RNS Number:4426I
Hyder Consulting PLC
26 November 2007
Hyder Consulting PLC (HYC.L)
Half Year results for the six months ended 30 September 2007
Hyder Consulting PLC, the international advisory and design consultant, is
pleased to announce its Half Year results for the period ended 30 September
2007.
Highlights
* Revenue up 12% to #108.7m
* Operating profit #6.1m (2006: #8.8m, after exceptional gains of #4.3m)
* Adjusted* operating profit up 31% to #6.7m
* Adjusted* net operating margin up to 7.3% from 6.4%
* Order book up 10% to #269m
* Interim dividend up 50% to 0.9 pence per share
* Strong growth opportunities in existing markets
* High value-added, infill acquisitions being carefully targeted
* before exceptional items and amortisation of intangible assets arising on
business combinations.
Sir Alan Thomas, Chairman of Hyder Consulting PLC, commented:
"I am pleased to report that our Half Year results are well ahead of last year's
and slightly ahead of expectations.
We grew our adjusted net operating margin to 7.3% (from last year's 6.4%), our
medium-term goal being 10%.
Hyder's regional markets remain strong and our order book is at record levels,
giving us much confidence for the full year."
Press contacts:
Hyder Consulting PLC
Tim Wade, Chief Executive Tel: +44 (0)20 7904 9011
Simon Hamilton-Eddy, Financial Director Tel: +44 (0)20 7904 9011
Biddicks
Shane Dolan Tel: +44 (0)20 7448 1000
Interim Management Report
I am pleased to report that our half year results are well ahead of the prior
year and slightly ahead of expectations: operating margins continue to grow.
Results
Revenue for the period increased by 12% to #108.7m (2006: #97.2m) with net
revenue, after accounting for direct project costs, increasing by 14% to #91.8m
(2006: #80.3m).
Adjusted operating profit increased by 31% to #6.7m (2006: #5.1m). Adjusted
operating profit margin increased to 6.2% (2006: 5.2%). The adjusted operating
margin on net revenue, after accounting for work by sub-consultants, increased
to 7.3% (2006: 6.4%). Operating profit was #6.1m: the 2006 figure was #8.8m
reflecting exceptional gains recognised in the prior period.
A small exceptional gain of #0.1m (2006: #4.3m) was recognised as a consequence
of our programme to restructure the Acer Group Pension Scheme (AGPS) and reduce
the IAS19 deficit.
Adjusted earnings per share increased by 19% to 14.82p (2006: 12.44p). Basic
earnings per share amounted to 13.47p (2006: 19.56p). Exceptional gains, which
were significant in 2006, are excluded from the calculation of adjusted earnings
per share.
Net debt amounted to #5.6m at 30 September 2007, compared to #4.3m at 30
September 2006, and net funds of #8.2m at 31 March 2007. The movement since the
year end is primarily a result of special pension contributions, the seasonal
trend of creditor settlements and increased debtor collections at the year end,
and increases in working capital related to higher revenues.
Taxation
The effective rate of tax is 12.9% (2006: 19.2%) reflecting low rates in the
Middle East, and Research and Development tax credits in the UK.
Dividend
The Board has declared a 50% increase in the interim dividend to 0.9p (2006:
0.6p) payable on 7 January 2008 to shareholders on the register at 7 December
2007.
Operating margins
One of our main objectives is to increase our adjusted net operating margin to
10%, and for the first half we achieved 7.3% compared with 6.4% for the same
period last year. In the Middle East region our long term presence has helped
us to benefit from the buoyant market conditions and our operating margins have
improved by a quarter.
Principal risks and uncertainties
The Group operates a structured risk management process which identifies,
evaluates and prioritises risk, and reviews mitigation activities. The
principal risks and uncertainties facing the Group over the remainder of the
financial year relate to significant changes in market conditions, recruitment
and retention of key staff, project delivery, and currency movements.
Pension fund
The deficit in the AGPS as reported under IAS19 reduced by #0.5m net of deferred
tax. The Group contributed #3.8m to the AGPS in the period, including a further
#2m special contribution in addition to the #2m contribution paid in September
2006. The special contributions were funded through a 15 year unsecured loan
facility.
Actuarial losses of #1.2m were recognised in the AGPS during the period
following revisions to our actuaries' mortality assumptions, mitigated by
increased discount rates and better returns on the fund's assets.
Regional review
UK / Europe
Revenue increased to #55.9m (2006: #52.1m) whilst operating profits increased to
#4.4m (2006: #3.4m).
The UK's multi-discipline capabilities and growth in its environmental and
sustainability related projects helped to increase revenues and profit
performance, despite relatively flat water and highways markets.
We have won a number of framework contracts for UK water companies and have
secured sizeable commissions for a water treatment plant in Northern Ireland and
for leakage management support to Severn Trent Water. There are also a number
of attractive highways related project opportunities in Ireland.
In April 2007 we acquired cost consultant RPA which is performing well.
Economic conditions and public sector forecasts have improved in Germany.
Elsewhere in Europe, we are concentrating on the newer and prospective members
of the European Union, such as Romania.
Middle East
Revenue increased to #24.3m (2006: #19.9m) whilst operating profits increased to
#2.0m (2006: #1.3m).
Our major longstanding clients in the region continue to place their confidence
in us. In the region we are currently working on seven super high-rise towers
of over 100 storeys. To put this into context there are only five buildings of
that height in the world.
In July, the Burj Dubai Tower was officially designated the tallest building in
the world, although construction is not yet complete. Hyder Consulting is the
Architect and Engineer of Record for the project and has an extensive
multi-discipline involvement, not just with the tower but also in the
infrastructure for the wider development of the surrounding area.
The scale of development in the Middle East is placing enormous demands on the
infrastructure. The first phase of the Dubai Light Rail is set to open in 2009
and we have seen an increased workload on the project. We are also busy with
numerous traffic management, highways and water and drainage infrastructure
upgrades, not just in Dubai but in other fast growing parts of the region such
as Abu Dhabi, Qatar, Bahrain and Oman.
Asia Pacific
Revenue increased to #28.5m (2006: #25.3m) whilst operating profits reduced
slightly to #1.7m (2006: #1.8m).
In Australia, after winning our first two Alliance contracts at the end of last
financial year, we secured a third for the widening and upgrading of a section
of the Great Western Highway in New South Wales. Though delays in securing
these contracts led to a slower than anticipated start in the first quarter of
the financial year, the award of these Alliance contracts has enabled the
region's workload to reach record levels. Our teams in Queensland were
appointed to the Nautilus project, an important strategic transport initiative
aimed at satisfying longer term public transport requirements in the northern
part of the state.
We have created an Australian Regional Advisory Board, composed of five
distinguished businessmen to help us define market trends and customer needs
more effectively.
On climate change and sustainability, we have begun to advise a number of major
corporations. A notable commission was from the Australian Branch of the World
Wildlife Fund to help it to analyse the effects of human activity on ecosystems
in Northern Australia.
The sustainability agenda was also behind a major and prestigious project in
Hong Kong, where we have been asked to develop a master plan to 'green' all of
urban Hong Kong, an area of nearly 18,000 hectares. Work on the project is
being led by a team from the newly acquired ACLA, which was also responsible for
landscaping at the 2008 Beijing Olympics equestrian venue in Hong Kong.
Outlook
Our financial goals are to grow our adjusted net operating margin to 10%, and to
double our net revenues over the next five years. This will be achieved through
a combination of organic growth and carefully targeted, high value-added, infill
acquisitions. The core of our strategy is to provide outstanding client service
through outstanding people.
Market conditions in all our regions remain strong and our record order book
gives us much confidence for the full year.
Sir Alan Thomas
Chairman
26 November 2007
Consolidated Income Statement for the six months ended 30 September 2007
(unaudited)
Six months Six months Year ended 31
ended 30 ended 30 March 2007
September September 2006
2007
Note #'000 #'000 #'000
Revenue 2 108,733 97,226 203,145
Cost of sales
Direct project costs (16,965) (16,900) (35,700)
Other operating costs (65,242) (57,293) (116,460)
Gross profit 26,526 23,033 50,985
Administration expenses (20,464) (14,256) (36,653)
Group operating profit 2 6,062 8,777 14,332
Analysed as:
EBITA (Pre-exceptional items) 7,154 5,554 12,262
Amortisation of intangible assets
- Software (446) (415) (861)
- Business combinations (781) (659) (1,407)
Pension scheme settlements and curtailments 135 4,297 5,095
UK / Europe property costs - - (547)
Asia Pacific office closure costs - - (210)
Group operating profit 2 6,062 8,777 14,332
Interest payable and similar charges 3 (628) (773) (1,341)
Interest receivable 3 119 120 358
Profit before taxation 5,553 8,124 13,349
Taxation (717) (1,561) (2,011)
Profit for the financial period 4,836 6,563 11,338
Profit attributable to minority interests 3 114 192
Profit attributable to equity shareholders 4,833 6,449 11,146
Earnings per share (pence)
Basic 4 13.47 19.56 32.44
Diluted 4 13.10 19.09 31.59
Equity - Ordinary 10p shares
Dividends (#'000) - paid 5 502 296 511
Dividend per share (pence) 5 1.40 0.90 1.50
Dividends (#'000) - proposed 323 197 502
Dividend per share (pence) 0.90 0.60 1.40
All activities are continuing.
Consolidated Statement of Recognised Income and Expense (unaudited)
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2007
2007 2006
#'000 #'000 #'000
Profit for the financial period 4,836 6,563 11,338
Exchange adjustments 85 (884) (1,572)
Cash flow hedges recognised - - 69
Transfer from minority interest 16 - (68)
Actuarial (losses) / gains on defined benefit (1,268) 863 (43)
pension schemes
Deferred taxation on actuarial losses / (gains) 355 (258) 34
Effect of UK tax rate change (775) - -
Net expense not recognised in the Income
Statement (1,587) (279) (1,580)
Total recognised income for the financial period 3,249 6,284 9,758
Equity shareholders 3,246 6,170 9,566
Minority interests 3 114 192
3,249 6,284 9,758
Consolidated Balance Sheet as at 30 September 2007 (unaudited)
As at 30 As at 30 As at
September September 31 March
2007 2006 2007
Note #'000 #'000 #'000
Non-current assets
Intangible assets 20,850 18,073 18,046
Property, plant and equipment 10,220 8,649 9,443
Deferred taxation assets 11,003 13,037 12,560
42,073 39,759 40,049
Current assets
Trade and other receivables 83,977 76,295 77,672
Corporation tax recoverable 2,098 1,365 336
Cash and cash equivalents 9,836 8,611 18,663
95,911 86,271 96,671
Current liabilities
Trade and other payables (50,727) (50,131) (55,474)
Current taxation liabilities (1,771) (1,758) (1,382)
Financial liabilities
- Borrowings (6,396) (6,185) (3,707)
Provisions 6 (3,046) (2,956) (2,908)
(61,940) (61,030) (63,471)
Net current assets 33,971 25,241 33,200
Non-current liabilities
Financial liabilities
- Borrowings (9,034) (6,710) (6,735)
Post employment benefits 10 (33,922) (37,400) (35,711)
Provisions 6 (237) (1,104) (530)
Deferred taxation liabilities (2,583) (3,436) (2,592)
Other non-current liabilities (1,744) (1,338) (1,747)
(47,520) (49,988) (47,315)
Net assets 2 28,524 15,012 25,934
Shareholders' equity
Called up ordinary share capital 3,591 3,320 3,585
Share premium account 21,411 13,860 21,262
Retained earnings 5,202 (1,455) 2,437
Other reserves (1,733) (812) (1,592)
Total shareholders' equity 28,471 14,913 25,692
Minority interests in equity 53 99 242
Total equity 7 28,524 15,012 25,934
The condensed financial statements on pages 4 to 20 were approved by the Board
of Directors on 26 November 2007 and were signed on its behalf by:
Simon Hamilton-Eddy
Financial Director
26 November 2007
Consolidated Statement of Cash Flows (unaudited)
Six months Six months Year ended 31
ended 30 ended 30 March 2007
September September 2006
2007
Note #'000 #'000 #'000
Cash flows from operating activities
Cash (used) / generated from operations 8 (6,393) (1,855) 7,067
Interest received 119 120 358
Interest paid (521) (322) (722)
Taxation paid (1,162) (2,103) (1,960)
Net cash (used) / generated from operating
activities (7,957) (4,160) 4,743
Cash flows from investing activities
Acquisition of subsidiaries (net of cash
acquired) 9 (2,852) (3,604) (3,762)
Proceeds from sale of property, plant and
equipment 10 5 43
Purchase of minority interests (129) (375) (375)
Purchase of property, plant and equipment (1,369) (1,292) (4,428)
Net cash used in investing activities (4,340) (5,266) (8,522)
Cash flows from financing activities
Net proceeds from issue of ordinary share
capital 83 156 7,558
Finance lease principal payments (661) (717) (1,257)
Net proceeds from issue of new borrowings 6,411 7,613 7,937
Repayment of borrowings (1,822) (1,566) (4,131)
Dividends paid to shareholders 5 (502) (296) (511)
Net cash from financing activities 3,509 5,190 9,596
Effects of exchange rate fluctuations (39) (319) (320)
Net (decrease) / increase in cash and cash
equivalents (8,827) (4,555) 5,497
Cash and cash equivalents at 1 April 18,663 13,166 13,166
Cash and cash equivalents at period end 9,836 8,611 18,663
Notes to the Consolidated Financial Statements (unaudited)
1. General information
(a) Basis of preparation
This condensed unaudited consolidated financial information for the half year
ended 30 September 2007 has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Services Authority and with IAS 34, "Interim
financial reporting" as adopted by the European Union (EU). The half year
condensed consolidated financial report should be read in conjunction with the
annual financial statements for the year ended 31 March 2007, which have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU.
The condensed consolidated half yearly financial statements have been prepared
in accordance with IFRS as adopted by the EU, and those parts of the Companies
Act 1985 related to reporting under IFRS that the Directors expect to be
applicable as at 31 March 2008. IFRS are subject to amendment or interpretation
by the International Accounting Standards Board and there is an ongoing process
of review and endorsement by the EU. For these reasons, it is possible that the
information presented in this report may be subject to change.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Although these estimates are based on management's best knowledge of
the amount, events or actions, actual results ultimately may differ from those
estimates.
The financial information does not constitute statutory accounts within the
meaning of section 240 of the Companies Act 1985. The financial information
relating to the year ended 31 March 2007 has been delivered to the Registrar of
Companies. The report of the auditors on these accounts was unqualified and did
not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
(b) Principal accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 March 2007, as described in those
financial statements.
The Group's significant accounting policies under IFRS are available on the
corporate website www.hyderconsulting.com within the "Investors" section.
2. Segmental analysis by location of operations
Reflecting the Group's management and internal reporting structure, primary
segmental information is presented within the Financial Statements in respect of
geographical segments. The Group manages its business on a global basis with
operations in three main geographical regions, UK and Europe, Asia Pacific and
the Middle East. The UK is the home country of the parent. Inter-segment
revenue relates to contracts priced on an arm's length basis. The secondary
reporting format is by business segment. The Directors consider that there is
only one business segment, being engineering design, planning, environmental and
management consultancy. Therefore, the disclosures for the secondary segment
have already been given in these Financial Statements.
(a) Segment revenue
2007 Inter-segment Six months Six months Year ended
revenue 2007 ended 30 ended 30 31 March
September September 2007
2007 2006
#'000 #'000 #'000 #'000 #'000
UK / Europe
- Continuing operations 55,460 (319) 55,141 49,774 105,637
- Acquisitions 769 - 769 2,336 4,268
Asia Pacific
- Continuing operations 29,355 (843) 28,512 24,878 46,897
- Acquisitions - - - 385 1,704
Middle East 30,966 (6,655) 24,311 19,853 44,639
116,550 (7,817) 108,733 97,226 203,145
(b) Segment results
Regional operating profit
UK / Europe
- Continuing operations 4,204 2,607 7,364
- Acquisitions 226 743 860
Asia Pacific
- Continuing operations 1,719 1,689 2,659
- Acquisitions - 73 258
Middle East 2,032 1,296 2,893
Corporate overheads (1,473) (1,269) (2,633)
6,708 5,139 11,401
Amortisation - business combinations
UK / Europe
- Continuing operations (335) (179) (385)
- Acquisitions (117) (182) (342)
Asia Pacific
- Continuing operations (290) (192) (368)
- Acquisitions - (50) (202)
Middle East (39) (56) (110)
Exceptional items
UK Pension scheme curtailments - 4,000 4,000
UK Pension scheme settlements 320 787 2,587
UK Associated pension settlement costs (185) (490) (1,492)
UK / Europe property costs - - (547)
Asia Pacific office closure costs - - (210)
Group operating profit 6,062 8,777 14,332
The gain on pension settlements arises from further members transferring out of
the AGPS during the period.
(c) Segment assets and liabilities
UK / Europe Asia Pacific Middle East Total
#'000 #'000 #'000 #'000
As at 30 September 2007
Segment assets 65,275 29,850 29,758 124,883
Corporation tax recoverable and deferred 13,101
taxation assets
Total assets 137,984
Segment liabilities (53,146) (13,806) (22,724) (89,676)
Current and deferred taxation liabilities (4,354)
Financial liabilities - Borrowings (15,430)
Total liabilities (109,460)
Net assets 28,524
As at 30 September 2006*
Segment assets 57,078 28,852 25,698 111,628
Corporation tax recoverable and deferred
taxation assets 14,402
Total assets 126,030
Segment liabilities (57,961) (14,823) (20,145) (92,929)
Current and deferred taxation liabilities (5,194)
Financial liabilities - Borrowings (12,895)
Total liabilities (111,018)
Net assets 15,012
As at 31 March 2007*
Segment assets 66,151 27,789 29,884 123,824
Corporation tax recoverable and deferred
taxation assets 12,896
Total assets 136,720
Segment liabilities (59,397) (13,433) (23,540) (96,370)
Current and deferred taxation liabilities (3,974)
Financial liabilities - Borrowings (10,442)
Total liabilities (110,786)
Net assets 25,934
* The figures as at 30 September 2006 and 31 March 2007 have been restated to
exclude balances related to taxation and borrowings.
(d) Other information
UK / Europe Asia Pacific Middle East Total
#'000 #'000 #'000 #'000
As at 30 September 2007
Capital expenditure 1,156 225 392 1,773
Depreciation 595 296 247 1,138
Amortisation - software 298 92 56 446
Amortisation - business combinations 452 290 39 781
As at 30 September 2006
Capital expenditure 970 349 365 1,684
Depreciation 616 257 108 981
Amortisation - software 298 80 37 415
Amortisation - business combinations 361 242 56 659
As at 31 March 2007
Capital expenditure 2,154 1,394 968 4,516
Depreciation 1,271 477 278 2,026
Amortisation - software 610 164 87 861
Amortisation - business combinations 727 570 110 1,407
3. Net finance costs
Six months Six months Year ended 31
ended 30 ended 30 March 2007
September 2007 September
2006
#'000 #'000 #'000
Bank borrowings (404) (206) (420)
Interest rate financial instruments - (29) (34)
Finance leases (117) (87) (261)
Bond facilities - - (7)
Unwinding of discounts in provisions (15) (45) (91)
Unwinding of discounts in deferred and
contingent consideration (68) (72) (109)
Net finance cost on pension scheme (24) (334) (419)
Interest payable and similar charges (628) (773) (1,341)
Investment interest income 115 93 325
Interest income received on tax refunds 1 27 33
Interest rate financial instruments 3 - -
Interest receivable 119 120 358
Net finance costs (509) (653) (983)
4. Earnings per share
(a) Number of shares
Six months Six months
ended 30 ended 30
September September Year ended 31
2007 2006 March 2007
Weighted average number of shares in issue 35,889,530 32,962,749 34,355,485
Effect of dilution
Share options 1,019,323 814,082 933,110
Weighted average shares (diluted) 36,908,853 33,776,831 35,288,595
(b) Earnings used in the calculation of earnings per share
Six months Six months Year
ended 30 ended 30 ended
September 2007 September 31 March
2006 2007
#'000 #'000 #'000
Earnings used for the calculation of basic
earnings per share 4,833 6,449 11,146
Less pension settlements and curtailments net of
costs (135) (4,297) (5,095)
Add back Asia Pacific office closure costs - - 210
Add back UK / Europe property costs - - 547
Add back amortisation of intangible assets on
business combinations 781 659 1,407
Add back tax on adjusted items (161) 1,289 1,133
Adjusted earnings 5,318 4,100 9,348
(c) Earnings per share
Six months Six months Year ended 31
ended 30 ended 30 March 2007
September September
2007 2006
Pence Pence Pence
Basic earnings per share 13.47 19.56 32.44
Less pension settlements and curtailments net of
costs (0.38) (13.03) (14.83)
Add back Asia Pacific office closure costs - - 0.61
Add back UK / Europe property costs - - 1.59
Add back amortisation of intangible assets on
business combinations 2.18 2.00 4.10
Add back tax on adjusted items (0.45) 3.91 3.30
Adjusted basic earnings per share 14.82 12.44 27.21
Six months Six months Year ended 31
ended 30 ended 30 March 2007
September September
2007 2006
Pence Pence Pence
Diluted earnings per share 13.10 19.09 31.59
Less pension settlements and curtailments net of
costs (0.37) (12.72) (14.44)
Add back Asia Pacific office closure costs - - 0.60
Add back UK / Europe property costs - - 1.55
Add back amortisation of intangible assets on
business combinations 2.12 1.95 3.99
Add back tax on adjusted items (0.44) 3.82 3.20
Adjusted diluted earnings per share 14.41 12.14 26.49
5. Dividends
Six months Six months Year ended 31
ended 30 ended 30 March 2007
September September
2007 2006
#'000 #'000 #'000
Dividends charged to equity in the period 502 296 511
Equity - Ordinary 10p shares
Final dividend paid (pence) 1.40 0.90 0.90
Interim dividend paid (pence) - - 0.60
The Directors are proposing an interim dividend of 0.90 pence per share (2006:
0.60 pence). In accordance with IFRS the interim dividend has not been
recognised in the Financial Statements but will be paid on 7 January 2008 to
shareholders on the register as at 7 December 2007.
6. Provisions
Professional Vacant property Total
indemnity
insurance
#'000 #'000 #'000
At 1 April 2007 2,834 604 3,438
Exchange adjustments 41 - 41
Charged to the Income Statement 651 - 651
Released to the Income Statement (803) - (803)
Utilised in year - (59) (59)
Amortisation of discount - 15 15
At 30 September 2007 2,723 560 3,283
At 30 September 2007
Current liabilities 2,723 323 3,046
Non-current liabilities - 237 237
2,723 560 3,283
At 31 March 2007
Current liabilities 2,834 74 2,908
Non-current liabilities - 530 530
2,834 604 3,438
At 30 September 2006
Current liabilities 2,908 48 2,956
Non-current liabilities - 1,104 1,104
2,908 1,152 4,060
Professional indemnity insurance
The provision reflects management's estimate of the likely cost of claims
including professional indemnity insurance excesses and has been provided in
accordance with Group policy. These provisions will be carried forward until
the claims to which they relate are agreed and amounts utilised or released as
appropriate.
Vacant property
The provision represents the estimated net present value of future rentals where
properties are vacant. These provisions will be utilised up until such time as
the vacant properties are re-let (when the requirement for a provision will be
reassessed), or the lease terminates, whichever occurs earlier.
7. Shareholders' funds and statement of changes in shareholders' equity
Share Share Retained Fair value Total Minority Total
capital premium earnings and other interest equity
reserves
#'000 #'000 #'000 #'000 #'000 #'000 #'000
At 1 April 2006 3,266 12,515 (8,232) 72 7,621 330 7,951
New shares issued 54 - - - 54 - 54
Premium on new shares issued - 1,345 - - 1,345 - 1,345
Profit for the period - - 6,449 - 6,449 114 6,563
Acquisition of minority - - - - - (279) (279)
interests
Dividends paid - - (296) - (296) - (296)
Actuarial losses on defined - - 862 - 862 - 862
benefit pension schemes
Deferred tax on actuarial - - (257) - (257) - (257)
losses
Share options charges - - 59 - 59 - 59
Deferred tax on share options - - (40) - (40) - (40)
Exchange adjustments - - - (884) (884) (66) (950)
At 30 September 2006 3,320 13,860 (1,455) (812) 14,913 99 15,012
New shares issued 265 - - - 265 - 265
Premium on new shares issued - 7,402 - - 7,402 - 7,402
Profit for the period - - 4,697 - 4,697 78 4,775
Acquisition of minority - - - - - 9 9
interests
Dividends paid - - (215) - (215) - (215)
Actuarial losses on defined - - (905) - (905) - (905)
benefit pension schemes
Deferred tax on actuarial - - 291 - 291 - 291
losses
Share options charges - - 74 - 74 - 74
Deferred tax on share options - - 18 - 18 - 18
Fair value gains on cash flow - - - 33 33 - 33
hedges
Cash flow hedges recognised - - - 69 69 - 69
Incentives granted in year - - - (240) (240) - (240)
Charge for the year - - - 46 46 - 46
Transfer to retained earnings - - (68) - (68) 68 -
Exchange adjustments - - - (688) (688) (12) (700)
At 31 March 2007 3,585 21,262 2,437 (1,592) 25,692 242 25,934
New shares issued 6 - - - 6 - 6
Premium on new shares issued - 149 - - 149 - 149
Profit for the period - - 4,833 - 4,833 3 4,836
Acquisition of minority - - - - - (168) (168)
interests
Dividends paid - - (502) - (502) - (502)
Actuarial losses on defined - - (1,268) - (1,268) - (1,268)
benefit pension schemes
Deferred tax on actuarial
losses - - 355 - 355 - 355
Effect of UK tax rate change - - (775) - (775) - (775)
Share options charges - - 79 - 79 - 79
Deferred tax on share options - - 27 - 27 - 27
Incentives granted in year - - - (300) (300) - (300)
Charge for the period - - - 74 74 - 74
Transfer to retained earnings - - 16 - 16 (16) -
Exchange adjustments - - - 85 85 (8) 77
At 30 September 2007 3,591 21,411 5,202 (1,733) 28,471 53 28,524
8. Notes to the Consolidated Statement of Cash Flows
(a) Cash flows from operating activities
Six months Six months Year ended
ended 30 ended 30 31 March
September September 2006 2007
2007
#'000 #'000 #'000
Profit for the financial period 4,836 6,563 11,338
Adjustments for:
Taxation 717 1,561 2,011
Depreciation 1,138 981 2,026
Loss / (profit) on disposal of property, plant and equipment 9 (3) 16
Amortisation of software 446 415 861
Amortisation of business combinations 781 659 1,407
Interest receivable (119) (120) (358)
Interest payable and similar charges 628 773 1,341
Amendments to fair value of consideration - - 1
Share option costs 186 105 248
Impairment of fixed assets - - 1,131
Release of vacant property provision - - (584)
Decrease in provisions (210) (299) (422)
Defined benefit scheme charges 959 1,754 3,378
Pension scheme curtailments - (4,000) (2,587)
Pension scheme settlements (320) (787) (4,000)
Contributions to defined benefit schemes (3,635) (4,195) (6,575)
Changes in working capital (excluding effects of
acquisitions):
Increase in trade and other receivables (5,980) (7,426) (9,839)
(Decrease) / increase in trade and other payables (5,829) 2,164 7,674
Cash (used) / generated from operations (6,393) (1,855) 7,067
(b) Reconciliation of movement in net funds / (debt)
At 30 Sept At 1 April Cash flow Acquisition Non cash Exchange At 30 Sept
2007 (excluding movement movement 2007
2006 cash and
overdraft)
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Cash at bank 8,611 18,663 (8,788) - - (39) 9,836
Debt due within 1 year (5,033) (2,534) (1,831) - (357) (17) (4,739)
Debt due after 1 year (4,762) (5,015) (2,758) - 357 (18) (7,434)
Finance leases due within
1 year (1,152) (1,173) 638 (11) (1,097) (14) (1,657)
Finance leases due after (1,948) (1,720) 23 (23) 175 (55) (1,600)
1 year
(12,895) (10,442) (3,928) (34) (922) (104) (15,430)
(4,284) 8,221 (12,716) (34) (922) (143) (5,594)
9. Acquisitions
The Group purchased RPA Quantity Surveyors Limited in April 2007 for a total
potential consideration of #3.4m which when discounted amounts to #3.3m. The
purchase was in line with Group policy and has been accounted for as an
acquisition.
All intangible assets were recognised at their respective fair values. The
residual excess over the net assets acquired, including intangible assets, is
recognised as goodwill in the Financial Statements.
Date of acquisition Location of Percentage of equity
operation acquired
RPA Quantity Surveyors Limited 24 April 2007 UK 100%
The acquisition of RPA Quantity Surveyors Limited has contributed #0.8m of gross
revenue and #0.2m to operating profits, before amortisation of intangible
assets.
Details of the provisional fair values of assets and liabilities, goodwill and
intangible assets and contingent consideration are as follows:
#'000
Property, plant and equipment 89
Trade and other receivables 664
Amounts recoverable on contracts 33
Cash and cash equivalents 60
Financial liabilities - borrowings (11)
Trade and other payables (450)
Current taxation liabilities (101)
Non-current liabilities:
Financial liabilities - borrowings (23)
Deferred taxation liabilities (4)
Net assets acquired 257
Customer contracts and relationships 610
Brand name 31
Intangibles assets acquired 641
Deferred taxation (192)
Goodwill 2,620
3,326
Consideration
Consideration and costs 2,912
Contingent consideration 414
Gross consideration 3,326
The fair value of assets and liabilities contain some provisional amounts which
will be finalised in the year to 31 March 2008. Goodwill represents the value
of synergies, prospects and the workforce.
The cash flows arising from the acquisition were as follows:
#'000
Cash consideration and costs 2,912
Cash acquired (60)
Net cash outflow 2,852
During the period to 30 September 2007 the provisional fair values of net assets
acquired in relation to the acquisition of ACLA Limited in Hong Kong and ACLA
Pte Limited in Singapore reduced by #0.1m to #0.2m against the carrying value of
goodwill acquired.
10. Pension commitments
Employees of the Group participate in a number of pension schemes both in the UK
and overseas. The principal scheme in the UK is the Acer Group Pension Scheme
(AGPS) which is a defined benefit scheme. The amounts included in the balance
sheet for post employment benefits are as follows:
As at 30 As at 30 As at 31
September 2007 September March 2007
2006
#'000 #'000 #'000
AGPS 30,544 34,217 32,670
Unfunded Annuitants scheme 684 781 650
Total AGPS and Annuitants scheme 31,228 34,998 33,320
Overseas schemes 2,694 2,402 2,391
Post employment benefits 33,922 37,400 35,711
AGPS
The Group has further increased its contributions to the AGPS, contributing
#3.8m in the period, including a #2m special contribution funded through an
unsecured loan facility. During the period further members have accepted the
Company's offer to transfer out their liabilities from the AGPS resulting in an
additional saving against the deficit of #0.3m being recognised in the period.
As at 30 As at 30 As at 31
September 2007 September March 2007
2006
AGPS and Annuitants scheme: % % %
Rate of increase in salaries 3.40 2.90 3.20
Rate of increase to pensions in payment:
- Index linked pensions with max 3% per annum 3.00 2.85 2.95
increases
- Other index linked pensions 3.40 2.90 3.20
Discount rate 5.80 5.10 5.30
Inflation assumptions 3.40 2.90 3.20
Expected rates of return on scheme assets:
Equities 8.50 8.00 8.30
Bonds 5.70 5.20 5.50
Other 5.75 4.50 5.25
Longevity at age 65 for current pensioners
- Men 21.4 years 18.5 years 18.5 years
- Women 23.9 years 21.5 years 21.5 years
Longevity at age 65 for future pensioners
- Men 22.9 years 19.4 years 19.4 years
- Women 25.4 years 22.4 years 22.4 years
The amounts included in the balance sheet for the #'000 #'000 #'000
AGPS and Annuitants scheme are as follows:
At 1 April (33,320) (43,084) (43,084)
Current service costs (800) (1,201) (2,180)
Notional interest on pension liability (24) (334) (425)
Contributions by employers 3,864 3,972 5,896
Actuarial gains / (losses) due to:
- Changes in mortality assumptions (10,425) - -
- Changes in other actuarial assumptions 7,687 2,417 2,095
- Return on assets 1,470 (1,555) (2,209)
Curtailments - 4,000 4,000
Settlements 320 787 2,587
Deficit in AGPS and Annuitants scheme (31,228) (34,998) (33,320)
Related deferred tax asset 6,744 8,579 8,395
Net pension deficit (24,484) (26,419) (24,925)
11. Contingent liabilities
The Directors estimate that at 30 September 2007 contingent liabilities,
primarily in respect of the insurance excesses relating to potential
professional indemnity claims, with regard to contracts of Group companies and
joint ventures, in excess of amounts provided for in the Financial Statements,
amounted to #8.3m compared with #8.3m at 31 March 2007. The Directors do not
consider any provision is necessary in respect of these amounts as they consider
the likelihood of loss to be remote based on legal and other advice received.
Hyder Consulting PLC and various Group companies have entered into performance
guarantees and performance bonds supporting project requirements in the ordinary
course of business. The Group's liabilities under performance guarantees are
only limited to the extent of the underlying contracts. The potential liability
of subsidiary undertakings under performance bonds as at 30 September 2007
totalled #11.1m compared with #11.2m at 31 March 2007. The Directors do not
consider any provision is necessary in respect of guarantees and bonds.
12. Cautionary statement
This Half Year Report has been prepared solely for the Company's members, as a
body. They may contain certain forward-looking statements with respect to the
financial condition, performance, results, strategy and objectives, operations
and businesses of the Group. By their nature these statements involve
uncertainty because they relate to future events and circumstances which are
beyond the Group's control. As a result the Group's actual future financial
condition, performance and results may differ materially from the plans or
expectations in any forward-looking statement. The Company assumes no obligation
to update or revise any forward-looking statement, resulting from new
information, future events or otherwise. Nothing in this Half Year Report
should be construed as a profit forecast.
13. Further information
Copies of the Half Year Report have been sent to shareholders. Further copies
are available from the Company's registered office at 29 Bressenden Place,
London SW1E 5DZ. In addition, an electronic version of the Half Year Report and
31 March 2007 financial statements can be viewed on the corporate web site:
www.hyderconsulting.com.
Statement of Directors' Responsibilities
The Directors confirm that this condensed set of financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union, and that
the Interim Management Report herein includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8.
The Directors of Hyder Consulting PLC are listed in the Hyder Consulting PLC
Annual Report and Financial Statements 2007. There have been no changes of
directors since the Annual Report. A list of current directors is maintained on
the Hyder Consulting website www.hyderconsulting,com.
By order of the Board
Neil Hunt
Company Secretary
26 November 2007
Independent Review Report to Hyder Consulting PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007, which comprises the income statement, balance sheet, statement
of recognised income and expense, cash flow statement and related notes. We have
read the other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
26 November 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KXLFLDFBFFBZ
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