TIDMFSD
FIELD SYSTEMS DESIGNS HOLDINGS PLC
CHAIRMAN'S STATEMENT
The Board presents the results of Field Systems Designs Holdings plc and its
subsidiaries (FSD) for the year ended 31 May 2021.
Last year we described the arrival of the COVID-19 threat and the uncertainty
over when we would be back in charge of our lives as we once knew them, or when
we would return to normality as a business. There is little doubt that the 2021
financial year has been a tough one; the absence of sufficient workload for
staff across the Group sadly resulted in some job losses, and very disruptive
working patterns for other staff, with many furloughed for long periods.
Business life changed for a while, whether working on site, working in the
factory, working from home, working in the office, or held in reserve on
furlough, all employees have made an invaluable contribution.
The operating results for the year were disappointing, but to be expected in
the circumstances when turnover fell rapidly to half that of previous levels.
The Board has still not properly understood the rationale for why Asset
Management Programme 7 (AMP7) never started as it should have in April 2020.
The framework plans by water utilities were not rolled forward into AMP7,
initially delayed by the impact of COVID-19 and then presumably by the tough
stance adopted by OFWAT in challenging their 2020-2025 spend budgets.
Fortunately projects tendered have not been lost, merely delayed, and so FSD is
confident that the quality of its delivered projects and its well-established
business credentials, together with its pipework fabrication factory, and the
reputation of its talented mechanical and electrical engineering and
installation personnel, will leave us in prime position as normality resumes.
The group is well-positioned with a strong cash balance and has retained the
majority of its experienced workforce to react swiftly as the Utility Companies
restart projects so desperately needed to keep our population watered and the
environment clean.
We expect as the World emerges from the shadow of the coronavirus that business
will return and the Board believes that a buoyant period lies ahead as the
water industry catches up the ground lost to COVID-19.
D K Bird
Chairman
30 November 2021
PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in the Companies Act 2006.
The group statement of financial position as at 31 May 2021 and the unaudited
group income statement for the year then ended have been extracted from the
Group's 2021 statutory financial statements, which have not yet been delivered
to the registrar of companies.
The directors of Field Systems Designs Holdings plc accept responsibility for
this announcement and confirm compliance with the AQSE Growth Market rules.
FIELD SYSTEMS DESIGNS HOLDINGS PLC
STRATEGIC REPORT
The directors present the Strategic Report for Field Systems Designs Holdings
Plc ('the Company') and its subsidiary undertakings (together referred to as
'the Group') for the year ended 31 May 2021.
OPERATIONAL PERFORMANCE
The Group achieved a turnover of £10 million for the year to 31 May 2021, a
reduction of 50% on last year. These results show significantly reduced
turnover and profitability, which reflect the serious impact of COVID-19 on the
release of work in the UK Water Industry.
The Water Industry's sixth Asset Management Programme (AMP6) came to a close in
April 2020, and FSD fully engaged itself in refreshing the pre-qualification
process as framework plans by water utilities were rolled forward into AMP7.
The impact of COVID-19, and conflicts between water utilities and OFWAT in
challenging their 2020-2025 expenditure budgets caused new orders expected by
FSD under AMP7 to be severely delayed.
The unexpected fall in turnover has created an excess in labour resources which
whilst mitigated by the government furlough scheme still placed a heavy cost
burden on the group with no productive output in return. This, together with
carrying overheads no longer relative to the volume of business resulted in
heavy losses, but also offered an opportunity to refine our procedures and
processes in readiness for the busy times ahead.
Gross profit margins from ongoing works fell due to the disruption and
additional costs of working under stringent COVID rules, the contractual stance
adopted by customers struggling with their own projects creating difficulties
for FSD in recovering value from imposed changes, and price competition in
winning a share of any remaining projects works.
Turnover was generated as follows: 2021 2020
£ £
Water and Sewerage treatment 7,872,941 17,548,220
Power generation and Energy from Waste 2,080,503 2,267,310
Transport and Tunnel infrastructure 25,251 25,667
--------------- ---------------
9,978,695 19,841,197
========= =========
Group revenues include transactions with four customers that amount to 10 per
cent or more of the Group's total annual revenues; the total amount of revenues
from those four customers amounts to £4.2 million, of which £2.9 million
derives from the Water and Sewerage treatment sector and £1.3 million derives
from the Power generation and Energy from Waste sector.
The Group made a gross loss of £(984,604) compared to gross profits last year
of £1,253,729. Group operating losses for the year were £(540,338), (2020:
profit £341,345) and the consolidated results show a group loss after tax of £
(461,780), (2020: profit £317,356)
BUSINESS REVIEW
The Field Systems Designs Group (FSD) focuses on delivering specialist
mechanical and electrical design and installation works.
Water and Sewerage
FSD successfully secured, engineered, managed and installed a volume of
Mechanical and Electrical (M&E) installation projects during the year across
the sector as the Group strives to complete to budget a quality job in a safe
working manner and maintain its reputation as a respected industry specialist.
Sales volumes in the Water Industry in 2021 provided 79% of group turnover
(2020: 88%). The Group undertook a diversity of projects for a number of
different Water Utilities in many regions of the United Kingdom, working for
multiple Tier One contractors under AMP6 frameworks and supply-chain
arrangements.
Power generation and Energy from Waste
In 2021 21% of turnover was derived from the Power and EfW sector (2020: 11%).
FSD worked primarily on Energy from Waste projects, completing electrical
installation works at Levenseat and Hull on projects which use advanced thermal
treatment gasification technology. There was also work undertaken during the
year on generators, and power station outage maintenance works supporting
installations completed in the past.
Transport and Tunnels
Electrical installation works on cable tunnels have their own complexities due
to the additional access, egress and safety issues which FSD carefully manage
with their experienced trained personnel. The Group continues to support such
tunnelling works as they arise, dealing competently with the complications
these projects involve.
Telemetry, Building services, Maintenance, Instrumentation, Controls and
Automation
FSD continues to undertake smaller electrical installation service contracts
across various sectors offering customers timeliness and value for money. An
electrical workshop facility with tooling and equipment enables the Group to
react quickly by producing various in-house components including small isolator
builds, lighting panels and remote monitoring enclosure pre-assemblies.
Mechanical design, fabrication and installation
The pipework fabrication facility owned by the Group gives its mechanical
subsidiary the flexibility to respond to customer's needs promptly when taking
on the mechanical elements of M&E installation contracts, The Group has grown
its client base by creating a reputation for quality in-house mechanical
fabrication and site installation services.
PRINCIPAL RISKS AND UNCERTAINTIES
The board regularly undertakes a review of business risks and uncertainties
confronting the Group and evaluates the significant project risks affecting its
business. The following issues are the principal risks and uncertainties faced
by the Group.
Economic
The Group's business may be affected by market forces beyond its control.
During a downturn all competing companies operating in the same industry
sectors will be impacted by economic and political change that will alter the
volume and value of available work.
BREXIT
There continues to be volatility in financial markets, in currency markets and
uncertainty over future actions by governments and businesses following Brexit
on
31 December 2020. The directors have reviewed the implications of the decision
to leave the EU and we have considered the impact on our business as part of
our risk management process. The directors believe that the short-term effects
are inflationary, primarily on material pricing, but that the long-term
relationships with our supply chain will aid our business to remain resilient
under the range of most likely scenarios.
COVID-19
The unpredictable nature of the Coronavirus pandemic and the timing of its
cessation has created uncertainty estimating the impact of future events which
is highly challenging at this time. The directors have reviewed the key areas
of risk to the business and the potential negative impact on the business which
includes determining the likelihood of customers to meet their debts as they
fall due, the impact on supplier's performance and ability to supply goods, the
impact on levels of human resources, and the difficulty in predicting the level
of future order intake.
Cyclical trading
The Group is heavily reliant on the Water industry and its business is affected
by the cyclical nature of the UK market caused by the 5-year Asset Management
Programmes (AMPs) governed by OFWAT. At the beginning and the end of each AMP
the water industry suffers a downturn as all competing companies operating in
this industry are chasing a reduced volume of available work. The Group
mitigates these uncertainties by continually monitoring changes in its market
sector, by focusing its sales efforts on non-water industry work-flows and
reviewing regularly forecasted sales opportunities to ensure that adequate
sales volumes can be secured.
Skilled personnel
The Group is dependent on the quality, attention and diligence of its personnel
across the full spectrum of its skill disciplines. The Group's ability to
attract, retain, train and motivate its skilled management and personnel will
be reflected by business growth, profitability and a reputation for quality
work. The Group offers 'added-value' to its customers by offering a superior
quality of project resource to complement its installation services.
Health and safety
The board reviews personnel issues on a monthly basis and the Safety, Health,
Environment and Quality manager (SHEQ) ensures there is investment in training
programmes for site and management to broaden the competence, knowledge and
experience of its employees. The Group continues to promote the further
training and improvement of staff; benefitting where applicable from the
introduction of the government Apprenticeship Levy.
The Group demands effective and successful management of health and safety
risks by its supply-chain and similar demands are rightly made by its own
customer base. Constant vigilance is paramount and any accident can have
serious consequences. The commitment to enforcing safe working and adherence to
regulation is strong at board level and flows through the organisation through
qualified specialists, continual instruction and training. The Group is
extremely aware of the potential for an 'incident' to damage the Group and
gives constant attention to ensuring that this risk is kept to a minimum. The
board, supported by a highly qualified health and safety specialist, endorses
the importance of vigilant health and safety practices.
Long term contracts - bidding
The majority of Group turnover is from fixed price and target price contracts.
The failure to adequately assess from client's specifications the full scope of
works, the correct pricing of that work and the time required to complete the
work may have serious ramifications on profitability. There are specific risk
management procedures in place to ensure that prices estimated for fixed price
contracts are accurate and to ensure the correct costing of successful bids as
the work progresses. The Tender Approval Procedure (TAP) is a key risk
management tool used to minimise these risks. The TAP completion process
identifies tender project risks, assesses the probability of their occurrence,
their impact if they do occur and actions necessary to manage them down to an
acceptable level. This procedure is used to ensure that commercial and
contractual risks are monitored and managed by the board.
Long term contracts - costing
Fixed price and target price contracts may also be subject to cost and time
overruns, and the costs of additional work undertaken on variations may not be
properly measured or fully recovered from the customer. The Project Summary
Report (PSR) is a key risk management tool used to minimise these risks. The
PSR completion process quantifies the value of project work undertaken after
successful contract award, reviews the potential commercial risks and
highlights any safety, technical, operational and environmental risks. This
tool is used to ensure that commercial and contractual risks are monitored and
managed by the board.
Competitiveness
The Group has a leading market position in sectors such as the water industry,
and has also penetrated other sectors such as tunnelling, the power industry
and energy from waste market to ensure a constant pipeline of enquiries.
Nevertheless in an increasingly competitive environment and with cyclical
volumes, accurate and competitive pricing is key to a successful contract
award. The board constantly monitors the competitiveness of its cost base to
ensure that its pricing remains competitive. Regular benchmarking and framework
submissions also assist this process of review.
Financial instruments
The Group uses financial instruments when required to provide a financing base
for the Group's operations. The Group's financial instruments consist primarily
of short-term debtors and creditors. The directors regularly review the Group's
cash position to ensure that facilities exist for continuity of funding and
effective cash management.
Cash flow
The Group has a strong balance sheet and access to additional debt funding, and
trades comfortably within its current working capital. Customers may require
additional project work to be undertaken and the Group may be required to fund
this work for a period of time until the additional costs can be formally
approved and funds received. The Group may also experience an increase in the
level of credit given to customers as a consequence of a change in their
financial status or payment systems. In such circumstances there are short-term
cash-flow consequences which are managed carefully by the finance department
and any consequences mitigated.
KEY PERFORMANCE INDICATORS (KPI's)
The board uses both financial and non-financial (operational) performance
indicators in the analysis and management of the business. The indicators
relate both to financial and contractual performance and to other non-financial
areas, including but not limited to, employees, health and safety, quality
assurance, customer satisfaction and the environment. KPI's are used by the
management to run and monitor the business and many of the trends and results
provide information which is commercially sensitive or is confidential in
nature.
Financial
The main financial KPI used by the board is the measure of gross profit margin
(being the gross project profit contribution as a percentage of turnover), as
overheads can largely be controlled in line with budget, however margins on
contractual activity are key to annual profitability. An overall target margin
is set annually in advance after review of overhead structure and subsequently
represents the average bid margin used in pricing projects. It is designed to
cover Group overheads plus an element of profit. The gross profit margin used
in the annual budgeting process is used to benchmark monthly performance and
provides for a degree of margin erosion due to difficulties in fully recovering
the value of additional works requested by customers. This varies according to
market conditions.
The actual margin experience is reflected in the reported results and a
detailed review is contained within the operational performance reported
earlier in the Strategic Report.
Non-financial
The board measures customer satisfaction using an independent on-line survey
assessment. A rolling 12-month record is kept of customer feedback on project
completion with charitable donations used to encourage participation. Customers
are asked to complete answers to a number of questions regarding the
performance of FSD as a whole and also at site level, on a scale of 1 (poor) to
5 (excellent) including such areas as the focus on Safety and the Environment,
completion of site work to programme, contract financial management and
standard of workmanship. The responses are used by the board as an independent
confirmation of group performance levels and negative feedback is vigorously
followed up and improvement measures implemented. The group targets an average
score of 4.5 and the overall responses have been very close to this target with
an average of 4.5 (2020: 4.5) during the year.
The ongoing independent assessments of the Group's Safety, Quality and
Environmental Standards are key to it maintaining the efficiency of its
operational performance and adherence to high levels of site safety and
environmental awareness.
The FSD Group is approved to the Quality Management Standard ISO 9001:2015, has
an environmental management system approved to ISO 14001:2015, and a safety
management system ISO 45001, the standard for Occupational Health & Safety.
Achilles UVDB, the Utilities Sector Vendor Database performance assessor,
regularly review the Group's processes for managing and installing electrical
services, as well as its fault resolution procedures. The results of the 2021
Achilles audit were again excellent, reflecting 100% scores in all 4 areas of
the Management System Evaluation and 100% in all 4 areas of the Onsite
Assessment; these assessments look at areas of health & safety, environment,
quality and social corporate responsibilities.
The Group board has both corporate and personal responsibility to ensure that
its operations are managed in a safe and environmentally controlled manner. In
common with its industry the Group measures its record on Health & Safety using
an annual Accident Frequency Rate (AFR) chart showing lost time accidents per
100,000 man-hours worked. The AFR is currently zero (2020:zero). The group has
recently achieved over 1.3 million man-hours without a reportable incident.
PENSIONS
The Scheme's funding position has improved from a surplus of £447,000 at the
start of the year to a surplus of £562,000 at the end of the year. The Group is
not recognising the surplus and so the Group's defined benefit pension scheme
funding position as at 31 May 2021 has been maintained at £Nil, a target
reached in 2017. This is derived from the Group's most recent actuarial review
reflecting market conditions at 31 May 2021.
QUALITY ASSURANCE
FSD is approved to the Quality Management Standard BS EN ISO 9001:2015. The
British Standards Institute (BSI) and Achilles, the Utilities Sector
procurement performance assessor, regularly review the group's processes for
managing and installing electrical services, as well as its fault resolution
procedures. Recent assessments have again been successfully completed with
excellent results from the UVDB Verify audits. The Group is committed to a
strategy that provides its clients with a high-quality service that conforms to
the client's requirements. This strategy includes a strong management
commitment to quality, the recruitment and retention of high calibre,
experienced and well-trained staff, properly documented procedures, processes
and controls, and compliance with all regulatory and legal requirements.
Quality Audits continue to be carried out across group sites on a regular basis
to ensure compliance and to improve the group's activities. The annual
management review meeting assesses the group's performance against targets and
sets new targets.
ENVIRONMENT
FSD has an environmental management system approved to the international
environment standard, ISO 14001:2015. The BSI and Achilles regularly review the
Group's processes for managing its impact on the environment. The Group
achieved its Achilles (Carbon Reduction Certification) accreditation in 2020,
as it strives to minimise harm to the environment, prevent pollution and use
best practice environment solutions wherever possible to minimise its carbon
foot-print. A risk assessment approach is used to manage environmental matters,
and to identify and assess key environmental hazards arising from business
activities and manage them appropriately.
HEALTH AND SAFETY
A commitment to Health and Safety is the Group's number one priority. Every
Board meeting starts by focusing on preserving high safety standards and
promoting a positive safety culture within the Group, to ensure that our
employees, customers, suppliers and the public are kept safe. FSD has a safety
management system implemented across all sites that has successfully been
approved to the Health and Safety Management System BS ISO 45001:2018
Occupational health and safety management systems (the internationally
recognised standard for management of occupational health and safety risks).
The Group achieved a ROSPA (Royal Society for the Prevention of Accidents) Gold
award again this year, and we have achieved 7 consecutive Gold awards giving
FSD Gold Medal Award status.
There is a strong commitment at Board level, supported by a highly qualified
health and safety specialist, which endorses the importance of vigilant health
and safety practices and the investment in training for site and management to
broaden the competence, knowledge and experience of its employees. This is
supported by expert guidance provided by MAKEUK, ECA and CITB.
EMPLOYEES
Our employees are fundamental to the success of the Group and we aim to be a
responsible employer in our approach to the provision of training and
remuneration and by making the health, safety and well-being of our employees
one of our primary considerations in the way we do business. We are pleased to
place on record our appreciation of the efforts and expertise demonstrated by
our employees, who continue to make a significant contribution to the Group.
Employee numbers decreased during the year from an average of 163 in 2020 to
146 in 2021, reflecting the reduction in turnover and a change in the mix of
work scope during the year.
CORPORATE GOVERNANCE AND s172 REPORTING
The Group recognises its responsibilities to the people it employs, its
customers and suppliers, its shareholders, the wider community, and the
environment. In accordance with section 172 of the Companies Act 2006 the
directors undertake to act in a way most likely to promote the long-term
success of the Group for the benefit of its stakeholders.
The preceding strategies outlined in this report demonstrate the Group's
concern for the interests of its employees, its primary commitment to health
and safety for its employees, customers, suppliers and the general public, and
the instruments it uses to monitor the quality of its services and customer
satisfaction. The Group has achieved accreditations, monitored externally,
which are used to review the processes it operates to lessen its impact on the
community and the environment.
The Board of directors meet quarterly to fulfil their duties and use bi-annual
trading statements to communicate coherently the Group's performance to its
members. Operational duties are delegated to an executive management team who
meet monthly to review our complex business operations and are charged with
maintaining the reputation of the Group for high standards of business conduct
by identifying, evaluating, managing and mitigating the risks faced by the
Group. FSD are a well-managed, responsible and ethical Group and are determined
to be widely recognised for our quality of installation, the skills of our
people and the seriousness with which we take our corporate responsibilities.
OUTLOOK
The Group's principal source of revenue historically has been from the Water
Industry. Sales volumes in the Water Industry have failed to grow this year as
would normally be expected when AMP7 should have been well underway, having
commenced in April 2020 and running for a further five years in line with
Ofwat's business plan approval programme until 2025. Despite FSD being fully
involved in the prequalification processes with the regional Utilities and
confident that it will secure its position on frameworks, the Utilities and
water process companies have failed to release any significant quantum of work
under AMP7.
Normally this stage of the five-year cycle would be marked by a step-up in
investment and engineering activity as capital projects are approved and
construction begins. However, with the global Coronavirus crisis coinciding
with the start of AMP7, together with some water companies appealing their
budget determinations to the Competition and Markets Authority (CMA), the usual
cyclical 'boom and bust' cycle of AMP investment has mis-fired, with an 18
month hiatus extending the 'bust' element of the cycle until late 2021.Early
indications are that the AMP7 to AMP8 transition will not create the
traditional dip in activity, this being due to programmes being pushed out from
the early part of AMP7 creating a potentially busy end to the Asset Management
Period.
Despite the excellent credentials FSD has in the Energy from Waste (EfW) sector
the construction experience has not been a pleasant one, therefore the company
has chosen to be more selective in projects tendered during the current year,
which will result is a decline in EfW opportunities. The board continues to
react to customer demands and keep standards high, whilst creating operational
efficiencies to best position the business for the opportunities ahead.
On behalf of the board
Nigel Billings, Managing Director
30 November 2021
FIELD SYSTEMS DESIGNS HOLDINGS PLC
GROUP INCOME STATEMENT
for the year ended 31 May 2021
2021 2020
£ £
TURNOVER 9,978,695 19,841,197
Cost of sales (10,963,299) (18,587,468)
_______ _______
GROSS (LOSS)/PROFIT (984,604) 1,253,729
Administrative expenses (1,077,861) (1,118,754)
Other operating income 1,522,127 206,370
_______ _______
GROUP OPERATING (LOSS)/PROFIT (540,338) 341,345
Interest receivable and similar income 11,355 15,640
Interest payable and similar charges (4,978) (2,528)
_______ _______
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES BEFORE (533,961) 354,457
TAXATION
Taxation 72,181 (37,101)
_______ _______
(LOSS)/PROFIT ON ORDINARYACTIVITIES AFTER
TAXATION ATTRIBUTABLE TO THE OWNERS OF THE
PARENT COMPANY (461,780) 317,356
====== ======
EARNINGS
PER SHARE
Basic (8.6)p 5.9p
====== ======
Diluted (8.5)p 5.9p
====== ======
All operations are continuing.
FIELD SYSTEMS DESIGNS HOLDINGS PLC
GROUP STATEMENT OF FINANCIAL POSITION
As at 31 May 2021
2021 2020
£ £
FIXED ASSETS
Tangible assets 453,916 606,486
CURRENT ASSETS
Stock - raw materials 80,016 83,184
Debtors 2,129,048 3,741,964
Cash at bank and in hand 6,033,376 5,960,462
________ ________
8,242,440 9,785,610
________ ________
CREDITORS
Amounts falling due within one year 5,004,173 6,141,516
________ ________
NET CURRENT ASSETS 3,238,267 3,644,094
________ ________
TOTAL ASSETS LESS CURRENT
LIABILITIES 3,692,183 4,250,580
CREDITORS
Amounts falling due after more than 10,323 36,940
one year
PROVISIONS FOR LIABILITIES
Deferred taxation 33,000 59,000
Post-employment employee benefits - -
________ ________
NET ASSETS 3,648,860 4,154,640
======= =======
CAPITAL AND RESERVES
Called up share capital 569,250 569,250
Share premium account 158,750 158,750
Other reserves 370,033 370,033
Profit and loss account 2,550,827 3,056,607
________ ________
TOTAL SHAREHOLDERS' FUNDS 3,648,860 4,154,640
======= =======
Approved by the board and signed on behalf of the board and authorised for
issue on
30 November 2021 by:-
Bruce Smith.........................................Director
Nigel Billings.......................................Director
END
(END) Dow Jones Newswires
November 30, 2021 11:43 ET (16:43 GMT)
Field Systems Designs (AQSE:FSD)
과거 데이터 주식 차트
부터 12월(12) 2024 으로 1월(1) 2025
Field Systems Designs (AQSE:FSD)
과거 데이터 주식 차트
부터 1월(1) 2024 으로 1월(1) 2025
