TIDMHYC
RNS Number : 6716G
Hyder Consulting PLC
02 July 2012
Hyder Consulting PLC ("Hyder" or the "Company")
Annual Financial Report and Notice of Annual General Meeting
Hyder announced it's Final Results for the financial year ending
31 March 2012 on 13 June 2012. In accordance with Listing Rule
9.6.1 the following documents have been submitted to the UK Listing
Authority via the national storage mechanism, where they will
shortly be available for inspection at www.hemscott.com/nsm.do:
Annual Report and Accounts for the financial year ending 31
March 2012;
AGM circular to shareholders containing Notice of the Annual
General Meeting to be held on 2 August 2012 ("AGM Notice");
Form of Proxy.
Copies of the Annual Report and Accounts and AGM Notice can also
be found on the Company's website at www.hyderconsulting.com.
Additional Information required by Disclosure and Transparency
Rule 6.3.5
The Appendix contains the information required in compliance
with DTR 6.3.5, which is in addition to the information
communicated in the Final Results announcement made on 13 June 2012
and should be read together with that announcement which is
available at www.hyderconsulting.com. This information is extracted
in full unedited form from the Annual Report and Accounts 2012.
References to page numbers and notes refer to page numbers and
notes in and to the Annual Report and Accounts. This material is
not a substitute for reading the full Annual Report and
Accounts.
Neil Hunt
Company Secretary
2 July 2012
Appendix:
Principal risks and uncertainties (Pages 27 to 30 of the Annual
Report and Accounts)
The group is broadly based, both internationally and across
market sectors, which provides considerable resilience to and
mitigates against economic and political risks. The group's risks
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. These systems can
only mitigate risk rather than eliminate it completely.
The group's principal risks have been identified as follows:
RISK MITIGATION
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Changes in market conditions
The group's business environment * Our strategy of service differentiation, key client
is competitive and we recognise management and international growth has enabled the
that the actions of competitors group to avoid being dependent on individual markets,
or potential competitors sectors or clients.
may affect our business.
Challenging market conditions * The international spread and sector diversity of the
can arise due to changes group provides protection against market changes in
in social, economic or political specific geographies or sectors.
factors, as well as increased
competition.
* The development of our design excellence centres in
Contracts may be secured India, the Philippines and Bulgaria provides
at lower margins, or the additional flexibility to respond to local market
order book could decrease movements.
as fewer opportunities are
secured. Cash generation
could be affected and lower * The group also recognises that its competitiveness is
staff utilisation could result enhanced by the recruitment and retention of key
in reduced profitability. staff members (see below).
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Management of projects
Managing clients' and our * We operate established bid processes to manage
own projects is core to our profitability and mitigate risks.
business.
Inadequate project management * Technical and project reviews are undertaken
could lead to financial loss, regularly; the group's internal systems and controls
increased risk of contractual facilitate this process.
disputes and claims and reputational
damage.
* Regular project management training is provided and
the group ensures that appropriately technically
skilled staff are used on projects.
-------------------------------------- ------------------------------------------------------------------
Contractual disputes and
claims * Established project and technical review procedures
Disputes and claims can arise are in place to minimise any potential exposure.
if we do not meet our contractual
commitments, and where project
solutions are inadequate * Should disputes arise they are dealt with at a local
or do not perform as intended. level wherever possible, to protect and enhance our
relationship with clients and suppliers. Where this
Disputes and claims could is not possible disputes are escalated to regional or
result in material settlements group management for resolution as swiftly as
against the group, damage possible.
to our client relationships
and limit our ability to
secure future contracts. * Arbitration or mediation services are used where
possible.
* A global insurance programme, at commercially
acceptable rates, is maintained with appropriate
limits of indemnity.
-------------------------------------- ------------------------------------------------------------------
Recruitment, utilisation
and retention of key staff * The group aims to offer competitive compensation
Failure to attract and retain packages to give it the opportunity to recruit and
high quality staff will constrain retain people of sufficient calibre.
the ability of the group
to win contracts and grow
the business. It could increase * We ensure that our staff obtain appropriate and
the risk of contractual disputes relevant experience to develop further, which assists
and claims. with their retention.
* The human resources function plays a central role in
succession planning, staff development and
recruitment and staff retention strategies.
* We regularly monitor our forward order book against
our resource levels and plan accordingly in order to
maximise staff utilisation rates.
* We regularly review utilisation rates throughout our
business and monitor them against pre-set targets
taking prompt action where appropriate.
-------------------------------------- ------------------------------------------------------------------
Management of working capital,
particularly in the Middle
East * We develop and maintain close working relationships
The majority of costs, including with clients and seek advance payments where
payroll, are paid before possible.
fees are settled by clients.
It may take us longer to
get paid than we anticipated * Global cash requirement forecasts are regularly
through poor payment terms, prepared and debt and work in progress levels with
late invoicing or poor collection clients are monitored.
of debts.
Insufficient working capital * Cash management performance indicators are reviewed
could constrain growth and regularly at project, sector and regional level and
lead to increased use of have helped to develop a strong cash culture within
banking facilities with the the group.
resultant costs. In the extreme
we may breach our banking
covenants. * The group maintains strong relationships with its
principal bankers. The group currently has GBP41m of
committed facility headroom.
-------------------------------------- ------------------------------------------------------------------
Defined benefit pension schemes
The group's main defined * The AGPS closed to new members in 2001 and future
benefit pension scheme, the benefit accrual ceased in April 2011.
AGPS, has a deficit.
The deficit is exposed to * The group maintains a good relationship with the
risk of changes in interest trustees and a revised funding plan has been agreed
rates and asset values, as following the triennial valuation on 1 April 2011.
well as inflation and the
life expectancy of the members.
The cash cost of funding
the existing deficit could
increase in the future.
-------------------------------------- ------------------------------------------------------------------
Crisis event/business continuity
A crisis event or business * Disaster recovery plans are in place and are reviewed
continuity issue could lead regularly.
to a loss of staff and/or
interruption to service delivery.
We rely on our IT and office * The group's IT networks and core business systems are
infrastructure in order to maintained and supported to provide assurance on data
operate. integrity and minimise the risk of data loss.
The loss of IT systems, or
being unable to access offices, * Where systems are identified as critical to the
could affect our performance. business their performance, resilience and security
is reviewed regularly in order to provide assurance
as to availability.
-------------------------------------- ------------------------------------------------------------------
Health and safety
The construction industry * Health and safety is an essential element of all
entails significant health Hyder's operations.
and safety risks.
There is a consequent risk * As a group we are committed to conducting our
to staff and clients, and activities in such a way as to ensure the health and
also a risk of reputational safety of our staff and anyone who may be affected by
damage to the group. our operations.
* We will comply with all relevant legislation and aim
continually to improve our health and safety
performance; all staff are expected to contribute to
this goal.
-------------------------------------- ------------------------------------------------------------------
Foreign exchange movements
The group reports its results * Established procedures exist to monitor foreign
in sterling, however only exchange risks in accordance with policies set by the
approximately 30% of the board. A summary of the group's key risk exposures
group's revenue is generated and the use of derivative and financial instruments
in sterling. The remaining are given in Note 15.
balance is generated in Australia,
the Middle East, Germany,
China and Hong Kong where * The revenue and costs of our international operations
revenue is normally denominated generally arise in the same currency and therefore
in the relevant local currency. the exposure to exchange fluctuations is not usually
significant and consequently not hedged.
Significant movements in
foreign exchange rates will
affect the sterling profits * Where a mismatch does exist it is generally priced
reported by the group and for in our customer contracts.
the value of assets and liabilities
denominated in foreign currencies
on the balance sheet. * Most of our overseas operations maintain local
currency overdraft and bonding facilities, which
provide partial mitigation against balance sheet
risk.
* In spite of fluctuations in exchange rates which
occur from time to time, it is not considered
necessary to hedge the net investment in overseas
subsidiaries at this time.
-------------------------------------- ------------------------------------------------------------------
Global regulatory environment
and business conduct * Regional management review their operations regularly
The group operates in many including ethics, employment practices, and health
jurisdictions and is subject and safety to ensure they have appropriate controls
to a wide range of rules to monitor and prevent potential breaches of group
and regulations, including policies and local legislation.
the UK Bribery Act. Non-compliance
could have significant consequences
for our operations or reputation. * The group maintains a global ethical business code
and has provided training on identifying and
preventing bribery.
-------------------------------------- ------------------------------------------------------------------
Responsibility Statement (Page 63 of the Annual Report and
Accounts)
The following statement is extracted from the Annual Report and
Accounts. The statement relates solely to the Annual Report and
Accounts and is not connected to the extracted information set out
in this announcement:
"The directors confirm that, to the best of their knowledge:
(a) the group and the company's 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; and
(b) 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. "
Related Party Transactions (Page 116 of the Annual Report and
Accounts)
The group has entered into transactions on an arm's length basis
with related parties, mostly jointly controlled operations, during
the year. Transactions relating to sales of consulting services to
these jointly controlled operations amounted to GBP41.8m (2011:
GBP49.9m).
Net amounts due from these jointly controlled operations
amounted to GBP10.0m (2011: GBP8.3m), and are included within trade
and other receivables (note 11), as the group utilises these
arrangements primarily as special purpose billing vehicles on
project related ventures with our partners. A listing of
significant jointly controlled operations is set out below:
Legal status Country
of Incorporation
/ region
of operation
Hunter Expressway Alliance Unincorporated Asia-Pacific
Tulla-Sydney Freeway Alliance Unincorporated Asia-Pacific
Airport Link Teaming Arrangement Unincorporated Asia-Pacific
Hyder-Arup-Black & Vetch JV* Incorporated Asia-Pacific
Aurecon-Hyder JV Unincorporated Asia-Pacific
Sapphire to Woolgoolga Teaming Arrangement Unincorporated Asia-Pacific
Hyder Meinhardt JV Unincorporated Asia-Pacific
Airport Berlin-Brandenburg Consult Unincorporated Europe
Hyder Consulting Middle East Limited & WS Atkins Unincorporated Middle East
& Partners Overseas
Hyder Halcrow JV Unincorporated UK
Faber Maunsell Hyder JV Unincorporated UK
* The group holds a 40% interest in the jointly controlled
operation's ordinary share capital.
Unincorporated Jointly controlled operations are normally
operated from the relevant Hyder regional office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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