Interim Results

Axis Intermodal PLC 25 September 2007 Axis Intermodal plc ('Axis' or 'the Group') Interim Results for the six months ended 30 June 2007 Axis Intermodal plc, the European transport equipment contract hire group, today announces its unaudited interim results for the six months ended 30 June 2007. Group Highlights: • Turnover up by 26% to £5.33 million (2006: £4.24 million) • Operating profit of £253,000 up 36% (2006: £186,000) • Single Axis brand for all companies • EPS 0.49p (2006: 0.03p) • UK fleet expands by 53% • German swapbody fleet grows by 15% • Interim dividend of 0.15p per ordinary share to be paid on 22 October 2007 • Adoption of IFRS Robert Montague, Executive Chairman, commented: 'We are pleased to report our interim results for the six months ended 30 June 2007 and the Group has made very good progress during the period. Under the single Axis brand the businesses in the UK and Germany have delivered further fleet expansion, increasing our fleet of trucks, trailers and swap bodies so far this year by 830 units. As a result of the continuing development of our relationship in Germany with our KG partners we have 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. In fact, to date this year we have replaced 12% of our UK fleet in addition to the headline increase.' Enquiries: Axis Intermodal plc Tel: 01993 883148 Robert Montague, Executive Chairman Amy Williams, Senior Business Assistant James Harris, Strand Partners Limited Tel: 0207 409 3494 Chairman's Statement We are pleased to report our interim results for the six months ended 30 June 2007 and the Group has made very good progress during the period. Under the single Axis brand the businesses in the UK and Germany have delivered further fleet expansion increasing our fleet of trucks, trailers and swap bodies so far this year by 830 units. As a result of the continuing development of our relationship in Germany with our KG partners we have 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 £5.328 million (2006: £4.240 million) from which the Group achieved an operating profit before interest of £253,000 (2006: £186,000). After net interest costs of £62,000 (2006: £166,000) the Group recorded a profit after tax of £288,000 (2006: £20,000) resulting in an increase in EPS from 0.03 pence to 0.49 pence. Net cash outflow during the period amounted to £1.022 million which included a prepayment for the acquisition of swapbodies in Germany of £1.082 million; this represents approximately 200 swapbodies and these funds are recovered as deliveries to our clients are effected. These results reflect the adoption of IFRS by the Company, and a detailed explanation of the transition has today been posted on the company's website at www.axisintermodal.com. Review of Operations The fleet of trucks, trailers and swapbodies has grown to 3,779 at 30 June 2007 (2006: 2,743). United Kingdom The demand for trucks and trailers in 2007 continues to be buoyant. The upturn in demand has been fuelled by the improvement in the German economy and the new markets created by the expanded EU member states. The enforced changes to the truck specification under the European emission standards has resulted in an increased demand for the latest truck equipment with a resultant hardening of contract hire rates. New orders for trucks and trailers are anticipated for delivery into late 2008 and by forward ordering Axis UK has achieved good delivery availability for equipment and is therefore well positioned to fulfil customer demand. This is despite the fact that deliveries of equipment in the EU have been under pressure with manufacturers finding it difficult to meet demand owing to shortages of parts including axles and even, in some cases, tyres. In addition to a fleet replacement programme of 12% in the half year, the total UK fleet increased by 53% to 926 vehicles in the period and is currently 993. 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 with customers as far a field as Southampton to Aberdeen. The re-branding of the company as Axis Intermodal has led to a greater awareness within the UK market place with our customer base growing by 33% during the period. To meet organic growth targets we have recruited additional experienced Business Managers across the UK and we are well positioned to continue to grow the business throughout 2008 and 2009. Duncan Scillitoe was appointed to the board of Axis UK as UK Sales Director to spearhead this growth. We have centralised the maintenance control at the Oxford head office and now offer our customers 24 /7 direct dial telephone contact. Additionally, we are upgrading our fleet management system which will further streamline overall customer service whilst improving cost control. Major European truck and trailer manufacturers are predicting that the current shortage of equipment will continue into 2009 and we are well positioned to take advantage of the ongoing customer demand. Axis Germany Axis Germany increased its swap body fleet in the first six months of the year by 15% to 2,853 units and the fleet is currently 2,929 units. We have ordered a further 710 swapbodies from YMCL, Krone and RETA to meet client demand resulting from the strength of the German economy and the expansion of the EU. We have been successful in renewing a major long term contract with Steinle/DSV for 740 swapbodies. Other clients including Hellmann, DPD, Hangartner, and GLS (a subsidiary of Royal Mail) have committed to a substantial number of the new swapbodies. A contract has recently been signed with DHL for 350 new customer branded swapbodies to be delivered in the fourth quarter of 2007. There is a positive outlook for the transportation industry in Germany and across Europe for 2008 and 2009. Dividend The Board has declared an interim dividend of 0.15 pence per ordinary share (2006: 0.13 pence) and looks forward to further dividend payments. This interim dividend will be paid on 22 October 2007 to shareholders on the register as at the close of business on 5 October 2007. Outlook The Board's strategy of continuing to develop and invest in our UK and German activities is showing rewards, as reflected in the increases in turnover and growth in market share. This growth gives the Board confidence that its actions will deliver shareholder value in the second half of the year and further improvement in subsequent years. Robert J Montague CBE Executive Chairman Consolidated income statement for the period ended 30 June 2007 Unaudited Unaudited Unaudited Six Six Year ended months ended months ended 31 December 30 June 2007 30 June 2006 2006 Note £'000 £'000 £'000 Revenue 5,328 4,240 9,148 Cost of sales (3,624) (2,777) (5,757) -------- -------- --------- Gross profit 1,704 1,463 3,391 Administrative expenses (1,451) (1,277) (2,544) -------- -------- --------- Operating profit 253 186 847 Interest income 9 1 4 Finance costs (5) (96) (172) Finance lease interest (66) (71) (150) -------- -------- --------- Profit on ordinary activities before tax 191 20 529 Tax on profit on ordinary activities 3 97 - (26) -------- -------- --------- Profit for the period 288 20 503 Attributable to: Equity holders of the parent 288 20 502 Minority interests - - 1 -------- -------- --------- 288 20 503 ======== ======== ========= Earnings per share 4 Basic - pence 0.49 0.03 0.85 ======== ======== ========= Diluted - pence 0.49 0.03 0.85 ======== ======== ========= Consolidated statement of recognised income and expense for the period ended 30 June 2007 Unaudited Unaudited Unaudited Six Six Year ended months ended months ended 31 December 30 June 2007 30 June 2006 2006 £'000 £'000 £'000 Exchange differences on translation of foreign operations 6 (10) (49) --------- -------- -------- Net income recognised directly in equity 6 (10) (49) Profit for the period 288 20 503 -------- -------- -------- Total recognised income and expense for the period 294 10 454 ========= ======== ======== Consolidated balance sheet at 30 June 2007 Unaudited Unaudited Unaudited 30 June 30 June 31 December 2007 2006 2006 Note £'000 £'000 £'000 Non-current assets Goodwill 3,519 3,146 3,519 Property, plant and equipment 2,490 5,812 2,564 Deferred tax assets 162 - - -------- -------- --------- 6,171 8,958 6,083 -------- -------- --------- Current assets Trade and other receivables 2,856 1,645 2,422 Cash and cash equivalents 389 6 1,417 Non-current assets held for sale 5 1,082 - - -------- -------- --------- 4,327 1,651 3,839 -------- -------- --------- Total assets 10,498 10,609 9,922 ======== ======== ========= Current liabilities Trade and other payables (3,185) (3,551) (3,371) -------- -------- --------- (3,185) (3,551) (3,371) -------- -------- --------- Net current assets/(liabilities) 1,142 (1,900) 468 -------- -------- --------- Non-current liabilities Other non-current payables (1,909) (2,330) (1,539) Deferred tax liabilities (111) (162) (46) -------- -------- --------- (2,020) (2,492) (1,585) -------- -------- --------- Total liabilities (5,205) (6,043) (4,956) ======== ======== ========= Net assets 5,293 4,566 4,966 ======== ======== ========= Equity Share capital 2,943 2,943 2,943 Share premium 1,070 1,070 1,070 Share based payments reserve 6 164 97 131 Other reserves 6 180 180 180 Translation reserve 6 (43) (10) (49) Retained earnings 6 979 286 691 -------- -------- --------- Total equity 5,293 4,566 4,966 ======== ======== ========= Consolidated condensed cash flow statement for the period ended 30 June 2007 Unaudited Six Unaudited Six Unaudited Year months ended months ended ended 31 December 30 June 2007 30 June 2006 2006 £'000 £'000 £'000 Profit before taxation 191 20 529 Adjustments for: Depreciation 260 553 817 Interest expense 71 167 322 Interest income (9) (1) (4) Share option expense 33 38 72 Loss / (profit) on sale of property, plant and equipment 20 50 (258) (Increase)in debtors (438) (259) (1,021) (Decrease) / increase in creditors (129) 278 806 Interest paid (71) (166) (322) Income taxes paid (52) - (38) -------- -------- --------- Net cash from operating activities (124) 680 903 -------- -------- --------- Purchases of property, plant and equipment (339) (676) (1,591) Proceeds on disposal of property, plant and equipment 137 776 4,895 Other investing cash flows (net) (1,073) (25) (21) -------- -------- --------- Net cash used in investing activities (1,275) 75 3,283 -------- -------- --------- Repayments of borrowings (412) (1,008) (3,485) Other financing cash flows (net) 789 265 704 -------- -------- --------- Net cash used in financing activities 377 (743) (2,781) Net(decrease)/increase in cash and cash equivalents (1,022) 12 1,405 Cash and cash equivalents at 1 January 1,417 4 4 Effect of foreign exchange rate changes (6) (10) 8 Cash and cash equivalents at 30 June -------- -------- --------- Bank balances and cash 389 6 1,417 ======== ======== ========= Notes to the interim financial statements for the period ended 30 June 2007 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 2007. 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 This interim financial information has been prepared by applying the IFRS-compliant accounting policies published on the company's website. 3 Tax The Group has recognized the benefit of unutilised tax losses to the extent to which the Directors believe that there is sufficient certainty of future trading profits. 4 Earnings per share From continuing operations Earnings Six months Six months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 £'000 £'000 £'000 Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent 288 20 503 --------- --------- --------- Earnings for the purposes of diluted earnings per share 288 20 503 ========= ========= ========= The calculation of the basic and diluted earnings per share is based on the following data: Number of Shares 30 June 30 June 31 December 2007 2006 2006 Number Number Number Weighted average number of ordinary shares for the purposes of basic earnings per share 58,861,443 58,861,443 58,861,443 Effect of dilutive potential ordinary shares Share options - - - --------- --------- --------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 58,861,443 58,861,443 58,861,443 ========= ========= ========= In accordance with IAS 33, no share options and no warrants have a dilutive effect on the earnings per share calculation (2006: nil). 5 Non-current assets held for sale Non-current assets acquired and held for sale relate to recently acquired swapbodies; as soon as all relevant documentation is completed the assets concerned are sold to the relevant financing company. 6 Reserves & retained earnings Share based payments Other Translation Retained reserve reserves reserve earnings Total £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2006 59 180 - 266 505 Exchange differences on transulation of overseas operations - - (10) - (10) Share options expensed 38 - - - 38 Net profit for the period - - - 20 20 --------- ------- -------- ------- ----- Balance at 30 June 2006 97 180 (10) 646 913 ========= ======= ======== ======= ===== Exchange differences on translation of overseas operations (Jul-Dec) - - (39) - (39) Share options expensed (Jul-Dec) 34 - - - 34 Net profit for the period (Jul-Dec) - - - 483 483 Equity minority interests Jul-Dec) - - - (1) (1) Dividends paid(Jul-Dec) - - - (77) (77) --------- ------- -------- ------- ------- Balance at 31 December 2006 131 180 (49) 691 953 ========= ======= ======== ======= ======= Balance at 1 January 2007 131 180 (49) 691 953 Exchange differences on translation of overseas - - 6 - 6 operations Share options expensed 33 - - - 33 Net profit for the period - - - 288 288 --------- ------- -------- ------- ------- Balance at 30 June 2007 164 180 (43) 979 1,280 ========= ======= ======== ======= ======= 7 Segment information The following is an analysis of the revenue and results for the period, analysed by geographical segment, the Group's primary basis of segmentation. The Group comprises the following business segments: United Kingdom Rest of Europe Revenue from external customers Segment result Six months Six months Year ended Six months Six months Year ended ended ended 31 December ended ended 31 December 30 June 2007 30 June 2006 2006 30 June 2007 30 June 2006 2006 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 4,257 3,187 6,634 361 81 (97) Rest of Europe 1,071 1,053 2,514 (108) 105 944 ---------- ---------- ---------- Total Revenue: 5,328 4,240 9,148 ---------- --------- --------- Operating profit: 253 186 847 ========== ========= ========= This information is provided by RNS The company news service from the London Stock Exchange LARILFID

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