Earnings down as Andrews Sykes focuses on costs and cash

Heating, cooling and pumping hire specialist Andrews Sykes reported revenue of £67.26m from continuing operations in its preliminary results on Wednesday, down from £77.25m year-on-year.

The AIM-traded firm said its EBITDA from continuing operations fell to £26.1m for the year ended 31 December, from £28.52m in 2019, while its operating profit slid to £16.39m from £19.3m.

Basic earnings per share from total operations came in at 30.87p, compared to 35.61p for 2019.

The company reported a net cash inflow from operating activities of £22.26m, up from £18.52m in the prior year, while net funds at year-end slipped to £7.67m from £12.14m.

Its board proposed a final dividend of 11.5p per share, up from 10.5p at the end of 2019, as interim and final dividends paid per equity share totalled 46.1p for the year, compared to 23.8p in the prior year.

“Andrews Sykes' trading continues to be resilient despite the unprecedented challenge posed by the coronavirus pandemic,” said chairman Jacques-Gaston Murray.

“Despite unprecedented circumstances, we are encouraged by how the business has constantly adapted to overcome operational issues.

“While lockdowns and 'stay at home' guidance have affected traditional opportunities in the facilities management and events sectors, we have instead capitalised on demand from other industries to generate profitable revenue.”

Murray said the company's “extensive involvement” with a number of pandemic-related projects ensured consistent boiler and chiller revenue through the year, supported by an “exceptional year” for its UK pump hire business, which finished the year up 3% on the previous year's revenue.

“Cost control, cash and working capital management continue to be priorities for the group,” he said.

“Capital expenditure is concentrated on assets with strong returns - in total £4.9m was invested in the hire fleet this year, lower than the normal level due to the decline in customer demand.”

In addition, Murray said the group invested a further £0.3m in property, plant and equipment.

“These actions will ensure that the group's infrastructure and revenue generating assets are sufficient to support future growth and profitability.

“Hire fleet utilisation, condition and availability continue to be the subjects of management focus.”

At 0900 BST, shares in Andrews Sykes Group were down 1.75% at 560p.