Half Yearly Report
AukettFitzroyRobinson – Press Release
Aukett Fitzroy Robinson Group Plc
Thursday June 7 2012
Aukett Fitzroy Robinson Group Plc
Interim Results For the Six Months ended 31 March 2012
Aukett Fitzroy Robinson Group Plc, the international practice of architects and interior design specialists, is pleased to announce its interim results for the six month period ended 31 March 2012.
Highlights
· Significant top line growth with revenue up 81% to £5.5m
· All geographical operating segments in profit
· Turnaround in results with profit before tax of £173,000 (2011: Loss of £761,000)
· Earnings per share improved by 0.49 pence
· Strong cash flow increased net funds to £827,000
· Improving order book conversion
· Winner of the AJ 100 International Practice of the Year 2012 award
Nicholas Thompson, Chief Executive Officer commented:
“Having returned the group to profitability our goal now is to maintain this position.”
Enquiries
Aukett Fitzroy Robinson – 020 7843 3000
Nicholas Thompson, Chief Executive Officer
Duncan Harper, Group Finance Director
finnCap – 020 7220 0500
Corporate Finance Sam Smith / Ed Frisby / Rose Herbert
Corporate Broking Simon Starr / Stephen Norcross
Hermes Financial PR
Chris Steele – 07979 604687
Trevor Phillips – 07889 153628
Interim statement
Overview
At long last we are able to report a positive financial outcome in these results for our group. The efforts that we have made to bring costs into line with our revenues in difficult market conditions have now borne some fruit.
We reported an initial recovery in our underlying financial position in the second half of last year and this recovery has continued into the first half of this year with all geographical operating segments reporting a profit. Not only has profitability returned but we have also exceeded our expectations in cash management.
Our Russian operation continued to perform well with a small number of large projects and our UK operation continued to progress a number of planning applications and projects on site providing consistency of revenue. Perhaps the most encouraging aspect has been the turnaround in our Middle East operation where we had previously decided to retain a base cost presence and this decision has been rewarded with new instructions being received in the first half of this year. Our improving performance in overseas markets was recently recognised by winning the AJ100 International Practice of the Year award.
Our goal now is to maintain and build upon what we have achieved over the past twelve months.
Summary of results
We reversed the previous half year loss and now report a pre tax profit of £173,000 (2011: loss of £761,000).
This was largely achieved because of our previous strategic decision to retain our skill base across the group with the objective of increasing our market share. As such our operating costs remained unchanged at £3.65m (2011: £3.54m) but revenues grew by a healthy 81% from £3.0m to £5.5m and revenues less sub consultant costs increased by 39% from £2.7m to £3.8m. Operating profit is £106,000 (2011: loss of £829,000)
After accounting for our share of joint venture after tax profits of £77,000 (2011: £79,000) and corporate tax of £85,000 (2011: tax credit of £187,000) including the impact of the change in UK tax rates, the amount retained in reserves is £88,000 (2011: loss of £633,000).
We are particularly pleased with our cash management success. Net funds stand at £827,000 (31 March 2011: Net debt of £409,000). This vindicates our decision to trade out of the recession utilising our own internal resources without increasing our bank debt or asking our shareholders for additional funds.
Operations
Our UK operation won a series of high profile projects in the most recent reporting period which compensates for its financial performance which will remain at the lower end of our expectations until these project wins are converted into full revenue streams in the post-planning application period.
A total of nine town planning applications were submitted during the period covering 1,127,000 square feet of development space in London. Two of these applications are now proceeding to the site phase – offices in Berkeley Square, Mayfair for Prupim and Wood Street in the City for Orchard Street. A further five applications are to be submitted in later in the 2012 calendar year covering 1,038,000 square feet of development space in London, Bristol and Colchester.
The UK operation won a number of significant projects in the six month period including a new 250,000 square foot business park in Norwich, a second site for Imperial College covering 250,000 square feet for student residential use, and more recently an office campus of 110,000 square feet in Cambridge for Development Securities. Shortly after the half year we also won a 400,000 square feet scheme comprising two headquarter office buildings in Reading for Prupim.
These additional projects take our work at the feasibility study or pre-planning stage to 3,679,000 square feet. In addition Veretec, our executive architect operation, was appointed to two major construction projects: one with Sir Robert McAlpine for a residential scheme in Mayfair and the other with BAM for an office scheme in Victoria.
Activity in Russia has largely been confined to two major hotel schemes as previously reported: one in Sochi and the other in Siberia. More recently we have been appointed to a further hotel project in Sochi for the 2014 Winter Olympics and on a five star hotel in Central Moscow thereby securing the workload of this operation for the next 18 to 24 months.
Our Middle East operation, which had been reduced to a base cost position in 2011, exceeded expectations by winning the re-modelling of a Hilton resort hotel in Ras al-Khaimah and being re-appointed to a Marriott Courtyard hotel in Abu Dhabi once funding was resumed, both in second quarter of this year. The latter appointment crystallised some outstanding fee income which is reflected in these results. Following the release of capital funds in the Emirates we have been actively bidding on other high quality projects and anticipate a further slow recovery of this part of our international operation. We have also been appointed as executive architects on a five star hotel project in Qatar through our Veretec operation in London.
Elsewhere in Continental Europe our Berlin associate continues to be appointed on a range of schemes covering hotels, shopping centres and education buildings, and made a significant contribution to our profits in the period. Our joint venture in Frankfurt continues to focus on interior fit-out projects for the upper end of the commercial tenant market. The Czech operation has continued to down-size as market activity recedes. Both the latter two operations made losses in the period but are expected to breakeven in the second half of the year.
We continue to explore possibilities of working in South American and have entered into agreements with local practices in Sao Paulo, Recife and Bogota.
Order book
We have previously reported on the value and quality of our order book – which is defined as future revenues less sub consultants costs from the end of the current financial year (in this case from 1 October 2012). Since our last report we have added ten new projects whilst six projects have been abandoned or we believe will not be progressed in the near future and two have been significantly downgraded in size. The fee income associated with the order book currently stands at £72.5m (2011: £82.0m) should they all proceed to completion.
Our expanding order book now stands at forty-six schemes (2011: forty-two) or projects with a total area of 19,736,000 square feet (2011: 19,700,000 square feet) with a construction value of £2.42bn (2011: £1.99bn).
Of this order book fifteen projects, comprising 11,775,000 square feet and £42.2m of future revenues, are on hold awaiting tenants, funding or market improvements.
The balance of thirty-one projects comprising 7,961,000 square feet and £30.3m of future revenues comprises:
· Ten projects instructed to construction totalling 3,602,000 square feet with future revenues of £4.8m;
· Ten projects in the pre-planning application stage totalling 1,364,000 square feet with future revenues of £9.2m; and
· Eleven projects in the feasibility stage totalling 2,995,000 square feet with future revenues of £16.3m.
These thirty-one projects represent our short term (up to thirty six months) workload outlook augmented by new work, additional instructions or smaller project income not included in the order book.
Prospects
We will continue to maintain our strategic initiative of pursuing project opportunities in London, the wider Russian market and the Middle East, places where we believe that we have a robust historic presence, strong track record in project delivery and a clear architectural and interior design skill set.
We are very aware that our improving performance over the past twelve months in returning the group to underlying profitability is based more on our success in gaining market share than from a general increase in development activity. Therefore we remain cautious about the future and our ability to maintain current profitability which is based upon out-performing in a static market, at least for another year.
Nicholas Thompson
Chief Executive Officer
6 June 2012
Consolidated income statement
For the six months ended 31 March 2012
|
Note |
Unaudited |
Unaudited |
Audited |
|
| Revenue |
2 |
5,454 |
3,006 |
9,075 |
| Sub consultant costs |
(1,697) |
(294) |
(2,768) |
|
| Revenue less sub consultant costs |
3,757 |
2,712 |
6,307 |
|
| Personnel related costs |
(2,520) |
(2,469) |
(4,711) |
|
| Office related costs |
(664) |
(606) |
(1,204) |
|
| Exceptional operating expense |
3 |
– |
– |
(835) |
| Other operating expenses |
(515) |
(490) |
(934) |
|
| Total other operating expenses |
(515) |
(490) |
(1,769) |
|
| Other operating income |
48 |
24 |
60 |
|
| Operating profit / (loss) |
106 |
(829) |
(1,317) |
|
| Finance income |
– |
4 |
6 |
|
| Finance costs |
(10) |
(15) |
(30) |
|
| Profit / (Loss) after finance costs |
96 |
(840) |
(1,341) |
|
| Share of results of associate & joint venture |
77 |
79 |
112 |
|
| Profit / (Loss) before tax |
2 |
173 |
(761) |
(1,229) |
| Tax (charge) / credit |
(85) |
187 |
274 |
|
| Profit / (Loss) from continuing operations |
88 |
(574) |
(955) |
|
| Loss from discontinued operation |
– |
(59) |
(215) |
|
| Profit / (Loss) for the period attributable to equity holders of the company |
88 |
(633) |
(1,170) |
|
| Basic and diluted earnings / (losses) per share | ||||
| From continuing operations |
0.06p |
(0.39)p |
(0.65)p |
|
| From discontinued operation |
– |
(0.04)p |
(0.15)p |
|
| Total earnings / (losses) per share |
4 |
0.06p |
(0.43)p |
(0.80)p |
Consolidated statement of comprehensive income
For the six months ended 31 March 2012
|
Unaudited |
Unaudited |
Audited |
||
| Profit / (Loss) for the period |
88 |
(633) |
(1,170) |
|
| Other comprehensive income: | ||||
| Currency translation differences |
19 |
23 |
(2) |
|
| Currency translation differences recycled on discontinued operation |
– |
– |
54 |
|
| Other comprehensive income for the period |
19 |
23 |
52 |
|
| Total comprehensive income for the period attributable to equity holders of the company |
107 |
(610) |
(1,118) |
Consolidated statement of financial position
At 31 March 2012
|
Note |
Unaudited |
Unaudited |
Audited |
|
| Non current assets | ||||
| Goodwill |
1,596 |
1,596 |
1,596 |
|
| Property, plant & equipment |
296 |
355 |
311 |
|
| Investment in associate |
144 |
214 |
118 |
|
| Investment in joint venture |
12 |
3 |
20 |
|
| Deferred tax |
785 |
583 |
711 |
|
| Total non current assets |
2,833 |
2,751 |
2,756 |
|
| Current assets | ||||
| Trade and other receivables |
3,663 |
3,361 |
3,271 |
|
| Current tax |
– |
57 |
26 |
|
| Cash and cash equivalents |
6 |
1,240 |
476 |
912 |
| Total current assets |
4,903 |
3,894 |
4,209 |
|
| Total assets |
7,736 |
6,645 |
6,965 |
|
| Current liabilities | ||||
| Trade and other payables |
(4,162) |
(2,363) |
(3,485) |
|
| Current tax |
(97) |
(24) |
– |
|
| Short term borrowings |
6 |
(150) |
(397) |
(181) |
| Provisions |
(225) |
(166) |
(165) |
|
| Total current liabilities |
(4,634) |
(2,950) |
(3,831) |
|
| Non current liabilities | ||||
| Long term borrowings |
6 |
(263) |
(488) |
(413) |
| Deferred tax |
(40) |
(13) |
(32) |
|
| Total non current liabilities |
(303) |
(501) |
(445) |
|
| Total liabilities |
(4,937) |
(3,451) |
(4,276) |
|
| Net assets |
2,799 |
3,194 |
2,689 |
|
| Capital and reserves | ||||
| Share capital |
1,456 |
1,456 |
1,456 |
|
| Foreign currency translation reserve |
248 |
200 |
229 |
|
| Retained earnings |
(1,347) |
(904) |
(1,438) |
|
| Other distributable reserve |
2,442 |
2,442 |
2,442 |
|
| Total equity attributable to equity holders of the company |
2,799 |
3,194 |
2,689 |
Consolidated statement of cash flows
For the six months ended 31 March 2012
|
Note |
Unaudited |
Unaudited |
Audited |
|
| Cash flows from operating activities | ||||
| Cash from / (used in) operations |
5 |
514 |
(491) |
215 |
| Interest paid |
(10) |
(15) |
(30) |
|
| Income taxes paid |
(27) |
(27) |
(45) |
|
| Net cash from / (used in) operating activities |
477 |
(533) |
140 |
|
| Cash flows from investing activities | ||||
| Purchase of property, plant & equipment |
(48) |
(36) |
(51) |
|
| Sale of property, plant & equipment |
1 |
2 |
3 |
|
| Interest received |
– |
4 |
6 |
|
| Dividends received from associate |
53 |
– |
109 |
|
| Net cash from / (used in) investing activities |
6 |
(30) |
67 |
|
| Net cash flow before financing activities |
483 |
(563) |
207 |
|
| Cash flows from financing activities | ||||
| Repayment of bank loan |
(150) |
(75) |
(150) |
|
| Payment of asset finance liabilities |
(31) |
(31) |
(63) |
|
| Net cash used in financing activities |
(181) |
(106) |
(213) |
|
| Net change in cash, cash equivalents and bank overdraft |
302 |
(669) |
(6) |
|
| Cash, cash equivalents and bank overdraft at start of period |
912 |
946 |
946 |
|
| Currency translation differences |
26 |
15 |
(28) |
|
| Cash, cash equivalents and bank overdraft at end of period |
6 |
1,240 |
292 |
912 |
Consolidated statement of changes in equity
For the six months ended 31 March 2012
|
Share |
Foreign |
Retained |
Other |
Unaudited |
|
| At 1 October 2011 |
1,456 |
229 |
(1,438) |
2,442 |
2,689 |
| Profit for the period |
– |
– |
88 |
– |
88 |
| Other comprehensive income |
– |
19 |
– |
– |
19 |
| Share based payment value of employee services |
– |
– |
3 |
– |
3 |
| At 31 March 2012 |
1,456 |
248 |
(1,347) |
2,442 |
2,799 |
For the six months ended 31 March 2011
|
Share |
Foreign |
Retained |
Other |
Unaudited |
|
| At 1 October 2010 |
1,456 |
177 |
(271) |
2,442 |
3,804 |
| Loss for the period |
– |
– |
(633) |
– |
(633) |
| Other comprehensive income |
– |
23 |
– |
– |
23 |
| At 31 March 2011 |
1,456 |
200 |
(904) |
2,442 |
3,194 |
For the year ended 30 September 2011
|
Share |
Foreign |
Retained |
Other |
Audited |
|
| At 1 October 2010 |
1,456 |
177 |
(271) |
2,442 |
3,804 |
| Loss for the year |
– |
– |
(1,170) |
– |
(1,170) |
| Other comprehensive income |
– |
52 |
– |
– |
52 |
| Share based payment value of employee services |
– |
– |
3 |
– |
3 |
| At 30 September 2011 |
1,456 |
229 |
(1,438) |
2,442 |
2,689 |
Notes to the interim results
1 Basis of preparation
The financial information presented in this interim report has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (‘IFRS’) as adopted by the EU that are expected to be applicable to the financial statements for the year ending 30 September 2012 and on the basis of the accounting policies expected to be used in those financial statements.
In September 2011 the group discontinued its Polish operation and the comparatives for the six months ended 31 March 2011 have been restated accordingly.
2 Operating segments
The group comprises a single business segment and four separately reportable geographical segments (together with a group costs segment).
| Segment revenue |
Unaudited |
Unaudited |
Audited |
|
| Continuing operations | ||||
| United Kingdom |
2,713 |
2,341 |
5,027 |
|
| Russia and Former CIS |
2,349 |
447 |
3,582 |
|
| Continental Europe |
194 |
218 |
458 |
|
| Middle East |
198 |
– |
8 |
|
| Revenue – Continuing operations |
5,454 |
3,006 |
9,075 |
|
| Discontinued operation | ||||
| United Kingdom |
– |
– |
– |
|
| Russia and Former CIS |
– |
– |
– |
|
| Continental Europe |
– |
70 |
170 |
|
| Middle East |
– |
– |
– |
|
| Revenue – Discontinued operation |
– |
70 |
170 |
|
| Continuing & discontinued operations | ||||
| United Kingdom |
2,713 |
2,341 |
5,027 |
|
| Russia and Former CIS |
2,349 |
447 |
3,582 |
|
| Continental Europe |
194 |
288 |
628 |
|
| Middle East |
198 |
– |
8 |
|
| Revenue |
5,454 |
3,076 |
9,245 |
The geographical split of revenue based on the location of project sites was:
|
Unaudited |
Unaudited |
Audited |
|
| United Kingdom |
2,524 |
2,136 |
4,748 |
| Russia and Former CIS |
2,339 |
460 |
3,627 |
| Continental Europe |
213 |
462 |
859 |
| Middle East |
345 |
18 |
6 |
| Rest of the World |
33 |
– |
5 |
| Revenue (including discontinued operation) |
5,454 |
3,076 |
9,245 |
| Segment result before tax |
Unaudited |
Unaudited |
Audited |
|
| Continuing operations | ||||
| United Kingdom |
21 |
(567) |
(1,186) |
|
| Russia and Former CIS |
191 |
(54) |
192 |
|
| Continental Europe |
1 |
41 |
86 |
|
| Middle East |
37 |
(120) |
(216) |
|
| Group costs |
(77) |
(61) |
(105) |
|
| Result before tax – Continuing operations |
173 |
(761) |
(1,229) |
|
| Discontinued operation | ||||
| United Kingdom |
– |
– |
– |
|
| Russia and Former CIS |
– |
– |
– |
|
| Continental Europe |
– |
(59) |
(215) |
|
| Middle East |
– |
– |
– |
|
| Group costs |
– |
– |
– |
|
| Result before tax – Discontinued operation |
– |
(59) |
(215) |
|
| Continuing & discontinued operations | ||||
| United Kingdom |
21 |
(567) |
(1,186) |
|
| Russia and Former CIS |
191 |
(54) |
192 |
|
| Continental Europe |
1 |
(18) |
(129) |
|
| Middle East |
37 |
(120) |
(216) |
|
| Group costs |
(77) |
(61) |
(105) |
|
| Result before tax |
173 |
(820) |
(1,444) |
The exceptional operating expense last year related to the United Kingdom segment.
3 Exceptional operating expense
The exceptional operating expense last year related to a provision against the amounts owed to the group in respect of a former project at 90-95 / 100 Piccadilly in Central London. Further details are contained in the statutory accounts of the group for last year.
4 Earnings per share
The calculations of basic and diluted earnings per share are based on the following data:
| Earnings |
Unaudited |
Unaudited |
Audited |
|
| Profit / (Loss) for the period |
88 |
(633) |
(1,170) |
| Number of shares |
Unaudited |
Unaudited |
Audited |
|
| Weighted average number of shares |
145,619 |
145,619 |
145,619 |
|
| Effect of dilutive options |
– |
– |
– |
|
| Diluted weighted average number of shares |
145,619 |
145,619 |
145,619 |
5 Reconciliation of profit / (loss) before tax to net cash from / (used in) operations
|
Unaudited |
Unaudited |
Audited |
||
| Profit / (Loss) before tax – continuing operations |
173 |
(761) |
(1,229) |
|
| Loss before tax – discontinued operation |
– |
(59) |
(215) |
|
| Currency translation differences recycled on discontinued operation |
– |
– |
54 |
|
| Share based payment value of employee services |
3 |
– |
3 |
|
| Finance income |
– |
(4) |
(6) |
|
| Finance costs |
10 |
15 |
30 |
|
| Share of results of associate & joint venture |
(77) |
(79) |
(112) |
|
| Depreciation |
62 |
56 |
114 |
|
| Loss on disposal of property, plant & equipment |
(1) |
(2) |
(2) |
|
| Change in trade & other receivables |
(315) |
779 |
639 |
|
| Change in trade & other payables |
599 |
(382) |
994 |
|
| Change in provisions |
60 |
(54) |
(55) |
|
| Net cash from / (used in) operations |
514 |
(491) |
215 |
6 Analysis of net funds / (debt)
|
Unaudited |
Unaudited |
Audited |
||
| Cash and cash equivalents |
1,240 |
476 |
912 |
|
| Secured bank overdraft |
– |
(184) |
– |
|
| Cash, cash equivalents and bank overdraft |
1,240 |
292 |
912 |
|
| Secured bank loan |
(413) |
(638) |
(563) |
|
| Asset finance liabilities |
– |
(63) |
(31) |
|
| Net funds / (debt) |
827 |
(409) |
318 |
|
| Cash and cash equivalents |
1,240 |
476 |
912 |
|
| Short term borrowings |
(150) |
(397) |
(181) |
|
| Long term borrowings |
(263) |
(488) |
(413) |
|
| Net funds / (debt) |
827 |
(409) |
318 |
7 Status of interim results
The interim results cover the six months ended 31 March 2012 and were approved by the board of directors on 6 June 2012. The interim results are unaudited.
The interim condensed set of consolidated financial statements in the interim report are not statutory accounts as defined by Section 434 of the Companies Act 2006.
Comparative figures for the year ended 30 September 2011 have been extracted from the statutory accounts of the group for that period.
The statutory accounts for the year ended 30 September 2011 have been reported on by the group’s auditors and delivered to the Registrar of Companies. The audit report thereon was unqualified, did not include references to matters which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under Section 498 of the Companies Act 2006.
8 Further information
Copies of the interim report will be dispatched to holders of 10,000 or more shares in due course. Copies will also be available on the company’s website (www.aukettfitzroyrobinson.com) and from the registered office of the company (36-40 York Way, London, N1 9AB).