Sweett Group reports £1.1M loss to March 2015

Sweett Group Chief Executive Douglas McCormick

Sweett Group’s new chairman and chief executive reported a £1.1M loss to the City and shareholder’s on Tuesday and announced that there would be no recommended final dividend due to the focus on reducing debt.

Turnover for the year also dropped £1.1M to £88.3M, down from £89.4M in 2014. Profit in 2014 was £2.8M.

Net debt increased £1.5M to £9.7m`, up from £8.2M in 2014.

The group’s pretax loss was influenced by three major factors it said. There were £1.7M of exceptional expenses incurred in the main investigating Wall Street Journal allegations and in connection with the Serious Fraud Office investigation into alleged bribery of officials by a former employee in the Middle East. There was an operating loss in the Middle East and North Africa (MENA) of £1.2M and £2.4M of goodwill impairment losses consisting of a £1.9M charge in Australia and a £0.5M charge in MENA.

However the UK business was strong with improved profitability and cash generation. Revenue for the UK, Ireland and Continental Europe was up 4.4% to £51.5M (2014: £49.3M) which accounted for 58.3% of the group’s total revenue.

The firm is also pursuing the sale of the its Asia Pacific (APAC) and India divisions to reduce debt. Asia Pacific reported revenues of £28.4M (2014: £28.6M) and India £1.9M (2014: £1.8M).

“The strategic review, which completed in April 2015, concluded that we have solid UK and European business which generate cash, with positive working capital dynamics, strong market positions and these geographies will be central to our growth going forward,” said chief executive Douglas McCormick. McCormick joined the company in March from Atkins where he had been group managing director of the rail division.

Once the sale of Asia Pacific and India is completed, “the board intends to invest further in the UK and European businesses and explore emerging opportunities in the USA and Canada,” he said.

“The key output of the strategic review was to focus on improving profitability and cash flow and thereby reduce the group’s debt through the sale of our APAC and India businesses, a process which is on going,” said chairman John Dodd who joined the group last year. Dodds was chief executive of Kier until 2010.

Sweett’s order book currently stands at £109M, the same as reported in 2014.


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