Philip Bernard Holder, Chairman

Chairman's Statement

Our performance in 2016 reflects the benefits of our successful strategy

I am pleased to present the annual report and financial statements for Fulcrum for the year ended 31 March 2016. The Group is reporting a significant profit improvement and increased cash generation. This has been achieved through the successful transition to a direct delivery model and major contract wins.
I am delighted and very proud to report that Fulcrum won Company of the Year at the 2016 Gas Industry Awards, a commendable accolade that recognises the achievements delivered by our strong leadership team, supported by an experienced and committed workforce.

Financial results

For the year ended 31 March 2016 the Group reported profit before tax of £4.3 million (2015: £0.6 million), and underlying EBITDA of £5.3 million (2015: £2.2 million). Revenue for the year was £34.5 million (2015: £33.7 million) which included £4.0 million for the Speyside distillery project. The Group achieved an 8.8% improvement in gross profit margin at 37.6% (2015: 28.8%) reflecting the move to direct delivery, operational efficiencies and an ongoing focus on tendering criteria and subsequent profitability.

Earnings per share for the period were 3.1p per share (2015: 1.8p). The adjusted earnings per share, before crediting deferred tax, was 2.7p (2015: 0.7p). The diluted earnings per ordinary share for the period was 2.7p (2015: 1.6p). The diluted adjusted earnings per share, before crediting deferred tax, was 2.4p (2015: 0.6p).

Net cash inflows before financing activities were £3.8 million (2015: 0.8 million), after the addition of pipeline assets of £1.9 million. At 31 March 2016 the overall net cash position was £8.3 million.

Dividend

Following on from last year’s maiden dividend (0.4p) and this year’s interim dividend (0.3p), the Board is recommending a final dividend for FY2016 of 0.6p per share, making the total dividend 0.9p for FY2016 (2015: 0.4p). The profit and cash generated by infrastructure services, and the transportation income from the growing pipeline asset base, provide confidence in the sustainability and growth of future dividends.

Board and Corporate Governance

There have been no changes to the Board during FY2016.

The Board remains focused on strong corporate governance, including nurturing a culture in which our people behave in accordance with our values and the highest standards of ethics and integrity, which is fundamental to building a business that can deliver sustainable, profitable growth. I believe that our commitment to business integrity, safety, sustainability and strong governance is a key strength of our business

Outlook

Fulcrum has continued to make excellent progress this year, delivering on our objectives and strategy. The management of direct labour, brought in-house on 1 April 2015, has delivered an improved customer experience with an efficient, integrated, end-to-end operating model.

With our robust and scalable operating platform, combined with a sustained focus on customer service excellence, we can look forward to building on recent contract wins and further expanding our multi-utility services.
The Group’s order book and operating cash flow both remain strong and support our strategy for growth.

We believe the outlook remains positive and that the Group continues to be well positioned to make further progress in 2017.

Philip Holder
Non-executive Chairman
7 June 2015

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