entu (UK) plc Trading Update (1709M)
11 October 2016 - 5:00PM
UK Regulatory
TIDMENTU
RNS Number : 1709M
entu (UK) plc
11 October 2016
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Entu (UK) plc
Trading update
Entu (UK) plc, ("Entu" or the "Company" or the "Group"), the
home improvement group providing energy efficiency products and
services to homeowners and businesses in the UK, issues the
following trading update.
EBITDA on the Group's continuing activities before exceptional
items for the year ending 31 October 2016 is expected to be between
GBP3.6million and GBP4.0million, with an improved performance in
the Energy Generation and Savings Division being offset by delays
in realising the benefits of the May restructuring in the Home
Improvements Division.
The Energy Generation and Savings Division will produce a result
ahead of plan in the second half. The insulation and new commercial
LED installations businesses are both performing in line with plan.
Astley Façades has had a strong second half, successfully managing
down risk on a number of completed contracts. Astley's final result
is dependent on a major project due to complete in October, but is
expected to be ahead of plan regardless.
Performance in the Home Improvements Division has been mixed in
the second half. The actions taken earlier in the year to reduce
costs and restructure the Group have led to improved performance in
many areas across the Division, although challenges in the
Division's installation capability have taken longer than
anticipated to address. Whilst significant improvements are being
made, the Division's overall results will be below management's
previous expectations.
Borrowings at the year-end are also anticipated to be higher
than expected at around GBP5million mainly due to exceptional
restructuring costs and issues identified within the Home
Improvements Division. The Board expects to be able to pay a final
dividend of 1.0p per ordinary share, in line with expectations,
resulting in a total dividend for the year of 1.5p per ordinary
share, subject to the reserves and cash position at the time the
Group announces its preliminary results. It is the Board's
intention to move towards a dividend policy of distributing one
half of its post-tax profits as dividends each year split broadly
one third as an interim dividend and two thirds as a final dividend
each year.
Outlook
The year ending 31 October 2017 is expected to benefit from the
restructure. Savings in the current year of approximately GBP0.9m,
are expected to yield an annualised benefit of approximately
GBP2.0m in FY 2017. Additional cost savings expected to be realised
in FY17 are now anticipated to be reinvested in the business to
strengthen management, the balance sheet and to improve controls
and processes.
This reinvestment, coupled with the work still to be done in
addressing the issues outlined above and management adopting a more
cautious position, means that despite the expected improvement in
profitability in FY17, the EBITDA outturn for the year ending 31
October 2017 is expected to be materially below current market
expectations.
The underlying core business is stable, and attractive
opportunities for growth remain. It is anticipated that the
restructuring and improvement actions being taken by Management
will build a stable platform for a return to profitable growth in
subsequent years.
11 October 2016
ENQUIRIES
entu
Ian Blackhurst, Chief Executive
Officer
Neill Skinner, Chief Financial
Officer 020 7457 2020
Zeus Capital Limited (Nomad &
Broker)
Andrew Jones / Dan Bate
John Goold / Dominic King 020 3829 5000
Instinctif Partners (Public Relations) 020 7457 2020
Helen Tarbet
James Gray
This information is provided by RNS
The company news service from the London Stock Exchange
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