Half Yearly Report

RNS Number : 1470T

Autoclenz Holdings PLC

23 September 2010

 

 

Thursday, 23 September 2010

 

 

 

 

Autoclenz Holdings Plc

Results for the 6 months to 30 June 2010

 

 

Autoclenz Holdings Plc, the UK's leading provider of outsourced Vehicle Valeting and Specialist Cleaning Services, announces its interim results for the 6 months to 30 June 2010.

 

 

 

 

Highlights:

 

 

Ø New business wins in Automotive Services contributed to sales increase of £1.3m (11%)

 

Ø Underlying profits before tax (before the amortisation of intangibles and share option related charges) broadly maintained at £684,000 (2009: £707,000), with underlying earnings per share 4.74p (2009: 4.89p)

 

Ø Start-up costs of expanding Automotive Movements business in North, and public sector cutbacks in Specialist Cleaning business will have some impact on second half results

 

Ø Continued strong cash generation has resulted in total net debt reducing by a further £352,000 to £1,124,000

 

 

 

 

Enquires:
James Leek, Chairman	07966 528295
Grahame Rummery, Chief Executive	07860 680428
Trevor Clingo, Group Finance Director	01283 550033
Autoclenz Holdings Plc
Ross Andrews/Nick Cowles
Zeus Capital Ltd	0161 831 1512
Fiona Tooley/Keith Gabriel
Citigate Dewe Rogerson Ltd	0121 362 4035

 

 

 

 

STATEMENT BY THE CHAIRMAN, JAMES LEEK

 

 

We are pleased to report that the company achieved first half sales of £13.3m an increase of approximately £1.3m on the first half of 2009 but despite the increase in sales underlying profits before tax were broadly similar to last year. It has been a period of mixed fortunes. Some stability has returned to the automotive market allowing us to increase sales in Automotive Services. In contrast, Specialist Cleaning, as noted in our May 2010 AGM statement, has suffered a significant decrease in sales following the bad January weather and the increasing budgetary pressures on public sector spending.

 

Underlying operating profit (before the amortisation of intangibles and share option related charges) was £734,000 (2009: £799,000). Finance costs have reduced from £92,000 to £50,000 reflecting lower borrowings and interest rates  giving underlying profit before tax of £684,000 (2009: £707,000). Underlying earnings per share based on the above profits were 4.74p (2009: 4.89p)

 

Operating Review and Segmental Analysis

These results were lower than our internal target. They reflect a good performance in Automotive Services, where gross profit increased by £208,000, but this was largely offset by a decline of £170,000 in the gross profit of Specialist Cleaning.

 

The table below analyses sales and profit margins in our two business sectors and reconciles underlying operating profit to the consolidated income statement.

 

Reconciliation of Profit

£'000					Change in Year
	2010	2010	2009	2009	%
Sales
Automotive Services	12,650		11,163		13.3%
Specialist Cleaning	663		866		-23.4%
Total Sales	13313		12029		10.7%
		Gross		Gross
		Margin		Margin
Gross Profit		%		%
Automotive Services	2,956	23.4%	2,748	24.6%
Specialist Cleaning	335	50.5%	505	58.3%
Total Gross Profit	3291	24.7%	3253	27.0%	1.2%
Fixed Costs	(2,557)		(2,453)		-4.2%
Underlying Operating Profit before Interest	734		799		-8.2%
Interest	(50)		(92)		45.7%
Underlying Operating Profit after Interest	684		707		-3.3%
Amortisation of Intangible Assets	(535)		(535)		0.0%
Share Option Related Chgs	0		(43)		100.0%
Profit / (Loss) before tax as per Consolidated Income Statement	149		129		15.5%

 

 

 

 

Automotive Services

In our core Automotive Services business we have won some satisfactory new business in most of our product areas, which continue to perform well, and these account for the major part of the £1.5m sales increase in automotive services.

 

We have also increased sales in Movements (the part of our Automotive business which collects and delivers cars for our rental and automotive dealership customers) but this has been more problematical as referred to below.

 

It has always been our intention to expand the geographical footprint of Movements from its largely Southern base. We quoted and were successful in winning significant new business in the North of England and Scotland on behalf of a major rental customer which could have an annual sales value in excess of £1m. This new business commenced in February 2010 and we transferred over 140 employees onto our payroll. The re-direction and management support costs of these individuals together with other start-up costs of this sizeable expansion have incurred significant losses in the first two months of operation and are reflected in the first half results of this year - we do not amortise or carry forward any start-up costs. However we are targeting to achieve break-even on this new business during the last quarter of this year. This is clearly disappointing and the current efficiencies and cost structure are significantly adverse to our estimates when we originally assessed this new opportunity. Our present view is that whilst taking longer to achieve this new contract will prove a profitable addition to the expansion of the Movements business.

 

Specialist Cleaning

REACT has suffered some very adverse market conditions with sales declining from £866,000 to £663,000, and gross profit from £505,000 to £335,000. Initially caused by the bad January weather, but then by a major reduction in spend by our public sector customers - custodial, police, highways and rail. These areas are reacting early to the central government budget cuts and either curtailing less essential work or to some extent taking it in house prior to making redundancies so they can better utilise their own employed capacity. We hope to regain some of this work when the situation stabilises but this may take some months.

 

In the meantime we have split our sales and marketing approach into two distinct areas to give better focus and penetration: Rapid Response, which covers the sectors referred to above, and Property Services particularly aimed at the Social Housing sector offering services such as void property clearance and sparkle cleans.

 

We have successfully started to win business from a number of Northern and Midland's based Housing Associations. We have achieved this by applying some of our valeting expertise to the preparation of properties, thus improving customer appeal both inside and outside. As we grow Property Services we anticipate it will give us greater visibility of forward sales and a more regular work inflow than the erratic but higher margin which we shall still be earning in Rapid Response. Our second half sales in Property Services will however be adversely impacted by the sudden insolvency of Connaught PLC to which we were a subcontractor for some of this Housing Association work. We are fighting to retain this work through other providers and directly, and although this will be a setback we are servicing a very large industry where we believe we have scope to make significant progress over time. We also expect that we will have to recognise in our second half accounts a bad debt from Connaught for approximately £40,000 in respect of unpaid work done since July.

 

As referred to in our Annual Report we are reviewing a number of potentially attractive add-on acquisitions which could increase the size and stability of our Specialist Cleaning division.

 

Finance

Good cash generation has continued with net debt reducing, as shown in note 10, by £352,000 to £1,124,000. We have repaid a further £650,000 of our medium term debt in the period, which has accordingly reduced to £650,000. We continue to comply with banking covenants and are targeting net debt to be around £1m by the end of 2010, assuming no outflow for acquisitions and will have repaid the term loan.

 

We were pleased to be able to return to the dividend list by paying a final 1p dividend in July 2010. We will, as stated in the year end report, pursue a cautious dividend policy reflecting profitability and cash generation on an annual basis.

 

Our legal appeal to the Supreme Court in the Belcher case was expected to be heard in October of this year, but due to pressure of other cases we have been informed that it will now be deferred into the first half of 2011. We are continuing to make appropriate provision for legal costs, and will update shareholders with any further developments if appropriate.

 

Outlook

The market prospects for the automotive sector remain difficult to assess but we are pleased with the present performance of our core valeting business. Overall we continue to generate good cash flow and debt reduction. On the other hand we have to contend with the challenges of getting right our new northern Movements business, reacting to public sector cutbacks at Rapid Response and dealing with the unwelcome hiccup of the Connaught demise. These latter three factors mean that although we are expecting a profitable second half, it will not be at the level of 2009 and therefore we are unlikely to meet our internal target of at least maintaining last year's level of profitability.

 

We are totally focused on dealing with these three difficult areas by the year end.

Condensed consolidated statement of comprehensive income and expenditure

For the period from 1 January to 30 June 2010

 

 

		Six months ended	Six months ended
		30 June 2010	30 June 2009
	Notes	£000	£000
Revenue		13,313	12,029
Cost of sales		(10,022)	(8,776)
Gross profit		3,291	3,253
Distribution costs		(309)	(266)
Administration expenses		(2,783)	(2,766)
Operating Profit		199	221
Finance cost		(50)	(92)
Profit before taxation		149	129
Taxation		(28)	(16)
Profit for the period		121	113
Basic earnings per share	3	1.16p	1.08p
Diluted earnings per share	3	1.16p	1.07p
Basic earnings per share (adjusted profit)	3	4.74p	4.89p
Diluted earnings per share (adjusted profit)	3	4.74p	4.82p

 

The results for the period are derived from continuing operations.

Condensed consolidated statement of financial position

As at 30 June 2010

 

 

		As at	As at
		30 June	31 December
		2010	2009
	Notes	£000	£000
Assets
Non-current assets
Goodwill		9,091	9,091
Other intangible assets	4	4,498	5,033
Property, plant and equipment	5	491	507
		14,080	14,631
Current assets
Inventories		19	10
Trade and other receivables	6	3,884	3,185
Cash and cash equivalents		380	488
		4,283	3,683
Total assets		18,363	18,314
Current liabilities
Trade and other payables	7	(3,049)	(1,818)
Obligations under finance leases	7 & 8	(21)	(20)
Current tax liabilities	7	(182)	(781)
Borrowings	7	(1,430)	(1,860)
Non-current liabilities
Deferred tax liabilities		(1,029)	(1,189)
Obligations under finance leases	8	(33)	(44)
Total liabilities		(5,744)	(5,712)
Net assets		12,619	12,602
Equity
Share capital		1,040	1,040
Share premium account		-	11,383
Share option reserve		106	106
Retained earnings		11,473	73
Total equity		12,619	12,602

Statement of changes in equity

For the period from 1 January to 30 June 2010

		Share Capital	Share Premium	Share Option Reserve	Retained Earnings	Total Equity
	Notes	£000	£000	£000	£000	£000
Balance at 1 January 2009		1040	11,383	292	(346)	12,369
Profit for the period		-	-	(186)	419	233
Balance at 31 December 2009		1,040	11,383	106	73	12,602
Balance at 1 January 2010		1,040	11,383	106	73	12,602
Profit for the period		-	-	-	121	121
Proposed dividend		-	-	-	(104)	(104)
Cancellation of share premium account	12	-	(11,383)	-	-	(11,383)
Increase in retained earnings	12	-	-	-	11,383	11,383
Balance at 30 June 2010		1,040	-	106	11,473	12,619

 

Condensed consolidated cash flow statement

For the period from 1 January to 30 June 2010

			Six months ended		Six months ended
			30 June 2010		30 June 2009
	Notes	£000	£000	£000	£000
Net cash inflow from operating activities	9		578		744
Investing Activities
Interest received		-		-
Proceeds on disposal of property, plant and  equipment		30		62
Purchase of property, plant and equipment		(216)		(216)
Net cash used in investing activities			(186)		(154)
Financing Activities
Repayment/Proceed of short term borrowing		200		(300)
Repayment of long term borrowings		(650)		(650)
Interest paid		(50)		(92)
Net cash outflow from financing activities			(500)		(1,042)
(Decrease) in cash			(108)		(452)

 

Condensed consolidated statement of comprehensive income and expense

For the period from 1 January to 30 June 2010

	Six months ended	Six months ended
	30 June 2010	30 June 2009
	£000	£000
Transfers:
Transferred (loss)/profit from equity on cash flow hedges	(13)	(18)
Profit/(loss) for the period	134	131
Total recognised income/(expense) for the period	121	113
Attributable to:
Equity holders of the parent	121	113

Notes to the Financial Accounting Statements

 

1 Accounting Policies

 

Basis of preparation

The unaudited condensed financial statements have been prepared in accordance with International Accounting Standard 34 (Interim Financial Reporting).

 

The unaudited consolidated income statement for each of the six month periods and the unaudited consolidated balance sheet as at 30 June 2010 do not amount to full accounts within the meaning of section 434 of the Companies Act 2006 and have not been delivered to the Registrar of Companies. The interim report was approved by the Board of Directors on 22 September 2009. The unaudited comparative figures for the six months to 30 June 2009, and the balance sheet as at 31 December 2009 have been prepared using accounting policies consistent with IFRS. They do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The unqualified audited accounts for the year ended 31 December 2009 have been filed with the Registrar of Companies and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

 

Accounting convention

The financial statements have been prepared under the historical cost convention. This has been applied consistently throughout the year and the preceding year.

 

Operating segments

The Group has adopted IFRS 8 'Operating Segments' with effect from 1 January 2009 which requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. The Groups' reportable segments have not changed from that reported under IAS 14 and remain as Automotive Services and Specialist Cleaning Services within the Income Statement. The Group does not allocate assets or liabilities to any reportable segment and hence no segmental information is available.

 

Revenue

Revenue is measured 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 value added tax and trade discounts.

 

Sale of goods

Revenue from the sale of goods is recognised when all the following conditions are satisfied:

- the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

- the amount of revenue can be measured reliably;

 

Rendering of services

- Revenue from a contract to provide services is recognised as each individual clean or movement is completed.

 

Goodwill

Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.

 

The purchased goodwill of the Group is regarded as having an indefinite useful economic life and, in accordance with IAS36 Impairment of Assets, is not amortised but is subject to annual tests for impairment. In reviewing the carrying value of goodwill of the various businesses, the board has considered the separate plans and cash flows of these businesses consistent with the requirements of IAS36, and is satisfied that these demonstrate that no impairment has occurred.

Intangible assets

For the acquisition of Autoclenz Limited on 7 December 2005, the Group recognised separately from goodwill intangible assets that were separable or arose from contractual or other legal rights and whose fair value could be measured reliably. These intangible assets have finite lives and are amortised on a straight-line basis over those lives, which range from 7-10 years.

 

At each balance sheet date, the Group reviews the carrying amounts of its intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

 

Recoverable amount is the higher of fair value and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit). In prior years a reversal of impairment loss is rerecognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

 

Property, plant and equipment

Tangible non-current assets are stated at cost, net of depreciation and are tested for impairment. The cost of tangible non-current assets is depreciated using a straight-line basis over their expected useful lives as follows:

 

Plant and motor vehicles	between 2 and 5 years
Property improvements	7 years

 

Leasing

Assets held under finance leases which confer rights and obligations similar to those attached to owned assets, are capiltalised as tangible fixed assets and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the profit and loss account over the period of the leases to produce a constant rate of charge on the balance of capital repayments outstanding.

 

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

 

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. For inventories that are ordinarily interchangeable, cost is calculated using the weighted average method. Net realisable value represents the expected selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

 

Financial instruments

Financial assets and financial liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Taxation

UK Corporation tax is provided at amounts expected to be paid using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date.

 

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

 

A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

 

Deferred tax is measured at the tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

 

Basis of consolidation

The accounts consolidate the accounts of the company, Autoclenz Limited and Autoclenz Services Limited.

 

Employee benefits

The Group offers all employees membership of the Group personal pension plan after 3 months' service. Since 1 September 2009 the Scheme has operated on a salary-sacrifice basis with members given the option to opt out of this arrangement. The company makes contributions at varying levels from 4% to 10%, dependent on the level of contribution made by the employee. Amounts charged to the consolidated income statement in respect of pension costs is the contribution payable in the year. Differences between contributions payable and paid in the year are shown as either accruals or prepayments on the statement of financial position.

 

Under IAS19 the Group recognises the monetary value of employee benefits accruing to employees but not yet settled; typically holiday pay. There is a requirement to present the value of the liability for employee benefits to be paid in the future for services provided up to the reporting date.

 

Finance costs

Finance costs of debt are recognised in the profit and loss account over the term of such instruments at a constant periodic rate on the carrying amount.

 

Period covered

All notes below detail costs and statistics relating to the period 1 January 2010 to 30 June 2010 for Autoclenz Limited, Autoclenz Holdings Plc and for Autoclenz Services Limited. The comparative period being the period from 1 January 2009 to 30 June 2009.

 

Going concern

The Group meets its day to day working capital requirements through a revolving credit facility of £3 million which is due for renewal in June 2011. The Group is subject to three quarterly covenant tests. These tests and applicable interest rates are included in the year end statutory accounts. The principal risks of the group include the employment status of valeters, loss of customers to competition or through a customer unable to pay a debt and these risks and other potential risks are kept under close review.

There is an ongoing legal case (Autoclenz Ltd v Belcher) regarding the employment status of 20 valeters. The case is listed for an appeal hearing at the Supreme Court in October 2010. Professional advice has been commissioned from employment lawyers throughout the process. All 20 of the valeters are engaged at one location in the Midlands, the court case relates to some extent to the specific working requirements of this particular auction customer. The group have accounted for a cost of settlement of this case, although we believe this is no reflection on the likely outcome of the Supreme Court appeal. Autoclenz's business model and indeed the valeting industry, rely on self employed valeters. In the event of an adverse ruling in this case it is important to note that Autoclenz believe that this claim is isolated to this account as the majority of Autoclenz's 250 customer accounts are operating with different working practices. An announcement to this effect was made on 14 October 2009 through RNS.

 

The Group's budgets and forecasts , take account of reasonably possible changes in trading performance and show that the group should be able to operate well within the level of the current facility, whilst also repaying debt on the term loan on the agreed dates.

 

After making enquiries, the Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the Interim report

and Accounts.

 

Derivative transactions

The Group enters into derivative transactions to manage the interest rate risk arising from its operations and sources of finance.

 

The Group does not hold or issue derivative financial instruments for speculative purposes.

 

Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity and the gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the 'finance cost' of the income statement.

 

Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of the grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

 

Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

2 Segmental analysis

	Six months ended	Six months ended
	30 June 2010	30 June 2009
	£000	£000
Revenue
Automotive Services	12,650	11,163
Specialist Cleaning Services	663	866
Total	13,313	12,029
Results
Automotive Services	2,956	2,748
Specialist Cleaning Services	335	505
Distribution costs	(309)	(266)
Administration expenses	(2,783)	(2,766)
Finance cost	(50)	(92)
Profit before taxation	149	129
Tax	(28)	(16)
Profit after taxation	121	113

 

The Group does not allocate all operating costs to the segments identified above, and these unallocated costs are separately identified above.

 

Assets and liabilities are not split by segment. The nature of the services provided is such that the return on capital is not a useful measure. The low value assets are not apportioned across the various businesses and the ledgers for payables and receivables are not segmented. Geographically, the group operates solely in the UK and as such revenue, costs, assets and liabilities all originate and are held in the UK.

 

3 Earnings per share

	2010		2009
	Basic shares	Diluted shares	Basic shares	Diluted shares
Weighted average number of ordinary shares	10,400,020	10,400,020	10,400,020	10,400,020
Effect of dilutive potential ordinary shares:  share options	-	-	-	158,915
Total	10,400,020	10,400,020	10,400,020	10,558,935
Profit (£000s)	121	121	113	113
Earnings per share (pence)	1.16p	1.16p	1.08p	1.07p
Profit (£000s)	121		113
Amortisation	535		535
Share based payment	-		43
Taxation per income statement	28		16
	684		707
Taxation at 28% (assumed notional rate)	(192)		(198)
Adjusted profit for the period	492	492	509	509
Adjusted earnings per share	4.74p	4.74p	4.89p	4.82p

4 Other intangible assets

		Non-contractual
	Contractual	customer
	Customers	relationships	Brand	Total
	£000	£000	£000	£000
Cost
At 1 January 2010	2,656	3,169	3,506	9,331
At 30 June 2010	2,656	3,169	3,506	9,331
Amortisation
At 1 January 2010	1,069	1,819	1,410	4,298
Charge for period	133	227	175	535
At 30 June 2010	1,202	2,046	1,585	4,833
Carrying amount
At 30 June 2010	1,454	1,123	1,921	4,498
Carrying amount
At 31 December 2009	1,587	1,350	2,096	5,033

 

5 Property, plant and equipment

	Plant, motor vehicles and property improvements
	£000
Cost
At 1 January 2010	2,699
Additions	216
Disposals	(229)
At 30 June 2010	2,686
Accumulated Depreciation
At 1 January 2010	2,192
Charge for the period	229
Eliminated on disposals	(226)
At 30 June 2010	2,195
Carrying Amount
At 30 June 2010	491
Carrying Amount
At 31 December 2009	507

 

6 Trade and other receivables

	As at 30 June	As at 31 December
	2010	2009
	£000	£000
Amounts receivable for the sale of goods	3,582	2,665
Other debtors	6	9
Prepayments	296	511
Amounts falling due within one year	3,884	3,185

7 Current liabilities

	As at 30 June	As at 31 December
	2010	2009
	£000	£000
Amounts falling due within one year
Short term loan	800	600
Bank loan and overdraft	630	1,260
Trade creditors	1,067	1,045
Finance lease	21	20
Corporation tax	182	163
Other taxation and social security	1,074	618
Other creditors	43	16
Accruals and deferred income	761	757
Proposed dividend	104	-
	4,682	4,479

 

The bank loan is secured by a charge on all the assets of the Group. Interest is charged at 1.25% over LIBOR (2009: 1.75%).

 

8 Obligations under finance leases

	Minimum		Present value of
	lease payments		minimum lease payments
	As at 30 June	As at 31 December	As at 30 June	As at 31 December
	2010	2009	2010	2009
Amounts payable under finance leases:	£000	£000	£000	£000
Within one year	25	25	-	-
In the second to fifth years inclusive	35	48	-	-
			54	64
Less: future finance charges	(6)	(9)	-	-
Present value of lease obligations	54	64
Less: amount due for settlement within  12 months (shown in current liabilities)			21	20
Amount due for settlement after 12 months			33	44

9 Cash flow

Reconciliation of operating profit to net cash inflow from operating activities

	Six months ended	Six months ended
	30 June 2010	30 June 2009
	£000	£000
Profit for the period	121	113
Adjustments for:
Finance costs	50	92
Income tax expense	28	16
Depreciation of property, plant and equipment	229	278
Amortisation of intangible assets	535	535
Amortisation of finance costs	20	20
Share based payment expense	-	43
Gain on disposal of property, plant and equipment	(27)	(25)
Operating cash flows before movements in working capital	956	1,072
(Increase)/decrease in inventories	(9)	1
(Increase) in receivables	(699)	(620)
Increase in payables	500	413
Cash generated by operations	(208)	(206)
Income taxes paid	(170)	(122)
Net cash from operating activities	578	744

 

10 Reconciliation of net debt

	Six months ended	Six months ended
	30 June 2010	30 June 2009
	£000	£000
Opening debt	(1,476)	(2,658)
Net cash flow from operating activities	578	744
Assets acquired on finance lease	10	(9)
Capital expenditure	(216)	(216)
Proceeds on disposal of assets	30	62
Financing	(50)	(92)
Closing debt	(1,124)	(2,169)

 

Net debt reduced by £352,000 (2009: decrease of £489,000).

 

11 Dividends paid and proposed

	As at 30 June	As at 31 December
	2010	2009
	£000	£000
Dividends paid and proposed on equity shares - proposed  final dividend for 2009 £0.10p per ordinary share	(104)	-

 

12 Share premium account

The Articles of Association for Autoclenz Holdings Plc (the Company) provided at Article 53 that subject to the provisions of the Acts, the Company could by special resolution reduce its share capital, any capital redemption reserve and any share premium account or other undistributable reserve in any way. As at 1 January 2010 the Share Premium Account of the Company stood in credit to the value of £11,383,244.30.

By a special resolution of the Company duly passed in accordance with Section 283 of the Companies Act 2006 at the AGM of the Company held on 19 May 2010, it was resolved that the amount standing to the Share Premium Account of the Company was cancelled.

 

The purpose of the cancellation of the Share Premium Account was to create distributable reserves within the Company Balance Sheet so as to enable the Company to pay dividends and/or buyback shares when authorised to do so by the Shareholders of the Company.

 

13 Related party transactions

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation.

 

14 General notes

Autoclenz Holdings plc is incorporated in Great Britain and registered in England and Wales under the Companies Act 2006. The address of the registered office is Autoclenz Holdings Plc, Stanhope Road, Swadlincote, Derbyshire, DE11 9BE.

 

This interim report will be posted to all shareholders of the company, and will be available on the Company's website (www.autoclenz.co.uk). The report will also be available for inspection by the public at the registered office of the company during normal business hours on any weekday.

This information is provided by RNS

The company news service from the London Stock Exchange