Group Results for 2015
27 January 2016
The Group's results for 2015 will be announced on 3 March 2016.
Despite the turmoil in the oil and gas sector, our unaudited management accounts indicate that the Group's trading results for 2015 were within the range of market expectations. This reflects the strength RPS derives from its diverse activities.
2015 was characterised by a significant reduction in investment by our oil and gas clients. Even after major cost reductions, the contribution from our Energy business reduced substantially. After a period of modest recovery in the first half of the year, the oil price declined 40% in the second half. In consequence, market conditions deteriorated further in the final months of the year.
Our other businesses, with the benefit of a number of high quality acquisitions, grew their profit in 2015. The repositioning of our AAP business away from the resources sector progressed well. Similar repositioning in BNE:NorthAmerica is at an earlier stage, but has started to work effectively. Our BNE:Europe business is taking good advantage of its improving markets.
The oil price continued to fall sharply in the early weeks of 2016. With the likelihood of further significant reduction in investment by our clients, we have decided to reduce again the capacity of the Energy business. We are, as part of the audit process, reviewing the value of intangible assets held on the balance sheet in relation to acquisitions in the oil and gas sector. It currently seems likely this will result in a non cash impairment charge of up to about £20 million, which will be accounted for in the 2015 results. This reflects current market conditions, but does not affect the strong position of our Energy business in this long term market.
In the current environment the risk of suffering bad debts, in respect of a small number of oil and gas clients, has increased. We are, therefore, reviewing the debtor exposure in the Energy business and may need to provide for doubtful debts up to about £7 million. Any charge needed would also be taken in respect of the 2015 results.
Our operating cash flow and conversion of profit into cash in 2015 was, once again, strong. The ability of RPS to continue to generate good cash flow is testament to the robust nature of our business.
27 January 2016
|RPS Group plc||Tel: 01235 863206|
|Dr Alan Hearne, Chief Executive|
|Gary Young, Finance Director|
|Instinctif Partners||Tel: 020 7457 2020|
RPS is an international consultancy providing advice upon the development of land property and other natural resources, the management of the natural and built environments and the health and safety of people. We have offices in the UK, Ireland, the Netherlands, Norway, the United States, Canada and Australia Asia Pacific and undertake projects in many other parts of the world.
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of RPS Group plc. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. The Board of RPS considers market expectations are best defined by the range of forecasts for PBTA published by analysts who consistently follow the Group. Nothing in this announcement should be construed as a profit forecast.