Last checked at 10 Sep 2009 07:00
Maintel Holdings Plc
Interim results for the six months to 30 June 2009
Maintel Holdings Plc, the telecoms services company, announces unaudited interim results for the six months to 30 June 2009.
Financial Highlights
Adjusted profit before tax of £1,128,000 (H108 - £811,000); adjusted profit before tax is basic profit before tax of £967,000 (H108 - £621,000), adjusted for goodwill impairment and intangibles amortisation
Adjusted earnings per share of 7.5p (H108 - 4.7p); adjusted earnings per share is basic and diluted earnings per share of 6.3p (H108 - 3.5p), adjusted for goodwill impairment and intangibles amortisation
Maintenance base increased to over £10m at 30 June 2009
Network services revenue and gross margin down only slightly on H108, with a large order in June benefiting the second half of 2009
Cash of £1.4m at 30 June 2009 (31 December 2008 - £1.0m) after paying a dividend of £334,000, taxation of £192,000 and share buy backs costing £30,000
Interim dividend proposed of 3.1p per share (2008: 2.5p)
Operational Highlights
Significant maintenance order from a major customer announced in April, since grown to c£800,000 revenue per annum. A further order from the same customer for £700,000 per annum was announced recently
Further restructuring of engineering, sales and service resource in response to reduced equipment sales - financial benefits being seen in H2 2009
For further information please contact:
Eddie Buxton, Chief Executive 020 7401 4601
Dale Todd, Finance Director 020 7401 0562
Marc Young, FinnCap 020 7600 1658
Chairman's statement
I am pleased to report that Maintel achieved adjusted profit before tax of £1,128,000 for the first half of 2009, an increase of 39% over the comparable period last year (£811,000), giving an adjusted earnings per share figure up 60% at 7.5p (H108 - 4.7p). Turnover was slightly down at £9.401m (H108 - £9.777m) reflecting our planned reduction in low margin equipment sales and the termination of two large network services contracts towards the end of 2008. 82% of Group turnover during the period can be classified as recurring revenues compared with 76% for 2008 as a whole.
The reduction of our cost base continued in the early part of the period incurring one off restructuring charges of £123,000 but restoring margins to satisfactory and, we believe, sustainable levels.
New business wins in our core area of maintenance have been pleasing and some key renewals of larger contracts have pushed our contracted base over £10m for the first time by the end of the period. The maintenance pipeline remains strong and we are well positioned for the second half of the year.
In network services, a large win has replaced much of the revenue lost in H208 but call traffic continues to be sensitive to economic conditions although other sources of revenue are growing. The new business picture here remains highly competitive and we are adding to our sales resource in this area.
The balance sheet remains strong with £1.4m cash at the end of the period and we are not so far seeing any noticeable deterioration in debt collection in spite of recessionary conditions.
In view of the strength of the first half's results and our positive outlook for the balance of the year, we are raising our interim dividend by 24% to 3.1p per share. This will be paid on 2 October.
J D S Booth
Chairman
9 September 2009
Business review
Results
The first half of 2009 has seen profit before impairment and amortisation up £317,000 on the first half of 2008. The 2009 figures include £123,000 in respect of restructuring the engineering and customer service resource to reflect the reduction in equipment sales - both planned and economy-driven - in the period; without these costs profit would also have been higher than in the second half of 2008.
Earnings per share have been enhanced by the buying back of 1,565,000 shares in 2008, most of these in the second half, and a further 40,000 in March 2009, so that both basic and adjusted EPS show an increase over the second half of 2008.
| H1 2009 | H1 2008 | H2 2008 | 2008 | ||||||||
| £000 | £000 | £000 | £000 | ||||||||
| Revenue | 9,401 | 9,777 | 9,638 | 19,415 | |||||||
| Profit before tax | 967 | 621 | 968 | 1,589 | |||||||
| Add back goodwill impairment and intangibles amortisation | 161 | 190 | 193 | 383 | |||||||
| Adjusted profit before tax | 1,128 | 811 | 1,161 | 1,972 | |||||||
| Basic and diluted earnings per share | 6.3p | 3.5p | 5.7p | 9.2p | |||||||
| Adjusted earnings per share* | 7.5p | 4.7p | 7.4p | 12.1p |
* Adjusted profit after tax divided by weighted average number of shares (note 3)
Revenue has reduced by £237,000 compared with the second half of 2008, with strong maintenance revenues benefiting from a large contract from a major customer - initially for £620,000pa, but since growing to c£800,000pa - partly offsetting the previously highlighted reduction in discretionary equipment sales and the termination by two larger customers of the network services division late in 2008. The maintenance base stood at a record high of over £10m at the end of the period.
The second half will benefit from a full six months of the new contract - less than 3 months were billed in the first half - together with a further order for c£700,000 recently announced from the same customer, and costs will reduce following a scaling back in engineering and service resource in the first half in a further response to the fall in equipment sales. In competitive market conditions, a large new network services contract has been signed in the first half of 2009, which is expected to more than compensate for the loss of two mid-level customers in that division in the period.
We are therefore well positioned for the second half of 2009.
The Group continues to be strongly cash generative, and cash balances remain healthy at 30 June 2009, at £1.4m (31 December 2008 - £1.0m), after corporation tax payments of £192,000, dividend payments of £334,000 and share buy backs at a cost of £30,000. The Group has no debt.
Maintenance and equipment division
| Revenue analysis (£000) | Six months to 30 June 2009 | Six months to 30 June 2008 | Year ended 31 Dec 2008 |
| Maintenance related | 4,924 | 4,459 | 9,157 |
| Equipment, installations and other | 1,785 | 2,514 | 4,702 |
| Total maintenance and equipment | 6,709 | 6,973 | 13,859 |
| Division gross profit (£000) | 2,784 (41%) | 2,412 (35%) | 5,017 (36%) |
| Average headcount during the period | |||
| Sales, marketing and customer service | 42 | 52 | 49 |
| Engineers | 81 | 86 | 84 |
Maintenance
As announced in April, we were awarded a significant maintenance contract by our largest customer, worth a minimum of £620,000 per annum in revenue at around normal gross margin levels, and in respect of seven end user companies, for a minimum one year term. This contract has since grown to around £800,000 per annum.
Other than that contract, sales effort has focussed on recurring revenue, including developing relationships with other leading telecoms industry players, and sales of maintenance contracts have exceeded budgeted levels in the first half whilst attrition, although slightly higher than the exceptionally low levels of 2008, remains encouragingly low compared with historical levels. The Group's second largest customer has re-signed for a further 3 years early in the second half, and numerous other large customers have also renewed their contracts with Maintel so far this year.
These factors have resulted in record maintenance-related revenues of £4.9m in the first half and, as noted earlier, we finished H109 with our highest ever annual contract base of over £10m.
Equipment Sales
As explained in previous reports, the economic slowdown and our planned move away from lower margin, big ticket equipment orders resulted in a steady reduction in those sales during 2008. 2009 started slowly but equipment sales appear to have stabilised at slightly over £300,000 per month, giving £1.8m for H109 compared with £2.5m for the equivalent period last year and £2.2m in the second half of 2008.
Margins on smaller sales are better, and this revenue stream also includes some profitable labour-only work in H109, so that the margin on equipment sales and labour charges has increased in H109.
In anticipation of the lower levels of equipment sales, the Group's engineering resource was reduced in H108 and, given the continued trend during 2008, further reductions were made in January 2009. The financial benefits from these were not felt until later in H109 due to notice periods. The first half also benefited from earlier reductions in sales and equipment-related customer service resource.
Network Services
| Revenue analysis (£000) | Six months to 30 June 2009 | Six months to 30 June 2008 | Year ended 31 Dec 2008 |
| Call traffic | 1,431 | 1,795 | 3,405 |
| Line rental | 936 | 772 | 1,645 |
| Other | 403 | 284 | 628 |
| Total Maintel Voice and Data | 2,770 | 2,851 | 5,678 |
| Division gross profit (£000) | 667 (24%) | 705 (25%) | 1,406 (25%) |
Largely as a result of the loss of two major customers late in 2008 following their respective acquisition and withdrawal from the market, our network services division revenues were £57,000 less in H109 than in H208.
Two medium-sized (primarily call traffic) customers cancelled during H109, which has been more than compensated by the signing of a larger line rental contract; however there has been a time lapse between contracts stopping and starting, leaving a net revenue shortfall. Despite this signing, new network services contracts have proved more difficult to secure during the first half, restricting growth, and the industry-wide reduction in call traffic due to the recession has also impacted the division's revenues, with call traffic revenues down by £179,000 compared with H208.
The increase in other revenue, £59,000 up on H208, is attributable to the growth in the division's data business.
Margins of the respective network services revenue streams remained relatively strong in H109 at 24%, compared with 25% in H208, with the replacement of higher margin call traffic with lower margin line rental being the primary cause of this slight reduction.
The divisional gross profit was £667,000 in the first half, compared with £701,000 in the second half of last year.
Administrative expenses, excluding goodwill impairment and intangibles amortisation
| Administrative expenses (£000) | Six months to 30 June 2009 | Six months to 30 June 2008 | Year ended 31 Dec 2008 |
| Sales expenses | 1,011 | 1,100 | 2,114 |
| Other administrative expenses (excluding goodwill impairment and intangibles amortisation) | 1,260 | 1,207 | 2,302 |
| Total other administrative expenses | 2,271 | 2,307 | 4,416 |
Continuing attention to costs - including, with a handful of pre-agreed exceptions, a salary freeze from 1 January 2009 - has meant that overall administrative expenses have increased only slightly over H208, with sales costs remaining static and increased commission compensating for reduced headcount.
Interest
The share buybacks in late 2008 and in March 2009 reduced the Group's cash reserves significantly at the time and, together with the poor rates of interest achievable on low risk deposits, this has resulted in minimal interest income in the period.
Taxation
The income statement shows an effective tax rate of 29.5% (2008 - 31.1%) The two main trading companies are taxed at 28.0% in 2009 (2008 - 28.5%), so that with disallowables the effective rate is above this, increased further by the goodwill impairment charge which does not attract tax relief.
Balance Sheet
The balance sheet remains strong, with £1.4m of cash (31 December 2008 - £1.0m) as noted above, after corporation tax payments of £192,000, dividend payments of £334,000 and share buy backs at a cost of £30,000. The Group has no debt.
No significant expenditure has been required on plant and equipment during the period, or on major stock purchases. A number of maintained phone systems are nearing the end of their useful lives and the parts held in stock associated with these have been further provided against in the period.
The deferred tax liability arises from the application of IFRS, whereby a liability of £290,000 was created on the recognition of the intangible asset relating to the acquisition of the District group in 2006.
Intangible assets
The Group has three intangible assets - goodwill arising on the acquisition of Maintel Network Services Limited, an intangible asset represented by customer contracts and relationships acquired from District and Callmaster Limited, together with goodwill relating to the District acquisition.
Goodwill has been subject to an impairment charge of £30,000 in the period (full year 2008 - £120,000), leaving a carrying value of £347,000 (end-2008 - £377,000).
The intangible asset relating to customer contracts and relationships has been subject to an amortisation charge of £131,000 (full year 2008 - £263,000), leaving a carrying value of £700,000 (end-2008 - £831,000).
Purchase of own shares
Further to the authority granted at the last AGM, the Company repurchased and cancelled 40,000 of its own shares in March 2009 at a price of 76p and a total cost of £30,000.
Market Conditions and Outlook
The Group's maintenance base has grown significantly in the last year and our focus is to sustain this trend, both through direct client relationships and by continuing to build on our relationships with major players in the telecoms industry. We are also investing to restore growth in our network services division, where market conditions remain competitive.
The pipeline is good in both areas, as it is for equipment sales, although the targets for the latter are low and to a large extent achievable from incidental sales to customers rather than new sales being sought at stressed margins in the current economic environment. To an extent, this business could justifiably be described as recurring revenue.
Maintel's "traditional" recurring revenue, however, derives from its maintenance and network services contracts, which represented £7.7m (82%) of our Group income in H109 (full year 2008 - £14.8m and 76%), giving good revenue visibility.
We are well placed, therefore, for the second half of 2009, which has begun satisfactorily.
Dividend
Given the solid results in the first half of 2009 and our expectations for the second half, the board proposes an increased interim dividend of 3.1p per share (H108 - 2.5p).
Eddie Buxton
Chief Executive
9 September 2009
Maintel Holdings Plc
Consolidated statement of comprehensive income
for the six months to 30 June 2009
|
| Six months to | Six months to | Year ended |
|
| 30 June 2009 | 30 June 2008 | 31 Dec 2008 |
|
| £'000 | £'000 | £'000 |
| (unaudited) | (unaudited) | (audited) | |
| Revenue | 9,401 | 9,777 | 19,415 |
| Cost of sales | 6,005 | 6,699 | 13,095 |
| Gross profit | 3,396 | 3,078 | 6,320 |
| Administrative expenses | |||
| Goodwill impairment | 30 | 59 | 120 |
| Intangibles amortisation | 131 | 131 | 263 |
| Other administrative expenses | 2,271 | 2,307 | 4,416 |
| 2,432 | 2,497 | 4,799 | |
| Operating profit | 964 | 581 | 1,521 |
| Finance income | 3 | 40 | 68 |
| Profit before taxation | 967 | 621 | 1,589 |
| Taxation | 285 | 197 | 495 |
| Profit for the period and total comprehensive income for the period | 682 | 424 | 1,094 |
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| Earnings per share | |||
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| |||
| Basic and diluted (note 3) | 6.3p | 3.5p | 9.2p |
Maintel Holdings Plc
Consolidated statement of financial position
as at 30 June 2009
|
| 30 June 2009 | 30 June 2008 | 31 Dec 2008 |
|
| £'000 | £'000 | £'000 |
|
| (unaudited) | (unaudited) | (audited) |
|
| |||
| Non current assets | |||
| Intangible assets | 1,046 | 1,401 | 1,208 |
| Property, plant and equipment | 223 | 201 | 200 |
| 1,269 | 1,602 | 1,408 | |
| Current assets | |||
| Inventories | 832 | 837 | 736 |
| Trade and other receivables | 4,073 | 3,993 | 3,164 |
| Cash and cash equivalents | 1,380 | 1,896 | 1,010 |
| Total current assets | 6,285 | 6,726 | 4,910 |
| Total assets | 7,554 | 8,328 | 6,318 |
| Current liabilities | |||
| Trade and other payables | 5,989 | 6,118 | 5,173 |
| Current tax liabilities | 310 | 226 | 193 |
| Total current liabilities | 6,299 | 6,344 | 5,366 |
| Non current liabilities | |||
| Deferred tax liability | 73 | 109 | 98 |
| Total net assets | 1,182 | 1,875 | 854 |
| Equity | |||
| Issued share capital | 108 | 121 | 108 |
| Share premium | 628 | 628 | 628 |
| Capital redemption reserve | 28 | 15 | 28 |
| Retained earnings | 418 | 1,111 | 90 |
| Total equity | 1,182 | 1,875 | 854 |
Maintel Holdings Plc
Consolidated statement of changes in equity
for the period to 30 June 2009 (unaudited)
|
| Share capital | Share premium | Capital redemption reserve | Retained earnings | Total |
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
|
| |||||
| At 1 January 2008 | 124 | 628 | 12 | 1,442 | 2,206 |
| Total comprehensive income | - | - | - | 424 | 424 |
| Dividend | - | - | - | (364) | (364) |
| Movements in respect of purchase of own shares | (3) | - | 3 | (391) | (391) |
| At 30 June 2008 | 121 | 628 | 15 | 1,111 | 1,875 |
| Total comprehensive income | - | - | - | 670 | 670 |
| Dividend | - | - | - | (300) | (300) |
| Movements in respect of purchase of own shares | (13) | - | 13 | (1,391) | (1,391) |
| At 31 December 2008 | 108 | 628 | 28 | 90 | 854 |
| Total comprehensive income | - | - | - | 682 | 682 |
| Dividend | - | - | (334) | (334) | |
| Share based payment credit | - | - | - | 10 | 10 |
| Movements in respect of purchase of own shares | - | - | - | (30) | (30) |
| At 30 June 2009 | 108 | 628 | 28 | 418 | 1,182 |
Maintel Holdings Plc
Consolidated cash flow statement
for the six months to 30 June 2009
|
| Six months to | Six months to | Year ended |
|
| 30 June 2009 | 30 June 2008 | 31 Dec 2008 |
|
| £'000 | £'000 | £'000 |
|
| (unaudited) | (unaudited) | (audited) |
|
| |||
| Operating activities | |||
| Profit before taxation | 967 | 621 | 1,589 |
| Adjustments for: | |||
| Goodwill impairment | 30 | 59 | 120 |
| Intangibles amortisation | 131 | 131 | 263 |
| Share based payments | 10 | - | - |
| Depreciation charge | 50 | 61 | 118 |
| Interest received | (3) | (40) | (68) |
| Loss on disposal of fixed assets | - | 1 | 2 |
| Operating cash flows before changes in working capital | 1,185 | 833 | 2,024 |
| (Increase)/decrease in inventories | (96) | (8) | 93 |
| (Increase)/decrease in trade and other receivables | (909) | (65) | 764 |
| Increase/(decrease) in trade and other payables | 816 | 93 | (852) |
| Cash generated from operating activities | 996 | 853 | 2,029 |
| Tax paid | (192) | (296) | (638) |
| Net cash flows from operating activities | 804 | 557 | 1,391 |
| Investing activities | |||
| Purchase of plant and equipment | (73) | (58) | (115) |
| Disposal of plant and equipment | - | 3 | 3 |
| Interest received | 3 | 40 | 69 |
| Net cash flows from investing activities | (70) | (15) | (43) |
| Financing activities | |||
| Other interest paid | - | - | (1) |
| Repurchase of own shares for cancellation | (30) | (391) | (1,782) |
| Equity dividends paid | (334) | (364) | (664) |
| Net cash flows from financing activities | (364) | (755) | (2,447) |
| Net increase/(decrease) in cash and cash equivalents | 370 | (213) | (1,099) |
| Cash and cash equivalents at start of period | 1,010 | 2,109 | 2,109 |
| Cash and cash equivalents at end of period | 1,380 | 1,896 | 1,010 |
Maintel Holdings Plc
Notes to the interim results
1. Basis of preparation
The financial information in these interim results is that of the holding company and all of its subsidiaries (the Group). It has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards as adopted for use in the EU (IFRSs). The accounting policies applied by the Group in this financial information are the same as those applied by the Group in its financial statements for the year ended 31 December 2008 and which will form the basis of the 2009 financial statements, except as described below.
A number of new and amended standards become effective for periods beginning on or after 1 January 2009. The principal changes that are relevant to the Group are:
IFRS 8 - Operating Segments
IFRS 8 is a disclosure standard only; there has been no effect on the reported results or previous financial position of the Group. The Group's reportable segments as reported under IAS 14 have remained unchanged following the adoption of this standard.
IAS 1 (revised 2007) - Presentation of Financial Statements
The revised standard has introduced a number of terminology changes (including revised titles for the condensed financial statements) and has resulted in a number of changes in presentation and disclosure. There has been no effect on the reported results or previous financial position of the Group.
None of the other new standards and amendments are expected to materially affect the Group.
The Group's results are not materially affected by seasonal variations.
The comparative financial information presented herein for the year ended 31 December 2008 does not constitute full statutory accounts for that period. The Group's annual report and accounts for the year ended 31 December 2008 have been delivered to the Registrar of Companies. The Group's independent auditor's report on those statutory accounts was unqualified, did not include references to any matters to which the auditors drew attention without qualifying their report, and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
The financial information for the half-years ended 30 June 2009 and 30 June 2008 is unaudited.
2. Segmental analysis
| Six months to 30 June 2009 | Maintenance and equipment | Network services | Central/ intercompany | Total |
| (unaudited) | £'000 | £'000 | £'000 | £'000 |
| Revenue | 6,709 | 2,770 | (78) | 9,401 |
| Included in telephone system maintenance revenue above is £1,000 of leasing income. | ||||
| Revenue is wholly attributable to the principal activities of the Group and, other than | ||||
| insignificant sales to EU countries, arises predominantly within the United Kingdom. | ||||
| Operating profit | 927 | 195 | (158) | 964 |
| Interest income | 3 | |||
| Profit before taxation | 967 | |||
| Taxation | (285) | |||
| Profit after taxation | 682 | |||
| Balance sheet | ||||
| Assets | 6,192 | 1,408 | (46) | 7,554 |
| Liabilities | (5,397) | (1,117) | 142 | (6,372) |
| Total | 795 | 291 | 96 | 1,182 |
| Other | ||||
| Capital expenditure | 73 | - | - | 73 |
| Depreciation | 50 | - | - | 50 |
| Amortisation and impairment | 11 | 24 | 126 | 161 |
| Six months to 30 June 2008 | Maintenance and equipment | Network services | Central/ intercompany | Total |
| (unaudited) | £'000 | £'000 | £'000 | £'000 |
| Revenue | 6,973 | 2,851 | (47) | 9,777 |
| Included in telephone system maintenance revenue above is £5,000 of leasing income. | ||||
| Revenue is wholly attributable to the principal activities of the Group and, other than | ||||
| insignificant sales to EU countries, arises predominantly within the United Kingdom. | ||||
| Operating profit | 533 | 220 | (172) | 581 |
| Interest income | 40 | |||
| Profit before taxation | 621 | |||
| Taxation | (197) | |||
| Profit after taxation | 424 | |||
| Balance sheet | ||||
| Assets | 6,391 | 1,449 | 488 | 8,328 |
| Liabilities | (5,301) | (1,146) | (6) | (6,453) |
| Total | 1,090 | 303 | 482 | 1,875 |
| Other | ||||
| Capital expenditure | 58 | - | - | 58 |
| Depreciation | 61 | - | - | 61 |
| Amortisation and impairment | 11 | 24 | 155 | 190 |
| Year to 31 December 2008 | Maintenance and equipment | Network services | Central/ intercompany | Total |
| £'000 | £'000 | £'000 | £'000 | |
| Revenue | 13,859 | 5,678 | (122) | 19,415 |
| Included in telephone system maintenance revenue above is £8,000 of leasing income. | ||||
| Other than equipment sales of £34,000 to EU countries, revenue is wholly attributable to the principal activities of the Group and arises predominantly within the United Kingdom. | ||||
| Operating profit | 1,433 | 472 | (384) | 1,521 |
| Interest income | 68 | |||
| Profit before taxation | 1,589 | |||
| Taxation | (495) | |||
| Profit after taxation | 1,094 | |||
| Balance sheet | ||||
| Assets | 4,594 | 1,308 | 416 | 6,318 |
| Liabilities | (4,462) | (1,158) | 156 | (5,464) |
| Total | 132 | 150 | 572 | 854 |
| Other | ||||
| Capital expenditure | 115 | - | - | 115 |
| Depreciation | 118 | - | - | 118 |
| Amortisation and impairment | 22 | 48 | 313 | 383 |
3. Earnings per share
Earnings per share have been calculated using the weighted average number of shares in issue during the period. This and earnings, being profit after tax, are as follows. An adjusted earnings per share figure - excluding the impairment of goodwill and amortisation of intangibles and, in 2008, one-off professional costs - is also shown in order to provide a clearer picture of the trading performance of the Group.
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| Six months to | Six months to | Year ended |
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| 30 June 2009 | 30 June 2008 | 31 Dec 2008 |
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| £'000 | £'000 | £'000 |
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| (unaudited) | (unaudited) | (audited) |
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| Earnings used in basic and diluted EPS, being profit after tax | 682 | 424 | 1,094 |
| Goodwill impairment and intangible amortisation, less tax thereon | 123 | 151 | 305 |
| One-off professional costs, less tax thereon | - | - | 35 |
| Adjusted earnings, being profit after tax, before goodwill impairment and intangible amortisation and one-off professional costs | 805 | 575 | 1,434 |
| Weighted average number of shares | 10,798 | 12,168 | 11,832 |
| Basic and diluted EPS | 6.3p | 3.5p | 9.2p |
| Adjusted EPS | 7.5p | 4.7p | 12.1p |
4. Dividends
|
| Six months to | Six months to | Year ended |
|
| 30 June 2009 | 30 June 2008 | 31 Dec 2008 |
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| £'000 | £'000 | £'000 |
|
| (unaudited) | (unaudited) | (audited) |
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| Dividends paid |
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| Final 2007, paid 30 April 2008 | |||
| - 3.0p per share | - | 364 | 364 |
| Interim 2008, paid 10 October 2008 | |||
| - 2.5p per share | - | - | 300 |
| Final 2008, paid 29 April 2009 | |||
| - 3.1p per share | 334 | - | - |
| 334 | 364 | 664 |
The directors propose to pay an interim dividend of 3.1p per share on 2 October 2009 to shareholders on the register at 18 September 2009.
Independent review report to Maintel Holdings Plc
Introduction
We have been engaged by the company to review the financial information in the interim results for the six months ended 30 June 2009 which comprises the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated cash flow statement, and related explanatory notes.
We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The interim results, including the financial information contained therein, are the responsibility of and have been approved by the directors. The directors are responsible for preparing the interim results in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market which require that the interim results be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the interim results based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the interim results for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.
BDO STOY HAYWARD LLP
Chartered Accountants and Registered Auditors
London
9 September 2009