TIDMCTO
RNS Number : 9942I
Clarke(T.) PLC
27 March 2018
TClarke plc - Results for the year ended 31(st) December
2017
TCLARKE INCREASES DIVID AS ORDER BOOK QUALITY STRENGTHENS
TClarke plc ("the Group" or "TClarke"), the Building Services
Group, announces its preliminary results for the year ended 31(st)
December 2017.
Financial highlights: Change 2017 2016
Revenue from continuing +12% GBP311.2m GBP278.6m
operations
Operating profit - underlying(1,2) +6% GBP7.3m GBP6.9m
Operating profit - reported +80% GBP7.9m GBP4.4m
Operating margin- underlying(1,2) -8% 2.3% 2.5%
Profit before tax from +5% GBP6.5m GBP6.2m
continuing operations -
underlying(1,2)
Profit before tax from +92% GBP7.1m GBP3.7m
continuing operations -
reported
Net cash +26% GBP11.7m GBP9.3m
Earnings per share - underlying(2) +7% 12.37p 11.60p
Earnings per share - underlying
(diluted)(2) +8% 12.13p 11.20p
Earnings per share - basic +147% 13.44p 5.45p
Final dividend per share +7% 2.90p 2.70p
Total dividend per share +9% 3.50p 3.20p
Forward order book +2% GBP337m GBP330m
(1) Underlying profit is profit from continuing operations
adjusted for amortisation of intangible assets and non-underlying
costs (see note 4)
(2) Underlying earnings is calculated by dividing underlying
profit after tax by the weighted average number of shares in
issue
New project wins since our last announcement include;
ONE Bishopsgate Plaza; 43 storey residential and five star
hotel
Beaufort Park, Hendon; three further residential blocks for St
George
John Lewis Department Store, Cheltenham
Ark Pioneer Academy; new secondary school in Barnet, London
Sedbergh Sports and Leisure Centre, Bradford
Bath Spa University; School of Art and Design
Aerohub Business Park, Newquay Airport
Argo Global - 1 Fen Court, London; office fit out
University of East Anglia, Norwich; building 60 teaching and
laboratory areas
Edison Primary School, Hounslow, London; science specialist free
school
Rothesay Pavilion, Bute; restoration of the 1930's Pavilion
Building
Hadrian's Tower, Rutherford Street, Newcastle (residential
scheme)
Ferry Village, Braehead (residential scheme)
Rolls-Royce, Derby; M&E Services to North Block, B, C, and D
Buildings
South Gilmerton, Edinburgh (residential scheme)
HMP Featherstone
Mark Lawrence, Chief Executive commented:
"I am pleased to report that TClarke is in an excellent
position. We are focused on the future and have a clear strategy to
deliver on our five key strategic markets. We are confident that
this will enable us to continue to drive improving returns for our
shareholders, as is demonstrated by our setting ourselves the
medium term target to increase underlying operating margin to
3%.
Underlying this, TClarke shows strong and improving cash
generation, rigorous risk control, excellent revenue visibility, a
balanced quality order book and improving profitability. This
financial and strategic strength is allowing us to invest for
future growth in our markets, driven by investments in
infrastructure and the digital world."
-ends-
Date: 27(th) March 2018
For further information contact:
TClarke plc
Mark Lawrence Trevor Mitchell
Chief Executive Officer Finance Director
Tel: 020 7997 7400
www.tclarke.co.uk
N+1 Singer (Financial Adviser RMS Partners
and Broker)
Sandy Fraser Simon Courtenay
Rachel Hayes Tel: 020 3735 6551
Tel: 020 7496 3000
www.nplus1singer.com
Chairman's statement
Whilst 2017 has been challenging for our sector, I am pleased to
report that it has been another year of improved profitability and
operating performance for TClarke. The cash position continues to
strengthen (26% increase year on year after major strategic
investment) and the Group is debt free on a net basis.
Our current and forward order book - in terms of both value and
project quality - is evidence of the continuing confidence of our
clients, and the market in general, in our performance, strength,
strategic positioning, quality of service and ability to
deliver.
The Group continues to focus on its strategic development to
ensure that it retains its market-leading position and continues to
meet, and enjoy the benefits of meeting, the growing and changing
demands and expectations of our clients. At the same time, TClarke
retains its focus on operational performance and profitable
growth.
Our 'You See, You Say' safety programme is recognised as an
industry leader. This is a matter of pride, since it stems directly
from the safety mindset shown by our people and the hard work of
our dedicated safety team, day by day across the UK, with
significant ongoing improvement in our outstanding safety record.
We will never be complacent as far as health and safety is
concerned and will always look to drive forward the boundaries in
health and safety achievement.
Strong headline performance
I am pleased to report another year of strong performance by the
Group, meeting market expectations.
We continue to be seen as the supplier of choice to major,
business critical projects for multi-national companies. During the
year, our forward order book hit record levels and at the end of
the year stood at GBP337million.
Turnover in the year increased by 12% to GBP311 million and
underlying profit before tax grew by 5% to GBP6.5 million.
Underlying EPS increased to 12.37p (2016: 11.6p).
Continued focus on cost discipline and cash management
Our performance and results have benefited from our ongoing
focus on cost discipline and cash management. This reflects our
ever strengthening disciplines in the internal management and
delivery of projects, together with our focused client and partner
management approach, and is a result of our project management and
delivery skills across the Group in all regions.
Average cash balances throughout the year continued to improve.
The net cash balance at the end of 2017 was GBP11.7 million This
has been achieved after the initial cash consideration of GBP1.5
million in the acquisition of Eton Associates and GBP1.0 million in
our enhanced manufacturing capabilities, based in our new facility
at Stansted.
Dividend
The Board is committed to a progressive dividend policy,
improving returns to shareholders and delivering a sustainable
increase in dividend over the longer term.
The Board is therefore pleased to recommend a final dividend for
the year ended 31st December 2017 of 2.9 pence per share, making a
total of 3.5 pence per share for the year, reflecting the Group's
performance and our confidence in the business going forward,
whilst balancing the rewards to shareholders with the interests of
other stakeholders.
Strategic focus and direction
The programme of strategic initiatives we have implemented to
reshape and refocus the business to align with value creation,
delivery and growth are bringing financial returns. We recognise,
however, that we cannot stand still. Our world and markets are
constantly changing. Technology, client demands and the
requirements of the digital world are constantly evolving and this
presents significant opportunity for us.
As we continue to grow and develop our core markets and
offerings, we are at the same time looking to further develop our
specialisms and integrated offerings to ensure we can deliver
value-creating solutions to our clients and partners. Our
acquisition of Eton Associates during the year was an important and
visible step in this strategic programme.
Board Changes
I was pleased to welcome Peter Maskell to the Board in January
2018 as a Non-Executive Director. Peter's experience in the digital
transformation of Phillips will be particularly helpful to us as we
continue our strategic development.
In February 2018, Martin Walton, Finance Director left the
business and Trevor Mitchell was appointed Finance Director,
effective 1st February 2018, for an interim term of one year. The
Board would like to thank Martin for his substantial contribution
to the Group since he joined the business in 2007 and wish him well
for the future.
Outlook
2017 was another very good year for TClarke. Our current and
forward order book is fully replenished with high-quality projects,
many of which are business critical for our clients.
The strength of our order book is evidence of our significant
market share and we are maintaining our discipline and focus to
deliver sustained margin improvement across all our regions. The
Board is confident that the Group is well placed to meet profit
expectations for the year ahead and our commitment to sustained
performance growth is such that the Board has set a medium term
target to increase the underlying operating margin to 3%.
I would like to conclude by expressing my thanks to all of our
stakeholders for their continued support and to all TClarke staff
across the UK for their work and commitment, which has allowed us
to deliver for our clients and further build our business and
brand.
Iain McCusker
Chairman
27th March 2018
Chief Executive's report
A focus on the future is the recurring theme evident across our
business in 2017; investments in people, in new skills and
expertise, in new operations and geographic locations and in
enhancing our core skills and specialisms.
These are all aspects of our clearly stated business strategy in
action. In 2017, we have continued to build our Company to ensure
that we are 100% fit to retain our market-leading position as we
move into a future which is full of opportunity.
Enhancing our core business
In 2017, the construction industry reaffirmed the value it
places on our core proposition of M&E contracting services, by
awarding us contracts to fill a record order book. In 2017, we also
made major steps forward with our partners by working on and
winning landmark projects which drive innovation, sharpen the
skills of our people and build expertise and commercial
advantage.
When I was appointed Chief Executive Officer in 2010, TClarke's
core business centred on electrical contracting for major projects
in London. In the following years we have expanded our core
skillset to include mechanical contracting, and in 2017 the order
book evidenced this successful progression. In 2017, our core
skillset has expanded further still. Our highly successful TClarke
Intelligent Buildings team has been complemented by the additional
scale and capability of Eton Associates. This allows us to provide
a comprehensive digital, data and controls operation, alongside
mechanical and electrical services.
This core expansion has been market driven and the market itself
is driven by macro-economic trends, including 'big data' and
digital, which are transforming end user demand in many ways. We
are acknowledged across our peer group as a leader in the
engineering skills that enable the vision, design, the planning and
the theoretical engineering to develop strong, safe, resilient,
environmentally positive cities, buildings and infrastructure. By
contributing in this way, TClarke will continue to have a
significant role to play in building Britain's future.
A recent example was in December when our South West team was
awarded the first M&E package for Dyson's prestigious new
global technology campus in Wiltshire.
Building our specialisms and sectors
In 2017, we have had considerable success across our markets.
Our Transport team's selection by Manchester Airport Group brings
us a major airport contract, our Design and Build team continues
its excellent performance and growth trajectory, our Mission
Critical team's work on data centres and the complex Selfridges
project has been highly valued and our TClarke Intelligent
Buildings team has won major data, fire and alarm projects.
Manufacturing has had its most successful year ever with the
opening of our multi-skilled, purpose-designed operation at
Stansted and Healthcare continues with its world class
partnerships, winning projects under the NHS's new P22 framework
agreements. Our Residential business again won a series of awards
and expanded its footprint and our successful in-house specialist
FM business has also won new partnerships.
It is also important to note that we have been extremely
successful in winning and delivering research and laboratory
projects across every region of our business. Once again, this
shows how our business can adapt as demand and opportunity shifts
in the marketplace.
Going forward, we are reorganising our go-to market strategy
with five new market offerings: Infrastructure, M&E
Contracting, Residential & Accommodation, Technologies and FM
& Frameworks. This will give us an improved focus on growth and
a better prospect of valuable metrics going forward - both for the
business and our shareholders to see and measure progress.
Deepening our partnerships
TClarke is not unusual in talking about partnership as being key
to success, but 2017 shone a light on the range and variety of
those relationships and their value to us. Michael Bloomberg in
London followed the actions of the local teams at David Wilson
Homes in Glasgow, Rolls-Royce's team in the North East and the
engineering team at the Royal Cornwall Hospital - they all took the
time to commend our people and their work.
These testimonials and commendations are of direct value to our
shareholders because they signal the continued and growing
preference for our brand. Brand reputation and the expressed demand
and encouragement from our clients in 2017 has led us to open new
offices in Portishead, Birmingham and Dumfries, and immediately won
major new projects in geographic areas that were new to us.
Regional highlights
Scotland
2017 was TClarke Scotland's most successful year to date, with
revenue, profit and operating margins all at a record high. Our
Residential team achieved further growth, delivering 2,325 units
and winning six Seal of Excellence and 12 Pride in the Job
commendations at the NHBC Awards. This growth was driven by the
nationwide commitment to address the ongoing housing shortage.
Our Engineering team delivered numerous projects, including the
fabrication of bespoke alignment and fixing templates for 20km of
electricity pylons for Morgan Sindall. Our Intelligent Buildings
Team was active on landmark installations, including 22 Bishopsgate
and it also began collaboration with the Group's new Eton
Associates team, at Canary Wharf Estates' One Bank Street
development. Scotland's M&E team had a strong year, delivering
projects for Mitsubishi and Heart of Midlothian FC. The M&E
Team also had success with major projects in the education and
renewable energy sectors.
The Scotland team recruited 16 new apprentices in 2017, and as
well as marking the continued progress of previous and current
Apprentice of the Year finalists within the business, we also saw
the introduction of an Apprentices' Steering Committee in Scotland
to strengthen the voice of the next generation within our
operation.
North
The 2017 results for the Northern region were in line with
expectations and previous forecasts. Revenue was slightly reduced,
but the operating profit was maintained.
During 2017 a number of prestigious projects were completed
across the Northern region. Newcastle delivered their third project
for the University of Sunderland, a new teaching facility for
nursing, and also delivered a new facility for Rolls-Royce in
Washington. Leeds continued the relationships with Bowmer &
Kirkland on the ETA framework for schools and also with ISG on
various projects including prisons and schools. A new three-year
framework agreement with BAE was secured by the North West office,
a significant success for the team alongside being appointed to the
MAG framework as part of the Group submission.
FM remains an integral part of the business in the North, with
Leeds at the forefront. The model has been proven and is currently
being rolled out at the Newcastle office, with the expectation that
the North West will follow once Newcastle is fully established.
Central and South West
We identified challenges in the South West region early in 2017
and steps were taken to target better quality projects and
in particular, projects that will run to completion beyond
feasibility stages. By December 2017 the effect of this work was
that the South West had secured all of its targeted revenue for
2018, with it's strongest ever order book. We now expect the South
West to perform in line with the rest of the Group.
Elsewhere in the region our Derby team showed continued
strength, particularly in residential and accommodation projects
while our Peterborough office showed strength in Medical, Retail
and the Lab and Research market of Cambridge.
We also opened our new office in Birmingham, initially to
support our growing FM client portfolio, but subsequently with the
strategy to target further opportunities across our chosen
sectors.
London and South East
2017 was another strong year for London and the South East, with
revenue showing continued strength both in the current year and
looking ahead. 2017 saw continued high levels of good quality
tender opportunities, and we were able to expand our core client
base and entered into direct negotiation on a number of key
projects, rather than being exposed to a competitive tender.
Revenues were driven by the ongoing success of our core M&E
operation. Successful delivery of major M&E projects, such as
Bloomberg Place and Rathbone Square, were matched by the smooth
transition of project teams onto new landmark projects such as 22
Bishopsgate and Building S9 at IQL Stratford.
The ongoing establishment of our mechanical offer on a par with
our electrical offer, continued successfully and was marked by the
award of projects, including our largest ever mechanical package at
Southbank Place.
During 2017, the London and South East business welcomed Eton
Associates into the Group and also successfully opened the new
Stansted manufacturing facility, capping a highly successful year
of significant investment in our future.
The ongoing success of targeted tendering
2017's order book was a record one for scale - but more
importantly for quality. We can define quality broadly as meaning
the kind of projects where clients value our services appropriately
and where our people want to be engaged upon because they are
professionally rewarding. Targeted tendering continued to prove
successful for TClarke in 2017 as we have consciously matched our
skills and resource to quality opportunities, with the purpose of
delivering value.
Sustaining our key advantage - our people
As I have travelled around our business and projects this year,
my strongest single impression has been of a pride in our people -
many of whom have built their whole careers with us and some of
whom are just starting out. The relative scale and quality of our
new apprentice intake massively exceeds the best industry
targets.
In 2017, our Training Academy was launched. It is focused on
developing the best career paths for our people and has senior
level commitment within TClarke and will be a key feature of our
business going forward. In 2017, we saw TClarke people achieving
degrees and professional qualifications, winning awards and moving
into new disciplines within our business. We saw previous winners
and finalists of our Apprentice of the Year award growing into
leadership roles. All of these achievements have given me a
considerable sense of pride and satisfaction in what we are
building at TClarke.
A record year for safety
In concluding, I want to spotlight our safety record in 2017. We
have an absolute accident reporting regime, in which every accident
however small, was recorded, we also achieved an 17% reduction in
the annual accident rate, against the backdrop of a record order
book. This didn't happen by accident! It has been the result of
constant vigilance and focus across our business and the work of
our dedicated nationwide safety operation. This work sits at the
heart of the TClarke Way.
Mark Lawrence
Group Chief Executive Officer
27th March 2018
Group Financial review
Summary of financial position 2017 2016
Continuing operations GBPm GBPm
Revenue 311.2 278.6
----------------------------------- --------- -------
Operating profit:
- Underlying(1) 7.3 6.9
- Reported 7.9 4.4
----------------------------------- --------- -------
Profit / (loss) before tax:
- Underlying(1) 6.5 6.2
- Reported 7.1 3.7
----------------------------------- --------- -------
Profit / (loss) after tax:
- Underlying(1) 5.2 4.9
- Reported 5.6 2.9
----------------------------------- --------- -------
Discontinued operations 0.0 (0.5)
----------------------------------- --------- -------
Profit / (loss) for the year 5.6 2.4
----------------------------------- --------- -------
Earnings per share:
- Underlying(1) 12.37p 11.60p
- Continuing operations 13.44p 6.74p
- Reported 13.44p 5.45p
----------------------------------- --------- -------
Dividend per share 3.5p 3.2p
----------------------------------- --------- -------
(1) Underlying operating profit and profit
before tax are stated before amortisation
of intangible assets and non-underlying
items - see Note 4
Highlights
Underlying profit in line with market expectations.
Excellent progress made on strategic financial targets of:
1. Strengthening cash position (26% increase year on year after
investments); and
2. Utilising cash to invest in technology through purchase of
Eton Associates (Building management system specialist) and
building prefabrication facility at Stansted. (Cash cost
approximately GBP2.5 million in 2017).
Completion of the Group reorganisation resulting in the Groups
operating entities being within a single statutory entity.
2017 underlying Group performance
Group revenue rose by 12% to GBP311.2 million for the year
(2016: GBP278.6 million). Group underlying operating profit
increased by GBP0.4 million to GBP7.3 million. London and South
East delivered particularly strong revenue and margin growth.
Scotland and the North also delivered a growth in profits but
Central and South West had a poor first half trading, resulting in
an underlying loss for the year. Overall operating margins 2.3%
(2016: 2.5%). Net underlying overheads as a percentage of revenue
were 10% (2016: 9.2%). We move into 2018 with a replenished
high-quality order book of GBP337 million (2016: GBP330
million).
London and South East
Revenue from our London and South East operations increased by
24% to GBP177.6 million (2016: GBP142.9 million), generating an
underlying profit of GBP8.5 million (2016: GBP3 million).
Underlying operating margin increased to 4.8% (2016: 2.4%). The
operating margin increase is in part due to a number of large jobs
completing in the period thereby releasing significant profits.
For 2018 the region is engaged on a number of high profile shell
& core commercial developments, all of which offer future fit
out opportunities. A number of areas continue to be regenerated and
offer large-scale mixed commercial and residential opportunities
such as the International Quarter in Stratford and Battersea Power
Station and Croydon. The development of our manufacturing facility
at Stansted and the acquisition of Eton Associates will assist in
us offering our clients a broader range of capability from within
the TClarke Group.
Central and South West
Revenue from our Central and South West operations reduced by
7.8% to GBP62.6 million (2016: GBP67.9 million). Underlying loss
was GBP1.8 million (2016: profit GBP0.9 million). The underlying
loss reflects a number of delayed starts in the South West coupled
with settlement of a number of legacy jobs. Looking forward, South
West has its budgeted turnover secured for 2018 with good quality
jobs. As a result, the region is expected to be profitable in the
current period.
In the Central area we continue to target opportunities in the
residential, retail and FM markets. We aim to build our presence in
the Birmingham and Cambridge markets, building upon recent
successful completions and activity in these areas.
North
In the North, revenue reduced by 11.7% to GBP48 million (2016:
GBP53.6 million), and underlying operating profit increased to
GBP2.4 million (2016: GBP1.8 million). The underlying operating
margin was 5% (2016: 3.4%); this increase was the result of a
particularly strong performance from the Leeds office due to a
number of educational projects and a growing small works
offering.
Looking forward, Newcastle aims to maintain its revenues with
particular focus on regional opportunities within the education
sector and a number of social housing opportunities. Leeds
continues to see opportunities from its recently developed
relationships, notably in education and other public sectors such
as prisons. In the North West we aim to build our presence in the
key Manchester area, building upon local relationships supported by
secured works at BAE, Springfield Nuclear Fuels and for Manchester
Airport Group.
Scotland
Scotland's revenue was GBP23.0 million (2016: GBP21.0 million),
and underlying operating profit was GBP0.8 million (2016: GBP0.6
million), representing an underlying operating margin of 3.5%
(2016: 2.9%). Scotland's strong performance was due to it's
collaboration on Intelligent Buildings with the London Operation.
As well as its continuing strength in the residential market,
Scotland has generated significant IT, mechanical and electrical
work streams in the commercial sector.
TClarke Scotland continues to expand, focusing on its key
sectors Residential and Technologies under the TClarke Intelligent
Buildings banner. There remains a good level of opportunity in
these sectors around the Scottish central belt and further afield
in key Scottish towns where we have a presence such as Aberdeen and
Dumfries. Whilst M&E Contacting remains a key part of the
business, we remain alert to the more competitive nature of this
sector.
Non-underlying items
Exceptional and non-underlying items comprise amortisation of
intangible assets of GBP0.2 million (2016: GBP0.2 million), Eton
acquisition costs of GBP0.2 million and a recovery of the
misappropriation of funds that occurred in 2016 of GBP1.0 million
(2016: charge of GBP2.3 million).
Finance costs
Net finance costs were GBP0.8 million (2016: GBP0.7 million),
including a GBP0.6 million (2016: GBP0.5 million) non-cash finance
charge in respect of the Group's defined benefit pension scheme.
Net interest on bank loans and overdrafts remained at GBP0.2
million (2016: GBP0.2 million), reflecting good cash performance
throughout the year.
Earnings per share
Basic earnings per share after discontinued operations increased
to 13.44p (2016: 5.45p), with basic earnings per share from
continuing operations increasing to 13.44p (2016: 6.74p).
Basic underlying earnings per share after adjusting for
amortisation of intangible assets and non-underlying costs and the
tax effect of these items, was 12.37p (2016: 11.60p).
Dividends
The Board is proposing a final dividend of 2.9p (2016: 2.7p),
with the total dividend for the year increasing by 5% to 3.5p
(2016: 3.20p). The dividend is covered 3.5 times by underlying
earnings.
The final dividend will be paid, subject to shareholder
approval, on 25th May 2018 to those shareholders on the register at
27th April 2018. The shares will go ex-dividend on 26th April 2018.
A dividend reinvestment plan (DRIP) is available to
shareholders.
Pension obligations
The triennial valuation of the pension scheme at 31st December
2015 showed a deficit of GBP14.9 million, representing a funding
level of 67% (2012 valuation: deficit GBP11.5 million, funding
level 68%).
The Group has been pursuing an agreed deficit reduction plan
over a number of years, however market factors have meant that the
deficit has not been reduced as intended and the cost of funding
current pension commitments has increased. Following agreement of
the 2015 valuation, the Group has proposed a revised deficit
reduction plan which includes making additional contributions and
continuing to provide security to the pension scheme in the form of
a charge over property assets up to a combined market value of
GBP3.1 million. From 1st January 2017 the future service
contribution increased to 21.4% of pensionable payroll (including
employee contributions) and the deficit reduction contribution has
been set at GBP1.0 million for the year ending 31st December 2017,
GBP1.25 million for the year ending 31st December 2018 and GBP1.5
million per annum thereafter. Employee contributions have increased
from 8% to 10%.
The scheme is closed to new members and the Group continues to
meet its ongoing obligations to the scheme.
In accordance with IAS 19 'Employee Benefits', an actuarial
expense of GBP2.3 million, net of tax, has been recognised in
reserves, with the pension scheme deficit increasing by GBP2.8
million to GBP23.4 million (2016: GBP20.6million).
Cash flow and funding
Net cash balances improved to GBP11.7 million at 31st December
2017 (2016: GBP9.3 million) after deducting the GBP5.0 million
(2016: GBP3.0 million) outstanding under the Group's revolving
credit facility. The balance is after the purchase of Eton
Associates (GBP1.5 million cash in 2017) and the investment in the
Stansted prefabrication facility (GBP1.0 million).
The Group retains a GBP10.0million revolving credit facility,
which is committed until 31st March 2020, and a GBP5.0 million
overdraft facility, renewable annually. Interest on overdrawn
balances is charged at 2.25% above base rate, and interest on
balances drawn down under the revolving credit facility is charged
at 2.25% above LIBOR, fixed for the duration of each drawdown
(typically three to six months). The Group was compliant with the
terms of the facilities throughout the year ended 31st December
2017 and the Board's detailed projections demonstrate that the
Group will continue to meet its obligations in the future.
The Group also has in place GBP32.5 million of bonding
facilities, of which GBP21.9 million were unutilised at 31st
December 2017.
Net assets and capital structure
The Group is funded by equity capital, retained reserves and
bank loans, and there are no plans to change this structure. The
strong underlying performance of the Group was partly offset by the
increase in the pension deficit resulting in shareholders' equity
rising by GBP2.3 million during the year to GBP16.4 million (2016:
GBP14.1 million).
Goodwill and intangible assets increased to GBP25.3 million
(2016: GBP22.8 million). This was due to the acquisition of Eton
Associates. Goodwill and intangible assets arising on previous
acquisitions represent a significant proportion of the Group's
total assets of GBP144.9 million (2016: GBP121.5 million). The
Board has undertaken a rigorous impairment review in respect of the
intangible assets at 31st December 2017 and concluded that no
impairment is necessary.
Group reorganisation
During the year we completed the implementation of the Group
reorganisation, bringing all the Group's operations together into a
single statutory entity, TClarke Contracting Limited, with a
separate statutory entity, TClarke Services Limited providing
engineering and support services to the enlarged operating company.
This reorganisation represents the culmination of a process of
rationalisation and increased consistency of organisation and
enabled the implementation of a new internal control framework and
procedures.
Accounting policies
The Group's consolidated financial statements are prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union. There have been no significant
changes to accounting policies during the year ended 31st December
2017.
Financial risk management
The Group's main financial assets are contract and other trade
receivables and cash and bank balances. These assets represent the
Group's main exposure to credit risk, which is the risk that a
counterparty will fail to discharge its obligations, resulting in
financial loss to the Group. The Group may also be exposed to
financial and reputational risk through the failure of a
subcontractor or supplier.
The financial strength of counterparties is considered prior to
signing contracts and reviewed as contracts progress where there
are indications that a counterparty may be experiencing financial
difficulty. Procedures include the use of credit agencies to check
the creditworthiness of existing and new clients and the use of
approved suppliers' lists and Group-wide framework agreements with
key suppliers.
Trevor Mitchell
Finance Director
27th March 2018
Consolidated income statement
for the year ended 31st December 2017
2017 2016
------------------------------- -------------------------------
Non- Non-
Underlying underlying Underlying underlying
items items Total items items Total
Note GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Continuing operations:
Revenue 3 311.2 - 311.2 278.6 - 278.6
Cost of sales (273.0) - (273.0) (246.2) - (246.2)
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Gross profit 38.2 - 38.2 32.4 - 32.4
Other operating income 0.1 - 0.1 0.2 - 0.2
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Administrative expenses
Amortisation of intangible assets - (0.2) (0.2) - (0.2) (0.2)
Non-underlying costs 4 - 0.8 0.8 - (2.3) (2.3)
Other administrative expenses (31.0) - (31.0) (25.7) - (25.7)
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Total administrative expenses (31.0) 0.6 (30.4) (25.7) (2.5) (28.2)
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Profit/(loss) from operations 7.3 0.6 7.9 6.9 (2.5) 4.4
Finance income - - - - - -
Finance costs (0.8) - (0.8) (0.7) - (0.7)
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Profit/(loss) before taxation 6.5 0.6 7.1 6.2 (2.5) 3.7
Taxation 5 (1.3) (0.2) (1.5) (1.3) 0.5 (0.8)
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Profit/(loss) from continuing operations 5.2 0.4 5.6 4.9 (2.0) 2.9
Loss for the year from discontinued operations - - - - (0.5) (0.5)
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Profit/(Loss) for the financial year 5.2 0.4 5.6 4.9 (2.5) 2.4
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Earnings/(loss) per share from continuing
operations:
Attributable to owners of TClarke plc
Basic 6 12.37 1.07 13.44 11.60p (4.86)p 6.74p
Diluted 6 12.13 1.04 13.17 11.20p (4.70)p 6.50p
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Earnings/(loss) per share:
Attributable to owners of TClarke plc
Basic 6 12.37 1.07 13.44 11.60p (6.15)p 5.45p
Diluted 6 12.13 1.04 13.17 11.20p (5.95)p 5.25p
---------------------------------------------- ---- ---------- ---------- ------- ---------- ---------- -------
Consolidated statement of comprehensive income
for the year ended 31st December 2017
2017 2016
GBPm GBPm
------------------------------------------------- ----- -----
Profit for the year 5.6 2.4
Other comprehensive (expense)/income:
Items that will not be reclassified to profit
or loss
-----
Actuarial (loss)/gain on defined benefit pension
scheme (2.3) (6.3)
------------------------------------------------- ----- -----
Other comprehensive (expense)/income for the
year net of tax (2.3) (6.3)
------------------------------------------------- ----- -----
Total comprehensive income/(expense) for the
year 3.3 (3.9)
------------------------------------------------- ----- -----
Consolidated statement of financial position
as at 31st December 2017 2017 2016
Note GBPm GBPm
-------------------------------------------------------- ---- ------- -------
Non-current assets
Intangible assets 2 25.3 22.8
Property, plant and equipment 4.9 3.9
Deferred tax assets 3.8 3.3
-------------------------------------------------------- ---- ------- -------
34.0 30.0
-------------------------------------------------------- ---- ------- -------
Current assets
Inventories 0.5 0.6
Amounts due from customers under construction contracts 26.4 35.9
Trade and other receivables 67.3 42.7
Cash and cash equivalents 9 16.7 12.3
-------------------------------------------------------- ---- ------- -------
110.9 91.5
-------------------------------------------------------- ---- ------- -------
Total assets 144.9 121.5
-------------------------------------------------------- ---- ------- -------
Current liabilities
Amounts due to customers under construction contracts (5.5) (2.5)
Trade and other payables (93.0) (81.0)
Current tax liabilities (1.5) (0.2)
Obligations under finance leases (0.1) (0.1)
-------------------------------------------------------- ---- ------- -------
(100.1) (83.8)
-------------------------------------------------------- ---- ------- -------
Net current assets 10.8 7.7
-------------------------------------------------------- ---- ------- -------
Non-current liabilities
Bank loans (5.0) (3.0)
Other payables - -
Retirement benefit obligations 8 (23.4) (20.6)
-------------------------------------------------------- ---- ------- -------
(28.4) (23.6)
-------------------------------------------------------- ---- ------- -------
Total liabilities (128.5) (107.4)
-------------------------------------------------------- ---- ------- -------
Net assets 16.4 14.1
-------------------------------------------------------- ---- ------- -------
Equity attributable to owners of the parent
Share capital 4.2 4.2
Share premium 3.1 3.1
ESOT reserve (0.8) (0.8)
Revaluation reserve 0.5 0.5
Retained earnings 9.4 7.1
-------------------------------------------------------- ---- ------- -------
Total equity 16.4 14.1
-------------------------------------------------------- ---- ------- -------
Consolidated statement of cash flows
for the year ended 31st December 2017 2017 2016
Note GBPm GBPm
------------------------------------------------------- ---- ----- -----
Net cash generated from operating activities 9 6.8 4.0
------------------------------------------------------- ---- ----- -----
Investing activities
Acquisition of subsidiary net of cash acquired (1.5) -
Purchase of property, plant and equipment (1.9) (0.2)
Receipts on disposal of property, plant and equipment 0.3 0.5
------------------------------------------------------- ---- ----- -----
Net cash generated from investing activities (3.1) 0.3
------------------------------------------------------- ---- ----- -----
Financing activities
Drawdown/(repayment) of bank borrowing 2.0 (2.0)
Equity dividends paid (1.4) (1.3)
Acquisition of shares by ESOT (0.2) (1.5)
Disposal of shares by ESOT 0.2 1.1
Repayment of HP and finance lease obligations 0.1 -
------------------------------------------------------- ---- ----- -----
0.7 (3.7)
------------------------------------------------------- ---- ----- -----
Net increase in cash and cash equivalents 4.4 0.6
Cash and cash equivalents at the beginning of the year 9 12.3 11.7
------------------------------------------------------- ---- ----- -----
Cash and cash equivalents at the end of the year 9 16.7 12.3
------------------------------------------------------- ---- ----- -----
Consolidated statement of changes in equity
for the year ended 31st December 2017 Attributable to owners of the parent
----------------------------------------------------------------
Share ESOT share Revaluation Retained
Share capital premium reserve reserve earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
At 1st January 2016 4.2 3.1 (0.4) 0.6 12.1 19.6
Comprehensive expense
Profit for the year - - - - 2.4 2.4
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Other comprehensive expense
Actuarial loss on retirement benefit obligation - - - - (7.3) (7.3)
Deferred income tax on actuarial loss on retirement
benefit obligation - - - - 1.4 1.4
Effect of change in tax rate - - - - (0.4) (0.4)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Total other comprehensive expense - - - - (6.3) (6.3)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Total comprehensive expense - - - - (3.9) (3.9)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Transactions with owners
Share-based payment credit - - - - 0.1 0.1
Shares acquired by ESOT - - (0.9) - - (0.9)
Shares distributed by ESOT - - 0.5 - - 0.5
Dividends paid - - - - (1.3) (1.3)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Total transactions with owners - - (0.4) - (1.2) (1.6)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Transfers - - - (0.1) 0.1 -
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
At 31st December 2016 4.2 3.1 (0.8) 0.5 7.1 14.1
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Comprehensive expense
Profit for the year - - - - 5.6 5.6
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Other comprehensive expense
Actuarial loss on retirement benefit obligation - - - - (2.7) (2.7)
Deferred income tax on actuarial loss on retirement
benefit obligation - - - - 0.5 0.5
Effect of change in tax rate - - - - - -
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Total other comprehensive expense - - - - (2.2) (2.2)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Total comprehensive income - - - - 3.4 3.4
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Transactions with owners
Share-based payment credit - - - - 0.3 0.3
Shares acquired by ESOT - - (0.2) - - (0.2)
Shares distributed by ESOT - - 0.2 - - 0.2
Dividends paid - - - - (1.4) (1.4)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Total transactions with owners - - - - (1.1) (1.1)
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Transfers - - - - - -
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
At 31st December 2017 4.2 3.1 (0.8) 0.5 9.4 16.4
---------------------------------------------------- ------------- ------- ---------- ----------- -------- -----
Notes to the preliminary financial statements
Note 1 - Basis of preparation
TClarke plc (the 'Company') is a company listed on the London
Stock Exchange and domiciled in the United Kingdom. The
consolidated preliminary financial statements (the 'financial
information') comprise the financial statements of the Company and
its subsidiaries (together the 'Group') and are prepared in
accordance with International Financial Reporting Standards
('IFRSs') as adopted by the European Union, IFRS IC Interpretations
and the Companies Act 2006 applicable to companies reporting under
IFRS and have been prepared on a going concern basis under the
historic cost convention as modified by the revaluation of land and
buildings.
During the year management reassessed the presentational
treatment of certain balance sheet items in respect of the Group's
construction contract portfolio in order to provide additional
clarity to the respective balances.
The financial information does not constitute the Company's
statutory accounts for the year ended 31(st) December 2017 or 2016
but is derived from the audited financial statements for the year
ended 31(st) December 2017. Statutory accounts for the year ended
31(st) December 2016 have been delivered to the Registrar of
Companies. Statutory accounts for the year ended 31(st) December
2017 will be delivered to the Registrar of Companies in due course
and will be available on the Company's website at
www.tclarke.co.uk. The auditors have reported on those accounts;
their reports were unqualified and did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006 in respect
of the accounts for the year ended 31(st) December 2016 or for the
year ended 31(st) December 2017.
Note 2 - Significant judgements and sources of estimation
uncertainty
In the application of the Group's accounting policies the
directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities at
the reporting date and the amounts of revenue and expenses 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.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
The estimates and assumptions that have the most significant
impact are set out below.
Revenue and margin
The recognition of revenue and profit on construction contracts
is a key source of estimation uncertainty due to the difficulty of
forecasting the final costs to be incurred on a contract in
progress and the process whereby applications are made during the
course of the contract with variations, which can be significant,
often being agreed as part of the final account negotiation. The
directors also take into account the recoverability of contract
balances and trade receivables and allowances are made for those
balances which are considered to be impaired.
Non-underlying items
Non-underlying items are items of financial performance which
the Group believes should be separately identified on the face of
the income statement to assist in understanding the underlying
financial performance achieved by the Group. The quantification,
disclosure and presentation in the financial statements of
non-underlying items requires judgement.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash generating unit giving rise to the
goodwill, including the estimation of the timing and amount of
future cash flows generated by the cash generating unit and a
suitable discount rate.
Retirement benefit obligations
The costs, assets and liabilities of the defined benefit scheme
operated by the Group are determined using methods relying on
actuarial estimates and assumptions, which are largely dependent on
factors outside the control of the Group. Details of the key
assumptions are set out in Note 9, and include the discount rate,
expected return on assets, rate of inflation and mortality rates.
The Group takes advice from independent actuaries relating to the
appropriateness of the assumptions. Changes in the assumptions used
may have a significant effect on the income statement, statement of
comprehensive income and the statement of financial position.
Note 3 - 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 four regional divisions; London and
South East, Central and South West, North, and Scotland, reporting
to the Chief Executive Officer, who is the chief operating decision
maker.
The measurement basis used to assess the performance of the
divisions is underlying profit from operations, stated before
amortisation of intangible assets and non-underlying items. All
assets and liabilities of the Group have been allocated to segments
apart from the retirement benefit obligation and tax assets and
liabilities.
All transactions between segments are undertaken on normal
commercial terms. All the Group's operations are carried out within
the United Kingdom, and there is no significant difference between
revenue based on the location of assets and revenue based on
location of customers.
Segment information about the Group's continuing operations is
presented below:
Year ended 31 December 2017
Central Unallocated
London & & South &
South East West North Scotland Eliminations Group
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Total revenue 192.3 63.1 50.8 27.3 - 333.5
Inter segment revenue (14.7) (0.5) (2.8) (4.3) - (22.3)
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Revenue from external operations 177.6 62.6 48.0 23.0 - 311.2
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Underlying profit from operations 8.5 (1.8) 2.4 0.8 (2.6) 7.3
Amortisation of intangibles - - (0.2) - - (0.2)
Non-underlying items (see note 4) 0.8 - - - - 0.8
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Profit from operations 9.3 (1.8) 2.2 0.8 (2.6) 7.9
Finance income
Finance costs - - - - (0.8) (0.8)
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Profit before tax 9.3 (1.8) 2.2 0.8 (3.4) 7.1
Taxation expense (1.5) (1.5)
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Profit for the year from continuing operations 5.6
----------------------------------------------- ---------- ------- ----- -------- ------------ ------
Year ended 31 December 2016
London & Central & Unallocated &
South East South West North Scotland Eliminations Group
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Total revenue 142.9 67.9 53.6 21.0 - 285.4
Inter segment revenue - (1.1) (3.4) (2.3) - (6.8)
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Revenue from external operations 142.9 66.8 50.2 18.7 - 278.6
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Underlying profit from operations 3.5 1.0 1.8 0.6 - 6.9
Amortisation of intangibles - - (0.2) - - (0.2)
Non-underlying items (see note 4) (2.3) - - - - (2.3)
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Profit from operations 1.2 1.0 1.6 0.6 - 4.4
Finance income - - 0.1 - (0.1) -
Finance costs (0.8) - - - 0.1 (0.7)
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Profit before tax 0.4 1.0 1.7 0.6 - 3.7
Taxation expense (0.8)
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Profit for the year from continuing operations 2.9
----------------------------------------------- ---------- ---------- ----- -------- ------------- -----
Note 4 - Non-underlying items
In the second half of the year ended 31st December 2016, the
Group uncovered financial irregularities within the accounting
function of a wholly owned subsidiary, DG Robson Mechanical
Services Limited ('DGR'). GBP2.9 million of cash was
misappropriated over a number of years, of which GBP1.9 million had
been expensed in 2016 and GBP1.0 million had been charged to the
income statement in previous years within cost of sales and
administrative expenses. The 2016 expense was separately disclosed
as a non-recurring item in the financial statements for the year
ended 31st December 2016. Results prior to and including 2015 have
not been restated as the impact cumulatively and in each year was
not considered to be material.
The Group engaged expert professional advisers to assist in the
investigation and recovery of the stolen funds. The cost of the
investigation have also been included disclosed as non-recurring
costs.
The Group reached an out-of-court settlement with a former
employee of DGR and related parties in respect of the
misappropriated funds. Under the terms of the settlement agreement,
the Company was due to receive aggregate cash payments of GBP1.4
million on or before 31st December 2017 (unless the Company agreed
to an extension of the final settlement date) in full and final
settlement of all claims by the Company and its subsidiaries
against the individual concerned and related parties. As at 31st
December 2017, the Group had received GBP1 million of the
settlement amount and was pursuing recovery of the outstanding
balance. No account has been taken of outstanding settlement
amounts in these financial statements.
The Group continues to pursue other third parties in order to
recover the balance of the misappropriated funds. It is too early
at this stage to estimate the quantum of any further recovery.
Expenses incurred in respect of the acquisition of Eton
Associates Limited during the year have been included as a
non-underlying item as acquisitions are an irregular event.
Note 5 - Taxation
2017 2016
GBPm GBPm
Current tax expense
UK corporation tax payable on profits
for the year 1,6 0.8
1,6 0.8
-------- ------
Deferred tax expense
Arising on:
Origination and reversal of temporary
differences (0.1) -
(0.1) -
-------- ------
Total income tax expense 1.5 0.8
-------- ------
Reconciliation of tax charge
Profit for the year 7.1 3.7
-------- ------
Tax at standard UK tax rate of 19.25%
(2016: 20%) 1.4 0.7
Permanently disallowable items 0.1 0.1
Taxation expense 1.5 0.8
-------- ------
Note 6 - Earnings / (loss) per share
A. Basic earnings / (loss) per share
Basic (loss) / earnings per share is calculated by dividing the
profit attributable to owners of the Company by the weighted
average number of ordinary shares in issue during the year.
2017 2016
Earnings / (loss): GBPm GBPm
Profit / (loss) attributable to owners
of the Company:
Continuing operations 5.6 2.9
Discontinued operations - (0.5)
------ ------
5.6 2.4
------ ------
Weighted average number of ordinary
shares (000s) 41,625 41,613
------- -------
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.
For the share options, a calculation is made to determine the
number of shares that could have been acquired at fair value
(determined as the average annual market share price of the
Company's shares) based on the monetary value of the subscription
rights attached to outstanding share options. The number of shares
calculated as above is compared with the number of shares that
would have been issued assuming the exercise of the share
options.
2017 2016
Earnings / (loss): GBPm GBPm
Profit / (loss) attributable to owners
of the Company:
Continuing operations 5.6 2.9
Discontinued operations - (0.5)
------- ---------
5.6 2.4
------- ---------
Weighted average number of ordinary
shares (000s) 41,625 41,613
Adjustments:
Savings Related Share Option Schemes
(000s) 201 170
Equity Incentive Plan
* Conditional share awards (000s) 649 854
* Options (000s) - 447
-------
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 42,475 43,084
------- ---------
C. Underlying earnings per share
Underlying earnings per share represents profit for the year
from continuing operations adjusted for amortisation of intangible
assets and non-underlying items and the tax effect of these items,
divided by the weighted average number of shares in issue.
Underlying earnings is the basis on which the performance of the
operating divisions of the business is measured.
Underlying earnings per share
2017 2016
GBPm GBPm
Profit from continuing operations
attributable to owners of the Company 5.6 2.9
Adjustments:
Amortisation of intangible assets 0.2 0.2
Non-underlying costs (see Note 4) (0.8) 2.3
Tax effect of adjustments 0,2 (0.5)
------- -------
Underlying profit from continuing
operations 5.2 4.9
------- -------
Weighted average number of ordinary
shares (000s) 41,625 41,613
Adjustments:
Savings Related Share Option Schemes
(000s) 201 170
Equity Incentive Plan
* Conditional share awards (000s) 649 854
* Options (000s) - 447
Weighted average number of ordinary
shares for diluted earnings per share
(000s) 42,475 43,084
------- -------
Note 7 - Dividends
2017 2016
GBPm GBPm
Final dividend of 2.90p (2016: 2.70p)
per ordinary share proposed and
paid during the year relating to
the previous year's results 1.2 1.1
Interim dividend of 0.60p (2016:
0.50p) per ordinary share paid during
the year 0.2 0.2
------ ------
1.4 1.3
------ ------
The Directors are proposing a final dividend of 2.90p (2016:
2.70p) per ordinary share totalling GBP1.2 million (2016: GBP1.1
million). Subject to approval at the Annual General Meeting, the
final dividend will be paid on 25(th) May 2018 to shareholders on
the register as at 27(th) April 2018. The shares will go
ex-dividend on 26(th) April 2018. This dividend has not been
accrued at the balance sheet date. A dividend reinvestment plan is
available to shareholders. Those shareholders who have not elected
to participate in the plan, and who would like to do so in respect
of the 2017 final payment, may do so by contacting Link Asset
Services on 0871 664 0300 (Lines are open 9.00am - 5:30pm Mon-Fri.
Calls cost 12p a minute plus network charges). The last day for
election for the final dividend reinvestment is 3(rd) May 2018 and
any requests should be made in good time ahead of that date.
Note 8 - Pension commitments
The present value of the defined benefit obligation, the related
current service cost and past service cost were measured using the
projected unit credit method. The amount included in the
consolidated statement of financial position arising from the
Group's obligations in respect of its defined benefit retirement
scheme is as follows:
2017 2016
GBPm GBPm
Present value of defined benefit
obligations 60.0 53.3
Fair values of scheme assets (36.6) (32.7)
------- -------
Deficit in scheme 23.4 20.6
------- -------
Key assumptions used:
Rate of increase in salaries 2.65% 2.60%
Rate of increase of pensions in
payment 3.10% 3.05%
Discount rate 2.60% 2.80%
Inflation assumption 3.35% 3.30%
Mortality assumptions (years): 2017 2016
Life expectancy at age 65 for current
pensioners:
Men 22.0 21.9
Women 24.4 24.2
Life expectancy at age 65 for future
pensioners (current age 45)
Men 23.3 23.1
Women 25.8 25.7
------- -------
Note 9 - Notes to the statement of cash flows
a. Reconciliation of operating profit
to net cash inflow from operating 2017 2016
activities GBPm GBPm
Profit / (loss) from operations:
Continuing operations 7.9 4.4
Discontinued operations - (0.6)
Depreciation charges 0.6 0.5
Profit on sale of property, plant
and equipment - (0.1)
Equity settled share based payment
expense / (credit) 0.3 0.1
Amortisation 0.2 0.2
Defined benefit pension scheme credit (0.5) (0.7)
------- ------
Operating cash flows before movements
in working capital 8.5 3.8
Decrease / (increase)in inventories 0.1 (0.2)
Decrease / (increase) in contract
balances 12.6 (6.6)
Increase in trade and other receivables (23.1) (6.4)
Increase in trade and other payables 9.1 14.1
------- ------
Cash generated by operations 7.2 4.7
Corporation tax paid (0.2) (0.5)
Interest paid (0.2) (0.2)
------- ------
Net cash generated by operating
activities 6.8 4.0
------- ------
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, and are analysed as follows:
2017 2016
GBPm GBPm
Cash and cash equivalents 16.7 12.3
------ ------
Note 10 - Related party transactions
The remuneration of the Directors of the Company was GBP2.0
million (2016: GBP1.8 million), including post- employment benefits
of GBP0.2 million (2016: GBP0.1 million) and termination benefits
of GBPnil (2016: GBP0.1million).
The remuneration of key management was GBP1.3 million (2016:
GBP3.6 million), including termination benefits of GBPnil (2016:
GBP0.1 million). Post-employment benefits in respect of key
management were GBP0.1 million (2016: GBP0.4 million).
Transactions between the Company and its subsidiary
undertakings, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. There were no
other related party transactions requiring disclosure in the
financial statements.
Note 11 - Annual General Meeting
The 106(th) Annual General Meeting will be held at 200
Aldersgate, St Pauls, London EC1A 4HD on Friday 18(th) May 2018 at
10.00 am.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DMGZFNVFGRZM
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