Last checked at 12 Sep 2008 07:00
RTC Group Plc ("RTC" or "the Company")
Interim results for the six months ended 30 June 2008
RTC Group Plc, formerly ATA Group Plc, a support services group, which provides recruitment, training and conferencing services, is pleased to announce its interim results for the six months ended 30 June 2008.
HIGHLIGHTS
Turnover increased 11 per cent. to £12.5m (2007: £11.2m)
Operating profit increased 8.3 per cent. to £262,000 (2007: £242,000).
Earnings per share of 2.19p (2007: 2.18p).
Interim dividend of 1.5p (2007: 1.5p).
Commenting on the results Bill Douie, Chairman, said:
"Our strategy of positioning the Group with product clarity, exemplary senior management and a well trained and motivated group of employees across all our businesses is progressing in line with the Board's timeline and there is clear evidence that the steps we are taking are beginning to deliver improved strategic cohesion and a broad holistic service offering which many of our competitors will find difficult to replicate."
Bill Douie also added:
"At this stage it is difficult to assess how the outlook for 2008 will unfold. Against this background, positioning is everything. Because we have to provide for the possibility, however remote, for serious recession we continue to concentrate on accumulating balance sheet strength, enhancing quality of management, tight control of costs and, above all, further sharpening our focus on revenue generation. Unsurprisingly this is also entirely appropriate for the equally unlikely event that all economic problems are rapidly solved and an upturn is around the corner. Or anything between the two."
12 September 2008
ENQUIRIES:
RTC Group Plc Tel: 01332 263 122
Bill Douie, Executive Chairman.
Andy Pendlebury, Group Chief Executive.
Andrew Bailey, Group Chief Operating Officer.
Evolution Securities Limited Tel: 0207 071 4300
Jeremy Ellis / Chris Clarke
CHAIRMAN'S STATEMENT
I am pleased to present the interim report of the Company for the six months to 30 June 2008.
Structure and Management
Under the leadership of Andy Pendlebury, Group Chief Executive, we continue to develop, enhance and add to our team of senior management with the appointment of managing directors for Ganymede and The Derby Conference Centre in July and August respectively. Further appointments in line with our proposed strategy will be made in the second half of 2008.
Trading
General
With there now being a general consensus that an economic downturn is upon us we are cautious about the prospects for the group as we move into the second half of the year. However, during the first half of the year we have so far only seen very limited tangible signs of lower activity in our core markets of engineering and rail. The exception is in our construction recruitment market place, where we have very low exposure and where demand for staff in the commercial and retail sectors have fallen sharply. Group turnover has increased in the period by 11 per cent. to £12.5m and operating profit by 8 per cent. to £262,000. Following the placement of new shares with the Chief Executive and the Chief Operating Officer, the weighted average number of shares in issue has risen to 8,477,244 and earnings per share on that figure have risen to 2.19p (2007: 2.18p)
Name change.
With the separation of conferencing activities into a stand alone profit centre (The Derby Conference Centre) it was decided that ATA Group no longer represented a recognisable mnemonic highlighting the core activities of the Group and, at the Annual General Meeting in May, it was resolved to change the name to RTC Group Plc, to represent more appropriately the core businesses of Recruitment, Training and Conferencing which make up the three key divisional profit centres.
Recruitment
This division now includes ATA Selection, a number of industry specific vertical recruitment divisions and Ganymede, our on track rail labour supply business. Turnover has risen by 13 per cent. to £9.9m and operating profit by 103 per cent. to £610,000, largely as a result of lower costs of production per unit of turnover. After a steady start in both permanent and contract, since the period end a pleasing acceleration in contractor numbers is evident and we have made a solid entry into the alternative energy markets.
Training (previously Railway)
The division no longer includes Ganymede or The Derby Conference Centre. Training turnover in the period was 11 per cent. lower at £1.8m resulting in an operating loss of £168,000 (2007: £102,000 profit).
Catalis has had a difficult first half with lower initial demand from one key client. Demand is now on the increase and there is no evidence of recessionary influences. The medium term and beyond will be positively influenced by the recent approval of the Crossrail project and the publication of strategic papers projecting further substantial increases in Railway Transport facilities.
Conferencing (previously Railway)
The re-branding of our Conferencing business as The Derby Conferencing Centre Limited, operating from the refurbished premises at London Road, Derby, completed and formally re-opened twelve months ago, has enabled turnover from this facility to increase by 82 per cent. to £901,000 in the period. Staffing and further improvements in the facility in readiness for further increases in demand have resulted in a small increase in operating loss compared with 2007. Our newly appointed Managing Director has now started work and we are looking forward to an acceleration of this progress.
Dividends
Although increases in profits over those achieved in the first half of 2007 have been modest, your Directors consider that recovery from the problems of 2006 has continued apace and that all divisions are making solid progress. In view of this they have resolved to pay a maintained interim dividend of 1.5p (2007: 1.5p).
Outlook & Strategy
Like many organisations competing in our arena we are in the midst of a potentially turbulent year. The key challenges continue to be those of optimising an already profitable recruitment business, planning for development and growth of the newly formed business units as we invest in the restructuring and market positioning of each respective business, and working to understand the implications to both our clients and industry sectors created by the runaway credit bubble and the consequent threats to global economic activity.
Further development of our contract recruitment business is anticipated enabling more utilisation of our nationwide network of branches, serving the SME market sector. We continue to make steady progress in the supply of engineering contractors to large corporates as we rollout more industry specific vertical divisions. Our presence in the white collar construction market in both contract and permanent recruitment is consolidating in most areas, but demand in the commercial property market has reduced sharply and our current drive is in Rail Civils and other large projects. Our training business has consolidated and is experiencing an increased flow of opportunities. The Derby Conference Centre has continued to grow turnover and following the successful appointment of a proven Conferencing Managing Director, cost control measures commensurate with operational activities are expected to improve both gross and net profit contribution.
At this stage it is difficult to assess how the outlook for 2008 will unfold. Against this background, positioning is everything. Because we have to provide for the possibility, however remote, for serious recession we continue to concentrate on accumulating balance sheet strength, enhancing quality of management, tight control of costs and, above all, further sharpening our focus on revenue generation. Unsurprisingly this is also entirely appropriate for the equally unlikely event that all economic problems are rapidly solved and an upturn is around the corner. Or anything between the two.
We are working intensely with all clients to understand their challenges and across all our sectors we are well positioned with sound management and a lean organisation to offer a range of solutions which will help the competitive position of both the RTC Group Plc and our major customers.
Our strategy of positioning the Group with product clarity, exemplary senior management and a well trained and motivated group of employees across all our businesses is progressing in line with the Board's timeline and there is clear evidence that the steps we are taking are beginning to deliver improved strategic cohesion and a broad holistic service offering which many of our competitors will find difficult to replicate. Our search for complimentary acquisition opportunities continues to attract potential targets and given the strength of the Group's balance sheet we are confident of our ability to quickly integrate any suitable businesses.
W.J.C.Douie, Chairman. 12th September 2008
CONSOLIDATED INCOME STATEMENT
| 6 Months | 6 Months | 12 Months | |||||
| to 30 Jun 2008 | to 30 Jun 2007 | to 31 Dec 2007 | |||||
| (unaudited) | (unaudited) | ||||||
| Notes | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Revenue | 2 | 12,487 | 11,235 | 23,615 | |||
| Cost of sales | (9,918) | (8,877) | (18,379) | ||||
| Gross Profit | 2,569 | 2,358 | 5,236 | ||||
| Administrative expenses | (2,307) | (2,116) | (4,489) | ||||
| Operating profit | 2 | 262 | 242 | 747 | |||
| Finance costs | 4 | 6 | (1) | ||||
| Profit on ordinary activities before taxation | 266 | 248 | 746 | ||||
| Income tax expense | 3 | (80) | (69) | (248) | |||
| Net profit | 186 | 179 | 498 | ||||
| Earnings per share (pence) | 5 | 2.19 | 2.18 | 6.07 | |||
There were no discontinued operations in either the current or comparative periods. There is no dilutive impact of share options.
GROUP STATEMENT OF CHANGES IN EQUITY
| As at | As at | As at | |
| 30 Jun 2008 | 30 Jun 2007 | 31 Dec 2007 | |
| (unaudited) | (unaudited) | ||
| £'000 | £'000 | £'000 | |
| Opening total equity | 4,062 | 3,857 | 3,857 |
| Profit for the period | 186 | 179 | 498 |
| Dividends | - | - | (287) |
| Issue of shares | 308 | - | - |
| Share based payment reserve | - | - | (6) |
| Closing total equity | 4,556 | 4,036 | 4,062 |
CONSOLIDATED BALANCE SHEET
| As at 30 Jun 2008 (unaudited) £'000 | As at 30 Jun 2007 (unaudited) £'000 | As at 31 Dec 2007
£'000 | |
| Assets | |||
| Non current | |||
| Goodwill | 924 | 924 | 924 |
| Property, plant & equipment | 729 | 703 | 738 |
| 1,653 | 1,627 | 1,662 | |
| Current | |||
| Inventory | 9 | 3 | 8 |
| Trade and other receivables | 4,601 | 5,304 | 4,982 |
| Deferred tax asset | 55 | 112 | 55 |
| Cash and cash equivalents | 945 | 24 | 266 |
| 5,610 | 5,443 | 5,311 | |
| Total assets | 7,263 | 7,070 | 6,973 |
| Liabilities | |||
| Current | |||
| Trade and other payables | (2,385) | (2,693) | (2,665) |
| Borrowings | - | (7) | (4) |
| Tax liabilities | (322) | (334) | (242) |
| Total Liabilities | (2,707) | (3,034) | (2,911) |
| Net Assets | 4,556 | 4,036 | 4,062 |
| Equity | |||
| Called up share capital | 90 | 82 | 82 |
| Share premium account | 2,117 | 1,817 | 1,817 |
| Capital redemption reserve | 50 | 50 | 50 |
| Share based payment reserve | 25 | 31 | 25 |
| Profit and loss account | 2,274 | 2,056 | 2,088 |
| Total equity | 4,556 | 4,036 | 4,062 |
CONSOLIDATED CASH FLOW STATEMENT
| 6 Months to 30 Jun 2008 (unaudited) | 6 Months to 30 Jun 2007 (unaudited) | 12 Months to 31 Dec 2007 | ||
| £'000 | £'000 | £'000 | ||
| Operating activities | ||||
| Operating result | 262 | 242 | 747 | |
| Employee equity settled share options | - | - | (6) | |
| Depreciation of property, plant & equipment | 152 | 141 | 318 | |
| Loss on sale of property, plant & equipment | - | - | (29) | |
| Change in inventories | (1) | - | (5) | |
| Change in trade and other receivables | 381 | (1,949) | (1,675) | |
| Change in trade and other payables | (280) | 746 | 724 | |
| Taxes paid | - | - | (220) | |
| Net interest received/(paid) | 4 | 6 | (1) | |
| Net cash (outflow)/inflow from operating activities | 518 | (814) | (147) | |
| Investing activities | ||||
| Purchases of property, plant & equipment | (143) | (190) | (451) | |
| Proceeds from sale of property, plant & equipment | - | - | 78 | |
| Disposal of businesses | - | 97 | 145 | |
| Net cash used in investing activities | (143) | (93) | (228) | |
| Cash inflow/(outflow) before financing | 375 | (907) | (375) | |
| Financing activities | ||||
| Capital element of finance lease rental payments | (4) | (8) | (11) |
|
| Issue of ordinary share capital including premium | 308 | - | - | |
| Equity dividends paid | - | - | (287) | |
| Net cash used from financing activities | 304 | (8) | (298) | |
| Net (decrease)/increase in cash and cash equivalents | 679 | (915) | (673) | |
| Cash and cash equivalents at the beginning of the period | 266 | 939 | 939 | |
| Cash and cash equivalents at the end of the period | 945 | 24 | 266 |
NOTES TO THE INTERIM STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2008
1. ACCOUNTING POLICIES
a) General information
RTC Group Plc is a public limited company incorporated and domiciled in England whose shares are publicly traded. The registered office address is The Derby Conference Centre, London Road, Derby, DE24 8UX. The company's registered number is 02558971. The principal activities of the Group are described in note 2.
b) Basis of preparation
The unaudited interim group financial statements of RTC Group Plc are for the six months ended 30 June 2008 and do not comprise statutory accounts within the meaning of S.240 of the Companies Act. They have been prepared in accordance with IAS 34 - Interim Financial Reporting. This report should be read in conjunction with the Group's Annual Report and Accounts 2007, which have been prepared in accordance with IFRS's as adopted by the European Union.
These unaudited group interim financial statements were approved for issue on 11 September 2008. No significant events, other than those disclosed in this document, have occurred between 30 June 2008 and this date.
c) Comparatives
The comparative figures for the year ended 31 December 2007 do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1995, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.
d) Accounting policies
The accounting policies adopted are consistent with those described in the annual financial statements for the year ended 31 December 2007. There have been no significant changes in the basis upon which estimates have been determined, compared to those applied at 31 December 2007 and no change in estimate has had a material effect on the current period.
2. SEGMENTAL ANALYSIS
The primary segment for segmental analysis is by business activity.
The Group has changed the reporting of its business activities from Recruitment and Rail, to Recruitment, Training and Conferencing as outlined in the Chairman's statement.
| 6 Months to | 6 Months to | 12 Months to | |
| 30 Jun 2008 | 30 Jun 2007 | 31 Dec 2007 | |
| (unaudited) | (unaudited) | ||
| £'000 | £'000 | £'000 | |
| REVENUE | |||
| Recruitment | 9,923 | 8,817 | 18,602 |
| Training | 1,848 | 2,078 | 4,064 |
| Conferencing | 901 | 496 | 1,276 |
| Inter-segment | (185) | (156) | (327) |
| 12,487 | 11,235 | 23,615 | |
| GROSS MARGIN | |||
| Recruitment | 1,773 | 1,481 | 3,467 |
| Training | 587 | 810 | 1,542 |
| Conferencing | 394 | 224 | 554 |
| Inter-segment | (185) | (156) | (327) |
| 2,569 | 2,359 | 5,236 | |
| OPERATING PROFIT/(LOSS) | |||
| Recruitment | 610 | 300 | 849 |
| Training | (168) | 102 | 202 |
| Conferencing | (180) | (160) | (304) |
| 262 | 242 | 747 | |
3. TAX ON PROFIT ON ORDINARY ACTIVITIES
The tax on profit on ordinary activities for the period to 30 June 2008 has been provided at 30%, being the estimated rate applicable to the Group for the period.
4. DIVIDENDS
The Board has approved an interim dividend of 1.5p per ordinary share net to be paid on 12 December 2008 to shareholders on the register of members on 14 November 2008.
5. EARNINGS PER SHARE
The earnings per share have been calculated on continuing operations after taxation, based on the weighted average number of shares in issue during the period. There were no discontinued operations in either the current or comparative periods. The outstanding share options are not considered to be dilutive in either the current or comparative periods.
| | | 6 Months to 30 Jun 2008 (unaudited) | 6 Months to 30 Jun 2007 (unaudited) | 12 Months to 31 Dec 2007 |
| | | | | |
| Weighted average number of shares | | 8,477,244 | 8,203,331 | 8,203,331 |
| Earnings (£’000) | | 186 | 179 | 498 |
| Earnings per share (pence) | | 2.19 | 2.18 | 6.07 |
6. ANALYSIS OF CHANGES IN NET FUNDS
| At |
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| At 30 | |
|
| 1 Jan 2008 | Cash Flows | Other Movements | Jun 2008 |
|
| £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash at bank and in hand | 266 | 679 | - | 945 |
| Debt due within 1 year: |
|
|
|
|
| HP and finance leases | (4) | 4 | - | - |
|
|
|
|
|
|
| Net Funds | 262 | 683 | - | 945 |
|
|
|
|
|
The Group has a working capital facility in with Lloyds TSB plc that allows it to borrow up to 90% of the invoiced trade debtors of ATA Selection Limited up to £3.5m. The bank facility is subject to unlimited cross guarantees between Group companies secured by mortgage debentures.
7. Related party transactions
RTC Group Plc is the parent company of the Group that includes the following entities that have been consolidated:
ATA Management Services Limited
ATA Selection Limited
Catalis Limited
The Derby Conference Centre Limited
Ganymede Solutions Limited
The Group has taken advantage of the exemption permitted by IAS 24, Related Party Disclosures, and has not disclosed transactions with other Group companies that are eliminated on consolidation.
RTC Group Plc
Registered Office
The Derby Conference Centre,
London Road,
Derby, DE24 8UX
Approved and authorised for release
for and on behalf of RTC Group Plc