Andrews Sykes maintains expectations after some first-half difficulties

25th Sep 2024 11:24

(Sharecast News) - Andrews Sykes Group reported first-half revenue of £38.4m in its half-year report on Wednesday, a slight decline from £38.8m in the same period last year.

The AIM-traded firm said that despite the dip, it saw a significant improvement in EBITDA, which rose to £18.1m, compared to £13.9m in the first six months of 2023.

Operating profit remained steady at £9.7m, while profit for the period slipped to £7.1m from £7.5m.

The company's cash position remained strong, with £21.1m in cash and cash equivalents.

Revenue at Andrews Sykes Hire in the UK fell 1.6%, mainly due to milder winter temperatures and a slow start to the summer cooling season.

European operations saw a 12.2% revenue drop, largely attributed to the closure of the French subsidiary in November last year, and weaker performances in Luxembourg and Belgium.

The Luxembourg market was affected by challenges in the construction sector, while Belgium experienced similar weather-related issues as the UK.

However, operations in Italy performed well, with revenue increasing 10.6% compared to the prior year.

The UAE-based Khansaheb Sykes reported a 31.7% increase in revenue, supported by new management and the establishment of a new depot in Abu Dhabi.

That growth translated into an additional £0.4m in operating profit compared to the first half of 2023.

In the UK, Andrews Air Conditioning and Refrigeration faced difficulties due to a reduction in large installation projects, leading to a 29% drop in revenue and a small operating loss.

Despite the challenges, the group's overall operating profit from UK and European hire businesses was marginally above the 2023 levels, reflecting strong cost control and operational efficiencies.

The board declared an interim dividend of 11.9p per share, matching last year's payout, to be paid on 1 November.

The company said it was committed to returning value to shareholders, and maintained a strong financial position.

Management remained confident of achieving full-year results in line with expectations despite a subdued trading environment in the UK and Northern Europe, while positive momentum continued in Southern Europe and the Middle East.

At 1055 BST, shares in Andrews Sykes Group were down 2.99% at 536p.

Reporting by Josh White for Sharecast.com.