26th Apr 2016 08:38
LONDON (Alliance News) - Sweett Group PLC said Tuesday its pretax profit in its recent financial year fell due to one-off property costs, legal fees and costs associated with refinancing its banking facilities, but said it has "good visibility" over the coming year.
The construction consultancy group said pretax profit for the year ended March 31, excluding exceptional expenses, was down at around GBP2.2 million from GBP2.9 million a year earlier, after it was hit by GBP300,000 in one-off property costs, GBP200,000 in legal costs coming from a historical arbitration claim in Ireland, and GBP300,000 of costs associated with the refinancing of its banking facilities.
However, Sweett said it expects to post revenue 6.6% higher than the previous year at GBP54.9 million from GBP51.5 million.
Sweett said it has reorganised the business into five regions during the financial year: London & the South East, England & Wales, Scotland & Ireland, Mainland Europe and North America. Sweett said this has "significantly improved accountability and re-energised the business".
Sweett noted, however, it will pay GBP851,152 in confiscation fees in May, in line with its announcement in February, in relation to offences under UK bribery laws committed by a former employee in the Middle East and ruled on by Southwark Crown Court. Following the Serious Fraud Office investigation, Sweett will also pay a fine of GBP1.4 million on top of this, 50% of which is to be paid in February 2017, and the remaining sum to be paid by February 2018.
The company also closed down its Middle East business and exited the region during the financial year, having sold its Asia Pacific and India businesses to Currie & Brown. That disposal remain subject to a dispute, with Currie & Brown seeking a GBP1.7 million adjustment to the GBP9.3 million purchase price.
This GBP1.0 million cost of closing the Middle East business, combined with the SFO fees and fines, means that the group's results for the recent financial year will include an exceptional charge of around GBP5.1 million, Sweett said, up from a charge of GBP1.7 million a year earlier and suggesting Sweett will report a pretax loss after the exceptional charge.
Sweett said its order book was GBP50.4 million at year-end, slightly down from the GBP52.1 million it recorded last year, but it said this "affords the group good visibility over the coming year".
"We have made very significant progress during the year to meet our key strategic objectives, which will inevitably lead to improved cash flows and provide us with a platform to grow profits sustainably," said Chief Executive Douglas McCormick.
Shares in Sweett were down 9.5% on Tuesday to 17.20 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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