30th Jun 2015 07:52
LONDON (Alliance News) - Construction and building consultancy Sweett Group PLC saw its shares fall heavily on Tuesday morning as it scrapped its dividend after swinging to a loss in its 2015 financial year, hit by goodwill charges and a decline in revenue.
Sweett said it swung to a pretax loss of GBP1.1 million in the year to the end of March, compared to a GBP2.8 million profit a year earlier, due primarily to a GBP2.4 million goodwill impairment charge it booked related to a probe by the UK's Serious Fraud Office into the conduct of a former employee of its Cyril Sweet International Ltd subsidiary in the Middle East.
The charge exacerbated the effect of lower revenue for the company, slipping to GBP88.3 million from GBP89.4 million, though the group said its core UK business has performed well. Middle East and Asia Pacific revenue both fell in the year, however, though it said its European business performed well.
The loss meant the company scrapped its dividend payout, saying it is focusing on reducing its debt obligations. Sweett shares were down 16% to 21.00 pence on the news, one of the worst performers in the AIM All-Share.
Sweett is still in the process of selling off its Asia-Pacific business, a decision announced in April following a review of the business undertaken by Chairman John Dodds and Chief Executive Douglas McCormick.
"The strategic review, which completed in April 2015, concluded that we have solid UK and European businesses which generate cash, with positive working capital dynamics, strong market positions and these geographies will be central to our growth going forward. The sale of our APAC and Indian businesses is progressing well. Once the sale has completed, the board intends to invest further in the UK and European businesses and explore emerging opportunities in the USA and Canada," McCormick said.
"Trading in the UK and Europe, the central pillars to our ongoing strategy is positive and we continue to build on our strong position with a number of high profile contracts recently won. I would like to thank our highly talented team and I very much look forward to working with them as we continue to grow the business with a focus on profitability, cash generation and margins," McCormick added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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