Andrews Sykes Group PLC – ASY – Half-year Report

Andrews Sykes Group PLC – ASY – Half-year Report

Andrews Sykes Group plc announces unaudited results for the six months ended 30 June 2020.

 

Summary of results

(Unaudited)

6 months ended

 30 June 2020

6 months

Ended

30 June 2019

£’000

£’000

Revenue from continuing operations

33,480

34,974

EBITDA* from continuing operations

11,781

11,435

Operating profit

7,000

6,918

Profit for the financial period

6,070

5,449

Basic earnings per share (pence)

14.39p

12.92p

Special interim dividend declared per equity share (pence)

23.70p

Second interim dividend declared per equity share (pence)

11.90p

11.90p

Cash and cash equivalents

32,096

23,770

Net funds

16,770

8,329

 

 

*              Earnings Before Interest, Taxation, Depreciation, profit on the sale of property, plant and equipment, Amortisation and non-recurring items.

Enquiries

 

Andrews Sykes Group plc

Paul Wood (MD)

+44 (0) 1902 328 700

GCA Altium (Nominated Adviser)

Tim Richardson

 

+44 (0) 20 7484 4040

 

 

Chairman’s Statement

Overview

Andrews Sykes’ trading continues to be resilient as sectors in which we trade show ongoing demand, despite the unprecedented challenge in the form of the coronavirus pandemic. We continue to be thankful and proud of our team members as they respond as essential service providers.

The group’s revenue for the 6 months ended 30 June 2020 was £33.5 million, a decrease of £1.5 million compared with the same period in 2019. However, the operating profit for the period was £7.0 million compared with £6.9 million in 2019, an increase of £0.1 million, reflecting a favourable business mix. Overall, net funds increased by £4.7 million from £12.1 million as at 31 December 2019 to £16.8 million as at 30 June 2020.

Operations review

Our main hire and sales businesses in Europe had mixed fortunes. Turnover at Andrews Sykes Hire in the UK improved by 4.8% compared with the same period in 2019. However, our businesses in the rest of Europe were significantly affected by a combination of the coronavirus pandemic and mild weather. Consequently, the combined operating profit for these businesses in the first half was £1.0 million below the level achieved in 2019.

Andrews Air Conditioning and Refrigeration, our UK air conditioning installation business, was particularly affected by the coronavirus pandemic as our engineers were not allowed access to certain customer sites in order to carry out their work. This business returned a small operating loss in the first half, £0.2 million below the profit returned in 2019.

Khansaheb Sykes, our business based in the UAE, had a difficult start to the period due to the coronavirus pandemic and reduced demand during Ramadan. The operating profit of Khansaheb Sykes decreased by £0.1 million compared with the first half of 2019.

Unallocated overheads and central expenses reduced by £0.2 million in the period compared with 2019 resulting in an improvement of £0.1 million in operating profit to £7.0 million in 2020 (2019: £6.9 million).

Profit for the financial period and Earnings per Share

Profit before tax was £7.2 million compared with £6.8 million in the same period last year. This increase is attributable to the £0.1 million improvement in operating profit, a net foreign exchange gain on inter-company balances of £0.4 million (2019: £Nil) due to the weakening of Sterling compared with the Euro and the UAE Dirham, and a net increase of £0.1 million in interest charges.

The total tax charge for the period decreased by £0.2 million to £1.1 million (2019: £1.3 million), an effective tax rate of 16.1% (2019: 19.4%), mainly due to prior year tax credits and an overall lower effective tax rate applicable to subsidiaries operating abroad.

Profit after tax was £6.1 million (2019: £5.5 million). Basic earnings per share increased by 1.47 pence, or 11.4%, to 14.39 pence (2019: 12.92 pence) reflecting this increase in profit.

Dividends

The final dividend of 10.50 pence per ordinary share for the year ended 31 December 2019 was approved by members at the AGM held on 16 June 2020. Accordingly, on 19 June 2020 the company made a total dividend payment of £4.43 million which was paid to shareholders on the register as at 29 May 2020.

Post the period end, on 28 August 2020 the company paid a special interim dividend of 23.7 pence per ordinary share, or £10.0 million in total, to shareholders on the register as at 7 August 2020. This dividend was paid out of the group’s substantial brought forward cash reserves accumulated from previous years trading, a proportion of which were surplus to the group’s requirements and were therefore returned to shareholders.

The board continues to adopt the policy of returning value to shareholders whenever possible. The group remains profitable, cash generative and financially strong. Accordingly, the board has decided to declare a second interim dividend for 2020 of 11.90 pence per ordinary share which in total amounts to £5.0 million. This will be paid on 6 November 2020 to shareholders on the register as at 9 October 2020. The ordinary shares will go ex-dividend on 8 October 2020.

Outlook

Whilst certain of the group’s business operations continue to be affected by the coronavirus pandemic, for example the performance of our air conditioning business in July and August suffered as occupation levels of our customers’ offices remained low as people continued to work from home, demand for cooling equipment was buoyant and pumps in the UK continues to perform in line with last year’s levels. Management remain optimistic that the business will improve as the economy recovers but are mindful that we live in uncertain times and circumstances can change very quickly.

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