MPAY.L Regulatory News (MPAY)

21 Mar 2006 07:00

Autoclenz Holdings PLC21 March 2006 Autoclenz Holdings Plc First Interim Results For The Period Ended 31st December 2005 Key Highlights: • Successful acquisition on 7th December 2005 of Autoclenz Limited for £18m • Admission to AIM and equity fundraising of £13m • Business performing in line with expectation: • Revenue £1.6m (period to 31st Dec 2005) • Operating Profits £20k (period to 31st Dec 2005) • Full year Revenue of subsidiary £24.7 m (2004 £24.3m) • Full year Operating Profits of subsidiary up 22.4% to £2.29m (2004: £1.87 m) • Net Assets £12.4m • Significant new business gains John Bell, Non-Executive Chairman of Autoclenz, commented: "The Group has made a solid start to the year and is performing in line withexpectations. Whilst strong competition has always been a feature of our corevaleting market, as can be seen from the 2005 performance of our subsidiary, ourdiffering range of services and growth in profit is proof that the adoptedstrategies are continuing to create growth in our business" "The strategy we set out at the time of our flotation is being implemented andnotwithstanding the challenges we face, we believe that strategy allows us tolook forward with confidence." 21 March 2006 ENQUIRIES: Autoclenz Holdings Plc Tel: 08707 510410Grahame Rummery, C.E.O.Trevor Clingo, Finance Director KBC Peel Hunt Ltd Tel: 020 7418 8900Julian Blunt College Hill Tel: 020 7457 2020Gareth DavidMatthew Gregorowski CHAIRMAN'S STATEMENT Overview These first interim results cover the four month period from the incorporationof Autoclenz Holdings plc through to 31 December 2005 and as such incorporatejust 24 days of trading of the underlying business of Autoclenz Limited. Our separation from Yule Catto and Co Plc was successfully completed on 7December 2005, the day on which the Company was admitted to trading on AIM. Inthis connection I would like to thank all who assisted in the flotation processand, in particular, our staff who remained focused on their individual areas ofresponsibility. The process ran smoothly and this enabled the financialperformance of the business to remain in line with our expectations. Results As noted above the unaudited consolidated figures contained in this report arebased on the four months from incorporation to 31st December 2005. To enable an evaluation of the performance of the trading subsidiary over alonger period we also include below the summarised unaudited results ofAutoclenz Limited for the year to 31 December 2005. 2005 2005 2004 Consolidated Limited Limited Sales £1.6m £24.7m £24.3m Gross Profit (Margin) £0.4m (25.7%) £7.1m (28.7%) £6.6m (27.0%) EBITDA £101K £2.8m £2.4m (Loss)/Profit before Taxation (£9K) £2.3m £1.8m Performance for Autoclenz Holdings Plc for the 4 months was in line withexpectations. Sales levels in Autoclenz Limited for the year to 31st December 2005 were inline with expectation. Whilst growth overall was modest the figure masksencouraging performance within parts of the business, in particular, AC Ready toRent, AC SMART and REACT which achieved revenue growth of 22%, 38% andapproximately 10% respectively, and all of which operate at higher margins thanthe core valeting business. In the core valeting business we maintained sales levels similar to 2004, thiswas a creditable performance in view of the 5% reduction in new carregistrations. This progress, together with strict cost controls throughout thebusiness, has enabled us to improve overall gross margins by 1.7% to 28.7%, andoperating profit margins by 1.6% to 9.3%. Operating profit before interest andtax is up 22% year on year to £2.29m (2004: £1.87m). Profit before taxation at £2.3m was in line with expectations and excludes £0.1mof costs relating to the flotation and interest charges for the 24 days to 31stDecember, borne by Autoclenz Holdings Plc. Cash generation for Autoclenz Limited was again strong with operating activitiesgenerating £1.9m (Group £1.7m), before deduction of taxes, capital expenditure,pre-IPO dividends paid to Yule Catto and flotation costs. After taking accountof these amounts the net cash generation for Autoclenz Limited was £0.9m (2004:£0.8m). The Group period end net debt levels stood at £4.8m representing gearing of38.5%. Strategy The Groups strategy, as highlighted at the time of the flotation on AIM, is toachieve sustainable growth in revenues, as well as profitability, mostimmediately through the growth of the group's brands nationally, particularlythe AC Smart and Pinnacle brands, as well as the development of the REACTbusiness. We are also working hard to maintain market leadership in the core valetingbusiness and to continue with the long term plans of growing sales and marginsbuilt on improved service levels. Autoclenz is the only market participant tooffer a nationwide bundled car valeting service and preparation service. Thisdifferentiator and an improvement in service levels have enabled Autoclenz toreduce its business churn rate (a key performance indicator in the valetingmarket place) to a record low in 2005. Current trading and prospects Whilst we face challenges in our core valeting market due to competitiveactivity and the dependence of this part of the business on new carregistrations, we can report strong activity in Pinnacle, our prestige brand, avery high level of interest and growth in AC SMART and continued activity in theReady to Rent market place. The first three months have seen our business grow,achieving new business gains of circa £1m. AC Ready to Rent is not only increasing its presence at airports throughout theUK, it is increasing its range of services offered to current and potential newcustomers alike. It is also involved, together with AC SMART, in developing newmarkets in the "No Fault Accident" repair industry. The activity and interest inthe combined range of services of both Autoclenz and AC SMART is giving both usand our customers the opportunity to increase sales and profits. REACT, our decontamination service and waste removal service continues to makeprogress in nearly all its areas of expertise. 'Flytipping' is a market that isemerging within the rail sector of our business, particularly in the Southernpart of the country. We have also seen an uptake in Graffiti Removal and AntiGraffiti coatings. The forthcoming proposed geographical reorganisation of thePolice Forces will bring both opportunities and challenges in the coming months. In summary, the group has made a solid start to the year and is performing inline with expectations. Whilst strong competition has always been a feature ofour core valeting market, as can be seen from our 2005 performance, ourdiffering range of services and growth in profit is proof that the adoptedstrategies are continuing to create growth in our business. The strategy we set out at the time of our flotation is being implemented andnotwithstanding the challenges we face, we believe that strategy allows us tolook forward with confidence. John BellNON EXECUTIVE CHAIRMAN Autoclenz Holdings PlcConsolidated Profit and Loss Accountfor the period from 1st September to 31st of December 2005 Note £000 Turnover (Acquisitions) 1,572Cost of sales (1,167) -------- Gross profit 405Distribution costs (24)Administration expenses (361) -------- Operating profit 20 Interest payable (29) -------- Loss on ordinary activities before taxation (9)Tax on profit on ordinary activities (13) -------- Loss on ordinary activities after taxation (22) ======== Basic Loss per share 2 (0.00322) pDiluted Loss per Share 2 (0.00321) p Consolidated Balance SheetAs at 31 December 2005 note £000Fixed Assets Intangible Assets - Goodwill 15,572 Tangible Assets 3 615 -------- 16,187 -------- Current Assets Stocks 4 Debtors 4 3,671 Cash at bank 1,667 -------- 5,342 Creditors : amounts falling due within one year 5 (4,663) --------Net Current Assets 679 -------- Total Assets less Current Liabilities 16,866 Creditors: amounts falling due after more than one year 6 (4,450) --------Net Assets 12,416 -------- Capital and Reserves Called up Share Capital 1,040 Share Premium Account 11,398 Profit and Loss (22) --------Equity Shareholders Funds 12,416 -------- Autoclenz Holdings PlcConsolidated Cash Flow Statementfor the period from 1st September to 31st December 2005 Note £000 £000 Net cash flow from operating activities 8 1,715 Returns on investments and servicing of finance Net interest (paid)/received (1) --------Net cash outflow from returns on investmentsand servicing of finance (1) Taxation 0 Capital Expenditure Purchase of tangible fixed assets (32) Sale of tangible fixed assets 2 (30) --------Acquisitions Acquisition of Autoclenz Ltd 7 (18,000) Overdraft acquired with Autoclenz Ltd 7 (868) -------- (18,868) --------Net cash outflow before financing (17,184) Financing Issue of ordinary share capital net of expenses 12,451 Term Loan net of expenses 4,800 Proceeds of short term borrowings 1,600 Net cash/inflow from financing 18,851 -------- --------Increase in cash 1,667 -------- Notes to the Financial Accounting Statements 1 Accounting Policies Basis of accountingThe financial statements have been prepared under the historical cost conventionand comply with applicable United Kingdom accounting standards. Turnover Turnover represents the invoiced value of goods sold and services provided tothird parties, net of value added tax and trade discounts. Fixed assets Tangible fixed assets are stated at cost, net of depreciation and any provisionfor impairment. The cost of tangible fixed assets is depreciated using astraight-line basis over their expected useful lives as follows: Plant and equipment - between two and five yearsProperty improvements - seven years Stocks Stocks are valued at the lower of cost and net realisable value. Net realisablevalue is based on estimated selling price, less further costs expected to beincurred to completion and disposal. Provision is made for obsolete, slow-movingor defective items where appropriate. Taxation UK Corporation tax is provided at amounts expected to be paid using the taxrates and laws that have been enacted or substantially enacted by the balancesheet date. Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future or a right topay less tax in the future have occurred at the balance sheet date. Timingdifferences are differences between the company's taxable profits and itsresults as stated in the financial statements, that arise from the inclusion ofgains and losses in tax assessments in periods different from those in whichthey are recognised in the financial statements. A net deferred tax asset is regarded as recoverable and therefore recognisedonly when, on the basis of all available evidence, it can be regarded as morelikely than not that there will be suitable taxable profits from which thefuture reversal of the underlying timing differences can be deducted. Deferred tax is measured at the average tax rates that are expected to apply inthe periods in which the timing differences are expected to reverse, based onthe tax rates and laws that have been enacted or substantively enacted by thebalance sheet date. Deferred tax is measured on a non-discounted basis. Consolidation The accounts consolidate the accounts of the company and Autoclenz Ltd, the onlysubsidiary. The result of Autoclenz Ltd is included from the effective date ofacquisition. Goodwill Consolidated goodwill, being the excess consideration over the fair value of theassets and liabilities acquired on the purchase of Autoclenz Ltd is capitalisedand charged to profit over 20 years. Pension Contributions The company does not have a pension scheme at present. Employees of AutoclenzLtd had the opportunity to belong to one of the Yule Catto pension schemes priorto the sale by Yule Catto. The company is currently designing a group personalpension with Mercer Human Resource Consulting (EB) Ltd. This is expected to comeinto force in April 2006. Finance Costs Finance Costs of debt are recognised in the profit and loss account over theterm of such instruments at a constant rate on the carrying amount. Period Covered All notes below detail costs and statistics relating to the period followingacquisition of Autoclenz Ltd to Dec 31 2005. 2 Loss Per Share Basic Dilutive Shares Shares --------- -------- In Issue from December 7 10,400,020 10,400,020On option 19,101 Sub Total 10,400,020 10,419,121 Weighted Average (24 days) 683,837 685,093 Loss £000's (22) (22) Loss per share (0.00322p) (0.00321p) 3 Tangible Fixed Assets Plant and Motor Vehicles £000 Cost at point of acquisition 2,251 Additions 32Disposals (44) At 31 December 2005 2,239 Depreciation at point of acquisition 1,643 Charge in period 23Disposals (42) At 31 December 2005 1,624--------------------------------- ---------Net Book Value 31 December 2005 615--------------------------------- --------- 4 Debtors £000 £000 Trade Debtors 3,306Other Debtors 22Prepayments 96--------------------------------- --------Amounts falling due within one year 3,424--------------------------------- Deferred Taxation 209 Called up Share Capital not paid 38 --------------------------------- --------Total Debtors 3,671--------------------------------- -------- 5 Creditors amounts falling due within one year £000 Short term loan 1,600Bank Loan 400Trade Creditors 744Corporation Tax 324Taxation and Social Security 881Other Creditors 374Accruals 340 -------- 4,663 -------- 6 Creditors amounts falling due after more than one year £000 Bank Loan 4,400Redeemable Preference Shares 50 -------- 4,450 -------- more than one year but not more than two years 1,050more than two years but not more than five years 3,600 -------- 4,650Finance costs incurred obtaining the bank loan 200 -------- 4,450 -------- The bank loan is secured by a charge on all the assets of the group. Interest ischarged at 1.75% over libor. 7 Acquisition of Autoclenz Ltd On 7 December 2005 the company acquired the whole issued share capital ofAutoclenz Ltd for a total consideration of £18m. The consideration was satisfied by a cash payment of the total sum. The £18m wasraised through obtaining a £5m 5 year term loan from HSBC and £13m from aplacing of 10.4m shares at £1.25. Net Assets acquired (net book value) £000 Tangible Fixed Assets 608 Stocks 5 Debtors 4,794 Creditors (2,162) Bank Overdraft (868) --------- 2,377 Provisional Goodwill * 15,623 ---------Acquisition Price 18,000 --------- \* The provisional goodwill figure has been assessed on the basis of the bookvalue of net assets acquired. The Directors will complete their determinationof goodwill based on the fair value of net assets acquired in 2006. 8 Cash Flow Reconciliation of Operating Profit to net cash inflow from operatingactivities £000 Operating profit 20Depreciation and amortisation charge 74(Increase)/Decrease in stocks 1(increase)/Decrease in debtors 1,161Increase/(Decrease) in creditors 459 ---------Net cash inflow from operating activities 1,715 9 General Notes There will be no dividend paid or proposed for the period ended 31 December2005. The next results to be reported by the group will be second interim figures forthe six months to 30 June 2006. The first Interim results of Autoclenz Holdings plc contained herein have notbeen audited by the group's auditors and do not constitute statutory accounts,though they have been subject to an auditors' interim review report which isdisclosed below. The figures have been prepared in accordance with theaccounting policies to be adopted in the first statutory accounts to be preparedfor the period ended 31 December 2006. The results of Autoclenz Ltd referred herein have been extracted withoutadjustment from the audited statutory accounts for the year ended 31 December2004 and the unaudited accounts for the year ended 31 December 2005. Theauditors opinion on the 2004 accounts was unqualified and did not contain anystatements under section 237(2) or (3) of the Companies Act 1985. The statutoryaccounts for the year ended 31 December 2004 have been filed with the registrarof companies. This interim report will be posted to all shareholders of the company, and willbe available on the Company's website (www.autoclenz.co.uk). The report will beavailable for inspection by the public at the registered office of the companyduring normal business hours on any weekday. Further copies will be available onrequest from Autoclenz Holdings plc, Stanhope Road, Swadlincote, Derbyshire,DE11 9BE. INDEPENDENT REVIEW REPORT TO AUTOCLENZ HOLDINGS PLC Introduction We have been instructed by the group to review the financial information for theperiod from 1st September 2005 to 31st December 2005 which comprises the profitand loss account, the balance sheet, the cash flow statement and related notes 1to 9. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company, in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare also responsible for ensuring that the accounting policies and presentationapplied to the interim figures are consistent with those applied in preparingthe preceding annual accounts except where any changes, and the reasons forthem, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the period from 1stSeptember 2005 to 31st December 2005. Deloitte & Touche LLPChartered Accountants This information is provided by RNS The company news service from the London Stock Exchange