Begbies Regulatory News (BEG)

16 Jan 2007 07:00

Begbies Traynor Group PLC16 January 2007 RNS Release 16 January 2006 Begbies Traynor Group plc Interim results for the period ended 31 October 2006 Begbies Traynor Group plc announces interim results for the period ended 31October 2006. Period Highlights: •Activity increased to £22m, up 58% on 2005 period •Adjusted eps of 3.6p, c/f 2.6p in 2005 period •Operating cash flow at 94% of PBTA •Acquired businesses performing well and fully integrated •Interim dividend of 1 penny per share declared •International network established and delivering benefits Ric Traynor, Executive Chairman, said: "We shall pursue a combination of organic and acquisitive growth in our currentprofessional service offerings and in extended compatible new areas ofprofessional activity with a view to delivering group activity in excess of£100m by 2010, whilst retaining operating margins at 20% or better. A number ofsuch new areas have been identified and researched and the board is activelytargeting opportunities within them." Enquiries, please contact: Ric Traynor Neil Boom/Laura BlackExecutive Chairman Gresham PR Ltd.Begbies Traynor Group plc 020 7404 90000161 839 0900 Chairman's Statement The first half of the current financial year of the group has delivered a verysatisfactory overall performance in line with the board's expectations andunderpinning current market forecasts for the full year to 30 April 2007. Weremain fully on track to deliver our original growth plan to achieve annualisedturnover of at least £50m at an average margin of 20% or more by the lastquarter of calendar 2007. The results include the activities of our two newly acquired business insolvencyoffices, which have added £2m of turnover in the period between them, bringingoverall group turnover to almost £22m for the six months, despite thetraditional summer holiday seasonal effects. We have continued to grow ournon-insolvency services in corporate finance and investigations, with new teamsrecruited in both disciplines. These services have contributed a turnover ofsome £2.8m (12.6% of group turnover) in the period. Activity in our core business insolvency services - held up well, despite thegenerally predicted upturn in business insolvency volumes remaining unfulfilled.There has been some increase in the final quarter of calendar 2006 and marketindicators continue to suggest that there will be a further upturn in 2007, butthis may not be significant until towards the end of the year or possibly inearly 2008. Consumer debt services, which have been expanded into debt management andrefinancing services, continue to grow, particularly in Scotland, and nowaccount for 10% of group activity. The operation of the market for IndividualVoluntary Arrangements in England and Wales is currently under review and wehave decided not to expand our position in that market aggressively until thereis clarity over maintainable profitability. Margins at both gross and net operating levels have held up to expectations,notwithstanding ongoing expenditure in new operations and the formation of ourinternational network (BGN), to give an operating profit before amortisation ofgoodwill of £4.4m (20.3%) for the period. After interest and corporation taxprovisions, this translates into fully taxed earnings before amortisation of£2.7m, equivalent to earnings per share of 3.6 pence, an increase of 38% overthe restated figure for the comparable period to 31 October 2005. Operating cash flow in the period was strong, with £3.8m (94% of profit beforetax) generated after capital expenditure. In addition to tax (£0.7m) anddividends (£0.7m), the company spent £4.3m on current and past acquisitions,giving an increase in net debt of £1.9m, of which £0.2m was met from increasedhire purchase funding on motor cars, leaving an increase in draw down of groupbank facilities of £1.7m. Having reviewed facilities and forward cash flows, theboard has declared an interim dividend of 1 penny per share (double the 2005level) representing less than 3 times adjusted earnings per share in the period.The dividend will be paid on 16 February 2007 to all shareholders on theregister at the 26 January 2007, with an ex-dividend date of 24 January 2007. In addition to securing extra resources for the group, through acquisition andlateral hiring of experienced professional teams to fuel continuing growth, theboard has extended its strategic plan for the group beyond the original 2007goals. We shall pursue a combination of organic and acquisitive growth in ourcurrent professional service offerings and in extended compatible new areas ofprofessional activity with a view to delivering group activity in excess of£100m by 2010, whilst retaining operating margins at 20% or better. A number ofsuch new areas have been identified and researched and the board is activelytargeting opportunities within them. Ric Traynor16 January 2007 Begbies Traynor Group plc Interim Financial Statement 31 October 2006 Group Profit and Loss Accounts Unaudited Unaudited & restated 6 months to 6 months to Year to 31 Oct 2006 31 Oct 2005 30 April 2006 £'000s £'000s £'000s Turnover 21,857 13,796 33,242 Direct costs (10,191) (6,632) (15,194) Administrative (7,233) (4,259) (10,306) expenses Other operating income 9 40 48 ---------- -------- --------- Operatingprofit beforeamortisation 4,442 2,945 7,790 Amortisation of goodwill (1,898) (1,495) (2,556) Interest payable and similar charges (355) (233) (476) ---------- -------- --------- Profit beforetaxation 2,189 1,217 4,758 Tax on profits on ordinary activities (807) (517) (1,737) ---------- -------- --------- Earnings onordinaryactivities 1,382 701 3,021 Dividends paid (749) (361) (732) ---------- -------- --------- Retainedearnings 633 340 2,289 ---------- -------- --------- ---------- -------- --------- Earnings per share - inpence Basic 1.8 1.0 4.2 Adjusted 3.6 2.6 6.7 Notes 1. The comparative results for the 6 months to 31 October 2005 have beenrestated as a result of changes to accounting standards relating to incomerecognition and the treatment of proposed dividends. Those changes haveincreased earnings for that period by £95,000. 2. Basic earnings per share are arrived at by dividing earnings by the averagenumber of shares in issue during the period. Adjusted earnings per share add back to earnings the after tax cost of goodwillamortisation. Begbies Traynor Group plc Interim Financial Statement 31 October 2006 Consolidated Balance sheets Unaudited Unaudited and restated At 31 Oct At 31 Oct At 30 April 2006 2005 2006 £'000s £'000s £'000sFixed Assets Goodwill on group formation 23,418 23,418 23,418 Goodwill on acquisitions 17,282 13,150 14,011 Intellectual property 187 187 187 --------- -------- --------- 40,887 36,755 37,616 Tangible assets 4,283 3,324 3,731 --------- -------- --------- 45,170 40,079 41,347 --------- -------- --------- Current Assets Debtors 22,447 13,940 19,972 Cash at bank and in hand 547 64 598 --------- -------- --------- 22,994 14,004 20,570Creditorsfalling duewithin oneyear (14,032) (11,791) (10,614) --------- -------- --------- Net CurrentAssets 8,962 2,214 9,956 --------- -------- --------- Total Assetsless CurrentLiabilities 54,132 42,293 51,303 Creditorsfalling dueafter morethan one year (14,363) (8,969) (12,938) --------- -------- --------- Net Assets 39,769 33,324 38,365 --------- -------- --------- --------- -------- --------- Capital and Reserves Issued share capital 3,779 3,610 3,744 Other reserves 31,768 28,073 31,032 Profit and loss account 4,222 1,641 3,589 --------- -------- --------- 39,769 33,324 38,365 --------- -------- --------- --------- -------- ---------Movements in Shareholders' Funds Profit for the period after taxation 1,382 701 3,021Less dividends paid (749) (361) (732)Share issues from acquisitions 1,210 500 2,915Shares to be issued (439) - 439Share issues for cash - 5,985 6,223 --------- -------- --------- 1,404 6,825 11,866Opening shareholders' funds 38,365 26,499 26,499 --------- -------- ---------Closing shareholders' funds 36,769 33,324 38,365 --------- -------- --------- --------- -------- --------- Begbies Traynor Group Plc Interim Financial Statement 31 October 2006 Group Cash Flow Statements Unaudited Unaudited & restated 6 months to 6 months to Year to 31 Oct 2006 31 Oct 2005 30 April 2006 £'000s £'000s £'000s Operating profit before amortisation 4,442 2,945 7,790 Depreciation 533 336 811 Loss/(profit) on sale of fixed 8 1 (5) assets --------- --------- --------- 4,983 3,282 8,596 Working capital movements Debtors (680) (744) (3,383) Creditors 931 (584) 520 --------- --------- --------- Cash inflowfrom operatingactivities 5,234 1,954 5,733 Returns and servicing offinancing Net finance charges paid (355) (233) (476) Dividends paid (749) (361) (732) Corporationtax paid (669) - (1,192) Capital expenditure and financialinvestment Fixed assets acquired, net of HP (632) (570) (1,112) funding Proceeds of fixed assets sold 197 115 325 Acquisitions (4,338) (5,087) (7,435) --------- --------- --------- Cash outflowbeforefinancing (1,312) (4,182) (4,889) Proceeds of share issues for cash 11 5,985 6,223 Asset finance repaid (390) (233) (549) Loans repaid - (910) (4,000) --------- --------- --------- Movement innet cash (1,691) 660 (3,215) Net bank debtat periodcommencement (7,437) (4,222) (4,222) --------- --------- --------- Net bank debtat period end (9,128) (3,562) (7,437) --------- --------- --------- Cash at bank and in hand 547 64 598 Amount drawn on bank facility (9,675) (3,626) (8,035) --------- --------- --------- Net bank debt at period end (9,128) (3,562) (7,437)Asset Finance (1,387) (1,069) (1,176) ========= ========= =========Net debt atperiod end (10,515) (4,631) (8,613) Status of Financial Statement The interim results for the 6 months ended 31 October 2006 are unaudited and donot comprise full accounts within the meaning of s 240 of the Companies Act1985.This financial statement, including comparative figures, has been prepared underUK GAAP and the accounting policies set out in the company's Annual Report andAccounts 2006. This information is provided by RNS The company news service from the London Stock Exchange