30th Sep 2005 07:01
Multi Group PLC30 September 2005 Date: 30 September 2005On behalf of: Multi Group Plc ("Multi" or "the Company")Embargoed until: 0700hrs Multi Group PlcInterim Results for six months ended 30 June 2005 Multi, the specialist recruitment group, today announces its interim results forthe six months to 30 June 2005. Chairman's Statement Multi Group plc began the year as a clean shell with some £5 million of cashresources and approximately £0.5 million, at original cost price, of computerservers and attendant software upon which in the future to base a centralisedback office operation. In March Multi announced the move into the personnel and recruitment sector withthe acquisition of Berry Recruitment Holdings Limited, a private companyoperating from eleven branches around the UK, whose fast growing medical andcare division was of particular interest to the directors. In June, the directors announced the acquisition of the business and assets ofGrays Personnel Limited, whose four branches complimented and filled gaps inBerry's network. To all intents and purposes this business has now been fullysubsumed into Berry and operates as a part of that business. In May Multi also announced that it had made a strategic investment in LorienPlc, an IT resourcing services group quoted on the Official List, and this iscovered in more detail below. The results for the first half of the year reflect the changes that have beentaking place and whilst important in their own right, do not provide ameaningful guide to the Company's future performance. Results for the period During the six months to 30 June 2005, Multi reported a pre-tax loss of £0.57million on turnover of £2.67 million. Comparison with previous periods is notmeaningful as the Company was then operating in a different industry sector. As at 30 June 2005 the Group had net assets of £6.86 million, and had cashresources of £3.36 million. Strategic developments On 23 May Multi announced that it had acquired 850,000 ordinary shares in Lorienat a price of 35 pence per share representing some 4.56 per cent. of Lorien'sissued voting share capital. Multi was deemed to be acting in concert with itslargest shareholder, Southwind Limited (together "the Concert Party"), inrespect of Lorien and Southwind was then interested in 3,250,000 Lorien shares,representing 17.5 per cent. of Lorien's issued share capital. The Concert Partywas therefore interested in a total of 4,100,000 Lorien shares, representing22.1 per cent. of its issued voting share capital. The directors also announced that they were considering the possibility ofmaking an offer for the entire issued voting share capital of Lorien at oraround the price per share paid by Multi for its shareholding. The directors subsequently met with the board of Lorien and their advisers todiscuss the possibility of Multi making such an offer. With the consent andco-operation of the Lorien board, Multi conducted a limited due diligenceexercise and having substantially completed this confirmed that it did notintend to make an offer for Lorien. The directors' current intention is toretain the strategic stake in Lorien. Since 30 June trading within the enlarged Berry business has been somewhatmixed. However, the directors still anticipate that Berry will have asatisfactory 2005, compared with the substantial loss reported during the yearprior to its acquisition, and that it will contribute more significantly to theGroup's results in future years. Strengthening of the Board I am delighted to announce that Diana Cornish, the former Executive Chairman ofBlue Arrow, has been appointed to the Board as a non-executive director. Diana is a well known and highly respected figure within the staffing andrecruitment industry who is particularly adept at integration and the managementof change. During her time with Blue Arrow she successfully integrated overforty companies and previously, as Chief Executive of Brook Street Bureau Plc,she oversaw an eight fold increase in that company's profitability. Diana is amember of the Cabinet Office list as an approved independent assessor and sitson various health authority panels to recruit chief executives and other boardmembers. Diana will also serve on Multi's remuneration and audit committees. Multi's Board now combines the expertise of experienced corporate operators withthat of an acknowledged industry expert. Strengthening the Company's team of advisers In September the Board was pleased to announce the appointment of RedleafCommunications as its financial PR and investor relations adviser. Redleaf has aformidable track record in assisting clients with strategic buy and buildprogrammes and are a welcome addition to the team of advisers supporting theBoard's ambitious plans for the development of the Group. The future Presently Multi has one principal trading subsidiary from which to generatesufficient profit to cover its central costs. There is clearly an immediate requirement to leverage up on Multi's cost baseand to acquire further businesses both to achieve critical mass and to developMulti into a strong and profitable group. Throughout the year the directors havebeen working hard creating a pipeline of acquisitions with which to grow theGroup and I look forward to having an opportunity to update shareholders on ourprogress in the near future. O C Cooke Executive Chairman Consolidated profit and loss account For the period ended 30 June 2005 Period ended Period ended Year ended 30 June 2005 30 June 2004 31 December 2004 (Unaudited) (Unaudited) (Audited) Note £'000 £'000 £'000 Turnover 1 2,670 4,912 5,744Cost of sales 1,991 740 926 Gross profit 679 4,172 4,818Selling and distribution costs 553 2,931 3,632Administrative expenses 780 1,361 2,526 Operating loss 2 (654) (120) (1,340)Earnings before interest, tax, anddepreciation Operating loss (654) (120) (1,340)Add back:Depreciation 37 729 890Amortisation 56 - -EBITDA (561) 609 (450) Profit on disposal of businesses - 1,190 3,305 (Loss)/profit on ordinary activities beforeinterest (654) 1,070 1,965Interest receivable 101 - 109Interest payable and similar charges (22) (80) (38) (Loss)/profit on ordinary activities beforetaxation (575) 990 2,036Taxation 3 - 46 (239) (Loss)/profit on ordinary activities aftertaxation (575) 1,036 1,797Dividends - - -(Loss)/profit for the financial period (575) 1,036 1,797 (Loss)/earnings per share:- Basic 4 (0.20)p 0.40p 0.69p- Diluted 4 (0.20)p 0.38p 0.67p(Loss)/earnings per share beforedepreciation and amortisation:- Basic 4 (0.17)p 0.69p 1.03p- Diluted 4 (0.17)p 0.65p 1.01p Consolidated balance sheet At 30 June 2005 As at As at As at 31 December 2004 30 June 2005 30 June 2004 (Unaudited) (Unaudited) (Audited) Note £'000 £'000 £'000Fixed assetsIntangible assets 5 4,724 - -Tangible assets 6 235 5,044 119Investments 7 300 - - 5,259 5,044 119Current assetsStocks - 144 -Trade debtors 1,104 2,336 39Prepayments and accrued income 387 362 180Other debtors 229 52 199Cash at bank and in hand 3,359 7 5,120 5,079 2,901 5,538Creditors: amounts falling due within oneyear (3,437) (4,001) (1,300) Net current assets/(liabilities) 1,642 (1,100) 4,238 Total assets less current liabilities 6,901 3,944 4,357Creditors: amounts falling due after morethan one year - (365) (20) Provisions for liabilities and charges (37) (88) (35) Net assets 6,864 3,491 4,302 Capital and reservesCalled up share capital 2,591 2,536 2,541Share premium account 4,432 3,050 3,095Shares to be issued 1,750 - -Other reserves - 250 -Profit and loss account (1,909) (2,345) (1,334) Shareholders' funds - equity 8 6,864 3,491 4,302 Consolidated cash flow statement For the period ended 30 June 2005 Period ended Period ended Year ended 30 June 2005 30 June 2004 31 December 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Reconciliation of operating loss to net cashinflow from operating activities Operating loss (654) (120) (1,340)Depreciation and amortisation charges 93 729 890Loss on disposal of fixed assets - 14 93Decrease in stocks - (32) (30)Decrease in debtors 167 22 2,512Decrease in creditors (50) (909) (3,064) Net cash outflow from operating activities (444) (296) (939)Consolidated cash flow statementNet cash outflow from operating activities (444) (296) (939)Returns on investments and servicing offinance 79 (80) 71Taxation recovered - 46 46Proceeds from sale of businesses - 980 7,980Capital expenditure (net of disposalproceeds) (328) (928) (977)Acquisitions (2,078) - - Cash (outflow)/inflow before financing (2,771) (278) 6,181Financing (211) (218) (155) (Decrease)/increase in cash in the period (2,982) (496) 6,026 Reconciliation of net cash (outflow)/inflowto decrease/(increase) in net debt(Decrease)/increase in cash in the period (2,982) (496) 6,026Cash outflow from decrease in debt and leasefinancing 2 295 929 Change in net debt resulting from cash flows (2,980) (201) 6,955New finance leases (7) (145) (144) (Increase)/decrease in net debt in the (2,987) (346) 6,811periodNet funds/(debt) at start of the period 5,008 (1,803) (1,803) Net funds/(debt) at 30 June/31 December 2,021 (2,149) 5,008 Notes to the interim results For the period ended 30 June 2005 1 Accounting periods The accounting reference date of the Group is 31 December. The current interim results are for the 26 week period ended 30 June 2005. The comparative year's results are for the year ended 31 December 2004. The comparative interim results are for the 26 week period ended 30 June 2004. 2 Continuing and discontinued operations Continued Discontinued Total £'000 £'000 £'000Period ended 30 June 2005 (Unaudited)Turnover 2,670 - 2,670 Operating loss (654) - (654) Period ended 30 June 2004 (Unaudited)Turnover - 4,912 4,912 Operating (loss)/profit (457) 337 (120) Year ended 31 December 2004 (Audited)Turnover - 5,744 5,744 Operating loss (783) (557) (1,340) 3 Taxation Period ended 30 Period ended 30 Year ended 31 June 2005 June 2004 December 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000The charge for taxation is based on the profit/(loss) on ordinary activities for the period andcomprises:UK corporation tax charge on operating activities - - 285Adjustments in respect of prior years - (46) (46)Deferred tax: - (46) 239 Notes to the interim results (continued) For the period ended 30 June 2005 4 (Loss)/earnings per share The calculation of (loss)/earnings per share for the period ended 30 June 2005is based on a loss after taxation of £544,000 (2004 interim: profit of£1,036,000; 2004 full year: profit of £1,797,000). The calculation of basic (loss)/earnings per share is based on the weightedaverage number of shares in issue during the period of 289,134,867 (2004interim: 256,460,947; 2004 full year: 260,192,656). Reconciliation of the denominators used for basic and diluted (loss)/earningsper share calculations: Effect of share options Basic Diluted30 June 2005 289,134,867 - 289,134,86730 June 2004 256,460,947 13,899,220 270,360,16731 December 2004 260,192,656 9,300,018 269,492,674 Additional disclosure is given below in respect of basic (loss)/earnings pershare before depreciation and amortisation, as the directors believe this givesa more accurate presentation of maintainable earnings. Year ended 31 December 2004 Period ended 30 Period ended 30 June 2005 June 2004 (Unaudited) (Unaudited) (Audited) Pence Pence Pence Basic (loss)/earnings per share (0.20) 0.40 0.69Depreciation and amortisation 0.01 0.29 0.34 Basic (loss)/earnings per share beforedepreciation and amortisation (0.19) 0.69 1.03 Diluted (loss)/earnings per share (0.17) 0.38 0.67Depreciation and amortisation 0.01 0.27 0.34 Diluted (loss)/earnings per share beforedepreciation and amortisation (0.16) 0.65 1.01 Notes to the interim results (continued) For the period ended 30 June 2005 5 Intangible assets Goodwill £'000CostAdditions and as at 30 June 2005 4,780 AmortisationCharge for period and as at 30 June 2005 56 Net book valueAt 30 June 2005 (Unaudited) 4,724At 30 June 2004 (Unaudited) -At 31 December 2004 (Audited) - Additions to goodwill in the period are analysed as follows: £'000 Additions on the acquisition of Berry Recruitment Holdings Limited 4,451Additions on the acquisition of the business of Grays Personnel Limited 329 4,780 6 Tangible assets Equipment for Motor Other tangible hire vehicles assets* Total £'000 £'000 £'000 £'000CostAt 1 January 2005 - - 279 279Additions - - 27 27Acquisition of subsidiary undertaking - 25 213 238 At 30 June 2005 - 25 519 544 DepreciationAt 1 January 2005 - - 160 160Charge for the period - 2 36 38Acquisition of subsidiary undertaking - 19 92 111 At 30 June 2005 - 21 288 309 Net book valueAt 30 June 2005 (Unaudited) - 4 231 235At 30 June 2004 (Unaudited) 3,865 437 742 5,044At 31 December 2004 (Audited) - - 119 119 *Other tangible assets include leasehold improvements, fixtures and fittings,office equipment and computer equipment. Notes to the interim results (continued) For the period ended 30 June 2005 7 Investments Listed £'000CostAdditions and as at 30 June 2005 300 Net book valueAt 30 June 2005 (Unaudited) 300At 30 June 2004 (Unaudited) -At 31 December 2004 (Audited) - The market value of the listed investments at 30 June 2005 was £344,250. 8 Reconciliation of movement in shareholders' funds Year ended Period ended Period ended 31 December 2004 30 June 2005 30 June 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000(Loss)/profit on ordinary activities aftertaxation for the financial period (575) 1,036 1,797Ordinary shares issued, net of expenses 1,387 100 150Change in shares to be issued 1,750 - - Net increase in shareholders' funds 2,562 1,136 1,947Opening shareholders' funds 4,302 2,355 2,355 Closing shareholders' funds 6,864 3,491 4,302 Notes to the interim results (continued) For the period ended 30 June 2005 9 Segmental analysis of turnover, operating profit/(loss) and net assets By business segment: Discontinued Discontinued Hire of plant & Software sales Continuing machinery activities Total £'000 £'000 £'000 £'000For the period ended 30 June 2005:Turnover - - 2,670 2,670 Loss on ordinary activities beforeinterest - - (654) (654) Net assets - - 6,864 6,864 For the period ended 30 June 2004:Turnover 4,939 (27) - 4,912 Profit/(loss) on ordinary activitiesbefore interest 1,522 5 (457) 1,070 Net assets/(liabilities) (1,084) - 4,575 3,491 For the year ended 31 December 2004:Turnover 5,771 (27) - 5,744 Profit/(loss) on ordinary activitiesbefore interest 2,743 5 (783) 1,965 Net assets - - 4,302 4,302 The interim financial information does not comprise statutory accounts asdefined in Section 240 of the Companies Act 1985. The interim financialinformation has been prepared on the basis of the accounting policies set out inthe Annual Report for the year ended 31 December 2004. The financial information for the periods ended 30 June 2004 and 30 June 2005 isunaudited. The financial information for the year ended 31 December 2004 is an extract fromthe latest Group accounts. Those accounts received an unqualified auditors'report and have been filed with the Registrar of Companies. - ends - Enquiries to: Oliver C Cooke, ChairmanMulti Group Plc Tel: 08701 602 901 Emma Kane/Miranda GoodRedleaf Communications Ltd Tel: 020 7955 1410 - Further information can be found on the Company's website http://www.multiplc.com . This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Servoca