staff have already joined us and currently TUPE negotiations
are underway for the transfer of others from the incumbent
contactors. We have a capability that is extremely attractive to
the water companies and capitalising upon it has been a key
strategy. Securing contracts recently for both Portsmouth and
Bristol Water, both new customers, is a further endorsement of that
strategy.
As previously reported, the Water business is being fully
integrated under the directorship of Andy Langman. The transition
has already commenced and is a major undertaking, but progressing
well. Once complete we are confident that this consolidated water
business, which was already a major supplier to the water industry
in this country in its previous incarnation, has the potential to
further increase both its market share and geographical
presence.
Cash Investment
Cash flow for the Group continues to be very positive and some
of the free-flow cash continues to be utilised within "nmcn
Investments". The project for 10 No. town houses in Nottingham is
now complete and agents have been appointed to undertake sales.
Projects for 11 No. and 38 No. houses in Sutton-in-Ashfield and
Southwell, respectively, are currently under construction. Two
further sites in Beeston and Etwall have been purchased, but no
construction has commenced. All the building work is being
undertaken by our own construction division and the net cash
requirement for our current development pipeline is circa GBP14.0
million.
Cashflow
The cash position remains very healthy, at 31st March 2019, our
cash balance was GBP22.0 million (unaudited).
Outlook
The outlook for the current year is positive and we expect
further progress, strategically, operationally and financially to
be made. Our secured workload for completion this financial year
stands at GBP342.0 million and we are confident that further orders
will be forthcoming.
For further information please contact:
nmcn PLC - 01623 515 008
John Homer, Chief Executive
Dan Taylor, Chief Financial Officer
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END
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