RNS No 8278p
AMCO CORPORATION PLC
23rd March 1998
Amco Corporation Plc
Preliminary Results For The Year Ended 31 December 1997
Highlights
* Turnover from continuing operations increased by
4.8% to #152 million (1996: #145 million)
* Profit before tax from continuing operations up 20%
to #4.8 million (1996: #4.0 million)
* Earnings per share increased by 5.1% to 20.6 pence
(1996: 19.6 pence)
* Final dividend increased to 4.5 pence per share
(1996: 4.0 pence)
* Total dividend for the year increased by 16.7% to
7.0 pence
* Concentration on building and construction
contracting produces significantly improved result
* Strong performance from Tolent - turnover and
margins significantly improved
Stuart Gordon, Chairman, commented: "The emphasis on our
building and construction activities will continue in
1998. Trading conditions in the UK construction market
continue to improve and forward order books for our
building and structural steel businesses are strong."
Enquiries:
Amco Corporation Plc 01709 828 218
Stuart Gordon, Chairman
Square Mile Communications 0171 583 4567
Kevin Smith
Amco Corporation Plc
Preliminary Results For The Year Ended 31 December 1997
Chairman's Statement
Introduction
The Group continued to make good progress in 1997,
increasing profits before tax from continuing operations
by 20% to #4.8 million (1996: #4.0 million).
During the year we began to see significant benefits from
the re-positioning of the Group, particularly from the
increased emphasis on our building and construction
businesses which followed the acquisition of the Tolent
Group in late 1995.
Tolent and our two structural steel businesses,
Billington and Modern Engineering, enjoyed buoyant
trading as the UK construction market continued to
benefit from favourable economic conditions. The
uncertainty surrounding the UK coal mining industry
continued to affect our underground engineering
businesses but as the emphasis of the Group's activities
has shifted towards the building and construction market
the overall impact was much reduced.
The only disappointment during the year was the
difficulties we experienced with the Bendicar project in
the USA. As I reported at the interim stage we have
closed Dosco's US operations and the Bendicar project has
been suspended pending the outcome of engineering studies
carried out in the UK. We do not expect to incur any
further costs in relation to our US operations.
Financial Summary
Turnover from continuing operations increased by 4.8% to
#152.0 million (1996: #145 million). The #1.1 million
loss on discontinued operations relates to the closure of
the Dosco's US business. Allowing for the impact of the
Bendicar write-off profit before tax was unchanged at
#3.7 million.
Interest cover increased to 9.5 times from 5.4 times in
1996. A reduced tax charge of 21% contributed to a 5.1%
increase in earnings per share to 20.6 pence (1996: 19.6
pence).
The Group was ungeared at 31 December 1997, with net
funds representing 12.4% of net assets (capital and
reserves). However, this figure included an exceptional
advance payment of #3.4 million - without this item
gearing would have been 7.7% (31 December 1996: 14%).
Net assets at 31 December 1997 were #1.20 pence per
share.
Dividend
I am pleased to announce an increased final dividend of
4.5 pence per share (1996: 4.0 pence), making a total for
the year of 7.0 pence, an increase of 16.7% over 1996.
The final dividend will be paid on 1 July 1998 to
shareholders on the register on 19 June 1998.
Operational Highlights
Conditions in the UK construction market continued to
improve during the year and Tolent experienced much
improved levels of activity. Turnover and margins were
significantly increased. Major contracts completed in
1997 included a further ground development contract for
Durham County Cricket Club, a major business park at
Tameside in Greater Manchester, interior fit-out works
for Goldman Sachs offices in the City of London and a
teaching facility for the University of Sheffield.
During the year Amalgamated Construction continued to
diversify its customer base, successfully establishing a
specialist contracting operation to service the rail,
water and energy markets.
Our structural steelwork businesses also benefited from
an upturn in activity and Billington, Modern Engineering
and Hollybank were able to report very satisfactory
results. Two major projects were completed at Heathrow
and Manchester airports and Billington's Barnsley
facility was expanded during the year.
Dosco Overseas Engineering, our UK based manufacturer of
tunnelling machinery, experienced some margin pressure
but was successful in winning significant orders from
South Korea and China.
Employees
On behalf of my Board colleagues I would like to thank
our subsidiary company directors and all the Group's
employees for their efforts in 1997.
Outlook
The emphasis on our building and construction activities
will continue in 1998. Trading conditions in the UK
construction market continue to improve and forward order
books for our building and structural steel businesses
are strong.
We anticipate that the uncertainty in the UK coalmining
industry will continue and we have taken steps to reduce
the Group's overall exposure to these markets. In
particular, we are increasingly seeking international
opportunities in the mineral exploration and extraction
industry. We have recently formed a 50:50 joint venture
company in Zambia in partnership with an established
local underground contractor to pursue the potential
opportunities available in the recently privatised
Zambian copper mining industry.
We are seeking powers at the Annual General Meeting to
enable us to buy back shares in the Company. This should
enhance earnings per share.
Stuart N. Gordon
CHAIRMAN
Chief Executive's Report
Introduction
The Amco Group operates in traditional construction
markets but many of its core activities are in
specialised niche areas of the marketplace which allows
its subsidiaries to concentrate on delivering quality and
value for money for its customers. Increasingly,
partnering arrangements are being sought with major
clients in order to improve the service provided and to
avoid the traditional adversarial approach prevalent
throughout the construction industry.
In 1997 the Group significantly improved the performance
of the majority of its construction businesses. In
particular we continued to realise benefits from our
ongoing concentration on construction activities,
particularly from building and structural steel. Group
trading is sub-divided into two distinct categories -
traditional construction contracting and specialist
contracting including mining and associated sectors.
Many of the companies within the Group execute work in
both categories. Over the last few years the emphasis
has moved toward the traditional construction businesses.
Building and Civil Engineering contracting activities are
carried out by Tolent Construction, Amalgamated
Construction, Billington Structures, Modern Engineering,
Amco Ground Engineering, Amco Orebit, Amco Engineering,
Dosco Overseas Engineering, Amco Plastics and Fibaflo.
Specialist Contracting is carried out by Amalgamated
Construction, Hollybank Engineering, Dosco Overseas
Engineering, Amco Engineering and Amco Plastics.
Building and Civil Engineering Contracting
During the year the Group's principal building and civil
engineering subsidiary, Tolent Construction, reaped the
benefit from the contract management and financial
reporting controls implemented since its acquisition by
Amco in the autumn of 1995. The Company achieved a
significant improvement in both turnover and margin by
developing its relationship with existing clients and
carefully selecting new contracts. In partnership with
two of its sister companies, Tolent Homes and Tolent
(Yorkshire) Developments, the Company has secured a
number of development contracts and this is viewed by
management as an activity where consistent returns can be
achieved in the coming year.
Major contracts carried out during 1997 included the
completion of the second phase of Durham County Cricket
Club's ground development at Chester-le-Street, a major
business park at Tameside in Greater Manchester, fit out
work for Goldman Sachs in the City of London and a
teaching facility for Sheffield University on reclaimed
mine workings in South Yorkshire.
The order book is presently looking extremely healthy
with a number of significant contracts having been
secured in late 1997 and early 1998. Contracts to be
undertaken during 1998 include a prestigious development
on the Quayside in Newcastle-upon-Tyne, student
accommodation for Sunderland University, land reclamation
in West Yorkshire, a business park at Park Royal in
London and further office refurbishment for Goldman
Sachs.
Amalgamated Construction increased its general
construction activities during 1997 and has been
successful in securing larger, long-term contracts for
1998 that should enable the Company to continue its
strategy of diversification away from its traditional
underground contracting markets. The Company has
established itself in the rail, water and energy markets
and further growth in the utility sector is anticipated
during the coming year.
Billington Structures and Modern Engineering (Bristol)
are the Group's two general structural steelwork
contractors and both have achieved growth in a market
that continues to operate on extremely tight margins.
The Group sanctioned major capital expenditure during the
year allowing Billington Structures to increase its
efficiency, by extending its present fabrication facility
in Wombwell, Barnsley, and by the acquisition of state of
the art production machinery. During 1997 #1,050,000 was
expended and a further #700,000 has been earmarked for
further capital expenditure in 1998. Management are
aware that efficiency gains are the key to improving the
quality of the company's earnings.
During the year the companies undertook projects at
Heathrow and Manchester Airports, together with their
traditional supermarket, leisure complex and factory
contracts. The order books into 1998 are very
encouraging with a major out of town shopping development
contract commencing in the spring.
Amco Ground Engineering had an extremely good first half
but found that opportunities in the United Kingdom were
extremely limited towards the end of the year and this
downturn in available work has continued into 1998. The
contraction of the UK market has led to the Company
increasingly looking overseas for exploration drilling
opportunities through its sister company Amco Orebit.
During the year an important contract was carried out in
the copper belt of the Democratic Republic of Congo on
the Tenke Fungurume project and further overseas
opportunities in developing countries are being actively
pursued.
Amco Engineering provides mechanical and electrical
engineering services and during 1997 signed a partnership
agreement with British Airports Authority for electronic
vehicle tracking and identification systems. Dosco
Overseas Engineering produces material handling systems,
primarily for export. These are large pipe conveyor
systems that enclose the material as it is transported to
prevent leakage. Sales in 1997 included an installation
for a power station in the Czech Republic and the 1998
order book included pipe conveyors for Poland and Chile.
Amco Plastics and Fibaflo produce plastic and composite
products for a range of industries.
Specialist Contracting
Amalgamated Construction has historically provided
tunnelling and contracting services to the UK coal mining
industry. With the ongoing rationalisation of the mining
industry the Company has striven, with notable success,
to diversify its client and industry base. However, by
maintaining its quality of workmanship and by increasing
efficiencies the Company managed to maintain its
competitive position.
Hollybank Engineering is engaged in the manufacture and
supply of underground steelwork, primarily to the UK
mining industry. The reduction in development work
within the coalfields has reduced demand for the
Company's products.
Dosco Overseas Engineering manufactures and provides
maintenance for tunnelling equipment for the civil
engineering and mineral extraction markets. The trial of
the TTM 100 machine for the underground system in Seoul,
South Korea was successful and a sale was achieved in the
spring of 1997. In addition, orders were received from
China and Poland for LH1300 roadheaders for the
coalmining industry.
Amco Engineering and Amco Plastics continue to supply
specialist services to the underground construction and
mining markets. Amco Plastics supplied over five
kilometres of ventilation ducting for the Madrid Metro
extension in 1997 and a similar order from New Zealand is
currently being processed.
Henry Schmill
GROUP CHIEF EXECUTIVE
Enquiries:
Amco Corporation Plc 01709 828 218
Stuart Gordon, Chairman
Square Mile Communications 0171 583 4567
Kevin Smith
Note to editors:
Amco Corporation Plc is a group of companies engaged in
building and construction, structural steelwork, ground
and mining engineering and manufacturing. Headquartered
in Rotherham, South Yorkshire, the Group employs some
2,000 personnel at 50 sites in the UK. Amco's shares are
listed on the Alternative Investment Market of the London
Stock Exchange.
AMCO CORPORATION Plc
Consolidated Profit and Loss Account for the year ended
31 December 1997
1997 1996
#'000 #'000 #'000 #'000
Turnover
Continuing operations 149,853 142,038
Discontinued
operations 1,237 6,337
-------- --------
151,090 148,375
Increase in work in
progress 564 2,478
Own work capitalised 1,035 911
-------- --------
152,689 151,764
Raw materials and
consumables 49,023 47,991
Other external changes 40,256 34,760
-------- --------
(89,279) (82,751)
-------- --------
63,410 69,013
Staff costs 48,488 54,884
Depreciation 2,144 1,760
Other operating charges 8,780 8,344
-------- --------
(59,412) (64,988)
-------- --------
3,998 4,025
Other operating income 164 253
-------- --------
Operating profit/(loss)
Continuing operations 5,225 4,856
Discontinued
operations (1,063) (578)
-------- --------
4,162 4,278
Profit on disposal of
discontinued
businesses - 328
Net interest (436) (856)
-------- --------
Profit on ordinary
activities
before taxation 3,726 3,750
Taxation on profit on
ordinary activities (790) (956)
-------- --------
Profit on ordinary
activities
after taxation 2,936 2,794
Dividends (997) (855)
-------- --------
Profit for the
financial year
transferred to
reserves 1,939 1,939
======== ========
Earnings per share 20.6p 19.6p
======== ========
AMCO CORPORATION Plc
Consolidated Balance Sheet at 31 December 1997
1997 1996
#'000 #'000 #'000 #'000
Fixed Assets
Tangible assets 18,955 16,908
Investments 1,021 914
-------- -------
19,976 17,822
Current assets
Stock and work in
progress 12,886 11,731
Amounts recoverable
on contracts 6,223 6,147
Debtors 16,293 15,671
Cash at bank and in
hand 11,013 7,134
-------- -------
46,415 40,683
Creditors: amounts
falling due within
one year (44,700) (38,395)
-------- -------
Net current assets 1,715 2,288
-------- -------
Total assets less
current liabilities 21,691 20,110
Creditors: amounts
falling due after
more than one year (4,461) (4,776)
Provisions for
liabilities and
charges (159) (202)
-------- -------
(4,620) (4,978)
-------- -------
17,701 15,132
======== =======
Capital and reserves
Called up share
capital 1,425 1,425
Share premium 1,864 1,864
Capital reserve 2,128 2,128
Profit and loss
account 11,654 9,715
-------- -------
Shareholders' funds 17,071 15,132
======== =======
AMCO CORPORATION Plc
Consolidated Cashflow statement for the year ended
31 December 1997
1997 1996
#'000 #'000 #'000 #'000
Net cash inflow from
operating activities 10,457 13,232
Returns on investments
and servicing of finance
Interest received 389 268
Interest paid (673) (1,059)
Finance lease interest
paid (152) (65)
------- -------
Net cash outflow from
returns on investments
and servicing of finance (436) (856)
Taxation (710) 553
Capital expenditure and
financial investment
Purchase of tangible
fixed assets (2,402) (2,716)
Sale of tangible fixed
assets 523 1,306
Employee Share
Ownership Plan
- purchase of
shares (220) (216)
- disposal of
shares 113 123
------- -------
Net cash outflow from
capital expenditure and
financial investment (1,986) (1,503)
Acquisitions and disposals
Sale of subsidiary
undertakings - 328
------- -------
Net cashflow from
acquisitions and
disposals - 328
Equity dividends paid (926) (784)
------- -------
Net cashflow before
financing 6,399 10,970
Financing
Bank loans repaid (1,530) (5,416)
Capital element of
finance lease rentals (1,051) (557)
------- -------
Net cashflow from
financing (2,581) (5,973)
------- -------
Increase in cash 3,818 4,997
======= =======
END
FR SEIFASUAUFID
Ashcourt (LSE:ARP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ashcourt (LSE:ARP)
Historical Stock Chart
From Jul 2023 to Jul 2024
