14th Jan 2009 07:00
14 January 2009
KBC Advanced Technologies plc
("KBC" or "the Group")
Pre-Close Trading Update
The Board of KBC is pleased to report that results for the year to 31 December 2008 are expected to deliver strong growth in revenue and profits in line with market expectations. Workload backlog at the year end is expected to be around £37 million - an increase of more than 20% on the prior year's closing backlog, benefiting from strong sales in the year and the strength of the US Dollar and Euro relative to Sterling.
This strong performance has been reflected in cash generation. The Group's cash resources are expected to have increased around fourfold to around £5.4 million from net cash of £1.3 million at 31 December 2007 and net cash of £1.2 million at 30 June 2008.
The last quarter saw an increase in software sales with further success in China and the Middle East. Our flagship product Petro-SIM™ has now been sold to around 100 sites. Much of the revenue related to these sales will be recognised in the first half of 2009, following the installation of the software at client sites. Despite the turmoil in the world's financial markets, in the second half of 2008 we saw a robust level of activity driven by the capital investment plans within the refining industry. This work included our appointment as adviser to PetroSA for a new refinery project in South Africa; receipt of a significant success fee for our work on the sale of Albania's refining assets and continued work on various capital projects in the Middle East, Korea and South America.
The current uncertain environment makes forecasting more difficult than usual but it is likely that the level of capital investment work will decline. However, our successful strategy to reposition the Group's offerings enables us to provide a range of services that assist clients with both their capital expenditure (CapX) and operating (OpX) programmes/budgets. This will be of particular importance during 2009 as we expect to see a swing towards OpX work as clients seek improvements in processing margins in the current oil price and product demand environment. This should help to offset the impact of any reductions in CapX work.
We enter 2009 with cautious optimism. We have the benefit of a strong pipeline of software revenues during the first quarter and we are taking a prudent approach to our cost base, which positions us to continue to grow the business during 2009, although at a more modest rate than has recently been the case.
-Ends-
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KBC Advanced Technologies plc |
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George Bright, Chief Executive Nicholas Stone, Operations and Finance Director |
01932 236314 |
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Weber Shandwick Financial |
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Nick Oborne/Clare Perks |
020 7067 0700 |
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Arbuthnot Securities |
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James Steel/Antonio Bossi/Katie Shelton |
020 7012 2000 |
Notes to Editors:
KBC Advanced Technologies plc, a leading independent consulting, process engineering and software group, delivers improved operating performance to the oil refining, petrochemical, and other process industries worldwide. We provide process consulting, strategic planning advice, energy price forecasting and market analysis, economic studies, capital project services, and training to help clients achieve their business objectives and improve their competitive position. The KBC human performance improvement division provides organisational effectiveness services, training programmes, operations manuals, and personnel development services. Our consultants recommend changes for material and measurable improvements in profitability. To assist clients in realising such improvements, KBC provides implementation services and software solutions, including the KBC SIM models and Petro-SIM™ for process optimisation, and energy optimisation software packages. Formed in 1979, KBC has offices in the UK, USA, Canada, Singapore, the Netherlands, Russia, China and Japan. For more information, visit www.kbcat.com.
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