30 Sep 2009 07:00
| Press Release | 30 September 2009 |
Mountfield Group plc
("Mountfield" or the "Group")
Interim Results
Mountfield Group plc (AIM:MOGP), a provider of integrated specialist construction support services, announces its interim results for the for the six months ended 30 June 2009.
Overview
| Total revenue of £5.37 million | |
| Pre tax loss of £0.77 million | |
| Cash position of £0.8 million | |
| Cost efficiency programme implemented |
Subsequent highlights
| Contract slippage has stopped, trading in the current period has started well as market for data centre financing improves |
Commenting on the maiden Preliminary Results, Graham Read, Chief Executive Officer of Mountfield Group plc, said: "Whilst this has been a difficult and disappointing period for the Group with a number of contracts delayed, we are now seeing an increase in activity in our core divisions and the data centre market sector reviving."
- Ends -
For further information:
| Mountfield Group plc | |
| Peter Jay, Executive Chairman | Tel: +44 (0) 20 7398 7718 |
| Graham Read, Chief Executive Officer | www.mountfieldgroupplc.com |
| Daniel Stewart & Company Plc | |
| Paul Shackleton / Oliver Rigby | Tel: +44 (0) 20 7776 6550 |
| oliverr@danielstewart.co.uk | www.danielstewart.co.uk |
| Media enquiries: | |
| Abchurch | |
| Charlie Jack / Stephanie Cuthbert | Tel: +44 (0) 20 7398 7718 |
| stephanie.cuthbert@abchurch-group.com | www.abchurch-group.com |
Chairman's Statement
The first six months of this year have been extremely testing for Group. This resulted from the dramatic fall in business activity in the data centre sector in which it operates and the postponement of a number contracts which the Group had expected to begin work on. The causes for postponement were largely due to 3rd party financing of these centres being restricted and accordingly tendering for new business slowed and contracts were postponed.
However there is current evidence of a return of confidence in the sector, as liquidity pressure eases. This has been reflected in the increased number and size of tenders in which the Group is now involved and the indications that some of the postponed contracts will now be activated at the end of this year or during the early part of 2010.
In the period the Group's revenue was £5.4 million and the loss before taxation was £0.77 million.
The decision was made to re-structure the operations of Mountfield Land Limited by closing down the operation in East Grinstead which concentrated on small to medium scale social housing schemes and to run the Company from the Group's headquarters in Wickford, Essex. Mountfield Land has been re-focussed on larger scale developments for social housing providers with the intention that the Group will also offer construction services as well as land sourcing for such projects.
In addition the Company is assessing exciting opportunities in the broader contracting market, as conditions in the sector improve. These include targeting other social housing projects that will draw on the Group's considerable project management skills.
Outlook
Although trading conditions remain difficult the Directors expect the second half of the year to produce a significant improvement on the first half and to be able to reverse the trend of the first six months.
For the reasons stated the Directors remain confident of the Group's prospects during the second half of this year and more particularly during 2010.
Peter Jay
Executive Chairman
28 September 2009
Mountfield Group plc
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2009
| Six months to 30 June 2009 (unaudited) | Six months to 30 June 2008 (unaudited) | Twelve months to 31 December 2008 (audited) | ||
| Note | £ | £ | £ | |
| Revenue | 5,371,783 | 9,668,005 | 17,444,169 | |
| Cost of sales | (4,690,010) | (8,016,912) | (14,689,825) | |
| Gross profit | 681,773 | 1,651,093 | 2,754,344 | |
| Administrative expenses | (1,011,981) | (600,667) | (1,453,980) | |
| Negative Goodwill | - | - | 126,308 | |
| Charge in respect of share based payments | (144,987) | - | (52,357) | |
| Loans written off | (217,777) | - | - | |
| Operating (loss)/profit | (692,972) | 1,050,426 | 1,374,315 | |
| Net finance costs | (74,405) | 16,414 | (13,838) | |
| (Loss)/profit before income tax | (767,377) | 1,066,840 | 1,360,477 | |
| Income tax expense | 2 | 143,603 | (320,052) | (187,610) |
| (Loss)/profit for the period and total comprehensive (Loss)/income for the period | (623,774) | 746,788 | 1,172,867 | |
| (Loss)/Earnings per share | ||||
| Basic (p) | 3 | (0.37) | 1.46 | 1.55 |
| Diluted (p) | 3 | (0.37) | 1.46 | 1.54 |
| All amounts relate to continuing operations. | ||||
Mountfield Group plc
Condensed consolidated statement of financial position
As at 30 June 2009
| 30 June 2009 (Unaudited) | 30 June 2008 (unaudited) | 31 December 2008 (audited) | ||
| £ | £ | £ | ||
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 15,816,529 | - | 15,816,529 | |
| Property, plant and equipment | 185,698 | 114,417 | 193,349 | |
| 16,002,227 | 114,417 | 16,009,878 | ||
| Current assets | ||||
| Inventories | 141,926 | - | 135,480 | |
| Trade and other receivables | 4,397,225 | 3,802,329 | 4,328,004 | |
| Cash and cash equivalents | 806,490 | 1,508,123 | 2,178,667 | |
| Deferred tax asset | 132,069 | - | - | |
| 5,477,710 | 5,310,452 | 6,642,151 | ||
| TOTAL ASSETS | 21,479,937 | 5,424,869 | 22,652,029 | |
| EQUITY AND LIABILITIES | ||||
| Share capital and reserves | ||||
| Issued share capital | 171,311 | 100 | 169,558 | |
| Share premium | 492,074 | - | 318,500 | |
| Other reserve | 197,344 | - | 52,357 | |
| Merger reserve | 12,951,180 | - | 12,951,180 | |
| Reverse acquisition reserve | (2,856,756) | - | (2,856,756) | |
| Retained earnings | 726,135 | 923,830 | 1,349,909 | |
| TOTAL EQUITY | 11,681,288 | 923,930 | 11,984,748 | |
| Current liabilities | ||||
| Trade and other payables | 3,326,066 | 3,937,941 | 4,317,056 | |
| Short-term borrowings | 645,655 | 52,053 | 170,325 | |
| Finance lease liabilities | 13,922 | 9,851 | 6,920 | |
| Current tax payable | 393,269 | 488,099 | 731,630 | |
| 4,378,912 | 4,487,944 | 5,225,931 | ||
| Non-current liabilities | ||||
| Loan notes | 5,419,737 | - | 5,419,737 | |
| Finance lease liabilities | - | 12,995 | 10,079 | |
| Provision for deferred taxation | - | - | 11,534 | |
| TOTAL LIABILITES | 9,798,649 | 4,500,939 | 10,667,281 | |
| TOTAL EQUITY & LIABILITIES | 21,479,937 | 5,424,869 | 22,652,029 |
Mountfield Group plc
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2009
| Share capital | Share premium | Other reserves | Reverse Acquisition reserve | Merger reserve | Retained earnings | Total | |
| £ | £ | £ | £ | £ | £ | £ | |
| Balance at 1 January 2008 | 100 | - | - | - | - | 177,042 | 177,142 |
| Profit for the period | - | - | - | - | - | 746,788 | 746,788 |
| Balance at 30 June 2008 | 100 | - | - | - | - | 923,830 | 923,930 |
| Balance at 1 July 2008 | 100 | - | - | - | - | 923,830 | 923,930 |
| Shares issued for cash in the period | 32,238 | - | - | - | - | - | 32,238 |
| Shares issued on conversion of loan notes | 6,500 | 318,500 | - | - | - | - | 325,000 |
| Shares issued on acquisition | 130,820 | - | - | - | 12,951,180 | - | 13,082,000 |
| Reverse acquisition | (100) | - | - | (2,856,756) | - | - | (2,856,856) |
| Share based payments | - | - | 52,357 | - | - | - | 52,357 |
| Profit for the period | - | - | - | - | - | 426,079 | 426,079 |
| Balance at 31 December 2008 | 169,558 | 318,500 | 52,357 | (2,856,756) | 12,951,180 | 1,349,909 | 11,984,748 |
| Balance at 1 January 2009 | 169,558 | 318,500 | 52,357 | (2,856,756) | 12,951,180 | 1,349,909 | 11,984,748 |
| Loss for the period | - | - | - | - | - | (623,774) | (623,774) |
| Share based payments | - | - | 144,987 | - | - | - | 144,987 |
| Shares issued in period to settle creditor | 1,753 | 173,574 | - | - | - | - | 175,327 |
| Balance at 30 June 2009 | 171,311 | 492,074 | 197,344 | (2,856,756) | 12,951,180 | 726,135 | 11,681,288 |
Mountfield Group plc
Condensed consolidated cash flow statement
For the six months ended 30 June 2009
| Six months to 30 June 2009 (unaudited) | Six months to 30 June 2008 (unaudited) | Twelve months to 31 December 2008 (audited) | ||
| £ | £ | £ | ||
| Cash from operating activities: | ||||
| (Loss)/profit from operations before interest and tax | (692,972) | 1,050,426 | 1,374,315 | |
| Adjusted for: | ||||
| Depreciation | 27,338 | 3,681 | 18,776 | |
| Share based reserve | 144,987 | - | 52,357 | |
| Negative goodwill | - | - | (126,308) | |
| (Decrease)/increase in inventories | (6,446) | - | 243 | |
| (Decrease)/increase in trade and other receivables | (69,221) | (1,272,291) | 1,107,589 | |
| (Decrease)/increase trade and other payables | (890,351) | 1,553,749 | (1,068,193) | |
| Cash generated by operations | (1,486,665) | 1,335,565 | 1,358,779 | |
| Finance costs | - | - | (8,106) | |
| Finance income | 283 | 16,414 | 40,679 | |
| Taxation paid | (338,362) | 167,846 | (99,969) | |
| Net cash flows from (used in) operating activities | (1,824,744) | 1,519,825 | 1,291,383 | |
| Cash flows from investing activities | ||||
| Purchase of equipment | (19,686) | (5,709) | (8,671) | |
| Costs of acquisition | - | - | (783,817) | |
| Cash acquired on acquisition | - | - | 1,653,603 | |
| Net cash flows from (used in) investing activities | (19,686) | (5,709) | 861,115 | |
| Cash flows from financing activities: | ||||
| Finance lease rentals | (3,077) | (1,073) | (6,920) | |
| Repayment of loans | - | (8,414) | (140,730) | |
| Net cash flows used in financing activities | (3,077) | (9,487) | (147,650) | |
| Net (decrease)/increase in cash and cash equivalents | (1,847,507) | 1,504,629 | 2,004,848 | |
| Cash and cash equivalents brought forward | 2,008,342 | 3,494 | 3,494 | |
| Cash and cash equivalents carried forward | 160,835 | 1,508,123 | 2,008,342 |
Mountfield Group plc
1. Notes to the Interim Report
i. Status of the interim financial statements
The Group's interim financial statements for the six months ended 30 June 2009 were authorised for issue by the directors on 30 of September 2009.
The consolidated interim financial statements, which are unaudited, do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2008 have been reported on by the Group's auditors, received an unqualified audit report and have been filed with the registrar of companies at Companies House.
ii. Accounting policies
The consolidated interim financial statements have been prepared in accordance with the disclosure requirements of the AIM rules and using the accounting policies used in the Report and Accounts of the Group for the year ended 31 December 2008. The AIM rules do not require compliance with the requirements of IAS 34 "Interim Financial Statements" and these interim financial statements have not been prepared in accordance with the requirements of that standard.
iii. Basis of Preparation
On 9 September 2008, Acre 1124 Limited changed its name to Mountfield Group Limited and on 23 October 2008 it re-registered as Mountfield Group plc ("the Company").
On 16 October 2008, Mountfield Group plc acquired the entire issued share capital of Mountfield Building Group Limited, which had one wholly owned subsidiary, MBG Construction Limited (the "MGB Group") acquired in August 2008. The consideration of £7,622,000 was satisfied by the issue of 51,220,000 Ordinary Shares of 0.1p each at a price of 10p per share and by the issue of £2,500,000 unsecured non-convertible loan notes.
As a result of these transactions, the former shareholders of MBG Group became the majority shareholder in the Company. Accordingly, the substance of the transaction was the MBG Group acquired the Company in a reverse acquisition.
Under IFRS 3 'Business Combinations', the acquisition of MBG Group was accounted for as a reverse acquisition. As a consequence of applying reverse acquisition accounting, the results for the period ended 31 December 2008 comprise those of Mountfield Building Group Limited plus those of the Mountfield Group plc and other acquired entities from 16 October 2008.
The comparative figures are those of Mountfield Building Group Limited for the period ended 30 June 2008. The consolidated statement of financial position comprises the combined balances of MBG Group, the Company, together with those of acquired entities mentioned below at 30 June 2009 and 31 December 2008. The comparative consolidated statement of financial position is that of Mountfield Building Group Limited alone at 30 June 2008.
The acquisitions of Connaught Access Flooring Limited, MBG Construction Limited and Mountfield Land Limited were accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree plus any costs directly attributable to the business combination.
2. Income tax expense
| Six months to 30 June 2009 | Six months to 30 June 2008 | Twelve months to 31 December 2008 | ||
| £ | £ | £ | ||
| Current tax on income for the period | - | 320,052 | 195,721 | |
| Deferred tax credit | (143,603) | - | (8,111) | |
| Income tax expense in the income statement | (143,603) | 320,052 | 187,610 | |
3. (Loss)/Earnings per share
Basic loss/earnings per share
The basic loss/earnings per share are calculated by dividing the earnings attributable to equity shareholders by the weighted average number of shares in issue. In calculating the diluted loss per share, share options outstanding have been taken into account where the impact of these is dilutive.
The weighted average number of shares in the period were:
| Six months to 30 June 2009 | Six months to 30 June 2008 | Twelve months to 31 December 2008 | |||||
| Number | Number | Number | |||||
| Basic ordinary shares of 0.1p each | 170,439,897 | 51,220,000 | 75,611,034 | ||||
| Dilutive ordinary shares from warrants | - | - | 736,776 | ||||
| Total diluted | 170,439,897 | 51,220,000 | 76,347,810 | ||||
In the six months to 30 June 2009, the conditions attached to the deferred consideration shares were not met and as such there is no dilutive effect on the average weighted number of ordinary shares or the diluted loss per share.
Earning attributable to equity shareholders of the parent
| Six months to 30 June 2009 | Six months to 30 June 2008 | Twelve months to 31 December 2008 | |
| Basic (loss)/earnings per share (p) | (0.37) | 1.46 | 1.55 |
| Diluted (loss)/earnings per share (p) | (0.37) | 1.46 | 1.54 |