RNS Number:4109E
Greatfleet PLC
25 September 2007
For immediate release
25 September 2007
Greatfleet PLC
("Greatfleet", the "Company" or the "Group")
Interim results for the six months ended 30th June 2007
The Board of Greatfleet PLC (AIM:GFG), the specialist recruitment business,
today announces its unaudited interim results for the 6 months ended 30th June
2007.
Financial highlights
* Revenue increased by 8.5% to #5.85 million (2006: #5.40 million)
* Gross profit (net fee income) increased by 43.0% to #4.45 million
(2006: #3.11 million)
* Operating profit increased by 28.5% to #0.35 million (2006: #0.27 million)
* Profit after tax increased by 50.2% to #0.31 million (2006: #0.21 million)
* Placing with institutional and other investors to raise #2.52 million
(before expenses) in March 2007
* Repayment of General Capital loan of #0.87 million in March 2007
Operational highlights
* Expansion of Longbridge Selection, including into Asian markets
* Continued growth in Longbridge International's markets
* Rejuvenation of LFI into paralegal market
* Research led methodology continues to be a differentiator
* New legal clients won during the period include: Ashurst; Clyde & Co;
Field Fisher Waterhouse; Halliwells; Norton Rose; Reynolds Porter
Chamberlain; and Wragge & Co
* New banking clients won during the period include: Morgan Stanley;
Barclays Capital; and Credit Suisse
Post period end events
* Resignation of Nigel Grant as the Group's Financial Director
* Repayment of the landlord's outstanding debt of #0.24 million
* Acquisition of Qualitas in Edinburgh and Dublin
* Challenging market conditions will impact on the outcome for the
financial year
Stuart Blake, Chief Executive Officer of Greatfleet, commented as follows:
"I am pleased to report an increase in Greatfleet's interim profits when
compared with this time last year. This is a result of our investment in our
teams over the last 12 months.
Recently we have experienced some weakness in our banking recruitment business
due to uncertainty in the financial services marketplace. This has led to the
Company's performance over the summer months being below the Board's
expectations and as a consequence the Board now believe that the outcome for the
current financial year will be materially below their previous expectations.
Our legal business' markets remain buoyant and we expect our trading in this
sector to continue to thrive. We believe that our legal recruitment business is
one of the market leaders in the UK.
The recent acquisition of Qualitas has started to be integrated and we
anticipate a small contribution this financial year."
Enquiries:
Greatfleet plc
Stuart Blake, Chief Executive Officer Tel: 0845 881 0700
Noble & Company Limited Tel: 020 7763 2200
Nick Naylor
Nick Athanas
Parkgreen Communications Limited Tel: 020 7851 7480
Simon Robinson
Ben Knowles
Chief Executive's statement
Overview
I would like to announce the Company's results for the six months to 30 June
2007. These results demonstrate that our strategy of seeking to generate
incremental revenues through our banking and legal clients has facilitated
growth in both revenues and profits.
The Company has continued to see growth across all of our legal markets both in
the UK and in France, Benelux and Germany. Additionally our Asian operation is
performing well having generated in excess of #0.4 million of revenue within the
period.
Whilst our banking recruitment business has started the year well recent
uncertainty in the financial services sector has led us to take a more cautious
view of the prospects for the sector during the remainder of the financial year.
Earlier in September the Company announced the acquisition of the entire issued
share capital of Qualitas People Solutions (Ireland) Limited, Qualitas People
Solutions (UK) Limited, Alliance Recruitment (Ireland) Ltd and Qualitas HR
Solutions (Ireland) Ltd (together known as "Qualitas") for a total initial
consideration of #3.4 million. I am delighted that we have acquired such an
excellent business operating in two key locations, Edinburgh and Dublin. I look
forward to reporting on the integration and resulting synergies when we announce
our results for the year ended 31 December 2007.
Our balance sheet was strengthened in March 2007 when we raised #2.52 million
(before expenses) in a placing of new ordinary shares in the Company. The
proceeds of the fundraising were used, inter alia, for general working capital
purposes, to grow the Company's legal recruitment business and to facilitate
expansion in overseas markets, particularly in certain emerging markets. Net
assets at 30 June 2007 were #5.9 million (31 December 2006: #3.2 million) and we
had net cash of #0.07 million (31 December 2006: net debt of #0.48 million). On
12 September 2007 we announced that we had entered into a facility with General
Capital Group plc of #0.65 million to fund the cash element of the consideration
payable for Qualitas.
Results
I am pleased to advise shareholders that our planned growth in key markets
across Europe has continued, resulting in revenue for the six months ending 30
June 2007 increasing by 8.5% over the equivalent period in 2006 to #5.85 million
(H1 2006: #5.40 million) and gross profit (net fee income) increasing by 43.0%
to #4.45 million (H1 2006: #3.11 million). Operating profit has increased by
28.5% to #0.35 million (H1 2006: #0.27 million). Profit after tax has increased
by 50.2% to #0.31 million (H1 2006: #0.21m).
This is the first financial statement shown under IFRS (International Financial
Reporting Standards) having previously been shown under UK GAAP. The results for
comparative periods have been restated from UK GAAP to IFRS. The restatement of
the results has resulted in, inter alia, the write of back of goodwill in the
comparative periods. Details of the transition from UK GAAP to IFRS are given in
note 5 to this announcement.
Business review
The Group currently operates in the following sectors: private practice and
in-house legal recruitment; corporate governance; accountancy; risk; wealth
management; IT; and financial services support.
Following the recent acquisition of Qualitas the Group now has 130 employees
focused upon fee earning and building the research capability which
differentiates the Group from many of its competitors. As a result of the
research methodology the Group continues to generate significantly higher net
fee income per consultant than is average in the marketplace.
The business continues to recruit within the Search, Selection and Contingency
marketplaces, in addition to supplying specialist contract staff within the IT
and infrastructure space.
Our core markets of legal, professional services and financial services have
continued to develop with incremental revenue streams having been generated from
Asia and Europe.
In particular the growth in the legal business has continued, with revenues
being generated from the UK, French, Benelux, German and Indian markets.
Longbridge is once again regarded as a top quality legal recruiter offering a
fully integrated service offering. We believe that we are one of the leading
legal recruitment firms in the UK.
With the re-emergence of LFI in placing paralegals our clients can now benefit
from our being a "one-stop" shop within the legal recruitment market.
Within banking we remain one of the market leaders in governance, having
expanded that area to include compliance and operational risk.
Operations within the accountancy, risk, wealth management, quantitative finance
and front office sectors have continued to thrive and we have recently
introduced corporate banking into our portfolio of services.
The IT business has now expanded in sector base to focus upon, banking, telcos,
public sector in order to maintain margin, and grow the contract base.
We see the acquisition of Qualitas as a significant move in achieving our target
of being a leading multi-site recruitment business focused upon key centres
across Europe where the provision of legal and financial services staff are
predominant.
We have continued to drive incremental revenues out of our blue chip client
base. This, coupled with our focus on niche markets and research led
methodology, leads us to believe that we will insulate the business against the
potential of a softening in the recruitment marketplace. Additionally our
geographic expansion will enable the Group to become significantly more robust.
It remains our belief that our research led methodology will continue to
differentiate the Group from its competitors and allow us to offer a quality
tailor-made service across all key markets, resulting in higher than normal net
fee income than competitive businesses.
Board
On 10 August 2007 we announced that Nigel Grant had resigned as the Group's
Financial Director. Nigel is leaving Greatfleet to pursue other career interests
and the Board of Greatfleet would like to thank Nigel for all of his hard work
over the past 4 years. Nigel has remained as an employee of Greatfleet to
facilitate an orderly handover of his responsibilities. Greatfleet have
commenced the search for a new Finance Director and a further announcement will
be made as appropriate. In the interim period the existing financial controller,
Wayne Bailey, is overseeing the finance function and is also assisting myself in
the implementation of new accounting software and reporting systems.
In addition the Company is in the process of strengthening the Board through the
recruitment of additional non-executive directors. It is intended that any new
non-executive directors appointed to the Board will either have experience and
expertise in the recruitment marketplaces or will have a financial background.
Further announcements will be made when appropriate.
Current trading
At the time of the Company's Annual General Meeting in May 2007, the Board
reported that conditions in the markets in which Greatfleet operates had been
favourable during the first four months of 2007 with continued competition for
talent within the financial services and legal marketplaces. The Board announced
in July 2007 that these market conditions had continued through the second
quarter of the year.
However, recently Greatfleet has experienced weakness in its banking recruitment
business as a consequence of the recent uncertainty within the financial
services marketplaces. This has led to the Company's performance over the summer
being below the Board's expectations and as a consequence the Board believe the
Company's results for the year to 31 December 2007 will be materially below
their previous expectations.
The Company's legal markets, both in the UK and across Europe remain buoyant and
the Group expects trading in these areas to continue to thrive. In addition, the
acquisition of Qualitas is expected to provide a small contribution to the
financial performance of the Group in the current financial year and the Board
anticipate that Qualitas will provide a significant impact to the Group's
performance in 2008.
Future prospects
The Board remains committed to generating shareholder value. In particular the
Group will continue to seek to grow its legal business and implement their
research-led methodology across an increasing number of UK and European
locations. The objective of the Group is to grow both organically and by
acquisition into one of Europe's leading niche financial services and legal
recruitment consultancy.
The integration of Qualitas is progressing well. We look forward to reporting to
shareholders on the progress of the integration and resulting synergies at the
time of the announcement of our results for the year ending December 2007. The
cash element of the acquisition was funded through a facility of #650,000
arranged with General Capital Group plc which is repayable over 36 months. We
remain committed to repaying this facility from the operating cashflow of the
business as soon as practicable.
Finally the Board would also like to express their appreciation to every member
of the Greatfleet staff for their continued efforts and commitment.
Stuart Blake
Chief Executive Officer
25 September 2007
Greatfleet plc
Interim results for the six months ended 30 June 2007
Condensed unaudited consolidated income statement
6 months ended 6 months ended Year ended
Notes 30 June 2007 30 June 2006 31 December
2006
Restated* Restated*
#'000 #'000 #'000
Revenue 5,852 5,395 11,359
Cost of sales (1,406) (2,286) (4,490)
Gross profit 4,446 3,109 6,869
Administrative expenses (4,099) (2,808) (5,948)
Share of operating loss
in joint venture 0 (31) (31)
Operating profit 347 270 890
Profit on disposal of
subsidiary 0 4 191
Investment income 31 2 3
Finance costs (67) (69) (96)
Profit before taxation 311 207 988
Taxation 0 0 0
Profit for the period
attributable to equity
shareholders 311 207 988
Earnings per share (pence)
Basic 2 0.46 0.37 1.76
Diluted 2 0.46 0.37 1.75
The results for 2007 and 2006 relate to continuing activities.
* Comparative information for the six months ended 30 June 2006 and the year
ended 31 December 2006 was previously reported under UK GAAP and has been
restated under IFRS as adopted by the EU. The reconciliations from UK GAAP to
IFRS for each period are shown in note 5 to this announcement.
Condensed unaudited consolidated balance sheet
30 June 2007 30 June 2006 31 December
2006
Restated* Restated*
Notes #'000 #'000 #'000
Non-current assets
Goodwill 4,881 4,854 4,881
Property, plant and equipment 170 155 199
5,051 5,009 5,080
Current assets
Trade and other receivables 4,281 2,866 2,926
Cash and cash equivalents 70 19 4
4,351 2,885 2,930
Total assets 9,402 7,894 8,010
Non-current liabilities
Bank loans 37 14 43
Convertible loan notes 0 237 250
Other loans 0 0 25
Investments in joint venture 0 187 0
Long term provisions 124 170 129
Obligations under finance leases 0 0 21
161 608 468
Current liabilities
Trade and other payables 2,259 3,084 2,401
Convertible loan notes 263 0 0
Current tax liabilities 751 922 814
Obligations under finance leases 0 0 15
Bank overdrafts and loans 37 963 1,047
Provisions 0 47 35
3,310 5,016 4,312
Total liabilities 3,471 5,624 4,780
Net assets 5,931 2,270 3,230
Equity
Share capital 4 1,486 1,120 1,126
Share premium account 4,815 2,699 2,821
Merger reserve 2,015 1,994 2,015
ESOP share reserve 0 (75) (75)
Convertible debt option reserve 53 53 53
Retained deficit (2,438) (3,521) (2,710)
Equity attributable to equity
holders of the parent 5,931 2,270 3,230
Total equity 5,931 2,270 3,230
Condensed unaudited consolidated cash flow statement
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December
2006
Restated* Restated*
#'000 #'000 #'000
Net cash inflow / (outflow) from
operating activities (806) 222 75
Investing activities
Interest received 5 2 3
Purchases of property, plant and equipment (9) (14) (22)
Purchase of subsidiaries 0 (5) (18)
Net cash used in investing activities (4) (17) (37)
Financing activities
Interest paid (33) (47) (142)
Repayment of bank loans (62) (34) (81)
Repayment of other loans (873) 0 (23)
Repayments of obligations under
finance leases (36) 0 (11)
Proceeds on sale of ESOP shares 5 0 0
Proceeds on issue of shares
(net of issue costs) 2,354 0 0
Net cash (used in) /
from financing activities 1,355 (81) (257)
Net increase / (decrease) in
cash and cash equivalents 545 124 (219)
Cash and cash equivalents at
beginning of period (475) (256) (256)
Cash and cash equivalents at end of period 70 132 (475)
Greatfleet plc
Interim results for the six months ended 30 June 2007
Notes to the unaudited interim consolidated financial statements
1. Accounting policies
The results for the six months ended 30 June 2007 include those for the holding
company and all of its subsidiary undertakings.
The interim financial report has been prepared in accordance with the AiM rules
for companies and the historic cost convention and also, for the first time,
with the International Financial Reporting Standards including International
Accounting Standards and Interpretations (IFRSs) because they will form part of
the period covered by the Group's first IFRS financial statements for the year
ended 31 December 2007.
The report has been prepared in accordance with those IFRSs in issue that are
endorsed by the EU and effective at 31 December 2007. The significant
differences to those presented in the annual report for the year ended 31
December 2006 are presented in note 5 to this announcement. The annual report
for the year ending 31 December 2007 will be the Group's first set of annual
financial statements prepared under IFRS as adopted by the EU.
2. Earnings per share
Basic earnings per ordinary share has been computed on the basis of a profit
after taxation of #311k (2006: #207k) and the weighted average number of
ordinary shares in issue during the period of 67,304,721 (2006: 56,004,721).
The diluted profit per share has been calculated including the dilutive effect
of options awarded. As a result the diluted weighted average number of ordinary
shares during the period is 69,012,618 (2006: 56,373,490).
3. Dividends
No dividends were paid or proposed for the period to 30 June 2007 (2006: #nil).
4. Share capital
On 12 March 2007 18 million new ordinary shares of 2 pence each were placed at
14 pence each generating net proceeds of #2,353,733.
5. Explanation of transition to IFRS
The Company reported under UK GAAP in its previously published financial
statements for the year ended 31 December 2006 and the interim report for the
six months ended 30 June 2006. The analysis below shows a reconciliation of
equity and profit as reported under UK GAAP as at 31 December 2006 and 30 June
2006 and the revised equity and profit under IFRS. In addition there is a
reconciliation of equity under UK GAAP to IFRS at the transition date for the
Group being 1 January 2006. An explanation of the reconciling items between UK
GAAP and IFRS for the Group is set out below.
Goodwill: IAS38 - Intangible assets: Under IAS38 goodwill is not amortised.
Instead it is subject to an annual impairment review. An adjustment has been
made to remove the goodwill amortisation charge.
Lease incentives: IAS17 - Leases: Under IAS17 a rent free period is spread over
the lease term. Under UK GAAP a rent free period was spread over the shorter of
the lease term and the period until a review date in which the rent is first
adjusted to a prevailing market rate. An adjustment has been made to spread the
rent free period over the lease term.
Holiday pay: IAS 19 - Employee Benefits: IAS19 requires the recording of a
holiday pay accrual. As the holiday year matches the financial year, when
comparing the year end and interim periods there is a balance sheet movement and
income statement impact.
Cash flow: The cash flow differences between UK GAAP and IFRS are all either
movements within a classification (adjustments netting to zero) or
presentational. There is no impact on the final cash position nor the movement
in the period.
The reconciliations of equity and profit below, together with the explanations
of the changes, are provided to facilitate the understanding of changes arising
from the adoption of IFRS.
Reconciliation of profit for the 6 months ended 30 June 2006
UK GAAP Effect of IFRS
in transition
IFRS format to IFRS
#'000 #'000 #'000
Revenue 5,395 5,395
Cost of sales (2,286) (2,286)
Gross profit 3,109 3,109
Administrative expenses (2,990) 182 (2,808)
Share of operating loss in joint venture (31) (31)
Operating profit 88 182 270
Profit on disposal of subsidiary undertakings 4 4
Investment income 2 2
Finance costs (69) (69)
Profit before taxation 25 182 207
Taxation 0 0
Profit for the period attributable to
equity shareholders 25 182 207
Reconciliation of profit for the year ended 31 December 2006
UK GAAP Effect of IFRS
in transition
IFRS format to IFRS
#'000 #'000 #'000
Revenue 11,359 11,359
Cost of sales (4,490) (4,490)
Gross profit 6,869 6,869
Administrative expenses (6,407) 459 (5,948)
Share of operating loss in joint venture (31) (31)
Operating profit 431 459 890
Profit on disposal of subsidiary undertakings 191 191
Investment income 3 3
Finance costs (96) (96)
Profit before taxation 529 459 988
Taxation 0 0
Profit for the period attributable to
equity shareholders 529 459 988
Reconciliation of equity at 1 January 2006 (date of transition to IFRS)
UK GAAP Effect of IFRS
in transition
IFRS format
#'000 #'000 #'000
Non-current assets
Goodwill 4,692 4,692
Property, plant and equipment 206 206
4,898 0 4,898
Current assets
Trade and other receivables 3,186 3,186
Cash and cash equivalents 14 14
3,200 0 3,200
Total assets 8,098 0 8,098
Non-current liabilities
Bank loans 49 49
Convertible loan notes 223 223
Long term provisions 35 141 176
Investments in subsidiaries / joint venture 217 217
524 141 665
Current liabilities
Trade and other payables 3,480 (20) 3,460
Current tax liabilities 907 907
Bank overdrafts and loans 908 908
Provisions 95 95
5,390 (20) 5,370
Total liabilities 5,914 121 6,035
Net assets / (liabilities) 2,184 (121) 2,063
Equity
Share capital 1,120 1,120
Share premium account 2,699 2,699
Merger reserve 1,994 1,994
ESOP share reserve (75) (75)
Equity reserve 53 53
Retained deficit (3,607) (121) (3,728)
Equity attributable to
equity holders of the parent 2,184 (121) 2,063
Reconciliation of equity at 30 June 2006
UK GAAP Effect of IFRS
in transition
IFRS format
#'000 #'000 #'000
Non-current assets
Goodwill 4,611 243 4,854
Property, plant and equipment 155 155
4,766 243 5,009
Current assets
Trade and other receivables 2,866 2,866
Cash and cash equivalents 19 19
2,885 0 2,885
Total assets 7,651 243 7,894
Non-current liabilities
Bank loans 14 14
Convertible loan notes 237 237
Long term provisions 35 135 170
Investments in subsidiaries / joint venture 187 187
473 135 608
Current liabilities
Trade and other payables1 3,037 47 3,084
Current tax liabilities 922 922
Bank overdrafts and loans 963 963
Provisions 47 47
4,969 47 5,016
Total liabilities 5,442 182 5,624
Net assets 2,209 61 2,270
Equity
Share capital 1,120 1,120
Share premium account 2,699 2,699
Merger reserve 1,994 1,994
ESOP share reserve (75) (75)
Equity reserve 53 53
Retained deficit1 (3,582) 61 (3,521)
Equity attributable to
equity holders of the parent 2,209 61 2,270
1 UK GAAP column includes #109,000 being an adjustment to the revenue
recognition prior year adjustment. At 30 June 2006 this was reported as #165,000
but was subsequently amended at 31 December 2006 to #56,000.
Reconciliation of equity at 31 December 2006
UK GAAP Effect of IFRS
in transition
IFRS format to IFRS
#'000 #'000 #'000
Non-current assets
Goodwill 4,402 479 4,881
Property, plant and equipment 199 199
4,601 479 5,080
Current assets
Trade and other receivables 2,926 2,926
Cash and cash equivalents 4 4
2,930 0 2,930
Total assets 7,531 479 8,010
Non-current liabilities
Bank loans 43 43
Convertible loan notes 250 250
Other loans 25 25
Provisions 0 129 129
Obligations under finance leases 21 21
339 129 468
Current liabilities
Trade and other payables 2,389 12 2,401
Current tax liabilities 814 814
Obligations under finance leases 15 15
Bank overdrafts and loans 1,047 1,047
Provisions 35 35
4,300 12 4,312
Total liabilities 4,639 141 4,780
Net assets 2,892 338 3,230
Equity
Share capital 1,126 1,126
Share premium account 2,821 2,821
Merger reserve 2,015 2,015
ESOP share reserve (75) (75)
Equity reserve 53 53
Retained deficit (3,048) 338 (2,710)
Equity attributable to
equity holders of the parent 2,892 338 3,230
The adjustments arising on transition to IFRS comprise:
Income statement a b c Total
6 months ended 30 June 2006
Administrative expenses 243 (11) (50) 182
Year ended 31 December 2006
Administrative expenses 479 (20) 459
6 months ended 30 June 2007
Administrative expenses 244 6 (46) 204
Balance sheet a b c Total
At 1 January 2006
Provisions 141 141
Trade and other payables (20) (20)
Retained deficit (121) (121)
At 30 June 2006
Goodwill 243 243
Provisions 135 135
Trade and other payables (3) 50 47
Retained deficit 243 (132) (50) 61
At 31 December 2006
Goodwill 479 479
Provisions 129 129
Trade and other payables 12 12
Retained deficit 479 (141) 338
See above for further details of the following adjustments:
a - writeback of amortisation of goodwill
b - lease incentive
c - holiday pay
6. Circulation to shareholders
Copies of the consolidated interim statements will be sent to shareholders with
further copies available from the Company's registered office, 85 Gracechurch
Street, London, EC3V 0AA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAENLALLXEAE
Greatfleet (LSE:GFG)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Greatfleet (LSE:GFG)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024
