31st Jan 2007 07:01
Stagecoach Theatre Arts PLC 31 January 2007 Stagecoach Theatre Arts plc - Interim Results 2006 Stagecoach Theatre Arts plc ("Stagecoach" or "the Group") Announcement of Interim Results for the six months ended 30 November 2006 Stagecoach Theatre Arts plc operates the UK's largest franchise network ofpart-time performing arts schools for young people aged between 4 and 16.Stagecoach continues to expand its core UK business, whilst seeking to developgrowth areas in new markets. We now have 633 Stagecoach schools, 668 EarlyStages classes, 35 SportsCoach schools and 63 Mini Stages sessions, with a totalof over 37,000 students worldwide (2005: 34,800 students). Franchise network turnover is up 8.5% to £11.5 million (2004: £10.6 million) forthe period. Loss before tax of £80,000 (2005: loss £399,000) is less than expected due tomore new school openings and reductions in UK overheads and divisional costs. The core UK Stagecoach business, which accounts for 92 per cent. of networkturnover, reported divisional profit, before allocation of general overheads, of£1,022,000 for the six-month period (2005: £782,000) and an estimated profitbefore tax of £382,000 (2005: £120,000). As forecast, each of the otherdivisions reported a loss for the period. David Sprigg and Stephanie Manuel, Joint Managing Directors, commented: "With 30 new Stagecoach schools opening in the UK in the Autumn Term 2006, beingthe largest number of new openings in a term for two years, we see that thedemand for performing arts tuition in the UK continues to grow. We haveimplemented a cost reduction programme across each of the divisions, and intendto see each division come to profitability as soon as possible, or else torestructure them further." Enquiries: Stagecoach Theatre Arts: Tel: 01932 254 333Richard Dawson, Finance Director and Investor Relations Smith & Williamson: Tel: 020 7131 4000John CowieSiobhan Sergeant Public Relations, JBPR: Tel: 01629 825 777John Burley Chairman's Statement Results and Overview The Group's results for the six months ended 30 November 2006 reflect furtherexpansion in the core Stagecoach Theatre Arts business and a reduction in ourcost base. There are now over 37,000 students attending Stagecoach, SportsCoach and MiniStages schools throughout the Group (2005: 34,800 students). The network turnover, which reports the underlying school fees throughout thefranchise network, was £11.5 million for the period, an increase of 8.5% (2005:£10.6 million). Group loss before tax was £80,000 (2005: loss before tax £399,000). As withprior years, we expect to make a loss in the first half of the year. There aremore income generating school weeks in the second half of the year than thefirst half, whilst the costs are evenly spread throughout the year. Thus, weexpect profits of the core business to be higher in the second half of the yearthan the first half. Due to the combined effect of the increase in income from new school openings,the reduction in overseas subsidiaries' costs and the reduction in UK overheads,the half-year loss is significantly reduced compared to the prior year. YourBoard is committed to a programme of further reductions in administration costsand overheads going forward. Loss per share was 1.1 pence (2005: loss per share: 4.4 pence). Operational Performance Stagecoach schools UK The numbers of Stagecoach Theatre Arts schools in the UK, and students attendingthem, have increased over the period to 603 schools and 25,338 students (2005:560 schools and 23,979 students). In the Autumn Term 2006, we opened 30 newStagecoach schools, the largest number of new openings in a term for two years.In addition, the number of Early Stages classes has increased to 640 with 8,444students attending (2005: 589 Early Stages classes and 7,736 students). Across the UK network of Stagecoach Theatre Arts schools, including the newschools opened this Autumn Term, 93% of all available places are taken. The demand for performing arts tuition for children in the UK continues toincrease and given that Stagecoach Theatre Arts provides the highest standardsof education and service, and with schools geographically spread across the UK,we are well positioned to continue to meet this increasing demand. The core UK Stagecoach business, which accounts for 92 per cent. of networkturnover, reported divisional profit, before allocation of general overheads, of£1,022,000 for the six-month period, (2005: £782,000) and an estimated profitbefore tax of £382,000 (2005: £120,000). As forecast, each of the other divisions reported a loss for the period. SportsCoach schools The SportsCoach franchise network has 27 franchisees, 35 SportsCoach schools, 10Early Sporties Classes and 1,360 students (2005: 23 franchisees, 35 schools, 5Early Sporties and 1,348 students). The SportsCoach division is developing newmarketing and advertising strategies to recruit students. Mini Stages Mini Stages, music for six-months to five-year-olds, complements the existingrange of educational services offered. We have 16 Mini Stages franchisees, 63sessions and 523 students (2005: 10 Mini Stages franchisees, 43 sessions and 461students). During the period, the Mini Stages business model has been revised tohelp expand the Mini Stages network. Overseas schools During the last financial year we implemented major restructuring of theStagecoach USA subsidiary business operations. The cost reduction benefit ofthis restructuring has been evident in this half-year, with the US subsidiarytrading near to break-even for the period. Stagecoach Germany has expanded its network with seven new school openings andfour new Early Stages compared to the prior year. Subsequent to the half-yearend, the Stagecoach Group has agreed to acquire the outstanding 10% ofStagecoach Germany that it does not own. Between these two overseas markets, there are 16 franchisees, 30 Stagecoachschools, 28 Early Stages classes, 2 Further Stages classes and a total of 1,320students (2005: 1,051 students). Stagecoach Agency The Stagecoach Agency is the largest performing arts agency for children in theUK, securing hundreds of professional auditions or actual work placements eachmonth for our Stagecoach students. Creative and Educational The annual Easy Stages showcase production this year was 'Annie', featuring 70Stagecoach students from schools across the country and overseas. The Groupstaged a number of other successful events during the period, including thefirst Stagecoach choir festival at Symphony Hall Birmingham, featuring over 400students from all the UK regional choirs and Germany. We also staged an event inDecember at Her Majesty's Theatre, London, where 16 Stagecoach schools fromaround the UK took part in an evening of song and dance. The Stagecoach Foundation Course is run in collaboration with Trinity/Guildhall,with significant workshop input from The Royal Academy of Dramatic Art('R.A.D.A'). The course, designed with the particular needs of Stagecoach andpart-time theatre arts schools in mind, is becoming recognized nationally. Itnow has accreditation from Trinity/Guildhall as part of their A.T.C.L in MusicalTheatre (Associate of Trinity College London). It is about to receivesignificant accreditation from Liverpool University, to count as part ofL.I.P.A's degree course (Liverpool Institute for Performing Arts). Dividend No interim dividend has been proposed (2005: £nil). Outlook The core UK Stagecoach business continues to expand as demand for tuition in theperforming arts increases. Whilst the Group is experiencing difficulties with expanding the otherdivisions, we have implemented measures to further reduce the Group cost baseacross all divisions. Your Board's primary objective continues to be to bringeach of these divisions to profitability as soon as possible, or else torestructure them further. Graham ColeChairman 30 January 2007 Consolidated Profit and Loss Account Unaudited Unaudited Audited Six months Six months Year ended ended ended 30 Nov 2006 30 Nov 2005 31 May 2006 £'000 £'000 £'000 Turnover Continuing activities 3,074 2,691 5,673 ========== ========== ========== Operating (loss)/profit (71) (393) 2 Exceptional costs - - (184)Net interest payable (9) (6) (13) ---------- ---------- ---------- Loss on ordinary activitiesbefore taxation (80) (399) (195) Taxation on profit on ordinaryactivities (30) (38) (22) ---------- ---------- ---------- Loss on ordinary activitiesafter taxation (110) (437) (217) Minority interest 4 6 3 ---------- ---------- ---------- Retained loss for the period (106) (431) (214) ========== ========== ========== Loss per share, pence - Basic (1.1) (4.4) (2.2) - Diluted (1.1) (4.4) (2.2) Consolidated Balance Sheet Unaudited Unaudited Audited 30 Nov 2006 30 Nov 2005 31 May 2006 £'000 £'000 £'000 Fixed assets Intangible assets 705 855 735Tangible assets 692 106 673 ---------- ---------- ---------- 1,397 961 1,408 ---------- ---------- ---------- Current assets Stock 313 323 279Debtors 1,288 1,892 2,128Cash at bank and in hand 551 177 304 ---------- ---------- ---------- 2,152 2,392 2,711 ---------- ---------- ---------- CreditorsAmounts falling due within one year (1,206) (1,203) (1,762) ---------- ---------- ---------- Net current assets 946 1,189 949 ---------- ---------- ---------- Total assets less currentliabilities 2,343 2,150 2,357 CreditorsAmounts falling due after one year (152) (69) (57) ---------- ---------- ---------- Net assets 2,191 2,081 2,300 ========== ========== ========== Capital and reserves Share capital 494 494 494Share premium 1,601 1,601 1,601Profit and loss account 115 4 220 ---------- ---------- ---------- 2,210 2,099 2,315 Minority interest (19) (18) (15) ---------- ---------- ---------- Equity shareholders' funds 2,191 2,081 2,300 ========== ========== ========== Consolidated Cash Flow Statement Unaudited Unaudited Audited Six months Six months Year ended ended ended 30 Nov 2006 30 Nov 2005 31 May 2006 £'000 £'000 £'000 Net cash inflow/(outflow) fromoperating activities 587 (305) (14) Net returns on investments andservicing of finance (8) (6) (13) Taxation - (1) (59) Capital expenditure (197) (107) (454) ---------- ---------- ---------- Net cash inflow/(outflow)/inflow before financing 382 (419) (540) Financing 125 92 81 ---------- ---------- ---------- Increase/(decrease) in cash atbank and in hand 507 (327) (459) ========== ========== ========== Notes to the Interim Report Basis of preparation These interim financial statements have been prepared on the basis of theaccounting policies set out in the statutory accounts for the year ended 31 May2006. The figures for the year ended 31 May 2006 have been extracted from thestatutory accounts for the year. These accounts received an unqualified auditreport and have been filed with the Registrar of Companies. The goodwill arising on consolidation in respect of acquisitions has beencapitalised and is amortised over its estimated useful life. The Directorsregard 20 years as a reasonable period for the estimated life of goodwill. The six months figures to 30 November 2006 have not been audited by the Group'sauditors and do not constitute statutory accounts within the meaning of Section240 of the Companies Act 1985. Loss per share Loss per share has been calculated on losses for the period divided by theweighted average number of ordinary shares in issue of 9,879,317 (2005:9,879,317). The average market value of the company's shares during the periodwas less than the exercise price for the company's options, consequently theseoptions are deemed to be non-dilutive. Taxation The expected rate of corporation tax for the year ending 31 May 2007 is 30%. Taxhas been provided for to take account of the Group's expected corporation taxliability for the year. Dividends No interim dividend has been proposed (2005: £nil). Responsibility The Directors of the company accept responsibility for the information containedin this document and to the best of their knowledge and belief (having taken allreasonable care to ensure that such is the case) the information contained inthis document is in accordance with the facts and does not omit anything likelyto affect the import of such information. Availability of Interim Report Copies of these results together with the Chairman's statement are availablefrom the Company's registered office at The Courthouse, Elm Grove,Walton-on-Thames, Surrey KT12 1LZ, and are posted on the Company's website,www.stagecoach.co.uk. 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