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Interim Results

Servelec reports return to growth

11 September 2017 07:13

Servelec reported a return to growth in revenue and profit in the first half of the year.

Cash conversion returned to anticipated levels and the group is aiming to be debt free by the year-end.

There has been a deferment of orders in some areas of our Automation business, which will reduce the anticipated growth for the full year.

CEO Alan Stubbs commented: "The Board is pleased with the progress made in the first half of 2017, particularly in Servelec HSC and Servelec Controls Oil & Gas and this progression is expected to continue into H2 and beyond.

"There are challenges in Servelec Controls Power & Infrastructure and in Servelec Technologies where there has been a deferment in customer demand.

"In Servelec Technologies, this is particularly related to SCADA / Telemetry projects and Remote Telemetry Unit (RTU) orders expected under AMP6 as budgets have been reallocated to compensate for the overhang of 'Open Water'.

"The Board has carried out a thorough review of the Combined Heat & Power project in Turkey, including the previously advised debt position.

"We are concerned at the lack of progress that has been made by the customer in resolving their funding arrangements and the £2.6m related debt from 2015 remains unpaid.

"If the Board considers there is still no demonstrable improvement in progress by the customer at the year-end, the debt will be fully provided for.

"Servelec HSC and Servelec Controls Oil & Gas are trading well and whilst the deferment of customer spend in Servelec Technologies is disappointing, we have market leading products in Servelec Technologies and its global business is developing.

"The Board remains positive about the longer term prospects for the group."

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