10th Apr 2006 07:02
Charles Taylor Consulting PLC10 April 2006 PRESS RELEASE Contacts: John Rowe, Chairman 020 7759 4900 George Fitzsimons, Group Finance Director 020 7759 6355 Charles Taylor Consulting plcAnnouncement of results for year ended 31 December 2005 Consolidated Financial HighlightsFor the year ended 31 December 2005 Year to Year to 31 December 31 December 2005 2004 IncreaseRevenue £67.7m £62.8m 8%Profit before tax £10.4m £9.5m 10%Profit after tax £10.0m £8.1m 24%Earnings per share 27.5p 22.4p 22%Dividends per share - interim 3.96p 3.60p 10%Dividends per share - final 6.04p 5.42p 11% _________ _________ _________ 10.00p 9.02p 11% The final dividend is payable on 25 May 2006 to Shareholders on the register on21 April 2006. CHAIRMANOS STATEMENT This is the tenth set of annual results we have published as a public company.Revenue has risen by 8%, profit before tax by 10%, and earnings per share by22%. Whereas year on year since 1996 our dividends have risen by ten percentper annum, it is proposed to increase the final dividend so that it produces atotal for the year of 10p (an 11% increase over 2004). GROUP OVERVIEW 2005 was a year which we flagged as one in which we would be making investmentsin the business, particularly in the Management division, in order to lay thefoundations for future growth. As it turned out, it was also to be a good yearfor Services. The most significant event of 2005, however, was that we were able to secure thegroup's entry into the insurance company run-off business, which we had longconsidered to be a good strategic fit for the group but where we had notpreviously identified a suitable candidate for acquisition. With the regularfees to be earned from handling the run-off of insurance companies oroperations, and the possibilities of new acquisitions from time to timeproducing capital releases, the sector holds attractive prospects. Mostimportantly of all, the management skills required here match those which wehave developed over many years in handling our existing clientsO affairs. Wehave established a new division to run this operation, and it is pleasing to seethat it made a good contribution in the one month that it was part of the groupin 2005. The business acquired owns various insurance companies in run-off and as aresult the group's balance sheet looks different from that drawn up at 31December 2004. As a result, there are more extensive notes to the accountsthan usual and I hope you will find these useful in understanding the position. MANAGEMENT DIVISION Revenue £33.0m (2004 £30.9m)Result £6.3m (2004 £6.0m) Mutuals For Standard, our principal shipping mutual client, it was a year in which itwas necessary for us to invest in the future. We reviewed rating levels for themembership and substantially completed the design and creation of an entirelynew computer system. Additionally, various individuals were relocated throughoutthe division's operations. The investments involved, both in the UK andelsewhere, should secure a sound base from which to grow in future years. Signal is our principal workers' compensation mutual. In order to service ourgrowing membership on the west coast of the USA an office was established therein the last quarter of the year. The payroll levels of the Club's members sawSignal achieve a record annual premium level for the 2005/06 mutual membershipyear of US$181m, followed by record monthly contributions to the mutual in themonth of December. Our other mutual management operations also performed satisfactorily. Those inAustralia benefited from the transfer of additional management resource toSydney. In the United Kingdom the development unit worked on a variety ofprojects, some of which I refer to later on. Investment Management The team involved here produced another very satisfactory performance for ourmutual insurance clients and continued to be top performers among ourcompetitors. The Taylor Hedge Fund, which is now opening itself to investorsfrom outside the company's current clients, produced another very satisfactoryreturn. SERVICES DIVISION Revenue £34.2m (2004 £32.0m)Result £4.6m (2004 £4.0m) All units produced strong performances and attracted significant amounts ofwork. Acceptable margins were achieved for Aviation and Energy. Whilst theunderlying margin for Marine, which incorporated average adjusting for the firsttime, was more acceptable, the reported margin was adversely affected, under thenew accounting standards, by the under-funding of its final salary pensionscheme. Non-marine greatly improved on its 2004 performance. Energy - 39% of Services Revenue The unprecedented ferocity of the hurricanes, which went through the US Gulf in2005, meant that all our Energy group's resources had to be concentrated tosupport the needs of the affected underwriters and their clients in that area.It was a very active year for all concerned. Aviation - 23% of Services Revenue After a slow start to the year work levels picked up significantly, and by theyear-end were back at budgeted levels. Of particular note within this area isthe growth of the group's work on behalf of liability underwriters, which grewsubstantially in the year. Marine - 22 % of Services Revenue The newly reorganised unit settled down well and continues to attractsignificant client support from both underwriters and ship owners around theworld. Non-marine - 16% of Services Revenue This unit produced a much-improved result and showed it was becoming, in certainspecialist areas, a force to be reckoned with. ACQUISITIONS In December 2005 we completed the acquisition of the LCL business. As can beseen from the accounts, it made a useful contribution to the overall result andwill be run as a separate division of the group, further strengthening our rangeof services. I look forward to reporting further about it in due course. CORPORATE GOVERNANCE The structure of your board reflects the historic pattern of growth and is ofparticular value to the non executive directors because of the interface itaffords to those parts of the business that hold the potential for futuregrowth. The non-executive directors and I continue to keep corporate governanceunder review and, as stated last year, the intention is that the roles ofchairman and chief executive will be split no later than March 2007. Our focusin this area is on ensuring that the board structure is in place to underpinlong-term shareholder value and to ensure a successful and thriving company. OUTLOOK AND CURRENT TRADING Trading since the beginning of the year has been in line with expectations.During 2005 we have both invested in the existing business and, through theacquisition of LCL, achieved entry to an exciting area in which we have longbeen interested. It creates significant growth opportunities for the future. All parts of your company are trading well, and the outlook at present lookspromising. In particular, the creation of a Public Sector Unit within theManagement division reflects the significant business opportunities presented bythe work we are doing in partnership with the UK government and others onproviding new mutual insurance associations to local government and other publicbodies. On your behalf I would like to thank all those who have contributed to thisexcellent result. It is as important to them that the company does well as itis to our clients and you the shareholders; it can never be over-emphasised thatwe are a people business and that we are fortunate to retain the services of thehigh calibre individuals who work within it. John RoweChairman7 April 2006 FINANCIAL REVIEW This report should be read in conjunction with the Chairman's Statement andCorporate Governance report which contain important information about thegroup's past performance, future developments and approach to risk management. Description of the BusinessThe Charles Taylor Consulting group provides management and insurance relatedservices to both buyers and providers of insurance. Segmental information is provided on the activities of the Management, Servicesand Run-off Divisions in note 2. Within the Management division there are three principal activities: Management Division 1. The management of mutuals The management of mutuals represents the largest activity of the ManagementDivision. This activity is the provision of all the day-to-day services involvedin running a mutual (risk transfer) association, whether on a fully regulated ordiscretionary basis. The members of the managed mutuals provide the capital andhave their risks covered on a mutual basis. All aspects of the administration ofthese arrangements are generally sub-contracted to group companies. 2. Investment management Investment management services are provided to mutual clients and groupinsurance companies. Funds under management are over US $1bn. 3. Risk management services This activity includes the provision of advice to corporate buyers of insuranceon the structure and appropriateness of their insurance arrangements, captiveand mutual feasibility studies and ad hoc insurance reviews. Services Division Within the Services division there are essentially four areas of activity,identified with the major markets for commercial insurance: - Aviation- Energy- Non-marine- Marine and Average Adjusting Average Adjusting became part of the Services Division on 1 January 2005. Thegroup believes that it is now most appropriate to manage all its time-recordingbusinesses within the same division. In each case, Services personnel are engaged in advising on issues and quantumin respect of insurance claims in their respective markets. Run-off Division The Run-off Division provides a wide range of specialist run-off and otherservices to the insurance industry, including claims management, balance sheetfinality and the release of shareholder value. The nature of the group's businesses leads them to reflect conditions in theworld insurance markets. In the case of mutual management, when insurance ismore expensive (hard market), the balance shifts in favour of mutuals, where theaim is to reduce the cost of insurance by there being a higher level ofaggregate risk retention between members of a mutual. The availability ofcheaper insurance (soft market) may lead to increased competitive pressure and aclimate where the alternative risk transfer mechanisms, such as mutuals, becomeless attractive. In most circumstances, however, once companies have become members of a mutual,through which they collectively control their own insurance affairs, they tendto remain there. The conditions that favour the creation and expansion of mutual insuranceschemes (i.e. hard market) are in some ways balanced by being less beneficialfor the Services division businesses because there are usually less claims todeal with, and vice versa. In the case of the Services division, a soft marketresults in easier insurance terms, which often results in buyers of insurancetransferring more of their risk for the same or reduced premiums. This istypically achieved by a reduction in the level of self-retained loss(deductible) before insurance cuts in. This usually results in more claimsfalling to insurers and more work for the Services division. Key Performance Indicators The group uses a number of budget-related measures to determine the performanceof operating units and, particularly, monitors work in progress and productivitylevels, issuing of fees and cash collections for the time-based businesses (i.e.those other than mutual management). There are no generally recognised measuresfor the position of the insurance market and the extent to which it is'hard' or 'soft' as previously referred to. Results This is the group's first set of annual results reported under InternationalFinancial Reporting Standards (IFRS). The effect on the 2004 comparatives was toreduce equity by £17.9m and net profit by £1.2m mainly in relation to thegroup's defined benefit pensions schemes. In 2005, turnover rose from £62.8m to £67.7m. Profit before tax rose from £9.5mto £10.4m. The accounts incorporate the results of LCL Group Limited and LCL AcquisitionsLimited, which were acquired on 1 December 2005. This has required a number ofchanges to the presentation of the group's financial statements and disclosures,particularly in relation to insurance company subsidiaries. While the group isstill fundamentally a service company, the financial statements are presented soas to enable readers to identify the contribution of insurance companies to thegroup's results, assets and liabilities. Dividends and earnings per share The proposed final dividend for 2005 is 6.04p (2004 - 5.42p) increased at ahigher rate than the interim dividend paid in November of 3.96p (2004 - 3.60p)so that the total dividend for the year is exactly 10.0p. This represents a yearon year increase of 10.9%. It remains the intention of your board to maintain aprogressive dividend policy, while retaining sufficient cash in the business tofund organic and acquisition growth. There remain 1.9m shares under option at the end of the year, which produce adiluted earnings per share of 27.27p compared to basic earnings per share of27.45p. Of the outstanding share options, 0.9m were exercisable below thecompany's share price at the close of business on 31 December 2005 - 316.0p. The earnings per share rose from 22.4p to 27.5p, an increase of 22%. Treasury The group continues to manage its exposure to foreign currency fluctuations bythe use of forward foreign exchange contracts. The contracts open during theyear and at the year end were all to protect the group's exposure to movementsin the US$: £ sterling rate. Over recent years, the US$ has weakened significantly against the £ sterling. In2003, the US$ profits of the group were translated at 1.63 to £1 and this hadmoved to 1.82 by 2005. The group has suffered in the short-term from the forwardsales of US$, as a result of the closing US$ rate moving from 1.90 at 31December 2004 to 1.73 at 31 December 2005. In addition, the group uses working capital overdrafts in billing currenciesother than the accounting currency, as a way to manage the exposure to currencyfluctuations. The borrowings in £ sterling and US$ are principally at rates that are linked toLIBOR plus margins of 1.25 - 1.75%. Taxation The group continues to enjoy a low tax rate. Tax amortisation on acquisitions inthe US and profits arising in lower tax jurisdictions overseas account for this. During 2005, the effective tax rate on profits was 3.8%, a reduction on the 2004level (15.3%), reflecting tax overprovisions in the prior year and therecognition of a US deferred tax asset. Financing During the year, £4.8m of cash was generated and loan repayments of £4.1m weremade. Net debt increased by £26.9m to £44.8m, with an increase of £27.6m inborrowings and £0.7m in cash and cash equivalents. The group has issued sharecapital (including share premium) of £25.4m. Existing loans and overdraft facilities were renegotiated with the group'sprincipal bankers in December 2005. During the year, a number of executive and share scheme options were exercisedproducing cash of £498,000. During 2006, 143,000 of options are exercisable atbelow the market price at 31 December 2005. If they were all exercised theywould generate £312,000 in cash for the group. Acquisitions In December 2005, the group acquired LCL Group Limited and LCL AcquisitionsLimited. The initial consideration amounted to £26.5m, of which £5.0m was paidin shares. The £1.9m balance of consideration for LCL Group Limited is payablein shares in 2006. Contingent deferred consideration in shares and loan notes ispotentially payable as distributable profits arise in LCL Acquisitions. George FitzsimonsFinance Director7 April 2006 Consolidated Income StatementFor the year ended 31 December 2005 Year to Year to 31 31 December December 2005 2004 Note £000 £000Continuing operationsRevenue 67,330 62,809Revenue from insurance contracts acquired 592 -Outward reinsurance premiums (242) - ________ ________Net revenue from insurance contracts acquired 350 -Total revenue 2 67,680 62,809Claims from insurance contracts acquired (1,603) -Reinsurance recoveries 1,628 -Expenses of managing insurance companies (314) -Investment and other income from insurance activities 564 - _______ ________Net expenses and other income from insurance contracts acquired 275 -Administrative expenses (56,812) (52,392)Share of results of associates 139 (18)Share of results of joint ventures 97 32 ________ ________Profit from insurance contracts acquired 625 -Profit from other activities 10,754 10,431 ________ ________Total profit from operations 11,379 10,431Investment and other income from non-insurance activities 580 273Finance costs (1,534) (1,184) ________ ________Profit before tax 10,425 9,520Income tax expense (398) (1,460) ________ ________Profit for the year from continuing operations 2 10,027 8,060 ________ ________Attributable to:Equity holders of the parent 9,915 8,029Minority interest 112 31 ________ ________ 10,027 8,060 ________ ________Dividends paid (3,371) (3,061) ________ ________ Retained profit for the year 6,656 4,999 ________ ________Earnings per share from continuing operations Basic (p) 3 27.45 22.43Diluted (p) 3 27.27 22.42 ________ ________ Consolidated Balance SheetAt 31 December 2005 At 31 At 31 December December 2005 2004 Note £000 £000Non-current assetsGoodwill 39,047 18,077Intangible assets 13,567 -Property, plant and equipment 4,392 3,096Interests in associates 883 698Interests in joint ventures 517 511Investments 31 43Deferred tax assets 7,652 7,896 ________ ________ 66,089 30,321 ________ ________Current assetsInvestments at fair value through income- Life insurance contracts 39,061 -- Investment contracts assets held to back unit-linked 230,136 -liabilitiesInvestments available for sale-Non-life insurance contracts 63,626 -Amounts receivable under reinsurance contracts 32,997 -Cash and cash equivalents in insurance businesses 30,571 -Other assets in insurance businesses 9,401 - ________ ________Total assets in insurance businesses 405,792 -Trade and other receivables 5 46,764 37,058Cash and cash equivalents 31,828 24,222 ________ ________ 78,592 61,280 ________ ________Total assets 550,473 91,601 ________ ________Current liabilitiesInsurance technical balances-Life insurance contracts 39,061 --Non-life insurance contracts 105,996 -Investment contracts unit-linked liabilities 230,136 -Other liabilities in insurance businesses 15,890 - ________ ________Total liabilities in insurance businesses 391,083 -Trade and other payables 6 23,263 14,868Tax liabilities 888 292Obligations under finance leases 115 112Bank overdrafts and loans 17,718 14,603Client funds 25,100 18,156 ________ ________ 67,084 48,031 ________ ________Net assets in insurance businesses 14,709 - ________ ________Net current assets - other 11,508 13,249 ________ ________Non-current liabilitiesBank loans 33,385 8,811Retirement benefit obligation 24,159 25,836Provisions 4,229 194Obligations under finance leases 206 211Deferred consideration - LCL acquisition 7,369 - ________ ________ 69,348 35,052 ________ ________Total liabilities 527,515 83,083 ________ ________Net assets 22,958 8,518 ________ ________ EquityShare capital 384 364Share premium account 24,979 19,505Merger reserve 6,872 6,872Capital reserve 662 662Own shares (1,501) (1,516)Retained earnings (8,731) (17,419) ________ ________Equity attributable to equity holders of the parent 22,665 8,468Minority interest 293 50 ________ ________Total equity 22,958 8,518 ________ ________ The financial statements were approved by the board of directors on 7 April 2006and were signed on their behalf by: George FitzsimonsDirector7 April 2006 Consolidated Cash Flow StatementFor the year ended 31 December 2005 Year to Year to 31 31 December December 2005 2004 Note £000 £000 Net cash from operating activities 8 14,628 16,380Investing activitiesInterest received 317 273Proceeds on disposal of property, plant and equipment 115 179Purchases of property, plant and equipment (976) (633)Purchases of investments (9) -Proceeds from sale of investments 232 35Acquisition of subsidiaries (27,887) (15,248)Net cash acquired with subsidiary 2,032 - ________ ________Net cash used in investing activities (26,176) (15,394) ________ ________Financing activitiesProceeds from issue of shares 494 4,176Dividends paid (3,371) (3,061)Repayments of borrowings (4,093) (3,835)Repayments of obligations under finance leases (140) (127)New bank loans raised 30,706 10,400Decrease in bank overdrafts (4,065) (526) ________ ________Net cash from financing activities 19,531 7,027 ________ ________Net increase in cash and cash equivalents 7,983 8,013Cash and cash equivalents at beginning of year 24,222 16,369Effect of foreign exchange rate changes (377) (160) ________ ________Cash and cash equivalents at end of year 31,828 24,222 ________ ________ Consolidated Statement of Recognised Income and ExpenseFor the year ended 31 December 2005 Year to Year to 31 31 December December 2005 2004 £000 £000Unrealised gains on available for sale investments 372 -Exchange differences on translation of foreign operations 766 (856)Actuarial gains/(losses) on defined benefit pension schemes 1,006 (4,633)Write-down of shares held by QUEST - (85) ________ ________Net income/(expense) recognised directly in equity 2,144 (5,574) ________ ________Profit for the year 6,656 4,999 ________ ________Total recognised income and expense for the year 8,800 (575) ________ ________Attributable to:Equity holders of the parent 8,688 (606)Minority interests 112 31 ________ ________ 8,800 (575) ________ ________ Notes to the AccountsFor the year ended 31 December 2005 1. Basis of preparation The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31 December 2005 or 2004, but is derivedfrom those accounts. Statutory accounts for 2004 have been delivered to theRegistrar of Companies and those for 2005 will be delivered following thecompany's annual general meeting. The auditors have reported on those accounts;their reports were unqualified and did not contain statements under s. 237 (2)or (3) Companies Act 1985. Transition to International Financial Reporting Standards (IFRSs) The group has applied IFRS 1, First Time Adoption of International financialReporting Standards, in preparing the statutory accounts for the year ended 31December 2005. Consequently, 2004 comparative information has been restatedunder these new accounting standards from that which was contained in thefinancial statements for the period. While the information included in this preliminary announcement has beencomputed in accordance with IFRSs, this announcement does not itself containsufficient information to comply with IFRSs. The company expects to publish fullfinancial statements that comply with IFRSs in April 2006. 2. Segmental information For management purposes, the group is currently organised into three operatingdivisions - CTC Management, CTC Services and CTC Run-off Services. Principal activities are as follows: CTC Management - Mutual management, captive management, investment managementand risk management. CTC Services -Energy, Aviation, Non-Marine and Marine (including Average)adjusting. CTC Run-off Services - insurance company acquisition and run-off services. Theresults of insurance companies have been shown separately in the segmentalinformation. Segmental information about these businesses is presented below: Year to Year to 31 31 December December 2005 2004 £000 £000RevenueManagement 32,981 30,850Services 34,196 31,959Run-off services 536 -Insurance companies - life and non-life 350 -Eliminations (383) - ________ ________Consolidated 67,680 62,809 ________ ________ Year to Year to 31 31 December December 2005 2004 £000 £000ResultManagement 6,285 5,998Services 4,644 4,007Run-off services 106 -Insurance companies - life and non-life 625 - ________ ________Consolidated 11,660 10,005 ________ ________Unallocated foreign exchange (517) 412Share of results of associates and joint ventures 236 14 ________ ________Profit from operations 11,379 10,431Investment income 580 273Finance costs (1,534) (1,184) ________ ________Profit before tax 10,425 9,520Tax (398) (1,460) ________ ________Profit after tax 10,027 8,060 ________ ________ At At 31 31 December December 2005 2004 £000 £000Balance SheetAssetsManagement 88,393 85,621Services 110,875 104,200Run-off services 27,390 -Insurance companies - life and non-life 405,792 -Unallocated corporate assets and eliminations (81,977) (98,220) ________ ________Consolidated total assets 550,473 91,601 ________ ________LiabilitiesManagement 67,988 55,788Services 92,186 91,116Run-off Services 31,056 -Insurance companies - life and non-life 391,083 -Unallocated corporate liabilities and eliminations (54,798) (63,821) ________ ________Consolidated total liabilities 527,515 83,083 ________ ________Segmental information on a geographical basis is shown below: Year to Year to 31 31 December December 2005 2004RevenueUnited Kingdom 21,971 21,094Other Europe 2,413 1,492North America 8,990 8,525Asia Pacific 8,286 7,403Bermuda 26,020 24,295 ________ ________Consolidated 67,680 62,809 ________ ________ 3. Earnings per share Earnings per ordinary share have been calculated by dividing the profit onordinary activities after taxation and minority interests for each period by theweighted average number of shares in issue. The shares held by the ESOP havebeen excluded from the calculation because the trustees have waived the right todividends on these shares. The calculation of the basic and diluted earnings per share is based on thefollowing data: Year to Year to 31 31 December December 2005 2004 £000 £000Earnings Earnings for the purposes of basic and diluted earnings per share beingnet profitattributable to equity holders of the parent 9,915 8,029 ____________ ____________ Number NumberNumber of shares Weighted average number of ordinary shares for the purposes of basic 36,115,159 35,790,684earnings per shareEffect of dilutive potential ordinary shares:Share options 241,046 26,564 ____________ ____________Weighted average number of ordinary shares for the purposes of diluted 36,356,205 35,817,248earnings per share ____________ ____________ 4. Acquisition of subsidiaries On 1 December 2005 the group acquired 100 per cent of the issued share capitalof LCL Group Limited and LCL Acquisitions Limited. Further details are given inthe directors' report. The consideration for LCL Group Limited comprised £21.5 million in cash and 0.7million Charles Taylor Consulting plc (CTC) shares with a fair value of £1.9million based on the fair value of tangible net assets acquired. Theconsideration for LCL Acquisitions Limited comprised an initial allotment of 1.9million CTC shares with a fair value of £5 million based on the prevailing shareprice at the relevant agreement date together with an earnout of up to 1.9million CTC shares and £10.0 million in loan notes. This has been accounted for as a single transaction by the purchase method ofaccounting. The net assets acquired in the transaction, and the goodwill arising, are asfollows: Acquiree's carrying amount Fair before value Fair combination adjustments value £000 £000 £000Net assets acquiredIntangible assets 7 12,916 12,923Property, plant and equipment 1,129 - 1,129Net assets in insurance businesses 13,689 (279) 13,410Trade and other receivables 1,491 - 1,491Cash and cash equivalents 2,032 - 2,032Trade and other payables (8,224) 2,600 (5,624)Tax liabilities (714) - (714)Provisions (368) (3,948) (4,316)Bank overdrafts and loans (4,900) - (4,900) ________ ________ ________ 4,142 11,289 15,431Attributable to minority interests (127) - (127) ________ ________ ________ 4,015 11,289 15,304 ________ ________ ________Goodwill 20,963 ________Total consideration 36,267 _________ Total £000Consideration comprises:Cash consideration for LCL Group Limited 21,500Share consideration for LCL Group Limited 1,935Deferred contingent consideration for LCL Acquisitions Limited 5,457Advance contingent share consideration for LCL Acquisitions Limited 5,000Acquisition costs payable 2,375 _______ 36,267 _______ Total deferred consideration payable at 31 December amounted to £7,369,000comprising share consideration for LCL Group Limited of £1,935,000 andcontingent consideration for LCL Acquisitions Limited of £5,457,000, lessinterest on advance consideration of £23,000. Net cash outflow arising on acquisitionsCash consideration paid - LCL Group Limited 21,500Acquisition costs paid 1,987Deferred consideration paid for Bateman Chapman (Holdings) Limited group 4,400 ________Net cash outflow 27,887 ________Cash and cash equivalents acquired 2,032 _________ The goodwill arising on the acquisition is attributable to the anticipatedprofitability arising from new customer relationships, future operatingsynergies from the combination and the ability to acquire and extract value fromfuture run-off businesses. LCL Group Limited and LCL Acquisitions Limited contributed £639,000 revenue and£720,000 to the group's result for the period between the date of acquisitionand the balance sheet date. It is impracticable to disclose the revenue and profit of the combined entity asthough the acquisition date for all the businesses was the beginning of the yearbecause a number of the businesses were themselves acquired by LCL during theyear, the businesses had non-coterminous year ends and the opening IFRS balancesheet of the entities at 1 January would be difficult to establish. 5. Trade and other receivables At 31 December At 31 December 2005 2004 £000 £000Trade debtors 19,254 17,661Amounts owed by associates 24 425Other debtors 4,466 2,043Prepayments and accrued income 22,889 16,725Corporation tax 131 204 ________ ________ 46,764 37,058 _________ _________ 6. Trade and other payables Group At 31 December At 31 December 2005 2004 £000 £000C Loan stock 98 185Other loans 450 -Trade creditors 4,791 2,165Amounts owed to associates 146 106Other taxation and social security 834 938Other creditors 1,975 938Accruals and deferred income 10,582 6,136Deferred consideration - Bateman Chapman acquisition - 4,400Deferred consideration - LCL acquisition* 4,387 - ________ ________ 23,263 14,868 _________ _________ *Represents a pre-existing obligation of the LCL Acquisitions Limited group ofcompanies prior to their acquisition by Charles Taylor Consulting plc. 7. Net interest bearing liabilities At 31 At 31 December December 2005 2004 £000 £000Net interest bearing liabilitiesCash and cash equivalents 31,828 24,222Bank overdrafts and current loans (17,718) (14,603)Non-current bank loans (33,385) (8,811)Loan stock (98) (185)Finance leases (321) (323) ________ ________ (19,694) 300Client funds (25,100) (18,156) ________ ________ (44,794) (17,856) ________ ________ 8. Notes to the cash flow statement Year to Year to 31 31 December December 2005 2004 £000 £000Profit from operations 10,754 10,431Adjustments for:Depreciation of property, plant and equipment 876 1,003Gain on disposal of property, plant and equipment (12) (47)(Decrease)/increase in provisions (175) 627Share of results of associates and joint ventures (236) (14) ________ ________Operating cash flows before movements in working capital 11,207 12,000(Increase)/decrease in receivables (7,864) 1,188Increase/(decrease) in payables 13,752 7,027 ________ ________Cash generated by operations 17,095 20,215Income taxes paid (1,090) (2,651)Interest paid (1,377) (1,184) ________ ________Net cash from operating activities 14,628 16,380 ________ ________ Additions to motor vehicles during the period amounting to £148,000 (2004 -£195,000) were financed by new finance leases. Cash and cash equivalents (which are presented as a single class of assets onthe face of the balance sheet) comprise cash at bank and other short-term highlyliquid investments with a maturity of three months or less. The cashflowstatements exclude the cashflows within the groupOs insurance companies. Cash includes client monies of £25,100,000 (2004 - £18,156,000). This Press Release contains certain forward-looking statements. By their nature,forward-looking statements involve risks and uncertainties because they relateto events and depend on circumstances that will or may occur in the future.Actual results may differ from those expressed in such statements, depending ona variety of factors, including demand and pricing; operational problems;general economic conditions; political stability and economic growth in relevantareas of the world; changes in laws and governmental regulations; exchange ratefluctuations and other changes in business conditions; the actions ofcompetitors and other factors. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Charles Taylor