1st May 2014 10:04
LONDON (Alliance News) - RPS Group PLC Thursday said it continued to grow "well" in the early part of 2014, supported by acquisitions made in 2013, adding that cash conversion in the first part of the year was ahead of budget.
In a statement, the consultancy said growth was "significantly affected" on consolidation as a result of the increase strength of sterling, but said it remains focused on delivering a satisfactory result for the year. Net bank debt at the end of March was GBP35.3 million, compared with GBP32.4 million at the end of 2013.
"The group has sufficient resources to maintain the usual rate of growth in the dividend, as well as continuing the group's acquisition strategy," RPS said in a statement, adding that interest costs have been modest as expected.
RPS advises on the development of natural resources, land and property, the management of the natural and built environments and the health and safety.
In energy, RPS said it has continued to benefit from "good levels" of demand from oil and gas companies in "many parts of the world," as well as from the financial services sector. It said the acquisitions of PEICE, Knowledge Reservoir, Ichron and OEC, which were made in 2013, are integrating well.
RPS said it expects demand for its services from the oil and gas sector to expand given "the need for energy supply set to grow significantly in the long term."
RPS said its built and natural environment business performed well in Europe, while remaining "well-positioned" in North America's expanding energy infrastructure market.
"Overall, our European business retains the potential to achieve growth this year. Further acquisition opportunities, which would enable us to take advantage of improving markets, are also being evaluated," RPS said.
"The strengthening of the US economy, the investment in shale oil and gas, and the exposure of the Canadian economy to natural resources provides us with a significant market opportunity. However, in this buoyant market, staff retention and recruitment has become exceptionally difficult, limiting our immediate potential," RPS said.
"The acquisition of HMA Land Services in September 2013, now reported in this segment, gives us access to the substantial pipeline development market. We have a good opportunity to develop this business and further acquisitions are under active consideration in both the US and Canada," RPS said.
RPS said its mining and energy clients in the Australia-Asia Pacific region remain focused more on operational efficiency and capital management than new project development. Projects have continued to be delayed, though in small numbers than last year, as a result, RPS said, noting that the trend has to a degree been offset by "increased optimism and investment" in private and public sector development projects, particularly in and around Sydney and Melbourne.
"As expected, trading in the first quarter was at a lower level than last year and we continued to reduce our cost base in order to sustain efficiency. The rebalancing of the economy continues positively but, as indicated previously, is going to take some time. In the meantime prospects in this business inevitably remain difficult to predict," RPS said.
RPS shares were Thursday quoted at 295.93 pence, up 0.5%.
By Samuel Agini; [email protected]; @samuelagini
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