20th Sep 2006 07:01
Autoclenz Holdings PLC20 September 2006 Issued by Citigate Dewe Rogerson Limited, BirminghamDate: Wednesday 20th September 2006 Embargoed: 7.00am Autoclenz Holdings Plc The UK's leading outsourced car valeting and vehicle preparation provider Interim Results 1st January 1st January to 30th June to 30th June 2006 2005 Autoclenz Holdings Autoclenz Limited Sales £13.3m £12.3m Gross Profit £3.8m £3.7m EBITDA £1.6m £1.5m Diluted Earnings per share (EPS) 3.84p Diluted EPS adjusted for Goodwill Amortisation 7.56p • Maiden interim dividend 1.5 pence • EBITDA up 6.7% • Positive operating cash flow of £0.8m • £1million of additional new business secured in the first half, with further contract wins in the pipeline • AC Smart - sales up 63% • Gross margin slightly depressed due to cost associated with the new business gains and some shortfall in the performance of REACT • On-going focus on cost controls to maintain competitiveness and growth and margin performance • Re-classified by FTSE under Business Support Services • It is considered that Autoclenz Holdings Plc shares satisfy conditions of Section 105 IHTA 1984 "I am pleased to report that the Group has made good progress and our results atthe half year are very much in-line with management expectations. "The Group continues to remain focussed on cost control, operationalefficiencies and margin improvement, to maintain our competitiveness and futuregrowth. "The strength and mix of our business brands provides us with the solidfoundation on which to develop further. All of the brands within the Group arebeing managed well and driven by a successful team of people at the operationallevel who are committed to each brand's success". John Bell, Chairman FULL STATEMENT ATTACHED Enquiries:Grahame Rummery, Chief Executive Fiona Tooley, DirectorTrevor Clingo, Group Finance Director Katie Dale, Senior Account ManagerAutoclenz Holdings Plc Citigate Dewe RogersonTelephone: 08707 510 410 Telephone: 0121 455 8370www.autoclenz.co.uk Mobile: 07770 788 624 (KD) -2- STATEMENT BY THE CHAIRMAN, JOHN BELL Review I am pleased to report that the Group has made good progress and our results atthe half year are very much in-line with management expectations. Overall, themarket remains very competitive and new car registrations fell year-on-year toJune 2006 by 4.2%. Despite this, we achieved sales growth of 7%, which is a verycreditable performance. Our core valeting business, AC Autoclenz, has made good progress in nearly allgeographical and market areas. Since the period end, we have secured a furthercontract with a major car logistics provider, to valet, manage and qualitycontrol vehicle preparation of up to 300 vehicles per day. This new contractwith an annualised value of £700,000, also adds a new key customer to ourgrowing portfolio. AC Smart our cosmetic repair division has had an outstanding start to 2006 withlike-for-like sales increasing 63%. This reflects an increased amount of workwithin the 'No fault accident repair industry'. In order to be well prepared forthe 2008 paint legislation changes, AC Smart has begun to implement the use ofwater based paints. To assist further growth within our AC Smart division, wehave added additional sales resource and commenced identifying both new productsand market areas. AC Ready To Rent has performed strongly through the expansion of its range ofservices to customers. During the period, new business was secured, the mostnotable being an additional new contract with an existing customer providing themanagement of the car rental fleet at Stansted Airport. This contract is worthapproximately £300,000 on an annualised basis, and is an extension to the rangeof services that the Group has historically provided to this customer. Pinnacle our prestige vehicle preparation division produced a strong first halfperformance, with growth principally coming from the South-East, although morerecently we have broadened the account base to encompass additional marques andnew accounts within the Midlands and the North. REACT, as already highlighted, has continued to experience challenging and mixedtrading conditions, with sales in the period down 1% on 2005 and marginsdepressed by 3%. This is principally as a result of market rationalisationwithin the public sector business although, we have successfully replaced someof this business with growth within the rail sector. As we move forward, thisbusiness is looking at various opportunities to exploit its skills in existing,but more importantly new markets, such as the food, health & hygiene sectors. Tofurther support this initiative, we have recruited additional personnel withspecialist knowledge in these markets, the benefits of which are expected to bereflected in Q4 2006 and the next financial year. Since the half year end, both REACT and AC Smart gained ISO 9001 accreditation. Strategy We continually review our strategy to ensure that we have the correct investmentand resource in the right place to support our success and growth. We are committed to our strategy of managing the core business, whilst addingnew products and services where higher margins might be expected. Within our brands, we remain focussed on AC Smart, where we can develop its coreservices and cross sell within our other businesses. We have already identifieda number of opportunities to expand our specialist brand Pinnacle, outside theM25 corridor, whilst at REACT, we will continue to look for additionalopportunities in new markets where these niche specialist skills can be adapted. -3- Current trading and prospects The Group continues to remain focussed on cost control, operational efficienciesand margin improvement, to maintain our competitiveness and future growth. The strength and mix of our business brands provides us with the solidfoundation on which to develop further. All of the brands within the Group arebeing managed well and driven by a successful team of people at the operationallevel who are committed to each brand's success. The logistics and management of the significant pieces of new business securedat the end of this half and the beginning of the second half of this financialyear have been put in place. Due to the complexity in establishing the workingpartnerships essential to the profitable running of these new accounts, we nowanticipate that the benefits of these contracts will start to contribute to theGroup's results in 2007, which is slightly later than first envisaged. We are encouraged also by the number of opportunities to tender for additionalcontractual business. The remainder of this financial year will be as competitive and challenging asthe first half, although we expect the Group to continue to make progress. Dividend As indicated in our trading update issued in July 2006, in-line with the Group'sdividend strategy, a maiden interim dividend of 1.5 pence per share will be paidon 25 October 2006 to Shareholders on the Register as at 29 September 2006. This underpins the confidence of the Board in the Group's future prospects. -4- Autoclenz Holdings Plc Consolidated Profit and Loss Account Period from Period from 1 January to 1 September to 30 June 2006 31 December 2005 Notes £000 £000 Turnover 13,311 1,572Cost of sales (9,473) (1,167) ---------- -----------Gross profit 3,838 405Distribution costs (276) (24)Administration expenses (2,605) (361)Other income ---------- ------------Operating profit 957 20Interest payable (205) (29) ---------- ------------Profit on ordinary activities beforetaxation 752 (9)Tax on profit on ordinary activities (352) (13) ---------- ------------Profit on ordinary activities aftertaxation 400 (22)Dividends paid and proposed 8 (156) - ---------- ------------Profit for the period 244 (22) ========== ============Basic Earnings per share 2 3.85p (0.00322)pDiluted Earnings per Share 2 3.84p (0.00321)p -5- Autoclenz Holdings Plc Consolidated Balance Sheet As at As at 30 June 31 December 2006 2005 Notes £000 £000 Fixed Assets Intangible assets - goodwill 10 15,185 15,572Tangible Assets 3 608 615 ---------- ------------ 15,793 16,187 ---------- ------------Current Assets Stocks 2 4Debtors 4 4,456 3,671Cash at bank 777 1,667 ---------- ------------ 5,235 5,342 Creditors: amounts falling due within one year 5 (4,418) (4,663) ---------- ------------Net Current assets 817 679 ---------- ------------ Total assets less current liabilities 16,610 16,866 Creditors: amounts falling due after more than 6 (3,970) (4,450) one year ---------- ------------Net assets 12,640 12,416 ---------- ------------ Capital and Reserves Called up Share Capital 1,040 1,040 Share premium account 11,383 11,398 Profit and loss 217 (22) ---------- ------------Shareholders' funds 12,640 12,416 ---------- ------------ -6- Autoclenz Holdings Plc Consolidated Cash Flow Statement Period Period from from 1 January to September to 30 June 31 December 2006 2005 Notes £000 £000 £000 £000 Net cash inflow fromoperating activities 7 783 1,715 Returns on investments andservicing of finance Net interest paid (118) (1) Net cash outflow fromreturns on investmentsand servicing of finance (118) (1) Taxation (291) (291) - - Capital expenditure andfinancial investment Purchase of tangible fixedassets (268) (32) Sale of tangible fixedassets 4 (264) 2 (30) Acquisitions Acquisition of Autoclenz Ltd (18,000) Overdraft acquired with Autoclenz Ltd (868) - (18,868) Net cash inflow/(outflow) before financing 110 (17,184) Financing Issue of ordinary share capital net of expenses - 12,451 Term Loan net of expenses - 4,800 (Reduction)/proceed of short term borrowings (1,000) 1,600 Net cash (outflow)/inflow fromfinancing (1,000) 18,851 ----------- -----------(Decrease)/Increase in cash (890) 1,667 =========== =========== -7- Autoclenz Holdings Plc Notes to the Financial Accounting Statements 1 Accounting Policies Basis of accountingThe financial statements have been prepared under the historical cost conventionand comply with applicable United Kingdom accounting standards. TurnoverTurnover represents the invoiced value of goods sold, and services provided, tothird parties, net of value added tax and trade discounts. Fixed assetsTangible fixed assets are stated at cost, net of depreciation and any provisionfor impairment. The cost of tangible fixed assets is depreciated using astraight-line basis over their expected useful lives as follows: Plant and motor vehicles between 2 and 5 yearsProperty improvements 7 years StocksStocks are valued at the lower of cost and net realisable value. Net realisablevalue is based on estimated selling price, less further costs expected to beincurred to completion and disposal. Provision is made for obsolete, slow-movingor defective items where appropriate. TaxationUK Corporation tax is provided at amounts expected to be paid using the taxrates and laws that have been enacted or substantially enacted by the balancesheet date. Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future or a right topay less tax in the future have occurred at the balance sheet date. Timingdifferences are differences between the company's taxable profits and itsresults as stated in the financial statements that arise from the inclusion ofgains and losses in tax assessments in periods different from those in whichthey are recognised in the financial statements. A net deferred tax asset is regarded as recoverable and therefore recognisedonly when, on the basis of all available evidence, it can be regarded as morelikely than not that there will be suitable taxable profits from which thefuture reversal of the underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply inthe periods in which the timing differences are expected to reverse, based onthe tax rates and laws that have been enacted or substantively enacted by thebalance sheet date. Deferred tax is measured on a non-discounted basis. ConsolidationThe accounts consolidate the accounts of the company and Autoclenz Ltd, the onlysubsidiary. GoodwillConsolidated goodwill, being the excess consideration over the fair value of theassets acquired on the purchase of Autoclenz Ltd, is capitalised and charged toprofit over 20 years. continued... -8- Pension ContributionsThe company launched a Group personal pension plan with the assistance of MercerHuman Resource Consulting (EB) Ltd, in April 2006. The pension is offered to allemployees after 3 months service. The company makes contributions at varyinglevels from 4% to 10%, depending on the level of contribution made by theemployee. Finance CostsFinance costs of debt are recognised in the profit and loss account over theterm of such instruments at a constant rate on the carrying amount. Period CoveredAll notes below detail costs and statistics relating to the period 1 January2006 to 30 June 2006. 2 Earnings per share Basic shares Diluted shares In Issue from December 7 10,400,020 10,400,020 On option 9,701 Sub total 10,400,020 10,409,721 Earnings (£000s) 400 400 Earnings per share 3.85p 3.84p Earnings per share - adjusted for GoodwillAmortisation 7.57p 7.56p 3 Tangible Fixed Assets Plant, motor vehicles and property improvements £'000 CostAt 1 January 2006 2,239Additions 268Disposals (167) ---------At 30 June 2006 2,340 ---------DepreciationAt 1 January 2006 1,624Charge for the year 271Disposals (163) ---------At 30 June 2006 1,732 ---------Net book valueAt 30 June 2006 608 =========Net book valueAt 31 December 2005 615 ========= continued... -9- 4 Debtors 2006 2005 £000 £000 Trade debtors 3,968 3,306Other debtors 25 22Prepayments 259 96 --------- ---------Amounts falling due within one year 4,252 3,424 --------- ---------Deferred Taxation 167 209Called up share capital not paid 38 38 --------- ---------Amounts falling due after more than one year 205 247 --------- ---------Total debtors 4,456 3,671 --------- --------- 5 Creditors 2006 2005 £000 £000Amounts falling due within one year Short term loan 600 1,600Bank loan 900 400Trade creditors 1,118 744Corporation tax 359 324Taxation and social security 891 881Other creditors 29 374Accruals 364 340Proposed dividend 156 - --------- --------- 4,418 4,663 --------- --------- 6 Creditors 2006 2005 £000 £000 Amounts falling due after more than one year Bank loan 3,920 4,400Redeemable preference shares 50 50 --------- --------- 3,970 4,450 --------- ---------More than one year but not more than two years 1,050 1,050 More than two years but not more than five years 3,100 3,600 Finance costs incurred obtaining the bank loan (203) (203)Bank loan amortised 23 3 --------- --------- 3,970 4,450 --------- --------- The bank loan is secured by a charge on all the assets of the Group. Interest ischarged at 1.75% over LIBOR. continued... -10- 7 Cash Flow Reconciliation of operating profit to net cash inflow from operating activities 2006 2005 £000 £000 Operating profit 957 20Depreciation and amortisation charge 679 74Profit on sale of tangible fixed assets (24) -Decrease in stocks 2 1(Increase)/decrease in debtors (865) 1,161Increase in creditors 34 459 --------- ---------Net cash inflow from operating activities 783 1,715 --------- --------- 8 Dividends paid and proposed £'000Dividends paid and proposed on equity shares- interim of 1.5p (2005: nil) per ordinary share 156 9 Acquisition of Autoclenz Ltd On 7 December 2005 the company acquired the whole issued share capital ofAutoclenz Ltd for a total consideration of £18m. The consideration was satisfied by a cash payment of the total sum. The £18m wasraised through obtaining a £5m 5 year term loan from HSBC and £13m from aplacing of 10.4m shares at £1.25. £'000Net Assets acquired (net book value) Tangible Fixed Assets 608Stocks 5Debtors 4,794Creditors (2,162)Bank Overdraft (868) --------- 2,377Provisional Goodwill * 15,623 ---------Acquisition Price 18,000 ========= \* The provisional goodwill figure has been assessed on the basis of the bookvalue of net assets acquired. The Directors will complete their determination ofgoodwill based on the fair value of net assets acquired in 2006. continued... -11- 10 Intangible assets: goodwill £'000 Cost at 1 January 2006 15,623 ---------At 30 June 2006 15,623 =========Amortisation at 1 January 2006 51 Charge in period 387 ---------At 30 June 2006 438 =========Net book value 30 June 2006 15,185 ========= ---------Net book value 31 December 2005 15,572 ========= 11 General notes The next results to be reported by the group will be from incorporation to 31December 2006. The interim results of Autoclenz Holdings plc for the period to 30 June 2006,and the comparatives for the period to 31 December 2005, contained herein, havenot been audited by the group's auditors and do not constitute statutoryaccounts, though they have been subject to review. The review report in relationto the period to 30 June 2006 is disclosed below. The figures have been preparedin accordance with the accounting policies to be adopted in the first statutoryaccounts to be prepared for the period ended 31 December 2006. The results of Autoclenz Limited for the period from 1 January to 30 June 2005referred to herein have been extracted from the audited non-statutory accountsfor the six month period to 30 June 2005. The auditor's opinion on theseaccounts was unqualified. The interim report will be posted to all shareholders of the company, and willbe available on the Company's website (www.autoclenz.co.uk). The report will be available for inspection by the public at the registeredoffice of the company during normal business hours on any weekday. Furthercopies will be available on request from Autoclenz Holdings plc, Stanhope Road,Swadlincote, Derbyshire, DE11 9BE. -12- INDEPENDENT REVIEW REPORT TO AUTOCLENZ HOLDINGS PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2006 which comprises the consolidated profit andloss account, the consolidated balance sheet, the consolidated cash flowstatement and related notes 1 to 11. We have read the other informationcontained in the interim report and considered whether it contains any apparentmisstatements or material inconsistencies with the financial information. This report is made solely to the company, in accordance with Bulletin 1999/4issued 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 directorsare also responsible for ensuring that the accounting policies and presentationapplied to the interim figures are consistent with those applied in preparingthe preceding annual accounts except where any changes, and the reasons forthem, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists 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 June 2006. Deloitte & Touche LLPChartered AccountantsSt Albans Date: 20th September 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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