Preliminary Statement of Results
21 Julho 2008 - 6:42AM
UK Regulatory
RNS Number : 4924Z
1700 Group PLC
21 July 2008
1700 Group Plc
Preliminary unaudited statement of results for the period to 31 March 2008
1700 Group Plc ("the Group"), the specialist media and publishing recruitment business, today announces its inaugural preliminary
unaudited statement of results for the period to 31 March 2008.
Highlights
* The Group's shares were successfully admitted to trading on AIM on 10 January 2008, raising �1.1 million before expenses;
* Trading results reflect the period since the acquisition of its two trading subsidiaries, Hamblyn Selection Ltd and Inspired
Selection Ltd, on 14 November 2007 and 10 January 2008 respectively;
* Turnover for the period was �617,000 and profit before tax of �20,000;
* Cash balance at 31 March 2008 was �329,000 and net debt of �971,000;
*
On a pro-forma basis, assuming a full year contribution from Hamblyn Selection and Inspired Selection, the turnover for the Group would
have been �2,080,000 with profit before tax of �326,000; and
* Slower trading in the period immediately after flotation in January 2008 has improved and turnover for the first quarter of 2008/9
was �700,000 with a profit before tax of �175,000, in line with expectations.
Commenting on the result, Steve Hyde, Chief Executive of 1700 Group Plc, said:
"These results, covering the period to 31 March 2008, reflect the period up to and initially after the float. Since that time, I am
pleased to say that sales have improved and the business has performed in line with expectations".
Enquiries:
1700 Group Plc
Steve Hyde, Group Chief Executive 020 7440 1505
Grant Thornton UK LLP (Nominated Advisor)
Gerry Beaney / Fiona Kindness 020 7383 5100
SVS Securities plc (Broker)
Ian Callaway / Peter Manfield 020 7638 5600
Chairman's Statement
This is my first report to you as Chairman of your board of directors, following the successful admission of the Group's shares to
trading on AIM on 10 January 2008.
1700 Group Plc was incorporated on 9 May 2007 but did not trade until the acquisition of its first trading subsidiary, Hamblyn Selection
Ltd ("Hamblyn") on 14 November 2007. The subsequent acquisition of the Group's second trading subsidiary, Inspired Selection Ltd
("Inspired"), was completed on 10 January 2008. These results, therefore, only include four and a half months trading for Hamblyn and two
and a half months for Inspired.
Both Hamblyn and Inspired specialise in recruitment for the media sector, the former operating in the sub sectors for the media planning
and buying, auditing, media sales, brand marketing, digital and online communications and the latter operating as a successful niche
recruitment business focused on book and journal publishing companies in the UK.
Financial Highlights
The Group's results for the period to 31 March 2008 were sales of �617,000 and a profit before tax of �20,000.
If the Group had acquired and consolidated its operating subsidiaries from the 1 April 2007 and traded for the full year to 31 March
2008, the pro forma results for this period would have been sales of �2,080,000 and a profit before tax of �326,000. These results were
slightly below expectations, in part due to challenging market conditions in the sectors Hamblyn operates during the run up to Christmas
last year, which continued across January and February of 2008.
The Group's sales in March were notably stronger and this has continued into the first quarter of 2008/09 with sales for the quarter
being �700,000 and profit before tax of �175,000, in line with expectations.
Change of name
As we announced on 20 March 2008, shareholders approved a change in the Group's name, from Steppingstone Associates Plc to 1700 Group
plc.
Employees
I would like to express my thanks to the Group's employees across its trading brands, for their loyalty and efforts throughout the
period they have been employed by the Group and for their continued dedication during the period of acquisition and flotation.
Chairman's Statement
Prospects
Your board remains conscious of the factors affecting the medium term outlook for the UK economy and believes that, although there has
been no obvious negative effect on the Groups trading experienced to date, the Group's revenues could be susceptible to any prolonged
downturn in the wider economy.
With this background in mind, the Group's operating costs continue to be carefully reviewed against anticipated revenue. This cost
control, however, has not limited investment in areas for organic growth and the Group continues to evaluate opportunities for acquisition.
David Mansfield
Chairman
16 July 2008
Consolidated Income Statement
For the period from 9 May 2007 to 31 March 2008
Period to
31 March
Notes 2008
�'000
Revenue 617
Cost of sales (305)
Gross profit 312
Administrative expenses (267)
Profit from operations 45
Finance income 3
Finance costs (28)
Profit on ordinary activities before tax 20
Taxation (7)
Profit for the period attributable to equity holders 13
Profit per share
Basic profit per share (pence) 2. -
All activities are derived from acquired and continuing operations.
There are no recognised gains or losses in the period, other than as shown above.
There is no material difference between the profit on ordinary activities before taxation and the retained profit for the period stated
above and their historical cost equivalents.
Consolidated Statement of Changes in Equity
For the period to 31 March 2008
Share Share Retained
capital premium earnings Total
�'000 �'000 �'000 �'000
Balance at 9 May 2007 - - - -
Acquisition of Hamblyn 100 2,200 - 2,300
Selection Limited
Acquisition of Inspired 24 951 - 975
Selection Limited
Placing of shares 36 1,072 1,108
Cost of share placing (572) (572)
Retained profit for period - - 13 13
Balance at 31 March 2008 160 3,651 13 3,824
Consolidated Balance Sheet
As at 31 March 2008
31 March
Notes 2008
�'000
Non-current assets
Intangible assets - goodwill 4,783
Property. plant and equipment 85
Total non-current assets 4,868
Current assets
Trade and other receivables 527
Cash and cash equivalents 4. 329
Total current assets 856
Total assets 5,724
Current liabilities
Trade and other payables 486
Borrowings 4. 400
Current tax liability 110
Total current liabilities 996
Non-current liabilities
Borrowings 4. 900
Deferred Tax 4
904
Total liabilities 1,900
Net assets 3,824
Equity
Share capital 5. 160
Share premium account 3,651
Retained earnings 13
Total equity attributable to equity holders 3,824
Consolidated Cash Flow
For the period from 9 May 2007 to 31 March 2008
Period to
31 March
Notes 2008
�'000
Net cash flow from operating activities
Profit from operations 45
Adjustments for:
Depreciation 13
Increase in trade and other receivables (220)
Increase in trade and other payables 308
Cash generated by operations 146
Interest paid (28)
Net cash from operating activities 118
Net cash used in investing activities
Purchase of subsidiary companies (1,750)
Net cash acquired on purchase of
subsidiary companies 542
Purchase of property, plant and equipment (30)
Interest received 3
Net cash used in investing activities (1,235)
Net cash from financing activities
Bank loans received 1,200
Repayment of loan note (389)
Increase in other borrowings 100
Net proceeds from issuance of ordinary shares 535
1,446
Net increase in cash and cash equivalents 329
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period 4. 329
Notes to Preliminary Statement
For the period from 9 May 2007 to 31 March 2008
1. Basis of preparation and accounting policies
Basis of accounting
The board approved the preliminary statement on the 16 July 2008.
The financial information set out in the preliminary statement does not constitute the Group's statutory accounts for the period ended
31 March 2008, within the meaning of section 240 of the Companies Act 1985. These accounts will be finalised and audited on the basis of the
financial information presented by the directors in this preliminary statement and will be delivered to shareholders together with the
notice of the Company's annual general meeting.
Whilst the financial information included in this preliminary statement has been prepared under the historical cost convention and in
accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this preliminary statement
does not itself contain sufficient information to comply with IFRSs and further information will be included in the Group's statutory
accounts to ensure compliance.
Basis of consolidation
The preliminary statement incorporates the financial statements of 1700 Group Plc and its subsidiary companies, Hamblyn Selection
Limited and Inspired Selection Limited. Business combinations are accounted for using the acquisition method of accounting. The cost of an
acquisition is measured as the cash paid or share capital issued, assets given and liabilities assumed or incurred at the date of exchange,
plus costs directly attributable to the acquisition.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the
identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost less
accumulated impairment losses. Goodwill, which is recognised as an asset, is reviewed for impairment at least annually. Any impairment is
recognised immediately in the income statement and is not subsequently reversed.
Revenue
Revenue, which excludes value added tax, comprises the value of services undertaken by the Group under its principal activity, which is
the provision of recruitment consultancy services. Revenue is recognised to the extent that it is probable that the economic benefit will
flow to the entity and is predominately recognised at the point of acceptance of employment.
Notes to Preliminary Statement
For the period from 9 May 2007 to 31 March 2008
Finance income
Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable.
Finance costs
All borrowing costs are recognised in the income statement in the period in which they are incurred.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Benefits
received and receivable as an incentive to enter in to an operating lease are also spread on a straight-line basis over the lease term.
Taxation
The tax expense or asset represents the sum of tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the period. Taxable profit differed from net profit reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that
are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is the asset expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profits, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be
utilized. Such assets and liabilities are not recognised if the temporary differences arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither
the tax profit nor the accounting profit
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
Notes to Preliminary Statement
For the period from 9 May 2007 to 31 March 2008
Tangible fixed assets
Tangible fixed assets are stated at cost less depreciation and any recognised impairment losses. Provision is made for depreciation at
rates calculated to write off the cost less estimated residual value, of each asset over is expected useful life, as follows:
Computer equipment 33% per annum straight line
Fixtures, fittings and equipment 25% per annum straight line
Motor vehicles 25% per annum straight line
Leasehold improvements remaining life of lease (or 5 years if shorter)
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the
carrying amount of the asset and is recognised in income.
Impairment of assets
At each balance sheet date, the Group reviews the carrying amounts of its other intangible and tangible assets to determine whether
there is any evidence that those assets have suffered an impairment loss. An impairment loss is recognised for the amount by which the
assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and
value is use. For the purposes of impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units).
Financial instruments
Financial assets and liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
2. Profit per share
Basic profit per share is calculated by dividing the Group's loss after taxation of �13,000 by the weighted average number of shares in
issue during the period from 9 May 2007 to 31 March 2008 of 57,453,903.
3. Dividend
The directors do not recommend a dividend for the period.
Notes to Preliminary Statement
For the period from 9 May 2007 to 31 March 2008
4. Cash and cash equivalents
31 March
2008
�'000
Cash at bank and in hand 329
Borrowings due within one year:
Bank loan (400)
Borrowings due after one year:
Bank loan (800)
Other loan (100)
Net indebtedness (971)
5. Share capital
31 March
2008
�'000
Authorised share capital
350,000,000 ordinary shares of 0.1p each 350
Issued and fully paid
160,200,250 ordinary shares of 0.1p each 160
The Company was incorporated on 9 May 2007. One ordinary share of �1 nominal value was issued on incorporation. On the 14 November 2007,
the ordinary share capital of the company was increased to �350,000 and each ordinary share was subdivided into 1,000 ordinary shares of
�0.001 each.
On 14 November 2007 a total of 100,192,210 new ordinary shares were issued on the acquisition of Hamblyn Selection Limited for a total
consideration of �2,300,000.
On 27 December 2007, the Company was re-registered as a public limited company.
On 10 January 2008, a total of 24,375,000 new ordinary shares were issued on the acquisition of Inspired Selection Limited, which,
together with a cash consideration of �1,725,000, amounted to a total consideration of �2,700,000.
On 10 January 2008, a total of 35,632,040 new ordinary shares were issued for a cash consideration of �1,108,010.
Notes to Preliminary Statement
For the period from 9 May 2007 to 31 March 2008
6. Annual General Meeting
The annual general meeting of the Company is due to be held on 18 September 2008 at the offices of Grant Thornton LLP, 30 Finsbury
Square, London EC2A 1AG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GCGDRIBDGGIB
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