1st Oct 2009 07:00
Avesco Group plc
Trading update
In Avesco Group's interim announcement in June 2009, we reported that the impact of the recession on the Group's profitability was severe and we expressed caution in the economic outlook. The late summer period has been quieter than we then anticipated and, combined with the movement of two large events from September to October 2009, will mean that the results for the year to 30 September 2009 will be substantially below market expectation.
Although early action was taken to reduce staff and other discretionary costs, this reduction was insufficient as revenues declined faster than budgeted. We have won significant new business but this success has not compensated for the underlying reduction in business activity, in particular, in the corporate sector. Further cost actions have been taken, the benefits of which will flow through into the coming year but which, together with other one-off charges, will lead to an increased exceptional charge being taken in the year ended 30 September 2009.
The Group continues to generate strong cash flow which has resulted in net debt declining significantly since the interim stage and a further reduction in net debt is forecast over the next twelve months.
The Group's balance sheet remains strong and its financial position has been improved by amendments to its bank facilities which remain in place through to September 2012.
Although the economic indicators would appear to show a more positive outlook, this has yet to translate into a stronger order book. However, the coming financial year will have the positive impact of the Winter Olympics in Vancouver, the World Expo in Shanghai and the FIFA World Cup in South Africa.
The last 12 months have been a challenging period. We have absorbed the impact of the recession, lowered our cost base, improved cash generation and increased market share whilst maintaining the capability of the Group. This leaves Avesco well positioned to capitalise and benefit as and when economic conditions improve.
For further information please contact:
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Avesco Group plc |
Tel: 01293 583400 |
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Ian Martin, Chief Executive |
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John Christmas, Finance Director |
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FinnCap |
Tel: 020 7600 1658 |
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Clive Carver Charles Cunningham |
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