RNS Number:3233Q
MSB International PLC
30 September 2003
Tuesday 30th September 2003
MSB INTERNATIONAL PLC
Interim results for the six months ended 31st July 2003
MSB International PLC ("MSB" or "the Company") today announces its interim
results for the six months ended 31st July 2003.
Financial highlights:
* Turnover #33.8 million (2002: #47.6 million)
* Profit before taxation of #103,000 (2002: breakeven)
* Strong cash position with #0.9 million generated from operating activities
in the period resulting in a net cash position of #6.7 million (2002:
#2.7 million)
* Overhead of #5.2 million after further cost base savings (2002: #7.2 million)
* Basic earnings per share of 0.3p (2002: nil).
* Interim dividend per share of 0.7p (2002: 0.7p)
Board changes:
* Nicholas Parker retiring from his role as Non-executive Director with
immediate effect, as stated at the preliminary results
* New Finance Director being sought following Douglas Adshead-Grant's
departure on 11th August 2003.
Operational highlights:
* Period of stability with steady progress
* Measures taken to reduce costs have successfully aligned overheads with
revenues
* Continued progress in new divisions: MSB Finance, MSB Sales, MSB
Engineering; and MSB Human Resources, launched since the period end.
Commenting on the results, Paul Davies, Chairman of MSB, said:
"Strong financial management and aggressive cost controls at MSB have resulted
in an improved cash position and a return to profitability despite continued
uncertainties in our marketplace.
"Outside of the core IT recruitment business, we continued to diversify and
invest in a wider range of recruitment services. Investment continued into the
Finance (Banking and Accounting), Sales (IT and Construction) and Engineering
divisions. On 23 September 2003 we announced the opening of the Human Resource
Services division.
"Notwithstanding the continued tough market place for our services, the Board
remains confident that the organisation changes and overhead savings we have
made, now put us in a position to achieve further improvements in the business
whilst retaining the capability to respond to market upturn as and when it
occurs."
- Ends -
For more information, please contact:
MSB International 020 8315 9000
Andrew Zielinski, Chief Executive
Merlin Financial 020 7606 1244
Paul Downes / Vanessa Maydon
Attached: Chairman's Interim Statement and Chief Executive's Statement
Profit & Loss Account
Balance Sheet
Cashflow Statement
Reconciliation of Movements in Shareholders Funds
Notes to the Interim Report
Review Report of the Auditors
CHAIRMAN AND CHIEF EXECUTIVE STATEMENT
Overview
In the first half of 2003/2004, strong financial management and aggressive cost
controls have resulted in an improved cash position and a return to
profitability despite continued uncertainties in the marketplace.
The management team has concentrated on MSB's traditional strengths in sales
and delivery which has substantially stemmed the trend of revenue reduction,
held our contractor numbers steady in the first half of the year, expanded our
recruitment sectors and widened our service offerings.
We continue to make headway in the development of long term relationships with
many of our major clients. We are often seen by them to be the supplier of first
choice, reflecting our ability to resource and place the best candidates against
short timeframes.
Notwithstanding the continued tough market place for our services, the Board
remains confident that the organisation changes and overhead savings we have
made, now put us in a position to achieve further improvements in the business
whilst retaining the capability to respond to market upturn as and when it
occurs.
Our 2002/2003 year end statement referred to the Board's awareness of the
changing circumstances which our industry faces and we continue to develop
strategic initiatives to enable us to take advantage of opportunities as they
arise.
Operational and Financial Review
Trading conditions in the first half of the year remained challenging. As
expected, there was no meaningful upturn or growth in demand for our services,
but the company entered a period of stability in which steady progress has been
made, with a small increase in trading quarter two over that of quarter one.
Whilst turnover in the period has declined to #33.8m (2002: #47.6m), cost saving
measures have resulted in a #2m saving in overheads to #5.2m (2002: #7.2m),
break-even at operating level and a profit before taxation of #0.1m (2002:
#Nil).
Outside of the core IT recruitment business, we continued to diversify and
invest in a wider range of recruitment services. Investment continued into the
Finance (Banking and Accounting), Sales (IT and Construction) and Engineering
divisions. On 23 September 2003 we announced the opening of the Human Resource
Services division.
The Company continued its focus on cash management, generating cash from
operating activities of #0.9m, resulting in a net cash position at 31 July 2003
of #6.7m (2002: #2.7m). Net assets at 31 July 2003 stood at #14.3m compared to
#14.4m at 31 January 2003.
Interim Dividend
Reflecting your Board's continued confidence in the future prospects for MSB, an
interim dividend of 0.7p per share has been declared payable on 31 October 2003
to shareholders who are on the register at 10 October 2003.
The Board
As stated in our year end results, Nick Parker's resignation from the Board as a
Non-executive Director is effective from this announcement. After 12 years
service with MSB, Nick has kindly agreed to continue to be available to offer
the Board the benefit of his wealth of experience as required on a consultative
basis. On 12 August, we announced that Douglas Adshead-Grant had left the
Company as Finance Director and the search for a suitable candidate is
progressing well.
Consolidated Profit and Loss Account
for the six months ended 31 July 2003
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 July 2003 31 July 2002 31 Jan 2003
Note #'000 #'000 #'000
---- ----------- ------------- ------------
Turnover 33,777 47,619 84,062
Cost of sales (28,571) (40,293) (71,252)
Gross Profit 5,206 7,326 12,810
Administration expenses (5,185) (7,203) (12,667)
Operating Profit 21 123 143
Exceptional item: amounts
written off investment 2 - - (422)
Net interest receivable/
(payable) 82 (123) (142)
Profit/(loss) on ordinary
activities before taxation 103 - (421)
Taxation on profit/loss
on ordinary activities 3 (45) (9) (32)
Profit/(loss) on ordinary
activities after taxation 58 (9) (453)
Dividend payable 4 (137) (137) (410)
Transfer from reserves (79) (146) (863)
Earnings per share 5
Basic earnings per share 0.30p 0.00p (2.32p)
Diluted earnings per 0.30p 0.00p (2.32p)
All turnover and operating profit relates to continuing activities.
Consolidated Balance Sheet
as at 31 July 2003
(Unaudited) (Unaudited) (Audited)
31 July 2003 31 July 2002 31 Jan 2003
#'000 #'000 #'000
------------- ------------- ------------
Fixed Assets
Tangible fixed assets 391 804 540
Investments 497 919 497
----------- ---------- ---------
888 1,723 1,037
----------- ---------- ---------
Current Assets
Debtors 12,215 17,867 11,588
Cash at bank and in hand 6,739 7,740 7,050
----------- ---------- ---------
18,954 25,607 18,638
----------- ---------- ---------
Creditors: amounts falling
due within one year (5,567) (12,168) (5,256)
Net current assets 13,387 13,439 13,382
Total assets less current
liabilities 14,275 15,162 14,419
Creditors: amounts falling
due after more than one year - - -
Net assets 14,275 15,162 14,419
Capital and Reserves
Called up share capital 1,025 1,025 1,025
Share premium account 1,263 1,263 1,263
Profit and loss account 11,987 12,874 12,131
----------- ---------- ---------
Equity shareholders' funds 14,275 15,162 14,419
----------- ---------- ---------
Consolidated Cash Flow Statement
for the six months ended 31 July 2003
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 July 2003 31 July 2002 31 Jan 2003
Note #'000 #'000 #'000
---- ---------- ---------- ---------
Net cash inflow from
operating activities 6 944 7,042 10,955
Returns on investments and
servicing of finance
Interest paid - (103) (380)
Interest received 82 79 191
Net cash inflow/(outflow) from
returns on investment and
servicing of finance 82 (24) (189)
Taxation paid (165) (521) (674)
Capital expenditure
Purchase of tangible fixed assets (36) (87) (99)
Proceeds from sale of tangible
fixed assets - 24 25
Net cash outflow from capital
expenditure (36) (63) (74)
Equity dividends paid to
shareholders (273) (273) (410)
Net cash inflow before management 552 6,161 9,608
of liquid resources and financing 552 6,161 9,608
Financing
Repayment of term loan - - (5,000)
Net increase in cash 7 552 6,161 4,608
Statement of Group Total Recognised Gains and Losses
For the six months ended 31 July 2003
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 July 2003 31 July 2002 31 Jan 2003
#'000 #'000 #'000
Profit / (loss) for the period 58 (9) (453)
Exchange movements in reserves (65) (20) (46)
----------- ---------- -----------
Total recognised losses for the
period (7) (29) (499)
Reconciliation of Movements in Shareholders' Funds
For the six months ended 31 July 2003
(Unaudited) (Unaudited) (Audited)
Six months Six months Year
ended ended ended
31 July 2003 31 July 2002 31 Jan 2003
#'000 #'000 #'000
----------- ---------- -----------
Profit / (loss) attributable
to shareholders 58 (9) (453)
Dividends (137) (137) (410)
Retained loss for the period (79) (146) (863)
Exchange movements in reserves (65) (20) (46)
Net change in shareholders' funds (144) (166) (909)
Opening shareholders' funds 14,419 15,328 15,328
Closing shareholders' funds 14,275 15,162 14,419
Notes to the Interim Report
1. The interim report has been prepared using the same accounting policies
as for the financial statements for the year ended 31 January 2003 and for the
six months ended 31 July 2002. The interim financial statements do not
constitute statutory accounts, as they are unaudited. They have, however, been
reviewed by the auditors. Full year figures for the year ended 31 January 2003
have been extracted from the annual report and financial statements for that
year, which received an unqualified audit opinion and have been filed with the
Registrar of Companies.
2. The exceptional charge of #422,000 in the year ended 31 January 2003
relates to amounts provided against the cost of MSB International PLC shares
held by MSB Incentive Scheme Trustee Limited. The market value of these shares
at 31 July 2003 was #103,000 greater than the carrying value.
3. The taxation charge for the six months ended 31 July 2003 is based on
the estimated effective tax rate for the full year, including the effect of
prior period tax adjustments and the movement in the deferred tax asset. This
effective rate is higher than the standard rate of Corporation Tax owing to the
effect of overseas losses and other disallowable expenses.
4. The interim dividend of 0.7p per share for the six months ended 31 July
2003 will be paid on 31 October 2003 to members on the register at 10 October
2003.
5. Earnings per share have been calculated using 19,516,979 shares (31 July
2002: 19,516,979, 31 January 2003: 19,516,979), being the average number of
shares in issue during the period excluding those shares held by MSB Incentive
Scheme Trustee Limited in accordance with Financial Reporting Standard 14
"Earnings Per Share".
6. Reconciliation of Operating Profit to Cash Inflow from Operating Activities
Unaudited Unaudited Audited
31 July 2003 31 July 2002 31 Jan 2003
#'000 #'000 #'000
--------- --------- ---------
Operating Profit 21 123 143
Depreciation 186 375 651
Profit on disposal of tangible
fixed assets - (5) (6)
(Increase)/decrease in debtors (708) 5,811 12,217
Increase/(decrease) in creditors 1,445 785 (2,003)
(Decrease) in provisions - (47) (47)
--------- --------- ---------
Net cash inflow from operating
activities 944 7,042 10,955
--------- --------- ---------
7. Reconciliation of Movement in Net Funds/(Debt)
Unaudited Unaudited Audited
31 July 2003 31 July 2002 31 Jan 2003
#'000 #'000 #'000
--------- --------- ---------
Inflow in cash in the period 552 6,161 4,608
Repayment of bank loan - - 5,000
--------- --------- ---------
Movement in net funds/(debt) in
the period 552 6,161 9,608
Net funds/(debt) at 1 February 6,187 (3,421) (3,421)
--------- --------- ---------
Net funds at 31 July/31 January 6,739 2,740 6,187
--------- --------- ---------
8. The interim report is being sent to shareholders. Further copies can be
obtained from the Company's registered office at Hanover Place, 8 Ravensbourne
Road, Bromley, Kent BR1 1HP.
Review Report of the Auditors to MSB International PLC
Introduction
We have been instructed by the Company to review the financial information which
comprises the consolidated profit and loss, consolidated balance sheet,
consolidated cash flow statement and associated notes. We have read the other
information contained in the Interim Report and considered whether it contains
any apparent misstatements or material inconsistencies with the financial
information.
Directors' responsibilities
The Interim Report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reason for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting polices and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and, therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company for the purpose of
the Listing Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 July 2003.
PricewaterhouseCoopers LLP
Chartered Accountants
London
29 September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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