TIDMHYC
RNS Number : 0400I
Hyder Consulting PLC
08 June 2011
Hyder Consulting PLC (HYC.L)
Final Results Announcement
Annual results for the year ended 31 March 2011
Geographic diversity and earnings growth
Hyder Consulting, the multi-national advisory and design
consultancy, today announces its results.
Financial & Operational highlights:
-- Adjusted operating profit* up 13% to GBP20.3m (2010:
GBP18.0m)
-- Net adjusted operating margins* up to 8.1% (2010: 6.7%)
-- Adjusted profit before tax* up 25% to GBP20.3m (2010:
GBP16.3m)
-- Adjusted diluted earnings per share* up 23% to 43.34p (2010:
35.26p)
-- Full year dividend up 29% at 7.75p (2010: 6.00p)
-- Net cash balances of GBP13.1m (2010: GBP3.6m); unutilised
facilities GBP46.7m
-- Order book of GBP312m (2010: GBP346m); strong pipeline in all
regions
-- Good visibility of earnings, with approximately 60% of next
year's revenues secured
-- 71% of revenues and 75% of operating profits earned
overseas
* Adjusted numbers exclude amortisation on business
combinations
Commenting on the results Sir Alan Thomas, Chairman, said:
"We've concentrated on the regions and sectors we understand
well and where Hyder has distinctive expertise. As a result,
earnings, cash and dividends have improved further in what have
been variable, and not always helpful, economic conditions.
We want to continue to grow earnings (and their quality) by
further market penetration in our selected sectors of transport,
utilities, property and environment. These four sectors are driven
by the growing demands of urbanisation, mass transit, climate
change and water and power scarcity, areas in which Hyder is
internationally competitive.
Hyder's geographic diversity gives us resilience and
flexibility, and the Board remains confident about the Group's
prospects for the year ahead."
Contacts:
Hyder Consulting PLC
Ivor Catto, Chief Executive Tel: +44 (0)20 7904
9011
Russell Down, Group Finance Director Tel: +44 (0)20 7904
9020
Citigate Dewe Rogerson
Ginny Pulbrook Tel: +44 (0)20 7282
2945
Ged Brumby Tel: +44 (0)20 7282
2996
There will be a results presentation for stockbroking analysts
today at 9.30am, to be held at Citigate Dewe Rogerson, 3 London
Wall Buildings, London Wall, EC2M 5SY
Chairman's Statement
I am pleased to report another year of increased profits,
margins and net cash balances.
Results
Revenue was GBP290.3m (2010: GBP308.6m); net revenue, after
deduction of sub-consultant costs, was GBP251.4m (2010:
GBP266.9m).
Adjusted operating profit grew by 13% to GBP20.3m (2010:
GBP18.0m), after absorbing GBP2.9m of redundancy costs (2010:
GBP3.4m), and after foreign currency translation gains of GBP1.7m.
The net revenue margin, after these items, grew to 8.1% (2010:
6.7%). Operating profit after amortisation on business combinations
increased by 20% to GBP18.2m (2010: GBP15.2m). Adjusted profit
before tax rose by 25% to GBP20.3m (2010: GBP16.3m).
Adjusted diluted earnings per share increased by 23% to 43.34p
(2010: 35.26p). Diluted earnings per share after amortisation of
business combinations was 38.63p (2010: 29.24p).
Funding
At 31 March 2011 the group had net cash of GBP13.1m (2010:
GBP3.6m). Cash balances at the year end amounted to GBP22.2m with
unutilised facilities of GBP46.7m.
The group generated operating cash flow of GBP19.2m (2010:
GBP15.7m), after making contributions of GBP3.1m towards the
pension deficit. Cash conversion for the year was 87% before
accounting for these contributions.
At 31 March 2011 the deficit in our UK pension scheme had
reduced to GBP17.3m (2010: GBP25.8m), primarily reflecting good
asset returns. Following a consultation period with active members,
and discussions with the Trustees, the scheme was closed to future
benefit accrual on 30 April 2011.
Dividend
In recognition of the group's financial performance, the
directors propose a final dividend of 6.00p per share (2010: 4.50p)
making a full year dividend of 7.75p per share (2010: 6.00p), an
increase of 29%. The full year dividend is covered 5.6 times by
adjusted diluted earnings per share (2010: 5.9 times).
Operating highlights
Asia-Pacific. Regional revenues grew by 20% to GBP114.0m, whilst
adjusted operating profits increased 37% to GBP14.4m. Adjusted
operating margins increased to 12.6% (2010: 11.0%). Foreign
currency translation gains were GBP1.6m. In Australia our transport
division has performed particularly well on a number of Alliance
contracts, which have been completed ahead of budget and timetable
resulting in bonus payments. We have invested in our water business
there and are confident of further growth in this market in the
coming year. There are good opportunities in the Queensland coal
seam gas market. The recent flooding and the results of state
elections have caused the deferral of some new infrastructure
contracts in Australia, but we are now seeing signs of their
revival. In November we acquired the business and assets of
transport consultancy Strategic Design and Development, which has
integrated well with our transport business. In China we have
invested in staff training, developing key client relationships and
expanding our regional market presence. We have opened new and
larger offices in Shanghai and Beijing.
Middle East. Revenue was GBP65.5m, 30% lower than the prior
year, with staff numbers reduced by 200 to approximately 1,000
following the deferral of new contract awards in the first half.
Adjusted operating profits were GBP2.6m (2010: GBP7.2m), and
margins 4.0% (2010: 7.7%), after absorbing redundancy costs of
GBP0.9m. In recent months our longstanding presence and trusted
client relationships in Abu Dhabi, Qatar and Bahrain have helped us
win major projects including Step Tunnel in Abu Dhabi, a call-off
contract with Ashgal in Qatar, and Muharraq waste water treatment
works in Bahrain. Though we have continued to experience delays in
some settlements with a small number of clients in the region,
there are signs that liquidity is improving in the region as a
whole. We are continuing to build our market presence in Saudi
Arabia ahead of an expected significant increase in infrastructure
expenditure there.
Europe. Despite an 8% fall to GBP110.8m in regional revenues,
adjusted operating profits increased by 94% to GBP6.6m due to some
important project awards and improvements in operational
efficiency. Adjusted operating margins increased to 5.9% (2010:
2.8%). In the UK our transport business has performed well and we
were pleased to be appointed recently to three Highways Agency
Project Support Frameworks. We have grown our rail business with a
continuing flow of work from Crossrail, London Underground and
Network Rail. Results in the water sector have improved with
further contract awards under AMP5, including a new framework
agreement with Southern Water. In Germany the integration of
Ingenieur Consult is proceeding well. Following the restructuring
in 2010, results have improved there and we have secured some
important contracts with German clients in the Middle East.
Strategy
We are a leading, multi-national, white collar engineering
design and advisory company and concentrate on those regions and
sectors we understand well and where Hyder has distinctive
expertise.
We want to continue to grow earnings (and their quality) by
further market penetration in our selected sectors of transport,
utilities, property and environment. These four sectors are driven
by the growing demands of urbanisation, mass transit, climate
change and water and power scarcity, areas in which Hyder is
internationally competitive.
We are very active in client development and invest company
resources in both existing and new key client accounts.
In support of our market-facing operations, we have developed
two design excellence centres: a long-established centre in Manila
which undertakes design of infrastructure and property projects;
and a new centre in Bangalore which carries out the design of
utility and rail projects.
We are responsive to attractive bolt-on acquisition
opportunities which we judge will enhance competencies in our core
sectors; strengthen our regional, client-facing capabilities; and
increase shareholder value.
People
We have adapted quickly and responsibly to market conditions and
now employ 3,697 people across our regions.
Our operations are structured regionally, managed by empowered
teams which understand local market needs and opportunities. We
employ a majority of local staff but with a mix of international
experts and a flat management structure with a culture of
responsiveness, teamwork, adaptability and client care. We have
continued to invest in the development of our people and promote
flexibility, encouraging staff to work in different geographies and
sectors where practical.
Outlook
With 71% of revenue and over 75% of operating profits earned
overseas, the group is broadly based, both internationally and
across market sectors. This diversity provides the group with
considerable resilience; it should help us to adapt rapidly to
variations in demand in individual regions, and will provide us
with opportunities as markets recover. The board is confident about
our prospects for the year ahead for which we have secured
approximately 60% of expected revenue.
On behalf of the board, I would like to express our appreciation
to all our clients for their continued support and to thank every
member of our staff for enabling us to report another year of
improved results.
Sir Alan Thomas
Chairman
8 June 2011
Business review
Hyder is a leading multi-national engineering consultancy
founded 150 years ago. Headquartered in London, 71% of our revenue
is earned outside the UK.
Asia-Pacific
Regional revenues increased by 20% to GBP114.0m (2010:
GBP94.8m), up 8.3% on a constant currency basis. Adjusted operating
profits amounted to GBP14.4m (2010: GBP10.5m) benefitting from
Alliance contract bonuses in Australia.
Australia: Revenue increased to GBP91.8m (2010: GBP75.9m), an
increase of 6.7% on a constant currency basis. Adjusted operating
profit increased by 40% to GBP13.9m (GBP9.9m), up 24.4% in constant
currency. Adjusted operating margins were 15.1% (2010: 13.0%).
Asia: Revenue increased 17% to GBP22.2m (2010: GBP18.9m), whilst
adjusted operating profit reduced slightly to GBP0.5m (2010:
GBP0.6m). Adjusted operating margins were 2.2% (2010: 3.1%)
reflecting the costs of investment in China during the period.
In Australia we have performed well on a number of
infrastructure Alliance contracts, which has enabled us to
recognise performance bonuses this year. We are currently working
on further Alliance contracts for the M80 motorway in Victoria, and
Hunter expressway in Queensland which we expect to complete
successfully this financial year. We have invested in developing
our rail business and have a number of good opportunities in this
sector.
In property, public sector work on the Building the Education
Revolution project, for the refurbishment of over 500 schools, has
now been completed; the substantial Royal North Shore hospital
project in Sydney has continued during the year. In the private
sector we are seeing early signs of the market returning and
anticipate growth in the current year.
We have invested in growing our Australian water business and
developed our reputation with the successful completion of projects
such as the National Water Initiative Impact Assessment. We see
substantial opportunities in the coal seam gas market and have won
important new projects in Queensland with Laing O'Rourke.
Projects completed in New South Wales during the year include
the Inner West Busway and the integrated fit-out of Cochlear's new
Global Headquarters. In Queensland, the Go Between Bridge provides
a new inner-city river crossing that caters for vehicle, pedestrian
and cycle traffic. In Victoria, the West Gate Freeway Upgrade
completes a critical section of the Melbourne freeway network.
In Queensland the flooding in January did not materially affect
our business, although we have seen new project opportunities being
deferred as federal government spend is diverted towards
remediation work. Whilst this has not affected our current workload
our forward order book has reduced. We expect this to recover as
new opportunities crystallise.
In what is largely a public sector and competitive market in
Hong Kong, we are well placed for continued work with MTR and
further Greening Masterplan projects. In mainland China we have
been investing in our expansion, winning commissions for the
planning of large urban areas and developing good relationships
with major contractors. Revenues in China increased significantly
in the year and we opened new and larger offices in Beijing and
Shanghai to accommodate this growth.
Major projects
-- Sapphire to Woolgoolga Design and Construct, Australia
-- Pacific Highway Upgrade (Tintenbar to Ewingsdale),
Australia
-- Coal Seam Gas - Kenya Projects, Water Treatment and Pipeline
Design, Australia
-- Kempsey Bridges Design and Construct, Australia
-- Royal Agricultural Society Showground Redevelopment,
Australia
-- White Bay Cruise Passenger Terminal, Australia
-- Xunlioa Seaside Resort, China
-- Dongshan Yan Yia Wei and Licang East, Urban and Landscape
planning, China
-- Happy Land theme park development, Vietnam
Middle East
Regional revenues were lower by 30% at GBP65.5m (2010:
GBP93.9m), down 32.2% on a constant currency basis, reflecting both
a scaling back of operations in Dubai, following the completion of
contracts there, and delays in contract awards in the region.
Adjusted operating profits were GBP2.6m (2010: GBP7.2m) after
absorbing GBP0.9m of redundancy costs and adjusted operating
margins 4.0% (2010: 7.7%).
Hyder has been operating in the Middle East for over 45 years,
and has developed excellent local knowledge and client
relationships. We continue to concentrate our efforts on the oil
backed economies of the UAE, Qatar, Bahrain, Kuwait and Saudi
Arabia. We have no projects or exposures to Libya, Iran, Egypt,
Yemen or Syria. In Bahrain, where we have an office of
approximately 100 staff, we are trading normally and only suffered
minimal disruption during the protest rallies earlier this
year.
Following the global credit crunch, our public and private
sector clients in the region undertook a review of their capital
programmes which delayed new project awards. We have also
experienced delayed contract payments, the settlement of aged debts
through structured payment plans, and some isolated delays in the
recovery of work in progress. More recently we have seen capital
programmes being revived, and some signs of liquidity returning,
with the strong oil price increasing confidence. These refreshed
programmes have been allocated large and committed budgets
concentrated on infrastructure spend, reflecting widespread intent
by governments to improve the quality of life for their citizens.
We have recently received a number of important new project awards
including the Muharraq sewage treatment plant in Bahrain, STEP
tunnel in Abu Dhabi and a highways design call off contract for
Ashgal in Qatar. As a consequence, our order book at the year end
has reduced slightly to GBP100.8m (2010: GBP110.8m).
We have developed a strong rail capability in the region
utilising our expertise from Germany, Hong Kong and the UK to win
projects in Qatar and the UAE. We have also secured our first
public transport planning project in Saudi Arabia where we have
been vigorous in seeking to participate in the major infrastructure
programmes being planned there.
Major projects
-- STEP Tunnel, Abu Dhabi
-- Emirati Neighbourhoods Package 4, Qatar
-- Muharraq waste water treatment plant, Bahrain
-- Ashgal call off consultancy, Qatar
-- Environmental Baseline Data study, Abu Dhabi
-- New Deira Fish Market and Deira Waterfront Development,
Dubai
-- T22, Saudi Arabia
Europe
Regional revenues were 8% lower at GBP110.8m (2010: GBP119.9m).
Adjusted operating profits increased by 94% to GBP6.6m (2010:
GBP3.4m) reflecting improved key account management and operational
efficiency.
UK: Revenue amounted to GBP87.2m (2010: GBP95.9m). Adjusted
operating profit increased by 77% to GBP5.5m (2010: GBP3.1m), after
absorbing GBP1.1m of redundancy costs. Adjusted operating margins
were 6.3% (2010: 3.3%).
Germany: Revenue was GBP23.6m (2010; GBP24.0m), whilst adjusted
operating profit increased 267% to GBP1.1m (2010: GBP0.3m) due to
improved operational efficiency. Adjusted operating margins were
4.7% (2010: 1.3%).
In the transport sector, we have performed well in a challenging
market. Important contracts have been the M25 widening (where we
are the clients' agent); Crossrail; TfL frameworks and more
recently, our successful bid to the Highways Agency for the project
support frameworks, which have enhanced our brand positioning,
whilst boosting our profile with key clients. In rail our
performances on Crossrail and North London Lines, as well as recent
wins with Network Rail and London Underground, have been
acknowledged by clients as being innovative and effective.
Our profile in the water sector has been strengthened by our
work on a number of important contracts. We are working on AMP 5
frameworks for South West Water and Severn Trent, have secured
major contracts with Thames and Welsh Water and have recently been
appointed to another framework by Southern Water.
In the property sector, recent major wins build on our
professional reputation in high rise structures which we expect to
lead to opportunities in the future.
In Germany, our investment in the development of client
relationships and improvements in operational efficiency have
substantially increased operating profits there.
Our property division has performed particularly well during the
year with notable projects such as the design of Halle football
stadium. The acquisition of Ingenieur Consult strengthens our
offering in this growing market. In the transport sector we have
continued our work at Frankfurt and Berlin airports and are working
on rail projects with key client Deutsche Bahn both in Germany and
overseas.
Major projects secured
-- Highways Agency, PSF Frameworks, UK
-- Atasehir Gardens, Turkey
-- Kent-Sussex platform extensions, UK
-- Bicester Eco-Town, UK
-- Walsall & Cannock signaling renewal, UK
-- Southern Water AMP 5 frameworks, UK
-- Frankfurt airport expansion, Germany
-- Wendlingen - Ulm rail site supervision, Germany
-- Industrial plant design: Pfalzer, Germany
Financial Review
The group's geographic diversity has enabled us to report
another year of improved financial results. Our Australian business
has performed particularly well, benefiting from Alliance contract
bonuses. In the Middle East we have encountered challenging trading
conditions, although towards the end of the year we have secured a
number of contracts that give us confidence for the year ahead.
Following management changes, results in the UK have improved
significantly from the prior year.
We continued to improve our cash performance in spite of the
liquidity pressures that exist in some markets. At the year-end our
net cash balances were GBP13.1m, a significant increase from
GBP3.6m the year before.
Revenue and profit
Revenue for the year was GBP290.3m (2010: GBP308.6m), 5.9%
lower. Net revenue, after deduction of sub-consultant costs, was
5.8% lower at GBP251.4m (2010: GBP266.9m). On a constant currency
basis revenue and net revenue decreased by 9.9% and 11.1%
respectively. The reduction in revenue is principally due to the
reduced scale of operations in the Middle East.
In presenting the group's adjusted profit below, amortisation of
intangible assets arising on business combinations has been
excluded as the directors believe that this assists with
understanding the underlying performance of the group:
2011 2010 Change
GBP'000 GBP'000 %
-------- -------- -------
Group operating profit 18,156 15,177 20%
Add back:
Amortisation on business combinations 2,147 2,825 (24%)
Adjusted operating profit 20,303 18,002 13%
Net finance income/(costs) 23 (1,710) (101%)
Adjusted profit before taxation 20,326 16,292 25%
-------- -------- -------
Adjusted operating profit increased 12.8% to GBP20.3m (2010:
GBP18.0m). The adjusted operating margin on net revenue increased
to 8.1% from 6.7%.
Foreign exchange gains of GBP1.7m have been recognised within
operating profit from translation of overseas profits, largely in
Australia. No exceptional items were incurred in the current or
prior year. Redundancy costs of GBP2.9m (2010: GBP3.4m) have been
absorbed within adjusted operating profit following actions to more
closely align our resource levels with projected workload and to
improve operational efficiency. The redundancy costs were primarily
incurred in the UK (GBP1.1m), the Middle East (GBP0.9m), and
Australia (GBP0.6m).
Adjusted profit before taxation increased 24.5% to GBP20.3m
(2010: GBP16.3m) reflecting lower financing costs.
Taxation
The taxation charge for the year was GBP3.3m (2010: GBP2.3m),
equating to a tax rate of 18.1% (2010: 17.1%). The tax rate on
adjusted profit before tax was 17.9% (2010: 17.3%).
The increase in the tax rate is a result of a change in the mix
of the group's profits, with a lower proportion of the profit being
earned in zero rate jurisdictions, primarily the UAE. The current
rate is lower than the UK tax of 28% reflecting research and
development tax credits in both Australia and the UK, and lower tax
rates in the Middle East.
Earnings per share
Basic earnings per share increased to 39.29p (2010: 29.50p);
diluted earnings per share increased to 38.63p (2010: 29.94p). The
weighted average number of ordinary shares during the year was
37.9m (2010: 37.9m), reflecting the shares issued to satisfy
options exercised during the year offset by shares purchased by the
employee benefit trust. In 2011, vested executive share options
have been treated as potentially issuable shares and included
within the calculation of diluted earnings per share, to the extent
that they are 'in the money'. In the prior year these shares were
included within the calculation of basic earnings per share, and
consequently the comparative numbers have been restated to reflect
this change as shown in note 3. After adjusting for the
amortisation of intangible assets arising on business combinations,
fully diluted earnings per share increased by 22.9% to 43.34p
(2010: 35.26p).
Dividends
In recognition of the group's financial performance, the board
has proposed a 29.2% increase in the full year dividend to 7.75p
(2010: 6.00p). A final dividend of 6.00p per share (2010: 4.50p) is
proposed for the year to 31 March 2011 which, if approved by the
shareholders, will be paid on 5 August 2011 to shareholders on the
register at 8 July 2011. The full year dividend is covered 5.6
times by adjusted fully diluted earnings per share (2010: 5.9
times).
Acquisitions
In the current financial year the Group acquired Ingenieur
Consult in Germany, and the business and assets of Strategic Design
and Development in Australia for cash consideration of GBP1.1m.
Further contingent consideration of GBP0.3m may be payable in
relation to the acquisition of Ingenieur Consult in the current
financial year dependent on business performance.
We are responsive to financially attractive, bolt-on
acquisitions to enhance skills and expand in our core sectors and
regions; presently there are a number of potential acquisition
opportunities under investigation.
As a result of acquisitions in prior years the charge for
amortisation of intangible assets from business combinations was
GBP2.1m (2010: GBP2.8m).
Goodwill on acquired businesses is carried forward at cost, and
reviewed annually for impairment. There has been no impairment to
the carrying value of goodwill this financial year.
Capital structure
During the year the company issued 169,960 10p ordinary shares
in relation to exercised share options. As at 31 March 2011 there
were 38,540,280 (2010: 38,370,320) fully paid ordinary shares in
issue.
During the year to 31 March 2011 shareholders' equity increased
by 20.4% to GBP81.4m (2010: GBP67.6m) primarily reflecting retained
earnings for the year. Net cash balances were GBP13.1m at 31 March
2011 (2010: GBP3.6m).
Shareholder return
At 31 March 2011 the net asset value per share was 211p (2010:
176p). The closing share price on 31 March 2011 was 362p per share
(2010: 255p); market capitalisation was GBP139.5m (2010:
GBP96.4m).
Financing
At the year end the group had net cash balances of GBP13.1m
(2010: GBP3.6m). Cash balances increased to GBP22.2m (2010:
GBP21.4m) and total borrowings reduced to GBP9.1m (2010: GBP17.8m)
providing substantial headroom against available facilities.
The group's principal committed banking facilities totalling
GBP45.8m are with HSBC and Barclays in the UK which include
revolving credit facilities of GBP20m and GBP18m expiring in April
2012 and February 2013 respectively, and other long term facilities
of GBP7.8m. In addition the group has access to a number of
overseas and on demand facilities of a further GBP6.0m, and leasing
facilities of GBP4.0m. Total facilities amount to GBP55.8m, all of
which are unsecured. The Group is in advanced discussions with HSBC
in relation to the renewal of its revolving credit facility.
Under the terms of its principal banking facilities the group is
required to operate within certain financial covenants. In line
with market practice these are related to net debt (including
guarantee liabilities), EBITDA, debt service costs and interest
cover. The group had significant headroom within all of these
covenants throughout the year.
The net finance income of the group amounted to GBP23k (2010:
cost GBP1.7m) primarily reflecting a GBP1.5m reduction in charges
for financing costs on pension schemes.
Cash flow
Net cash was GBP13.1m at 31 March 2011 (2010: GBP3.6m) the
movement is shown below:
2011 2010
GBP'000 GBP'000
-------- --------
Net cash / (debt) 1 April 3,633 (5,729)
Cash generated from operations 19,164 15,702
Interest (319) (753)
Tax (4,522) (498)
Acquisition consideration (440) (1,168)
Capital expenditure (net) (2,153) (2,438)
Dividend (2,358) (1,730)
FX/ other 91 247
Net cash 31 March 13,096 3,633
-------- --------
Our cash balances have improved, despite delays in contract
settlements from certain clients in the Middle East. Trade debtors
in the region reduced to GBP23.5m (2010: GBP29.4m); net work in
progress balances increased slightly to GBP13.3m (2010: GBP12.3m)
as a result of delayed contract billings; we remain confident of
recovering these amounts due.
Cash generated from operating activities was GBP19.2m (2010:
GBP15.7m), after funding contributions towards the AGPS deficit of
GBP3.1m (2010: GBP3.0m). The proportion of EBITDA converted into
operating cash flow in the year was 87% (2010: 80%), before
accounting for these contributions.
Tax payments increased substantially in the year, principally in
Australia, to GBP4.5m (2010: GBP0.5m). Cash consideration paid for
acquisitions was GBP1.1m (2010: GBP1.2m) with cash balances
acquired of GBP0.7m. Consideration paid in the prior year primarily
related to the full earn-out payment for the ACLA acquisition which
was completed in 2006.
Retirement benefit obligations
The group operates both defined benefit and defined contribution
schemes.
The principal defined benefit scheme is the AGPS, for which the
sponsoring employer is Hyder Consulting (UK) Limited. There are no
group guarantees in place in relation to the AGPS.
The scheme was closed to new members in 2001 and had 164 active
members at 31 March 2011. A 60 day consultation period was recently
concluded with active members concerning the scheme's closure to
future accrual. Following a review of the proposals and the outcome
of the consultation the Scheme's Trustees consented to close the
Scheme to future accrual with effect from 30 April 2011. This
change will reduce the rate of growth of the Scheme's liabilities
and the volatility of the pension scheme deficit in future
years.
The gross deficit in the scheme at 31 March 2011 reduced to
GBP17.3m (2010: GBP25.8m); the deficit net of deferred tax reduced
to GBP13.5m (2010: GBP20.3m). The reduction in the deficit reflects
better than expected asset returns, a change in the inflation
assumption used for deferred member liabilities from RPI to CPI,
deficit contributions of GBP3.1m in the year, offset by actuarial
losses due to improving mortality assumptions and reduced discount
rates. A triennial valuation of the scheme as at 1 April 2011 is
expected to be concluded during the current financial year.
The main assumptions in valuing the deficit are disclosed in
note 6. The sensitivities of the AGPS scheme liabilities to changes
in these assumptions are shown below:
Assumption Change in assumption Indicative effect on scheme
liabilities
------------------ --------------------- ----------------------------
Discount rate Increase / decrease Decrease / increase by
by 0.5% 9%
Rate of inflation Increase / decrease Increase / decrease by
by 0.5% 6%
Longevity Increase by 1 year Increase by 2-3%
The net finance income for pension schemes amounted to GBP0.5m
in the year (2010: cost GBP1.0m).
The board acknowledges that valuations of defined benefit
schemes under IAS 19 are inherently volatile, and will continue to
take action where appropriate to reduce the AGPS deficit.
Overseas post employment benefit liabilities relate principally
to benefits payable on termination to staff in the Middle East and
reduced to GBP6.0m (2010: GBP7.0m) as a result of the reduction in
staff numbers during the year.
Ivor Catto Russell Down
Chief Executive Group Finance Director
Consolidated income statement for the year ended 31 March
2011
2011 2010
Note GBP'000 GBP'000
---------- ----------
Revenue 1(a) 290,297 308,606
Net operating costs (272,141) (293,429)
---------- ----------
Group operating profit 1(b) 18,156 15,177
---------- ----------
Finance costs 2 (910) (2,178)
Finance income 2 933 468
---------- ----------
Profit before taxation 18,179 13,467
---------- ----------
Analysed as:
Adjusted profit before taxation 20,326 16,292
Amortisation of business combination
intangible assets (2,147) (2,825)
Profit before taxation 18,179 13,467
---------- ----------
Taxation (3,297) (2,300)
---------- ----------
Profit attributable to equity holders
of the parent 14,882 11,167
========== ==========
Earnings per share (p)
Basic 3 39.29 29.50
Diluted 3 38.63 29.24
Adjusted basic 3 44.08 35.58
Adjusted diluted 3 43.34 35.26
--------------------------------------- ----- ---------- ----------
Consolidated statement of comprehensive income
2011 2010
GBP'000 GBP'000
-------- --------
Profit for the year 14,882 11,167
Other comprehensive income / (expense)
for the year
Foreign exchange movements (1,795) 1,029
Cash flow hedges 133 49
Actuarial gain / (loss) on defined
benefit pension schemes 2,705 (2,528)
-------- --------
Total other comprehensive income /
(expense) for the year 1,043 (1,450)
-------- --------
Total comprehensive income for the year
attributable to equity shareholders 15,925 9,717
======== ========
All balances are shown net of taxation.
Consolidated statement of changes in equity
Share Share Retained Other Non-controlling
capital premium earnings reserves Total interest Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- --------- --------- -------- ---------------- --------
At 1 April 2009 3,776 28,840 13,828 12,376 58,820 30 58,850
New shares issued 61 - - - 61 - 61
Premium on new shares
issued - 441 - - 441 - 441
Profit for the year - - 11,167 - 11,167 - 11,167
Dividends paid - - (1,730) - (1,730) - (1,730)
Actuarial loss on
defined benefit pension
schemes - - (2,528) - (2,528) - (2,528)
Share based payments - - 394 - 394 - 394
Cash flow hedges - - - 49 49 - 49
Employee trust purchase
of own shares - - - (84) (84) - (84)
Transfer of own shares
from EBT - - (72) 72 - - -
Non-controlling interest
acquired - - - - - (30) (30)
Foreign exchange
movements - - - 1,029 1,029 - 1,029
-------- -------- --------- --------- -------- ---------------- --------
At 31 March 2010 3,837 29,281 21,059 13,442 67,619 - 67,619
New shares issued 17 - - - 17 - 17
Premium on new shares
issued - 308 - - 308 - 308
Profit for the year - - 14,882 - 14,882 - 14,882
Dividends paid - - (2,358) - (2,358) - (2,358)
Actuarial gain on
defined benefit pension
schemes - - 2,705 - 2,705 - 2,705
Share based payments - - 414 - 414 - 414
Cash flow hedges - - - 133 133 - 133
Employee trust purchase
of own shares - - - (559) (559) - (559)
Transfer of own shares
from EBT - - (96) 96 - - -
Foreign exchange
movements - - - (1,795) (1,795) - (1,795)
-------- -------- --------- --------- -------- ---------------- --------
At 31 March 2011 3,854 29,589 36,606 11,317 81,366 - 81,366
======== ======== ========= ========= ======== ================ ========
All balances are shown
net of taxation.
Consolidated balance sheet as at 31 March 2011
2011 2010
GBP'000 GBP'000
--------- ---------
Assets
Non-current assets
Intangible assets 39,070 42,231
Property, plant and equipment 7,550 10,456
Deferred tax assets 10,079 10,834
56,699 63,521
--------- ---------
Current assets
Trade and other receivables 111,747 115,636
Corporation tax recoverable 602 1,141
Cash and cash equivalents 22,220 21,399
134,569 138,176
--------- ---------
Liabilities
Current liabilities
Borrowings (1,469) (2,630)
Trade and other payables (64,816) (70,160)
Current tax liabilities (4,469) (4,653)
Provisions (4,201) (4,650)
(74,955) (82,093)
--------- ---------
Net current assets 59,614 56,083
--------- ---------
Non-current liabilities
Borrowings (7,655) (15,136)
Retirement benefit obligations (23,954) (33,527)
Provisions (619) (1,090)
Deferred tax liabilities (731) (1,014)
Other non-current liabilities (1,988) (1,218)
(34,947) (51,985)
--------- ---------
Net assets 81,366 67,619
========= =========
Equity
Called up ordinary share capital 3,854 3,837
Share premium 29,589 29,281
Retained earnings 36,606 21,059
Other reserves 11,317 13,442
--------- ---------
Total shareholders' equity 81,366 67,619
========= =========
Consolidated cash flow statement
2011 2010
Note GBP'000 GBP'000
--------- --------
Cash flows from operating activities
Cash generated from operations 5(a) 19,164 15,702
Net finance costs (319) (753)
Taxation paid (4,522) (498)
--------- --------
Net cash generated from operating
activities 14,323 14,451
--------- --------
Cash flows from investing activities
Acquisition of subsidiaries (net of
cash acquired) (440) -
Deferred and contingent consideration
paid - (1,168)
Proceeds from disposal of property, plant
and equipment (incl. software) 229 1,158
Purchase of property, plant and equipment
(incl. software) (2,382) (3,596)
--------- --------
Net cash used in investing activities (2,593) (3,606)
--------- --------
Cash flows from financing activities
Proceeds on issue of shares 325 476
Employee trust purchase of own shares (559) (84)
Repayments of obligations under finance
leases (995) (1,124)
Net movement on borrowings (7,680) (6,012)
Dividends paid 4 (2,358) (1,730)
--------- --------
Net cash used in financing activities (11,267) (8,474)
--------- --------
Net increase in cash and cash equivalents 463 2,371
--------- --------
Cash and cash equivalents at 1 April 21,399 18,129
Effects of exchange rate fluctuations 358 899
Cash and cash equivalents at 31 March 22,220 21,399
========= ========
Reconciliation of net cash
2010 2010
Note GBP'000 GBP'000
-------- --------
Net increase in cash and cash equivalents 463 2,371
Decrease in debt 8,675 6,249
Effect of exchange rate changes 325 742
-------- --------
Change in net cash during the year 9,463 9,362
-------- --------
Net cash / (debt) at 1 April 3,633 (5,729)
-------- --------
Net cash at 31 March 5(b) 13,096 3,633
======== ========
Notes to the Financial Statements
1. Segmental analysis by location of operations
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the board that makes strategic
decisions.
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, Asia-Pacific, the Middle East, and
Europe. The UK is the home country of the parent. Inter-segment
revenue relates to contracts priced on an arm's length basis.
The group's revenue is derived from the provision of engineering
consultancy services.
(a) Segment revenue
Inter-segment Total Total
revenue 31 March 31 March
2011 2011 2011 2010
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------------- ---------- ----------
Australia 92,102 (338) 91,764 75,929
Asia 22,721 (466) 22,255 18,865
-------- -------------- ---------- ----------
Asia-Pacific 114,823 (804) 114,019 94,794
Middle East 66,716 (1,229) 65,487 93,859
UK 87,799 (604) 87,195 95,925
Germany 23,626 (30) 23,596 24,028
-------- -------------- ---------- ----------
Europe 111,425 (634) 110,791 119,953
-------- -------------- ---------- ----------
292,964 (2,667) 290,297 308,606
======== ============== ========== ==========
(b) Segment results
Regional operating profit
Australia 13,912 9,865
Asia 547 595
-------- --------
Asia-Pacific 14,459 10,460
Middle East 2,605 7,150
UK 5,460 3,127
Germany 1,105 271
-------- --------
Europe 6,565 3,398
Corporate overheads (3,326) (3,006)
-------- --------
Group adjusted operating profit 20,303 18,002
Amortisation on business combinations (2,147) (2,825)
Group operating
profit 18,156 15,177
======== ========
(c) Total assets
31 March 31 March
2011 2010
GBP'000 GBP'000
--------- ---------
Australia 40,718 41,892
Asia 18,249 18,856
--------- ---------
Asia-Pacific 58,967 60,748
Middle East 55,459 69,744
UK 46,512 43,376
Germany 30,330 27,829
--------- ---------
Europe 76,842 71,205
191,268 201,697
========= =========
2. Net finance costs
2011 2010
GBP'000 GBP'000
-------- --------
Bank borrowings (463) (498)
Finance leases (89) (222)
Interest rate financial instruments (234) (259)
Unwinding of discounts (124) (185)
Net finance cost on pension schemes - (1,014)
-------- --------
Finance costs (910) (2,178)
-------- --------
Investment income 467 226
Unwinding of discounts - 242
Net finance income on pension schemes 466 -
-------- --------
Finance income 933 468
-------- --------
Net finance costs 23 (1,710)
======== ========
3. Earnings per share
(a) Number of shares
2011 2010
----------- -----------
Weighted average number of shares
in issue 37,876,301 37,852,912
Effect of dilution
Share options 645,467 340,203
Weighted average shares (diluted) 38,521,768 38,193,115
=========== ===========
In 2011, vested executive share options have been treated as
potentially issuable shares and included within the calculation of
diluted earnings per share, to the extent that they are 'in the
money'. In the prior year these shares were included within the
calculation of basic earnings per share, and consequently the
comparative numbers have been restated to reflect this change.
(b) Earnings used in the calculation of earnings per share
2011 2010
GBP'000 GBP'000
-------- --------
Profit attributable to equity shareholders 14,882 11,167
Add back amortisation of intangible assets
on business combinations 2,147 2,825
Less tax on adjusted items (333) (525)
-------- --------
Adjusted earnings 16,696 13,467
======== ========
(c) Earnings per share
2011 2010
p p
------- -------
Basic earnings per share 39.29 29.50
Add back amortisation of intangible assets
and business combinations 5.67 7.46
Add back tax on adjusted items (0.88) (1.38)
------- -------
Adjusted basic earnings per share 44.08 35.58
======= =======
2011 2010
p p
------- -------
Diluted earnings per share 38.63 29.24
Add back amortisation of intangible assets
and business combinations 5.57 7.40
Add back tax on adjusted items (0.86) (1.38)
------- -------
Adjusted diluted earnings per share 43.34 35.26
======= =======
4. Dividends
2011 2010
GBP'000 GBP'000
-------- --------
Dividends charged to equity in the
year 2,358 1,730
======== ========
Equity - Per Ordinary 10p share
Final dividend paid (pence) 4.50 3.15
Interim dividend paid (pence) 1.75 1.50
The directors are proposing a final dividend of 6.00p per share
(2010: 4.50p). In accordance with IFRS the dividend has not been
recognised in the financial statements but if approved by
shareholders will be paid on 5 August 2011 to shareholders on the
register as at 8 July 2011.
5. Notes to the consolidated cash flow statement
(a) Cash flows from operating activities
2011 2010
GBP'000 GBP'000
-------- ---------
Profit for the financial
year 14,882 11,167
Adjustments for:
Taxation 3,297 2,300
Depreciation 3,473 3,731
Amortisation - Software 1,755 1,732
Amortisation - Business combinations 2,147 2,825
Interest receivable (933) (468)
Interest payable and similar
charges 910 2,178
-------- ---------
EBITDA 25,531 23,465
Loss on disposal of property, plant
and equipment 680 732
Fair value gain on financial
instruments (19) (183)
Share option costs 414 421
Decrease in provisions (920) (4,596)
Decrease in retirement benefit
obligations (829) (2,073)
Deficit contributions to defined benefit
pension scheme (3,099) (3,000)
Changes in working
capital:
Decrease in trade and other
receivables 6,531 23,093
Decrease in trade and other
payables (9,125) (22,157)
--------
Cash generated from
operations 19,164 15,702
======== =========
(b) Reconciliation of movement in net cash
At 1 April Non-cash Exchange At 31 March
2010 Cash flow movement movement 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ---------- --------- --------- ------------
Cash at bank 21,399 463 - 358 22,220
----------- ---------- --------- --------- ------------
Debt due within
1 year (1,804) 1,795 (904) 26 (887)
Debt due after 1
year (13,874) 5,885 904 (15) (7,100)
Finance leases
due within 1
year (826) 995 (756) 5 (582)
Finance leases
due after 1
year (1,262) - 756 (49) (555)
----------- ---------- --------- --------- ------------
(17,766) 8,675 - (33) (9,124)
----------- ---------- --------- --------- ------------
3,633 9,138 - 325 13,096
=========== ========== ========= ========= ============
6. Retirement benefit obligations
AGPS and Annuitants scheme
The key assumptions
used were: 2011 2010
----------- -----------
Rate of increase in
salaries 3.20% 3.80%
Rate of increase to pensions
in payment:
- Index linked pensions with max 3% per
annum increases 2.55% 2.60%
- Other index linked
pension 3.40% 3.55%
Discount rate 5.50% 5.60%
Inflation assumptions
(RPI) 3.60% 3.80%
Inflation assumptions 3.00% -
(CPI)
Longevity at age 65 for current
pensioners
- Men 23.3 years 22.1 years
- Women 25.3 years 24.0 years
Longevity at age 65 for future
pensioners
- Men 25.4 years 24.0 years
- Women 27.2 years 25.9 years
The assets in the scheme and the
expected rates of return were:
Long term Long term
rate of rate of
return return
expected Value at expected Value at
at 31 March 31 March at 31 March 31 March
2011 2011 2010 2010
% per annum GBP'000 % per annum GBP'000
------------- ---------- ------------- ----------
Equities 8.15 79,777 8.30 71,421
Bonds 5.35 34,342 5.50 30,023
Other 0.50 621 0.50 328
---------- ----------
Total market value
of assets 114,740 101,772
Present value of scheme
liabilities (132,009) (127,571)
---------- ----------
Deficit in the scheme (17,269) (25,799)
Present value of
unfunded annuities
scheme (725) (688)
---------- ----------
Deficit in UK based
schemes (17,994) (26,487)
Related deferred tax
asset 3,998 5,658
---------- ----------
Net pension deficit (13,996) (20,829)
========== ==========
7. Financial information
The information within this final results announcement does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006 and should be read in conjunction with the
group's statutory accounts for the year ended 31 March 2011. The
statutory accounts for the financial year ended 31 March 2011 will
be delivered to the Registrar of Companies following the company's
annual general meeting. The auditors have given an unqualified
report on those accounts which does not contain an emphasis of
matter paragraph or any statement under section 498 (2), (3) or (4)
of the Companies Act 2006. The company's annual report and accounts
for the financial year ending 31 March 2011 is expected to be
posted to shareholders on 24 June 2011 and will be available for
viewing on the company's website at www.hyderconsulting.com
thereafter.
8. Responsibility Statement
The responsibility statement below has been prepared in
connection with and is included in the company's full annual report
and accounts for the year ended 31 March 2011. Certain parts of
that report are not included within this final results
announcement:
"The directors confirm that to the best of their knowledge:
-- the group and company financial statements in this Annual
Report, which have been prepared in accordance with IFRS and UK
GAAP respectively, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the group and
the company taken as a whole;
-- the management report (which comprises the Chairman's
statement and the Directors' Report), includes a fair review of the
development and performance of the business and the position of the
group and the company taken as a whole, together with a description
of the principal risks and uncertainties that they face. "
9. Cautionary Statement
This final results announcement contains 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 expressed or implied within any
forward-looking statement. Any forward-looking statements reflect
knowledge and information available at the date of preparation of
this final results announcement and the company assumes no
obligation to update or revise any forward-looking statement,
resulting from new information, future events or otherwise.
Liability arising from anything in this final results announcement
shall be governed by English law. Nothing in this final results
announcement should be construed as a profit forecast.
10. Risks and uncertainties
The group faces a number of risks, which are regularly monitored
by the board. Risk management and internal control systems provide
a means of identifying, evaluating and managing the significant
risks facing the group. The group's principal risks and
uncertainties will be described in the group's Annual Report and
Accounts. These relate to funding, contractual disputes and claims,
competitors, resources, key markets sectors and clients, integrity
and sustainability of IT networks and core business systems, health
and safety, and foreign exchange movements.
11. Basis of preparation
The group's financial statements have been prepared in
accordance with International Financial Reporting Standards
("IFRS") and IFRIC interpretations endorsed by the European Union
("EU") and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
The consolidated financial statements are prepared on a going
concern basis under the historical cost convention, as modified by
the valuation of intangible assets acquired on business
combinations, financial instruments and pension assets and
liabilities which are measured at fair value.
These results have been prepared using the accounting policies
set out in the group's 31 March 2010 Annual Report and
Accounts.
Non statutory information - Summary of five year trading
results
31 March 31 March 31 March 31 March 31 March
2011 2010 2009 2008 2007
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- ---------- --------- ---------
Consolidated income
statement
Revenue 290,297 308,606 318,970 233,672 203,145
Net revenue 251,373 266,922 269,903 196,907 167,445
Adjusted operating
profit 20,303 18,002 16,828 15,037 11,401
Amortisation of
goodwill and
intangibles (2,147) (2,825) (3,241) (1,802) (1,407)
Exceptional items and
other adjustments - - (8,579) 180 4,338
--------- --------- ---------- --------- ---------
Profit before
interest and
taxation 18,156 15,177 5,008 13,415 14,332
Net finance costs 23 (1,710) (1,796) (667) (983)
--------- --------- ---------- --------- ---------
Profit before
taxation 18,179 13,467 3,212 12,748 13,349
========= ========= ========== ========= =========
Consolidated balance
sheet
Intangible assets 39,070 42,231 46,728 45,452 18,046
Property, plant and
equipment 7,550 10,456 13,477 11,142 9,443
Deferred tax assets 10,079 10,834 12,240 8,559 12,560
Current assets 134,569 138,176 157,879 119,407 96,671
--------- --------- ---------- --------- ---------
191,268 201,697 230,324 184,560 136,720
Current liabilities (74,955) (82,093) (106,630) (71,781) (63,471)
--------- --------- ---------- --------- ---------
Total assets less
current liabilities 116,313 119,604 123,694 112,779 73,249
Non-current
liabilities (34,947) (51,985) (64,844) (63,045) (47,315)
--------- --------- ---------- --------- ---------
Net assets 81,366 67,619 58,850 49,734 25,934
========= ========= ========== ========= =========
Called up share
capital 3,854 3,837 3,776 3,770 3,585
Share premium account 29,589 29,281 28,840 28,667 21,262
Retained earnings 36,606 20,654 13,556 15,939 2,437
Other reserves 11,317 13,847 12,648 1,332 (1,592)
--------- --------- ---------- --------- ---------
Total shareholders'
equity 81,366 67,619 58,820 49,708 25,692
Minority interests in
equity - - 30 26 242
--------- --------- ---------- --------- ---------
Total equity 81,366 67,619 58,850 49,734 25,934
========= ========= ========== ========= =========
Statistics
Adjusted net
operating margin % 8.08 6.74 6.23 7.63 6.81
Adjusted diluted
earnings per share p 43.34 35.26 33.82 33.36 26.49
Basic earnings per
share p 39.29 29.50 9.12 30.91 32.44
Dividends per
ordinary share p 7.75 6.00 4.50 3.00 2.00
Average number of
employees Number 3,859 4,360 4,912 4,257 3,798
Net cash / (debt) GBP'000 13,096 3,633 (5,729) (11,125) 8,221
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EANKXELXFEFF
Hyder Consulting (LSE:HYC)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Hyder Consulting (LSE:HYC)
Historical Stock Chart
Von Jul 2023 bis Jul 2024