A strong performance in challenging conditions

The financial performance in the year to 30 April 2021 has once again been very strong with the results showing only slight revenue decline in challenging economic conditions, margin improvement and excellent cash generation.

Basis of preparation

The financial results set out are extracted from financial statements prepared under International Financial Reporting Standards. Prudent accounting policies continue to be applied on a basis consistent with prior years.

The Board has prepared a working capital forecast using assumptions as to future trading. These forecasts include the best estimate of future trading, including the economic impact of the anticipated lifting of global COVID-19 restrictions over the next 12 months.

Given the uncertainty within forecasts, various sensitivity analyses have been performed to assess the impact to future trading. The analyses show that the Group continues to have positive cash balance, a fully unutilised borrowing facility and meets the performance covenants within the borrowing facility.

Based upon these projections and its cash balances, the directors have concluded that the Group has adequate working capital and therefore it is appropriate to use the going concern basis of preparation.

Revenue and profit

Our primary measure of revenue, net revenue, was £664.5m (2020: £680.7m), representing a 2.4 percent decline over the prior year. Our turnover (which includes subcontract revenue) was £727.4m (2020: £744.3m).

The slight revenue decline reflects significant contractions in the aviation and oil and gas markets. Excluding revenue attributable to these sectors, net revenue showed growth of 7.6 percent.

At the regional level, overall growth was achieved in two of our seven regions, with particularly strong growth in Europe of 23 percent. This strong performance delivered across global markets is a result of us investing in the right things: our people, the community and the services we deliver for clients.

In real estate and infrastructure, our ability to manage complex portfolios and to enhance the performance of major programmes remains robust.

EBITA of £114.3m compares with £87.6m for the prior year, and EBITA margin was 17.2 percent (2020: 12.9 percent).

Taxation

The taxation charge for the financial year was £24.9m (2020: £18.6m), representing an effective rate of 22.1 percent (2020: 21.5 percent). The effective rate reflects the global nature of our business and the impact of varying tax rates across different jurisdictions.

Cash flow and working capital

Strong cash generation has continued through the financial year, reflecting the good cash management principles adopted throughout our business. This resulted in free cash flow of £109.3m (2020: £65.0m), and cash generation – defined as operating cash flow as a percentage of EBITDA – of 119 percent (2020: 99 percent).

Cash conversion over the last five financial years is 104 percent. Debtor days at the year-end were 51 (2020: 55), and our average debtor days across the financial year was 59 (2020: 60).

Working capital management continues to be a key discipline across our business. As our geographic reach has extended, significant attention continues to be placed on establishing appropriate working capital management behaviour in all territories, and this has been key to maintaining our strong cash flow performance.

Funding

Cash, net of overdrafts and bank loans, was £155.1m at 30 April 2021 (2020: £94.8m). Net funds, including longdated loans due to former shareholders and excluding IFRS 16 lease liabilities, were £152.2m at the year-end date (2020: £90.8m).

Bank facilities provide us with committed facilities of £80.0m until May 2022 to finance future operational cash requirements and selective acquisitions in line with our strategic aims. The facilities remain unutilised.

Pensions

We operate a number of pension schemes across the global business. Additionally, the business maintains one closed defined benefit scheme arising from the UK business.

This scheme was closed to new members in 1992 and to future accrual in 2006. At 30 April 2021 the IAS19 deficit had reduced to £nil (2020: £2.0m), due to contributions paid into the scheme.

Treasury

The treasury risks we face include interest rate risk, foreign exchange risk, credit risk and liquidity risk. Instruments such as interest rate swaps have not been entered into to mitigate risk as these risks are considered to be low.

A two percent increase to the cost of external finance would not have a material impact to profit before taxation. Contracts are mostly undertaken in the currency of local subsidiaries, and therefore foreign currency revenue streams are matched by the currency of the relevant cost base.

Financial highlights

Consolidated income statement

Year ended 30 April	2021 £000	2020 £000
Continuing operations
Turnover	727,351	744,329
Sub-contract revenue	(62,805)	(63,619)
Net revenue	664,546	680,710
Staff costs	(472,999)	(491,862)
Other direct expenses	(22,481)	(34,245)
Depreciation	(15,179)	(14,857)
Other operating charges	(40,852)	(52,622)
Operating profit	113,035	87,124
Analysed as:
Operating profit before amortisation	114,342	87,626
Amortisation	(1,307)	(502)
Operating profit	113,035	87,124
Finance income	462	663
Finance expense	(1,109)	(1,444)
Net finance expense	(647)	(781)
Share of profit of joint ventures, net of tax	270	274
Profit before taxation	112,658	86,617
Corporation tax expense	(24,906)	(18,632)
Retained profit for the financial year	87,752	67,985
Profit attributable to:
Owners of the Company	86,995	67,365
Non-controlling interests	757	620
Retained profit for the financial year	87,752	67,985