This was another year of strong, profitable growth. During the reporting period, total revenue from continuing operations was £185m, up from £157m in the previous year and representing an increase of 18%. We achieved profit before tax and profit sharing schemes of £12.1m from continuing operations during the reporting period, up from £8.3m the previous year and representing an increase of 46%. This enabled us to reward our employee members with a total profit distribution of £7.3m. Business environment The benefit of an aligned business portfolio across different markets was clearly demonstrated once again during the reporting period. Our North America and UK operations showed strong growth, buoyed by the largest ever contract win in our history, as a key supplier and subcontractor to the Royal Navy’s Fleet Solid Support (FSS) programme. This had a positive impact during the reporting period, but its multi- year nature means that the contract will keep contributing to our financial performance for several years to come. In contrast, the APAC region, including our key Australia market, was a more challenging business environment, particularly in the defence market where delays to key programmes held back growth. However, our environment business continued to make progress within the region. Financial performance Overall, the prevailing trend of governments strengthening their defence capabilities in response to an increasingly uncertain world, and organisations needing our services in order to navigate both energy transition and climate change, mean that we are well placed to support customers in all our regions. Margin Margin increased from 5.7% in the previous year to 6.7% in the reporting period, which was even more pleasing as it was achieved during a year of high and often volatile inflation. Our ability to increase our margin during such an inflationary period reflects a successful combination of judicious cost management, efficiency measures and project management controls. Cash flow At the end of the reporting period, our cash position was £9m above the previous year’s level. This positive cash outcome was achieved after the payment of distributions to employees, tax liabilities and contribution to the pension scheme. This was made possible by strong working capital management and the cash-generative nature of our work. Employee distribution Total distribution to employees during the reporting period was £7.3m, up from £5.2m in the previous year. Due to our strong cash position and balance sheet, we were able to make an initial distribution before the 2023 calendar year end, earlier than in previous years. This enabled us to better reward the people who are both central to our success and increasingly in demand from competitors. Pension update We continue to carefully manage our pension liability and implement the plan already in place to reduce liabilities over the medium term. However, a recent change in fiduciary manager resulted in a modification to the mix of assets held within the pension investment portfolio. This change led to a reduction in the returns from those assets over the reporting period and consequently an increase in pension liabilities, but we expect the longer-term impact to be positive. A strong year in which BMT achieved double-digit growth in both revenue and profits. BMT Group Ltd | Review of performance 22-23 26
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