CVH.L Regulatory News (CVH)

29 Sep 2005 11:30

Cavanagh Group PLC29 September 2005 CAVANAGH GROUP PLCINTERIM RESULTS FOR THE SIX MONTHS ENDED 30 June 2005 KEY POINTS • Turnaround in EBITDA from a loss of £702k to a profit of £133k • Pre-tax loss of £0.2m (2004: £1.5m loss) • Turnover £6.3m (2004: £6.3m) Andrew Fay, Chief Executive, comments: "I am very pleased to report such a turnaround in the business. We anticipated that 2005 would be a year of consolidation and stabilityfollowing the acquisition and integration of Ernst & Young Financial Managementin the previous year. Our financial performance for the first half of this yearclearly demonstrates the progress made. We are further enthused by continuing todrive efficiencies coupled with our focus on growing the business profitably" For further information please contact: Andrew Fay, Chief ExecutiveCavanagh Group plc 01444 475400 CHAIRMAN'S STATEMENTFor the six months ended 30 June 2005 Results The results to June 2005 show turnover of £6.26m (2004: £6.33m) and an EBITDA of£133k (2004: £702k loss) Operations During the period, the management focus has centred on maximizing the skills ofour staff and strengthening the overall quality of service to Clients. This inturn has enabled the Group to maintain income and to build on the value in ourmodel, and this is now demonstrated in our results. Progress in reducing costswill continue, based on the decisions taken to restructure last year and thiswill also be evident in the second half of 2005 and early 2006. All of this hasbeen achieved while the Group has reduced the overall number of Consultants from75 to 65. The Group's philosophy has always been to improve quality and notcompromise and this is to continue. We are pleased with our existing Consultantbase, and we are motivated by the discussions we are currently engaged in, withquality Consultants who we hope will join during the second half of 2005. Thiswill help our organic growth and we anticipate growing the number of Consultantssteadily as and when the best opportunities present themselves. I am pleased to report the new back office system went live on 1st July 2005 asscheduled, which will assist in driving further operational efficiencies. Business Opportunities As anticipated, management have been able to develop business relations bothwith existing introducers and contacts as well as other strategic alliances setup to benefit from closer working relationships with other professionals in thelegal and accounting sectors. We continue to focus on the professional and highnet worth sector for our advice proposition together with the corporate sector.Progress has accelerated due to A-day opportunities within both markets and theactivity has increased considerably as there is an immediate requirement forprofessional advice. The Group is continually prioritising the significantopportunities presented to it, and improving the value for the Group and ourClients. CPRM Limited, our actuarial advice service launched in September 2004 hascontinued to develop attractive Client relationships. Income is expected tocontinue to grow during the remainder of 2005, and consequently to contributeprofitably to the Group's progress. Outlook The Group has made enormous strides in the period since flotation just three anda half years ago. The strategy employed has been to grow the company to become asignificant player in the provision of independent financial advice, and webelieve the current results show that a progressive journey to this position hasbeen underway. The opportunities on the back of this year's consolidation willcontinue and we see Cavanagh as a major winner in the sector for the future. Whilst 2004 was a difficult year of change for Cavanagh, 2005 is one ofconsolidation whereby we return to profitability and build a solid base for thefuture. John CampbellChairman29th September 2005 Cavanagh Group plcGROUP PROFIT AND LOSS ACCOUNTfor the six months ended 30 June 2005 Unaudited Unaudited Audited Six months to Six months to 14 months to 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 TURNOVER 6,255 6,326 12,217 --------- ---------- --------OPERATING LOSS Before exceptional 9 (831) (2,453)costs and goodwillamortisationExceptional costs 0 (467) (645) --------- ---------- -------- 9 (1,298) (3,098)Goodwill (100) (109) (202)amortisation --------- ---------- -------- (91) (1,407) (3,300) Share of joint 40 60 109venture operatingprofitNet Interest payable (138) (153) (225) --------- ---------- --------LOSS ON ORDINARY ACTIVITIES BEFORE (189) (1,500) (3,416)TAXATION Tax on loss on ordinary activities (16) 468 1,065 --------- ---------- --------LOSS ON ORDINARY ACTIVITIES (205) (1,032) (2,351)AFTER TAXATION Minority Interest 0 0 5 --------- ---------- --------RETAINED LOSS (205) (1,032) (2,346) ========= ========== ======== Loss per share (pence) - basic and fully diluted (1.89) (10.32) (22.62) ========= ========== ======== The operating loss for the year arises from the group's continuing operations.No separate Statement of Total Recognised Gains and Losses has been presented asall such gains and losses have been dealt with in the Profit and Loss Account. Cavanagh Group plcGROUP BALANCE SHEET30 June 2005 Unaudited Unaudited Audited 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 FIXED ASSETSIntangible assets 1,695 1,884 1,795Tangible assets 694 798 706Investments - share of assets of joint 2 2 2venture --------- ---------- -------- 2,391 2,684 2,503 CURRENT ASSETSDebtors 3,629 3,188 3,233Cash at bank and in hand 501 705 1,122 --------- ---------- -------- 4,130 3,893 4,355CREDITORSAmounts falling due within one (2,431) (2,320) (2,243)year --------- ---------- --------NET CURRENT ASSETS 1,699 1,573 2,112 --------- ---------- --------TOTAL ASSETS LESS CURRENT 4,090 4,257 4,615LIABILITIES CREDITORSAmounts falling due after more than (3,800) (4,450) (4,100)one year PROVISIONS FOR LIABILITIES AND (287) (105) (307)CHARGES --------- ---------- --------TOTAL ASSETS LESS CURRENT 3 (298) 208LIABILITIES ========= ========== ======== CAPITAL AND RESERVESCalled-up equity share 109 100 109capitalShare premium account 2,706 1,065 2,706Profit and loss account (2,807) (1,463) (2,602)Minority Interest (5) 0 (5) --------- ---------- --------SHAREHOLDERS' FUNDS 3 (298) 208 ========= ========== ======== Cavanagh Group plcGROUP CASH FLOW STATEMENTfor the six months ended 30 June 2005 Unaudited Unaudited Audited Six months to Six months to 14 months to 30 June 30 June 31 December 2005 2004 2004 £'000 £'000 £'000 Net cash outflow from operating activities (311) (771) (2,364) RETURNS ON INVESTMENTS AND SERVICING OF FINANCEDividends received from joint venture 40 60 104Net Interest paid (138) (153) (225) --------- ---------- --------NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS (98) (93) (121)AND SERVICING OF FINANCE --------- ---------- -------- TAXATION 0 0 (13) --------- ---------- -------- CAPITAL EXPENDITUREPayments to acquire tangible fixed (112) (751) (781)assets --------- ---------- --------NET CASH OUTFLOW FROM CAPITAL (112) (751) (781)EXPENDITURE --------- ---------- -------- ACQUISITIONS AND DISPOSALSNet cash acquired with subsidiary 0 0 1,322Acquisition costs 0 0 (3,565) --------- ---------- --------NET CASH OUTFLOW FROM ACQUISITIONS 0 0 (2,243)AND DISPOSALS --------- ---------- --------CASH OUTFLOW BEFORE FINANCING (521) (1,615) (5,522) --------- ---------- -------- FINANCINGIssue of equity share capital 0 0 1650Bank loan 0 0 4500Bank loan repayment (100) 0 0 --------- ---------- --------NET CASH (OUTFLOW)/ INFLOW FROM (100) 0 6,150FINANCING --------- ---------- --------(DECREASE)/INCREASE IN CASH (621) (1,615) 628 ========= ========== ======== Notes: 1. The interim results are unaudited and do not comprise statutory accountswithin the meaning of Section 240 of the Companies Act 1985. The results for theperiod ended 31 December 2004 have been extracted from the Group accounts forthat period. Those financial statements have been filed with the Registrar ofCompanies and included an auditor's report which was unqualified. 2. The interim results have been prepared in accordance with the accountingpolicies adopted in the accounts for the period ended 31 December 2004. Theinterim results in 2004 were for the six months to April 2004, but following thechange in year end from October to December 2004, the interims are now for thesix months to June. 3. Loss per share is based on a loss after taxation of £205,000 and on10,868,400 ordinary shares, being the weighted average number in issue duringthe period. 4. Reconciliation of operating loss to net cash flow from operatingactivities Unaudited Unaudited Audited 6 months to 6 months to 14 months ended 30 June 2005 30 June 2004 31 December 2004 £'000 £'000 £'000 Operating loss (91) (1,407) (3,300)Amortisation of goodwill 100 109 202Depreciation 124 129 251(Increase) / decrease in debtors (412) (174) 138(Decrease) / increase in creditors (32) 572 345 Net cash outflow from operating activities (311) (771) (2,364) 5. Reconciliation of net cash flow to movement in net funds Unaudited Unaudited Audited 6 months to 6 months to 14 months ended 30 June 2005 30 June 2004 31 December 2004 £'000 £'000 £'000 Increase/(decrease) in cash in the period (621) (1,615) 628Cash flow in respect of bank loans 100 0 (4,500)Change in net funds (521) (1615) (3,872) Opening net borrowings (3,378) (2,180) 494 Closing net borrowings (3,899) (3,795) (3,378) 6. Copies of this report will be sent to shareholders shortly. 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