TIDMSTA
RNS Number : 4140M
Stagecoach Theatre Arts PLC
29 January 2009
Stagecoach Theatre Arts plc (STA.L)
("Stagecoach" or "the Group")
Interim Results
for the half year ended 30 November 2008
"Stagecoach Theatre Arts plc operates the UK's largest franchise network of
part-time performing arts schools for children aged between 4 and 16"
Highlights
Financial
* Profit before tax up 28 per cent to GBP0.33 million (2007: GBP0.26m), reflecting
an increase in continuing franchise fees from the existing schools network and
the continuing financial contribution from the restructuring and cost reductions
undertaken over the past two years.
* Franchise network fees (ie. underlying school fees throughout franchise network)
up 6 per cent to GBP13.3m (2007: GBP12.6m) reflecting continuing solid
performance of franchisees worldwide. Group revenue of GBP3.05 million (2007:
GBP3.09 million) reduced marginally, reflecting fewer initial franchise fees
from new school sales and re-sales.
* Healthy cash balance at half year end increased 17 per cent to GBP1.4m (2007:
GBP1.2m).
* Earnings Per Share substantially up by 47 per cent to 2.5p (2007: 1.7p).
* Maiden Interim Dividend payable of 0.5 pence per share (2007: nil).
Operations
* This year saw a Stagecoach Agency FIRST - every West End musical that has
children in the cast has featured at least one Stagecoach student.
* October launch of Stagecoach Parties, offered as an additional activity for our
Stagecoach franchisees, which helps with marketing as well as to provide a
supplemental income.
* Potential new revenue stream is the development of a new performing arts course
for 16 to 18 year olds, to run concurrently with a student's academic studies.
* Stagecoach USA subsidiary moves into profit for the first time.
* In September, the first Stagecoach school was opened in Athens, Greece, under an international licence agreement. We are delighted to report that the school opened with a full register.
David Sprigg, Managing Director, commented:
"We are pleased with the financial results for the first six months of the year
and our reported 28 per cent. increase in profits, against what is an
increasingly tough economic climate. Our experience over the past twenty years
has been that children's education is one of the last items of expenditure to be
cut from the family budget.
Despite the difficulties that 2009 will undoubtedly bring, we remain cautiously
optimistic."
ENDS
Enquiries:
+-----------------------------------+--------------------------------+
| Stagecoach Theatre Arts | Tel: 01932 254 333 / 07775 643 |
| Richard Dawson, Finance Director | 939 |
| and Investor Relations | www.stagecoach.co.uk |
| | |
+-----------------------------------+--------------------------------+
| | |
+-----------------------------------+--------------------------------+
| Smith & Williamson Corporate | Tel: 020 7131 4000 |
| Finance Limited - Nominated | |
| Adviser | |
| David Jones / Siobhan Sergeant | |
+-----------------------------------+--------------------------------+
| | |
+-----------------------------------+--------------------------------+
| Public Relations, Adventis | Tel: 020 7034 4758 / 07879 458 |
| Financial PR | 364 |
| Tarquin Edwards | |
+-----------------------------------+--------------------------------+
Chairman's Statement
Results and Overview
I am pleased to report a 28% increase in profits for the six months to 30
November 2008 to GBP333,000 (2007: GBP261,000). Despite the uncertain global
economic climate, the total number of students in the Group's schools has
increased marginally to 40,112 (2007: 40,040). Network fees, which reflect total
school fees earned over the period by our franchisees, have increased 6% to
GBP13.3 million (2007: GBP12.6 million).
Continuing franchise fees from the existing schools network have increased over
the period but there have been fewer initial franchise fees from new school
sales and re-sales and, as a result, Group revenue has reduced marginally to
GBP3.05 million (2007: GBP3.09 million). However, the continuing financial
contribution from the restructuring and cost reductions undertaken over the past
two years has resulted in the overall increase in profitability during the
period.
Group cash balances increased 17% to GBP1.4 million as at 30 November 2008
(2007: GBP1.2 million). Earnings per share for the six month period were up 47%
to 2.5 pence (2007: 1.7 pence). Last year, the Company initiated the payment of
a final dividend and we are pleased to announce the payment of a maiden interim
dividend of 0.5 pence per share (2007: nil). This interim dividend which amounts
to GBP49,397 will be paid on 18 March 2009 to those shareholders on the register
as at 20 February 2009.
Operational Performance
UK Schools
The number of Stagecoach Theatre Arts schools in the UK and students attending
have increased in comparison to last year to 625 schools, 712 Early Stages
classes and 35,821 students (2007: 615 schools, 678 Early Stages classes and
35,571 students).
There has been a small decrease in average student numbers per main school to
41.9 students (2007: 42.7) and Early Stages to 13.2 (2007: 13.4), although over
93% of all available places are still taken.
The integration of the SportsCoach and Mini Stages franchises into the
Stagecoach UK support and reporting function has been successful and has
resulted in a small operating profit. Despite a number of SportsCoach and Mini
Stages school closures, this restructuring has also increased average student
numbers per school.
The SportsCoach network has 24 SportsCoach schools, 8 Early Sporties Classes and
1,000 students (2007: 27 schools, 10 Early Sporties and 1,097 students). There
are 349 Mini Stages students and 104 Montessori nursery students (2007: 665 and
84 students respectively). We were delighted to receive an accreditation of
Excellence from OFSTED for our Montessori school.
From October, Stagecoach Parties was offered as an additional activity for our
Stagecoach franchisees, to help with marketing, as well as to provide a
supplemental income. So far 35 of our franchises have paid the annual licence
fee for the rights to run Stagecoach Parties. Stagecoach Parties are a fun,
structured party for children of all ages, predominantly run as a child's
birthday party activity, held either at their home or in a local hired venue.
Another potential new revenue stream is the development of a new performing arts
course for 16 to 18 year olds, to run concurrently with a student's academic
studies. This two-year course is scheduled to commence in September 2009.
The Stagecoach Agency maintains its status as the largest performing arts agency
for children in the UK and continues to provide our students with varied work
across all areas of the entertainment industry. Our September 2008 intake
numbered 2,043 (2007: 2,137). The total of individual submissions for jobs from
August 2007 to September 2008 was over 16,000, resulting in approximately 5,000
auditions and bookings.
The jobs have become more varied and high profile and this year saw a Stagecoach
Agency first, in that every West End musical that has children in the cast has
featured at least one Stagecoach student. We are in the process of raising our
profile in the lucrative Voice Over market, in which we should excel because of
our unique nationwide pool of regional and ethnic voices.
Overseas schools
Following the restructuring of the US operations in May 2008, we are pleased to
announce that the Stagecoach USA subsidiary reported a profit before tax for the
first time.
The German operations continue to expand steadily with two new schools. However
further growth is needed in order to achieve the critical mass required for the
German subsidiary to move into profitability.
In September, the first Stagecoach school was opened in Athens, Greece, under an
international licence agreement. We are delighted to report that the school
opened with a full register.
In our overseas markets there are now 52 Stagecoach schools, 55 Early Stages
classes, 3 Further Stages classes, 12 Mini Stages sessions and a total of 2,838
students (2007: 46 Stagecoach schools, 47 Early Stages classes, 4 Further Stages
classes, 13 Mini Stages sessions and a total of 2,623 students).
Creative and Educational
We have enjoyed a busy six months for large-scale performances and events. In
June a national choir festival at the Birmingham symphony hall featured over 400
Stagecoach students from around the UK. Also in June over 300 students performed
at Her Majesty's Theatre in London's West End. In August we staged our annual
showcase, the musical Children of Eden at the Leatherhead Theatre featuring
students from schools in the UK, Ireland, USA and Germany. In November, another
300 Stagecoach students again performed at Her Majesty's Theatre. In December,
80 Stagecoach schools and an estimated 3,600 Stagecoach students simultaneously
performed the musical piece, entitled "Glad Rags", for a Guinness World Record
attempt (of which we are awaiting confirmation).
Strategy
Your Board has been committed to the strategy of bringing each part of our
business to profitability. With the US subsidiary moving into profit this half
year, only the German subsidiary remains loss making. Despite the current
difficult economic climate which has caused a slow down in new school sales in
Germany, we continue to invest in this market taking a medium to long term view
that Stagecoach Germany has the most potential to imitate the success of
Stagecoach UK.
Our key strategic objectives are:
* further growth in the UK; assisted by new income streams from the core business
such as Stagecoach Parties, the on-line shop (www.stagecoachshop.co.uk), and our
new performing arts course for 16 to 18 year olds
* growth from our other networks (International, SportsCoach)
* maintain a tight management of costs, and thus to build up the cash reserves
further
* continue to provide a return to shareholders with a progressive dividend policy
The Group also continues to support the Stagecoach Charitable Trust, which runs
InterAct Theatre Workshops, providing inclusive performing arts tuition to
children of all abilities and needs.
Prospects
We are pleased with the financial results for the first six months of the year
in this increasingly tough economic climate. Our experience over the past
twenty years has been that children's education is one of the last items of
expenditure to be cut from the family budget.
However, we are not immune from the lack of credit: the banks' unwillingness to
lend as they have in the past will inevitably reduce the number of franchise
sales and re-sales and therefore that portion of our income. Nor are we entirely
immune to the effects of recession: the economic climate has already led some
franchisees to postpone plans to expand their businesses and redundancies may
result in loss of students, reducing revenue to our franchisees and ourselves.
We have therefore increased our marketing and promotional activity and are
strongly encouraging all our franchisees to do likewise in order to maintain
student numbers. In other areas we are continuing with cost reductions wherever
possible.
Despite the difficulties that 2009 will undoubtedly bring we remain cautiously
optimistic.
Graham Cole
Chairman
29 January 2009
Unaudited Condensed Consolidated Income Statement
+--------------------------------+-------+------------+--+------------+------------+
| For the six month period ended | | Six months ended | Year ended |
| | | | |
| 30 November 2008 | | | |
+--------------------------------+-------+----------------------------+------------+
| | | 30 Nov | | 30 Nov | 31 May |
+--------------------------------+-------+------------+--+------------+------------+
| | | 2008 | | 2007 | 2008 |
+--------------------------------+-------+------------+--+------------+------------+
| |Notes | GBP'000 | | GBP'000 | GBP'000 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Network fees (see note) | | 13,275 | | 12,627 | 28,466 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Revenue | 2 | 3,054 | | 3,099 | 6,326 |
+--------------------------------+-------+------------+--+------------+------------+
| Cost of sales | | (1,807) | | (1,798) | (3,177) |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Gross profit | | 1,247 | | 1,301 | 3,149 |
+--------------------------------+-------+------------+--+------------+------------+
| Other operating income | | 12 | | 13 | 30 |
+--------------------------------+-------+------------+--+------------+------------+
| Administrative expenses | | (950) | | (1,053) | (2,482) |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Operating profit | 2 | 309 | | 261 | 697 |
+--------------------------------+-------+------------+--+------------+------------+
| Financial income | | 28 | | 7 | 22 |
+--------------------------------+-------+------------+--+------------+------------+
| Financial expenses | | (4) | | (7) | (12) |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Net financing income | | 24 | | - | 10 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Profit before tax | | 333 | | 261 | 707 |
+--------------------------------+-------+------------+--+------------+------------+
| Taxation | 3 | (90) | | (90) | (206) |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Profit for the period | | 243 | | 171 | 501 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Attributable to: | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Equity holders of the parent | | 243 | | 171 | 501 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Earnings per share (pence) | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| * Basic earnings per share | 5 | 2.5 | | 1.7 | 5.1 |
+--------------------------------+-------+------------+--+------------+------------+
| * Diluted earnings per share | 5 | 2.4 | | 1.7 | 5.0 |
+--------------------------------+-------+------------+--+------------+------------+
Note: Network fees represent total school fees earned over the period by our
franchisees from over 40,000 students that attended Stagecoach, SportsCoach and
Mini Stages worldwide.
Unaudited Condensed Consolidated Statements of Recognised Income and Expenses
+---------------------------------------+------------+--+------------+------------+
| For the six month period ended 30 | Six months ended | Year ended |
| November 2008 | | |
| | | |
+---------------------------------------+----------------------------+------------+
| | 30 Nov | | 30 Nov | 31 May |
+---------------------------------------+------------+--+------------+------------+
| | 2008 | | 2007 | 2008 |
+---------------------------------------+------------+--+------------+------------+
| | GBP'000 | | GBP'000 | GBP'000 |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Foreign exchange translation | (1) | | 1 | (22) |
| differences | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Net income/(expense) recognised | (1) | | 1 | (22) |
| directly in equity | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Profit for the period | 243 | | 171 | 501 |
+---------------------------------------+------------+--+------------+------------+
| Total income and expense recognised | 242 | | 172 | 479 |
| for the period attributable to equity | | | | |
| holders of the parent | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
Unaudited Condensed Consolidated Balance Sheet
As at 30 November 2008
+--------------------------------+-------+------------+--+------------+------------+
| | | Six months ended | Year ended |
+--------------------------------+-------+----------------------------+------------+
| | | 30 Nov | | 30 Nov | 31 May |
+--------------------------------+-------+------------+--+------------+------------+
| | | 2008 | | 2007 | 2008 |
+--------------------------------+-------+------------+--+------------+------------+
| | | GBP'000 | | GBP'000 | GBP'000 |
+--------------------------------+-------+------------+--+------------+------------+
| Non-current assets | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Property, plant and equipment | | 98 | | 92 | 100 |
+--------------------------------+-------+------------+--+------------+------------+
| Intangible assets - Goodwill | | 981 | | 981 | 981 |
+--------------------------------+-------+------------+--+------------+------------+
| Intangible assets - Computer | | 330 | | 460 | 395 |
| software | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Total non-current assets | | 1,409 | | 1,533 | 1,476 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Current assets | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Inventories | | 296 | | 327 | 303 |
+--------------------------------+-------+------------+--+------------+------------+
| Trade and other receivables | | 1,178 | | 1,016 | 2,340 |
+--------------------------------+-------+------------+--+------------+------------+
| Cash and cash equivalents | | 1,380 | | 1,243 | 1,032 |
+--------------------------------+-------+------------+--+------------+------------+
| Total current assets | | 2,854 | | 2,586 | 3,675 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Total assets | 2 | 4,263 | | 4,119 | 5,151 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Equity | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | 494 | |
| Share capital | | 494 | | | 494 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | 1,601 | |
| Share premium | | 1,601 | | | 1,601 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | (12) | |
| Translation reserve | | (36) | | | (35) |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | 584 | |
| Retained earnings | | 961 | | | 916 |
+--------------------------------+-------+------------+--+------------+------------+
| Total equity | | 3,020 | | 2,667 | 2,976 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Non-current liabilities | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Other interest-bearing loans | | 25 | | 83 | 50 |
| and borrowings | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Other payables | | - | | 15 | - |
+--------------------------------+-------+------------+--+------------+------------+
| Deferred tax liabilities | | 16 | | 64 | 16 |
+--------------------------------+-------+------------+--+------------+------------+
| Total non-current liabilities | | 41 | | 162 | 66 |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Current liabilities | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| Other interest-bearing loans | | 59 | | 63 | 66 |
| and borrowings | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | 1,143 | | 1,227 | 2,043 |
| Trade and other payables | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | 1,202 | | 1,290 | 2,109 |
| Total current liabilities | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | 2 | 1,243 | | 1,452 | 2,175 |
| Total liabilities | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | 4,263 | | 4,119 | 5,151 |
| Total equity and liabilities | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
| | | | | | |
+--------------------------------+-------+------------+--+------------+------------+
Unaudited Condensed Consolidated Cash Flow Statement
For the six month period ended 30 November 2008
+---------------------------------------+------------+--+------------+------------+
| | Six months ended | Year ended |
+---------------------------------------+----------------------------+------------+
| | 30 Nov | | 30 Nov | 31 May |
+---------------------------------------+------------+--+------------+------------+
| | 2008 | | 2007 | 2008 |
+---------------------------------------+------------+--+------------+------------+
| | GBP'000 | | GBP'000 | GBP'000 |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Cash flows from operating activities | | | | |
+---------------------------------------+------------+--+------------+------------+
| Profit for the period | 243 | | 171 | 501 |
+---------------------------------------+------------+--+------------+------------+
| Adjustment for: | | | | |
+---------------------------------------+------------+--+------------+------------+
| Depreciation and amortisation | 77 | | 77 | 159 |
+---------------------------------------+------------+--+------------+------------+
| Foreign exchange differences | (8) | | (1) | (41) |
+---------------------------------------+------------+--+------------+------------+
| Financial income | (28) | | (7) | (22) |
+---------------------------------------+------------+--+------------+------------+
| Financial expense | 4 | | 7 | 12 |
+---------------------------------------+------------+--+------------+------------+
| Loss on disposal of property, plant | 1 | | - | 8 |
| and equipment | | | | |
+---------------------------------------+------------+--+------------+------------+
| Employee share option scheme | - | | 6 | 8 |
+---------------------------------------+------------+--+------------+------------+
| Taxation | 90 | | 90 | 206 |
+---------------------------------------+------------+--+------------+------------+
| Operating profit before changes in | 379 | | 343 | 831 |
| working capital and provisions | | | | |
+---------------------------------------+------------+--+------------+------------+
| Decrease/(increase) in trade and | 1,183 | | 914 | (393) |
| other receivables | | | | |
+---------------------------------------+------------+--+------------+------------+
| Decrease/(increase) in inventories | 8 | | (29) | (5) |
+---------------------------------------+------------+--+------------+------------+
| (Decrease)/increase in trade and | (665) | | (194) | 623 |
| other payables | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Cash generated from the operations | 905 | | 1,034 | 1,056 |
+---------------------------------------+------------+--+------------+------------+
| Interest received | 28 | | 7 | 22 |
+---------------------------------------+------------+--+------------+------------+
| Interest paid | (4) | | (7) | (12) |
+---------------------------------------+------------+--+------------+------------+
| Taxation paid | (258) | | - | (167) |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| | 671 | | | 899 |
| Net cash from operating activities | | | 1,034 | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Cash flows from investing activities | | | | |
+---------------------------------------+------------+--+------------+------------+
| Acquisition of additional shares in | (82) | | (84) | (99) |
| subsidiary | | | | |
+---------------------------------------+------------+--+------------+------------+
| Acquisition of property, plant and | (11) | | (15) | (48) |
| equipment | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Net cash used in investing activities | (93) | | (99) | (147) |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Cash flows from financing activities | | | | |
+---------------------------------------+------------+--+------------+------------+
| | (198) | | | |
| Dividends paid | | | - | - |
+---------------------------------------+------------+--+------------+------------+
| Repayment of borrowings | (32) | | (33) | (61) |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Net cash used in financing activities | (230) | | (33) | (61) |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Net increase in cash and cash | 348 | | 902 | 691 |
| equivalents | | | | |
+---------------------------------------+------------+--+------------+------------+
| Cash and cash equivalents at | 1,032 | | 341 | 341 |
| beginning of the period | | | | |
+---------------------------------------+------------+--+------------+------------+
| | | | | |
+---------------------------------------+------------+--+------------+------------+
| Cash and cash equivalents at end of | 1,380 | | | 1,032 |
| the period | | | 1,243 | |
+---------------------------------------+------------+--+------------+------------+
Notes to the Condensed Financial Statements
For the six month period ended 30 November 2008
1. Accounting Policies
General
Stagecoach Theatre Arts plc is a company incorporated in the UK.
The condensed consolidated interim financial statements for the six months ended
30 November 2008 consolidate those of the Company and its subsidiaries (together
referred to as the 'Group').
The comparative figures for the financial year ended 31 May 2008 are not the
company's statutory accounts for that financial year. Those accounts have been
reported on by the company's auditors and delivered to the registrar of
companies. The report of the auditors was (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 237(2) or (3) of the Companies Act 1985.
Basis of preparation
The condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard 34
'Interim Financial Reporting', as adopted by the European Union.
The same accounting policies and presentation methods of computation are
followed in the condensed set of financial statements as applied in the Group's
latest annual audited financial statements for the year ended 31 May 2008.
Measurement convention
The financial statements are presented in sterling, rounded to the nearest
thousand and are prepared on the historical cost basis.
Use of estimates and judgements
The preparation of financial statements in conformity with International
Financial Reporting Standards as adopted by the EU ('Adopted IFRSs') 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 estimates are
revised and in any future periods affected.
2. Segment Reporting
Primary reporting format - business segments
The Group operates as one business segment, franchising (Stagecoach, including
the Stagecoach Agency, SportsCoach and Mini Stages). This is the Group's primary
segment, as no other activities are significant enough to report separately. The
unallocated segment relates to a nursery school business and corporate
overheads, assets and liabilities.
The segment results for the periods are as follows:
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | Six months ended | Year ended |
+-----------------+---------------------------------------------------------------------------+-------------------------------------+
| | 30 Nov 2008 | 30 Nov 2007 | 31 May 2008 |
+-----------------+-------------------------------------+-------------------------------------+-------------------------------------+
| |Franchising |Unallocated | Total |Franchising |Unallocated | Total |Franchising |Unallocated | Total |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | GBP'000 | GBP'000 |GBP'000 | GBP'000 | GBP'000 |GBP'000 | GBP'000 | GBP'000 |GBP'000 |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Network fees | 13,119 | 156 | 13,275 | 12,498 | 129 | 12,627 | 28,207 | 259 | 28,466 |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Revenue | 2,898 | 156 | 3,054 | 2,970 | 129 | 3,099 | 6,067 | 259 | 6,326 |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Operating | 1,087 | (778) | 309 | 1,004 | (743) | 261 | | | |
| profit/(loss) | | | | | | | 2,546 | (1,849) | 697 |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Total assets | 2,786 | 1,477 | 4,263 | 2,763 | 1,356 | 4,119 | 3,955 | 1,196 | 5,151 |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Total | (570) | (673) | (1,243) | (805) | (647) | (1,452) | (1,513) | (662) | (2,175) |
| liabilities | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Other segment | | | | | | | | | |
| items: | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Capital | 1 | 10 | 11 | 15 | - | 15 | 45 | 3 | 48 |
| expenditure | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
| Depreciation | 69 | 8 | 77 | 70 | 7 | 77 | 142 | 17 | 159 |
| and | | | | | | | | | |
| amortisation | | | | | | | | | |
+-----------------+-------------+-------------+---------+-------------+-------------+---------+-------------+-------------+---------+
Secondary reporting format - geographical segments
The Group's operations are based in four main geographical areas. The UK is the
home country of the Parent Company. Revenue is analysed on an origination basis
and is all derived from external customers. Segment assets, which comprise total
assets, including capital expenditure, are allocated on the basis of location.
The main operations in the principal territories for the periods are as follows:
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | Network fees | Revenue | Operating profit/(loss) |
+--------------+-----------------------------+-----------------------------+-----------------------------+
| | Six months | Year | Six months | Year | Six months | Year |
| | ended | ended | ended | ended | ended | ended |
+--------------+-------------------+---------+-------------------+---------+-------------------+---------+
| | 30 Nov | 30 Nov | 31 May | 30 Nov | 30 Nov | 31 May | 30 Nov | 30 Nov | 31 May |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| United | 12,587 | 12,132 | 27,120 | 2,943 | 3,006 | 5,997 | 320 | 362 | 821 |
| Kingdom | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Europe | 564 | 345 | 1,004 | 80 | 45 | 205 | (18) | (77) | (53) |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Americas | 100 | 128 | 289 | 27 | 44 | 115 | 4 | (28) | (78) |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| Rest of the | 24 | 22 | 53 | 4 | 4 | 9 | 3 | 4 | 7 |
| world | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | | | | | | | | | |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
| | 13,275 | 12,627 | 28,466 | 3,054 | 3,099 | 6,326 | 309 | 261 | 697 |
+--------------+---------+---------+---------+---------+---------+---------+---------+---------+---------+
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| | Segment assets | Capital expenditure |
+-------------------------------------+-----------------------------+-----------------------------+
| | 30 Nov | 30 Nov | 31 May | 30 Nov | 30 Nov | 31 May |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |GBP'000 |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| United Kingdom | 4,009 | 3,950 | 4,945 | 10 | 15 | 46 |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| Europe | 156 | 87 | 147 | 1 | - | 2 |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| Americas | 98 | 82 | 59 | - | - | - |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| Rest of the world | - | - | - | - | - | - |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| | | | | | | |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
| | 4,263 | 4,119 | 5,151 | 11 | 15 | 48 |
+-------------------------------------+---------+---------+---------+---------+---------+---------+
3. Taxation
The income tax expense is recognised in each interim period based on the best
estimate of the weighted average annual income tax rate expected for the full
financial year individually for each tax jurisdiction in which the Group
operates and applied to the pre-tax profits of the relevant entity.
+----------------------------------------------+-----------+---+-----------+----------+
| | Six months ended | Year |
| | | ended |
+----------------------------------------------+---------------------------+----------+
| | 30 Nov | | 30 Nov | 31 May |
+----------------------------------------------+-----------+---+-----------+----------+
| | 2008 | | 2007 | 2008 |
+----------------------------------------------+-----------+---+-----------+----------+
| | Unaudited | | Unaudited | Audited |
+----------------------------------------------+-----------+---+-----------+----------+
| | GBP'000 | | GBP'000 | GBP'000 |
+----------------------------------------------+-----------+---+-----------+----------+
| | | | | |
+----------------------------------------------+-----------+---+-----------+----------+
| UK taxation | 90 | | 90 | 206 |
+----------------------------------------------+-----------+---+-----------+----------+
4. Dividends
+----------------------------------------------+-----------+---+-----------+----------+
| | Six months ended | Year |
| | | ended |
+----------------------------------------------+---------------------------+----------+
| | 30 Nov | | 30 Nov | 31 May |
+----------------------------------------------+-----------+---+-----------+----------+
| | 2008 | | 2007 | 2008 |
+----------------------------------------------+-----------+---+-----------+----------+
| | Unaudited | | Unaudited | Audited |
+----------------------------------------------+-----------+---+-----------+----------+
| | GBP'000 | | GBP'000 | GBP'000 |
+----------------------------------------------+-----------+---+-----------+----------+
| | | | | |
+----------------------------------------------+-----------+---+-----------+----------+
| Amounts recognised as distributions to | | | | |
| equity holders in the period: | | | | |
+----------------------------------------------+-----------+---+-----------+----------+
| Final dividend for the year ended 31 May | 198 | | - | - |
| 2008 of 2p per ordinary share (2007: | | | | |
| GBPnil). The final dividend was approved by | | | | |
| shareholders at the AGM on 17 September 2008 | | | | |
| and paid on 25 November 2008. | | | | |
+----------------------------------------------+-----------+---+-----------+----------+
There is an interim dividend payable of 0.5 pence per share (2007: nil). This
interim dividend which amounts to GBP49,397 will be paid on 18 March 2009 to
those shareholders on the register as at 20 February 2009.
5. Earnings per share
+----------------------------------------------+-----------+--+-----------+----------+
| | Six months ended | Year |
| | | ended |
+----------------------------------------------+--------------------------+----------+
| | 30 Nov | | 30 Nov | 31 May |
+----------------------------------------------+-----------+--+-----------+----------+
| | 2008 | | 2007 | 2008 |
+----------------------------------------------+-----------+--+-----------+----------+
| | Unaudited | | Unaudited | Audited |
+----------------------------------------------+-----------+--+-----------+----------+
| | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| Earnings | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| Profit for the period for basic and diluted | 243 | | 171 | 501 |
| earnings per share (GBP'000) | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| Number of shares | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| Weighted average number of shares used for | 9,879 | | 9,879 | 9,879 |
| basic earnings per share ('000) | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| Dilutive effect of share options ('000) | 113 | | 113 | 106 |
+----------------------------------------------+-----------+--+-----------+----------+
| Fully diluted weighted average number of | 9,992 | | 9,992 | 9,985 |
| shares used for diluted earnings per share | | | | |
| ('000) | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| | | | | |
+----------------------------------------------+-----------+--+-----------+----------+
| Basic earnings per share (pence) | 2.5 | | 1.7 | 5.1 |
+----------------------------------------------+-----------+--+-----------+----------+
| Diluted earnings per share (pence) | 2.4 | | 1.7 | 5.0 |
+----------------------------------------------+-----------+--+-----------+----------+
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary shares
in issue during the period.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue by the number of shares deemed to be issued
for no consideration (options granted to employees).
6. Related Party Transactions
The directors consider there to be no one individual or entity that ultimately
controls the Group.
Directors of the Company and their immediate relatives control 59.93% of the
voting shares of the Company. Directors' rights to subscribe for shares in the
company are indicated below:
+---------------+--------------+-------------+------------+--------------------+
| | Date of | Exercise | Number of | Dates when |
| | Grant | Price | options | exercisable |
+---------------+--------------+-------------+------------+--------------------+
| Richard | 21 Oct 01 | 42p | 47,786 | 14 Dec 01 to 21 |
| Dawson | | | | Oct 11 |
+---------------+--------------+-------------+------------+--------------------+
| | 27 Jan 05 | 67.5p | 100,000 | 31 May 07 to 27 |
| | | | | Jan 15 |
+---------------+--------------+-------------+------------+--------------------+
| | 4 Oct 06 | 32.5p | 100,000 | 31 May 07 to 4 Oct |
| | | | | 16 |
+---------------+--------------+-------------+------------+--------------------+
| | | | | |
+---------------+--------------+-------------+------------+--------------------+
| Manzoor | 5 Aug 02 | 112.5p | 44,444 | 5 Aug 05 to 4 Aug |
| Ishani | | | | 12 |
+---------------+--------------+-------------+------------+--------------------+
| | 27 Jan 05 | 67.5p | 100,000 | 31 May 07 to 27 |
| | | | | Jan 15 |
+---------------+--------------+-------------+------------+--------------------+
| | 4 Oct 06 | 32.5p | 100,000 | 31 May 07 to 4 Oct |
| | | | | 16 |
+---------------+--------------+-------------+------------+--------------------+
No options held by Directors were exercised during the period and no options
held by Directors lapsed during the period. The mid-market price of the shares
at 30 November 2008 was 54 pence and the range during the period was 54 to 72
pence.
During the period the directors' remuneration including benefits in kind was
GBP321,312 (30 Nov 2007: GBP279,980).
Manzoor Ishani has an interest in Sherrards, a firm of solicitors that the
Company contracts with from time to time for legal services.
The Group continues to support and provide management time to the Stagecoach
Charitable Trust (SCT), the trustees of which include Stephanie Manuel and David
Sprigg. During the period the Group donated GBP29,420 to SCT (30 Nov 2007:
GBP16,694).
7. Responsibility
The Directors of the company accept responsibility for the information contained
in this document and to the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case) the information contained in
this document is in accordance with the facts and does not omit anything likely
to affect the import of such information.
8. Parent Company Accounting Policies
In the last annual accounts, in relation to the parent company balance sheet
(which is not included in these interim statements), the accounting policy
included a disclosure to the effect that the accounting treatment involved the
true-and-fair override of an accounting requirement of the Companies Act 1985.
This disclosure was inappropriate since the Companies Act 1985 accounting
provisions do not apply as the parent company prepared its accounts in
accordance with EU Adopted IFRSs; the accounting adopted continues to apply but
the true-and-fair override disclosure, made in error, will be removed from the
next annual accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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