Lakehouse prepares for 'transformation' after tough year

Support services group Lakehouse posted its full-year results to 30 September 2016 on Tuesday, with the board saying revenue and profitability principally reflected the underperformance of the property services division, together with the impact of carbon pricing reductions within energy services, offset in part by the contribution of recent acquisitions.

The London-listed firm posted underlying revenues of £305.8m, down from £336.6m in 2015, with statutory revenues of £333.8m down from £340.2m.

Underlying EBITA was £10.9m, falling from £22.2m, representing a margin of 3.6%, reduced from 6.6%.

The board reported underlying profit before tax of £9.9m, compared with £21.6m, with a statutory operating loss of £31.7m, swinging from a profit of £4.6m in 2015.

It reported a statutory loss before tax of £33.3m, compared to a 2015 statutory profit of £3.2m.

Underlying basic earnings per share were 5.2p, down from 13.7p, with a statutory basic loss per share of 18.6p, compared with earnings per share of 1.9p.

The firm’s underlying operating cash conversion was 121%, and its statutory operating cash outflow was 171%.

Group order book stood at £543m at year end, down from £595m, reflecting caution in bidding within property services, though the company said the value of frameworks increased to £1.6bn from £1.3bn in the year.

Forward visibility of revenues were 87% of forecast revenue for FY17 at November 2016, or 77% on a like-for-like basis.

At year-end, net debt stood at £20.6m, compared to net cash of £6.6m at the start of the year.

The board proposed a final dividend of 0.5p per share, taking the total to 1.5p for the year, down from 1.9p in 2015.

“FY16 has been a challenging year for Lakehouse but one we believe will prove to be transformational, having focused on reviewing the strategy of the group, stabilising operational performance with a view to improvement and controlling costs at every level, whilst retaining a high quality of client service,” said chairman Bob Holt.

“We have taken tough decisions to exit some business streams within property services alongside bringing in a new management team to stabilise operations in the remainder of the division and reset the dial.”

Holt said the core businesses of compliance, energy services and construction were well established, “excellent” businesses which have a clear vision of what needs to be delivered.

“Looking forward, our strategy will be evolutionary but we are confident that, with our newly stabilised group, the long term fundamentals of the commercial markets in which we operate will provide us opportunities to deliver consistent performance, grow sustainably and to return value to shareholders.

“The new year has started satisfactorily and current trading is in line with management expectations.”