Quieter Falklands trading sees FIH earnings fall
(ShareCast News) - Falkland Islands and UK-focussed specialist services company FIH Group updated the market on its trading for the year to 31 March on Thursday, cautioning that the results remained subject to audit and final approval by the board.
The AIM-traded firm said that, as outlined in its trading update of 14 March, trading in the second half was stronger than originally anticipated, although as expected, profitability was still significantly lower than in second half last year due to quieter trading in the Falklands.
Full year underlying profit before tax was therefore likely to be approximately 20-25% lower than the prior year, the board said, in the range of £2.3m - £2.5m, principally due to the reduced contribution from the Falklands operations.
The group's cash flow during the year was strong, the board reported, confirming that after capital investment of over £1.6m - primarily to support long term expansion at Momart - FIH ended the year with record cash balances of £15.1m, an increase of over £1m compared to 31 March 2016.
"The group has delivered a satisfactory trading performance, reflecting the much quieter trading conditions which were expected in the Falklands and the solid performance of the group's UK businesses, which both saw improved profits compared to the prior year," said chairman Edmund Rowland.
"With record cash balances of £15.1m and net cash of £11.3m, giving net cash per FIH share of 90 pence per share, the group's financial position and prospects remain strong.
"As chairman, I remain committed to delivering sustainable long term growth in shareholder value by investing in the strong niche businesses the group already has and by delivering on our promise of securing high quality selective acquisitions."
In line with that commitment, Rowland said the board would be consulting over the coming period with shareholders as to the benefits of a potential return of excess capital and details of its proposals would be made public in the coming weeks, prior to the announcement of the group's full year results on 13 June.
"n the meantime we will immediately commence a process to appoint an experienced independent non-executive director to further strengthen the Board.
"I look forward to updating the market on our growth strategy as the year progresses, as we seek out opportunities that will create an enhanced platform for sustainable long term growth."