RNS Number:5008D
Hacas Group PLC
14 May 2001
HACAS GROUP PLC
HACAS Group PLC ("HACAS")
(The leading UK social housing consultancy with offices in London, Leeds,
Glasgow, Edinburgh and Coventry)
INTERIM RESULTS FOR THE PERIOD ENDED 31 MARCH 2001
Highlights
Six months to 31 March: 2001 2000 Change
Turnover #5.76m #2.91m +98%
Profit before tax #1.16 #0.69m +67%
Earnings per share (basic) 2.88p 1.83p +57%
Dividend 0.60p 0.55p +9%
* Integration of Chapman Hendy Associates proceeding well
* Fee income from local authorities increased by 125%
* Fee income from housing associations increased by 48%
* Fee income from other clients increased by 56%
* Lead advisers to the UK's three largest housing authorities
For further information:
Julian Ashby (Chairman) 020 7609 9491
Derek Joseph (Managing Director) 020 7609 9491
Oliver Scott (Peel Hunt) 020 7418 8900
Background note:
The Market
The social housing sector is the Group's primary operating market. The sector
comprises housing associations, local authority and other public sector
housing providers together with the related government departments,
regulators, trade bodies, suppliers and funders. This sector owns over 25% of
the UK housing stock.
Government policy encourages area regeneration and substantial investment in
repairing and modernising local authority housing. This often involves the
transfer of the local authority's housing stock to a new or existing housing
association and substantial funding from the commercial loans market. It is
anticipated that some #13 billion of such funding will be required over the
next ten years. This is a key area of the Group's work.
The HACAS Group and its clients
The HACAS Group comprises three main operating companies of which HACAS
Chapman Hendy Ltd is the largest. These companies advise over 120 local
authorities including some of the largest (such as Glasgow and Birmingham).
They also advise a majority of the largest housing associations. Our 500 most
regular housing association clients hold assets ranging between #50 million
and #1.4 billion. Other clients include government departments, Housing
Corporation, Scottish Homes, National Audit Office and the Audit Commission.
The Group carries out research for government departments and regulators and
also advises financial institutions, commercial companies involved in the
social housing sector, as well as Eastern European governments. HACAS Chapman
Hendy Ltd
HACAS Chapman Hendy is the main operating company providing a wide range of
consultancy and outsourcing services to local authorities, housing
associations and other organisations operating in the social housing and key
worker housing sectors.
As a result of the merger with Chapman Hendy, the enlarged company is now
organized into the following nine consultancy teams:
* Local authority (finance, regeneration & transfers)
* Housing association finance and commercial
* Finance Director placements
* Best value and housing association (general)
* North team (full range of services from Leeds base)
* Asset management services
* Human Resources
* Information Technology
* Care
Other Group subsidiaries
HACAS Exchequer Services Ltd advises housing associations and local
authorities on funding and treasury management. Exchequer Services obtained
SFA registration in June 2000 and is active in the growing stock transfer
market and in advising on the refinancing of existing housing debt. Work is
currently being undertaken with the National Housing Federation to provide
treasury management training across the social housing sector.
HCH Scotland Ltd operates from offices in Glasgow and Edinburgh and provides a
wide range of services to Scottish housing associations, local authorities and
other clients.
The Royal Borough of Kensington and Chelsea Assured Homes PLC was established
under the Business Expansion Scheme in 1990. The Directors have taken
advantage of the strong property market to sell most of the portfolio. The
remaining properties are on assured short-hold tenancies and provide a good
return on capital.
Chairman's Statement
Results
We are pleased to report interim results that show a significant increase on
the comparable period last year and reflect the benefits of the acquisition
and integration of Chapman Hendy Associates. Turnover is up 98%, profits
before tax have increased by 67% and earnings per share by 57%.
Dividend
In the light of the good progress, the Directors have declared an interim
dividend of 0.6p per share (a 9% increase on last year) payable on 5 July to
shareholders on the register at 25 May.
Business Development
Our mainstream consultancy work for housing associations, local authorities
and government agencies has grown in each of these areas. Fee income from
local authorities increased by 125%, from housing associations by 48% and from
other clients by 56%.
We are the lead advisers to the three largest housing authorities in the UK -
Glasgow, Birmingham and Sheffield. We have also completed two substantial
research projects for the Department of the Environment, Transport & the
Regions and one for the Northern Ireland Housing Executive. This work
exemplifies our leading role within the sector.
Outlook
The second half has begun well but includes the summer period where fee
revenues are traditionally lower. We are confident of meeting our targets for
the year. The publication of the government's White Paper on housing has
confirmed the development of its housing strategies to which the company is
well placed to contribute. We are advising the three local authorities who
are furthest forward with the Government's new initiative of Arms Length
Management Companies and this confirms our leading edge role. We have also
won part of a long term contract with the Defence Housing Executive. At a
time of rapid change, the demand for our broad range of services is
increasing.
We are focussing on organic growth while we secure the full benefits of our
acquisition of Chapman Hendy Associates. At the same time, we continue to
broaden our product range and increase our penetration of adjacent consultancy
markets. From this position of strength we will continue to explore other
opportunities for sustained growth including complementary acquisitions when
appropriate.
Staffing
We are a people business and our continued success is due to the skill and
commitment of our staff. They have coped with the uncertainties and changes
resulting from the merger and generated our best ever results. We thank them
all for their contribution to the company.
Julian Ashby
Chairman
14 May 2001
Unaudited Consolidated Profit and Loss Account
for the 6 months to 31 March 2001
Six Months Year to 30
to 31 March September
2001 2000 2000
# # #
Turnover
Continuing Operations 5,763,702 2,914,707 6,380,322
Rental income 14,024 27,778 47,542
Net operating expenses -4,670,888 -2,310,846 -5,140,434
Profit/(loss) on property disposals -25,993 4,221* 5,521
Operating profit 1,080,845 635,860 1,292,951
Interest receivable 76,973 57,942 157,382
Profit on ordinary activities before
taxation
1,157,818 693,802 1,450,333
Tax on ordinary activities -342,681 -219,415 -400,568
Ordinary dividends -169,806 -140,485 -325,245
Retained Profit for the period 645,331 333,902 724,520
Investment properties
Unrealised surplus on revaluation 47,700
Realisation of valuation gains of
previous years
101,498 282,229* 369,111
Earnings per share (basic) 2.880p 1.836p* 4.007p
Earnings per share (fully diluted) 2.752p 1.737p* 3.917p
* restated to reflect comparable treatment of realised gains from revaluation
reserve
Notes:
1. The figures for the year to 30 September 2000 are extracted from
the audited accounts for the Group.
2. The figures for Turnover, Continuing Operations and Net operating
expenses include an amount of inter-group turnover. In the opinion of the
Directors of HACAS Group PLC these amounts are not material and do not affect
the operating profit shown.
3. Earnings per share are based on the following number of shares in
issue:
Issued Fully Diluted
31 March 2001 28,300,950 29,616.061
30 September 2000 28,223,450 29,413,407
31 March 2000 25,824,932 27,314,789
4. Copies of this statement are being sent to shareholders. Further
copies can be obtained from the Secretary at HACAS Group PLC, United House,
North Road, London N7 9DP.
Group Balance Sheet
Unaudited at 31 Unaudited at 31 Audited at 30
March 2001 March 2000 September 2000
# # #
Fixed assets
Investments 530,004 50,004 530,004
Tangible assets 488,325 1,001,279 886,800
Intangible assets 618,971 (756,427) 631,507
1,637,300 294,856 2,048,311
Current assets
Work in progress 1,240,166 384,992 1,004,202
Debtors 3,087,418 1,032,551 2,223,740
Cash at bank and in hand 3,759,563 4,403,039 3,333,743
8,087,147 5,820,582 6,561,685
Creditors: falling due
within one year
2,479,114 1,576,464 2,076,257
Net current assets 5,608,001 4,244,118 4,485,428
Total assets less current
liabilities
7,245,301 4,538,974 6,533,739
Provisions (10,000) (72,000) (10,000)
Totals 7,235,333 4,466,974 6,523,739
Capital and reserves
Called up share capital 2,830,095 2,582,493 2,822,345
Share premium account 1,898,544 483,453 1,840,031
Profit and loss account 2,431,472 1,207,413 1,684,643
Revaluation reserve 75,222 193,615 176,720
Shareholders' funds 7,235,333 4,466,974 6,523,739
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