3rd Feb 2005 07:00
Fairplace Consulting PLC03 February 2005 INTERIM RESULTS The Board of Directors of Fairplace Consulting plc today reports the Group's unaudited results for the six months to 31 December 2004 - Sales of £2.1 million (2003 : £2.35 million) reflecting difficult conditions in UK outplacement market - Costs reduced to £2.43 million (2003 : £2.65 million) with greater resourcing flexibility for 2005 - Operating loss before goodwill of £0.33 million (2003 loss : £0.3 million) in line with management expectations - Outplacement sales starting to strengthen and increasing contributions from talent management services - Second half has started positively and two major contracts won in past month - Expansion into search and interim management specialising in HR appointments Mark Allsup, Chairman, said : " 2004 proved a difficult year for providers of outplacement services, aswitnessed by consolidations and trading results within the sector. Despiteprevailing market conditions, Fairplace has entered 2005 with increasedconfidence. Over the past year we have repositioned the business : bringing in a ChiefExecutive and a City Managing Director from a larger competitor ; placing themarketing focus on specific sectors and geographies ; changing the resourcingmodel and reducing fixed delivery costs ; creating a consulting team withexpertise in coaching and other talent management services ; and extending theinternational network through partnerships and alliances. Our growth strategy is based on capturing a greater share of the outplacementmarket and building broader relationships with clients through the provision oftalent management services. The Board anticipates that the positive effects of this strategy will becomeincreasingly evident during 2005."Michael Moran, Chief Executive, said : " I am delighted with the significant progress we have made in positioningFairplace for a return to profitability. Outplacement sales have started tostrengthen and our talent management services are gathering real momentum. The volume of business in the pipeline indicates that our strategy is beginningto deliver results. We are particularly pleased to have won two competitive bidsin the past month which are expected to benefit the Company's second halfperformance." For enquiries, please contact : Mark Allsup, Chairman 020 7816 0707Michael Moran, Chief ExecutiveClare Hanson, Finance DirectorFairplace Consulting plc Mark Baker 020 7845 7900The Wriglesworth Consultancy Chairman's StatementWhile conditions in the outplacement market continued to be difficult,significant progress has been made in positioning Fairplace for a return toprofitability. With the arrivals of Michael Moran as Chief Executive and Linda Jackson asco-Managing Director of the City practice last summer, we have strengthened ourposition in the outplacement sector, while opening up new avenues for growth intalent management services. These include executive coaching, where the UKmarket is believed to be considerably larger than outplacement and highlyfragmented. The effects of this strategy are already being seen : Fairplace has beensuccessful in winning competitive bids for two major accounts in the past month; and we are deriving an increasing proportion of our revenues fromnon-outplacement services. These have recently been expanded to include searchand interim management, specialising in HR appointments. Trading Results Sales for the six months to 31 December 2004 declined by 10.6% to £2.1 million(2003 : £2.35 million), but costs were also lower at £2.43 million (2003 : £2.65million) as a number of measures to reduce fixed costs took effect. Theoperating loss before goodwill of £(0.33 million) was therefore similar to thecomparable period in 2003. This was in line with management expectations. While there is no interim dividend payment, it remains the Board's intention toresume dividend payments as soon as the Company's performance allows. City Despite the general market conditions, the City division's outplacement saleswere higher than in 2003 as monthly activity levels picked up in the autumnperiod. Sales of HR consulting services also increased. The second half has started positively with a number of clients embarking onrestructuring projects. This appears to mirror the latest quarterly financialservices survey by the CBI and PwC which suggests an accelerating rate of jobcuts in the banking, insurance and fund management sectors. We also believe that Fairplace is gaining market share and are pleased to haverecently won a substantial new banking client for which we will provide bothoutplacement and coaching services. UK Sales were below target, but the division ended the half-year on a morefavourable trading note. In the last month we have secured a nationwideoutplacement contract with a financial services client which is expected to havea positive impact on second half performance. We have sharpened our marketing focus on specific client sectors and geographicregions in order to maximise use of resources and give us competitive advantage. In October we were pleased to receive the Association of Career FirmsInternational's Quality of Excellence award for effectiveness in deliveringon-site, distance and other services to one of the UK's largest insurancecompanies. Distance-Based Sales were below the 2003 level, due to the lower level of UK project activityin the first half and reduced creditor business, but profitability wassatisfactory. We continue to offer a very high quality distance service from our centre inNorthampton which is unmatched by our competitors. International ItalyFairplace Consulting Italy(100% subsidiary) Sales showed some improvement on the same period in 2003 and new businessprospects for the second half are encouraging. PortugalFairplace Recursos Humanos(40% shareholding) Losses for the second full year of operation were substantially reduced andfurther progress is looked for in 2005. Switzerland In December we were delighted to announce an alliance with Choice, an executivecoaching, career transition and change management consultancy based in Zurich. Through alliances and membership of Career Partners International, our coveragenow encompasses many of the world's leading financial centres. We are workingclosely with CPI's other member firms on a number of marketing, productdevelopment and technology initiatives which should yield benefits in 2005. Current Trading and Prospects The second half has started on an improved trading note and the Directors areencouraged by the volume of business in the pipeline. Excellent progress is alsobeing made in the development of talent management and other services which areexpected to contribute an increasing proportion of revenues. While implementation of the new strategy is at an early stage, the Boardbelieves that the positive effects will become increasingly evident during 2005. Mark AllsupChairman 3 February 2005 Fairplace Consulting plc Group profit and loss accountFor the Period 6mths to 6mths to 12mths to 31/12/04 31/12/03 30/6/04 Unaudited Unaudited Audited £ £ £ Turnover 2,097,403 2,347,762 4,758,383 Administrative expenses (2,430,877) (2,648,081) (5,398,140) Operating (loss) beforeexceptional items and goodwill (333,474) (300,319) (639,757) Exceptional Items - - (190,320) Operating (loss) before goodwill (333,474) (300,319) (830,077) Goodwill (66,480) (73,128) (132,088) Operating (loss) after goodwill (399,954) (373,447) (962,165) Gain on sale of investment - - 97,316Provision against investment - - (41,335)Interest receivable 1,012 8,314 13,453Interest payable (1,056) (343) (711)Other income/expenditure (44) 7,971 68,723 (Loss) on ordinaryactivities before tax (399,998) (365,476) (893,442) Corporation tax charge (50,513) (50,513) (176,439)Deferred tax provision 5,953 ---------- ---------- ---------Tax credit on ordinary activities - 93,099 119,069 ---------- ---------- ---------(Loss) for the period (399,998) (272,377) (774,373) ---------- ---------- --------- Dividend - (115,504) (115,504) ---------- ---------- ---------Retained (loss) for the period (399,998) (387,881) (889,877) ========== ========== ========= EPS (note 1) (7.27) (4.95) (14.08)EPS before goodwill (6.06) (3.62) (11.68)Fully diluted EPS (7.27) (4.95) (14.08) Fairplace Consulting plc Group balance sheetFor the period ending 31/12/04 31/12/03 30/06/04 Unaudited Unaudited Audited £ £ £Fixed assets:Intangible 2,026,012 2,336,223 2,092,492Tangible 500,032 639,572 597,346Investments - 171,650 - -------- -------- -------- 2,526,044 3,147,445 2,689,838Current assets:Stock and work in progress 40,626 44,398 32,322Debtors 1,198,666 1,185,049 1,087,664Cash at bank and in hand 32,949 592,023 376,510 -------- -------- -------- 1,272,241 1,821,470 1,496,496 Creditors: falling due within oneyear (1,200,713) (1,476,247) (1,188,764) Net current assets 71,528 345,223 307,732 Total assets less currentliabilities 2,597,572 3,492,668 2,997,570 Creditors: falling due after morethan one year (31,410) (24,512) (31,410) -------- -------- --------Net assets 2,566,162 3,468,156 2,966,160 ======== ======== ======== Capital and reserves:Called up share capital 825,026 825,026 825,026Share premium account 2,079,842 2,079,842 2,079,842Profit and loss account (338,706) 563,288 61,292 -------- -------- --------Equity shareholders' funds 2,566,162 3,468,156 2,966,160 ======== ======== ======== Fairplace Consulting plc Group Cash Flow StatementFor the Period: 6mths to 6mths to 12mths to 31/12/04 31/12/03 30/6/04 Unaudited Unaudited Audited £ £ £ Cash (out)/inflow from operating activities (461,569) 89,793 (102,431) Returns on investment and servicing offinance:Dividends Received - - -Interest received 1,012 8,314 13,453Other interest paid (1,056) (278) (711) -------- -------- ------- (44) 8,036 12,742 Taxation:Corporation tax refunded/(paid) 111,739 (14,812) (69,843) Capital expenditure and financial investment: Purchase of tangible fixed assets (3,687) (284,891) (350,713)Proceeds from sales of tangible fixed assets 10,000 - - -------- -------- ------- 6,313 (284,891) (350,713) Acquisitions and disposals:Purchase of subsidiary undertaking - - (19,269)Proceeds from sale of investment - - 227,631 -------- -------- ------- - 208,362 Equity dividends paid - (161,290) (276,794) Cash flow before use of liquidresources and financing (343,561) (363,164) (578,677) -------- -------- -------(Decrease) in cash in the period (343,561) (363,164) (578,677) ======== ======== ======= Reconciliation of operating profit to 6mths to 6mths to 12mths tooperating cashflow 31/12/04 31/12/03 30/6/03 Unaudited Unaudited Audited £ £ £Operating (loss)/profit before goodwill (333,474) (300,319) (830,077)Depreciation 88,392 68,908 176,922Loss/(gain) on foreign exchange - - (227)Loss on disposal of fixed assets 2,660 - -(Increase)/decrease in stock (8,305) 16,405 28,482(Increase)/decrease in debtors (222,739) 151,125 409,181Increase/(decrease) in trade creditors 149,086 367,261 46,031(Decrease)/increase in accrualsand deferred income (163,267) (152,429) 93,184Increase/(decrease) in tax andsocial security 26,078 (61,158) (25,927) -------- -------- -------Net cash flow from operating activities (461,569) 89,793 (102,431) ======== ======== ======= Notes 1. The calculation of earnings per share is based on the loss after tax of £399,998 (2003: Loss £272,377) and on the number of shares in issue being the adjusted weighted average number of shares in issue during the period of 5,500,170 (2003: 5,502,275). 2. This Interim Statement for the six months ended 31 December 2004 is unaudited and was approved by the Directors on 2nd February 2005. The financial information set out above does not constitute statutory accounts within the meaning of Section 240 of Companies Act 1985. The information given as comparative figures for the financial year ended 30 June 2004 was extracted from the Group's statutory accounts for that financial year. 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. 3. The accounting policies remain as stated in the Annual Report for the year ended 30 June 2004. 4. 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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