Interim Results
Embargoed until 7.00 am on
11 November 2005
RDF Group Plc ('the Group')
Interim Results for the six months ended
30th September 2005
Introduction and Results
I am pleased to report significantly improved results for the six months ended
30 September 2005. Turnover for the period has more than doubled to £9.19
million, (2004: £4.23 million) resulting in a profit before tax of £555,000
(2004: £227,000). Post tax profits for the period are £369,000 (2004: £147,000)
with earnings per share 3.55p (2004: 1.41p). Your Board is proposing the
payment of an interim dividend of 0.75 pence per share, payable on 16 December
2005, to those shareholders on the register at close of business on 25 November
2005. The shares will be declared ex-dividend on 23 November 2005.
Business Review
The first six months of this financial year have seen strong growth in both of
the Group's core businesses, namely 'Managed Service' bespoke software
development, support and maintenance and 'Recruitment Services', offering
high-value contract and permanent staff recruitment.
Your Directors are pleased to report that existing business gains have been
maintained and, in most cases, developed further to contribute to the increased
revenues. The Group's investment in an expanded sales force is now driving new
sales throughout the UK and progress is being made in selling higher value
services to our clients. The Group continues to receive strong levels of
business from all of its major clients.
The Group's premises in Brighton and Livingston are being fully utilised and
this, combined with continuing tight control of costs and optimal staffing
levels, has provided improved profit margins.
Current Trading
Your Board is confident that the second half of this financial year will see
continued growth in demand for its services, with confirmed commitment levels
on retained business being matched by an expected further growth in new
business. Your Directors will continue to seek to invest in sales and marketing
opportunities, to increase revenues and to improve margins
Your Directors are focussed on expanding the number of Managed Service clients
through new sales initiatives and cross-selling these higher value services to
other clients. In addition, your Board is looking at a number of initiatives to
increase the range of IT-related services we can offer to our clients.
I should like to take this opportunity to thank all management and staff
throughout the Group for their efforts in successfully building on the
significant progress made last financial year. I should also like to thank my
Board colleagues and our advisers for their continued advice and support.
Subject to unforeseen circumstances, your Board is confident of continuing
business growth in the second half of this year.
George Kynoch
Chairman
11 November 2005
Group profit and loss account for the six months ended 30th September 2005
Unaudited six months Audited
to 30th September twelve
months to
31st March
2005 2004 2005
£'000 £'000 £'000
Turnover 9,193 4,227 9,390
Cost of sales (7,285) (3,210) (7,126)
Gross Profit 1,908 1,017 2,264
Operating expenses
Administrative expenses (1,333) (778) (1,729)
Operating profit 575 239 535
Net interest payable (20) (12) (20)
Profit on ordinary activities before 555 227 515
taxation
Taxation on profit from ordinary activities (186) (80) 191
(note 2)
Profit for the financial period 369 147 324
Dividends (52) - (52)
Retained profit 317 147 272
Earnings per share (note 3)
Basic 3.55p 1.41p 3.12p
Diluted 3.44p 1.40p 3.00p
All disclosures relate only to continuing operations.
There are no recognised gains or losses other than the profit for the period.
Group balance sheet at 30th September 2005
Unaudited Audited
30th September 31st March
2005 2004 2005
£'000 £'000 £'000
Fixed assets
Tangible assets 198 187 167
Current assets
Debtors 3,481 1,685 2,846
Cash at bank and in hand 255 209 51
3,736 1,894 2,897
Creditors: amounts falling due within one (2,460) (1,042) (1,907)
year
Net current assets 1,276 852 990
Total assets less current liabilities 1,474 1039 1,157
Provisions for liabilities and charges
Deferred tax (11) (18) (11)
1,463 1021 1,146
Capital and reserves
Called up share capital 208 208 208
Share premium account 103 103 103
Profit and loss account 1,152 710 835
Equity shareholders' funds 1,463 1021 1,146
Group cash flow statement for the six months ended 30th September 2005
Unaudited six months Audited
to 30th September twelve months
to
31st March
2005 2004 2005
£'000 £'000 £'000
Net cash inflow from operating activities 485 417 282
Returns on investments and servicing of
finance
Interest paid (20) (12) (20)
Net capital expenditure and financial (55) (5) (11)
investment
Equity dividends paid (52) - (52)
Taxation
UK corporation tax - - (18)
Net cash inflow before financing 358 400 181
Financing
Increase in invoice discounting - - 61
Net cash inflow from financing - - 61
Increase in cash in the period 358 400 242
Reconciliation of operating profit to net
cash flow from operating activities
Operating profit 575 239 535
Depreciation charges 24 26 52
(Increase) in debtors (635) (11) (1,173)
Increase in creditors 521 163 868
Net cash inflow from operating activities 485 417 282
Reconciliation of net cash flow to movement
in net funds/(debt)
Opening net debt (133) (191) (314)
Increase in cash in period 358 400 242
Cash inflow from changes in debt - - (61)
Closing net funds/(debt) 225 209 (133)
Analysis of funds/(debt)
At 1st At 30th
April September
2005 2005
£'000 £'000
Cash at bank and in hand 51 255
Overdrafts (184) (30)
Total (133) 225
Notes to the interim results
1. Basis of Preparation
The financial information for the six month period ended 30 September 2005 is
unaudited and does not constitute statutory accounts within the meaning of the
Companies Act 1985. The financial information contained in this statement has
been prepared using accounting policies consistent with those set out in the
Group's statutory accounts for the year ended 31 March 2005 and should be read
in conjunction therewith.
The financial information for the year ended 31 March 2005 has been extracted
from the statutory accounts of RDF Group PLC which contained an unqualified
audit report and which did not contain a statement under section 237(2) or 237
(3) of the Companies Act 1985 and which have been filed with the Registrar of
Companies.
2. Tax
Unaudited six months to Audited twelve
30th September months to
31st March
2005 2004 2004
£'000 £'000 £'000
United Kingdom Corporation Tax
On ordinary activities (186) (81) (200)
Deferred tax movement - 1 9
(186) (80) (191)
The tax charge provided at the half year is based on the estimated effective
tax rate for the Group applicable to the year ending 31 March 2006 as applied
to the pre-tax profits for the period.
3. Earnings per share
The calculation of basic earnings per share of 3.55 pence (30 September 2004:
1.41 pence, 31 March 2005: 3.12 pence) is based on the profit on ordinary
activities after taxation of £369,000 (30 September 2004: £147,000, 31 March
2005: £324,000) and on the weighted average number of shares in issue during
the period and throughout the previous year of 10,400,000.
The fully diluted earnings per share amounting to 3.44 pence (30 September
2004: 1.40 pence, 31 March 2005: 3.00 pence) has been calculated on the basis
of adding 321,111 (30 September 2004: 106,353, 31 March 2005: 409,685) to the
weighted average number of shares to take account of the dilutive effect of
outstanding share options to give 10,721,111 (30 September 2004: 10,506,353, 31
March 2005: 10,809,685) shares in issue assuming that options where the
exercise price is lower than fair value are exercised.
4. Dividends
In respect of the current period, the directors propose that a dividend of 0.75
pence per share will be paid to those shareholders on the register at close of
business on 25 November 2005 on 16 December 2005. The proposed dividend is not
included as a liability in the interim statement in accordance with FRS 21.
5. Copies of report
The interim statement will be posted to all shareholders and will be available
on request from the Company Secretary, 2 Bartholomews, Brighton, BN1 1HG.
Enquiries:
RDF Group Plc
David Wood/Paul Jewell Tel: 01273 200100
John East & Partners Limited
Simon Clements Tel: 020 7628 2200