REG - Andrews Sykes Group - Final results for the year ended 31 December 2024
07/05/2025 07:00
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RNS Number : 5618H Andrews Sykes Group PLC 07 May 2025
7 May 2025
ANDREWS SYKES GROUP PLC
("Andrews Sykes" or "the Company" or "the Group")
Final Results
for the year ended 31 December 2024
Summary of Results
Year ended Year ended
31 December
31 December
2024
2023
£000 £000
Revenue from continuing operations 75,942 78,747
Adjusted EBITDA* from continuing operations 30,933 30,622
Operating profit 23,187 22,737
Profit after tax for the financial period 16,798 17,758
Net cash inflow from operating activities 20,323 24,946
Net funds 7,152 4,570
Cash and cash equivalents 23,181 19,967
Total interim, special and final dividends paid 10,841 35,743
(pence) (pence)
Basic earnings per share 40.13 42.24
Interim, special and final dividends paid per share 25.90 85.30
Proposed final dividend per share 14.00 14.00
* Earnings before interest, taxation, depreciation, profit on the sale of
plant and equipment and amortisation
Enquiries
Andrews Sykes Group plc T: +44 (0)1902 328 700
Carl Webb, Group Managing Director
Ian Poole, Group Finance Director and Company Secretary
Houlihan Lokey UK Limited (Nominated Advisor) T: +44 (0)20 7484 4040
Tim Richardson
CHAIRMAN'S STATEMENT
Overview and outlook
Andrews Sykes' trading remained strong during 2024 and we are pleased to
report that the Group as a whole has again delivered a record level of
operating profitability. We are thankful for and proud of our team members who
have made this possible by continuing to provide our customers with an
essential 24 hour service offering.
2024 was not without its challenges, with revenue opportunities being
constrained by the unseasonally cool summer weather experienced in the UK and
across much of Europe. However, our long-standing commitment to tight cost
control and leveraging our strong relationships with customers have allowed us
to not only maintain but increase our operating profitability over the
previous year.
The Group continued to develop its relationships with key customers throughout
the UK and Europe which has underpinned the strong results reported. These key
accounts provide a consistent revenue stream. Whilst turnover is down in the
second half of the year as compared to the prior year, mainly due to reduced
revenue opportunities presented by poor summer temperatures, the focus on our
key accounts means the Group has still produced operating profit growth
despite reporting a lower revenue.
During the year we have been working on plans to enter the Saudi Arabian
market which is currently experiencing a well publicised construction boom in
an effort to diversify the Saudi Arabian economy. We are delighted to announce
that a new subsidiary incorporated in Saudi Arabia opened in early 2025 and
will be managed by our UAE management team who have done such a good job in
turning around our existing business in the Middle East. This market
represents a significant growth opportunity in 2025 and beyond.
Our new German subsidiary, Klimamieten AS Gmbh, has experienced a difficult
first year with limited revenue generated so far; undoubtedly impacted by the
wider stagnant German economic situation. We remain hopeful of future growth
in this large market.
We remain encouraged by how our highly experienced management team has
consistently adapted the business to overcome market and operational issues
and take advantage of new revenue opportunities.
Positive trading momentum has continued into the current year, with overall
performance in the year to date in line with the Board's expectations. The
Group is confident in its core markets, its revenues and its profits.
2024 trading summary
The Group's revenue for the year ended 31 December 2024 was £75.9 million, a
decrease of £2.8 million, or 3.6%, compared with last year. Of this £2.8
million decrease, £1.5 million was a result of the previously taken decision
to cease operating within the French market. A further £0.9 million decrease
was as a result of stronger Sterling exchange rates versus the Euro and the
Dirham. Excluding these two factors, underlying turnover was down year on year
just £0.4 million or 0.5%. Despite this decrease in revenue, through
careful cost management and commercial negotiations for the early exit of
previously vacated lease properties, operating profit has increased by 2.0%,
or £0.5 million, from £22.7 million last year to £23.2 million in the year
under review. Turnover for the second half of the year was down 5.9%, or £2.3
million, on the corresponding period last year and reflects the cooler weather
experienced across the UK and Europe over the summer months in 2024 which
limited revenue opportunities in comfort cooling.
Decreasing interest rates in the UK and Europe over 2024 contributed to
decreased returns on cash reserves which, coupled with an increased interest
charge from the increased value of right-of-use lease obligations, has meant
net finance income decreasing from £0.9 million last year to a net nil in the
current year. Profit before taxation was £23.2 million (2023: £23.6 million)
and profit after taxation was £16.8 million (2023: £17.8 million).
The Group has reported a decrease in the basic earnings per share of 2.11p, or
5.0%, from 42.24p in 2023 to 40.13p in 2024. This is mainly attributable to
the above decrease in the Group's net finance income and increased tax
charges.
The Group continues to generate strong net cash inflows. Net cash inflow from
operating activities was £20.3 million compared with £24.9 million last
year.
Cost control, cash generation and working capital management continue to be
priorities for the Group, with stocks maintained at the same level as last
year. Capital expenditure is concentrated on assets with strong returns; in
total £5.5 million was invested in the hire fleet this year. In addition, the
Group invested a further £1.1 million in property, plant and equipment. These
actions will ensure that the Group's infrastructure and revenue generating
assets are sufficient to support future growth and profitability. Hire fleet
utilisation, condition and availability continue to be the subjects of
management focus.
Operating performance
The following table splits the results between the first and second half
years:
Turnover Operating profit
£'000 £'000
1st half 2024 38,387 9,726
1st half 2023 38,843 9,713
2nd half 2024 37,555 13,461
2nd half 2023 39,904 13,024
Total 2024 75,942 23,187
Total 2023 78,747 22,737
The above table reflects the continued progress of the business, with second
half profitability being improved on £2.3 million lower revenue.
The turnover of our main business segment in the UK decreased from £44.4m
last year to £43.1m with operating profit increasing from £15.0m to £15.4m.
This result was reflective of the poor summer weather experienced with the UK
having the lowest average summer temperature since 2015, mitigated by
commercial successes in the early lease exit from previously vacated
properties. Air conditioning hire was down £2.8m or 33.9% on the prior year.
Pump hire continues to grow with revenues at record levels for the seventh
year in a row and 2.0% higher than 2023.
Our European businesses also recorded decreases in turnover, from £26.7
million last year to £23.6 million, and operating profit decreasing from
£8.7 million to £8.2 million in 2024. £1.5 million of the revenue reduction
was a result of ceasing our loss making French operations. Northern Europe in
particular was impacted by the same cooler summer temperatures as seen in the
UK and has been reflected in decreased chiller and air conditioning hire
revenues. Each of our European subsidiaries reported lower turnover levels
during 2024. Stronger Sterling exchange rates also negatively impacting our
European subsidiaries reported revenues by £0.7 million as compared to 2023.
The turnover of our hire and sales business in the Middle East has increased
from £5.6 million last year to £7.7 million, and operating profit increased
from £0.4 million to £1.1 million in the year under review. This result
marks a strong turnaround driven by the new local management who were
installed during the summer of last year. The increased operating profit is
reflective of the increased revenue allied with expected credit losses
remaining under control, with a charge of £0.1 million in 2024 compared to
£0.2 million in 2023. It is pleasing that as the year progressed core hire
revenues increased, with revenues in the second half of the year 11.8% up on
the first half of the year. Management are confident of this trend continuing.
Our fixed installation and maintenance business in the UK saw a decrease in
turnover from £2.1m to £1.6m and returned a small operating profit, an
increase of £0.1 million from the small operating loss reported in 2023.
Central overheads were £1.5 million in the year compared with £1.3 million
in 2023.
Profit for the financial year
Profit before tax was £23.2 million this year compared with £23.6 million
last year; a decrease of £0.4 million. This is largely attributable to the
£0.5 million increase in operating profit offset by net interest income
reducing by £0.9 million due to lower interest receivable and higher interest
charged on right-of-use lease obligations.
Tax charges increased from £5.8 million in 2023 to £6.4 million this year.
The overall effective tax rate increased from 24.7% in 2023 to 27.6% this
year, primarily driven by the introduction of corporation tax for the first
time in the United Arab Emirates and the full year impact of the increase in
UK corporation tax from 19% to 25% in April 2023. A detailed reconciliation of
the theoretical corporation tax charge based on the accounts profit multiplied
by the applicable tax rate and the actual tax charge is given in note 10 to
the consolidated financial statements. Profit for the financial year was
£16.8 million compared with £17.8 million last year.
Defined benefit pension scheme
As reported last year, the Company has successfully de-risked its defined
benefit scheme by completing a buy-in deal. This transaction means that future
liabilities are fully de-risked and the Company will not be required to
contribute significant cash payments into the pension scheme to fund adverse
liability movements. As such no cash contributions into the scheme were made
during 2024. The defined benefit pension scheme surplus after the application
of an asset restriction has increased from £1.6m as at 31 December 2023 to
£1.8m at the year end primarily as a result of UK tax legislation introduced
in April 2024 reducing the asset restriction charge levied on the defined
benefit pensions scheme surplus.
Equity dividends
The Company paid two dividends during the year. On 21 June 2024, a final
dividend for the year ended 31 December 2023 of 14.00 pence per ordinary share
was paid. This was followed on 1 November 2024 by an interim dividend for 2024
of 11.90 pence per ordinary share. Therefore, during 2024, a total of £10.8
million in cash dividends was returned to our ordinary shareholders.
The Board has decided to propose a final dividend of 14.0 pence per ordinary
share. If approved at the forthcoming Annual General Meeting, this dividend,
which in total amounts to £5.9 million, will be paid on 20 June 2025 to
shareholders on the register as at 23 May 2025.
Share buybacks
As at 6 May 2025, there remained an outstanding general authority for the
directors to purchase 5,232,343 ordinary shares, which was granted at last
year's Annual General Meeting.
The Board believes that it is in the best interests of shareholders to have
this authority in order that market purchases may be made in the right
circumstances if the necessary funds are available. Accordingly, at the next
Annual General Meeting, shareholders will be asked to vote in favour of a
resolution to renew the general authority to make market purchases of up to
12.5% of the ordinary share capital in issue.
Net funds
Net funds increased by £2.6 million from £4.6 million at 31 December 2023 to
£7.2 million at 31 December 2024. Net funds include cash and cash equivalents
of £23.2 million (2023: £20.0 million) less right-of-use lease obligations
of £16.0 million (2023: £15.4 million).
JJ Murray
Executive Chairman
6 May 2025
Consolidated Income Statement
for the year ended 31 December 2024
Year ended Year ended
31 December 2024
31 December 2023
£000 £000
Revenue 75,942 78,747
Cost of sales (26,743) (27,017)
Gross profit 49,199 51,730
Distribution costs (11,335) (11,451)
Administrative expenses (14,909) (16,583)
Decrease/ (increase) in credit loss provision 232 (959)
Operating profit 23,187 22,737
Adjusted EBITDA* 30,933 30,622
Depreciation (5,968) (6,002)
Depreciation of right-of-use assets (2,929) (2,814)
Profit on the sale of plant and equipment and right-of-use assets 1,151 931
Operating profit 23,187 22,737
Finance income 1,060 1,618
Finance costs (1,060) (759)
Profit before tax 23,187 23,596
Tax expense (6,389) (5,838)
Profit for the period from continuing operations attributable to equity 16,798 17,758
holders of the Parent Company
Earnings per share from continuing operations:
Basic and diluted 40.13p 42.24p
Dividend per equity share paid during the period 25.90p 85.30p
Proposed dividend per equity share 14.00p 14.00p
(*) Earnings before interest, taxation, depreciation, profit on sale of plant
and equipment and amortisation.
Consolidated Statement of Comprehensive Total Income
for the year ended 31 December 2024
Year ended Year ended
31 December
31 December
2024
2023
£000 £000
Profit for the period 16,798 17,758
Other comprehensive income
Currency translation differences on foreign currency operations (464) (421)
Net other comprehensive expense that may be reclassified to profit and loss (464) (421)
(49) (5,988)
Re-measurement of defined benefit pension assets and liabilities
Related asset restriction 275 2,012
Net other comprehensive income/ (expense) that will not be reclassified to 226 (3,976)
profit and loss
(238) (4,397)
Other comprehensive expense for the period net of tax
Total comprehensive income for the period attributable to equity holders of
the Parent Company
16,560 13,361
Consolidated Balance Sheet
At 31 December 2024
31 December 31 December
2024
2023
£000 £000
Non-current assets
Property, plant and equipment 19,403 19,344
Right-of-use assets 14,874 13,959
Deferred tax assets - 126
Defined benefit pension scheme surplus 1,786 1,618
36,063 35,047
Current assets
Stocks 2,394 2,405
Trade and other receivables 17,888 19,251
Current tax assets 769 904
Cash and cash equivalents 23,181 19,967
44,232 42,527
Total assets 80,295 77,574
Current liabilities
Trade and other payables (15,865) (17,858)
Current tax liabilities (471) (950)
Right-of-use lease obligations (2,556) (2,429)
(18,892) (21,237)
Non-current liabilities
Deferred tax liabilities (185) -
Right-of-use lease obligations (13,473) (12,968)
Provisions (1,560) (2,903)
(15,218) (15,871)
Total liabilities 34,110 37,108
Net Assets 46,185 40,466
Equity
Called up share capital 419 419
Share premium 13 13
Retained earnings 42,231 36,048
Translation reserve 3,273 3,737
Other reserve 249 249
Total equity 46,185 40,466
Consolidated Cash Flow Statement
for the year ended 31 December 2024
Year ended Year ended
31 December
31 December
2024
2023
£000 £000
Operating activities
Profit for the period 16,798 17,758
Adjustments for:
Tax charge 6,389 5,838
Finance costs 1,060 759
Finance income (1,060) (1,618)
Profit on disposal of plant and equipment and right-of-use assets (1,151) (931)
Depreciation of property, plant and equipment 5,968 6,002
Depreciation and impairment of right-of-use assets 2,929 2,814
Difference between pension contributions paid and amounts recognised in the
Income Statement
166 147
Increase in inventories (1,196) (550)
Decrease in receivables 901 41
(Decrease)/ increase in payables (1,541) 1,289
Movement in provisions (1,310) 221
Cash generated from continuing operations 27,953 31,770
Interest paid (1,015) (759)
Corporation tax paid (6,615) (6,065)
Net cash inflow from operating activities 20,323 24,946
Investing activities
Disposal of property, plant and equipment 1,162 1,145
Purchase of property, plant and equipment (5,387) (4,060)
Cash on deposit with greater than three month maturity - 16,700
Interest received 952 1,202
Net cash (outflow)/ inflow from investing activities (3,273) 14,987
Financing activities
Capital repayments for right-of-use lease
obligations (2,920) (2,759)
Equity dividends paid (10,841) (35,743)
Share repurchase - (1,863)
Net cash outflow from financing activities (13,761) (40,365)
Net increase/ (decrease) in cash and cash equivalents 3,289 (432)
Cash and cash equivalents at the start of the period 19,967 20,518
Effect of foreign exchange rate changes (75) (119)
Cash and cash equivalents at the end of the period 23,181 19,967
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Share capital UAE legal reserve Netherlands capital reserve Retained earnings Attributable to equity holders of the parent
Capital
Share premium Translation reserve redemption reserve
£000 £000 £000 £000 £000 £000 £000 £000
At 31 December 2022 421 13 4,158 159 79 9 59,872 64,711
Profit for the period - - - - - - 17,758 17,758
Other comprehensive expense for the period net of tax - - (421) - - - (3,976) (4,397)
Total comprehensive income/ (expense) - - (421) - - - 13,782 13,361
Dividends paid - - - - - - (35,743) (35,743)
Share repurchase (2) - - 2 - - (1,863) (1,863)
Total of transactions with shareholders (2) - - 2 - - (37,606) (37,606)
At 31 December 2023 419 13 3,737 161 79 9 36,048 40,466
Profit for the period - - - - - - 16,798 16,798
Other comprehensive (expense)/ income for the period net of tax - - (464) - - - 226 (238)
Total comprehensive (expense)/ Income - - (464) - - - 17,024 16,560
Dividends paid - - - - - - (10,841) (10,841)
Total of transactions with shareholders - - - - - - (10,841) (10,841)
At 31 December 2024 419 13 3,273 161 79 9 42,231 46,185
Notes to the Interim Financial statements
1 Basis of preparation
Whilst the information included in this preliminary announcement has been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs), this announcement does
not itself contain sufficient information to comply with IFRSs. Therefore the
financial information set out above does not constitute the company's
financial statements for the 12 months ended 31 December 2024 or 31 December
2023 but it is derived from those financial statements.
2 Going concern
The directors are required to consider the application of the going concern
concept when approving financial statements. The principal element required to
meet the test is sufficient liquidity for a period from the end of the year
until at least 12 months subsequent to the date of approving the accounts.
Management has prepared a detailed "bottom-up" budget including profit and
loss and cash flow for the financial year ending 31 December 2025 and has
extrapolated this forward until the end of May 2026 in order to form a view of
an expected trading and cash position for the required period. This base level
forecast fully incorporates management's expectations around the performance
of the group and was prepared on a cautiously realistic basis. This forecast
takes into account specific factors relevant in each of our businesses. These
2025 forecasts have been reviewed and approved by the Board.
Whilst profitability and cash flow performance to the end of March 2025 has
been close to expectation, in order to further assess the company's ability to
continue to trade as a going concern, management have performed an exercise to
assess a reasonable but plausible downside scenario and the impact of this on
profit and cash. For the purposes of the cash forecast, only the below
assumptions have been incorporated into this forecast:
• Normal level of dividends will be maintained
during the 12 months subsequent to the date of approving the accounts;
• No new external funding sought;
• Hire turnover and product sales reduced by 18%
versus budget- a variance level seen across any individual product class for
2025 and 2024 actual results versus budgets;
• All overheads continue at the base forecast
level apart from overtime and commission and repairs and marketing, which are
reduced by 5% and travel costs reduced by 2.5%;
• All current vacancies are filled immediately;
and
• Capital expenditure is reduced by 5%.
The above factors have all been reflected in the forecast for the period
ending 12 months subsequent to the date of approving the accounts. The board
consider this scenario to be extremely unlikely. The headline numbers at a
group level would be:
• Group turnover for the 12 months ending 31
December 2025 is forecast to be adverse to the 31 December 2024 figures.
Operating profit is below the profit for 2024.
• Closing net funds as at the end of May 2026 are
forecast to be comparable to the level reported at 31 December 2024.
Under this reasonable but plausible downside scenario, the group has
sufficient net funds throughout 2025 and up to the end of May 2026, to
continue to operate as a going concern.
A final sensitivity analysis was performed in order to assess by how much
group turnover could fall before further external financing would need to be
sought. Under this scenario it was assumed that:
• Capital expenditure falls proportionately to
turnover;
• Temporary staff are removed from the group; and
• Various overheads decrease proportionately with
turnover.
Given these assumptions, and for modelling purposes only, assuming dividends
are maintained at normal levels, group turnover could fall to below £40
million on an annualised basis without any liquidity concerns. Due to the
level of confidence the Board has in the future trading performance of the
group, this scenario is considered highly unlikely to occur.
The group has considerable financial resources and a wide operational base.
Based on the detailed forecast prepared by management, the Board has a
reasonable expectation that the group has adequate resources and management
experience to continue to trade for the foreseeable future even in the
reasonable but plausible downside scenario identified by the group. Management
have also considered the risks previously identified around climate change and
their potential impact on the forecasts produced and have not identified any
significant risks that impact the going concern assumption. Accordingly, the
Board continues to adopt the going concern basis when preparing this Annual
Report and Financial Statements.
3 International Financial Reporting Standards (IFRS)
adopted for the first time in 2024
There were no new standards or amendments to standards adopted for the first
time this year that had a material impact on the results of the group. The
prior year comparatives have not been restated for any changes in accounting
policies that were required due to the adoption of new standards this year.
4 Distribution of Annual Report and Financial
Statements
The group expects to distribute copies of the full Annual Report and Financial
Statements that comply with IFRSs by 23 May 2025 following which copies will
be available either from the registered office of the company; Unit 601 Axcess
10 Business Park, Bentley Road South, Wednesbury, WS10 8LQ; or from the
company's website; www.andrews-sykes.com (http://www.andrews-sykes.com) . The
Annual Report and Financial Statements for the 12 months ended 31 December
2023 have been delivered to the Registrar of Companies and those for the 12
months ended 31 December 2024 will be filed at Companies House following the
company's Annual General Meeting. The auditor has reported on those financial
statements; the report was unqualified, did not draw attention to any matters
by way of emphasis without qualifying their report and did not contain details
of any matters on which they are required to report by exception.
5 Date of Annual General Meeting
The group's Annual General Meeting will be held at 3.00 p.m. on Tuesday, 17
June 2025 at Unit 5, Peninsular Park Road, London, SE7 7TZ.
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