TIDMHYC
RNS Number : 6843K
Hyder Consulting PLC
27 June 2014
Hyder Consulting PLC ("Hyder" or the "Company")
Annual Financial Report and Notice of Annual General Meeting
Hyder's Final Results for the financial year ended 31 March 2014
were announced on 11 June 2014. 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 ended 31 March
2014;
AGM circular to shareholders containing Notice of the Annual
General Meeting to be held on 1 August 2014 ("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 to this announcement contains the information
required in compliance with DTR 6.3.5, which is in addition to the
information communicated in the Final Results announcement 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 in the Annual Report
and Accounts 2014. References to page numbers and notes are to
those in the Annual Report and Accounts. This material is not a
substitute for reading the full Annual Report and Accounts.
Neil Hunt
Company Secretary
Tel: 020 3014 9000
27 June 2014
Appendix:
Principal risks and uncertainties (Pages 24 to 27 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
------------------------------------------ --------------------------------------------------------------------
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 * The international spread and sector diversity of the
can arise due to group provides protection against market changes in
changes in social, economic specific geographies or sectors.
or political factors, as well
as increased competition.
* The development of our design excellence centres
The order book decreases as provides additional flexibility to respond to local
fewer opportunities are secured, market movements.
contracts may be secured at
lower margins, and terms and
conditions may become more * The group also recognises that its competitiveness is
onerous. Cash generation could enhanced by the recruitment and retention of key
be affected and lower staff staff members (see below).
utilisation could result in
reduced profitability.
* 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 * We categorise all of our projects based on their
financial loss, increased value and complexity, ensuring appropriately
risk of contractual disputes experienced project managers are appointed.
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
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 * Should disputes arise they are dealt with at a local
damage our client level wherever possible, to protect and enhance our
relationships and limit our relationship with clients and suppliers. All material
ability to secure future contracts. claims are monitored at group level and regularly
Claims which are settled outside considered by the board.
the scope of our insurance
coverage or for amounts in
excess of the relevant indemnity * Alternative dispute resolution is used where
limit could result in material appropriate.
liabilities for the group.
* 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 * We ensure that our staff obtain appropriate and
disputes and claims.
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
The majority of costs, including * We develop and maintain close working relationships
payroll, are paid before fees
are settled by clients. It
may take us longer to get with clients and seek advance payments
paid than we anticipated through where
poor payment terms, late invoicing possible.
or poor collection of debts. * Global cash forecasts are prepared regularly and debt
Insufficient working capital
could constrain growth and and work in progress levels with
lead to increased use of banking clients are monitored
facilities with the resultant against set credit limits.
costs. In the extreme we may * Cash management performance indicators are
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 * The group maintains a good relationship with the
rates and asset values, as
well as inflation and the
life expectancy of the members. Trustees.
The cash cost of funding the * A revised funding plan was agreed following the
existing deficit could increase triennial valuation on 1 April 2011; the April 2014
in the future. valuation is currently under way.
* 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 * The group's systems and processes are phased into the
into the group is fundamental acquired entity as soon as practicable after
to maximising their value. acquisition.
Inadequate integration could
impact an acquisition's value
or result in risks being inappropriately * A member of the regional executive team will oversee
managed. the integration process in order to maximise the
value of the acquisition.
------------------------------------------ --------------------------------------------------------------------
Crisis event/business continuity
We rely on our IT and office * Business continuity plans are in place and are
infrastructure in order to reviewed regularly.
operate. A crisis event or
business continuity issue
could lead to a loss of staff * The group's IT networks and core business systems are
and/or interruption to service maintained and supported to provide assurance on data
delivery. integrity and minimise the risk of data loss.
The loss of IT systems, or
being unable to access * Where systems are identified as critical to the
offices, could affect our business their performance, resilience and security
performance. 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 * As a group we are committed to conducting our
also a risk of reputational activities in such a way as to ensure the health and
damage to the group. 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 exchange risks in accordance with policies set by the
less than 30% of the group's board. A summary of the group's key risk exposures
revenue is generated in sterling. and the use of derivative and financial instruments
The remaining balance is generated are given in note 16.
in Australia, the Middle East,
Germany, China and Hong Kong
where revenue is normally * The revenue and costs of our international operations
denominated in the relevant
local currency.
generally arise in the same currency
Significant movements in foreign and therefore the
exchange rates will affect exposure to exchange fluctuations
the sterling profits reported is not usually significant and consequently
by the group and the value not hedged.
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 its operations
The group operates in many
jurisdictions and is subject
to a wide range of rules and regularly and undertakes training
regulations, including the on business ethics,
UK Bribery Act 2010. 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
the regions in which we operate
could affect our ability to have developed a good understanding
undertake projects effectively of the political
and collect cash. and economic conditions.
* 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 - (Pages 79 to 80 of the Annual Report
and Accounts)
The following statement is extracted from the Annual Report and
Accounts. The statement relates solely to the full 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 Strategic 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.
The directors consider that this Annual Report and Financial
Statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders to assess
the company's performance, business model and strategy."
Related Party Transactions
a) Joint ventures (page 128 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 GBP6.6m
(2013: GBP6.4m), 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. Total revenue from joint operations amounted to
GBP32.1m (2013: GBP46.3m). A listing of significant jointly
controlled operations with revenue exceeding GBP1m is set out
below:
Name Project Description Legal Status Country of
Incorporation/
region of operation
Hyder WSP London Bridge Unincorporated UK
Station
Hyder Halcrow M25 DBFO Unincorporated UK
Hyder-Arup-Black & Veatch Widening of Incorporated Asia
Joint Venture Tolo/Fanling
Highway
Aurecon-Hyder Regional Rail Unincorporated Australia
Link E
Faber Maunsell Hyder Severn Trent Unincorporated UK
Sewage Treatment
Works
Gold Coast Rapid Transit - Gold Coast Rapid Unincorporated Australia
IV Transit - IV
Planungsgemeinschaft GPI Tulla-Sydney Unincorporated Australia
Freeway Zukunft Unincorporated Germany
Cargo Hub Frankfurt
b) Key management personnel (page 122 of the Annual Report and Accounts)
Aggregate costs of key management personnel
2014 2013
GBP'000 GBP'000
-------- ------------
Salaries and benefits 2,391 2,754
Pension costs 126 148
Termination payments - 104
Share based payment expense 84 16
-------- ------------
2,601 3,422
======== ============
The group has identified 13 persons (2013: 13) 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 directors'
remuneration can be found in the Directors' Remuneration Report on
page 68.
c) Post Employment Benefits
Transactions with post employment benefit plans are disclosed in
note 27 (page 123 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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