Results round-up

The FTSE Smallcap group increased revenue 16% to £1.1bn in the 12 months to November, with more than 80% of business generated outside the UK by the year-end, which saw some extra boost from the weaker pound. Excluding this, revenue was up 9% at constant currency rates.

Gross profit was lifted 11% to £287.7m or 4% CCR, with profit from contract workers up 10% and permanent staff down 8% at CCR. A strong finish to the year saw gross profit up 8% in the fourth quarter.

Adjusted group operating profit of £44.9m was up 9% but down 3% if excluding currencies.

The conversion ratio was down 40 basis points to 15.6%, which led to adjusted profit before tax shrinking 3% on a constant currency basis to £44.5m, though at the reported level it was up 9%.

Basic adjusted earnings per share of 25.7p were up 11% thanks to currency effects but down 1% otherwise, with diluted of 24.9p up 20%, as expected.

"We have delivered an encouraging overall result for the year, with a strong finish in the final quarter," said chief executive Gary Elden.

"Pleasing performances in the USA and Continental Europe, particularly from our market-leading businesses in the Netherlands and Germany, were key to this result.

"With 81% of our business now generated outside the UK and 71% of our GP generated by our more resilient Contract business, our business profile has changed significantly over recent years. After two years of turbulent political, market and economic conditions, we enter 2018 in good shape, with a clear vision to be the number one STEM [science, technology, engineering, and mathematics] talent provider in the best STEM markets."

Shareholders in alcohol wholesaler and distributor Conviviality were crying into their beer after results for the 26 weeks to 29 October sent the shares down 10%, even though the interim dividend was topped up 7.1% to 4.5p.

The AIM-traded firm said it continued to trade in line with the board's expectations for the full year.

It claimed to have “robust” half-year results with an increase in revenue and adjusted EBITDA, with profits reflecting the phasing of cost synergies into the second half of the year.

Revenue was up 9.2% to £836.3m, while the company’s gross margin fell 0.3 percentage points to 12.5%, which the board put down to increased sales to large national account customers in the period.

Adjusted EBITDA rose 1.7% to £23.3m, while adjusted profit after tax fell 1.6% to £12.3m and its adjusted fully diluted earnings per share reduced 5.6% to 6.8p.

On a statutory basis, profit after tax was down 10.3% to £5.2m, with fully diluted earnings per share off 12.1% to 2.9p.

Net debt at £133.3m was 3.7% below net debt a year earlier of £138.4m.

“Our customers and franchisees have continued to recognise the strength of the Conviviality proposition and the opportunities a single supplier and distribution solution affords them,” commented chief executive officer Diana Hunter.

“This has been evidenced by our above market growth in both the on trade and the off trade during the period.”

Hunter said the board made “deliberate “choices to successfully grow market share and enhance the quality of future earnings by agreeing long-term contracts with the firm;s larger customers, and securing new national account customers.

“These gains in market share coupled with our continued strong sales demonstrates our competitive advantage, the broad customer base we have developed and the robust nature of Conviviality as the UK's leading drinks wholesaler, distributor and solution provider to our customers.

“As previously highlighted, cost initiatives for the second half of the current financial year provide confidence for both achieving current year board expectations, as well as the Group's longer-term performance,” Hunter added.

Marechale Capital shares also fell significantly on Monday morning, after the company revealed a serious drop in revenue and profit for the six months to 31 October.

The AIM-traded company reported revenue for the period of £125.1k, down from £531k in the equivalent period a year earlier.

Its cost of sales reduced by more than two thirds to £44.4k from £153k, but gross profits were down to just £80.7k from £378.1k.

The firm reported an operating loss of £278.3k, swinging from a small profit of £13.6k a year earlier.

On a statutory basis, the loss for the period was £459.8k, compared to a profit of £10.1k in the prior year, with basic and diluted losses per share of 0.007p, down from profits of 0.02p per share.

“Marechale Capital has had a challenging half year since we reported our final results back in July,” said chairman Mark Warde-Norbury.

“The fall in revenues is largely due to delays in a number of the transactions we are involved in, although I am pleased to be able to report that we have recently closed a transaction for a leisure sector client which generated a fee of around £300,000.

“Whilst our deal flow remains strong, it is still taking longer to complete transactions.”

Warde-Norbury said one of Marechale Capital's key strategies was the achievement of growth in net asset value generated from options and investments in client and partner companies.

He said that unfortunately, NUKS and Future Biogas had diminished “significantly” in value recently, resulting in write-downs.

“In light of the above, the board of Marechale Capital continues to consider its options,” Warde-Norbury added.