(SSV) Siteserv

Siteserv plc

Half Year Results Announcement

For the six months ended 31 October 2011

Dublin, 16 December 2011: Siteserv plc ("Siteserv" or the "Group"), a leading support services group, announces its unaudited half year results for the six months ended 31 October, 2011. (ESM: STV; AIM: SSV)

*Excludes amortisation of intangible assets

Financial Highlights

v Revenue growth of 9% to €92.2m as the Group continues to secure new contract wins and renewals in Ireland and the UK

v Operating profit growth of 4% to €4.8m

v Profit after tax up 60% to €0.8m

v As at 31 October 2011, the group had revenue visibility of circa €265m up to October 2014

Strategic Highlights

Delivering on the stated commitment to drive organic growth and to diversify revenue by sector & geography, Siteserv secured a number of significant contract wins and renewals in the period. These include:

v UK Industrial Services business:

v Awarded 3 year extension to a maintenance contract at the Petroplus Coryton Refinery in the UK with an estimated value of €40m over 3 years

v Secured a 3 year framework contract for access and insulation services to the ESB in Ireland with at a potential value of €2m over 3 years;  its second major contract since its recent launch in Ireland

v The business also secured maintenance contracts worth over €10m from Centrica in Humberside for three Combined Cycle Gas Turbine (CCGT) Power Stations in the period

v Irish Support Services business:

v Awarded a contract, in partnership with RTE, to provide wireless signal remediation services in Ireland and the UK which has a potential value of €1m. This is an important strategic win for the business as it embarks on its market entry into the UK utilities sector

v Recently secured a contract for the management of Home Emergency Services on behalf of AA Ireland. This uniquely positions the business to provide a nationwide range of facility maintenance services to both the domestic and commercial sectors and provides a platform for further growth in the facility maintenance arena

v Launched a state of the art customer service call centre to manage over 350,000 customer calls per annum for BSkyB, Bord Gáis and AA Ireland. The Irish Support Services business now visits 50,000 homes a month on the island of Ireland.

v Awarded a contract to install 150km of back bone fibre from Ennis to Cork on behalf of Aurora, the telecommunications division of Bord Gáis, at an estimated value of €1.4m

v Roan Building Systems (manufacturer of modular accommodation in Ireland and the UK) awarded a contract for a 24 bed ward for the NHS at North Walsham Hospital in the UK worth €2.5m

Operating Highlights

v The previously announced All Ireland BSkyB residential contract was successfully rolled out during the period with all key performance indicators being achieved. The contract is valued at over €60m over 3 years

v Roan Building Systems is now an approved supplier to the Government Procurement Service , the national procurement agency for the UK public sector, enabling it to tender for a broad range of public sector modular building contracts

v Irish Support Services business, Sierra, received the overall 'Irish Construction Utility Services Award' at the annual NISO awards reflecting a relentless commitment to best-in-class health and safety management

v Siteserv's commitment to safety is also reflected in industry leading safety standards: in the first half of 2012, Siteserv recorded an Accident Rate Frequency ('ARF') of 0.25 over 2 million man-hours, significantly better than the industry norms in both the UK (ARF 4.73) and Ireland (ARF 12.8)

Performance Review & Outlook

Siteserv Chief Executive, Brian Harvey commented:

"We are pleased to report revenue and operating profit growth against a difficult market backdrop. We continue to deliver on our stated corporate objectives; our revenue performance is consistent with our goal to drive organic growth and geographically diversify our revenue. We recorded a number of new contract wins across Ireland and the UK in the period and retain visibility over a significant revenue and profit stream for the next 3 years.

In Ireland, our Support Services business continues to build on its market leading position servicing over 50,000 homes per month across Ireland and Northern Ireland. We now manage over 350,000 customer calls each year from our new state of the art customer contact centre as we extend our range of services to consolidate our relationships with key customers. The breath of our service offering ensures that the business is uniquely positioned to capitalise on emerging opportunities in the utilities sector.

Our modular accommodation, civil engineering and motorway barrier businesses continues to be adversely affected by austerity measures in Ireland and these businesses are increasingly focused on further expansion into the UK market. Roan Building Systems continues to win contracts in the UK and is now an approved supplier for the UK Government Procurement Service which should secure further contract wins, particularly in the education sector, where it has a leading position in Ireland.

The UK Division delivered a strong performance in the period with revenues and profits up by 17% and 20% respectively on a constant currency basis. The Industrial Services business continues to secure new contracts and renewals and has made a strong start in Ireland having secured a 3 year framework contract for the ESB, its second major contract in the country this year. The hire and sales business also increased revenues and profits.

We are very pleased to receive further recognition for our commitment to health and safety as our employees continue to deliver one of the best safety records in our industry. Our ability to maintain such a safe working environment is a key component of our ability to win and retain contracts".

Full Year Outlook

Although the trading environment remains challenging, we expect the UK Division to continue to outperform last year and deliver revenue and earnings growth. The Irish Support Services business will continue to benefit from the All Ireland BSkyB contract award, which will have a more pronounced impact on the second half of the year given that the contract for the Northern Ireland only commenced on October 1. Performance in the modular accommodation, civil engineering and motorway barrier businesses will remain subdued given the constraints on Irish government spending on road, hospital and education infrastructural projects.

The reduction in interest costs arising from the renegotiated banking facilities at the end of July will have a greater impact in the second half of the year.

Siteserv's diverse range of services and increasing long-term contractual revenue streams will continue to play a key role in offsetting the impact of economic uncertainty on the Group's performance. We will continue to diversify our revenue by geography and sector and generate free cash flow to drive organic growth.

Note regarding forward-looking statements:

This press release includes forward-looking statements, including statements concerning expectations about future financial performance, economic and market conditions, etc. These statements are neither promises nor guarantees, but are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

Contacts

Results Overview

UK Division

The UK Division comprised 58% of Group revenue and 57% of Group EBITDA in the period. Excluding the impact of currency movements, revenues and profits are up 17% and 20% respectively on last year, with all three business reporting revenue and bottom line improvements.

The Industrial Services business accounted for approximately 57% of the UK Division's revenue and continues to provide Siteserv with long-term maintenance contracts and future revenue and earnings visibility. It secured a 3 year extension to its existing maintenance contract for the provision of access, insulation and asbestos removal for Petroplus at the Coryton Refinery site in Essex, where the company has been working since 1996, initially for Mobil Oil and subsequently for Petroplus after they acquired the refinery from BP in May 2007. The business continues to expand into Ireland having secured a national framework agreement in August for both access and insulation services for ESB Energy International.

The Hire & Sales business, which operates from 24 depots across the UK, continues to show encouraging signs of growth whilst the Contract Scaffolding business remains challenging with further branch closures announced in the period.  The business is now serviced from five regional depots.

Infrastructure & Utilities Support Services Division

The Infrastructure & Utilities Support Services Division comprised 35% of Group revenue and 51% of Group EBITDA in the period.

The impact of reduced Irish Government and local authority spending continues to adversely affect this Division, particularly in the motorway barrier, civil engineering and modular accommodation businesses. The BSkyB contract increased from 13 counties to all 26 counties in the Republic of Ireland in May 2011, with the six counties of Northern Ireland going live on October 1. The value of this exclusive 3 year contract is estimated at circa €60m.

The UPC contract, which was awarded in September 2010 to install cable TV, broadband and telephony services to Dublin customers, also boosted growth as this contract was only operational for one month in the previous period.  Growth in the Bord Gáis home energy services contract, which commenced in April 2010, also positively impacted performance in the period.

Access Division

The Access Division comprised 7% of Group revenue and 6% of Group EBITDA in the period.

The results include the revenues and profits arising from Eventserv's contracts for the provision of staging and crowd control barriers for the state visits to Ireland of Queen Elizabeth II and President Barack Obama.

New Banking Facilities to Support Continuing Growth and Cash Flow Generation

During the first half of the year, the Group put in place new banking facilities of up to €10 million, with its current lender, to provide the Group with increased financial flexibility and to fund continuing organic growth.

As part of this new banking agreement, the Group has also re-negotiated its existing facilities through to December 2012.

There are no capital repayments during the term. Reduced debt servicing costs improve cash flow generation to fund additional growth.

Cash Flow and Net Debt Position

Net cash flow from operating activities of €2.7m reduced by €3.9m on the prior year. 

Working capital had a negative impact on cash flow in the period reflecting the Group's continuing focus on driving revenue growth.  Net capital expenditure reduced from €5.8m in the prior year, where the capex programme was front loaded, to €3.3m in the first half. This investment also reflects the Group's commitment to fund growth.

Net debt at period end was €150.3m. The Group had a closing cash balance of €6.1m at the period end.