ENVIRON GROUP (INVESTMENTS) PLC 
By 22 August 2011
Environ Group (Investments) plc(“Environ Group” or the “Company”)
Results for the Year Ended 31 March 2011Environ Group (Investments) Plc the AIM quoted support services and fire prevention specialists, today announces its statement of results for the year ended 31 March 2011.
Key points• Gross profit increased 15% to £6.4 million (2010: £5.5 million).
• Profit before tax for the year of £461,000 (2010: loss of £17.2 million) with improved performance from all three subsidiaries. • Cash at year end £237,000 (2010: £116,000). • Net Assets £8.1 million (2010: £4.0 million). • Streamlined business, now has the necessary accreditation in the emerging Renewable Energy markets and national operation ready to take full advantage of government initiatives. • Establishment of Midlands based Training Centre to assist in accreditation of engineers to cope with the expected demand in the Renewable Energy market. Commenting on the results Chairman Nigel Wray said:After an extraordinarily turbulent financial year to 31 March 2010 I am pleased to report a small pre- tax profit for the year to 31 March 2011. As discussed at the interim stage when we in fact recorded a small loss, every month of the second half has continued to be profitable. As indeed has the start of the new financial year.
Our three businesses are in legislation led sectors with strong growth potential in the future. It is very early days and times (and margins) are tough but the current year has started satisfactorily and I would reiterate once again that all of the Board are substantial shareholders and greatly committed to making the Group a true success.
Environ Group (Investments) Plc
Mark Sims – Chief Executive Tel: +44 (0) 1782 826939 Nominated Adviser: Grant Thornton Corporate Finance Daniela Amihood Tel: +44 (0) 207 383 5100 Broker: Seymour Pierce Limited Marianne Woods and Jacqui Briscoe Tel: +44 (0) 207 107 8000Ch airman ’s St atem ent
After an extraordinarily turbulent financial year to 31 March 2010 your new Board is pleased to report a small pre-tax profit for the year to 31 March 2011. As discussed at the interim stage when we in fact recorded a small loss, every month of the second half has continued to be profitable. As indeed has the start of the new financial year.
Some difficult decisions have been taken, costs have been cut back wherever possible and we now believe that our three subsidiary companies are well placed in their own fields to benefit from an upturn when it comes. Other than the convertible loan stock which is principally owned by the Directors, we have no net bank debt and hopefully, therefore, are in reasonable shape. I continue to believe that the provision of decent housing, the provision of energy saving measures and the protection of buildings against the risk of fire have all to be significant growth areas for the future, albeit that the country as a whole is experiencing one of those ‘bumps’ along the road. In addition, from a national security point of view, which presumably should be a government’s first priority, it cannot make sense to rely on gas and oil from highly unstable regimes. Hence, the use of solar power, and the adoption of green policies to cut down our need for fuel from abroad you would have thought is a must for the future. This is the area we are in and we want to be in. It is very early days but the current year has started satisfactorily and I would reiterate once again that all of the Board are substantial shareholders and greatly committed to making Environ a true success.Nigel WrayCh ief Ex ecu t iv e Of f icer ’s Repo rt
During the past fiscal year, we have made significant progress against our key business goals whilst navigating the challenges of a fiercely competitive market in which we are operating.
We recognise that the future of our business must be in markets that are driven by both legislation and Renewable Energy solutions. We firmly believe that in the fullness of time these sectors will provide organic growth, and that these markets will continue long into the future - providing the foundation for us to expand into market leaders. Over the last 12 months it pleases me that we have reduced greatly our dependence on the government’s Warm Front scheme by adding many additional clients to our portfolio. Having worked through that agenda, we have now created a business with a diverse client base, firmly in the markets which we believe will provide many opportunities to us in the years to come. The result of the efforts over the last year have therefore laid the foundation for further expansion in the medium term, both organically and by way of further acquisitions, particularly in the Renewable Energy sector. Both BGC and Fenhams are now firmly established in the renewable energy market, and both have gained all of the necessary accreditation to deliver these services across the whole of the UK. The government’s Feed in Tariff (FIT’s) and Renewable Heat Incentive (RHI) have provided a timely boost to the renewable’s market within the last twelve months. Recently, the EU members agreed that by 2020, 20% of energy should be sourced from renewable sources. I firmly believe therefore that this sector will provide some exciting growth levels over the next few years, as the government attempts to have an almost seven-fold increase over the current renewable share of the energy market, in scarcely more than a decade. It is expected that an investment into the renewable energy market of over £100 billion will be needed within the next decade in order for the UK to meet these targets. Ever increasing energy prices and a subsequent increase in fuel poverty numbers nationally are also set to further drive the market in which we operate, with projects such as the government’s much talked about Green Deal scheme, for which both BGC and Fenhams are perfectly placed to secure work within this area. Further national reports highlighting the ever increasing fuel poverty levels in the UK, have raised the focus and debate within the sector as to how these issues should be addressed. This again should result in yet more emphasis on green solutions, as this seems the most viable long term solution to the ever spiralling problem. Our dependence in the UK on other countries to provide our energy has resulted in a situation where prices are now outside our control. The long term solution to this problem will almost definitely be provided by way of Renewable Energy, and again we intend to be perfectly placed to prosper from this. Our medium term strategy is to widen our geographical coverage of the UK through acquisition and organic growth. We are also preparing our Midlands based training facility in order for us to deliver the accreditation necessary for the renewable sector, this should give us another income stream and, more importantly, the kudos of this should create the foundation for the business to succeed as we expect. The result of our continued diversification in the next six months should see us having a fully mobilised national operation across all renewable solutions. I firmly believe that we have the ability to become a market leader within this sector, in terms of both the installation fields and also the training requirements in this exciting emerging Renewable Energy market. Construction markets, especially new build markets, have been in deep recession in the UK. As a consequence IPCL has seen many contracts delayed and margins have been drastically cut. However, as a result of many changes in our operations to reduce costs and improve serviceability, we have stabilised the business in order for it to trade through these difficult times. We firmly believe that long term market within the fire protection sector will only increase; as yet more stringent regulations are imposed upon construction companies. The blue chip client base that we serve in this sector clearly highlights the ever increasing reputation our business is gaining within this sector. Our on-going projects such as ‘The Shard’ in London confirm our reputation to be able to deliver demanding schemes on time, and importantly within budget. We firmly believe that once the UK market emerges from the current recession, IPCL will be in prime position to prosper within this sector. There is no doubt we have improved our business performance over the later part of last year, but it’s clear that we need to accelerate our progress to be as profitable and cost efficient as the rest of the industry. The savings from our recent restructuring will be reinvested back into the business, enabling us to; continue to explore the new markets emerging into our sector, improving our supply chain and building our brands.Mark SimsCONSOLIDATED INCOME STATEMENT For the year ended 31 March 2011Year ended31 March2011Year ended
31 March
2010
Continuing operations£’000 £’000Revenue 19,507 19,085Cost of sales (13,147) (13,568)
Gross profit 6,360 5,517Other administrative expenses (5,881) (6,260)
Operating Profit/(Loss) before exceptional items 479 (743)Exceptional itemsGoodwill impairment -- (6,062) Restructuring costs -- (849) Acquisition related 258 (161)
Profit/(Loss) from operating activities 737 (7,815)Net finance expense (276) (392)
Profit/(Loss) before taxation 461 (8,207)Income Taxes 212 82
Profit/(Loss) from continuing operations 673 (8,125)Profit/ (Loss) from discontinued operations -- (9,035)Profit/(Loss) for the year 673 (17,160)
Continuing operationsBasic profit/(loss)loss per ordinary share 0.79p (43.48)p
Diluted profit/(loss)loss per ordinary share 1.05p (33.58)pDiscontinued operationsBasic profit/(loss)loss per ordinary share -- (48.34)p
Diluted profit/(loss)loss per ordinary share -- (37.63)pCONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 March 2011Non current assets2011 2010£’000 £’000Property, plant and equipment 222 270
Goodwill 12,000 12,000Total non current assets 12,222 12,270Current assetsInventories 223 111
Trade and other receivables 3,369 3,631 Cash and cash equivalents 488 116Total current assets 4,080 3,858Total assets 16,302 16,128Current liabilitiesTrade and other payables (4,780) (5,731) Current tax payable -- (289) Finance leases (12) (52) Bank borrowings (251) (2,282) Deferred cash consideration -- (388) Total current liabilities (5,043) (8,742)Non-current liabilitiesFinance leases (4) (8) Deferred tax liability (10) - Convertible Loan Notes (3,155) (3,205) Deferred cash consideration -- (188) Total non current liabilities (3,169) (3,401)Total liabilities (8,212) (12,143)Net assets 8,090 3,985EquityCalled up share capital 5,570 4,402
Share premium account 17,747 13,916 Other reserves 276 1,843 Profit and loss account (15,503) (16,176)Equity Attributable to Equity Holders of the Parent 8,090 3,985CONSOLODATED STATEMENT OF CHANGES IN EQUITY For the year ended 31st March 2011Called up share capital £’000 | Share premium account £’000 | Other reserves £’000 | Profit and loss account £’000 | Total equity £’000 | |
Balance at 31 March 2009 | 3,623 | 12,626 | 1,340 | 984 | 18,573 |
Issue of shares (net of issue costs) | 779 | 1,290 | -- | -- | 2,069 |
(Loss) for the year Shares to be issued in respect of acquisitions | -- -- | -- -- | -- 1,003 | (17,160) -- | (17,160) 1,003 |
Adjustment to contingent consideration | -- | -- | (1,250) | -- | (1,250) |
Amounts relating to earlier acquisitions | -- | -- | 400 | 400 | |
Liabilities to be exchanged for shares | -- | -- | 300 | -- | 300 |
Share based payments; services provided -- -- 50 -- 50 | |||||
Balance at 31 March 2010 | 4,402 | 13,916 | 1,843 | (16,176) | 3,985 |
Issue of shares (net of issue costs) | 1,168 | 3,332 | -- | -- | 4,500 |
Profit for the year | -- | -- | -- | 673 | 673 |
Shares issued in respect of acquisitions Shares issued in lieu of deferred consideration | -- -- | -- -- | (68) (1,000) | -- -- | (68) (1,000) |
Transfer to share premium account | -- | 499 | (499) | -- | -- |
Year ended
31 March
2010
£’000 £’000Net cash from operating activities (564) (1,325)Interest and loan arrangement costs (127) (337)
Income taxes paid (67) (291)Net cash outflow from operating activities (758) (1,953)Cashflow from investing activitiesAcquisition of subsidiary undertakings (net of cash) -- (1,166) Amounts paid in respect of previous acquisitions (318) (801) Disposal of subsidiary undertakings (net of cash) 200 1,289
Purchases of property, plant and equipment (59) (160) Proceeds from disposal of property, plant and equipment -- 23Net cash outflow from investing activities (177) (815)Financing | |||
Proceeds from issue of shares | 3,600 | 956 | |
Proceeds from issue of convertible loan notes | -- | 3,205 | |
Repayment of convertible loan notes | (50) | -- |
Costs of share issue | (168) | (111) | |
Proceeds of new bank and other loans | -- | 575 | |
Repayment of bank loans | (2,282) | (1,352) | |
Finance lease repayments | (44) | (98) | |
Net cash from financing activities | 1,056 | 3,175 | |
Net increase in cash and cash equivalents | 121 | 407 | |
Cash and cash equivalents at start of year | 116 | (291) | |
Cash and cash equivalents at end of year | 237 | 116 | |
Comprising of: | |||
Cash and cash equivalents per the balance sheet Less: Bank overdraft | 488 (251) | 116 -- | |
Cash, cash equivalents and short term borrowings | 237 | 116 |
The above summary of results for the year ended 31 March 2011 does not constitute statutory financial statements within the meaning of section 434 of the Companies Act 2006 and has not been delivered to the Registrar of Companies. Statutory financial statements will be filed with the Registrar of Companies in due course; the independent auditors' report on those financial statements under Section 495 of the Companies Act 2006 is unqualified and does not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
Environ Group (Investments) Plc’s annual report will shortly be posted to shareholders and will be made available on the Group's website www.environgroup.co.uk.
