6th Nov 2007 07:00
Penna Consulting PLC06 November 2007 PENNA CONSULTING PLC ANNOUNCES INTERIM RESULTS 6 November 2007 Penna Consulting Plc (PNA) the Human Capital Management Consultancy group todayannounces its results for the six month period ended 30 September 2007. Headlines • Profit before tax £0.5m (2006: loss £1.0m) • Revenue up 13.2% • Net Cash £0.9m (2006: net debt £4.3m) Commenting on the results, Stephen Rowlinson, Chairman said: "Penna's management, financial and cost structure is now very robust. We have animpressive portfolio of closely related businesses and demand for our servicesis on an upward trend. We are looking forward to completing a very satisfactoryyear and to continued profitable growth in 2008/9." For further information please contact: Stephen Rowlinson, Chairman 0771 00 23699Gary Browning, Chief Executive 020 7648 2448David Firth, Finance Director 020 7648 2423 Penna Consulting PlcChairman's Review I am pleased to report a turnaround from loss to profit in the first half ofthis year compared to the same period of 2006/7. The usual seasonal pattern isfor the Company to make most of its profits in the second half and therefore aprofit before tax of £517k for the first six months indicates that the Group ismaking significant progress. In 2006/07 a loss of £998k in the first half wasfollowed by a profit of £2,011k before redundancy costs in the second half. Our balance sheet is strong. At midyear we had Net Cash of £0.9m compared to NetDebt of £4.3m last year. Net Assets have grown from £13.2m to £18.2m and NetTangibles (i.e. excluding Goodwill) from Net Tangible Liabilities of £0.8m toNet Tangible Assets of £4.2m. This positive movement of £5.0m results from the£3.5m net proceeds of the share placing completed in October 2006 and £1.5m fromretained earnings. While the Board is not proposing an Interim Dividend we are keeping Dividendpolicy under review. Net Revenue * Six months to Six months to Change on 30 Sept 2007 30 Sept 2006 Prior period £'000 £'000 %UK (ex Northern Ireland)Career Transition 7,557 7,246 +4%Recruitment 846 1,237 -32%Interim 1,411 1,061 +33%Recruitment Communications 384 310 +24%Leadership Services 1,442 952 +51%HR Consulting 1,452 2,071 -30%UK 13,092 12,877 +2% Ireland 863 1,030 -16% Rest of Europe 1,037 905 +15%Intercompany revenue - (162) -Total Net Revenue * 14,992 14,650 +2% Total Revenue 22,419 19,797 +13% * Revenue less pass through costs Operational review In the UK, Career Transition showed a modest 4% growth in Net Revenue comparedto the previous year. However, there was a clear growth trend developing duringthe period and by mid year there was a healthy level of work in progress and agood pipeline of contracts for the second half. Leadership Services and Interim Management both achieved impressive growth of51% and 33% respectively and Recruitment Communications grew by 24% albeit froma smaller base. HR Consulting had a satisfactory six months although year on year comparisonsare distorted by a single large contract in train in H1 of 2006/7. Recruitmentshowed a further drop in revenue and the benefits of the action plan undertakenat the beginning of the calendar year have yet to be seen. Ireland saw Net Revenue reduce by 16% but the Region remained profitable andgrew its work in progress and order pipeline. Our Continental Division hadanother successful half year with Net Revenue growing by 15%. Outlook Penna's management, financial and cost structure is now very robust. We have animpressive portfolio of closely related businesses staffed by highly talentedconsultants who share a commitment to achieving excellence in all aspects of ourservice to clients and to the wider community. Demand for our services is on an upward trend and we are looking forward tocompleting a very satisfactory year and to continued profitable growth in 2008/9. Stephen RowlinsonChairman6 November 2007 Penna Consulting PlcConsolidated income statementfor the six months ended 30 September 2007 (unaudited) Six Months Six Months Year Ended Ended Ended 30 September 30 September 31 March Notes 2007 2006 2007 £'000 £'000 £'000Continuing operationsRevenue 22,419 19,797 43,379Operating expenses (21,858) (20,677) (42,647) Operating profit/(loss) 561 (880) 732 Finance costs (44) (118) (160) Profit/(loss) before tax 517 (998) 572 Tax 2 (156) 300 - Profit/(loss) for the period 361 (698) 572 Attributable to: Equity holders of the parent 361 (698) 572 Earnings/(loss) per share: 3 1.4p (3.6)p 2.6p Penna Consulting PlcConsolidated balance sheetat 30 September 2007 (unaudited) 30 September 30 September 31 March 2007 2006 2007 £'000 £'000 £'000Non-current assetsGoodwill 14,036 14,036 14,036Tangibles 1,934 2,112 1,972Intangibles - software 33 80 50 16,003 16,228 16,058 Current assetsTrade receivables 9,601 9,320 9,956Other current assets 1,809 1,705 1,916Corporation tax - 352 -Deferred tax 77 - 77Cash and short term deposits 2,156 381 3,218 13,643 11,758 15,167 Total assets 29,646 27,986 31,225 Current liabilitiesTrade payables 1,295 2,690 2,667Bank overdrafts and loans 900 4,181 1,200Loan notes 343 451 431Obligations under finance leases 96 89 94Provisions 32 221 194Corporation tax 165 - 8Other creditors and accruals 8,232 6,605 7,906 11,063 14,237 12,500 Non-current liabilitiesBank loans - - 300Obligations under finance leases 37 137 88Provisions for liabilities and charges 311 383 388 348 520 776 Total liabilities 11,411 14,757 13,276 Net assets 18,235 13,229 17,949 Capital and reservesCalled up share capital 1,264 978 1,264Share premium account 15,109 11,899 15,109Merger reserve 10,170 10,170 10,170Employee Share Option Plan reserve (397) (397) (397)Foreign currency translation reserve (13) 63 66Retained loss (7,898) (9,484) (8,263) Total equity 18,235 13,229 17,949 Penna Consulting PlcConsolidated statement of changes in equityat 30 September 2007 (unaudited) Called up Foreign share Share Merger ESOP currency Retained Total capital premium reserve reserve translation loss equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 April 2006 978 11,899 10,170 (397) 42 (8,839) 13,853 Share issue - - - - - - - Currency translation differences - - - - 21 - 21 Loss - - - - - (698) (698) Share option charge - - - - - 53 53 At 30 September 2006 978 11,899 10,170 (397) 63 (9,484) 13,229 Share issue 286 3,210 - - - - 3,496 Currency translation differences - - - - 3 - 3 Profit - - - - - 1,270 1,270 Share option charge - - - - - (49) (49) At 31 March 2007 1,264 15,109 10,170 (397) 66 (8,263) 17,949 Share issue - - - - - - - Currency translation differences - - - - (79) - (79) Profit - - - - - 361 361 Share option charge - - - - - 4 4 At 30 September 2007 1,264 15,109 10,170 (397) (13) (7,898) 18,235 Penna Consulting PlcConsolidated group cash flow statementfor the six months ended 30 September 2007 (unaudited) Six Months Six Months Year Ended Ended Ended 30 September 30 September 31 March 2007 2006 2007 Note £'000 £'000 £'000 Cash flows from operating activities Cash (used)/ generated by operations 5a (73) (102) 2,238Tax refunded/(paid) 1 (17) 45 Interest paid - bank interest (44) (104) (134) Net cash (used)/generated by operating activities (116) (19) 2,149 Cash flows from investing activities Net purchase of property, plant and equipment (209) (196) (266)Sale of investment - 750 750 Net cash (used)/generated by investing activities (209) 554 484 Cash flows from financing activities Interest paid - finance leases (9) (14) (26)Bank loan received - 2,250 2,250Repayment of finance leases (40) (41) (85)Repayment of loan notes (88) (2,011) (2,031)Issue of ordinary share capital - - 3,496Loan from Director - 1,925 -Bank loan repaid (600) (250) (750) Net cash (used)/generated by financing activities (737) (1,859) 2,854 Net (decrease)/increase in cash and cash (1,062) 2,394 5,487equivalents Cash and cash equivalents at start of period 3,218 (2,269) (2,269) Cash and cash equivalents at end of period 5b 2,156 125 3,218 Penna Consulting PlcNotes to the interim financial statementsfor the six months ended 30 September 2007 (unaudited) 1. Accounting policies The consolidated interim financial statements are for the six months ended 30September 2007. They have been prepared under the historical cost conventionusing accounting policies that are consistent with International FinancialReporting Standards ("IFRS") which are expected to be applied in the year endfinancial statements. The interim financial statements have neither been auditednor reviewed pursuant to guidance issued by the Auditing Practices Board. 2. Taxation Taxation has been provided for at 30% (2006:30%), for the UK and appropriaterates for overseas earnings. 3. Earnings/(loss) per share The calculation of basic and diluted earnings per share are based on the following amounts: Six months Six months Year ended ended ended 30 September 30 September 31 March 2007 2006 2007EarningsProfit/(loss) from continuing operations 361 (698) 572(£'000)Profit/(loss) for the period (£'000) 361 (698) 572 Number of sharesWeighted average number of 25,173,348 19,459,062 22,151,821SharesDilution effect of share option - 27,013 -SchemesDiluted weighted average number 25,173,348 19,486,075 22,151,821of Shares Earnings/(loss) per share: Basic 1.4p (3.6)p 2.6p Diluted 1.4p (3.6)p 2.6p 4. Dividends No interim dividend was proposed (2006: nil) for the six months ended 30 September 2007. Penna Consulting PlcNotes to the interim financial statements (continued)for the six months ended 30 September 2007 (unaudited) Six Months Six Months Year Ended Ended Ended5a. Reconciliation of operating profit to net cash 30 September 30 September 31 Marchoutflow from operating activities 2007 2006 2007 £'000 £'000 £'000 Operating profit/(loss) 561 (880) 732Adjustments for:Depreciation 264 255 509Loss on disposal of fixed assets - 94 80Share option expense 3 53 4 Changes in working capital:Decrease in trade and other receivables 451 1,831 995(Decrease)/increase in trade and other payables (1,352) (1,251) 94Surplus property provision reversed - - (176) Cash (used)/generated by operations (73) 102 2,238 At 31 At 30 September At 30 September March 2007 2006 20075b. Cash and cash equivalents £'000 £'000 £'000 Cash and cash equivalents are made up as follows:Net cash/(bank overdraft) 2,045 (74) 3,019Cash on restricted deposit 111 199 199 Cash and cash equivalents 2,156 125 3,218 6. Nature of the financial information The financial information set out in this document does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985. Statutoryaccounts for the year ended 31 March 2007, on which the auditors gave anunqualified audit report, have been delivered to the Registrar of Companies andcopies of the Interim Report can be obtained from our Registered Office at 3rdFloor, St Mary's Court, 20 St Mary at Hill, London EC3R 8EE. The Board of Directors approved the Interim Report on 6 November 2007. Thefinancial information in respect of the six months to 30 September 2007 isunaudited. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PNA.L