Medserv plc published its Preliminary Statement of Results for the year ended 31 December 2006 following a Board of Directors’ meeting held on 30 March 2007. The Directors proposed a net dividend of 2c06 per share for approval at the Annual General Meeting which is due to be held on 31 May 2007. The dividend is payable to those shareholders as at close of trading on Wednesday 25 April for settlement on Monday 30 April 2007.
Medserv’s turnover during the year ended 31 December 2006 amounted to Lm2.9 million, 4% below the turnover of Lm3.05 million forecasted during the October 2006 IPO. The revenue in 2006 represents a drop of 30% from the previous year mainly due to the temporary delay of the roll-out of new oil drilling contracts. Administrative expenses increased by 15.4% to Lm568,148 with a sharp rise in other operating income to Lm83,787 and a significant drop in other operating expenses to just Lm3,220 compared to Lm192,862 in 2005. Earnings before interest, tax, depreciation and amortisation amounted to Lm596,700 with a margin of 20.4%.
Medserv’s operating profit was 1.1% higher than that forecast at Lm518,534 but 38% below the level in 2005. After deducting net financial expenses of Lm3,246 the pre-tax profit in 2006 amounted to Lm515,288 with a profit for the year of Lm655,995.
Based on the 10 million shares in issue as at end of December 2006, Medserv’s earnings per share was 6c6 compared to 19c4 in 2005. Medserv’s share capital increased from 1,020 ordinary shares of Lm1 each as at 31 December 2005 to 10 million shares of a nominal value of Lm0.10 each in December 2006. This resulted from the capitalisation of Lm998,980 from retained earnings and a share split of 10 shares of Lm0.10 nominal value each for every Lm1 ordinary share previously held, which took place on 27 September 2006. The earnings per share based on the weighted average number of shares in issue during 2006 of 2,610,285 shares amounts to 25c (2005: 74c4).
The Directors’ recommendation of a net dividend of 2c06 per share represents a dividend payout ratio of 40% on the distributable profits to shareholders of Lm515,288.
As at 31 December 2006, Medserv’s total assets amounted to Lm4.1 million with shareholders’ funds of Lm2.7 million. The Company’s pre-tax return on equity (profit before tax divided by average equity) in 2006 was of 18.8% with a return on assets of 15.9% (profit before tax divided by average assets). Post-tax return on equity amounts to 23.9%.
On 13 February 2007 Medserv announced that further to the Memorandum of Understanding (MoU) concluded with Misurata Free Zone (MFZ) in Libya on 31 January 2007, negotiations have been completed and a joint stock company, Medserv Misurata Free Zone Company (MMFZC) has been submitted for registration with the MFZ. The Misurata Free Zone is an area free of taxes and customs duties which owns and operates the Misurata Free Trade Zone in Libya, including part of the Misurata sea port. The principle object of MMFZC, the majority shareholding of which is held by Medserv plc, is the establishment and operation of a logistic and supply base in the Misurata Free Zone for the purpose of serving the oil and gas industry both offshore and onshore Libya.
Upon the registration of MMFZC at the Misurata Free Zone, special detailed agreements will be entered into stipulating that:
(1) MFZ shall, subject to a cost and for a term of 30 years, provide MMFZC with certain facilities and services including a dedicated quay warehousing and a laydown area; and
(2) Medserv plc shall, subject to a cost and also for a term of 30 years, provide MMFZC with management services for the overall management of MMFZC’s affairs, the upkeep of best industry practices, selection of appropriate staff, technical and software assistance, as well as marketing and promotion of MMFZC’s business.