Interim Results
September 24 2003 - 2:02AM
UK Regulatory
RNS Number:0985Q
Lloyds British Testing PLC
24 September 2003
Lloyds British Testing plc
Equipment inspection, testing, certification and maintenance
Interim Results for the Six Months to 30 June 2003
HIGHLIGHTS
"The underlying contract base has continued to grow and has increased by some 9%
in the first 6 months of 2003. Both revenue and gross margins have improved
compared to the same period last year."
* Turnover - #8.3m +2.4%
* EBITDA - #0.9m +9.1%
* Profit after tax & interest - #0.2m +3.7%
"Whilst it is unlikely that the Company will meet its original projections for
the year ended 31st December 2003, unless there is a significant and sustained
improvement in the sector as a whole in the near future, the profit before tax
for this year will be significantly ahead of 2002."
* Extracts from the Chairman's and Chief Executive's Statement
JOINT CHAIRMANS AND CHIEF EXECUTIVE'S STATEMENT
We are pleased to report our interim results for the period ended 30th June
2003. As stated in the 2002 annual report both the Support Services and
Engineering Services Divisions had exceeded their targets for the first quarter
of the financial period and we were hopeful that this signalled the beginning of
a recovery in the engineering sector. However, this was not sustained in the
second quarter and overall the six months results to 30th June 2003 are in line
with expectations and ahead of last year.
RESULTS
Turnover at #8.3 million increased 2.7% compared to #8.1 million for the
comparable period last year (2002). Profits after tax and interest at #203,700
increased 3.7% compared to #196,300 (2002) for the comparable period last year.
DIVIDEND
Due to the Company's continued profitability and positive cashflow the: Board is
proposing the payment of an interim dividend of 0.15p per share to be paid on
14th November 2003 to shareholders on the register on 10th October 2003. The
board is committed to a progressive dividend policy.
OPERATIONAL REVIEW
The Engineering Services Division continues to focus on major utility contracts
and the on going development of its crane maintenance division, The underlying
contract base has continued to grow and has increased by some 9% in the first 6
months of 2003. Both revenue and gross margins have improved compared to the
same period last year. A number of major tenders remain outstanding and it is
anticipated that at least one major award will be seen in the next quarter.
Following our strategic review last year we have continued to focus on cost
reduction and improved operational efficiency in the Support Services Division.
This continues to trade profitably with overheads below budgeted levels for the
period. In addition our tight control of capital expenditure has reduced
spending in this area below budget.
During the period the board has been in negotiations to sell the 'Support
Services Powered Access division, which had been identified as a non-core
business during the 2002 strategic review. Negotiations have since failed to
conclude a sale and the board have consequently transferred all powered access
activities to two principal sites to enable the company to maximise its return
on assets, It is not anticipated that a sale of this division will be achieved
in the foreseeable future due to the level of saturation of companies involved
in this market sector.
ACQUISITIONS
During the period the materials handling business (Hedley handling Services) has
been successfully integrated into the existing Newcastle operation and is to
date exceeding its expectations both in revenue and profits The Board continues
to maintain its policy of growth both organically and through acquisitions.
During the course of the period we have had negotiations with various target
companies.
OUTLOOK
Whilst the Group has traded in line with expectations during the period, the
powered access division has suffered from the protracted negotiations to achieve
its sale. Because of the high margins achieved in this division a small change
in turnover has a disproportionate effect on profitability. This has impacted
on the Group's ability to achieve its year end profit targets
Your Board reacted rapidly to the adverse market conditions by speeding up the
cost control and operating efficiencies that were initiated in the 2002
strategic review. Divisional structures have become leaner and more
operationally efficient which will improve profitability.
Whilst the issues remaining with the powered access division will adversely
affect the anticipated profitability for the remainder of the financial year, we
are confident that the actions already implemented will correct this position
for the future.
Whilst it is unlikely that the Company will meet its original projections for
the year ended 31st December 2003, unless there is a significant and sustained
improvement in the sector as a whole in the near future, the profit before tax
for this year will be significantly ahead of 2002.
The Board continues to seek out quality, strategic acquisitions in the lifting
equipment and engineering sector, which will ultimately enhance our shareholder
value.
Brian Ralley
Non-Executive Chairman
Ian White
Chief Executive Office
24 September 2003
Enquiries
Ian White or Hayden Davis
0870 197 5515
PROFIT AND LOSS ACCOUNT
For the six months ended 30 June
2003
Pro-forma Statutory Pro-forma
6 Months 6 Months 5 Months Year
ended Ended ended Ended
30 June 30 June 31 December 31 December
2003 2002 2002 2002
#'000 #'000 #'000 #'000
Note Unaudited Unaudited Audited Audited
Turnover 8,328.2 8,133.5 7,274.5 16,706.9
Operating profit 431.6 486.9 323.6 726.3
PBITDA and Exceptional Costs* 905.3 829.7 1,024.6 1,616.9
Depreciation (374.4) (315.9) (369.7) (531.5)
Amortisation (99.3) (26.9) (71.8) (99.6)
Exceptional Costs - - (259.5) (259.5)
Operating profit 431.6 486.9 323.6 726.3
Net interest 139.7 220.8 121.9 376.4
Profit on ordinary activities before taxation 291.9 266.1 201.7 349.9
Taxation 88.2 69.8 85.0 68.0
Profit on ordinary activities after taxation 203.7 196.3 116.7 281.9
Dividend 2 47.7 - 79.4 79.4
Retained profit for the period 203.7 196.3 37.3 202.5
Earnings per 1p Ordinary Share Pence Pence Pence Pence
Basic 3 0.64p - 0.37p -
Adjusted 3 0.95p - 1.41p -
* Profit before exceptional costs, interest, taxation, depreciation and goodwill
amortisation.
All operations are continuing
There were no recognised gains or losses other than the profit for the period.
CONSOLIDATED BALANCE SHEET
as at 30 June 2003
Pro-forma Statutory
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
Fixed assets
Intangible assets 3,593.9 774.0 3693.2
Tangible assets 5,205.3 5,449.0 5,093.7
8,799.2 6,223.0 8,786.9
Current assets
Stock and work in progress 608.9 584.2 568.7
Debtors 4,265.6 4,354.9 4,638.8
Cash at bank and in - 14.6 596.7
hand
4,874.5 4,953.7 5804.2
Creditors
Amounts falling due within one (4,429.4) (4,901.2)) (5,436.9)
year
Net current assets 445.1 52.5 367.3
Total assets less current 9,244.3 6,275.5 9,154.2
liabilities
Creditors
Amounts falling due after one (2,752.2) (4,204.8) (2,818.3)
year
Provisions for liabilities and (173.2) (194.0) (173.0)
charges
Net assets 6,318.9 1,876.7 6,162.9
Capital and reserves
Called up share 317.7 1,680.0 317.7
capital
Share Premium account 3,893.2 - 3,893.2
Other Reserves 1914.6 142.8 1,914.6
Profit and loss 193.4 53.9 37.4
account
Equity shareholders' funds 6,318.9 1,876.7 6,162.9
CONSOLIDATED CASHFLOW STATEMENT
for the six months ended 30 June
2003
Pro-forma Statutory
6 Months 6 Months 5 Months
ended ended Ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Note Unaudited Unaudited Audited
Net cash inflow from operating activities 4 706.0 450.3 62.8
Returns on investments and servicing of finance
- Net interest (132.0) (213.8) (121.9)
Taxation - - 13.5
Capital expenditure and financial investment
- Payments to acquire tangible fixed assets (486.0) (337.3) (416.2)
- Receipts from sale of tangible fixed - - 89.6
assets
(486.0) (337.3) (326.6)
Acquisitions and disposals
- Purchase of subsidiary - - (3,025.9)
undertaking
Net cash inflow/(outflow) before financing 88.0 (100.8) (3,398.1)
Financing
- Issue of ordinary share - - 4,500.0
capital
- Share issue costs - - (387.3)
- New borrowings 200.0 3,000.0 -
- Repayment of borrowings (160.0) (583.1) (1,860.0)
- Hire purchase and finance lease (85.4) (87.6) (121.0)
obligations
(45.4) 2,329.3 2,131.7
Increase/(decrease) in cash in the period 5 42.6 2,228.5 (1,266.4)
NOTES TO THE INTERIM ANNOUNCEMENT
1 BASIS OF PREPARATION
The financial information in respect of the six months ended 30 June 2003 consolidates the accounts of
Lloyds British Testing plc and its subsidiary, Lloyds British Group Limited, from 1 January 2003 to 30 June
2003.
The statutory financial information in respect of the period ended 31 December 2002 consolidates the
accounts of Lloyds British Testing plc and its subsidiary from the date of incorporation of the company to
31 December 2002.
The pro-forma profit and loss account for 31 December 2002 presents full years trading of the company and
its subsidiary. This incorporates the pre-acquisition results of Lloyds British Group Limited from 1
January 2002 to 31 July 2002, together with the post acquisition results for the Group for the period 1
August 2002 to 31 December 2002. The effect of fair value adjustments on the acquisition of Lloyds British
Group Limited have been excluded from the pro-forma profit and loss account.
The financial information for the six months ended 30 June 2002 is presented on a pro-forma basis as Lloyds
British Testing plc did not commence to trade until 1 August 2002 following the acquisition of Lloyds
British Group Limited and the immediate hive-up of it's trade and net assets to the company. The financial
information presented therefore represents that of Lloyds British Group Ltd and its subsidiary undertaking
Lloyds British Testing Limited for the six-month pre-acquisition period to 30 June 2002.
The interim financial statements have been prepared in accordance with applicable accounting standards and
under the historical cost convention. The accounting policies remain unchanged from those adopted for the
year ended 31 December 2002 and it is the Board's intention to adopt these policies in full for the company
for the year to 31 December 2003.
The financial information contained in this report has been neither audited nor reviewed by the company's
auditors.
2 DIVIDENDS
Pro-forma Statutory Pro-forma
6 months ended 6 months 5 months year
30 June ended ended ended
2003 30 June 31 December 31 December
2002 2002 2002
#'000 #'000 #'000 #'000
Proposed final dividend of 0.25p per - - 79.4 79.4
share
Proposed interim dividend of 0.15p 47.7 - - -
per share
3 EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the profit on ordinary activities after
tax and on the number of ordinary shares in issue during the period. The adjusted earnings per share
is calculated excluding the impact of amortisation of goodwill for 6 months ended 30 June 2003, and
amortisation of goodwill and exceptional operating costs for 5 months ended 31 December 2002.
The share options are not considered to have a dilutive effect due to the exercise price being higher
than the fair value of the shares.
The profits and weighted average number of shares used in the calculations are set out below:
6 months ended Statutory 5 months ended
30 June 2003 31 December 2002
Weighted Weighted
average average
number of number of
shares shares
Earnings per Earnings per
share share
Profit Profit
#'000 '000 p #'000 '000 p
Basic earnings per share 203.7 31,796.6 0.64 116.8 31,769.6 0.37
Amortisation of goodwill 99.3 31,769.6 0.31 71.8 31,769.6 0.22
Exceptional operating items - - - 259.5 31,769.6 0.82
Adjusted earnings per share 303.0 31,769.6 0.95 448.1 31,769.6 1.41
4 NET CASH INFLOW FROM OPERATING ACTIVITIES
Pro-forma Statutory
6 Months 6 Months 5 Months
ended ended ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
Operating profit 431.6 486.9 323.7
Depreciation 374.4 315.9 297.9
Amortisation 99.3 26.9 71.8
Profit on sale of tangible fixed assets - - (0.8)
(Increase)/decrease in stock and work in (40.1) (136.5) (63.3)
progress
Decrease/(increase) in debtors 373.1 62.0 (361.8)
(Decrease) in creditors (532.3) (304.9) (204.7)
Net cash inflow from operating activities 706.0 450.3 62.8
5 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Pro-forma Statutory
6 Months 6 Months 5 Months
Ended Ended Ended
30 June 30 June 31 December
2003 2002 2002
#'000 #'000 #'000
Unaudited Unaudited Audited
Increase/(decrease) in cash in the period 42.6 2,228.5 (1,266.4)
Net cash (inflow)/outflow from debt (40.0) (2,416.8) 1,360.0
Capital element of finance lease payments 85.4 87.6 121.0
Inception of new finance leases - (104.2) (16.3)
Net debt acquired - - (4,766.6)
Movement in net debt in the period 88.0 (204.9) (4,568.3)
Net debt at beginning of period (4,568.3) (6,213.3) 0.0
Net debt at end of period (4,480.3) (6,418.2) (4,568.3)
6 PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this interim report does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985.
The figures for the period ended 31st December 2002 have been extracted from the statutory financial
statements, which have been filed with the Registrar of Companies. The auditor's report contained
within those financial statements was unqualified and did not contain a statement under Section 237
(2) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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