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Half Year Results to 30 June 2016

Servelec Group PLC

("Servelec" or the "Company")

Half year results for the six months to 30 June 2016

On track for Full Year delivery despite difficult First Half

Servelec Group plc ("Servelec" or the "Group"), the UK-based technology group which provides software, hardware and services predominantly to the UK Healthcare, Local Government, Oil & Gas, Nuclear, Power and Utilities sectors, today announces its results for the six months ended 30 June 2016.

FINANCIAL HIGHLIGHTS

 

Six months to 30 June

 

 

2016 (£m)

2015 (£m)

Change (%)

Revenue

28.4

30.0

(5)%

Underlying operating profit*

4.5

6.3

(28)%

Operating profit from continuing operations

1.8

4.9

(63)%

Profit before tax from continuing operations

1.7

4.8

(65)%

Order entry**

37.4

44.1

(15)%

Cash flow from operating activities

1.6

11.2

(86)%

Net debt / (net cash)

13.0

(5.7)

n/a

Adjusted diluted earnings per share***

4.9p

6.7p

(27)%

Basic earnings per share

2.0p

5.3p

(62)%

Dividend per share

1.65p

1.65p

-

Notes:    * after adding back exceptional costs, amortisation on acquired intangibles and share based payments   expense.

** order entry is the total contract value of revenue from an order received in the period.

*** after adding back exceptional costs, amortisation on acquired intangibles, share base payments and the related tax adjustment

OPERATIONAL SUMMARY

Trading is in line with the revised Board expectations that follow from the trading update announced on 15 June 2016.  Following the slippage in contracts management swiftly took action to reallocate resources to focus more on sales and reduced project implementation and other costs. These actions are already yielding the anticipated benefits

Alan Stubbs, Chief Executive Officer, commented:

The Board is positive about the long term prospects for Servelec Group.  Swift action has been taken to strengthen our sales team and reduce implementation resources in Healthcare and to reallocate resources across Controls and Technologies whilst maintaining our ongoing focus on reducing costs. Coupled with recent contract wins we are confident in achieving the revised market expectations for the year. Large contract wins in H2, which will be executed during 2016, 2017 and beyond together with a growing pipeline of opportunities mean that we are on track to return to growth in 2017.

The events which triggered the previous trading update are issues of timing. The long term structural demand for our technology, products and services remains.  Our customers value our products, services and our people such that Servelec continues to be their first choice when opportunities come to market.”

In the first half of 2016, Servelec recorded a number of contract wins across the business which will positively impact H2 2016.

Health & Social Care

  • Healthcare maintained a high win rate including contracts for RiO systems into North Devon Healthcare NHS Trust and Shropshire Community Health NHS Trust.
  • Healthcare sold its first RiO system into the Republic of Ireland, to St Patrick’s Mental Health Services, a market opened up to Servelec post the 2015 acquisition of Aura.
  • Servelec Corelogic won five of the seven contracts that came to market in the period with its Mosaic case management suite.
  • Following the acquisition of Synergy in March 2016 three major contracts were won with Durham County Council, Stockport Metropolitan Borough Council and Medway Council. Product extensions were signed with Kent County Council and Rotherham Metropolitan Borough Council.

Automation

  • Servelec Controls (Power & Nuclear) gained further momentum including contracts won with Sellafield Ltd and SSE Generation Ltd.
  • Important contracts were won by Servelec Technologies as part of the AMP6 programme, including supplying up to £5m of RTUs to Anglian Water and upgrading Wessex Water’s SCADA / Telemetry system.
  • International RTU sales continue to deliver positive results in Europe, specifically in telecoms and broadcast communications with Servelec’s TBox products.

POST PERIOD UPDATE

Servelec has won a number of important new contracts since the period end. These wins reassure the Board for the Full Year and into 2017/18.

Health & Social Care

Since the period close the Health & Social Care business has:

  • Won a RiO system into Lancashire Care NHS Foundation Trust and also won a significant RiO contract with NHS Scotland to provide systems across Scottish Child Health in the whole of Scotland. This signals a move into the wider UK geography with RiO and enables further opportunities in Scotland as the project gains referenceability.
  • Completed a successful pilot of Flow in Wales’ Betsi Cadwaladr University Health Board, which will provide further scope for increased sales into Wales.
  • Won an additional three contracts for Mosaic with local authorities in the south-west of England and one in the Channel Islands as well as the previously announced win with Cambridgeshire County Council.

Automation

  • Servelec Controls (Oil & Gas) has won a framework contract with National Grid which positions the company well for future contract tenders.
  • Servelec Controls (Power & Nuclear) has won a significant contract to upgrade a Westinghouse control system at Sizewell B.
  • Wessex Water and a number of other water company clients have given Servelec framework contract extensions of between two and five years removing the need to re-tender for this work.

For further enquiries, please contact:

Servelec Group plc  

Alan Stubbs, Chief Executive Officer

Mike Cane, Chief Financial Officer

Pamela Weeks, Head of Corporate Communications

+44 (0) 1246 437 400

 

Investec Bank plc  

Dominic Emery / Sebastian Lawrence                    

Patrick Robb / Matt Lewis

+44 (0) 207 597 4000

 

Tulchan Group  

James Macey White                                             

Nick Hennis

+44 (0) 20 7353 4200

 

Click here, to view the Investor Presentation

 

Category: Servelec Group, financial results, Financial reporting, half year results, Financial

Read our half year results for the six months to 30 June 2016

 

 

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