Interim Results

RNS Number : 2589E

Axis Intermodal PLC

25 September 2008

 



Axis Intermodal plc

('Axis' or 'the Group')

Interim Results for the six months ended 30 June 2008

Axis (AIM: AXI), the European transport equipment contract hire group, today announces its unaudited interim results for the six months ended 30 June 2008.  

Group Highlights:

• Turnover increased by 62% to £8.594 million
  

• Profit after tax increased to £312,000 resulting in an increase in EPS from 0.49 pence to 0.53 pence
  

• The UK fleet increased by 34% to 1,562
  

• Strong performance from marine container division with long term contracts established in USA, Far East and Europe
  

• Acquisition of the spare parts business from Sea Containers Inc. for the sum of $250,000 to establish Axis SeaCo Parts
  

• Interim dividend increased by 67% to 0.25 pence per ordinary share
  

Robert Montague, Executive Chairman, commented:

'The growth we have seen this year so far has been good and there are indications that we will succeed in our expansion plans for this year and beyond. However, we live in uncertain times and Axis cannot assume that it will defy gravity as the clouds of recession continue to develop. Despite this caution we are well positioned to take advantage of all business opportunities.''

Further information:

Axis Intermodal plc Robert J. Montague, Executive Chairman Amy Williams, Business Assistant to Executive Chairman	Tel: [phone]
Strand Partners Limited (Nominated Adviser) James Harris	Tel: [phone]
SVS Securities plc (Broker) Peter Manfield	Tel: [phone]
Media enquiries BOTTLE PR Rachel Brewin ([e-mail]) Gillian Gibbons ([e-mail])  Claire Cairns ([e-mail])	Tel: [phone]

Chairman's Statement

I am pleased to present our interim results for the six months ended 30 June 2008.

The Group has made good progress during the period with strong growth in Sea-Axis (our marine container activity), the European Swapbody fleet, as well as the UK truck and trailer division, all under the single Axis brand.

These results reflect the ability to grow the fleets in a low risk way, continuing to work with our KG partners having access to substantial funding with which to meet the demands of the business, while still maintaining the risk management strategy of protecting exposure to residual values. 

Financial Results 

Turnover for the period was £8.594 million (2007: £5.328 million) from which the Group achieved an operating profit before interest of £535,000 (2007: £253,000). 

After interest of £161,000 (2007: £62,000) the Group recorded a profit after tax of £312,000 (2007: £288,000) resulting in an increase in EPS from 0.49 pence to 0.53 pence. 

Review of Operations

The fleet of trucks, trailers, marine containers and swapbodies has grown to 6,502 units at 30 June 2008 (2007: 3,779).

United Kingdom

The demand for trucks and trailers in 2008 has been good, whilst order books at the manufacturers shorten. The need for equipment has continued and we have held prices to those in 2007 through flexible commitment undertakings with our suppliers enabling them to forward commit to the necessary raw materials.

The UK fleet increased by 34% to 1,562 vehicles in the period and is currently 1,700. With the current demand and forward orders in place, the fleet is expected to almost double in size this year. The business has grown from a regional player to a national player in the UK market with our customer base growing by 38% during the period.

Our new fleet management system is fully operational providing greater focus and analysis which will further streamline overall customer service whilst improving cost control. 

Axis Germany 

Axis Germany increased its Swapbody fleet in the first six months of the year by 10.2% to 3,634 units and the fleet is currently 4,093 with a further 1,000 Swapbodies from YMCL, Krone and RETA due to be delivered to meet additional client demand. 

We have been successful in winning further long term business with DHL and many other clients including Hellmann, DPD, Hangartner and GLS (a subsidiary of Royal Mail) in Germany, Switzerland, Austria and other European countries.

There is a cautiously optimistic outlook for the transportation industry in Germany and across Europe for 2008 and 2009. 

Sea-Axis

Our new division has started well with long term contracts being won in the USA, Far East and Europe. We have now established a network of offices including Hong Kong, Singapore and Shanghai in addition to our European representation and have welcomed Clive Francis as Managing Director of the Marine Container division.

Equipment orders have been delivered including tanks and refrigerated containers as well as the licensed SeaCell2 pallet wide dry freight container. The fleet at the end of June stood at 2,410 teu (twenty foot equivalent unit, the standard unit measurement in the industry). 

Axis SeaCo Parts

In May this year we successfully acquired this spare parts business from Sea Containers America Inc. for the sum of US$ 250,000. The strategy of this 'bolt on' business is that it offers a 'just in time' operation supplying spares for the marine container and shipping industry and we are able to support and have a close working relationship with clients not purely in the supply of equipment but as a full service partner. We welcome Vic Warren and his team to Axis.

Dividend 

The Board has declared an interim dividend of 0.25 pence per ordinary share (2007: 0.15 pence) payable on 7 November 2008 to shareholders on the register as at the close of business on 24 October 2008.

Outlook 

The Board's strategy is to continue to develop and invest in all our range of assets and to grow turnover and EPS. The growth we have seen this year so far has been good and there are indications that we will succeed in our expansion plans for this year and beyond. However, we live in uncertain times and Axis cannot assume that it will defy gravity as the clouds of recession continue to develop. Despite this caution we are well positioned to take advantage of all business opportunities.  

Robert J Montague CBE 

Executive Chairman 

Condensed consolidated income statement  for the period ended 30 June 2008
				Unaudited Six months ended 30 June 2008		Unaudited Six months ended 30 June 2007		Audited Year ended 31 December 2007
	Note			£'000		£'000		£'000
Revenue				8,594		5,328		12,085
Cost of sales				(5,466)		(3,624)		(7,690)
Gross profit				3,128		1,704		4,395
Administrative expenses				(2,593)		(1,451)		(3,740)
Operating profit				535		253		655
Interest income				3		9		16
Finance costs				(26)		(5)		(27)
Finance lease interest				(138)		(66)		(85)
Profit on ordinary activities before tax				373		191		559
Tax on profit on ordinary activities				(61)		97		(60)
Profit for the period				312		288		499
Attributable to:
Equity holders of the parent				312		288		499
				312		288		499
Earnings per share	3
Basic - pence				0.53		0.49		0.85
Diluted - pence				0.53		0.49		0.85

Consolidated statement of recognised income and expense  for the period ended 30 June 2008
				Unaudited Six months ended 30 June 2008		Unaudited Six months ended 30 June 2007		Audited Year ended 31 December 2007
				£'000		£'000		£'000
Exchange differences on translation of foreign operations				(21)		6		(30)
Net income recognised directly in equity				(21)		6		(30)
Profit for the period				312		288		499
Total recognised income and expense for the period				291		294		469

Condensed consolidated balance sheet  at 30 June 2008
				Unaudited 30 June 2008		Unaudited 30 June 2007		Audited 31 December 2007
	Note			£'000		£'000		£'000
Non-current assets
Goodwill				3,519		3,519		3,519
Property, plant and equipment				4,937		2,490		3,289
Deferred tax assets				87		162		104
				8,543		6,171		6,912
Current assets
Inventories				305		-		-
Trade and other receivables	4			6,452		2,856		4,515
Cash and cash equivalents				247		389		359
Non-current assets held for sale				-		1,082		-
				7,004		4,327		4,874
Total assets				15,547		10,498		11,786
Equity
Share capital				2,943		2,943		2,943
Share premium				1,070		1,070		1,070
Share-based payment reserve	5			236		164		218
Other reserve	5			180		180		180
Translation reserve	5			(100)		(43)		(79)
Retained earnings	5			1,315		979		1,003
Total equity				5,644		5,293		5,335
Non-current liabilities
Borrowings				1,114		354		748
Customer deposits				266		277		255
Deferred tax liabilities				199		111		157
Obligations under finance leases				3,192		1,555		2,456
				4,771		2,297		3,616
Current liabilities
Trade and other payables				2,944		2,083		1,636
Current tax liabilities				20		97		66
Obligations under finance leases				1,434		638		574
Bank overdrafts and loans				734		90		559
				5,132		2,908		2,835
Total liabilities				9,903		5,205		6,451
Total equity and liabilities				15,547		10,498		11,786

Condensed consolidated cash flow statement for the period ended 30 June 2008
			Unaudited Six months ended 30 June 2008		Unaudited Six months ended 30 June 2007		Audited Year ended 31 December 2007
			£'000		£'000		£'000
Profit before taxation			373		191		559
Adjustments for:
Depreciation			406		260		617
Profit/loss on disposal of property, plant and
equipment			2		20		(41)
Interest expense			162		71		112
Interest income			(3)		(9)		(16)
Share option expense			18		33		87
Operating cashflows before movements in working capital			958		566		1,318
Increase in receivables			(1,937)		(438)		(2,093)
Increase / (decrease) in payables			1,307		(129)		(555)
Cash generated by operations before interest and taxation			328		(1)		(1,330)
Interest paid			(162)		(71)		(112)
Income taxes paid			(96)		(52)		(161)
Net cash inflow / (outflow) from operating
activities			70		(124)		(1,603)
Investing activities
Interest received			3		-		16
Proceeds on disposal of property, plant and equipment			81		137		288
Purchases of property, plant and equipment			(451)		(339)		(509)
Acquisition of subsidiary			(126)		-		-
Other investing cash flows (net)			-		(1,073)		-
Net cash used in investing activities			(493)		(1,275)		(205)
Financing activities
Dividends paid			0.0		-		(187)
Other new loans raised			385		1,029		811
Repayments of other loans			-		-		(2)
Repayments of bank loans			(19)		(412)		(63)
Repayment of obligations under finance leases			(232)		(330)		(402)
Net cash from financing activities			134		287		157
Net decrease in cash and cash equivalents			(289)		(1,112)		(1,651)
Cash and cash equivalents at 1 January			(200)		1,417		1,417
Effect of foreign exchange rate changes			2		(6)		34
Cash and cash equivalents at 30 June			(487)		299		(200)

1.    Basis of preparation

These interim financial statements do not constitute statutory accounts within the meaning of the Companies Act 1985 and are unaudited. The Board approved the unaudited interim financial statements on 24 September 2008.

The interim financial statements have been prepared on the going concern basis and under the historical cost convention.

These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the group operates.

2.    Significant accounting policies

The interim financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the group's 2007 financial statements, which are published on the group's website.

3.    Earnings per share

From continuing operations

The calculation of the basic and diluted earnings per share is based on the following data:

Earnings
		Six months ended 30 June 2008	Six months ended 30 June 2007		Year ended 31 December 2007
		£'000	£'000		£'000
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent		312	288		499
Earnings for the purposes of diluted earnings
per share		312	288		499

Number of shares

		30 June 2008	30 June 2007		31 December 2007
		Number	Number		Number
Weighted average number of ordinary shares for the purposes of basic earnings per share		58,856,842	58,856,842		58,856,842
Effect of dilutive potential ordinary shares:
Share options		-	-		-
Weighted average number of ordinary shares
for the purposes of diluted earnings per share		58,856,842	58,856,842		58,856,842

In accordance with IAS 33, no share options and no warrants have a dilutive effect on the earnings per share calculation (2007: nil).

4.    Trade and other receivables

Trade and other receivables comprise the following:

		30 June 2008	30 June 2007		31 December 2007
		£'000	£'000		£'000
Trade receivables		2,467	1,214		1,909
Income tax receivable		17	-		17
Other receivables		50	103		43
Prepayments and accrued income		3,918	1,539		2,546
		6,452	2,856		4,515

5.    Reserves and retained earnings

		Share based payments		Other	Translation		Retained
		reserve		reserves	reserve		earnings	Total
		£'000		£'000	£'000		£'000	£'000
Balance at 1 January 2007		131		180	(49)		691	953
Exchange differences on translation of overseas operations		-		-	6		-	6
Share options expensed		33		-	-		-	33
Net profit for the period		-		-	-		288	288
Balance at 30 June 2007		164		180	(43)		979	1,280
Exchange differences on translation of overseas operations (Jul-Dec)		-		-	(36)		-	(36)
Share options expensed (Jul-Dec)		54		-	-		-	54
Net profit for the period (Jul-Dec)		-		-	-		211	211
Dividends paid (Jul-Dec)		-		-	-		(187)	(187)
Balance at 31 December 2007		218		180	(79)		1,003	1,322
Balance at 1 January 2008		218		180	(79)		1,003	1,322
Exchange differences on translation of overseas operations		-		-	(21)		-	(21)
Share options expensed		18		-	-		-	18
Net profit for the period		-		-	-		312	312
Balance at 30 June 2008		236		180	(100)		1,315	1,631

6.    Segment information

The following is an analysis of the revenue and results for the period, analysed by geographical segment.

The Group comprises the following geographical segments:

United Kingdom

Europe (ex.UK)

Rest of World

		Revenue from external customers					Segment result
		Six Months ended 30 June 2008		Six Months ended 30 June 2007	Year Ended 31 December 2007		Six months ended 30 June 2008	Six months ended 30 June 2007	Year ended 31 December 2007
		£'000		£'000	£'000		£'000	£'000	£'000
United Kingdom		6,566		4,257	9,351		232	361	627
Europe (ex. UK)		1,899		1,071	2,734		289	(108)	28
Rest of World		129		-	-		14	-	-
Total revenue:		8,594		5,328	12,085
				Operating profit:			535	253	655

7.    Business combinations

On 14 May 2008, the group acquired 100% of the share capital of SeaCo Parts International Inc, a marine container parts retailer operating in the US. The acquired business contributed revenues of £129,000, and net profit of £14,000 to the group from 14 May 2008 to 30 June 2008. The cost of the acquisition was USD 250,000.

Details of net assets acquired and goodwill are as follows:

Purchase consideration:		$'000		£'000
- Cash paid		250		126
- Direct costs relating to the acquisition		-		-
Total purchase consideration		250		126
Book value of net assets acquired		(750)		(377)
Fair value adjustment		500		251
Goodwill		-		-

A fair value adjustment was applied at the date of acquisition by management, to write down specific inventories to their fair value.

The assets and liabilities arising from the acquisition are as follows:

				Acquiree's
		Fair value		carrying value
		$' 000		$' 000
Cash and balances at bank		91		91
Trade receivables		224		224
Other receivables		3		3
Inventories		174		174
Fixed assets		7		7
Total Assets		499		499
Trade payables		226		226
Other payables		23		23
Current liabilities		249		249
Net assets acquired		250		250

8.    Availability of Interim Statements

A copy of Axis's interim statements is available from the Company's registered office at 15 Fenlock Court, Lower Road, Long Hanborough, Oxfordshire OX29 8LN, registered number 04980247 and is also available for download from the Company's website at www.axisintermodal.com.

 

END

 

 

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