Newsletter No. 47
HALCROW PENSIONERS ASSOCIATION
Newsletter No. 47 : November 2021
This is a newsletter of the Halcrow Pensioners Association (HPA). More details of HPA's objectives, organisation and its activities are here. You have been sent this newsletter because you may be a member of the Halcrow Pension Scheme or its successor, HPS2 or be a former member of HPS who has transferred to the PPF. Membership of HPA is open to all interested HPS / HPS2 members and currently costs £10/year (only for those joining in 2021 as those who paid during 2020 have been given a subscription holiday as explained in Newsletter No. 43). If you do not wish to receive the HPA newsletters then please email the webmaster to remove your name from the mailing list.
Jacobs UK Annual Report for Year Ending 2nd October 2020
The Annual Report and Financial Statements for Jacobs UK for the year ending 2nd October 2020 was received at Companies House in early October 2021. This report is of interested to HPS2 members as it includes the transfer, on 23rd December 2019, of sponsorship of Halcrow Pension Scheme 2 (HPS2) to Jacobs UK with Halcrow Group Limited (HGL) released from all its obligations as the principal sponsor. Sponsorship of the other, smaller, defined benefit schemes was also transferred from HGL to Jacobs during the period. The report also notes that on 2nd October 2020 the trade and majority of assets of Halcrow Group Limited were transferred to Jacobs U.K. Limited for a fair value consideration of £76.6 million which reduces the paper debt owed by Halcrow Group to Jacobs. There were certain assets excluded from the transfer and are retained by Halcrow Group Limited although the intention is eventually wind down the company.
In the year covered by the report the turnover from continuing operations was £630,268k (2019: £572,280k) which was an increase of 10% on the prior year. Cost of sales in relation to continuing and discontinued operations also increased from £572,242k in 2019 to £611,568k. The company's profit before tax for the period was £36,896k (2019: £136,023k). The company has recorded a profit before tax in both the current and previous financial years and the company's balance sheet shows that it has current assets of £434M and current liabilities of £431M at its most recent balance sheet date. The Directors believe that the company has enough resources to continue in operation for the foreseeable future. If the company requires assistance to meet its financial obligations, Jacobs Engineering Group, Inc would be able to provide support. Anyone wishing to study the full report can download it from Companies House.
This Jacobs report is also of interested to HPS2 as it enables some comparison to be made between HPS2 and the three other defined benefit (DB) pension schemes already sponsored by Jacobs UK (Jacobs Engineering UK Ltd, Babtie and Allott and Lomax). The assets and liabilities of the four DB schemes Jacobs Engineering UK, Babtie, Allot and Lomax and HPS2 are tabulated below:
We know, from information provided by the HPS2 trustee, that the HPS2 deficit had improved to nearly zero by July 2021 so it is possible that the other schemes will have been close to or in positive territory by the same time. Of note HPS2 is the largest although the Babtie scheme isn’t far behind. The Allot and Lomax scheme is relatively small.The annual company contributions put HPS2 in the same ball park as the Babtie scheme (the largest current contributory commitment for Jacobs UK) and the Jacobs Engineering UK scheme. A more detailed analysis and comparison between these pension schemes is provided here.
Halcrow Group Annual Report for year ending 31 December 2019
The Annual Report and Financial Statements for Halcrow Group Ltd (HGL) for 2019 were finally submitted to Companies House on 23rd September 2021, almost one year overdue. The reporting period includes the transfer of sponsorship of HPS2 to Jacobs UK. The subsequent report (for a 9 month period to achieve alignment with the Jacobs reporting year) is now overdue.
Turnover increased from £256M in 2018 to £273M in 2019. The profit before taxation was £31.5M, prior year the loss before taxation was £69.9M. The result of the loss in 2018 was mainly due to an onerous lease provision of £30.8M relating to the vacation of offices within the UK and increased administation expenses. Administrative expenses decreased by £48M during 2019, moving from £90M in 2018 to £42M. The decrease in costs is mainly due to the reduction in transfer pricing costs from £33.5M in 2018 to £17M in 2019 and the release of professional indemnity claims provisions of £2.9M. The company therefore appeared to be profitable for the first time in recent history and perhaps is related to the change in transfer pricing costs.
The average number of staff employed by HGL during 2019 was 2,063 (2017 professional & technical plus 46 administrative) which is about 9% down on 2018's total of 2,272 (2,100 P&T plus 172 admin).
The Future of HPA
The need for HPA continues and among the possible ongoing tasks to look after HPA members' interests are:
1. To keep HPA members informed about HPS2 and other pension-related matters.
2. To closely monitor HPS2, the HPS2 Trustee and Jacobs UK (the scheme sponsoring company) to see whether adequate contributions are being made to the pension scheme.
3. To examine and comment on proposals for changes to pension-related laws or regulations where we think they would affect our interests.
4. Take opportunities to press for better supervision of pension schemes and their sponsoring companies.
5. To follow the potential changes in pension scheme rules arising from the Hampshire vs PPF and Bauer court decisions.
Previous Newsletters
If you haven't been with HPA from the start or want to remind yourself of previous events then you can browse through the previous newsletters for which there is a full list here.