Half Yearly Report

RNS Number : 2181V

Begbies Traynor Group PLC

11 December 2013

 



11 December 2013

Begbies Traynor Group plc

Half year results

for the six months ended 31 October 2013

Begbies Traynor Group plc (the 'company' or the 'group'), the UK's leading independent business recovery practice, today announces its half year results for the six months ended 31 October 2013.

Financial highlights

·      Revenue of £22.3m (2012: £26.1m)

·      EBITA* (pre-exceptional items and net acquisition-related items) of £2.6m (2012: £3.7m)

·      Adjusted profit before tax** of £2.1m (2012: £3.2m)

·      Profit before tax of £2.0m (2012: £2.0m)

·      Profit for the period of £1.6m (2012: £1.4m)

·      Earnings per share:

-      adjusted basic and diluted EPS*** of 1.8p (2012: 2.5p)

-      basic and diluted EPS of 1.7p (2012: 1.5p)

·      Interim dividend maintained at 0.6p (2012: 0.6p)

·      Net debt reduced to £17.8m (Oct 2012: £18.3m)

* Earnings before interest, tax and amortisation of intangible assets arising on acquisitions

** Profit before tax of £2.0m (2012: £2.0m) plus amortisation of £0.1m (2012: £0.2m) plus exceptional and net acquisition-related items  of £nil (2012: £1.0m)

*** See reconciliation in note 5

Operational highlights

·      Difficult market conditions persisted as expected with a 10% reduction in number of UK corporate insolvencies in the first three quarters of the calendar year

·      Cost reduction programme delivered savings of £2.9m, in excess of the £2.0m previously anticipated

·      Completed acquisition of Manchester-based insolvency boutique with a strong internet presence

·      Continued to develop advisory services through BTG Financial Consulting, with several complex assignments completed

Commenting on the results, Ric Traynor, Executive Chairman of Begbies Traynor Group, said:

"This half year period has seen a continuation of the trends seen in the recent past, as we had expected. The continuing benign financing environment in the UK has led to further reductions in corporate insolvencies, with a consequent reduction in the group's revenue.

"We anticipate some improvement in trading levels in the second half of the financial year, over the traditionally busier winter months, and will benefit from the contribution from the recently completed acquisition.

"With the benefit of our reduced cost base, a stable financial position and committed medium and long-term bank facilities, the group remains in a strong position to take advantage of opportunities to develop and enhance the business, both organically and through selective acquisitions."

A meeting for analysts will be held today at 9.00am at the offices of MHP Communications, 60 Great Portland Street, London, W1W 7RT.  Please contact Giles Robinson on 020 3128 8788 if you would like to attend.

Enquiries please contact:

Begbies Traynor Group plc	0161 837 1700
Ric Traynor - Executive Chairman
Nick Taylor - Group Finance Director
Canaccord Genuity Limited	020 7523 8350
(Nominated Adviser and Joint Broker)
Bruce Garrow / Philippa Underwood
Shore Capital	020 7408 4090
(Joint Broker)
Pascal Keane
MHP Communications
Reg Hoare / Katie Hunt / Giles Robinson	020 3128 8100

Information on Begbies Traynor Group can be accessed via the Group's website at

www.begbies-traynorgroup.com

CHAIRMAN'S STATEMENT

INTRODUCTION

This half year period has seen a continuation of the trends seen in the recent past, as we had expected. The continuing benign financing environment in the UK has led to further reductions in corporate insolvencies, with a consequent reduction in the group's revenue.

We have continued to manage our cost base, which has delivered year on year efficiencies of £2.9m, £0.9m higher than the £2m previously reported. These savings have mitigated the reduction in revenues and enabled the group to continue trading profitably in difficult market conditions.

As announced in October, we have invested in the business through the acquisition of Cooper Williamson, a Manchester-based insolvency boutique with a strong internet presence, which is now fully integrated into our operations and is generating new insolvency cases for the wider group. 

Net debt has reduced from the position one year ago to £17.8m (2012: £18.3m). This debt position, together with the group's profitable trading and expectations for the remainder of the financial year, has enabled the board to maintain the interim dividend at 0.6p.

RESULTS

The group's revenue in the half year to 31 October 2013 decreased to £22.3m (2012: £26.1m). Earnings before interest, tax and amortisation ('EBITA') (pre-exceptional and net acquisition-related items) decreased to £2.6m (2012: £3.7m).  Adjusted profit before tax* decreased to £2.1m (2012: £3.2m).  Exceptional and net acquisition-related items were £nil (2012: £1.0m). Profit before tax was unchanged at £2.0m (2012: £2.0m).

Earnings per share ('EPS')^**, adjusted for the net of tax impact of the amortisation of intangible assets arising on acquisitions, exceptional and net acquisition-related items, decreased to 1.8p (2012: 2.5p). Basic and diluted EPS were 1.7p (2012: 1.5p).

Net debt at 31 October 2013 was £17.8m (Apr 2013: £17.2m; Oct 2012: £18.3m), having made £0.5m of acquisition payments in the period. These borrowings are comfortably within the group's bank facilities, with gearing of 31% (Apr 2013: 30%; Oct 2012: 32%) and interest cover of 4.7 times.

* Profit before tax of £2.0m (2012: £2.0m) plus amortisation of £0.1m (2012: £0.2m) plus exceptional and net acquisition-related items  of £nil (2012: £1.0m)

** See reconciliation in note 5

DIVIDEND

The board remains committed to its long-term progressive dividend policy, which takes account of underlying growth in earnings, whilst acknowledging short-term fluctuations in profits and the requirement for continuing investment in the business.

Having considered financial performance in the current year, the outlook for the remainder of the financial year and the on-going requirements of the business, the board has declared a maintained interim dividend of 0.6p (2012: 0.6p).

The interim dividend will be paid on 9 May 2014 to shareholders on the register as at 11 April 2014, with an ex-dividend date of 9 April 2014.

OPERATIONAL REVIEW

Insolvency and restructuring

Begbies Traynor is the UK's leading independent business recovery practice, providing a partner-led service to stakeholders in troubled businesses.

Results

Segmental profits in the period decreased to £5.2m (2012: £6.0m) as a result of a reduction in revenue to £20.9m (2012: £24.0m). Operating margins were 24.7% (2012: 25.0%).

The insolvency market remains challenging, with a further reduction in UK corporate insolvency appointments in the calendar year to date. This reduced level of market activity led to lower insolvency appointments for the group, which combined with pressure on fee rates,caused the reduced revenue levels in the period. 

As we have previously reported, we have kept our cost base under constant review due to the continuing market pressures, which has mitigated the impact of the reduction in revenue. The number of people employed in the group's insolvency division has decreased to 400 as at 31 October 2013 (including 12 new joiners from the Cooper Williamson acquisition) from 415 at the start of the financial year.

Acquisition of Cooper Williamson

On 1 October 2013, we completed the acquisition of Cooper Williamson, a Manchester-based corporate insolvency boutique, in line with our strategy to strengthen our position as the UK's leading independent business recovery practice.

Cooper Williamson had successfully developed its own business rescue website (www.realbusinessrescue.co.uk), which was a significant driver of new cases for the acquired firm. However, as an independent business, the firm was largely only able to fulfil cases in its local region. The acquired business has now been fully integrated into our existing operations and the website has already begun to generate new insolvency cases for the group on a national level. The acquisition is expected to be earnings enhancing, both initially and after any additional consideration is paid.

Strategy

Begbies Traynor remains the market leader in UK mid-market insolvency and we believe that the combination of our full national coverage, strong relationships with all major UK banks and excellent referral networks from other professional services organisations leaves the business well placed to take full advantage of this market.

We have continued to develop our advisory services through the BTG Financial Consulting business, which was launched in the last financial year. In addition to completing several complex restructuring assignments in the period, we have also been appointed to advise on some significant debt advisory matters with debt levels in the £50m - £300m range.

We will continue to develop our core division through a combination of senior recruitment, selective acquisitions and staff development, with the intention of progressively increasing our market share. Further development over the medium term will come from winning higher value, more complex instructions from existing clients and prospects, by demonstrating our growing capabilities and credentials.

Global risk partners

Global risk partners is a specialist risk consulting and forensic investigation consultancy. Its services include forensic technology and accountancy; risk and security consultancy; and corporate intelligence and investigations.

Revenues in this segment decreased to £1.4m (2012: £2.2m), resulting in a loss of £0.2m (2012: profit £0.2m). Whilst losses have reduced from the £0.4m experienced in the second half of the previous financial year, activity levels remain lower than those required to generate a profitable return from the operations. The board is currently reviewing options to improve the financial performance of the division, through a combination of business development opportunities and cost savings.

The number of people employed in global risk partners decreased to 27 on 31 October 2013 from 30 at the start of the financial year.

INSOLVENCY MARKET

The number of corporate insolvencies (Source: The Insolvency Service) for the nine months ended 30 September 2013 was 14,436 (nine months ended 30 September 2012: 16,048), a decrease of 10%. Activity levels stabilised in the third quarter of the calendar year, with 4,717 national appointments, a reduction of 3% on 2012. Overall, this reflects the continuing benign financing environment in the UK, supported through base rates being maintained at 0.5% since May 2009.

In previous economic cycles, the number of corporate appointments has peaked after recessions when the economy enters a recovery phase. This is due to a combination of financially stressed companies being unable to finance working capital requirements; higher interest rates giving an increased cost of finance for financially stressed businesses; and banks being willing to crystallise losses on distressed loans, supported by additional purchasers for distressed assets.

Although there are currently signs of economic recovery (the most recent Begbies Traynor Red Flag Alert research has shown continuing decreases in critical financial problems for UK companies), this has not yet impacted on the level of corporate insolvency appointments. With the current Bank of England guidance for interest rates to remain at current levels through to 2015, there are no signs of any immediate short-term economic pressures which would cause a marked increase in insolvency levels.

OUTLOOK

As the UK insolvency business with the largest market share by volume, any change in national insolvency numbers, which remain difficult to predict in the current climate, has a direct impact on our operational volumes. As noted above, the number of corporate insolvencies for the first three quarters of calendar year 2013 is 10% lower than in 2012.

We anticipate some improvement in trading levels in the second half of the financial year, over the traditionally busier winter months, and will benefit from the contribution from the recently completed acquisition.

With the benefit of our reduced cost base, a stable financial position and committed medium and long-term bank facilities, the group remains in a strong position to take advantage of opportunities to develop and enhance the business, both organically and through selective acquisitions.

The group also retains the capacity and expertise to handle an increase in activity levels should they arise, which would result in improved profit and margins due to the inherent operational gearing in the business.

We will provide an update on third quarter trading in early March 2014 when the impact of fourth quarter corporate insolvency statistics will be known.

Ric Traynor

Executive chairman

11 December 2013

FINANCIAL REVIEW

FINANCIAL HIGHLIGHTS

Group revenue for the period was £22.3m (2012: £26.1m), a decrease of £3.8m.

EBITA (pre-exceptional and net acquisition-related items) decreased to £2.6m (2012: £3.7m), as a result of lower activity levels mitigated by cost reductions resulting from the restructuring completed in the prior year.

Net acquisition-related items in the period include acquisition costs relating to the Cooper Williamson acquisition of £0.1m, offset by a £0.1m credit from adjustments to contingent consideration on prior year acquisitions. No restructuring costs were incurred in the current period (2012: £1.0m).

Amortisation of intangible assets arising on acquisitions was £0.1m (2012: £0.2m).

Finance costs increased to £0.6m (2012: £0.5m), due to the increased cost of the new medium and long-term bank facilities entered into in April 2013.

Adjusted profit before tax was £2.1m (2012: £3.2m). Profit before tax was £2.0m (2012: £2.0m). The reconciliation between these profit measures is as follows:

	Six months ended 31 October 2013		Six months ended 31 October 2012
	£m		£m
Adjusted profit before tax	2.1		3.2
Less:
Amortisation of intangible assets arising on acquisitions	(0.1)		(0.2)
Exceptional and net acquisition-related items	-		(1.0)
Profit before tax	2.0		2.0

The tax charge for the period was £0.4m (2012: £0.7m), based on a weighted average expected tax rate for the full year of 20%. This reflects an expected tax credit in the current year, resulting from a reduction in deferred tax liabilities due to the decrease in the UK corporation tax rate to 20% by 2015.

Profit for the period was £1.6m (2012: £1.4m).

EARNINGS PER SHARE ('EPS')

EPS*, adjusted for the net of tax impact of the amortisation of intangible assets arising on acquisitions, exceptional and net acquisition-related items, was 1.8p (2012: 2.5p). Basic and diluted EPS were 1.7p (2012: 1.5p).

* See reconciliation in note 5

ACQUISITION

On 1 October 2013, the group completed the acquisition of the trade and assets of Cooper Williamson Ltd, the Manchester-based corporate insolvency specialist. The acquisition was for an initial consideration of £0.9m, satisfied in cash of £0.45m and through the issue of 1,141,842 new ordinary shares. 

Under the terms of the acquisition, there is contingent consideration of up to £1.1m payable, subject to financial performance hurdles over the three years from completion, which may be satisfied in cash or by issuing new ordinary shares at the group's discretion.  The group has also agreed to further consideration of up to £0.5m, subject to financial performance in the following two years.

In accordance with IFRS 3 (revised), a liability of £0.6m has been recognised in respect of contingent consideration (giving expected total consideration of £1.5m) and acquisition costs of £0.1m have been charged to the income statement.

The acquisition is expected to be earnings enhancing, both initially and after any additional consideration is paid.

CASH FLOWS

Net cash flows from operating activities (after interest and tax) in the period decreased to £0.5m (2012: £2.8m), due to previously anticipated working capital outflows of £3.0m including utilisation of prior year provisions and reduced levels of trade and other payables.

Investing cash flows of £0.6m (2012: £0.5m), include acquisition payments of £0.5m (2012: £nil), deferred consideration payments of £nil (2012: £0.3m) and net capital expenditure of £0.1m (2012: £0.3m).

Financing cash outflows of £0.6m (2012: £1.6m) include dividend payments of £0.5m (2012: £0.5m), a net repayment on the group's principal bank facilities of £nil (2012: £1.0m), and a net repayment of other finance of £0.1m (2012: £0.1m).

FINANCING

Net borrowings at 31 October 2013 were £17.8m (2012: £18.3m), with a reduction in gearing to 31% (2012: 32%) and significant headroom within the total facilities of £35m. During the period, all bank covenants were met and the group's financial position remains robust.

The group's principal unsecured, committed facilities of £30m provide the group with medium and long-term financing with maturity dates from 2017 to 2021.

NET ASSETS

At 31 October 2013 net assets were £57.7m (2012: £57.6m), equivalent to net assets per share of 64p (2012: 64p), and are analysed as follows:

	31 Oct 2013	30 Apr 2013	31 Oct 2012
	£m	£m	£m
Non-current assets	53.8	52.6	53.2
Current assets	39.0	40.2	44.1
Net borrowings	(17.8)	(17.2)	(18.3)
Current tax	(0.6)	(0.5)	(0.5)
Other liabilities	(16.7)	(17.4)	(20.9)
			________
Net assets	57.7	57.7	57.6

Nick Taylor

Group finance director

11 December 2013

Statement of comprehensive income

		Six months ended 31 October 2013 (unaudited) £'000				Six months ended 31 October 2012 (unaudited) £'000				Year ended 30 April 2013 (audited) £'000
	Before				Before				Before
	exceptional		Exceptional		exceptional		Exceptional		exceptional		Exceptional
	and net		and net		and net		and net		and net		and net
	acquisition-		acquisition-		acquisition-		acquisition-		acquisition-		acquisition-
	related items		related items	Total	related items		related items	Total	related items		related items	Total
	£'000		£'000	£'000	£'000		£'000	£'000	£'000		£'000	£'000
Revenue	22,308		-	22,308	26,136		-	26,136	51,092		-	51,092
Direct costs	(12,090)		-	(12,090)	(14,402)		(914)	(15,316)	(27,966)		(3,320)	(31,286)
Gross profit	10,218		-	10,218	11,734		(914)	10,820	23,126		(3,320)	19,806
Other operating income	91		-	91	195		-	195	343		-	343
Administrative expenses	(7,682)		25	(7,657)	(8,277)		(44)	(8,321)	(15,815)		(578)	(16,393)
Earnings before interest, tax and amortisation	2,627		25	2,652	3,652		(958)	2,694	7,654		(3,898)	3,756
Amortisation of intangible assets arising on acquisitions	(140)		-	(140)	(182)		-	(182)	(364)		-	(364)
Finance costs	(561)		-	(561)	(494)		-	(494)	(977)		-	(977)
Profit before tax	1,926		25	1,951	2,976		(958)	2,018	6,313		(3,898)	2,415
Tax	(379)		-	(379)	(893)		230	(663)	(1,854)		857	(997)
Profit for the period	1,547		25	1,572	2,083		(728)	1,355	4,459		(3,041)	1,418
Total comprehensive income for the period	1,547		25	1,572	2,083		(728)	1,355	4,459		(3,041)	1,418
Earnings per share
Basic and diluted				1.7p				1.5p				1.6p

All of the profit and comprehensive income for the period is attributable to equity holders of the parent

Consolidated statement of changes in equity

For the six months ended 31 October 2013 (unaudited)	Share	Share	Merger	Translation	Retained	Total
	capital	premium	reserve	reserve	earnings	equity
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 May 2013	4,663	17,581	17,584	-	17,867	57,695
Total comprehensive income for the period	-	-	-	-	1,572	1,572
Dividends	-	-	-	-	(2,002)	(2,002)
Credit to equity for equity-settled share-based payments	-	-	-	-	4	4
Shares issued	60	414	-	-	-	474
At 31 October 2013	4,723	17,995	17,584	-	17,441	57,743

For the six months ended 31 October 2012 (unaudited)	Share		Share		Merger	Translation		Retained		Total
	capital		premium		reserve	reserve		earnings		equity
	£'000		£'000		£'000	£'000		£'000		£'000
At 1 May 2012	4,651		17,524		17,584	(33)		18,740		58,466
Total comprehensive income for the period	-		-		-	-		1,355		1,355
Dividends	-		-		-	-		(1,979)		(1,979)
Exchange differences recognised in income statement on disposals	-	-		-		33	-		33
Credit to equity for equity-settled share-based payments	-		-		-	-		72		72
Modification to cash settled share-based payments	-		-		-	-		(343)		(343)
Shares issued	5	27		-		-	-		32
At 31 October 2012	4,656		17,551		17,584	-		17,845		57,636

For the year ended 30 April 2013 (audited)	Share	Share	Merger	Translation	Retained	Total
	capital	premium	reserve	reserve	earnings	equity
	£'000	£'000	£'000	£'000	£'000	£'000
At 1 May 2012	4,651	17,524	17,584	(33)	18,740	58,466
Total comprehensive income for the year	-	-	-	-	1,418	1,418
Dividends	-	-	-	-	(1,980)	(1,980)
Exchange differences recognised in income statement on disposals	-	-	-	33	-	33
Credit to equity for equity-settled share-based payments	-	-	-	-	99	99
Modification to cash settled share-based payments	-	-	-	-	(410)	(410)
Shares issued	12	57	-	-	-	69
At 30 April 2013	4,663	17,581	17,584	-	17,867	57,695

The merger reserve arose on the formation of the group in 2004.

Consolidated balance sheet

	31 October 2013 (unaudited)	31 October 2012 (unaudited)	30 April 2013 (audited)
	£'000	£'000	£'000
Non-current assets
Intangible assets	51,927	50,675	50,436
Property, plant and equipment	1,915	2,512	2,165
	53,842	53,187	52,601
Current assets
Trade and other receivables	39,070	44,051	40,233
Cash and cash equivalents	4,290	4,910	4,962
	43,360	48,961	45,195
Total assets	97,202	102,148	97,796
Current liabilities
Trade and other payables	(9,331)	(12,824)	(9,413)
Current tax liabilities	(636)	(468)	(496)
Borrowings	(77)	(158)	(109)
Provisions	(822)	(1,508)	(2,157)
	(10,866)	(14,958)	(12,175)
Net current assets	32,494	34,003	33,020
Non-current liabilities
Trade and other payables	(596)	(25)	-
Borrowings	(22,000)	(23,070)	(22,018)
Provisions	(812)	(1,282)	(830)
Deferred tax	(5,185)	(5,177)	(5,078)
	(28,593)	(29,554)	(27,926)
Total liabilities	(39,459)	(44,512)	(40,101)
Net assets	57,743	57,636	57,695
Equity
Share capital	4,723	4,656	4,663
Share premium	17,995	17,551	17,581
Merger reserve	17,584	17,584	17,584
Retained earnings	17,441	17,845	17,867
Equity attributable to owners of the company	57,743	57,636	57,695

Consolidated cash flow statement

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Cash flows from operating activities
Cash generated by operations	1,290	3,383	7,793
Income taxes paid	(373)	(31)	(436)
Interest paid	(386)	(568)	(1,545)
Net cash flows from operating activities	531	2,784	5,812
Investing activities
Proceeds on disposal of property, plant and equipment	-	40	40
Purchase of property, plant and equipment	(168)	(310)	(386)
Purchase of intangible fixed assets	-	-	(28)
Proceeds on disposal of businesses	-	10	30
Deferred consideration payments in the period	(19)	(280)	(667)
Acquisition of businesses	(450)	-	-
Net cash from investing activities	(637)	(540)	(1,011)
Financing activities
Dividends paid	(541)	(539)	(1,980)
Repayments of hire purchase finance obligations	-	(57)	(98)
Proceeds on issue of shares	25	32	69
Repayment of loans	(50)	(72)	(132)
Repayment of bank facility	-	(1,000)	(2,000)
Net cash from financing activities	(566)	(1,636)	(4,141)
Net (decrease) increase in cash and cash equivalents	(672)	608	660
Cash and cash equivalents at beginning of period	4,962	4,302	4,302
Cash and cash equivalents at end of period	4,290	4,910	4,962

1.     Basis of preparation and accounting policies

(a) Basis of preparation

The half year condensed consolidated financial statements do not include all of the information and disclosures required for full annual financial statements and should be read in conjunction with the group's annual financial statements as at 30 April 2013, which have been prepared in accordance with IFRSs as adopted by the European Union.

This condensed consolidated half year financial information does not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 30 April 2013 were approved by the board of directors on 3 July 2013 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

The directors have reviewed the financial resources available to the group and have concluded that the group is a going concern. This conclusion is based upon, amongst other matters, a review of the group's financial projections for a period of twelve months following the date of this announcement, together with a review of the cash and committed borrowing facilities available to the group.  Accordingly, the going concern basis has been used in preparing these half year condensed consolidated financial statements.

The condensed consolidated financial statements for the six months ended 31 October 2013 have not been audited nor subject to an interim review by the auditors.  IAS 34 'Interim financial reporting' is not applicable to these half year condensed consolidated financial statements and has therefore not been applied.

(b) Significant accounting policies

The accounting policies adopted in preparation of the half year condensed consolidated financial statements are consistent with those followed in the preparation of the group's annual financial statements for the year ended 30 April 2013.

2.     Segmental analysis by class of business

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Revenue
Insolvency and restructuring	20,889	23,956	47,522
Global risk partners	1,419	2,180	3,570
	22,308	26,136	51,092
EBITA (before exceptional items and net acquisition-related items)
Insolvency and restructuring	5,162	5,982	12,302
Global risk partners	(185)	222	(212)
Shared and central costs	(2,350)	(2,552)	(4,436)
	2,627	3,652	7,654

3.     Finance costs

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Interest payable	559	484	963
Unwinding of discount on deferred consideration liabilities	2	10	14
	561	494	977

4.     Exceptional and net acquisition-related items

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Acquisition costs	124	-	-
Adjustments to contingent consideration on prior year acquisitions	(149)	-	-
Restructuring costs	-	958	3,753
Refinancing costs	-	-	145
	(25)	958	3,898

5.     Earnings per share

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

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Earnings
Profit for the period attributable to equity holders	1,572	1,355	1,418

	31 October 2013 (unaudited)	31 October 2012 (unaudited)	30 April 2013 (audited)
	number	number	number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share	90,251,268	89,958,215	90,040,153
Effect of dilutive potential ordinary shares:
Share options	614	-	-
Contingently issuable shares	6,114	-	-
Weighted average number of ordinary shares for the purposes of diluted earnings per share	90,257,996	89,958,215	90,040,153

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	pence	pence	pence
Basic and diluted earnings per share	1.7	1.5	1.6

The following additional earnings per share figures are presented as the directors believe they provide a better understanding of the trading position of the group:

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Earnings
Profit for the period attributable to equity holders	1,572	1,355	1,418
Amortisation of intangible assets arising on acquisitions	140	182	364
Unwinding of discount on deferred consideration liabilities	2	10	14
Exceptional and net acquisition-related items	(25)	958	3,898
Tax effect of above items	(28)	(274)	(944)
Adjusted earnings	1,661	2,231	4,750

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	pence	pence	pence
Adjusted basic and diluted earnings per share	1.8	2.5	5.3

6.     Dividends

The interim dividend of 0.6p (2012: 0.6p) per share (not recognised as a liability at 31 October 2013) will be payable on 9 May 2014 to ordinary shareholders on the register at the close of business on 11 April 2014.  The final dividend of 1.6p per share as proposed in the 30 April 2013 financial statements and approved at the group's AGM was paid on 7 November 2013 and was recognised as a liability at 31 October 2013.

7.     Reconciliation to the cash flow statement

	Six months ended 31 October 2013 (unaudited)	Six months ended 31 October 2012 (unaudited)	Year ended 30 April 2013 (audited)
	£'000	£'000	£'000
Profit for the period	1,572	1,355	1,418
Adjustments for:
Tax	379	663	997
Finance costs	561	494	977
Amortisation of intangible assets	226	267	534
Depreciation of property, plant and equipment	418	438	861
Exceptional restructuring costs	-	420	1,384
Profit on disposal of property, plant and equipment	-	(4)	(5)
Share-based payment expense	4	72	99
Operating cash flows before movements in working capital	3,160	3,705	6,265
Decrease (increase) in receivables	1,101	(668)	2,489
(Decrease) increase in payables	(1,617)	1,069	(420)
Decrease in provisions	(1,354)	(723)	(541)
Cash generated by operations	1,290	3,383	7,793

 

END

 

 

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