Clarke(T.) PLC
12 March 2004
Preliminary Results for the year ended 31 December 2003
T. CLARKE ANNOUNCES STRONG PEFORMANCE AS ACQUISITIONS STRENGTHEN GROUP
T. Clarke plc, the electrical engineering and contracting company, has announced
its preliminary results for the year to 31 December 2003.
•Profit before amortisation of goodwill £9.54M (2002: £11.29M)
•Profit Before Tax £8.94M (2002: £10.79M)
•Turnover £143.3M (2002: £144M)
•EPS 46.8p (2002: 56p)
•Final Dividend up to 19p (2002: 18p)
•Special Dividend of 10p per share paid in September
•Total Dividend for the year 27p (2002: 25p) - Excluding Special Dividend
•Acquisition announced of Mitchell and Hewitt, based in Derby for £5.9m
•Aylward Electrical acquired in July for £3.4M
Major completions include: - Imperial College of Science, London
- Paternoster Square, St Paul's
- BBC White City, London
- BBC Mailbox, Birmingham
- Times Square, EC2
- More London, SE1
Major projects won include: - Bishop's Square, Bishopsgate, London
- Cardinal Place, Victoria
- BBC West One, London
Russell Race, Chairman commented:
' Given the difficult trading conditions during the year, especially in our core
markets of London and the South East, these results are a credit to the entire
Group. Turnover has remained robust, but as we anticipated, margins have
tightened. We are delighted that we have won an encouraging number of new
contracts, which improves our visible earnings stream into 2005 and 2006.
' We have continued to broaden the base of the business in the regions and our
acquisitions are performing well. I am delighted to announce today that we have
agreed to buy Mitchell & Hewitt, an electrical contractor based in Derby. We are
confident that this will complement our existing Midlands operations.
' Looking forward, whilst our markets remain challenging, we are confident that
the long-term prospects for our markets looks more promising. There are positive
signs of renewed activity in our core markets and this bodes well for the
Group.'
-ends-
Date: 12 March 2004
For further information contact:
T. Clarke plc City Profile Group
Pat Stanborough, Chief Executive Simon Courtenay
John Daly, Finance Director Tel: 020-7448-3244
Tel: 020-7358-5000
web: www.tclarke.co.uk
Chairman's Statement
Results for 2003
Early in the year we warned of potentially difficult trading conditions, the
main impact of which fell on our core London & South East activities during the
second half. Despite this, I am pleased to report that Group turnover decreased
by less than 1% to £ 143.3m ( 3% excluding the acquisition made during the year),
however profit before tax was down by 17% to £ 8.94m ( 20% before acquisition),
reflecting the anticipated tightening of margins.
Earnings per share fell from 56.0p to 46.8p but, given the Board's confidence in
the medium term outlook for the Group, a final dividend of 19p per share ( 2002:
18p ) is being recommended, which together with the interim payment would bring
the total for the year to 27p per share ( 2002: 25p ) excluding the special
dividend of 10p per share paid at the interim stage.
The combined effects of acquisitions ( including the GDI loan notes paid during
the year ), property purchases and in particular the fall off in volume of major
contracts in the London area, together with the special dividend, resulted in a
fall in cash balances at the year end to £ 14m ( December 2002: £22m ).
Operational Review
We anticipated at the interim stage that, despite the slowdown in new orders
being received in the Home Counties, we would achieve market expectations for
the year and that proved to be the case. In the London area, major completions
during the year included Imperial College, Paternoster Square, BBC White City,
BBC Mailbox Birmingham, Times Square and More London. Current major projects in
the Capital include The Treasury East Whitehall, Bank of America Canary Wharf
and the New London Stock Exchange.
In the longer term, recently won London contracts which will be started during
this year and carry forward to 2005 and 2006 include Bishop's Square
Bishopsgate, Cardinal Place Victoria, Romford & Havering Hospital, Hammersmith
Hospital Renal Unit, Imperial College Framework Agreement along with BBC West
One.
It is worth highlighting the success during the year of many of our regional
operations, with several of the businesses achieving outstanding results. While
the average size of regional contracts is smaller than those secured in London,
there were some notable contract wins in 2003 including Albion Tower Leeds,
Horizon West Business Park Newbury for Vodafone, HMP Prison Preston Daycare
Centre along with the completion of five stores for Waitrose Supermarkets.
There was also a significant increase in the volume of profitable smaller
contracts executed in the regions during the year.
Strategic Review
We welcomed into the Group in July the Aylward companies for a consideration of
£ 3.4m. I am pleased to announce the acquisition yesterday of Mitchell & Hewitt
Ltd. for £ 5.9m. This company, based in Derby, will complement our Midlands
activities and we welcome the directors and staff to the Clarke Group.
We will continue to consider further acquisitions where these would strengthen
our regional coverage.
Staff Development
Despite the slowdown the group has continued to keep up its numbers of
apprentices and other trainees as we acknowledge that our continued growth is
well served by a steady flow of trained and qualified new operatives. We are
also aware of the need to continue to encourage where possible the employment of
more women and members of the ethnic minorities in our workforce.
During 2003 we completed our training programme for the Construction Skills
Certification Scheme card as required by the Major Contractors Group across our
entire operations, which means that we have achieved this target about a year
ahead of the requirement. This highlights our drive for continuous improvement.
Corporate Governance
In response to the new requirements we have incorporated in our report those
disclosures that we already comply with. Special Resolution No. 1 is an
amendment to the Articles so that Executive Directors need to be re-elected
every three years to bring the articles in line with Corporate Governance
requirements and Messrs Stanborough, Fairman & DeFalco are being put up for
re-election in anticipation of the above amendment being approved.
Special Resolution No.2 will give the company the ability to entertain proxy
voting by electronic means. This will allow our Crest registered shareholders to
use proxy voting via Crest and we could consider other electronic methods of
voting for non Crest shareholders. The resolution also allows for the
communication with shareholders electronically but the company does not intend
to use this ability in the short term.
In anticipation of the requirement of the new Corporate Governance regulations
the company has commenced work on a Social Responsibility Policy and will
publish the same in due course along with its Heath & Safety and Risk Management
Policies.
Prospects
We continue to experience very different trading conditions across various parts
of the Group. Whilst the regional operations are in general enjoying
satisfactory levels of demand, London and Home Counties are still patchy, with
many large contracts taken to planning only to be still awaiting final approval.
Additionally, margin pressure continues unabated throughout the country and
particularly so on the larger, long-term contracts.
Overall, we anticipate that turnover for the year may approach last year's
level, but the achievement of profits in line with 2003 depends very much on the
timing of the upswing of demand in the London commercial market. The outlook for
2005 and beyond looks particularly bright, given the positive signs of renewed
demand for commercial properties in the City and West End.
I would like to take this opportunity to thank all the staff including my
executive colleagues for the hard work that they have put in during a difficult
year and commend them on the results that they have achieved in demanding
circumstances. In particular I would like to pay tribute to John Nixon who
retired on grounds of ill health last year and was a loyal servant to the T
Clarke Group for over forty years and also to wish Barry Buchanan a happy
retirement following his decision to take early retirement after just less than
forty years service with T Clarke.
11 March 2004
R.J.Race
Chairman
Group profit and loss account
For the year ended 31st December 2003
2003 2002
Continuing £ £
Acquisitions Operations Total Total
Turnover 3,867,421 139,397,875 143,265,296 143,990,323
Cost of 2,942,722 119,746,613 122,689,335 122,505,302
sales
________________________________________________________________________________
Gross Profit 924,699 19,651,262 20,575,961 21,485,021
Administrative 748,430 11,542,575 12,291,005 11,303,387
expenses
________________________________________________________________________________
Operating 176,269 8,108,687 8,284,956 10,181,634
profit
________________________________________________________________________________
Interest 655,569 614,806
receivable
(net)
________________________________________________________________________________
Profit on
ordinary 8,940,525 10,796,440
activities
before
taxation
Taxation on
profit on 2,941,000 3,612,818
ordinary
activities
________________________________________________________________________________
Profit on
ordinary 5,999,525 7,183,622
activities
after taxation
Dividends 4,743,007 3,204,745
________________________________________________________________________________
Profit for the
financial 1,256,518 3,978,877
year
________________________________________________________________________________
Earnings per 46.8 pence 56.04 pence
share
________________________________________________________________________________
In 2002 and 2003 the group had no recognised gains or losses other than the
result for the financial year.
Group balance sheet
At 31st December 2003
2003 2002
£ £
Fixed assets
Goodwill 5,653,644 4,158,645
Tangible assets 4,685,182 3,297,857
________________________________________________________________________________
10,338,826 7,456,502
________________________________________________________________________________
Deferred taxation 39,984 25,461
________________________________________________________________________________
Current assets
Work in progress 4,617,142 4,594,849
Debtors 14,737,627 15,598,865
Cash at bank and in hand 17,064,594 24,930,060
________________________________________________________________________________
36,419,363 45,123,774
Creditors, amounts falling due within one (28,452,194) (35,601,036)
year
________________________________________________________________________________
Net current assets 7,967,169 9,522,738
________________________________________________________________________________
Total assets less current liabilities 18,345,979 17,004,701
Creditors, amounts falling due after more (97,808) (13,048)
than one year
________________________________________________________________________________
18,248,171 16,991,653
________________________________________________________________________________
Capital and reserves
Called up equity share capital 1,281,898 1,281,898
Share premium 1,046,602 1,046,602
Revaluation reserve 35,971 37,303
Profit and loss account 15,883,700 14,625,850
________________________________________________________________________________
Equity Shareholders' funds 18,248,171 16,991,653
________________________________________________________________________________
These financial statements were approved by the board on 11th March 2004
P.E. STANBOROUGH Director
R.J. RACE Director
Group cash flow statement
For the year ended 31st December 2003
2003 2002
£ £ £ £
Net cash 4,740,693 18,760,375
inflow from
operating
activities
Returns on
investments
and servicing
of finance
Interest 714,152 611,279
received
Interest (58,583) (96,473)
paid
________________________________________________________________________________
Net cash
inflow from 655,569 614,806
returns on
investments
and servicing
of finance
Taxation
UK corporation (3,386,319) (3,464,994)
tax paid
Capital
expenditure
and financial
investment
Purchase of (1,508,006) (892,594)
tangible fixed
assets
Sale of 41,567 89,555
tangible fixed
assets
________________________________________________________________________________
Net cash
outflow from (1,466,439) (803,039)
capital
expenditure
and
financial
investment
Acquisitions
and
disposals
Purchase of (3,287,931) (2,668,592)
subsidiaries
Net cash 234,688 1,178,615
acquired with
subsidiaries
________________________________________________________________________________
(3,053,243) (1,489,977)
Equity (4,614,832) (2,820,176)
dividends paid
________________________________________________________________________________
Cash inflow 7,124,569 10,796,995
before use of
liquid
resources
Management of
liquid
resources
Cash placed on (13,500,000) (22,802,492)
short term
deposits
Cash received 22,802,492 15,000,000
from short
term deposits
________________________________________________________________________________
Net cash
inflow / 9,302,492 (7,802,492)
outflow from
management of
liquid
resources
________________________________________________________________________________
Increase/
(decrease) in 2,177,923 (2,994,503)
cash in the
year before
financing
Financing
Finance lease (15,848) - (8,739)
payments
Repayment of (1,109,897) (1,478,500)
loan notes
________________________________________________________________________________
(1,125,745) (1,478,239)
________________________________________________________________________________
Increase in 1,052,178 1,507,264
cash in the
year
________________________________________________________________________________
Notes :-
1. The earnings per share represents the profit for the year on ordinary
activities after taxation divided by the number of ordinary shares in issue.
The numbers of ordinary shares, being a weighted average, for the purpose of
this calculation, is 12,818,980 (2002: 12,818,980).
2. The figures for the year ended 31 December 2003 have been extracted from
the full audited accounts for the year, which have not yet been delivered to
the Registrar of Companies. The figures have been prepared and compiled in
accordance with applicable accounting standards under the historical cost
convention. The comparative figures for the year ended 31 December 2002 have
been taken from, but do not constitute, the group's statutory accounts for
the year. Those statutory accounts have been reported on by the group's
auditors and will be delivered to the Registrar of Companies. The report of
the auditors was unqualified and did not contain a statement under section
237 (2) or (3) of the Companies Act 1985.
3. Copies of the annual report and accounts will be posted to shareholders
shortly. Further copies can be obtained from the Company's registered
office; Stanhope House, 116-118 Walworth Road, London, SE17 1JY.
4. The Company's Annual General Meeting will be held in the Bishops Room,
Simpsons, The Strand, London WC2 on Friday 7 May 2004 at 12:00 noon.
5. Subject to the approval of shareholders the final dividend of 19 pence per
share will be paid on 10 May 2004. The shares will go ex-dividend on 14
April 2004. The records will close on 16 April 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
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