RNS Number:4272Z
AMCO Corporation PLC
07 March 2006
AMCO CORPORATION PLC ("AMCO" OR "THE GROUP")
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2005
CHAIRMAN'S STATEMENT
Results before taxation
I am pleased to report substantially improved results for 2005. The profit
before taxation for 2005 was #7.0 million compared with #3.0 million in 2004.
This was on total turnover of #126 million as compared with #134 million for
2004.
Structural steel activities had a particularly good year and contracting,
property development and plastics manufacture all performed well. Dosco
underground equipment manufacture again had an unsatisfactory year although only
modest losses were sustained.
Taxation
The effective rate was 28.6% due mainly to the utilisation of the balance of
trading losses brought forward.
Earnings per share
Earnings per share were 42.7 pence for 2005 compared with 23.0 pence for 2004.
Dividend
I am delighted to announce a return to the payment of dividends with a
recommended dividend for 2005 of 11 pence per share payable on 3rd July 2006 to
shareholders of record on 2nd June 2006.
Liquidity and capital resources
The Group had net funds in hand at 31st December 2005 of #4.2 million as
compared with a net debt position at 31st December 2004 of #0.2 million.
Pension Schemes
The net deficits on the Group's final salary pension schemes increased by #0.8
million to #12.6 million at 31st December 2005.
We intend to make additional contributions, in excess of normal contributions,
to the schemes of #1.4 million in 2006.
Prospects for 2006
I am pleased to report that prospects for 2006 are good.
Structural steel activities continue to be buoyant and another good year is
expected in 2006.
Property development activities in 2006 should be better than in 2005 having
regard to developments in progress.
Following the closure of the U.K. coal contracting activities in 2005, we expect
reduced profits from contracting activities in 2006.
Plastics manufacturing is expected to have a satisfactory year in 2006.
Dosco is operating in a very difficult market but we hope for modest profits in
2006.
Management and workforce
I should like to thank all directors and employees for their efforts and
enthusiasm in 2005 which have contributed to a significant extent to the very
satisfactory outcome to the year.
S. N. Gordon
Chairman
7th March 2006
OPERATIONAL REVIEW
Overview
The Group's focus on the development of its contracting, structural steel and
property businesses continues, supported by its interests in engineering and
manufacturing.
The results in 2005 were a further significant improvement on the figures
registered in 2004.
2005 marked the Group's final withdrawal from the UK coal mining contracting
industry after 35 years.
Provided that the progressive growth of our specialist construction activities
are maintained and that the structural steel market remains relatively buoyant,
and with the completion of property development projects currently in hand, the
Group should achieve a further satisfactory performance in 2006.
We will continue to make investment throughout the Group to expand the scope of
the services and products we offer and improve the efficiency and profitability
of our businesses.
Health and Safety
Health and Safety is at the core of the Group's operations and is seen as an
integral element of ongoing business success. Considerable emphasis continues to
be placed on the identification and minimisation of health and safety risk, the
prevention of accidents and the effective management of Occupational Health,
Safety and Employee Well Being.
As part of our policy of continuous improvement further initiatives will be
adopted throughout 2006 to build on the health and safety successes of the
previous 12 months, particularly in the areas of employee behaviour and
occupational health.
Management Systems
2005 saw further significant progress made in relation to the review and
development of management systems within the Group. Amalgamated Construction,
Amco Plastics, Billington Structures and Hollybank all operate process based
business management systems delivered electronically using web browser
technology.
Billington Structures has continued to develop its electronic management
information system. It now includes document management and is linked to
accounting software. It is now possible, through a single portal, to store and
retrieve all relevant documents by project and to monitor costs against projects
in real-time.
January 2006 saw Amalgamated Construction roll out its "Workspace" Knowledge and
Document Management System and employees are currently undergoing training in
its use.
Companies within the Group have all successfully maintained ISO 9000 (Quality)
and ISO 14000 (Environmental) certification of their management systems during
2005. During this period Billington Structures also successfully achieved
certification to the Occupational Health Standard ISO 18001.
Training and Development
Substantial investment in employee training and development to meet the needs of
the future business has been made in 2005 and will continue throughout 2006.
The ongoing development of employee skills, knowledge and competence is seen as
fundamental to the achievement of our longer term strategic objectives and as
such will continue to be the focal point around which our training and
development strategy has been developed. This area received particular attention
during 2005 with a significant amount of groundwork being carried out towards
the development of a Competency Framework encompassing the areas of Management
and Leadership Skills, Technical Capability and Health & Safety.
Significant focus has been and will continue to be placed on increasing health
and safety knowledge and awareness amongst employees. Of particular note during
2005 was the successful completion of CITB recognised Health and Safety Training
by all operational line managers and supervisors within Amalgamated
Construction.
Both Amalgamated Construction and Billington Structures continue to actively
support the construction industry's national initiative of achieving a fully
qualified workforce.
Environment
We have continued to pursue our goal of continuous environmental improvement
through the ongoing reduction of the environmental impact of our operations.
Reductions in energy usage and waste have remained our main focus of attention.
The Group continues to pride itself on the comprehensive measures implemented
throughout the organisation for the control of our environmental impacts. Not
only do these measures ensure our ongoing compliance with legislation they also
earn acknowledgement from our clients.
The ongoing development and promotion of good environmental practice,
underpinned by sound environmental awareness and employee training, is seen to
be a key issue in continued business success.
Contracting
Amalgamated Construction had a successful year in 2005 reflecting strong demand
for and growth of its specialist construction activities. The business is
structured into two multi-disciplined client focused operating divisions;
Capital Projects and Infrastructure Services.
Capital Projects is focussed on traditional and design & build contracting
opportunities covering civil engineering, tunnelling, bulk materials handling
and multi-discipline engineering projects servicing in particular the energy,
water and transport sectors. During 2005 the business completed major projects
for a number of blue chip clients including National Grid Transco, Scottish and
Southern Energy, United Utilities, RWE Innogy and Scottish Water. On Merseyside
it completed the high profile Mersey Queensway Road Tunnel Emergency Escapes
contract for Mersey Passenger Transport Authority, having previously undertaken
the Mersey Kingsway Tunnel Cross Passages contract for the same client. The #13
million project included the construction of seven emergency refuge rooms
located below the road deck with associated fire protected, ramped access ways
from road level down into each refuge.
The Infrastructure division includes our specialist rail, mining and
multi-disciplined engineering and maintenance activities. Amco Rail had a very
successful year and further consolidated its position successfully delivering
multi-disciplined civils, structures, maintenance and engineering projects
throughout the Rail network. The growing prestige of the business was further
demonstrated in early 2006 when it was awarded Minor Works framework contracts
for three of the Network Rail Territories This #20 million per annum contract
is for a period of 3 years with an option for a 2 year extension. Amco Mining
was awarded a further extension to its exploration drilling contract in Guinea
and undertook major surface and underground installation works at Svea Nord Mine
on Spitzbergen for SNSG. Amco Engineering had a satisfactory year from its
growing portfolio of maintenance work being undertaken for Magnox, National
Grid, E-on, SSE, the Environment Agency, British Waterways and the Oil and
Pipelines Agency.
The continued reduction in the UK coal mining industry determined that we
withdraw from deep mine contracting and as a result Amco Mining Services Ltd,
the company established to service the requirements of UK Coal Plc, ceased to
trade at the end of 2005.
Structural Steel
Billington Structures enjoyed a record year for turnover and profit in 2005.
Market conditions were generally favourable and the company benefited from its
well-established relationships with a number of major contractors and clients.
The company operates out of two modern production facilities at Wombwell near
Barnsley and Yate near Bristol.
It was a particularly busy year on the SLAM contract for the MOD, with a large
number of projects being undertaken. Other significant contracts included a
town-centre development in Durham, an extension to a building that the company
had built previously for Ikea in Doncaster, which has created the largest
warehouse in Europe, and a number of buildings at the Langeled facility, which
is the UK end of the new gas pipe-line from Norway.
The company's abilities were recognised within the industry by winning two major
awards. It was named Structural Specialist of the Year by Building Magazine and
Specialist Steelwork Contractor of the Year by Construction News.
Its continuing efforts to enhance health and safety have included the
achievement of ISO 18001, the health and safety management standard, and the
successful establishment of Works Improvement Teams in its two factories. These
have tapped into the enthusiasm and knowledge of shopfloor employees and led to
a number of worthwhile initiatives and improvements. The company's safety
barrier system, 'easi-edge', was made generally available within the industry
and has enjoyed considerable success. Its distinctive orange barriers are
protecting workers on steel-framed multi-storey buildings on a large number of
sites in cities throughout the country.
A major effort is underway to improve the facilities at the company's Yate
factory, with a view to increasing capacity. As part of this, an additional CNC
saw and drill is on order, for delivery mid 2006. This machine is next
generation, with substantial productivity benefits over current machines and
will more than double the factory's sawing and drilling capacity. Continued
growth in the business has meant that there is a severe shortage of office space
at the company's main site at Wombwell. The Group has addressed this by
authorising an extension to the main office-block, which should provide
sufficient space for the foreseeable future when it is finished in the autumn of
2006.
The other structural steel business is Hollybank Engineering, which serves the
underground mining industry. Its fortunes are closely bound up with those of the
coal industry and, in consequence, it has declined considerably over the past
several years. However, in recent years it has stabilised and is still
profitable. Immediate prospects are not good, with more pit closures announced,
but it is possible that recent upheavals in the global energy market have
improved the medium and longer-term prospects for coal and hence for Hollybank.
Property Development
In 2005 Amco Developments further consolidated its position in the Yorkshire and
North East property development markets and had another successful year with the
sale of Folly Hall Mill, Huddersfield and the St. Mary's Gate site in Sheffield,
which it owned in its joint venture with Strata.
Work began on the Arundel Street, Sheffield apartment block comprising 68 units,
34 of which have already been sold. Completion of the block is anticipated in
October 2006.
A detailed planning consent was obtained for a large mixed use scheme in
Sheffield comprising 205 apartments, 10,000 sq. ft. of retail space and 35,000
sq. ft. of office accommodation. It is anticipated a start on site will be made
in October 2006 and strong interest has already been registered in the office
element.
The residential element of the development at St. James Boulevard, Newcastle,
which is currently being undertaken in a joint venture, has been substantially
sold and the commercial element forward sold to an investor with completion
taking place in March 2006.
Work continues on the 166,000 sq. ft. Temple Point Business Park in Leeds
immediately adjacent to Junction 46 of the M1. Two buildings totalling 22,000
sq. ft. have been successfully completed and sold. Other phases comprising
43,000 sq. ft. in seven units are currently in various stages of completion.
A number of other schemes are expected to come on stream during 2006.
Engineering
Dosco continues to develop its activities and services away from its traditional
core market which centred on the UK coal mining industry. This market has now
effectively been replaced through its expanding activities servicing the export
mining and material handling markets.
Although the business provided by the UK coal mining industry will continue to
be serviced by the company, Dosco has had to look outside this market to provide
the opportunity for a continuing structured and sustainable growth. The success
achieved in changing its market base now provides a sound basis for Dosco to
continue to expand its products and services around the world. The Russian
service centre is now well established in the Siberian coalfields.
During 2005 the company successfully completed a #2.5m contract to supply three
roadheading machines to the Chinese coal mining market and one to Russia. One of
the sales into China was for a MK4 machine, a new machine utilising the latest
technologies for variable strata conditions
Orders for 2006 have so far been received from USA, China and the Dominican
Republic. The American order is for an initial two machines which will be used
to develop underground workings for the extraction of oil, the Dominican
Republic order is for a machine to develop the Santo Domingo underground system.
Manufacturing
During 2005 Amco Plastics continued to focus on the expansion of its extrusion
business with the development of new products to serve a wide cross-section of
industry applications. The company successfully completed the supply of almost
30 kilometres of tunnel ventilation ducting to the high speed train link from
Madrid to La Coruna at Guadarrama during 2005 and as a result won the contract
to supply similar ducting to the new road tunnel from France to Spain at Le
Perthus.
Amco Plastics also supplied more than 80 million metres of extruded product to
the UK cable industry and 25 million metres of tube to the UK DIY industry.
FINANCIAL DIRECTOR'S REPORT
Results
Total turnover in the year ended 31st December 2005 reduced by 6.3% to #126.0m
from #134.5m in the previous year.
The Group reported a total operating profit for 2005 of #7.2m a 125% increase on
the profit achieved in 2004 of #3.2m. Operating margins also more than doubled,
increasing from 2.4% to 5.7%.
Taxation
The tax charge of #2.0m in the year equates to an effective corporation tax rate
of 28.6% on the Group's profits.
Profit and dividends per share
Earnings per share were 42.7p in 2005, which compares with earnings per share of
23.0p in 2004. No dividends were paid in the year although a final dividend of
11p per share is proposed in respect of the 2005 results. As a result of the
Group implementing FRS 21: "Events after the balance sheet date" the proposed
final dividend is no longer shown as a liability of the Group at 31st December
2005.
Capital expenditure
The Group continued to invest in capital equipment with a further #3.3m (2004 -
#2.4m) of capital expenditure in the year of which #1.8m (2004 - #1.3m) related
to replacements in the Group's motor vehicle fleet. Of the balance of #1.5m,
#1.1m was in respect of new equipment in the structural steel businesses with
the rest invested in plant and equipment throughout the Group. The depreciation
charge for the year was #2.3m which, together with sundry disposals, caused the
total fixed assets in the Group to increase by #0.5m to #15.1m.
Cashflow
The Group had net funds at the end of 2005 of #4.2m, an increase of #4.4m from
the net debt position of #0.2m at the end of 2004. There were no bank overdrafts
at the year end with the Group having total cash at bank of #7.7m at 31st
December 2005, a cash inflow of #2.1m in 2005. Bank and other loans reduced by
#2.3m and the level of finance leases remained constant.
Pension Schemes
The deficit on the Group's pension schemes as calculated by FRS 17 increased
during the year by #0.8m to #12.6m after allowing for deferred tax. This
increase in the deficit was a result of changes in the actuarial assumptions
underlying the present value of the scheme liabilities. The actual return on the
scheme assets of #7.9m was #5.3m in excess of the anticipated return and the
Group made contributions #0.9m in excess of the current service charge but the
#7.3m actuarial losses caused the gross deficit to increase by #1.1m before
deferred tax. The Group intends to make additional contributions to the pension
schemes in 2006 of #1.4m.
I. Swire
Group Financial Director
7th March 2006
Profit and loss account for the year ended 31st December 2005
2005 2004
#000 #000 #000 #000
Total turnover (including share of turnover in
joint ventures)
125,982 134,498
Increase /(decrease) in work in progress 46 (331)
126,028 134,167
Less: share of turnover in joint ventures (7,222) (2,542)
Group turnover 118,806 131,625
Raw materials and consumables 44,019 46,945
Other external charges 25,140 34,548
(69,159) (81,493)
49,647 50,132
Staff costs 37,783 42,215
Depreciation 2,349 2,539
Other operating charges 3,043 2,340
(43,175) (47,094)
Group operating profit 6,472 3,038
Share of operating profit in joint ventures 739 178
Total operating profit
7,211 3,216
Net interest (68) (187)
Other finance (cost)/income (192) 2
Profit on ordinary activities before taxation 6,951 3,031
Tax on profit on ordinary activities (1,971) (312)
Profit transferred to reserves 4,980 2,719
Earnings per share 42.7p 23.0p
Statement of total recognised gains and losses for the year ended 31st December 2005
2005 2004
#000 #000
Profit for the financial year 4,980 2,719
Actuarial loss recognised in the pension
scheme (1,858) (4,032)
Movement on deferred tax relating to pension
liability 342 929
Current tax relating to pension liability 215 281
Total recognised gains/(losses) for the year 3,679 (103)
Consolidated balance sheet at 31st December 2005
2005 2004
#000 #000 #000 #000
Fixed assets
Tangible assets 15,136 14,649
Investments 350 350
Investments in joint ventures:
share of gross assets 12,595 5,630
share of gross liabilities (10,934) (4,485)
1,661 1,145
17,147 16,144
Current assets
Stock and work in progress 11,381 10,801
Amounts recoverable on contracts 957 8,098
Debtors 15,823 13,209
Cash at bank and in hand 7,738 5,618
35,899 37,726
Creditors: amounts falling due
within one year (28,653) (33,634)
Net current assets 7,246 4,092
Total assets less current liabilities 24,393 20,236
Creditors: amounts falling due
after more than one year (1,710) (1,830)
Net assets excluding pension liability 22,683 18,406
Pension liability (12,640) (11,840)
Net assets including pension liability 10,043 6,566
Capital and reserves
Called up share capital 1,293 1,293
Share premium 1,864 1,864
Capital redemption reserve 132 132
Property revaluation reserve 3,284 3,284
Other reserves (798) (596)
Profit and loss account 4,268 589
Shareholders' funds 10,043 6,566
Consolidated cashflow statement for the year ended 31st December 2005
2005 2004
#000 #000 #000 #000
Net cash inflow from operating activities 7,702 3,277
Dividends from joint ventures 0 125
Returns on investments and servicing of finance
Interest received 159 174
Interest paid (87) (214)
Hire purchase interest paid (140) (147)
Net cash outflow from returns on
Investments and servicing of finance (68) (187)
Taxation (486) 153
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,499) (928)
Sale of tangible fixed assets 702 2,203
Net cashflow from capital expenditure and
financial investment
(797) 1,275
Net cash inflow before financing 6,351 4,643
Financing
Bank and other loans (2,290) 1,640
Capital element of finance lease rentals (1,739) (1,689)
Employee Share Ownership Plan
- purchase of shares (230) (20)
- disposal of shares 28 5
Net cash outflow from financing (4,231) (64)
Increase in cash 2,120 4,579
Notes:
1. Basis of preparation
The financial information in this preliminary announcement has been prepared in
accordance with the accounting policies set out in the financial statements of
Amco Corporation Plc for the year ended 31st December 2004, which have remained
unchanged for the financial year ended 31st December 2005 apart from the
adoption of FRS 21 - Events After the Balance Sheet Date.
2. Accounts
The summary accounts set out above do not constitute statutory accounts as
defined by Section 240 of the UK Companies Act 1985. The summarised consolidated
balance sheet at 31 December 2005, the summarised consolidated profit and loss
account, the summarised consolidated cash flow statement and the summarised
statement of total recognised gains and losses for the year then ended have been
extracted from the Group's 2005 statutory financial statements upon which the
auditors' opinion is unqualified. The statutory financial statements for the
year ended 31 December 2005 were approved by the directors on 7th March 2006,
but have not yet been delivered to the Registrar of Companies.
3. Earnings per share
Earnings per ordinary share have been calculated on the basis of profit for the
year after tax, divided by the weighted average number of ordinary shares in
issue in the year (excluding those held in the ESOP Trust) of 11,654,508 (2004 -
11,797,808).
4. Preliminary announcement
Copies of the preliminary announcement are available from the company's
registered office at Amco House, Cedar Court Office Park, Denby Dale Road,
Wakefield, WF4 3QZ. The Annual Report and Accounts for the year ended 31st
December 2005 will be posted to shareholders on or about 29th April 2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSFFLWSMSESD
Ashcourt (LSE:ARP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ashcourt (LSE:ARP)
Historical Stock Chart
From Jul 2023 to Jul 2024
