Wet summer impacts Andrew Sykes’ fortunes

30 September 2012

Air conditioning rental firm Andrew Sykes posted positive gains in its financial results for the first half of 2012, despite business challenges associated with poor weather conditions in Northern Europe.

The group's revenue for the six months ended 30 June 2012 was £28.6 million (US$46 million), an increase of 3.1% compared with 2011’s figure of £27.7 million (US$44.7 million). Normalised operating profit increased by £0.5 million (US$0.8 million) from £5.9 million (US$9.5 million) in the first half of 2011 to £6.4 million (US$10.3 million) in 2012. Profit before tax increased by £1 million (US$ 1.6 million), a jump of 18.6%, to achieve £6.7 million (US$ 10.8 million).

Andrew Sykes’ hire and sales business in the UK and Northern Europe faced a number of challenges and opportunities during the first half of 2012. A cold spell of weather in February and early March stimulated demand for heating products, but this was then offset by a wet summer, which saw air conditioning rental remain flat.

However, first half results for the UK air conditioning installation business benefited from a significant contract for the supply of equipment in connection with the London Olympic Games.

The firm’s subsidiary in The Netherlands saw revenue increase 30% compared with the same period last year. Business also continued to develop at the company’s Belgian and Italian subsidiaries.

Middle East turnover decreased by 16% compared with the first half of 2012 but operating profit increased by 50% to £400000 (US$645000).

The group continues to generate strong cash flows. As at 30 June 2012 the group had net funds of £12.6 million (US$20.3 million), an increase of £4.7 million (US$ 7.6 million) compared to the same time in 2011. This growth came despite a £2 million (US$ 3.2 million) investment in new plant and equipment and property improvements during the first half.

Looking ahead, the Andrew Sykes board anticipates "a reasonable performance" for the rest of 2012.

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