TClarke plc Half-Year Report 2022

TClarke plc

Half year results for the six months ended 30 June 2022

TClarke posts record half year results as it closes in on £500m revenue target

TClarke plc (“the Group” or “TClarke”), the Building Services Group, announces its half year results for the period ended 30 June 2022.

Business Highlights:

• First half year revenues exceed £200m for the first time
• 9% operating margin achieved
• Interim dividend increased by 67%
• Full year 2022 revenues now expected to be circa £450m, ahead of market expectations
• Record forward order book of £586m as at 30 June 2022
• Bonding capacity increased to support £500m per annum revenues
• Bank facilities extended to August 2026

Earnings per share is calculated by dividing profit after tax by the weighted average number of shares in issue

Trading

Trading has continued to be strong for the first six months of 2022 with revenue up 49% compared with the corresponding period last year. Revenue growth has been experienced by all regions but has been particularly strong in London where revenues at £125.1m are 72% higher than in 2021. This growth is expected to continue throughout the rest of 2022 with revenues for the full year now expected to be circa £450m.

The growth in revenues has been supported by maintaining our operating margin close to target levels at 2.9%; again driven by the London business. London's operating margin for the first six months of the current year is 4.6% (2021 1.4%), UK South operating margin is 2.8% (2021 3.7%) and UK North operating margin is 2.7% (2021 3.7%).  After deducting group costs of £2.0m the overall Group operating margin during the period is 2.9% (2021 1.7%).

Cash and Facilities

Good financial discipline is at the centre of our operations. Net cash is £7.2m as at 30 June 2022; an increase of £5.2m compared with 30 June 2021. Average month end net cash during H1 2022 is £3m.The principal cash movements are detailed in the banking facilities section of this report.

In support of our growth strategy we have now put in place banking facilities with NatWest comprising a £25m revolving credit facility (RCF) which extends to August 2026 and a £5m overdraft facility.

Many of our clients demand performance bonds to be in place as part of the contract requirements. Due to the strength of the business TClarke has at its disposal one of the largest bonding capacities when compared to our recognised peer group. This too has recently been increased to provide for a total bonding capacity of £65.1m.

Dividend

The Board proposes an interim dividend of 1.25p per share (2021: 0.75p per share) to be paid on 30 September 2022 to shareholders on the register at 2 September 2022. TClarke has a progressive dividend policy and is also rebalancing the split between the interim and final dividend. As a result the interim dividend now proposed has been increased by the full amount of the expected increase in total dividend for 2022.

Net Assets

Group net assets have increased by £8.6m in the six months to 30 June 2022 and now stand at £35.1m. This is principally due to the increase in retained earnings and the post-tax reduction in pension deficit.

Order Book

Our future confidence is underpinned with the success of the Group's forward order book which has been replenished and expanded and now stands at a new record of £586m. This is an £83m increase compared to the position at 30 June 2021. In addition, TClarke has many target projects and opportunities with our pipeline of current bids exceeding £1bn.The split of the order book is as follows:

Outlook

TClarke is moving rapidly towards achieving its 2023 £500m annual revenue target whilst maintaining its operating margin. The Board expects based upon the performance to date, revenues to exceed current expectations for 2022 at circa £450m for the full year.

Mark Lawrence, Chief Executive, commented

“With the current economic conditions, the business is rightly cautious, however the strategy we follow is of a disciplined tendering approach with early engagement with our supply chain partners and our clients which is ensuring we are not exposed to unnecessary risks. 

The record half year revenues and forward order book along with the current visibility of future workloads in our target revenue streams mean TClarke now expects to deliver £450m revenue in 2022 and achieve its £500m target in 2023.”

-ends-