TIDMHYC
RNS Number : 1972I
Hyder Consulting PLC
28 June 2013
Hyder Consulting PLC ("Hyder" or the "Company")
Annual Financial Report and Notice of Annual General Meeting
Hyder announced its Final Results for the financial year ending
31 March 2013 on 12 June 2013. 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 2013;
AGM circular to shareholders containing Notice of the Annual
General Meeting to be held on 31 July 2013 ("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 12 June 2013
and should be read together with that announcement which is
available at www.hyderconsulting.com. This information is extracted
in, or reference is made to, the full unedited form from the Annual
Report and Accounts 2013. 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
28 June 2013
Appendix:
Principal risks and uncertainties (Pages 30 to 33 of the Annual
Report and Accounts)
The group is broadly based, both internationally and across
market sectors, which provides considerable resilience against
economic and political risks. Risk management and internal control
systems operate at group, region and project level; the group's
risks are regularly monitored by the board. These systems provide a
means of identifying, evaluating and managing the significant risks
facing the group, ensuring that risk is managed at the most
effective level in the business. 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 clients, group to avoid being dependent on individual markets,
competitors or potential competitors sectors or clients.
may affect our business.
Challenging market conditions
can arise due to * The international spread and sector diversity of the
changes in social, economic group provides protection against market changes in
or political factors, as well specific geographies or sectors.
as increased competition.
Contracts may be secured at
lower margins, the order book * The development of our design excellence centres
decrease as fewer opportunities provides additional flexibility to respond to local
are secured, and terms and market movements.
conditions may become more
onerous. Cash generation could
be affected and lower staff
utilisation could result in * The group also recognises that its competitiveness is
reduced profitability. enhanced by the recruitment and retention of key
staff members (see below).
* We operate established bid processes to manage
profitability and mitigate risks.
------------------------------------------ -------------------------------------------------------------------------
Management of projects
Managing clients' and our * Technical and project reviews are undertaken
own projects is core to our regularly; the group's common internal systems and
business. controls facilitate this process.
Inadequate project management
could lead to
financial loss, increased * We categorise all of our projects based on their
risk of contractual disputes value and complexity, ensuring appropriately
and claims and reputational experienced project managers are appointed.
damage.
* Regular project management training is provided and
the group ensures that appropriately technically
skilled staff are used on projects.
------------------------------------------ -------------------------------------------------------------------------
Contractual disputes and claims
Disputes and claims may arise * Established bid, project and technical review
if we fail to meet our contractual procedures are in place to minimise any potential
commitments in the provision exposure.
of our services.
Disputes and claims could
damage our client * Should disputes arise they are dealt with at a local
relationships and limit our level wherever possible, to protect and enhance our
ability to secure future contracts. relationship with clients and suppliers. All material
Claims which are settled outside claims are monitored at group level and regularly
the scope of our insurance considered by the board.
coverage or for amounts in
excess of the relevant indemnity
limit could result in material
liabilities for the group. * Alternative dispute resolution is used where
appropriate.
* A global insurance programme, at commercially
acceptable rates, is maintained with appropriate
limits of indemnity.
------------------------------------------ -------------------------------------------------------------------------
Recruitment, utilisation and
retention of key staff
Failure to attract and retain * The group aims to offer competitive compensation
high quality staff will constrain
the ability of the group to
win contracts, undertake work packages to give it the opportunity
and grow the business. It to recruit and
could increase the risk of retain people of sufficient calibre.
contractual disputes and claims.
* We ensure that our staff obtain appropriate and
relevant experience to develop
further, which assists
with their retention.
* The human resources function undertakes a range of
activities to attract and retain
high quality staff and
monitors a number of KPIs. Their
activities include
a regular employee engagement survey,
succession
plans, staff development and 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 * We develop and maintain close working relationships
East with clients and seek advance payments where
The majority of costs, including possible.
payroll, are paid before fees
are settled by clients. It
may take us longer to get
paid than we anticipated through * Global cash forecasts are prepared regularly and debt
poor payment terms, late invoicing and work in progress levels with clients are
or poor collection of debts. monitored against set credit limits.
Insufficient working capital
could constrain growth and
lead to increased use of banking * Cash management performance indicators are
facilities with the resultant
costs. In the extreme we may
breach our banking covenants. reviewed regularly at project, sector
and regional
level and have helped to develop
a cash culture
within the group.
* The group maintains strong relationships with its
principal bankers. The group currently
has GBP45m of
committed facility headroom.
------------------------------------------ -------------------------------------------------------------------------
Defined benefit pension schemes
The group's main defined benefit * The AGPS closed to new members in 2001 and future
pension scheme, the AGPS,
has a deficit.
benefit accrual ceased in April
The deficit is exposed to 2011.
risk of changes in interest
rates and asset values, as * The group maintains a good relationship with the
well as inflation and the
life expectancy of the members.
The cash cost of funding the trustees and a revised funding plan
existing deficit could increase was agreed
in the future. following the triennial valuation
on 1 April 2011.
* The investment strategy is subject to regular review.
------------------------------------------ -------------------------------------------------------------------------
Acquisition integration
The group strategy includes * The group undertakes appropriate internal and
both strategic and external financial, commercial, legal and cultural
opportunistic acquisitions. due diligence prior to undertaking acquisitions.
The identification of
liabilities acquired and the
integration of acquisitions
into the group is fundamental * The group's systems and processes are implemented
to maximising their value. into the acquired entity as soon as practicable after
Inadequate integration could acquisition.
impact an acquisition's value
or result in risks being inappropriately
managed.
* A member of the regional executive team will oversee
the integration process in order to maximise the
value of the acquisition.
------------------------------------------ -------------------------------------------------------------------------
Crisis event/business continuity
A crisis event or business * Business continuity plans are in place and are
continuity issue could reviewed regularly.
lead to a loss of staff and/or
interruption to service delivery.
We rely on our IT and office
infrastructure in order to * The group's IT networks and core business systems are
operate. maintained and supported to provide assurance on data
integrity and minimise the risk of data loss.
The loss of IT systems, or
being unable to access
offices, could affect our
performance. * Where systems are identified as critical to the
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; we operate established processes
and safety risks. throughout the group.
There is a consequent risk
to staff and clients, and
also a risk of reputational * As a group we are committed to conducting our
damage to the group. activities in such a way as to ensure the health and
safety of our staff and anyone who may be affected by
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 less exchange risks in accordance with policies set by the
than 30% of the group's revenue board. A summary of the group's key risk exposures
is generated in sterling. and the use of derivative and financial instruments
The remaining balance is generated are given in note 15.
in Australia, the Middle East,
Germany, China and Hong Kong
where revenue is normally
denominated in the relevant * The revenue and costs of our international operations
local currency. generally arise in the same currency and therefore
the exposure to exchange fluctuations is not usually
Significant movements in foreign significant and consequently not hedged.
exchange rates will affect
the sterling profits reported
by the group and the value
of assets and liabilities * Where a mismatch does exist it is generally priced
denominated in foreign currencies for in our customer contracts.
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
appropriate to hedge the net investment in overseas
subsidiaries at this time.
------------------------------------------ -------------------------------------------------------------------------
Global regulatory environment
and business conduct * Regional management review their operations
The group operates in many
jurisdictions and is subject
to a wide range of rules and regularly and undertake training
regulations, including the on business ethics,
UK Bribery Act. Non-compliance employment practices, and health
could result in fines, and and safety to
have significant consequences prevent potential breaches of group
for our operations or reputation. policies and local legislation.
* The group maintains a global ethical business
code and has provided training on
identifying and
preventing bribery.
* Our pro-forma contracts with our sub-consultants
include appropriate wording regarding
ethical
business practices.
------------------------------------------ -------------------------------------------------------------------------
Economic
Changing economic conditions * The group primarily operates in five regions where we
or political instability in have developed a good understanding of the political
the regions in which we operate and economic conditions.
could affect our ability to
undertake projects effectively
and collect cash.
* Any project work undertaken outside of our principal
trading regions is subject to enhanced
approval
processes in order to ensure performance
is optimised and the safety of our
staff assured.
* We seek advance payments wherever possible and
manage our cash performance at project
level
carefully. Cash management performance
indicators
are reviewed regularly and have
helped to develop a
cash culture within the group.
------------------------------------------ -------------------------------------------------------------------------
Responsibility Statement - (Page 64 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's 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
a) Joint ventures (page 124 of the Annual Report and Accounts)
The group has entered into transactions on an arm's length basis
through jointly controlled operations during the year. Net amounts
due from these jointly controlled operations amount to GBP1.8m
(2012: GBP2.2m), and are included within trade and other
receivables. The group utilises these arrangements primarily as
special purpose billing vehicles on project related ventures with
our partners. A list of significant jointly controlled operations
is set out below:
Name Project Description Legal Status Country of
Incorporation/
region of operation
Hyder WSP London Bridge Unincorporated UK
Station
Hyder Aurecon Regional Rail Unincorporated Australia
Link E
Hyder SMEC Oxley Highway Unincorporated Australia
to Kempsey
Hyder Halcrow M25 DBFO Unincorporated UK
Hyder, VicRoads, Parsons Brinckerhoff, Tulla-Sydney Unincorporated Australia
Thiess Freeway
b) Key management personnel (page 118 of the Annual Report and Accounts)
Aggregate costs of key management personnel
2013 2012
GBP'000 GBP'000
-------- --------
Salaries and benefits 2,754 2,541
Pension costs 148 149
Termination payments 104 -
Share based payment expense 416 485
-------- --------
3,422 3,175
======== ========
The group has identified 13 persons (2012: 10) discharging
managerial responsibility during the course of the year, comprising
the Hyder Consulting PLC directors and the regional managing
directors. Full details of the Hyder Consulting PLC director's
remuneration can be found in the Directors' Remuneration Report on
page 76.
c) Post Employment Benefits
Transactions with post employment benefit plans are disclosed in
note 26 (page 119 of the Annual Report and Accounts).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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