Hyder Consulting PLC : Annual Results for the year ended 31 March 2012

Hyder Consulting PLC

13 June 2012

Hyder Consulting PLC (HYC.L) Final Results Announcement

Annual results for the year ended 31 March 2012

Strong results; confident for the year ahead

Hyder Consulting, the multi-national design and engineering consultancy, today announces its results.

Business highlights

• Order book up 16% to £363m

• Revenues of £277.3m (2011: £290.3m)

• Adjusted operating profit* of £21.0m (2011: £20.3m)

• Adjusted pre tax profit* of £21.6m (2011: £20.3m)

• Net operating margins of 8.7% (2011: 8.1%)

• Adjusted diluted earnings per share* of 44.34p (2011: 43.34p)

• Full year dividend up 16% to 9.00p per share (2011: 7.75p)

• Net cash balances of £15.6m (2011: £13.1m)

Statutory reporting

• Operating profit of £17.1m (2011: £18.2m)

• Pre tax profit of £17.6m (2011: 18.2m)

• Diluted earnings per share of 35.96p (2011: 38.63p)

*Adjusted numbers exclude exceptional items, acquisition costs and amortisation of acquired intangibles

Commenting on the results Sir Alan Thomas, Chairman, said:

"The large proportion of our revenues and profits earned overseas has enabled the group to perform well  in mixed market conditions. Hyder's strong order book, balance sheet and prospective opportunities give us confidence for the year ahead."

Contacts:

Hyder Consulting PLC

Ivor Catto, Chief Executive Tel: +44 (0)20 7904 9011

Russell Down, Group Finance Director Tel: +44 (0)20 7904 9020

Citigate Dewe Rogerson

Ginny Pulbrook Tel: +44 (0)20 7282 2945

There will be a results presentation for stockbroking analysts today at 9.00am, to be held at Citigate Dewe  Rogerson, 3 London Wall Buildings, London Wall, EC2M 5SY

Chairman's Statement

I am pleased to report another good set of results in what have been mixed market conditions.

Results

The order book increased substantially to £362.8m (2011: £312.3m) following a number of large and important contract awards in the second half year. Approximately 60% of the current year's forecast revenue is in the order book.

Revenue amounted to £277.3m (2011: £290.3m); net revenue, after deduction of sub-consultant costs, was £241.8m (2011:

£251.4m).

Adjusted operating profit was £21.0m (2011: £20.3m), after absorbing £1.5m of redundancy costs (2011: £2.9m), and after foreign currency translation gains of £0.9m. The adjusted net operating profit margin grew to 8.7% (2011: 8.1%). During the year exceptional costs of £1.5m were incurred (2011: £Nil) in relation to (i) vacant properties in the UK (£1.3m) and (ii) the closure of the UK defined benefit scheme to future accrual (£0.2m). Operating profit was £17.1m (2011: £18.2m).

Adjusted profit before tax rose to £21.6m (2011: £20.3m). Profit before tax was £17.6m (2011: £18.2m).

Adjusted diluted earnings per share increased to 44.34p (2011: 43.34p). Diluted earnings per share were 35.96p (2011: 38.63p).

Funding

At 31 March 2012 the group had net cash of £15.6m (2011: £13.1m). Cash balances at the year end amounted to £23.2m with unutilised facilities of £45.8m.

Operating cash flow was £15.6m (2011: £19.2m), after making contributions of £3.9m towards the pension deficit (2011: £3.0m). Cash conversion for the year was 76% before accounting for these contributions, reflecting the greater working capital requirements of the Middle East operations where our order book has grown significantly.

The UK pension scheme was closed to future accrual on 30 April 2011. At 31 March 2012 the deficit had reduced to £16.3m (2011: £17.3m).

We look to expand both organically and through strategic acquisitions which will enhance our professional expertise and competitiveness in core markets and sectors. We completed three acquisitions during the year at a net cost of £2.5m; ESR Technology, a specialist energy, water and space consultant operating in the UK and Abu Dhabi; SAK infrastructure consultants in Saudi Arabia; and GW Engineers, a resources consultancy in Australia. All three are performing well.

Dividend

In recognition of the group's financial performance, the board proposes an increase in the final dividend to 7.00p per share (2011: 6.00p). The full year dividend amounts to 9.00p per share (2011: 7.75p), an increase of 16.1% this year and a doubling over the last three years. The full year dividend is covered 4.9 times by adjusted diluted earnings per share (2011: 5.6 times).

Operating highlights

Asia-Pacific.

Regional revenues were £112.2m (2011: £114.0m); adjusted operating profits were £14.7m (2011: £14.4m).

In Australia, our transport division performed well in the second half. We have secured significant new highway and rail contracts, and continued to work successfully on a number of Alliance contracts. Our commercial property division completed work on the Sydney Centrepoint development which was opened during the year; market conditions remain subdued and competitive. We have grown our resources business organically and acquired a local resources consultancy, GW Engineers. We are confident of good growth in this market in the coming year. In China and Vietnam we have invested in growing our geographical and market presence, including the opening of a new office in Chongqing, China.

Middle East.

Revenue was £63.8m (2011: £65.5m); adjusted operating profits increased by 50.0% to £3.9m (2011: £2.6m).

Results have improved as work begins on new contracts and our investment in key clients comes to fruition. In Qatar we have secured important projects with Ashghal, Kahramaa and Qatar Metro as part of the country's 2030 infrastructure development goals and in preparation for the 2022 FIFA World Cup. In Saudi Arabia we have recently completed the acquisition of SAK, building our market presence and increasing our exposure to the growing infrastructure market there. We have already started benefiting from this increased presence in the Kingdom through the recent award of a three year advisory commission from Jeddah Municipality. Elsewhere we have undertaken major utilities projects including Step Tunnel in Abu Dhabi and Muharraq waste water treatment works in Bahrain.

Europe

Revenue was £101.2m (2011: £110.8m); adjusted operating profits were £5.5m (2011: £6.6m).

In the UK we have grown our rail business in a competitive market and have been appointed designers on London Bridge station, undertaken further work for Crossrail, and implemented platform extension works for Network Rail. The highways market has been particularly challenging with lower workload which affected utilisation rates. More recently we have won a number of projects with the Highways Agency under framework agreements. Results in the utilities sector have improved as workload has built up during the AMP5 programme. In Germany results are ahead of last year, with Ingenieur Consult, and our industrial property business performing ahead of expectations.

People

We now employ 3,774 people across our regions, an increase of 2.1% on the previous year. We have increased headcount in the Middle East by 8.2% as our workload there has grown, offset by a reduction in numbers in the challenging UK market.

After a period of restructuring we have given particular attention to the training and development of our people and, where practical, provide them with opportunities to gain experience in different geographies and sectors, thereby strengthening the skills base and widening opportunity.

Outlook

The large proportion of our revenues and profits earned overseas has enabled the group to perform well in mixed market conditions. Hyder's strong order book, balance sheet and prospective opportunities give us confidence for the year ahead.

I would like to express our appreciation to our clients for their confidence in us and to thank every member of Hyder's staff for their efforts and for their contribution to another year of strong results.

Sir Alan Thomas

Chairman

13 June 2012

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