IBI Group announces first quarter 2013 results
TORONTO – IBI Group Inc. (the “Company”) (TSX: IBG) today announced its financial results for the three months ended March 31, 2013.
Revenue for the first quarter ended March 31, 2013 was $84,599,000, ($87,373,000 to normalize to an average quarter of 63 days) compared to $86,896,000 for the first quarter of 2012. Net earnings for the first quarter of 2013 were $656,000 ($2,856,0000 to normalize to an average quarter of 63 days), compared to $3,733,000 for the first quarter of 2012.
The results for the first quarter of 2013 are based on 61 available working days, which is two days fewer than both the average quarter and the first quarter of 2012, each being 63 days. The impact on the results of an extra two working days would be $2.8 million of revenue, based on the average revenue achieved in the quarter ended March 31, 2013. Operating costs are assumed to remain constant since these are monthly costs not dependent on number of working days.
Update on the recovery plan
The recession that commenced in the fourth quarter of 2008 and its impact on the economies of the United States and Europe, impaired IBI Group initially in the housing sector, in which IBI had relatively high exposure, and subsequently in IBI projects in social and transportation infrastructure. Europe continues to contract, recovery in the United States is encouraging but tentative, and a slowdown is being indicated in the Canadian economy.
IBI Group continues to move forward with its recovery program. The recovery plan is a series of actions to enhance profitability and to improve billings and collections, which will lead to a reduction of working capital and debt. The recovery plan was outlined in full in the 2012 year-end reporting.
During the first quarter of 2013, IBI continued action on the recovery plan including:
- Aligning staff levels with levels of committed work. At the end of first quarter of 2013 staff members numbered 2,814 compared to 2,852 at the end of 2012 for a decrease of 38 staff members or a 1.3% reduction of staff. This represents a savings of approximately $2.5 million per annum. The process is continuing in the second quarter of 2013 in an orderly fashion, to ensure the firm’s ability to perform work for its clients and to achieve higher productivity.
- Improved cash generation. Cash used in operations in the first quarter of 2013 was a significant improvement of $6.4 million over the first quarter of 2012. The cash used in operations for the first quarter of 2013 would have been even lower had it not been for the dampening impact of the timing of contract billings (fees collectible at completion of certain events only). Management is committed to sustaining this trend over the ensuing quarters.