TIDMHYC
RNS Number : 4566T
Hyder Consulting PLC
20 November 2013
Hyder Consulting PLC (HYC.L)
Half Year Results Announcement
Results for the half year ended 30 September 2013
Strong order book; remain confident for the full year
Hyder Consulting, the multinational design and engineering
consultancy, today announces its financial results for the half
year ended 30 September 2013.
Highlights:
l Order book up 24% to GBP438m (2012: GBP353m)
l Revenues of GBP150.1m (2012: GBP150.0m)
l Adjusted profit before tax* GBP9.6m (2012: GBP11.0m**)
l Profit before tax GBP7.7m (2012: GBP9.9m**)
l Adjusted diluted earnings per share 19.31p (2012:
21.77p**)
l Interim dividend up 13% to 4.5p per share (2012: 4.0p)
l Headcount increased to 4,111 (2012: 3,936)
l Net cash balances of GBP6.0m (2012: GBP15.2m)
* Adjusted numbers exclude acquisition costs, amortisation of
acquired intangibles and prior year exceptional items
** Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised)
Ivor Catto, Chief Executive, said: "We've concentrated on
growing markets and on clients with committed infrastructure plans.
The order book increased substantially in the first half, and we're
particularly pleased with the growth in the Middle East and the UK.
The pipeline of opportunities is strong and professional staff
numbers are growing."
Contacts:
Hyder Consulting PLC
Ivor Catto, Chief Executive Tel: +44 (0)20 3014 9000
Russell Down, Group Finance Director Tel: +44 (0)20 3014
9000
Citigate Dewe Rogerson
Ginny Pulbrook Tel: +44 (0)20 7282 2945
There will be a results presentation for stockbroking analysts
today at 9.00am, to be held at Numis Securities, London Stock
Exchange, Paternoster Square, London, EC4M 7LT
Chairman's Statement
I am pleased to report our half year results were in line with
expectations and that the order book increased substantially.
Financial results
Revenue for the period was GBP150.1m (2012: GBP150.0m). Revenue
grew strongly in the UK and Middle East regions, up 20% and 15%
respectively, following the mobilisation of staff on new projects
in the UK rail sector and in Qatar. Net fees were GBP130.3m (2012:
GBP131.5m).
Adjusted operating profit in the period was GBP10.6m (2012:
GBP11.9m) reflecting the weaker Australian dollar and performance
related bonuses having been booked in the prior period. In the UK,
operating profit grew by 164% due to increased workload in the rail
sector and improving market conditions. Middle East profits
increased 39% as staff were mobilised on new contracts. Reported
operating profit was GBP8.7m (2012: GBP10.9m).
Net finance costs were GBP1.0m (2012: GBP0.9m), largely due to
notional interest costs on pension liabilities. Adjusted profit
before tax was GBP9.6m (2012: GBP11.0m).
The effective rate of tax fell to 19.9% (2012: 24.7%) as the mix
of group profits shifted towards lower tax jurisdictions: the
adjusted rate was 20.9% (2012: 24.1%). Adjusted diluted earnings
per share were 19.31p (2012: 21.77p).
The order book increased by 24% to GBP438m (2012: GBP353m).
Headcount during the first half increased by 4% to 4,111 (September
2012: 3,936). The proportion of staff in global design centres
again increased. We anticipate further growth in staff numbers
during the second half.
Funding
The group has a strong balance sheet with net cash balances of
GBP6.0m (2012: GBP15.2m). During the period the group acquired PLD
Consulting, an Australian energy specialist for an initial
consideration of GBP1.4m; purchased GBP0.9m of shares for the
employee benefit trust; and made contributions of GBP1.8m (2012:
GBP0.4m) to the closed Acer Group Pension Scheme (AGPS). Cash
utilised from operations was GBP5.6m (2012: Cash generated of
GBP8.0m), reflecting growth in the Middle East and the consequent
higher working capital balances.
The deficit in the AGPS increased by GBP1.0m, net of deferred
tax, to GBP16.1m. Actuarial losses of GBP2.4m were recognised in
the period primarily as a result of lower than expected asset
returns.
Dividend
The Board has declared a 13% increase in the interim dividend to
4.5p (2012: 4.0p) payable on 16 January 2014 to shareholders on the
register on 13 December 2013.
Regional review
Asia Pacific
Revenue was GBP54.2m (2012: GBP66.9m), and operating profits
GBP6.5m (2012: GBP9.0m). The results were affected by the weaker
Australian dollar and the comparison with last year affected by the
receipt of performance-related payments on transport contracts. The
order book was GBP70.9m (2012: GBP91.9m), reflecting a reduction in
bidding activity in advance of the recent Australian general
election. Following the election of the new government, which has
publicly endorsed infrastructure investment, there has been a
significant increase in bidding activity.
The underlying trading in Australia has been in line with our
expectations. The transport sector performed well despite the
uncertainty prior to the general election. We have a number of
excellent opportunities and are well positioned on a number of
transport projects on which we expect to mobilise staff in the
fourth quarter. In the property sector we are working on a number
of prestigious projects and see promising opportunities from the
2018 Commonwealth Games in the Gold Coast. The recently acquired
BCH and GW Engineers have performed well and are providing new
opportunities for the group. We acquired Brisbane-based PLD
Consulting in September which has integrated well.
In Asia, the new management team has made good progress, the
outlook has improved and the business reported a profit for the
first half.
Middle East
Revenues increased by 15% to GBP42.0m (2012: GBP36.4m), and
operating profits by 39% to GBP3.8m (2012: GBP2.7m). The order book
increased by 71% to GBP224.4m (2012: GBP131.1m) following the award
of further work packages on the Doha Expressway programme.
In Qatar we performed strongly following the continued
mobilisation of staff on infrastructure and highway works for
Ashghal, and the award of social infrastructure projects including
universities and hospitals. In the UAE, awards in the property
sector increased as market conditions improved. Our business in
Saudi Arabia is growing; we continue to act as advisor to Jeddah
Municipality on infrastructure works and have recently secured a
number of projects in the utilities sector.
Following the growth in revenue, and mobilisation costs on new
contracts, working capital has increased. We anticipate that
advance payments for new contracts and milestone billings will
reduce working capital in the second half.
Europe
Revenues increased by 15% to GBP53.8m (2012: GBP46.7m) and
operating profits were GBP1.9m (2012: GBP1.9m). The order book
increased by 10% to GBP142.4m (2012: GBP129.5m) following the award
of further framework contracts from, inter alia, the Environment
Agency and National Grid.
In the UK, market conditions are improving and our attention to
key client management has led to a number of important framework
contract awards over recent periods. Our rail business again
performed ahead of expectations and we are working on London Bridge
Station and major projects with Crossrail, Network Rail and
Transport for London. In the highways sector, we have seen
improving visibility from the Highways Agency and teams have been
supporting some of our larger Middle East projects. In the
utilities sector results have improved following recent project
awards including the WEM framework for the Environment Agency. The
integration of PCS, acquired last year, has proceeded well and has
formed an integral part of our energy business.
In Germany a lower workload and negotiations on contract
variations have affected results and we reported a loss for the
period. Following a number of operational changes and a renewed
focus on key clients we anticipate the business returning to
profitability in the second half.
Outlook
The group has performed in line with plan during the first half
and we are particularly pleased with the strong growth in the
Middle East and in the UK. The group's order book has increased
substantially, the pipeline of opportunities is encouraging and the
headcount is growing. Our strong financial position along with the
group's geographical spread and sector coverage give the board
confidence for the full year outcome.
I would again like to express the board's appreciation to our
staff for their hard work in achieving these results and our
clients for their continued and greatly valued support.
Sir Alan Thomas
Chairman
20 November 2013
Statutory disclosures
Going concern
After making enquiries, the directors have a reasonable
expectation that the company and the group have adequate resources
to continue in operational existence for the foreseeable future and
therefore continue to adopt the going concern basis in preparing
the financial statements.
Statement of Directors' Responsibilities
This half year report is the responsibility of, and has been
approved by the directors. The directors confirm that to the best
of their knowledge: (i) this condensed set of financial statements
has been prepared in accordance with IAS 34 as adopted by the
European Union; and (ii) 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 are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The directors of Hyder Consulting PLC at the date of this
announcement are:
Sir Alan Thomas - Chairman
Ivor Catto - Chief Executive
Russell Down - Group Finance Director
Jeffrey Hume - Non-Executive Director
Kevin Taylor - Non-Executive Director
Paul Withers - Non-Executive Director
Cautionary Statement
This half yearly financial report has been prepared solely for
the Company's members, as a body. The report 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.
Further information
An electronic version of this half yearly financial report and
the 31 March 2013 annual report can be viewed on the Company's
website: www.hyderconsulting.com.
Consolidated income statement for the six months ended 30
September 2013 (unaudited)
Year
ended
Six months ended 30 Six months ended 30 31 March
September 2013 September 2012* 2013*
--------------------------------- --------------------------------- ----------
Total Total
before before
adjusted Adjusted adjusted Adjusted
items items Total items items Total Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- --------- ---------- ---------- --------- ---------- ----------
Revenue 2 150,056 - 150,056 150,003 - 150,003 298,101
Operating
costs (139,482) - (139,482) (138,128) - (138,128) (274,542)
Amortisation
of acquired intangibles
and acquisition
costs - (1,854) (1,854) - (1,019) (1,019) (2,483)
Exceptional items - - - - - - (2,513)
---------- --------- ---------- ---------- --------- ---------- ----------
Operating profit/(loss) 10,574 (1,854) 8,720 11,875 (1,019) 10,856 18,563
---------- --------- ---------- ---------- --------- ---------- ----------
Finance
costs 3 (1,191) - (1,191) (1,124) - (1,124) (2,296)
Finance
income 3 176 - 176 210 - 210 350
---------- --------- ---------- ---------- --------- ---------- ----------
Profit/(loss)
before tax 9,559 (1,854) 7,705 10,961 (1,019) 9,942 16,617
---------- --------- ---------- ---------- --------- ---------- ----------
Taxation 4 (1,998) 466 (1,532) (2,646) 194 (2,452) (4,738)
---------- --------- ---------- ---------- --------- ---------- ----------
Profit/(loss)
for the period 7,561 (1,388) 6,173 8,315 (825) 7,490 11,879
========== ========= ========== ========== ========= ========== ==========
Profit/(loss) attributable
to:
Owners of the
parent 7,535 (1,388) 6,147 8,460 (825) 7,635 12,000
Non-controlling
interests 26 - 26 (145) - (145) (121)
----------- --------- ---------- ---------- --------- ---------- ----------
7,561 (1,388) 6,173 8,315 (825) 7,490 11,879
=========== ========= ========== ========== ========= ========== ==========
Earnings per
share (p)
Basic 5 15.94 19.91 31.24
Diluted 5 15.75 19.65 30.79
Adjusted
basic 5 19.54 22.06 42.96
Adjusted
diluted 5 19.31 21.77 42.34
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
Consolidated statement of comprehensive income for the six
months ended 30 September 2013 (unaudited)
Six months Six months Year
ended ended 30 ended
30 September September 31 March
2013 2012* 2013*
GBP'000 GBP'000 GBP'000
-------------- ----------- ----------
Profit for the
period 6,173 7,490 11,879
Other comprehensive (expense)/income
for the period
Items which will subsequently be reclassified
to the income statement:
Foreign exchange movements (8,487) (1,429) 4,644
Cash flow hedges 95 5 63
-------------- ----------- ----------
(8,392) (1,424) 4,707
Items which will not subsequently be reclassified
to the income statement:
Remeasurement loss on defined benefit
pension schemes (2,557) (1,885) (4,562)
-------------- ----------- ----------
Total other comprehensive (expense)/income
for the period (10,949) (3,309) 145
-------------- ----------- ----------
Total comprehensive (expense)/income
for the period (4,776) 4,181 12,024
============== =========== ==========
Attributable
to:
Equity holders of the
parent (4,783) 4,327 12,130
Non-controlling interests 7 (146) (106)
-------------- ----------- ----------
(4,776) 4,181 12,024
============== =========== ==========
All balances are shown net of tax.
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
Consolidated statement of changes in equity for the six months
ended 30 September 2013 (unaudited)
Share Share Retained Other Non-controlling Total
capital premium earnings* reserves Total* interests equity*
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- --------- ----------- ---------- -------- ---------------- ---------
At 1 April 2012 3,863 29,789 43,646 9,583 86,881 391 87,272
Profit for the period - - 7,635 - 7,635 (145) 7,490
Foreign exchange movements - - - (1,428) (1,428) (1) (1,429)
Cash flow hedges - - - 5 5 - 5
Remeasurement loss on post
employment benefit schemes* - - (1,885) - (1,885) - (1,885)
New shares issued 3 - - - 3 - 3
Premium on new shares
issued - 62 - - 62 - 62
Dividends paid - - (2,653) - (2,653) - (2,653)
Share based payments - - 491 - 491 - 491
Employee trust purchase - - - - - - -
of own shares
Transfer of own shares
from EBT - - (226) 226 - - -
At 30 September 2012 3,866 29,851 47,008 8,386 89,111 245 89,356
Profit for the period - - 4,365 - 4,365 24 4,389
Foreign exchange movements - - - 6,057 6,057 16 6,073
Cash flow hedges - - - 58 58 - 58
Remeasurement loss on post
employment benefit schemes - - (2,677) - (2,677) - (2,677)
New shares issued 11 - - - 11 - 11
Premium on new shares
issued - 208 - - 208 - 208
Dividends paid - - (1,523) - (1,523) - (1,523)
Share based payments - - 228 - 228 - 228
Transfer of own shares
from EBT - - (100) 100 - - -
--------- --------- ----------- ---------- -------- ---------------- ---------
At 31 March 2013 3,877 30,059 47,301 14,601 95,838 285 96,123
Profit for the period - - 6,147 - 6,147 26 6,173
Foreign exchange movements - - - (8,468) (8,468) (19) (8,487)
Cash flow hedges - - - 95 95 - 95
Remeasurement loss on post
employment benefit schemes - - (2,557) - (2,557) - (2,557)
New shares issued 9 - - - 9 - 9
Premium on new shares
issued - 217 - - 217 - 217
Dividends paid - - (3,074) - (3,074) - (3,074)
Share based payments - - 417 - 417 - 417
Employee trust purchase
of own shares - - - (875) (875) - (875)
Transfer of own shares
from EBT - - (1,322) 1,322 - - -
--------- --------- ----------- ---------- -------- ---------------- ---------
At 30 September 2013 3,886 30,276 46,912 6,675 87,749 292 88,041
========= ========= =========== ========== ======== ================ =========
All balances are shown net of tax.
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
Consolidated balance sheet at 30 September 2013 (unaudited)
As at 30 As at As at
September 30 September 31 March
2013 2012* 2013*
Note GBP'000 GBP'000 GBP'000
----------- -------------- ----------
Assets
Non-current assets
Intangible assets 7 44,425 42,436 46,730
Property, plant and equipment 7 8,851 7,679 9,387
Deferred tax assets 10,270 10,740 10,684
----------- -------------- ----------
63,546 60,855 66,801
Current assets
Trade and other receivables 8 129,054 119,864 120,098
Cash and cash equivalents 11(b) 13,443 22,146 32,037
142,497 142,010 152,135
Liabilities
Current liabilities
Borrowings (2,062) (796) (1,964)
Trade and other payables 9 (67,018) (64,545) (69,870)
Current tax liabilities (3,253) (4,081) (3,655)
Provisions 10 (2,445) (3,335) (3,304)
(74,778) (72,757) (78,793)
----------- -------------- ----------
Net current assets 67,719 69,253 73,342
----------- -------------- ----------
Non-current liabilities
Borrowings (5,358) (6,155) (5,772)
Post employment benefits 13 (29,784) (26,737) (29,383)
Provisions 10 (754) (1,207) (966)
Deferred tax liabilities (2,698) (911) (3,185)
Other non-current liabilities (4,630) (5,742) (4,714)
(43,224) (40,752) (44,020)
Net assets 88,041 89,356 96,123
=========== ============== ==========
Equity
Called up ordinary share capital 3,886 3,866 3,877
Share premium 30,276 29,851 30,059
Retained earnings 46,912 47,008 47,301
Other reserves 6,675 8,386 14,601
----------- -------------- ----------
Equity attributable to equity
holders of the parent 87,749 89,111 95,838
Non-controlling interests 292 245 285
Total equity 88,041 89,356 96,123
=========== ============== ==========
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1) and for the amendments to the acquisition
balance sheet of BCH Engineering Consultants Pty Ltd (see note
12).
Consolidated cash flow statement for the six months ended 30
September 2013 (unaudited)
Six months Six months
ended 30 ended Year ended
September 30 September 31 March
2013 2012 2013
Note GBP'000 GBP'000 GBP'000
----------- -------------- -----------
Cash flows from operating activities
Cash (used in) / generated from
operations 11(a) (5,603) 8,001 27,868
Net finance costs (340) (311) (796)
Tax paid (2,295) (2,385) (4,157)
----------- -------------- -----------
Net cash (used in) / generated
from operating activities (8,238) 5,305 22,915
----------- -------------- -----------
Cash flows from investing activities
Acquisition of subsidiaries (net
of cash acquired) and deferred
consideration 12 (1,477) (120) (5,242)
Proceeds from disposal of property,
plant and equipment (incl. software) 68 8 43
Purchase of property, plant and
equipment (incl. software) (2,615) (2,865) (6,263)
----------- -------------- -----------
Net cash used in investing activities (4,024) (2,977) (11,462)
----------- -------------- -----------
Cash flows from financing activities
Proceeds on issue of shares 226 65 284
Employee trust purchase of own (875) - -
shares
Repayments of obligations under
finance leases (34) (232) (269)
Proceeds on issue of new borrowings 2,000 500 5,000
Repayment of borrowings (2,356) (889) (5,759)
Dividends paid 6 (3,074) (2,653) (4,176)
----------- -------------- -----------
Net cash used in financing activities (4,113) (3,209) (4,920)
----------- -------------- -----------
Net (decrease)/increase in cash and
cash equivalents (including bank overdrafts) (16,375) (881) 6,533
----------- -------------- -----------
Cash and cash equivalents at 1 April 30,862 23,218 23,218
Effect of exchange rate changes (2,327) (191) 1,111
----------- -------------- -----------
Cash and cash equivalents at end of
period (including bank overdrafts) 12,160 22,146 30,862
=========== ============== ===========
Reconciliation of net cash
Six months Six months
ended 30 ended Year ended
September 30 September 31 March
2013 2012 2013
Note GBP'000 GBP'000 GBP'000
----------- -------------- -----------
Net (decrease)/increase in cash
and cash equivalents (16,375) (881) 6,533
Decrease in debt 390 621 1,028
Effect of exchange rate changes (2,293) (188) 1,097
----------- -------------- -----------
Change in net cash during the
period (18,278) (448) 8,658
----------- -------------- -----------
Net cash at 1 April 24,301 15,643 15,643
----------- -------------- -----------
Net cash 11(b) 6,023 15,195 24,301
=========== ============== ===========
Notes to the Financial Statements
1. General information
(a) Basis of preparation
This condensed unaudited consolidated financial information for
the half year ended 30 September 2013 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 2013, 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 on a going concern basis under the historical cost
convention, as modified by the valuation of financial instruments
which are measured at fair value. The statements are prepared in
accordance with IFRS as adopted by the EU, and those parts of the
Companies Act 2006 related to reporting under IFRS.
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 434 of the Companies Act 2006. The
financial information relating to the year ended 31 March 2013 has
been delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified.
The financial statements at 31 March 2013 have been restated for
the amendments to the acquisition balance sheet of BCH Engineering
Consultants Pty Ltd, and the financial statements at both 30
September 2012 and 31 March 2013 have been restated to reflect the
effects of the adoption of IAS 19 Employee Benefits (Revised).
(b) Principal accounting policies
The group has adopted the amendments to IAS 19 (revised 2011)
'Employee Benefits' and Amendments to IAS 1 "Presentation of Items
of Other Comprehensive Income" which requires an entity to present
the items of other comprehensive income that may be recycled to
profit or loss in the future, separately from those that would
never be recycled to profit or loss.
The revision to IAS 19 requires the financing cost of a defined
benefit pension scheme to be calculated on the net liability. It is
effective for the year ending 31 March 2013 and the figures for the
six months ended 30 September 2012 and the year ended 31 March 2013
have been restated. The impact of the restatement is to increase
the post-employment benefit finance expense by GBP1.0m for the six
months to 30 September 2012 and by GBP2.2m for the year to 31 March
2013 with a corresponding increase in other comprehensive
income.
All other accounting policies adopted are consistent with those
of the annual financial statements for the year ended 31 March
2013, 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.
(c) Principal risks and uncertainties
The group faces a number of risks which are regularly monitored
by the board. A structured risk management, internal control and
internal audit process seeks to provide a means of identifying,
evaluating and prioritising risk. However these systems can only
operate to mitigate risk rather than eliminate it completely. The
principal risks and uncertainties facing the group have not changed
from the prior year end and are summarised as follows:
-- Changes in market conditions;
-- Management of projects;
-- Contractual disputes and claims;
-- Recruitment, utilisation and retention of key staff;
-- Management of working capital, particularly in the Middle East;
-- Defined benefit pension schemes;
-- Acquisition integration;
-- Crisis event/business continuity;
-- Health and safety;
-- Foreign exchange movements;
-- Global regulatory environment and business conduct;
-- Economic.
Further information on the principal risks and uncertainties is
included at pages 30 - 33 of the annual report for the year ended
31 March 2013 which is available on our website at
www.hyderconsulting.com.
2. Segmental analysis by location of operations
Operating segments are reported in a manner consistent with the
internal reporting provided to the board (the chief operating
decision maker), which is responsible for allocating resources and
assessing performance of the operating segments.
Reflecting the group's management and internal reporting
structure, segmental information is presented within the financial
statements in respect of geographical segments. The group manages
its business as five segments arranged into 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
Six months Inter-segment Six months Six months Year
ended revenue ended ended ended
30 September 2013 30 September 30 September 31 March
2013 2013 2012 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- -------------- -------------- -------------- ----------
Australia 43,720 (538) 43,182 56,296 102,551
Asia 11,125 (88) 11,037 10,569 20,833
-------------- -------------- -------------- -------------- ----------
Asia-Pacific 54,845 (626) 54,219 66,865 123,384
Middle
East 43,114 (1,107) 42,007 36,447 75,159
UK 43,185 (77) 43,108 35,826 75,509
Germany 10,772 (50) 10,722 10,865 24,049
-------------- -------------- -------------- -------------- ----------
Europe 53,957 (127) 53,830 46,691 99,558
-------------- -------------- -------------- -------------- ----------
151,916 (1,860) 150,056 150,003 298,101
============== ============== ============== ============== ==========
(b) Segment results
GBP'000 GBP'000 GBP'000
-------- -------- --------
Australia 6,408 9,670 16,120
Asia 68 (645) (1,176)
-------- -------- --------
Asia-Pacific 6,476 9,025 14,944
Middle
East 3,783 2,717 7,091
UK 2,971 1,124 3,416
Germany (1,058) 759 1,350
-------- -------- --------
Europe 1,913 1,883 4,766
Corporate overheads (1,598) (1,750) (3,242)
-------- -------- --------
Adjusted operating
profit 10,574 11,875 23,559
Amortisation of acquired intangibles (1,580) (1,019) (2,177)
Acquisition costs (274) - (306)
-------- -------- --------
(1,854) (1,019) (2,483)
Exceptional items - - (2,513)
Operating
profit 8,720 10,856 18,563
======== ======== ========
The group's trading operations overall are not subject to
significant seasonal variations, however cash flows are normally
weighted towards the second half year.
(c) Other profit and loss disclosures
Six months ended 30 September Six months ended 30 September
2013 2012
------------------------------------------- -------------------------------------------
Amortisation Amortisation
Amortisation of acquired Amortisation of acquired
Depreciation of software intangibles Depreciation of software intangibles
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------- ------------- ------------- ------------- -------------
Australia 289 158 833 583 176 405
Asia 77 43 10 110 81 40
------------- ------------- ------------- ------------- ------------- -------------
Asia-Pacific 366 201 843 693 257 445
Middle
East 451 269 135 224 251 253
UK 438 241 426 348 203 176
Germany 170 96 176 162 88 145
------------- ------------- ------------- ------------- ------------- -------------
Europe 608 337 602 510 291 321
------------- ------------- ------------- ------------- ------------- -------------
1,425 807 1,580 1,427 799 1,019
============= ============= ============= ============= ============= =============
Year ended 31 March 2013
-------------------------------------------
Amortisation
Amortisation of acquired
Depreciation of software intangibles
GBP'000 GBP'000 GBP'000
------------- ------------- -------------
Australia 870 325 841
Asia 218 142 45
------------- ------------- -------------
Asia-Pacific 1,088 467 886
Middle
East 608 484 493
UK 774 424 500
Germany 336 170 298
------------- ------------- -------------
Europe 1,110 594 798
------------- ------------- -------------
2,806 1,545 2,177
============= ============= =============
(d) Total assets
As at As at As at
30 September 30 September 31 March
2013 2012 2013*
GBP'000 GBP'000 GBP'000
-------------- -------------- ----------
Australia 47,857 55,665 57,446
Asia 16,853 18,526 16,561
-------------- -------------- ----------
Asia-Pacific 64,710 74,191 74,007
Middle
East 67,297 60,044 66,262
UK 47,663 45,512 51,896
Germany 26,373 23,118 26,771
-------------- -------------- ----------
Europe 74,036 68,630 78,667
206,043 202,865 218,936
============== ============== ==========
*Restated to reflect the amendments to the acquisition balance
sheet of BCH Engineering Consultants Pty Ltd (see note 12).
3. Net finance costs
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012* 2013*
GBP'000 GBP'000 GBP'000
-------------- -------------- ----------
Bank borrowings (267) (233) (459)
Finance leases (6) (12) (20)
Interest rate financial instruments (55) (69) (143)
Amortisation of arrangement fees (122) (65) (126)
Unwinding of discounts on provisions
and other liabilities (109) (101) (226)
Net finance cost on post employment
benefit schemes (632) (644) (1,322)
-------------- -------------- ----------
Finance costs (1,191) (1,124) (2,296)
-------------- -------------- ----------
Investment income 98 94 159
Unwinding of discounts on trade receivables 78 116 191
Finance income 176 210 350
-------------- -------------- ----------
Net finance costs (1,015) (914) (1,946)
============== ============== ==========
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
4. Tax
The tax charge for the period has been calculated using an
estimate of the effective annual rate of tax for the group for the
full year. This rate has been applied to the pre-tax profits for
the group for the six months ended 30 September 2013. The effective
rate of tax fell to 19.9% (2012: 24.7%) as the mix of group profits
shifted towards lower tax jurisdictions: the adjusted rate was
20.9% (2012: 24.1%).
The group has separately calculated the tax rate applicable to
amortisation of acquired intangibles, acquisition costs and
exceptional items for the period. Tax rate changes that were
substantively enacted at the balance sheet date have been factored
into the calculation of the effective tax rates.
Six months Six months
ended 30 ended Year ended
September 30 September 31 March
2013 2012* 2013*
----------- -------------- -----------
Tax rate on profit before tax 19.9% 24.7% 28.5%
Tax rate on amortisation of acquired
intangibles, acquisition costs and exceptional
items 25.1% 19.0% 9.9%
Tax rate on adjusted profit before
tax 20.9% 24.1% 24.2%
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
5. Earnings per share
(a) Number of shares
Six months Six months Year
ended 30 ended ended
September 30 September 31 March
2013 2012 2013
----------- -------------- -----------
Weighted average number of shares
in issue 38,571,454 38,354,740 38,410,442
Effect of dilution
Share options 465,728 496,016 566,468
Weighted average shares (diluted) 39,037,182 38,850,756 38,976,910
=========== ============== ===========
(b) Earnings used in the calculation of earnings per share
Six months Six months Year
ended 30 ended ended
September 30 September 31 March
2013 2012* 2013*
GBP'000 GBP'000 GBP'000
----------- -------------- ----------
Profit attributable to equity shareholders 6,147 7,635 12,000
Add back amortisation of acquired intangibles
and acquisition costs 1,854 1,019 2,483
Add back exceptional items - - 2,513
Less tax on adjusted items (466) (194) (495)
----------- -------------- ----------
Adjusted earnings 7,535 8,460 16,501
=========== ============== ==========
(c) Earnings per share
Six months Six months Year
ended 30 ended ended
September 30 September 31 March
2013 2012* 2013*
p p p
----------- -------------- ----------
Basic earnings per share 15.94 19.91 31.24
Add back amortisation of acquired intangibles
and acquisition costs 4.81 2.66 6.46
Add back exceptional items - - 6.54
Less tax on adjusted items (1.21) (0.51) (1.28)
----------- -------------- ----------
Adjusted basic earnings per share 19.54 22.06 42.96
=========== ============== ==========
Six months Six months Year
ended 30 ended ended
September 30 September 31 March
2013 2012* 2013*
p p p
----------- -------------- ----------
Diluted earnings per share 15.75 19.65 30.79
Add back amortisation of acquired intangibles
and acquisition costs 4.75 2.62 6.37
Add back exceptional items - - 6.45
Less tax on adjusted items (1.19) (0.50) (1.27)
----------- -------------- ----------
Adjusted diluted earnings per share 19.31 21.77 42.34
=========== ============== ==========
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
6. Dividends
Six months Six months Year
ended 30 ended ended
September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
----------- -------------- ----------
Dividends charged to equity in the
period 3,074 2,653 4,176
=========== ============== ==========
Equity - per ordinary 10p share
Final dividend paid (p) 8.00 7.00 7.00
Interim dividend paid (p) - - 4.00
As at 30 September 2013, the employee benefit trust had an
agreement in place to waive dividends on 349,202 ordinary shares
(31 March 2013: 659,727; 30 September 2012: 703,678). This
arrangement reduced the dividends paid in the period by GBP31,000
(31 March 2013: GBP78,000; 30 September 2012: GBP52,000).
The directors have declared an interim dividend of 4.50p per
share (2012: 4.00p). This will be paid on 16 January 2014 to the
shareholders on the register as at 13 December 2013.
7. Intangible assets and Property, plant and equipment
Property,
Other intangible Total intangible plant
Goodwill* assets assets and equipment
GBP'000 GBP'000 GBP'000 GBP'000
---------- ----------------- ----------------- ---------------
Net book value
At 1 April 2012 34,348 9,913 44,261 6,954
Exchange adjustments (443) (74) (517) (168)
Additions - separately
acquired - 510 510 2,355
Additions - business - - - -
combinations
Disposals - - - (35)
Depreciation and amortisation - (1,818) (1,818) (1,427)
---------- ----------------- ----------------- ---------------
At 30 September 2012 33,905 8,531 42,436 7,679
Exchange adjustments 1,701 381 2,082 420
Additions - separately
acquired - 727 727 2,671
Additions - business
combinations 3,010 3,424 6,434 26
Disposals - (5) (5) (30)
Depreciation and amortisation (3,040) (1,904) (4,944) (1,379)
---------- ----------------- ----------------- ---------------
At 31 March 2013 35,576 11,154 46,730 9,387
Exchange adjustments (2,625) (767) (3,392) (521)
Additions - separately
acquired - 1,247 1,247 1,368
Additions - business
combinations 2,197 34 2,231 104
Disposals - (4) (4) (62)
Depreciation and amortisation - (2,387) (2,387) (1,425)
---------- ----------------- ----------------- ---------------
At 30 September 2013 35,148 9,277 44,425 8,851
========== ================= ================= ===============
* Restated for the amendments to the acquisition balance sheet
of BCH Engineering Consultants (see note 12).
8. Trade and other receivables
As at 30 As at As at
September 30 September 31 March
2013 2012 2013
GBP'000 GBP'000 GBP'000
----------- -------------- ----------
Trade receivables 60,968 77,419 61,799
Less: Provision for impairment
of receivables (5,255) (11,053) (7,161)
----------- -------------- ----------
Trade receivables - net of provisions 55,713 66,366 54,638
Amounts recoverable on contracts 60,677 42,747 52,907
Other receivables 6,331 5,741 6,915
Prepayments and accrued income 6,171 4,845 5,464
Corporation tax recoverable 162 165 174
----------- -------------- ----------
129,054 119,864 120,098
=========== ============== ==========
9. Trade and other payables
As at 30 As at As at
September 30 September 31 March
2013 2012* 2013*
GBP'000 GBP'000 GBP'000
----------- -------------- ----------
Trade payables 10,868 9,902 9,099
Payments in advance on contracts 25,671 27,561 27,254
Other tax and social security
payable 5,567 4,497 7,597
Other payables 11,064 11,370 12,062
Accruals 11,463 9,784 11,739
Lease incentives 487 353 472
Derivative financial instruments 89 121 123
Contingent and deferred consideration 1,809 957 1,524
----------- -------------- ----------
67,018 64,545 69,870
=========== ============== ==========
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1) and for the amendments to the acquisition
balance sheet of BCH Engineering Consultants Pty Ltd (see note
12).
10. Provisions
Professional
indemnity
Reorganisation insurance Vacant property Total
GBP'000 GBP'000 GBP'000 GBP'000
--------------- ------------- ---------------- --------
At 1 April 2013 680 2,068 1,522 4,270
Exchange adjustments (26) (34) - (60)
Charged to the income statement - 397 44 441
Released to the income statement - - (9) (9)
Utilised (311) (955) (220) (1,486)
Unwinding of discount - - 43 43
--------------- ------------- ---------------- --------
At 30 September
2013 343 1,476 1,380 3,199
=============== ============= ================ ========
At 30 September
2013
Current liabilities 343 1,476 626 2,445
Non-current liabilities - - 754 754
--------------- ------------- ---------------- --------
343 1,476 1,380 3,199
=============== ============= ================ ========
At 30 September
2012
Current liabilities - 2,882 453 3,335
Non-current liabilities - - 1,207 1,207
--------------- ------------- ---------------- --------
- 2,882 1,660 4,542
=============== ============= ================ ========
At 31 March 2013
Current liabilities 680 2,068 556 3,304
Non-current liabilities - - 966 966
--------------- ------------- ---------------- --------
680 2,068 1,522 4,270
=============== ============= ================ ========
Reorganisation
The provision represents redundancy and other reorganisation
costs payable as a result of restructuring in Asia.
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. The maximum period
covered by these provisions is 5 years.
11. Notes to the consolidated cash flow statement
(a) Cash flows from operations
Six months Six months
ended 30 ended Year ended
September 30 September 31 March
2013 2012* 2013*
GBP'000 GBP'000 GBP'000
----------- -------------- -----------
Profit for the financial
period 6,173 7,490 11,879
Adjustments for:
Tax 1,532 2,452 4,738
Depreciation 1,425 1,427 2,806
Amortisation - software 807 799 1,545
Amortisation - acquisitions 1,580 1,019 2,177
Acquisition costs 274 - 306
Exceptional items - - 2,513
Interest receivable (176) (210) (350)
Interest payable and similar
charges 1,191 1,124 2,296
----------- -------------- -----------
EBITDA 12,806 14,101 27,910
(Profit)/loss on disposal of property,
plant and equipment (2) 27 27
Fair value (gain)/loss on financial
instruments (163) 16 47
Share option costs 417 491 719
Decrease in provisions (1,114) (742) (1,093)
Decrease in post employment
benefits (234) (96) (405)
Deficit contributions to the AGPS defined
benefit pension scheme (1,818) (390) (927)
Changes in working
capital:
Increase in trade and other
receivables (9,544) (1,419) 64
Decrease in trade and other
payables (5,951) (3,987) 1,526
----------- -------------- -----------
Cash generated from / (used
in) operations (5,603) 8,001 27,868
=========== ============== ===========
(b) Reconciliation of movement in net cash
At 30 At 30
September At 1 April Non-cash Exchange September
2012 2013 Cash flow movement movement 2013
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- ----------- ---------- --------- --------- -----------
Cash at bank 22,146 32,037 (16,185) - (2,409) 13,443
----------- ----------- ---------- --------- --------- -----------
Bank overdraft - (1,175) (190) 82 (1,283)
Debt due within 1 year (726) (713) 356 (356) - (713)
Debt due after 1 year (5,982) (5,625) - 356 - (5,269)
Finance leases due
within 1 year (70) (76) 34 (34) 10 (66)
Finance leases due
after 1 year (173) (147) - 34 24 (89)
----------- ----------- ---------- --------- --------- -----------
Total debt (6,951) (7,736) 200 - 116 (7,420)
----------- ----------- ---------- --------- --------- -----------
Net cash 15,195 24,301 (15,985) - (2,293) 6,023
=========== =========== ========== ========= ========= ===========
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
12. Acquisitions
The group acquired the business and assets of PLD Consulting Pty
Ltd in Australia on 7 September 2013 for a total potential
consideration of GBP2.2m. The purchase has been accounted for as a
business combination. Had the acquisition completed on the first
day of the financial year, group revenues for the period would have
been GBP151.3m and group adjusted operating profit would have been
GBP10.8m. Since acquisition the business has contributed revenue of
GBP250k and adjusted operating profit of GBP22k.
Details of the provisional fair value of assets and liabilities,
goodwill and intangible assets are as follows:
Total
GBP'000
--------
Intangible assets 34
Property, plant and equipment 104
Trade and other payables (53)
Other non-current liabilities (40)
--------
Net assets acquired 45
Goodwill 2,197
--------
2,242
========
Consideration
Cash consideration 1,357
Deferred consideration 308
Contingent consideration 577
--------
Gross consideration 2,242
========
Fair values are provisional and may be revised.
Prior year acquisitions
The group purchased the entire share capital of BCH Engineering
Consultants on 17 December 2012. The fair values of the acquired
assets and liabilities disclosed as provisional in the Annual
Report 2013 in respect of this acquisition have been finalised
during the period. The following adjustments have been made, as at
the date of acquisition:
Fair values Fair value
of
previously Adjustments assets
disclosed made acquired
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Intangible assets 1,593 - 1,593
Deferred tax assets 29 - 29
Trade and other receivables 414 - 414
Amounts recoverable on
contracts 50 - 50
Cash and cash equivalents 169 - 169
Trade and other payables (220) - (220)
Corporation tax liabilities (5) - (5)
Deferred tax liabilities (478) - (478)
------------ ------------ -----------
Net assets acquired 1,552 - 1,552
Goodwill 1,414 63 1,477
------------ ------------ -----------
2,966 63 3,029
============ ============ ===========
Consideration
Cash consideration 1,960
Deferred consideration 124
Contingent consideration 945
-----------
Gross consideration 3,029
===========
The finalisation of the valuation of net assets on acquisition
gave rise to an additional cash payment of GBP63k due to the vendor
in respect of the sale and a corresponding adjustment to the fair
value of goodwill. During the year deferred consideration payments
of GBP120k were made in respect of this acquisition.
Acquisition cash flows
The cash flows arising from all acquisitions are as follows:
Total
GBP'000
--------
Cash consideration 1,357
Deferred consideration 120
--------
Net cash outflow 1,477
========
13. Post employment benefits
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 scheme was closed to future benefit accrual on 30 April
2011. The group's net liabilities in respect of post employment
benefits comprise the following:
As at As at 30 As at
30 31
September September March
2013 2012 2013
GBP'000 GBP'000 GBP'000
---------- ---------- --------
AGPS 20,121 18,977 19,089
Overseas and unfunded
annuitants schemes 9,663 7,760 10,294
---------- ---------- --------
29,784 26,737 29,383
========== ========== ========
AGPS
A reconciliation of the amounts included in the consolidated
balance sheet for the AGPS is as follows:
As at 30 As at 30 As at
31
September September March
2013 2012* 2013*
GBP'000 GBP'000 GBP'000
---------- ---------- ---------
At 1 April (19,089) (16,305) (16,305)
Net interest on pension
liability (384) (357) (751)
Scheme expenses (107) (60) (204)
Contributions by employers 1,818 390 927
Remeasurement (losses)
/ gains due to:
- Assets (9,047) (346) 11,330
- Liabilities 6,688 (2,299) (14,086)
---------- ---------- ---------
Deficit in AGPS (20,121) (18,977) (19,089)
---------- ---------- ---------
Related deferred tax asset 4,024 3,874 4,390
---------- ---------- ---------
Net pension deficit (16,097) (15,103) (14,699)
========== ========== =========
As at 30 As at 30 As at
31
September September March
The key assumptions used 2013 2012 2013
were:
----------- ----------- -----------
Rate of increase to pensions
in payment:
- Index linked pensions with max 3% per
annum increases 2.50% 2.17% 2.55%
- Other index linked pension 3.30% 2.66% 3.35%
Discount rate 4.55% 4.30% 4.35%
Inflation assumptions
(RPI) 3.50% 2.70% 3.55%
Inflation assumptions
(CPI) 2.50% 2.00% 2.55%
Longevity at age 65 for
current pensioners
- Men 23.8 years 23.6 years 23.7 years
- Women 25.4 years 25.3 years 25.4 years
Longevity at age 65 for
future pensioners
- Men 25.8 years 25.7 years 25.8 years
- Women 27.8 years 27.6 years 27.7 years
*Restated to reflect the adoption of IAS 19 Employee Benefits
(Revised) (see note 1).
14. Contingent liabilities
The group maintains insurance against claims for professional
negligence which may have been, or may in the future be, received
in the ordinary course of business. The complex nature of the
projects on which the group provides services and the involvement
of other parties means that such claims can be substantial and take
a significant time to resolve. Provisions are made for legal and
settlement costs below the deductible level or in excess of the
insured level where it is considered that a liability may exist.
The provisions held of GBP1,476,000 (31 March 2013: GBP2,068,000;
30 September 2012: GBP2,882,000) represent the directors' best
estimate of the outcome of these claims and associated costs, on
the basis of the information available and, where appropriate,
having obtained legal advice.
Hyder Consulting PLC and various group companies have entered
into tender bonds, performance bonds and advance payment bonds
supporting project requirements and certain other bonds and
guarantees in the ordinary course of business. The group's
liabilities under performance guarantees are only limited to the
extent of the underlying contracts. The directors do not consider
any provision is necessary in respect of guarantees and bonds.
Independent review report to Hyder Consulting PLC
Introduction
We have been engaged by the company to review the Interim
Results in the half-yearly financial report for the six months
ended 30 September 2013, which comprises the Consolidated Income
Statement, the Consolidated Statement of Changes in Equity,
Consolidated Balance Sheet, the Consolidated 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 Conduct 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
Conduct 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 2013 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 Conduct Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
20 November 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GGGWCGUPWGMB
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