29th Sep 2006 07:01
Company Health Group PLC29 September 2006 For release at 0700h, 29 September 2006 Company Health Group PLC Interim Results for the Six Months Ended 30 June 2006 Company Health Group PLC (AIM: CHT) is a national provider of quality, highvalue health services designed to benefit both employers and employees by takinga positive and proactive approach to managing health risks and issues in theworkplace. In addition, the Group provides medical evidence services to thefinancial services industry. Highlights •Good progress made in the first half - turnover of £2.26 million, representing a full six months trading for all three Group businesses, up 11% on a comparable basis. •Profit before tax of £56,000 (no directly comparable figure available due to the reversal of the Group's businesses and Admission to AIM in April 2005) •Strong performance from the life assurance medical evidence business - turnover up 25% as the number of paramedic examinations undertaken continued to increase. •Occupational health regional office relocated to new premises in Gateshead with significant investment made in recruiting additional professional staff to position the business for growth. •Physiotherapy business Milligan & Hill - acquired in August 2005 and successfully integrated - saw revenues increase by 13% on a comparable basis and now comprises some 20% of Group turnover. Commenting, Ralph Gough, Chairman and Chief Executive of Company Health Group,said, "Company Health has continued to make good progress during the first sixmonths of 2006 and these results demonstrate, I believe, a successful beginningto our strategy for growth. We look forward to building on this success in theremainder of the year." For further information please contact: Ralph Gough, Chairman Simon Hudson, John West, Clemmie CarrGeorge Gonzalez, Finance DirectorCompany Health Group Plc Tavistock CommunicationsTel: 020 7553 8820 Tel: 020 7920 3150 Statement by the Chairman, Ralph Gough Company Health Group has continued to make good progress during the first sixmonths of 2006. These results include all three businesses which now comprisethe Group for the first full period and demonstrate, I believe, a successfulbeginning of our strategy for growth. Results The increase in turnover from £0.59 million to £2.26 million reflects theinclusion in the comparable period of only two months of trading for two of ourbusinesses following Reversus plc's acquisition of DTC Group Ltd in April 2005and the exclusion of Milligan & Hill, which was acquired in August 2005. Had all three Group businesses been included for the whole of the comparable2005 period, turnover would show an 11% increase, with a particularly strongperformance from the life assurance medical evidence business, which enjoyed a25% increase in turnover as the number of paramedic examinations undertakencontinued to grow. Profit on ordinary activities was £56,000 (2005: £4,000) after increasedadministrative costs of £899,000 (2005: £273,000) due to the move to publiclisted company status and net interest payable of £26,000 (2005: net interestreceivable of £7,000). Basic earnings per share following a nil tax charge(2005: same) were 0.15p (2005: 0.02p). The Directors are not declaring aninterim dividend at this stage in the Group's development but plan to institutea progressive dividend policy for shareholders once performance and retainedprofits allow. Review Diagnostic Technologies Corporation Ltd (DTCL), which provides medicalexamination services to the life assurance industry, performed well during thefirst half. A number of major new clients were won and the full benefit of thesecontracts will be reflected in DTCL's results over the next twelve months, andsubsequent years, as the volume of work undertaken builds. The operationalgearing inherent in this business means that top line growth - the increasingnumber of paramedic examinations - will lead to higher net margins as the costbase will not increase proportionately. Our occupational health business, Company Health Ltd (CHL), maintained its levelof turnover despite the significant investment involved in its expansion andrelocation to new premises in the North East of England. CHL has been trading inthe North East for over 15 years and is now positioned, in its new premises, toincrease its activity levels substantially. The new centre, at Team Valley,provides a greater number of consulting rooms for occupational health,rehabilitation and related advice services and is co-located with many largecompanies including Homebase, Currys, Next, Boots, MFI, and PC World. Althoughthis investment in facilities and additional nursing staff reduced the grossmargin slightly in the period under review, we are already starting to see thebenefits of increased scale and capacity in the current second half. Milligan & Hill Ltd (M&H), the Group's physiotherapy and ergonomics business,has made very good progress since its acquisition last year and accounted forsome 20% of total turnover in the first half. M&H increased its turnover by 13%compared with the comparable period last year with the increase resulting from acombination of additional business with existing clients and new client wins.During the second half we will begin the implementation of building a nationwidenetwork of occupational physiotherapy and rehabilitation practitioners. Thisnetwork will enable M&H to substantially extend its geographic coverage. Outlook We are pleased with the progress all three divisions of the Group have made inthe first half and look forward to building upon our successes to date. Weexpect DTCL and M&H to add to our bottom line with further new contract winsresulting from increased demand both for paramedic assessments from thefinancial services industry and for ergonomic and physiotherapy services fromemployers generally. The move to the new Team Valley offices provides CHL withan excellent opportunity to expand its occupational health client base in theNorth East, not least by targetting the substantial number of neighbouringbusinesses on the estate. In addition, Company Health will continue to grow itsbusiness throughout the rest of the UK. We continue to witness a trend towards safer, healthier, more productive workenvironments and believe that the Group is well positioned to take advantage ofthis development. In the coming years we will seek to grow all three businessesorganically and by acquisition. I look forward to further updating shareholdersat the time of the full year results at the end of the first quarter of 2007. Ralph GoughChairman28 September 2006 Consolidated profit and loss accountfor the six months ended 30 June 2006 6 months to 6 months to 12 months to June 2006 June 2005 Dec 2005 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 ------ -------- ------- --------Turnover 2,260 586 2,686Cost of sales (1,279) (316) (1,401)--------------------- ------ -------- ------- --------Gross Profit 981 270 1,285Administrative expenses (899) (273) (1,228)--------------------- ------ -------- ------- --------Operating Profit/(Loss) 82 (3) 57Net interest(payable)/receivable (26) 7 (2)--------------------- ------ -------- ------- --------Profit on ordinaryactivities 56 4 55before taxationTaxation 2 - - (24)--------------------- ------ -------- ------- --------Profit for the period 56 4 31--------------------- ------ -------- ------- --------Earnings per share (pence) - basic 3 0.15 0.02 0.15 - diluted 3 0.11 0.02 0.12 ------ -------- ------- -------- There are no recognised gains or losses other than those stated in the aboveprofit and loss accounts. Consolidated balance sheetas at 30 June 2006 As at As at As at 30 June 30 June 31 Dec 2006 2005 2005 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 ----- ------- ------- ------Intangible Assets 3,886 2,615 3,894Tangible Assets 170 166 154------------------------- ----- ------- ------- ------Total fixed assets 4,056 2,781 4,048------------------------- ----- ------- ------- ------Stocks 88 55 44Debtors 967 666 757Cash at bank and in hand 1,059 534 724------------------------- ----- ------- ------- ------Total current assets 2,114 1,255 1,525------------------------- ----- ------- ------- ------Creditors: amounts falling duewithin one year (2,173) (1,259) (1,521)------------------------- ----- ------- ------- ------Net current (liabilities)/ (59) (4) 4assets ----- ------- ------- -------------------------------Total assets less currentliabilities 3,997 2,777 4,052------------------------- ----- ------- ------- ------Creditors: amounts falling dueafter more than one year (163) (61) (274)------------------------- ----- ------- ------- ------Net assets 3,834 2,716 3,778------------------------- ----- ------- ------- ------Capital and reservesCalled up share capital 5 371 2,093 371Share premium account 5 1,944 12,818 1,944Capital Redemption Reserve 5 - 9 -Shares to be issued 5 933 - 933Profit and Loss Account 5 586 (12,204) 530------------------------- ----- ------- ------- ------Equity shareholders' funds 3,834 2,716 3,778------------------------- ----- ------- ------- ------ Consolidated cash flowfor the six months ended 30 June 2006 6 months to 6 months to Period to June 2006 June 2005 Dec 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 -------- ------- -------Net cash outflow from operatingactivities (1) (215) (54)Returns on investments and servicingof debtInterest paid (22) (3) (22)Interest received 1 11 23Interest element of finance lease (4) (1) (4)--------------------------- -------- ------- -------Capital Expenditure and financialinvestmentPayments to acquire tangible fixedassets (37) (5) (26)--------------------------- -------- ------- -------Acquisitions and disposalsPurchase of subsidiary undertaking - (257) (579)Debt acquired with subsidiaryundertaking - (177) (184)--------------------------- -------- ------- -------Cash inflow/(outflow) before (63) (647) (846)financing -------- ------- ----------------------------------FinancingDebt due within one year:Net (decrease)/increase in short termborrowings (189) (20) 25Debt due beyond one year:Secured bank loan received - - 375Repayment of secured loans (97) (5) (30)Capital element of hire purchasepayments (27) (3) (12)--------------------------- -------- ------- -------Increase/(decrease) in cash (376) (675) (488)--------------------------- -------- ------- -------Reconciliation of operating profit tonet operating cash flows -------- ------- ----------------------------------Operating Profit 82 (3) 57Depreciation and loss on sale ofassets 21 6 28Amortisation charges 7 26 105(Increase)/decrease in stocks (44) (1) 10Decrease/(increase) in debtors (210) (159) (134)Increase/(decrease) in creditors 143 (84) (120)--------------------------- -------- ------- -------Net cash outflow from operatingactivities (1) (215) (54)--------------------------- -------- ------- -------Reconciliation of net cash flow tomovement in net debt --------------------------- -------- ------- -------Increase/(decrease) in cash in theperiod (376) (675) (488)Cash outflow from decrease in debt 286 25 (370)Capital element of finance leases 27 3 12Debt acquired - (296) (296)--------------------------- -------- ------- -------Movement in net debt in the period (63) (943) (1,142)Net debt at 1st January 2006 (538) 593 604--------------------------- -------- ------- -------Net debt at 30 June 2006 (601) (350) (538)--------------------------- -------- ------- ------- Notes 1. Accounting policies The financial statements are prepared under the historical cost convention andin accordance with applicable accounting policies. Turnover Turnover comprises the invoiced value of goods and services supplied by thegroup derived from its ordinary activities, net of Value Added Tax and tradediscounts. Depreciation and diminution in value of assets Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixedassets, less their estimated residual value, over their expected useful lives onthe following bases: Leasehold improvements - 10% per annum on a straight line basisFixtures andequipment - between 10% straight line and 25% per annum on a reducing balance basisMotorvehicles - 25% reducing balance basis Intangible fixed assets have been capitalised and amortisation is provided bythe group to write off the costs incurred over their estimated useful economiclives as follows: Paramedexaminationdevelopmentcosts - at a rate of £1 per completed examinationPurchasedgoodwill - 5% per annum on a straight line basis Stocks Stocks and work in progress are valued at the lower of cost and net realisablevalue after making due allowance for obsolete and slow moving stocks. Costincludes all direct costs. Foreign exchange Assets and liabilities in foreign currencies are translated into sterling at therates of exchange ruling at the balance sheet date. Transactions in foreigncurrencies are translated into sterling at the rate ruling on the date of thetransaction. Exchange differences are taken into account in arriving at theoperating profit. Leasing Assets obtained under hire purchase contracts and finance leases are capitalisedas tangible fixed assets and depreciated over their useful lives. Finance leasesare those where substantially all of the benefits and risks of ownership areassumed by the company. Obligations under such agreements are included increditors net of the finance charge allocated to future periods. The financeelement of the rental payment is charged to the profit and loss account so as toproduce a constant periodic rate of charge on the net obligation outstanding ineach period. Rentals paid under operating leases are charged to the profit andloss account on a straight line basis over the term of the lease. Pension costs Contributions to the employees' individual pension schemes are charged to theprofit and loss account as paid. 2. Taxation An estimate has been made of the appropriate rate of taxation for the six monthsto 30 June 2006 of £nil (2005: £nil). 3. Earnings per share The calculation of earnings per share is based on the profit on ordinaryactivities after taxation for the six months ended 30 June 2006 of £56,000(2005: £4,000) and on the number of ordinary shares outstanding during the sixmonths ended 30 June 2006 of 37,127,094 (2005: 17,917,941). 4. Movement in net debt Debt at Debt at 1 January Cash Flow 30 June 2006 Movements 2006 £'000 £'000 £'000 ---------- ---------- -----------Cash in hand and at Bank 724 335 1,059Overdrafts (608) (711) (1,319)-------------- ---------- ---------- ----------- 116 (376) (260)Debt due after 1 year (257) 97 (160)Debt due within 1 year (369) 189 (180)Finance Leases (28) 27 (1)-------------- ---------- ---------- ----------- (538) (63) (601) ---------- ---------- ----------- 5. Statement of changes in equity Share Share Shares to Profit and Total Capital Premium be Issued Loss Account Equity £'000 £'000 £'000 £'000 £'000 ------- ------- ------- --------- -------At 1 January 2006 371 1,944 933 530 3,778Profit for the period - - - 56 56------------- ------- ------- ------- --------- -------At 30 June 2006 371 1,944 933 586 3,834------------- ------- ------- ------- --------- ------- 6. Copies of report Copies of this Interim Statement will be sent to shareholders. Further copieswill be available from the Company Secretary, Peter Ashcroft, at Company HealthGroup Plc, 309 New loom House, 101 Back Church Lane, London E1 1LU([email protected]). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
CHT.L