Rtc Grp. Regulatory News (RTC)

9 Sep 2005 07:00

ATA Group PLC09 September 2005 ATA GROUP INTERIM STATEMENT 2005 CHAIRMAN'S STATEMENT I am pleased to present the interim report of the Company for the six months to30 June 2005. Trading General Economic conditions remain stable, as does the trading environment inrecruitment, although the Railway Industry is undergoing a process offundamental change which creates significant uncertainty and challenging tradingconditions much as expected. Although group turnover in the six months to 30June 2005 increased 4.8% to £8.9m (2004 £8.5m), profit before tax fell to£48,000 (2004 £0.55m). Earnings per share fell to 0.41p (2004 4.60p). Recruitment Recruitment and labour supply turnover in the period was £5.9m (2004 £4.5m), arise of 32%. Operating profit declined slightly to £0.15m (2004 £0.16m). The performance of ATA Selection improved during the period in permanentrecruitment and further significant progress was made in contract recruitment.The additional direct costs associated with rapid expansion in contractpersonnel and subsequent turnover growth have served to restrain overallcontract gross margin as new recruits develop their skills and gain experience. Ganymede Tracklayers, having secured its first contract with Network Rail tosupply labour in the Thames Valley maintenance area in 2004 has built on thissuccess and has important business flows in the London Underground systemthrough an expanding relationship with Tube Lines. The business flows fromNational Rail Infrastructure Renewals Companies has, however, beendisappointingly slow. The combined effect of these achievements has been toconsolidate Ganymede on a wider client base and improve its contribution toGroup. Gem Weld (UK) Limited, acquired in August 2004, has been fully integrated and,following a very difficult period to December 2004, has made significant andpleasing progress in generating good trading relationships with Renewalscompanies and has joined Ganymede in securing a valuable contract from NetworkRail in the Thames Valley area. Revenue flows have consequently improved andthe business has achieved profitability at the period end. Training Training turnover in the period has been seriously impacted by reduced demandfor signal engineer and rail safety training following the transfer of allInfrastructure Maintenance to Network Rail in 2H04 and has fallen to £3.0m(2004 £4.02m) a fall of 25%. An operating loss of (£97,000) was incurred,mostly falling in the first quarter (2004 first half profit £0.425m). It is now clear that Network Rail have decided to abandon the facilities andexpertise, sold at the time of privatisation, available from the private sectorand, instead, establish competing facilities of their own. Whatever thebusiness case for this policy we have to deal with the consequences and do notnow expect to provide significant services in this area to Network Rail beyondMarch 2006. This is expected to reduce turnover in this segment of our trainingactivities by a net £1.0m in 2005 and a further net £1.0m in 2006. Rail Training Audit Services continues to trade at budgeted levels and istendering for renewal of the contract with Network Rail to commence at thebeginning of 2006. Dividends Your Directors consider that significant market change has taken place in thefirst half of 2005 which has impacted severely on net pre-tax profits but thattrading at more satisfactory levels may be expected in the second half. In viewof this they have resolved to pay a reduced interim dividend of 1.0p (20042.5p). Outlook My previous statement predicted that 2005 would be a challenging year; so it isproving. The bulk of this year's re-positioning has taken place in the firsthalf and the second should demonstrate a more stable picture. Furtherdevelopment of contract recruitment is anticipated enabling more intensive useto be made of our nationwide network of branches, where permanent recruitment isexpected to gather pace too. This is expected to generate continuing increasesin turnover and, through improvements in contract consultant maturity and skill,to generate improvements in profits from this section of our business. GanymedeTracklayers is continuing steady development and expects to extend further itsclient base outside Network Rail. Having completed a short period of adjustmentand integration, GemWeld will also build on the successes of the first half andextend its business and profitability in a similar manner. The second half isexpected to produce a steadier performance from both Catalis and Rail TrainingAudit Services although further ahead continued adjustment to changes at NetworkRail and the need to secure a renewal of their contract with Rail Training AuditServices will present further challenges. The re-positioning of Catalis RailTraining to take full advantage of a much altered Railway Industry will besubstantially complete by April 2006. Although I am confident that the Groupwill continue to make solid progress in dealing with a fast changing tradingenvironment, I expect the recovery from the first half trading setback to beslower than we would have wished. Consequently, profits for the year to 31December 2005 are expected to be materially below expectations. W.J.C.Douie, Chairman. 9 September 2005. CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 Months 6 Months 12 Months to to to 30 Jun 30 Jun 31 Dec 2005 2004 2004 (unaudited) (unaudited) As restated As restated Notes £'000 £'000 £'000 £'000 £'000 £'000TurnoverContinuing operations 8,930 8,519 17,054Acquisitions - - 98 2 8,930 8,519 17,152Operating ProfitContinuing operations 54 586 1,558Acquisitions - - (140) 2 54 586 1,418 Net interest payable (6) (35) (57) (6) (35) (57)Profit on ordinary activities before taxation 48 551 1,361Tax on profit on ordinary activities 3 (14) (176) (436)Profit on ordinary activities after taxation 34 375 925 Dividends 4 (319) (318) (522) Retained profit / (loss) for the financial period (285) 57 403 Earnings per share (pence) 5 0.41 4.60 11.34 There were no recognised gains or losses other than those reported in the Profitand Loss Account. CONSOLIDATED BALANCE SHEET As at As at As at 30 Jun 30 Jun 31 Dec 2005 2004 2004 (unaudited) (unaudited) Notes As restated As restated £'000 £'000 £'000FIXED ASSETSIntangible assets 1,118 1,083 1,154Tangible assets 1,323 1,771 1,588 2,441 2,854 2,742CURRENT ASSETSStock 29 12 29Debtors falling due after more than one year 802 817 809Debtors falling due within one year 3,222 3,372 3,483Cash at bank 803 1,314 715 4,856 5,515 5,036CREDITORS: Due within one year (2,992) (3,998) (3,209) NET CURRENT ASSETS 1,864 1,517 1,827 TOTAL ASSETS LESS CURRENT LIABILITIES 4,305 4,371 4,569 CREDITORS: Due after more than one year (50) (161) (50) PROVISIONS FOR LIABILITIES AND CHARGES (101) (150) (101) NET ASSETS 4,154 4,060 4,418 CAPITAL AND RESERVESCalled up share capital 82 82 82Share premium account 1,817 1,784 1,796Capital redemption reserve 50 50 50Profit and loss account 8 2,205 2,144 2,490 7 SHAREHOLDERS' FUNDS 4,154 4,060 4,418 CONSOLIDATED CASH FLOW STATEMENT 6 Months 6 Months 12 Months to to to 30 Jun 30 Jun 31 Dec 2005 2004 2004 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 CASH INFLOW FROM 6 312 1,186 1,857OPERATING ACTIVITIES Returns on investments and servicing of finance (6) (35) (57) Taxation (135) (326) (506) Payments to acquire tangible fixed assets (97) (190) (321) Receipts on disposal of tangible fixed assets 31 20 35 Purchase of subsidiary undertaking - - (15)Net Debt acquired with subsidiary (19) Equity dividends paid - - (522) Net cash inflow before use ofliquid resources and financing 105 655 452 Issue of ordinary share capital 21 9 21 Decrease in medium term loans (8) (136) (500) Capital element of finance lease rental payments (30) (53) (97) (DECREASE)/INCREASE IN CASH BALANCES 88 475 (124) ATA GROUP PLCNOTES TO THE INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2005 1. ACCOUNTING POLICIES The accounting policies used in the preparation of the interim accounts areconsistent with those used in the preparation of the audited annual accounts forthe year ended 31 December 2004 with the exception of the introduction of FRS 21'Events after the balance sheet date', which requires dividends which areproposed after the balance sheet date to be disclosed and not recognised as aliability. Comparative data for the six months to 30 June 2004 and twelvemonths to 31 December 2004 has been restated in accordance with this standard.The interim accounts follow the provisions of SSAP 24 'Accounting for pensioncosts' which is consistent with the policy used in the preparation of theaudited accounts for the year ended 31 December 2004. The company is requiredto adopt the provisions of FRS 17 'Retirement benefits' for the year ended 31December 2005, however it has been impracticable to prepare these interimstatements on this basis as it has not been possible to obtain appropriatevaluations. The Group financial information consolidates the accounts of ATAGroup Plc and all its material subsidiary undertakings using the acquisitionmethod. The comparative figures for the year ended 31 December 2004 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. 2. SEGMENTAL ANALYSIS 6 Months to 6 Months to 12 Months to 30 Jun 2005 30 Jun 2004 31 Dec 2004 (unaudited) (unaudited) (audited) £'000 £'000 £'000TURNOVER Recruitment and labour supply 5,936 4,504 9,380Training and consultancy 2,994 4,015 7,772 8,930 8,519 17,152 OPERATING PROFIT Recruitment and labour supply 151 161 270Training and consultancy (97) 425 1,148 54 586 1,418 Operating profit is stated after amortisation of goodwill of £36,000 in theperiod (2004 £33,000). 3. TAX ON PROFIT ON ORDINARY ACTIVITIES The tax on profit on ordinary activities for the period to 30 June 2005 has beenprovided at the estimated rate applicable to the group for the period. 4. DIVIDENDS The Board has approved an interim dividend of 1p per ordinary share net to bepaid on 12 December 2005 to shareholders on the register of members at 18November 2005. 6 Months to 6 Months to 12 Months to 30 Jun 2005 30 Jun 2004 31 Dec 2004 (unaudited) (unaudited) As restated As restated £'000 £'000 £'000 Final dividend 2003, declared April 2004 - 318 318Interim dividend 2004, declared September 2004 - - 204 Final dividend 2004, declared April 2005 319 - - 319 318 522 5. EARNINGS PER SHARE The earnings per share have been calculated on the profit on ordinary activitiesafter taxation, both before and after exceptional items, and on the number ofshares in issue (8,195,812) during the period. The fully diluted earnings pershare is not materially different from the basic earnings per share and has notbeen disclosed. 6. CASH FLOW RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2004 £'000Operating profit 54Amortisation 36Depreciation 333Profit on sale of fixed assets (2)Decrease in debtors 268Decrease in creditors (377) ----------------Net cash inflow from operating activities 312 ================ ANALYSIS OF CHANGES IN NET FUNDS At Cash Other At 30 1 Jan 2005 Flows Movements Jun 2005 £'000 £'000 £'000 £'000 Net Cash:Cash in hand and at bank 715 88 803 Debt:Debt due within 1 year (10) 8 (1) (3)Debt due after 1 year (1) - 1 0HP and finance leases (107) 30 (77) Net Funds 597 126 0 723 7. MOVEMENT IN SHAREHOLDERS FUNDS STATEMENT OF MOVEMENT IN GROUP SHAREHOLDERS FUNDS As at As at As at 30 Jun 2005 30 Jun 2004 31 Dec 2004 £'000 £'000 £'000Opening shareholders funds as previously stated 4,099 3,676 3,676Prior period adjustment 319 318 318Opening shareholders funds as restated 4,418 3,994 3,994Profit / (loss) for the period (285) 57 403Issue of shares 21 9 21Closing shareholders funds 4,154 4,060 4,418 8. PRIOR PERIOD ADJUSTMENTS FRS 21 Events after the balance sheet date. Under the terms of FRS 21 dividends which have been declared after the balancesheet date are not recognised as a liability at that date. The effect of changes in accounting policy on comparative financial informationof prior periods is as follows: Period ended Year ended 30 Jun 2004 31 Dec 2004 (unaudited) £'000 £'000Dividends: 204 523 Dividend previously charged to profit and loss in the periodDividend charged to profit and loss under FRS 21 (318) (522)Net (reduction) / increase to retained profit in the period (114) 1 Profit / (loss) for year:As previously reported 171 402FRS 21 (114) 1As restated 57 403 Creditors:As previously reported (4,202) (3,528)FRS 21 204 319As restated (3,998) (3,209) Reserves profit and loss account:As previously reported 1,940 2,171FRS 21 204 319As restated 2,144 2,490 ATA GROUP PLCRegistered OfficeKingston House,Oaklands Business Park,Armstrong Way,Yate,South Gloucestershire BS37 5NAApproved 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