RNS Number:8434D
ATA Group PLC
14 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 provides
employment solutions and training services to client companies in the United
Kingdom 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, the
problems are those of optimising an already profitable business and planning for
development and growth. Further development of contract recruitment is
anticipated enabling more intensive use to be made of our nationwide network of
branches, where permanent recruitment is expected to continue the trend to more
effective working. Our first steps to enter the white collar Construction market
in both contract and permanent recruitment have made a slow but steady start, as
has our entry into the supply of engineering contractors to Large Corporates.
Our training business continues to make progress and the renewed Derby
Conference Centre has started well although significant business results are not
expected 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 4300
Jeremy Ellis
ATA Group Plc
CHAIRMAN'S STATEMENT
I am pleased to present the interim report of the Company for the six months to
30 June 2007.
Structure and Management
I am pleased to report that our top management team has stabilised and is
performing well. The Recruitment business, ATA Selection, has two regional
Directors responsible for the North, Andrew Hardaker, and the South (including
Corporate Contract), Charles Cornwell. Paul McLoughlin continues as Managing
Director of the Railway business, Catalis Rail Training, The Derby Conference
Centre and Ganymede Manpower Services. The Group Board now consists of Bill
Douie, Executive Chairman, Andrew Bailey, Group Managing Director and the recent
valuable addition of Andy Pendlebury, Non-Executive Director, supported by, Mark
Kendall as Company Secretary and Group Financial Controller.
Trading
General
Economic conditions have remained stable in the first half. As has been seen in
the last few weeks, there is much instability in credit and consequently other
markets as the Global Economy faces the possibility of recession and events in
the Middle East and elsewhere serve to de-stabilise the world environment. For
the time being this has not affected the trading environment in recruitment, and
the Railway Industry seems now to have settled down and calmer conditions
prevail. Group turnover in the six months to 30 June 2007 increased 23% to
#11.24m, (2006 #9.15m), operating profit from continuing operations before
exceptionals rose to #242,000 (2006 #170,000). Earnings per share from
continuing operations before exceptionals rose to 2.95p (2006 2.07p).
Recruitment
Recruitment turnover in the period was #8.19m (2006 #5.55m). Operating profit
rose to #355,000 (2006 #300,000). The performance of ATA Selection improved
during the period in permanent recruitment and continuing progress was made in
contract 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 losses
reduced 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 operates
from London Road, Derby and Clapham in West London. The vast majority of all
training is for clients from the private sector, with very little business
directly with Network Rail. Nonetheless, our client base is wholly dependant
upon Network Rail contracts and it is pleasing to note that a return to
significant capital expenditure on the Railways has occurred, particularly in
the field of signalling renewal contracts. There are also announced plans for
significant spend in other areas covering track and station upgrading and major
new projects including Thameslink and Crossrail.
The rebranding of our Conferencing business as, The Derby Conferencing Centre
Limited, operating from the recently refurbished premises at London Road, Derby
has been completed and a formal re-opening took place on 1st June. Early
business flows have been encouraging.
Ganymede Manpower Services (Ganymede Tracklayers) has, however, encountered
difficult trading conditions as projects on the London Underground network were
completed with no follow on business for the time being. Firm management action
has materially reduced costs and it is proving possible to continue to make a
real but small financial contribution, whilst awaiting the establishment of
further Underground work and the initiation of certain announced Network Rail
projects.
Although the nadir of the fortunes in this division has passed, a return to
respectable profitability is not expected until 2008.
During the period the decision was taken to exercise a break option on the lease
of the Group head office premises at Yate, South Gloucester. All functions
previously carried out at Yate, including the registered office address, have
now been transferred to London Road, Derby.
Dividends
Your Directors consider that recovery from the problems of 2006 has begun and
they are pleased that steady progress is being made in all areas and that
profits for the period are derived entirely from normal trading. In view of this
they 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 changes
in the quantity of top management available to our Group prompted a strategic
review in 2006. It was necessary to overcome these problems and return the Group
to a healthy trading condition and that has largely occurred, although there is
further 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. All
elements are in place to achieve the fulfilment of Phase One.
The strategic focus must now shift to building on the solid base achieved in the
programme. We have, therefore, decided to concentrate on the pursuit of organic
start-up opportunities with vigour and seek acquisitions of support service
companies with proven track records and management in current and compatible
niche markets.
I am particularly pleased that Andy Pendlebury, with his wealth of experience
and contacts, has joined us with a particular brief to concentrate on those two
objectives 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, the
problems are those of optimising an already profitable business and planning for
development and growth. Further development of contract recruitment is
anticipated enabling more intensive use to be made of our nationwide network of
branches, where permanent recruitment is expected to continue the trend to more
effective working. Our first steps to enter the white collar Construction market
in both contract and permanent recruitment have made a slow but steady start, as
has our entry into the supply of engineering contractors to Large Corporates.
Our training business continues to make progress and the renewed Derby
Conference Centre has started well although significant business results are not
expected until 2008.
IFRS
The results which follow are prepared for the first time in accordance with
International Reporting Standards (IFRS) and in order to give the greatest level
of clarity, we have prepared notes on the impact of adopting IFRS, which include
reconciliation 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 18,134
Cost of sales (8,877) (6,789) (13,692)
Gross Profit 2,358 2,356 4,442
Administrative expenses (2,116) (2,186) (4,558)
Operating profit from 2 242 170 (116)
continuing operations
before exceptional items
Exceptional item 3 - 974 974
Profit on disposal of fixed 3 - 88 73
assets
________________________________________________
242 1,232 931
Finance costs 6 (13) (3)
________________________________________________
Profit on ordinary 248 1,219 928
activities before taxation
Income tax expense 4 (69) (356) (315)
________________________________________________
Profit on ordinary 179 863 613
activities after taxation
Loss 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 from
continuing operations
before exceptional items
Earnings per share - 7 2.18 10.52 7.47
continuing operations
(pence)
Earnings per share - 7 2.18 7.62 5.35
continuing and discontinued
operations (pence)
Fully diluted earnings per 7 2.18 10.52 7.47
share - continuing
operations (pence)
Fully diluted earnings per 7 2.18 7.62 5.35
share - continuing and
discontinued 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 #'000
Assets
Non current
Goodwill 924 983 924
Property, plant & equipment 703 881 654
____________________________________
1,627 1,864 1,578
____________________________________
Current
Inventory 3 27 3
Trade and other receivables 5,416 5,411 3,564
Cash and cash equivalents 24 676 939
____________________________________
5,443 6,114 4,506
____________________________________
Total assets 7,070 7,978 6,084
____________________________________
Liabilities
Current
Trade 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 current
Borrowings - (46) (2)
Deferred tax liability - (43) -
____________________________________
Total Liabilities (3,034) (3,686) (2,227)
____________________________________
Net Assets 4,036 4,292 3,857
____________________________________
Equity
Called up share capital 82 82 82
Share premium account 1,817 1,817 1,817
Capital redemption reserve 50 50 50
Share based payment reserve 31 33 31
Profit 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 #'000
Operating activities
Operating result 242 1,232 931
Operating loss from discontinuing - (340) (291)
operations
Net interest received/(paid) 6 (13) (3)
Employee equity settled share options - 5 3
Depreciation of property, plant & 141 242 438
equipment
Loss on sale of property, plant & - (98) (37)
equipment
Impairment of goodwill - 134 64
Change in stock - 18 28
Change in trade and other receivables (1,949) (345) 1,404
Change 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 - 21 238
Disposal 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 24 676 939
the 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 ended
30 June 2007. They have been prepared in accordance with IAS 34 - Interim
Financial Reporting, and are covered by IFRS 1 - First-time adoption of IFRS, as
they are part of the period covered by the company's first IFRS financial
statements for the year ending 31 December 2007.
These interim financial statements are prepared using the IFRS accounting
policies (including IAS) and interpretations issued by the International
Financial Reporting Interpretations Committee ("IFRIC") that are expected to be
applicable for the full reporting year ending 31 December 2007. These remain
subject to ongoing amendment and/or interpretation and are therefore subject to
possible change. Consequently information included in these interim financial
statements may need updating for any subsequent amendments to IFRS required for
first time adoption, or for new standards that the Group may elect to adopt
early.
Previously the Group's financial statements were prepared in accordance with UK
Generally Accepted Accounting Practice (UK GAAP). The principal accounting
policies previously adopted are explained in the Group's last UK GAAP Annual
Report for the year ended 31 December 2006. The principal accounting policies
under IFRS are consistent with those adopted under UK GAAP, with the exception
of those policies set out in note 1d below.
b) Comparatives
The comparative figures for the year ended 31 December 2006 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.
c) Transition to IFRS
ATA Group Plc's transition date for the adoption of IFRS is 1 January 2006 and
the company has prepared its opening balance sheet at that date.
The Group has elected not to apply IFRS 3 retrospectively to business
combinations.
d) Main impacts of International Financial Reporting Standards
Outlined below are those International Financial Reporting Standards which will
have an impact on the financial statements of ATA Group Plc. The numerical
impact of the adoption of IFRS on the income statement and shareholders' equity
is given in note 10.
IFRS 3 "Business Combinations" prohibits the amortisation of goodwill, instead
goodwill is subject to annual impairment reviews.
Under the transitional provisions of IFRS 1, the goodwill balance at 31 December
2005 has been frozen and hence amortisation charges booked in the year to 31
December 2006 have been reversed. Impairment previously recognised under UK GAAP
has not been reversed.
The cash flow statements for the periods ended 30 June 2006 and 31 December 2006
as presented in the interim financial information have been subject to a number
of presentational adjustments following the transition to IFRS. There is no
impact in the net increase in cash and cash equivalents for each period as
reported under IFRS compared with that originally reported under UK GAAP.
There is no impact on these financial statements from IAS 39, Financial
Instruments 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 #'000
REVENUE
Recruitment Division 8,190 5,546 11,584
Railway Division 3,045 3,599 6,550
____________________________________
11,235 9,145 18,134
____________________________________
OPERATING PROFIT/(LOSS) - Before exceptional
items
Recruitment Division 355 300 414
Railway 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 of
keyman insurance in relation to the former Chief Executive.
The profit on disposal of fixed assets in 2006 relates to maintenance assets
sold 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 been
provided 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 #'000
Revenue - 549 580
___________________________________
Operating profit - (340) (291)
Attributable tax credit - 102 87
___________________________________
Net operating loss - (238) (204)
attributable to
discontinued operations
Profit on disposal of
discontinued operations - - 43
Attributable tax charge - - (13)
___________________________________
- - 30
___________________________________
Loss on discontinued
operations after taxation - (238) (174)
___________________________________
6. DIVIDENDS
The Board has approved an interim dividend of 1.5p per ordinary share net to be
paid on 11 December 2007 to shareholders on the register of members on 16
November 2007.
7. EARNINGS PER SHARE
The earnings per share have been calculated both on the profit on continuing
operations after taxation and on the loss on continuing and discontinued
operations, based on the number of shares in issue during the period. The
outstanding share options are not considered to be dilutive in either the
current or comparative periods.
In addition, because of the impact of exceptional items in the comparative
periods, the earnings per share on operating profit before exceptional items
have 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 of
shares 8,203,331 8,203,331 8,203,331
Earnings from operating
profit before exceptional
items (#'000) 242 170 (116)
Earnings from continuing
operations (#'000) 179 863 613
Earnings from continuing and
discontinued operations
(#'000) 179 625 439
___________________________________________
Earnings per shares -
Operating profit before
exceptional items 2.95 2.07 (1.41)
Earnings per share -
continuing operations (pence) 2.18 10.52 7.47
Earnings per share -
continuing and discontinued
operations (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) - 24
Debt due within more than 1
year:
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 #'000
Opening shareholders' funds 3,857 3,662 3,662
Profit for the period 179 625 439
Dividends - - (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 financial
statements for the year ended 31 December 2006 and its unaudited interim
financial statement dated 30 June 2006. The analysis below shows a
reconciliation of shareholders' equity and profits as reported under UK GAAP as
at, and for the periods ended, 31 December 2006 and 30 June 2006 to the revised
shareholders' equity and profits under IFRS as reported in this interim
financial information. In addition, there is a reconciliation of shareholders'
equity under UK GAAP to IFRS at the transition date for the Group, being 1
January 2006.
a) Reconciliation of profit for the period:
Year ended 31 Six months ended 30
December 2006 June 2006
#'000 #'000
Profit for the period under UK GAAP 377 594
Goodwill amortisation 62 31
_______________________________
Profit for the period as reported under 439 625
IFRS
b) Reconciliation of shareholders' equity
As at 1 As at 31 As at 30
January December June 2006
2006 2006
#'000 #'000 #'000
Shareholders' equity as reported under 3,662 3,795 4,261
UK GAAP
Goodwill amortisation - 62 31
______________________________
Shareholders' equity as reported under 3,662 3,857 4,292
IFRS
ATA Group Plc
Registered Office
The Derby Conference Centre,
London Road,
Derby, DE24 8UX
Approved and authorised for release
for and on behalf of ATA Group Plc
This information is provided by RNS
The company news service from the London Stock Exchange
END
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