Altitude Group Regulatory News (ALT)

9 Sep 2008 07:00

Altitude Group plc

Interim results for the six month period ended 30 June 2008

Altitude Group plc ("Altitude", the "Group" or the "Company") announces its interim results for the six month period ended 30 June 2008. Altitude is a marketing, information and logistics solutions provider.

KEY POINTS

Good progress has been made to return the Group to profitability in difficult wider economic circumstances

Gross profit increased to £3.8m (2007 : £3.5m) on turnover of £9.0m (2007 : £9.7m)

Adjusted operating profit increased by 68% to £436,000 (2007 : £260,000) 

Profit before taxation improved by 98% to £273,000 (2007 : £122,000)

Strong working capital management increased cash by £1.6m to net cash of £1.1m (2007 : net debt £0.5m)

Earnings per share increased six fold to 0.6p (2007 : 0.1p)

Account wins increased key client base and potential for growth in 2009

Strategic changes and restructuring continue to be implemented according to plan

Colin Cooke, Chairman, commented:

"We view the next few months positively despite the obvious challenges in the economy. Our companies are well placed to gain market share, offsetting the impact of reduced spend in specific instances, and our balance sheet allows the Group to take advantage of opportunities that arise.

A compelling service offering, efficient cost base and solid balance sheet are especially important in the current climate and we believe we have all three of these attributes in place."

9 September 2008

Enquiries:

CHAIRMAN'S STATEMENT

I am pleased to report the interim results for the six month period ended 30 June 2008. 

Overview

On sales of £9.0m (2007 : £9.7m), the Group produced an operating profit of £0.3m (2007 : £0.1m), an increase of 96%. Adjusted operating profit increased to more than £0.4m (2007 : less than £0.3m) and profit before taxation increased to more than £0.2m (2007 : £0.1m).

Net cash improved to £1.1m compared to net borrowings of £0.5m at the same time last year (£0.7m at 31 December 2007) and shareholders' funds increased by £0.3m over the same period to £5.9m.

A focus on margin delivery in Promotional Marketing and the further development of the Information and Exhibitions offerings have led to these improvements.  Client wins in Promotional Marketing and changes to our charging structure in Information and Exhibitions will have some positive impact late this year, but should lead to a greater improvement in 2009. 

Operational overview

Promotional Marketing

Improved margin performance in the Promotional Marketing division more than offset expected volume reductions in the period.  Cost savings made during the prior year have been realised during this period and we have achieved further operational improvements since the period end. These further savings are expected to reduce operating costs by a further £0.2m per annum with effect from 2009.

During the period we have developed improved and more efficient customer offerings, recognising the need to offer consistently high levels of customer service as well as cost-effective solutions. This has led to recent account wins that are expected to add significantly to the business once operational. 

Our trade supplier, AdProducts.com, continued to perform well and has increased both its product range and its customer base.  This business is expected to grow further in the second half of 2008 as it confirms its position as a leading supplier to the industry.

Information & Exhibitions

Information & Exhibitions achieved new client wins in the software business and a continued improvement in the performance of the now market leading Trade Onlytm National Show.

Both in technology and services, this business is now the recognised market leader in our industry. Whilst market conditions will be more challenging for the foreseeable future, our services are used to improve efficiency and reduce operating costs and are especially relevant in challenging markets.  Our growth plans remain valid.

Financial review

The Group has returned to profitability following the restructuring programme undertaken during the second half of last year, and showed strong earnings growth against the comparative period, delivering £0.3m operating profit for the first half (2007 : £0.1m) with expected volume reductions being offset by better margin improvement in our Promotional Marketing division and volume increases in our Information & Exhibitions division being delivered through the software business and the Trade Only national exhibition.

Cash performance has been very strong with £1.1m on our balance sheet at 30 June 2008 (31 December 2007 : £0.7m). Our working capital profile has been normalised with the unsustainable higher trade creditor position at 31 December 2007 of approximately £0.8m being entirely cleared by the collection of overdue debts from our customers. The quality of our earnings during the period has been strong with operating profit converting to cash. The positive cash performance of the Group has delivered a saving against expected financing costs and there has been only a small requirement for capital investment. The Board may consider utilising surplus cash resources to buy in shares from the market.

The annual financial statements for the year ended 31 December 2007 included the recognition of certain prior year restatements, and those prior year restatements have been reflected, where appropriate, within the comparative six month period ended 30 June 2007 presented within this half-yearly financial information. The prior year restatements are described within the statutory accounts for the year ended 31 December 2007. The overall affect of those adjustments was to reduce the profit for the six months period ended 30 June 2007 to £53,000 from £284,000 and Total equity and reserves as at 30 June 2007 to £5,692,000 from £6,736,000.

Outlook

We view the next few months positively despite the obvious challenges in the economy. Our companies are well placed to gain market share, offsetting the impact of reduced spend in specific instances, and our balance sheet allows the Group to take advantage of opportunities that arise.

A compelling service offering, efficient cost base and solid balance sheet are especially important in the current climate and we believe we have all three of these attributes in place.

Colin Cooke

Chairman

  Consolidated income statement 

for the six month period ended 30 June 2008

There were no recognised gains or losses in the period other than the profit for the period and therefore no statement of recognised income and expenses is presented.

Consolidated statement of changes in equity 

for the six month period ended 30 June 2008 

  Consolidated balance sheet 

as at 30 June 2008

Consolidated cash flow statement 

for the six month period ended 30 June 2008

  Notes to the half yearly financial information

1. Basis of preparation

This consolidated half yearly financial information for the half year ended 30 June 2008 has been prepared in accordance with IAS 34, 'Interim financial reporting' as adopted by the European Union.

The financial information contained in the interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2007 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement made under Section 237(2) or Section 237(3) of the Companies Act 1985.

There were no recognised gains or losses in the six month period ended 30 June 2008 other than the profit for the period and therefore no statement of recognised income and expenses is presented.

The condensed, consolidated financial statements in this half-yearly financial report for the six months ended 30 June 2008 have been prepared using accounting policies and methods of computation consistent with those set out in the Annual Report and financial statements for the year ended 31 December 2007. In preparing the condensed financial statements, management are required to make accounting assumptions and estimates. The assumptions and estimation methods were consistent with those applied to the Annual Report and financial statements for the year ended 31 December 2007. In particular, certain prior year restatements were recognised within the annual financial statements for the year ended 31 December 2007, and those prior year restatements have been reflected, where appropriate, within the comparative six month period ended 30 June 2007 presented within this half-yearly financial information. The prior year restatements are described in detail within the statutory accounts for the year ended 31 December 2007. The overall affect of those adjustments was to reduce the profit for the six months period ended 30 June 2007 to £53,000 from £284,000 and to reduce total equity and reserves as at 30 June 2007 to £5,692,000 from £6,736,000.

The Board confirms that to the best of its knowledge :

The interim report was approved by the Board of Directors on 8 September 2008.

The calculation of earnings per ordinary share is based on the profit or loss for the period divided by the weighted average number of equity voting shares in issue.