TIDMNMCN
RNS Number : 0000R
NMCN PLC
25 June 2020
NMCN PLC
AGM 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, has released a first quarter trading update to coincide
with its Annual General meeting which will be held at 12.00 noon
today. All figures in this update are unaudited, unless otherwise
stated.
Overview
The Board is pleased to be able to report that the Group had
made a good start to 2020, prior to the COVID-19 pandemic. In the
first quarter, revenue increased by 3.7% to GBP97.9 million and
pre-tax profit was up by 5.9% to GBP1.8 million.
COVID-19 Response
In response to the COVID-19 situation we have taken all
appropriate steps to protect the health and wellbeing of our staff,
customers, and suppliers and to fully comply with Government
requirements and guidance as our highest priority. The positioning
of the business to emerge from this period in the strongest
possible condition, has been guided by our Positive Impactive Plan
(ESG policies) and we have continued to remain a responsible member
of the communities in which we operate.
During the lockdown period, we maintained our operations in
sectors of critical national infrastructure supporting the COVID-19
response, where safety and regulation permitted. More recently we
have continued to re-open virtually all our other projects
successfully. During April and May, the Group's activities
represented in excess of 75% of the workload we would anticipate in
a more normal operating environment. Our operations in the Built
Environment business units have been the more disrupted with a
temporary cessation of works at most sites.
2020 Trading Update
The majority of the first quarter trading performance reflects
the period prior to the COVID-19 lockdown which impacted our
operations from March onwards. As referenced above, we have done
much to maintain the delivery of our services but for the balance
of the year, performance has been, and will continue to be,
impacted by disruptions to both order intake and operating
efficiency.
Built Environment Segment
Revenue overall for Built Environment increased by GBP6.8
million to GBP31.0 million (Q1 2019: GBP24.2 million) reflecting
ongoing organic growth across all business units in the segment.
The segment generated profits of GBP0.2 million (Q1 2019: GBP0.2
million); the main driver being the continuing performance within
the Telecoms unit into 2020. Across the other business units, the
impact of the severe weather during the period on Highways and
Building, along with the initial impact of COVID-19 on the Building
business unit and the investment in the new Power & Industrial
team resulted in a small contribution.
Water Segment
The Water business has continued to perform strongly despite a
reduction in revenue due to the AMP transition year for many of the
segment's customers. Q1 revenues were down by 4.7% to GBP66.9
million (Q1 2019: GBP70.2 million), but despite this, profitability
increased to GBP1.6 million (Q1 2019: GBP1.5 million).
We continue to progress our full asset lifecycle management
offering and since the preliminary announcement in April we have
secured further orders and frameworks from Anglian Water and the
Coal Authority. The segment is well positioned to take advantage of
the resurgence in opportunities post the pandemic.
Cash Generation & Working Capital
As at 31(st) March 2020, the Group's cash position was GBP11.8
million. There has been a reduction from the previous year due to
revenue growth (increasing working capital requirements), the mix
of contract and customer payment terms and the continued strategic
investment in nmcn Investments. However, we have maintained close
cash management protocols and cash preservation measures during the
lockdown period and we anticipate cash being at similar level at
the half year.
Financial Guidance & Outlook
The Board intends to release its Interim Results on the 6 August
2020. It is anticipated the Group will also be able to give
guidance for the full-year at that time, taking into account
detailed assessments in relation to the changes in ongoing
construction methodology and operational efficiency, brought about
by the social distancing challenges of COVID-19 and improved
visibility on any potential implications of lockdown recovery on
the expected order intake for the balance of the year.
The Group continues to trade profitably and our secured workload
for completion in this financial year stands at GBP314 million.
Moreover, we expect to make further strategic and operational
progress during the year.
John Homer - Chief Executive - commented:
"We had a good start to 2020 which is reflected in the
performance of the business in the first quarter prior to the
COVID-19 lockdown at the end of March. Throughout the lockdown we
have remained operational where it is safe to do so and complied
with all the relevant guidelines.
"I am truly proud of the conduct of all our people in this
period of unprecedented challenges. They have responded with
flexibility and commitment, reflecting the culture of nmcn that has
evolved over many years.
"Challenges remain, but our order intake, balance sheet and
positive cash position remain healthy. The non-discretionary spend
required in our core markets will hold steady in any economic
downturn and we expect to be able to benefit from this in future
trading."
25 June 2020
For further information please contact:
nmcn PLC - 01623 515 008
John Homer, Chief Executive
Dan Taylor, Chief Financial Officer
About nmcn
nmcn PLC is a leading engineering and construction company in
the UK. Its talented 1,800-strong team offers multi-sector
engineering and construction skills, technical innovation, design,
and specialist fabrication.
The Company delivers major built environment and water industry
projects across the UK - from buildings and highways to large-scale
water networks and treatment plants. With its history dating back
to 1946, nmcn now has 12 UK offices and four off-site manufacturing
facilities.
www.nmcn.com
This disclosure is made in accordance with Article 19 of the EU
Market Abuse Regulation 596/2014.
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END
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