Rtc Grp. Regulatory News (RTC)

14 Sep 2007 07:00

ATA Group PLC14 September 2007 ATA Group plc Interim Results for the six months to 30 June 2007 ATA Group plc ("ATA") is a human resource support services group, which providesemployment solutions and training services to client companies in the UnitedKingdom and the Republic of Ireland. HIGHLIGHTS Turnover 23% increase to £11.24m (2006: £9.15m) Operating profit from continuing operations before exceptionals at £242,000(2006: £170,000). Earnings per share from continuing operations before exceptionals at 2.95p(2006: 2.07p). Interim dividend increased to 1.5p (2006: 1.0p). Commenting on the results Bill Douie, Chairman, said: "As in 2006 we are in the midst of a challenging year. This time, however, theproblems are those of optimising an already profitable business and planning fordevelopment and growth. Further development of contract recruitment isanticipated enabling more intensive use to be made of our nationwide network ofbranches, where permanent recruitment is expected to continue the trend to moreeffective working. Our first steps to enter the white collar Construction marketin both contract and permanent recruitment have made a slow but steady start, ashas our entry into the supply of engineering contractors to Large Corporates.Our training business continues to make progress and the renewed DerbyConference Centre has started well although significant business results are notexpected until 2008." 14th September 2007 ENQUIRIES: ATA Group plc Tel: 01332 263 122 Bill Douie, Executive Chairman.Andrew Bailey, Group Managing Director. Evolution Securities Limited Tel: 0207 071 4300Jeremy Ellis ATA Group Plc CHAIRMAN'S STATEMENT I am pleased to present the interim report of the Company for the six months to30 June 2007. Structure and Management I am pleased to report that our top management team has stabilised and isperforming well. The Recruitment business, ATA Selection, has two regionalDirectors responsible for the North, Andrew Hardaker, and the South (includingCorporate Contract), Charles Cornwell. Paul McLoughlin continues as ManagingDirector of the Railway business, Catalis Rail Training, The Derby ConferenceCentre and Ganymede Manpower Services. The Group Board now consists of BillDouie, Executive Chairman, Andrew Bailey, Group Managing Director and the recentvaluable addition of Andy Pendlebury, Non-Executive Director, supported by, MarkKendall as Company Secretary and Group Financial Controller. Trading General Economic conditions have remained stable in the first half. As has been seen inthe last few weeks, there is much instability in credit and consequently othermarkets as the Global Economy faces the possibility of recession and events inthe Middle East and elsewhere serve to de-stabilise the world environment. Forthe time being this has not affected the trading environment in recruitment, andthe Railway Industry seems now to have settled down and calmer conditionsprevail. Group turnover in the six months to 30 June 2007 increased 23% to£11.24m, (2006 £9.15m), operating profit from continuing operations beforeexceptionals rose to £242,000 (2006 £170,000). Earnings per share fromcontinuing operations before exceptionals rose to 2.95p (2006 2.07p). Recruitment Recruitment turnover in the period was £8.19m (2006 £5.55m). Operating profitrose to £355,000 (2006 £300,000). The performance of ATA Selection improvedduring the period in permanent recruitment and continuing progress was made incontract recruitment. Actions initiated to improve staff recruitment,development and retention are bearing fruit and consultant numbers are rising. Railway Railway turnover in the period was £3.05m (2006 £3.60m). Operating lossesreduced to £113,000 (2006 £130,000). Catalis Rail Training is trading in calmer waters and has consolidated,following the final closure of the training school in Crewe, and now operatesfrom London Road, Derby and Clapham in West London. The vast majority of alltraining is for clients from the private sector, with very little businessdirectly with Network Rail. Nonetheless, our client base is wholly dependantupon Network Rail contracts and it is pleasing to note that a return tosignificant capital expenditure on the Railways has occurred, particularly inthe field of signalling renewal contracts. There are also announced plans forsignificant spend in other areas covering track and station upgrading and majornew projects including Thameslink and Crossrail. The rebranding of our Conferencing business as, The Derby Conferencing CentreLimited, operating from the recently refurbished premises at London Road, Derbyhas been completed and a formal re-opening took place on 1st June. Earlybusiness flows have been encouraging. Ganymede Manpower Services (Ganymede Tracklayers) has, however, encountereddifficult trading conditions as projects on the London Underground network werecompleted with no follow on business for the time being. Firm management actionhas materially reduced costs and it is proving possible to continue to make areal but small financial contribution, whilst awaiting the establishment offurther Underground work and the initiation of certain announced Network Railprojects. Although the nadir of the fortunes in this division has passed, a return torespectable profitability is not expected until 2008. During the period the decision was taken to exercise a break option on the leaseof the Group head office premises at Yate, South Gloucester. All functionspreviously carried out at Yate, including the registered office address, havenow been transferred to London Road, Derby. Dividends Your Directors consider that recovery from the problems of 2006 has begun andthey are pleased that steady progress is being made in all areas and thatprofits for the period are derived entirely from normal trading. In view of thisthey have resolved to pay an improved interim dividend of 1.5p (2006: 1.0p). Strategy The massive changes wrought by a re-structured Railway Industry and by changesin the quantity of top management available to our Group prompted a strategicreview in 2006. It was necessary to overcome these problems and return the Groupto a healthy trading condition and that has largely occurred, although there isfurther ground to make up before we can claim to be fully back to robust health.Good management is in place and sound trading results are being achieved. Allelements are in place to achieve the fulfilment of Phase One. The strategic focus must now shift to building on the solid base achieved in theprogramme. We have, therefore, decided to concentrate on the pursuit of organicstart-up opportunities with vigour and seek acquisitions of support servicecompanies with proven track records and management in current and compatibleniche markets. I am particularly pleased that Andy Pendlebury, with his wealth of experienceand contacts, has joined us with a particular brief to concentrate on those twoobjectives in support of the Chairman and Group Managing Director. Outlook As in 2006 we are in the midst of a challenging year. This time, however, theproblems are those of optimising an already profitable business and planning fordevelopment and growth. Further development of contract recruitment isanticipated enabling more intensive use to be made of our nationwide network ofbranches, where permanent recruitment is expected to continue the trend to moreeffective working. Our first steps to enter the white collar Construction marketin both contract and permanent recruitment have made a slow but steady start, ashas our entry into the supply of engineering contractors to Large Corporates.Our training business continues to make progress and the renewed DerbyConference Centre has started well although significant business results are notexpected until 2008. IFRS The results which follow are prepared for the first time in accordance withInternational Reporting Standards (IFRS) and in order to give the greatest levelof clarity, we have prepared notes on the impact of adopting IFRS, which includereconciliation to the results on a UK GAAP basis. W.J.C.Douie, Chairman. 14th September 2007 CONSOLIDATED INCOME STATEMENT 6 Months 6 Months 12 Months to 30 Jun 2007 to 30 Jun 2006 to 31 Dec 2006 (unaudited) (unaudited) As restated As restated Notes £'000 £'000 £'000 £'000 £'000 £'000 Revenue 2 11,235 9,145 18,134Cost of sales (8,877) (6,789) (13,692)Gross Profit 2,358 2,356 4,442Administrative expenses (2,116) (2,186) (4,558)Operating profit from 2 242 170 (116)continuing operationsbefore exceptional itemsExceptional item 3 - 974 974Profit on disposal of fixed 3 - 88 73assets ________________________________________________ 242 1,232 931 Finance costs 6 (13) (3) ________________________________________________Profit on ordinary 248 1,219 928activities before taxationIncome tax expense 4 (69) (356) (315) ________________________________________________Profit on ordinary 179 863 613activities after taxationLoss on discontinued 5 - (238) (174)operations after taxation ________________________________________________Net profit 179 625 439 Earnings per share - 7 2.95 2.07 (1.41)operating profit fromcontinuing operationsbefore exceptional items Earnings per share - 7 2.18 10.52 7.47continuing operations(pence)Earnings per share - 7 2.18 7.62 5.35continuing and discontinuedoperations (pence) Fully diluted earnings per 7 2.18 10.52 7.47share - continuingoperations (pence)Fully diluted earnings per 7 2.18 7.62 5.35share - continuing anddiscontinued operations(pence) CONSOLIDATED BALANCE SHEET As at As at As at 30 Jun 2007 30 Jun 2006 31 Dec 2006 (unaudited) (unaudited) As restated As restated Notes £'000 £'000 £'000AssetsNon currentGoodwill 924 983 924Property, plant & equipment 703 881 654 ____________________________________ 1,627 1,864 1,578 ____________________________________CurrentInventory 3 27 3Trade and other receivables 5,416 5,411 3,564Cash and cash equivalents 24 676 939 ____________________________________ 5,443 6,114 4,506 ____________________________________Total assets 7,070 7,978 6,084 ____________________________________LiabilitiesCurrentTrade and other payables (2,693) (3,084) (1,941)Borrowings (7) (26) (13)Tax liabilities (334) (487) (271) ____________________________________ (3,034) (3,597) (2,225) ____________________________________Non currentBorrowings - (46) (2)Deferred tax liability - (43) - ____________________________________Total Liabilities (3,034) (3,686) (2,227) ____________________________________Net Assets 4,036 4,292 3,857 ____________________________________ EquityCalled up share capital 82 82 82Share premium account 1,817 1,817 1,817Capital redemption reserve 50 50 50Share based payment reserve 31 33 31Profit and loss account 2,056 2,310 1,877 ____________________________________Total equity 9 4,036 4,292 3,857 ____________________________________ CONSOLIDATED CASH FLOW STATEMENT 6 Months to 6 Months to 12 Months to 30 Jun 2007 30 Jun 2006 31 Dec 2006 (unaudited) (unaudited) £'000 £'000 £'000Operating activitiesOperating result 242 1,232 931Operating loss from discontinuing - (340) (291)operationsNet interest received/(paid) 6 (13) (3)Employee equity settled share options - 5 3Depreciation of property, plant & 141 242 438equipmentLoss on sale of property, plant & - (98) (37)equipmentImpairment of goodwill - 134 64Change in stock - 18 28Change in trade and other receivables (1,949) (345) 1,404Change in trade and other payables 746 475 (628)Taxes paid - - (251) ____________________________________Net cash (outflow)/inflow from operating activities (814) 1,310 1,658 ____________________________________ Investing activities Purchases of property, plant & equipment (190) (39) (134) Proceeds from sale of property, plant &equipment - 21 238Disposal of businesses 97 - 97 ____________________________________Net cash used in investing activities (93) (18) 201 ____________________________________Cash inflow/(outflow) before financing (907) 1,292 1,859 ____________________________________Financing activities Decrease in medium term loans - (1) (1) Capital element of finance lease rental (8) (29) (86)payments Equity dividends paid - - (247) ____________________________________Net cash used from financing activities (8) (30) (334) ____________________________________Net (decrease)/increase in cash and cash equivalents (915) 1,262 1,525 ____________________________________Cash and cash equivalents at the beginning of the period 939 (586) (586) ____________________________________Cash and cash equivalents at the end of 24 676 939the period ____________________________________ NOTES TO THE INTERIM STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 1. ACCOUNTING POLICIES a) Introduction The interim financial statements of ATA Group Plc are for the six months ended30 June 2007. They have been prepared in accordance with IAS 34 - InterimFinancial Reporting, and are covered by IFRS 1 - First-time adoption of IFRS, asthey are part of the period covered by the company's first IFRS financialstatements for the year ending 31 December 2007. These interim financial statements are prepared using the IFRS accountingpolicies (including IAS) and interpretations issued by the InternationalFinancial Reporting Interpretations Committee ("IFRIC") that are expected to beapplicable for the full reporting year ending 31 December 2007. These remainsubject to ongoing amendment and/or interpretation and are therefore subject topossible change. Consequently information included in these interim financialstatements may need updating for any subsequent amendments to IFRS required forfirst time adoption, or for new standards that the Group may elect to adoptearly. Previously the Group's financial statements were prepared in accordance with UKGenerally Accepted Accounting Practice (UK GAAP). The principal accountingpolicies previously adopted are explained in the Group's last UK GAAP AnnualReport for the year ended 31 December 2006. The principal accounting policiesunder IFRS are consistent with those adopted under UK GAAP, with the exceptionof those policies set out in note 1d below. b) Comparatives The comparative figures for the year ended 31 December 2006 do not constitutestatutory accounts within the meaning of S.240 of the Companies Act 1995, butthey have been derived from the audited financial statements for that year,which have been filed with the Registrar of Companies. The report of theauditors was unqualified and did not contain a statement under section 237 (2)or (3) of the Companies Act 1985. c) Transition to IFRS ATA Group Plc's transition date for the adoption of IFRS is 1 January 2006 andthe company has prepared its opening balance sheet at that date. The Group has elected not to apply IFRS 3 retrospectively to businesscombinations. d) Main impacts of International Financial Reporting Standards Outlined below are those International Financial Reporting Standards which willhave an impact on the financial statements of ATA Group Plc. The numericalimpact of the adoption of IFRS on the income statement and shareholders' equityis given in note 10. IFRS 3 "Business Combinations" prohibits the amortisation of goodwill, insteadgoodwill is subject to annual impairment reviews. Under the transitional provisions of IFRS 1, the goodwill balance at 31 December2005 has been frozen and hence amortisation charges booked in the year to 31December 2006 have been reversed. Impairment previously recognised under UK GAAPhas not been reversed. The cash flow statements for the periods ended 30 June 2006 and 31 December 2006as presented in the interim financial information have been subject to a numberof presentational adjustments following the transition to IFRS. There is noimpact in the net increase in cash and cash equivalents for each period asreported under IFRS compared with that originally reported under UK GAAP. There is no impact on these financial statements from IAS 39, FinancialInstruments Measurement. 2. SEGMENTAL ANALYSIS The primary segment for segmental analysis is by business activity. 6 Months to 6 Months to 12 Months to 30 Jun 2007 30 Jun 2006 31 Dec 2006 (unaudited) (unaudited) As restated As restated £'000 £'000 £'000REVENUE Recruitment Division 8,190 5,546 11,584Railway Division 3,045 3,599 6,550 ____________________________________ 11,235 9,145 18,134 ____________________________________OPERATING PROFIT/(LOSS) - Before exceptionalitems Recruitment Division 355 300 414Railway Division (113) (130) (530) ____________________________________ 242 170 (116) ____________________________________ 3. NON-RECURRING ITEM AND PROFIT ON DISPOSAL OF FIXED ASSETS IN 2006 The non-recurring item in 2006 related to the net payment received in respect ofkeyman insurance in relation to the former Chief Executive. The profit on disposal of fixed assets in 2006 relates to maintenance assetssold to Network Rail under the terms of an agreement dated 21 June 2006. 4. TAX ON PROFIT ON ORDINARY ACTIVITIES The tax on profit on ordinary activities for the period to 30 June 2007 has beenprovided at the estimated rate applicable to the Group for the period. 5. LOSS ON DISCONTINUED OPERATIONS 6 Months 6 Months 12 Months to 30 Jun 2007 to 30 Jun 2006 to 31 Dec 2006 (unaudited) (unaudited) As restated As restated £'000 £'000 £'000Revenue - 549 580 ___________________________________Operating profit - (340) (291)Attributable tax credit - 102 87 ___________________________________Net operating loss - (238) (204)attributable todiscontinued operationsProfit on disposal ofdiscontinued operations - - 43Attributable tax charge - - (13) ___________________________________ - - 30 ___________________________________Loss on discontinuedoperations after taxation - (238) (174) ___________________________________ 6. DIVIDENDS The Board has approved an interim dividend of 1.5p per ordinary share net to bepaid on 11 December 2007 to shareholders on the register of members on 16November 2007. 7. EARNINGS PER SHARE The earnings per share have been calculated both on the profit on continuingoperations after taxation and on the loss on continuing and discontinuedoperations, based on the number of shares in issue during the period. Theoutstanding share options are not considered to be dilutive in either thecurrent or comparative periods. In addition, because of the impact of exceptional items in the comparativeperiods, the earnings per share on operating profit before exceptional itemshave been disclosed. 6 Months to 6 Months to 12 Months to 30 Jun 2007 30 Jun 2006 31 Dec 2006 (unaudited) (unaudited) Weighted average number ofshares 8,203,331 8,203,331 8,203,331Earnings from operatingprofit before exceptionalitems (£'000) 242 170 (116)Earnings from continuingoperations (£'000) 179 863 613 Earnings from continuing anddiscontinued operations(£'000) 179 625 439 ___________________________________________Earnings per shares -Operating profit beforeexceptional items 2.95 2.07 (1.41)Earnings per share -continuing operations (pence) 2.18 10.52 7.47Earnings per share -continuing and discontinuedoperations (pence) 2.18 7.62 5.35 ___________________________________________ 8. ANALYSIS OF CHANGES IN NET FUNDS At Other At 30 1 Jan 2007 Cash Flows Movements Jun 2007 £'000 £'000 £'000 £'000 Cash at bank and in hand 939 (915) - 24Debt due within more than 1year:HP and finance leases (2) 2 -Debt due within 1 year: _______________________________________HP and finance leases (13) 6 - (7) _______________________________________Net Funds 924 (907) - 17 _______________________________________ 9. MOVEMENT IN SHAREHOLDERS' EQUITY STATEMENT OF MOVEMENT IN GROUP SHAREHOLDERS' EQUITY As at As at As at 30 Jun 2007 30 Jun 2006 31 Dec 2006 As restated As restated £'000 £'000 £'000Opening shareholders' funds 3,857 3,662 3,662Profit for the period 179 625 439Dividends - - (247)Issue of shares - - -Share based payment reserve - 5 3 _______________________________Closing shareholders' funds 4,036 4,292 3,857 _______________________________ 10. TRANSITION TO INTERNATIONAL REPORTING STANDARDS ATA Group Plc reported under UK GAAP in its previously published financialstatements for the year ended 31 December 2006 and its unaudited interimfinancial statement dated 30 June 2006. The analysis below shows areconciliation of shareholders' equity and profits as reported under UK GAAP asat, and for the periods ended, 31 December 2006 and 30 June 2006 to the revisedshareholders' equity and profits under IFRS as reported in this interimfinancial information. In addition, there is a reconciliation of shareholders'equity under UK GAAP to IFRS at the transition date for the Group, being 1January 2006. a) Reconciliation of profit for the period: Year ended 31 Six months ended 30 December 2006 June 2006 £'000 £'000Profit for the period under UK GAAP 377 594 Goodwill amortisation 62 31 _______________________________Profit for the period as reported under 439 625IFRS b) Reconciliation of shareholders' equity As at 1 As at 31 As at 30 January December June 2006 2006 2006 £'000 £'000 £'000Shareholders' equity as reported under 3,662 3,795 4,261UK GAAPGoodwill amortisation - 62 31 ______________________________Shareholders' equity as reported under 3,662 3,857 4,292IFRS ATA Group PlcRegistered OfficeThe Derby Conference Centre,London Road,Derby, DE24 8UX Approved and authorised for releasefor and on behalf of ATA Group Plc This information is provided by RNS The company news service from the London Stock Exchange