Begbies Regulatory News (BEG)

16 Jan 2006 07:00

Begbies Traynor Group PLC16 January 2006 RNS Release 16 January 2006 Begbies Traynor Group plc Interim results for the period ended 31 October 2005 Begbies Traynor Group plc, the UK's leading independent insolvency, corporaterescue and recovery specialist, announces interim results for the period ended31 October 2005. Financial and business highlights: •Turnover increased 29 per cent to £14.2 million (2004: £11 million) •Operating profit of £2.8 million up by 60% (2004: £1.75 million) •Profit before tax increased by 90% to over £1 million (2004: £570,000) •Adjusted earnings per share of 2.5 pence (2004: 1.9 pence) •Placing of new equity in July funded further expansion •Interim dividend of 0.5 pence per share to be paid on 17 February 2006 •Entry into the fast-growing 'retail' insolvency market by acquiring W3 Debt Solutions Ric Traynor, Executive Chairman, said: "The board remains confident that the group will deliver full year results to 30 April 2006 in line with expectations and looks forward to the challenge ofdelivering further growth in shareholder value in the 2006/07 financial year." Enquiries, please contact: Ric Traynor Neil Boom/Dave PettetExecutive Chairman Gresham PR Ltd.Begbies Traynor Group plc 020 7404 90000161 839 0900 Chairman's Statement I am pleased to present the Interim Statement of the group for the six monthsended 31 October 2005 and to report that we are continuing to deliver on ourstrategy of growth through acquisition and development in our core UK corporaterecovery activity, coupled with expansion of our service offerings into relatedprofessional services. Activity in the six months to 31 October 2005 was as anticipated, given that theperiod represents the less productive and active seasons of the year and setagainst a continuing static level of overall market volumes, with turnoverincreasing by 29% (over the comparable period in 2004) to £14.2 million. At theoperating profit level, the group's performance in the period, at £2.8 million(2004: £1.8 million), shows an increase in margin to some 20% as a result of theongoing dilution of our fixed central overhead burden. Profit before taxationwas £1.1 million, an increase of 90% over the pro-forma comparable figure.Adding back the amortisation of goodwill, which we continue to aggressivelyapply, this translated into earnings per share of 2.5 pence in the period, anincrease of 36% over the equivalent pro-forma figure for the comparable sixmonth period. Conversion of operating profit into cash generation from operations remainsstrong and our placing of new equity in July has funded our continuing cashexpenditure on acquisitions, leaving drawdown on group bank borrowing facilitiesof £15 million at a modest level of £3.6 million at 31 October 2005. In view ofthe strong performance in the period, the board has declared an interim dividendof 0.5 pence per share, in accordance with our goal of delivery of progressiveshareholder value overall. The dividend will be paid on 17 February 2006 to allshareholders on the register at 27 January 2006. During the period, we completed two major acquisitions, MCF in the field ofcorporate finance and the Southend-based insolvency practice TGF, on which wehave previously reported. The integration of these two businesses into the groupis progressing well. Together, they contributed some £1.8 million to turnoverand £0.6 million to group operating profit in the period. In November 2005, the group entered the field of 'retail' personal insolvencythrough the acquisition of W3 Debt Solutions. We anticipate that this area ofactivity is set for further growth as a result of the substantial increase indemand for personal debt solutions. Our network of offices and qualifiedprofessionals throughout the UK is now well placed to provide these solutions tolocal communities alongside our main focus on the business arena. In addition,we have recently welcomed general insolvency practitioners in Stoke and Halifaxinto the group. The benefits of these developments will be seen in the secondhalf of this financial year and beyond. Looking forward, our planned programme of consolidation of independentspecialist insolvency service providers and outreach into wider serviceprovision continues, with a number of possible additions to the group currentlyin the pipeline. There are early signs that the business insolvency market maysee a cyclical upturn this calendar year, but this is yet to translate into anincrease in formal appointments. The board remains confident that the group will deliver full year results to 30April 2006 in line with expectations and looks forward to the challenge ofdelivering further growth in shareholder value in the 2006/07 financial year. Ric Traynor16 January 2006 Begbies Traynor Group plc Interim Financial Statement 31 October 2005 Group Profit and Loss Accounts Unaudited Pro-forma Pro-forma 6 months to 6 months to Year to 31 Oct 2005 31 Oct 2004 30 April 2005 £'000s £'000s £'000s Turnover 14,205 11,005 24,705 Movement in work in progress (544) 465 529 ---------- -------- ---------Value of work done 13,661 11,470 25,234 Direct costs (6,632) (5,708) (11,963) Administrative expenses (4,259) (4,093) (8,655) Other operating income 40 88 156 ---------- -------- --------- Operating profit 2,810 1,757 4,772 Amortisation of goodwill (1,495) (879) (2,020) Interest payable and similar charges (233) (308) (481) Pre acquisition profits - (342) (342) (note 1) ---------- -------- --------- Profit before taxation 1,082 228 1,929 Tax on profits on ordinary activities (note 1) (476) (89) (618) ---------- -------- --------- Earnings on ordinary activities 606 139 1,311 Dividends (402) - (330) ---------- -------- --------- Retained earnings 204 139 981 ---------- -------- --------- ---------- -------- --------- Earnings per share - in pence(note 2) Basic 0.9 0.7 2.6 Adjusted 2.5 1.9 5.0 Notes 1. Taxation Profits up to 30 September 2005, which accrued to the former owners of firms inthe group have been deducted in arriving at the pro-forma profit before taxationin the 6 months to 31 October 2004. Taxation charges are estimated at thegroup's estimated tax rate of 32% after taking credit (at 30%) for allowablegoodwill amortisation. 2. Earnings per Share Basic earnings per share are arrived at by dividing the profit attributable toordinary shareholders in the 6 months to 31 October 2005 by the weighted averagenumber of shares in issue in that period (69,557,309). Comparative earnings per share are shown on a pro-forma basis to include allprofits in the respective periods and appropriate weighted average numbers ofshares notionally in issue. Adjusted earnings per share add back to earnings the after tax cost of goodwillamortisation. Begbies Traynor Group plc Interim Financial Statement 31 October 2005 Consolidated Balance sheets Unaudited Unaudited Audited At 31 Oct At 31 Oct At 30 April 2005 2004 2005 £'000s £'000s £'000sFixed Assets Goodwill on group formation 23,418 23,418 23,418 Goodwill on acquisitions 13,150 4,559 4,230 Intellectual property 187 187 187 --------- -------- --------- 36,755 28,164 27,835 Tangible assets 3,324 2,157 2,526 --------- -------- --------- 40,079 30,321 30,361 --------- -------- --------- Current Assets Work in progress 1,802 1,207 2,036 Debtors 11,768 9,125 9,526 Cash at bank and in hand 64 2,131 131 --------- -------- --------- 13,634 12,463 11,693Creditors falling duewithin one year (11,876) (8,965) (10,501) --------- -------- --------- Net Current Assets 1,758 3,498 1,192 --------- -------- --------- Total assets less Current Liabilities 41,837 33,819 31,553 Creditors falling dueafter more than one year (8,969) (8,482) (5,374) --------- -------- --------- 32,868 25,337 26,179 --------- -------- --------- --------- -------- --------- Capital and Reserves Issued share capital 3,610 3,271 3,271 Other reserves 28,073 21,927 21,927 Profit and loss account 1,185 139 981 --------- -------- --------- Equity Shareholders' Funds 32,868 25,337 26,179 --------- -------- --------- --------- -------- --------- Movements in Shareholders' FundsProfit for the periodafter taxation 606 139 1,311Less dividends (402) - (330) --------- -------- --------- 204 139 981Net proceeds on share issues On group accretion - 20,166 20,166 On flotation - 5,032 5,032 From acquisition 500 - - From new equity placing 5,985 - - --------- -------- --------- 6,689 25,337 26,179Opening shareholders' funds 26,179 - - --------- -------- ---------Closing shareholders' funds 32,868 25,337 26,179 --------- -------- --------- --------- -------- --------- Begbies Traynor Group Plc Interim Financial Statement 31 October 2005 Group Cash Flow Statements Unaudited Pro-forma Pro-forma 6 months to 6 months to Year to 31 Oct 2005 31 Oct 2004 30 April 2005 £'000s £'000s £'000s Total operating profit 1,315 878 2,752 Depreciation 336 369 862 Amortisation 1,495 879 2,020 (Profit)/loss on sale of assets 1 (7) 29 --------- --------- --------- EBITDA 3,147 2,119 5,663 Working capital movements Work in progress 468 (298) (529) Debtors (1,077) (1,390) (2,412) Creditors (1,494) 474 (984) --------- --------- --------- Cash inflow from operating activities 1,044 905 1,738 Returns on financing andservicing of financing Net finance charges paid (233) (291) (476) Former partners accounts repaid - (1,655) (1,655) Dividends paid (361) - - Corporation tax paid - - (241) Capital expenditure andfinancial investment Fixed assets acquired (1,070) (1,379) (2,459) Fixed assets sold 115 633 758 Acquisitions (5,087) (1,581) (2,281) --------- --------- --------- Cash outflow before financing (5,592) (3,368) (4,616) Financing Proceeds of share issues 5,985 5,032 5,032 Asset finance raised - net of repayments 267 609 449 --------- --------- --------- Movement in net cash 660 2,273 865 Net debt at beginning ofthe period (4,222) (5,087) (5,087) --------- --------- --------- Net debt at the end of the period (3,562) (2,814) (4,222) --------- --------- --------- Cash at bank and in hand 64 2,131 131 Amount drawn on bank facility (3,626) (4,946) (4,353) --------- --------- --------- (3,562) (2,815) (4,222) --------- --------- --------- --------- --------- --------- Status of Financial Statement The interim results for the 6 months ended 31 October 2005 are unaudited and donot comprise full accounts within the meaning of s240 of the Companies Act 1985.Pro-forma unaudited comparative figures for the 6 months to 31 October 2004 andthe year to 30 April 2005 for the underlying group are given to assist readersof this financial statement. The financial statement and comparative pro-forma figures have been preparedunder UK GAAP and the accounting policies of the group as set out in its AnnualReport and Accounts 2005, dated 1 July 2005. This information is provided by RNS The company news service from the London Stock Exchange