Spice celebrates record year with ‘stonking’ acquisition
UTILITY services group Spice has announced another record set of results following a year of milestones and growth across the business.
The Leeds-based firm reported that pre-tax profits for the year ended May 1, 2009 grew by 58% to £32.3m. Revenue rose by 24% to £386m.
It also announced expansion of its Australian telecoms division following the £6.9m acquisition of ComGroup Australia.
The deal, described by Spice chief executive Simon Rigby as a “stonking opportunity” sees Spice further grow its telecoms business, which was formed in 2002 with the acquisition of Simco.
Simco’s sister group meanwhile was bought out by ComGroup. The acquisition re-unites the two businesses.
Melbourne-based ComGroup, designs and distributes Simoco branded mobile radio handsets and systems to utilities and government.
The £15m turnover business also has a UK base in Andover and employs 101 staff.
Mr Rigby said: “There are some fantastic bolt on acquisitions out there and this was an absolutely stonking opportunity for our shareholders.”
“The acquisition strengthens our capability to manage complex distributed systems where flexible telecoms solutions are essential to our client’s network operations.”
He said that the past financial year had been one operational highlights including Spice’s migration from AIM to full listing on the London Stock Exchange in July, 2008, the recovery of £50m for clients during Spice’s first year of ownership of Revenue Assurance Services (RAS), the creation of its Corby training centre and the winning of key contracts including AT&T, H2) and Scottish Power.
“We have today reported another record set of results after a year of significant development for the group including our move from AIM to the official list,” he added.
“Despite the wider economic environment and consequent market challenges, PBTA (profit before tax, exceptional items and the amortisation of intangible fixed assets) has increased by 58% during the year.”
The group has also made a total of five acquisitions in the period including British Power International, Mono Services, Morrel Consulting, Nifes, and Treewise and Stowland.
Spice has converted 96% of earnings before the deduction of interest, tax and amortisation expenses (EBITA) into operating cash flow.
The group’s balance sheet is significantly stronger when compared to prior year and net debt at May 1 was lower than expected at £95.8m giving it £74.2m of headroom on its committed banking facilities, which remain in place until 2012.
During the year the group has undergone a reorganisation of its management and reporting structures. Spice now provides total utility support services across two divisions – supply and distribution.
Revenue for the supply division, which includes RAS and Inenco, rose 53% for the period to £35.1m.
The distribution division, which focuses electricity, water, facilities and gas, saw revenue rise by 22% to £350m. Both electricity and water saw strong growth with electricity now accounting for around half of the divisions revenues.
Mr Rigby continued: “We are very pleased to be placing these financial results for our shareholders.”
The group also confirmed deputy chairman John Taylor’s retirement from the board.
Mr Taylor was previously chairman of the group and has been with the company for many years.
