Preliminary Results
05 March 2003 - 6:00PM
UK Regulatory
RNS Number:2916I
Tolent PLC
05 March 2003
TOLENT PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2002
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report another year of record profits.
In 2002 there was a substantial reduction in office fit-out work due to the
level of financial activity in London. However the Tolent Group was able to
improve profitability albeit on a lower turnover base with a wide range of other
construction work at better margins. Once again a high percentage of turnover
represented repeat business and negotiated work.
Construction in 2002 included an oriental spa facility at Seaham, a football
academy at Sunderland, distribution units in Doncaster and Manchester, a leisure
club at Dartford and the commencement of a large office development on Tyneside.
Financial Summary
Turnover reduced by 18% from #154 million in 2001 to #126 million in 2002.
Operating profits increased by 9.0% from #2.3 million in 2001 to #2.5 million in
2002. Margins improved from 1.5% in 2001 to 2.0% in 2002.
Profit before tax was up by 8.5% from #2.4 million in 2001 to #2.6 million in
2002.
Earnings per share increased by 6.3% from 12.8 pence in 2001 to 13.6 pence in
2002.
The Group had net funds in hand at the end of 2002 of #12.3 million compared
with #16.6 million at the end of 2001. This figure fluctuates from year to year
depending on the type and quantity of work in progress.
Shareholders' funds have increased during 2002 by 83.3% from the restated (for
deferred tax) #1.8 million in 2001 to #3.3 million (26 pence per share at the
end of 2002).
Dividends
I am delighted to announce a dividend of 2.5 pence per share payable on 1st July
2003 to shareholders of record on 6th June 2003. This makes a total of 4.5 pence
per share in respect of the 2002 financial year. For Companies Act 1985
technical reasons this dividend has to be treated as a first interim 2003
dividend.
Operational Highlights
During 2002 we have successfully undertaken a wide range of projects for blue
chip clients including:
Goldman Sachs
Next Generation Leisure
Sage
Shepherd Offshore
Terrace Hill
Rank
Our involvement with the pharmaceutical and petro-chemical industries continues
with clients including:
Proctor and Gamble
Dupont
Mercke Sharp and Dohme
We went forward into 2003 with a healthy order book of #90 million.
Employees
On behalf of the board of directors I would like to thank our subsidiary company
directors and all the Group's employees for their efforts in 2002.
Outlook for 2003
We entered 2003 with a substantial workload including the major Sage project in
Newcastle and we look forward to another profitable year.
Due to unforeseeable delays in 2002 there was no contribution from our joint
venture office development south east of Leeds. We hope there will be some
contribution from this 166,000 square feet development in 2003.
Stuart N. Gordon
Chairman
4th March 2003
MANAGING DIRECTOR'S REVIEW
Introduction
Tolent operates across the construction sector providing services in building,
civil engineering and property development. Many of our activities are in niche
markets delivering quality and value for money solutions to support the business
activities of an increasing customer base.
Our policy of providing a flexible and responsive service to meet the needs and
goals of our customers and partners has allowed us to reap the benefits of
consistent repeat and negotiated business opportunities with an ever growing and
satisfied customer base.
Our future strategy is to continue to grow organically, supported by selective
acquisitions when opportunities arise in niche and sustainable markets.
A programme of continuous improvement in Health and Safety management is sought
in all companies and rigorous training initiatives are maintained for both our
operatives and staff.
Our commitment to Training and Development continues with staff development a
priority to achieve the Group's long term business objectives. In-house training
facilities and programmes have been established and are proving to be a success.
Tolent Construction Limited
2002 has seen a drop in turnover largely as a result of the completion of a
major fit out contract for Goldman Sachs which was carried out in a joint
arrangement with Interior Plc. However we have been able to continue to improve
on previous profits by focusing on negotiated work and repeat business with blue
chip clients.
Throughout the year there has been a steady decline in our London workload but
this has been compensated for by a very strong performance in the North where we
have secured several major projects.
We continue to operate from five regional offices on a national basis where our
local knowledge allows us to respond to an ever changing market and customer
demands.
Examples of our client base and geographical spread can be demonstrated by
projects completed during the year, e.g. a further #8m Leisure Club for Next
Generation at Dartford, a #9m office refurbishment for Helical Bar at Shepherds
Bush, a further #5m distribution unit for Helios at Doncaster, and a further #4m
office development for UK Land on Tyneside.
The outlook for the industry remains competitive but we enter 2003 with 60% of
our projected turnover secured with several major negotiated projects in the
pipeline.
The decline in the London office fit out market has seen us become increasingly
involved in the leisure field, the most prestigious projects being the Seaham
Serenity Spa #8m and Sunderland AFC Academy #8.2m with several other similar
projects in progress.
We are currently constructing the new #52m headquarters for Sage on the
Newcastle Great Park which is the first development on this major flagship
scheme.
Our reputation for quality and delivery continues to bring repeat business and
new clients and consequently we look forward with confidence.
During 2002 we have continued to invest in additional IT equipment which is now
helping to standardise and streamline our procedures to give us better control
of site costs and overheads.
Interior Tolent - Joint Arrangement
Established in 1999 to fit out new offices for Goldman Sachs the project has now
been successfully completed. Tolent has a 35% share of this joint arrangement
which is set up as a separate company.
Tolent Balfour Kilpatrick - Joint Arrangement
Established during 2000 to fit out further offices for Goldman Sachs the work
has progressed well and should be completed in 2003.
Checkhire - Joint Venture
Checkhire is a 50/50 joint venture company owned by Tolent and Amco Property
Investments plc. In December 2001 the company purchased 15.5 acres of land and
has planning permission to develop 166,000sq. ft. of office space.
The land is immediately adjacent to Junction 46 of the M1 and is an established
prime office location for south east Leeds.
There is a strong demand for the type of space to be provided and work will
start in April and be phased over 2 years.
Ravensworth Properties
We have 100% occupancy of premises with good quality tenants and consequently we
have turned in a creditable performance which should continue.
John G. Wood
Managing Director
4th March 2003
FINANCIAL DIRECTOR'S REPORT
Results
Total group turnover reduced by 18.2% in 2002 from #153.7m in 2001 to #125.8m.
This reduction followed three years of strong growth when turnover increased
annually by 16.1%, 23.9% and 37.8% during 1999, 2000 and 2001 respectively. The
2001 peak was achieved by the throughput of a major management project where the
turnover was high but the margin low due to the low risk associated with the
work.
Operating profits in 2002 increased to #2.5m up from #2.3m in 2001 and margins
also increased from 1.5% to 2.0% as the Group's reliance on low risk, low margin
management contracts reduced.
Net interest remained constant at a credit of #0.1m. Bank balances during the
year generated #0.3m of interest with the #0.2m of interest payable relating to
property loans on the Group's investment properties.
The profit before tax increased by #0.2m in the year to #2.6m, an increase of
8.5%.
Taxation and earnings per share
The tax charge in 2002 was #0.8m which equates to 32.4% of pre-tax profits.
Earnings per share increased by 6.2% from 12.8p in 2001 to 13.6p in 2002.
During the year the Group adopted FRS 19 - Deferred Tax and as this was a change
in accounting policy it has led to a prior year adjustment being made in the
financial statements. The deferred tax relates to accelerated capital allowances
claimed on properties held for investment. These properties are not expected to
be sold in the foreseeable future and are expected to be held until after the
time when any such liability could arise.
Dividends
An interim dividend of 2p per share was paid during the year. A further dividend
of 2.5p is proposed which for Companies Act 1985 reasons has to be treated as a
first interim 2003 dividend. The total proforma dividend for 2002 of 4.5p is
just over three times covered by the profit after taxation. Shareholders' funds
during the year have increased from a restated #1.8m to #3.3m.
Cashflow
The group had net funds at the end of 2002 of #12.3m, which is a net outflow of
funds of #4.3m from the net funds position of #16.6m at the end of 2001. Cash at
bank and in hand has reduced by #4.4m to #15.2m.
Ian Swire
Financial Director
4th March 2003
Profit and loss account for the year ended 31st December 2002
2002 2001 (restated)
#000 #000 #000 #000
Turnover 125,828 153,746
Raw materials and consumables 9,231 11,661
Other external charges 96,588 123,242
(105,819) (134,903)
20,009 18,843
Staff costs 14,687 13,830
Depreciation 131 116
Other operating charges 2,704 2,620
(17,522) (16,566)
Operating profit 2,487 2,277
Net interest 91 99
Profit on ordinary activities before taxation 2,578 2,376
Taxation on profit on ordinary activities (836) (736)
Profit on ordinary activities after taxation 1,742 1,640
Dividends (256) 0
Profit transferred to reserves 1,486 1,640
Basic earnings per share 13.6p 12.8p
Statement of total recognised gains and losses
2002 2001 (restated)
#000 #000 #000 #000
Profit for the financial year 1,742 1,640
Unrealised surplus on revaluation of investment 0 390
properties
Total recognised gains and losses for the year 1,742 2,030
Prior year adjustment (534)
Total gains and losses recognised since last 1,208
financial statements
Consolidated balance sheet at 31st December 2002
2002 2001 (restated)
#000 #000 #000 #000
Fixed assets
Tangible assets 5,819 4,883
Current assets
Stock 82 196
Amounts recoverable on contracts 9,690 12,165
Debtors 13,165 9,774
Cash at bank and in hand 15,178 19,589
38,115 41,724
Creditors: amounts falling due (37,297) (41,356)
within one year
Net current assets/(liabilities) 818 368
Total assets less current liabilities 6,637 5,251
Creditors: amounts falling due (2,759) (2,875)
after more than one year
Provisions for liabilities and charges (550) (534)
(3,309) (3,409)
3,328 1,842
Capital and reserves
Called up share capital
Equity 1,283 1,283
Non-equity 13 13
1,296 1,296
Property revaluation reserve 902 902
Profit and loss account 1,130 (356)
Shareholders' funds 3,328 1,842
Consolidated cashflow statement for the year ended 31st December 2002
2002 2001
#000 #000 #000 #000
Net cashflow from operating activities (1,988) 6,261
Returns on investments and servicing of finance
Interest received 280 322
Interest paid (189) (223)
Net cash outflow from returns on investments and 91 99
servicing of finance
Taxation (1,077) (396)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,069) (137)
Net cash outflow from capital expenditure and (1,069) (137)
financial investment
Equity dividends paid (256) 0
Net cashflow before financing (4,299) 5,827
Financing
Bank loans (112) 113
Net cashflow from financing (112) 113
Increase in cash (4,411) 5,940
Notes:
1. Basis of preparation
The financial information in this preliminary announcement has been prepared in
accordance with the accounting policies set out in the financial statements of
Tolent Plc for the year ended 31st December 2001, which have remained unchanged
for the financial year ended 31st December 2002, except for the adoption of FRS
19 - Deferred Tax.
2. Earnings per share
Earnings per ordinary share have been calculated on the basis of profit for the
period after tax, divided by the weighted average number of ordinary shares in
issue in the year of 12,832,626 (2001 - 12,832,626).
3. Preliminary announcement
Copies of the preliminary announcement are available from the company's
registered office at 25 Moorgate Road, Rotherham, South Yorkshire, S60 2AD. The
Annual Report and Accounts for the year ended 31st December 2002 will be posted
to shareholders on or about 1st May 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
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