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Round-up

Goals; Bellway; Faroe; SMS; Enquest

Goals Soccer Centres

·     Profit before tax increased by £9.9m to £3.7m (2015: loss £6.2m);

·     Returned to sales growth increasing by 1.6% to £33.5m (2015: £33.0m);

·     Returned to like-for-like sales1 growth increasing by 0.5% (2015: -4.9%);

·     Recovery in H2 with like-for-like1 sales, Underlying EBITDA2 and Underlying Profit Before Tax3 increasing by  2.9%, 0.2% and 4.5% respectively;

·     Exceptional and non-recurring charges of £3.9m (2015: £14.5m) relating to a non-cash impairment of £2.5m, restructuring and strategic projects totalling £1m and non-recurring costs of £0.5m relating to the development and rollout of new brand and values.

Nick Basing, chairman said: “2016 has been a huge period of transformational Change. Its a good start to report profit growth and positive trend in like-for-like sales.  These results are early but encouraging evidence of our new strategy starting well. The business is on its way to being fit for purpose.”

 Mark Jones, chief executive said: “In the last six months we have made good headway executing our plan: 136 pitches re-laid resulting in a much more attractive proposition for customers; development of the new Clubhouse format which will be trialled later this year; and progress on the food and beverage proposition. 

“Additionally, we have had a successful launch of our second club in the USA and are due to commence consruction of our third club in H1 2017. We are delivering a better product which is already showing in the numbers and are confident that we can realise our ambitions.”

Faroe Petroleum

·      Revenue (excluding hedging gains) of £94.8 million (2015: £113.0 million) – reduction reflects lower accounting production (revenue from the acquired DONG assets between the effective date and completion date reduced the final cash consideration paid on 6 December 2016 from $70.2 million to a net $30.4 million)

·      EBITDAX £25.8 million (2015: £60.4 million), includes realised hedging gains of £4.7 million (2015: £9.3 million) classified as Other Income – reflecting lower revenue, lower realised hedging gains and higher opex

·      Loss after tax of £32.8 million (2015: £52.9 million) after pre-tax impairment charges of £2.8 million (2015: £45.1 million) and exploration write-offs of £29.9 million (2015: £83.6 million)

·      Pre-tax exploration and appraisal capex of £47.5 million (£12.1 million post-tax) (2015: £61.9 million pre-tax, £14.8 million post-tax) and development and production investments (including acquisitions) of £32.8 million (2015: £38.7 million)

Graham Stewart, chief executive, said: “2016 was transformational for Faroe with the acquisition of a significant Norwegian portfolio of producing assets which doubled Group production and added material reserves, the material Brasse discovery in Norway, and a successful £66 million equity fund raise. 

“Production from our UK & Norwegian portfolio averaged approximately 17,395 boepd in 2016, and we increased our 2P reserves base by 42% to 81 mmboe.  Ending the year with a significant cash position of £97 million and a new undrawn seven year Reserve Based Lending facility of $250 million puts Faroe in a strong position.

“With our hub area focus, centered principally around the Ula, Njord and Brage areas, Faroe is now in position for a major growth phase as we take advantage of low industry costs and invest across our core assets in 2017 and beyond

“We believe that we have the asset base to reach our stated goal of 40-50,000 boepd organically within the next five years, with robust economics even at low commodity prices. We will also continue to seek to capitalise on our strong financial position to pursue further consolidation opportunities on the Norwegian and UK continental shelves, while maintaining our focus on high impact exploration and appraisal drilling.”

Bellway

Pre-tax profits rose 9.3% to £247.6 million on revenue up 5.9% to £1.15bn

Chairman, John Watson, said: “Bellway’s strong operational focus and consistent execution of its growth strategy has resulted in a record number of legal completions in a first half year and another excellent financial performance.  The emphasis on volume growth, together with a further rise in the operating margin, has resulted in earnings increasing by over 10% to 163.9p per share, the highest achieved by the Group in a first half trading period. 

“Bellway is achieving this growth whilst retaining a focus on return on capital employed and maintaining an appropriate and conservative use of bank debt and land creditors.  Our strong balance sheet and operational capacity still provides scope for further controlled expansion, enabling Bellway to achieve additional, future volume and earnings growth, by continuing to invest in attractive land opportunities across the country. 

“I am pleased to announce that the interim dividend will increase in line with earnings, by over 10% to 37.5p per share.  The interim dividend has risen by 134% in the three years since January 2014, over which time the Group has paid out dividends equivalent to 237p per share. 

“In addition to the payment of a regular dividend, the net asset value per ordinary share (‘NAV’) of the Group has risen by 566p to 1,612p per share over the same three year period.  Taken together, this represents a total growth in value of 803p per share and an accounting return of almost 21% per annum.  This demonstrates the substantial returns generated for our shareholders as a result of the Group’s ongoing and disciplined growth strategy. 

“For the foreseeable future, the board expects to maintain a full year dividend cover of around three times earnings as sufficient land opportunities remain available that meet or exceed the Group’s required returns, resulting in further value creation for shareholders.  Bellway does, however, retain the ability to amend dividend cover should there be a substantial change in market conditions.”

Smart Metering Systems

·      Revenue increased by 25% to £67.2m (2015: £53.9m) 

·      Total annualised recurring income* increased by 19% to £41.3m (2015: £34.7m) 

·      Gross profit increased by 23% to £36.9m (2015: £30.1m) 

·      Gross profit margin remained consistent at 55% (2015: 56%) 

·      EBITDA increased by 17% to £32.5m (2015:£27.9m)

·      PBT increased by 4% to £18.2m (2015:17.5m)

·      Underlying PBT** increased by 13% to £19.6m (2015: £17.4m) 

·      Earnings per share decreased to 17.33p (2015: 17.46p)

·      Underlying earnings per share*** increased to 19.20p (2015: 17.38p) 

·      Final dividend of 2.73p per ordinary share totalling 4.1p for the full year (2015: 3.3p), an increase of 24%

Alan Foy, chief executive Officer, said: “2016 has been a year of transformation for the business as it grew to over 1.25 million utility metering and data assets under management generating £41.3m in annually recurring index-linked income.

“The strong financial position has supported three strategic acquisitions, which has delivered a scalable delivery platform with the opportunity to install and own new domestic smart utility meters (gas and electricity) mandated to be installed in every home in the UK over the next four to five years.

“We have seen a strong start to 2017 and are well positioned to continue making progress in our core markets.  We will continue to invest in meter and data assets and grow our recurring revenue base across both the I&C and Smart Domestic market segments. We have built the foundations to allow us to capitalise on future opportunities.”

Smart Metering Systems has appointed David Harris as Chief Financial Officer – details here

Enquest

·      Production averaged 39,751 Boepd in 2016, up 8.7% on 2015 

·      Revenue of $849.6 million and EBITDA** of $477.1 million, reflecting EnQuest’s strong operational performance and hedging activities 

·      Cash generated from operations of $408.3 million, up from $221.7 million in 2015

·      Comprehensive financial restructuring significantly improved EnQuest’s liquidity position

·      Net debt at the year end, was $1,796.5 million, compared to $1,548.0 million at the end of 2015

2017 update and outlook

·      The Kraken development continues under budget and on track for first oil in Q2 2017

·      EnQuest’s confirms 2017 average production guidance, in the range of 45,000 Boepd to 51,000 Boepd for the full year – dependent on the timing of Kraken first oil

·      EnQuest also remains on course to reduce average unit opex further in 2017 to be within the range of $21/bbl to 25/bbl including Kraken production, driven by further cost reductions across the supply chain.  Cash capex is set to be in the range $375 million to $425 million in 2017, the majority of which is being invested in the Kraken development

·      Hedging of c.6 million barrels for 2017, at an average of c.$51/bbl

·      Total debt facilities of c.$2.1 billion remain in place 

·      The proposed EnQuest acquisition of interests in the Magnus oil field and the Sullom Voe terminal was announced on 24 January.  Transition activities have begun and are ongoing; the process is expected to take 6-12 months, with no cash outlay for EnQuest

CEO Amjad Bseisu said“EnQuest further streamlined its operations in 2016 and delivered cash capital expenditure at $609 million and unit opex at $24.6/bbl, both well down on the previous year.  Operationally EnQuest worked at high levels of production efficiency and safely delivered production averaging 39,751 Boepd, our highest annual production figure, supporting our financial objectives.

“2016 saw the successful restructuring of our balance sheet, designed to strengthen EnQuest’s liquidity position, to reduce the level of its cash debt service obligations and to enable it to bring the Kraken development onstream.

“In early 2017, EnQuest securely moored the Kraken FPSO on station in the North Sea, where commissioning work continues on the vessel and the subsea infrastructure; preparations for the handover to operations are ongoing.  The project remains below budget and on track to deliver first oil in Q2 2017.

“In early 2017, EnQuest and BP announced EnQuest’s proposed acquisition of interests in the Magnus oil field and the Sullom Voe oil terminal.  The innovative structure of the acquisition recognises EnQuest’s differential strength in managing maturing assets and infrastructure, whilst generating significant potential for future growth.  

“EnQuest’s combination of integrated technical capabilities and high levels of production efficiency and cost control ideally positions us to create value from assets such as Magnus and from the substantial potential in our existing asset portfolio, with 215 MMboe of net 2P reserves at the end of 2016.  

“Our journey to optimise and increase production and reduce costs continues, with average 2017 production anticipated to be between 45,000 Boepd and 51,000 Boepd.  Following delivery of Kraken, EnQuest will begin moving from a period of heavy capital investment into one focused on cash generation and deleveraging the balance sheet.”

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