TClarke upbeat as it deals with internal fraud

Building services group TClarke announced its year-end trading update on Friday for the year ended 31 December, ahead of its preliminary results which will be announced on 28 March.

The London-listed firm reported that underlying profits were substantially ahead of last year, saying it entered 2017 in a “strong, confident position”, supported by an improved net cash balance and improved forward order book.

“Further to our announcement on 31 October 2016, the 2016 results will include exceptional charges and provisions in relation to the internal fraud at our DGR subsidiary,” the board said in a statement.

“These are estimated at £2.2m, including a provision for professional costs of £0.4m directly associated with our efforts to recover the misappropriated funds.

“Profits for the year are expected to be in line with market expectations after reflecting the full impact of the accounting adjustment for the fraud in the period, other than the provision for related professional costs referred to above.”

TClarke said legal proceedings to recover the misappropriated funds were ongoing.

The group said its year-end net cash position improved 39% for the fourth successive year to £9.2m.

“Supporting our growth, our banking facilities with NatWest were renewed successfully as planned.

“The Group now has access to an increased three year £10m - previously £5m - revolving credit facility and a £5m - previously £8m - overdraft facility.”

The firm’s forward order book as at 31 December strengthened to £330m from £300m.

Notable new project wins included two significant London office fit out projects for a social media client and a major asset manager client, along with projects at The University of Gloucester Business School & Growth Hub and The Plymouth History Centre.

“The exceptionally strong underlying trading performance for the 2016 financial year and the year end cash position are, to an extent, a reflection of the timing of major project completions and stage payments received in the second half,” the board explained.

“Nonetheless, the cautious improvements in the group's core markets, supported by a strong forward order book that has seen no project cancellations, together mean that we enter the 2017 financial year in optimistic mood.

“It is the board's expectation that the group's actual performance will exceed current market expectations for the year.”