Costain Group PLC - Interim Results
1997年10月11日 - 2:52AM
ＲＮＳを含む英国規制内ニュース （英語）
RNS No 681f
COSTAIN GROUP PLC
10th October 1997
COSTAIN GROUP PLC
Unaudited interim results of the Costain Group
for the six months ended 30th June, 1997
Introduction
The first six months of the year was an extremely difficult
period for the Group. This was partly due to the continued
suspension of the Company's share listing on the London Stock
Exchange, pending the announcement of the Group's 1996 results
and clarification of its financial position.
The continuing uncertainty about the Group led to a fall in
orders and prevented the Group from benefiting from the upturn
in the UK construction industry. The work in hand at the end
of June 1997 stood at #490 million, compared to #636 million
at the same time last year.
On 14th March, 1997, the Group completed the sale of its US
Coal business to Rencoal. However, the agreement provided for
the consideration paid by Rencoal to be adjusted by reference
to the net assets being sold as at 31st January, 1997, the
effective date of purchase. Between late April and early
October, Costain and Rencoal were in dispute as to the amount
by which the consideration payable by Rencoal should be
adjusted.
Having taken extensive legal and accounting advice and
following a protracted period of negotiation, the Group agreed
to a purchase price reduction of US$9.7 million (#6.0 million)
in order to settle this dispute. This agreement is conditional
upon the approval of certain banks which, in turn, is
conditional upon completion of the Open Offer and the payment
by the Company of US$1.15 million (#0.7 million) owed by it to
those banks. As a result of this settlement the cash
consideration received by the Group is US$22.8 million (#14.1
million) (of which US$22.5 million (#13.9 million) was paid on
completion). In addition, the Group has released its
entitlements to a completion adjustment of US$2.0 million
(#1.2 million) and waived the right to receive extra
contractual sums and assumed a liability owed by Rencoal to a
third party, together amounts to a further US$1.7 million
(#1.1 million). As part of the settlement, Rencoal waived all
other rights which it may otherwise have had under the
warranties contained in the conditional sale agreement. There
is no provision under the conditional sale agreement for
further adjustment of the consideration.
Despite these difficulties, the Group won several major
engineering and construction contracts both in the UK and
overseas.
Results
The results for the six months ended 30th June, 1997 show a
loss before interest and tax of #3.7 million (1996: #13.0
million loss) on a turnover of #317.2 million (1996: #356.9
million).
Engineering and Construction
The Group's engineering and construction businesses made an
operating loss of #1.5 million (1996: #3.2 million loss) on a
turnover of #295.1 million (1996: #239.2 million).
US Coal
US Coal traded under Costain's ownership for the month of
January, thereafter the economic interest passed to Rencoal
Inc.
Property
The California housing business sold the last of its homes in
July 1997. The leisure market in Spain is reviving and greater
interest is being shown in our jointly owned housing
development there, although this is not yet profitable. On
12th September, 1997, the Group completed the sale of
Spitalfields to Metacorp Berhad for #23.1 million (reduced
from #23.4 million as a result of receipts by Costain from the
Spitalfields joint venture during the course of 1997).
Finance
Operating cash outflow for the first six months totalled #8.9
million, compared to #16.0 million in the same period in 1996.
Net borrowings at 30th June 1997 were #13.5 million. However,
taking into account the proceeds of today's Open Offer and the
sale of Spitalfields, the Group would have had a pro forma net
cash balance as at 30th June of #58.6 million (of which #28.7
million was the Group's share of cash held by joint ventures).
Open Offer
Under the terms of an Open Offer, shareholders in the Company
are being offered the opportunity to subscribe New Ordinary
Shares in the Company at 40p per share on the basis of 1 new
ordinary share for every 1.593357 Existing Ordinary Shares in
the Company of which they were respectively the registered
holders on Wednesday, 1st October, 1997.
Benefits of the Open Offer
The Board views the Open Offer as a necessary and positive
step which it believes bring significant benefits to the Group
through:
* the clarification of the Group's financial affairs and
the lifting of the suspension of the listing of the
Company's shares, which should reassure customers,
suppliers, sub-contractors and joint venture partners,
better enabling the Group to compete for new business;
* the strengthening of the Group's balance sheet through
the injection of new equity capital which will be a major
factor in such reassurance and is expected to result in
the Group's pro forma shareholders' funds being increased
to #26.0 million as at 30th June, 1997;
* the investment and support for the Group shown by the
Group's existing major shareholders and Skanska which is
expected by the Directors to help the Group to win future
work in certain of its important trading markets;
* the strengthening of the Group's relationship with
Skanska; and
* the easing of the financial pressure which the Group has
suffered in recent months, which should allow the new
senior management team, led by the recently appointed
Chief Executive, to focus its efforts on improving the
operating performance of the Group.
Trading and Prospects
As indicated above, the Group's trading position has been
adversely affected by the continued suspension of the
Company's shares on the London Stock Exchange.
The continuing uncertainty has led to a steady fall in orders,
which will result in a reduced workload for the remainder of
the year and in 1998, and has prevented the Group from
benefiting from the upturn in the UK construction industry.
Despite this, there have been some real operational
achievements, with good progress being achieved on many
existing projects.
In the UK, Costain Construction's current work in the building
sector includes four major projects, three of which are for
financial institutions in the City of London and one, together
with Skanska, for a private prison in Bridgend, which is due
to be completed ahead of programme.
Costain Civil Engineering is on schedule to complete the #74
million Newbury by-pass next year. It is also making progress
on the complex project to widen and strengthen the M5
Avonmouth bridge and on the joint venture projects to build
the Cardiff Bay Barrage and the London Bridge section of the
Jubilee Line Extension. The Group has forged a range of new
partnering and alliance arrangements. Clients with whom it has
agreed such relationships include Thames Water, Welsh Water,
Newport County Borough Council, Gwent Consultancy and BAA.
In Hong Kong, the Tsing Ma suspension bridge, for which
Costain was a major joint venture contractor, was officially
opened in April 1997 and Costain continues to play a major
role in the construction of the Chek Lap Kok international
airport. We are continuing to pursue a number of major
opportunities in the region. However, the Group has
experienced a delay in receipt of monies to which it believes
it is entitled under certain contracts in South East Asia. In
Malaysia, we continue to target major projects with Intria.
Since the year end, Costain Oil, Gas & Process has completed
its joint venture project with Costain South East Asia for the
design and construction of the large sludge treatment plant at
Stonecutters Island in Hong Kong, and in the Middle East has
completed a maintenance shutdown at Das Island and recently
has been awarded a further phase of maintenance shutdown
contracts. It has also embarked on its third joint venture
project with a major shareholder, Mohammed Abdulmohsin Al-
Kharafi & Sons WLL (''Kharafi''), in Kuwait.
Costain Middle East progressed a large defence project in
Saudi Arabia, a hospital in Egypt and the new Bank of Bahrain
headquarters building. The problem contracts referred to in
the December 1996 circular to shareholders are now either
completed or nearing completion.
In Southern Africa, Costain (Africa) Limited has recently
merged its contracting operations with those of Fmi Holdings
(Private) Limited, an indigenous Zimbabwean company, to form
Fmi Costain (Private) Ltd, now the largest indigenous
contractor in Zimbabwe. The Directors believe that this is
likely to lead to a wider range of work opportunities in the
country. Costain is also pursuing new opportunities elsewhere
in Southern Africa, including some with Kharafi in Botswana
and Tanzania.
However, there is a need to rebuild client confidence in the
Group's financial stability following the relisting of the
Company's shares, and 1997 is proving to be another
particularly difficult and challenging year. The benefits
which the Directors expect from the restructuring are not
expected to have an impact on the Group's 1997 trading
results.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Half year ended 30th June
Year ended 31st December
1997 1996 1996
Half Half Year
year year #m
Notes #m (re-
stated)
#m
Turnover
Group undertakings
Continuing operations 1 305.6 250.8 567.2
Discontinued operations 11.6 106.1 177.3
____ ____ ____
317.2 356.9 744.5
===== ===== =====
Operating loss
Continuing operations 1 (3.5) (7.4) (37.5)
Discontinued operations (2.2) (5.6) (15.0)
____ ____ ____
(5.7) (13.0) (52.5)
Profit/(loss) on sale
of fixed assets
Continuing operations 0.4 - 2.9
Discontinued operations 1.6 - (0.3)
Provision for future
sale of business - - (3.1)
____ ____ ____
Loss on ordinary
activities
before interest (3.7) (13.0) (53.0)
Net interest payable
and similar charges (1.7) (6.2) (9.3)
____ ____ ____
Loss on ordinary
activities
before taxation (5.4) (19.2) (62.3)
Taxation (0.1) (0.7) (0.2)
____ ____ ____
Loss on ordinary
activities
after taxation (5.5) (19.9) (62.5)
Minority interests 0.2 0.1 (1.1)
______ ______ ______
Deficit for the period (5.3) (19.8) (63.6)
===== ===== =====
Loss per share 2 (2.6) p (38.2)p (51.7)p
CONSOLIDATED CASH FLOW STATEMENT
Half year ended 30th June
Year ended 31st December
1997 1996 1996
Half year Half year Year
#m #m #m #m #m #m
Net cash outflow
from operating
activities (8.9) (16.0) (9.0)
Net cash outflow
from returns on
investments
and servicing
of finance (1.7) (7.2) (10.3)
Tax paid (1.6) (0.8) (2.0)
Investing
activities
Sales of businesses 13.7 9.2 20.9
Net
sales/(purchases)
of tangible 0.5 (5.1) (6.2)
fixed assets
Funding of
investments (2.4) (5.0) (10.5)
____ ____ ____
Net cash
inflow/(outflow) (0.9) 4.2
from investing
activities 11.8
_____ _____ _____
Net cash outflow
before financing (0.4) (24.9) (17.1)
Issue of ordinary
share capital - - 77.6
Issue costs - - (4.6)
- - 73.0
_____ _____ _____
Net cash
(outflow)/inflow (0.4) (24.9) 55.9
Borrowings assumed
by purchaser
of business 7.5 - -
Opening net
borrowings (19.4) (76.4) (76.4)
Exchange (1.2) - 1.1
differences
_____ _____ _____
Closing net
borrowings (13.5) (101.3) (19.4)
===== ====== =====
CONSOLIDATED BALANCE SHEET
Half year as at 30th June
Year as at 31st December
1997 1996 1996 1997
Half Half Year Half year
year year (pro-
forma)
(note 3)
#m #m #m #m
Fixed assets
Tangible assets 10.6 90.3 75.4 10.6
Investments 24.6 34.4 24.0 3.5
_____ _____ _____ _____
35.2 124.7 99.4 14.1
_____ _____ _____ _____
Current assets
Debtors - pension
fund prepayment 46.8 53.0 50.5 46.8
Other debtors
and stocks 173.6 224.5 185.0 172.1
Cash at bank, monies
on 39.5 40.9 46.4 83.2
deposit and in hand
_____ _____ _____ _____
259.9 318.4 281.9 302.1
_____ _____ _____ _____
Creditors: amounts
falling due within
one year
Borrowings 53.0 135.4 32.9 14.9
Other creditors 223.5 258.7 243.1 225.2
_____ _____ _____ _____
276.5 394.1 276.0 240.1
_____ _____ _____ _____
Net current assets
Due within one year (69.8) (137.5) (53.9) 8.8
Debtors due after
one year 53.2 61.8 59.8 53.2
_____ _____ _____ _____
(16.6) (75.7) 5.9 62.0
_____ _____ _____ _____
Total assets less
current liabilities 18.6 49.0 105.3 76.1
Borrowings falling
due - 6.8 32.9 9.7
after more than
one year
Other creditors
falling
due after more than
one year and 40.0 92.7 88.4 40.3
provisions
_____ _____ _____ _____
(21.4) (50.5) (16.0) 26.1
_____ _____ _____ _____
Ordinary
shareholders' funds (21.5) (49.6) (16.3) 26.0
Minority interests 0.1 (0.9) 0.3 0.1
_____ _____ _____ _____
(21.4) (50.5) (16.0) 26.1
===== ===== ===== =====
NOTES TO THE ACCOUNTS
1. Business and geographical segment information - continuing
operations Business segment information
Turnover Operating
(loss)/profit
1997 1996 1996 1997 1996 1996
Half Half Full Half Half Full
year year year year year year
#m (restate #m #m (restate #m
d) d)
#m #m
Engineering
& Con- 295.1 239.2 543.9 (1.5) (3.2) (20.4)
struction
Residential
& Commer-
cial 12.9 13.1 27.4 (0.6) (2.4) (14.7)
property
_____ _____ _____ _____ _____ _____
308.0 252.3 571.3 (2.1) (5.6) (35.1)
_____ _____ _____
Inter
company
(1.4) (1.8) (2.4)
interest*
_____ _____ _____
(3.5) (7.4) (37.5)
_____ _____ ____
Geographical segment information
Turnover Operating (loss)/profit
1997 1996 1996 1997 1996 1996
Half Half Full Half Half year Full
year year year year (restated year
#m (restate #m #m ) #m
d) #m
#m
United
Kingdom 180.4 161.1 350.1 (4.4) (3.7) (21.7)
United
States 12.0 9.8 25.8 (0.2) 0.3 (1.3)
Rest of
the 115.6 81.4 195.4 2.5 (2.2) (12.1)
world
_____ _____ _____ _____ _____ _____
308.0 252.3 571.3 (2.1) (5.6) (35.1)
_____ _____ _____
Inter
company
(1.4) (1.8) (2.4)
interest*
_____ _____ _____
(3.5) (7.4) (37.5)
_____ _____ _____
* The inter-company interest represents interest earned by
Engineering & Construction on funds lent to the other
divisions.
Turnover includes turnover attributable to associated
undertakings of #2.4 million (1996: #1.5 million, 1996:
year #4.1 million)
2. Loss per share
The calculation of loss per share is based on losses of #5.3
million (1996: losses #19.8 million, 1996: year losses #63.6
million) and 207,136,352 ordinary shares (1996: 51,784,088,
1996: year 123,093,324) being the average number of shares in
issue during the period.
3. Pro forma balance sheet
The pro forma balance sheet shows the impact of the open offer
which is expected to raise #47.5 million (net of expenses) and
the sale of Spitalfields which was completed in September at a
price of #23.1 million. #9.7 million of short term borrowings
as at 30th June, 1997 have been converted into long term
borrowings as part of the new bank arrangements.
The results of the Group for the six months to 30th June, 1997
and 30th June, 1996 were prepared in accordance with the
accounting policies stated in the Company's 1995 statutory
accounts and are unaudited.
The figures for the year ended 31st December, 1996 do not
constitute the Company's statutory accounts within the meaning
of Section 240 of the Companies Act 1985, but have been
extracted from the information presented by the Directors in
the preliminary announcement of the Company's results for the
year ended 31st December, 1996. The Directors expect that,
conditionally upon completion of the Open Offer, the statutory
accounts for the year ended 31st December, 1996 will be
finalised on the basis of the preliminary announcement and will
be delivered to the registrar of companies.
END
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