TIDMMBE TIDMMWB
RNS Number : 3857J
MWB Business Exchange Plc
30 March 2010
FOR IMMEDIATE RELEASE
30 March 2010
MWB BUSINESS EXCHANGE PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
MWB Business Exchange Plc is the UK's second largest provider of flexible office
space and meeting rooms. The organisation currently operates a total of 73
centres focused on Central London and key regional business centres.
HIGHLIGHTS
· Revenue down 5% to GBP112.4m over the previous 12 month period.
· Significant expansion in capacity by acquisition during Spring 2009
of 16 former MLS Group PLC centres, predominantly in London.
· Excluding start-up losses of GBP2.6m from these centres, EBITDA
diminished by 31% to GBP12.4m compared to year to 31 December 2008.
· Overall profit before tax reduced 70% to GBP4.2m against GBP14.0m for
the comparable 12 month period.
· Business Exchange* Revenue Per Available Workstation (REVPAW) reduced
20% to GBP6,955 at 31 December 2009 from GBP8,700 at 31 December 2008.
· Business Exchange* Revenue Per Occupied Workstation (REVPOW) down 14%
to GBP8,265 at 31 December 2009 compared to GBP9,650 at 31 December 2008.
· Business Exchange* occupancy at 84% at 31 December 2009.
· City Executive Centres** REVPAW: GBP3,820, REVPOW: GBP5,145,
occupancy 74% at 31 December 2009 - significantly higher than at date of
acquisition.
· Three additional new centres in London and one in Harrogate opened in
the year to 31 December 2009. Two further London centres to open in Spring
2010.
· Special 15p per share interim dividend paid in June 2009.
· Cash balance of GBP6.4m at 31 December 2009.
"Business Exchange offers a powerful mix of product, price and location"
Richard Balfour-Lynn, Chairman
* Leased centres operated under the 4/5 star Business Exchange brand
only.
** Leased centres operated under the 3 star City Executive Centres brand
only (re-branded former MLS centres).
Contact:
+------------------------+------------------+------------------+------------------+
| MWB Business Exchange | | Baron Phillips | |
| Plc | | Associates | |
+------------------------+------------------+------------------+------------------+
| Richard Balfour-Lynn, | Tel: 020 7706 | Baron Phillips | Tel: 020 7920 |
| Chairman | 2121 | | 3161 |
+------------------------+------------------+------------------+------------------+
| John Spencer, Chief | Tel: 020 7868 | Brewin Dolphin | |
| Executive | 7268 | Limited | |
+------------------------+------------------+------------------+------------------+
| Keval Pankhania, | Tel: 020 7868 | Sandy Fraser | Tel: 0845 213 |
| Finance Director | 7255 | | 2072 |
+------------------------+------------------+------------------+------------------+
MWB BUSINESS EXCHANGE PLC CHAIRMAN'S STATEMENT
Business Exchange experienced a successful 2009 by adhering to its well proven
strategy of focusing on the London market. Expansion in this market has been
our stated goal for some time as we have always believed that concentrating our
centres in such a dynamic business environment will generate the most profitable
returns.
The highlight of the year was our acquisition of 16 carefully selected centres
from MLS, a rival of Business Exchange, which was going into administration.
These centres are predominantly located in London. Since the year end we have
commenced fit out of two new Central London centres in Knightsbridge and
Paddington. Both centres will open in the first half of 2010 and are in prime
locations where there is very little competition.
As a result, Business Exchange has an increasingly dominant footprint in the
capital with 47 centres. Today Business Exchange is London's largest provider
of serviced offices with almost 14,000 workstations covering nearly 1.2m sq ft.
These centres now account for 64% of our total portfolio of 73 centres across
1.8m sq ft, providing approximately 20,000 workstations.
As is well documented the market demand for offices in the UK has been extremely
weak and, as a consequence, total revenue for the year to 31 December 2009
dropped 5% to GBP112.4m compared to GBP118.7m in 2008. This reflected a 6% fall
in occupancy to 84% and an 18% decline in rate in our mature centres, offset by
the acquisition of the MLS centres. The resulting EBITDA was GBP9.8m against
GBP18.1m while pre-tax profits declined to GBP4.2m from GBP14.0m the previous
year, producing an EPS of 7.9p against last year's 20.4p. In June 2009 we paid
a special interim dividend totalling GBP9.8m, demonstrating our positive
earnings growth. Even after this, our operations continue to be underpinned by
GBP27.9m of net assets, with no debt.
As a result REVPOW (annualised revenue per occupied workstation) in our mature
centres eased some 14% from GBP9,650 to GBP8,265 and REVPAW (annualised revenue
per available workstation) was down 20% to GBP6,955 from GBP8,700. There was
also an 18% decline in revenue from our meeting and conference room division,
which dropped to GBP9.2m from GBP11.3m.
Business Exchange, London's largest provider of serviced offices, offers a
powerful mix of product, price and location underpinned by robust internal cost
controls that ensure the Company has reasonable resilience against the current
market conditions. It should be noted that the contracted nature of Business
Exchange's revenue creates a lag of up to 18 months between what occurs in the
market and the financial performance reflected in our results. In other words
our numbers reflect price reductions that occurred in 2008 and 2009.
In 2009 we continued to see a demand shift in the market towards small and
medium-sized enterprises (SMEs) as corporates and larger clients reined back
their expenditure on both serviced offices and meeting rooms. We therefore saw
larger higher-paying clients move out which were replaced by smaller clients and
start-up businesses in a more competitive environment.
Encouragingly, our renewal rates were maintained at 70% and as the year
progressed our existing clients accepted rate increases for their workstations
on renewal. Equally, new workstation prices stabilised. This was in stark
contrast to the end of 2008 and the first half of 2009 when incoming licensees
were paying considerably less than those they replaced. The benefit to Business
Exchange, therefore, of licence fees hardening will not be seen until the second
half of 2011 and thereafter.
Our focus on the SME and business start-up market enables us to spread our risk.
Although there is an initial short-term revenue fall when a large client moves
out there is greater long-term benefit from the Group's improved resilience due
to a wider and more diverse client base. At the same time, our provision of
high level service and employee engagement, together with the quality of our
centres, continue to attract, and, increasingly retain clients. Typically the
average number of workstations licensed to a client at 31 December 2009 was six
and the average length of stay 25 months (compared to eight and 23 months
respectively a year ago).
We continue to ensure the business reflects a broad and dynamic customer base
and is not dependent on any one specific sector. Just as importantly, we are
constantly reviewing and improving our infrastructure. To that end, the roll
out of our new IT and Telephony platform will create new revenue-generating
opportunities through a broader product and service offering, as well as meeting
the ever evolving demands of our wide client base.
The current year is one of consolidation with the focus on improving the
performance of the new and existing centres by driving occupancy and revenue.
Already we are seeing the market for serviced offices and meeting rooms improve
and demand strengthen. Early indications are that occupancy is increasing and
rates are stabilising, particularly in London. Our strategy of maintaining the
leading position in Central London will enable us to take full advantage of the
improving market conditions forecast by the capital's leading property
consultants. London's position as a major global financial centre will be
reinforced as confidence returns to the financial markets and we move towards
the 2012 Olympics.
Richard Balfour-Lynn
Chairman
30 March 2010
KEY FINANCIAL HIGHLIGHTS
The key performance indicators for the business, its trading performance and
balance sheets for the years ended 31 December 2009 and 2008, are summarised
below:-
+------------------------------------+---------+-------------+-------------+
| | | Year ended | Year ended |
| | | 31 December | 31 December |
| | | 2009 | 2008 |
+------------------------------------+---------+-------------+-------------+
| Operating statistics | | | |
| | | | |
+------------------------------------+---------+-------------+-------------+
| Revenue | GBP'000 | 112,416 | 118,708 |
+------------------------------------+---------+-------------+-------------+
| Occupancy at year end * | % | 82 | 90 |
+------------------------------------+---------+-------------+-------------+
| Annualised revenue per available | | | |
| workstation | GBP | 6,180 | 8,700 |
| (REVPAW) at year end * | | | |
+------------------------------------+---------+-------------+-------------+
| Annualised revenue per occupied | | | |
| workstation | GBP | 7,545 | 9,650 |
| (REVPOW) at year end * | | | |
+------------------------------------+---------+-------------+-------------+
| EBITDA | GBP'000 | 9,808 | 18,106 |
+------------------------------------+---------+-------------+-------------+
| Leased centres at year end | Number | 50 | 38 |
+------------------------------------+---------+-------------+-------------+
| Operating and Management Agreement | | | |
| centres at year end | Number | 8 | 4 |
+------------------------------------+---------+-------------+-------------+
| Management contract centres at | Number | 15 | 13 |
| year end | | | |
+------------------------------------+---------+-------------+-------------+
| | | | |
+------------------------------------+---------+-------------+-------------+
| | | Year ended | Year ended |
| | | 31 December | 31 December |
| | | 2009 | 2008 |
+------------------------------------+---------+-------------+-------------+
| Financial performance | | | |
| | | | |
+------------------------------------+---------+-------------+-------------+
| Profit before tax | GBP'000 | 4,211 | 13,954 |
+------------------------------------+---------+-------------+-------------+
| Basic earnings per share | Pence | 7.9 | 20.4 |
+------------------------------------+---------+-------------+-------------+
| Dividend paid per share | Pence | 15.0 | 1.93 |
+------------------------------------+---------+-------------+-------------+
| | | | |
+------------------------------------+---------+-------------+-------------+
| | | At | At |
| | | 31 December | 31 December |
| | | 2009 | 2008 |
+------------------------------------+---------+-------------+-------------+
| Balance sheet composition | | | |
| | | | |
+------------------------------------+---------+-------------+-------------+
| Property, plant and equipment | GBP'000 | 44,464 | 41,535 |
+------------------------------------+---------+-------------+-------------+
| Net cash | GBP'000 | 6,433 | 16,404 |
+------------------------------------+---------+-------------+-------------+
| Equity attributable to | GBP'000 | 28,969 | 35,623 |
| shareholders | | | |
+------------------------------------+---------+-------------+-------------+
| | | | |
+------------------------------------+---------+-------------+-------------+
* Statistics relate to leased centres only. The 2009 figures are diluted due
to the acquisition of the former MLS centres.
BUSINESS RISKS AND UNCERTAINTIES
As part of the business review, the Directors comment below on risks surrounding
the business. These risks are not new to the business and reflect the sector in
which the Group operates. This section describes some of the specific risks
that could materially affect the Group's business. The risks outlined below
should be considered in connection with any financial information in the
financial statements. These risks could affect the Group's business, its
operating profits, net assets and capital resources.
Economic, political, social and regulatory changes adversely affecting the
Group's financial performance
The Group is exposed to the risk of adverse regional or global political,
economic and financial market developments (including recession, inflation and
currency fluctuations), which could lower the Group's revenues and operating
results in the future.
The Group's results could also be adversely affected by events that reduce
domestic or international travel, such as actual or threatened acts of terrorism
or war, epidemics, travel-related accidents or industrial action, increased
transportation and fuel costs and natural disasters. Therefore, any of these
events could have a material and adverse effect on the revenues and net
operating profits of the Group which could reduce the Group's net cash available
for distribution to shareholders.
Financial market volatility adversely affecting the Group's financial
performance
Most of the risks faced by the Group at the date of this Report emanate from the
volatility of financial markets, the resultant reduction in supply of credit and
its significant increase in cost. This has been accentuated during the past two
years, due to the rapid deterioration in financial markets in the UK. For MWB
Business Exchange, these risks fall into a number of categories as set out
below, all of which have been proactively managed by the Board in the past and
are being even more actively managed in the current economic climate.
Liquidity risk affects the Group, in that this could result in it being unable
to meet its financial obligations as they fall due. The Board's approach to
managing liquidity is to ensure, as far as possible, that the Group will always
have sufficient liquidity to meet its liabilities, without incurring
unacceptable losses or risking damage to the Group's reputation and business.
The Group uses detailed cash flow reporting to assist the Board in monitoring
cash flow requirements and optimising cash returns on investments across the
whole Group. The Group typically ensures it has sufficient forecast cash and
available facilities to meet expected cash outflows for a forward period of two
years.
The Group's variable rate borrowings are exposed to a risk of change in cash
flows due to changes in interest rates. Investments in short-term receivables
and payables are not exposed to interest rate risk. The Group adopts a policy
of managing its exposure to changes in interest rates. This is generally
achieved by the Group entering interest rate swaps or fixed rate contracts with
financially secure counter-parties denominated in Sterling, where considered
appropriate by the Board. The Group holds financial instruments mainly to hedge
financial risk on finance drawn for its operations, or for the temporary
investment of short-term funds, and to manage the interest rate risks arising
from its operations and sources of finance.
The risk to the Group arises principally from the Group's receivables from
customers. The demographics of the Group's customer base, including the general
default risk in the principal sectors in which the Group operates, have less of
an influence on credit risk. Geographically there is a concentration of credit
risk in London, where the Group has 45 serviced offices. Total revenue in
London was approximately GBP86.5 million for the year ended 31 December 2009.
The Group has established credit policies for dealing with new customers, their
creditworthiness, payment and delivery terms.
The Group has confirmed dedicated bank facilities of GBP8.0 million available
until December 2011.
Declines in revenue
Fluctuations in revenues are driven largely by general economic and local market
conditions, as well as by other factors such as health and safety concerns,
which in turn affect levels of business. The local supply of similar businesses
and class to those operated by the Group will also affect a given property's
revenue.
Reliance in part on reputation of brand
The Group operates its business centres under the MWB Business Exchange and City
Executive Centre brands. If an event occurred that materially damaged the
reputation of these brands or there was a failure to sustain their appeal to our
customers, this could have an adverse impact on the Group's earnings and assets
and resultant shareholder value.
In addition, the value of the brands is influenced by a number of external
factors including changes in consumer preferences and perceptions. The Group is
highly focused on service delivery to ensure that product provided matches
consumer preferences. Controls are in place to ensure adherence to all
legislative aspects affecting the business and experienced executives manage
these important areas of the Group.
Loss of key management personnel
The Group is reliant in part on its team of executives. The Board undertakes
detailed succession-planning reviews and ensures that knowledge of all material
business elements and processes is known by at least two senior executives. The
future success of the Group depends on the ability of its existing management
team, the identification and appointments of suitable additional executives when
required, and on the Group's ability to motivate and retain staff with the
requisite experience. The Executive Directors and the majority of the senior
executives of the Group are incentivised to produce enhanced returns to
shareholders and all key executives of the Group have been with the Group for 5
years or more.
Reliance on key business centres and the London market
Business Exchange's portfolio is deliberately London biased as the Board
considers that this market shows the best demand characteristics for the service
provided by Business Exchange. The 45 London centres operated by the Group
account for 66% of Business Exchange's total workstations and 77% of total
revenue. Dedicated marketing and sales resources are deployed to these key
locations to ensure occupancy and revenues are maintained, and to satisfy levels
of existing and prospective client demand. The Group's buildings are well
maintained and, subject to excessive cost being incurred, are considered by the
Board to be well protected against this type of risk.
Reliance on key clients
MWB Business Exchange has concentrated on increasing the number of SMEs and
smaller corporate clients, thereby preventing a reliance on a small number of
larger clients. However, if Business Exchange were to lose one or more
significant clients which were not quickly replaced at a similar level of
REVPOW, revenue would be impacted. As a business strategy, the number of
clients who occupy more than 15% of any one business centre in the Group has
been significantly reduced in recent years. As a result, there are now only 44
clients out of approximately 2,000 who occupy such an amount, and no single
client occupies more than 2% of the entire portfolio.
Changes in the office market
If the conventional property market changes significantly and landlords offer
variations to existing leases such as shorter leases, more flexible lease terms,
giving significant rent reductions, or providing significant rent free periods,
the Group's business centres may become less attractive to both existing and
potential clients.
Changes in long-term growth drivers
There can be no assurance that the factors the Directors expect to drive the
long-term growth in the serviced office market in the future will in fact do so.
For example, the trends towards flexible working styles and increased
outsourcing of office and related services may not develop as expected by the
Board. Changes in working practices could occur which would be detrimental to
MWB Business Exchange, such as more employees working from home than is
currently envisaged in the Group's Business Plan. By focusing on developing a
critical mass of SME and start-up clients, the Directors believe that any
changes to long-term growth drivers would have a limited and controlled effect
on the existing business.
Changes in competitive landscape
There are relatively few barriers to entry into the serviced office market at
the local and national level because there are not considered to be significant
legislative or regulatory barriers, although availability of finance will be a
restrictive factor for new entrants. Although it is harder to establish a
national network, this may not deter new entrants or existing competitors. In
addition, there is the potential for local operators to establish wider
networks, for example by forming alliances amongst operators to provide scale.
If the Group is unable to respond adequately to the competitive challenges it
faces, or to maintain a sustainable competitive advantage, it may be unable to
retain its position and it may lose market share. In addition, competitive
markets produce a downward pressure on prices. This could affect the prices
that Business Exchange can charge for workstations that are occupied by clients
in its business centres, which may cause an adverse impact on its revenue and
profitability.
The Directors of MWB Business Exchange continue to leverage their property
expertise and property contacts within the industry, which enables the business
to manage buildings effectively and to acquire buildings in key business
locations. Through its economies of scale, the Group can minimise initial
set-up costs which competitors operating on a smaller scale may be unable to
achieve. These savings are available to management to deliver a more robust
proposition to Business Exchange's client base. The ongoing enhancement of its
service delivery enables the Group to provide a differentiated proposition to
existing and prospective clients, in order to maintain its competitive advantage
against other competitors. Investment in this area is also made by the Group on
a continual basis, thus maintaining and enhancing its competitive edge.
Long-term cost base does not match short-term revenue profile
MWB Business Exchange currently leases the majority of its properties; the
remainder are operated under management agreements. The length of the leases
and the time at which the Group may exercise any break option in such leases is
nearly always longer than the duration of the period of occupation by clients.
If revenues decline, the Group may not be able to reduce significantly its
property related cost base throughout the remaining period of these leases.
Most of the Group's business centres are profitable and the strong profitability
of the network largely negates this impact. Whilst Business Exchange cannot
assign a lease without landlord consent, it could sublet which would
substantially reduce the liability. Operating and Management Agreements and
management contracts are also used to mitigate the risk from leases as such
agreements normally generate a revenue stream to the Group regardless of
occupancy and market conditions.
Refurbishment and reinstatement costs
The terms of most of the property leases held by the Group require it to ensure
the properties are kept in good repair throughout the lease term and that the
properties are reinstated at the end of the lease to the condition prior to any
alterations carried out to the premises. Full reinstatement costs may be
incurred on termination of such leases causing an adverse impact on Business
Exchange's operations and financial condition.
MWB Business Exchange's buildings are kept in a good state of repair and a
significant annual budget is used to maintain buildings to an agreed standard.
This should ensure that dilapidation costs on exit are minimal, as has been the
case with leases terminated in recent years.
Technology and systems disruption adversely affecting the Group's efficiency
To varying degrees, the Group is reliant upon information technologies and
systems for the running of its businesses, particularly those which are highly
integrated with business processes. Any disruption to those technologies or
systems could adversely affect the efficiency of the business. The Group
provides its clients with access to IT and telecommunications equipment.
Significant developments in the technology which businesses use, require the
Group to make further investments in new technology and this is a continuing
area of cost incurred by the Group. MWB Business Exchange invests considerable
financial resource to ensure that its IT infrastructure can accommodate new
technologies and also to ensure it is abreast of new ideas.
Changes in tax legislation materially changing the tax paid by the Group
Tax computations of the Group for accounting periods ended 31 December 2008 have
been submitted to HMRC. The tax computations for the Group's most recent
accounting period ended 31 December 2009 are not due for submission to HMRC
until December 2010 and are therefore not finalised. Provision has been made in
the financial statements for current and deferred taxation in accordance with
the Group's accounting policy on taxation which is summarised below. Should the
amount of tax provided prove to be insufficient to meet agreed liabilities,
further provision may be necessary, which could reduce the net asset value of
the Group.
The Group is exposed to financial risks from increases in tax rates and changes
in the basis of taxation, including corporation tax and VAT. The engagement of
experienced executives within the Group and by its parent undertaking to handle
these matters enhances the protection to the Group in this area of its
activities. The Group and its parent also maintain a regular monitoring of
legislative proposals and undertake detailed analysis and review with external
(non-audit related) advisers to evaluate and, if possible, to mitigate the
impact of changes.
Movements in share price
The trading price of the ordinary shares may be subject to fluctuations in
response to many factors, including stock market fluctuations. This may be
accentuated by market volatility, the level of which may be unusual or
excessive, and which may also be caused by restrictions in the availability of
equity or debt finance. These fluctuations can also be caused by general
economic conditions or changes in political sentiment that may adversely affect
the market price of the Company's ordinary shares, regardless of the Group's
actual performance or conditions in its key markets. Factors which may affect
the Company's share price include, but are not limited to, the Group's expected
and actual performance and the performance of the sectors in which the Group
operates.
Shareholders should be aware that past performance is not necessarily indicative
of likely future performance. Furthermore, the Company's share price may fall
in response to the market's view of the Group's current strategy or if the
Group's operating results and prospects from time to time are below the
expectations of market analysts and investors, or if market sentiment is
adversely affected by third party commentary concerning the Board's or the
Group's activities.
The market price of the Company's ordinary shares may not reflect the current or
anticipated value of the Company. In addition, this may fluctuate from day to
day, depending on factors such as supply and demand, market conditions, the
performance of the Group and general market sentiment. The price of ordinary
shares is also subject to normal stock market fluctuations and other risks
inherent in investing in securities.
Loss of Executive Directors
The loss of any of the Executive Directors could harm the Group or cause delay
in the implementation of the Group's strategy due to the loss of input from
those individuals. The future success of the Group is, in part, dependent upon
the ability of its existing management team and on the Group's ability to
motivate and retain staff with the requisite experience.
The Executive Directors are committed to the Company and incentivised through
the Long-Term Incentive Scheme. The involvement of Non-Executive Directors with
many years' experience in the services sector also assists in this respect.
Potential influence of the principal shareholder
MWB Group Holdings Plc ('Holdings'), through its subsidiaries, has maintained
the majority shareholding in MWB Business Exchange Plc that it held at flotation
in December 2005. Due to the share purchases and cancellations mentioned above,
which reduced the overall number of shares in issue, Holdings now owns 71.5% of
the Company. The fact that Holdings did not realise its historical investment
at flotation is a demonstration of its confidence in the Group's business. As
the majority shareholder, Holdings could influence the decisions of the Board.
However, its goals are aligned with other shareholders in terms of requiring
growth and return from the business and the Board continues to operate in an
independent manner.
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2009
+------------------------------------+-------+--------------+-------------+
| | | Year ended | Year ended |
| | | 31 December | 31 December |
| | | 2009 | 2008 |
+------------------------------------+-------+--------------+-------------+
| |Notes | GBP'000 | GBP'000 |
+------------------------------------+-------+--------------+-------------+
| Revenue | 2 | 112,416 | 118,708 |
| | | | |
+------------------------------------+-------+--------------+-------------+
| Cost of sales | | (106,922) | (102,681) |
+------------------------------------+-------+--------------+-------------+
| Gross profit | | 5,494 | 16,027 |
| | | | |
+------------------------------------+-------+--------------+-------------+
| Administrative expenses | | (1,078) | (2,443) |
+------------------------------------+-------+--------------+-------------+
| Results from operating activities | | 4,416 | 13,584 |
| | | | |
+------------------------------------+-------+--------------+-------------+
| Finance income | | 297 | 974 |
+------------------------------------+-------+--------------+-------------+
| Finance expenses | | (502) | (604) |
+------------------------------------+-------+--------------+-------------+
| Profit before taxation | | 4,211 | 13,954 |
| | | | |
+------------------------------------+-------+--------------+-------------+
| Taxation | 3 | (9) | 79 |
+------------------------------------+-------+--------------+-------------+
| Profit for the year | | 4,202 | 14,033 |
+------------------------------------+-------+--------------+-------------+
| Attributable to: | | | |
+------------------------------------+-------+--------------+-------------+
| Equity shareholders of the Company | | 5,296 | 14,033 |
+------------------------------------+-------+--------------+-------------+
| Minority interests | 6 | (1,094) | - |
+------------------------------------+-------+--------------+-------------+
| | | 4,202 | 14,033 |
+------------------------------------+-------+--------------+-------------+
| Basic and diluted earnings per | 4 | 7.9p | 20.4p |
| share | | | |
+------------------------------------+-------+--------------+-------------+
All amounts relate to continuing operations. The notes form part of these
financial statements.
CONSOLIDATED BALANCE SHEET
at 31 December 2009
+------------------------------------+-------+--------------+-------------+
| | | 31 December | 31 December |
| | | 2009 | 2008 |
+------------------------------------+-------+--------------+-------------+
| |Notes | GBP'000 | GBP'000 |
+------------------------------------+-------+--------------+-------------+
| Non-current assets | | | |
+------------------------------------+-------+--------------+-------------+
| Intangible asset - goodwill | 5 | 10,412 | 7,587 |
+------------------------------------+-------+--------------+-------------+
| Property, plant and equipment | 7 | 44,464 | 41,535 |
+------------------------------------+-------+--------------+-------------+
| Trade and other receivables | 8 | 2,062 | 1,863 |
+------------------------------------+-------+--------------+-------------+
| | | 56,938 | 50,985 |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Current assets | | | |
+------------------------------------+-------+--------------+-------------+
| Trade and other receivables | 8 | 27,956 | 18,650 |
+------------------------------------+-------+--------------+-------------+
| Cash and cash equivalents | 9 | 6,433 | 23,333 |
+------------------------------------+-------+--------------+-------------+
| | | 34,389 | 41,983 |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Total assets | | 91,327 | 92,968 |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Current liabilities | | | |
+------------------------------------+-------+--------------+-------------+
| Loans and borrowings | 10 | - | (6,929) |
+------------------------------------+-------+--------------+-------------+
| Trade and other payables | 11 | (45,497) | (37,273) |
+------------------------------------+-------+--------------+-------------+
| | | (45,497) | (44,202) |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Non-current liabilities | | | |
+------------------------------------+-------+--------------+-------------+
| Other payables and accruals | 11 | (17,955) | (13,143) |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Total liabilities | | (63,452) | (57,345) |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Net assets | | 27,875 | 35,623 |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Equity | | | |
+------------------------------------+-------+--------------+-------------+
| Share capital | | 66 | 69 |
+------------------------------------+-------+--------------+-------------+
| Share premium account | | 35,459 | 35,459 |
+------------------------------------+-------+--------------+-------------+
| Capital redemption reserve | | 3 | - |
+------------------------------------+-------+--------------+-------------+
| Merger reserve | | 38,831 | 38,831 |
+------------------------------------+-------+--------------+-------------+
| Retained earnings | | (45,390) | (38,736) |
+------------------------------------+-------+--------------+-------------+
| Total equity attributable to | | | |
| shareholders of the Company | | 28,969 | 35,623 |
+------------------------------------+-------+--------------+-------------+
| Minority interests | 6 | (1,094) | - |
+------------------------------------+-------+--------------+-------------+
| | | | |
+------------------------------------+-------+--------------+-------------+
| Total equity | | 27,875 | 35,623 |
+------------------------------------+-------+--------------+-------------+
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December
2009
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| Year ended | | | Capital | | | | | |
| 31 December | | | redemp-tion | | | | | |
| 2009 | Share | Share | reserve | Merger | Retained | | Minority | Total |
| | capital | premium | | reserve | earnings | Total | interests | equity |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| At 1 January | 69 | 35,459 | - | 38,831 | (38,736) | 35,623 | - | 35,623 |
| 2009 | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| Profit for | - | - | - | - | 5,296 | 5,296 | (1,094) | 4,202 |
| the year | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| Dividends | | | | | | | | |
| paid to | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| equity | - | - | - | - | (9,846) | (9,846) | - | (9,846) |
| shareholders | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| Shares | | | | | | | | |
| purchased | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| and | (3) | - | 3 | - | (2,379) | (2,379) | - | (2,379) |
| cancelled | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| Write back | | | | | | | | |
| of share | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| option | | | | | | | | |
| cost | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| through | - | - | - | - | 275 | 275 | - | 275 |
| equity | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| At 31 | | | | | | | | |
| December | | | | | | | | |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
| 2009 | 66 | 35,459 | 3 | 38,831 | (45,390) | 28,969 | (1,094) | 27,875 |
+--------------+---------+---------+-------------+---------+----------+---------+-----------+---------+
+--------------------------+---------+---------+-------------+---------+----------+---------+
| Year ended | | | Capital | | | |
| 31 December 2008 | | | redemp-tion | | | |
| | Share | Share | reserve | Merger | Retained | Total |
| | capital | premium | | reserve | earnings | equity |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| At 1 January 2008 | 69 | 35,459 | - | 38,831 | (51,414) | 22,945 |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| Profit for the year | - | - | - | - | 14,033 | 14,033 |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| Dividends paid to equity | - | - | - | - | (1,334) | (1,334) |
| shareholders | | | | | | |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| Shares purchased and | - | - | - | - | (293) | (293) |
| cancelled | | | | | | |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| Write back of share | | | | | | |
| option cost | - | - | - | - | 272 | 272 |
| through equity | | | | | | |
+--------------------------+---------+---------+-------------+---------+----------+---------+
| At 31 December 2008 | 69 | 35,459 | - | 38,831 | (38,736) | 35,623 |
+--------------------------+---------+---------+-------------+---------+----------+---------+
The notes form part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2009
+-------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Profit for the year | 4,202 | 14,033 |
+-------------------------------------------+--------------+-------------+
| Adjustments | | |
+-------------------------------------------+--------------+-------------+
| Taxation | 9 | (79) |
+-------------------------------------------+--------------+-------------+
| Finance income | (297) | (974) |
+-------------------------------------------+--------------+-------------+
| Finance expenses | 502 | 604 |
+-------------------------------------------+--------------+-------------+
| Items capitalised in prior year expensed | - | 240 |
| in 2008 | | |
+-------------------------------------------+--------------+-------------+
| Depreciation of property, plant and | 5,370 | 4,447 |
| equipment | | |
+-------------------------------------------+--------------+-------------+
| Loss on disposal of fixed assets | 22 | 75 |
+-------------------------------------------+--------------+-------------+
| Equity settled share-based obligations | 275 | 272 |
+-------------------------------------------+--------------+-------------+
| Cash settled share-based obligations | 1,100 | 2,100 |
+-------------------------------------------+--------------+-------------+
| Cash flows from operations before changes | 11,183 | 20,718 |
| in working capital | | |
+-------------------------------------------+--------------+-------------+
| | | |
| Change in trade and other receivables | (9,280) | (2,726) |
+-------------------------------------------+--------------+-------------+
| Change in trade and other payables | 10,293 | 9,152 |
+-------------------------------------------+--------------+-------------+
| Cash generated from operations | 12,196 | 27,144 |
+-------------------------------------------+--------------+-------------+
| | | |
| Corporation tax paid | (109) | - |
+-------------------------------------------+--------------+-------------+
| Interest paid | (409) | (529) |
+-------------------------------------------+--------------+-------------+
| Net cash from operating activities | 11,678 | 26,615 |
+-------------------------------------------+--------------+-------------+
| Cash flows from investing activities | | |
+-------------------------------------------+--------------+-------------+
| Interest received | 348 | 920 |
+-------------------------------------------+--------------+-------------+
| Acquisition of business | (2,138) | - |
+-------------------------------------------+--------------+-------------+
| Purchase of property, plant and equipment | (7,616) | (4,067) |
+-------------------------------------------+--------------+-------------+
| Proceeds from disposal of fixed assets | 24 | - |
+-------------------------------------------+--------------+-------------+
| Net cash used in investing activities | (9,382) | (3,147) |
+-------------------------------------------+--------------+-------------+
| Cash flows from financing activities | | |
+-------------------------------------------+--------------+-------------+
| Purchase of own shares, inclusive of | (2,379) | (293) |
| costs | | |
+-------------------------------------------+--------------+-------------+
| Proceeds from drawdown of borrowings | - | 7,000 |
+-------------------------------------------+--------------+-------------+
| Borrowings repaid | (6,971) | (10,020) |
+-------------------------------------------+--------------+-------------+
| Dividends paid | (9,846) | (1,334) |
+-------------------------------------------+--------------+-------------+
| Net cash used in financing activities | (19,196) | (4,647) |
+-------------------------------------------+--------------+-------------+
| | | |
| Net (decrease)/increase in cash and cash | (16,900) | 18,821 |
| equivalents | | |
+-------------------------------------------+--------------+-------------+
| Opening cash and cash equivalents | 23,333 | 4,512 |
+-------------------------------------------+--------------+-------------+
| Closing cash and cash equivalents | 6,433 | 23,333 |
+-------------------------------------------+--------------+-------------+
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
Basis of preparation
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2009 or 2008. Statutory
accounts for 2008 have been delivered to the registrar of companies, and those
for 2009 will be delivered in due course. The auditors have reported on those
accounts; their reports were (i) unqualified, (ii) did not include a reference
to any matters to which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under section 498
(2) or (3) of the Companies Act 2006 in respect of the accounts for 2008 nor a
statement under section 498 (2) or (3) of the Companies Act 2006 in respect of
the accounts for 2009.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that are currently exercisable or
convertible are taken into account.
The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that
control ceases. Where necessary, accounting policies of subsidiaries are
changed on acquisition to align them with the policies adopted by the Group.
Intra-group balances and transactions and any unrealised income and expenses
arising from intra-group transactions are eliminated in preparing the
consolidated financial statements.
Operations conducted by Group subsidiaries on an agency basis for third parties
are excluded from the consolidation, both as regards the Income Statement and
the Balance Sheet.
Use of estimates and judgements
The preparation of financial statements requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future
periods affected.
In particular, information about significant areas of estimation, uncertainty
and critical judgements in applying accounting policies that have the most
significant effect on the amount recognised in the financial statements are
described in the following notes:-
Note 1 - accounting treatment of Operating and Management Agreement revenue
recognition
Note 5 - measurement of recoverable amounts of cash-generating units containing
goodwill
Note 12 - measurement of financial instruments
Revenue recognition
Revenue principally comprises licence fees billed to clients for their office
accommodation, rentals charged and service charges invoiced to tenants. Licence
fee income is invoiced in advance, deferred and recognised on provision of the
service. Service income is recognised in the month the service is provided.
Management fee income from Operating and Management Agreements (OMAs) where the
company is not owned by the Group is recognised when the services are provided
to the landlord. For OMAs where the company is owned by the Group, 'revenue'
includes management fees and shares of net profit, which are recognised in the
period in which they are earned. Losses arising under OMAs are recognised to
the extent required by the underlying contract.
In all instances, revenue is shown net of discounts and VAT. Revenue is
measured at the fair value of consideration received or receivable.
Lease incentives
Lease incentives, such as rent free periods received or granted, are amortised
on a straight-line basis over the anticipated lease term.
Leased assets
Fixed assets acquired under finance lease agreements are capitalised and
depreciated over the shorter of the lease term and estimated useful economic
life. Obligations under such agreements are included in amounts owed to
creditors, net of finance charges allocated to future years. Finance charges
are allocated to accounting periods during the lease term so as to produce a
constant periodic rate of charge on the remaining balance of the obligation for
each accounting period.
Assets held under operating leases are not recognised as assets of the Group.
Rentals payable and incentives received under operating leases are recognised in
the Income Statement on a straight-line basis over the non-cancellable period of
the lease.
Retirement benefits
Obligations for contributions to defined contribution pension plans are
recognised as an expense in the Income Statement as incurred.
Dividends
Dividends which have been approved by shareholders at previous Annual General
Meetings are included within liabilities if still unpaid at the balance sheet
date. Interim and final dividends proposed at the balance sheet date that are
subject to approval by shareholders at the Annual General Meeting are not
included as a liability in the current period's financial statements.
Finance income and expense
Finance income comprises interest receivable on funds invested. Interest income
is recognised in the Income Statement as it accrues, using the effective
interest method.
Finance expense comprises bank charges, interest payable and finance charges on
finance leases that are recognised in the Income Statement.
Taxation
Income tax expense comprises current and deferred tax. Income tax expense is
recognised in profit or loss except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the reporting date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the
initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or
loss, and differences relating to investments in subsidiaries and jointly
controlled entities to the extent that it is probable that they will not reverse
in the foreseeable future. In addition, deferred tax is not recognised for
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. Deferred tax assets and
liabilities are offset if there is a legally enforceable right to offset current
tax liabilities and assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future
taxable profits will be available against which the temporary difference can be
utilised. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
Goodwill
Goodwill is carried at cost less any recognised impairment losses which arise
from annual assessment of its carrying value.
Impairment
The carrying amounts of the Group's non-financial assets other than deferred tax
assets are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any indication exists, the asset's recoverable
amount is estimated. For goodwill and intangible assets that have an indefinite
useful life, the recoverable amount is estimated at each balance sheet date.
The recoverable amount of an asset or cash-generating unit is the greater of its
value in use and its fair value, less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to their present value using a
pre-discount rate that reflects current market assessments of the time value of
money, and the risks specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use which is largely independent of the
cash inflows of other assets or groups of assets (cash-generating unit). For
the purpose of impairment testing, the goodwill acquired in a business
combination is allocated to cash-generating units that are expected to benefit
from the synergies of the combination.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the Income Statement. Impairment losses recognised in respect of
cash-generating units are allocated first to reduce the carrying amount of any
goodwill allocated to the units and then to reduce the carrying amount of other
assets in the unit on a pro-rata basis.
Property, plant and equipment
Leasehold improvements relating to operating leases, fixtures and equipment are
measured at cost less accumulated depreciation and any impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of an
asset and includes professional fees and, for qualifying assets, capitalised
borrowing costs.
The gain or loss on disposal or derecognition of property, plant and equipment
is determined by comparing the sale proceeds with the carrying amount of the
asset at the date of disposal or derecognition, and is recognised in the Income
Statement.
Depreciation is charged so as to write off the cost of property, plant and
equipment, less residual amounts, using the straight line method, over the
following estimated useful lives:-
+-----------------------------------+----------------------------------+
| Operating leasehold improvements: | |
| Machinery and electrical | The shorter of 20 years and the |
| | term of the lease |
+-----------------------------------+----------------------------------+
| Ceilings, floors and partitions | The shorter of 15 years and the |
| | term of the lease |
+-----------------------------------+----------------------------------+
| Front of house | The shorter of 7 years and the |
| | term of the lease |
+-----------------------------------+----------------------------------+
| | |
+-----------------------------------+----------------------------------+
| Other plant, machinery, fixtures | 5 to 10 years |
| and equipment | |
+-----------------------------------+----------------------------------+
Operational properties in the course of development are not depreciated.
Depreciation commences once a centre is available for use.
Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
If the effect is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and, where appropriate, the risks specific to the
liability.
Financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash
and cash equivalents, loans and borrowings and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value.
Subsequent to initial recognition, non-derivative financial instruments,
excluding cash and cash equivalents, are measured at amortised cost using the
effective interest method, less any impairment losses.
Cash and cash equivalents comprise cash balances and call or short-term
deposits. Bank overdrafts that are repayable on demand and form an integral
part of the Group's cash management are included as a component of cash and cash
equivalents for the purpose of the Cash Flow Statement.
Interest bearing bank loans and overdrafts are initially recorded at fair value.
The net amount of any premium or discount over the nominal value, less issue
costs, is amortised over the life of the instrument using the effective interest
method at a constant cost of financing over its life and charged or credited to
interest payable in the Income Statement.
The Group's activities expose it primarily to the financial risk of changes in
interest rates. The Group uses interest rate swaps, swaptions, caps, floors and
collars to hedge these exposures when considered appropriate. The Group does
not use derivative instruments for speculative purposes.
Ordinary share capital is classified as equity. Incremental costs directly
attributable to the issue of ordinary shares and share options are recognised as
a deduction from equity, net of any tax effects. When share capital recognised
as equity is purchased by the Company, the amount of consideration paid
including directly attributable costs, net of any tax effects, is recognised as
a deduction from total equity.
Share-based payment transactions
The share option programme allows certain employees to acquire shares in the
Company and for such equity settled share-based payments the fair value of
options granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period in which the employees become
unconditionally entitled to the options. The fair value of the options granted
is measured using an option valuation model, taking into account the terms and
conditions upon which the options were granted. Except where forfeiture is due
only to share prices not achieving the threshold for vesting, the amount
recognised as an expense is adjusted to reflect the actual number of share
options that vest, with the full unaccrued charge pertaining to leavers' options
being recognised in the year of their departure.
The fair value of the amount payable to employees in respect of the Long-Term
Incentive Scheme, which will be settled in cash, is recognised as an expense
with a corresponding increase in liabilities over the period that the employees
become entitled to payment. The liability is remeasured at each reporting date
and at settlement date. Any changes in the fair value of the liability are
recognised as personnel expense in the Income Statement.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations have been
issued recently but are not effective for this financial year ended 31 December
2009. Accordingly, they have not been applied in preparing these financial
statements. Their adoption is not expected to have a material affect on the
financial statements. The main standards which may affect future financial
statements of the Group are:
IFRS 3 (Revised) Business Combinations (effective from 1 July 2009) broadens the
definition of a business, requires contingent consideration to be fair valued,
transaction costs other than share and debt issue costs to be expensed as
incurred, any pre-existing interest in an acquiree to be measured at fair value
with the gain or loss recognised in profit or loss and minority interests to be
either measured at its fair value or at its proportionate interest in the
identifiable assets and liabilities of the acquiree on a transaction by
transaction basis. The Group has not yet determined the potential effect of
this standard, although the Directors do not consider it will be material to the
consolidated financial statements as a whole.
IAS 27 Consolidated and Separate Financial Statements (effective 1 July 2009)
requires accounting for ownership changes in a subsidiary while maintaining
control to be recognised as an equity transaction. If control of a subsidiary
is lost, any interest retained is to be measured at its fair value and the gain
or loss recognised in profit or loss. The Group has not yet determined the
potential effect of this standard, although the Directors do not consider it
will be material to the consolidated financial statements as a whole.
2 SEGMENT REPORTING
Segmental information is presented in respect of the Group's businesses. The
primary format is based on the Group's internal reporting structure.
The Group comprises the following main business segments:
o Four and five star serviced office accommodation under the Business Exchange
brand; and
o Three star serviced office accommodation under the City Executive Centres
brand.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Inter-segment pricing is
determined on an arm's length basis. The Group does not report internally
segmental balance sheet information. Accordingly this is not given below, in
accordance with April 2009 Improvements to IFRSs - IFRS 8 which, as permitted,
has been adopted ahead of its latest effective date.
+----------------------------------+---------------+-----------+--------------+
| | Business | City | |
| Year ended 31 December 2009 | Exchange | Executive | Consolidated |
| | | Centres | |
+----------------------------------+---------------+-----------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+---------------+-----------+--------------+
| Serviced office revenue - leased | 88,683 | 8,053 | 96,736 |
| centres | | | |
+----------------------------------+---------------+-----------+--------------+
| Serviced office revenue - OMAs | 5,362 | 432 | 5,794 |
+----------------------------------+---------------+-----------+--------------+
| Meeting room revenue | 8,906 | 323 | 9,229 |
+----------------------------------+---------------+-----------+--------------+
| Managed centres revenue | 706 | 625 | 1,331 |
+----------------------------------+---------------+-----------+--------------+
| Less: elimination of revenue | (629) | (45) | (674) |
| double-counted above | | | |
+----------------------------------+---------------+-----------+--------------+
| Revenue per Income Statement | 103,028 | 9,388 | 112,416 |
+----------------------------------+---------------+-----------+--------------+
| Segment EBITDA | 12,177 | (2,369) | 9,808 |
+----------------------------------+---------------+-----------+--------------+
| Depreciation and amortisation | (5,280) | (112) | (5,392) |
+----------------------------------+---------------+-----------+--------------+
| Results from operating | 6,897 | (2,481) | 4,416 |
| activities | | | |
+----------------------------------+---------------+-----------+--------------+
| Net finance income/(expense) | 186 | (391) | (205) |
+----------------------------------+---------------+-----------+--------------+
| Taxation | (9) | | (9) |
| | | - | |
+----------------------------------+---------------+-----------+--------------+
| Profit/(loss) for the year | 7,074 | (2,872) | 4,202 |
+----------------------------------+---------------+-----------+--------------+
| | | | |
+----------------------------------+---------------+-----------+--------------+
| Leased centres at year end | 37 | 13 | 50 |
+----------------------------------+---------------+-----------+--------------+
| OMAs at year end | 5 | 3 | 8 |
+----------------------------------+---------------+-----------+--------------+
| Managed centres at year end | 1 | 14 | 15 |
+----------------------------------+---------------+-----------+--------------+
| | | | |
+----------------------------------+---------------+-----------+--------------+
| REVPAW at year end * | GBP6,955 | GBP3,820 | GBP6,180 |
+----------------------------------+---------------+-----------+--------------+
| REVPOW at year end * | GBP8,265 | GBP5,145 | GBP7,545 |
+----------------------------------+---------------+-----------+--------------+
| Occupancy at year end * | 84% | 74% | 82% |
+----------------------------------+---------------+-----------+--------------+
* = Leased centres only
+----------------------------------+-------------+-----------+--------------+
| | Business | City | |
| Year ended 31 December 2008 | Exchange | Executive | Consolidated |
| | | Centres | |
+----------------------------------+-------------+-----------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-------------+-----------+--------------+
| Serviced office revenue - leased | 101,101 | 199 | 101,300 |
| centres | | | |
+----------------------------------+-------------+-----------+--------------+
| Serviced office revenue - OMAs | 5,724 | - | 5,724 |
+----------------------------------+-------------+-----------+--------------+
| Meeting room revenue | 11,301 | - | 11,301 |
+----------------------------------+-------------+-----------+--------------+
| Managed centres revenue | 1,440 | 365 | 1,805 |
+----------------------------------+-------------+-----------+--------------+
| Less: elimination of revenue | (1,422) | | (1,422) |
| double-counted above | | - | |
+----------------------------------+-------------+-----------+--------------+
| Revenue per Income Statement | 118,144 | 564 | 118,708 |
+----------------------------------+-------------+-----------+--------------+
| Segment EBITDA | 17,985 | 121 | 18,106 |
+----------------------------------+-------------+-----------+--------------+
| Depreciation and amortisation | (4,495) | (27) | (4,522) |
+----------------------------------+-------------+-----------+--------------+
| Results from operating | 13,490 | 94 | 13,584 |
| activities | | | |
+----------------------------------+-------------+-----------+--------------+
| Net finance income | 370 | - | 370 |
+----------------------------------+-------------+-----------+--------------+
| Taxation | 79 | | 79 |
| | | - | |
+----------------------------------+-------------+-----------+--------------+
| Profit for the year | 13,939 | 94 | 14,033 |
+----------------------------------+-------------+-----------+--------------+
| | | | |
+----------------------------------+-------------+-----------+--------------+
| Leased centres at year end | 38 | - | 38 |
+----------------------------------+-------------+-----------+--------------+
| OMAs at year end | 4 | - | 4 |
+----------------------------------+-------------+-----------+--------------+
| Managed centres at year end | 1 | 12 | 13 |
+----------------------------------+-------------+-----------+--------------+
| | | | |
+----------------------------------+-------------+-----------+--------------+
| REVPAW at year end * | GBP8,700 | - | GBP8,700 |
+----------------------------------+-------------+-----------+--------------+
| REVPOW at year end * | GBP9,650 | - | GBP9,650 |
+----------------------------------+-------------+-----------+--------------+
| Occupancy at year end * | 90% | - | 90% |
+----------------------------------+-------------+-----------+--------------+
* = Leased centres only
All operations are carried out in Great Britain.
3 TAXATION
The taxation charge for the year in the Income Statement arose as follows:-
+-------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Current taxation | | |
+-------------------------------------------+--------------+-------------+
| UK corporation tax | | |
+-------------------------------------------+--------------+-------------+
| Arising on profit for the year | - | - |
+-------------------------------------------+--------------+-------------+
| Adjustment in respect of prior years | (9) | 180 |
+-------------------------------------------+--------------+-------------+
| Deferred tax asset in subsidiary at | | |
| acquisition in 2007 written off | - | (101) |
+-------------------------------------------+--------------+-------------+
| Total corporation tax (charge)/credit for | (9) | 79 |
| the year | | |
+-------------------------------------------+--------------+-------------+
No tax was recognised directly in equity during the year ended 31 December 2009
or during the previous year.
Taxation has been reduced from the amount that would arise from applying the
prevailing corporation tax rate to the profit before taxation in the Income
Statement, as follows:-
+-------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| UK corporation tax charge at 28% (2008: | | |
| 28.5%) for the year on the profit | (1,179) | (3,977) |
| before taxation in Income Statement | | |
+-------------------------------------------+--------------+-------------+
| Excess of capital allowances claimed over | (1,510) | (634) |
| depreciation charged | | |
+-------------------------------------------+--------------+-------------+
| Expenditure permanently disallowed for | | |
| taxation purposes and unrelieved tax | (1,823) | (285) |
| losses carried forward | | |
+-------------------------------------------+--------------+-------------+
| Profits not taxable and capitalised | | |
| expenditure deductible for taxation | 4,512 | 4,896 |
| purposes | | |
+-------------------------------------------+--------------+-------------+
| | - | - |
+-------------------------------------------+--------------+-------------+
| Adjustment in respect of prior years | (9) | 79 |
+-------------------------------------------+--------------+-------------+
| Total corporation tax (charge)/credit for | (9) | 79 |
| the year | | |
+-------------------------------------------+--------------+-------------+
4 EARNINGS PER SHARE
The earnings per share figures are calculated by dividing the profit
attributable to equity shareholders of the Company for the year by the weighted
average number of ordinary shares in issue during the year, as follows:-
+-------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Profit attributable to equity | 5,296 | 14,033 |
| shareholders of the Company | | |
+-------------------------------------------+--------------+-------------+
| | | |
+-------------------------------------------+--------------+-------------+
| | Number '000 | Number '000 |
+-------------------------------------------+--------------+-------------+
| Weighted average number of ordinary | 67,003 | 68,917 |
| shares (basic) | | |
+-------------------------------------------+--------------+-------------+
| Effect of shares issuable under share | | |
| option schemes (no effect in either | - | |
| 2009 or 2008) | | - |
+-------------------------------------------+--------------+-------------+
| Weighted average number of shares | 67,003 | 68,917 |
| (diluted) | | |
+-------------------------------------------+--------------+-------------+
| Earnings per share | 7.9p | 20.4p |
+-------------------------------------------+--------------+-------------+
| Diluted earnings per share | 7.9p | 20.4p |
+-------------------------------------------+--------------+-------------+
5 INTANGIBLE ASSET - GOODWILL
+-------------------------------------------+--------------+-------------+
| | 31 December | 31 December |
| | 2009 | 2008 |
+-------------------------------------------+--------------+-------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Cost | | |
+-------------------------------------------+--------------+-------------+
| At 1 January | 7,587 | 7,587 |
+-------------------------------------------+--------------+-------------+
| Acquisition in the year (see note 6) | 2,825 | - |
+-------------------------------------------+--------------+-------------+
| At 31 December 2009 | 10,412 | 7,587 |
+-------------------------------------------+--------------+-------------+
During the year ended 31 December 2007 the Group acquired Stanhope Business
Centres Limited, a serviced office business based in London. Goodwill of GBP7.6
million arose on this acquisition and was recognised in the year ended 31
December 2007. An impairment review of the Stanhope Business Centres goodwill
was undertaken by the Directors on 31 December 2009. This compared the carrying
value of goodwill with the anticipated recoverable amount of the two business
centres owned by Stanhope Business Centres which are the cash-generating unit to
which the goodwill was allocated. The recoverable amount of the cash-generating
unit is based on value in use, which is calculated from cash flow projections
for the lifetimes of the underlying leases, using data from Board approved
budgets covering the period to 31 December 2011. The key assumptions for the
value in use calculations were discount rates, licence fee income, client
renewals and occupancy rates. The Directors estimate discount rates using
pre-tax rates that reflect the current market assessments of the time value of
money and risks specific to the cash-generating units, and they consider the
appropriate pre-tax risk adjusted discount rate is 11%. Changes in licence fee
income, client renewals, occupancy rates and direct costs are based on assumed
compound growth rates of 2% to 5%, as well as past experience and expectations
of future changes in the market. Based on this review, the Directors concluded
that there had been no impairment to the Stanhope Business Centres goodwill
during the year ended 31 December 2009.
The goodwill recognised arising from the acquisition described below derives
from the synergies forecast to be gained from the assimilation of the new
centres into the Group's network and the strengthening of its brands to become
the dominant provider of serviced office accommodation in the London region. An
impairment review of this goodwill was undertaken by the Directors on 31
December 2009. The criteria, assumptions and methodology used were similar to
those described above. Based on this review, the Directors concluded that there
had been no impairment to the MWB Executive Centres (Holdings) Ltd goodwill
during the year ended 31 December 2009.
6 ACQUISITION OF BUSINESS
During the period 29 April to 1 June 2009 the Group acquired 16 business centres
(one of which was subsequently closed) from the Administrator of MLS Group PLC
('MLS'), by means of a 'pre-pack' arrangement, and by direct negotiation from
MLS's former landlords after they had exercised their repossession rights. They
are complementary to the Group's existing centres and in line with its stated
strategy of focusing on London and the surrounding area. The centres are held
in a newly incorporated sub-group led by MWB Executive Centres (Holdings) Ltd,
of which the Group owns 65%. The transactions were accounted for using the
purchase method of accounting as summarised below. Only fair values at the date
of acquisition are stated as full access to MLS's books of account was not
available.
+------------------------------------------------------------+------------+
| | Fair value |
+------------------------------------------------------------+------------+
| | GBP'000 |
+------------------------------------------------------------+------------+
| Net assets acquired | |
+------------------------------------------------------------+------------+
| Property, plant and equipment | 732 |
+------------------------------------------------------------+------------+
| Lease deposit | 225 |
+------------------------------------------------------------+------------+
| Licensee deposit liabilities | (1,414) |
+------------------------------------------------------------+------------+
| Finance lease and other liabilities | (230) |
+------------------------------------------------------------+------------+
| | (687) |
+------------------------------------------------------------+------------+
| Goodwill | 2,825 |
+------------------------------------------------------------+------------+
| Total consideration | 2,138 |
+------------------------------------------------------------+------------+
+------------------------------------------------------------+------------+
| Satisfied by: | |
+------------------------------------------------------------+------------+
| Cash paid and payable | 943 |
+------------------------------------------------------------+------------+
| Directly attributable costs | 1,195 |
+------------------------------------------------------------+------------+
| | 2,138 |
+------------------------------------------------------------+------------+
No cash or cash equivalents were acquired.
In the period to 31 December 2009 the centres acquired generated revenue of
GBP8,563,000, an operating loss of GBP2,736,000 (EBITDA: loss of GBP2,624,000)
and a loss before and after tax of GBP3,127,000. The minority shareholder's
share of those losses amounts to GBP1,094,000. It is impracticable to state
what the results would have been for the full year ended 31 December 2009 due to
the lack of access to MLS's books of account.
7 PROPERTY, PLANT AND EQUIPMENT
+----------------------------+--------------+--------------+--------------+
| | Operating | Plant, | |
| | leasehold | machinery, | |
| | improvements | fixtures & | Total |
| | | equipment | |
+----------------------------+--------------+--------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+--------------+--------------+--------------+
| Cost | | | |
+----------------------------+--------------+--------------+--------------+
| At 1 January 2009 | 38,962 | 32,135 | 71,097 |
+----------------------------+--------------+--------------+--------------+
| Acquisition of business | 313 | 419 | 732 |
| (note 6) | | | |
+----------------------------+--------------+--------------+--------------+
| Additions | 4,139 | 3,477 | 7,616 |
+----------------------------+--------------+--------------+--------------+
| Retirements | (1,095) | (19,902) | (20,997) |
+----------------------------+--------------+--------------+--------------+
| Disposals | (26) | (26) | (52) |
+----------------------------+--------------+--------------+--------------+
| At 31 December 2009 | 42,293 | 16,103 | 58,396 |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Depreciation | | | |
+----------------------------+--------------+--------------+--------------+
| At 1 January 2009 | (5,576) | (23,986) | (29,562) |
+----------------------------+--------------+--------------+--------------+
| Charge for the year | (3,161) | (2,209) | (5,370) |
+----------------------------+--------------+--------------+--------------+
| Retirements | 1,095 | 19,902 | 20,997 |
+----------------------------+--------------+--------------+--------------+
| Disposals | 1 | 2 | 3 |
+----------------------------+--------------+--------------+--------------+
| At 31 December 2009 | (7,641) | (6,291) | (13,932) |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Net book value | | | |
| At 31 December 2009 | 34,652 | 9,812 | 44,464 |
+----------------------------+--------------+--------------+--------------+
Fully depreciated assets acquired before 2004 have been retired.
GBP176,000 (2008: GBPnil) of gross assets, GBP155,000 net book value, included
above are covered by finance leases. All such assets were taken on as part of
the acquisition of business centres from the Administrator of MLS Group PLC
described in note 6 above.
8 TRADE AND OTHER RECEIVABLES
+-------------------------------------------+--------------+-------------+
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Due after more than one year | | |
+-------------------------------------------+--------------+-------------+
| Other receivables | 2,030 | 1,768 |
+-------------------------------------------+--------------+-------------+
| Prepayments and accrued income | 32 | 95 |
+-------------------------------------------+--------------+-------------+
| | 2,062 | 1,863 |
+-------------------------------------------+--------------+-------------+
| | | |
+-------------------------------------------+--------------+-------------+
| Due within one year | | |
+-------------------------------------------+--------------+-------------+
| Trade receivables | 2,407 | 1,400 |
+-------------------------------------------+--------------+-------------+
| Other receivables | 256 | 96 |
+-------------------------------------------+--------------+-------------+
| Amounts due from subsidiaries of MWB | | |
| Group Holdings Plc (note 13) | 10,105 | - |
+-------------------------------------------+--------------+-------------+
| Prepayments and accrued income | 14,104 | 14,070 |
+-------------------------------------------+--------------+-------------+
| Retention balances | 1,084 | 3,084 |
+-------------------------------------------+--------------+-------------+
| | 27,956 | 18,650 |
+-------------------------------------------+--------------+-------------+
Retention balances predominantly comprise cash funds received from tenants as
security for lease obligations. These are retained in Group bank accounts which
are separate from the main Group facilities and are not generally available for
use in the Group's operations.
9 CASH AND CASH EQUIVALENTS
+-------------------------------------------+--------------+-------------+
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| | | |
+-------------------------------------------+--------------+-------------+
| Cash and current accounts at bank | 6,430 | 494 |
+-------------------------------------------+--------------+-------------+
| Short-term fixed rate deposits at bank | 3 | 22,839 |
+-------------------------------------------+--------------+-------------+
| Cash and cash equivalents per Balance | | |
| Sheet and | 6,433 | 23,333 |
| Cash Flow Statement | | |
+-------------------------------------------+--------------+-------------+
10 LOANS AND BORROWINGS
+-------------------------------------------+--------------+-------------+
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Current liabilities | | |
+-------------------------------------------+--------------+-------------+
| Secured bank loan borrowings | - | 6,929 |
+-------------------------------------------+--------------+-------------+
The loan was repaid during 2009 from retained cash flow.
Terms and debt repayment schedule
The Group's loans are denominated in Sterling; no foreign exchange risk was
incurred by the Group on its debt arrangements during the year ended 31 December
2009 or in the previous year. The Group's loans bear floating rates of interest
which are normally for periods ranging from one week to one year, set by
reference to bank base rate. The terms and conditions on the Group's
outstanding loans at 31 December 2009, inclusive of bank margin, were as
follows:-
+--------------------+----------+----------+---------+----------+---------+----------+
| | | | 31 December | 31 December |
| | | | 2009 | 2008 |
+--------------------+----------+----------+--------------------+--------------------+
| | Nominal | | Face | Carrying | Face | Carrying |
| | interest | Year | value | amount | value | amount |
| | rate | of | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | maturity | | | | |
+--------------------+----------+----------+---------+----------+---------+----------+
| Due within one | | | | | | |
| year | | | | | | |
+--------------------+----------+----------+---------+----------+---------+----------+
| Secured bank loans | Base + | 2009 | n/a | n/a | 6,971 | 6,929 |
| | 1.25% | | | | | |
+--------------------+----------+----------+---------+----------+---------+----------+
| Secured bank loans | LIBOR + | 2011 | | | | |
| | 2.75% | | - | - | n/a | n/a |
+--------------------+----------+----------+---------+----------+---------+----------+
| | | | | | 6,971 | 6,929 |
| | | | - | - | | |
+--------------------+----------+----------+---------+----------+---------+----------+
The secured borrowings above are secured by charges on substantially all of the
Group's property, plant and equipment. At 31 December 2008 the Group had a
revolving bank loan facility of GBP13.0 million (of which the drawing of GBP7.0
million included in the table above formed part), which was available to the
Group until 31 December 2009. There was no commitment fee payable on the
undrawn portion. On 25 March 2009, the term of the aforementioned banking
facility was extended to 31 December 2011 with a revised total amount available
of GBP8.0 million. As a result, since 25 March 2009, no funding facilities of
the Group are due to expire in 2010 and this extension in term confirms the
ongoing financial resources of the Group. In early April 2009 the Group repaid
the full loan outstanding at 31 December 2008.
Funding financial risk
The Group's funding financial risk centres on the total interest cost incurred
on the Group's short- and medium-term loan facility, which at 31 December 2009
remained undrawn (2008: GBP7.0 million drawn). The Board currently chooses to
retain these funds, if drawn, at floating rates due to the relatively low level
of current interest rates by reference to the earnings capability of the Group's
business centres which were acquired with the funds drawn. The Board reviews
this policy on a regular basis to ensure good management of its exposure to
interest rate fluctuations.
11 TRADE AND OTHER PAYABLES
+----------------------------------------------+--------------+------------+
| | 31 December | 31 |
| | 2009 | December |
| | GBP'000 | 2008 |
| | | GBP'000 |
+----------------------------------------------+--------------+------------+
| Current liabilities | | |
+----------------------------------------------+--------------+------------+
| Trade payables | 8,183 | 1,905 |
+----------------------------------------------+--------------+------------+
| Amounts due to subsidiaries of MWB Group | 307 | 18 |
| Holdings Plc (note 13) | | |
+----------------------------------------------+--------------+------------+
| Client deposits | 13,298 | 14,726 |
+----------------------------------------------+--------------+------------+
| Operating lease incentives | 556 | 609 |
+----------------------------------------------+--------------+------------+
| Accruals | 19,093 | 14,688 |
+----------------------------------------------+--------------+------------+
| PAYE, NIC and VAT | 1,136 | 2,267 |
+----------------------------------------------+--------------+------------+
| Finance leases, current portion | 157 | - |
+----------------------------------------------+--------------+------------+
| Deferred income | 2,767 | 3,060 |
+----------------------------------------------+--------------+------------+
| | 45,497 | 37,273 |
+----------------------------------------------+--------------+------------+
| Non-current liabilities | | |
+----------------------------------------------+--------------+------------+
| Operating lease incentives | 17,920 | 13,143 |
+----------------------------------------------+--------------+------------+
| Finance leases, non-current portion (less | 35 | - |
| than two years) | | |
+----------------------------------------------+--------------+------------+
| | 17,955 | 13,143 |
+----------------------------------------------+--------------+------------+
12 FINANCIAL INSTRUMENTS
Overall summary
The Group has exposure to the following principal risks in the operation and
management of its business:-
(i) Liquidity risk;
(ii) Market risk;
(iii) Interest rate risk; and
(iv) Credit risk;
Set out below is information about the Group's exposure to each of the above
risks, the Group's objectives, policies and processes for measuring and managing
risk, and the Group's management of capital. Further quantitative disclosures
are included throughout these consolidated financial statements.
The Directors have overall responsibility for the establishment and oversight of
the Group's risk management framework. The Audit Committee of the Board
monitors the Group's risk management policies and reports to the Board on its
activities.
The Group's risk management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management policies to provide
protection for the Group's activities are reviewed during the year to reflect
changes in market conditions. The Group, through its management standards and
procedures, aims to develop a disciplined and constructive control environment
in which employees understand their roles and obligations.
The Audit Committee oversees how management monitors compliance with the Group's
risk management policies and procedures and reviews the adequacy of the risk
management framework in relation to the risks faced by the Group.
This is managed and controlled through a detailed funding policy and capital
management strategy, details of which are set out below.
Funding policy
The Group's treasury policies are designed to ensure that:-
(i) Sufficient committed loan facilities are available to support
current and future business requirements. Cash and loan management is a core
feature of the Board's business model and two year rolling cash flow forecasts,
updated on a monthly basis, are controlled by the Executive Directors to manage
these requirements.
(ii) The interest cost on Group debt is supported as much as possible
from maintainable income flows, with the retirement of debt matched against
forecast inflows over short and medium-term programmes.
Capital management strategy
The Board's policy is to maintain a strong capital base within the Group so as
to maintain investor and creditor protection, and to maintain market confidence
in the Group. This strategy also sustains future development potential of the
Group. The Directors monitor return on capital achieved by the Group, which the
Board has defined as EBITDA divided by total shareholders' equity, and its
comparison to return on value, being EBITDA divided by Group enterprise value.
The Board seeks to maintain a balance between the higher returns that might be
possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position. Neither the Company nor any of its
subsidiaries are subject to externally imposed capital requirements. There were
no material changes in the Group's approach to capital management during the
year ended 31 December 2009 or during the previous year.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial
obligations as they fall due. The Board's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities as they fall due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the
Group's reputation.
The Group uses detailed cash flow reporting, which assists the Board in
monitoring cash flow requirements and optimising cash returns across the whole
Group. The Group typically ensures it has sufficient forecast cash and
available facilities to meet expected cash outflows for a period of two years,
including the servicing of financial obligations. These forecasts include all
generally predictable events within the Group but necessarily exclude the
potential impact of extreme circumstances such as natural disasters that cannot
reliably be modelled and forecast. In addition, the Group maintains available
bank facilities which totalled GBP8.0 million at 31 December 2009, of which
nothing was drawn down. These provide additional liquidity protection for the
Group. The contractual maturity of the Group's financial liabilities is set out
below and in note 10 to the financial statements.
Market risk
Market risk that affects the Group is the risk that changes in market prices,
such as interest rates and equity prices, will affect the Group's income or the
value of its holdings of financial instruments. The objective of the Group's
market risk management is to manage and control market risk exposures within
acceptable parameters, while seeking to optimise returns to shareholders.
Interest rate risk
The Group's variable rate borrowings are exposed to a risk of change in cash
flows due to changes in interest rates. Investments in short-term receivables
and payables are not exposed to interest rate risk.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at 31 December 2009 would have
(decreased)/increased equity and/or the Income Statement by the amounts shown
below. This analysis assumes that all other variables remain constant.
+---------------------------------------+----------+----------+-----------------+----------+
| | --Income | ---------Equity-------- |
| | Statement-- | |
+---------------------------------------+---------------------+----------------------------+
| | 100 | 100 bp | 100 | 100 |
| | bp | Decrease | bp | bp |
| | Increase | GBP'000 | Increase | Decrease |
| | GBP'000 | | GBP'000 | GBP'000 |
+---------------------------------------+----------+----------+-----------------+----------+
| 31 December 2009 | | | | |
+---------------------------------------+----------+----------+-----------------+----------+
| Variable rate instruments: Cash flow | | - | | |
| sensitivity (net) | - | | - | - |
+---------------------------------------+----------+----------+-----------------+----------+
| | | | | |
+---------------------------------------+----------+----------+-----------------+----------+
| 31 December 2008 | | | | |
+---------------------------------------+----------+----------+-----------------+----------+
| Variable rate instruments: Cash flow | (70) | 70 | | |
| sensitivity (net) | | | - | - |
+---------------------------------------+----------+----------+-----------------+----------+
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The risk to the Group arises principally from the Group's
receivables from customers.
The Group has established credit policies under which each new customer is
analysed individually for creditworthiness before the Group's standard payment
and delivery terms and conditions are offered. The Group's review includes
external ratings when available, and in some cases bank references. Purchase
limits are established for each customer, which represent the maximum open
amount that may be permitted in the day-to-day operations of the Group without
requiring prior approval from a member of middle or senior management.
Customers that fail to meet the Group's benchmark creditworthiness level may
still transact with the Group but on a restricted, generally only prepayment,
basis.
Customers that are graded as high risk are placed on a restricted customer list,
and future sales are only made on a restricted basis. Customers are normally
required to deposit two months' licence fee at the commencement of the licence
as security for their receivables due to the Group.
Exposure to credit risk
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. The Board considers there is not a material
risk attached to the customer base of the Group's serviced office business.
This is because the customer base is intrinsically diversified and management
ensures the business has a broad spread of customers at each of the Group's
serviced offices. Geographically there is a concentration of credit risk in
London, where the Group has or operates 45 (2008: 28) serviced offices. Total
revenue in London totalled GBP86.5 million (2008: GBP84.9 million) for the year
ended 31 December 2009.
The carrying amount of financial assets represents their maximum credit exposure
to the Group, which at 31 December 2009 was as follows:-
+------------------------------------+------+--------------+-------------+
| | | 31 December | 31 December |
| | | 2009 | 2008 |
+------------------------------------+------+--------------+-------------+
| |Note | GBP'000 | GBP'000 |
+------------------------------------+------+--------------+-------------+
| | | | |
+------------------------------------+------+--------------+-------------+
| Trade and other receivables | 8 | 30,018 | 20,513 |
+------------------------------------+------+--------------+-------------+
| Cash and cash equivalents | 9 | 6,433 | 23,333 |
+------------------------------------+------+--------------+-------------+
| | | 36,451 | 43,846 |
+------------------------------------+------+--------------+-------------+
The maximum exposure to credit risk at the reporting date is the carrying value
of each class of receivable mentioned above. Credit risk is mitigated by the
use of direct debit, which currently accounts for 48% of all trade receipts, and
by requesting deposits generally representing two months' licence fees from
licensees, which at 31 December 2009 totalled GBP13.3 million (2008: GBP14.7
million), see also note 11. The deposits are utilised, where appropriate, to
offset the charge to the Income Statement that would otherwise occur from
provisions for impairment referred to below.
The ageing of trade receivables at 31 December 2009 was as follows:-
+--------------------------+-----------+------------+----------+------------+
| | 31 December 2009 | 31 December 2008 |
| | | |
+--------------------------+------------------------+-----------------------+
| | Gross | Impairment | Gross | Impairment |
+--------------------------+-----------+------------+----------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+-----------+------------+----------+------------+
| | | | | |
+--------------------------+-----------+------------+----------+------------+
| Current | 1,385 | - | 663 | - |
+--------------------------+-----------+------------+----------+------------+
| 1-30 days overdue | 1,207 | (185) | 426 | - |
+--------------------------+-----------+------------+----------+------------+
| 31-120 days overdue | 509 | (509) | 745 | (434) |
+--------------------------+-----------+------------+----------+------------+
| More than 120 days | 23 | (23) | 266 | (266) |
| overdue | | | | |
+--------------------------+-----------+------------+----------+------------+
| | 3,124 | (717) | 2,100 | (700) |
+--------------------------+-----------+------------+----------+------------+
Based on historical default rates, the Board believes that no material amount of
impairment allowance is necessary in respect of trade receivables not past due
or past due by up to 60 days; the majority of the balance relates to customers
that have good financial track records with the Group. Factors considered when
evaluating impairment include whether the customer is still trading, the ageing
of unpaid debt, balances held as deposits, statements provided by the customer
and external debt agencies.
The movement on the impairment provision during the year was as follows:-
+-------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 31 December | 31 December |
| | 2009 | 2008 |
+-------------------------------------------+--------------+-------------+
| | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+-------------+
| Opening provision | 700 | 814 |
+-------------------------------------------+--------------+-------------+
| Amounts provided | 660 | 893 |
+-------------------------------------------+--------------+-------------+
| Amounts utilised | (643) | (1,007) |
+-------------------------------------------+--------------+-------------+
| Closing provision | 717 | 700 |
+-------------------------------------------+--------------+-------------+
Determination of fair values
The following tables show the carrying amounts and fair values of the Group's
financial instruments at 31 December 2009. The carrying amounts are included in
the Balance Sheet. The fair values of the financial instruments are the amounts
at which the instruments could be exchanged in a current transaction between
willing parties. The fair value of all other financial instruments is not
materially different from the carrying amounts because they incur interest at
variable rates. The fair values of other financial instruments reflect the
replacement values of the financial instruments used to manage the Group's
exposure to adverse interest rate movements.
The carrying amounts and fair values of financial assets and liabilities at 31
December 2009 were as follows:-
+------------------------------------+-----------+-----------+-----------+-----------+
| | 31 December | 31 December |
| | 2009 | 2008 |
+------------------------------------+-----------------------+-----------------------+
| | Carrying | Fair | Carrying | Fair |
| | amount | value | amount | value |
+------------------------------------+-----------+-----------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+-----------+-----------+-----------+-----------+
| | | | | |
+------------------------------------+-----------+-----------+-----------+-----------+
| Trade and other receivables | 30,018 | 30,018 | 20,513 | 20,513 |
+------------------------------------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | 6,433 | 6,433 | 23,333 | 23,333 |
+------------------------------------+-----------+-----------+-----------+-----------+
| Secured bank loans | - | - | (6,929) | (6,971) |
+------------------------------------+-----------+-----------+-----------+-----------+
| Trade and other payables excluding | | | | |
| operating | (42,209) | (42,209) | (33,604) | (33,604) |
| lease incentives and deferred | | | | |
| income | | | | |
+------------------------------------+-----------+-----------+-----------+-----------+
| | (5,758) | (5,758) | 3,313 | 3,271 |
+------------------------------------+-----------+-----------+-----------+-----------+
Liquidity risk and hedge profile
The maturity profile of the Group's financial liabilities, including interest
payments, is set out below:-
+---------------------------------+---------+----------+----------+---------+----------+
| | -----------Contractual cash | |
| | flows------------ | |
+---------------------------------+-----------------------------------------+----------+
| | Within | Between | | | |
| | one | one and | | | Carrying |
| 31 December 2009 | year or | two | | Total | amount |
| | on | years | | GBP'000 | GBP'000 |
| | demand | GBP'000 | | | |
| | GBP'000 | | | | |
+---------------------------------+---------+----------+----------+---------+----------+
| Non-derivative financial | | | | | |
| liabilities | | | | | |
+---------------------------------+---------+----------+----------+---------+----------+
| Trade and other payables | 42,188 | 36 | | 42,224 | 42,209 |
| excluding operating lease | | | | | |
| incentives and deferred income | | | | | |
+---------------------------------+---------+----------+----------+---------+----------+
+---------------------------------+---------+---------+----------+---------+----------+
| | -------------Contractual cash | |
| | flows------------ | |
+---------------------------------+----------------------------------------+----------+
| | Within | Between | | | |
| | one | one and | | | Carrying |
| 31 December 2008 | year or | two | | Total | amount |
| | on | years | | GBP'000 | GBP'000 |
| | demand | GBP'000 | | | |
| | GBP'000 | | | | |
+---------------------------------+---------+---------+----------+---------+----------+
| Non-derivative financial | | | | | |
| liabilities | | | | | |
+---------------------------------+---------+---------+----------+---------+----------+
| Secured bank loans | 6,971 | - | | 6,971 | 6,929 |
+---------------------------------+---------+---------+----------+---------+----------+
| Trade and other payables | 33,604 | | | 33,604 | 33,604 |
| excluding operating lease | | - | | | |
| incentives and deferred income | | | | | |
+---------------------------------+---------+---------+----------+---------+----------+
| | 40,575 | | | 40,575 | 40,533 |
| | | - | | | |
+---------------------------------+---------+---------+----------+---------+----------+
13 RELATED PARTY BALANCES AND TRANSACTIONS
+-------------------------------------------+---------------+--------------+
| | 31 December | 31 December |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+-------------------------------------------+---------------+--------------+
| Current assets | | |
+-------------------------------------------+---------------+--------------+
| Trade and other receivables (note 8) | | |
+-------------------------------------------+---------------+--------------+
| Amounts owed by subsidiaries of MWB | 10,105 | - |
| Group Holdings Plc | | |
+-------------------------------------------+---------------+--------------+
| | | |
+-------------------------------------------+---------------+--------------+
| Current liabilities | | |
+-------------------------------------------+---------------+--------------+
| Trade and other payables (note 11) | | |
+-------------------------------------------+---------------+--------------+
| Amounts owed to subsidiaries of MWB | 307 | 18 |
| Group Holdings Plc | | |
+-------------------------------------------+---------------+--------------+
During the year ended 31 December 2009, the Group incurred GBP53,000 of charges
(2008: GBP58,000) from MWB Group Holdings Plc ('Holdings') in respect of
accommodation costs in accordance with the services agreement between the
Company and Holdings dated 16 December 2005. This agreement also provides for
the Group to use office space at its head office under licence from Holdings.
All costs charged to the Group in accordance with this agreement are recharged
at cost and are calculated on an arm's length basis.
The amount owed by subsidiaries of Holdings at 31 December 2009 primarily
represents the tax effect and related benefit of shelter provided by
subsidiaries of Holdings in the elimination of tax liabilities of the MWB
Business Exchange Group in the current and previous periods. Since 31 December
2009 GBP4.0 million has been repaid by Holdings.
14 ACCOUNTS AND FINANCIAL INFORMATION
This announcement of the audited results for MWB Business Exchange Plc for the
year ended 31 December 2009 and the unaudited Half-Yearly Financial Report for
the six months ended 30 June 2009 are available from the Company Secretary,
Filex Services Limited, 179 Great Portland Street, London W1W 5LS. The Annual
Report and Financial Statements for the year ended 31 December 2009 will be
posted to shareholders in May 2010 and will also be available from the Company
Secretary.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND
FINANCIAL STATEMENTS
The Directors are responsible for preparing the Report of the Directors and the
group and parent company financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare group and parent company financial
statements for each financial year. As required by the AIM Rules of the London
Stock Exchange they are required to prepare the group financial statements in
accordance with IFRSs as adopted by the EU and applicable law and have elected
to prepare the parent company financial statements in accordance with UK
Accounting Standards and applicable law (UK Generally Accepted Accounting
Practice).
Under company law the Directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the group and parent company and of their profit or loss for that period. In
preparing each of the group and parent company financial statements, the
Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and estimates that are reasonable and prudent;
- for the group financial statements, state whether they have been prepared in
accordance with IFRSs as adopted by the EU;
- for the parent company financial statements, state whether applicable UK
Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the parent company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent company's transactions and disclose
with reasonable accuracy at any time the financial position of the parent
company and enable them to ensure that its financial statements comply with the
Companies Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the group and to prevent
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate
and financial information included on the Company's website. Legislation in the
UK governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
We, the Directors of the Company, confirm that to the best of our knowledge:-
A) the financial statements of the Group have been prepared in accordance with
IFRSs as adopted by the EU, and for the Company under UK GAAP, in accordance
with applicable United Kingdom law and give a true and fair view of the assets,
liabilities, financial position and profit of the Group; and
B) the Report of the Directors includes a fair review of the development and
performance of the business and the position of the Group, together with a
description of the principal risks and uncertainties that face the Group.
By order of the Board
+------------------------------------+------------------------------------+
| John Spencer | Keval Pankhania |
+------------------------------------+------------------------------------+
| Chief Executive | Finance Director |
+------------------------------------+------------------------------------+
| 30 March 2010 | |
+------------------------------------+------------------------------------+
GROUP BUSINESS CENTRES at 31 December 2009
Contact details for all business centres operated by the Group:-
+------------------+------------+------------------+------+--------------------+
| 4/5 star offices | Telephone: | Freephone 0808 | Web: | www.mwbex.com |
| | | 100 1800 | | |
+------------------+------------+------------------+------+--------------------+
| 3 star offices | Telephone: | Freephone 0800 | Web: | www.cecoffices.com |
| | | 013 0355 | | |
+------------------+------------+------------------+------+--------------------+
+----------------------------------+------------------------+--------------+
| | | Number |
| Leased centres | Location | of |
| | | workstations |
+----------------------------------+------------------------+--------------+
| 43 Temple Row | Birmingham B2 5LS | 275 |
+----------------------------------+------------------------+--------------+
| Atrium Court, The Ring | Bracknell RG12 1BW | 464 |
+----------------------------------+------------------------+--------------+
| Lower Castle Street | Bristol BS1 3AG | 243 |
+----------------------------------+------------------------+--------------+
| Wellington House, East Road | Cambridge CB1 1BH | 172 |
+----------------------------------+------------------------+--------------+
| 9-10 St. Andrew Square | Edinburgh EH2 2AF | 352 |
+----------------------------------+------------------------+--------------+
| Westpoint, 4 Redheughs Rigg, | Edinburgh EH12 9DQ | 256 |
| South Gyle | | |
+----------------------------------+------------------------+--------------+
| Crossweys, 28-30 High Street | Guildford GU1 3EL | 171 |
+----------------------------------+------------------------+--------------+
| 1 Farnham Road | Guildford GU2 4RG | 299 |
+----------------------------------+------------------------+--------------+
| Craneshaw House, 8 Douglas Road | Hounslow TW3 1DA | 165 |
+----------------------------------+------------------------+--------------+
| Vantage House, 21-23 Wellington | Leeds LS1 4DE | 370 |
| Street | | |
+----------------------------------+------------------------+--------------+
| 1 Whitehall, Whitehall Road | Leeds LS1 4HR | 411 |
+----------------------------------+------------------------+--------------+
| Liverpool Street, 55 Old Broad | London EC2M 1RX | 370 |
| Street | | |
+----------------------------------+------------------------+--------------+
| Providian House, 16-18 Monument | London EC3R 8AJ | 219 |
| Street | | |
+----------------------------------+------------------------+--------------+
| 107-111 Fleet Street | London EC4A 2AB | 408 |
+----------------------------------+------------------------+--------------+
| 60 Cannon Street | London EC4N 6JP | 344 |
+----------------------------------+------------------------+--------------+
| Winchester House, 259-269 Old | London NW1 5RA | 375 |
| Marylebone Road | | |
+----------------------------------+------------------------+--------------+
| Alpha House, 100 Borough High | London SE1 1LB | 283 |
| Street | | |
+----------------------------------+------------------------+--------------+
| 6 Hays Lane | London SE1 2QG | 255 |
+----------------------------------+------------------------+--------------+
| 10 Greycoat Place | London SW1P 1SB | 543 |
+----------------------------------+------------------------+--------------+
| Lasenby House, 32 Kingly Street | London W1B 5QQ | 256 |
+----------------------------------+------------------------+--------------+
| Liberty House, 222 Regent Street | London W1B 5TR | 297 |
+----------------------------------+------------------------+--------------+
| 77 Oxford Street | London W1D 2ES | 290 |
+----------------------------------+------------------------+--------------+
| 18 Soho Square | London W1D 3QL | 278 |
+----------------------------------+------------------------+--------------+
| 130 Shaftesbury Avenue | London W1D 5EU | 721 |
+----------------------------------+------------------------+--------------+
| Cobalt Building, 19-20 Noel | London W1F 8GW | 141 |
| Street | | |
+----------------------------------+------------------------+--------------+
| 33 Cavendish Square | London W1G 0PW | 516 |
+----------------------------------+------------------------+--------------+
| Marble Arch Tower, 55 Bryanston | London W1H 7AA | 256 |
| Street | | |
+----------------------------------+------------------------+--------------+
| 1 Berkeley Street | London W1J 8DJ | 357 |
+----------------------------------+------------------------+--------------+
| 85 Tottenham Court Road | London W1T 4DU | 360 |
+----------------------------------+------------------------+--------------+
| 83 Baker Street | London W1U 6LA | 347 |
+----------------------------------+------------------------+--------------+
| 26-28 Hammersmith Grove | London W6 7BA | 499 |
+----------------------------------+------------------------+--------------+
| 1a Hammersmith Broadway | London W6 9DL | 311 |
+----------------------------------+------------------------+--------------+
| 16-19 Southampton Place | London WC1A 2AJ | 200 |
+----------------------------------+------------------------+--------------+
| 4/4a Bloomsbury Square | London WC1A 2RP | 160 |
+----------------------------------+------------------------+--------------+
| 344-354 Gray's Inn Road | London WC1X 8BP | 313 |
+----------------------------------+------------------------+--------------+
| 88 Kingsway | London WC2B 6AA | 330 |
+----------------------------------+------------------------+--------------+
| Amadeus House, Floral Street | London WC2E 9DP | 264 |
+----------------------------------+------------------------+--------------+
| 25 Floral Street | London WC2E 9DS | 313 |
+----------------------------------+------------------------+--------------+
| 17-19 Bedford Street | London WC2E 9HP | 205 |
+----------------------------------+------------------------+--------------+
| 53-59 Chandos Place | London WC2N 4HS | 211 |
+----------------------------------+------------------------+--------------+
| Golden Cross House, 8 Duncannon | London WC2N 4JF | 500 |
| Street | | |
+----------------------------------+------------------------+--------------+
| Siena Court, The Broadway | Maidenhead SL6 1NJ | 175 |
+----------------------------------+------------------------+--------------+
| Trident One, Styal Road | Manchester M22 5XB | 328 |
+----------------------------------+------------------------+--------------+
| Exchange House, 494 Midsummer | Milton Keynes MK9 2EA | 260 |
| Boulevard | | |
+----------------------------------+------------------------+--------------+
| 15 Wheeler Gate | Nottingham NG1 2NA | 117 |
+----------------------------------+------------------------+--------------+
| John Eccles House, Robert | | |
| Robinson Avenue, | Oxford OX4 4GP | 124 |
| Oxford Science Park | | |
+----------------------------------+------------------------+--------------+
| Atlantic House, Imperial Way | Reading RG2 0TD | 363 |
+----------------------------------+------------------------+--------------+
| Parkshot House, 5 Kew Road | Richmond TW9 2PR | 442 |
+----------------------------------+------------------------+--------------+
| Centurion House, London Road | Staines TW18 4AX | 183 |
+----------------------------------+------------------------+--------------+
| Regal House, 70 London Road | Twickenham TW1 3QS | 135 |
+----------------------------------+------------------------+--------------+
| 50 leased centres at 31 December | | 15,227 |
| 2009 | | |
+----------------------------------+------------------------+--------------+
+----------------------------------+------------------------+--------------+
| | | Number |
| Operating and Management | Location | of |
| Agreement centres | | Workstations |
+----------------------------------+------------------------+--------------+
| Level 33, 25 Canada Square, | London E14 5LB | 270 |
| Canary Wharf | | |
+----------------------------------+------------------------+--------------+
| 27 Austin Friars | London EC2N 2QP | 104 |
+----------------------------------+------------------------+--------------+
| City Tower, 40 Basinghall Street | London EC2V 5DE | 220 |
+----------------------------------+------------------------+--------------+
| 133 Houndsditch | London EC3A 7AH | 327 |
+----------------------------------+------------------------+--------------+
| St. Clement's House, 27/28 | London EC4N 7AE | 416 |
| Clement's Lane | | |
+----------------------------------+------------------------+--------------+
| Westgate House, Westgate Road | London W5 1YY | 195 |
+----------------------------------+------------------------+--------------+
| Pall Mall Court, King Street | Manchester M2 4PD | 241 |
+----------------------------------+------------------------+--------------+
| Elizabeth House, Duke Street | Woking GU21 5AM | 62 |
+----------------------------------+------------------------+--------------+
| 8 Operating and Management | | |
| Agreement | | 1,835 |
| centres at 31 December 2009 | | |
+----------------------------------+------------------------+--------------+
| | | |
+----------------------------------+------------------------+--------------+
+----------------------------------+------------------------+--------------+
| | | Number |
| Management contract centres | Location | of |
| | | Workstations |
+----------------------------------+------------------------+--------------+
| Tower Point 44, North Road | Brighton BN1 1YR | 350 |
+----------------------------------+------------------------+--------------+
| Europa House, Barcroft Street | Bury BL9 5BT | 266 |
+----------------------------------+------------------------+--------------+
| Temple Court, Cathedral Road | Cardiff CF11 9HA | 164 |
+----------------------------------+------------------------+--------------+
| Castle Court, Cathedral Road | Cardiff CF11 9LJ | 103 |
+----------------------------------+------------------------+--------------+
| Copthall Bridge House, Station | Harrogate HG1 1SP | 177 |
| Bridge | | |
+----------------------------------+------------------------+--------------+
| Silk House Court, Tithebarn | Liverpool L2 2LZ | 114 |
| Street | | |
+----------------------------------+------------------------+--------------+
| 1 Sekforde Street, Clerkenwell | London EC1R 0BE | 213 |
+----------------------------------+------------------------+--------------+
| London Wall City Business Centre | | |
| 2 London Wall Buildings | London EC2M 5UU | 156 |
+----------------------------------+------------------------+--------------+
| 2 Finch Lane | London EC3V 3NA | 71 |
+----------------------------------+------------------------+--------------+
| 52 Grosvenor Gardens | London SW1W 0AU | 234 |
+----------------------------------+------------------------+--------------+
| 118 Piccadilly, Mayfair | London W1J 7NW | 102 |
+----------------------------------+------------------------+--------------+
| Cuthbert House, City Road, All | Newcastle-upon-Tyne | 192 |
| Saints | NE1 2ET | |
+----------------------------------+------------------------+--------------+
| Quorum Business Park, Benton | Newcastle-upon-Tyne | 390 |
| Lane | NE12 8BX | |
+----------------------------------+------------------------+--------------+
| Watson Chambers, Market Place | Sheffield S1 2GH | 156 |
+----------------------------------+------------------------+--------------+
| Provincial House, Solly Lane | Sheffield S1 4BB | 116 |
+----------------------------------+------------------------+--------------+
| 15 management contract centres | | |
| at 31 December 2009 | | 2,804 |
+----------------------------------+------------------------+--------------+
| | | |
+----------------------------------+------------------------+--------------+
| Total | | |
+----------------------------------+------------------------+--------------+
| 73 centres at 31 December 2009 | | 19,866 |
+----------------------------------+------------------------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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