Triad Regulatory News (TRD)

12 Jun 2006 07:01

Triad Group Plc12 June 2006 Triad Group Plc Preliminary announcement of audited resultsfor the year ended 31 March 2006 Chairman's statement Business Review Financial Highlights • Turnover for the year ended 31 March 2006: £42.7m (2005: £46.2m) • Pre tax losses: £0.79m (2005: £0.14m profit). Pre tax losses are after charging exceptional legal and professional expenses of £391,000 (2005: £222,000), as detailed in note 3 of the financial statements • Gross profit as a percentage of turnover: 15.7% (2005: 14.9%) • Year end cash reserves: £1.77m (2005: £0.10m) Business Performance The resourcing business has continued to move away from bulk users at lowmargins and to concentrate on niche markets with higher margin returns. Growthhas been seen in various key niche markets including 'chip & pin' rollout andsupport contracts. We are choosing new niche markets on the basis of highermargins and higher charge rates. We have been concentrating in particular on thegrowth markets based on specialist skills such as Business Systems and modellingtools. We are also emphasising the importance of developing expertise among ourconsultants and sales force as part of specialising in new and emergingtechnologies in order to offer a higher level of added value. We have nowcompleted a programme of retraining and refocusing existing staff to apply ourunderstanding of the IT market more closely to various market areas for examplePetrochemical Exploration, Power, Pharmaceutical and Mapping. Internal resourcing systems are being realigned taking into considerationautomated matching and text based communication systems allowing theidentification and contact with potential candidates immediately. We are also concentrating on developing our Systems and Consultancy work and Iexpect growth in these areas to make a significant contribution to the resultsin future. Staff morale continues to be high and staff attrition low. Wecontinue actively to recruit new staff. Higher levels of responsibility have recently been awarded to senior and longserving employees with a view to strengthening the management structure and I ampleased to report that this change has been very successful. We have excellent teams of managers, consultants and sales people developed overmany years and I look forward with enthusiasm to seeing the results of theirrevitalised efforts in the coming year. As I reported in my interim statement improvements in cash collection andmanagement had resulted in a significant increase in cash reserves. Debtor daysat the year end were 48 days (2005: 59 days). Our cash position is verysatisfactory and indeed we have not required an overdraft since January 2006. Mira Makar On 6 March 2006 Mira Makar, who ceased to be an employee and director of TriadGroup Plc with effect from 8 December 2005, brought a claim against the Companyin the Employment Tribunal which the directors are resisting vigorously. Theamount of the claim has not been stated by Mira Makar. If the claim comes to atribunal hearing, this is likely to be towards the end of the current calendaryear. In the meantime, the directors will make efforts to obtain a resolutionof the situation before the substantial expense of time and money implied by ahearing is incurred. Change of Auditors On 5 April 2006 PricewaterhouseCoopers LLP gave notice to Triad Group Plc inaccordance with section 392 of the Companies Act 1985 that they were resigningas auditors and confirmed, in accordance with section 394 of the Companies Act1985, that there were no circumstances connected with their ceasing to holdoffice which they considered should be brought to the attention of the membersor creditors of Triad Group Plc. BDO Stoy Hayward LLP have been appointed tofill the casual vacancy and a resolution for their re-appointment will be put tothe next annual general meeting. John Rigg Chairman 9 June 2006 Consolidated income statementfor the year ended 31 March 2006 Note 2006 2005 £'000 £'000Revenue 42,725 46,200Cost of sales (36,007) (39,294) -------------- --------------Gross profit 6,718 6,906Administrative expenses 3 (7,358) (6,780) -------------- --------------Operating (loss)/profit (640) 126Finance income 43 50Finance expense ( 49) (16)Other finance losses ( 145) (22) -------------- --------------(Loss)/profit before tax (791) 138Tax expense 6 (16) (25) -------------- --------------(Loss)/profit for the year (807) 113 -------------- -------------- Basic earnings per share 4 (5.33)p 0.75p --------- --------- Diluted earnings per share 4 (5.33)p 0.72p --------- --------- There is no recognised income or expense except for the (loss)/profit for theperiods stated above therefore no separate statement of recognised income andexpense has been prepared. Consolidated balance sheet as at 31 March 2006 Note 2006 2005 £'000 £'000Non-current assetsIntangible assets 65 88Property, plant and equipment 778 820Deferred tax 206 213 ---------- ---------- 1,049 1,121 ---------- ----------Current assetsTrade and other receivables 8,336 12,002Cash and cash equivalents 1,767 104 ---------- ---------- 10,103 12,106 ---------- ----------Total assets 11,152 13,227 ---------- ----------Current liabilitiesTrade and other payables (5,631) (6,863)Financial liabilities (18) -Short term provisions (229) (205) ---------- ---------- (5,878) (7,068) ---------- ----------Non-current liabilitiesFinancial liabilities (18) -Long term provisions (1,701) (1,801) ---------- ---------- (1,719) (1,801) ---------- ----------Total liabilities (7,597) (8,869) ---------- ----------Net assets 3,555 4,358 ========== ==========Shareholders' equity Share capital 151 151Share premium account 562 562Capital redemption reserve 104 104Retained earnings 2,738 3,541 ---------- ----------Total shareholders' equity 8 3,555 4,358 ========== ========== Consolidated cash flow statement for the year ended 31 March 2006 Note 2006 2005 £'000 £'000Cash flows from operating activities Cash generated from operations 7 2,003 (2,578)Interest paid (49) (16)Interest received 43 50Tax paid (9) (13) -------------- --------------Net cash from operating activities 1,988 (2,557) -------------- --------------Cash flows from investing activities Purchase of intangible assets (27) (54)Purchase of property, plant and (503) (613)equipmentProceeds from sale of property plantand equipment 169 84 -------------- --------------Net cash from investing activities ( 361) (583) -------------- --------------Cash flows from financing activitiesAssets acquired under finance leases 60 -Finance lease principal payments (24) - -------------- --------------Net cash from financing activities 36 - -------------- -------------- Net increase/(decrease) in cash andcash equivalents 1,663 (3,140) Cash and cash equivalents at beginningof the period 104 3,244 -------------- --------------Cash and cash equivalents at end of theperiod 1,767 104 ============== ============== NOTES TO THE PRELIMINARY RESULTS 1. Basis of preparation These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS and IFRIC interpretations) issued by theInternational Accounting Standards Board (IASB) with those parts of theCompanies Act 1985 applicable to companies preparing their accounts under IFRS.This is the first time the group has prepared its financial statements inaccordance with IFRS, having previously prepared its financial statements inaccordance with UK accounting standards. The disclosures required by IFRS 1 concerning the transition from UK GAAP toIFRS were published with the group's interim results in December 2005. 2. Preliminary announcement The board approved the preliminary announcement on 9 June 2006.The financial information set out in the announcement does not constitute thegroup's statutory accounts for the years ended 31 March 2006 or 31 March 2005within the meaning of Section 240 of the Companies Act 1985, and has beenextracted from the statutory accounts, on which an unqualified audit report hasbeen issued by BDO Stoy Hayward LLP. These statutory accounts are yet to bedelivered to the Registrar of Companies. The previous auditors, PricewaterhouseCoopers LLP, issued an unqualified opinionon the group's statutory information under UK GAAP for the year ended 31 March2005, which have been filed with the Registrar of Companies. 3. Administrative expenses Administrative expenses include a charge of £391,000 (2005: £222,000) forexceptional administrative expenses in respect of legal and professional feeswhich the group has been obliged to incur as a result of the situation regardingMira Makar. 2006 2005 £'000 £'000 Administrative expenses 6,967 6,558Exceptional administrative expenses 391 222 ______ ______Total administrative expenses 7,358 6,780 ====== ====== 4. Earnings per ordinary share Earnings per share has been calculated on the (loss)/profit on ordinaryactivities after tax divided by the weighted average number of shares in issueduring the period based on the following: 2006 2005 (Loss)/profit on ordinary activities aftertaxation £(807,000) £113,000 -------------- -------------- Average number of shares in issue 15,149,579 15,149,579 Effect of dilutive options * - 504,600 _________ _________Average number of shares in issue plusdilutive options 15,149,579 15,654,179 -------------- -------------- Basic earnings per share (5.33)p 0.75p --------- --------- Diluted earnings per share (5.33)p 0.72p --------- --------- * The share options have no dilutive effect in the current year. 5. Dividends No dividends have been paid or proposed for year ended 31 March 2006 (2005:nil). 6. Tax expense The tax charge for the year is £16,000 (2005: £25,000) on loss before taxationof £791,000 (2005: £138,000 profit).The tax expense for the year differs fromthe standard rate of corporation tax in the UK (30%). The differences areexplained below. 2006 2005 £'000 £'000 (Loss)/profit on ordinary activities before tax (791) 138(Loss)/profit on ordinary activities multiplied bystandard rate of corporation tax in the UK of 30%(2005: 30%) (237) 41 Effects of: Expenses not deductible for tax purposes 22 51Adjustments in respect of previous periods 9 -Movement in unrecognised deferred tax asset in respectof operating losses 222 (67) ______ ______Total current tax charge for the year 16 25 --------- --------- 7. Reconciliation of net (loss)/profit to cash flows from operations 2006 2005 £'000 £'000 Net (loss)/profit (807) 113 Adjustments for:Tax 16 25Depreciation of property, plant and equipment 396 370Profit on disposal of property, plant and equipment (20) (17)Amortisation of intangible assets 50 52Interest income (43) (50)Interest expense 49 16Share-based payments expense 4 - Changes in working capitalDecrease/(increase) in trade and other receivables 3,666 (4,602) (Decrease)/increase in trade and other payables (1,232) 1,772 Decrease in provisions (76) (257) -------------- -------------- Cash flows from operations 2,003 (2,578) ============== ============== 8. Statement of changes in equity 2006 2005 £'000 £'000 Shareholders' funds at 1 April 4,358 4,245 (Loss)/profit for the financial year (807) 113Share-based payments 4 - _____ _____Shareholders' funds at 31 March 3,555 4,358 ===== ===== This information is provided by RNS The company news service from the London Stock Exchange