15th Sep 2008 07:00
|
For Immediate Release |
15 September 2008 |
WHITE YOUNG GREEN PLC
Preliminary results for the year ended 30 June 2008
White Young Green Plc, consultant to the built, natural and social environment, announces its preliminary results for the year ended 30 June 2008.
Highlights:
Commenting on the results, Chairman Peter Wood said:
"It gives me great pleasure to report another excellent year for White Young Green marked by strong double digit organic growth across primary skill groups and geographies. The strategic focus on international diversification, energy and the environment and transport and infrastructure is already generating significant opportunities and will provide a sound basis for continued progress. * adjusted business performance excludes the amortisation of acquired intangibles and research and development tax credits relating to prior years.
For further information, please contact:
Lawrie Haynes, Chief Executive
Bob Hartley, Finance Director
WHITE YOUNG GREEN PLC Tel: 0113 278 7111
Tim Anderson / Rebecca Skye Dietrich
BUCHANAN COMMUNICATIONS Tel: 020 7466 5000
CHAIRMAN'S STATEMENT
INTRODUCTION
It gives me great pleasure to report another excellent year for White Young Green ("WYG") marked by strong double digit organic growth across primary skill groups and geographies. This organic growth was augmented by the contribution from three strategically important acquisitions and has placed the Group in a positive position to deliver continued growth in the future.
FINANCIAL PERFORMANCE
In the year to June 2008 gross revenue increased by 28% to £282.1m (2007: £220.6m) of which £22.4m came from acquisitions completed in the course of the year. Revenue attributable to third parties, on which the Group does not make a margin, increased to £50.0m (2007: £44.1m). As a result net revenue, which reflects the value of work done by WYG staff, increased by 32% to £232.1m (2007: £176.5m).
Operating profit before the amortisation of acquired intangibles increased by 35% to £26.4m (2007: £19.6m). This increase included a contribution from acquisitions of £3.7m. Operating profit after amortisation of intangibles increased by 31% to £22.2m (2007: £16.9m). Operating margin on net revenue was increased to 11.4% (2007: 11.1%) and the organic growth generated by the business in the year was 14%.
Earnings per share, adjusted to exclude amortisation of intangibles and the one-off reduction in the charge to taxation due to the benefit of prior year research and development tax credits, increased by 29% to 31.6p (2007: 24.5p). Earnings per share has now more than doubled over the past five years. Basic earnings per share increased by 35% to 28.4p (2007: 21.0p).
Cash flow from trading improved significantly in the year. Cash generated from operations increased to £31.0m (2007: £11.4m) and represents 117% (2007: 58%) of operating profit. The focus on working capital management led to a further improvement in working capital days in the UK and Ireland which fell to 100 days (2007: 103 days) and an improvement in overall working capital days for the Group which fell to 96 days (2007: 99 days).
Net debt at the year end was £68.2m (2007: £44.6m) with the increase resulting from cash payments of £29.5m in respect of initial and additional consideration on acquisitions. The Group has banking facilities of £112m, which are secured until 2012. Interest was covered 5.2 times (2007: 6.2 times) by operating profit before amortisation of acquired intangibles.
Future prospects continue to be positive. The order book now stands at a record £400m (2007: £380m) of which 51% is represented by long term framework agreements extending beyond 2012. Approximately, 66% of the net revenue target for 2009 has been secured together with 36% of the targeted revenue for 2010. This puts the Group in a strong position to continue to deliver consistent growth.
DIVIDEND
In view of the financial performance and prospects of the Group, it is proposed that the final dividend is increased by 17% to 6.3p (2007: 5.4p) resulting in a total dividend for the year of 9.5p (2007: 8.3p), an annual increase of 14%. The dividend is covered 3.3 times (2007: 3.0 times) by adjusted earnings per share and 3.0 times (2007: 2.5 times) by basic earnings per share. The final dividend will be paid on 16 December 2008 to shareholders on the register at 3 October 2008.
STRATEGY
During the year the Group has developed and refined its Corporate Development Plan. The focus for growth in the future will be on three areas of activity: international diversification, energy and the environment and transport and infrastructure. Of these areas, international diversification is seen as the primary objective at the present time. This has been achieved in Poland and in Turkey which now offer a range of services which complement the core socio-economic consultancy and further international opportunities are currently being explored.
The opportunity to develop by acquisition continues to be attractive and key areas and disciplines have been identified for future acquisitive growth. It is the combination of acquisitive and organic growth which will underpin the ongoing development of the business together with the commitment to continue to deliver a high quality, client focused service.
Significant work has been undertaken in the year to improve the internal organisation of the Group, streamlining operating activities, improving systems and devolving responsibility within a measured framework. Progress is already being made in areas such as work winning, service delivery, working capital management and staff turnover. It is expected that this improvement will facilitate the achievement of the targeted level of organic growth for the business of in excess of 10% per annum.
ACQUISITIONS
WYG completed three acquisitions in the first half of the financial year for an initial consideration of £34.4m. The combined revenue of these acquisitions on an annualised basis was £22.4m.
The businesses acquired were Savell, Bird and Axon, which is a leading provider of high level transportation consultancy, Management Consultants Group, which provides financial management consultancy to governments and public bodies in the international arena and P H McCarthy, a leading provider of engineering services in Ireland specialising in the infrastructure sector.
Each of these acquisitions has been made in accordance with WYG's overall strategic aims. All have integrated well into the Group and are delivering results in line with expectations.
Acquisitions continue to be funded by a mixture of shares and cash. Typically, the payment is split between initial and additional consideration. Any additional consideration, which will be linked to the achievement of agreed performance targets, is paid in shares or cash at the discretion of WYG. In the last financial year all additional consideration has been paid in cash.
BOARD
In January 2008 Richard McCaffrey resigned as Chief Operating Officer of the company. I thank him for his valued contribution in developing the scale and reach of the business over the past seven years.
On 1 July 2008 Paul Hamer joined WYG as Chief Operating Officer. I am delighted to welcome Paul to the Group. He has held senior positions in the contracting, oil, chemical and petrochemical industries and brings over 20 years experience in business management, leadership and project delivery to WYG.
EMPLOYEES
The success of WYG is totally due to the engagement and commitment of over 3,400 staff around the world. On behalf of the Board I thank all staff for their hard work and effort over the past year.
The Group is determined to attract, develop and retain professional staff at all levels. The results of the recent WYG Staff Survey were encouraging with over 91% of staff enjoying the work they do and over three quarters of staff saying they would recommend WYG to a friend as a good place to work. In the year the "Putting People First" improvement initiative has seen increased investment in Human Resource support, an improved graduate development programme, the introduction of the "Learning Academy" to develop internal learning, the establishment of a new competency framework for structured career development and improved all round communication. The overall result is a business with a common set of values and aspirations which are clearly understood by all staff.
PROSPECTIVE OFFER
On 20 June 2008, the Group announced that it had received an unsolicited approach that may or may not have led to an offer being made for the entire issued share capital of the company. On 13 August 2008, it was confirmed that discussions had ceased and the Group was no longer in talks regarding a possible takeover.
Whilst the approach was initially unsettling for employees, I would like to thank them all for their efforts in continuing to provide an excellent professional service to all clients. It is estimated that the one-off professional costs associated with the approach will be in the region of £300,000.
OUTLOOK
Although a number of the economic indicators in the UK and Ireland remain uncertain, the outlook for WYG continues to be favourable.
The Group has a broad client base spanning both the public and private sectors. It has a resilient flexible workforce which can be directed at those market sectors generating the best opportunities and experiencing the most positive growth. Initiatives are underway to streamline and improve operations in key areas such as business development, working capital management and cost control. In addition, the strategic focus on international diversification, energy and the environment and transport and infrastructure is already generating significant opportunities and the Board believes the combination of all these factors will provide a sound basis for continued progress.
BUSINESS REVIEW
OPERATING PERFORMANCE
The operating performance in the year to June 2008 was very good with growth being generated across all business segments and geographies.
Gross revenue increased by 28% to £282.1m (2007: £220.6m) of which 14% was organic. This revenue growth was generated from both the public and private sectors of the economy. Public sector revenue grew by 34% in the year compared to growth of 28% in the private sector. The balance of work performed by the Group is now split 46% (2007: 45%) public sector and 54% (2007: 55%) private sector.
This movement between public and private sectors shows the resilience of the WYG business model where resource can be readily moved to take full advantage of any changes in demand in the economy. There has been a downturn in demand in some private sector markets such as commercial and residential development. This comprised 23% of WYG revenue in the year. However, WYG offers a variety of services into these sectors ranging from town planning, transport planning, environmental impact assessment through to design services and general project management and the Group has seen a continued demand for these services in spite of the downturn in the market.
The trading performance can be split by market sector as follows:
|
2008 |
2007 |
|
|
Defence |
4% |
4% |
|
Health & education |
15% |
14% |
|
Law and order |
3% |
5% |
|
Transport and infrastructure |
24% |
22% |
|
Power and utilities |
7% |
5% |
|
Industry |
8% |
10% |
|
Commercial |
15% |
16% |
|
Residential |
8% |
7% |
|
Leisure |
4% |
3% |
|
Retail |
7% |
7% |
|
Financial services |
2% |
3% |
|
Other |
3% |
4% |
The WYG business model is founded on flexibility in terms of sector penetration, resource allocation, management structure and business focus which enables the Group to take maximum advantage of any movement in demand in its markets.
The order book, has increased in the year to a record £400m (2007: £380m) and comprises £204m from framework contracts and £196m from projects. The order book extends out beyond 2012 with £171m relating to the year to June 2009 and £104m for the year to June 2010.
ENGINEERING
The Engineering business segment generated 44% of gross revenue in the year and has continued to show strong underlying organic growth at 12%.
In the year gross revenue increased by 33% to £125.4m (2007: £94.5m), net revenue increased by 33% to £113.7m (2007: £85.4m) and operating profit by 61% to £9.3m (2007: £5.8m). Operating margin on net revenue increased to 8% (2007: 7%).
The Engineering capability is structured around three specific business streams; buildings, infrastructure and energy. In each the potential market is huge, made up of demand from both public and private sectors.
In Buildings, the WYG service offering is spearheaded by Adams Kara Taylor (AKT), the progressive design led consultancy acquired in November 2006. Since acquisition AKT has continued to prosper and in the current year secured several large development projects including the £300m Kings Cross commercial development for Argent and a number of Olympic related projects such as the Carpenters Lock Footbridge and Olympic Energy Centre.
AKT has also been involved in three projects contributing to the regeneration of Leicester which are almost complete, the John Lewis Store, the Cinema and The Curve Theatre. Similar initiatives are underway in other cities across the country.
In addition to these large projects, AKT has continued to teach, to research and to design small, complex structures throughout 2008. The London Festival of Architecture proved a great opportunity for such projects which included Tonkin Liu's travelling 'Fresh Flower Pavilion' (which became the emblem of the festival).
In healthcare and education, WYG continue to be a leading player in the marketplace. In education key projects were delivered in the year including Accrington and Rossendale College, St Pauls Centre at Blackburn College and Macclesfield 6th Form Centre and College of Further Education. Further commissions were secured including the new £60m Business School and Student Exchange at Manchester Metropolitan University and colleges of further education including Blackburn, Preston, Trafford, Winstanley and Rochdale. It is expected that the Government's "Building Schools for the Future" initiative will continue to generate a strong workload.
In healthcare the NHS LIFT scheme continues to be a prime source of opportunity with projects secured at St Helens, Knowsley and Leeds. Major hospital schemes are being progressed at Birmingham, Pontefract and Pinderfields, Teddington, Broomfield and Nottingham. The market in healthcare and education continues to be buoyant.
In infrastructure WYG continues to see opportunity in the highways sector with the current focus being on the A453 widening between M1 junction 24 and Nottingham. In Rail significant revenue growth of 31% was generated in the year through a mix of work across four main asset groups (civils, estates, track and enhancements). Recent project success has included the planned refurbishment of Edinburgh Waverley Railway Station within the city's World Heritage Site. WYG has been awarded a £1.85m commission to survey, evaluate and produce engineering proposals to refurbish extensive areas of the historic station through to outline design. In addition, Network Rail has awarded WYG two commissions for the design and development of a package of platform extensions at nineteen stations (46 platforms) between Vauxhall and Reading.
The Network Rail 2007 Strategic Business Plan for the next 5-year control period (CP4) shows an increase in investment of 12% and 35% in civil engineering and property respectively. As stated in the Department for Transport's High Level Output Statement and Transport Scotland's business plan, and confirmed in the Network Rail Strategic Business Plan, the proposed infrastructure enhancement expenditure on the rail network increases from £3.3bn in CP3 to £8.7bn in CP4. This funding is generally targeted at specific operational/capacity improvement schemes and WYG expect to benefit from this investment in the future.
In energy WYG has a strong background of providing civil, structural surveying and environmental services for the decommissioning of Sellafield. In sustainable energy WYG has been commissioned to provide a comprehensive range of services on the proposed bio-ethanol plant at Stallingborough, Lincolnshire. This has provided a valuable platform to progress further major green energy project opportunities both in the UK and internationally.
WYG is a leading authority in the efficient use of energy in the design of the built environment and in the year has delivered highly efficient and innovative buildings, setting new design parameters for top BREEAM ratings in the education, healthcare, and leisure sectors. This was recognised by the securing of the City of London Sustainable Cities Award, the Local Authority's Building Control Award and the North West Business Environment Award for the Eco Centre project for Cockermouth School.
The energy market is expected to be particularly buoyant in future years with an increased emphasis on nuclear, renewable energy and sustainability. WYG has an excellent track record in all these areas, has excellent relationships with authorities such as Sellafield, Magnox, National Grid and Nuclear Decommissioning Authority and expects to use this to generate strong organic growth.
MANAGEMENT SERVICES
The Management Services business segment comprises cost management, property and project management and safety management in GB and Ireland and socio-economic services internationally. It generated 32% of gross revenue in the year and grew organically by 17%.
In the year gross revenue increased by 20% to £90.8m (2007: £76.0m), net revenue increased by 24% to £65.1m (2007: £52.7m) and operating profit fell slightly by 2% to £8.2m (2007: £8.3m) due to a reduction in the margin enjoyed by the business in Ireland. Operating margin on net revenue decreased to 13% (2007: 16%).
The success of the Management Services business is founded on providing a trusted quality service to clients generating high value returns. The business continues to secure high profile projects, building on strong brand reputation and customer loyalty.
Management Services workload is spread evenly with 45% of revenue generated from the Public Sector. This provides an extremely diverse client base with the strength to weather potential threats from market fluctuations in the current economic climate. No single client provides more than 5% of revenue with Ministry of Defence remaining the largest customer. 25% of revenue in GB is generated in the Law and Order and Defence sectors. In particular WYG is providing the Ministry of Justice with Client Representative Services to help accommodate the increasing prison population. This includes current orders to manage the delivery of some £300m of investment in new build and refurbishment projects across the prisons estate.
Public procurement has an increasing demand for quality professional services across each of its sectors. For example, the ever changing model for procurement and the ongoing use of PFI and Prime Contracting solutions leads to the need for client support to be tailored to new and innovative activities. WYG's position as a leading consultancy supporting the Defence Sector continues, with ongoing frameworks with Defence Estates and QinetiQ. In addition to the role as Independent Certifier on the £1.5bn Allenby Connaught Project (the redevelopment of Salisbury and Aldershot Garrisons), WYG has also secured similar work at MoD Northwood and as the funder's adviser at MoD Corsham. The government continues its commitment to improve the accommodation and welfare facilities for the armed forces. WYG's role on schemes such as Project SLAM, winner of Programme of the Year at the Association for Project Management awards 2007, continues in providing support to Defence Estates in managing the £1.2bn expenditure on this high profile scheme.
The Commercial and Retail development market continues to be a major part of business activity and saw the completion in the year of the landmark £120m redevelopment of 55 Baker Street, the former Marks and Spencer headquarters, for London & Regional Properties. The building has re-defined this mid-town area of London and set the benchmark for cutting edge modern office accommodation with over 5,000 people now working there. Further landmark developments include the £300m redevelopment of Clapham Junction, a joint venture by Land Securities and Delancy and major town centre redevelopments with Tesco in Sittingbourne, Dartford and West Bromwich. In Liverpool work continues with Neptune Developments on some £150m of investment in the regeneration of the Mann Island and New Brighton schemes.
WYG Trench Farrow focuses on the corporate fit-out market. Despite a difficult operating environment the business continues to win high profile new commissions in addition to ongoing work including the £90m reconstruction of the City of London Guildhall Offices and the £40m project to house Deloitte at their new headquarters building at New Street Square in London. Recent appointments include the relocation of Moody's Investor Services to Canada Tower Docklands, the Standard Bank 120,000 sq ft relocation in the City and a commission from The Football Association to undertake its business reorganisation and relocation to the new Wembley Stadium.
Significant appointments have been secured in the social housing sector delivering project, cost and safety management services to clients. At the forefront of this is the management of some £300m investment in 15,000 properties with Liverpool Mutual Homes. Further investment schemes are being managed with Riverside Housing and London Borough of Barking and Dagenham.
In the increasingly important higher education sector WYG has been working with a number of high profile Universities. One example is the Mountbatten Project for the University of Southampton. WYG Trench Farrow was appointed as Project Manager for the design and construction of the £50m Computer Science and Optoelectronics research facility. Using a two stage tender approach, the world class building was completed in approximately two and a half years after a catastrophic fire destroyed the original facility.
ENVIRONMENT, PLANNING AND TRANSPORT
Environment, Planning and Transport generated 24% of gross revenue in the year and grew organically by 12%.
In the year gross revenue increased by 32% to £65.9m (2007: £50.1m), net revenue increased by 39% to £53.3m (2007: £38.4m) and operating profit by 63% to £8.9m (2007: £5.5m). Operating margin on net revenue increased to 17% (2007: 14%).
The year was marked by continuing strong organic growth in core service markets, the successful acquisition and integration of Savell Bird & Axon, the market leading transport consultancy business acquired in August 2007, and success in winning a number of highly prestigious commissions from new and existing clients.
In Environment the widest range of environmental services is delivered, directed at addressing the complex interrelated regulatory issues faced by clients. This breadth of service offering and assured quality of service is highly valued by clients whose environmental challenges and risks cross single disciplines, such as noise and air, ecology and sustainability.
In addition, a diverse range of client markets is served, including plc boards, strategists, public sector organizations, planners, constructors, developers and operating businesses. Services are provided to businesses in their day-to-day operational activity, as well as advising on ongoing environmental issues, such as flood risk, while also delivering advice on specific projects, such as before, during and after the building phases of residential, commercial, industrial and other development projects. Clients include HSBC, Tesco, Persimmon, National Grid, Network Rail and Waste Recycling Group.
Market conditions remain strong due to the increasing importance of environmental standards in business regulation in the UK and worldwide. Clients require environmental consultancy advice which helps them comply with ever changing and increasingly strict environmental standards.
Cutting edge services, such as those within Corporate Environmental Responsibility and Management continue to support clients such as DEFRA, whilst the enhancement of sustainability services through the WYG Future initiative continues to deliver practical but innovative services for clients such as Tesco and HSBC.
Planning
WYG Planning continues to focus on the provision of class-leading services to a diverse client base across the public and private sectors. The core skills within this area are town planning, urban design, masterplanning and landscape architecture.
The principal sectors of the economy in which the Planning business operates are: retail and town centres; residential; commercial and industrial; minerals and waste; energy infrastructure; education and healthcare. Additionally, growing demand for support to local planning authorities and government bodies in connection with development control services, planning strategy and policy formulation has been a prominent feature of the past year. The business is the lead consultant on a number of high-profile mixed use urban regeneration schemes, greenfield urban extensions and other major commercial developments across the UK, which invariably bring into play specialist skills from other parts of WYG.
Key developments in the year, which have underpinned continued organic growth, have included the expansion of the planning teams in London and the Midlands, and the establishment of a minerals planning capability. Notable project commissions have included providing a team of town planners to advise on the implementation of planning control services at the Waterfront Development in Dubai, acting as planning advisers for the Acquiva floating hotel in Canary Wharf and the preparation of a masterplan of the north bank of the Tyne in Newcastle.
Transport Planning
In August 2007, WYG made a significant investment in transport planning, recognising the importance that will increasingly be placed upon transport issues in the context of producing sustainable developments. To place itself at the forefront of this important advisory market, WYG acquired Savell Bird & Axon (SBA), one of the leading independent transport consultants in the UK. SBA had some 70 staff operating from offices in central London, central Manchester and central Cardiff and specialise in providing transport advice to the development industry with the great majority of work being for private developers but also providing advice to local authorities and government departments. This capability complements WYG's existing transport planning expertise.
Among its customers are J Sainsbury, IKEA, National Grid, The Welsh Assembly, Prudential Portfolio Managers, Legal & General, B&Q, Stanhope, Peel Holdings, Hammerson, Land Securities, British Land, Westfield and Prologis.
The business has enjoyed a strong workload throughout the year and continues to see strong demand for its advices. Key recent appointments include Stanton Ironworks, where around 4,000 residential units and extensive employment development is proposed as a sustainable urban extension, regenerating what was one of the largest ironworks in Europe and Wirral Waters, a major residential led mixed-use development comprising over 10,000 homes for Peel Holdings, one of the UK's largest development companies.
The combination of SBA and WYG Transport Planning has expanded the range of services offered to clients, which now encompass both leading edge modelling and engineering solutions along with strategic advice on the constraints and opportunities of client sites.
TRADING PERFORMANCE BY GEOGRAPHY
GREAT BRITAIN
WYG generates 63% of its gross revenue from Great Britain. In the year gross revenue increased by 22% to £177.6m (2007: £145.5m), net revenue increased by 24% to £157.6m (2007: £126.9m) and operating profit by 48% to £17.8m (2007: £12.0m). Operating margin on net revenue increased to 11% (2007:10%).
The business in Great Britain continues to operate across all skills sets and in all sectors of the economy. Although certain sections of the private sector are experiencing a slowdown at the present time, it remains the case that significant demand is still being experienced from the public sector in health, education and law and order. In addition, the demand on infrastructure, including rail, highways and urban regeneration, shows no sign of abating and will continue to provide significant opportunity in the coming year.
In the private sector, there continues to be commercial development opportunity, particularly in the design led area of the market where WYG has a strong presence because of the reputation for excellence and innovation of Adams, Kara, Taylor. Energy and sustainability also are sectors of the economy where continued demand is being enjoyed and where WYG can exhibit expertise across all skill sets. It is expected that this ability will lead to further opportunity in the coming year.
IRELAND
Overall the business in Ireland delivered a strong result in a challenging economic environment. Economic forecasts in the first half of the year indicated that the Irish economy would grow by between 3% and 4% in 2008. This has now been recently downgraded for the Republic of Ireland to 0.5% during 2008 and no substantial growth in 2009. This reduced growth figure has been heavily influenced by a slowdown in the international economy, the contraction in financial markets and rising inflation. This much lower growth in comparison to previous years represents the beginning of a new cycle for the construction industry in Ireland where growth in future years will be more modest.
Against this backdrop, the WYG business delivered an excellent result. Gross revenue increased by 57% to £54.7m (2007: £34.8m), net revenue increased by 59% to £49.4m (2007: £31.2m) and operating profit increased by 39% to £6.9m (2007: £5.0m), giving an operating margin of 14% (2007: 16%). The business grew organically by 22%. WYG now operates from ten locations in Ireland, employs over 700 people and generates 19% of gross revenue. 29% of WYG Ireland's business is generated in Northern Ireland and 71% in the Republic of Ireland.
In October 2007 PH McCarthy Consulting Engineers was acquired by WYG. This strategic acquisition has strengthened capability in water services, roads & bridges, structural engineering and building services. WYG is now one of the leading suppliers of infrastructure design services in Ireland. During the year WYG Ireland were successfully appointed to a number of major roads schemes including the N3 Clonee to Kells, N7 Castletown to Nenagh and the N9/10 Knocktopher to Carlow dual carriageway. In addition, the business has also grown in the health and education sectors over the past 12 months with appointments to the Women & Childrens Hospital in Belfast and the PPP school programme in the Republic of Ireland.
Malachi Cullen, the Athlone based engineering business has been successfully integrated into WYG Ireland and as a result Management Services and EPT have organically grown teams in the Athlone office to provide a full service in this region of Ireland.
The environmental team in Ireland delivered strong organic growth during the year by adding new skills to the service offering, such as building acoustics, geo-technics and sustainability consultancy. The insurance sector, in which the environmental business is a leading player, continues to grow and is forecast to do so over the next 12 months.
The key driver to sustaining the construction sector in Ireland over the short to medium term will be the level of public sector investment in infrastructure projects. Governments in Northern Ireland and the Republic of Ireland have committed to borrowing to fund infrastructure projects and WYG Ireland is well placed to continue to service this sector particularly following the acquisition of PH McCarthy.
INTERNATIONAL
WYG International provides social and economic regeneration consultancy together with the core WYG technical skills of Engineering, Management Services and Environment, Planning and Transport. It generated 18% of the gross revenue of the Group.
In the year to June 2008 gross revenue increased by 23% to £49.8m (2007: £40.3m) net revenue increased by 36% to £25.1m (2007: £18.4m) and operating profit reduced by 35% to £1.7m (2007: £2.6m) resulting in a fall in operating margin from 15% to 7%. Margins were adversely affected by a slowdown in throughput of work in the second half of the year and a change in mix of work in the business with more technical consultancy being performed at a lower margin than the traditional social and economic regeneration consultancy.
In Poland the transition from implementing projects financed under pre-accession funding controlled by the EC, to projects financed under locally managed Structural Funds is progressing well. A number of new projects financed through the European Social Fund and the European Regional Development Fund have been secured. These include the supervision of rail construction contracts along the route from Warsaw to Gdynia and engineering design projects for roads in Bialystok and Kelce. In Romania and Turkey the pipeline of future projects has strengthened significantly over the last year. Recent successes include a 'project preparation facility' for infrastructure projects, training to regional development agencies on infrastructure in Romania and technical assistance for the improvement of access in the Turkish telecommunications market.
In Africa, each of the two major projects in South Africa in KwaZuluNatal and Eastern Cape have been extended. In the Eastern Cape, where WYG International is project managing the EU's investment in poverty alleviation, the extension involves an additional £4m. These two projects will continue to provide an effective bridgehead for penetration into the local market for at least the next two years. In Russia and the rest of the former Soviet Union, WYG International is now fully diversified from internationally funded public sector work to work in the private sector which continues to grow across the regions. Projects in the mining, utilities and retail markets now dominate the WYG portfolio.
The international order book has grown significantly and increased by 28% in the last quarter of the financial year to £72.4m. New appointments in this period have included a water governance project in Central Asia, judiciary work in the Ukraine and a major £12m project to support the development and upgrading of transport, environment and energy infrastructures in the Western Balkans.
FINANCIAL REVIEW
Revenue
The value of work earned in the financial year increased by 28% to £282.1m (2007: £220.6m). This work earned included a contribution from acquisitions made in the financial year of £22.4m. When the impact of acquisitions is eliminated from both 2008 and 2007 the underlying revenue growth was 14%.
Margins
When assessing the margin performance of the business, management measures operating profit margin by reference to net revenue generated which excludes the value of revenue subcontracted to third parties on which no margin is made. In essence, the margin assessment reflects the operating margin generated from in house revenue. Net revenue generated increased by 32% to £232.1m (2007: £176.5m) and operating profit margin was increased to 11.4% (2007: 11.1%).
This margin can be analysed by business segment as follows:
|
Margin |
Mix |
|||
|
2008 |
2007 |
2008 |
2007 |
|
|
Engineering |
8% |
7% |
44% |
43% |
|
Management Services |
13% |
16% |
32% |
34% |
|
Environment |
17% |
14% |
24% |
23% |
Operating Profit
Operating profit before the amortisation of intangibles increased by 35% to £26.4m (2007: £19.6m). Operating profit increased by 31% to £22.2m (2007: £16.9m).
Finance Costs
Finance costs in the income statement reflect both the cost of borrowing and financing items relative to the defined benefit pension schemes.
The finance cost of borrowing has increased to £5.0m (2007: £3.1m). This increase is a reflection of the increase in net borrowing over the year as a result of the Group financing a greater proportion of its acquisitions in cash and paying all additional consideration in cash. The headline cost of borrowing for the Group is at a level between 0.45% and 0.9% above LIBOR and EURIBOR. Finance costs are covered 5.2 times (2007: 6.2 times) by operating profit before the amortisation of acquired intangibles.
Finance cost charges relating to the defined benefit pension schemes have reduced to £0.4m (2007: £0.5m).
Acquisitions and Amortisation of Acquired Intangibles
Acquisitions continue to be a key component in WYG's growth strategy. A total of three acquisitions were completed in the year to June 2008 for a total consideration of £40.5m. These acquisitions contributed £22.4m and £3.7m to revenue and operating profit respectively in the financial year.
Under IFRS it is necessary to identify the intangible assets relative to the acquired companies and amortise the intangible assets over their estimated useful lives. Intangible assets of £8.2m (2007: £5.2m) were acquired in the year and a charge of £4.2m (2007: £2.6m) made relative to the amortisation of these and previously acquired intangible assets. This charge is identified separately in the Consolidated Income Statement to assist with the interpretation of performance pre and post the amortisation charge.
Taxation
The Corporation Tax charge in the year on profit before the amortisation of acquired intangibles and the one-off benefit of prior year research and development tax credits is £5.0m (2007: £4.5m) representing an effective rate of 23.6% (2007: 27.8%). The tax charge on adjusted profit is £2.4m (2007: £3.5m) and represents an effective rate of 14.3% (2007: 26.0%).
The tax charge has benefited from tax relief in the UK on research and development expenditure. In the year, agreement was reached with HM Revenue and Customs on the eligibility of the Group claim for tax relief for such expenditure. This has reduced the charge to taxation by £1.7m of which £1.4m has been identified separately and disclosed in the other items column in the Profit and Loss Account as it related to prior year expenditure. The ongoing impact of research and development tax credits is expected to be to reduce the annual charge to taxation by £0.35m.
In addition to this the Group continues to benefit from the profit of certain of its overseas subsidiaries being taxed at a lower rate than the UK Corporation Tax rate of 28%. It is expected that there will continue to be a positive differential between the Group Tax charge and the headline rate of UK Corporation Tax.
Dividend
The proposed final dividend of 6.3p (2007: 5.4p) together with the interim dividend of 3.2p (2007: 2.9p) will deliver a full year dividend of 9.5p (2007: 8.3p) which represents an increase of 14%. The proposed full year dividend is covered 3.3 times (2007: 3.0 times) by adjusted earnings per share.
Going forward the Group intends to maintain its policy of dividend progression whilst ensuring that the dividend is covered between two and three times by adjusted earnings per share.
Shareholders' Equity
Shareholders' equity increased by £31.5m in the year to £120.4m (2007: £88.9m). The increase comprised the following elements:
|
£m |
|
|
Profit attributable to equity shareholders |
14.4 |
|
Equity dividend paid |
(4.4) |
|
Actuarial gain on pension schemes |
0.6 |
|
New shares issued |
15.3 |
|
Share based payments |
(0.2) |
|
Exchange differences |
6.1 |
|
Gain on cashflow hedge |
0.2 |
|
Tax on items taken direct to equity |
(0.5) |
|
Increase in shareholders equity |
31.5 |
The share price on 30 June 2008 was 330.0p having started the financial year at 451.5p. Group market capitalisation at 30 June 2008 was £170.5m (2007: £217.5m).
Cash Flow
The following table explains the movement in WYG's net debt:
|
2008 £m |
2007 £m |
||
|
Cash flow from operations |
31.0 |
11.4 |
|
|
Interest and tax |
(10.1) |
(7.0) |
|
|
Net capital expenditure |
(7.6) |
(5.5) |
|
|
Free cash flow |
13.3 |
(1.1) |
|
|
Net purchase of businesses |
(27.9) |
(10.9) |
|
|
Dividends |
(4.4) |
(3.5) |
|
|
Purchase of own shares |
(0.6) |
(0.9) |
|
|
Issue of shares |
0.2 |
0.8 |
|
|
Other |
(4.2) |
(0.2) |
|
|
Movement in net debt |
(23.6) |
(15.8) |
|
|
Opening in net debt |
(44.6) |
(28.8) |
|
|
Closing net debt |
(68.2) |
(44.6) |
Key points to note with regard to cash flow are as follows:
Cash flow from operations improved significantly in the year as a result of continued improvement in working capital management and was 117% (2007: 58%) of operating profit before the amortisation of acquired intangibles. Working capital days in the UK and Ireland fell from 103 days to 100 days reflecting an improvement in the ongoing management of work in progress in particular. Payments received in advance by WYG International increased as more advance payments were received from the EU in the final quarter of the year.
Net capital expenditure in the year increased to £7.6m (2007: £5.5m) and was £1.9m in excess of the annual charge for depreciation. The major areas of expenditure for the Group continue to be IT equipment and office fixtures and fittings. It is expected that capital expenditure in the coming year will be between £8m and £9m and will continue to run ahead of the annual depreciation charge.
A summary of the key debt ratios for the Group is as follows:
|
2008 |
2007 |
||
|
Gearing |
57% |
50% |
|
|
Interest Cover |
5.2 |
6.2 |
|
|
Leverage - net debt to EBITDA |
2.12 |
1.83 |
The Group continues to have conservative levels of interest cover and leverage. These two key debt ratios form the basis of the Group borrowing covenants. There continues to be significant headroom against the levels set out in those covenants.
Pension Schemes
The Group has two defined benefit pension schemes which have been closed to new members for a number of years. WYG contributed £1.6m (2007: £0.7m) into these schemes during the year. The WYD Scheme received a contribution of £0.6m and has seen its closing net liability fall to £1.4m (2007: £2.5m). The 1986 Scheme received a payment of £1.0m to settle continued obligations and is in the process of being wound up.
Treasury Operations
WYG's policy on treasury and financial risk is set by the Board and reviewed on a regular basis. The treasury risk faced by the Group includes interest rate risk, credit risk and foreign exchange risk.
It is the policy of WYG that the Group does not speculate in financial instruments or enter into speculative transactions. The types of financial instruments used by the Group include internal cash resources, borrowings, advance payment bonds, interest rate caps and debtor and creditor balances arising directly from Group operations.
Group policy on interest rate risk is to minimise interest cost whilst at the same time reducing exposure, where possible, to interest rate fluctuation.
A proportion of WYG's assets are funded using fixed rate finance lease contracts. During the year the Group refinanced its car fleet moving from a finance lease basis to a contract hire basis. The asset and finance lease liability relative to the car fleet was transferred to Lloyds TSB which resulted in finance lease obligations at 30 June 2008 being reduced when compared to the previous year. At 30 June 2008 outstanding liabilities in respect of such contracts totalled £2.4m (2007: £5.0m).
At 30 June 2008 the Group had five interest rate caps, three covering Sterling borrowings of £30m and two covering Euro borrowings of €15m. As a result the proportion of borrowings covered by fixed or capped interest rates totals 61% (2007: 59%). On 14 July 2008, the balance of caps held between Sterling and Euro was changed such that one cap of £10m covered Sterling borrowings and four caps of €45m covered Euro borrowings. This better reflected the mix of Sterling and Euro borrowings held by the Group.
In February 2007 the Group agreed revised banking facilities with its principal bankers, Lloyds TSB, Fortis Bank and Royal Bank of Scotland. The main facility, committed for a period of five years to 2012, comprises a term and revolving loan facility totalling £100m. In addition the Group has an annually renewed overdraft facility of £5m and finance lease facility of £7m provided by Lloyds TSB.
At 30 June 2008, WYG had undrawn committed borrowing facilities from its debt providers of £43.8m (2007: £67.4m).
The majority of revenue and expenditure from operations is denominated in the same currency giving an effective hedge to relevant transactions. A proportion of the Group's net assets is denominated in Euros and in the year the Group formalised its net investment hedging strategy. As a result the Group converted a proportion of its sterling borrowings to Euro to mitigate the exposure to exchange rate movements on these Euro assets.
SUMMARY
WYG has enjoyed another year of successful growth in a period when the markets in which it operates varied significantly. The growth achieved has underlined the basic strength of the WYG business model which has been developed to absorb fluctuations in economic conditions, concentrate on those areas of the economy generating the most demand, and deliver a high quality service to a loyal client base.
Market conditions continue to be challenging but with a forward order book of £400m and a focus on high quality service delivery, the Group is in an excellent position to continue to grow and deliver increased revenue and profit in the year ahead.
Consolidated Income Statement:
for the year ended 30 June 2008
|
|
Before |
Other items * |
Before |
Other items * |
|||
|
other items * |
Total |
other items * |
Total |
||||
|
2008 |
2008 |
2008 |
2007 |
2007 |
2007 |
||
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Continuing operations |
|||||||
|
Revenue |
2 |
282,108 |
- |
282,108 |
220,641 |
- |
220,641 |
|
Operating expenses |
(255,712) |
(4,194) |
(259,906) |
(201,081) |
(2,648) |
(203,729) |
|
|
Operating profit |
2 |
26,396 |
(4,194) |
22,202 |
19,560 |
(2,648) |
16,912 |
|
Finance costs |
(5,354) |
- |
(5,354) |
(3,548) |
- |
(3,548) |
|
|
Profit before tax |
21,042 |
(4,194) |
16,848 |
16,012 |
(2,648) |
13,364 |
|
|
Tax |
3 |
(4,969) |
2,558 |
(2,411) |
(4,453) |
973 |
(3,480) |
|
Profit attributable to equity shareholders |
16,073 |
(1,636) |
14,437 |
11,559 |
(1,675) |
9,884 |
|
|
Earnings per share |
|||||||
|
Basic |
4 |
31.6p |
(3.2p) |
28.4p |
24.5p |
(3.5p) |
21.0p |
|
Diluted |
4 |
30.4p |
(3.1p) |
27.3p |
23.4p |
(3.4p) |
20.0p |
|
Dividend per share |
|||||||
|
Interim - proposed and paid |
3.2p |
- |
3.2p |
2.9p |
- |
2.9p |
|
|
Final - proposed |
6.3p |
- |
6.3p |
5.4p |
- |
5.4p |
|
|
9.5p |
- |
9.5p |
8.3p |
- |
8.3p |
||
|
Paid |
8.6p |
- |
8.6p |
7.5p |
- |
7.5p |
* "Other items" relate to the amortisation of acquired intangibles and research & development tax credits relating to prior years.
BALANCE SHEET:
for the year ended 30 June 2008
|
2008 |
2007 |
||
|
£'000 |
£'000 |
||
|
Non-current assets |
|||
|
Goodwill |
115,625 |
81,122 |
|
|
Other intangible assets |
15,203 |
10,506 |
|
|
Property, plant and equipment |
14,517 |
10,841 |
|
|
Investments |
- |
- |
|
|
Deferred tax assets |
1,933 |
2,761 |
|
|
Derivative financial instruments |
506 |
305 |
|
|
147,784 |
105,535 |
||
|
Current assets |
|||
|
Work in progress |
48,041 |
40,867 |
|
|
Trade and other receivables |
81,621 |
64,577 |
|
|
Tax recoverable |
2,260 |
709 |
|
|
Cash and cash equivalents |
17,427 |
8,619 |
|
|
149,349 |
114,772 |
||
|
Current liabilities |
|||
|
Trade and other payables |
(83,657) |
(68,100) |
|
|
Current tax liabilities |
(1,490) |
(3,298) |
|
|
Financial liabilities |
(1,756) |
(2,381) |
|
|
(86,903) |
(73,779) |
||
|
Net current assets |
62,446 |
40,993 |
|
|
Non-current liabilities |
|||
|
Financial liabilities |
(83,874) |
(50,810) |
|
|
Retirement benefit obligation |
(1,843) |
(3,966) |
|
|
Deferred tax liabilities |
(4,127) |
(2,823) |
|
|
(89,844) |
(57,599) |
||
|
Net assets |
120,386 |
88,929 |
|
|
Shareholders' equity |
|||
|
Share capital |
2,583 |
2,408 |
|
|
Share premium account |
21,614 |
21,428 |
|
|
Merger reserve |
51,599 |
36,696 |
|
|
Hedging and translation reserve |
5,616 |
(687) |
|
|
Retained earnings |
38,974 |
29,084 |
|
|
Total shareholders' equity |
120,386 |
88,929 |
|
|
2008 |
2007 |
Cash Flow Statement:
for the year ended 30 June 2008
|
Note |
£'000 |
£'000 |
|
|
Operating activities |
5 |
||
|
Cash generated from operations |
30,998 |
11,351 |
|
|
Interest paid |
(5,304) |
(2,607) |
|
|
Tax paid |
(4,833) |
(4,362) |
|
|
Net cash generated from operating activities |
20,861 |
4,382 |
|
|
Investing activities |
|||
|
Proceeds on disposal of property, plant and equipment |
4,247 |
242 |
|
|
Purchases of property, plant and equipment |
(6,476) |
(2,390) |
|
|
Purchases of businesses |
(29,538) |
(13,909) |
|
|
Purchases of intangible assets (computer software) |
(1,409) |
(976) |
|
|
Cash balances acquired with businesses |
1,643 |
3,061 |
|
|
Net cash used in investing activities |
(31,533) |
(13,972) |
|
|
Financing activities |
|||
|
Net proceeds on issue of ordinary share capital |
192 |
833 |
|
|
Equity dividends paid |
(4,364) |
(3,503) |
|
|
Repayments of borrowings |
(1,242) |
(29,413) |
|
|
Draw down of loan facilities |
31,665 |
48,102 |
|
|
Repayments of obligations under finance leases |
(6,519) |
(3,002) |
|
|
Purchase of own shares for Employee Benefit Trust |
(622) |
(868) |
|
|
Net cash generated from financing activities |
19,110 |
12,149 |
|
|
Net increase in cash and cash equivalents |
8,438 |
2,559 |
|
|
Cash and cash equivalents at beginning of year |
8,604 |
6,045 |
|
|
Cash and cash equivalents at end of year |
17,042 |
8,604 |
Statement of Recognised Income and Expense:
for the year ended 30 June 2008
|
2008 |
2007 |
|||
|
£'000 |
£'000 |
|||
|
Profit attributable to equity shareholders |
14,437 |
9,884 |
||
|
Net exchange adjustments offset in reserves net of tax |
6,102 |
(560) |
||
|
Actuarial gains/(losses) on defined benefit pension schemes |
584 |
(84) |
||
|
Gains on cash flow hedges |
201 |
305 |
||
|
Tax on items taken directly to equity |
(525) |
133 |
||
|
Total recognised income and expense for the year |
20,799 |
9,678 |
Statement of Changes in Shareholders' Equity:
for the year ended 30 June 2008
|
2008 |
2007 |
|||
|
£'000 |
£'000 |
|||
|
Profit attributable to equity shareholders |
14,437 |
9,884 |
||
|
Net exchange adjustments offset in reserves net of tax |
6,102 |
(560) |
||
|
Actuarial gains/(losses) on defined benefit pension schemes |
584 |
(84) |
||
|
Gains on cash flow hedges |
201 |
305 |
||
|
Share-based payments |
(242) |
505 |
||
|
New share capital issued, net of expenses |
15,264 |
6,896 |
||
|
Tax on items taken directly to equity |
(525) |
133 |
||
|
Equity dividends paid |
(4,364) |
(3,503) |
||
|
Net addition to shareholders' equity |
31,457 |
13,576 |
||
|
Equity attributable to equity shareholders of the Companyat beginning of year |
88,929 |
75,353 |
||
|
Equity attributable to equity shareholders of the Company at end of year |
120,386 |
88,929 |
Notes to the Accounts:
1. Financial information
This preliminary announcement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information for the years ended 30 June 2008 and 30 June 2007 has been extracted from the consolidated accounts on which the auditors have given unqualified opinions and which do not contain statements under Sections 237(2) or 273(3) of the Companies Act 1985. The announcement has been agreed with the company's auditors for release.
The financial information included in this preliminary announcement does not include all the disclosures required by International Financial Reporting Standards (IFRS) or the Companies Act 1985 and accordingly it does not itself comply with IFRS or the Companies Act 1985.
Statutory accounts for the year ended 30 June 2008 will be despatched to shareholders by 10 November 2008 for approval at the Annual General Meeting to be held on 10 December 2008. The Group's annual report and accounts will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
The Group prepares its annual consolidated accounts in accordance with IFRS and its interpretations issued by the International Accounting Standards Board as adopted by the European Union and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. There are no material differences between the accounting policies adopted for use in the preparation of the consolidated accounts for the year ended 30 June 2008 and the financial information included in this preliminary announcement and the accounting policies disclosed in the 2007 Annual Report and Accounts, copies of which are available on the White Young Green Plc website, www.wyg.com.
These consolidated accounts have been prepared under the historical cost convention with the exception of derivative financial instruments and share based payments which are recognised at fair value.
2. Segmental Information
Primary Reporting Format - Business Segments
For management purposes, the Group is currently organised into three operating units - Engineering, Management Services and The Environment. These operating units are the basis on which the Group reports its primary segment information.
Segmental information about these businesses is presented below:
|
Management |
The |
|
||
|
Engineering |
Services |
Environment |
Group |
|
|
2008 |
2008 |
2008 |
2008 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Revenue |
||||
|
External sales |
129,206 |
91,658 |
66,912 |
287,776 |
|
Inter-segment sales |
(3,850) |
(820) |
(998) |
(5,668) |
|
Total revenue |
125,356 |
90,838 |
65,914 |
282,108 |
|
Result |
||||
|
Operating profit before amortisation of acquired intangibles |
9,339 |
8,153 |
8,904 |
26,396 |
|
Amortisation of acquired intangibles |
(1,203) |
(1,711) |
(1,280) |
(4,194) |
|
Operating profit |
8,136 |
6,442 |
7,624 |
22,202 |
|
Finance costs |
(5,354) |
|||
|
Profit before tax |
16,848 |
|||
|
Tax |
(2,411) |
|||
|
Profit attributable to equity shareholders |
14,437 |
|||
2. Segmental Information continued
|
Management |
The |
|
||
|
Engineering |
Services |
Environment |
Group |
|
|
2007 |
2007 |
2007 |
2007 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Revenue |
||||
|
External sales |
100,368 |
76,667 |
51,524 |
228,559 |
|
Inter-segment sales |
(5,830) |
(659) |
(1,429) |
(7,918) |
|
Total revenue |
94,538 |
76,008 |
50,095 |
220,641 |
|
Result |
||||
|
Operating profit before amortisation of acquired intangibles |
5,792 |
8,316 |
5,452 |
19,560 |
|
Amortisation of acquired intangibles |
(633) |
(1,853) |
(162) |
(2,648) |
|
Operating profit |
5,159 |
6,463 |
5,290 |
16,912 |
|
Finance costs |
(3,548) |
|||
|
Profit before tax |
13,364 |
|||
|
Tax |
(3,480) |
|||
|
Profit attributable to equity shareholders |
9,884 |
|||
3. Tax
|
|
2008 |
2007 |
|||
|
£'000 |
£'000 |
||||
|
Current tax: |
|||||
|
UK corporation tax on profits for the year at 29.5% (2007: 30%) |
3,479 |
3,812 |
|||
|
Adjustments in respect of previous years |
(2,081) |
- |
|||
|
Overseas tax on profits for the year |
1,289 |
868 |
|||
|
2,687 |
4,680 |
||||
|
Deferred tax: |
|||||
|
Movement in deferred tax |
(276) |
(1,200) |
|||
|
2,411 |
3,480 |
||||
|
Tax on items charged to equity: |
|||||
|
Deferred tax (charge)/credit related to share-based payments |
(361) |
108 |
|||
|
Deferred tax (charge)/credit related to the actuarial gains and losses on retirement benefit schemes |
(164) |
25 |
|||
|
(525) |
133 |
||||
4. Earnings Per Share
The calculation of the basic and diluted earnings per share is based on the following data:
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
|
Earnings for the purposes of basic and diluted earnings per share being profit for the year |
14,437 |
9,884 |
|
Adjustment relating to other items* |
1,636 |
1,675 |
|
Earnings for the purposes of basic and diluted adjusted earnings per share |
16,073 |
11,559 |
* "Other items" include the amortisation of acquired intangibles and research and development tax credits relating to prior years
|
2008 |
2007 |
|||
|
Number |
Number |
|||
|
Number of shares |
||||
|
Weighted average number of shares for basic earnings per share |
50,902,193 |
47,104,215 |
||
|
Effect of dilutive potential ordinary shares: |
||||
|
Share options |
112,460 |
199,754 |
||
|
Shares to be issued in respect of acquisitions |
1,892,929 |
2,003,896 |
||
|
Weighted average number of shares for diluted earnings per share |
52,907,582 |
49,307,865 |
||
|
Earnings per share |
||||
|
Basic |
28.4p |
21.0p |
||
|
Diluted |
27.3p |
20.0p |
||
|
Adjusted earnings per share |
||||
|
Basic |
31.6p |
24.5p |
||
|
Diluted |
30.4p |
23.4p |
||
5. Cash Generated from Operations
|
2008 |
2007 |
|||||
|
£'000 |
£'000 |
|||||
|
Profit from operations |
22,202 |
16,912 |
||||
|
Adjustments for: |
||||||
|
Depreciation of property, plant and equipment |
4,652 |
3,773 |
||||
|
Amortisation of intangible assets |
5,249 |
3,458 |
||||
|
(Profit)/loss on disposal of property, plant and equipment |
(858) |
48 |
||||
|
Share options charge |
1,214 |
1,573 |
||||
|
Operating cash flows before movements in working capital |
32,459 |
25,764 |
||||
|
Increase in inventories |
(4,666) |
(7,459) |
||||
|
Increase in receivables |
(5,648) |
(10,946) |
||||
|
Increase in payables |
8,853 |
3,992 |
||||
|
Cash generated from operations |
30,998 |
11,351 |
||||
|
Interest paid |
(5,304) |
(2,607) |
||||
|
Tax paid |
(4,833) |
(4,362) |
||||
|
Net cash generated from operating activities |
20,861 |
4,382 |
||||
6. Analysis of Changes in Net Financial Liabilities
|
At |
Other |
At |
|||
|
1 July |
Cash |
non-cash |
30 June |
||
|
2007 |
flows |
Acquisitions |
items |
2008 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Cash and cash equivalents |
8,619 |
7,165 |
1,643 |
- |
17,427 |
|
Bank overdrafts |
(15) |
(370) |
- |
- |
(385) |
|
Bank loans due after one year |
(47,901) |
(31,620) |
(252) |
(2,819) |
(82,592) |
|
Loan notes due within one year |
(323) |
1,197 |
- |
(1,114) |
(240) |
|
Finance leases and hire purchase contracts |
(4,952) |
6,519 |
- |
(3,980) |
(2,413) |
|
(44,572) |
(17,109) |
1,391 |
(7,913) |
(68,203) |
Related Shares:
WYG