TIDMNMCN
RNS Number : 3193I
NMCN PLC
08 August 2019
8 August 2019
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
NMCN PLC
UNAUDITED CONDENSED GROUP HALF YEARLY FINANCIAL STATEMENTS
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,
announces its unaudited interim results for the six months ended 30
June 2019.
Highlights:-
Six Months Six Months Period Movement
Ended Ended
30 June 2019 30 June 2018
GBP'000 GBP'000 %
Restated(1)
Revenue 183,978 161,175 14.1%
------------- ------------- ----------------
Profit Before Tax 3,463 2,503 38.4%
Cash and Cash Equivalents 25,785 18,891 36.5%
------------- ------------- ----------------
Earnings per Share 27.0p 20.0p 35.1%
------------- ------------- ----------------
Proposed Dividends 9.0p 6.0p 50.0%
------------- ------------- ----------------
(1) After IFRS 16 Leases and other prior period restatements -
see note 3.
o Revenue increased by 14.1% compared with H1 2018.
o Profit before tax increased by 38.4% to GBP3.5 million (H1 FY18 restated: GBP2.5 million).
o Cash of GBP25.8 million, an increase of 36.5% (H1 FY18: GBP18.9 million).
o Current order book for completion in 2019 of circa GBP356
million (H1 FY18: circa GBP320 million).
o Increased interim dividend to 9.0p (H1 FY18: 6.0p).
John Homer - Chief Executive - Commented:
"These results demonstrate the continued progress made in the
business against our strategic objectives. Our focus on profit
improvement (profit before tax circa 38% ahead of last year) and
cash generation (period end balance circa 36% ahead of last year)
continues to show returns.
We continue to invest significantly in the development of our
people and the evolution of our employer brand. It is our firm
belief that our people are the overarching differentiator in the
service that we provide and the primary driver for our continued
success.
The outlook for future trading remains positive and provides the
opportunity to maximise earnings from our operations. We are
confident that the Board's expectations will be achieved, with net
margins slightly exceeding 2%."
For further information:-
John Homer, Chief Executive
Daniel Taylor, Chief Financial
Officer
01623 515008
nmcn PLC
OUR OPERATING AND FINANCIAL REVIEW
Group Financial Performance
In the first half of 2019, the Group has achieved satisfactory
growth in both revenue and profitability. Revenue for the period
increased by 14.1% from GBP161.2 million to GBP184.0 million.
Profit before tax for the period totalled GBP3.5 million compared
to GBP2.5 million for the same period in 2018, an increase of over
38%. Continued progress has been achieved across the business units
and sectors. The Telecoms business returned to a commendable level
of profitability, following the completion of the strategic
business review and the extension of a term contract with its
principal customer. Results overall for the period were better than
the Board's expectations and there is cautious optimism for the
second half and beyond.
On 1 January 2019 the Group adopted IFRS 16 Leases under the
retrospective method, leading to a restatement of the Group's
previously reported results. As a result of the transition
additional assets and liabilities of GBP2.0 million have been
recognised as at 30 June 2018, with a minimal impact on profit
before tax. Full details of the transition can be found in note
3.
Built Environment Segment
As restated
6 months ended 6 months ended Period movement
30 June 2019 30 June 2018
GBP'000 GBP'000 %
Revenue 51,874 48,786 6.3%
Operating profit 588 4 13,365.2%
Operating profit
margin 1.1% 0.0% 1.1%
Secured workload 118,000 89,000 32.6%
The Built Environment segment has seen a sustainable growth in
revenue in the period from GBP48.8 million to GBP51.9 million, an
increase of 6.3%. This growth in the segment is despite uncertainty
in the marketplace causing delays on the commencement of major
schemes. This has impacted both the Construction and Highways
business units.
These delays have meant only a small contribution to operating
profit in the first half of the year by these business units;
however, both have healthy order books to construct in the second
half of 2019. Both business units have invested in people for the
future, to ensure we have the capability to deliver the additional
revenue forecast in the second half of 2019 and future years. The
Highways business unit in particular has been awarded a place on
the Regional Development Partnership by Highways England where its
first scheme is junction improvements on the M621 for circa GBP28
million. This scheme will commence in 2020 once the design stage is
completed. The Construction business unit has a number of large
schemes, which we are working on early design stages with
developers, where orders are anticipated in the second half of the
year for 2020 and beyond.
The Telecoms business unit has seen a significant turnaround in
the first half of 2019 when compared to the same period last year.
The business unit has achieved an operating profit of GBP0.5
million for the period. Further growth is expected in super-fast
broadband over the next few years, and the business unit is well
placed to take advantage of the right opportunities.
Secured order book for the Built Environment segment to
construct in 2019 is GBP118 million (H1 2018: GBP89 million), an
increase from the comparable period of 32.6%.
Water Segment
As restated
6 months ended 6 months ended Period movement
30 June 2019 30 June 2018
GBP'000 GBP'000 %
Revenue 132,104 112,389 17.5%
Operating profit 2,953 2,585 14.2%
Operating profit
margin 2.2% 2.3% (0.1%)
Secured workload 238,000 231,000 3.0%
The Water segment has achieved another significant growth in
revenue for the period up from GBP112.4 million to GBP132.1
million, an increase of 17.5%. The Water segment also achieved an
increase in operating profit to GBP3.0 million from GBP2.6 million,
an increase of 14.2%.
During the period, and as previously reported, the Water segment
has been successful in securing the following strategic frameworks
for the Asset Management Period 7 ("AMP 7"):
o Severn Trent Water, Lots 1, 2 and 3
o South West Water, Civil Engineering K7 Capital Works Framework
o South Staffs Water, Water Treatment Works
The secured order book of circa GBP238 million for the Water
segment is an increase of 3.0% on the previous period (H1 2018:
GBP231 million). The Board is cautious around a potential downturn
in workload through the AMP transition which may impact Q4 2019 and
into 2020.
Legacy
In relation to the one remaining outstanding legacy contract
with Cyden Homes Limited, the Group is pursuing claims with the
client for sums greater than the carrying value and will continue
to do so until it is resolved.
Cash
The improvement in profitability has resulted in a significant
enhancement of the half-year bank position with cash at 30 June
2019 being GBP25.8 million (H1 2018: GBP18.9 million). This is
after further investment in the self-funded nmcn residential
developments of GBP4.4 million (H1 2018: GBP2.0 million), where all
schemes are progressing well with the first sales due to be
completed imminently. The forecast cash flows remain positive and
hence the Group continues to assess strategic investment
opportunities.
Dividend
The increase in profitability and the improved cash position,
along with the Board's strategy to maintain a progressive dividend
policy, has meant that the Board is proposing a 50% increase on the
interim dividend to 9.0p per share (H1 2018: 6.0p per share). The
dividend will be paid on 13 September 2019 to shareholders on the
register at 16 August 2019.
Outlook
The current order book for completion this year is circa GBP356
million (2018: circa GBP320 million). This leads the Board to be
confident that its expectations will be achieved, with net margins
slightly exceeding 2%.
The Board is cautious around the AMP transition for Q4 2019 and
into 2020, in relation to the revenue deliverable. Uncertainty
around the political landscape and Local Government expenditure
will remain until a conclusion is reached, but the Group's strong
reputation for operational delivery, our balance sheet, cash
position and positive rebrand mean it is well placed to manage
these headwind challenges. The outlook therefore for the Group
remains positive, with the Group well positioned to obtain
additional opportunities that prevail due to the well-publicised
issues of some of the major construction companies in the UK.
UNAUDITED CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
The unaudited condensed Group results for the half year ended 30
June 2019 are shown below together with the unaudited (restated)
Group results for the half year ended 30 June 2018 and the audited
(restated) Group results for the year ended 31 December 2018.
Six Months Ended 30 June Year Ended
31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Restated(1) Restated(1)
Revenue 183,978 161,175 340,450
Other operating income 610 291 1,277
------------ ------------- ------------
184,588 161,466 341,727
Raw materials and consumables (28,848) (24,556) (48,930)
Other external charges (104,176) (91,636) (197,605)
Employee costs (41,946) (38,116) (78,633)
Depreciation of property,
plant and equipment (2,611) (2,258) (4,677)
Other operating charges (3,466) (2,311) (5,720)
------------ ------------- ------------
Operating profit 3,541 2,589 6,162
------------ ------------- ------------
Finance income 37 - 31
Finance costs (115) (86) (185)
------------ ------------- ------------
Profit before tax 3,463 2,503 6,008
Tax (Note 7) (705) (475) (1,187)
------------ ------------- ------------
Profit for the period 2,758 2,028 4,821
Other comprehensive income - - -
------------ ------------- ------------
Total comprehensive income
for the period 2,758 2,028 4,821
============ ============= ============
Attributed to:-
Equity holders of the parent 2,758 2,028 4,821
------------ ------------- ------------
2,758 2,028 4,821
============ ============= ============
Basic earnings per share (Note
6) 27.0p 20.0p 47.5p
Diluted earnings per share
(Note 6) 26.3p 20.0p 45.0p
Dividend per share (Note 8) 9.0p 6.0p 18.0p
(1) After IFRS 16 Leases and other prior period restatements -
see note 3.
UNAUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Share-Based Capital
Share Payment Merger Redemption Retained
Capital Reserve Reserve Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2018 as previously reported 1,015 - 455 20 11,343 12,833
Adjustment on adoption
of IFRS 16 (Note 3.5) - - - - (21) (21)
-------- ------------ -------- ------------ --------- --------
Balance at 1 January
2018 as restated 1,015 - 455 20 11,322 12,812
Profit and total comprehensive
income for the period
as restated (Note 3.5) - - - - 2,028 2,028
Dividends paid - - - - (305) (305)
-------- ------------ -------- ------------ --------- --------
Balance at 30 June 2018
as restated 1,015 - 455 20 13,045 14,535
Profit and total comprehensive
income for the period
as restated (Note 3.5) - - - - 2,793 2,793
Share-based payment expense - 1,069 - - - 1,069
Share-based payment expense
- deferred tax - 381 - - - 381
Dividends paid - - - - (609) (609)
-------- ------------ -------- ------------ --------- --------
Balance at 31 December
2018 as restated (Note
3.5) 1,015 1,450 455 20 15,229 18,169
Profit and total comprehensive
income for the period - - - - 2,758 2,758
Purchase of own shares
(Note 11) - - - - (164) (164)
Exercise of share options 29 (697) - - (977) (1,645)
Share-based payment expense - 521 - - - 521
Share-based payment expense
- deferred tax - (236) - - - (236)
Dividends paid - - - - (1,214) (1,214)
-------- ------------ -------- ------------ --------- --------
Balance at 30 June 2019 1,044 1,038 455 20 15,632 18,189
======== ============ ======== ============ ========= ========
UNAUDITED CONDENSED GROUP BALANCE SHEETS
The unaudited condensed Group balance sheets as at 30 June 2019
and 30 June 2018 (restated) are shown below together with the
audited (restated) Group balance sheet as at 31 December 2018.
30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Assets Restated(1) Restated(1)
Non-current assets
Property, plant and equipment 25,710 20,886 22,591
Investments in joint ventures - 75 -
Deferred tax asset 739 890 902
26,449 21,851 23,493
-------- ------------ ------------
Current assets
Inventories 1,855 1,539 1,791
Trade and other receivables 66,929 67,265 60,814
Cash and cash equivalents 25,785 18,891 33,353
-------- ------------ ------------
94,569 87,695 95,958
-------- ------------ ------------
Total assets 121,018 109,546 119,451
======== ============ ============
Equity and liabilities
Capital and reserves attributable
to equity holders of the
Parent
Share capital 1,044 1,015 1,015
Share-based payment reserve 1,038 - 1,450
Merger reserve 455 455 455
Capital redemption reserve 20 20 20
Retained earnings 15,632 13,045 15,229
-------- ------------ ------------
Total equity 18,189 14,535 18,169
======== ============ ============
Liabilities
Non-current liabilities
Obligations under leases 6,119 2,579 3,016
Provisions 339 401 350
6,458 2,980 3,366
-------- ------------ ------------
Current liabilities
Trade and other payables 91,444 87,811 93,140
Current income tax payable 810 312 157
Obligations under leases 4,117 3,908 4,619
96,371 92,031 97,916
-------- ------------ ------------
Total liabilities 102,829 95,011 101,282
-------- ------------ ------------
Total equity and liabilities 121,018 109,546 119,451
======== ============ ============
(1) After IFRS 16 Leases and other prior period restatements -
see note 3.
UNAUDITED CONDENSED GROUP STATEMENTS OF CASH FLOWS
The unaudited condensed Group statements of cash flows for the
periods ended 30 June 2019 and 30 June 2018 (restated) are shown
below together with the audited (restated) Group statement of cash
flows for the year ended 31 December 2018.
Six Months Ended 30
June Year Ended
31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
Restated(1) Restated(1)
Cash flows from operating activities
Operating profit 3,541 2,589 6,162
Adjustments for:
Depreciation of property, plant
and equipment 2,611 2,258 4,677
Gain on disposal of property,
plant and equipment (203) (293) (574)
Equity-settled share-based payment
transactions 521 - 1,069
-------- ------------ ------------
Operating cash flows before movements
in working capital 6,470 4,554 11,334
(Increase)/decrease in inventories (64) 284 29
(Increase)/decrease in receivables (1,747) (11,607) 1,177
Increase in amounts owed by joint
ventures (4,368) (2,036) (8,364)
Decrease in reinstatement provision (11) (3) (54)
(Decrease)/increase in payables (3,370) 14,340 19,669
-------- ------------ ------------
Cash (used in)/generated from
operations (3,090) 5,532 23,791
Income tax paid (129) - (500)
-------- ------------ ------------
Net cash (used in)/generated from
operations (3,219) 5,532 23,291
Cash flows from investing activities
Purchase of property, plant and
equipment (1,438) (1,953) (3,263)
Proceeds on disposal of property,
plant and equipment 532 550 930
Investment in joint ventures - (75) -
Interest received 37 - 31
Interest paid - (4) (4)
-------- ------------ ------------
Net cash used in investing activities (869) (1,482) (2,306)
Cash flows from financing activities
Equity dividends paid (1,214) (305) (914)
Purchase of own shares (164) - -
Proceeds from exercise of share
options 29 - -
Repayments of obligations under
leases (2,016) (1,778) (3,543)
Interest payable under leases (115) (82) (181)
-------- ------------ ------------
Net cash used in financing activities (3,480) (2,165) (4,638)
Net (decrease)/increase in cash
and cash equivalents (7,568) 1,885 16,347
Cash and cash equivalents at start
of period 33,353 17,006 17,006
-------- ------------ ------------
Cash and cash equivalents at end
of period 25,785 18,891 33,353
======== ============ ============
(1) After IFRS 16 Leases and other prior period restatements -
see note 3.
1. Basis of preparation
The unaudited condensed Group half-yearly financial statements
have been prepared in accordance with International Accounting
Standard (IAS) 34, Interim Financial Reporting, and have been
prepared on the basis of International Financial Reporting Standards
(IFRSs) as adopted by the European Union. They do not include
all of the information required for full annual financial statements.
These condensed consolidated half-yearly financial statements
have not been subject to audit or review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 by the Company's
auditor, do not comprise statutory accounts within the meaning
of Section 435 of the Companies Act 2006, and should be read in
conjunction with the Annual Report 2018. The comparative figures
for the year ended 31 December 2018 are not the Group's statutory
accounts for that financial year. Those accounts have been reported
upon by the Group's auditor and delivered to the Registrar of
Companies. The report of the auditor was unqualified, did not
include a reference to any matters to which the auditor drew attention
by way of emphasis without qualifying their report and did not
contain statements under Section 435 and 498 (2) or (3) respectively
of the Companies Act 2006.
The Board regularly reviews financial statements, cash balances
and forecasts and the Directors confirm that they consider the
Group has adequate resources to continue to operate for the foreseeable
future. Accordingly, they continue to adopt the going concern
basis in preparing the unaudited condensed Group half yearly financial
statements.
This is the first set of the Group's financial statements where
IFRS 16 Leases has been applied. Changes to significant accounting
policies are described in Note 3.
2. Use of judgements and estimates
The preparation of unaudited condensed Group half-yearly financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from these estimates.
In preparing these unaudited condensed Group half-yearly financial
statements, the significant judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 December
2018.
The Group's financial risk management objectives and policies
are consistent with those disclosed in the consolidated financial
statements as at and for the year ended 31 December 2018.
3.1. Changes in significant accounting policies and other restatements
Except as described below, the accounting policies adopted in
the preparation of the unaudited condensed Group half-yearly financial
statements to 30 June 2019 are consistent with the policies applied
by the Group in its consolidated financial statements as at, and
for the year ended 31 December 2018.
This is the first set of the Group's financial statements where
IFRS 16 Leases has been applied. The impact on these condensed
half-yearly financial statements and the changes to the Group's
significant accounting policies, together with details of other
restatements, are described in further detail below.
The Group has considered amendments to existing standards and
interpretations that are effective for the year ending 31 December
2019 and is of the view that they have no impact on the unaudited
condensed Group half-yearly accounts, except as noted below for
IFRS 16.
3.2. IFRS 16 Leases - overview
The Group has initially adopted IFRS 16 Leases from 1 January
2019 under the retrospective approach.
IFRS 16 replaces IAS 17 and provides a single lease accounting
model, requiring lessees to recognise right of use assets and
lease liabilities in the balance sheet for all applicable leases.
Operating lease costs previously recognised within operating profit
in the statement of comprehensive income have been replaced by
depreciation and finance costs. The adoption of IFRS 16 under
the retrospective approach has affected the comparative information
presented in the Group's condensed half-yearly financial statements,
representing an increase in gross assets and liabilities in the
balance sheet and an increase in operating profit and finance
costs in the statement of comprehensive income. The impact of
the restatement on the prior period's results is shown in note
3.5.
3.3. IFRS 16 Leases - changes in accounting policy
The details of the new significant accounting policy and the nature
of the change to previous accounting policy in relation to the
Group's adoption of IFRS 16 Leases is set out below.
Amended accounting policy Nature of change in accounting
policy
The Group assesses whether The Group previously determined
a contract is or contains whether a contract was or
a lease at inception of the contained a lease under IFRIC
contract. 4. In practice, all contracts
A contract is or contains that are classified as a lease
a lease if the contract includes under IFRS 16 were also previously
the right to control the use classified as a lease under
of an identified asset for IFRIC 4 and vice versa.
a period of time in exchange
for consideration. Factors
that are considered when making
this assessment include: the
Group's right to obtain substantially
all the economic benefits
from use of the asset; the
Group's right to direct the
use of the asset; and the
supplier's right to substitute
the asset.
-------------------------------------
The Group allocates the consideration Under IAS 17, the Group previously
in the contract to each lease classified leases as operating
component on the basis of or finance leases based on
relative stand-alone selling its assessment of whether
prices. For each lease component, the lease transferred significantly
the Group recognises a right all the risks and rewards
of use asset and a lease liability of ownership to the Group.
at the lease commencement Under IFRS 16, the majority
date. of the Group's leases are
recognised on the balance
sheet as right of use assets
and lease liabilities, including
those arrangements previously
classified as either finance
leases or operating leases
under IAS 17.
-------------------------------------
Lease liabilities are presented Lease liabilities were only
as "obligations under leases" recognised under IAS 17 in
in the balance sheet. respect of arrangements classified
The lease liability is initially as finance leases. This distinction
measured at the present value no longer exists under IFRS
of future lease payments, 16.
discounted at the interest Where an arrangement was treated
rate implicit in the lease. as a finance lease under IAS
Where the implicit interest 17, a liability was initially
rate cannot be determined, recognised equal to the value
the Group discounts the future of the asset capitalised within
lease payments using its incremental property, plant and equipment
borrowing rate. (see below). The liability
The lease liability is subsequently was subsequently measured
measured at amortised cost at amortised cost using the
using the effective interest effective interest method.
method. There is no material difference
between the amounts recognised
as liabilities or as interest
expense for such arrangements
following the adoption of
IFRS 16.
Lease payments associated
with operating leases were
recognised as an expense on
a straight-line basis over
the lease term, with no amounts
being recognised on the balance
sheet.
-------------------------------------
Right of use assets are presented Assets were only recognised
in "property, plant and equipment" under IAS 17 in respect of
on the balance sheet. arrangements classified as
The right of use asset is finance leases.
initially measured at cost, Where an arrangement was previously
representing the initial amount treated as a finance lease
of the lease liability adjusted under IAS 17, an asset was
for any up-front lease payments, recognised within property,
direct costs incurred or lease plant and equipment at the
incentives received. fair value of the asset or,
The right of use asset is if lower, the present value
subsequently depreciated on of the minimum lease payments.
a straight-line basis to the The asset was subsequently
earlier of the end of the depreciated on the same basis
useful life of the right of as other similar assets purchased
use asset or the end of the by the Group without recourse
lease term. The estimated to financing arrangements.
useful lives of right of use Such assets are now presented
assets are determined on the as right of use assets within
same basis as those of property, property, plant and equipment.
plant and equipment. There is no material difference
between the amounts recognised
as assets or as depreciation
expense for such arrangements
following the adoption of
IFRS 16.
In addition, under IFRS 16
a right of use asset is now
recognised within property,
plant and equipment for assets
under leases that were previously
classified as operating leases
under IAS 17, for which were
lease payments were recognised
as an expense on a straight-line
basis over the lease term,
with no amounts being recognised
on the balance sheet.
-------------------------------------
No right of use asset or lease The treatment of short-term
liability is recognised in leases and leases for low-value
respect of leases with terms assets is unchanged on adoption
of 12 months or less or in of IFRS 16 as all such leases
relation to low value assets. were previously classified
Lease payments associated as operating leases under
with such leases are recognised IAS 17.
as an expense on a straight-line
basis over the lease term.
-------------------------------------
3.4. Other restatements
As disclosed in the consolidated financial statements for the
year ended 31 December 2018, the Group made two restatements to
its previously reported results, which were both in relation to
reclassifications only. The restatements also applied to the six
months ended 30 June 2018 as noted below. The restatements had
no impact on total comprehensive income or the total equity of
the Group.
The Company reclassified an asset that was jointly owned from
within contract assets to property, plant and equipment due to
the long-term nature of the asset concerned. The net book value,
and hence total adjustment at 30 June 2018 was GBP0.8 million.
The Company also reclassified items between contract assets and
accruals, increasing both by GBP4.3 million to better reflect
the nature and timing of the transactions involved. The restatements
combined also increased revenue and the related costs by GBP0.3
million. The impact of the restatement on the prior period's results
is shown in note 3.5.
3.5. Impact of restatements on the condensed half-yearly financial
statements
Impact on the condensed Group statements of comprehensive income
Six Months Ended 30 June Year Ended 31 December
2018 2018
As Reported Adjustments Restated As Reported Adjustments Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Note Note Note Note
Explanation of adjustment 3.3 3.4 3.3 3.4
Revenue 160,859 - 316 161,175 340,450 - - 340,450
Other operating income 291 - - 291 1,277 - - 1,277
------------ -------- -------- --------- ------------ -------- -------- ----------
161,150 - 316 161,466 341,727 - - 341,727
Raw materials and
consumables (24,509) - (47) (24,556) (48,930) - - (48,930)
Other external charges (91,636) - - (91,636) (197,605) - - (197,605)
Employee costs (38,116) - - (38,116) (78,633) - - (78,633)
Depreciation of property,
plant and equipment (1,778) (211) (269) (2,258) (4,166) (511) - (4,677)
Other operating charges (2,543) 232 - (2,311) (6,282) 562 - (5,720)
------------ -------- -------- --------- ------------ -------- -------- ----------
Operating profit 2,568 21 - 2,589 6,111 51 - 6,162
Finance income - - - - 31 - - 31
Finance costs (56) (30) - (86) (114) (71) - (185)
------------
Profit before tax 2,512 (9) - 2,503 6,028 (20) - 6,008
Tax (477) 2 - (475) (1,191) 4 - (1,187)
------------ -------- -------- --------- ------------ -------- -------- ----------
Profit for the period 2,035 (7) - 2,028 4,837 (16) - 4,821
Other comprehensive
income - - - - - - - -
------------ -------- -------- --------- ------------ -------- -------- ----------
Total comprehensive
income for the period 2,035 (7) - 2,028 4,837 (16) - 4,821
============ ======== ======== ========= ============ ======== ======== ==========
3.5. Impact of restatements on the condensed half-yearly financial
statements (continued)
Impact on the condensed Group balance sheets
As at 1 January 2018
As Reported Adjustment Restated
GBP'000 GBP'000 GBP'000 GBP'000
Note Note
Explanation of adjustment 3.3 3.4
Assets
Non-current assets
Property, plant and
equipment 18,174 1,409 - 19,583
Investments in joint
ventures - - - -
Deferred tax asset 1,223 5 - 1,228
------------ -------- -------- ---------
19,397 1,414 - 20,811
------------ -------- -------- ---------
Current assets
Inventories 1,820 - - 1,820
Trade and other receivables 53,627 - - 53,627
Cash and cash equivalents 17,006 - - 17,006
------------ -------- -------- ---------
72,453 - - 72,453
------------ -------- -------- ---------
Total assets 91,850 1,414 - 93,264
============ ======== ======== =========
Equity and liabilities
Capital and reserves attributable
to equity holders of the Parent
Share capital 1,015 - - 1,015
Share-based payment
reserve - - - -
Merger reserve 455 - - 455
Capital redemption
reserve 20 - - 20
Retained earnings 11,343 (21) - 11,322
------------ -------- -------- ---------
Total equity 12,833 (21) - 12,812
============ ======== ======== =========
Liabilities
Non-current liabilities
Obligations under
leases 2,514 374 - 2,888
Provisions 404 - - 404
------------ -------- -------- ---------
2,918 374 - 3,292
------------ -------- -------- ---------
Current liabilities
Trade and other payables 73,471 - - 73,471
Current income tax
payable 177 - - 177
Obligations under
leases 2,451 1,061 - 3,512
------------ -------- -------- ---------
76,099 1,061 - 77,160
------------ -------- -------- ---------
Total liabilities 79,017 1,435 - 80,452
Total equity and liabilities 91,850 1,414 - 93,264
============ ======== ======== =========
3.5. Impact of restatements on the condensed half-yearly financial
statements (continued)
Impact on the condensed Group balance sheets
As at 30 June 2018 As at 31 December 2018
As Reported Adjustment Restated As Reported Adjustment Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Note Note Note Note
Explanation of adjustment 3.3 3.4 3.3 3.4
Assets
Non-current assets
Property, plant and
equipment 18,147 1,951 788 20,886 19,918 2,673 - 22,591
Investments in joint
ventures 75 - - 75 - - - -
Deferred tax asset 883 7 - 890 893 9 - 902
------------ -------- -------- --------- ------------ -------- -------- ---------
19,105 1,958 788 21,851 20,811 2,682 - 23,493
------------ -------- -------- --------- ------------ -------- -------- ---------
Current assets
Inventories 1,539 - - 1,539 1,791 - - 1,791
Trade and other receivables 63,014 - 4,251 67,265 60,814 - - 60,814
Cash and cash equivalents 18,891 - - 18,891 33,353 - - 33,353
------------ -------- -------- --------- ------------ -------- -------- ---------
83,444 - 4,251 87,695 95,958 - - 95,958
------------ -------- -------- --------- ------------ -------- -------- ---------
Total assets 102,549 1,958 5,039 109,546 116,769 2,682 - 119,451
============ ======== ======== ========= ============ ======== ======== =========
Equity and liabilities
Capital and reserves attributable
to equity holders of the Parent
Share capital 1,015 - - 1,015 1,015 - - 1,015
Share-based payment
reserve - - - - 1,450 - - 1,450
Merger reserve 455 - - 455 455 - - 455
Capital redemption
reserve 20 - - 20 20 - - 20
Retained earnings 13,073 (28) - 13,045 15,266 (37) - 15,229
------------ -------- -------- --------- ------------ -------- -------- ---------
Total equity 14,563 (28) - 14,535 18,206 (37) - 18,169
============ ======== ======== ========= ============ ======== ======== =========
Liabilities
Non-current liabilities
Obligations under
leases 2,122 457 - 2,579 2,329 687 - 3,016
Provisions 401 - - 401 350 - - 350
------------ -------- -------- --------- ------------ -------- -------- ---------
2,523 457 - 2,980 2,679 687 - 3,366
------------ -------- -------- --------- ------------ -------- -------- ---------
Current liabilities
Trade and other payables 82,772 - 5,039 87,811 93,140 - - 93,140
Current income tax
payable 312 - - 312 157 - - 157
Obligations under
leases 2,379 1,529 - 3,908 2,587 2,032 - 4,619
------------ -------- -------- --------- ------------ -------- -------- ---------
85,463 1,529 5,039 92,031 95,884 2,032 - 97,916
------------ -------- -------- --------- ------------ -------- -------- ---------
Total liabilities 87,986 1,986 5,039 95,011 98,563 2,719 - 101,282
Total equity and
liabilities 102,549 1,958 5,039 109,546 116,769 2,682 - 119,451
============ ======== ======== ========= ============ ======== ======== =========
3.5. Impact of restatements on the condensed half-yearly financial
statements (continued)
Impact on the condensed Group statements of cash flows
Six Months Ended 30 June Year Ended 31 December
2018 2018
As Reported Adjustment Restated As Reported Adjustment Restated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Note Note Note Note
Explanation of adjustment 3.3 3.4 3.3 3.4
Cash flows from operating activities
Operating profit 2,568 21 - 2,589 6,111 51 - 6,162
Adjustments for:
Depreciation of PPE(1) 1,778 211 269 2,258 4,166 511 - 4,677
Gain on disposal of PPE (293) - - (293) (574) - - (574)
Share-based payment expense - - - - 1,069 - - 1,069
Operating cash flows before
movements in working
capital 4,053 232 269 4,554 10,772 562 - 11,334
Decrease in inventories 284 - - 284 29 - - 29
(Increase)/decrease in
receivables (11,044) - (563) (11,607) 1,177 - - 1,177
Increase in amounts owed
by joint ventures (2,036) - - (2,036) (8,364) - - (8,364)
Decrease in reinstatement
provision (3) - - (3) (54) - - (54)
Increase in payables 14,046 - 294 14,340 19,669 - - 19,669
Cash generated from
operations 5,300 232 - 5,532 23,229 562 - 23,791
Income tax paid - - - - (500) - - (500)
------------ -------- -------- --------- ------------ -------- -------- ---------
Net cash generated from
operations 5,300 232 - 5,532 22,729 562 - 23,291
Cash flows from investing activities
Purchase of PPE (1,953) - - (1,953) (3,263) - - (3,263)
Proceeds on disposal of
PPE 550 - - 550 930 - - 930
Investment in joint
ventures (75) - - (75) - - - -
Interest received - - - - 31 - - 31
Interest paid (4) - - (4) (4) - - (4)
------------ -------- -------- --------- ------------ -------- -------- ---------
Net cash used in investing
activities (1,482) - - (1,482) (2,306) - - (2,306)
Cash flows from financing activities
Equity dividends paid (305) - - (305) (914) - - (914)
Repayments of obligations
under leases (1,576) (202) - (1,778) (3,052) (491) - (3,543)
Interest payable under
leases (52) (30) - (82) (110) (71) - (181)
------------ -------- -------- --------- ------------ -------- -------- ---------
Net cash used in financing
activities (1,933) (232) - (2,165) (4,076) (562) - (4,638)
Net increase in cash and
cash equivalents 1,885 - - 1,885 16,347 - - 16,347
Cash and cash equivalents
at beginning of period 17,006 - - 17,006 17,006 - - 17,006
------------ -------- -------- --------- ------------ -------- -------- ---------
Cash and cash equivalents
at end of period 18,891 - - 18,891 33,353 - - 33,353
============ ======== ======== ========= ============ ======== ======== =========
(1) Property, Plant & Equipment
4. Segment reporting
The Board reviews the Group's operational performance via two
segments: the Water segment and the Built Environment segment.
Segment revenue and profit
Six Months Ended 30 June 2019
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Revenue 51,874 132,104 183,978
================== ======== =========
Result before corporate
expenses 4,197 9,669 13,866
Corporate expenses (3,609) (6,716) (10,325)
Operating profit 588 2,953 3,541
================== ========
Finance income 37
Finance costs (115)
---------
Profit before tax 3,463
Tax (705)
---------
Total comprehensive income for the period 2,758
=========
Six Months Ended 30 June 2018
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Restated Restated Restated
Revenue 48,786 112,389 161,175
================== ========= =========
Result before corporate
expenses 3,227 9,043 12,270
Corporate expenses (3,223) (6,458) (9,681)
Operating profit 4 2,585 2,589
================== =========
Finance income -
Finance costs (86)
---------
Profit before tax 2,503
Tax (475)
---------
Total comprehensive income for the period 2,028
=========
Segment assets
30 June
2019 2018
GBP'000 GBP'000
Restated
Built Environment 59,725 55,746
Water 61,293 53,800
Total segment assets and consolidated total
assets 121,018 109,546
========= ==========
For the purpose of monitoring segment performance and allocating
resources between segments, the Group's Chief Executive monitors
the tangible and financial assets attributable to each segment.
Assets used jointly by reportable segments are allocated on
the basis of the revenues earned by individual reportable segments.
Other segment information
Depreciation and Additions to
amortisation non-current assets
30 June 30 June
2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
Restated Restated
Built Environment 915 738 2,123 1,389
Water 1,696 1,520 3,932 2,427
2,611 2,258 6,055 3,816
=========== ========== ======== ===============
There were no impairment losses recognised in respect of property,
plant and equipment.
All of the above relates to continuing operations and arose
in the United Kingdom.
5. Revenue from contracts with customers
The following table shows the Group's revenue from contracts
with customers, disaggregated into major classes of revenue
and reconciled to the amount of revenue reported for the Group's
reportable segments (Note 4).
Six Months Ended 30 June 2019
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Construction 17,620 - 17,620
Highways 15,750 - 15,750
Telecommunications 18,504 - 18,504
nmcn Sustainable Solutions - 36,008 36,008
NMCNomenca - 96,096 96,096
51,874 132,104 183,978
=================== ========= =========
Six Months Ended 30 June 2018
Built Environment Water Total
GBP'000 GBP'000 GBP'000
Restated Restated Restated
Construction 21,880 - 21,880
Highways 13,885 - 13,885
Telecommunications 13,021 - 13,021
nmcn Sustainable Solutions - 32,150 32,150
NMCNomenca - 80,239 80,239
48,786 112,389 161,175
=================== ========= =========
Revenues of approximately GBP92,010,000 (2018: GBP79,044,000)
within the Water segment were derived from a single external
customer.
6. Earnings per share
Basic earnings per share and diluted earnings per share are
calculated on the profit attributable to equity holders of the
parent of GBP2,758,000 (2018 restated: GBP2,028,000). The weighted
average of 10,211,825 (2018: 10,150,000) shares in issue during
the year is used for the basic earnings per share calculation.
Outstanding share awards granted under the Performance Share
Plan ("PSP") totalling 702,255 awards (2018: 1,016,898) are
considered to be contingently issuable shares that could potentially
dilute basic earnings per share in the future, of which the
performance-related vesting conditions had been satisfied in
respect of 264,986 awards as at 30 June 2019 (2018: nil). This
additional number of shares is therefore included in the diluted
earnings per share calculation as at that date.
7. Taxation
In respect of the six months ended 30 June 2019, the corporation
tax effective rate was 20% (2018: 19%). A corporation tax provision
has been included in relation to the taxable profits of the
Company.
8. Dividends
Amounts recognised as distributions to equity holders in the
half year:-
Six Months
to 30 June
2019 2018
GBP'000 GBP'000
Final dividend for the year ended 31 December 2018
of 12.0p (2017: 3.0p) per share. 1,214 305
======== ========
The Directors propose an interim dividend of 9.0p (2018: 6.0p)
per share, total GBP939,000 (2018: GBP609,000), which will be
paid on 13 September 2019 to the shareholders on the register
at 16 August 2019.
9. Related parties
The Group's related parties are key management personnel who are
the executive directors, non-executive directors and business
unit leaders.
The Company has a controlling shareholder for the purposes of
the Listing Rules, being the Moyle family and its associates.
The relevant agreements as required by LR 9.2.2AR(2)(a) have been
put in place between the Company, Mr R Moyle and the Moyle family
trusts.
10. Contingent liabilities
Lloyds Bank PLC, Aviva Insurance Limited and HCC International
Insurance Co. Ltd have given Performance Bonds to a value of GBP8,264,000
(2018: GBP8,654,000) on the Group's behalf. These bonds have been
made with recourse to the Group.
11. Share capital
During April 2019 the Group purchased 32,500 of its ordinary shares,
which are held as treasury shares. Shares held in treasury may
subsequently be cancelled, sold for cash or used to satisfy options
exercised under any of the Company's share schemes. Whilst held
in treasury, the shares are not entitled to receive any dividend
or dividend equivalent (apart from any issue of bonus shares)
and have no voting rights.
During June 2019 the Company issued 288,608 ordinary shares in
order to satisfy the vesting of share awards to certain directors,
granted in 2016, under the Company's Performance Share Plan ("PSP").
The total number of ordinary shares in issue and total number
of voting rights in the Company, excluding shares held as treasury
shares, was 10,406,108 as at 30 June 2019 (2018: 10,150,000).
12. Seasonality
The Group's activities are not subject to significant seasonal
variations.
13. Principal risks and uncertainties
The Board consider the principal risks and uncertainties relating
to the Group for the next six months to be the same as detailed
in the last Annual Report and Accounts to 31 December 2018.
14. Responsibility Statement of the Directors in respect of the half-yearly
financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements, which has been
prepared in accordance with IAS 34 and the ASB's 2007 statement
of Half Year Reports, gives a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Group;
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules,
being an indication of important events that have occurred
during the first six months of the financial year and
their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties
for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules,
being related party transactions that have taken place
in the first six months of the current financial year
and that have materially affected the financial position
or performance of the entity during that period; and
any changes in the related party transactions described
in the last annual report that could do so.
J Homer
Chief Executive
D A Taylor
Chief Financial Officer
8 August 2019
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 DMGGRNNGGLZM
(END) Dow Jones Newswires
August 08, 2019 02:01 ET (06:01 GMT)
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