24 Mar 2011 07:00
Thursday, 24 March 2011
Autoclenz Holdings Plc
Preliminary Announcement of Results for the year to 31 December 2010
Highlights:
·; Automotive Services - a satisfactory year with increased sales and maintained gross profit, notwithstanding the challenging market conditions
·; Movements - the new Northern business which sustained losses in 2010 is now in profit, and other profitable business is being secured.
·; Specialist Cleaning - a difficult year as expected with reduced sales and profit; modest growth targeted for 2011 following sales and managerial re-organisation
·; Underlying operating profit before tax (before amortisation of intangibles and share option related charges) £1.2million (2009: £1.36million), with underlying earnings per share after actual tax charge 11.12p (2009:12.53p) Applying standard 28% tax charge earnings per share 8.32p (2009: 9.44p)
·; Consolidated Income Statement shows profit before tax £0.13million (2009:£0.48 million) with basic earnings per share 0.83p (2009: 4.03p)
·; Good cash generation continues with year end net debt reduced to £0.75million (2009:£1.48 million) and £5million term loan now fully repaid
·; Maintained recommended final dividend of 1p (2009: 1p)
"The overall results are creditable given the challenging market conditions and reflect the resilience of our core automotive business and our financial strength. We are mildly encouraged by the on budget results for the first two months of 2011 and there is strong determination to put the setbacks of 2010 behind us and deliver improved profitability"
James Leek, Chairman
Enquires: | |
James Leek, Chairman | 07966 528295 |
Grahame Rummery, Chief Executive | 07860 680428 |
Trevor Clingo, Group Finance Director | 01283 550033 |
Autoclenz Holdings Plc | |
www.autoclenz.co.uk | |
AIM: ACZ | |
Ross Andrews/Nick Cowles | |
Zeus Capital Ltd | 0161 831 1512
|
Fiona Tooley/Keith Gabriel | |
Citigate Dewe Rogerson Ltd | 0121 362 4035 |
STATEMENT BY THE CHAIRMAN, JAMES LEEK
Results
We are pleased to report that although the difficult areas highlighted in our interim report have continued as expected to impact our profitability, the overall results are creditable given the challenging market conditions and reflect the resilience of our core automotive business and our financial strength.
Underlying operating profit (before the amortisation of intangibles and share option related charges) was £1.29million (2009: £1.54million). Interest charges at £0.1million (2009: £0.2million) continued to reduce sharply with lower debt levels resulting in underlying operating profit after interest of £1.2million (2009: £1.36million) and underlying earnings per share of 11.12p (2009: 12.53p). The adjusted earnings per share, applying a standard tax charge of 28% to the underlying operating profit after interest is 8.32 pence (2009: 9.44 pence).
The accompanying Financial Review reconciles underlying profits as stated above with the statutory figures in the Consolidated Income Statement which show: operating profit £0.22million (2009: £0.66million), profit before tax £0.13million (2009: £0.48million), and basic earnings per share of 0.83 pence (2009: 4.03 pence).
Operating Review and Segmental Analysis
We continue to operate our activities in two distinct segments:
·; Automotive Services (incorporating AUTOCLENZ/PINNACLE valeting, AC SMART, READY TO RENT and MOVEMENTS)
·; Specialist Cleaning Services (incorporating REACT RAPID RESPONSE and REACT PROPERTY SERVICES)
Automotive Services had a satisfactory year under the circumstances with increased sales and broadly maintained gross profit contribution. Specialist Cleaning Services however suffered a further decline in sales and a consequent reduction of some £0.2million gross profit - accounting for most of the reduction in the Group's underlying operating profit for the year.
Automotive Services
Revenue increased by £2.54 million (11%) from £22.4million to £24.9 million continuing the trend of the first half year with gross profit maintained at £5.5 million. A good performance in a year in which both new and used car sales showed little year on year change. The increased sales revenue was achieved across all our services reflecting both better customer retention and more focussed sales and marketing activities. An important part of the revenue increase came from our new Movements business in the North of England and Scotland with annual sales value in excess of £1 million. We explained in our interim report that this planned addition to our hitherto largely southern based Movements business brought with it significant start-up and support costs and it was therefore loss making during 2010. These losses together with the increased pressure generally on selling prices which is normal in a recession accounted for the reduction in percentage gross margin.
On a more positive note our Movements business secured business with a major Tyre and Exhaust provider to provide a Collection and Delivery service for its customers in 22 of its centres.
We can also report that we have renewed our contract for a 3 year period with our major Auction customer. This has been achieved at some margin reduction but is acceptable given the size of the business involved.
For 2011, the general economic outlook in the automotive sector continues to be challenging with forecasts of a small 5% reduction in new car sales, following the ending of the scrappage scheme which boosted first half sales in 2010. There are a number of significant contract renewals and tenders which we are actively working on, but our objective is to maintain the sales volumes we achieved in 2010 whilst improving the mix of our business towards those customers who appreciate the value and economics of the premium service which we offer - the goal is to restore some of the gross margin loss we saw in 2010 and to think more radically about our fixed and variable cost base. In this respect we are pleased to report that the new northern Movements business has moved into marginal profitability during the first months of 2011 and whilst there are still improvements to make, it should not prove a drag on results as it did in 2010.
Specialist Cleaning
We reported very fully in our interim report on the impact of public sector spending cuts and the other adverse factors which impacted the year and have led to a sales decline from £1.6 million to £1.4million and a lower gross margin resulting in a gross profit reduction of £200,000.
We are now looking ahead and rebuilding this business with new enthusiasm and direction. Both React Rapid Response (the decontamination activities) and React Property Services (specialist cleaning for the local authority and affordable housing sectors) have new internally promoted management. There is new focus on forming longer term partnerships with the leading FM providers and Housing Associations, better use of our large industry database, and a radical overhaul of our tendering and quotation processes, all of which have already brought us over £200,000 of new housing business on an annualised basis. We are targeting modest growth in sales and profitability in what we hope should be the beginning of a transformational year for these activities. Despite the public sector cut-backs and uncertainties, we are serving large markets with many service opportunities for us; clarity of our product offerings and customer selection should help us rebuild a profitable business.
We continue to review a number of potentially attractive add-on acquisitions which could increase the size and stability of the Specialist Cleaning division and whose characteristics would be regularity of workflow and some barriers to entry.
Finance
Good cash generation has continued and we are pleased to report that with net debt falling from £1.48million to £0.75million we achieved our stated target of reducing year end debt below £1million. Another important milestone has been reached since at the end of the year we repaid in full the £5million 5 year term loan which had been drawn down in December 2005 at the time of the public flotation.
Despite the many challenging economic and industry conditions since then, Autoclenz Ltd has consistently been profitable and has generated net cash of £5.1 million during this period after paying net dividends of £1.1 million; the accompanying Financial Review shows the history of this.
We are also pleased to have been able to return to the dividend list with a 1p final dividend paid in July 2010. We will, as previously stated, continue a cautious dividend policy reflecting profitability and cash generation on an annual basis, and are therefore proposing a final dividend again of 1p to be paid in June 2011.
Our legal appeal to the Supreme Court in the Belcher case is now expected to be heard in May 2011. We are continuing to make appropriate provision for legal costs, and will update shareholders with any further developments as appropriate.
Our People
I would like to thank on behalf of shareholders the management, staff and our many sub-contractors who deliver the high quality Autoclenz services to our customers, and a financial return to shareholders. During the current year we are introducing development and training courses for senior management and executives. We are also proposing to issue a new tranche of share options under our existing EMI scheme to include a wider range of senior people who we believe are important to the future growth and success of the company.
Outlook
We have indicated above in the operating review the key areas of focus for profit improvement in our two divisions. The achievement of these will not be easy in the current economic climate, we are mildly encouraged by the on budget results for the first two months of the year and there is strong determination at all levels to put the setbacks of 2010 behind us and deliver improved profitability. We will keep shareholders informed appropriately as the year progresses.
James Leek
Non-Executive Chairman
FINANCE REVIEW BY THE GROUP FINANCE DIRECTOR, TREVOR CLINGO
Overview
Growth in sales in a competitive automotive market only partially corrected a fall in gross margin across all Autoclenz's services. The Specialist Cleaning Service sector suffered a 15.6% drop in sales, predominately in the public sector. Continued tight management of debtors and cash flow has reduced net debt by 49.2% to £750,000.
Period Reported
The primary statements cover the period from 1 January 2010 to 31 December 2010.
Autoclenz Holdings Plc trades through two wholly owned subsidiaries, Autoclenz Ltd and Autoclenz Services Ltd. Autoclenz Ltd provides Car Valeting, SMART Repairs and Premises Cleaning for franchised dealerships, Auction Centres and Rental Clients nationwide together with Property Cleaning and Clearing Services through the 'React' brand. Autoclenz Services Ltd provides a Collection and Delivery Service mainly to Rental Clients but also to franchised dealerships.
Revenue
Revenue increased during the year by 9.5% to £26.3 million. Autoclenz Services increased by 50.9% to £3.9 million due to new contracts that commenced during the year. All the Automotive Services that are offered by Autoclenz Ltd have shown increases on 2009 levels. Specialist Cleaning Services however declined overall during the year by 15.6% to £1.4 million. In the first half the decline reported was 23.4% and a considerable improvement has been made in the second half with sales up 7.4% to £712,000. This improvement has predominately been achieved by concentrating resources on the Property Services sector.
Gross Profit
In the reporting period a gross profit of £6.2 million (2009: £6.4 million) gave rise to a margin of 23.4% (2009: 26.6%).
The margin within Automotive Services declined by 2.6% from 24.6% to 22.0%. The entire Automotive Sector was highly competitive during the reported period. Price reductions were experienced in some accounts and there was a greater tendency for customers to send out formal tenders to the valeting industry to obtain lower prices.
Specialist Cleaning Services saw its margin decrease by 4% to 49.5%. This reduction is mostly due to the trend of changing the mix of business from the less predictable Specialist Clinical Cleans to non-clinical which requires lower specialist skills and usually involves larger often recurring revenues.
Underlying Fixed Costs
The underlying fixed costs (Administration and Distribution costs less amortisation of intangibles and share related movements) increased by 0.7% to £4.869 million (2009: £4.834 million). This increase includes a £59,000 bad debt relating to Connaught Partnership Ltd, a Specialist Cleaning Services customer which went into administration midway through the year.
Reconciliation of Profit
The table below reconciles the statutory operating profit detailed on the Consolidated Income Statement to an operating profit adjusted for amortisation of intangible assets and share based payments.
Reconciliation of Profit before Tax | |||||
£'000 | 2010 | 2010 | 2009 | 2009 | Change in Year |
% | |||||
Sales | |||||
Automotive Services | 24,930 | 22,389 | 11.3% | ||
Specialist Cleaning | 1,375 | 1,629 | -15.6% | ||
Total Sales | 26,305 | 24,018 | 9.5% | ||
Gross | Gross | ||||
Margin | Margin | ||||
Gross Profit | % | % | |||
Automotive Services | 5,473 | 22.0% | 5,507 | 24.6% | -0.6% |
Specialist Cleaning | 681 | 49.5% | 871 | 53.5% | -21.8% |
Total Gross Profit | 6,154 | 23.4% | 6,378 | 26.6% | -3.5% |
Fixed Costs | -4,869 | -4,834 | -0.7% | ||
Underlying Operating Profit before Interest | 1,285 | 1,544 | -16.8% | ||
Interest | -84 | -180 | 53.3% | ||
Underlying Operating Profit after Interest | 1,201 | 1,364 | -12.0% | ||
Amortisation of Intangible Assets | -1,070 | -1,070 | 0.0% | ||
Share Option Related Charges | 0 | 186 | 100.0% | ||
Profit before Tax as per Consolidated Income Statement | 131 | 480 | 72.7% |
Interest
Interest charges reduced by £96,000 to £84,000 (2009: £180,000). Interest cover has improved to 15.3 times (2009: 8.6 times) when calculated on the underlying operating profit before interest.
Taxation
The underlying effective rate of taxation in the period on profit before amortisation of intangible assets and share based payments is 28.7% (2009: 28%).
Earnings per share
Basic earnings per share for the period was 0.83 pence (2009: 4.03 pence). The adjusted basic earnings per share before the amortisation of intangible assets and share based payments was 11.12 pence (2009: 12.53 pence). The earnings per share, applying a standard tax charge of 28% to the underlying operating profit after interest of £1,201,000, is 8.32 pence (2009: 9.44 pence).
Dividend
The Directors will recommend a final dividend of 1.0 pence per share (2009: 1.0 pence) at the Annual General Meeting on May 19th 2011, to be paid on 1st June 2011.
Cash Flow
Net debt reduced by £726,000 (2009: £1,182,000). The closing net debt as at 31 December 2010 is £750,000 (2009: £1,476,000).
Reconciliation of the debt movements is summarised in the table below. Further details of the breakdown of net cash from operating activities can be found in note 7 of the accounts.
Reconciliation of Cash Flow | ||
£'000 | 2010 | 2009 |
Opening Debt | -1,476 | -2,658 |
Net Cash from Operating Activities | 1,290 | 1,766 |
Reduction in Finance Lease Debt | 20 | 0 |
Assets acquired on finance lease | 0 | -22 |
Capital Expenditure | -440 | -486 |
Proceeds on Disposal | 44 | 104 |
Financing | -84 | -180 |
Dividends Paid | -104 | 0 |
Closing Debt | -750 | -1,476 |
As at the 31st December 2010 the £5 million term loan has been fully repaid from the cash flow generated since the flotation in December 2005.
Historic Cash Generation
£000's | 2006 | 2007 | 2008 | 2009 | 2010 | Total |
Opening Debt | 5,868 | 4,809 | 3,792 | 2,658 | 1,476 | |
Cash Generated | 1,215 | 1,517 | 1,519 | 1,182 | 830 | 6,263 |
Dividend Paid | (156) | (500) | (385) | (-) | (104) | (1,145) |
Closing Debt | 4,809 | 3,792 | 2,658 | 1,476 | 750 | |
Net Cash Generation |
5,118 |
The table above illustrates that since the date of flotation a total of £6,263,000 cash has been generated. £1,145,000 has been paid out as dividends (18.3%) and debt has been reduced from an initial £5.87 million to £0.75 million as at 31st December 2010 a reduction of 87.2%.
Banking Facilities
The Bank Facilities Agreement dated 1 December 2005 which provides a loan of £5 million over 5 years and the provision of a £3 million working capital facility remains in place, with the addition of a side letter that extends this facility to June 2011.
All term loan repayments have been made on due dates and covenants have all been complied with in 2010 as they were in 2009.
As at 31 December 2010 a net £706,000 was being utilised of the working capital facility (2009: £112,000).
In 2010 4 repayments were made of the term loan totalling £1.3 million (2009: £1.3 million). As noted above the term loan is now fully paid.
The Group has approval from HSBC credit committee to extend the £3 million working capital facility for a further three years to 30 June 2014.
Key Performance Indicators (KPI)
Key Performance Indicators are used by the Board and Senior Management to monitor progress against targets on a monthly basis. The major KPI's used in 2010 were:
Target | Actual | |
Customer Churn | 11.6% | 10.3% |
Gross Margin | 27.0% | 23.4% |
Indirect Costs | £5.023m | £4.869m |
Customer Care Survey Collection | 80% | 82.1% |
Number of Vehicle Accidents | 317 | 274 |
The results in the table above show that Autoclenz met or exceeded its targets for four of the 5 major KPI's. Some of the shortfall in gross margin was offset by revenue levels being 6.2% ahead of target and indirect costs being 3.1% better than target.
Principal Risks and Uncertainties
There are a number of risks and uncertainties which could impact the Group's long term performance. The Board has a process to identify, manage and mitigate risk. The principal risks are considered to be:
Principal Commercial Risk | Mitigating Action |
Self Employed Status | Management training, continuing process audits, review of practices to ensure self-employed measures are clear and specialist advice of independent experts.
Autoclenz is defending a claim in which 20 of the 2078 operators used in 2008 are claiming Employment Status. There has been no court hearing since the last Annual Report. The 20 operators were all engaged within one of Autoclenz's 250 customer accounts within its core valeting business. This particular location has different working practices to the vast majority of other accounts. The original claim was made in 2008, no additional claims have been made since that date. Autoclenz continues to make financial provision for legal costs which although no reflection on our belief of the outcome is nevertheless prudent.
|
Competition and low barriers to entry | Strong long term relationships, through excellent service levels. Spread of customers, so loss of 1 large customer would not significantly damage Autoclenz. Detailed customer care process managed by an Independent Manager.
|
Loss of crucial management | Competitive pay, bonus scheme related to divisional performance, career progression. Account relationships kept by more than one manager.
|
Bad Debts | New customers credit checked, rigorous use of credit recovery agents, daily cash management. Quick escalation through management. Professional experienced Credit Controllers.
|
Failure of IT Systems | Close relationship with IT providers. Regular replacement of critical hardware. Off site back-ups of all operating systems.
|
Price pressure combined with loss of volume | Multi service offering, monthly customer profitability measured. Business model that links sales volume to level of direct costs.
|
Going Concern Basis
The Group's business activities will be detailed in the full Annual Report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described earlier in this Financial Review. In addition to this full details of financial instruments, credit risk and liquidity risk are included as note 25 to the primary financial statement in the full Annual Report.
As highlighted in the Financial review, the Group meets its day to day working capital requirements through a revolving credit facility of £3million which falls for renewal on 30th June 2011. The Group has approval from HSBC's credit committee to extend these facilities for a further 3 years until 30 June 2014 and expects to formalise this arrangement ahead of 30 June 2011.The Group has forecasts and projections to the end of 2013 and these indicate that the Group will operate within these facilities throughout that period.
There is an ongoing legal case (Autoclenz Ltd v Belcher) regarding the employment status of 20 valeters. The case is listed for an appeal hearing at the Supreme Court on 11 May 2011. Prudent provision for legal costs and potential settlement costs has been included in the accounts. The case was originally due to be heard in October 2010 but was postponed by the Supreme Court. Due to this there has been no progress in the last 12 months other than verbal updates between Autoclenz and their legal representatives on a quarterly basis.
After making enquiries the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operation for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the Annual Report and Accounts.
Trevor Clingo
Group Finance Director
23 March 2011
Consolidated statement of comprehensive income
For the year ended 31 December 2010
Year ended | Year ended | ||
31 December 2010 | 31 December 2009 | ||
Notes | £000 | £000 | |
Revenue | 1 | 26,305 | 24,018 |
Cost of sales | (20,151) | (17,640) | |
Gross profit | 6,154 | 6,378 | |
Distribution costs | (559) | (533) | |
Administration expenses | (5,380) | (5,185) | |
Operating profit | 215 | 660 | |
Net finance costs | (84) | (180) | |
Profit before tax | 2 | 131 | 480 |
Tax | 3 | (45) | (61) |
Profit for the year | 86 | 419 | |
Basic profit per share | 4 | 0.83p | 4.03p |
Diluted profit per share | 0.83p | 4.03p |
The results for the period are derived from continuing operations.
Consolidated statement of financial position
As at 31 December 2010
As at | As at | ||
31 December 2010 | 31 December 2009 | ||
Assets | Notes | £000 | £000 |
Non-current assets | |||
Goodwill | 9,091 | 9,091 | |
Other intangible assets | 3,963 | 5,033 | |
Property, plant and equipment | 476 | 507 | |
13,530 | 14,631 | ||
Current assets | |||
Inventories | 16 | 10 | |
Trade and other receivables | 3,666 | 3,185 | |
Cash and cash equivalents | 294 | 488 | |
3,976 | 3,683 | ||
Total assets | 17,506 | 18,314 | |
Current liabilities | |||
Trade and other payables | 5 | (2,018) | (1,818) |
Obligations under finance leases | 5 | (28) | (20) |
Current tax liabilities | 5 | (979) | (781) |
Borrowings | 5 & 6 | (1,000) | (1,860) |
Total current liabilities | (4,025) | (4,479) | |
Non-current liabilities | |||
Deferred tax liability | (881) | (1,189) | |
Obligations under finance leases | 6 | (16) | (44) |
Total liabilities | (4,922) | (5,712) | |
Net assets | 12,584 | 12,602 | |
Equity | |||
Share capital | 1,040 | 1,040 | |
Share premium account | - | 11,383 | |
Share option reserve | 106 | 106 | |
Retained earnings | 11,438 | 73 | |
Total equity | 12,584 | 12,602 |
Consolidated statement of changes in equity
For the year ended 31 December 2010
2010 | 2009 | |
£000 | £000 | |
Balance at 1 January 2010 | 12,602 | 12,369 |
Redemption of share premium account | (11,383) | - |
Increase in retained earnings | 11,383 | - |
Reduction in share option reserve | - | (186) |
Final dividend paid for 2009 | (104) | - |
Net profit for the year | 86 | 419 |
Balance at 31 December 2010 | 12,584 | 12,602 |
Consolidated statement of cash flows
For the year ended 31 December 2010
Year ended | Year ended | ||||
31 December 2010 | 31 December 2009 | ||||
Notes | £000 | £000 | £000 | £000 | |
Net cash inflow from operating activities | 7 | 1,290 | 1,766 | ||
Investing activities | |||||
Interest received | - | 3 | |||
Proceeds on disposal of property, plant and equipment | 44 | 104 | |||
Purchases of property, plant and equipment | (440) | (486) | |||
Net cash used in investing activities | (396) | (379) | |||
Financing activities | |||||
Dividends paid | (104) | - | |||
Repayment of borrowings | (900) | (1,500) | |||
Interest Paid | (84) | (183) | |||
Net cash used in financing activities | (1,088) | (1,683) | |||
Decrease in cash | (194) | (296) |
Notes to the Consolidated Financial Accounting Statements
1 Segmental analysis
The Group has applied IFRS 8 Operating Segments. IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance.
The identification and analysis of the reportable segments under IFRS 8 are as below.
2010 | 2009 | |
£000 | £000 | |
Revenue | ||
Automotive Services | 24,930 | 22,389 |
Specialist Cleaning Services | 1,375 | 1,629 |
Total | 26,305 | 24,018 |
Gross profit | ||
Automotive Services | 5,473 | 5,507 |
Specialist Cleaning Services | 681 | 871 |
6,154 | 6,378 | |
Unallocated costs | ||
Distribution costs | (559) | (533) |
Administration expenses | (5,380) | (5,185) |
Net finance cost | (84) | (180) |
Profit before tax | 131 | 480 |
Tax | (45) | (61) |
Profit after tax | 86 | 419 |
The Group does not allocate all operating costs to the segments identified above, and these unallocated costs are separately identified above.
Assets and Liabilities are not split by segment. The nature of the services provided is such that the return on capital is not a useful measure. The low value assets are not apportioned across the various businesses and the ledgers for payables and receivables are not segmented. Geographically the Group operates solely in the UK and as such revenue, costs, assets and liabilities all originate and are held in the UK.
2 Profit on ordinary activities before taxation
Profit on ordinary activities before taxation is stated after | 2010 | 2009 |
charging/(crediting): | £'000 | £'000 |
Share based payment | - | (186) |
Depreciation of owned property, plant and equipment | 462 | 521 |
Amortisation of intangible assets | 1,070 | 1,070 |
Amortisation of finance cost | 40 | 40 |
Fees payable to the company's auditors for the audit of the company accounts | 2 | 2 |
Fees payable to the company's auditors for the audit of the Group accounts | 13 | 12 |
The audit of the company's subsidiaries pursuant to legislation | 22 | 22 |
Total Audit Fees | 37 | 36 |
Profit on disposal of property, plant and equipment | (35) | (53) |
3 Tax
2010 | 2009 | |
£'000 | £'000 | |
The tax charge comprises: | ||
UK corporation tax at current rates | 352 | 403 |
Adjustment for prior years | 1 | (21) |
Current tax | 353 | 382 |
Deferred tax | (308) | (321) |
UK corporation tax at current rates | 45 | 61 |
The standard rate of tax for the period, based on the UK standard rate is 28% (2009: 28%). The actual tax charge for the current and previous period differs from the standard rate for the reasons set out below in the following reconciliation:
2010 | 2009 | |
£'000 | £'000 | |
Profit on ordinary activities before taxation | 131 | 480 |
Tax at 28% (2008: 28%) | (37) | (134) |
Expenditure not deductible for tax purposes | (312) | (306) |
Income not allowable for tax purposes | - | 52 |
Deferred tax liability on intangibles | 300 | 300 |
Short term timing differences | - | (1) |
Adjustment in respect of prior period | (1) | 21 |
Marginal relief | - | 7 |
Effect of changes in tax rate | 5 | - |
Current year tax | (45) | (61) |
4 Earnings per share
2010 | 2009 | |
Basic shares | Basic shares | |
Weighted average number of ordinary shares | 10,400,020 | 10,400,020 |
Profit (£000s) | 86 | 419 |
Profit per share (pence) | 0.83 | 4.03 |
Earnings per share (excl amortisation) (pence) | 11.12 | 12.53 |
There is no dilutive effect on the earnings per share in respect of share options as the exercise price is higher than the share price achieved.
5 Current Liabilities
2010 | 2009 | |
Amounts falling due within one year | £000 | £000 |
Short term loan | 1,000 | 600 |
Bank loan | - | 1,260 |
Trade creditors | 1,119 | 1,045 |
Finance lease | 28 | 20 |
Corporation tax | 142 | 163 |
Other taxation and social security | 837 | 618 |
Other creditors | 239 | 16 |
Accruals and deferred income | 660 | 757 |
4,025 | 4,479 |
6 Borrowings
2010 | 2009 | |
£000 | £000 | |
Short term loan | 1,000 | 600 |
Bank loan | - | 1,260 |
Finance lease | 44 | 64 |
1,044 | 1,924 | |
Amounts due for settlement within 12 months | 1,028 | 1,880 |
Amounts due for settlement after 12 months | 16 | 44 |
1,044 | 1,924 |
7 Cash flow
Reconciliation of operating profit to net cash inflow from operating activities | ||
2010 | 2009 | |
£000 | £000 | |
Profit for the year | 86 | 419 |
Adjustments for: | ||
Finance income | - | (3) |
Finance costs | 84 | 183 |
Income tax expense | 45 | 61 |
Depreciation of property, plant and equipment | 462 | 521 |
Amortisation of intangible assets | 1,070 | 1,070 |
Amortisation of finance costs | 40 | 40 |
Share based payment expense | - | (186) |
Gain on disposal of property, plant and equipment | (35) | (53) |
Operating cash flows before movements in working capital | 1,752 | 2,052 |
(Increase)/decrease in inventories | (6) | 7 |
(Increase) in receivables | (481) | (432) |
Increase in payables | 400 | 498 |
Cash generated by operations | 1,665 | 2,125 |
(375) | (359) | |
Income taxes paid | ||
Net cash from operating activities | 1,290 | 1,766 |
8 Reconciliation of movement in shareholders' funds
2010 | 2009 | |
£000 | £000 | |
Profit for the year | 86 | 419 |
Net increase in shareholders' funds | 86 | 419 |
Opening shareholders' funds | 12,602 | 12,369 |
Redemption of share premium account | (11,383) | - |
Increase in retained earnings | 11,383 | - |
Dividend paid | (104) | - |
Share option reserve | - | (186) |
Closing shareholders' funds | 12,584 | 12,602 |
9 Reconciliation of net cash flow to movement in net debt
2010 | 2009 | |
£000 | £000 | |
(Decrease) in cash in the period | (194) | (296) |
Cash inflow from movements in debt | 920 | 1,478 |
Change in net debt resulting from cash flows | 726 | 1,182 |
Net debt at beginning of period | (1,476) | (2,658) |
Net debt at end of period | (750) | (1,476) |
10 Analysis of changes in net debt
At 1 January 2010 | Cash flow | At 31 December 2010 | |
£000 | £000 | £000 | |
Cash at bank | 488 | (194) | 294 |
Debt due within one year | (1,920) | 892 | (1,028) |
Debt due after one year | (44) | 28 | (16) |
Net debt | (1,476) | 726 | (750) |
11 The financial information set out above does not constitute the company's statutory accounts for the years ended 31 December 2010 or 2009, but is derived from those accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.
12 The Annual Report is to be published and sent to shareholders shortly. Copies will be also available on request from The Company Secretary, Autoclenz Holdings Plc, Stanhope Road, Swadlincote, Derbyshire, DE11 9BE and will also be available on the Company web-site: www.autoclenz.co.uk.
13 The Annual General Meeting will be held at the Company's registered office: Stanhope Road, Swadlincote, Derbyshire, DE11 9BE at 11.30am on Thursday, 19 May 2011.