30th Sep 2008 07:00
Mavinwood Plc
("Mavinwood" or "the Company")
Interim results for the six months ended 30th June 2008
Financial key points 2008 2007
Continuing operations:
Revenue £36.0m £29.5m
Earnings before interest, tax, amortisation of intangible assets
and share based payments charge (EBITA) £3.5m £4.8m
Operating profit £2.3m £3.8m
Profit before tax £0.9m £2.9m
Basic earnings per share from continuing operations 0.06p 0.45p
Adjusted profit before tax* £2.1m £3.9m
Adjusted fully diluted earnings per share* 0.29p 0.51p
Basic (loss) /earnings per share (0.18p) 0.39p
* before discontinued operations, amortisation of intangible assets, share based payments charge and notional interest on contingent consideration
Kevin Mahoney, Chief Executive, commented;
'At the beginning of the year we anticipated that the first 6 months of 2008 would be behind last years results but were confident that the second half would see considerable improvement. Unfortunately, as we announced on 24 September the insurance repair division lost a major contract which we expected to retain.
Whilst our Document Handling division has performed extremely well, ahead of market expectations, Emergency Repair has suffered as Insurance Companies have reacted to the global market turmoil by cutting costs. This was exacerbated by the under performance of the social housing business at Mono Services which was sub-scale and unprofitable. I am pleased to announce that we sold this social housing business on 27 September and the retained operation is expected to be profitable in the second half.
Although we have been through a difficult period I am confident that the Group is in a strong position to provide good returns for shareholders in the medium to long term.'
Enquiries:
Mavinwood plc
Kevin Mahoney, Chief Executive 020 7661 9650
Mike Vincent, Finance Director 020 7661 9651
Collins Stewart
Adrian Hadden 020 7523 8353
Threadneedle Communications
John Coles 020 7653 9848
CHIEF EXECUTIVE'S REVIEW
RESULTS
Revenue from continuing operations in the six months ended 30 June 2008 was £36.0 million (2007: £29.5 million), with profit before tax of £0.9 million (2007: £2.9 million) and basic earnings per ordinary share of 0.06p (2007: 0.45p).
We think, however, that it is more relevant to consider Mavinwood's performance from continuing operations before share based payments charge, amortisation of intangible assets and notional interest on contingent consideration. On this basis, EBITA was £3.5 million (2007: £4.8 million), profit before tax was £2.1 million (2007: £3.9 million), and fully diluted earnings per share were 0.29p (2007: 0.51p). Comparative figures for 2007 have been restated for the sale of Mono Services Limited.
The Mavinwood Group comprises two divisions, Emergency Repair and Document Handling.
EMERGENCY REPAIR
|
Six months ended 30 June 2008 |
Six months ended 30 June 2007 |
Year ended 31 December 2007 |
|||||
|
£'000 |
£'000 |
£'000 |
|||||
|
Revenue |
ANSA, Independent Inspections and Mono Services continuing operations |
* |
20,061 |
24,201 |
45,726 |
||
|
Peter Cox |
** |
8,438 |
- |
4,232 |
|||
|
Total |
28,499 |
24,201 |
49,958 |
||||
|
EBITA*** |
ANSA, Independent Inspections and Mono Services continuing operations |
* |
2,092 |
3,894 |
7,326 |
||
|
Peter Cox |
** |
294 |
- |
288 |
|||
|
Business development and integration costs |
(652) |
- |
- |
||||
|
Total |
1,734 |
3,894 |
7,614 |
||||
|
* Ansa, Independent Inspections and Mono continuing operations throughout 2008 and 2007 |
|||||||
|
** Peter Cox 3 months in 2007 |
|||||||
|
*** excluding share based payments charge |
|||||||
This division includes three businesses that serve principally the insured repair sector. Approximately 90% of sales are to the leading insurance companies.
All three businesses share a common business process that is:
Take the emergency call from the customer via the insurer
Arrange a survey to validate or repudiate the claim and cost out the repair
Undertake the repair either by directly employed labour or sub contractors
ANSA specialises in drainage surveys and repair; Independent Inspections specialises in flooring surveys and restoration and Mono Services in building fabric surveys and repairs both often due to water damage.
ANSA and Independent Inspections are national businesses.
There is some customer overlap between the businesses but one of our opportunities moving forward is to offer all our services to a wider range of customers.
All these businesses operate to high service standards. Examples of key performance indicators that are monitored on a continuous basis are:
Response times in terms of contacting a policyholder after they report an insured event
Courtesy of staff and customer satisfaction
Average cost per claim
A range of integration projects are underway including:
Optimising IT platforms
Purchasing initiatives
Optimising back office functions
Reviewing marketing opportunities and widening the service offering
Turning to the key issues within each operation:
ANSA
Sales were down by 14%, mostly volume related. The cost base at ANSA is being addressed to bring costs down in line with reduced volumes.
Operating profit however declined by 40% partly because we invested £0.5m in retaining and expanding one particular insurance contract. However, as announced on 24 September, this contract has not been renewed. ANSA remains a good business and customers continue to benefit from strong performance in claims validation, service delivery and cost control.
INDEPENDENT INSPECTIONS
Independent Inspections' volume of instructions were some 15% up on the first half of 2007. The robust management action taken in the first half of 2007 to reduce costs has benefited the operation in the second half of 2007 and into 2008. New revenue streams are being developed to enhance the business performance further. Independent's business tends to be stronger in the second half of the year.
MONO SERVICES
Mono Services operates in the building fabric repair business for one large insurer via their joint venture partner and in the social housing market. The insurance work was re-directed via the joint venture partner from May 2007 and transition costs and different work practices adversely affected its profitability compared to the first half of 2007. Due to reduced volumes and a change in the mix of customers, the social housing contracts were unprofitable.
There was no real overlap between the two types of business; job values were smaller in social housing and executed by different teams. In terms of size, the insurance business runs annualised sales of £8m of sales per annum whereas the social housing activity is around £5m.
We concluded that the social housing business is sub-scale and it has been sold on 27 September. The retained insurance business has been combined with ANSA and is expected to return to profit in the second half.
PETER COX
Peter Cox is a national provider of damp and waterproofing, timber preservation and wall stabilisation for property. Sales grew by 5% in a difficult market but investment in the fleet and information technology has meant a reduction in profit for the first half. Peter Cox's business is seasonal with profits skewed to the second half.
BUSINESS DEVELOPMENT AND INTEGRATION COSTS
£0.1m was incurred on developing new business streams and we are bidding on a series of new tenders. £0.5m was spent in integration of the division in the first half, principally on building the IT infrastructure for the division.
DOCUMENT HANDLING
|
Six months ended 30 June 2008 |
Six months ended 30 June 2007 |
Year ended 31 December 2007 |
|||||
|
£'000 |
£'000 |
£'000 |
|||||
|
Revenue |
Restore and Wansdyke |
* |
4,944 |
4,407 |
8,934 |
||
|
DCS |
** |
2,607 |
924 |
3,022 |
|||
|
Total |
7,551 |
5,331 |
11,956 |
||||
|
EBITA*** |
Restore and Wansdyke |
* |
1,629 |
1,338 |
2,808 |
||
|
DCS |
** |
948 |
292 |
1,078 |
|||
|
Total |
2,577 |
1,630 |
3,886 |
||||
|
* Wansdyke and Restore throughout 2008 and 2007 |
|||||||
|
** DCS 9 months in 2007 |
|||||||
|
*** excluding share based payments charge |
|||||||
RESTORE AND WANSDYKE
Document Handling serves a wide range of customers, including law firms, corporates of varying sizes, financial services companies, councils and health trusts. Our customers are mostly based in London and the South across to Bristol and South Wales. The majority of sales are the storage and retrieval of archive boxes but also individual files and other material such as magnetic media and film.
Scanning of documents on a selective basis is also offered to clients. Shredding/pulping of documents at the end of their useful lives is currently outsourced, although this would form a logical product extension.
Restore and Wansdyke are operated under one management team.
We operate a combination of freehold and leasehold sites at Wansdyke and Restore respectively. Due to the absence of rental charges, the return on sales at Wansdyke is higher than that at Restore.
The market for the physical storage of archives continues to grow well in excess of GDP, with especially strong growth in sectors such as professional services. Overall volume growth in Restore and Wansdyke compared to the first half of 2007 was 11% and the return on sales is 33%.
We are gradually utilising our underground storage facilities near Bath and we have plenty of capacity for the medium term expansion for the business.
DOCUMENT CONTROL SERVICES (DCS)
We acquired DCS on 26 March 2007. DCS is a quality national operation scanning and indexing documents with high intellectual property content. The business has a blue chip customer base including Network Rail, Highways Agencies, oil and gas companies, city councils and property companies. DCS has met its profit expectation under its earn out agreement for the year to 30 June 2008 and the contingent consideration of £2 million is being settled.
CENTRAL COSTS
Central costs have increased from £724,000 to £805,000 in the first half of 2008.
INTEREST
Net interest payable amounted to £1,441,000 (2007: £884,000).
PROFIT BEFORE TAX
The profit before tax from continuing operations for the period ended 30 June 2008 was £899,000 (2007: £2,943,000). However, the Directors believe that an adjusted measure of profit before tax and earnings per share provides shareholders with a more appropriate representation of the underlying earnings derived from the Group's continuing business. The items adjusted for in arriving at that underlying level are as follows:
|
Six months ended 30 June 2008 |
Restated Six months ended 30 June 2007 |
Restated Year ended 31 December 2007 |
|||||
|
£'000 |
£'000 |
£'000 |
|||||
|
Profit before tax |
899 |
2,943 |
5,509 |
||||
|
Amortisation of intangible assets |
206 |
62 |
288 |
||||
|
Share based payments charge |
960 |
911 |
1,892 |
||||
|
Notional interest on contingent consideration |
75 |
(58) |
62 |
||||
|
Adjusted profit before tax |
2,140 |
3,858 |
7,751 |
||||
TAX
Due to the distortions caused by the non-deductibility of the notional interest on the contingent consideration and amortisation of intangible assets, the reported tax charge is 67.9% (2007: 30.6%). However, the underlying tax rate during 2008 was 28.5%, as a percentage of adjusted profit before taxation (2007: 30.4%).
EARNINGS PER SHARE (EPS)
|
Six months ended 30 June 2008 |
Restated Six months ended 30 June 2007 |
Restated Year ended 31 December 2007 |
|||||
|
Earnings per share from continuing operations (pence) |
|||||||
|
Basic |
0.06p |
0.45p |
0.64p |
||||
|
Diluted |
0.05p |
0.39p |
0.54p |
||||
|
Adjusted earnings per share from continuing operations (pence) |
|||||||
|
Basic |
0.33p |
0.59p |
1.19p |
||||
|
Diluted |
0.29p |
0.51p |
1.02p |
||||
Basic EPS is 0.06p, which compares with 0.45p in 2007. Basic EPS adjusted as above was 0.33p (2007: 0.59p). Assuming the exercise of all options and awards under the LTIP in 2008 at an average price of 15.0p plus the conversion of the convertible A shares (2007: 17.6p), the fully diluted adjusted EPS becomes 0.29p (2007: 0.51p).
DIVIDENDS
Mavinwood intends to re-invest profits in the business and the Board do not recommend declaring an interim dividend (2007: Nil).
SHARE ISSUES
New equity was issued on two occasions in the first six months of 2008. 0.5 million shares were issued on exercise of awards under the LTIP to the previous head of Document Handling who retired due to ill health in late 2007. 3.3 million shares were allotted at 12.0p per share on 5 June 2008 as part funding of the contingent consideration for DCS.
BALANCE SHEET
Net assets increased to £51.1m in the half year reflecting the loss for the period of £0.8m plus the share issues. Goodwill and intangibles on the seven acquisitions at 30 June 2008 were £70.3m (2007: £64.2m).
Property, plant and equipment totalled £11.4m (2007: £11.3m) principally comprising the freehold underground storage facilities at Wansdyke, but also computer systems, storage racking and vehicles.
Operating working capital (excluding cash) amounted to a net £9.1m at 30 June 2008. Net debt at 30 June 2008 totalled £33.3m (2007: £24.6m) after deferred financing costs of £0.3m (2007: £0.3m).
CASH FLOW
The net cash inflow from continuing operations before capital expenditure was £2,330,000 (2007: £1,648,000). This inflow is after taking account of an outflow of £1.6m on working capital principally due to slow payment by insurers at the half year. However, this outflow was considerably better than the £3.6m outflow sustained in the first half of 2007.
Capital expenditure totalled £701,000 (2007: £1,135,000) compared to depreciation of £471,000 (2007: £467,000). Significant expenditure comprised the fitting out of empty space in the underground storage areas at Wansdyke and installing new racking at both Restore and Wansdyke.
Deferred consideration in respect of the acquisitions of Peter Cox and DCS of £1.9 million was paid in the first half.
BOARD
There were no changes to the Board in the half year.
OUTLOOK
This has been a very mixed six months for our two divisions. Document Handling has continued to grow significantly with organic operating profit up by 21%. Emergency Repair has however suffered in a difficult market as insurance companies have reacted to the developing 'credit crunch'. We are taking significant costs out of the Emergency Repair division to mitigate the drop in volume. Operating difficulties at Mono exacerbated under performance although these issues have been stemmed by the sale of the Mono social housing business in September.
The fourth quarter of 2008 is now unlikely to see any pick up in activity in Emergency Repair, made worse by the non renewal of an insurance contract. Accordingly, we now expect underlying profit before tax for the full year to be below the reported level of 2007 which was £7.3m.
Management continue to explore opportunities for enhancing shareholder value.
Kevin Mahoney
Chief Executive Officer 30 September 2008
Condensed Consolidated Interim Income Statement
for the six months ended 30 June 2008
|
Unaudited |
Unaudited Restated |
Unaudited Restated |
|||||
|
Six months ended |
Six months ended |
Year ended |
|||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||||
|
Note |
£'000 |
£'000 |
£'000 |
||||
|
Continuing operations |
|||||||
|
Revenue |
2 |
36,050 |
29,532 |
61,914 |
|||
|
Cost of sales |
(21,305) |
(17,631) |
(36,091) |
||||
|
Gross profit |
14,745 |
11,901 |
25,823 |
||||
|
Administrative expenses |
(12,405) |
(8,074) |
(17,942) |
||||
|
Operating profit |
2,340 |
3,827 |
7,881 |
||||
|
Investment income |
57 |
40 |
106 |
||||
|
Finance costs |
(1,498) |
(924) |
(2,478) |
||||
|
Profit before tax |
899 |
2,943 |
5,509 |
||||
|
Income tax expense |
3 |
(610) |
(900) |
(2,602) |
|||
|
Profit from continuing operations |
289 |
2,043 |
2,907 |
||||
|
Discontinued operations Loss from discontinued operations |
7 |
(1,136) |
(276) |
(323) |
|||
|
(Loss)/ profit for the period |
(847) |
1,767 |
2,584 |
||||
|
Attributable to |
|||||||
|
Equity holders of the Company |
(847) |
1,767 |
2,584 |
||||
|
(Loss)/ earnings per share (pence) |
|||||||
|
Basic |
4 |
(0.18)p |
0.39p |
0.56p |
|||
|
Diluted |
4 |
(0.18)p |
0.33p |
0.48p |
|||
|
Earnings per share from continuing operations (pence) |
|||||||
|
Basic |
4 |
0.06p |
0.45p |
0.64p |
|||
|
Diluted |
4 |
0.05p |
0.39p |
0.54p |
|||
Consolidated Statement of Changes in Shareholders' Equity
for the six months ended 30 June 2008
|
Share capital |
Share premium |
Share based payments reserve |
Retained earnings |
Total equity |
|||||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|||||
|
Balance at 1 January 2007 |
503 |
40,060 |
1,102 |
2,572 |
44,237 |
||||
|
Profit for the period |
- |
- |
- |
1,767 |
1,767 |
||||
|
503 |
40,060 |
1,102 |
4,339 |
46,004 |
|||||
|
Issue of shares during the period |
4 |
996 |
- |
- |
1,000 |
||||
|
Share based payments charge |
- |
- |
900 |
- |
900 |
||||
|
Balance at 30 June 2007 |
507 |
41,056 |
2,002 |
4,339 |
47,904 |
||||
|
Profit for the period |
- |
- |
- |
817 |
817 |
||||
|
507 |
41,056 |
2,002 |
5,156 |
48,721 |
|||||
|
Issue of shares during the period |
5 |
895 |
- |
- |
900 |
||||
|
Share based payments charge |
- |
- |
992 |
- |
992 |
||||
|
Balance at 1 January 2008 |
512 |
41,951 |
2,994 |
5,156 |
50,613 |
||||
|
Loss for the period |
- |
- |
- |
(847) |
(847) |
||||
|
512 |
41,951 |
2,994 |
4,309 |
49,766 |
|||||
|
Issue of shares during the period |
4 |
483 |
- |
- |
487 |
||||
|
Issue costs |
- |
(37) |
- |
- |
(37) |
||||
|
Share based payments charge |
- |
- |
960 |
- |
960 |
||||
|
Awards under the LTIP exercised |
- |
- |
(86) |
- |
(86) |
||||
|
Balance at 30 June 2008 |
516 |
42,397 |
3,868 |
4,309 |
51,090 |
Condensed Consolidated Interim Balance Sheet
at 30 June 2008
|
Unaudited |
Unaudited |
Unaudited |
||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
||||
|
Note |
£'000 |
£'000 |
£'000 |
|||
|
Assets |
||||||
|
Non-current assets |
||||||
|
Intangible assets |
70,348 |
64,192 |
70,634 |
|||
|
Property, plant and equipment |
11,383 |
11,303 |
12,220 |
|||
|
Investments |
507 |
550 |
556 |
|||
|
Deferred tax asset |
- |
- |
179 |
|||
|
82,238 |
76,045 |
83,589 |
||||
|
Current assets |
||||||
|
Inventories |
506 |
323 |
381 |
|||
|
Trade and other receivables |
18,731 |
18,499 |
23,140 |
|||
|
Cash and cash equivalents 5 |
449 |
908 |
1,108 |
|||
|
19,686 |
19,730 |
24,629 |
||||
|
Assets held for sale 7 |
5,736 |
- |
- |
|||
|
Total assets |
107,660 |
95,775 |
108,218 |
|||
|
Liabilities |
||||||
|
Current liabilities |
||||||
|
Trade and other payables |
(9,815) |
(12,087) |
(15,554) |
|||
|
Bank overdrafts and loans 5 |
(7,560) |
(3,444) |
(4,337) |
|||
|
Current tax liabilities |
(957) |
(3,025) |
(1,229) |
|||
|
Other financial liabilities 5 |
(23) |
(116) |
(45) |
|||
|
Provisions 6 |
(2,302) |
(989) |
(3,698) |
|||
|
(20,657) |
(19,661) |
(24,863) |
||||
|
Liabilities directly associated with assets classified as held for sale 7 |
(5,504) |
- |
- |
|||
|
Net current (liabilities)/assets |
(739) |
69 |
(234) |
|||
|
Non-current liabilities |
||||||
|
Bank loans 5 |
(26,170) |
(21,918) |
(27,643) |
|||
|
Deferred tax liability |
(4,239) |
(4,478) |
(5,099) |
|||
|
Provisions 6 |
- |
(1,814) |
- |
|||
|
(30,409) |
(28,210) |
(32,742) |
||||
|
Net assets |
51,090 |
47,904 |
50,613 |
|||
|
Shareholders equity |
||||||
|
Called up share capital |
516 |
507 |
512 |
|||
|
Share premium account |
42,397 |
41,056 |
41,951 |
|||
|
Share based payments reserve |
3,868 |
2,002 |
2,994 |
|||
|
Retained earnings |
4,309 |
4,339 |
5,156 |
|||
|
Attributable to equity holders of the Company |
51,090 |
47,904 |
50,613 |
|||
Condensed Consolidated Interim Statement of Cash Flows
for the six months ended 30 June 2008
|
Unaudited |
Unaudited Restated |
Unaudited Restated |
||||
|
Six months ended |
Six months ended |
Year ended |
||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
||||
|
£'000 |
£'000 |
£'000 |
||||
|
Cash inflow from operating activities |
||||||
|
Continuing operations |
||||||
|
Profit for the period |
289 |
2,043 |
2,907 |
|||
|
Depreciation of property, plant and equipment |
471 |
467 |
843 |
|||
|
Amortisation of intangible assets |
206 |
62 |
288 |
|||
|
Finance costs recognised in profit and loss |
1,441 |
884 |
2,372 |
|||
|
Income tax expense recognised in profit and loss |
610 |
900 |
2,602 |
|||
|
Share based payments charge |
960 |
911 |
1,892 |
|||
|
Gain on disposal of property, plant and equipment |
- |
- |
(33) |
|||
|
Movement in working capital |
||||||
|
Change in inventories |
(125) |
(12) |
(1) |
|||
|
Change in trade and other receivables |
(981) |
(4,850) |
(4,845) |
|||
|
Change in trade and other payables |
(541) |
1,243 |
986 |
|||
|
Net cash generated from continuing operations |
2,330 |
1,648 |
7,011 |
|||
|
Discontinued operations |
||||||
|
Loss for the period |
(1,270) |
(398) |
(462) |
|||
|
Income tax expense recognised in profit and loss |
134 |
122 |
139 |
|||
|
Movement in working capital |
||||||
|
Change in inventories |
- |
- |
13 |
|||
|
Change in trade and other receivables |
204 |
(280) |
(1,100) |
|||
|
Change in trade and other payables |
903 |
19 |
186 |
|||
|
Net cash generated from discontinued operations |
(29) |
(537) |
(1,224) |
|||
|
Net cash generated from operations |
2,301 |
1,111 |
5,787 |
Condensed Consolidated Interim Statement of Cash Flows (continued)
for the six months ended 30 June 2008
|
Unaudited |
Unaudited Restated |
Unaudited Restated |
||||
|
Six months ended |
Six months ended |
Year ended |
||||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
||||
|
£'000 |
£'000 |
£'000 |
||||
|
Net cash generated from operations |
2,301 |
1,111 |
5,787 |
|||
|
Net finance costs |
(1,248) |
(996) |
(1,575) |
|||
|
Income taxes paid |
(1,176) |
(189) |
(2,782) |
|||
|
Net cash (used by)/generated from operating activities |
(123) |
(74) |
1,430 |
|||
|
Cash flows from investing activities |
||||||
|
Purchases of property, plant and equipment |
(701) |
(1,135) |
(2,582) |
|||
|
Proceeds from share issues |
388 |
- |
- |
|||
|
Contingent consideration |
(1,539) |
- |
(106) |
|||
|
Acquisition of subsidiary, net of cash acquired |
(400) |
(5,581) |
(6,988) |
|||
|
Cash flows used in investing activities |
(2,252) |
(6,716) |
(9,676) |
|||
|
Cash flows from financing activities |
||||||
|
Repayment of borrowings |
(1,000) |
(1,000) |
(2,000) |
|||
|
Repayment of indebtedness |
- |
- |
(4,794) |
|||
|
New bank loans raised |
2,500 |
6,550 |
14,300 |
|||
|
Loan note receipts |
28 |
- |
- |
|||
|
Deferred financing costs |
(18) |
(70) |
(192) |
|||
|
Increase in bank overdrafts |
223 |
444 |
337 |
|||
|
Finance lease principal repayments |
(22) |
(76) |
(147) |
|||
|
Net cash generated in financing activities |
1,711 |
5,848 |
7,504 |
|||
|
Net decrease in cash and cash equivalents |
(664) |
(942) |
(742) |
|||
|
Cash and cash equivalents at start of period |
1,108 |
1,850 |
1,850 |
|||
|
Less: Net cash and cash equivalents included in discontinued operations |
5 |
- |
- |
|||
|
Cash and cash equivalents at the end of period |
449 |
908 |
1,108 |
|||
Notes to the Consolidated Interim report
for the six months ended 30 June 2008
1 Basis of preparation
The unaudited interim financial information for the half year ended 30 June 2008, which has been approved by the Board of Directors on 29 September 2008, has been prepared based on the accounting policies consistent with those used in the financial statements for the year ended 31 December 2007 and those expected to be applied in the financial statements for the year ended 31 December 2008.
The results for the previous periods have been restated to show the impact of discontinued operations.
The interim report for the six months ended 30 June 2008 does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The restated results for the year ended 31 December 2007 have been extracted from the financial statements for the year ended 31 December 2007 which have been filed with the Registrar of Companies. The auditors' report contained therein, was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
2 Segmental information
|
Unaudited |
Unaudited |
Unaudited |
|||
|
Six months ended |
Six months ended |
Year ended |
|||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
£'000 |
£'000 |
£'000 |
|||
|
|
|
|
|
||
|
Revenue |
|||||
|
The revenue was derived from the Group's principal activities in the UK as follows: |
|||||
|
Emergency Repair |
28,499 |
24,201 |
49,958 |
||
|
Document Handling |
7,551 |
5,331 |
11,956 |
||
|
|
36,050 |
29,532 |
61,914 |
||
|
Results |
|||||
|
The profit after tax was derived from the Group's principal activities in the UK as follows: |
|||||
|
Emergency Repair |
1,734 |
3,894 |
7,614 |
||
|
Document Handling |
2,577 |
1,630 |
3,886 |
||
|
Central costs |
(805) |
(724) |
(1,439) |
||
|
Share based payments charge |
(960) |
(911) |
(1,892) |
||
|
Amortisation of intangible assets |
(206) |
(62) |
(288) |
||
|
Operating profit |
2,340 |
3,827 |
7,881 |
||
|
Net finance cost |
(1,441) |
(884) |
(2,372) |
||
|
Profit before tax |
899 |
2,943 |
5,509 |
||
|
Income tax expense |
(610) |
(900) |
(2,602) |
||
|
Profit after tax |
289 |
2,043 |
2,907 |
||
|
Segmental assets: |
|||||
|
Emergency Repair |
70,198 |
59,171 |
71,433 |
||
|
Document Handling |
37,344 |
36,341 |
36,533 |
||
|
Central |
118 |
263 |
252 |
||
|
Total |
107,660 |
95,775 |
108,218 |
||
|
Segmental liabilities: |
|||||
|
Emergency Repair |
(14,509) |
(13,764) |
(14,297) |
||
|
Document Handling |
(6,143) |
(6,150) |
(5,004) |
||
|
Central |
(35,918) |
(27,957) |
(38,304) |
||
|
Total |
(56,570) |
(47,871) |
(57,605) |
||
|
Segmental net assets: |
|||||
|
Emergency Repair |
55,689 |
45,407 |
57,136 |
||
|
Document Handling |
31,201 |
30,191 |
31,529 |
||
|
Central |
(35,800) |
(27,694) |
(38,052) |
||
|
Total |
51,090 |
47,904 |
50,613 |
||
|
Property, plant and equipment additions |
701 |
1,135 |
2,287 |
||
|
Depreciation of property, plant and equipment and amortisation of intangible assets |
677 |
529 |
1,131 |
3 Tax
The underlying tax charge is based on the expected effective tax rate for the full year to 31 December 2008 and is calculated as 28.5% on profit before tax.
4 Earnings per ordinary share
Basic earnings per share have been calculated on the profit after tax for the period and the weighted average number of ordinary shares in issue during the period.
Adjusted earnings per share that are before share based payments charge, amortisation of intangible assets and notional interest on contingent consideration have been presented in addition to the basic earnings per share since, in the opinion of the Directors, this provides shareholders with a more appropriate representation of the underlying earnings derived from the Group's businesses.
|
Unaudited |
Unaudited |
Unaudited |
|||
|
Six months ended |
Six months ended |
Year ended |
|||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
No. of shares |
No. of shares |
No. of shares |
|||
|
Weighted average number of shares in issue |
463,302,426 |
455,409,225 |
457,684,786 |
||
|
(Loss)/profit for the period |
(847) |
1,767 |
2,584 |
||
|
Total basic (loss)/ earnings per ordinary share |
(0.18p) |
0.39p |
0.56p |
||
|
£'000 |
£'000 |
£'000 |
|||
|
Profit after taxation on ordinary activities |
289 |
2,043 |
2,907 |
||
|
Adjustments |
|||||
|
Amortisation of intangible assets |
206 |
62 |
252 |
||
|
Share based payments charge |
960 |
641 |
1,892 |
||
|
Tax effect |
- |
- |
312 |
||
|
Notional interest on contingent consideration |
75 |
(58) |
62 |
||
|
Adjusted earnings |
1,530 |
2,688 |
5,425 |
||
|
Basic earnings per ordinary share from continuing operations |
0.06p |
0.45p |
0.64p |
||
|
Adjusted basic earnings per ordinary share (before amortisation of intangible assets, share based payments charge and notional interest on contingent consideration) |
0.33p |
0.59 p |
1.19p |
|
No. of shares |
No. of shares |
No. of shares |
|||
|
Weighted average number of Shares in issue |
463,302,426 |
455,409,225 |
457,684,786 |
||
|
Convertible 'A' shares |
21,747,162 |
28,823,625 |
30,467,786 |
||
|
Share options and awards under the LTIP |
45,028,761 |
44,590,775 |
46,116,659 |
||
|
Weighted average fully diluted number of shares in issue |
530,078,349 |
528,823,625 |
534,269,141 |
||
|
Total fully diluted (loss)/ earnings per ordinary share |
(0.18p) |
0.33p |
0.48p |
||
|
Fully diluted earnings per ordinary share |
0.05p |
0.39p |
0.54p |
||
|
Adjusted fully diluted earnings per ordinary share (before amortisation of intangible assets, share based payments charge and notional interest on contingent consideration) |
0.29p |
0.51p |
1.02p |
The diluted earnings per share are the basic earnings per share adjusted for the dilutive effect of the conversion into fully paid shares of the outstanding share options and awards under the LTIP. They are also adjusted for the conversion of the A shares into ordinary shares at the average price for the period of 15.0p (30 June 2007: 17.61p; 31 December 2007: 18.4p).
5 Analysis of changes in net debt
|
Audited |
Unaudited |
||||||||
|
At |
Non cash |
At |
|||||||
|
1 January |
movement |
30 June |
|||||||
|
2008 |
Cash flow |
Disposals |
2007 |
2008 |
|||||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||||
|
Cash and cash equivalents |
1,108 |
(664) |
5 |
- |
449 |
||||
|
Current financial liabilities |
|||||||||
|
Bank loans repayable within one year |
(4,337) |
(1,733) |
- |
(1,490) |
(7,560) |
||||
|
Finance leases repayable within one year |
(45) |
22 |
- |
- |
(23) |
||||
|
Non-current financial liabilities |
|||||||||
|
Bank loans repayable in more than one year |
(28,000) |
- |
- |
1,500 |
(26,500) |
||||
|
Deferred financing costs |
357 |
63 |
- |
(90) |
330 |
||||
|
Net debt |
(30,917) |
(2,312) |
5 |
(80) |
(33,304) |
6 Contingent consideration
The Group paid contingent consideration in the period in respect of the following companies:
|
£'000 |
|||||
|
Restore Limited |
89 |
||||
|
Peter Cox Limited |
1,050 |
||||
|
Document Control Services Limited |
400 |
||||
|
1,539 |
|||||
|
Additional contingent consideration of £1,600,000 has been provided for on a discounted basis in respect of Document Control Services Limited. This is due as follows: |
|||||
|
Unaudited |
Unaudited |
Unaudited |
|||
|
Six months ended |
Six months ended |
Year ended |
|||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
£'000 |
£'000 |
£'000 |
|||
|
Less than 1 year |
1,564 |
- |
1,889 |
||
|
Greater than 1 year |
- |
1,814 |
- |
||
|
1,564 |
1,814 |
1,899 |
7 Discontinued operations
The sale of Mono Services Limited ('the company') was completed on 27 September 2008. Prior to this date, the insurance building repair business was transferred to another group company 'Ansa Building Services Limited' leaving the social housing contracts in the company. The consideration for the sale was £450,000.
The social housing business had been shown as discontinued operations. An analysis of the loss on discontinued operations is shown below:
|
Unaudited |
Unaudited |
Unaudited |
|||
|
Six months ended |
Six months ended |
Year ended |
|||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
|||
|
£'000 |
£'000 |
£'000 |
|||
|
Revenue |
2,246 |
2,872 |
6,239 |
||
|
Trading loss for the period |
(469) |
(398) |
(462) |
||
|
Taxation Provision for loss on disposal Impairment of goodwill |
134 (466) (335) |
122 - - |
139 - - |
||
|
(1,136) |
(276) |
(323) |
The net assets of the company have been classified as held for sale at 30 June. An analysis of the net assets at 30 June is given below.
|
£'000 |
|||||
|
Property, plant and equipment |
346 |
||||
|
Inventories |
164 |
||||
|
Trade and other receivables |
5,226 |
||||
|
Trade and other payables |
(5,708) |
||||
|
Bank overdrafts |
(5) |
||||
|
Current tax losses available for group relief |
222 |
||||
|
Provisions |
(13) |
||||
|
Net assets classified as held for sale |
232 |
||||
Adjustments have been made to the asset value in respect of this business in order that it is held at its estimated realisable value at 30 June. This has resulted in a provision for loss on disposal of £0.5m. Goodwill of £0.3m has also been written off. The final result on sale will be booked in the accounts for the year ended 31 December 2008.
ENDS
Related Shares:
Restore