Avesoro Resources Regulatory News (ASO)

23 Nov 2006 07:00

Avesco PLC23 November 2006 EMBARGOED UNTIL 7.00am, 23 November 2006 AVESCO plc INTERIM RESULTS Avesco plc, the international provider of services to the corporatepresentation, entertainment and broadcast markets, announces its interim resultsfor the half year ended 30 September 2006. KEY HIGHLIGHTS • Group turnover up 27% to £36.8m (2005: £29.1m) • Gross profit margin up 2.4 points to 37.6% (2005: 35.2%) • Pre-tax profit of £0.9m (2005: loss £0.8m) • Earnings per share of 4.0p (2005: loss 5.0p) • Successful establishment of new MCL operation in London • Net cash inflow before financing of £0.5m (2005: outflow of £0.7m) • Introduction of interim dividend of 0.5p per share Ian Martin, Chairman, commented: "We have continued the momentum built up in the second half of the lastfinancial year making considerable progress both in financial terms and in thedevelopment of the Group. Our strategy to strengthen the international spreadand balance of the Group began to show through as each region progressed both interms of profitability and top line growth. "Our current order book is in good shape and we will continue to focus on ourkey objectives of improving profits and cash flow. I believe the company is wellpositioned to take advantage of the many positive trends in our marketplaces andremain confident that, with the businesses that we have, we are well placed todrive the development of the Group over the next few years." For further information please contact: Avesco plc On the day: 020 7067 0700Ian Martin, Chairman Thereafter: 01293 583400John Christmas, Group Finance Director Weber Shandwick Square Mile 020 7067 0700Terry Garrett / Alex White Chairman's statement Introduction The results of the Group for the half year ended 30 September 2006 showconsiderable progress both in financial terms and in the development of theGroup, continuing the momentum built up in the second half of the last financialyear. We have an excellent, well balanced spread of operations, a growing pool oftalented individuals and continue to grow the business in its specialist areas. Results The unaudited interim results for the six months ended 30 September 2006 showGroup turnover rising by 27% in the period to reach £36.8m (2005: £29.1m). Thegross profit margin improved by 2.4 points from 35.2% to 37.6%. Profit onordinary activities before taxation was £0.9 million (2005: loss £0.8m). Thisequates to basic earnings per share of 4.0p (2005: loss per share 5.0p). The Group saw a strong improvement in operating cash generation which rose to£8.9m in the period (2005: £5.3m). Notwithstanding our organic growthcommitments and considerable investment in new equipment, the Group's net debtposition reduced to £10.9m (2005: £6.3m) from the year end level of £12.3m. In keeping with the Board's confidence in the business, we are introducing aninterim dividend of 0.5p (2005: nil). Market Overview We have experienced a continuing positive trend in activity levels as clientsincreased the number and scope of their events with us even though marketconditions overall remain competitive. During the last few years, we haveinvested significantly and have made considerable progress in our businesses andwe are now seeing the benefits. Review of Operations It was a good first half to the financial year with strong growth in turnover,profit and cash generation. Operating margins improved and the Group's net debtreduced. This underlying improvement was achieved after considerable investmentin growth through equipment purchases, office openings, new staff and a smallacquisition by JVR in Holland. Our strategy to strengthen the international spread and balance of the Groupbegan to show through as each region progressed both in terms of profitabilityand top line growth. Creative Technology North America continued the positive trend of the secondhalf of the last financial year. The improved result at the interim stage is dueto the efforts of the US management team in integrating the separate NorthAmerican operations into a single business unit and deriving significantoperational and financial benefits from their actions. CT London continues to exceed our high expectations of the business. We have ahighly capable and motivated team, producing excellent results. The strong ethosof the management team on quality continues to attract new customers. CT Germanycontinues to perform well, growing its business and diversifying its customerbase. We are exploring ways to expand the CT franchise into Europe, the MiddleEast and China, building on our existing customer relationships in theseterritories. MCL produced strong performances in Glasgow and NEC but the overall profit washeld back by the costs incurred in the successful establishment of the Londonoffice and the relocation of the Edinburgh office to an upgraded facility. The rapid development of our Broadcast Services division, Presteigne, continueswith a near doubling in both turnover and profits. This performance was drivenby our investment in high definition television ("HDTV") equipment, the growthof our systems business and the very successful establishment of a Germanoffice. The development of HDTV in Europe continues to accelerate and we havefurther strengthened our position with the purchase in October of MVS, aspecialist provider of radio frequency technology and broadcast hire equipmentin the UK. This acquisition extends Presteigne's expertise in a fast developingsegment of the market. In May we announced the purchase of a small audio visual rental business inHolland, for a maximum consideration of £0.2m. The business has now beenintegrated into JVR's Amsterdam office, building on our presence in thisimportant market. In the South of France, Action has established an IT servicesbusiness to leverage its market leading position in audio visual services inthat region. Strategy Avesco's strategy remains clear and straightforward - to build a media servicesgroup that is recognised for the quality of its people, its services and itsfinancial return to shareholders. We will continue to focus on our key objectives of improving profits and cashflow. We will manage the operating cash flow to enhance shareholder value byinvesting further in the growth of our business and reducing our debt, whereappropriate. Prospects The general economic outlook into 2007 appears to remain positive and supportivefor the Group. Whilst we have a few key months to come, our current order bookis in good shape. Summary I believe the company is well positioned to take advantage of the many positivetrends in our marketplaces. These will create opportunities for Avesco. We arewell capitalised and, with high quality operations and exceptional people, wewill push forward to make the most of the potential. My thanks again to the people who work at Avesco. They have made all thedifference, repeatedly demonstrating their talent and passion in deliveringthese strong results. I remain confident that, with the businesses that we have, we are well placed todrive the development of the Group over the next few years. Ian MartinChairman23 November 2006 Unaudited consolidated profit and loss accountFor the six months ended 30 September 2006 Six months ended 30 September 2006 Six months ended 30 September 2005 _______________________________________________________________________________ Before Before exceptional Exceptional exceptional Exceptional items and items and items and items and goodwill goodwill goodwill goodwill amortisation amortisation Total amortisation amortisation Total £'000 £'000 £'000 £'000 £'000 £'000______________________________________________________________________________________________________________ Turnover 36,826 - 36,826 29,058 - 29,058Cost of sales (22,987) - (22,987) (18,839) - (18,839)______________________________________________________________________________________________________________Gross Profit 13,839 - 13,839 10,219 - 10,219 Operating expenses (12,564) (6) (12,570) (9,990) (729) (10,719)______________________________________________________________________________________________________________Operating profit / (loss) 1,275 (6) 1,269 229 (729) (500) Loss on disposal of fixed assets - (43)______________________________________________________________________________________________________________Profit / (loss) on ordinary activities before interest andtaxation 1,269 (543)Net interest payable and similar items (397) (218)______________________________________________________________________________________________________________Profit / (loss) on ordinaryactivities before taxation 872 (761)Taxation (99) (106)______________________________________________________________________________________________________________Profit / (loss) on ordinaryactivities after taxation and for the financial period 773 (867)Dividends (286) (190)______________________________________________________________________________________________________________Retained profit / (loss) for thefinancial period 487 (1,057)______________________________________________________________________________________________________________ Earnings / (losses) per shareBasic and diluted 4.0p (5.0)p______________________________________________________________________________________________________________ All turnover and operating profits relate to continuing operations. Consolidated profit and loss accountFor the year ended 31 March 2006 Year ended 31 March 2006 ___________________________________________________ Before exceptional Exceptional items and items and goodwill goodwill amortisation amortisation Total £'000 £'000 £'000________________________________________________________________________________ Turnover 65,338 - 65,338Cost of sales (42,019) - (42,019)________________________________________________________________________________Gross Profit 23,319 - 23,319 Operating expenses (20,675) (1,507) (22,182)________________________________________________________________________________Operating profit / (loss) 2,644 (1,507) 1,137 Loss on disposal of fixed assets (43)________________________________________________________________________________Profit on ordinary activitiesbefore interest and taxation 1,094Net interest payable and similar items (550)________________________________________________________________________________Profit on ordinary activitiesbefore taxation 544 Taxation (151)________________________________________________________________________________Profit on ordinary activitiesafter taxation and for thefinancial period 393 Dividends (191)________________________________________________________________________________Retained profit for the financialperiod 202________________________________________________________________________________ Earnings per shareBasic and diluted 2.2p________________________________________________________________________________ All turnover and operating profits relate to continuing operations. Unaudited consolidated balance sheetAs at 30 September 2006 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000________________________________________________________________________________ Intangible assets 94 781 -Tangible assets 30,658 25,872 29,497________________________________________________________________________________Fixed assets 30,752 26,653 29,497 Stocks 1,321 1,472 844Debtors 13,542 11,339 15,715Cash 4,025 4,262 808________________________________________________________________________________Current assets 18,888 17,073 17,367 Borrowings (6,046) (3,097) (5,307)Other creditors (13,874) (13,883) (13,462)________________________________________________________________________________Creditors: amounts falling due withinone year (19,920) (16,980) (18,769)________________________________________________________________________________Net current (liabilities) / assets (1,032) 93 (1,402)________________________________________________________________________________Total assets less current liabilities 29,720 26,746 28,095 Borrowings (8,920) (7,425) (7,821)________________________________________________________________________________Creditors: amounts falling due aftermore than one year (8,920) (7,425) (7,821) Provisions for liabilities and charges (637) (1,001) (716)________________________________________________________________________________Net assets 20,163 18,320 19,558________________________________________________________________________________ Share capital 1,909 1,909 1,909Share premium 2,106 2,106 2,106Capital redemption reserve 50 50 50Other reserve 29,551 29,551 29,551Profit and loss account (13,453) (15,296) (14,058)________________________________________________________________________________Equity shareholders' funds 20,163 18,320 19,558________________________________________________________________________________ Unaudited consolidated cash flow statementFor the six months ended 30 September 2006 Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000__________________________________________________________________________________________ Group operating profit / (loss) 1,269 (500) 1,137Depreciation of tangible assets 5,642 4,621 9,819Amortisation of intangible assets 6 729 1,507LTIP charge 192 126 142Profit on sale of tangible assets (129) (202) (489)Change in working capital 2,017 638 (2,498)Change in provisions (79) (77) (362)__________________________________________________________________________________________Net cash inflow from operating activities 8,918 5,335 9,256 Returns on investments and servicing of finance (418) (218) (510)Taxation (207) (59) (60)__________________________________________________________________________________________Net cash inflow before capital expenditure 8,293 5,058 8,686 Purchase of tangible assets (7,982) (7,033) (17,258)Sale of tangible assets 286 1,239 2,155__________________________________________________________________________________________Net cash outflow for capital expenditure (7,696) (5,794) (15,103) Purchase of trades and businesses (96) - -Equity dividends paid - - (191)__________________________________________________________________________________________Net cash inflow / (outflow) before financing 501 (736) (6,608) Issue of ordinary shares - 2,383 2,383Change in bank loans 358 1,585 1,243Change in hire purchase obligations 2,522 (589) 1,672__________________________________________________________________________________________Net cash inflow from financing 2,880 3,379 5,298__________________________________________________________________________________________Change in cash 3,381 2,643 (1,310)__________________________________________________________________________________________ Net debt: Cash 4,025 4,262 808Bank overdrafts (812) (982) (1,474)__________________________________________________________________________________________ 3,213 3,280 (666) Bank loans (5,554) (5,702) (5,546)Hire purchase obligations (8,600) (3,838) (6,108)__________________________________________________________________________________________Net debt (10,941) (6,260) (12,320)__________________________________________________________________________________________ Unaudited consolidated statement of total recognised gains and lossesFor the six months ended 30 September 2006 Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000___________________________________________________________________________________________________ Profit / (loss) for the period 773 (867) 393 Currency translation differences (74) 194 157___________________________________________________________________________________________________Total recognised gains and losses relating to the period 699 (673) 550___________________________________________________________________________________________________ Unaudited reconciliation of movements in equity shareholders' fundsFor the six months ended 30 September 2006 Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000___________________________________________________________________________________________________ Profit / (loss) for the period 773 (867) 393Dividends (286) (190) (191)___________________________________________________________________________________________________Profit / (loss) for the financial period 487 (1,057) 202 Proceeds of ordinary shares issued for cash - 2,383 2,383Currency translation differences (74) 194 157LTIP 192 126 142___________________________________________________________________________________________________Net change in equity shareholders' funds 605 1,646 2,884 Opening equity shareholders' funds 19,558 16,674 16,674___________________________________________________________________________________________________Closing equity shareholders' funds 20,163 18,320 19,558___________________________________________________________________________________________________ Notes to interim report and accounts 1 Status of interim report and accounts The interim report and accounts are unaudited but have been reviewed by theauditors and their independent review report is set out on page 12. The interimreport and accounts, which were approved by the Board of Directors on 22November 2006, are not full accounts within the meaning of section 240 of theCompanies Act 1985. The figures for the year ended 31 March 2006 have been extracted from theaudited annual report and accounts that have been filed with the Registrar ofCompanies. The audit report on that annual report and accounts was unqualifiedand did not contain a statement under Section 237(2) or (3) of the Companies Act1985. 2 Accounting policies The interim report and accounts have been prepared using the accounting policiesto be applied in the annual report and accounts for the year ending 31 March2007. These are consistent with those included in the annual report and accountsfor the year ended 31 March 2006. 3 Loss on sale of fixed assets On 5 July 2005 NMT Outside Broadcast (UK) Limited completed the exercise of itsoption to purchase the fixed assets of a Group company for a consideration of£433,000. This created a loss on disposal of £43,000. 4 Turnover by origin Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000________________________________________________________________________________ United Kingdom 15,438 13,047 27,420Mainland Europe 8,116 6,442 13,215United States of America 13,272 9,569 24,703________________________________________________________________________________Group turnover 36,826 29,058 65,338________________________________________________________________________________ 5 Profit / (loss) on ordinary activities before taxation by origin Excluding exceptional items and goodwill amortisation Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000_______________________________________________________________________________________________ United Kingdom 637 373 1,927Mainland Europe 386 238 452United States of America 252 (382) 265_______________________________________________________________________________________________Group operating profit 1,275 229 2,644_______________________________________________________________________________________________ Including exceptional items and goodwill amortisation Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000_______________________________________________________________________________________________ United Kingdom 637 (37) 1,207Mainland Europe 380 (81) (335)United States of America 252 (382) 265_______________________________________________________________________________________________Group operating profit / (loss) 1,269 (500) 1,137Non-operating exceptional items - (43) (43)Net interest payable and similar items (397) (218) (550)_______________________________________________________________________________________________Profit / (loss) on ordinary activities before taxation 872 (761) 544_______________________________________________________________________________________________ 6 Goodwill amortisation and loss on disposal of fixed assets Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000________________________________________________________________________________ Goodwill amortisation (6) (729) (1,507)________________________________________________________________________________Total goodwill amortisation (6) (729) (1,507)________________________________________________________________________________Loss on disposal of fixed assets - (43) (43)________________________________________________________________________________Total non-operating exceptional items - (43) (43)________________________________________________________________________________ 7 Earnings / (losses) per share Six months Six months ended ended Year ended 30 September 30 September 31 March 2006 2005 2006 £'000 £'000 £'000_________________________________________________________________________________________Earnings / (losses)Profit / (loss) for the period 773 (867) 393Non-operating exceptional items - 43 43Goodwill amortisation 6 729 1,507_________________________________________________________________________________________Adjusted earnings / (losses) 779 (95) 1,943_________________________________________________________________________________________ Weighted average number of sharesFor basic and diluted earnings per share (000's) 19,094 17,318 18,204 Earnings / (losses) per shareBasic and diluted 4.0p (5.0)p 2.2pAdjusted 4.1p (0.5)p 10.7p Basic earnings / (losses) per share have been calculated by dividing profit /(loss) after taxation by the weighted average number of ordinary shares in issueduring the period. Adjusted earnings per share have been calculated by dividing profit / (loss)after taxation in respect of continuing operations and excluding goodwillamortisation and exceptional items, by the weighted average number of ordinaryshares in issue during the period. 8 Interim dividend An interim dividend of 0.5p per share will be paid on 10 April 2007 to shareholders on the register on 16 March 2007. At 30 September 2006, the interim dividend had not been paid and is therefore not recognised in the results for the period to 30 September 2006. 9 Distribution of interim report and accounts Copies of this interim report and accounts are being sent to all shareholdersand additional copies are available either from the Company's web site (www.avesco.com) or from the Company's registered office: Avesco plc, Unit E2,Sussex Manor Business Park, Gatwick Road, Crawley, West Sussex, RH10 9NH.Telephone: +44 (0) 1293 583 400. Fax: +44 (0) 1293 583 410. E-mail:mail@avesco.co.uk Independent review report to Avesco Plc Introduction We have been instructed by the company to review the financial information forthe six months ended 30 September 2006 which comprises the consolidated profitand loss account, consolidated statement of total recognised gains and losses,consolidated balance sheet, consolidated cash flow statement and the relatednotes. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the AIM Rulesfor Companies. The accounting policies are consistent with those that thedirectors intend to use in the preparation of the next annual financialstatements. The maintenance and integrity of the Avesco plc web site is the responsibilityof the directors; the work carried out by the auditors does not involveconsideration of these matters and, accordingly, the auditors accept noresponsibility for any changes that may have occurred to the interim reportsince it was initially presented on the web site. Legislation in the UnitedKingdom governing the preparation and dissemination of financial information maydiffer from legislation in other jurisdictions. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of management and applying analyticalprocedures to the financial information and underlying financial data and, basedthereon, assessing whether the disclosed accounting policies have been applied.A review excludes audit procedures such as tests of controls and verification ofassets, liabilities and transactions. It is substantially less in scope than anaudit and therefore provides a lower level of assurance. Accordingly we do notexpress an audit opinion on the financial information. This report, includingthe conclusion, has been prepared for and only for the company for the purposeof the AIM Rules for Companies and for no other purpose. We do not, in producingthis report, accept or assume responsibility for any other purpose or to anyother person to whom this report is shown or into whose hands it may come savewhere expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 September 2006. PricewaterhouseCoopers LLPChartered AccountantsGatwick23 November 2006 This information is provided by RNS The company news service from the London Stock Exchange