29th Mar 2005 07:00
Scott Tod PLC29 March 2005 FOR RELEASE 7.00AM 29 MARCH 2005 Scott Tod Plc ("Scott Tod" or "the Company") (Distribution and processing of ATMs and a developer and manufacturer of card vending and change machines) Interim Results for the six months ended 31 December 2004 Main Points • Turnover of £5.614 million for 6 months to 31 December 2004 • EBITDA for the 6 months £818,000 • £56,000 Profit before tax and amortisation of goodwill for 6 months to 31 December 2004 • Basic Earnings per Share before goodwill amortisation of 0.14p • Management review of the overall business ongoing • 2,466 ATMs installed as at 31 December 2004 • Market conditions becoming more competitive • Focus on the quality of location for ATMs, rather than numbers alone, to improve performance • Charge per withdrawal to be brought into line with industry average • Change Machines and Card Vending divisions performing in-line with management expectations For further information: Scott Tod PlcDavid Massie (Chairman) 020 7389 1770Nicholas Tod (Chief Executive) 01873 811 634 Beattie FinancialBrian Coleman Smith / John Moriarty / Jo Clewlow 020 7398 3300 Scott Tod Plc (Distribution and processing of ATMs and a developer and manufacturer of card vending and change machines) Interim Results for the six months ended 31 December 2004 CHAIRMAN'S STATEMENT For the six months ended 31 December 2004, turnover was £5.614 million (2003£0.875 million), and profit before tax and amortisation of goodwill £56,000(2003 £38,000). Operating profit for the six months was £136,000. There werebasic earnings per share before goodwill amortisation of 0.14p and a basic lossper share of 0.36p after goodwill amortisation. The comparative figures are notmeaningful as the Group only came into its current form in November 2003, withthe reverse takeover of Scott Tod Developments Limited. No interim dividend isproposed (2004 - Nil). Notwithstanding the comments below, there were a number of positive factors inthe six months. EBITDA for the period was £818,000 (2003 - £148,000) see note9. Cash at bank rose to £7.3 million, reflecting both the £2.4 million raisedthrough a placing in May 2004 and the change to the Company's funding proceduresin relation to bank notes used in ATMs. An 'overdraft' of £6.7 million,reflecting bank notes drawn from the Company's bankers for use in ATMs, needs tobe set against this balance. There was no other bank debt and tangible fixedassets of £5.8 million (2003 - £3.3 million) were part-funded through hirepurchase contracts totalling £2.7 million (2003 - £2.6 million). At our AGM on 30 November 2004, the Company expressed confidence in the future.This was on the back of reported LINK transaction figures in October 2004 whichwere at record levels. However, on 25 January 2005, the Company updated themarket and indicated that it believed that results for the second half of theyear (ie to 30 June 2005) would be below market expectations. Since that time,Management have reviewed the overall business and the following conclusions havebeen drawn: 1. At 1 July 2004, the Company had an estate of 1,947 ATMs. This represented growth of 165% from the equivalent 1 July 2003 figure of 734. 2. During the period to 31 December 2004, the Company received significant orders for new ATM installations and increased staff and resources to roll-out these machines. 3. However, many of these orders were part of large corporate orders and our customers were not able or willing to proceed with the installations at the pace which the Company had planned and this led to a shortfall against plan. In spite of this, the ATM estate reached 2,466 at 31 December 2004 (a growth of 27% in the six month period). 4. The Company incurred costs and overheads gearing up for the new business as outlined above. Many of the newly installed ATMs were either not yet revenue generating or made a contribution for only a short time in the period under review. In addition, costs were incurred in preparing for "Chip & Pin" changes. 5. A review of the estate has concluded that a significant number of ATMs are transacting at levels below that which the Company seeks to achieve. 6. The market is becoming more competitive, with greater churn. Since 31 December 2004, the Company has both won from and lost to a competitor contracts involving several hundred ATMs. In the light of these conclusions a more balanced "roll-out" is now forecast forthe remainder of the current financial year. The ATM estate was 2,611 at 28February 2005 but focus over the next few months will be on relocating existinglow transacting ATMs to better sites. Although the Company has orders in hand for several hundred additional ATMs,Management intend during the remainder of 2005 to put much greater emphasis onthe quality of location for ATMs and to address the problem of a number ofunder-performing ATMs. While a number of these are due to entirely seasonalfactors (installation in theme parks, etc) and others where the customer has notutilised the ATM sufficiently, Management believe more can be done to raisetransaction levels. In addition, the charge for withdrawals on Fully Managedmachines is being increased to industry levels. The introduction of the Company's in-house CiT (Cash in Transit) service hasdramatically improved machine availability - over the Christmas period thecompany had no "cash outs" - but this has been achieved at some cost. TheCompany needs to increase the number of Fully Managed ATMs to spread the fixedcost more evenly. The Company has also taken steps to improve its procedures toreduce uninsured losses which impacted the first half by some £95,000. All areas of the business are under review and action is being taken to reduceoverheads and set them by 30 June 2005 to a level appropriate with the plannedpace of expansion thereafter. The Company's other two divisions, Change Machines and Card Vending performedbroadly in line with Management expectations. Sales of change machines arelargely concentrated in the February to May period. Our principal card vendingcustomer is Patientline. As at 31 December 2004 a substantial amount ofPatientline's stock was held at our premises awaiting installation due to abacklog in their installation programme. As a consequence of this backlog, salesto Patientline in the second half of the year are expected to be lower thanthose achieved in the first half of the year. The announcement on 25 January 2005 also highlighted that the vendors of ScottTod Developments Limited were now in the Board's view unlikely to hit theminimum level of their earn out which was based on a £875,000 profit before taxand amortisation of goodwill for the year ending 30 June 2005. That remains theBoard's view and the changes outlined above will impact further on the resultsfor the second half. In the absence of a dramatic improvement in currenttrading, then both the earn out and all options for shares to be issued underthe Company's EMI option scheme, (which had a similar condition) will lapse. Nochanges are proposed to the earn out but the Remuneration Committee will in duecourse give further thought to overall employee motivation. It will be seen that a three fold strategy is now in place: a) to upgrade the quality of the ATM estate by relocating underperforming ATMs; b) to roll out existing (and new) orders in a balanced method; and c) to reduce costs and to position the Company for a return to growth in 2005/2006. David MassieChairman29 March 2005 Independent Review Report to Scott Tod plc Introduction We have been instructed by the company to review the financial information whichcomprises the consolidated profit and loss account, consolidated balance sheet,consolidated cash flow statement and the notes to the interim financialstatements. We have read the other information contained in the interim reportand considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly we do not expressan audit opinion on the financial information. This report, including theconclusion, has been prepared for and only for the company for the purpose ofthe Listing Rules of the Financial Services Authority and for no other purpose.We do not, in producing this report, accept or assume responsibility for anyother purpose or to any other person to whom this report is shown or into whosehands it may come save where expressly agreed by our prior consent in writing. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 December 2004. PricewaterhouseCoopers LLPCardiff, 23 March 2005 Notes: (a) The maintenance and integrity of the Scott Tod plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the website. (b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions. Consolidated profit and loss accountfor the six months ended 31 December 2004 6 months ended 6 months ended Year ended 30 31 December 31 December June 2004 2003 2004 (unaudited) (unaudited) (audited)Note £000 £000 £000 Turnover 5,614 875 6,676 Cost of sales (4,236) (601) (4,901)----------------------------------------------------------------------------------------- Gross profit 1,378 274 1,775 Operating charges (1,088) (175) (888)----------------------------------------------------------------------------------------- Operating profit for the period before amortisation of goodwill 290 99 887 Amortisation of (154) (31) (258) goodwill ----------------------------------------------------------------------------------------- Operating profit 136 68 629 Net interest payable (234) (61) (230)----------------------------------------------------------------------------------------- (Loss)/profit before taxation (98) 7 399 Taxation (13) (2) (127)----------------------------------------------------------------------------------------- (Loss)/profit after taxation (111) 5 272 Dividend - - (234)----------------------------------------------------------------------------------------- (Loss)/profit for the year (111) 5 38----------------------------------------------------------------------------------------- 3 (Losses)/earnings per ordinary share (pence) Basic Diluted (0.36) 0.05 1.4 (0.35) 0.05 1.4----------------------------------------------------------------------------------------- 3 Earnings per share before amortisation of goodwill (pence) Basic Diluted 0.14 0.33 2.7 0.14 0.32 2.7----------------------------------------------------------------------------------------- Consolidated balance sheet at31 December 2004 31 December 31 December 30 June 2004 2003 2004 (unaudited) (unaudited) (audited)Note £000 £000 £000 Fixed assets Intangible fixed assets 2,657 3,971 4,061 Tangible fixed assets 5,775 3,264 4,420----------------------------------------------------------------------------------- 8,432 7,235 8,481----------------------------------------------------------------------------------- Current assets Stocks 711 671 923 4 Debtors 3,069 1,832 2,171 Cash at bank and in hand 7,334 1,206 4,549----------------------------------------------------------------------------------- 11,114 3,709 7,643----------------------------------------------------------------------------------- 5 Creditors: amounts falling due within one year (10,632) (3,143) (5,897)----------------------------------------------------------------------------------- Net current assets 482 566 1,746----------------------------------------------------------------------------------- Total assets less current liabilities 8,914 7,801 10,227 6 Creditors: due after more than one year (1,446) (1,336) (1,398) 7 Provisions for liabilities and charges (139) (269) (132) Deferred income (66) - (73)----------------------------------------------------------------------------------- Net assets 7,263 6,196 8,624----------------------------------------------------------------------------------- Capital and reserves Share capital 312 270 312 Share capital to be issued - 50 50 Share premium account 7,024 5,896 8,224 Profit and loss account (73) (20) 38----------------------------------------------------------------------------------- 8 Equity shareholders' funds 7,263 6,196 8,624----------------------------------------------------------------------------------- Consolidated cash flow statementfor the six months ended 31 December 2004 6 months ended 6 months ended Year ended 30 31 December 31 December June 2004 2003 2004 (unaudited) (unaudited) (audited)Note £000 £000 £000 Operating activities 9 Net cash inflow/(outflow) from operating activities 476 (350) 632-------------------------------------------------------------------------------- Return on investments and servicing of finance: Interest paid on bank loans and overdraft (109) (26) (161) Interest paid on finance leases (145) (50) (88) Interest received 20 3 19 Equity dividend paid (234) - --------------------------------------------------------------------------------- Cash (outflow) from returns on investments and servicing of finance (468) (73) (230)-------------------------------------------------------------------------------- Capital expenditure and financial investment Purchase of tangible fixed assets (1,076) (225) (976) Sale of tangible fixed assets - - 82 Receipt of capital government grant - - 79-------------------------------------------------------------------------------- Cash (outflow) from capital expenditure (1,076) (225) (815)-------------------------------------------------------------------------------- Acquisitions and disposals Purchase of subsidiary (including acquisition costs) - (616) (616) Net (overdraft) acquired with subsidiary undertaking - (50) (477)-------------------------------------------------------------------------------- Net cash (outflow) from acquisitions and disposals - (666) (1,093)-------------------------------------------------------------------------------- Cash (outflow) before financing (1,068) (1,314) (1,506)-------------------------------------------------------------------------------- Financing Issue of ordinary shares (net of issue costs) - 2,233 4,703 Repayment of finance leases (701) (29) (834)-------------------------------------------------------------------------------- Repayment of bank loans (13) (2) (18)-------------------------------------------------------------------------------- Net cash (outflow)/inflow from financing (714) 2,202 3,851-------------------------------------------------------------------------------- 10 (Decrease)/increase in cash in the period (1,782) 888 2,345-------------------------------------------------------------------------------- Notes to the interim reportfor the six months ended 31 December 2004 1 Basis of preparation The interim report has been prepared using accounting policies that have been consistently applied and are those used in the preparation of the financial statements for the year ended 30 June 2004. 2 Dividends No dividend has been declared for the six months ended 31 December 2004. 3 (Losses)/earnings per share The calculation of losses per share and diluted losses per share for the six months ended 31 December 2004 are set out below. (Losses)/ Weighted Per share earnings average number amount price Six months ended 31 December 2004 £000 of shares pence Basic EPS: (Losses)/profit attributable to shareholders (111) 31,200.0 (0.36) Effect of dilution - 312.0 0.01 ---------------------------------------------------------------- Diluted EPS: (111) 31,512.0 (0.35) ---------------------------------------------------------------- Earnings per share before goodwill amortisation: Profit before goodwill amortisation 43 31,200.0 0.14 Effect of dilution - 312.0 - 43 31,512.0 0.14 ---------------------------------------------------------------- Six months ended 31 December 2003 Basic EPS: Profit attributable to shareholders 5 10,846.0 0.05 Effect of dilution - 270.0 - ---------------------------------------------------------------- Diluted EPS: 5 11,116.0 0.05 ---------------------------------------------------------------- Earnings per share before goodwill amortisation Profit before goodwill amortisation 36 10,846.0 0.33 Effect of dilution - 270.0 (0.01) ---------------------------------------------------------------- 36 11,116.0 0.32 ---------------------------------------------------------------- Year ended 30 June 2004 Basic EPS: Profit attributable to shareholders 272 19,286.5 1.4 Effect of dilution - 186.0 - ---------------------------------------------------------------- Diluted EPS: 272 19,472.5 1.4 ---------------------------------------------------------------- Earnings per share before goodwill amortisation 530 19,286.5 2.7 Profit before goodwill amortisation - 186.0 - ---------------------------------------------------------------- Effect of dilution 530 19,472.5 2.7 ---------------------------------------------------------------- 4 Debtors Included in debtors at 31 December 2004 are debts totalling £493,000 (2003: £455,000) that on collection will be used to settle certain creditors. 5 Creditors: amounts falling due within one year December December June 2004 2003 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Bank overdraft 6,668 215 2,101 Bank loan - 29 13 Finance leases 1,275 1,276 1,210 Trade creditors and accruals 1,831 1,072 1,648 Corporation tax creditor 69 105 63 Other taxation and social security 74 32 60 Proposed dividend - - 234 Other creditors 715 414 568 ------------------------------------------------------------------------------- 10,632 3,143 5,897 ------------------------------------------------------------------------------- As set out in note 4 above, liabilities amounting to £493,000 (2003:£455,000) will be settled directly by the bank once the debts are recovered. 6 Creditors: amounts falling due after more than one year 31 December 31 December 30 June 2004 2003 2004 (unaudited) (unaudited) (audited) £000 £000 £000 ------------------------------------------------------------------------------- Finance leases 1,446 1,336 1,398 ------------------------------------------------------------------------------- 7 Provisions for liabilities and charges Deferred tax £000 At 30 June 2004 132 Charge for the period 7 ------------------------------------------------------------------------------- At 31 December 2004 139 ------------------------------------------------------------------------------- 8 Movement in equity shareholders' funds 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 (unaudited) (unaudited) (audited) £000 £000 £000 (Loss)/profit for the period after taxation (111) 5 38 Adjustment to deferred consideration (1,250) - - Share scheme option charged to - - 25 profit for the year Issue of shares - 6,083 8,453 ----------------------------------------------------------------------------- Movement in equity shareholders' funds (1,361) 6,088 8,516 Equity shareholders' funds at start of period 8,624 108 108 ----------------------------------------------------------------------------- Equity shareholders' funds at the end of the period 7,263 6,196 8,624 ----------------------------------------------------------------------------- £1,250,000 was included within the fair value of the purchase consideration at 30 June 2004 relating to further consideration payable contingent on the achievement of certain performance targets by 30 June 2005. As these performance targets are now unlikely to be achieved, this deferred consideration has been eliminated from the fair value of the purchase consideration and the carrying value of intangible fixed assets has been reduced accordingly. 9 Reconciliation of operating profit to net cash flow from operating activities 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 (unaudited) (unaudited) (audited) £000 £000 £000 Continuing activities Operating profit 136 68 629 Depreciation charge 535 49 373 Profit on disposal of fixed assets - - (10) Amortisation charge 154 31 258 Release of capital government grant (7) - (6) ------------------------------------------------------------------------------- Earnings before interest, taxation, depreciation and amortisation 818 148 1,244 Share scheme option charged to shareholders funds - - 25 Decrease/(increase) in stock 212 25 (227) (Increase) in debtors (898) (315) (654) (Decrease) in provisions for liabilities and charges - - (198) Increase/(decrease) in creditors 344 (208) 442 ------------------------------------------------------------------------------- Net cash inflow/(outflow) from operating activities 476 (350) 632 ------------------------------------------------------------------------------- 10 Analysis of net debt 30 June Other 31 December (audited) Cash non cash (unaudited) 2004 flow changes 2004 2003 £000 £000 £000 £000 £000 Cash at bank and in hand 4,549 2,785 - 7,334 1,206 Bank overdrafts (2,101) (4,567) - (6,668) (215) ---------------------------------------------------------------------------------- Net cash at bank and in hand 2,448 (1,782) - 666 991 UK term loans due within one year (13) 13 - - (29) Finance leases (2,608) 701 (814) (2,721) (2,612) ---------------------------------------------------------------------------------- Net debt at end of the period (173) (1,068) (814) (2,055) (1,650) ---------------------------------------------------------------------------------- 11 Reconciliation of net cash flow to movement in net debt 6 months ended 6 months ended Year ended 31 December 31 December 30 June 2004 2003 2004 (unaudited) (unaudited) (audited) £000 £000 £000 (Decrease)/increase in cash in the period (1,782) 888 2,345 Cash (outflow)/inflow from decrease in debt (100) 31 51 ---------------------------------------------------------------------------------- Change in net (debt)/cash resulting from cash flows (1,882) 919 2,396 Increase in debt due to acquisition of subsidiary company: Finance leases - (2,641) (2,641) Bank loans - (31) (31) ---------------------------------------------------------------------------------- Movement in net debt in the period (1,882) (1,753) (276) Net (debt)/cash at beginning of period (173) 103 103 ---------------------------------------------------------------------------------- Net debt at end of period (2,055) (1,650) (173) ---------------------------------------------------------------------------------- 12 Results for the six months ended 31 December 2004 and the six months ended 31 December 2004 are unaudited. Full audited accounts for the group for the year ended 30 June 2004, on which the auditors gave an unqualified report, have been delivered to the Registrar of Companies. 13 A copy of this announcement is being sent to all shareholders and further copies are available from the Company Secretary, Centurion House, 37 Jewry Street, London EC3N 2ER This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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