Andalas Energy & Power Regulatory News (ADL)

26 Sep 2005 07:00

AdVal Group PLC26 September 2005 AdVal Group plc Audited Preliminary Results for the Year Ended 31 March 2005 AdVal Group plc ('AdVal' or the 'Group'), the learning solutions group, todayannounces its audited preliminary results for the year ended 31 March 2005. Highlights • First operating profit (before interest and tax) since 2001 • Turnover on continuing businesses up 16% to £2.65 million (2004: £2.29million) and gross profit also up at £1.30 million (2004: £1.12 million) • Total overheads reduced by £0.49 million (2004: reduction of £1.20 million) • Operating profit of £0.03 million (including £0.05 million on discontinued operations) before interest and tax (2004: £0.64 million loss with no impact of discontinued operations) before exceptional items, interest and tax • No Exceptional charges (2004: exceptional charges of £0.19 million, comprising redundancy and other associated costs) • Loss for the financial year transferred from reserves reduced to £0.03 million (2004: £0.84 million loss transferred from reserves) • Disposal of the testing business, which contributed a trading profit of £0.05 million in the year before loss on disposal (2004: £0.03 million profit) • Issue of a Convertible Loan Note in September 2004 raised approximately £0.26 million (before expenses) to strengthen the Group's balance sheet and provide additional working capital Chairman's statement As reported in the Interim results announcement last November, the Group'strading in the first half of 2004/5 year was stable, with a first quarter ataround breakeven turned by the summer holiday season into a small loss for thefirst half year of £56,000 (2003/4 - loss of £495,000). I am pleased to reportthat, including the results of Testline Ltd, on which I comment below, thesecond half showed a modest profit, giving a full year result of a loss of£33,800 (2003/4 full year loss of £835,300). On 31 March 2005, we sold our Testline subsidiary to its management team.Testline's results for the year are shown as 'Discontinued operations'.Following the preparation of Completion accounts, the final consideration was£142,000 and the Parent also received a dividend of £140,000. We shall be usingthe cash realised from, and management time released by, this sale to developour core e-learning business. We have already started investing in both bespoke and generic activities. TheETS contract continues to progress satisfactorily and to extend in scope. Thereliance of the business on the successful performance of this contract wasalways a significant factor in considering the likely profitability of the Groupbetween 2003/4 and 2005/6 and it is gratifying to see it is going well. ETS andother projects have provided the base for further investment in sales andmarketing activity, initially focussed on our traditional strengths in theDefence and Financial services sectors but increasingly expanding into newareas. We have won work from a number of new customers (for example; Innovene,Clear Channel Entertainment and Quintec) and secured an encouraging number ofvideo training contracts with the Ministry of Defence through a frameworkcontract. I reported last November that we had been invited to participate indiscussions on potential defence equipment contracts; now that Alvis-Vickers ispart of BAE Systems we are involved in still more opportunities with thisclient. However, decisions in the Defence sector always take time and thesediscussions, whilst positive, have not yet resulted in contract awards. We werealso pleased to announce the renewal of our Preferred Supplier agreement withthe Royal Bank of Scotland, which has placed a number of contracts with us sincethe renewal. The combination of the high up-front cost of investment in sales and marketingactivity and the increasing lead time for customer decisions will,unfortunately, have a substantial adverse effect on the first half of 2005/6,but the prospects list has grown very significantly, order intake is improvingand we remain optimistic about the medium term and a recovery over the secondhalf, to show continued progress in the full year. I also reported in November that development of our new e-Learning BTEC Award inCustomer Services in conjunction with Edexcel was going well and this was dulylaunched at the beginning of January. There is an encouraging level of interestand we have made a number of sales of pilot courses, the earliest of which arenow nearing completion. Feedback to date from those customers has been positivebut the nature of this product, involving as it does multi-user licences and thepotential for licences that represent recurring yearly revenues, means thedecision-making process is particularly long. Overall, the turnaround is proceeding in line with plan and we are sufficientlywell into the phase of generating new business opportunities that we can see itbeginning to convert into orders. Market conditions are not easy, and averagecontract sizes are smaller, but we believe we are more than holding our own. As announced in September 2004, we completed a follow-on fund raising in thatmonth of £260,000 (before costs), on identical terms to last year's ConvertibleLoan Notes, namely a conversion price of 2.75p (being 95.6% of the mid-marketprice on 24 September, the day before the announcement) and an interest couponof 5.5%, payable half yearly in arrears. The necessary Shareholder Resolutionswere passed at an Extraordinary General Meeting on 6 January 2005. As a small AiM group, we are well aware of the need to grow to cover the costsof being publicly traded. Now we have stabilised the core business our strategyis to combine investment for growth in the existing businesses with an activesearch for potential acquisitions, for which we have a clear set of criteria.We believe that when the successful implementation of this strategy is apparent,it should lead to a rapid and significant re-rating of our share price. Finally, I would again like to thank all my colleagues throughout the Group.Without them, the recovery would be longer and their commitment and enthusiasmcontinue to provide great encouragement. Dr Lars AhrellChairman23 September 2005 For further information, please contact: AdVal Group plc 01296 388100Dr Lars Ahrell, Chairman AdVal Group plc Audited Consolidated Profit and Loss Account For the year ended 31 March 2005 Note 2005 2004 2004 2004 Before Exceptional exceptional items Total items (Note 3) Total £ £ £ £ TurnoverContinuing operations 2,651,266 2,285,907 2,285,907Discontinued operations 467,896 749,777 749,777 --------- --------- ---------Group 3,119,162 3,035,684 3,035,684Turnover Cost of sales (1,820,305) (1,916,517) (1,916,517) --------- --------- --------- Gross profit 1,298,857 1,119,167 1,119,167 Other operating charges (1,272,552) (1,759,885) (187,444) (1,947,329) --------- --------- -------- --------- Operating profit/(loss)Continuing operations (22,334) (644,437) (187,444) (831,881)Discontinued operations 48,639 3,719 3,719 --------- --------- -------- --------- Group operating profit/(loss) 26,305 (640,718) (187,444) (828,162)Loss on sale of subsidiary (19,825) --------- --------- -------- --------- 6,480 (640,718) (187,444) (828,162) --------- --------- -------- --------- Interest receivable 2,125 6,681 Interest payable (56,136) (30,242) --------- ---------Loss on ordinary activities before taxation (47,531) (851,723) Tax on loss on ordinary activities 13,707 16,472 --------- --------- Profit/(loss) for the financial year (33,824) (835,251) --------- ---------Loss per share (pence) (0.10) (2.58) ========= ========= AdVal Group plc Audited Consolidated Balance Sheet As at 31 March 2005 2005 2004 Note £ £ Fixed assetsIntangible assets 46,599 174,677Tangible assets 126,737 119,270 --------- --------- 173,336 293,947 --------- ---------Current assetsStocks 90,125 27,211Debtors 1,204,117 478,055Cash at bank and in hand 214,319 378,299 --------- --------- 1,508,561 883,565Creditors: amounts falling due within one year 1,046,388 745,682 --------- ---------Net current assets 462,173 137,883 --------- ---------Total assets less current liabilities 635,509 431,830 ========= ========= Creditors: amounts falling due after more than one year, convertible loan notes 843,143 608,170 Provisions for liabilities and chargesOther provisions - - Capital and reservesCalled-up equity share capital 345,001 344,081Share premium account 8,052,023 8,050,413Other reserves (8,000) (8,000)Profit and loss account (8,596,658) (8,562,834) --------- ---------Deficiency (207,634) (176,340) --------- --------- 635,509 431,830 ========= ========= AdVal Group plc Audited Consolidated Cash Flow Statement For the Year ended 31 March 2005 2005 2004 Note £ £Net cash outflow from operating activities 5 (396,620) (6,215) Returns on investments and servicing of financeInterest received 2,125 6,681Interest paid (56,136) (30,242) --------- ---------Net cash outflow from returns on investments and servicing of finance (54,011) (23,561) Taxation 22,235 - Capital expenditure and financial investmentPayments to acquire tangible fixed assets (143,240) (42,633)Proceeds from sale of tangible fixed assets 10,777 - --------- ---------Net cash outflow for capital expenditure and financial investment (132,463) (42,633) Acquisitions and disposalsDisposal of subsidiary undertaking 159,376 - --------- ---------Cash outflow before financing (401,483) (72,409) FinancingIssue of equity share capital - 90,551Receipt from raising loan notes 237,503 608,170Repayment of bank loans - (10,000) --------- ---------Net cash inflow/(outflow) from financing 237,503 688,721 --------- --------- Increase/(decrease) in cash (163,980) 616,312 ========= ========= Notes 1. The preliminary announcement has been prepared in accordance with applicable accounting standards and under the historical cost convention. Profits and losses on intra-group transactions are eliminated in full. 2. The above financial information does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The summarised balance sheet at 31 March 2005 and the summarised profit and loss account and summarised cash flow statement for the year then ended have been extracted from the Group's audited financial statements. Those financial statements have not yet been delivered to the Registrar of Companies. The comparative financial information is based upon statutory accounts for the year ended 31 March 2004. 3. Exceptional items The exceptional items in 2004 comprised redundancy and other associated costs. 4. The calculation of basic earnings per ordinary share is based on a loss of £33,824 (2004 - loss of £835,251), and on 34,460,023 (2004 - 32,347,167) being the weighted average number of equity shares outstanding during the year. 5. Net cash outflow from operating activities 2005 2004 £ £ Operating loss 26,305 (828,162)Amortisation 10,253 18,933Depreciation 114,218 150,446Decrease in stocks (78,552) 65,262Decrease in debtors (887,451) 429,613Increase/(decrease) in creditors 418,607 219,176Decrease in provisions - (61,483) -------- ---------Net cash outflow from operating activities (396,620) (6,215) ======== ========= 6. Reconciliation of net cash flow to movement in net debt 2005 2004 £ £ Increase/(decrease) in cash in the period (163,980) 616,312 Net cash (inflow) from loan notes (237,503) (608,170)Net cash outflow from bank loans - 10,000Conversion of 2008 loan note 2,530 - -------- ---------Change in net debt (398,953) 18,142 Net debt at 1 April 2004 (229,871) (248,013) -------- ---------Net debt at 31 March 2005 (628,824) (229,871) ======== ========= 7. The Convertible Loan Stock carries interest at 5.5% and is redeemable in 2008, unless previously converted into Ordinary shares at 2.75pence per share. 8. The Annual General Meeting is expected to be held on 25 October 2005 at AdVal Group plc, Ringwood House, Walton Street, Aylesbury, Buckinghamshire HP21 7QP. The Annual Report and Accounts will be sent to shareholders by 30 September.Further copies will be available from the Company's registered office, RingwoodHouse, Walton Street, Aylesbury, Buckinghamshire HP21 7QP. 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