1st Feb 2006 07:30
Stagecoach Theatre Arts PLC 01 February 2006 Stagecoach Theatre Arts plc - Interim Results 2005 Stagecoach Theatre Arts plc ("Stagecoach") Announcement of Interim Results for the six months ended 30 November 2005 Stagecoach Theatre Arts operates the UK's largest franchise network of part-timeperforming arts schools for young people aged between 4 and 16. Stagecoachcontinues to expand its core business, whilst developing other growth areas.There are now 560 Stagecoach schools, 589 Early Stages classes and 35SportsCoach schools in the UK, and a total of 34,844 students worldwide (2004:32,209 students). Franchise network turnover up 12% to £10.6 million (2004: £9.5 million) Loss before tax of £0.4m (2004: loss £0.2m), reflecting the continued investmentin SportsCoach and Mini Stages in the UK, and new schools in USA and Germany. Aswith the prior year, we expect our full year results to be weighted towards thesecond half. The core UK Stagecoach business, which accounts for 92 per cent of the networkturnover, reported divisional profit, before allocation of general overheads, of£782,000 for the six-month period. Significant achievements during the period: First Early Sporties franchise schools opened, a new format of classes for 4 to6 year olds; The Stagecoach Agency secured over 1,100 professional auditions or workplacements for Stagecoach students from 1 August 2005; A number of high profile successful events and productions during the period,including 400 Stagecoach students performing at The Theatre Royal, London. Stephanie Manuel and David Sprigg, Joint Managing Directors, commented: "The demand for performing arts tuition for children in the UK is at itsgreatest level ever, resulting in another period of significant growth in thenumber of schools and students attending. We continue to implement our strategyfor expansion in the UK and overseas, whilst maintaining the very high standardsof education throughout all the schools." Enquiries: Stagecoach Theatre Arts: Tel: 01932 254 333 Richard Dawson, Finance Director and Investor Relations Evolution Securities: Tel: 020 7071 4300 Tom Price Henry Turcan Public Relations, JBPR: Tel: 01629 825 777 John Burley Chairman's Statement Results and Overview The Group's results for the six months ended 30 November 2005 reflect furtherexpansion in the core business and the development of and investment in theemerging divisions. During the Autumn Term 2005, there were 34,844 studentsattending Stagecoach, SportsCoach and Mini Stages schools across the network(Autumn 2004: 32,209 students). The network turnover, which reports the underlying school fees throughout thefranchise network, was approximately £10.6 million for the period, an increaseof 12% (2004: £9.5 million). Group loss before tax was £399,000 (2004: loss before tax: £189,000). The lossfor this period reflects the further investment in and development ofSportsCoach, Stagecoach USA, Stagecoach Germany and Mini Stages. We expect profits of the core business to be higher in the second half of theyear than the first half. There are more income generating school weeks in thesecond half of the year than the first half, whilst the costs are evenly spreadthroughout the year. In addition, we anticipate that a greater proportion ofinitial franchise fees will be recognised in the second half of the financialyear. Loss per share was 4.4 pence (2004: loss per share: 2.5 pence). Operational Performance Stagecoach schools The numbers of Stagecoach Theatre Arts schools and students attending them haveincreased over the period to 560 schools and 23,979 students (2004: 517 schoolsand 22,609 students). In addition, the number of Early Stages classes hasincreased to 589 with 7,736 students attending (2004: 538 Early Stages classesand 7,329 students). Across the entire network of Stagecoach Theatre Artsschools, including the new schools and Early Stages classes opened this AutumnTerm, 95% of all available places are taken. The demand for performing arts tuition for children in the UK is at its greatestlevel ever, and given that Stagecoach Theatre Arts provides the higheststandards of education and service, we are well positioned to meet thisincreasing demand. The core UK Stagecoach business, which accounts for 92 per cent of networkturnover, reported divisional profit, before allocation of general overheads, of£782,000 for the six-month period, and an estimated profit before tax of£120,000. Each of the other emerging divisions reported losses for the period,including the development costs written off. SportsCoach schools The SportsCoach franchise network continues to expand, with 35 SportsCoachschools and 1,270 students (2004: 32 schools and 1,126 students). Theintroduction of Early Sporties, classes for 4 to 6 year olds, has proved animmediate success, with 5 classes and 78 students in the Autumn Term. Your Boardexpects that Early Sporties will have the same positive impact on the growth ofthe SportsCoach network, by acting as a feeder to the SportsCoach schools, asEarly Stages did for the Stagecoach schools network. Mini Stages Mini Stages, music for six-months to five-year-olds, complements the existingrange of educational services offered. We have completed the first year offranchising Mini Stages classes, and in the Autumn Term 2005 there were 10 MiniStages franchisees, 43 sessions and 461 students. Overseas schools We continue to invest in and develop both our USA and German subsidiarycompanies. Stagecoach USA and Germany each opened a further two franchisedschools in Autumn 2005. Between these two markets, there are 23 Stagecoachschools, 20 Early Stages classes, 2 Further Stages class and a total of 1,051students. Stagecoach Agency The Group's casting agency for Stagecoach students has been very successful, andis the biggest children's performing arts agency in the UK. The first nationwideStagecoach Agency Brochure produced in conjunction with Spotlight, featured2,257 students. The Agency is pleased to report that it has secured over 1,100professional auditions or actual work placements for Stagecoach students in theperiod from 1 August to 31 December 2005. Creative and Educational The Group staged a number of successful events during the period. The annualEasy Stages showcase production this year was 'Gypsy Blood', an original musicalproduction written by Veronica Bennetts, the Group's Educational Director. Theproduction featured 73 Stagecoach students from schools across the country andoverseas. In August, 380 Stagecoach students from 12 schools performed at theDance, Drama and Music Extravaganza at the NEC Birmingham. In November, 400Stagecoach students performed in the West End, at The Theatre Royal Drury Lane. During the period we held a series of Training Workshops for School Principalsand Teachers, and have developed a Foundation Course for Teachers of PerformingArts in collaboration with RADA and Trinity/Guildhall. Dividend No interim dividend has been proposed (2004: £nil). Outlook The core UK Stagecoach business continues to expand as demand for tuition in theperforming arts increases, whilst we invest for long-term future growth via newmarkets and a broader educational offering. The prospects for the future remainencouraging. Graham Cole Chairman 1 February 2006 Independent Review Report to Stagecoach Theatre Arts plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 November 2005 which comprises the consolidated profitand loss account, the consolidated balance sheet, the consolidated cash flowstatement and related notes. We have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report is made solely to the company and in accordance with Bulletin 1999/4issues by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the rules of theLondon Stock Exchange for companies trading securities on the AlternativeInvestment Market which require that the half-yearly report be presented andprepared in a form consistent with that which will be adopted in the company'sannual accounts having regard to the accounting standards applicable to suchannual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 November 2005. PKF (UK) LLP Guildford, UK 1 February 2006 Consolidated Profit and Loss Account Stagecoach Theatre Arts plc Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Nov 2005 30 Nov 2004 31 May 2005 £'000 £'000 £'000 Turnover Continuing activities 2,691 2,520 5,746 Acquired activities - 3 - 2,691 2,523 5,746 Operating (loss)/profit (393) (191) 58 Continuing activities (393) (199) 58 Acquired activities - 8 - Net interest (payable)/receivable (6) 2 2 (Loss)/profit on ordinary activities before taxation (399) (189) 60 Tax on profit on ordinary activities (38) (57) (79) Loss on ordinary activities after taxation (437) (246) (19) Minority interests 6 1 7 Retained loss for the period (431) (245) (12) Loss per share, pence - Basic (4.4) (2.5) (0.2) - Diluted (4.4) (2.5) (0.2) Consolidated Balance Sheet Stagecoach Theatre Arts plc Unaudited Unaudited Audited 30 Nov 2005 30 Nov 2004 31 May 2005 £'000 £'000 £'000 Fixed assets Intangible assets 855 827 794 Tangible assets 106 135 112 961 962 906 Current assets Stock 323 301 262 Debtors 1,892 1,781 2,208 Cash at bank and in bank 177 274 504 2,392 2,356 2,974 Creditors Amounts falling due within one year (1,203) (1,093) (1,362) Net current assets 1,189 1,263 1,612 Total assets less current liabilities 2,150 2,225 2,518 Creditors Amounts falling due after one year (69) - - Net assets 2,081 2,225 2,518 Capital and reserves Share capital 494 486 494 Share premium 1,601 1,545 1,601 Profit and loss account 4 200 435 2,099 2,231 2,530 Minority interest (18) 5 (12) Equity shareholders' funds 2,081 2,225 2,518 Consolidated Cash Flow Statement Stagecoach Theatre Arts plc Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Nov 2005 30 Nov 2004 31 May 2005 £'000 £'000 £'000 Net cash (outflow)/inflow from operating activities (305) 83 417 Net returns on investments and servicing of finance (6) 2 2 Taxation (1) (1) (148) Capital expenditure (107) (11) (10) Acquisitions and disposals - (17) (16) Equity dividends paid - (195) (195) Net cash (outflow)/inflow before financing (419) (139) 50 Financing 92 (3) 38 (Decrease)/increase in cash at bank and in hand (327) (142) 88 Notes to the Interim Report Basis of preparation The interim financial statements have been prepared on the basis of theaccounting policies set out in the statutory accounts for the year ended 31 May2005. The figures for the year ended 31 May 2005 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 2005 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 (2004:9,712,172). 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 2005 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 (2004: £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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