29th Nov 2011 07:00
29 November 2011
Mortice Limited
("Mortice" or the "Company")
Interim Results
Mortice (AIM:MORT), the Singapore headquartered, AIM listed security and facility management company with operations in India through its fully owned subsidiary Tenon , today announces its interim results for six months ended 30 September 2011.
Significant highlights
·; Healthy interim profit for the second successive year
·; Revenue growth of 37%
·; Business grown at 36% in the guarding segment
·; Facilities Management (FM) business grown at 40 %
·; Delivered strong broad based performance, with profit before taxation of US$1.10 million up by 78% (H1 2010/11: US$ 0.45 Million)
·; PAT of US$0.75 million up by 98% (H1 2010/11: US$ 0.27 Million)
·; Better profitablity (PAT) in local currency of operations (Indian Rupees)
In Local Currency of Operations the PAT of the Group is INR 33.8 Million which is greater than projected PAT (in INR). The loss of comprehensive income, net of tax of USD 0.71 Million, is due to weakening of local currency of operations against USD .
The Directors believe this growth in revenues and profitability is in line with management expectations.
Statement by the Executive Chairman, Mr. Manjit Rajain
These excellent results are in line with our expectations and we are happy to announce our second successive interim of healthy profits. We have controlled our costs and have been able to achieve very good business growth in both guarding and Integrated facility management services despite tough market conditions. We have managed to increase our support base within our clients. This has been achieved with excellent service delivery by a committed and highly dedicated team of professionals. Our people are our biggest assets who have through their commitment demonstrated delivery of a high level of services.
We believe that our business model of integrated facility management services through self-delivery creates a platform enabling the Company to be competitive and innovative in the market. This makes us a preferred partner of choice to our clients.
Mortice is growing and winning market share in both guarding and integrated facility management segments. We will continue to focus on growth through qualitative delivery of services and innovative ideas and continue to enhance margins and increase market share. We will also maintain our commitment to conduct our business ethically and maintain the highest levels of integrity. We are committed to our shareholders to create value for them.
Extracts from the unaudited financial statements are attached below and the full version of the unaudited financial statements will be available on the Company's website www.morticegroup.com.
For further information please contact:
Mortice Limited | ||
Manjit Rajain, Executive Chairman | Tel: +91 981 800 0011 | |
Seymour Pierce Ltd (NOMAD) | ||
Nandita Sahgal | Tel: +44 207 107 8000
| |
Seymour Pierce Ltd (Corporate Broking) | ||
Jeremy Stephenson | Tel: +44 207 107 8000 |
Mortice Limited and its subsidiaries Unaudited condensed consolidated interim financial statements 30 September 2011
Unaudited condensed consolidated statements of financial position
(All amounts in United States Dollars, unless otherwise stated)
| As at | As at | As at |
30 September 11 (Unaudited) | 31 March 11 (Audited) | 30 September 10 (Unaudited) | |
ASSETS |
|
|
|
Non current |
|
|
|
Goodwill | 1,344,215 | 1,472,925 | 1,464,072 |
Other intangible assets | 106,325 | 125,825 | 134,332 |
Property, plant and equipment | 1,219,279 | 1,293,372 | 1,216,619 |
Long-term financial assets | 583,545 | 1,325,975 | 1,115,162 |
Deferred tax assets | 1,478,440 | 1,304,169 | 1,376,646 |
| 4,731,804 | 5,522,266 | 5,306,831 |
Current |
|
|
|
Inventories | 128,513 | 143,099 | 101,573 |
Trade and other receivables | 15,572,895 | 12,305,018 | 11,809,196 |
Prepaid taxes | 831,530 | 1,684,804 | 1,089,231 |
Cash and bank balances | 1,917,017 | 2,508,965 | 1,660,916 |
| 18,449,955 | 16,641,886 | 14,660,916 |
Total assets | 23,181,759 | 22,164,152 | 19,967,747 |
EQUITY AND LIABILITIES |
|
|
|
Equity |
|
|
|
Capital and reserves |
|
|
|
Share capital | 9,555,312 | 9,555,312 | 9,555,312 |
Reserves | (2,299,802) | (2,334,492) | (2,942,971) |
| 7,255,510 | 7,220,820 | 6,612,341 |
Non- controlling interests | 8,264 | 4,982 | 2,169 |
Total equity | 7,263,774 | 7,225,802 | 6,614,510 |
Liabilities |
|
|
|
Non-current |
|
|
|
Employee benefit obligations | 566,856 | 494,790 | 394,442 |
Borrowings | 137,369 | 172,333 | 142,519 |
| 704,225 | 667,123 | 536,961 |
Current |
|
|
|
Trade and other payables | 11,095,100 | 9,918,519 | 9,244,964 |
Borrowings | 4,118,660 | 4,352,708 | 3,571,312 |
| 15,213,760 | 14,271,227 | 12,816,276 |
Total liabilities | 15,917,985 | 14,938,350 | 13,353,237 |
|
|
|
|
Total equity and liabilities | 23,181,759 | 22,164,152 | 19,967,747 |
(The annexed notes form an integral part of and should be read in conjunction with these financial statements) |
Unaudited condensed consolidated statement of comprehensive income
(All amounts in United States Dollars, unless otherwise stated)
|
| Six months ended | Six months ended | |
30 September 11 | 30 September 10 | |||
Revenue |
|
|
| |
Service income |
| 30,020,931 | 21,872,847 | |
Other income |
| 178,619 | 36,442 | |
Total income |
| 30,199,550 | 21,909,289 | |
|
|
|
| |
Expenses |
|
|
| |
Staff and related costs |
| 26,272,493 | 19,364,965 | |
Materials consumed |
| 382,942 | 594,109 | |
Other operating expenses |
| 1,770,178 | 1,046,835 | |
Depreciation and amortisation of non-financial assets |
| 244,556 | 181,372 | |
Finance costs |
| 420,628 | 267,090 | |
Total expenses |
| 29,090,797 | 21,454,371 | |
|
|
|
| |
|
|
|
| |
Profit before taxation |
| 1,108,753 | 454,918 | |
Tax expense |
| (359,941) | (179,291) | |
|
|
|
| |
Profit for the period |
| 748,812 | 275,627 | |
Other comprehensive income: Exchange difference on translating foreign operations |
| (710,840) |
42,505 | |
Total comprehensive income for the year net of tax |
| 37,972 | 318,132 | |
Profit for the period attributable to: |
|
|
| |
- Owners of the parent |
| 745,530 | 273,552 | |
- Non-controlling interest |
| 3,282 | 2,075 | |
|
| 748,812 | 275,627 | |
Total comprehensive income attributable to: |
|
|
| |
- Owners of the parent |
| 34,690 | 316,057 | |
- Non-controlling interest |
| 3,282 | 2,075 | |
|
| 37,972 | 318,132 | |
Earnings per share: Basic and diluted |
|
0.02 | 0.01 | |
(The annexed notes form an integral part of and should be read in conjunction with these financial statements) | ||||
|
|
|
| |
Unaudited condensed consolidated statement of changes in equity
(All amounts in United States Dollars, unless otherwise stated)
| Equity attributable to shareholders of the Company |
| |||||
| Share capital | Currency translation reserve | Accumulated losses | Non-controlling interest | Total equity |
| |
Number of shares | Amount |
| |||||
Balance as at 1 April 2010 | 47,700,001 | 9,555,312 | (408,173) | (2,850,855) | 94 | 6,296,378 |
|
Total comprehensive income for the period | - | - | 42,505 | 273,552 | 2,075 | 318,132 |
|
Balance as at 30 September 2010 | 47,700,001 | 9,555,312 | (365,668) | (2,577,303) | 2,169 | 6,614,510 |
|
|
|
|
|
|
|
|
|
Balance as at 1 April 2011 | 47,700,001 | 9,555,312 | (316,785) | (2,017,707) | 4,982 | 7,225,802 |
|
Total comprehensive income/(loss) for the period | - | - | (710,840) | 745,530 | 3,282 | 37,972 |
|
Balance as at 30 September 2011 | 47,700,001 | 9,555,312 | (1,027,625) | (1,272,177) | 8,264 | 7,263,774 |
|
(The annexed notes form an integral part of and should be read in conjunction with these financial statements)
Unaudited condensed consolidated statements of cash flows
(All amounts in United States Dollars, unless otherwise stated)
| Six months ended | Six months ended | |
30 September 2011 | 30 September 2010 | ||
(A) Cash flow from operating activities |
|
| |
Profit before taxation | 1,108,753 | 454,918 | |
Adjustments for: |
|
| |
Depreciation and amortisation of non-financial assets | 244,556 | 181,372 | |
Finance cost | 420,628 | 207,286 | |
Finance income | (41,850) | (21,033) | |
Impairment of trade and other receivables | 220,874 | 12,411 | |
Operating profit before working capital changes | 1,952,961 | 834,954 | |
Changes in operating assets and liabilities |
|
| |
Working capital changes: |
|
| |
Trade and other receivables | (4,950,924) | (3,306,935) | |
Inventories | 2,251 | (10,621) | |
Trade and other payables | 2,390,336 | 3,083,797 | |
Cash generated from / (used in) operations | (605,376) | 601,195 | |
Income tax paid | 21,654 | (423,974) | |
Interest paid | (412,632) | (207,995) | |
Net cash used in operating activities | (996,354) | (30,774) | |
|
|
| |
(B) Cash flow from investing activities |
|
| |
Acquisition of plant, property and equipment | (277,444) | (394,815) | |
Interest received | 85,216 | 1,481 | |
Placement of pledged fixed deposit | (558,398) | (847,792) | |
Withdrawal of pledged fixed deposit | 1,197,921 | - | |
Net cash generated from/(used in) investing activities | 447,295 | (1,241,126) | |
|
|
| |
(C ) Cash flows from financing activities |
|
| |
Proceeds from finance lease obligation | 45,270 | 129,118 | |
Repayment of finance lease obligation | (68,008) | (179,714) | |
Repayment of bank borrowings | (8,826) | - | |
Proceed from bank overdraft, net | 168,219 | 2,255,310 | |
Net cash generated from financing activities | 136,655 | 2,204,714 | |
Net increase / (decrease) in cash and cash equivalents | (412,404) | 932,814 | |
Cash and cash equivalents at the beginning of the period | 2,508,965 | 697,408 | |
Effect of change in exchange rate on cash and cash equivalents | (179,544) | 30,694 | |
Cash and cash equivalents at the end of the period | 1,917,017 | 1,660,916 | |
Notes to unaudited condensed consolidated interim financial statements
(All amounts in United States Dollars, unless otherwise stated)
1. INTRODUCTION
Mortice Limited ('the Company' or 'Mortice') was incorporated on 9 January 2008 as a public limited Company in the Republic of Singapore. The Company's registered office is situated at 36 Robinson Road, #17-01 City House, Singapore 068877.
The Company was listed on the Alternative Investment Market (AIM) of the London Stock Exchange on 15 May 2008. The Company along with its subsidiaries (hereinafter, together referred to as 'the Group') are engaged in providing guarding services, facilities management services, mechanical and engineering maintenance services and sale of safety equipment and their installation. The Group's operations are spread across India. The various entities comprising the Group have been defined.
Name of subsidiaries | Country of incorporation | Effective group Shareholding % |
Tenon Property Services Private Limited ('Tenon Property') | India | 99.48 |
Peregrine Guarding Private Limited ('PGPL') | India | 99.48 |
Tenon Support Services Private Limited ('Tenon Support') | India | 99.48 |
Tenon Project Services Private Limited ('Tenon Project') | India | 99.48 |
Roto Power Projects Private Limited ('Roto') | India | 99.43 |
These unaudited condensed consolidated financial statements were approved by the Board on ___________.
The immediate and ultimate holding company is Mancom Holdings Limited, a company incorporated in British Virgin Islands.
2. BASIS OF PREPARATION
These condensed consolidated interim financial statements are for the six months ended 30 September 2011 have been prepared in accordance with IAS 34 Interim Financial Reporting as developed and published by the International Accounting Standards Board ('IASB'), on a going concern basis. They do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 March 2011.
The functional currency of the entities within the Group (other than the Company) is Indian Rupees ('INR'). The Company has a functional currency of United States Dollars ('USD'). The group's management has chosen to present the consolidated financial information in USD, the functional currency of the Company.
All inter-company transactions and balances are eliminated on consolidation and the unaudited condensed consolidated interim financial statements reflect external transactions only. The accounting periods of the subsidiaries are coterminous with that of the Company.
Previous period's amounts have been regrouped/ reclassified, wherever considered necessary to make them comparable with those of the current period.
Notes to unaudited condensed consolidated interim financial statements (contd.)
3. SIGNIFICANT ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with the accounting policies adopted in the Group's last annual financial statements for the year ended 31 March 2011. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements
4. ESTIMATES
When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group's last annual financial statements for the year ended 31 March 2011.
5. SEGMENT ANALYSES
The Group has reported segment results based on internal management reporting information that is regularly reviewed by the Group's Chief Executive Officer and Chairman. Chief Executive Officer and Chairman have concluded that the operating segment disclosure should be based on service offered by Group.
The reportable segments identified by the group are: guarding services and facility management services.
The revenue and profit generated by each of Group's business segments are summarized as follows:
1 April 2011 to 30 September 2011 | ||||
| Guarding | Facility Management | Others | Total |
Revenue from external customers | 21,703,413 | 8,210,471 | 107,047 | 30,020,931 |
Segment operating profit | 559,020 | 284,931 | (24,399) | 819,552 |
Total segment assets | 15,150,060 | 8,098,094 | 122,575 | 23,370,729 |
|
|
|
|
|
1 April 2010 to 30 September 2010 | ||||
| Guarding | Facility Management | Others | Total |
Revenue from external customers | 15,935,334 | 5,524,938 | 412,575 | 21,872,847 |
Segment operating profit | 509,585 | 9,667 | 38,842 | 558,094 |
Total segment assets | 12,415,948 | 8,393,072 | 189,883 | 20,998,903 |
Notes to unaudited condensed consolidated interim financial statements (contd.)
Reconciliation on reportable segments profit to group profit is summarised as under:
| Six months ended 30 September 2011 | Six months ended 30 September 2010 |
Segment operating profit before tax | 819,552 | 558,094 |
|
|
|
Reconciling items: |
|
|
Other income not allocated | 159,243 | 36,442 |
Other income/(expense) not allocated (Mortice Limited) | 129,958 | (139,618) |
Group profit before tax | 1,108,753 | 454,918 |
|
|
|
6. EARNINGS PER SHARE
Both basic and diluted earnings per share have been calculated using the profit or loss attributable to shareholders of Mortice Limited as the numerator.
Calculation of basic and diluted profit per share is as follows:
| Six months ended 30 September 2011 | Six months ended 30 September 2010 |
Earning attributable to equity holders (USD) | 748,812 | 275,627 |
Weighted average number of ordinary shares outstanding for basic and diluted earnings per share | 47,700,001 | 47,700,001 |
|
|
|
Basic and diluted earnings per share (USD) | 0.02 | 0.01 |
- |
|
Notes to unaudited condensed consolidated interim financial statements (contd.)
7. RELATED PARTY TRANSACTIONS
Related parties include subsidiaries, key management and entities in which the key management has interest or control.
Significant related party transactions are as follows:
Transaction with key management:
Particulars | Six months ended 30 September 2011 | Six months ended 30 September 2010 |
Remuneration | 227,541 | 226,665 |
The outstanding balance payable to related parties under the category of key management as at 30 September 2011 and 30 September 2010 are USD 24,748 and USD 29,335 respectively.
In addition to the above, the key management personnel participate in the gratuity plan of the Group.
Entities over which key management are able to exercise control
Particulars | Six months ended 30 September 2011 | Six months ended 30 September 2010 |
Deposits given | - | 478,694 |
Recovery of advance | (84,157) | (423,638) |
Advance given | 45,502 | - |
Transfer of motor vehicle | - | 23,938 |
Commission paid | 26,943 | - |
Office rental paid | 79,548 | 78,104 |
Name of related parties over which key management are able to exercise control
1. Peregrine Services Private Limited
2. Mircro Azure Computers Private Limited
3. Peregrine Protection Services Private Limited
Notes to unaudited condensed consolidated interim financial statements (contd.)
8. COMMITMENTS
Operating lease commitments (non-cancelable)
At the financial position date, the Group and the Company were committed to making the following rental payments in respect of non-cancelable operating leases of office premises with an original term of more than one year:
Nature of the contingency/ commitments | Six months ended 30 September 2011 | Six months ended 30 September 2010 |
Not later than one year | 73,876 | 48,085 |
Later than one year and not later than five years | - | 46,082 |
Later than five years | - | - |
73,876 | 94,167 |
9. PROPERTY, PLANT AND EQUIPMENT
The acquisitions of property, plant and equipment, for the six months ended 30 September 2011 are USD 277,444 (six months ended 30 September 2010 : USD 394,815 and for the twelve months ended 31 March 2011 are USD 700,543).
10. COMPARATIVE FIGURES
a. The statement of comprehensive income for the six months ended 30 September 2010 has been reclassified due to reclassification of certain figures. The reclassified items pertain to expenses related to senior management staff who are engaged in managing the operations of the Group, which were earlier included under 'Other operating costs' and have now been reclassified to 'Staff and related costs'. Details of these reclassifications are summarized below -
Particulars | Six months ended 30 September 2010 | Six months ended 30 September 2010 (Reclassified) | Movement |
(A) | (B) | (A-B) | |
Staff and related costs Other operating costs | 19,076,868 1,334,932 | 19,364,965 1,046,835 | (288,097) 288,097 |
Notes to unaudited condensed consolidated interim financial statements (contd.)
b. The statement of cash flows for the six months ended 30 September 2010 has been reclassified due to reclassification of certain figures. The reclassified items pertains to restricted cash (pledge fixed deposits) related to deposits that have been made for earning interest and pledged with other parties to meet contractual obligations. These deposits were earlier included 'Cash flow from financing activities' and have now been reclassified under 'Cash flow from investing activities'. Details of these reclassifications are summarized below -
Particulars | Six months ended 30 September 2010 | Six months ended 30 September 2010 (Reclassified) | Movement |
(A) | (B) | (A-B) | |
Placement of fixed deposits
| |||
Cash flow from investing activities
| - | (847,952) | 847,952 |
Cash flow from financing activities
| (847,952) | - | (847,952) |
Related Shares:
MORT.L