TIDMSSV
RNS Number : 2250L
Siteserv PLC
28 July 2011
Siteserv plc
Preliminary Results Announcement for Year Ended 30 April
2011
Dublin, 28 July 2011: Siteserv plc ("Siteserv" or the "Group"),
a leading support services group, announces its preliminary results
for the year ended 30 April 2011. (ESM: STV; AIM: SSV)
30 April
Results Summary 30 April 2011 2010
------------------------------------- -------------- -----------
EUR151.4
Revenue EUR168.5m m
EBITDA EUR15.5m EUR16.6 m
Operating Profit Before Exceptional
Items EUR8.3m EUR8.3 m
Profit Before Tax and Exceptional
Items EUR0.1m EUR0.7 m
Exceptional Items - (EUR2.0 m)
Profit / (Loss) After Tax
and Exceptional Items EUR0.2m (EUR0.7 m)
Net Debt EUR144.5m EUR145.1
m
Adjusted Fully Diluted EPS* 0.6 cent 1.3 cent
------------------------------------- -------------- -----------
*Excludes amortisation of intangible assets, notional interest
on deferred consideration and exceptional items.
Financial Highlights
v Revenue growth of 11% to EUR168.5m as the Group continues to
secure new contracts in Ireland and the UK
v Significant contract wins and renewals which are expected to
deliver EUR80m of revenue over three years
v Operating profit of EUR8.3m in line with management's
expectations
v Strong pipeline of long-term revenue - at 30 April 2011 the
Group had visibility of over EUR250m up to FY 2014
v Since the year end, Siteserv has put in place new banking
facilities to provide the Group with additional working capital to
support growth opportunities
v These new facilities, together with amendments to Siteserv's
existing banking agreement, provide the Group with increased
financial flexibility, reduced debt servicing costs and improved
cash flow generation to fund additional growth
Strategic & Operating Highlights
v Consistent with its focus on delivering organic growth and
diversifying revenue by sector and geography, Siteserv secured a
number of significant contract wins and contract renewals.
v Irish Support Services Division awarded All Ireland BSkyB
Residential contract (value c. EUR60m over c. 3 years)
v UK Industrial Services Division awarded a new contract by
Growhow at their Ince manufacturing facility in the UK (value c.
EUR7m over 3 years) and also awarded a number of contract
renewals:
o Two year renewal to contract with Centrica on 2 power stations
and Humber Refinery (value c. EUR2.5m over 2 years)
o Two year renewal to contract with ExxonMobil on Fife Ethylene
Plant (value c. EUR7m over 2 years)
v UK Industrial Services Division to enter the Irish market
having signed a letter of intent for a three year contract with PSE
Kinsale-Energy Limited on the Kinsale Head offshore gas field
(approx value c. EUR1.5m over 3 years)
v Irish Support Services Division secured a water rehabilitation
/ metering contract in Dublin (value c. EUR1m)
v EventServ awarded contracts for state visits to Ireland of
Queen Elizabeth II and President Barack Obama (value c.
EUR0.6m)
New Banking Facilities to Support Continuing Growth and Cashflow
Generation
On 27 July 2011, the Group put in place new banking facilities
of up to EUR10 million, with Anglo Irish Bank, to provide the Group
with increased financial flexibility and to fund continuing organic
growth. The key features of these facilities are:
v Additional EUR5m working capital facility
v New ancillary facility of up to EUR5m for bonds and letters of
credit
v Facility expires on 31 December 2012
In addition to the EUR5m working capital facility, the EUR5m
ancillary facility will enable the Group to compete for support
services contracts which require letters of credit / bonds as a
pre-condition to contract award.
As part of this new banking agreement, the Group has also
re-negotiated its existing facilities through to December 2012.
This will result in interest savings of c. EUR2.5m in FY 2012 and
up to c. EUR2.9m in FY 2013.
There will be no capital repayments during the term. Reduced
debt servicing costs will improve cash flow generation to fund
additional growth.
Siteserv Chief Executive, Brian Harvey commented:
"In difficult market conditions, Siteserv is pleased to report
revenue growth of 11% to EUR168.5m for the year ended 30 April
2011. All of this growth is organic and is consistent with our
objective to diversify our revenue by geography and sector. The UK
business performed particularly well in the year, delivering
revenue and EBITDA growth of 21% and 48% respectively. This helped
to offset lower contributions from the two Irish Divisions where
performance was impacted by substantial cuts in Irish Government
and local authority spending.
We are particularly pleased that the Group's Support Services
business secured an exclusive outsourcing contract with BSkyB
Residential to be its sole provider for installation and
maintenance services in the 32 counties of Ireland and Northern
Ireland worth an estimated EUR60 million over approximately three
years. This award follows the two year contract win with UPC during
the year for the installation of VoIP, cable TV and broadband in
North Dublin, worth an estimated EUR6m and a contract to provide
Water Rehabilitation / Metering in Dublin. The Group's Support
Services business will perform maintenance services in
approximately 50,000 homes per month across the island further
strengthening its position as the leading support services provider
on the island of Ireland.
In the UK, the Industrial Services Division was awarded a new
contract by Growhow at their Ince manufacturing facility. In
addition, it was successful in renewing its contracts with Centrica
and ExxonMobil and wining a further contract with Vivergo on the BP
plant in Saltend as reported at the time of our first half
results.
In the current year the UK Industrial Services Division will
enter the Irish market having signed a letter of intent to provide
access services to PSE Kinsale-Energy for the Kinsale Head offshore
gas field. This follows the expansion of three of our Irish based
businesses into the UK last year.
Siteserv's diverse range of services and increasing long-term
contractual revenue streams will continue to play a key role in
offsetting the impact of economic volatility on the Group's
performance. Our objective is to continue to diversify our revenue
by geography and sector and generate free cash flow to drive
organic growth. Our new banking facilities will provide additional
flexibility and working capital to support our growth objectives
and will enhance the Group's cashflow generation capability".
FY 2012 Full Year Outlook
The Group's performance in the year-to-date is ahead of the
prior year. The Group currently expects year-on-year growth in
EBITDA for FY 2012, although the level of growth is difficult to
quantify in the current economic environment. The reduction in
interest cost, as a result of the Group's new banking agreement,
will enhance pre tax profits.
The Infrastructure & Utilities Support Services Division
continues to be affected by the substantial cuts in Irish
Government and local authority spending but will benefit from the
All Ireland BSkyB Residential contract and the recently announced
UPC contract in FY 2012.
The UK business,which accounts for 57% of Group Revenue, will
benefit from the Industrial Services contract wins and renewals
outlined above. The Group's Hire & Sales business, which
recorded considerable growth in FY 2011, has had a positive start
to FY 2012, however, its full year performance may be impacted by
the continuing volatility of the economic recovery in the UK. The
performance of the UK business should also benefit in FY 2012 from
the closure of three loss making depots in the Contract Scaffolding
Division in the final quarter of FY 2011.
The outlook for the Access Division in Ireland remains
difficult. This business will remain focused on continuing cost
reduction, operational efficiencies and the sale of surplus
stock.
Siteserv plc will continue to focus on business where revenues
are underpinned by essential maintenance programmes and
non-discretionary spending. We aim to build predictable revenue
streams of multi-year contracts with blue chip partners and will
focus on delivering organic growth and on diversifying revenue
geographically.
Note regarding forward-looking statements:
This announcement includes forward-looking statements, including
statements concerning expectations about future financial
performance, economic and market conditions, etc. These statements
are neither promises nor guarantees, but are subject to risks and
uncertainties that could cause actual results to differ materially
from those anticipated.
For further information, please visit www.siteserv.ie
Siteserv plc FD KCapital Source
------------------------------- ----------------------
Brian Harvey, Chief Executive Jonathan Neilan
Niall Devereux, Group Finance Mark Kenny
Director Tel: +353 1 663 3686
Tel: +353 1 601 1550
------------------------------- ----------------------
Davy Corporate Finance
-----------------------
Des Carville
Nicholas O'Gorman
Tel: +353 1 679 6363
-----------------------
Results Overview
UK Division
2011 2010
EURm EURm
------------------ ----- -----
Revenue 95.9 79.2
EBITDA 8.6 5.8
Operating profit 4.8 1.7
------------------ ----- -----
The UK Division comprised 57% of Group revenue and 55% of Group
EBITDA.
The Industrial Services business which accounted for
approximately 57% of UK revenue (and 32% of Group revenue)
continues to provide Siteserv with long-term revenue and earnings
visibility as its non-discretionary maintenance services remained
in demand with its blue chip petrochemical, nuclear and power
generation customer base. The Division reported a strong set of
results with both revenues and margins improving on the prior year.
The Division was awarded a two year renewal to the Centrica
contract (value c. EUR2.5m over 2 years) and a two year renewal to
the contract with ExxonMobil on Fife Ethylene Plant (value c. EUR7m
over 2 years). In addition, the Division will enter the Irish
market having signed a letter of intent for a three year contract
with PSE Kinsale-Energy on the Kinsale Head offshore gas field
(value c. EUR1.5m over 3 years).
The growth in the Hire & Sales business experienced in the
first half of the year continued through the second half with the
Division reporting a 32% increase in revenue for the full year.
Given the proportion of fixed costs in this Division, much of the
benefit of this growth contributed to the increase in the UK
operating profit.
The Contract Scaffolding Division continued to trade in
difficult conditions and a decision was taken in the final quarter
of the financial year to close three loss making branches. The
performance of this Division will continue to be monitored on an
on-going basis.
Positive movements in the value of sterling against the euro
since the beginning of the financial year increased revenue and
EBITDA by EUR3.7m and EUR0.3m respectively.
Infrastructure & Utilities Support Services Division
2011 2010
EURm EURm
------------------ ----- -----
Revenue 62.2 62.8
EBITDA 8.8 13.5
Operating profit 6.7 11.4
------------------ ----- -----
The Infrastructure & Utilities Support Services Division
comprised 37% of Group revenue and 57% of Group EBITDA.
The impact of reduced Government and local authority spending in
Ireland continues to adversely affect these businesses,
particularly in road, infrastructural and civils projects. However,
the Division benefitted from the Bord Gais home energy services
contract, which commenced in April 2010 and the UPC residential
contract which commenced in September 2010. The EUR2m M74 noise
barrier contract in Scotland, which was announced last July, was
largely completed in the financial year.
The BSkyB Residential All Ireland contract commenced in the
Republic of Ireland in May 2011, so it had no impact on the year to
30 April 2011. The Northern Ireland rollout is expected to go live
in October 2011 and similarly its contribution to revenue and
profits will positively impact the FY 2012 results.
Access Division
2011 2010
EURm EURm
---------------- ------ ------
Revenue 10.4 9.4
EBITDA 0.2 (0.7)
Operating loss (0.6) (2.1)
---------------- ------ ------
The Access Division comprised 6% of Group revenue and 1% of
Group EBITDA in the year.
The Division remained EBITDA positive during the year but
continued to operate in a very challenging economic environment.
The focus for the business remains on managing its costs base,
maintaining the market leadership positions of its brands and
converting any excess stock into cash.
Exceptional Items
2011 2010
EURm EURm
---------- ----- ------
Bank fee - (2.0)
---------- ----- ------
The exceptional charge of EUR2m in the prior year arose on the
renegotiation of the Group's banking facilities. This fee will
become payable in future years in the event that certain financial
targets are exceeded or if there is a refinance event.
Banking and Subsequent Events
The Group traded within its banking covenants during the year.
Subsequent to the year end, as outlined above the Group put in
place new banking facilities of up to EUR10 million and also
re-negotiated its existing banking facilities which will result in
interest savings of c. EUR2.5m in FY 2012 and c. EUR2.9m in FY
2013.
Cash Flow and Net Debt Position
Operating cash flow for the year decreased by EUR6.9m. Working
capital absorbed EUR2.0m in cash compared to a release of EUR4.9m
in the prior year, as the Group moves from a period of contraction
to one of double-digit revenue growth.
As previously guided, net capital expenditure increased from its
low base of EUR4.0m in the prior year to EUR7.6m in the year to
April 2011 to fund growth - primarily in the UK Industrial Services
and Hire & Sales Divisions.
Net debt at year end was EUR144.5m. The Group had a closing cash
balance of EUR5.5m at year end.
Consolidated Income Statement
for the year ended 30 April 2011
2011 2010
EUR'000 EUR'000
Revenue 168,460 151,378
-------------------------------------- -------- --------
Trading Profit 8,778 8,861
Intangible asset amortisation (517) (518)
Operating Profit 8,261 8,343
Finance costs (8,130) (9,692)
-------- --------
Profit / ( Loss) Before Taxation 131 (1,349)
Income tax credit 87 634
-------- --------
Profit / (Loss) After Taxation and
Attributable to Equity Shareholders 218 (715)
-------------------------------------- -------- --------
Earnings Per Ordinary Share
Basic earnings per ordinary share 0.2 c (1.0) c
Fully diluted earnings per ordinary
share 0.2 c (1.0) c
Consolidated Balance Sheet
as at 30 April 2011 2011 2010
EUR'000 EUR'000
Non-Current Assets
Intangible assets 96,863 97,819
Property, plant and equipment 47,807 47,606
Financial asset investments 200 -
--------- ---------
144,870 145,425
--------- ---------
Current Assets
Inventories 13,343 8,241
Trade and other receivables 29,801 28,377
Cash and cash equivalents 5,512 5,862
48,656 42,480
--------- ---------
Total Assets 193,526 187,905
--------- ---------
Current Liabilities
Trade and other payables 31,041 22,318
Provisions for liabilities and charges 990 2,436
Current tax liabilities 75 8
Deferred consideration 813 1,125
Interest bearing loans and borrowings 2,284 1,502
35,203 27,389
--------- ---------
Non-Current Liabilities
Provisions for liabilities and charges 3,761 4,318
Interest bearing loans and borrowings 147,764 149,452
Deferred tax liabilities 340 202
151,865 153,972
--------- ---------
Total Liabilities 187,068 181,361
--------- ---------
Net Assets 6,458 6,544
--------- ---------
Capital and Reserves
Share capital 202 202
Share premium account 28,520 28,520
Share based payment reserve 1,003 866
Retained earnings (14,865) (15,083)
Foreign currency translation reserve (8,402) (7,961)
--------- ---------
Shareholders' Equity 6,458 6,544
--------- ---------
Consolidated Cash Flow Statement
for the year 30 April 2011 2011 2010
EUR'000 EUR'000
Cashflows From Operating Activities
Profit / (loss) before taxation 131 (1,349)
Gain on retranslation of loans - (883)
Depreciation of property, plant and
equipment 6,587 7,574
Amortisation of share based payments
and intangibles 654 666
Interest received (23) (21)
Interest expenses 8,153 9,827
Release of notional interest on deferred
consideration - (114)
Profit on disposal of property, plant
and equipment (134) (278)
-------- --------
Operating Cashflow Before Movement
in Working Capital 15,368 15,422
-------- --------
Movement in inventories (5,368) 5,586
Movement in trade and other receivables (1,975) 5,339
Movement in trade and other payables 5,328 (6,065)
-------- --------
Cash Generated From Operations 13,353 20,282
Income tax repaid / (paid) 284 (213)
Net Cash From Operating Activities 13,637 20,069
Financing Costs
Interest received 23 21
Interest paid (6,244) (7,826)
-------- --------
(6,221) (7,805)
Investing Activities
Capital expenditure (7,564) (3,986)
Investment in associate (200) -
-------- --------
(7,764) (3,986)
Financing Activities
Other loans (443) (424)
Net finance lease payments (877) (1,293)
Net bank loan drawdowns / ( repayments) 1,631 (2,933)
Deferred consideration paid (313) (2,425)
-------- --------
Net Cash Used In Financing Activities (2) (7,075)
Net (decrease) / increase in cash
and cash equivalents (350) 1,203
Cash and cash equivalents at beginning
of year 5,862 4,659
-------- --------
Cash and Cash Equivalents at End
of Year 5,512 5,862
-------- --------
Consolidated Statement of Comprehensive Income
for the year ended 30 April 2011
2011 2010
EUR'000 EUR'000
Items of Expense Recognised Directly in Equity
Currency translation adjustments (441) (695)
-------- --------
Net Expense Recognised Directly in Equity (441) (695)
Profit / (loss) for the year 218 (715)
Total Expense Recognised for the Year (223) (1,410)
-------- --------
Consolidated Statement of Changes in Equity
for the year ended 30 April 2011
2011 2010
EUR'000 EUR'000
At beginning of year 6,544 7,606
Profit / (loss) for the year 218 (715)
Issue of shares - 3
Share premium arising on issue of shares - 197
Share based payment reserve 137 148
Foreign currency translation reserve (441) (695)
At end of year 6,458 6,544
-------- --------
Segmental Analysis
for the year ended 30 April 2011
Revenue Operating Profit
2011 2010 2011 2010
EUR'000 EUR'000 EUR'000 EUR'000
Infrastructure & Utilities 62,234 62,848 6,724 11,413
UK 95,899 79,177 4,841 1,745
Access 10,327 9,353 (648) (2,142)
Head Office - - (2,656) (2,673)
-------- -------- --------- --------
Total 168,460 151,378 8,261 8,343
-------- -------- --------- --------
Finance costs (8,130) (7,692)
--------- --------
Profit Before Taxation & Before
Exceptional Items 131 651
--------- --------
Earnings Per Ordinary Share
for the year ended 30 April 2011
2011 2010
EUR'000 EUR'000
Earnings
Profit / (loss) after tax attributable
to ordinary shareholders 218 (715)
Release of notional interest on deferred
consideration - (114)
Amortisation of intangibles 517 518
Exceptional items - 2,000
------------ ------------
Adjusted profit after taxation and exceptional
items attributable to ordinary shareholders 735 1,689
------------ ------------
Number of Shares
Weighted average number of ordinary shares
in issue during the year 126,392,041 125,118,888
Dilutive effect of outstanding share options - 200,000
------------ ------------
Diluted weighted average number of ordinary
shares 126,392,041 125,318,888
------------ ------------
Earnings Per Ordinary Share
Basic earnings per ordinary share 0.2 cent (1.0) cent
Fully diluted earnings per ordinary share 0.2 cent (1.0) cent
Adjusted Earnings Per Ordinary Share
Adjusted basic earnings per ordinary share 0.6 cent 1.3 cent
Adjusted fully diluted earnings per ordinary 0.6 cent 1.3 cent
share
Appendix
Siteserv is a leading support services group operating from
approximately 50 strategic locations in the UK and Ireland.
The Group has three Divisions:
1) UK Division
The UK Division, Deborah Services, accounted for 57% of revenue
in FY 2011. Deborah has three operating units:
a) Industrial Services business (57% of UK revenue) which
provides multi-discipline essential support services such as
insulation, asbestos removal, protective coating & industrial
painting to the petrochemical, power, oil, gas, nuclear and
pharmaceutical industries; (typically, contracts are for a five to
seven year duration);
b) Contract Scaffolding business supplies and erects scaffolding
systems for the industrial sector, Government departments and local
authorities;
c) Hire & Sales business sells and hires scaffolding,
fencing and access equipment to private contractors and national
hire and sale companies.
2) Infrastructure & Utility Support Services Division
This Division accounted for 37% of Group revenue in FY 2011 and
comprises:
a) Holgate Infrastructure & Motorway Services, a market
leader in the supply, design and installation of motorway crash
barriers and noise barriers for the civil engineering sector;
b) Sierra Support Services, which provides satellite
installation and maintenance services, home energy services, power
network maintenance, cable installation and civil engineering
services. Its customers include local authorities, utility and
satellite companies;
c) RoanKabin, which is a leading manufacturer of modular
off-site portable accommodation for the education and healthcare
sectors.
3) Access Division
The Access Division accounted for 6% of revenue in FY 2011 and
comprises:
a) Siteserv Access & Formwork, provides equipment and
services to the civil engineering, commercial building and
construction sectors;
b) Eventserv, which specialises in providing staging, seating,
temporary fencing, crowd control barriers and rigging to the event
sector.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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