Fulcrum Utility Services Ltd Update on publication of preliminary results (6497F)
July 16 2019 - 1:00AM
UK Regulatory
TIDMFCRM
RNS Number : 6497F
Fulcrum Utility Services Ltd
16 July 2019
16 July 2019
FULCRUM UTILITY SERVICES LIMITED
("Fulcrum" or the "Group")
Update on publication of preliminary results
Fulcrum Utility Services Limited, the UK's market leading
independent multi-utility infrastructure and services provider,
announces that as part of finalising the preliminary results for
year ended 31 March 2019, the Group, following extensive
discussions with its auditors and taking into account developing
guidance on its interpretation, is changing its accounting policy
following the adoption of IFRS15: Revenue from Contracts with
Customers. This change is in relation to infrastructure assets
constructed and subsequently retained in the Group's licensed asset
owning companies (as opposed to assets constructed for third
parties).
The Group's decision three years ago to retain more assets was
in order to enhance shareholder value over time as assets grow in
value. Also, during the same period the Group has successfully
extended its customer base into the housing market. In this market,
in particular, the asset value can exceed the costs of construction
and where the value of the asset is greater than the construction
cost this element of profit is now taken directly to reserves
through Other Comprehensive Income rather than via the profit and
loss account. Further, and again only in relation to assets
retained by the Group, the value of internally adopted assets which
was previously included in turnover is now effectively included as
a reduction in cost of sales. These two accounting adjustments
represent no change in the Group's underlying financial performance
or cash generation.
As a result of the above accounting changes, the reported EBITDA
of the Group is expected to reduce and there will be a
corresponding additional increase in balance sheet reserves.
Further, turnover is expected to reduce with a similar reduction in
cost of sales. These changes remain subject to final audit but the
Board currently estimates this to be in the order of approximately
GBP1.1 million reduction in EBITDA and corresponding increase to
balance sheet reserves and GBP8.1 million reduction in turnover and
cost of sales. It is emphasised that these accounting changes only
relate to assets constructed and retained by the Group. As at 31
March 2019, the Group's five yearly independent asset revaluation
shows the value of infrastructure assets increasing by
approximately GBP9 million.
As stated above, there is no change to the Group's underlying
performance or cash resources and the Group remains committed to
paying an increased dividend for the full year in line with the
Group's previously stated dividend policy.
The Group has had to undertake significant work to determine the
above changes and is now in the final stages of audit.
All figures above are subject to final audit confirmation.
This announcement contains inside information.
Enquiries:
Fulcrum Utility Services Limited +44 (0) 3330 146
Martin Harrison, Chief Executive Officer 466
Daren Harris, Chief Financial Officer
Cenkos Securities plc (Nominated adviser and broker) +44 (0)20 7397
Max Hartley (Nomad) / Michael Johnson (Sales) 8900
Camarco (Financial PR advisers)
Ginny Pulbrook / Tom Huddart +44(0)203 757 4992
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END
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