Last checked at 30 Sep 2009 14:09
30 September 2009 GARNER PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009 CHAIRMAN'S STATEMENT The interim results to 30th June 2009 are that we made a Group loss after taxof 672,000 (2008: profit of 20,000) based on an increased turnover of 3,431,000 (2008: 1,259,000). This has resulted in a Group loss per share of0.95p (2008: earnings per share 0.05p). The increase in revenues compared to the same period in 2008 was driven by therecent combination of the Garner and Norman Broadbent businesses. Comparinglike with like, turnover from continuing operations was down 22% to 984,000(2008: 1,259,000). As stressed in my Chairman's statement accompanying the 2008 year end results,trading conditions in the second half of 2008 and the beginning of 2009 havebeen very tough. Although management have identified and executed a number ofcost saving initiatives to streamline the business, the impact of which willnot be fully realised until the last quarter, we have had to incur additionalrestructuring expenses that have added to the pressure on the bottom line. Once this program is complete, these one-off costs will total 200,000,however, on a more positive note, they are expected to result in annualisedcost savings of approximately 1,500,000 across the Group. Clearly the losses incurred over the last six months have had a negative impacton working capital, which, coupled with the necessary capital investment in ourIT systems, has resulted in a net cash outflow of 592,000. Net debt(excluding the long term deferred consideration on the Norman Broadbentacquisition) has increased from 334,000 at 31st December 2008 to 1,230,000 at30th June 2009. However, trading since the end of the period has stabilisedwhich, coupled with the action taken in the first half to reduce our overheads,has stemmed the cash outflow. The last six months has also seen the net asset position of our balance sheetdecrease from 1,044,000 at 31st December 2008 to 372,000 at 30th June 2009. Working capital remains tight and the Board is reviewing a number ofopportunities to strengthen the balance sheet and increase the working capitalheadroom as a matter of priority. A further announcement will be made toshareholders in due course. Whilst trading has stabilised in the third quarter, economic conditions remainchallenging and our first year as the enlarged group will be worse than wecould have anticipated. Despite this, we continue to be positive about theacquisition of Norman Broadbent and we believe that we will be well placed togrow once trading conditions improve. A GarnerChairman
For further information, please contact:
Andrew Garner, Chairman Garner Plc 020 7629 8822
Lindsay Mair, Antony Legge Dowgate Capital Advisers 020 7492 4777
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2009
Year Six months Six months ended 31 ended 30 ended 30 December June 2009 June 2008 2008 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Revenue 3,431 1,259 3,274 Cost of operations (4,074) (1,187) (3,031) GROUP OPERATING (LOSS)//PROFIT (643) 72 243 Net finance costs (17) (43) 107
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION (660) 29 350 Tax expense (12) (9) 7 (LOSS)/PROFIT FOR THE FINANCIAL PERIOD (672) 20 357 (Loss)/Earnings per share - basic (0.95)p 0.05p 0.88p (Loss)/Earnings per share - diluted (0.91)p 0.05p 0.81p
There are no recognised gains and losses other than as stated above. Accordingly, no Statement of Total Recognised Income & Expense is given.
CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2009 As at 30 June 2009 As at 30 June 2008 As at 31 December 2008 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 Goodwill 7,049 959 7,049
Property, plant and equipment 223 14
198 TOTAL NON-CURRENT ASSETS 7,272 973 7,247 Trade and other receivables 1,505 1,069 2,013 Cash and cash equivalents 51 - 643 TOTAL CURRENT ASSETS 1,556 1,069 2,656 TOTAL ASSETS 8,828 2,042 9,903 TOTAL CURRENT LIABILITIES (4,239) (2,990) (4,384) Non-current liabilities (4,217) (323) (4,475) TOTAL LIABILITIES (8,456) (3,313) (8,859) TOTAL ASSETS LESS TOTAL LIABILITIES 372 (1,271) 1,044 Issued share capital 5,709 4,944 5,709 Share premium account 4,868 3,853 4,868 Retained earnings (10,205) (10,068) (9,533) TOTAL EQUITY 372 (1,271) 1,044
CONSOLIDATED CASHFLOW STATEMENT & NOTES
Year Six months Six months ended 31 ended 30 ended 30 December June 2009 June 2008 2008 (unaudited) (unaudited) (audited) Notes GBP000 GBP000 GBP000 Net cash from operating activities (i) (673) (192) 894
Cash flows from investing activities and servicing of finance
Interest paid (17) (43) 107
Payments to acquire tangible assets (58) (3) (3) Acquisition of subsidiary, inclusive of cash acquired - - (566) Net cash used in investing activities
(75) (46) (462)
Cash flows from financing activities Net cash inflow from equity placing - 10 633 Repayment of secured loans (102) - (94) Payment/(repayment) of advances from directors
160 90 88 Payment of transaction costs - (272)
Increase in invoice discounting 246 78 (198) Repayment of deferred consideration (148) - - Net cash from financing activities
156 178 157 Net movement in cash and cash equivalents
(592) (60) 589
Net cash and cash equivalents at beginning of period
643 56 54
Net cash and cash equivalents at end of period 51 (4) 643 Analysis of net funds Cash and cash equivalents
51 - 643 Bank overdraft - (4) - 51 (4) 643 Borrowings due within one year
(810) (932) (556)
Borrowings due after one year (211) (323) (321) Directors loan account (260) (156) (100) Deferred consideration (5,066) - (5,214) Net funds (6,296) (1,415) (5,548) Note (i)
Reconciliation of operating profit to net cash from operating activities Year Six months Six months ended 31 ended 30 ended 30 December June 2008 June 2008 2008 (unaudited) (unaudited) (audited) GBP000 GBP000 GBP000 Operating profit (643) 72 243
Depreciation of property plant and equipment 34 3 10 Amortisation of loan arrangements fees - 3 - (Increase) in trade and other receivables
508 (257) 508
(Decrease) in trade and other payables (514) 77 232 Taxation paid (58) (90) (99) Net cash from operating activities (673) (192) 894
NOTES TO THE UNAUDITED INTERIM REPORT
1. BASIS OF PREPARATION The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thegroup's statutory financial statements for the year ended 31 December 2008,prepared under International Financial Reporting Standards (IFRS), have beenfiled with the Registrar of Companies. The auditor's report on thosestatements was unqualified. The interim financial information for the six months ended 30 June 2009, hasbeen prepared in accordance with International Financial Reporting Standards(IFRS) and on the same basis and using the same accounting policies as used inthe financial statements for the year ended 31 December 2009. The interimfinancial statements have not been audited. BASIS OF CONSOLIDATION
The group financial statements consolidate those of the Company and of its subsidiary undertakings Garner International Limited, BNB Recruitment Consultancy Limited, Bancomm Limited and BNB Recruitment Overseas Holdings Limited, companies incorporated in England and Wales. Profits or losses on intra-group transactions are eliminated in full.
2. earnings PER ORDINARY SHARE The calculation of the losses per share is based on the loss attributable toordinary shareholders of 672,000 (2008: profit of 20,000) and the weightedaverage number of ordinary shares in issue during the period, being 70,855,519(2008: 38,061,315). 3 COPIES OF THE UNAUDITED INTERIM REPORT
Copies of this report are available on request from the Company's registered office at 6 Derby Street, London, W1J 7AD and are also available on the Company's website www.garnerinternational.com.
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