9 Jul 2008 07:00
ο»Ώ
Wednesday, 9 July 2008
Begbies Traynor Group plc
(the "Group" or the "Company")
PreliminaryΒ Results for the year endedΒ 30 April 2008
Begbies Traynor Group plc, the specialist professional services organisation, today announces its preliminary results for theΒ yearΒ endedΒ 30 April 2008.
Financial highlights
RevenuesΒ from continuing operationsΒ of Β£48.1mΒ (2007: Β£41.9m): - includesΒ Β£4.3m contribution from acquisitions - second halfΒ organic growth rateΒ ofΒ 11%Β after zero growth in first halfEBITA was Β£8.1m (2007:Β Β£10m)
Adjusted* profit before tax was Β£7.0m (2007:Β Β£9.2m):
- strong improvement in second half performanceΒ compared to first halfProfit before taxΒ from continuing operationsΒ was Β£5.7m (2007:Β Β£8.5m)
Profit for the year of Β£1.1m (2007: Β£5.0m)Β afterΒ a Β£2.4m impairment charge relating to discontinued operationsΒ
Earnings per share:
- adjusted EPS**Β ofΒ 6.0p (2007:Β 8.0p - basic and fully dilutedΒ EPS from continuing operations was 4.7p (2007: 7.3p)Total dividend maintained at 2.5p per share (2007: 2.5p)
* Profit before tax from continuing operations of Β£5.7m (2007: Β£8.5m) plus amortisation of Β£1.1m (2007: Β£0.5m)Β plus finance charge arising from the discounting of deferred consideration of Β£0.2m (2007:Β£0.2m)
** See reconciliation in note 6
OperationalΒ highlights
Continued investment in ongoing and new activities:Β
- five acquisitions completed during the year to boostΒ Insolvency and Tax practices - 23% increase in direct fee earners during the year increases capacityProcess underway to dispose of consumer insolvency activity and one other non-core business
Renewed and enhanced banking facilities agreed in April 2008Β
Upswing in insolvency activityΒ in 2008 continues
- high profile engagements including Silverjet, Alphasteel and Carlyle Capital CorporationRic Traynor, Executive Chairman, commented:
"The year being reportedΒ uponΒ was an extraordinaryΒ periodΒ forΒ our core business of insolvency administration, which accounts for over 75% of Group continuing revenues. Following one of the quietest periods for corporate insolvency in nearly 20 years, reflecting the ready availability of easy credit, the advent of the credit crunch through the autumn of 2007 resulted in aΒ significantΒ change in activity levels.Β I am therefore pleased to announce improved insolvency performance in the second half.
"WeΒ start the new financial year with an enhanced insolvency platform, a replenished insolvency case load and market indicators which continue to predict stronger demand in this, our counter-cyclical core business. WeΒ therefore look forward to a sustained period of improved new work flow and insolvency returns.
"Overall,Β activity levels at theΒ startΒ ofΒ the current financial yearΒ are well ahead of the same period last yearΒ andΒ weΒ will provide an update on progress at the time of the Company's AGM in October."
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For further information, please contact: |
www.begbies-traynorgroup.com |
|
Begbies Traynor Group plc |
0161 837 1700 |
|
Ric Traynor, Executive Chairman John Gittins, Chief Financial Officer |
|
|
Shore Capital & Corporate Limited |
020 7408 4090 |
|
Guy Peters |
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|
Smithfield |
020 7360 4900 |
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Reg Hoare/Katie Hunt/Will Henderson |
About Begbies Traynor Group:
Begbies Traynor Group plc is a specialist professional services organisation providing independent professional advice and solutions to businesses, financial institutions, the accountancy profession and individuals in the areas of corporate finance, recovery, investigation, risk management, commercial finance and specialist tax advice. It is listed on AIM (Ticker: BEG.L).
Β Β Chairman's Statement
INTRODUCTION
The year being reportedΒ uponΒ was an extraordinaryΒ periodΒ forΒ our core business of insolvency administration, which accounts for over 75% of Group continuing revenues.Β FollowingΒ one of the quietest periods for corporate insolvency in nearly 20 years, reflecting the readyΒ availability of easy credit,Β the advent of the credit crunch through the autumn of 2007 resulted in aΒ significantΒ change in activity levels.
Β
OPERATIONALΒ REVIEWΒ - CONTINUING OPERATIONS
Insolvency
Insolvency revenues increased by nearly 4% over the previous year to Β£38.1m (2007: Β£36.7m). Segmental EBITA fell to Β£7.6m (2007: Β£9.3m).Β
There has been a significant recovery in work flowΒ in our core activityΒ ofΒ businessΒ insolvencyΒ in the latter part of the financial year. This includedΒ some high profile engagements for the Group,Β such asΒ Silverjet, Alphasteel and Carlyle Capital Corporation.Β The divisionΒ had beenΒ impacted by the weak market conditionsΒ for our servicesΒ inΒ calendarΒ yearΒ 2007, when the number of business insolvencies nationally fell by 10% over the previous yearΒ (source:Β Government'sΒ Insolvency Service).Β
Our viewΒ at the timeΒ was that this was a temporary setback andΒ for that reasonΒ we continued to invest in our insolvency operations. This has beenΒ both organically, in staff, new offices and support infrastructureΒ and byΒ theΒ acquisition of twoΒ practices inΒ LeedsΒ andΒ YorkΒ during the financial year. In addition,Β twoΒ further insolvency practices inΒ SouthamptonΒ andΒ CardiffΒ were acquiredΒ immediately following the year end.Β Β The investment in the operating base is expected to bear fruit in the more favourable current market conditions.Β
Corporate finance
CorporateΒ financeΒ reported revenues of Β£4.8m (2007: Β£2.8m). SegmentalΒ EBITAΒ fell toΒ Β£0.5m (2007: Β£0.9m).Β
Revenue has increased as the Group has expanded its corporate finance activities,Β bothΒ through acquiring a successful practiceΒ inΒ NewcastleΒ in theΒ second half of last yearΒ andΒ organically. We have engagedΒ fiveΒ new partners across the countryΒ since the end of the prior year,Β whoΒ spentΒ the early part of theΒ financialΒ yearΒ building their portfolio of engagements.Β Performance in the second half was therefore stronger as these new partners began to contributeΒ more substantively, following aΒ loss makingΒ first halfΒ for the division.Β The overall profit is lower than 2007, when operating margins reflected the strong general market conditionsΒ for corporate finance services.
OtherΒ (including tax)
Revenues in this segment increased by Β£2.8m to Β£5.2m (2007: Β£2.4m). Segmental EBITA was broadly break-even (2007: loss of Β£0.3m).
TheseΒ operations include the Group's newly acquired taxΒ consultingΒ practice,Β as well as its existing forensics andΒ investigations businesses. Our tax activities, which focus principally on providing outsourced specialist tax advice via fellow professionals, have performed strongly in the yearΒ and provide a solid platform from which to grow into a major service line.Β The forensics and investigations activities were broadly flat when compared to the previous year.Β The Group has also invested in some newΒ start upΒ service lines of commercial finance and asset management consulting,Β which have incurred early stage costs in the year, but provideΒ importantΒ support activity for other major service lines, particularly insolvency services.Β
Β Β STRATEGY AND OBJECTIVES
The Group's strategy is to develop a specialist professional services group, retaining strong counter cyclical revenues, by both organic growth and acquisition. We will:
focus on our core activity of mid market insolvency, taking advantage of the current upturn in cases resulting from the worsening economic outlook;
steadily grow our two existing additional service lines of corporate finance and taxation consultancy, taking into account the likely short and medium term outlook in their respective market places; and
broaden our professional services to other areas in due course, when prudent to do so in terms of management resource, funding and prevailing market conditions.
ACQUISITIONS
During the year, the Group acquiredΒ a number ofΒ businesses, as detailed below,Β for a total consideration of Β£11.8m.Β Since the year-endΒ we have acquired the insolvency and corporate finance practice of FanshaweΒ LoftsΒ inΒ SouthamptonΒ and a small insolvency practice inΒ Cardiff.
Insolvency
In November 2007, the Group acquired the insolvency division ofΒ Bartfields (UK) Limited, whichΒ joined our existingΒ LeedsΒ practice. In DecemberΒ 2007, the Group acquired David Horner & Co Ltd, an insolvency practice with offices inΒ York,Β MiddlesbroughΒ andΒ Doncaster.
Both of these operations have now been successfullyΒ integratedΒ and have performed in line with expectations.
Tax
In line with the strategy to extendΒ the Group's professional services offering,Β three tax practicesΒ wereΒ acquired in the year.
In May 2007, the Group acquired Stellar Financial Partners LLP, which provides specialised fiscal structuring and investigations consultancy advice to independent financial advisors, financial institutions and general practice accountantsΒ and is based inΒ Manchester.
In January 2008 the Group acquired Shaw Tax, previously the largest independent firm of dedicated Chartered Tax Advisors in theΒ UK.Β Β ItsΒ team specialisesΒ in the provision of corporate and personal taxation services including consultancy, compliance, wealth management and trusteeΒ services. The businessΒ operates fromΒ BirminghamΒ andΒ London.
Finally, in February 2008, the Group completed the acquisition of CoyleΒ Clark LLP, a two partner specialist tax investigation practice, which operates fromΒ ManchesterΒ andΒ Northern Ireland.
These three acquisitions, which have a combined pro-forma annual revenue of approximately Β£5m, are beingΒ Β integrated into one operation, trading as BTG Tax, and have performedΒ profitablyΒ in line with expectations.
Other
In May 2007,Β the GroupΒ invested inΒ Servisional, a business improvement and customer relationship management (CRM) consultancy.
DISPOSALS
During the year, the Board decided toΒ withdraw from theΒ consumer insolvencyΒ market, in light of conditions in this sector and the sub-scale nature of theΒ operation. It has taken the decision to initiate offers for the current case book. This process is underway and the Group is involved in discussions with a number of interested parties.
In addition,Β as a result of a recent review of non-strategic activities, the Board has decided to dispose of the non-core Servisional business. This business, although only relatively recently acquired to broaden the Group's service offering, has failed to develop any synergies from being within the Group. It is currentlyΒ being actively marketed for sale.
DIVIDEND
InΒ the light of these results,Β the Board hasΒ recommendedΒ a maintained final dividend for the yearΒ of 1.5p per ordinary share. If approved, theΒ totalΒ dividend for the year endedΒ 30 April 2008Β will amount toΒ 2.5pΒ per shareΒ (2007:Β 2.5p).
Over the longer termΒ the Board has adopted a progressive dividend policy, which takes account of the underlying growth in earnings, whilst acknowledging the requirement for continuing investment to underpin growth over the longer term.Β
BOARD CHANGES
We have taken the opportunity to strengthen theΒ BoardΒ this yearΒ with a number of appointments and responsibility changes.
John Gittins, who previously held the finance director role in a number of fastΒ growingΒ support services companies,Β joined theΒ BoardΒ asΒ Chief Financial OfficerΒ in October 2007.Β Graham McInnes,Β whoΒ served asΒ Chief Financial OfficerΒ since our flotation in 2004,Β has takenΒ on the role ofΒ Corporate Development DirectorΒ andΒ also executive responsibleΒ for the corporate finance practice.
Geoff Hill, who wasΒ aΒ non-executive director until October 2007, has now taken on an executive role asΒ boardΒ member responsibleΒ forΒ bringing together theΒ Group'sΒ recently acquiredΒ tax practices,Β as well asΒ itsΒ forensic and intelligence activities.Β Geoff is a chartered accountant and was previously senior partner at a large independent practice inΒ LeedsΒ and led its merger with a top 15Β UKΒ accounting practice.Β Β
Finally, John May joined theΒ board in October 2007 asΒ aΒ non-executive director.Β John brings considerable experience ofΒ the management ofΒ growingΒ service companies from his background asΒ anΒ executive director of Caledonia Investments plc and previously Hambros Group.
We believe these changes strengthen theΒ BoardΒ and provide the appropriate focus on our three key service linesΒ in order to implementΒ ourΒ clearly defined growthΒ strategy.Β
PEOPLE
Our most valued assetΒ isΒ the expertise, professionalism and commitmentΒ ofΒ our people and I thank all ofΒ them for their contributionΒ to our results this year. We now haveΒ 447Β direct fee earners (an increase ofΒ 23%Β compared to a year ago) and 133Β in support functions.Β
In addition,Β we haveΒ recentlyΒ redesigned the partner reward platform so that, going forward,Β partners are highly motivated and incentivised financially to deliver long-term, sustainable growth within our various markets.Β
OUTLOOK
The GroupΒ starts theΒ new financialΒ year withΒ an enhanced insolvency platform,Β a replenishedΒ insolvency case loadΒ and market indicatorsΒ whichΒ continue to predict stronger demand in this, ourΒ counter-cyclical core business.Β Β TheΒ Board thereforeΒ looks forward to a sustained period ofΒ improved new work flowΒ and insolvency returns.
The 'Begbies Traynor Red Flag Alert' statistics, which we publish quarterly, monitor adverse actions and other corporate distress signals, such as the issue of county court judgements and winding-up petitions, which areΒ early warning signsΒ of potential insolvency activity. Our most recent survey published in May 2008 revealed that the number ofΒ UKΒ companies experiencing critical or significant problems in the first quarter of 2008 had increased substantially over the same period in 2007. The statistics for the second quarter of 2008 are due for publication later this month and will show further significant deterioration.
We have broadly completed theΒ rollΒ out of our national corporate finance complement and, given the current economic environment, the mix of our workΒ is expected toΒ shift towards business and debt advisoryΒ and supportΒ activities and be less dependent onΒ capitalΒ transactions. We believe this willΒ generate a sustainable level of activity.
We have now established critical mass in our third major service line, taxation, and we believeΒ thisΒ hasΒ significantΒ growth potential, both organicallyΒ and by acquisition.
Overall,Β activity levels at theΒ startΒ ofΒ the current financial yearΒ are well ahead of the same period last yearΒ andΒ weΒ will provide an update on progress at the time of the Company's AGM in October.Β Β
Ric Traynor
Executive Chairman
9thΒ July 2008Β Β Financial Review
FINANCIAL HIGHLIGHTS
The Group's revenue from continuing operationsΒ in the year was Β£48.1mΒ (2007: Β£41.9m), anΒ increaseΒ of Β£6.2mΒ orΒ 15%. Current year acquisitions contributedΒ Β£4.3mΒ of this growth, with the remainderΒ largelyΒ generated through organic growth in existing service lines,Β particularly in the second half of the year when we experienced a recovery in insolvency activities and generated returns from first half investments in our corporate finance practice. On an annualised basis, the acquisitions reportedΒ approximatelyΒ Β£8m of revenues.
EBITA decreased to Β£8.1mΒ (2007: Β£10.0m)Β at a reduced margin of 17% (2007: 24%). The decrease in margin is due to the difficult market conditions in the first half of the financial year in the insolvency division and the Group'sΒ continuedΒ investment in growth ahead of profit delivery. This includedΒ recruitment intoΒ existing service teamsΒ andΒ support infrastructure, the establishment of new service lines, a newΒ ManchesterΒ headquarters and the continued development of the BGN international network.Β The full year performance masks the improvement experienced in the second half year, with an 80% increase in EBITA in H2 to Β£5.2m from Β£2.9m in H1.
Amortisation increased to Β£1.1mΒ (2007: Β£0.5m), due to the combination of the full year impact of prior year acquisitions and current year acquisitions. Finance costs increased to Β£1.3mΒ (2007: Β£1.0m),Β due toΒ increased levels of net debtΒ due toΒ our general investment activitiesΒ and higher interest rates.
Adjusted profit before tax*Β was Β£7.0m (2007: Β£9.2m). Β Profit before tax was Β£5.7m (2007: 8.5m).
The tax charge was Β£1.9mΒ (2007: Β£3.0m), which represents an effective rate of 33% (2007: 35%). The reduction in effective rate in the year isΒ largelyΒ due to the change inΒ taxΒ rateΒ from 30% to 28% in relation to theΒ Group'sΒ deferred tax liabilities.
Profit for the year from continuing operations was Β£3.8m (2007: Β£5.5m).
DISCONTINUED OPERATIONSΒ
AsΒ the Board hasΒ resolved to dispose of the Group'sΒ consumerΒ insolvency and CRM consultancy operations,Β IFRSΒ 5 'Nonίcurrent assets held for sale and discontinued operations', requires the financial results for these activities to be disclosed as discontinued operations in the income statement and the carrying value of the net assets to be written down to theΒ fair value of the assets less costs to sell. This has resulted in aΒ non-cashΒ adjustment toΒ the net assetsΒ carrying value of Β£2.4m.
Discontinued operations, afterΒ non-cashΒ write down costsΒ noted above,Β generated a loss after tax of Β£2.8mΒ (2007:Β lossΒ Β£0.5m).Β The carrying value of the assets of Β£1.1m and liabilities of Β£0.5m are separatelyΒ disclosed on the balance sheet.
EARNINGS PER SHAREΒ ('EPS')
EPSΒ from continuing operations**,Β adjusted forΒ theΒ net of tax impact of amortisation and the finance charge arising from the discounting ofΒ deferred consideration liabilities, wasΒ 6.0p (2007:Β 8.0p).Β Basic and fully dilutedΒ EPS from continuing operations was 4.7p (2007: 7.3p).
FINANCING
In April 2008, the Group renewedΒ and increased its banking facilitiesΒ to support future growth. The new facilities include a Β£20m, three year,Β revolving credit facility ('RCF') and a Β£5mΒ overdraft.Β Interest on the RCF is charged at 1.4% over LIBOR andΒ on the overdraft isΒ 1.5% overΒ bank base rate.Β Β At 30 April 2008, Β£7mΒ of the RCF and the entire Β£5mΒ overdraftΒ were undrawn. The Group continues to use other sources of finance as appropriate, including hire purchase contracts and bank loans.
Gross borrowings at 30 April 2008 were Β£18.4mΒ (2007: Β£5.8m), giving gearing of 37% (2007: 12%). Interest cover was 6.2 times (2007: 10.4 times).Β
Β
CASH FLOWS
Operating cash flows in the year decreased to Β£5.8mΒ (2007: Β£8.1m),Β principally due to the reduced levels of operating profits noted above. 2008 was a significantΒ year of investment for the Group,Β with Β£4.5mΒ of capital investment, including the development of the new head office, Β£6.3mΒ of payments in relation to current year acquisitions and a further Β£2.8mΒ of deferredΒ considerationΒ payments. This investment has been financed through a combination of new bank loans, hire purchase contracts and drawdown of theΒ Group's RCF, resulting in an inflow from investing of Β£10.0m.
NET ASSETS
At 30 April 2008Β net assets were Β£49.4mΒ (2007: Β£49.8m).
Non-current assets increased to Β£57.2mΒ (2007: Β£46.7m),Β as a result ofΒ goodwill and intangible assets recognised onΒ acquisitions in the yearΒ and the Group's investments noted above.
Current assets increased to Β£31.3mΒ (2007: Β£25.2m), principallyΒ fromΒ increasedΒ trade receivables and recoverable income and costs on cases, due to theΒ combination of acquired businesses andΒ working capital absorption of the Group'sΒ organicΒ revenue growth in the year, particularly in the second half.
Total liabilities increased toΒ Β£39.0mΒ (2007: 22.1m) due to increased gross borrowings of Β£12.6mΒ following the investing activities in the year noted above; additional deferred considerationΒ ofΒ Β£2.6mΒ due to current year acquisitions; and other increases in working capital liabilities of Β£1.7m. Total liabilities include Β£7.7m of deferred consideration payments, of which Β£3.9m is payable within one year.
INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS')
This is our first year reporting under IFRS, the effect of which on comparative periods is set outΒ in a separateΒ announcement available on the Group's website at www.begbies-traynorgroup.com.
The principal adjustments relate to acquisition accounting. IFRS 3 'business combinations' requires the recognition of intangible assets separately from goodwill;Β goodwill is not amortised but is subject to annual impairment reviews;Β and deferred consideration is provided at net present value with the unwind of the discount rate charged to the income statement over the period to payment.
John Gittins
Chief financial officer
9thΒ July 2008
Β Β CONSOLIDATED INCOME STATEMENT
Year ended 30 April 2008
|
Note |
2008 Β£'000 |
2007 Β£'000 |
|||
|
CONTINUING OPERATIONS: |
|||||
|
Revenue |
2 |
48,108 |
41,910 |
||
|
Direct costs |
(24,270) |
(18,627) |
|||
|
GROSS PROFIT |
23,838 |
23,283 |
|||
|
Other operating income |
4 |
9 |
|||
|
Administrative expenses |
(15,720) |
(13,320) |
|||
|
EARNINGS BEFORE INTEREST, TAX AND AMORTISATION |
2 |
8,122 |
9,972 |
||
|
Amortisation |
(1,125) |
(520) |
|||
|
Finance costs |
3 |
(1,320) |
(957) |
||
|
PROFIT BEFORE TAX |
5,677 |
8,495 |
|||
|
Tax |
4 |
(1,873) |
(2,975) |
||
|
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS |
3,804 |
5,520 |
|||
|
DISCONTINUED OPERATIONS: |
|||||
|
Loss for the year from discontinued operations |
5 |
(2,752) |
(480) |
||
|
PROFIT FOR THE YEAR |
1,052 |
5,040 |
|||
|
Attributable to: |
|||||
|
Equity holders of the parent |
1,172 |
5,040 |
|||
|
Minority interest |
(120) |
- |
|||
|
1,052 |
5,040 |
||||
|
EARNINGS PER SHARE |
|||||
|
From continuing operations |
|||||
|
Basic and diluted |
6 |
4.7 |
7.3 |
||
|
From continuing and discontinued operations |
|||||
|
Basic and diluted |
6 |
1.4 |
6.7 |
||
There are no recognised gains in either year other than the profit for that year.
Β Β CONSOLIDATED BALANCE SHEET
30 April 2008
|
2008 Β£'000 |
2007 Β£'000 |
||||
|
NON-CURRENT ASSETS |
|||||
|
Intangible assets |
50,399 |
42,432 |
|||
|
Property, plant and equipment |
6,843 |
4,277 |
|||
|
57,242 |
46,709 |
||||
|
CURRENT ASSETS |
|||||
|
Trade and other receivables |
29,558 |
24,718 |
|||
|
Cash and cash equivalents |
553 |
527 |
|||
|
Assets held for sale |
1,140 |
- |
|||
|
31,251 |
25,245 |
||||
|
TOTAL ASSETS |
88,493 |
71,954 |
|||
|
CURRENT LIABILITIES |
|||||
|
Trade and other payables |
(13,908) |
(11,337) |
|||
|
Current tax liabilities |
(171) |
(1,485) |
|||
|
Financial liabilities |
(2,324) |
(667) |
|||
|
Liabilities directly associated with assets classified as held for sale |
(465) |
- |
|||
|
(16,868) |
(13,489) |
||||
|
NET CURRENT ASSETS |
14,383 |
11,756 |
|||
|
NON-CURRENT LIABILITIES |
|||||
|
Trade and other payables |
(3,833) |
(2,316) |
|||
|
Non-currentΒ taxΒ liabilities |
- |
(193) |
|||
|
Financial liabilities |
(16,032) |
(5,131) |
|||
|
Deferred tax |
(2,311) |
(1,000) |
|||
|
(22,176) |
(8,640) |
||||
|
TOTAL LIABILITIES |
(39,044) |
(22,129) |
|||
|
NET ASSETS |
49,449 |
49,825 |
|||
|
EQUITY |
|||||
|
Share capital |
4,061 |
4,044 |
|||
|
Share premiumΒ |
22,157 |
21,696 |
|||
|
Merger reserve |
17,584 |
17,584 |
|||
|
Retained earnings |
5,647 |
6,501 |
|||
|
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT |
49,449 |
49,825 |
|||
|
MINORITY INTEREST |
- |
- |
|||
|
TOTAL EQUITY |
49,449 |
49,825 |
|||
Β Β CONSOLIDATED CASH FLOW STATEMENT
|
Year ended 30 April 2008 |
2008 Β£'000 |
2007 Β£'000 |
||
|
PROFIT FOR THE YEAR |
1,052 |
5,040 |
||
|
Adjustments for: |
||||
|
Tax |
1,408 |
2,769 |
||
|
Finance costs |
1,320 |
957 |
||
|
Amortisation |
1,399 |
520 |
||
|
Depreciation |
1,519 |
1,142 |
||
|
Loss recognised on the measurement to fair value less costs to sell |
2,357 |
- |
||
|
Loss on asset sale |
25 |
27 |
||
|
Operating cash flows before movements in working capital |
9,080 |
10,455 |
||
|
Increase in receivables |
(3,748) |
(3,570) |
||
|
Increase in payables |
499 |
1,169 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
||||
|
Cash generated by operations |
5,831 |
8,054 |
||
|
Income taxes paid |
(1,835) |
(1,981) |
||
|
Interest paid |
(1,085) |
(700) |
||
|
NET CASH FLOWS FROM OPERATING ACTIVITIES |
2,911 |
5,373 |
||
|
INVESTING ACTIVITIES |
||||
|
Proceeds on disposal of property, plant and equipment |
678 |
301 |
||
|
Purchases of property, plant and equipment |
(4,472) |
(1,942) |
||
|
DeferredΒ considerationΒ payments in the year |
(2,779) |
(3,487) |
||
|
Acquisition of subsidiaries |
(6,306) |
(3,185) |
||
|
NET CASH USED IN INVESTING ACTIVITIES |
(12,879) |
(8,313) |
||
|
FINANCING ACTIVITIES |
||||
|
Dividends paid |
(2,026) |
(1,505) |
||
|
HP finance received |
2,326 |
1,055 |
||
|
Repayments of obligations under finance |
||||
|
leases |
(1,154) |
(939) |
||
|
Proceeds on issue of shares |
478 |
7,787 |
||
|
Repayment of bank loans |
(250) |
- |
||
|
New bank loans raised |
2,125 |
- |
||
|
Drawdown (repayment) of bank facilityΒ |
8,495 |
(3,529) |
||
|
NET CASH FROM FINANCING ACTIVITIES |
9,994 |
2,869 |
||
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
26 |
(71) |
||
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
527 |
598 |
||
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
553 |
527 |
||
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.
Β Β NOTES
Basis of preparation
The results for the year ended 31 March 2008 have been prepared for the first time in accordance withΒ IFRS and results for the comparative period have been restated under IFRS. The changes in accounting policies resulting from the IFRS restatement, together with the financial impacts of these changes and the full IFRS accounting policies of the Group are set out in the document entitled 'IFRS Restatement Report', which can be found on the Group's website, www.begbies-traynorgroup.com.
The financial information set out in this statement relating to the year ended 30 April 2008 does not constitute statutory accounts for that period as defined in section 240 of the Companies Act 1985. Statutory accounts for 2008 will be delivered to the Registrar of Companies following the company's annual general meeting. The auditors have reported on those accounts; their report is unqualified and does not contain a statement under either section 237(2) or (3) of the Companies Act 1985.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not contain sufficient information to comply with IFRS.
The comparative results for the year ended 30 April 2007 have been re-presented to reflect the disclosure of the Group's consumerΒ insolvency operations and Servisional, the CRM consultancy, within discontinued operations (see noteΒ 5).
Β
2. SEGMENTAL RESULTS
For management purposes, the Group is currentlyΒ organisedΒ into three operating segments. These segments are the basis on which the Group reports its primary segmental information.
The principal activities are as follows
Insolvency;
Corporate finance; and
Other professional services,Β principallyΒ comprising the Group's tax consulting practice and its forensics and investigations businesses.
Selected segmentalΒ information about these businesses is presented below.Β
|
Insolvency 2008 Β£'000 |
Corporate finance 2008 Β£'000 |
Others 2008 Β£'000 |
Consolidated 2008 Β£'000 |
|||||
|
Revenue |
||||||||
|
Total revenue |
38,099 |
4,867 |
5,375 |
48,341 |
||||
|
Inter-segment revenueΒ |
- |
(107) |
(126) |
(233) |
||||
|
External revenue |
38,099 |
4,760 |
5,249 |
48,108 |
||||
|
EBITA |
7,640 |
544 |
(62) |
8,122 |
||||
|
Insolvency 2007 Β£'000 |
Corporate finance 2007 Β£'000 |
Others 2007 Β£'000 |
Consolidated 2007 Β£'000 |
|||||
|
Revenue |
||||||||
|
TotalΒ revenue |
36,708 |
2,768 |
2,461 |
41,937 |
||||
|
Inter-segment revenue |
- |
(9) |
(18) |
(27) |
||||
|
ExternalΒ revenue |
36,708 |
2,759 |
2,443 |
41,910 |
||||
|
EBITA |
9,348 |
910 |
(286) |
9,972 |
||||
Β
3. FINANCE COSTS
|
2008 Β£'000 |
2007 Β£'000 |
|
|
Interest on bank overdrafts and loans |
944 |
722 |
|
Finance charges on hire purchase instalments |
141 |
70 |
|
Total interest expense |
1,085 |
792 |
|
Unwinding of discount on deferred consideration liabilities |
235 |
165 |
|
Total finance costs |
1,320 |
957 |
4. TAX
|
Continuing operations |
Β Discontinued operations |
TotalΒ |
||||
|
2008 Β£'000 |
2007 Β£'000 |
2008 Β£'000 |
2007 Β£'000 |
2008 Β£'000 |
2007 Β£'000 |
|
|
Current tax charge (credit) |
809 |
2,113 |
(499) |
(206) |
310 |
1,907 |
|
AdjustmentΒ |
- |
34 |
- |
- |
- |
34 |
|
Deferred tax |
1,064 |
828 |
34 |
- |
1,098 |
828 |
|
1,873 |
2,975 |
(465) |
(206) |
1,408 |
2,769 |
|
Corporation tax is calculated at 30 % (2007 - 30 %) of the estimated assessable profit for the year.
Β
5. DISCONTINUED OPERATIONS
During the year theΒ Board decided to withdraw from the consumer insolvency market in light of conditions in this sector and the sub-scale nature of the operation, and has taken the decision to initiate offers for the current case book. The case book is being actively marketed for sale and there is an expectation that a transaction will qualify for recognition as a completed sale within one year.
In addition, as a result of a recent review of non-strategic activities, the Board hasΒ decided to dispose of the non-core Servisional business, a CRM consultancy. This business is being actively marketed for sale and there is an expectation that a transaction will qualify for recognition as a completed sale within one year.
These two businesses therefore meet the definition of a disposal group in accordance with IFRS 5 'Nonίcurrent assets held for sale andΒ discontinued operations' as at 30 April 2008 and are therefore classified as held for sale and discontinued operations.
The results of the discontinued operations which have been included in the consolidated income statement, were as follows:
|
2008 Β£'000 |
2007 Β£'000 |
|
|
Revenue |
2,540 |
2,573 |
|
Direct costs |
(1,753) |
(1,426) |
|
Gross profit |
787 |
1,147 |
|
Admin expenses |
(1,373) |
(1,833) |
|
EBITA |
(586) |
(686) |
|
Amortisation |
(274) |
- |
|
Loss recognised on the measurement to fair value less costs to sell |
(2,357) |
- |
|
LossΒ Β before tax |
(3,217) |
(686) |
|
Tax |
465 |
206 |
|
Loss for the period from discontinued operations |
(2,752) |
(480) |
6. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the following data:
Β
|
2008 Β£'000 |
2007 Β£'000 |
|
|
Earnings |
||
|
Profit for the year from continuing operations attributable to equity holders |
3,804 |
5,520 |
|
Loss from discontinued operations attributable to equity holders |
(2,632) |
(480) |
|
Profit for the year attributable to equity holders |
1,172 |
5,040 |
|
Number of shares |
2008 |
2007 |
|
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share |
81,032,686 |
75,783,977 |
|
Basic and diluted earnings per share from: |
2008 pence |
2007 pence |
|
Continuing operations |
4.7 |
7.3 |
|
Discontinued operations |
(3.3) |
(0.6) |
|
Total |
1.4 |
6.7 |
The following additional earnings per share figures are presented as the directors believe they provide a better understandingΒ of the trading position of theΒ Group.
|
2008 Β£'000 |
Β 2007 Β£'000 |
|
|
Earnings |
||
|
Profit for the year from continuing operations attributable to equity holders |
3,804 |
Β 5,520 |
|
Amortisation |
1,125 |
520 |
|
Finance cost resulting from unwind of discount on deferred consideration liabilities |
235 |
165 |
|
TaxΒ effect |
(315) |
(156) |
|
Adjusted earningsΒ |
4,849 |
Β 6,049 |
|
2008 |
2007 |
|
|
Number of shares |
||
|
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share |
81,032,686 |
75,783,977 |
|
2008 pence |
2007 pence |
|
|
Adjusted basic and diluted earnings per share from continuing operations |
6.0 |
8.0 |
Β
7. DIVIDENDS
|
Year ended 2008 Β£'000 |
Year ended 2007 Β£'000 |
|
|
Amounts recognised as distributions to equity holders in the period |
||
|
Final dividend for the year endedΒ 30 April 2007Β of 1.5pΒ (2006Β -Β 1p) per share. |
1,214 |
749 |
|
Interim dividend for the year endedΒ 30 April 2008Β of 1p (2007: 1p) per share. |
812 |
756 |
|
2,026 |
1,505 |
|
|
Proposed final dividend for the year endedΒ 30 April 2008Β of 1.5p (2007: 1.5p) per share. |
1,218 |
1,214 |
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability inΒ this financial information.
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