RNS Number:3817U
High-Point Rendel Group PLC
11 April 2002
The issuer advises that the following replaces its interim results announcement
released today at 07:00 under RNS number 3639U.
In the highlights Earnings per share should read "Earnings per share of 2.3p"
and not as previously stated.
In the Chief Executive's comments the sentence referring to the Department of
Energy's grant should read $2.2 million instead of £2.2m as previously stated.
All other details remain unchanged. The full ammended text appears below.
High-Point Rendel Group plc
BUOYANT HIGH-POINT RENDEL
LOOKS TO THE FUTURE WITH CONFIDENCE
High-Point Rendel Group plc, ("High-Point"), the international business,
management and consulting business, today announces its interim results for the
six months to 31 January 2002.
Highlights:
• Pre-tax profits £670,000
• Turnover up to £13,956,000
• Earnings per share 2.3p
• Dividend per share of 0.8p
Commenting on the results, Chief Executive Kelvin Hingley said
" I am delighted to report that the Group is making significant progress.
Despite challenging market conditions, the forward order book is at very healthy
levels. This bodes well for the future performance of the Company.
" We have taken the opportunity to improve the structure of the business. We
have undertaken a wide ranging review and rationalisation of the overhead
structure.
" Our Sure power joint venture is making progress and in a major boost, the US
Department of Energy has awarded a grant for up to $2.2 million for a team led
by Sure Power to research the development of a combined energy / heat and power
system which can be retro-fitted into existing operations data centres."
- ends -
Date: 11 April 2002
For further information contact:
High Point Rendel Group plc City Profile
Kelvin Hingley, Chief Executive Ed Senior
Bill Trendell, Finance Director Simon Courtenay
020-7928-8999 020-7448-3244
Web: www.highpointrendel.com e-mail: edward.senior@city-profile.com
Chairman's Statement
Overview
The first six months of the year has been challenging for High-Point Rendel. The
Group has made good progress in securing business with major clients during this
period and we enter the second half with the highest level of order book we have
had for years.
Results
In the six months to 31st January 2002 the Group made a profit after exceptional
items and taxation of £629,000 (2001 : £685,000). Turnover for the period was
virtually unchanged at £13,956,000 (2001 : £13,882,000).
Dividend
Your Board has decided to declare an unchanged interim dividend of 0.8p per
share. The dividend will be paid on 14th June 2002 to registered shareholders at
the close of business on 24th May 2002.
Trading
Historically the second half of our financial year has shown significantly
improved performance. We have also concluded a rationalisation of our overhead
structure, the benefits of which commenced in the second half of this financial
year. Results for this financial year will depend on the precise timing of
further orders and we will keep shareholders informed.
In Europe, Africa and Middle East the average size of assignment continues to
grow and we have secured a number of major assignments in the United Kingdom,
Ghana and Ukraine. We have won a series of follow on and repeat commissions with
multi-national organizations, and we have significantly reduced the number of
tenders submitted and improved the ratio of successful presentations for
prospective work.
Fee income generated in the United Kingdom continues to grow and now represents
35% of turnover. The marrying together of our core skills to analyse and manage
the risks associated with delivering major capital asset programmes is
increasingly in worldwide demand. We differentiate ourselves by our ability to
provide practical business solutions for controlling and managing the complex
matrix of economic, financial, commercial, contractual, technical and
programming risks inherent in capital asset development. This particularly
manifests itself in the procurement of major infrastructure through Private
Finance Initiatives and Public Private Partnerships.
Satisfactory progress is being made on those exceptional issues in the Middle
and Near East referred to in my Chairman's Statement of 2001. New business
opportunities in the regions have grown and each of these is being treated on
its merits, particularly in the face of the present escalating conflict.
There are signs of increasing activity in the Indian Sub-Continent and we have
been engaged by international contractors and trading houses on projects, which
we anticipate, will become long term assignments for the Group.
Business in Asia-Pacific has progressed well in China, Malaysia, Philippines and
Thailand. The Hong Kong market remains very competitive and we are continuing
our policy of being selective in the assignments we undertake. High-Point Rendel
has been advising Chinese companies on the risks of operating internationally
for over twenty years and we believe the reputation, respect and trust we have
gained will deliver long term value to the Group as the international interface
with China grows following its entry into the World Trade Organization.
Sure Power
Last year we invested US$1 million in the Sure Power Corporation, a US high
availability, high quality, power technology company. The system is targeted at
customers where power is mission critical. An upward revaluation of £318,000 in
this investment has been made and is included in the statement of total
recognised gains and losses.
Our US office has continued to commit the majority of its available resources to
assisting Sure Power Corporation, market its system and in preparing sales
proposals to potential customers. There is now a range of products available and
progress is being made in researching and meeting with major potential customers
both in the US and in other locations where High-Point Rendel has a strong
market presence.
The timing of orders remains uncertain, but I am delighted to announce that the
US Department of Energy has awarded a grant for up to US$2.2 million for a team
led by Sure Power Corporation to research the development of an innovative
distributed energy/combined heat and power system which can be retro-fitted into
existing operational data centre facilities. The project comes in response to
the rapid growth of the US's high-tech infrastructure and the Department of
Energy's support after a long period of investigation into alternative systems
is not only encouraging for Sure Power but shows a real commitment to find a
highly reliable way to meet extreme power needs.
Strategy
High-Point Rendel has been undergoing a period of significant change, a process
started four years ago. It has taken time to achieve progress in depth and
although the benefits have not yet flowed through to our results, we remain
committed to the strategy today.
Our consultancy business is at the heart of that strategy. It is the means by
which we are determined to deliver on our objectives. We believe our deep
understanding of major capital asset investment risks enables us to devise and
implement risk control and management strategies on behalf of those
organizations who are now being required to guarantee project completion, to
provide debt or equity funding and/or to underwrite insurable risks.
We have driven our client focused approach across our functional and
geographical base, and this has already led to an increased range of
appointments with major international corporations, who insist on client
confidentiality due to the complex and sensitive nature of the work.
We have created a number of interrelated business partnerships, which are at the
forefront of our strategy in UK, Italy, Middle East, India and China. We have
structured ourselves operationally to maximise the use of appropriate local and
international resources as opposed to competing or seeking to supplant them.
We have developed, or are developing, business, management and marketing
alliances with organizations seeking to distribute their products and
state-of-the-art technologies. Each of these we believe has worldwide
application, and brings potentially long term high value returns to our
shareholders. Whilst the time taken to bring these products to customers'
attention and to gain commitment to buy is taking longer than we anticipated, it
does not diminish our belief that a major market exists.
Summary
We continue to position ourselves with our clients, partners and alliances to
provide attractive solutions to the risks faced in the industry in which we
operate today. No one can underestimate the challenges to business around the
world in the aftermath of the tragic events of the 11th September, and the
present conflict in the Middle East. At High-Point Rendel we remain vigilant,
recognising the impact these circumstances may have on our short term
aspirations for some of the services we offer. At the same time, however, our
clients face the same heightened risks and we have a world renowned ability to
provide clear and considered solutions to clients investing in capital intensive
transactions in normal let alone uncertain times.
Your Board is currently evaluating the options available to maximise shareholder
value commensurate with delivering our long term strategy. We fully recognise
the need to generate extra value and appreciate the long term approach taken by
our shareholders over the last four years as we have developed our strategy
whilst also coping with changing world economic and political events.
I remain confident that the strategy, skills, experience and quality of people
in High-Point Rendel can meet the challenges of a world seeking to encompass the
economic, financial, social and political changes thrust upon it. The integrity,
enthusiasm, commitment and delivery capability of our team are values which I
believe are fundamental to engendering customer trust and loyalty, and
delivering sustainable long term growth.
High-Point Rendel Group plc
GROUP PROFIT & LOSS ACCOUNT
Unaudited Audited
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
As restated As restated
(see note 1) (see note 1)
Note £000 £000 £000
Turnover 2 13,956 13,882 26,751
Operating costs (13,104) (12,902) (27,774)
________ ________ ________
Group operating profit/(loss) 2,3 852 980 (1,023)
Share of operating loss in joint venture (59) - (38)
Share of operating loss of associate undertakings - - (14)
________ ________ ________
Total operating profit/(loss): Group and share of
joint venture and associate undertakings 793 980 (1,075)
Interest (123) (97) (209)
Profit/(loss) on ordinary activities before taxation 670 883 (1,284)
Taxation 4 (41) (179) 40
________ ________ ________
Profit/(loss) on ordinary activities after taxation 629 704 (1,244)
Minority interest - equity - (19) (19)
________ ________ ________
Profit/(loss) for the period 629 685 (1,263)
Dividends (219) (219) (219)
________ ________ ________
Retained profit/(loss) for the period 410 466 (1,482)
________ ________ ________
Earnings per share - basic 2.3p 2.6p (4.7p)
________ ________ ________
Earnings per share - diluted 2.3p 2.5p n/a
________ ________ ________
Dividends per ordinary share 0.8p 0.8p 0.8p
________ ________ ________
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Unaudited Audited
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
As restated As restated
(see note 1) (see note 1)
£000 £000 £000
________ ________ ________
Profit/(loss) attributable to shareholders 629 685 (1,263)
Surplus on revaluation of investment 318 - -
Exchange difference on retranslation of net assets
of subsidiary undertakings 56 18 30
________ ________ ________
Total recognised gains and losses for the period 1,003 703 (1,233)
________ ________ ________
High-Point Rendel Group plc
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Unaudited Audited
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
As restated As restated
(see note 1) (see note 1)
£000 £000 £000
________ ________ ________
Opening shareholders' funds
As originally stated 8,215 8,502 8,502
Prior period adjustment 312 272 272
________ ________ ________
As restated 8,527 8,774 8,774
Total recognised gains and losses 1,003 703 (1,233)
Dividends (219) (219) (219)
New shares issued - 1,126 1,205
________ ________ ________
Closing shareholders' funds 9,311 10,384 8,527
________ ________ ________
High-Point Rendel Group plc
GROUP BALANCE SHEET
Unaudited Audited
31 January 31 January 31 July
2002 2001 2001
As restated As restated
(see note 1) (see note 1)
£000 £000 £000
________ ________ ________
Fixed assets
Intangible assets 1,577 1,663 1,620
Tangible assets 917 1,005 911
Investments 1,008 717 749
________ ________ ________
3,502 3,385 3,280
________ ________ ________
Current assets
Debtors 15,678 15,131 14,985
Cash at bank and in hand 1,137 1,898 988
________ ________ ________
16,815 17,029 15,973
________ ________ ________
Creditors
Amounts falling due within one year (10,489) (9,367) (10,170)
________ ________ ________
Net current assets 6,326 7,662 5,803
________ ________ ________
Total assets less current liabilities 9,828 11,047 9,083
Creditors
Amounts falling due after more than one year (53) (164) (77)
Provision for liabilities and charges (464) (499) (479)
________ ________ ________
9,311 10,384 8,527
________ ________ ________
Capital and reserves
Share capital 274 273 274
Reserves 9,037 10,111 8,253
________ ________ ________
Equity shareholders' funds 9,311 10,384 8,527
________ ________ ________
High-Point Rendel Group plc
GROUP STATEMENT OF CASH FLOWS
Unaudited Audited
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
Note £000 £000 £000
________ ________ ________
Net cash inflow/(outflow) from operating activities 5 522 1,276 (1,549)
Returns on investments and servicing of finance (123) (97) (209)
Taxation (19) (151) (237)
Capital expenditure and financial investment (152) (844) (969)
Dividends paid - (383) (602)
Net cash flow before financing 228 (199) (3,566)
________ ________ ________
Financing (82) 1,023 1,008
________ ________ ________
Increase/(decrease) in cash 146 824 (2,558)
________ ________ ________
Capital expenditure in the six months to 31 January 2001 and the year to 31 July
2001 includes a payment of £703,000 to acquire an investment in Sure Power
Corporation.
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)
Unaudited Audited
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
£000 £000 £000
________ ________ ________
Increase/(decrease) in cash 146 824 (2,558)
Repayment of capital element of finance lease rentals 82 103 197
________ ________ ________
Changes in net debt resulting from cash flows 228 927 (2,361)
Exchange adjustments - - -
Inception of new finance lease obligations (31) (196) (207)
________ ________ ________
Movement in net (debt) 197 731 (2,568)
________ ________ ________
Opening net (debt) (3,697) (1,129) (1,129)
________ ________ ________
Closing net (debt) (3,500) (398) (3,697)
________ ________ ________
1. Basis of preparation of interim financial information
The interim financial information has been prepared on the basis of the
accounting policies set out in the group's statutory accounts for the year ended
31 July 2001 except as stated below. The taxation charge is calculated by
applying the directors' best estimate of the annual tax rate to the profit for
the period. Other expenses are accrued in accordance with the same principles
used in the preparation of the annual accounts.
Change in accounting policy - Valuation of Trade Investments
The group has changed its policy regarding the valuation of its trade
investments from compliance with the historical cost convention to the
application of an alternative basis of valuation. As such the group's trade
investments are now valued based on the directors' opinion of the market value
of the shares.
The change in accounting policy has resulted in a revised valuation of the
group's equity investment in Sure Power Corporation of £1.02m (year ended 31
July 2001: £0.7m).
Restatement in accounts - Financial Reporting Standard 19 - Deferred Tax
Financial Reporting Standard 19 - Deferred Tax (FRS 19) has been adopted for the
first time by the group in this Interim Report.
In previous years the group had complied with Statement of Standard Accounting
Practice 15 - Deferred Taxation (SSAP 15) which has been superseded by the
introduction of FRS 19. SSAP 15 required provision for deferred tax to be made
using the liability method to the extent that net deferred tax assets or
liabilities were likely to crystallise in the foreseeable future. This method
was commonly referred to as the partial provision method. FRS 19, by contrast,
requires a form of full provisioning.
The effect of the implementation of FRS 19 on the reported results is as
follows:
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
£000 £000 £000
Tax on (profit)/loss 35 (94) 40
________ ________ ________
Increase/(Reduction) in (profit)/loss for the period 35 (94) 40
________ ________ ________
Deferred tax assets 347 178 312
________ ________ ________
Net assets 347 178 312
________ ________ ________
The implementation of FRS19 does not affect the group's cash or borrowings
position.
2. Segmental analysis
Turnover Operating profit/(loss)
Six months to Year to Six months to Year to
31 January 31 January 31 July 31 January 31 January 31 July
2002 2001 2001 2002 2001 2001
£000 £000 £000 £000 £000 £000
By class of business
Capital project delivery 7,541 7,617 13,597 635 275 (1,173)
Business and management 6,415 6,265 13,154 217 705 150
services
________ ________ ________ ________ ________ ________
Total 13,956 13,882 26,751 852 980 (1,023)
________ ________ ________ ________ ________ ________
By geographic origin
Europe, Africa and Middle East 9,543 9,792 16,235 788 1,464 (361)
Asia and Pacific Rim 3,990 3,946 10,265 64 24 249
Americas 423 144 251 - (508) (911)
________ ________ ________ ________ ________ ________
Total 13,956 13,882 26,751 852 980 (1,023)
________ ________ ________ ________ ________ ________
By geographic market 9,111 9,382 16,423
Europe, Africa and Middle East 412 755 922
Indian Sub-Continent 4,010 3,601 9,154
Asia and Pacific Rim 423 144 252
________ ________ ________
Americas 13,956 13,882 26,751
________ ________ ________
3. Exceptional items
Six months to Year to
31 January 31 January 31 July
Recognised before operating profit/(loss): 2002 2001 2001
£000 £000 £000
Specific bad debt provision (308) - 400
Restructuring costs 195 - -
Start-up costs of Sure Power Alliance 0 603 922
Abortive acquisition costs 0 230 174
Reinstatement of doubtful debt 0 (560) -
________ ________ ________
Net exceptional (profit)/loss (113) 273 1,496
________ ________ ________
4. Taxation
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
As restated As restated
(see note 1) (see note 1)
£000 £000 £000
The charge for taxation includes the following:
Current year charge 146 - -
UK corporation tax 11 85 261
Overseas tax
Prior year adjustments - - (191)
UK corporation tax (81) - (70)
Overseas tax (35) 94 (40)
________ ________ ________
Deferred taxation 41 179 (40)
________ ________ ________
5. Reconciliation of operating profit/(loss) to net cash inflow/(outflow) from
operating activities
Six months to Year to
31 January 31 January 31 July
2002 2001 2001
£000 £000 £000
Operating profit/(loss) 852 980 (1,023)
Depreciation 183 294 458
Amortisation of goodwill 43 43 86
Profit on sale of tangible fixed assets (6) (5) (20)
Movements in working capital and other non-cash items (550) (36) (1,050)
________ ________ ________
Net cash inflow from operating activities 522 1,276 (1,549)
________ ________ ________
6. Publication of non-statutory accounts
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is based on the
statutory accounts for the financial year ended 31 July 2001. Those accounts,
upon which the auditors issued an unqualified opinion, have been delivered to
the Registrar of Companies.
7. Copies of this statement will be sent to all shareholders and will be
available to the public at the company's registered office, 61 Southwark Street,
London SE1 1SA.
This information is provided by RNS
The company news service from the London Stock Exchange
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