9 Jul 2008 07:00

Wednesday, 9 July 2008
Begbies Traynor Group plc
(the "Group" or the "Company")
PreliminaryĀ Results for the year endedĀ 30 April 2008
Begbies Traynor Group plc, the specialist professional services organisation, today announces its preliminary results for theĀ yearĀ endedĀ 30 April 2008.
Financial highlights
Revenues from continuing operations of £48.1m (2007: £41.9m): - includes £4.3m contribution from acquisitions - second half organic growth rate of 11% after zero growth in first halfEBITA was £8.1m (2007: £10m)
Adjusted* profit before tax was £7.0m (2007: £9.2m):
- strong improvement in second half performance compared to first halfProfit before tax from continuing operations was £5.7m (2007: £8.5m)
Profit for the year of Ā£1.1m (2007: Ā£5.0m)Ā afterĀ a Ā£2.4m impairment charge relating to discontinued operationsĀ
Earnings per share:
- adjusted EPS**Ā ofĀ 6.0p (2007:Ā 8.0p - basic and fully dilutedĀ 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 £5.7m (2007: £8.5m) plus amortisation of £1.1m (2007: £0.5m) plus finance charge arising from the discounting of deferred consideration of £0.2m (2007:£0.2m)
** See reconciliation in note 6
OperationalĀ highlights
Continued investment in ongoing and new activities:Ā
- five acquisitions completed during the year to boostĀ 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 2008Ā
Upswing in insolvency activityĀ in 2008 continues
- high profile engagements including Silverjet, Alphasteel and Carlyle Capital CorporationRic Traynor, Executive Chairman, commented:
"The year being reportedĀ uponĀ was an extraordinaryĀ periodĀ forĀ 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 aĀ significantĀ change in activity levels.Ā I am therefore pleased to announce improved insolvency performance in the second half.
"WeĀ 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. WeĀ therefore look forward to a sustained period of improved new work flow and insolvency returns.
"Overall,Ā activity levels at theĀ startĀ ofĀ the current financial yearĀ are well ahead of the same period last yearĀ andĀ weĀ will provide an update on progress at the time of the Company's AGM in October."
|
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 |
|
|
Smithfield |
020 7360 4900 |
|
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).
Ā Ā Chairman's Statement
INTRODUCTION
The year being reportedĀ uponĀ was an extraordinaryĀ periodĀ forĀ our core business of insolvency administration, which accounts for over 75% of Group continuing revenues.Ā FollowingĀ one of the quietest periods for corporate insolvency in nearly 20 years, reflecting the readyĀ availability of easy credit,Ā the advent of the credit crunch through the autumn of 2007 resulted in aĀ significantĀ change in activity levels.
Ā
OPERATIONALĀ REVIEWĀ - CONTINUING OPERATIONS
Insolvency
Insolvency revenues increased by nearly 4% over the previous year to Ā£38.1m (2007: Ā£36.7m). Segmental EBITA fell to Ā£7.6m (2007: Ā£9.3m).Ā
There has been a significant recovery in work flowĀ in our core activityĀ ofĀ businessĀ insolvencyĀ in the latter part of the financial year. This includedĀ some high profile engagements for the Group,Ā such asĀ Silverjet, Alphasteel and Carlyle Capital Corporation.Ā The divisionĀ had beenĀ impacted by the weak market conditionsĀ for our servicesĀ inĀ calendarĀ yearĀ 2007, when the number of business insolvencies nationally fell by 10% over the previous yearĀ (source:Ā Government'sĀ Insolvency Service).Ā
Our viewĀ at the timeĀ was that this was a temporary setback andĀ for that reasonĀ we continued to invest in our insolvency operations. This has beenĀ both organically, in staff, new offices and support infrastructureĀ and byĀ theĀ acquisition of twoĀ practices inĀ LeedsĀ andĀ YorkĀ during the financial year. In addition,Ā twoĀ further insolvency practices inĀ SouthamptonĀ andĀ CardiffĀ were acquiredĀ immediately following the year end.Ā Ā The investment in the operating base is expected to bear fruit in the more favourable current market conditions.Ā
Corporate finance
CorporateĀ financeĀ reported revenues of Ā£4.8m (2007: Ā£2.8m). SegmentalĀ EBITAĀ fell to £0.5m (2007: Ā£0.9m).Ā
Revenue has increased as the Group has expanded its corporate finance activities,Ā bothĀ through acquiring a successful practiceĀ inĀ NewcastleĀ in theĀ second half of last yearĀ andĀ organically. We have engagedĀ fiveĀ new partners across the countryĀ since the end of the prior year,Ā whoĀ spentĀ the early part of theĀ financialĀ yearĀ building their portfolio of engagements.Ā Performance in the second half was therefore stronger as these new partners began to contributeĀ more substantively, following aĀ loss makingĀ first halfĀ for the division.Ā The overall profit is lower than 2007, when operating margins reflected the strong general market conditionsĀ for corporate finance services.
OtherĀ (including tax)
Revenues in this segment increased by £2.8m to £5.2m (2007: £2.4m). Segmental EBITA was broadly break-even (2007: loss of £0.3m).
TheseĀ operations include the Group's newly acquired taxĀ consultingĀ practice,Ā as well as its existing forensics andĀ investigations businesses. Our tax activities, which focus principally on providing outsourced specialist tax advice via fellow professionals, have performed strongly in the yearĀ and provide a solid platform from which to grow into a major service line.Ā The forensics and investigations activities were broadly flat when compared to the previous year.Ā The Group has also invested in some newĀ start upĀ service lines of commercial finance and asset management consulting,Ā which have incurred early stage costs in the year, but provideĀ importantĀ support activity for other major service lines, particularly insolvency services.Ā
Ā Ā 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 acquired a number of businesses, as detailed below, for a total consideration of £11.8m. Since the year-end we have acquired the insolvency and corporate finance practice of Fanshawe Lofts in Southampton and a small insolvency practice in Cardiff.
Insolvency
In November 2007, the Group acquired the insolvency division ofĀ Bartfields (UK) Limited, whichĀ joined our existingĀ LeedsĀ practice. In DecemberĀ 2007, the Group acquired David Horner & Co Ltd, an insolvency practice with offices inĀ York,Ā MiddlesbroughĀ andĀ Doncaster.
Both of these operations have now been successfullyĀ integratedĀ and have performed in line with expectations.
Tax
In line with the strategy to extendĀ the Group's professional services offering,Ā three tax practicesĀ wereĀ 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 accountantsĀ and is based inĀ Manchester.
In January 2008 the Group acquired Shaw Tax, previously the largest independent firm of dedicated Chartered Tax Advisors in theĀ UK.Ā Ā ItsĀ team specialisesĀ in the provision of corporate and personal taxation services including consultancy, compliance, wealth management and trusteeĀ services. The businessĀ operates fromĀ BirminghamĀ andĀ London.
Finally, in February 2008, the Group completed the acquisition of CoyleĀ Clark LLP, a two partner specialist tax investigation practice, which operates fromĀ ManchesterĀ andĀ Northern Ireland.
These three acquisitions, which have a combined pro-forma annual revenue of approximately £5m, are being  integrated into one operation, trading as BTG Tax, and have performed profitably in line with expectations.
Other
In May 2007,Ā the GroupĀ invested inĀ Servisional, a business improvement and customer relationship management (CRM) consultancy.
DISPOSALS
During the year, the Board decided toĀ withdraw from theĀ consumer insolvencyĀ market, in light of conditions in this sector and the sub-scale nature of theĀ 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,Ā 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 currentlyĀ being actively marketed for sale.
DIVIDEND
InĀ the light of these results,Ā the Board hasĀ recommendedĀ a maintained final dividend for the yearĀ of 1.5p per ordinary share. If approved, theĀ totalĀ dividend for the year endedĀ 30 April 2008Ā will amount toĀ 2.5pĀ per shareĀ (2007:Ā 2.5p).
Over the longer termĀ 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.Ā
BOARD CHANGES
We have taken the opportunity to strengthen theĀ BoardĀ this yearĀ with a number of appointments and responsibility changes.
John Gittins, who previously held the finance director role in a number of fastĀ growingĀ support services companies,Ā joined theĀ BoardĀ asĀ Chief Financial OfficerĀ in October 2007.Ā Graham McInnes,Ā whoĀ served asĀ Chief Financial OfficerĀ since our flotation in 2004,Ā has takenĀ on the role ofĀ Corporate Development DirectorĀ andĀ also executive responsibleĀ for the corporate finance practice.
Geoff Hill, who wasĀ aĀ non-executive director until October 2007, has now taken on an executive role asĀ boardĀ member responsibleĀ forĀ bringing together theĀ Group'sĀ recently acquiredĀ tax practices,Ā as well asĀ itsĀ forensic and intelligence activities.Ā Geoff is a chartered accountant and was previously senior partner at a large independent practice inĀ LeedsĀ and led its merger with a top 15Ā UKĀ accounting practice.Ā Ā
Finally, John May joined theĀ board in October 2007 asĀ aĀ non-executive director.Ā John brings considerable experience ofĀ the management ofĀ growingĀ service companies from his background asĀ anĀ executive director of Caledonia Investments plc and previously Hambros Group.
We believe these changes strengthen theĀ BoardĀ and provide the appropriate focus on our three key service linesĀ in order to implementĀ ourĀ clearly defined growthĀ strategy.Ā
PEOPLE
Our most valued assetĀ isĀ the expertise, professionalism and commitmentĀ ofĀ our people and I thank all ofĀ them for their contributionĀ to our results this year. We now haveĀ 447Ā direct fee earners (an increase ofĀ 23%Ā compared to a year ago) and 133Ā in support functions.Ā
In addition,Ā we haveĀ recentlyĀ redesigned the partner reward platform so that, going forward,Ā partners are highly motivated and incentivised financially to deliver long-term, sustainable growth within our various markets.Ā
OUTLOOK
The GroupĀ starts theĀ new financialĀ year withĀ an enhanced insolvency platform,Ā a replenishedĀ insolvency case loadĀ and market indicatorsĀ whichĀ continue to predict stronger demand in this, ourĀ counter-cyclical core business.Ā Ā TheĀ Board thereforeĀ looks forward to a sustained period ofĀ improved new work flowĀ 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 areĀ early warning signsĀ of potential insolvency activity. Our most recent survey published in May 2008 revealed that the number ofĀ UKĀ 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 theĀ rollĀ out of our national corporate finance complement and, given the current economic environment, the mix of our workĀ is expected toĀ shift towards business and debt advisoryĀ and supportĀ activities and be less dependent onĀ capitalĀ transactions. We believe this willĀ generate a sustainable level of activity.
We have now established critical mass in our third major service line, taxation, and we believeĀ thisĀ hasĀ significantĀ growth potential, both organicallyĀ and by acquisition.
Overall,Ā activity levels at theĀ startĀ ofĀ the current financial yearĀ are well ahead of the same period last yearĀ andĀ weĀ will provide an update on progress at the time of the Company's AGM in October.Ā Ā
Ric Traynor
Executive Chairman
9thĀ July 2008Ā Ā Financial Review
FINANCIAL HIGHLIGHTS
The Group's revenue from continuing operations in the year was £48.1m (2007: £41.9m), an increase of £6.2m or 15%. Current year acquisitions contributed £4.3m of this growth, with the remainder largely generated through organic growth in existing service lines, 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 reported approximately £8m of revenues.
EBITA decreased to £8.1m (2007: £10.0m) 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's continued investment in growth ahead of profit delivery. This included recruitment into existing service teams and support infrastructure, the establishment of new service lines, a new Manchester headquarters and the continued development of the BGN international network. The full year performance masks the improvement experienced in the second half year, with an 80% increase in EBITA in H2 to £5.2m from £2.9m in H1.
Amortisation increased to £1.1m (2007: £0.5m), due to the combination of the full year impact of prior year acquisitions and current year acquisitions. Finance costs increased to £1.3m (2007: £1.0m), due to increased levels of net debt due to our general investment activities and higher interest rates.
Adjusted profit before tax* was £7.0m (2007: £9.2m).  Profit before tax was £5.7m (2007: 8.5m).
The tax charge was £1.9m (2007: £3.0m), which represents an effective rate of 33% (2007: 35%). The reduction in effective rate in the year is largely due to the change in tax rate from 30% to 28% in relation to the Group's deferred tax liabilities.
Profit for the year from continuing operations was £3.8m (2007: £5.5m).
DISCONTINUED OPERATIONSĀ
AsĀ the Board hasĀ resolved to dispose of the Group'sĀ consumerĀ insolvency and CRM consultancy operations,Ā IFRSĀ 5 'Nonßcurrent 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 theĀ fair value of the assets less costs to sell. This has resulted in aĀ non-cashĀ adjustment toĀ the net assetsĀ carrying value of Ā£2.4m.
Discontinued operations, after non-cash write down costs noted above, generated a loss after tax of £2.8m (2007: loss £0.5m). The carrying value of the assets of £1.1m and liabilities of £0.5m are separately disclosed on the balance sheet.
EARNINGS PER SHAREĀ ('EPS')
EPSĀ from continuing operations**,Ā adjusted forĀ theĀ net of tax impact of amortisation and the finance charge arising from the discounting ofĀ deferred consideration liabilities, wasĀ 6.0p (2007:Ā 8.0p).Ā Basic and fully dilutedĀ EPS from continuing operations was 4.7p (2007: 7.3p).
FINANCING
In April 2008, the Group renewed and increased its banking facilities to support future growth. The new facilities include a £20m, three year, revolving credit facility ('RCF') and a £5m overdraft. Interest on the RCF is charged at 1.4% over LIBOR and on the overdraft is 1.5% over bank base rate.  At 30 April 2008, £7m of the RCF and the entire £5m overdraft 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 Ā£18.4mĀ (2007: Ā£5.8m), giving gearing of 37% (2007: 12%). Interest cover was 6.2 times (2007: 10.4 times).Ā
Ā
CASH FLOWS
Operating cash flows in the year decreased to £5.8m (2007: £8.1m), principally due to the reduced levels of operating profits noted above. 2008 was a significant year of investment for the Group, with £4.5m of capital investment, including the development of the new head office, £6.3m of payments in relation to current year acquisitions and a further £2.8m of deferred consideration payments. This investment has been financed through a combination of new bank loans, hire purchase contracts and drawdown of the Group's RCF, resulting in an inflow from investing of £10.0m.
NET ASSETS
At 30 April 2008 net assets were £49.4m (2007: £49.8m).
Non-current assets increased to £57.2m (2007: £46.7m), as a result of goodwill and intangible assets recognised on acquisitions in the year and the Group's investments noted above.
Current assets increased to £31.3m (2007: £25.2m), principally from increased trade receivables and recoverable income and costs on cases, due to the combination of acquired businesses and working capital absorption of the Group's organic revenue growth in the year, particularly in the second half.
Total liabilities increased to £39.0m (2007: 22.1m) due to increased gross borrowings of £12.6m following the investing activities in the year noted above; additional deferred consideration of £2.6m due to current year acquisitions; and other increases in working capital liabilities of £1.7m. Total liabilities include £7.7m of deferred consideration payments, of which £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 outĀ in a separateĀ 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;Ā goodwill is not amortised but is subject to annual impairment reviews;Ā 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
9thĀ July 2008
Ā Ā CONSOLIDATED INCOME STATEMENT
Year ended 30 April 2008
|
Note |
2008 £'000 |
2007 £'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.
Ā Ā CONSOLIDATED BALANCE SHEET
30 April 2008
|
2008 £'000 |
2007 £'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-currentĀ taxĀ 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 premiumĀ |
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 |
|||
Ā Ā CONSOLIDATED CASH FLOW STATEMENT
|
Year ended 30 April 2008 |
2008 £'000 |
2007 £'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) |
||
|
DeferredĀ considerationĀ 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 facilityĀ |
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.
Ā Ā NOTES
Basis of preparation
The results for the year ended 31 March 2008 have been prepared for the first time in accordance withĀ 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 consumerĀ insolvency operations and Servisional, the CRM consultancy, within discontinued operations (see noteĀ 5).
Ā
2. SEGMENTAL RESULTS
For management purposes, the Group is currentlyĀ organisedĀ 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,Ā principallyĀ comprising the Group's tax consulting practice and its forensics and investigations businesses.
Selected segmentalĀ information about these businesses is presented below.Ā
|
Insolvency 2008 £'000 |
Corporate finance 2008 £'000 |
Others 2008 £'000 |
Consolidated 2008 £'000 |
|||||
|
Revenue |
||||||||
|
Total revenue |
38,099 |
4,867 |
5,375 |
48,341 |
||||
|
Inter-segment revenueĀ |
- |
(107) |
(126) |
(233) |
||||
|
External revenue |
38,099 |
4,760 |
5,249 |
48,108 |
||||
|
EBITA |
7,640 |
544 |
(62) |
8,122 |
||||
|
Insolvency 2007 £'000 |
Corporate finance 2007 £'000 |
Others 2007 £'000 |
Consolidated 2007 £'000 |
|||||
|
Revenue |
||||||||
|
TotalĀ revenue |
36,708 |
2,768 |
2,461 |
41,937 |
||||
|
Inter-segment revenue |
- |
(9) |
(18) |
(27) |
||||
|
ExternalĀ revenue |
36,708 |
2,759 |
2,443 |
41,910 |
||||
|
EBITA |
9,348 |
910 |
(286) |
9,972 |
||||
Ā
3. FINANCE COSTS
|
2008 £'000 |
2007 £'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 |
Ā Discontinued operations |
TotalĀ |
||||
|
2008 £'000 |
2007 £'000 |
2008 £'000 |
2007 £'000 |
2008 £'000 |
2007 £'000 |
|
|
Current tax charge (credit) |
809 |
2,113 |
(499) |
(206) |
310 |
1,907 |
|
AdjustmentĀ |
- |
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.
Ā
5. DISCONTINUED OPERATIONS
During the year theĀ 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 hasĀ 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 'Nonßcurrent assets held for sale andĀ 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 £'000 |
2007 £'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) |
- |
|
LossĀ Ā 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:
Ā
|
2008 £'000 |
2007 £'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 understandingĀ of the trading position of theĀ Group.
|
2008 £'000 |
 2007 £'000 |
|
|
Earnings |
||
|
Profit for the year from continuing operations attributable to equity holders |
3,804 |
Ā 5,520 |
|
Amortisation |
1,125 |
520 |
|
Finance cost resulting from unwind of discount on deferred consideration liabilities |
235 |
165 |
|
TaxĀ effect |
(315) |
(156) |
|
Adjusted earningsĀ |
4,849 |
Ā 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 |
Ā
7. DIVIDENDS
|
Year ended 2008 £'000 |
Year ended 2007 £'000 |
|
|
Amounts recognised as distributions to equity holders in the period |
||
|
Final dividend for the year endedĀ 30 April 2007Ā of 1.5pĀ (2006Ā -Ā 1p) per share. |
1,214 |
749 |
|
Interim dividend for the year endedĀ 30 April 2008Ā of 1p (2007: 1p) per share. |
812 |
756 |
|
2,026 |
1,505 |
|
|
Proposed final dividend for the year endedĀ 30 April 2008Ā 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 inĀ this financial information.
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