20th Feb 2006 07:00
FAIRPLACE CONSULTING PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 Fairplace is a consultancy providing a range of talent management and careermanagement services.The Board of Directors of Fairplace Consulting plc today reports the Group'sunaudited results for the six months to 31 December 2005. The Board has alsoannounced today the appointment of City Financial Associates as NominatedAdviser and Seymour Pierce Ellis as Broker to the Company together with aplacing, subject to shareholder approval, to raise approximately ‚£450,000before expenses.Interim ResultsSales of ‚£2.43 million (2004: ‚£1.82 million excluding discontinued business)representing a 33.5% increaseSales of talent management services increase to ‚£0.41 million (2004: ‚£0.11million)Outplacement sales increase by 18.1% to ‚£2.02 million (2004: ‚£1.71 millionexcluding discontinued business)Substantial investment in development of talent management products andservicesOperating loss before goodwill of ‚£0.49 million (2004: loss of ‚£0.38 millionexcluding discontinued business)Sales for January 2006 in line with management expectations and above monthlylevels of previous quarterEnquiries:Mark Allsup, Chairman, 020 7816 0707Fairplace Consulting plcBrian Thorn, 020 7845 7900The Wriglesworth ConsultancyChairman's StatementI am pleased to be able to report an increase in first half outplacementrevenues of over 18% on a like-for-like basis despite the restricted level ofdemand for outplacement services in the current market, which is predominantlyrecruitment-led.The first half also saw an encouraging increase in revenues from talentmanagement services. The half-year results reflect a substantial investment inthe development of these services which are central to our strategic plan.While we believe there is good potential to build our market share from thecurrent 5% level to 10%, the UK outplacement market is at a cyclical low pointand a major upturn will be dependent on a change in economic conditions.Our strategy therefore has been to create a complementary and incrementalrevenue stream in talent management. Since we embarked on this strategyeighteen months ago we have been building a range of talent management productsand services, which we are now well-positioned to market to existing and newclients. Progress in the latest six months has been very positive: we areproviding more than one service to six of our ten largest clients; and we havedelivered coaching services to some 35 organisations.Trading ResultsFor the six months to 31 December 2005 sales increased by 33.5% to ‚£2.43million (2004: ‚£1.82 million excluding discontinued business). Over half ofthis increase was attributable to growth in sales of talent managementservices.Investment in these services was substantial and included: a modularaccreditation programme for our coaching faculty, which now comprises 23accredited coaches; training and accreditation of many of our consultants inpsychometric assessment; development of iTracker and CoachTracker, our on-linetracking and feedback systems for outplacement and coaching; and the creationof TalentTracker, an on-line assessment tool for senior managers, which helpsan organisation to identify and develop its talented people using 360 degreefeedback.We publicised and promoted our talent management services through PR, clientevents and sponsorships. This has already started to attract new clients toFairplace.The costs relating to this investment were fully recognised in the first halfoperating loss before goodwill of ‚£0.49 million (2004: loss of ‚£0.38 millionexcluding discontinued business).Placing and EGMWe announced earlier today that the Company proposes to raise approximately ‚£450,000 before expenses by way of a placing of new ordinary shares.The Board considers that it is in the Company's best interests to strengthenits financial resources through an equity issue. The placing is intended torepay overdraft borrowings, which presently amount to ‚£283,751 and to providefunding for continuing development and greater marketing capacity in keysectors and markets outside London. The Company's ‚£350,000 overdraft facilityhas recently been renewed and also remains available for utilisation ifrequired.Seymour Pierce Ellis Limited has agreed to place 3.75 million new ordinaryshares at 12 pence per share to raise approximately ‚£450,000 before expenses.As the issue price of 12 pence per share is below the 15 pence nominal value ofthe Company's existing ordinary shares, it will therefore be necessary to carryout a capital reorganisation in order for the placing to proceed. This willinclude a subdivision of each of the Company's 15 pence ordinary shares intoone 3 pence ordinary share and deferred shares.A circular containing details of the proposed placing and capitalreorganisation together with a Notice of EGM and a proxy card are being postedto shareholders today. The EGM will be held at 11.00 am on Thursday 16 March2006.Voting undertakings in favour of the EGM resolutions have been received inrespect of 2,404,569 ordinary shares, representing 39.74% of the ordinaryissued share capital.Appointments of AdvisersThe Board also announced today the appointment of City Financial AssociatesLimited ("CFA") as Nominated Adviser and Seymour Pierce Ellis Limited ("SPE")as Broker to the Company with immediate effect.CFA (www.city.fin.co.uk) is a subsidiary of Dowgate Capital plc, which is anAIM quoted company.SPE acted as Broker to Fairplace on its Admission to AIM in July 1997 and weare delighted to renew this relationship.Share OptionsFairplace is establishing a new Enterprise Management Incentives ("EMI") Planin order to be able to provide a suitable long term incentive scheme foremployees regarded as key to the accomplishment of the Company's strategic andfinancial objectives.The Board intends to grant the following share options under the plan:Michael Moran (Chief Executive): 266,667 options over ordinary sharesLinda Jackson (Director): 133,333 options over ordinary sharesThese options are proposed to be granted at the share price on the date ofgrant, subject to the agreement of HM Revenue & Customs Shares Valuation.Exercise of options will be dependent on the achievement of certain performancecriteria.Current Trading and ProspectsWhile the Board remains cautious about the timing of a recovery in the UKoutplacement market, we believe we can continue to increase market share.We are confident about the immediate growth prospects for the talent managementmarket and have built a solid platform on which to increase our revenues fromtalent management services. The placing will provide funding for continuingdevelopment and additional marketing resources.The second half has started positively with January sales in line withmanagement expectations and above the monthly levels seen in the previousquarter.Mark AllsupChairman20 February 2006Fairplace Consulting plc Group profit and loss account For the Period 6 months to 6 months to 12 months to 31/12/05 31/12/04 30/06/05 Unaudited Unaudited Audited Turnover: Continuing operations 2,431,213 1,819,988 4,844,318 Discontinued operations - 277,415 528,750 2,431,213 2,097,403 5,373,068 Administrative expenses Continuing operations (2,921,247) (2,195,814) (5,095,923) Discontinued operations - (235,063) (489,692) (2,921,247) (2,430,877) (5,585,615) Operating (loss) before goodwill Continuing operations (490,034) (375,826) (251,605) Discontinued operations - 42,352 39,058 (490,034) (333,474) (212,547) Goodwill Continuing operations (49,018) (33,978) (190,896) Discontinued operations - (32,502) (54,170) (49,018) (66,480) (245,066) Operating (loss) after goodwill Continuing operations (539,052) (409,804) (442,501) Discontinued operations - 9,850 (15,112) (539,052) (399,954) (457,613) Gain on sale of investment - - (779,196) Interest receivable 137 1,012 7,113 Interest payable (5,143) (1,056) (8,189) Other income/expenditure (5,006) (44) (780,272) (Loss) on ordinary activities before (544,058) (399,998) (1,237,885)tax Taxation - - 41,579 Retained (loss) for the period (544,058) (399,998) (1,196,306) EPS (note 1) (9.82) (7.27) (21.75) EPS before goodwill (8.93) (6.06) (17.29) Fully diluted EPS (9.82) (7.27) (21.75)Fairplace Consulting plc Group balance sheet For the period ending 31/12/05 31/12/04 30/06/05 Unaudited Unaudited Audited ‚£ ‚£ ‚£ Fixed assets: Intangible 937,084 2,026,012 986,109 Tangible 367,565 500,032 404,316 Investments - - - 1,304,649 2,526,044 1,390,425 Current assets: Stock and work in progress 16,027 40,626 18,235 Debtors 1,432,874 1,198,666 2,177,844 Cash at bank and in hand - 32,949 - 1,448,901 1,272,241 2,196,079 Creditors: falling due within (1,447,947) (1,200,713) (1,816,650)one year Net current assets 954 71,528 379,429 Total assets less current 1,305,603 2,597,572 1,769,854liabilities Deferred Taxation 16,443 (31,410) - Net assets 1,322,046 2,566,162 1,769,854 Capital and reserves: Called up share capital 907,526 825,026 825,026 Share premium account 2,093,592 2,079,842 2,079,842 Profit and loss account (1,679,072) (338,706) (1,135,014) Equity shareholders' funds 1,322,046 2,566,162 1,769,854 Fairplace Consulting plc Group Cash Flow Statement For the Period: 6mths to 6mths to 12mths to 31/12/05 31/12/04 30/06/05 Unaudited Unaudited Audited ‚£ ‚£ ‚£ Cash (out)/inflow from operating 62,951 89,793 (759,422)activities Returns on investment and servicing of finance: Dividends Received - - - Interest received 137 8,314 7,113 Other interest paid (5,143) (278) (8,189) (5,006) 8,036 (1,076) Taxation: Corporation tax refunded/(paid) - (14,812) 46,741 Capital expenditure and financial investment: Purchase of tangible fixed assets (28,821) (284,891) (17,068) Proceeds from sales of tangible fixed - - 27,732assets (28,821) (284,891) 10,664 Acquisitions and disposals: Purchase of subsidiary undertaking - - - Proceeds from sale of investment - - 82,121 - 82,121 Equity dividends paid - (161,290) - Cash flow before use of liquid 29,124 (363,164) (620,972)resources and financing Financing: Issue of ordinary share capital 96,250 - - increase/(decrease) in cash in the 125,374 (363,164) (620,972)period Reconciliation of operating profit to 6mths to 6mths to 12mths tooperating cashflow 31/12/05 31/12/04 30/06/05 Unaudited Unaudited Audited ‚£ ‚£ ‚£ Operating (loss)/profit before (490,034) (300,319) (212,547)goodwill Depreciation 65,570 68,908 178,189 Loss on disposal of fixed assets - - 4,176 (Increase)/decrease in stock 2,208 16,405 14,087 (Increase)/decrease in debtors 728,527 151,125 (1,158,325) Increase/(decrease) in trade (8,078) 367,261 254,370creditors (Decrease)/increase in accruals and (169,487) (152,429) 54,013deferred income Increase/(decrease) in tax and social (65,755) (61,158) 106,615security Net cash flow from operating 62,951 89,793 (759,422)activities Notes 1. The calculation of earnings per share is based on the loss after tax of ‚£ 544,058 (2004: Loss ‚£399,998) and on the number of shares in issue being the adjusted weighted average number of shares in issue during the period of 5,542,247 (2004: 5,500,170). 2. This Interim Statement for the six months ended 31 December 2005 is unaudited and was approved by the Directors on 17th February 2006. The financial information set out above does not constitute statutory accounts within the meaning of Section 240 of Companies Act 1985. The information given as comparative figures for the financial year ended 30 June 2005 was extracted from the Group's statutory accounts for that financial year. Statutory accounts for that financial year have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified. 3. The accounting policies remain as stated in the Annual Report for the year ended 30 June 2005. 4. This Interim Statement is being sent by post to all registered shareholders. Additional copies are available from the Company's registered office, 36-38 Cornhill, London, EC3V 3PQ. ENDFAIRPLACE CONSULTING PLCRelated Shares:
Ls -3x Avgo