RNS Number:8102D
Reed Health Group PLC
07 October 2004
7 October 2004
Reed Health Group plc
("Reed Health Group", "the Company" or "the Group")
Preliminary Results for the year ended 30 June 2004
Reed Health Group plc, the provider of staffing services in the Health, Social
Care and Education sectors in the UK, announces preliminary results for the year
ended 30 June 2004
2004 2003 Change
Turnover #104.82m #116.15m -9.8%
Operating profit #1.45m #5.84m -75.2%
Profit before tax #1.37m #5.57m -75.4%
Earnings per share pre-exceptional 3.69p 8.89p -58.5%
items and goodwill amortisation
Dividend - final 1.62p 1.62p unchanged
- total 2.35p 2.35p unchanged
* Despite reduced profits gross margin has been maintained at 23%
* One-off costs total #3.45m. Without these, operating profit would have
been #4.9m, or 4.7% of sales (compared to 5.0% last year)
* Reed Social Care: five new branches opened and are trading well. Two
more will open in the year ahead
* Reed Health & Reed Doctor: approved for National Framework Agreements
for Allied Health Professions and Medical Locums for England & Wales and
Scotland
* Reed Nurse: development of new branches has been affected by one-off
costs of compliance and Care Standards Agency regulations. Consequently they
have been integrated with Reed Social Care to improve the overall margin
* Outcome expected for new London Agency Project (LAP3) for Nurses in
March 2005
* Closer co-operation between Reed Doctor, Reed Health and Reed Nurse
divisions has generated joint proposals to both NHS and independent sector
clients
* Complete integration of Group's IT, Bill and Pay and management
information systems
* Offers clients excellent on-line access to information
* Overall central cost savings will be #1.5m per annum
Commenting on the outlook for the current year, Barry Hartop, Chairman, said:
"The industry continues to face competitive and regulatory challenges to which
Reed Health Group is responding well. Overall, the Health and Care recruitment
markets continue to offer opportunities on a very large scale and we believe
that Reed Health Group is well positioned to capitalise on these opportunities.
We expect to derive significant benefits from both our successful new Care
branch openings and our position with the National Framework Agreements over the
coming months and, by building on the solid foundations we have laid, we
anticipate delivering an improved performance in the year ahead."
- Ends -
For further information, please contact:
Reed Health Group plc 020 7845 4700
David Fennell, Chief Executive
Mark Garratt, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Susanne Walker
7 October 2004
Reed Health Group plc
("Reed Health Group", "the Company" or "the Group")
Preliminary Results for the year ended 30 June 2004
Chairman's Statement
This was an important year for Reed Health Group. Eighteen months ago, we made
the key decision to concentrate on the integration of the Reed Health Group,
Locum Group and BMG Associates businesses and I am pleased that this integration
is now almost complete. It had become apparent that our overall markets, whilst
very large, were not offering the same growth opportunities as in the previous
five years. As a result we have continued to focus on achieving organic growth
by increasing our presence in the expanding segments of our markets. The
greatest benefit to our shareholders is that we have streamlined our disparate
systems, IT, branding and the operational structure. We now have one, highly
efficient company, operating with significantly reduced overheads.
People
In the process, we have retained our key staff and our major clients in our NHS
and local authority markets.
Since Lord Sawyer's role as Chairman passed to me in October 2003, membership of
our Board has remained unchanged. On our subsidiary board, which covers
Australia and New Zealand, we appointed Bill Bartlett as non-Executive resident
Director. Bill has pursued an international career with Ernst & Young and I am
delighted that we have the benefit of his great experience to strengthen our
international skills.
During the past year Reed Health Group staff have worked with energy and
enthusiasm through profound changes and, on behalf of the Board, I would like to
thank them for their hard work.
Strategy
Our commitment to shareholders for the year ahead is, first and foremost, to
deliver a good return on the past year's investments. More immediately, over the
next six months we will be carrying out a thorough strategic review of the
business to determine how best to build on our sound foundations. As a leading
provider in our markets, we are determined to protect both our trading strengths
and our reputation. We are a responsible agency of introduction enjoying
excellent working relationships with the professions we serve.
Financials
For the year to 30 June 2004, turnover was #104.82 million (2003: #116.15
million). Operating profit was #1.45 million (2003: #5.84 million) and pre-tax
profit was #1.37 million (2003: #5.57 million). Adjusted earnings per share were
3.69p (2003: 8.89p). Full details of our financial performance are given in the
Finance Director's Review.
Dividend
I am pleased to announce that the Board is recommending a final dividend of
1.62p (unchanged on last year) payable on 17 December 2004 to shareholders on
the register on 19 November 2004.
Outlook
The industry continues to face competitive and regulatory challenges to which
Reed Health Group is responding well. Overall, the Health and Care recruitment
markets continue to offer opportunities on a very large scale and we believe
that Reed Health Group is well positioned to capitalise on these opportunities.
We expect to derive significant benefits from both our successful new Care
branch openings and our position with the National Framework Agreements over the
coming months and, by building on the solid foundations we have laid, we
anticipate delivering an improved performance in the year ahead.
Barry Hartop
Chairman
CHIEF EXECUTIVE'S REVIEW
The development and performance of the Group during the financial year
Reed Health Group continues to operate within the public sector professions,
primarily Health (including the medical, allied health and nursing professions)
and Care (including qualified and residential social workers), with a presence
in Education.
Geographically, our offices in the UK continue to represent 99% of our sales,
with small but growing operations in both Australia and New Zealand.
I am pleased to report that we held our gross margin at 23% of sales, the same
as the previous year's. This year's results have been impacted by one-off costs
of #3.45 million. Without these costs operating profit would have been 4.7% of
sales, compared with 5.0% last year.
After recent years of strong growth the financial year to June 2004 has been
marked by contraction in our industry. Sales across the Group have been static
or have fallen slightly, partly due to a switch by some customers from temporary
to permanent appointments. In the Health sector, new contract terms and
conditions from the NHS Purchasing and Supply Agency ("PASA") have increased the
volume of compliance-related processing and data handling.
Our response has been twofold. Firstly, we have ensured that all our candidates
are fully compliant, so that we continue to be selected for all the Framework
Agreements and Agency Projects. Indeed, not only do we continue to be selected
for national and regional contracts but we are also being approved for Service
Level Agreements with groups of NHS Trusts. Reed Doctor, Reed Health and Reed
Nurse have all been selected for their respective Frameworks.
Secondly, we have made it an over-riding Group objective to concentrate on cost
reduction and become more efficient in all our processes, with much of this work
being carried out in the second half.
In place of duplicated systems, we now have a single wide-area network for the
entire Group. This will almost halve our pay and bill costs and greatly improve
the flow of information to our clients and candidates. This re-structuring was
mostly completed by the year-end and helps the Group to compete with confidence
in the year ahead.
Our new IT, Bill and Pay systems were launched at the start of May. The rollout
went very rapidly but was not without disruption to the business, delaying the
raising of invoices during an eight-week period. We cannot defer payments to our
candidates, and therefore debtors and borrowings rose sharply.
Operating Review
Reed Social Care (2004 turnover: #34.3m, 2003: #34.1m)
Reed Social Care has had a year of stability and we now have seventeen established
branches. In order to take advantage of the growing market, we opened five new
branches during the year, which are now trading profitably. We have also
integrated two further branches in other new locations, which were opened during
the year by Reed Nurse.
Each of our established branches completed the year with an experienced manager
and a full team in place, supported by stable and successful regional operations
and business development teams.
During the year, we moved our Manchester and Leeds branches into new offices and
we merged our Croydon branch into the re-furbished Lewisham branch.
The opening of the five new branches went to plan. We have good managers and
teams in place, all delivering a useful contribution as we start the next
financial year. This has given us the confidence to roll out further Reed Social
Care branches in the year ahead in new locations, starting with Middlesbrough,
and at two new locations opened by Reed Nurse.
Contracts were won with both local authorities and private sector clients,
including Manchester City Council and Buckinghamshire County Council for the
recruitment of qualified social workers.
We anticipate increasing market share in the year ahead by winning further
contracts, due to our ability to supply both qualified social workers from other
developed English-speaking countries and, to supply both residential social
workers and qualified nurses, through our greatly expanded national branch
network. We believe our new IT capabilities will give us a very strong offering
as a "master vendor" and also as an approved "e-commerce" provider, as
government bodies progress towards "e-procurement".
Reed Health (2004 turnover: #31.7m, 2003: #39.8m)
The largest part of our health sector business is in Allied Health Professions
("AHPs"), where we are also one of the largest providers to the NHS.
This division experienced a 20% decline in sales. In the previous year, we
noticed an almost three-fold increase in the number of competitors. This year,
decreased demand from NHS Trusts was due to continuing appointments of staff
into new permanent positions.
We have now completed the re-branding and operational integration of Locum Group
Health with Reed Health Professionals. As we ended the financial year, Reed
Health was chosen for the National Framework Agreement for England and Wales. We
have also been chosen for the National Framework Agreement for Scotland, as one
of just four suppliers.
In January 2004 we were appointed by Hammersmith Hospitals, as "Master Vendor"
for all their laboratory staff. The successful implementation of the contract
was followed quickly by the extension of this contract to September 2007, to
cover all clinical support staff.
We are seeing increasing numbers of staff being appointed to permanent NHS
positions. Consequently, we now have a dedicated sales team to sell candidates
for permanent appointments, sourced from overseas. For temporary workers, we now
have regional teams in the South (Ilford), the Midlands (Birmingham), the North
(Manchester) and a recently enlarged team in Scotland (Glasgow). This structure
is designed to keep us close to local clients, and has been of particular
benefit in the North, where we have been awarded a "Master Vendor" contract with
Stockport NHS Trust, for the supply of all AHPs.
NHS Trusts are being urged to negotiate contracts with major suppliers, as there
is no competition in this market by NHS Professionals. In the year ahead, we are
well placed to extend our range of local agreements with the Trusts.
Reed Doctor (2004 turnover: #15.8m, 2003: #14.4m)
Having successfully re-branded this division, sales increased by 9.7% over the
year. This was partly as a result of the first National Framework Agreement, for
which we submitted 'middle-of-the-range' pricing. A risk to the major approved
suppliers under the Agreement is that doctors can still secure bookings at
above-market pay rates through certain minor players. Therefore, as NHS
Purchasing and Supply Agency ("PASA") admitted there is a wide spread of
differently priced agencies to the Framework Agreement, which means that
bookings tend to go to the most highly priced. As PASA is unable to ensure the
exclusion of unapproved suppliers there is a risk that a two-tier market will be
created. In Scotland, however, only three suppliers were approved and this is
helping us to expand our operations in an area where we have already been
officially selected as preferred providers to eight out of fifteen Unified
Health Boards.
The year ahead for Reed Doctor may prove to be challenging, due to the impact of
increased compliance requirements of the next National Framework Agreement for
England and Wales.
Reed Nurse (2004 turnover: #20.1m, 2003: #23.1m)
Reed Nurse continues to be a significant supplier to NHS Trusts, particularly in
London and the South East. Our contracts for the management of the nurse banks
at Hammersmith Hospitals and at Barnet, Enfield and Haringey, continue, as we
are able to offer the service they require and best value. We also provide back
up to NHS Professionals throughout London.
We believe "NHS Professionals" will continue to rely on agency support as long
as there is an excess of demand over supply. This exists not just in the UK but
throughout the English speaking developed world, from which the NHS derives an
unprecedented proportion of its nursing workforce.
Throughout the year, new contract terms introduced by the PASA have greatly
increased the time and cost involved in engaging agency nurses and midwives.
There are now a minimum of 35 steps to be completed, compared with the twelve
required previously. These include delivering, at additional cost to the Group,
at least five sessions of training and carrying out annual or more frequent
appraisals on the work done by the candidate. While these are worthwhile
functions, candidates tell us that they are not required when working as
employees of the NHS and are deterred by the time needed to be taken.
Outside London, the National Care Standards Agency (which was replaced in April
2004 by the Commission for Social Care Inspection) was unexpectedly slow to
issue licences for the new branches we were hoping to open. Licence applications
require us to show the name of our local employee who is to be licensed. We have
then had to wait up to a year for an inspection before the licence was issued,
during which time we are not permitted to advertise the existence of our office.
This has effectively blocked our attempts to expand our branch network outside
London. Looking ahead we have therefore decided to integrate the Nurse branches
with the Care branches, in all areas except in London. The year ahead includes
the new "LAP3" London Agency Project contract, which comes into effect in April
2005. We will reflect the increased operating costs in our charge rates in order
to remain commercially viable.
Teachers UK (2004 turnover: #2.6m, 2003: #4.8m)
Teachers UK, our education division, provide supply teachers through three
branches, to local schools on the outskirts of London. This enables us to keep
in close contact with all candidates and to offer instant availability of
teachers to provide cover before the morning's classes begin. Our local branch
network has also helped our candidates from overseas to settle in.
The increase in the number of UK trained teachers now qualifying has reduced
demand for temporary teachers in general. There has also been an increase, over
several years, in the number of competitors, which has tended to raise pay rates
at the expense of margins.
We are pursuing opportunities in the higher education institutions, having
recruited and placed lecturers in health subjects, from Australia and New
Zealand.
International (2004 turnover: #0.30m, 2003: #0.06m)
We were pleased with the number of candidates which have come through our
offices in Australia, New Zealand and Canada.
As in the UK, we spend a significant amount of time in helping candidates to
assemble all their documentation in readiness for entering the flexible work
market. In practice, about half do not proceed. This is partly because of market
changes; for example, the demand for teachers has diminished, leading us to
switch emphasis to other professions. On their arrival in the UK we offer
candidates help with opening bank accounts and hiring cars; we arrange social
events and follow up visits at the workplace.
During the past year we have drawn our overseas operations much closer to the UK
operation. Our staffs' contracts of employment, our trading terms and
conditions, our insurance cover, IT systems and our monthly Board reports and
meetings are all now consistent with UK practice. In the year ahead, we will
complete the implementation of our ISO 9000: 2000 quality management system and
also the training programme to achieve the Investors in People award in
Australia.
Local sales in Australia and New Zealand are developing well. Our staff selling
into these markets are generating a growing contribution towards local
overheads. We expect this market to show continuing growth as the benefits of
the availability of well-selected flexible staff become widely appreciated.
The position of the Group at the end of the financial year and the main factors
underlying the Group's performance
Group turnover as a whole was 9.8% down on prior year, due mainly to declining
demand for temporary staff in Reed Nurse, some of the Reed Health and at
Teachers UK. Trading was disrupted by the drawn-out process of achieving
candidate compliance under the PASA contract terms and the rollout of our new IT
systems, during the last quarter. We believe that these issues have "bottomed
out" and that, with lower central costs, the Group can continue to compete
strongly in its traditional markets.
The main factors likely to affect the future development and performance of the
Group
The diversity of the business is a strength. With flat demand from the NHS, the
Group is able to develop more rapidly its place as a key supplier to Local
Authorities for qualified and residential social workers.
Developments in IT are bringing powerful and efficient solutions on to the
market. The technology we have implemented during the second half enables us to
offer "e-procurement" solutions, both as a master vendor and as an approved
supplier.
The scale of our national and international branch network has always enabled
the Group to access the widest selection of candidates. It now helps in
tendering for national-scale contracts and also in opening up for business in
countries where we previously only sourced candidates.
At the end of the financial year Reed Health Group had completed a phase of
integration and investment and adapted to a changing marketplace.
The projects completed comprised of:
i) The common branding and launch of new marketing styles
ii) The consolidation of sales operations
iii) The achievement of the Investors in People award
iv) The rationalisation of our back office systems and IT
v) The realisation of a Group-wide cost efficiency programme including a
thorough review of Reed Nurse
In our relationships with our major customer, the NHS, we are pleased that we
are now fully compliant with the new PASA terms.
Over the coming six months we will carry out a thorough strategic review, to
build on our inherent strengths in our markets.
Looking ahead we aim to deliver a significantly improved result by building on
the achievements of the past year.
FINANCE DIRECTOR'S REVIEW
Following a year of integration and change I report the results for the year
ended 30 June 2004.
Turnover
Turnover for the Group was #104.8 million (2003: #116.2 million).
Gross Profit
Gross profit was #24.2 million (2003: #26.6 million) and gross margin, as a
percentage of sales remained constant at 23%.
Operating profit and margin
Administrative expenses after goodwill amortisation and exceptional costs were
#22.7 million (2003: #20.7 million). The increase is due to one off costs
incurred during the year. Of these costs, #1.5 million is attributable to the
Group's investment in new branches, #0.5 million relates to one off costs
connected with the implementation of the Group's new single IT platform, #1.0
million is due to the increased compliance requirements in the Nurse division
and #0.3 million relates to legal and consultancy costs in respect of the new
Employment Agencies Act, re-branding and other legislative changes.
The Group's operating profit before goodwill amortisation was #3.0 million
(2003: #7.9 million), representing a net operating margin of 2.9% (2003: 6.8%).
Pre-tax profit
Profit before tax and goodwill amortisation amounted to #2.9 million (2003: #7.6
million). Profit before tax was #1.37 million, compared with #5.57 million last
year.
Taxation
The tax charge for the year was #0.74 million giving an effective rate of 54%
(2003: 41%). The effective tax rate on profits, before goodwill amortisation and
exceptional items, was 25.3% (2003: 29.2%).
Earnings per share
Adjusted earnings per share, before exceptional items and goodwill amortisation,
were 3.69p (2003: 8.89p). Adjusted earnings per share, on a diluted basis but
before exceptional items and goodwill amortisation were 3.69p (2003: 8.88p).
Basic and diluted earnings per share on the FRS 14 basis were 1.05p (2003:
5.47p) due to the significant amortisation charge.
Dividend
The Board has proposed a final dividend of 1.62p per share, which together with
the interim dividend of 0.73p brings the total dividend for the year to 2.35p
(2003: 2.35p). This represents a yield of 4.35% (2003: 2.8%) on the 30 June 2004
share price of 68p and a dividend cover (pre exceptional items and goodwill
amortisation) of 1.57 times. The dividend is payable on 17 December 2004 to
shareholders on the register as at 19 November 2004.
Cashflow
Cashflow from operations was a negative #6.7 million (2003: positive #8.8
million). This decrease has arisen from the short term difficulties experienced
during the implementation of the new IT platform. Capital expenditure for the
year amounted to #1.3 million and consisted of investment in computer systems
hardware and software to support the business and an investment in thirteen new
branches. Dividends, interest, and corporation tax amounted to a net payment of
#3.1 million.
Equity shareholders' funds
Equity shareholders' funds decreased from #33.4 million in 2003 to #32.5 million
in 2004 reflecting a transfer from reserves of #0.8 million after dividends of
#1.4 million.
Treasury
Net debt at the end of the year was #14.0 million (2003: #2.7 million). This
increase is due to the data migration difficulties experienced during the
implementation of the new IT platform. The gearing of the Company has increased
to 40% (2003: 8.8%). This short-term position is expected to be significantly
improved at December 2004 with a renewed focus on debt collection.
Derivatives and other financial instruments
The Group's financial instruments comprise borrowings, cash and various items
such as trade debtors and creditors that arise directly from its operations. The
main purpose of these instruments is to raise finance for operations. The Group
has not entered into derivatives transactions nor does it trade in financial
instruments as a matter of policy. The main risks arising from the Group's
financial instruments are interest rate risk and liquidity risk.
Operations are financed through a mixture of retained profits and bank
borrowings. The Board's policy is to use variable rate borrowings.
Interest rates remain broadly unchanged and possible short-term variations in
the rates should not significantly impact the cost of debt to the Group.
The Group's exposure to foreign currency risk remains low due to the relative
size of the overseas operations.
- Ends -
For further information, please contact:
Reed Health Group plc 020 7845 4700
David Fennell, Chief Executive
Mark Garratt, Finance Director
Weber Shandwick Square Mile 020 7067 0700
Susanne Walker
Reed Health Group plc
Consolidated Profit and Loss Account
for the year ended 30 June 2004
Note 2004 2003
#'000 #'000
Turnover: continuing activities 104,821 116,153
Cost of sales (80,649) (89,601)
------- -------
Gross profit 24,172 26,552
Administrative expenses (22,724) (20,712)
------- -------
------- -------
Operating profit before goodwill amortisation
and exceptional items 3,024 7,876
Goodwill amortisation (1,576) (1,576)
Exceptional items - (460)
------- -------
Operating profit: continuing activities 1,448 5,840
Net interest payable (78) (272)
------- -------
Profit on ordinary activities before taxation 1,370 5,568
Tax on profit on ordinary activities 2 (744) (2,304)
------- -------
Profit for the financial year 626 3,264
Dividends on equity shares (1,401) (1,401)
------- -------
Transfer (from) / to reserves (775) 1,863
======= =======
Earnings per share p p
Basic 4 1.05 5.47
Diluted 4 1.05 5.47
Adjusted earnings per share before
goodwill amortisation and exceptional items
Basic 4 3.69 8.89
Diluted 4 3.69 8.88
Dividends per share 3 2.35 2.35
There were no recognised gains and losses other than those noted in the
consolidated profit and loss account above.
Reed Health Group plc
Consolidated Balance Sheet
at 30 June 2004
Note 2004 2003
#'000 #'000
Fixed assets
Intangible assets 28,472 30,048
Tangible assets 1,531 953
-------- --------
30,003 31,001
Current assets
Debtors due within one year 25,316 16,026
Cash at bank and in hand - 223
-------- --------
25,316 16,249
Creditors: Amounts falling due within one year (22,825) (13,876)
-------- --------
Net current assets 2,491 2,373
-------- --------
Total assets less current liabilities 32,494 33,374
-------- --------
Net assets 32,494 33,374
======== ========
Capital and reserves
Called up share capital 1,193 1,193
Share premium account 21,478 21,478
Merger reserve 6,317 6,317
Capital redemption reserve 51 51
Investment in own shares (105) -
Profit and loss account 3,560 4,335
-------- --------
Equity shareholders' funds 5 32,494 33,374
======== ========
Reed Health Group plc
Consolidated Cash Flow Statement
for the year ended 30 June 2004
Note 2004 2003
#'000 #'000
Net cash (outflow) / inflow from operating activities 6 (6,721) 8,843
Returns on investment and servicing of finance 7 (78) (272)
Taxation paid (1,636) (2,622)
-------- --------
(8,435) 5,949
Capital expenditure and financial investment
Investment in own shares (105) -
Payments for tangible fixed assets (1,334) (562)
-------- --------
(1,439) (562)
-------- --------
Dividends (1,401) (1,234)
-------- --------
Net cash (outflow) / inflow before financing (11,275) 4,153
Financing
Repayment of bank loans - (8,000)
Funds advanced under invoice discounting facility 10,060 2,938
Expenses of share issue - (7)
-------- --------
10,060 (5,069)
-------- --------
Decrease in cash 9 (1,215) (916)
======== ========
Reed Health Group plc
Notes to the Preliminary Results
30 June 2004
1. SEGMENTAL REPORTING
All turnover is derived from the United Kingdom except for #335,000 generated in
Australia (2003: #60,000). The Directors consider all operations to form one
class of business.
2. TAXATION
2004 2003
#'000 #'000
United Kingdom Corporation Tax:
Current tax on income for the year 956 2,347
Adjustments in respect of previous periods 30 (43)
-------- --------
Total current tax 986 2,304
Deferred taxation, net reversal of timing differences (242) -
-------- --------
Tax on profit on ordinary activities 744 2,304
======== ========
The tax charge for the year is higher than the standard rate of corporation tax
in the UK. The differences in the current tax charges are explained below.
Profit on ordinary activities before taxation 1,370 5,568
-------- --------
Theoretical UK Corporation tax rate 30% (2003: 30%) 411 1,670
Effects of:
Goodwill amortisation not tax deductible 496 473
Trading losses in overseas subsidiaries - 218
Deferred tax movements 97 -
Adjustments in respect of previous periods 30 (43)
Other adjustments (48) (14)
-------- --------
986 2,304
======== ========
3. DIVIDENDS
2004 2003
#'000 #'000
Interim dividend paid of 0.73p per share (2003: 0.73p per
share) 435 435
Proposed final dividend of 1.62p (2003: 1.62p per share) 966 966
-------- --------
Total dividend in year 1,401 1,401
======== ========
4. EARNINGS PER SHARE
Basic earnings per share is calculated using the earnings attributable to
ordinary shareholders and the weighted average number of Ordinary Shares in
issue during the year.
Diluted earnings per share is calculated by adjusting the Ordinary Shares in
issue by the potential dilutive effect of share options.
There are no other potentially dilutive categories other than share options.
The additional calculation of earnings per share has been shown to highlight the
impact of goodwill amortisation and exceptional items.
The basis of the earnings and weighted average number of shares used in the
calculations are set out below:
Earnings 2004 EPS Earnings 2003 EPS
#'000s Weighted p #'000s Weighted p
average average
number number
of shares of shares
thousands thousands
FRS 14 Basis
Basic earnings per
share 626 59,645 1.05 3,264 59,645 5.47
Dilutive effect of - 52 -
options ------------------------------------------------------
Diluted earnings per
share 626 59,645 1.05 3,264 59,697 5.47
======================================================
Adjusted to exclude goodwill
amortisation and
exceptional items
Basic - FRS 14 Basis 626 59,645 1.05 3,264 59,645 5.47
Exceptional items - - - 460 - 0.77
Goodwill amortisation 1,576 - 2.64 1,576 - 2.64
------------------------------------------------------
Adjusted basic
earnings per share 2,202 59,645 3.69 5,300 56,645 8.89
======================================================
Diluted - FRS 14 Basis 626 59,645 1.05 3,264 59,697 5.47
Exceptional items - - - 460 - 0.77
Goodwill amortisation 1,576 - 2.64 1,576 - 2.64
------------------------------------------------------
Adjusted diluted
earnings per share 2,202 59,645 3.69 5,300 59,697 8.88
======================================================
5. RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
2004 2003
#'000 #'000
Group
Total recognised gains relating to the financial year 626 3,264
Dividends (1,401) (1,401)
Net costs of share issue - (7)
Investment in own shares (105) -
-------- --------
(Decrease)/Increase in shareholders' funds (880) 1,856
Opening shareholders' funds 33,374 31,518
-------- --------
Closing shareholders' funds 32,494 33,374
======== ========
6. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
2004 2003
#'000 #'000
Operating profit 1,448 5,840
Amortisation of goodwill 1,576 1,576
Depreciation of tangible fixed assets 756 684
Working capital movements
Debtors (9,048) 3,676
Creditors (1,453) (2,933)
-------- --------
Net cash (outflow)/inflow from continuing operating
activities (6,721) 8,843
======== ========
7. RETURNS ON INVESTMENT AND SERVICING OF FINANCE
2004 2003
#'000 #'000
Interest received 4 10
Interest paid (82) (282)
-------- --------
(78) (272)
======== ========
8. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2004 2003
#'000 #'000
Decrease in cash (1,215) (916)
Repayment of loans - 8,000
Funds advanced under invoice discounting facility (10,060) (2,938)
-------- --------
(Increase)/reduction in net debt (11,275) 4,146
Opening net debt (2,715) (6,861)
-------- --------
Closing net debt (13,990) (2,715)
======== ========
9. ANALYSIS OF NET DEBT
At 1 Cash Flow At 30 June
July 2003 2004
#'000 #'000 #'000
Cash at bank and in hand 223 (223) -
Bank overdraft - (992) (992)
-------- -------- --------
223 (1,215) (992)
Borrowings (2,938) (10,060) (12,998)
-------- -------- --------
Net debt (2,715) (11,275) (13,990)
======== ======== ========
10. ANNUAL REPORT
The Annual Report will be sent to all shareholders in due course and will be
available from the Group's registered office, Fairgate House, 78 New Oxford
Street, London WC1A 1HB.
11. PRELIMINARY STATEMENT
This preliminary statement, which has been agreed with the Auditors was approved
by the Board on 7 October 2004. It is not the Company's statutory accounts.
Statutory accounts will be sent to shareholders shortly.
The statutory accounts for the year ended 30 June 2003 have been delivered to
the Registrar of Companies and received an audit report which was unqualified
and did not contain statements under s237 (2) or (3) of the Companies Act 1985.
The statutory accounts for the year ended June 2004 have not yet been approved,
audited or filed.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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