16th Jan 2006 07:00
Spice Holdings PLC16 January 2006 16 January 2006 Interim Results 30 October 2005 Spice Holdings plc ("Spice" or "the Group"), the provider of outsourced supportservices, is pleased to announce its interim results for the period ended 30October 2005. Financial highlights Profit before tax of £3.0 million (2004: £1.8 million) - 61% increase EBITA of £3.8 million (2004: £2.5 million) - 53% increase Basic earnings per share of 5.4 pence (2004: 4.6 pence) - 17% increase Adjusted diluted earnings per share of 6.4 pence (2004: 5.3 pence) - 21%increase Interim dividend of 0.7 pence per share (2004: 0.5 pence) Operational highlights July 2005 Launch of Freedom Data Services July 2005 Acquisition of Lamva September 2005 Acquisition of Circle Britannia and Serviceline September 2005 Placing of 7 million shares raising net proceeds of £14.5 million September 2005 Acquisition of Hutchison September 2005 BAA letter of agreement November 2005 Acquisition of Kemac Simon Rigby, Chief Executive Officer commented: "We have delivered excellent growth in the first half of the financial year. "The Board believes that prospects for the Group remain strong, based on itsposition in expanding markets and its highly focused and motivated team. TheGroup's trading performance in the second half of the year continues to be inline with our expectations. "We look to the future with a degree of confidence." ...Ends... For further information, please contact: Spice Holdings plc Tel: 0113 384 3838Simon Rigby, Chief Executive OfficerOliver Lightowlers, Group Finance DirectorCarl Chambers, Corporate Development Director Financial Dynamics Tel: 020 7831 3113Sally LewisBilly Clegg Chief Executive Officer's statement Overall performance I am delighted to present our interim results for the period ended 30 October2005. The Group has again delivered strong financial performance from itsexisting operations and also from acquisitions made during the period. Turnoverfor the six months ended 30 October 2005, arising from continuing operations,was £55.6 million (2004: £41.3 million) and profit on ordinary activities beforetax was £3.0 million (2004: £1.8 million), increases of 35% and 61%respectively. At the same time our EBITA operating margins improved to 6.9%(2004: 6.0%). Spice operates via four trading divisions. Looking at each inturn: Electricity Services The first six months of the financial year have been a very busy time forElectricity Services, particularly with the acquisition of Lamva Limited (Lamva)and the launch of Freedom Data Services in July 2005. I am pleased to reportthat Electricity Services has delivered profit before tax and interest of £1.6million (2004: £1.2 million) for the six month period ended 30 October 2005, a38% improvement on the comparative period. Of this increase in profits in theperiod, Lamva contributed £0.3 million. Lamva provides civil and electrical services to the electricity utility sectorincluding switchgear changes; new connections; overhead line renewal andmaintenance; electrical and civil design services; and wayleaves services. Thebusiness operates primarily in the East and South of England and its customersinclude electricity distribution companies and wind farm operators. Spice hasworked alongside Lamva, for many years, as fellow Key Strategic Partners of EdFEnergy, the distribution network operator. The acquisition of Lamva, which following the acquisition has been re-branded asFreedom Projects, has accelerated the development of Electricity Servicestowards the higher value added areas of professional and technical serviceswhere better margins can be obtained. Utilising the expertise of FreedomProjects with our existing Technical Services business, we are now constructingnetworks to several wind farms within the UK and have recently won projects inDundee and Kettering. We have developed partnerships and alliances with wind farm developers whichallow us to work across the value chain, from obtaining wayleaves and consentsto installing the infrastructure, electrical network, commissioning of turbinesand the ongoing maintenance of the network on behalf of the wind farm operator.With the political pressure on developing clean energy this is a particular areawhere Electricity Services will develop its service offering. Further acquisitions will be targeted to widen Electricity Services' customerbase, and to add additional high valued skills which will enable us to grow ourprivate network customer base, in conjunction with Facilities Services. Whilstacquisitions are adding to the growth of the business, it is pleasing to reportthat the existing Electricity Services' businesses have continued to groworganically. This trend will continue into the second half as our cross sellingefforts continue to bear fruit. The recently formed business of Freedom Data Services, which manages utilitydrawings, plans and other databases, is already performing ahead of schedule andhas won projects and contracts with National Grid. Further, Freedom DataServices has made a positive contribution in the first half of the financialyear. With the pressure on utilities to reduce their operating costs, weanticipate that there will be added impetus to outsourcing data management. Electricity Services, under its Freedom brand, is developing a 'Cradle to Grave'approach to utility network projects. This, alongside the recent distributionprice review settlements reached with the distribution network operators whichnationally allows for an average 48% increase in capital spend over the nextfive years, will enable Electricity Services to be well placed to increase itscustomer base and market share. To enable us to both develop the Freedom brand and to meet our aspirations,Electricity Services is investing in its key resource, which is people, andpresently has 10% of its staff as trainees and apprentices. By pursuing morestability through framework contracts, this will enable us to recruit bothgraduates and apprentices to fill the UK skills shortage in engineering. Facilities Services The newly established Facilities Services Division was created in September 2005by the acquisition of Circle Britannia Limited (Circle Britannia) and its sistercompany Serviceline (Nationwide) Limited (Serviceline). I am pleased to reportthat Facilities Services has performed ahead of our expectations for the twomonths since the acquisition and that the business contributed profit beforeinterest and tax of £0.3 million during the six month period ended 30 October2005. Circle Britannia is a provider of outsourced facilities services to corporateclients and reinstatement services for major insurers. Serviceline providesoutsourced maintenance helpdesk services delivered either as part of anintegrated facilities management service, incorporating Circle Britannia'sfacilities service operation, or as a stand alone service managing client'sexisting suppliers. The activities of Circle Britannia and Serviceline have manysimilarities to those carried out by Electricity Services, which maintains andrenews both electrical and building infrastructure within the utilities sector.In forming this division, the Group acquired a highly prestigious client basewhich includes Starbucks, Norwich Union, Dixons and Waterstones. The acquisition provides the Group with a bridgehead into the commercialfacilities management sector. The facilities management market is estimated tobe worth £100 billion in the UK with the contracted-out element of this marketestimated to be worth around £60 billion. The sector is fast growing withsignificant future potential. Already some sizeable opportunities have arisen,resulting from Spice's acquisition, and these organic growth opportunities arebeing rigorously pursued. Further acquisition opportunities will also be soughtto accelerate the development of Facilities Services. Opportunities that arebeing considered include bolt ons to our existing business and also activitiesthat we view as being complementary including energy management,, HVAC (heating,ventilation and air conditioning) maintenance and M&E (mechanical andelectrical) maintenance. Telecoms Services AirRadio continues to deliver improved performance as revenues increased by 12%compared to the comparative six month period. Additional radio network capacityhas been added to both the Heathrow and Gatwick networks in order that we cantake full advantage of the British Airports Authority (BAA) contract agreed inSeptember 2005. We continue to look for new opportunities at UK airports toexpand our operations, with Southampton being added to the network in thisperiod. We hope to add a minimum of two further airports in the second half ofthis financial year. Work for our biggest client British Airways (BA) continuesto develop steadily as we provide consultancy services connected to HeathrowTerminal 5 together with other projects. Our biggest area of growth has beenwithin non-BA revenues which have grown by 67% compared with the same periodlast year. Our Team Telecom business has benefited from a slight improvement in marketconditions in the wireless communications market and financial performance forthis business has been in line with expectations. In September we acquiredHutchison Communications Systems Limited and Hutchison Communications Systems(France) SARL (Hutchison), a specialised telecommunications maintenancebusiness, which provides first line maintenance and support to internet protocol(IP) & telephony network operators. Hutchison operates on a pan European basisand is well placed to tap into the growth in this market. We are currentlyundertaking a process of integrating and merging this business with TeamTelecom, in order to gain economies of scale in management, operations andadministration. We anticipate that this process will be completed in the secondhalf of the financial year and expect to see a positive impact to profits inthis period. Team Simoco, our Professional Mobile Radio business, continues to re-develop itsUK and overseas distribution channels, adding some 46 new distributors in thefirst six months of the financial year, which has been aided by the introductionof a series of new radio and trunking products which revolutionise the way thistype of technology is both priced and used. During the first half of thefinancial year, Team Simoco secured the sale of the first UK commercialterrestrial trunked radio (TETRA) system which is a considerable regulatorybreakthrough and one we hope to exploit over the coming months and years ahead.Standard product sales grew steadily (some 31% increase) and UK maintenanceservices continue to build, showing a 20% improvement compared to the sameperiod last year. However, the business continues to suffer from slower thananticipated international systems sales. Telecoms Services reported a profit before interest and tax for the six monthperiod ended 30 October 2005 of £0.7 million (2004: £1.0 million), which isdisappointing. Whilst most of the potential international systems bids remainlive and have not been lost to competitors, the overall performance of theTelecoms Division has been adversely impacted by this delay. Water Services I am pleased to report that Water Services has delivered profit before interestand tax of £2.3 million (2004: £1.5 million) for the six months ended 30 October2005. This represents a 52% increase against the comparative six month period.This profit growth arises from each of our operating businesses and includes thebenefit, for the first time, of a positive contribution of £0.4 million fromAtlantic Water Services (AWS). H2O Water Services (H2O) and AWS, which undertake water meter installation andsmall works operations, delivered enhanced performance as a result of thecompletion of the integration plan, which has included the centralisation ofoperating centres allowing more efficient use of resources. Recently securedwork from Brey Utilities (a consortium to deliver water and wastewater servicesacross Ministry of Defence sites in the Midlands, Wales and South West) hasaided in widening both our client and geographical base. In addition, we havebeen able to exploit other opportunities by leveraging from the skills andresources of the other companies within Water Services. This, together withworks being undertaken for our other major clients including United Utilities,Yorkshire Water, South East Water and Scottish Water, provides a firm platformfor future growth. Shortly after the period end in November 2005, Water Services completed theacquisition of Kemac Services Limited (Kemac). Kemac provides meter survey andinstallation, meter reading, leakage detection, water regulations inspection andrectification and emergency plumbing services to the water utility market in theUK. Its customers include a number of major water utilities, whose geographicterritories are complementary to those in which Water Services already operates. Metro Rod, which provides drain and environmental services, increased commercialand key client revenues by 10% compared to the comparative period. Performancewithin the business also benefited from the implementation of a new controlsystem within the franchisee network. This has included jointly setting targetsand objectives with franchisees, followed by the monitoring of subsequentperformance in order to stimulate growth. These system improvements are alsoexpected to benefit the business in the longer term. Meter U has experienced continued organic revenue and profit growth during theperiod. Meter U is now reading around 1.4 million meters per month compared toapproximately 1.0 million meters at the end of the last financial year. Ourrelationship with our key client, Siemens, continues to develop. During theperiod, 120 gas meter readers have been recruited in the South of England. Inorder to facilitate further resource growth, a number of initiatives have beenput in place including the development of links with the armed forces'redeployment service and the implementation of a new franchising package. Acquisitions Three acquisitions have been made during the period. In July 2005, we acquired the issued share capital of Lamva for netconsideration of £5.7 million. Consideration was settled by £5.2 million in cashand £0.5 million in shares. This acquisition reinforces our presence andexpertise in the higher value specialist electricity services market, whilstenhancing our ability to continue our expansion in other parts of the country. In September 2005, we acquired the issued share capital of Circle Britannia andServiceline for cash consideration of £15.2 million. In September 2005, we also acquired the issued share capital of Hutchison forinitial cash consideration of £1.1 million. Deferred consideration of up to £3.9million will also be paid in cash, depending on the earnings of Hutchison in the12 months to 28 February 2007. The total cash consideration payable will notexceed £5.0 million. Subsequent to the period under review in November 2005, we acquired the issuedshare capital of Kemac for initial cash consideration of £2.0 million. Deferredconsideration of up to £4.0 million will also be paid in cash, depending on theearnings of Kemac for the 18 months to April 2007. The total cash considerationpayable will not exceed £6.0 million. Integration of these acquired businesses is progressing according to plan. Financial Review Profitability and net margins have continued to improve. Turnover Turnover from existing operations at £46.7 million (2004: £41.3 million) is up12.9% on the comparative six months. Organic growth has been delivered withinall areas of the business, apart from Team Simoco, which has continued to sufferfrom slower than anticipated international sales. In addition, acquisitions madeduring the period contributed £8.9 million of turnover, giving rise to totalGroup turnover for the period of £55.6 million (2004: £41.3 million), anincrease of 34.5%. Profit on ordinary activities before interest, tax and amortisation ofintangible fixed assets (EBITA) EBITA increased by 53.3% to £3.8 million (2004: £2.5 million). Acquisitionscontributed £0.8 million to EBITA in the period. Overall EBITA operating marginswere 6.9% compared with 6.0% for the comparative six month period. Margins wereimproved within our Electricity and Water divisions - Electricity Services EBITAmargins were 6.9% against 6.8% last year, Water Services margins were 11.8%against 9.2%. EBITA margins within Telecoms Services reduced from 18.1% to14.6%. EBITA margins within Facilities Services were 10.6%. Interest Interest payable was reduced to £0.3 million (2004: £0.4 million). The reductionin interest charge arises from the benefit of the original flotation and placingproceeds together with the cash generation of our operations offset by the costof acquisitions made. During the period, the Group has also taken theopportunity to re-negotiate its banking facilities with HSBC which has resultedin more favourable borrowing terms. At 30 October 2005, the Group hadsignificant unutilised banking facilities. Interest cover for the period is 10.5times compared with 5.8 times last year. Profit on ordinary activities before tax Profit on ordinary activities before tax has increased to £3.0 million (2004:£1.8 million). Earnings per share Basic earnings per share at 5.4 pence (2004: 4.6 pence) increased by 17.4% andadjusted diluted earnings per share at 6.4 pence (2004: 5.3 pence) by 20.7%. Inprior periods, the Group's ESOP had had adequate shares to satisfy all optionsvested and also options granted but not yet vested. As a result of optionsgranted in the period, this is no longer the case and new shares will have to beeither issued or bought on the market to make up this difference. Dividend The Board has approved an interim dividend of 0.7 pence (2004: 0.5 pence) pershare payable on 14 February 2006 to shareholders on the register at 27 January2006. In so doing, the Board has increased the proportion of the anticipatedfull year dividend that is payable in respect of the first half. The dividend iscovered six times (2004: seven) by earnings. Cashflow Net cash inflows from operating activities increased by £3.3 million to £3.1million (2004 net cash outflow: £0.2 million). During the period working capitalutilised increased by circa £1.7 million connected principally with theacquisitions made. In September 2005, the Group placed 7,009,346 new shares at aprice of 214 pence with institutional and other investors to raise net proceedsof approximately £14.5 million. Balance Sheet Net assets have increased to £35.6 million (2004 as restated: £15.2 million),reflecting the impact of the net placing proceeds (£14.5 million) together withretained profit for the period and cash generated from the exercise of employeeshare options. Net debt is £9.3 million (2004: £7.0 million). Outlook We remain pleased with the overall Group performance to date and tradingcontinues to be in line with our expectations. The Board believes that the longterm prospects for the Group remain strong based on its position in ourexpanding markets, driven by our focussed and motivated team. W S RigbyChief Executive Officer16 January 2006 Consolidated profit and loss account for the six months ended 30 October 2005 Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 Note £'000 £'000 £'000 as restated as restatedTurnover: - Continuing operations 46,665 41,318 85,508- Acquisitions 8,915 - - Group turnover 2, 6 55,580 41,318 85,508Cost of sales (39,028) (29,113) (59,713) Gross profit 16,552 12,205 25,795Administrative expenses (12,726) (9,975) (19,943) EBITA 3,826 2,495 6,208Amortisation of intangible fixed assets (567) (265) (356) Operating profit: - Continuing operations 2,662 2,230 5,852- Acquisitions 597 - - Group operating profit 3,259 2,230 5,852Profit/(loss) arising on disposal of fixed assets 31 - (77)Net interest payable (311) (384) (567) Profit on ordinary activities before tax 2,979 1,846 5,208Tax on profit on ordinary activities 3 (867) (554) (1,515) Profit on ordinary activities after tax 2,112 1,292 3,693Equity minority interests - (5) (5) Profit for the period 2,112 1,287 3,688Dividends 4 (633) - (177) Retained profit for the period 1,479 1,287 3,511 Earnings per share (pence per share)Basic 5 5.4 4.6 11.6Diluted 5 5.1 4.4 10.8 Consolidated balance sheet as at 30 October 2005 Unaudited Unaudited Audited 30 October 31 October 30 April 2005 2004 2005 Note £'000 £'000 £'000 as restated as restatedFixed assets Development expenditure 815 576 712Purchased goodwill 29,678 6,329 6,950Negative goodwill (174) (394) (174) Intangible fixed assets 30,319 6,511 7,488Tangible fixed assets 12,702 12,013 11,876Investments 212 212 212 43,233 18,736 19,576 Current assets Stock 3,480 2,131 1,773Debtors 26,701 15,043 16,609 30,181 17,174 18,382 Creditors - amounts falling due within one year (28,007) (15,626) (16,990) Net current assets 2,174 1,548 1,392 Total assets less current liabilities 45,407 20,284 20,968Creditors - amounts falling due after (8,739) (3,154) (1,437)more than one yearProvisions for liabilities and charges (1,076) (1,882) (1,389) Net assets 35,592 15,248 18,142 Capital and reserves Called up share capital 4,946 4,213 4,213Share premium account 27,462 13,116 13,104Revaluation reserve 1,513 1,724 1,555Capital redemption reserve 100 100 100Profit and loss account 1,571 (3,905) (830) Equity shareholders' funds 7 35,592 15,248 18,142 Consolidated cash flow statement for the six months ended 30 October 2005 Unaudited Unaudited Audited 6 months to 6 months to Year ended 31 October 31 October 30 April 2005 2004 2005 Note £'000 £'000 £'000Net cash inflow/(outflow) from operating activities 8a) 3,069 (214) 4,024 Returns on investments and servicing of financeNet interest paid (310) (378) (560)Interest element of finance lease payments (1) (6) (7) (311) (384) (567) Taxation (94) (880) (1,483) Capital expenditure and financial investmentPurchase of tangible owned fixed assets (1,008) (572) (2,308)Development expenditure (206) (103) (329)Sale of tangible fixed assets 348 373 1,786 (866) (302) (851) Acquisitions and disposals Purchase of trade and assets - net consideration paid - (566) (1,362)Purchase of subsidiary undertakings (23,422) - -Net cash acquired with subsidiary undertakings 2,015 - - (21,407) (566) (1,362) Equity dividends paid (633) - (177) Net cash outflow before financing (20,242) (2,346) (416) Financing Principal repayment due under finance leases (36) (65) (133)Sale of investments - own shares 880 459 1,141Net proceeds from issue of shares 14,526 11,279 11,267Bank loan repayments (1,672) (9,820) (11,812)Bank loan advances 9,000 1,750 1,750 22,698 3,603 2,213 Increase in cash 8c) 2,456 1,257 1,797 Notes to the interim report for the six months ended 30 October 2005 1 Basis of accounting The interim financial statements have been prepared using the same accountingpolicies as were used in the Group's statutory financial statements for the yearended 30 April 2005 except for the adoption of FRS 21 Events After The BalanceSheet Date and FRS 22 Earnings per Share on 1 May 2005. Comparative numbers havebeen restated to reflect the impact of the adoption of FRS 21 and FRS 22 whereappropriate. In addition, FRS 25 Financial Instruments: Disclosure andPresentation was adopted on 1 May 2005 and considered in determining disclosuresmade within the interim financial statements. The interim financial statements are unaudited. The interim financial statementsfor the six months ended 30 October 2005 and for the six months ended 31 October2004 contained within the interim report do not constitute statutory financialstatements. The figures for the year ended 30 April 2005 have been extractedfrom the financial statements for 2005. These financial statements received anunqualified auditors' report and have been delivered to the Registrar ofCompanies. 2 Turnover Turnover, which excludes value added tax, arises from several activities.Turnover is recognised in the profit and loss account at the point that aservice is provided or products supplied for each of the following activities: • facilities management and maintenance services; • private mobile radio products; • drain care, maintenance, repair and cleaning services; • services for the development and support of telecommunications networks; • employment agency services; • property maintenance; and • information technology installation, commissioning and maintenance activities. 3 Taxation The taxation charge on the profit on ordinary activities has been based upon theestimated effective tax rate of 29.1% (2004: 30.0%) for the current year. 4 Dividends The Board has approved an interim dividend and it is proposed that an interimdividend for the period ended 30 October 2005 of 0.7 pence per share (2004: 0.5pence), amounting to £310,000 (2004: £177,000), will be paid on 14 February 2006to those shareholders on the register at 27 January 2006. Dividends amounting to£36,000 (2004: £34,000) have been waived by the ESOP trust and deducted inarriving at the aggregate dividend to be paid. The adoption of FRS 21 has given rise to an increase in retained profit andshareholders' funds of £614,000 at 30 April 2005. In accordance with FRS 21, theinterim dividend for the period ended 30 October 2005 will be accounted for,following payment of that dividend, in the second half of the financial year. 5 Earnings per share Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of shares in issue duringeach period. The weighted average number of shares, after adjusting for sharesheld by the ESOP, in issue during the period used in the calculation of basicearnings per share was as follows: Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 '000 '000 '000 Weighted average shares for basic earnings per share 38,845 28,253 31,900 5 Earnings per share (continued) Diluted earnings per share is the basic earnings per share adjusted for theeffect of the conversion into fully paid shares of the weighted average numberof share options outstanding during the year. The weighted average number ofshares in issue during the period used in the calculation of diluted earningsper share was as follows: Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 '000 '000 '000 Weighted average shares for diluted earnings per share 41,246 29,554 34,043 Adjusted earnings per share have been calculated so as to exclude the effect ofthe amortisation of all intangible fixed assets and non operating exceptionalitems. Adjusted earnings per share have been presented in order that the effectson reported earnings of the amortisation of intangible fixed assets and nonoperating exceptional items can be fully appreciated. Adjusted earnings used inthe calculation of basic and diluted earnings per share reconciles to basicearnings as follows: Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000Basic earnings 2,112 1,287 3,688Non operating exceptional items (31) - 77Amortisation of intangible fixed assets 567 265 356Adjusted earnings 2,648 1,552 4,121 Earnings per share (pence per share)Basic 5.4 4.6 11.6Diluted 5.1 4.4 10.8Adjusted earnings per share (pence per share)Basic 6.8 5.5 12.9Diluted 6.4 5.3 12.1 6 Segmental analysis The turnover for the period was derived from the Group's principal activitiesand is attributable to the following markets: Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000By destination UK 54,570 40,037 83,830Continental Europe 667 700 853Rest of the World 343 581 825 55,580 41,318 85,508 6 Segmental analysis (continued) Turnover for the period is derived from the Group's principal activities asfollows: Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000Electricity Services 25,352 17,860 36,742Facilities Services 3,865 - -Telecoms Services 6,396 6,855 13,493Water Services 19,837 16,500 35,045Head office 130 103 228 55,580 41,318 85,508 Profit before tax is derived from the Group's principal activities as follows: Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000Electricity Services 1,601 1,161 2,780Facilities Services 295 - -Telecoms Services 687 1,043 2,373Water Services 2,276 1,496 2,937Head office (1,600) (1,470) (2,238) 3,259 2,230 5,852Non operating exceptional items 31 - (77)Net interest payable (311) (384) (567) 2,979 1,846 5,208 7 Reconciliation of movement in equity shareholders' funds Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000 as restated as restatedProfit for the period 2,112 1,287 3,688Dividends (633) - (177)Retained profit for the period 1,479 1,287 3,511Proceeds from sale of own shares 880 458 1,141Issue of shares 15,565 12,636 12,636Costs of share issue (474) (1,356) (1,369)Net addition to equity shareholders' funds 17,450 13,025 15,919Opening equity shareholders' funds 18,142 2,223 2,223Closing equity shareholders' funds 35,592 15,248 18,142 8 Notes to the cash flow statement 8a) Reconciliation of operating profit to net cash inflow/(outflow) Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000Operating profit 3,259 2,230 5,852Depreciation of tangible fixed assets 925 865 1,720Amortisation of negative goodwill - - (220)Amortisation of intangible fixed assets 567 265 576(Increase)/decrease in stocks (749) 233 742Increase in debtors (3,479) (705) (2,271)Increase/(decrease) in creditors 2,546 (3,102) (2,375)Net cash inflow/(outflow) from operating activities 3,069 (214) 4,024 8b) Analysis of net debt At At 1 May Non cash 30 October 2005 Cash flows movements 2005 £'000 £'000 £'000 £'000Bank overdraft (2,713) 2,456 - (257)Increase/(decrease) in cash during the (2,713) 2,456 - (257)periodBank loans due within one year (243) (24) - (267)Bank loans due after one year (1,429) (7,304) - (8,733)Finance leases due within one year (55) 34 (1) (22)Finance leases due after one year (8) 2 - (6)Net debt (4,448) (4,836) (1) (9,285) 8c) Reconciliation of net cash inflow to movement in net debt Unaudited Unaudited Audited 6 months to 6 months to Year ended 30 October 31 October 30 April 2005 2004 2005 £'000 £'000 £'000Increase in cash in the year 2,456 1,257 1,797Cash inflow from increase in debt and lease financing (22,698) (3,603) (2,213)Change in net debt resulting from cash flows (20,242) (2,346) (416)Net proceeds received from share issue 14,526 11,279 11,267Sale of investments - own shares 880 459 1,141New and acquired finance leases (1) (36) (36)Net debt at 1 May (4,448) (16,404) (16,404)Net debt at 30 October (9,285) (7,048) (4,448) 9 Availability of interim report The interim report will be sent to all shareholders on 17 January 2006. Copiesmay be obtained from the Company Secretary at PO Box 111, Bradford Road, Morley,Leeds LS27 0YE for a period of one month from today's date. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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