Release Date: December 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Diales PLC (LSE:DIAL, Financial) achieved a global rebranding, consolidating its operations under a single brand, which is expected to result in cost savings.
- The company reported a 5.8% increase in revenue on a like-for-like basis, excluding discontinued operations.
- Gross profit increased by 2% to GBP11 million, with a margin improvement to 26.6%.
- The Middle East operations have returned to consistent profitability, with increased revenue and reduced headcount.
- Diales PLC (LSE:DIAL) maintained a strong cash position, ending the year with GBP4.3 million, and returned over GBP1 million to shareholders through dividends and share buybacks.
Negative Points
- The company faced a higher tax charge due to profitable areas in higher tax jurisdictions, impacting overall profitability.
- There were losses from discontinued operations, particularly in the USA, Oman, and Kuwait, which affected the financial results.
- The Asia Pacific region reported a segmental loss due to competitive pricing and a lack of work in certain service lines.
- Administrative costs related to exiting businesses in the Middle East, such as Oman and Kuwait, have been challenging and costly.
- The tax rate is expected to remain high at around 38% moving forward, due to the utilization of tax losses brought forward.
Q & A Highlights
Q: What did the rebrand from Driver to Diales cost, and was it a one-off?
A: It was a one-off cost. We already had the Diales brand for 10 years, so the rebranding was a light refresh done internally, costing between GBP20,000 and GBP30,000. We expect future savings as we consolidate branding efforts under Diales. - Mark Wheeler, CEO
Q: How significant do you feel the newest offices in Saudi Arabia and South Korea can be over the medium term? Do you expect the political situation in South Korea to impact the business?
A: These regions are important due to construction hotspots. We don't foresee significant long-term impacts from the political situation in South Korea. Our staff are safe, and the economy remains stable. - Mark Wheeler, CEO
Q: Are there any plans for further office openings in China or Japan?
A: We work with Chinese clients globally but have no current plans for offices in China. We'll respond to market changes as needed. - Mark Wheeler, CEO
Q: You mentioned office closures in New York, Oman, and Kuwait. When will these be completed, and are they loss-making?
A: Oman and Kuwait have been closed for over a year, but administrative costs remain. New York is winding down and is currently profitable. - Mark Wheeler, CEO
Q: Will the tax rate be higher moving forward?
A: We expect a tax rate of around 38% as we've utilized tax losses and returned to profit. - Charlotte Parsons, CFO
Q: Are there any bad debts associated with clients moving into administration?
A: Potentially, yes. We're working with administrators to recover some debts and hope to reverse provisions in the current year. - Charlotte Parsons, CFO
Q: What are your hiring plans given the importance of staff levels and utilization?
A: We have a targeted hiring plan focusing on specific sectors and potential acquisition targets. It's a structured process, and we're making progress. - Mark Wheeler, CEO
Q: With high levels of cash, what are your plans for capital allocation?
A: We plan to return cash to shareholders through dividends and buybacks and are considering acquisitions. The Board will discuss future steps soon. - Mark Wheeler, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
