17th Mar 2008 07:30
Savile Holdings Plc (the "Company" or "Savile") Results for the six months ended 31 December 2007
Chairman's Statement
I am pleased to present my statement for the half year ended 31 December 2007.
Group turnover on continuing operations in the six months ended 31 December 2007 amounted to ‚£3,044,454 (2006: ‚£2,466,811). Group operating loss was ‚£ 29,634 (2006: profit ‚£68,811) after goodwill amortisation costs of ‚£54,000 (2006: ‚£nil), and payment of compensation for loss of office of ‚£165,360 (2006: ‚£ nil).
Net assets excluding intangible fixed assets at 31 December 2007 were ‚£820,849 (2006: ‚£800,465) including cash of ‚£100,678 (2006: ‚£91,885). Since the year end additional funds of ‚£151,000 were raised by a placing, providing the Company with additional working capital.
The Group's strategy is to create centres of excellence across a range of markets within the field of human capital management. As a result, the Fairplace brand will now concentrate on career management and career transition advice, which remains at the core of the business and accounts for some 60 per cent of turnover. The Cedar International team, led by Helen Pitcher, have settled in well and, trading as Cedar TM Limited, are on target to be a net contributor for the year. The Cedar TM brand will concentrate on all talent management and executive coaching.
As shareholders will be aware, we changed the name of the group to Savile Holdings plc, as part of our intention to develop a wider range of human capital services. We are continuing our strategy of growth through acquisition as well as selective hiring. On the acquisition front, we are announcing today, conditional on approval by shareholders, the acquisition of IDDAS Limited, a Board level transition and career mentoring business. Details of the acquisition are contained in a circular which is being posted to shareholders today.
On the hiring front, we have been pleased to announce, in December, the appointment of Mark Sidlin as our Group Finance Director, and more recently, the appointment of Jo Bond as Group Marketing Director. With these and other appointments, the Group is steadily forming an increasingly strong platform for future growth.
OUTLOOK
The current uncertain economic outlook will present us with both opportunities as well as challenges; it remains the case that most markets which we serve will remain competitive, and we will continue to monitor carefully our cost base to ensure that we generate appropriate returns on all our activities.
With the acquisition of IDDAS we will as a group be well positioned to offer transition and talent management services to all levels within our client organizations. We will also continue to look to offer additional relevant human capital services over the next few years, whether by organic growth or by acquisition. We are particularly mindful that having got our cost base under control our principal challenge now is to grow revenues and profits across the group.
Jonathan CohenChairman17 March 2008
For further information please see www.savile.com or contact:
Jonathan Cohen, ChairmanMark Sidlin, Finance DirectorSavile Holdings plcTel: 020 7816 0707Nominated AdviserCity Financial Associates LimitedTony Rawlinson, ChairmanTel: 020 7492 4777
Consolidated income statement for the six month period to 31 December 2007
Six months Six months Year ended ended ended 30 June 2007 31 December 31 December 2007 2006 Note Unaudited Unaudited Unaudited 1 ‚£ ‚£ ‚£ Continuing operations Revenue 3,044,454 2,466,811 5,068,722 Delivery costs (1,254,422) (974,925) (2,002,071) Overheads (1,762,529) (1,423,075) (2,826,138) Disposal of fixed assets (3,137) - (25,624) Intangible assets amortisation 3 (54,000) - - Goodwill impairment - - (400,000) ------------ ------------ ------------ Operating (loss)/profit (29,634) 68,811 (185,111) Finance income 2,710 607 1,024 Finance expenses (236) (1,747) (2,405) ------------ ------------ ------------ (Loss)/profit before taxation (27,160) 67,671 (186,492) Taxation - - - ------------ ------------ ------------ (Loss)/profit for the period from (27,160) 67,671 (186,492)continuing operations Loss for the period from 2 - (54,637) (331,296)discontinued operations ------------ ------------ ------------ (Loss)/profit for the period (27,160) 13,034 (517,788)attributable to equity shareholders ======== ======== ======== Pence Pence Pence EPS 4 (0.28) 0.13 (5.30) Fully diluted EPS 4 (0.28) 0.13 (5.30)
Consolidated balance sheet at 31 December 2007
As at 31 As at 31 As at December December 2007 2006 30 June 2007 Note Unaudited Unaudited Unaudited ‚£ ‚£ ‚£ Non current assets Intangible assets Goodwill 3 2,290 600,000 - Other intangible assets 3 27,000 - - Property, plant and equipment 175,514 257,724 187,647 Deferred tax 16,443 - 16,443 ------------ ------------ ------------ 221,247 857,724 204,090 ------------ ------------ ------------ Current assets: Inventories 19,125 9,060 15,383 Trade and other receivables 1,977,594 1,656,741 1,446,758 Cash and cash equivalents 100,678 91,885 271,098 ------------ ------------ ------------ 2,097,397 1,757,686 1,733,239 ------------ ------------ ------------ Total assets 2,318,644 2,615,410 1,937,329 ======== ======== ======== Current liabilities Trade and other payables 1,468,505 1,214,945 1,062,533 ------------ ------------ ------------ Total liabilities 1,468,505 1,214,945 1,062,533 ------------ ------------ ------------ Net assets 850,139 1,400,465 874,796 ======== ======== ======== Equity Share capital 294,005 1,020,026 294,005 Share premium account 2,381,033 2,381,033 2,381,033 Capital redemption reserve 726,021 - 726,021 Retained earnings (2,550,920) (2,000,594) (2,526,263) ------------ ------------ ------------ Equity attributable to equity 850,139 1,400,465 874,796holders of the company ======== ======== ============
Consolidated statement of changes in equity at 31 December 2007 (unaudited)
Called up Share Capital Profit and Total Equity share premium redemption loss capital reserve ‚£ ‚£ ‚£ ‚£ ‚£ At 1 July 2006 1,020,026 2,381,033 - (2,013,628) 1,387,431 Profit for the period - - - 13,034 13,034 ------------ ------------ ------------ ------------ ------------ At 31 December 2006 1,020,026 2,381,033 - (2,000,594) 1,400,465 Loss for the period - - - (530,822) (530,822) Credit to equity for - - - 5,153 5,153share based payments Buy back of own shares (726,021) - 726,021 - - ------------ ------------ ------------ ------------ ------------ At 30 June 2007 294,005 2,381,033 726,021 (2,526,263) 874,796 Loss for the period - - - (27,160) (27,160) Credit to equity for - - - 2,503 2,503share based payments ------------ ------------ ------------ ------------ ------------ At 31 December 2007 294,005 2,381,033 726,021 (2,550,920) 850,139 ======== ======== ======== ======== ========
Co nsolidated cash flow statement for the period to 31 December 2007
Six months Six months Year ended ended ended 30 June 2007 31 December 31 2007 December 2006 Note Unaudited Unaudited Unaudited ‚£ ‚£ ‚£ Cash flows from operating activities Cash (used in)/from operations (71,591) (138,539) 77,644 Interest paid (236) (1,747) (2,621) --------- --------- --------- Net cash (used in)/from operating (71,827) (140,286) 75,023activities --------- --------- --------- Cash flows from investing activities Purchase of property, plant and (15,013) (8,838) (17,307)equipment Proceeds on disposal of property, - - 11,153plant and equipment
Acquisition of trade and assets 3 (86,290) - (39,320)
Interest received 2,710 607 1,147 --------- --------- ---------
Net cash used in investing activities (98,593) (8,231) (44,327)
--------- --------- --------- Cash flow from financing activities: - - - --------- --------- --------- (Decrease)/Increase in cash in the (170,420) (148,517) 30,696period ======= ======= ======= Cash generated from operations Six months Six months Year ended ended ended 30 June 2007 31 December 31 2007 December 2006 Unaudited Unaudited Audited ‚£ ‚£ ‚£ Operating (loss)/ profit - Continuing operations (29,634) 68,811 (185,111) - Discontinued operations 2 - (32,593) (67,638) - Amortisation and impairment of 54,000 - 400,000intangibles - Loss on disposal of property, plant 3,137 - 25,624and equipment - Depreciation 27,008 64,181 105,332 - Share based payment charge 2,503 - 5,153 Changes in working capital (excluding the effects of acquisition): - Inventories (3,742) 10,463 4,140 - Trade and other receivables (530,836) 18,628 156,854 - Trade and other payables 405,973 (268,029) (366,710) --------- --------- --------- Cash (used in)/from operations (71,591) (138,539) 77,644 ======= ======= =======Notes 1. Accounting policies Interim report
This Interim Statement for the six months ended 31 December 2007 is unaudited and was approved by the Directors on 11 March 2008. The financial information set out above does not constitute statutory accounts within the meaning of section 240 of the 1985 Act. The information given as comparative figures for the financial year ended 30 June 2007 was extracted from the Group's statutory accounts for that financial year and amended as necessary to comply with IFRS. As such these results are unaudited. The Statutory accounts for that financial year have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified.
The interim statements also comply with IAS 34.
Basis of consolidation
The Group financial statements consolidate the accounts of the Company and all its subsidiary undertakings drawn up to 30 June each year. The results of subsidiaries sold are consolidated for the period to the date on which control passed.
Revenue recognition
Revenue is recognised at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and value added tax.
Revenue in respect of talent management and outplacement services is recognised in line with delivery. Where revenue is generated from individual coaching sessions, the resulting income is recognised on completion of each session. Where revenue is generated by contracts covering a number of sessions then revenue is recognised in line with estimated performance over the course of the contractual term.
Sales of goods are recognised when goods are delivered.
Business Combinations
The purchase method of accounting is used to account for the acquisition of subsidiaries by the group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the group's share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in `intangible assets'. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
2. Discontinued activities
On 17 May 2007 the Group disposed of its subsidiary Fairplace Consulting Italy Srl ("Fairplace Italy"). This resulted in a loss on disposal of ‚£241,821 (2006 - ‚£Nil) which included the disposal of the remaining goodwill associated with this entity of ‚£200,000 (2006 - ‚£Nil).
Six months Six months Year ended ended ended 30 June 2007 31 December 31 December 2007 2006 Unaudited Unaudited Unaudited ‚£ ‚£ ‚£ Revenue - 186,563 225,272 Delivery costs (17,371) (12,684) Overheads (201,785) (280,226) --------- --------- --------- Operating loss - (32,593) (67,638) Finance income - 123 Finance expenses - - (216) --------- --------- --------- Loss before taxation - (32,593) (67,731) Attributable tax expense - - - Loss on disposal of investments - - (241,821) --------- --------- --------- Loss for the period from discontinued - (32,593) (309,552)operations relating to Fairplace Italy ======= ======= =======
In addition the group incurred the following losses in connection with its disposal of
Working Transitions 2005 Limited in the year ended 30 June 2005.
Loss on disposal of investments - (22,044) (21,744) ------------ ------------ ------------ Net loss for the period from - (54,637) (331,296)discontinued operations ========== ========== ========== 3. Acquisition
On 21 September 2007 the Company acquired the business and assets of Corporate Executive Development and Resourcing Plc from the administrators of that company. The business and assets were transferred into a new company, Cedar TM Limited, which is a 100% subsidiary of Savile Holdings plc.
A summary of the assets transferred and the fair value adjustments in accordance with IFRS 3 is as follows:
Book value Fair value Fair value adjustment ‚£ ‚£ ‚£ Customer contracts - 80,000 80,000 Brand - 1,000 1,000 Plant and equipment 3,000 - 3,000 ------- ------- ------- Acquisition costs 3,000 81,000 84,000 ------- ------- Goodwill on acquisition 2,290 ------- Purchase consideration 86,290 =======
The purchase consideration, all of which was payable in cash, comprised:
Cash consideration 15,000 Liabilities assumed in exchange for 66,278control of the acquired business Associated costs 5,012 ------- 86,290 =======
The intangible assets are being amortised over their estimated useful lives of six months.
Amortisation charged during the period against brand and customer contracts totalled ‚£54,000 (2006: ‚£nil) and the resulting carrying value of these assets at the balance sheet date was ‚£27,000 (2006: ‚£nil). Goodwill is not amortised so its carrying value at the balance sheet date was ‚£2,290.
4. Earnings per share
The calculation of earnings per share is based on the loss after tax of ‚£27,160 (2006: profit ‚£13,044) and on the number of shares in issue being the adjusted weighted average number of shares in issue during the period of 9,800,170 (2006: 9,800,170). There are no dilutive securities at any reporting date.
5. First-time adoption of IFRS
Savile Holdings Plc reported under UK GAAP in its previously published financial statements for the year ended 30 June 2007. The tables below shows the reconciliation of the profit and net assets as reported previously under UK GAAP to those reported under IFRA for the six month period to 31 December 2006 and the year ended 30 June 2007. As at the date of transition, 1 July 2006, there were no reconciling items between equity under UK GAAP and equity under IFRS.
Reconciliation of profit after tax between Six months Year endedUK GAAP and IFRS ended 30 June 2007 31 December 2006 Unaudited Unaudited ‚£ ‚£ Loss after tax - UK GAAP (51,970) (517,788) Amortisation of goodwill 65,004 125,833 Increase in goodwill impairment - (80,000) Increase in loss on disposal of Fairplace - (45,833)Italy --------- --------- Profit/(loss) after tax - IFRS 13,034 (517,788) ======= =======Reconciliation of net assets and total Six months Year endedequity between UK GAAP and IFRS ended 30 June 2007 31 December 2006 Unaudited Unaudited ‚£ ‚£ Net assets - UK GAAP 1,335,461 874,796 Goodwill adjustment 65,004 - ---------- ---------- Total equity - IFRS 1,400,465 874,796 ======== ========
Explanation of reconciling item between UK GAAP and IFRS
From the date of transition to IFRS, 1 July 2006, goodwill is no longer amortised. The goodwill expense has been removed from the income statement for the six months ended 31 December 2007, year ended 30 June 2007 and six months ended 31 December 2006. Goodwill amortisation incurred prior to the date of the transition to IFRS has not been adjusted as the IFRS 1 Business Combinations exemptions have been applied with respect to business combinations occurring before this date and, consequently, the carrying value under UK GAAP at 1 July 2006 is deemed cost under IFRS on transition.
6. Interim statement
This Interim Statement is being sent by post to all registered shareholders. Additional copies are available from the Company's registered office, 36-38 Cornhill, London, EC3V 3PQ.
SAVILE HOLDINGS PLCRelated Shares:
Ls -3x Avgo