30th Mar 2006 07:01
North Midland Construction PLC30 March 2006 NORTH MIDLAND CONSTRUCTION PLC 2005 PRELIMINARY RESULTS North Midland Construction PLC ("the Company") the UK provider of civilengineering, building, mechanical and electrical services to public and privateorganisations, announces preliminary results for the year ended 31 December2005. Highlights from the results and the Chairman's Statement:- Year ended Year ended 31 December 2005 31 December 2004 £'000 £'000 Revenue 153,123 106,417 Profit before Tax 3,945 3,278 Profit for the Year 2,751 2,285 Earnings per Share 25.12p 21.98p Dividends 7.0p 6.0p - Another record year in terms of Revenue and Profitability - North Midland Building has achieved excellent results - All areas of the business profitable - Excellent workload being carried forward into the New Year - Proposed final dividend of 5.0p (2004 : 4.0p) For further information:- Robert Moyle, ChairmanNorth Midland Construction PLC - 01623 518812 Mike Garratt, Finance DirectorNorth Midland Construction PLC - 01623 518816 CHAIRMAN'S STATEMENT It is extremely gratifying to report another year of organic growth with bothGroup profits before tax and revenue reaching record levels of £3.9m and £153.1mrespectively. All elements of the Group traded profitably and the return of thebuilding subsidiary to former levels of profitability was particularlysatisfying. To enable shareholders to further understand the particular natureof the individual Group constituents a further breakdown of the performance isnow provided. The Civil Engineering division is the largest element within the parent companyand has been sub-divided into four operating divisions namely water, power, railand industrial. Overall revenue escalated to £54m and profitability exceededbudget. The highlight of the year was the successful procurement of bothexisting and new contracts from the water companies' AMP4 bidding process andthis, coupled with the successful expansion of the other business divisions,will provide a fundamental base revenue for the next four years. Expansion intothe waste sector has been particularly successful and the completion of a £6mproject at Bidston in Liverpool is testament to this. Highways proved to be a difficult market during the last year with adebilitating drop in revenue during the summer, due to a lack of tenderingopportunities. This adversely affected profitability, which was reduced from theprevious year. On a positive note, the Highways Agency has extended the AmScottconsortium's, of which the division is a member, Area 7 contract until 2008. The Utilities division continues to prosper with new term contracts beingsecured with Easynet and GEO (a subsidiary of Hutchinson Whampoa).Unfortunately, cutbacks by BT on the two contracts in the East Midlands and EastAnglia reduced revenue, which in turn reduced profitability in comparison to theprevious year. Cabling operations have been increased and a full turn-keycontract has recently been secured with BT for the MOD. 2004 had severed an unbroken period of year-on-year growth for North MidlandBuilding Limited and it is particularly pleasing to report that lessons werelearnt in 2005 and that the subsidiary has bounced back to deliver a record yearboth in terms of revenue up to £32m and profitability. Both the scale ofprojects being undertaken and the range of clients have been increased.Currently, the largest ever individual contract is being constructed, valued at£27m, for student accommodation in Lincoln. The first phase was successfullydelivered to both time and budget during the year. North Midland Building entersthe new year with a record order book and the portents for future growth arevery favourable. Nomenca Limited delivered a comparable profit to 2004, on a revenue increased by30% to £26m. The company was particularly successful in the AMP4 procurementprocess and new contracts have been obtained with both Wessex Water and AnglianWater, whilst existing clients in the water sector have been maintained.However, the AMP4 programme started slowly and this contributed to thedeterioration in margin. As with the Civil Engineering division, the watersector, with the AMP4 contracts now secured, will provide a fundamental platformof workload to expand upon. Increasingly, work is being won from outside thewater sector and this provides a better balance of business for the company. The mantra of the Group is to deliver quality projects on time, to budget, usingpremium health and safety and environmental practices. To achieve that missiondemands a particular quality of workforce. North Midland Construction PLC andits subsidiaries is somewhat of an anachronism in the current day constructionindustry, in that delivery is provided using fundamentally its own directlyemployed workforce. The training and development of that resource, therefore,becomes of paramount importance. A record number of training days per employeehas been provided during the past year and most gratifyingly, the return hasbeen an improved performance in quality, health & safety and environmentaldelivery. Clients find the model attractive to their needs and the Group's "churn" rate for employees is far below the national average. It is themaintenance, further education and expansion of this core of loyal, well trainedand committed people that will ensure the organic growth desired. The last year has witnessed the share price of your Company, rising tounprecedented levels and your Board feels that this is a fair reflection of thetrue value of your Company and its future prospects. Demanding targets have beenset for the current year for both revenue and profits. The current securedworkload stands at £120m and this provides your Board with great confidence forthe year ahead. This confidence, allied with the desire to maintain anacceptable yield, permits your Board to recommend an increase in the finaldividend of 1.0p, making a total of 7.0p for the year. Robert Moyle Chairman Consolidated Income Statement for the Year Ended 31 December 2005 Year ended Year ended 31 December 2005 31 December 2004 (As Restated) £'000 £'000Revenue 153,123 106,417Operating Profit 4,087 3,341Finance Costs (142) (63)Profit before Tax 3,945 3,278Tax (1,194) (993)Profit for the Year 2,751 2,285 Attributed to: Minority Interest 289 131Equity Holders of the Parent 2,462 2,154Earnings per share 25.12p 21.98p Amount of actual final dividend onordinary shares proposed to theShareholders on the register at the closeof business on 21 April 2006, which willbe paid on 24 May 2006. 5.00p 4.00p The calculation of earnings per share is based on 9,800,000 shares (2004 :9,800,000) being the number of shares in issue throughout the period and on aprofit of £2,462,000 (2004 : £2,154,000). Consolidated Balance Sheet as at 31 December 2005 2005 2004 (As Restated) £'000 £'000ASSETS Non-current AssetsProperty, Plant and Equipment 5,992 5,100Goodwill 106 106 6,098 5,206Current AssetsInventories 870 959Construction Contracts 6,461 6,321Trade and Other Receivables 33,306 23,936Cash and Cash Equivalents 6,870 4,151 47,507 35,367 TOTAL ASSETS 53,605 40,573 EQUITY AND LIABILITIES Equity Attributable to Equity Holders ofthe Parent Share Capital 980 980Capital Redemption Reserve 20 20Retained Earnings 13,486 11,612 14,486 12,612 Minority Interest 603 387 Total Equity 15,089 12,999 Non-currently LiabilitiesObligations Under Finance Leases - Due after One Year 1,018 659Provisions 384 197 1,402 856Current LiabilitiesTrade and Other Payables 35,345 25,173Current Tax Payable 808 817Obligations Under Finance Lease - Due within One Year 961 728 37,114 26,718 Total Liabilities 38,516 27,574 TOTAL EQUITY AND LIABILITIES 53,605 40,573 Consolidated Statement of Changes in Equity for the Year Ended 31 December 2005 Total Attributable to Minority Total Equity Holders of the Parent Interest Equity £'000 £'000 £'000Balance at 31 December 2003- As Originally Stated 10,654 449 11,103- Changes in Accounting Policy Relating to First-time Application of IFRS 343 - 343- As Restated 10,997 449 11,446 Changes in Equity for 2004Purchase of shares in subsidiary - (193) (193)Profit for the Year 2,154 131 2,285Total Recognised Income andExpense for the Year 2,154 131 2,285Dividends (539) - (539)Balance at 31 December 2004 12,612 387 12,999 Changes in Equity for 2005Profit for the Year 2,462 289 2,751Total Recognised Income and Expense for 2,462 289 2,751the YearDividends (588) (73) (661)Balance at 31 December 2005 14,486 603 15,089 The total attributable to equity holders of the parent is the aggregate of sharecapital, capital redemption reserve and retained earnings. Share capital of£980,000 and capital redemption reserve of £20,000 have not changed during thetwo years ended 31 December 2005. Consolidated Cash Flow for the Year Ended 31 December 2005 2005 2004 (As restated) £'000 £'000Cash Flows from Operating ActivitiesOperating Profit 4,087 3,341 Adjustments for:Depreciation of Property, Plant & 1,253 1,075Equipment (102) (110)(Gain) on Disposal of Property, Plant &Equipment 187 8Increase in Reinstatement Reserve Operating Cash Flows before Movement inWorking Capital 5,425 4,314Decrease/(Increase) in Inventories 89 (37)(Increase) in Construction Contracts (140) (3,842)(Increase) in Receivables (9,370) (803)Increase in Payables 10,172 5,169 Cash Generated from Operations 6,176 4,801Tax Paid (1,202) (1,088)Interest Paid (142) (63) Net Cash from Operating Activities 4,832 3,650 Cash Flows from Investing ActivitiesPurchase of Property, Plant & Equipment (650) (1,144)Proceeds on disposal of Property, Plant & 133 223Equipment - (213)Purchase of Shares in SubsidiaryNet Cash (used in) Investing Activities (517) (1,134) Cash Flows from Financing ActivitiesEquity Dividends Paid (588) (539)Dividends Paid to Minority Interests (73) (86)Repayment of Obligations Under Finance (935) (556)Leases Net cash (used in) Financing Activities (1,596) (1,181)Net Increase in Cash and Cash Equivalents 2,719 1,335Cash and Cash Equivalents at 1 January 2005 4,151 2,816Cash and Cash Equivalents at 31 December 2005 6,870 4,151 The accounts have been prepared in accordance with International FinancialReporting Standards (IFRSs) and are presented in sterling. The only significanteffect is that proposed equity dividends are not recognised under IFRSs but wereunder "UK GAAP". The abridged financial information presented is based on the full accounts ofthe Group for the year ended 31December 2005, on which the auditors have givenan unqualified report. The accounts have yet to be filed with the Registrar of Companies. The Annual report and Accounts for the year ended 31December 2005 will bedespatched to the Shareholders on 28 April 2006. The Annual General meeting will be held on 24 May 2006 at 12 noon. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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