TIDMCTO
RNS Number : 7038F
TClarke PLC
20 July 2021
TClarke plc
Half year results for the six months ended 30 June 2021
TClarke on track for full year; record order book of more than
GBP500m
TClarke plc ("the Group" or "TClarke"), the Building Services
Group, announces its half year results for the period ended 30 June
2021.
Business Highlights:
-- Record GBP503m order book, with the order growth primarily in
the Technology sector where recent investment over prior periods is
starting to be rewarded
-- Three Data Centre projects won successfully with more being tendered
-- Significant progress in building capability as the Company
progresses towards target of delivering GBP500m in revenues whilst
maintaining margins
-- Proprietary Smart Building solution gaining traction in both
commercial market and other growth areas given the increasing focus
on 'net zero carbon'
-- Additional order book potential upside from significant opportunities in bidding stage
-- Interim dividend maintained at 0.75p
-- Well set for increased volumes and margin growth in the second half of the year
Financial Highlights: 2021 2020
Revenue GBP138.2m GBP106.1m
Operating profit - underlying(1) GBP2.4m GBP2.2m
Operating profit - reported GBP2.4m (GBP1.0m)
Operating margin- underlying(1) 1.7% 2.1%
Profit before tax - underlying(1) GBP1.9m GBP1.7m
Profit before tax - reported GBP1.9m (GBP1.5m)
Net cash GBP2.0m GBP7.5m
Earnings per share - underlying(2) 3.58p 3.10p
Earnings per share - basic 3.58p (2.85p)
Interim dividend per share 0.75p 0.75p
Forward order book GBP503m GBP402m
(1) Underlying operating profit, profit before tax and operating
margin are stated before amortisation of intangible assets and
restructuring costs.
(2) Underlying earnings per share is calculated by dividing
underlying profit after tax by the weighted average number of
shares in issue
Trading
The business has reached a significant strategic milestone with
our forward order book in excess of GBP500m for the first time as
we deliver our growth strategy. The investment that we have made in
our people to support the tendering process and project delivery
has started to be reflected both in the record order book and also
in preparation for the London business to deliver very significant
growth in volumes in the second half of 2021.
As previously reported, turnover and profit in 2021 will be
heavily weighted to the second half of the year. This is
particularly significant in the London business where two thirds of
secured turnover and over 80% of profit is forecast to be delivered
in the last six months of the year. London's operating margin for
the first six months was 1.4% (2020 3.2%), UK South operating
margin was 3.7% (2020 3.1%) and UK North operating margin was 3.7%
(2020 (1.1%)). After deducting group costs of GBP1m the overall
Group operating margin during the period was 1.7% (2020 2.1%).
Cash
Net cash of GBP2.0m as at 30 June 2021 is some GBP5.5m lower
than at the same time in 2020. This is mainly the result of the
introduction of the construction industry reverse charge VAT scheme
from 1 March 2021, with the impact of this change being a once off
reduction in cash of GBP3.5m. The principal cash movements are
detailed in the banking facilities section of this report.
Dividend
The Board proposes an interim dividend of 0.75p per share (2020:
0.75p per share) to be paid on 1 October 2021 to shareholders on
the register at 3 September 2021.
Order Book
It is pleasing to report that the Group's order book now stands
at a new record of GBP503m. This is a GBP100m increase compared to
the position at 30 June 2020. In addition, TClarke has many
significant opportunities in the bid stage and is well placed to
secure these opportunities. The growth in order book has not come
from deferred projects from 2020 but encouragingly the
opportunities have come primarily in the Technology sector where
our investment over the last few years is starting to be
rewarded.
Three significant Data Centre projects have been secured for
completion by the first quarter of 2022, with several others
currently being tendered.
Separately, the investment in the Group's proprietary Smart
Building solution is gaining traction not only in the commercial
market but in growth areas such as the healthcare sector where
there is an increasingly important 'net zero carbon' agenda.
The split of the order book is as follows:
Market sector 30 June 30 June % Increase
2021 2020 over
2020
Infrastructure GBP93m GBP85m 9%
--------- --------- -----------
Technology GBP132m GBP49m 169%
--------- --------- -----------
Residential & Hotels GBP113m GBP112m 1%
--------- --------- -----------
Engineering Services GBP153m GBP139m 10%
--------- --------- -----------
Facilities Management GBP12m GBP17m (29%)
--------- --------- -----------
Total GBP503m GBP402m 25%
--------- --------- -----------
Outlook
TClarke has made excellent progress in building its capability
and order book as we rapidly progress to reach our target to
deliver GBP500m in revenues whilst maintaining our margins. The
Board expects revenues and profit to build quickly throughout the
course of the second half of 2021 and remains confident of meeting
market expectations for the full year.
Mark Lawrence, Chief Executive, commented
" We are immensely proud of the teams here at TClarke that have
worked hard to secure our largest ever order book which now stands
at GBP503 million. In March of this year, I stated that we expected
revenues and profit to build rapidly throughout the course of the
second half of the year as our recently secured projects gain
momentum. We have an excellent balance of projects across a wide
range of growing sectors and our reputation for delivering high
quality work remains a key strength of our business. With the
current project programmes we believe that the second half of 2021
will be the busiest in our history. "
-ends-
Date: 20 July 2021
For further information contact:
TClarke plc
Mark Lawrence
Chief Executive Officer
Trevor Mitchell
Finance Director
Tel: 020 7997 7400
www.tclarke.co.uk
Cenkos Securities plc (Corporate
Broker)
Ben Jeynes (Corporate Finance)
Alex Potten (Sales)
Tel: 020 7397 8900
www.cenkos.com
RMS Partners
Simon Courtenay
Tel: 020 3735 6551
Operational Review
The Group is managed in three operational areas, London, UK
South and UK North, providing nationwide coverage from nineteen
locations across the UK.
We focus on repeat customers and framework contracts in the
following key markets:
-- Infrastructure
-- Residential & Hotels
-- Facilities Management
-- Engineering Services
-- Technologies
TClarke - London
30 06 2021 30 06 2020
GBPm GBPm
Revenue 72.8 58.7
----------- -----------
Underlying operating profit 1.0 2.0
----------- -----------
Underlying operating profit margin 1.4% 3.2%
----------- -----------
Order book 346 252
----------- -----------
London is the most significant of our three operating divisions
and includes our combined engineering services London business, our
London technology business and our off-site prefabrication facility
at Stansted.
We have continued to make good progress on our key projects
within our Engineering Services offering, and the first half of the
current year has seen a particularly strong performance across our
medical controls panel manufacturing projects. London is engaged on
a number of high profile commercial and hotel developments all of
which offer future fit out opportunities. We have started work on
the first of our large data centre project wins, and as set out
above are well positioned to significantly increase output and
profitability in the second half of the year. The London order book
has grown by 37% mainly as a result of the Data Centre wins. In
addition, there are many opportunities that we are well placed to
secure across all our market sectors.
The heavy weighting of turnover to the second half of 2021
combined with investment in people needed to deliver the volume of
projects has meant that London operating margin has fallen to 1.4%.
Our expectation is for margins to recover during the second half of
2021 back to London's normal operating margin of circa 3.5%.
TClarke - UK South
30 06 2021 30 06 2020
GBPm GBPm
Revenue 35.4 29.1
----------- -----------
Underlying operating profit 1.3 0.9
----------- -----------
Underlying operating profit margin 3.7% 3.1%
----------- -----------
Order book 57 72
----------- -----------
UK South operates from our offices at Birmingham, Derby,
Kimbolton, Newport, Peterborough, Portishead, Plymouth and St
Austell, and is able to target a vast range of construction and
facilities management opportunities across the region.
The first half of the year has seen continued success in the
healthcare sector, delivering and securing significant projects
across the region. The Small Works and Facilities Management teams
have also seen a strong performance, including the Climate
Solutions and Security divisions. The region has successfully
secured two large de-carbonisation schemes to be delivered during
2021.
TClarke - UK North
30 06 2021 30 06 2020
GBPm GBPm
Revenue 30.0 18.3
----------- -----------
Underlying operating profit/(loss) 1.1 (0.2)
----------- -----------
Underlying operating profit/(loss) margin 3.7% (1.1%)
----------- -----------
Order book 100 78
----------- -----------
The UK North division operates from seven locations; Liverpool,
Manchester, Leeds, Newcastle, Falkirk, Aberdeen and Dumfries.
An operating profit of GBP1.1m reflects a strong performance for
the first half of the year, driven by completion of our first major
engineering services project in Liverpool, our continued success in
winning and delivering a number of educational projects through our
Leeds office and Scotland's residential work. In addition our
Manchester office has recently secured a significant engineering
services project for a major financial institution.
Pension Obligations
In accordance with IAS 19 'Employee Benefits', an actuarial gain
of GBP4.4m, net of tax, has been recognised in reserves during the
period, with the pension scheme deficit decreasing to GBP24.5m
(30th June 2020: GBP29.9m). The decrease in the deficit is largely
the result of the discount rate increasing to 2.0% (30(th) June
2020: 1.6%). In accordance with the Group's agreed deficit
reduction plan, described in detail in the most recent annual
report, the annual deficit reduction contribution is set at GBP1.5m
for the current year, and will remain at this amount until the
review of the next triennial actuarial valuation of the scheme at
31 December 2021.
The scheme is closed to new members and the Group continues to
meet its ongoing obligations to the scheme.
Banking Facilities and Cash Flow
The Group has a GBP10m overdraft facility, repayable on demand,
and a GBP15m revolving credit facility ("RCF") expiring on 31st
August 2024. At 30 June 2021 the RCF was fully drawn down and the
overdraft facility was unutilised. The gross cash balance was
GBP17.0m, resulting in net cash of GBP2.0m. The Group therefore has
up to GBP27.0m available to support the Group's working capital
flows and funding demands during the course of the year. The Group
has GBP40.1m bonding facilities in place of which GBP25.2m were
unutilised at 30 June 2021.
The net cash figure of GBP2m is GBP5.5m lower than at the same
time in 2020. This is mainly as a result of the introduction of the
Construction industry reverse charge VAT scheme from 1 March 2021.
The impact of this has been to reduce cash by GBP3.5m. The
principal cash movements are detailed below:
GBPm
--------------------------- ------
Balance 1 July 2020 7.5
--------------------------- ------
Profit after tax 4.3
Reverse Charge VAT regime (3.5)
Repayment of deferred
VAT (1.1)
Dividends (1.9)
Pension deficit reduction (1.5)
Employee Share Trust
Share Purchase (0.5)
Other (1.3)
--------------------------- ------
Balance at 30 June 2021 2.0
--------------------------- ------
Net Assets and Capital Structure
The Group is funded by equity capital, retained reserves and
bank facilities, and there are no plans to change this.
Shareholders' equity is GBP19.0m; an increase of GBP3.3m compared
to 30 June 2020.
Condensed consolidated income statement
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Revenue 138.2 106.1 231.9
Cost of sales (123.0) (90.9) (199.0)
----------- ----------- -----------
Gross profit 15.2 15.2 32.9
Administrative expenses:
----------- ----------- -----------
Amortisation of intangible assets - (0.2) (0.2)
Non-underlying costs - (3.0) (3.7)
Other administrative expenses (12.8) (13.0) (26.9)
----------- ----------- -----------
Total administrative expenses (12.8) (16.2) (30.8)
Operating profit/(loss) 2.4 (1.0) 2.1
Finance costs (0.5) (0.5) (0.9)
----------- ----------- -----------
Profit/(loss) before taxation 1.9 (1.5) 1.2
Taxation (0.4) 0.3 -
----------- ----------- -----------
Profit/(loss) for the period 1.5 (1.2) 1.2
Earnings per share
Attributable to owners of TClarke
plc
Basic 3.58p (2.85)p 2.87p
Diluted 3.38p (2.85)p 2.69p
Underlying basic 3.58p 3.10p 10.29p
----------- ----------- -----------
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Profit/(loss) for the period 1.5 (1.2) 1.2
Other comprehensive income/(expense)
Items that will not be reclassified
to profit or loss
Actuarial gain on defined benefit
pension scheme, net of tax 4.4 (6.0) (4.8)
Revaluation of minority shareholding
equity investment - - (2.0)
Other comprehensive income/(expense)
for the period, net of tax 4.4 (6.0) (6.8)
Total comprehensive income/(expense)
for the period 5.9 (7.2) (5.6)
----------- ----------- -----------
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Non-current assets
Intangible assets 25.3 25.3 25.3
Property, plant and equipment 7.6 7.9 8.0
Deferred taxation 5.2 5.9 6.2
Trade and other receivables 3.2 - 3.6
Investments - 2.0 -
Total non-current assets 41.3 41.1 43.1
----------- ----------- -----------
Current assets
Inventories 0.4 0.3 0.4
Amounts due from customers under construction
contracts 56.4 39.6 41.7
Trade and other receivables 37.3 31.3 34.5
Current tax receivables 0.6 - 0.7
Cash and cash equivalents 17.0 22.5 25.2
----------- ----------- -----------
Total current assets 111.7 93.7 102.5
----------- ----------- -----------
Total assets 153.0 134.8 145.6
----------- ----------- -----------
Current liabilities
Borrowings (15.0) (15.0) (15.0)
Amounts due to customers under construction
contracts (1.8) (1.5) (1.1)
Trade and other payables (85.8) (68.3) (77.5)
Current tax liabilities - - -
Obligations under leases (1.2) (1.5) (1.3)
----------- ----------- -----------
Total current liabilities (103.8) (86.3) (94.9)
----------- ----------- -----------
Net current assets 7.9 7.4 7.6
----------- ----------- -----------
Non-current liabilities
Obligations under leases (2.0) (2.9) (2.2)
Deferred tax liabilities (0.2) - -
Trade and other payables (3.5) - (2.6)
Retirement benefit obligation (24.5) (29.9) (30.2)
Total non-current liabilities (30.2) (32.8) (35.0)
----------- ----------- -----------
Total liabilities (134.0) (119.1) (129.9)
Net assets 19.0 15.7 15.7
----------- ----------- -----------
Equity attributable to owners of the
parent
Share capital 4.3 4.3 4.3
Share premium 3.8 3.8 3.8
Revaluation reserve 0.8 0.9 0.8
Retained earnings 10.1 6.7 6.8
----------- ----------- -----------
Total equity 19.0 15.7 15.7
----------- ----------- -----------
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
to to to
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Net cash (used in) / generated by operating
activities (see note 5A) (5.3) (2.1) 3.7
----------- ------------- -----------
Investing activities
Investment in minority shareholding - (2.0) (2.0)
Purchase of property, plant and equipment (0.1) (0.1) (0.2)
Net cash generated (used in) / by investing
activities (0.1) (2.1) (2.2)
----------- ------------- -----------
Financing activities
Facility fee - (0.1) (0.1)
Proceeds from bank borrowing - 15.0 15.0
Equity dividends paid (1.5) - (1.9)
Acquisition of shares by ESOT (0.5) - (0.1)
Repayment of lease obligations (0.8) (0.6) (1.6)
Net cash (used in)/generated from financing
activities (2.8) 14.3 11.3
----------- ------------- -----------
Net (decrease) / increase in cash and
cash equivalents (8.2) 10.1 12.8
Cash and cash equivalents at beginning
of period 25.2 12.4 12.4
----------- ------------- -----------
Cash and cash equivalents at end of period
(see note 5) 17.0 22.5 25.2
----------- ------------- -----------
Condensed consolidated statement of changes
in equity
For the six months ended 30th June 2021
Share Share premium Revaluation Retained
capital reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
At 1st January 2021 4.3 3.8 0.8 6.8 15.7
---------- ---------------- ---- ------------ ----------- ---------
Comprehensive income
Profit for the period - - - 1.5 1.5
Other comprehensive income
Actuarial gain on retirement
benefit obligation - - - 5.5 5.5
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - (1.1) (1.1)
Total other comprehensive
income - - - 4.4 4.4
---------- ---------------- ---- ------------ ----------- ---------
Total comprehensive income - - - 5.9 5.9
---------- ---------------- ---- ------------ ----------- ---------
Transactions with owners
Share based payment debit - - - (0.9) (0.9)
Shares acquired by ESOT - - - (0.5) (0.5)
Shares distributed by ESOT 0.3 0.3
Dividends paid - - - (1.5) (1.5)
---- ------------
Total transactions with owners - - - (2.6) (2.6)
---------- ---------------- ---- ------------ ----------- ---------
At 30th June 2021 4.3 3.8 0.8 10.1 19.0
---------- ---------------- ---- ------------ ----------- ---------
Condensed consolidated statement of changes in equity
For the six months ended 30th June 2020
Share Share premium Revaluation Retained
capital reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
At 1st January 2020 4.3 3.8 0.9 13.9 22.9
--------- --------------- ------------ ---------- -------
Comprehensive income
Loss for the period - - - (1.2) (1.2)
Other comprehensive
expense
Actuarial loss on
retirement
benefit obligation - - - (7.4) (7.4)
Deferred income tax
on
actuarial gain on
retirement
benefit obligation - - - 1.4 1.4
Total other
comprehensive
expense - - - (6.0) (6.0)
--------- --------------- ------------ ---------- -------
Total comprehensive
expense - - - (7.2) (7.2)
--------- --------------- ------------ ---------- -------
Total transactions
with owners - - - - -
--------- --------------- ------------ ---------- -------
At 30th June 2020 4.3 3.8 0.9 6.7 15.7
--------- --------------- ------------ ---------- -------
Condensed consolidated statement of changes in equity
For the year ended 31st December 2020
Share Share Revaluation Retained
capital premium reserve earnings Total
GBPm GBPm GBPm GBPm GBPm
At 1st January 2020 4.3 3.8 0.9 13.9 22.9
--------- --------- ------------ ----------- -------
Comprehensive income
Profit for the year - - - 1.2 1.2
Other comprehensive income
Actuarial gain/(loss) on
retirement benefit
obligation - - - (6.5) (6.5)
Deferred income tax on
actuarial gain on retirement
benefit obligation - - - 1.7 1.7
Minority shareholding equity
investment - - - (2.0) (2.0)
Total other comprehensive
income - - - (6.8) (6.8)
--------- --------- ------------ ----------- -------
Total comprehensive income - - - (5.6) (5.6)
--------- --------- ------------ ----------- -------
Transactions with owners
Transfer on depreciation of
freehold properties - - (0.1) 0.1 -
Share based payment credit - - - 0.4 0.4
Shares acquired by ESOT - - - (0.1) (0.1)
Dividends paid - - - (1.9) (1.9)
------------
Total transactions with owners - - (0.1) (1.5) (1.6)
--------- --------- ------------ ----------- -------
At 31st December 2020 4.3 3.8 0.8 6.8 15.7
--------- --------- ------------ ----------- -------
Notes to the condensed consolidated financial statements for the
six months to 30 June 2021
Note 1 - Basis of preparation
TClarke plc (the 'Company') is a company incorporated and
domiciled in the United Kingdom. The nature of the Group's
operations and its principal activities are set out in Note 2 below
and in the interim management report. The consolidated interim
financial statements comprise the condensed financial statements of
the Company and its subsidiaries (together the 'Group').
These condensed interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The statutory accounts for the year ended 31
December 2020 were approved by the Board of Directors on 24 March
2021 and have been delivered to the Registrar of Companies and a
copy has been made available on the Company's website at
www.tclarke.co.uk . The auditors' report on those accounts was
unqualified and did not contain any statement under section 498 of
the Companies Act 2006.
These interim financial statements have been prepared in
accordance with both International Accounting Standards in
conformity with the requirements of Companies Act 2006 and
International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union
('IFRS'). The Interim Financial Report has been prepared in
accordance with the Disclosure and Transparency Rules ('DTR') of
the Financial Conduct Authority. They do not include all the
information required for the full annual financial statements and
should be read in conjunction with the financial statements of the
Group as at and for the year ended 31 December 2020.
The interim financial statements have not been audited or
reviewed by the Company's auditors.
Accounting policies
Except as described below, the financial statements have been
prepared using the accounting policies and presentation that were
applied in the audited financial statements for the year ended 31
December 2020.
Taxes on income in the interim periods are accrued using the
estimated effective tax rate that would be applicable to expected
total annual earnings.
Estimates and financial risk management
The preparation of interim financial statements requires the
Directors to make judgements, estimates and assumptions about the
carrying amounts of assets and liabilities at the reporting date
and the amounts of revenue and expense incurred during the period
that may not be readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results
may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by the Directors in applying the Group's accounting
policies and the key sources of uncertainty together with the
Group's financial risk management objectives and policies were the
same as those that applied to the financial statements as at and
for the year ended 31st December 2020. The principal risks and
uncertainties continue to be those which are set out on pages 22-25
of the Group's annual report and accounts for the year ended 31st
December 2020, under the following headings: Political, economic
and market conditions; Financial strength; Reputation; Winning new
work; Contract delivery; People and skills; Health and safety;
Supply chain; Pensions; and Cyber security.
Going concern
The Group has a GBP10m overdraft facility, which is repayable on
demand, and a GBP15m revolving credit facility ("RCF") expiring 31
August 2024. At the half year point the RCF was fully drawn down
and the overdraft facility was unutilised. The gross cash balance
was GBP17.0m, resulting in net cash of GBP2.0m. The Group therefore
has up to GBP27.0m available to support the Group's working capital
flows and funding demands during the course of the year.
To support the Group's operations the Group also have available
bonding facilities of GBP40.1m, of which GBP25.2m is currently
unutilised.
After making appropriate enquiries, the Directors are satisfied
that the Company and Group have adequate resources to continue
their operations for the foreseeable future. Accordingly, the
Directors continue to adopt the going concern basis in preparing
the financial statements.
Note 2 - Segmental information
The Group provides electrical and mechanical contracting and
related services to the construction industry and end users.
For management and internal reporting purposes the Group is
organised geographically into three regional divisions; London, UK
South & UK North, reporting to the Chief Executive, who is the
chief operating decision maker.
30 June 2021 London UK South UK North Group costs Total
and Unallocated
GBPm GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 72.8 35.4 30.0 - 138.2
------- --------- --------- ----------------- ------
Operating profit 1.0 1.3 1.1 (1.0) 2.4
Finance costs - - - (0.5) (0.5)
------- --------- --------- ----------------- ------
Profit/(loss) before tax 1.0 1.3 1.1 (1.5) 1.9
Taxation (expense)/credit - - - (0.4) (0.4)
------- --------- --------- ----------------- ------
Profit/(loss) for the period 1.0 1.3 1.1 (1.9) 1.5
------- --------- --------- ----------------- ------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Facilities Management 1.0 1.1 4.4 6.5
Infrastructure 9.3 22.8 12.2 44.3
Engineering Services 37.2 6.0 1.8 45.0
Residential & Hotels 12.6 5.3 11.0 28.9
Technologies 12.7 0.2 0.6 13.5
Total revenue 72.8 35.4 30.0 138.2
--------- ----------- ----------- --------
30 June 2020 London UK South UK North Group costs Total
and Unallocated
GBPm GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 58.7 29.1 18.3 - 106.1
------- --------- --------- ----------------- ------
Underlying operating profit/(loss) 2.0 0.9 (0.2) (0.5) 2.2
Non-underlying costs - - - (3.0) (3.0)
Amortisation of intangibles - - (0.2) - (0.2)
------- --------- --------- ----------------- ------
Operating profit 2.0 0.9 (0.4) (3.5) (1.0)
Finance costs - - - (0.5) (0.5)
------- --------- --------- ----------------- ------
Profit/(loss) before tax 2.0 0.9 (0.4) (4.0) (1.5)
Taxation (expense)/credit - - - 0.3 0.3
------- --------- --------- ----------------- ------
Profit/(loss) for the period 2.0 0.9 (0.4) (3.7) (1.2)
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Facilities Management 1.1 5.0 3.0 9.1
Infrastructure 7.1 12.2 8.4 27.7
Engineering Services 27.1 6.1 1.8 35.0
Residential & Hotels 7.8 5.6 4.6 18.0
Technologies 15.6 0.2 0.5 16.3
Total revenue 58.7 29.1 18.3 106.1
--------- ----------- ----------- --------
31 December 2020 London UK South UK North Group costs Total
and Unallocated
GBPm GBPm GBPm GBPm GBPm
Revenue from contracts with
customers 134.6 55.1 42.2 - 231.9
------- --------- --------- ----------------- ------
Underlying operating profit/(loss) 4.9 2.7 0.7 (2.3) 6.0
Restructuring costs - - - (3.7) (3.7)
Amortisation of intangibles - - (0.2) - (0.2)
------- --------- --------- ----------------- ------
Operating profit/(loss) 4.9 2.7 0.5 (6.0) 2.1
Finance costs - - - (0.9) (0.9)
------- --------- --------- ----------------- ------
Profit/(loss) before tax 4.9 2.7 0.5 (6.9) 1.2
Taxation expense - - - - -
------- --------- --------- ----------------- ------
Profit/(loss) for the year 4.9 2.7 0.5 (6.9) 1.2
------- --------- --------- ----------------- ------
London UK South UK North Total
GBPm GBPm GBPm GBPm
Business sector
--------- ----------- ----------- --------
Facilities Management 2.4 9.7 5.7 17.8
Infrastructure 20.6 22.1 16.2 58.9
Engineering Services 59.4 15.7 6.5 81.6
Residential & Hotels 21.7 7.6 12.8 42.1
Technologies 30.5 - 1.0 31.5
Total revenue 134.6 55.1 42.2 231.9
--------- ----------- ----------- --------
Note 3 - Taxation expense
The effective corporation tax rate applied for the period is
19.0% (30 June 2020: 19.0%).
Note 4 - Earnings per share
A. Basic earnings per share
The earnings per share represent the profit for the period
divided by the weighted average number of ordinary shares in
issue.
Unaudited Unaudited Audited
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Earnings
Profit/(loss) attributable to owners
of the Company 1.5 (1.2) 1.2
Weighted average number of ordinary
shares (000s) 41,898 42,211 42,295
------------ ------------ -------------
Basic earnings per share 3.58p (2.85)p 2.87p
------------ ------------ -------------
B. Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has three categories of dilutive potential ordinary shares: share
options granted under the Savings Related Share Option Scheme, and
conditional share awards and options granted under the Equity
Incentive Plan. Further details of these schemes are given in note
19 of the 2020 annual report and financial statements .
Unaudited Unaudited Audited
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Earnings
Profit/(loss) attributable to owners
of the Company 1.5 (1.2) 1.2
1.5 (1.2) 1.2
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 41,898 42,211 42,295
Adjustments
Savings Related Share Options (000s) 451 385 295
Equity Incentive Plan
Conditional share awards (000s) 1,982 2,453 2,453
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 44,331 45,049 45,043
------------ ------------ -------------
Diluted earnings per share 3.38p (2.85)p 2.69p
------------ ------------ -------------
C. Underlying earnings per share
Underlying earnings per share represents the profit for the
period adjusted for amortisation of intangible assets and
non-underlying costs and the tax effects of these items, divided by
the weighted average number of ordinary shares in issue. Underlying
earnings is the basis on which the performance of the operating
divisions is measured.
The underlying profit for the period is calculated as
follows:
Unaudited Unaudited Audited
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Profit attributable to owners of the
Company 1.5 (1.2) 1.2
Adjustments
Amortisation of intangible assets - 0.1 0.1
Restructuring costs - 3.0 3.0
Tax effect of adjustments - (0.5) -
------------ ------------ -------------
Underlying profit after tax 1.5 1.4 4.3
------------ ------------ -------------
Weighted average number of ordinary
shares in issue (000s) 41,898 42,211 42,295
Adjustments
Savings Related Share Options (000s) 451 385 295
Equity Incentive Plan
Conditional share awards (000s) 1,982 2,453 2,453
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 44,331 45,049 45,043
------------ ------------ -------------
Underlying earnings per share 3.58p 3.10p 9.66p
------------ ------------ -------------
Diluted underlying earnings per share 3.38p 2.90p 10.29p
------------ ------------ -------------
Note 5 - Notes to the consolidated statement of cash flows
Unaudited Unaudited Audited
A. - Reconciliation of operating profit 30 06 2021 30 06 2020 31 12 2020
to net cash from operating activities GBPm GBPm GBPm
Operating profit/(loss) 2.4 (1.0) 2.1
Depreciation charges 1.0 1.2 2.1
Equity settled share based payments (0.6) 0.2 0.4
Amortisation of intangible assets - 0.2 0.2
Additional pension contributions (0.8) (2.9) (1.5)
Defined benefit pension scheme movement 0.2 (0.4) (1.7)
Operating cash flows before movements
in working capital 2.2 (2.7) 1.6
Movement in inventories - - (0.2)
(Increase) / Decrease in contract balances (14.0) 6.4 3.9
(Increase) / Decrease in operating trade
and other receivables (2.4) 10.9 3.8
Increase / (Decrease) in operating trade
and other payables 9.2 (16.3) (4.5)
------------ ------------ ------------
Cash (used in) / generated by operations (5.0) (1.7) 4.6
Corporation tax paid - (0.2) (0.6)
Interest paid (0.3) (0.2) (0.3)
------------ ------------ ------------
Net cash (used in) / generated by operating
activities (5.3) (2.1) 3.7
------------ ------------ ------------
B. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and other
short-term highly liquid investments that are readily convertible
into cash, less bank overdrafts.
Note 6 - Related party transactions
Transactions between the Company and its subsidiary
undertakings, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. Full disclosure
of the Group's other related party transactions is given in Note 22
to the Group's financial statements for the year ended 31 December
2020. There have been no material changes in these relationships in
the six months ended 30 June 2021 that have materially affected the
financial position or performance of the Group during that
period.
Note 7 - Pension commitments
The present value of the defined benefit retirement benefit
scheme and the related past and current service costs were measured
using the projected unit credit method. The amount included in the
statement of financial position arising from the Group's
obligations in respect of its defined benefit retirement benefit
scheme is as follows:
Unaudited Unaudited Audited
30 06 2021 30 06 2020 31 12 2020
GBPm GBPm GBPm
Present value of defined benefit
obligations 69.9 73.5 76.3
Fair value of scheme assets (45.4) (43.6) (46.1)
------------- ------------- -------------
Deficit in scheme recognised
in the statement of financial
position 24.5 29.9 30.2
Key assumptions used
Rate of increase in salaries 2.90% 2.45% 2.60%
Rate of increase of pensions
in payment 3.10% 2.80% 3.00%
Discount rate 2.00% 1.60% 1.40%
Inflation assumption 3.20% 2.90% 2.90%
Unaudited Unaudited Audited
Mortality assumptions (years) 30 06 2021 30 06 2020 31 12 2020
Life expectancy at age 65 for
current pensioners:
Men 21.8 21.7 21.8
Women 24.1 23.9 24.1
Life expectancy at age 65 for
future pensioners
(current age 45)
Men 22.8 22.7 22.8
Women 25.3 25.1 25.2
Statement of Directors' responsibilities
The Directors confirm that the condensed interim financial
statements have been prepared in accordance with International
Accounting Standard 34 'Interim Financial Reporting' and that the
interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months 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
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
On behalf of the Board
Iain McCusker - Chairman
Mark Lawrence - Chief Executive
Trevor Mitchell - Finance Director
20 July 2021
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END
IR GZGMNZLFGMZM
(END) Dow Jones Newswires
July 20, 2021 02:00 ET (06:00 GMT)
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