Become a Member

Track your favourite stocks
Create & monitor portfolios
Daily portfolio value

Company	Chg	Chg %
Quickpicks
£	%
Add shares to your quickpicks to display them here!

Interim Results

18th Aug 2016 07:00

RNS Number : 4861H

North Midland Construction PLC

18 August 2016

NORTH MIDLAND CONSTRUCTION PLC

UNAUDITED CONDENSED GROUP HALF YEARLY FINANCIAL STATEMENTS

North Midland Construction PLC (the "Company"), the UK provider of civil engineering, building, mechanical and electrical services to public and private organisations, announces interim results for the six months ended 30 June 2016.

Highlights:-

	Six Months Ended	Six Months Ended
	30 June 2016	30 June 2015
	£'000	£'000

Revenue	129,580	107,249

Profit Before Tax	512	136


Total Comprehensive Income	476	136

Earnings per Share	4.69p	1.34p

Proposed Dividends	1.5p	Nil

o Revenue increased by 20.8% compared with H1 2015.

o Profit before tax increased to £0.512 million (H1 FY15: £0.136 million).

o Significant £1.559 million loss in Utilities division (H1 FY15: loss of £0.829 million).

o Current cash of £2.878 million (H1 FY15: bank borrowings of £1.512 million).

o The Directors propose a dividend of 1.5p per share (H1 FY15: £Nil)

For further information:-

Robert Moyle, Chairman

John Homer, Chief Executive

Daniel Taylor, Group Finance Director

01623 518812

North Midland Construction PLC

CHAIRMAN'S STATEMENT

It is heartening to report that the return to profitability on increased revenues reported at the Annual General Meeting has been maintained. A half-year profit before tax of £0.51 million (H1 FY15 £0.14 million) was delivered on revenues increased by 20.8% to £129.58 million (H1 FY15 £107.25 million).

The civil engineering division, which operates predominantly in the power sector, returned to profitability as the problematical legacy contracts have now been resolved. The profit for the period was £0.13 million (H1 FY15 £0.24 million loss) on revenues increased by 301.7% to £13.83 million (H1 FY15 £3.44 million). The division has expanded its capabilities into the waste to energy market and this sector offers promising future growth opportunities. Recent contract awards include a Crop Digester in Nottingham and a pumping station for the Doncaster Drainage Board.

The building division has had an excellent half-year. Profitability increased by 73.4% to £0.25 million (H1 FY15 £0.14 million) on revenues increased by 96.6% to £11.59 million (H1 FY15 £5.90 million). Secured workload for the remainder of the current year is circa £11 million and the division will enter 2017 with a healthy workload.

The highways division enhanced profitability by 31.9% to £0.22 million (H1 FY15 £0.17 million) on revenues increased by 6.6% to £20.04 million (H1 FY15 £18.79 million). The recent successful expansion of operations into the South West has been consolidated upon and the secured workload for the remainder of the year is circa £13 million.

Significant losses have continued in the utilities division and the division is currently undergoing a major restructure. Losses increased to £1.56 million (H1 FY15 £0.83 million loss) on revenues increased by 16.8% to £15.47 million (H1 FY15 £13.24 million). £0.36 million of these losses emanated from the cessation of old legacy contracts. As aforementioned, the major restructure currently being undertaken will be completed in the immediate future. However, it is anticipated that this will not produce a return to profitability before the end of this financial year, although the losses in the second half will be of a significantly reduced scale.

The AMP6 programme for Severn Trent Water and the joint venture projects with Laing O'Rourke for the construction of a reservoir at Ambergate and with Barhale for works on the Elan Valley Aqueduct are now well underway. Consequently NMCNomenca has managed to increase profitability by 91.7% to £1.38 million (H1 FY15 £0.72 million) on revenues that escalated by 18.2% to £49.59 million (H1 FY15 £41.97 million). An order for the Newark Sewer Strategy has recently been received by the BNM Alliance (Joint Venture between NMCNomenca and Barhale) for £54.60 million. Secured workload to date for the remainder of the year stands at £39.4 million.

The Nomenca subsidiary has suffered from orders being delayed during the water industry transition from the AMP5 to the AMP6 programme, despite increasing the number of frameworks secured. Consequently revenues declined by 20.3% to £19.06 million (H1 FY15 £23.91 million), and profitability by 7.0% to £0.21 million (H1 FY15 £0.23 million). Recent order levels have improved and the secured workload for construction for the remainder of the year is £25.28 million.

There was a significant improvement in the half-year bank position compared with the previous year. Current cash at the 30 June 2016 was £2.88 million (H1 FY15 £1.51 million bank borrowings). The level of Performance Bonds was virtually unchanged at £6.52 million (H1 FY15 £6.44 million). Significant outstanding cash, most particularly in the major outstanding problematical legacy building contract, for which resolution still has to be achieved, continues to be withheld.

With the exception of the utilities division, the Group has delivered a well earned return to profitability. The Board is confident that this progress can be maintained and therefore propose a dividend of 1.5p per share. The dividend will be paid on 23 September 2016 to shareholders on the register at 26 August 2016.

Robert Moyle

Chairman

North Midland Construction PLC

18 August 2016

UNAUDITED CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME

The unaudited condensed Group results for the half year ended 30 June 2016 are shown below together with the unaudited Group results for the half year ended 30 June 2015 and the audited Group results for the year ended 31 December 2015.

	Six Months Ended 30 June		Year Ended
	2016	2015	31 December 2015
	£'000	£'000	£'000
Revenue	129,580	107,249	217,612
Other operating income	219	75	162
	129,799	107,324	217,774
Raw material and consumables	(22,007)	(15,900)	(36,094)
Other external charges	(75,286)	(61,251)	(121,439)
Employee costs	(28,403)	(26,814)	(53,350)
Depreciation of property, plant & equipment	(1,186)	(929)	(1,961)
Other operating charges	(2,294)	(2,242)	(4,083)
Operating profit	623	188	847
Interest received	-	-	-
Finance costs	(111)	(52)	(241)
Profit before tax	512	136	606
Tax (Note 4)	(36)	-	645
Profit for the period	476	136	1,251
Other comprehensive income	-	-	-
Total comprehensive income for the period	476	136	1,251
Attributed to:-
Equity holders of the parent	476	136	1,251
	476	136	1,251
Earnings per share basic and diluted (Note 3)	4.69p	1.34p	12.32p
Dividend per share (Note 5)	1.5p	NIL	NIL

UNAUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

			Capital
	Share	Merger	Redemption	Retained
	Capital	Reserve	Reserve	Earnings	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2015	1,015	455	20	7,476	8,966
Profit and total comprehensive income for the period	-	-	-	136	136
Dividends paid	-	-	-	-	-
Balance at 30 June 2015	1,015	455	20	7,612	9,102
Profit and total comprehensive income for the period	-	-	-	1,115	1,115
Dividends paid	-	-	-	-	-
Balance at 31 December 2015	1,015	455	20	8,727	10,217
Profit and total comprehensive income for the period	-	-	-	476	476
Dividends paid	-	-	-	-	-
Balance at 30 June 2016	1,015	455	20	9,203	10,693

UNAUDITED CONDENSED GROUP BALANCE SHEET

The unaudited condensed Group Balance Sheets as at 30 June 2016 and 30 June 2015 are shown below together with the audited Group Balance Sheet as at 31 December 2015.

		30 June		31 December
		2016	2015		2015
		£'000	£'000		£'000
Assets

Non-Current Assets
	Property, plant and equipment	13,011	12,655		12,781
	Deferred tax asset	705	82		705
		13,716	12,737		13,486
Current Assets
	Inventories	1,964	1,697		2,335
	Construction contracts	15,801	16,162		17,537
	Trade and other receivables	39,433	34,614		31,395
	Current income tax receivable	-	-		21
	Cash and cash equivalents	2,878	-		6,621
		60,076	52,473		57,909

Total Assets		73,792	65,210		71,395

Equity & Liabilities

Capital & Reserves attributable to equity holders of the Parent
	Share capital	1,015	1,015		1.015
	Merger reserve	455	455		455
	Capital redemption reserve	20	20		20
	Retained earnings	9,203	7,612		8,728
Total Equity		10,693	9,102		10,218

Liabilities

Non-current Liabilities
	Obligation under finance leases - due after one year	2,004	2,396		2,263
	Provisions	394	344		361
		2,398	2,740		2,624
Current Liabilities
	Trade & other payables	58,626	50,269		56,588
	Current income tax payable	54	-		-
	Obligations under finance leases - due within one year	2,021	1,587		1,965
	Current bank borrowings	-	1,512		-
		60,701	53,368		58,553

Total Liabilities		63,099	56,108		61,177

Total Equity & Liabilities		73,792	65,210		71,395

UNAUDITED CONDENSED GROUP STATEMENT OF CASH FLOWS

The unaudited condensed Group statement of cash flows for the periods ended 30 June 2016 and 30 June 2015 are shown below together with the audited Group statement of cash flows for the year ended 31 December 2015.

	Six Months Ended 30 June		Year Ended
	2016	2015	31 December 2015
	£'000	£'000	£'000
Cash flows from operating activities
Operating profit	623	188	847
Adjustments for:
Depreciation of property, plant and equipment	1,185	929	1,964
Gain on disposal of property, plant and equipment	(215)	(74)	(131)
Increase in provisions	33	15	32

Operating cash flows before movements in
working capital	1,626	1,058	2,712

Decrease/(increase) in inventories	371	25	(613)
Decrease/(increase) in construction contracts	1,736	(3,324)	(4,699)
(Increase)/decrease in receivables	(8,039)	(1,340)	1,880
Increase/(decrease) in payables	2,040	(1,183)	5,122

Cash (used in)/generated from operations	(2,266)	(4,764)	4,402

Income Tax received	21	13	25
Interest received	-	-	-
Interest paid	(111)	(53)	(241)
Net cash (used in)/generated from operating activities	(2,356)	(4,804)	4,186

Cash flows from investing activities
Purchase of property, plant and equipment	(477)	(1,093)	(1,034)
Proceeds on disposal of property, plant and equipment	353	90	180
Net cash used in financing activities	(124)	(1,003)	(854)

Cash flows from financing activities
Repayments of obligations under finance leases	(1,263)	(981)	(1,988)

Net cash used in financing activities	(1,263)	(981)	(1,988)

Net (decrease)/increase in cash and cash equivalents	(3,743)	(6,788)	1,344
Cash and cash equivalents at 1 January 2016	6,621	5,276	5,276
Cash/(current borrowings) and cash equivalents at 30 June 2016	2,878	(1,512)	6,620

1.	Basis of preparation
	The unaudited condensed consolidated half-yearly financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, and have been prepared on the basis of International Financial Reporting Standards (IFRS's) as adopted by the European Union that are effective for the full year ending 31 December 2015. They do not include all of the information required for full annual financial statements. These condensed consolidated half-yearly financial statements have not been subject to audit or review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 by the company's auditor, do not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006, and should be read in conjunction with the Annual Report 2015. The comparative figures for the year ended 31 December 2015 are not the Group's statutory accounts for that financial year. Those accounts have been reported upon by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain statements under Section 435 and 498 (2) or (3) respectively of the Companies Act 2006.

	The Board regularly reviews financial statements, cash balances and forecasts and the Directors confirm that they consider the Group has adequate resources to continue to operate for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the condensed half yearly financial statements.

	The accounting policies adopted in the preparation of the condensed consolidated half-yearly financial statements to 30 June 2016 are consistent with the policies applied by the Group in its consolidated financial statements as at, and for the year ended 31 December 2015. The Group has considered amendments to existing standards and interpretations that are effective for the year ending 31 December 2016 and is of the view that they have no impact on the half-yearly accounts.

	The preparation of consolidated half-yearly financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

	In preparing these condensed half-yearly financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2015.

	The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2015.

2.	Segment reporting
	Business segments The Group is comprised of the following business segments:- - 'PLC' - comprising building, civil engineering, highways, utilities and NMCNomenca divisions - Nomenca - mechanical and electrical engineering products and services Segment revenue and profit

	Six Months Ended 30 June 2016
	Building	Civil Engineering	Highways	Utilities	NMCNomenca	Nomenca	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue
External sales	11,593	13,827	20,038	15,469	49,591	19,062	129,580

Result before
corporate expenses	910	640	821	(852)	3,120	2,203	6,842

Corporate expenses	(662)	(513)	(603)	(707)	(1,743)	(1,991)	(6,219)

Operating profit/(loss)	248	127	218	(1,559)	1,377	212	623
Net finance costs							(111)
Profit before tax							512
Tax							(36)
Total comprehensive income for the period							476

	Six Months Ended 30 June 2015
	Building	Civil Engineering	Highways	Utilities	NMCNomenca		Nomenca			Total
	£'000	£'000	£'000	£'000	£'000		£'000			£'000
Revenue
External sales	5,897	3,442	18,790	13,244	41,971		23,905			107,249

Result before
corporate expenses	569	90	821	(207)	2,049		2,204			5,526

Corporate expenses	(426)	(328)	(655)	(622)	(1,331)		(1,976)			(5,338)

Operating profit/(loss)	143	(238)	166	(829)	718		228			188
Net finance costs										(52)
Profit before tax										136
Tax										-
Total comprehensive income for the period										136

Segment assets
						30 June
						2016		2015

						£'000		£'000
Building						11,464		12,441
Civil Engineering						6,703		4,577
Highways						15,048		7,279
Utilities						17,081		17,629
NMCNomenca						10,145		7,130
Nomenca						13,351		16,154
Total segment assets and consolidated total assets						73,792		65,210

For the purpose of monitoring segment performance and allocating resources between segments, the Group's Chief Executive monitors the tangible and financial assets attributable to each segment. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments.

Other segment information
				Depreciation and		Additions to
				amortisation		non-current assets
				30 June		30 June
				2016	2015	2016			2015
				£'000	£'000	£'000			£'000
Building				124	66	163			174
Civil Engineering				148	38	194			102
Highways				215	210	281			555
Utilities				166	148	217			391
NMCNomenca				532	467	696			1,237
Nomenca				-	-	-			-
				1,185	929	1,551			2,459

There were no impairment losses recognised in respect of property, plant and equipment.

All of the above relates to continuing operations and arose in the United Kingdom.

Information about major customer
Revenues of approximately £55,483,000 (2015: £39,105,000) were derived from a single external customer. These revenues are attributable to the Civil Engineering, NMCNomenca, and Nomenca segments.

3.	Earnings per share
	The basic and diluted earnings per share are the same and have been calculated on profits of £476,000 (2015: profits of £136,000) and a weighted average number of shares in issue of 10,150,000 (2015: 10,150,000).

4.	Taxation
	In respect of the six months ended 30 June 2016, the corporation tax effective rate was 20% (2015: 21.5%). A corporation tax provision has been included in relation to the taxable profits of Nomenca Limited. No provision has been made for the six months ended 30 June 2016 for any other Group taxable profits due to the bought forward tax losses within the group.

5.	Dividends
	Amounts recognised as distributions to equity holders in the half year:-
				Six Months to June
				2016	2015
				£'000	£'000
	Final dividend for the year ended 31 December 2015 of £Nil (2014: £Nil) per share.			-	-

	The Directors propose an interim dividend of 1.5p (2015: £Nil) per share.

6.	Related parties
	The Group's related parties are key management personnel who are the executive directors, non-executive directors and divisional managers.

7.	Contingent liabilities
	Lloyds Bank PLC, Aviva Insurance Limited and HCC International Insurance Co. Ltd have given Performance Bonds to a value of £6,521,000 (2015 : £6,437,000) on the Group's behalf. These bonds have been made with recourse to the Group.

8.	Seasonality
	The Group's activities are not subject to significant seasonal variations.

9.	Principal risks and uncertainties
	The Board consider the principal risks and uncertainties relating to the Group for the next six months to be the same as detailed in the last Annual Report and Accounts to 31 December 2015.

10.	Responsibility Statement of the Directors in respect of the half-yearly financial report
	We confirm that to the best of our knowledge:

	·	the condensed set of financial statements, which has been prepared in accordance with IAS 34 and the ASB's 2007 statement of Half Year Reports, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;

	·	the interim management report includes a fair review of the information required by:

		(a)	DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

		(b)	DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

R Moyle
Chairman
J Homer Chief Executive
D A Taylor
Finance Director

18 August 2016

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR DDLFFQVFBBBL

Related Shares:

FTSE 100 Latest

Value8,275.66

Change0.00