Interim Results

Aukett Fitzroy Robinson Group PLC 08 June 2007 8 June 2007 AUKETT FITZROY ROBINSON GROUP PLC 2007 INTERIM RESULTS ANNOUNCEMENT Aukett Fitzroy Robinson Group Plc ('Aukett Fitzroy Robinson'), the international group of architects and designers, announces its Interim Results for the six months ended 31 March 2007. Aukett Fitzroy Robinson provides creative design, commercial awareness and efficient delivery of high quality projects; with specific expertise in offices, retail, interiors, hotels, transportation, residential, urban and landscape design, industrial, historic buildings, mixed-use and leisure facilities. Financial Highlights Six months ended 31 March 2007 2006 unaudited unaudited • Group turnover £9.42m £6.86m • Operating profit £1,282k £137k • Profit before tax £1,264k £47k • Earnings per share 0.58p 0.01p Key Points of Statement: * Profit before tax rises to £1,264k from £47k * Margin increase to 13.4% * Turnover rises 37.4% to £9.42m CEO Nicholas Thompson said: 'We see the second half maintaining progress made to date and the Group is expected to exceed market expectations for the current year through margin improvements.' Enquiries: Aukett Fitzroy Robinson Group Plc www.aukettfitzroyrobinson.com Nicholas Thompson, CEO Tel: 020 7636 8033 Chris Steele, Adventis Tel: 020 7034 4759 Sam Smith, J M Finn Tel: 020 7600 1660 AUKETT FITZROY ROBINSON GROUP PLC Interim Statement for the six months ended 31 March 2007 Overview The Group's financial performance in the first six months of the year shows a further improvement over prior year with profit before tax increasing to £1,264,000 (interim 2006: £47,000) and net margins increasing from 0.7% to 13.4%. Adjusted profit before tax and before staff bonuses and charge for the exercise of share options was £1,718,000 a net margin of 18.2%. This result reflects a general improvement in all Group operations with the exception of Poland, where an operating loss of £18,000 (interim 2006: loss £55,000) was recorded for the half year following management's decision to write off the balance sheet value of net Work in Progress (amounts recoverable on contracts). Summary of Results Unaudited Group turnover for the six months has increased to £9,423,000 from £6,860,000 an increase of 37.4% which is in line with management expectations. Group operating profit has increased to £1,282,000 (interim 2006: £137,000). After accounting for our share of joint venture profits of £34,000 (interim 2006: £nil), exceptional charges of £nil (interim 2006: £15,000), net interest payable of £52,000 (interim 2006: £75,000) and taxation of £415,000 (interim 2006: £38,000) retained profit for the period is £849,000 (interim 2006: £9,000). Group net borrowings were eliminated during the first half creating a net cash surplus of £463,000 (interim 2006: net borrowings £1,590,000) Revenue Recognition Amounts recoverable on contracts at 31 March 2007 of £912,000 (interim 2006: £984,000) represents 18 days (interim 2006: 26 days) of Group turnover on an annualised basis, which management consider is fairly stated. The Group recognises revenue on a prudent basis by careful assessment of its income on a contract-by-contract basis taking into account the work stage complete and any associated commercial risk. Operations In order to provide further support to the Group's expansion plans, the management and operational structure of the Group was reorganised in April 2007. This reorganisation identified four new operational units, three in the UK and one in Europe covering Russia and Central and Eastern Europe with separate support services functions including Innovation, Design & Delivery; Client Relations & Marketing; and Finance. Key staff have been appointed to each operational or services board, based upon our career development programme, which includes non-Directors at board level. As previously announced, the Group appointed Finance Professionals, an executive search firm, to find a replacement for Mr Carter who left the company on 12th April 2007. A replacement Finance Director has now been found and is due to join the Group on or before 8th August 2007. The past six months has seen a regular flow of enquiries from our existing client portfolio including Asda, Castlemore, Fenwick, Macquarie Goodman (which encompasses two development clients: Arlington and Akeler), Marks & Spencer, St Martin's Property along with continuing instructions under our framework agreements with Thameslink. New European commissions are being undertaken for HSBC and Microsoft. We continue to benefit from our position in the architecture market for high quality, one-off projects as exemplified by the instruction from Dunhill to be the architect for their new concept store in London's West End. New enquiries received by the Group feature both a larger scale and an increased volume of future project opportunities than previously undertaken. Corporate Outlook Two of the Group's key objectives are to double annual turnover to £25m by 2010 and raise net profit margins. These interim results, which are derived from organic growth, underline our progress towards these two objectives. The UK market for architectural services remains buoyant and we are currently operating at near full capacity. This level of UK market activity is also mirrored in our Russian and Central and Eastern European operations. Where necessary, management has shortened the interval between remuneration reviews to alleviate near term salary expectations. It is unlikely that such additional costs can be passed on through contract pricing and management attention will remain focused upon lowering operational overheads and improving productivity to balance this equation. Management's decision to address the half year trading deficit in Poland is a reflection on the location which remains central to both our service offer to European clients through our network of offices and to our off-shoring strategy. We expect the operation to trade at breakeven during the second half of the year. We now have 9 signed contracts in Russia totalling $800m of construction value covering 5.2 million square feet of building development. We believe that the Russian property market will continue to grow for some years to come based upon internal investment funding led by indigenous Russian developers. We continue to review opportunities. Our policy is to pursue only those opportunities that can add real commercial value and enhance our existing business offer. Prospects In our annual report we referred to an anticipated return to a dividend payment policy. To effect a dividend payment requires a reduction in the capital of the Company and the Court procedure necessary to achieve this was approved by the Board in April of this year. Once this procedure is complete we expect to announce a dividend as a gesture of our confidence in future prospects. We see the second half maintaining progress made to date and the Group is expected to exceed market expectations for the current year through margin improvements. 8 June 2007 Aukett Fitzroy Robinson Group Plc 14 Devonshire Street London W1G 7AE Consolidated profit and loss account For the six months ended 31 March 2007 Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 Unaudited unaudited audited £000 £000 £000 Gross turnover: Group and share of joint ventures 9,751 7,013 16,677 Less share of joint ventures (328) (153) (393) --------- --------- --------- Group turnover (note 1) 9,423 6,860 16,284 --------- --------- --------- Group operating profit (note 2) 1,282 137 840 Share of operating profit in joint ventures and 34 - 83 associate Exceptional charge: Loss on disposal of subsidiary and joint ventures - (15) (15) --------- --------- --------- Profit on ordinary activities before interest 1,316 122 908 Interest receivable 7 5 44 Interest payable (59) (80) (166) --------- --------- --------- Profit on ordinary activities before tax (note 3) 1,264 47 786 Tax charge on profit on ordinary activities (note 4) (415) (38) (137) --------- --------- --------- Retained profit of the Group 849 9 649 ========= ========= ========= Earnings per share (note 5): Basic 0.58p 0.01p 0.45p Diluted 0.58p 0.01p 0.45p Summarised consolidated balance sheet At 31 March 2007 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 Fixed assets Intangible assets 1,570 1,622 1,596 Tangible assets 257 339 322 Investment in joint ventures and associate 36 31 25 ---------- ---------- ---------- 1,863 1,992 1,943 Current assets Debtors 8,228 6,447 6,432 Cash at bank and in hand 1,873 816 1,341 ---------- ---------- ---------- 10,101 7,263 7,773 Creditors falling due within one year (6,903) (5,675) (5,588) ---------- ---------- ---------- Net current assets 3,198 1,588 2,185 ---------- ---------- ---------- Total assets less current liabilities 5,061 3,580 4,128 Creditors falling due after one year (1,087) (1,200) (1,162) ---------- ---------- ---------- Net assets 3,974 2,380 2,966 ========== ========== ========== Capital and reserves Share capital 1,456 1,448 1,448 Share premium account 1,498 1,385 1,385 Merger reserve 1,542 1,542 1,542 Profit and loss account (522) (1,995) (1,409) ---------- ---------- ---------- Equity shareholders' funds 3,974 2,380 2,966 ========== ========== ========== Summarised consolidated cash flow statement For the six months ended 31 March 2007 Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 Net cash flow from operating activities 771 13 1,716 Returns on investments and servicing of finance (52) (75) (122) Tax paid (68) - (65) Capital expenditure (42) (145) (326) ---------- ---------- ---------- Net cash inflow/(outflow) before financing 609 (207) 1,203 Net cash outflow from financing (77) (20) (76) ---------- ---------- ---------- Increase/(Decrease) in cash during the period 532 (227) 1,127 ========== ========== ========== Reconciliation of operating loss to net cash flow from operating activities Group operating profit 1,282 137 840 Depreciation and amortisation of fixed assets 132 182 337 Loss on disposal of fixed assets - - 61 Share Options expense 85 - - Increase in debtors (1,816) (536) (634) Increase in creditors 1,088 230 1,112 ---------- ---------- ---------- Net cash flow from operating activities 771 13 1,716 ========== ========== ========== Statement of total recognised gains and losses For the six months ended 31 March 2007 Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 Profit for the financial period 849 9 649 Currency translation differences 38 41 (13) ---------- ---------- ---------- Total recognised gains and losses since last annual report 887 50 636 ========== ========== ========== Reconciliation of movements in shareholders' funds For six months ended 31 March 2007 31 March 2007 30 September 2006 unaudited audited £000 £000 Opening shareholders' funds 2,966 2,330 Foreign exchange gain/(loss) 38 (13) New shares issued 121 - Profit attributable to shareholders 849 649 ---------- ---------- Closing shareholders' funds 3,974 2,966 ========== ========== Notes 1 Amounts invoiced to clients and turnover An analysis of amounts invoiced to clients and turnover of the Group by geographical area of destination is as follows: Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 Amounts invoiced to clients United Kingdom 8,608 5,545 12,908 Rest of Europe 1,746 1,340 4,024 ---------- ---------- ---------- Total 10,354 6,885 16,932 ========== ========== ========== Movements in amounts recoverable on contracts United Kingdom (953) 325 127 Rest of Europe 22 (350) (775) ---------- ---------- ---------- Total (931) (25) (648) ========== ========== ========== Turnover United Kingdom 7,655 5,870 13,035 Rest of Europe 1,768 990 3,249 ---------- ---------- ---------- Total 9,423 6,860 16,284 ========== ========== ========== 2 Group operating profit Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 Amounts invoiced to clients 10,354 6,885 16,932 Movement in amounts recoverable on contracts (931) (25) (648) ---------- ---------- ---------- Group turnover 9,423 6,860 16,284 Other income 71 59 27 Staff costs (4,148) (3,612) (7,271) Amortisation of goodwill (25) (25) (51) Depreciation (107) (157) (286) Loss on disposal - - (61) Other operating charges (3,932) (2,988) (7,802) ---------- ---------- ---------- Group operating profit 1,282 137 840 ========== ========== ========== 3 Profit on ordinary activities before tax An analysis of profit on ordinary activities before tax by geographical area is set out below. Consolidation adjustments are included under the United Kingdom. Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 United Kingdom 918 60 428 Rest of Europe 346 (13) 358 ---------- ---------- ---------- Total 1,264 47 786 ========== ========== ========== 4 Tax charge on profit on ordinary activities Six months ended Six months ended Year ended 31 March 2007 31 March 2006 30 September 2006 unaudited unaudited audited £000 £000 £000 United Kingdom corporation tax at 30% (301) - - Overseas tax (103) (38) (126) Share of tax from joint ventures and associate (11) - (1) Adjustment to prior year provision - - (36) ---------- ---------- ---------- Tax charge on profit for period (415) (38) (163) Deferred tax - - 26 ---------- ---------- ---------- (415) (38) (137) 5 Earnings per share The earnings per share is calculated on the profit attributable to shareholders of £849,000 for the six months ended 31 March 2007 (2006 interim: £9,000; 2006 final: £649,000) and on 145,077,414 (2006 interim: 144,813,825; 2006 final: 145,413,825) ordinary shares, being the weighted average number of shares in issue during the period. The diluted profit per share attributable to shareholders is calculated on 145,634,369 ordinary shares (2006 interim: 145,413,825; 2006 final: 145,413,825). 6 Analysis of net debt An analysis of the movement in net debt during the period is as follows: At 1 October Cash flow Non-cash At 31 March 2006 movements 2007 £000 £000 £000 £000 Cash at bank and in hand 1,341 532 - 1,873 ---------- ---------- ---------- ---------- 1,341 532 - 1,873 ---------- ---------- ---------- ---------- Bank loans and other loans repayable in: Less than one year (150) 75 (75) (150) More than one year (1,162) - 75 (1,087) Hire purchase and finance lease creditors (9) - - (9) ---------- ---------- ---------- ---------- (1,321) 75 - (1,246) ---------- ---------- ---------- ---------- Net debt 20 607 - 627 ---------- ---------- ---------- ---------- 5% loan note repayable in less than one year (200) 36 - (164) ---------- ---------- ---------- ---------- (200) 36 - (164) ---------- ---------- ---------- ---------- Net Cash / (Borrowings) (180) 643 - 463 ========== ========== ========== ========== 7 Statutory accounts The comparative figures for the year ended 30 September 2006 have been derived from the Company's statutory accounts for that financial year. Statutory accounts for that financial year have been reported on by the Company's auditors and delivered to 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. 8 Basis of preparation The financial statements comply with relevant accounting standards and the Companies Act 1985 and have been prepared on a consistent basis using the same accounting policies as set out in the 2006 Annual Report. 9 Further information Further information about the Group, including copies of the 2006 annual report, additional copies of this interim report and recent press releases sent to the London Stock Exchange, may be obtained from the Company's registered office at 14 Devonshire Street, London W1G 7AE. Such information may also be obtained through the Company's website at www.aukettfitzroyrobinson.com. The interim report is expected to be mailed to shareholders on or before 30 June 2007. This information is provided by RNS The company news service from the London Stock Exchange LFBDQBXBBX

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