Booming utility markets boost Spice

SPICE has delivered another set of record results as chief executive Simon Rigby hailed a “fantastic performance across the business”.

“I know its all doom and gloom in the markets but I can’t find any for you,” said Mr Rigby as the Leeds-based utility support services group announced a 40% increase in pre-tax profits to £17.1m from £12.2m, a 37% leap in revenue to £312m from £228m and a 50% increase in its dividend to 6p.

“The market might be a cyncial old cow but I’m struggling to find the downturn,” he added.

“Around 80% of our turnover is from utility-related activities and the regulators are spending more on the utility networks and these are 10-year capital programmes. These are recession-proof markets, but I’m not being a clever dick about it – because we have in these markets for 20 years,” declared Mr Rigby.

Spice – which recently saw former Grand Metropolitan board director and Punch Taverns chairman Peter Cawdron replace outgoing Sir Rodney Walker as non-executive chairman – will step up from the Alternative Investment Market to the main London Stock Exchange list later this month.

The group was founded 12 Spice was founded 12 years ago when Mr Rigby and his team bought the facilities business of Yorkshire Electricity for a nominal sum. It then had 12 employees and now has several thousand staff.

During the year to April 30 the group made 12 acquisitions and Mr Rigby said it would continue to make bolt-on additions to its business as well as looking at opportunities to find more business in deregulating markets in Europe and the US through extending business with existing customers.

It made its biggest acquisition a year ago, paying £103m for Revenue Assurance Services which provides specialist billing audits, account services and debt management for the utility industry.

Mr Rigby said he was also keen for the group to add gas network operator National Grid Transco as a customer. “It is a £2.4bn market and that is something we are very keen to get into.”

Spice turned in a 19% increase in like-for-like organic growth in earnings before interest, tax and amortisation and coverted 124% of operating profit into operating cash flow during the 12 months.

Chairman Mr Cawdron said: “We have recorded strong levels of organic growth in each of our operating businesses and the acquisitions that we have made in the year have also made significant contributions to our results.

“Many exciting opportunities exist for the new financial year, which has got off to a pleasing start. We enter 2009 with confidence.”