Interim Results
Capita Group PLC
25 July 2002
25th July 2002
THE CAPITA GROUP PLC
Interim results for the six months ended 30th June 2002
RECORD RESULTS AND NEW CONTRACT WINS
Financial highlights:
Six months ended Six months ended Change
30th June 2002 30th June 2001
Turnover £391m £323m + 21%
Operating Profit* £44.3m £31.3m + 42%
Profit before tax* £40.2m £29.1m + 38%
Earnings per share* 4.3p 3.15p** + 37%
Interim dividend per share 1p 0.75p + 33%
* before amortising goodwill
** after restatement for FRS 19 (deferred tax)
Operating highlights:
• Strong rise in operating margins to 11.3% (2001: 9.7%), reflecting
increasing quality of contracts and economies of scale;
• Record level of new contract wins - £1.1bn of new contracts in the
first seven months of 2002, exceeding the full year total of £744m for
2001;
• £160m ten year contract announced today with Lincoln Financial Group to
provide Life and Pensions administration services in the UK. This
contract also provides a base for Capita to grow a new business area in
Life and Pensions;
• In February 2002 Capita signed its largest ever contract to date, a
partnership with the BBC to administer TV Licensing, worth £500m over
ten years;
• High visibility of forward revenues due to recent contract wins and
lengthening contract terms (average now 7-10 years) - 98% visibility on
2002 turnover of £895m, continued high visibility on 2003 turnover;
• Pipeline of bid opportunities worth in excess of £1bn and addressable
market size increased from £50bn p.a. to an estimated £65bn p.a.
Capita uniquely positioned to capitalise on growth opportunities across
the Private Sector, Central and Local Government;
• Financial strength through strong operating profit to cash conversion
and a prudently funded balance sheet;
• Accounting consistently more conservative than required by the relevant
accounting standards, a simple corporate structure, no special purpose
financing vehicles, no associated companies and no long term PFI
contracts.
Rod Aldridge, Executive Chairman of The Capita Group Plc, commented:
'I am delighted to be able to announce such strong results today. Once again,
the Group's earnings are growing strongly whilst continuing to be highly
predictable and robust. The long-term nature of our contracts and the
increasing demand for the provision of essential services across the nine
markets which we now operate in create a framework for Capita to deliver
continued growth. The size of our addressable market for outsourcing services
continues to grow and now represents an estimated £65bn per annum. Capita is
the largest player in this market and yet our current revenues represent only
1.4% of the total market potential. The breadth of our offering and our
established reputation with customers means that we are uniquely positioned to
capitalise on the opportunities within these markets. We are therefore very
confident of the Group's prospects for the year as a whole and for our continued
future growth.'
For further information:
The Capita Group Plc Tel: 020 7799 1525
Rod Aldridge OBE, Executive Chairman Press Office: 020 7544 3141
Paul Pindar, Chief Executive
Shona Nichols, Group Marketing Director
Finsbury Tel: 020 7251 3801
Morgan Bone
Mark Harris
Chairman's Statement
Results
The Group has enjoyed strong growth in the six months to 30 June 2002. Once
again, we have achieved record results. Group turnover increased by 21% to
£391m (half year to 30 June 2001: £323m), operating profits before goodwill
amortisation rose by 42% to £44.3m (2001: £31.3m) and net profits before
taxation and goodwill amortisation increased by 38% to £40.2m (2001: £29.1m).
Earnings per share before amortising goodwill grew by 37% to 4.3p (2001: 3.15p
re-stated due to FRS19).
During the period, our operating margins have increased from 9.7% to 11.3%.
This reflects the increasing quality of work won by the Group, the economies of
scale we now have and our decision to be highly selective about what
opportunities we pursue and operate.
Other financial measures also demonstrate the underlying strength of Capita's
business. We continue to enjoy excellent cashflow with £41m generated by our
operations in the period. Our pre-tax return on average capital employed
(including debt) will also show a significant increase for the year as a whole.
Capital expenditure for the period has been high due to two projects, the
Criminal Records Bureau and Transport for London's (TfL) congestion charging
scheme. Both of these projects will enjoy attractive financial returns and the
latter has the potential to create a very substantial pipeline of new business.
For the year as a whole, capital expenditure is estimated to be approximately 7%
of annual revenue compared to our historic levels over the past five years of 4%
to 5%. The nature of the opportunities we are currently bidding for indicates
that capital expenditure in 2003 will be significantly lower, representing less
than 4% of revenue.
Dividend
The Board has declared an interim dividend of 1p net per ordinary share (2001:
0.75p), a 33% increase. The dividend will be payable on 11 October 2002 to
shareholders on the register at the close of business on 13 September 2002. The
dividend is covered 4.3 times by earnings per share before amortising goodwill.
Accounting policies
The Board has noted recent comment regarding accounting policies adopted by
companies in the support services sector, particularly with regard to accounting
for contract costs. The relevant accounting standards in this area are SSAP9,
FRS15 and UITF34. Capita has consistently exceeded the requirements of these
accounting standards. The Board believes that Capita's policies are robust,
appropriate and consistently more conservative than those required by the
relevant accounting standards. The Board has always adopted this approach and
is fully committed to continuing to follow this prudent policy in the future.
We have a simple corporate structure, with no special purpose funding vehicles,
no associated companies and we are not involved in long term PFI projects.
Creating growth
We have three complementary approaches to securing growth. First, we seek to
secure major contracts to deliver complex projects that use our skills across
the Group and which generate high quality recurring revenues. Second, each of
our individual businesses is structured to generate incremental growth through
the development of existing accounts and new business wins. Third, we continue
to make strategic acquisitions to strengthen the Group's presence within a
specific market and to broaden its service capability. We have made strong
progress with respect to each of these three approaches.
Major contracts
In our full year results announcement in February 2002, we reported on £744m of
major contract wins secured during 2001. In the first seven months of 2002, we
have already surpassed the total for the previous year, having achieved £1.1bn
of major contract wins against an internal target of £500m. We continue to win
one out of every two contracts bid for, compared with the industry average of
one in five.
This performance will underpin strong growth for the full year and we also have
high visibility of our revenues for 2003. Our pipeline of new bid opportunities
spanning both the public and private sectors is worth in excess of £1bn and we
expect to make further announcements in the second six months. We will continue
to be highly selective, bidding only for projects where we can add significant
value for both customers and shareholders.
Of the long-term contracts won this year, four are of major significance to the
Group's positioning going forward. In February, we signed the Group's largest
ever contract, a ten year partnership with the BBC to administer TV Licensing.
This contract, worth £500m over a ten year term, went live on 1 July 2002 and
will hold us in good stead to bid for other opportunities involving large scale
revenue collection.
In March, Capita signed a contract with Transport for London (TfL) to administer
the proposed congestion charging scheme in London. This contract is estimated
to be worth £280m over the first five years of operation. We are now
implementing this project, which we believe represents the beginning of a major
new business area for the Group.
I am delighted to announce today that, subject to contract and pending FSA
approval, we have entered into a significant partnership with Lincoln Financial
Group ('Lincoln'), a major company in the Life and Pensions market in the UK.
Under the terms of the agreement, Capita will acquire the processing and
administration services and the associated assets of Lincoln for a consideration
of £5m payable in cash between 2004 and 2006 plus further performance related
sums payable up to 2007. At the same time, Capita and Lincoln will enter into a
ten year contract worth £160m for Capita to provide third party administration
services to Lincoln. The contract commences in August 2002.
As a result of the agreement, Capita will have a state of the art processing
centre in Gloucester, which will become the base for establishing a new business
area for Capita to undertake legacy and non-legacy life and pensions
administration outsourcing work.
In 1999, through our investment in Eastgate, Capita initiated its presence in
general insurance outsourcing, a £4bn market. Three years later, we are the
clearly established market leader in back office processing for the general
insurance industry. The Life and Pensions market, which is worth c.£5bn per
annum, offers similar potential. We believe this partnership will be the
stepping-stone to replicating our success in the general insurance market place.
I am also delighted to announce today that, subject to contract, Capita has
formed a unique partnership with four local authorities in South Wales to
support transport infrastructure initiatives and deliver professional support
services across the region. Capita has formed a new company with four local
authorities, Monmouthshire, Torfaen, Blaenau Gwent and Caerphilly. The four
authorities are contracting with the new company for ten years to provide
services worth an estimated £83m. Capita will own 51% of the new venture and is
investing £1m in consideration for acquiring its shareholding. The new venture
will be jointly owned by Capita and the four authorities and assumes the
business and assets of the Gwent Consultancy, a transport infrastructure
consultancy business, presently owned by five unitary authorities (the four new
joint owners and Newport).
Our strategy will be to build upon Gwent Consultancy's success to create a
substantial infrastructure consultancy and professional support services centre
from a new base in South Wales. The team has considerable experience of
transport management, an area of business that offers considerable potential for
the Group.
Incremental new business
Our second important means of growth is generated by our individual business
units securing work from existing and new clients. Capita now has many
thousands of clients and our exceptional levels of customer satisfaction result
not only in high client retention and renewal rates, but also in our ability to
extend the breadth of services.
In our insurance business, Capita has renewed its contract with Norwich Union
for the management of motor third party liability desk top handling and we have
extended the scope of our contract with Abbey National Plc, increasing the
contract value by £10m. Zurich Financial Services has not only extended its
loss adjusting contract for a further two years with us, but has also recently
signed a three year contract to receive our new contractor repair network
service for property claims.
We have also extended for a further year our contract with the Department for
Work and Pensions for the administration of Winter Fuels and the contract we
have with Westminster City Council for debt management services for Council Tax
and Business Rates for four years, with an option of a further year. These
extensions generate revenues of £10m in total for the Group. Academy, our
software business, has completed a very successful first half year, highlighted
by attaining preferred bidder status on contracts worth £2m in the last month
alone. In revenues and benefits, we have won five out of the last six
opportunities we have bid for.
Equita, our debt management company, has secured eight new contracts for the
collection of Road Traffic debt on behalf of local authorities. We have been
successful in securing contracts with every local authority in the North and
North West that has adopted Decriminalised Parking Enforcement. The company has
also had numerous contract extensions with existing Council Tax and Non Domestic
Rate clients, including Birmingham City Council where there has been a 14%
increase in monies collected in 2001/2002.
Our consultancy business has continued to thrive, securing contract extensions
with Bolton MBC, Centrex (formerly National Police Training), and the Office of
the Deputy Prime Minister and a new contract with the Department for Work and
Pensions to support the pension credit implementation programme. Capita
Strategic Education Services (Capita SES) has won praise for its role as a
partner of Leeds City Council providing strategic education and management
support for Education Leeds. A report issued on 11 July by Ofsted, the schools
inspectorate, has indicated that significant progress has already been made in
improving services. Capita SES has also won new contracts with the Department
for Education and Skills, Gloucestershire LEA and local Learning and Skills
Councils.
Capita IRG continues to expand its client base and service offering. We now
administer shareholder communications to six million shareholders on behalf of
1,700 corporate clients and have secured contracts to administer Share Incentive
Plans (SIPs) for Logica, BACS, Kelloggs, BMW and Royal Bank of Canada. We now
administer SIPs for 75 corporate clients, positioning us as market leaders with
25% of the market. Cross selling revenues have also increased by 50% on last
year and the number of additional services our share registration clients take
from us has grown by 40% since the start of the year.
Our property consultancy, one of the top ten consultancies in the UK, has made
strong progress. It is providing full multi-disciplinary services to a range of
organisations, especially in the area of office building, with the fit-out of
new HQ buildings for The Royal Bank of Scotland in six UK locations and a major
project for Lloyds TSB. We are benefiting from increased investment by the
Government and other agencies in transportation and are now well positioned to
carry out work in the airport, highways, rail and underground markets.
Acquisitions
During the period, we have continued our policy of making small acquisitions to
develop our position in specific markets. In the first six months, four
acquisitions were completed for an aggregate initial consideration of £43m. All
have been integrated into the appropriate business division. The two largest
transactions were the purchase of four human resources businesses from
PricewaterhouseCoopers ('PwC') for an initial consideration of £14m and the
acquisition of Wynchgate Holdings, an absence management services business, for
an initial consideration of £18.6m.
The businesses acquired from PwC, which generate proforma revenues of £15m per
annum, strengthen Capita's skills in payroll administration, employee benefits
administration, interim management and executive search and selection (trading
as Veredus). The businesses have many prestigious clients, including the
Department of Health, DfES, the Office for Public Sector Reform and Morgan
Stanley. The majority of Local Authorities in the UK have also been clients
within the last three years.
Capita has now built an unparalleled position in the HR outsourcing market.
Whilst there are many niche, specialist providers, there are few significant
players able to provide integrated solutions. One third of all FTSE 250
companies expect to outsource in excess of 20% of their HR work and the market
potential in the UK is now valued at £10bn (source: NelsonHall).
Capita's skills, which encompass payroll, employee benefits, personnel
administration, HR information technology, workforce recruitment and management,
workforce development and organisational development are ideally placed to
address this market.
This position was strengthened further in June through the acquisition of three
businesses from the Wynchgate Group, with proforma revenues of £17m per annum.
These businesses specialise in providing absence and related cost management
services for the education sector and, increasingly, the health sector. The
principal business is the UK's leading provider of staff absence services to the
education sector, typically through three year contracts. The client base
includes 42 Local Education Authorities (LEAs) and over 2,000 schools and a
growing number of 'not for profit' organisations. The business uses an
innovative IT solution to assist with monitoring staff in order to increase
attendance and to reduce the overall cost of absenteeism. Joining forces with
Capita will provide the business with immediate access to the software
relationships that we have with approaching 23,000 schools and 155 LEAs.
We would like to welcome all the employees of our newly acquired businesses into
Capita along with those that have joined us through contract wins and direct
recruitment. More than 1,750 have joined the Group in the period.
Operational performance
Through the services that the Group administers, we now interact with 33 million
individuals in the UK. Our record of service delivery continues to be
excellent. We are able to present our potential clients with numerous case
studies setting out Capita's track record in improving services.
Many of our current initiatives are at the leading edge of modernising the way
organisations deliver services. Several have a higher profile than we have
previously experienced, which means we will be more in the public eye during the
implementation phase. However, when established, the long term success of these
complex projects will reinforce Capita's unique position in the market and will
raise further the barriers to entry for new competitors.
At the Criminal Records Bureau (CRB), which was formally opened by the Home
Secretary, the live service for standard and enhanced disclosures was launched
on 11 March 2002. We have so far issued over 100,000 disclosures, providing
greater protection to children and vulnerable adults.
The implementation of such a complex, crucial system has been challenging. The
CRB has always anticipated that there will be an initial period where published
service standards would be under pressure due to the combination of new staff
operating new systems and customers adapting to new procedures. It is pleasing
to report that the output of the agency is accelerating strongly and we
anticipate that published service standards will be met by the end of the
Summer. The experience gained with this project and the relationship developed
with the Home Office will stand Capita in good stead as future opportunities are
identified.
Our contract to administer the TV Licensing service on behalf of the BBC went
live on 1 July 2002. Approximately 1,400 staff from Consignia joined Capita on
this date. A new contact centre was formally opened in Darwen on 12 July 2002,
building on the strategic relationship that Capita has with Blackburn with
Darwen Borough Council, and providing the BBC with a state of the art centre.
Capita's task is to issue and collect payment for over 23.5 million TV licences
per annum, with a particular focus on increasing 'take up' and reducing evasion.
We are delighted by the manner in which this project has been managed, both
during the implementation period and since the 'go live' date. We have
developed a strong partnership with the BBC, which augurs well for the future.
We continue to work with the Department for Education and Skills on the run down
of the Individual Learning Accounts scheme and on the business model for a
successor scheme.
Our contract with Abbey National Plc to manage its general insurance back office
processes is progressing well. Following the successful release of Phase 1 of
the Consumer Direct System (which enables Abbey National customers to purchase
household insurance over the internet), Phase 2 will be launched within the next
month. This will extend the internet service to include motor insurance and
allow direct access to the Consumer Direct system for Abbey National's Telesales
units.
Our contract with Transport for London (TfL) to implement London's Congestion
Charging scheme is also progressing well. We will be responsible for delivering
and managing the customer service infrastructure, including multi-contact
customer service centres that process payment by telephone and web. In
addition, the payment infrastructure will also be extended to selected shops,
petrol stations, kiosks and a small number of meters.
We believe that the potential for developing our business in the congestion
charging market place in the UK is highly encouraging. The Transport Secretary
has already indicated that he will look favourably upon similar schemes
elsewhere. There are many potential opportunities to develop Capita's role
including an extension to the existing inner London area and numerous other UK
cities with acute traffic congestion problems. The fact that Capita has built a
scaleable, modular solution to the congestion charging problem will give us a
very significant 'first mover' advantage. We will have both a unique flexible
system and unparalleled experience in implementing it. We are excited by
transport as a potential market for further significant growth for Capita and
believe that the transport management market in the UK could be worth £7bn per
annum.
Markets
We have previously stated that the market for our services in the UK across
Local Government, Education, Central Government and Financial Services is worth
around £50bn per annum. With the activity that we are now seeing and the
business drivers that are now in place, we believe that the value of the market
has increased substantially. Reference has been made earlier in the Statement
to new areas of business in Transport Management, Life and Pensions and in Human
Resources. In addition to these, there are emerging opportunities for the Group
in the Health Services where, for example, the Department of Health is currently
preparing a Register of those interested in raising performance in the NHS. The
recent announcement of the Comprehensive Spending Review by the Chancellor of
the Exchequer underpins the Government's wish to modernise public services and
to involve the private sector in these reforms. Indeed, significant additional
monies have been allocated to Education, a market where the Group has a strong
position.
We therefore now believe that our addressable market in the UK is £65bn per
annum, an increase of 30%. Only a small part of these services have been
outsourced to date. We believe that the market will continue to develop in an
orderly and structured way over the next decade. The major competition
continues to be the in-house option, but the drivers for change are high in both
the public and private sectors. This underpins our intention to remain in the
UK to develop our business for the foreseeable future.
Divisional structure
As Capita develops and grows the services it provides, we intend to continue to
strengthen and deepen our management structure to ensure we maintain control
over the quality of our services and our financial performance.
Accordingly, with effect from 1 July 2002, we have added a new division, called
'Integrated Services'. This division will assume responsibility for a number of
Capita's complex, integrated projects including the Criminal Records Bureau, the
BBC TV Licensing contract and TfL's congestion charging scheme, in addition to
some of our existing activities. At the same time, we have added to the
Executive Board, thereby increasing the Board complement to nine Executives. We
will ensure shareholders are provided with transparency of financial reporting
with regard to the changes that have been made.
We believe that the structure going forward will continue to encourage and
nurture some of the exceptional talent we have across the Capita Group.
Our people
As ever, the Board would like to offer its sincere thanks to all our staff who
contribute to the Group's progress. We have a unique culture and a strong team
spirit throughout the Group, which have been significant factors in the success
we have enjoyed during the period. Our clients also appreciate Capita's open
and fair style of doing business.
Over Capita's 13 years as a public company, its value has increased from £8m to
£1.8bn. In a survey published by Sunday Business on 14 July, Capita was named as
the top performing share out of Britain's 200 largest companies over the past
decade. We believe that the Group is ideally positioned to continue its strong
growth over the next decade and that we have an exceptional team in place to
achieve this.
In 2000, we introduced a staff Share Save Scheme, giving each of our employees
the opportunity to become a shareholder in Capita. We are strong believers in
promoting share ownership amongst our 16,500 staff. Accordingly, we intend to
introduce a Share Incentive Plan (SIP) to operate alongside our Share Save
Scheme and both will be open to all employees to participate. This scheme will
allow employees to buy shares from their monthly salary in a tax efficient
manner, subject to a holding period of five years. Under the scheme, there will
be no dilution for existing shareholders as the shares required for the SIP will
be purchased on the open market each month. In addition, we will be asking
shareholders to approve a long-term incentive plan aimed at retaining and
motivating the most senior executives in the Group. We believe these schemes
will have a strong motivational effect for our employees.
Prospects
The Group has a business model which is consistent, proven and sustainable over
the long-term. Our approach to growth and our long-term strategy remains
unchanged. The market for our services continues to expand and provides an
excellent basis for continued future growth.
The Group is trading strongly, generating good profits and healthy cashflow. We
will experience strong revenue growth in the second half because many of our
recent contract wins only become operational during that period. We anticipate
revenue of £895m for the full year. We are confident that shareholders will be
very pleased by Capita's performance for the year as a whole.
Rodney M Aldridge OBE
Executive Chairman
SUMMARY INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2002
Six months Six months
to 30th June to 30th June
2002 2001
(As restated)
Before Goodwill Total Before Goodwill Total
Goodwill amortisation Goodwill amortisation
Notes £'000's £'000's £'000's £'000's £'000's £'000's
Turnover 1
Continuing operations 383,778 - 383,778 323,015 - 323,015
Acquisitions 7,444 - 7,444 - - -
391,222 - 391,222 323,015 - 323,015
Operating profit 1
Continuing operations 43,339 (10,870) 32,469 31,301 (8,073) 23,228
Acquisitions 952 (331) 621 - - -
Group operating profit 44,291 (11,201) 33,090 31,301 (8,073) 23,228
Net interest payable (4,047) - (4,047) (2,244) - (2,244)
Profit before taxation 40,244 (11,201) 29,043 29,057 (8,073) 20,984
Taxation 11,711 - 11,711 8,418 - 8,418
Profit after taxation 28,533 (11,201) 17,332 20,639 (8,073) 12,566
Minority interest 22 - 22 24 - 24
Profit for the period 28,511 (11,201) 17,310 20,615 (8,073) 12,542
Dividends 6,656 - 6,656 4,946 - 4,946
Retained profit for the period 21,855 (11,201) 10,654 15,669 (8,073) 7,596
Earnings per share * 3 4.30p (1.69)p 2.61p 3.15p (1.24)p 1.91p
Diluted earnings per 3
share * 4.11p (1.61)p 2.50p 3.05p (1.20)p 1.85p
Dividend per share * 4 1.00p 0.75p
* The comparatives have been adjusted for the effect of FRS 19.
SUMMARY BALANCE SHEET AS AT 30TH JUNE 2002
30th June 30th June
(As restated)
2002 2001
£'000's £'000's
Fixed assets
Intangible assets 440,383 358,105
Tangible assets 83,516 53,677
523,899 411,782
Current assets
Trade investments 5,838 7,791
Debtors 200,823 165,059
Cash at bank 16,225 -
222,886 172,850
Creditors: Amounts falling due
within one year 280,558 308,594
Net current liabilities (57,672) (135,744)
Total assets less current liabilities 466,227 276,038
Creditors: Amounts falling due
after more than one year 148,652 3,882
Provision for charges and liabilities 18,190 3,217
299,385 268,939
Shareholders' funds
Called up share capital - Ordinary 13,311 13,184
Shares to be issued - 4,310
Share premium and other reserves 285,470 250,845
Minority interests 604 600
299,385 268,939
The comparatives have been adjusted for the effect of FRS 19.
SUMMARY GROUP CASH FLOW
FOR THE SIX MONTHS ENDED 30TH JUNE 2002
Six months Six months
to 30th June to 30th June
2002 2001
£'000's £'000's
Cashflow from operating activities 41,023 36,220
Returns on investment and servicing of finance (4,095) (1,075)
Taxation paid (3,804) (7,800)
Capital expenditure and
financial investment (30,414) (15,517)
Acquisitions and disposals (36,518) (45,691)
Equity dividends paid (9,922) (7,214)
Net cash flow before financing (43,730) (41,077)
Financing 69,402 (8,539)
Increase / (Decrease) in cash in the period 25,672 (49,616)
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 30TH JUNE 2002
Six months Six months
to 30th June to 30th June
2002 2001
(As
restated)
£'000's £'000's
Profit attributable to the members of the parent undertaking 17,310 12,794
Prior period adjustment (see note 5) - (252)
Profit attributable to the members of the
parent undertaking, as restated 17,310 12,542
Exchange adjustment - (5)
Total recognised gains and losses 17,310 12,537
NOTES TO THE FINANCIAL STATEMENTS
1. Analysis of turnover by division: Six months Six months
to 30th June to 30th June
2002 2001
(As restated)
£'000's £'000's
Continuing Activities Business Services 130,916 117,915
Commercial Services 110,820 81,563
Integrated Services 64,039 54,147
Professional Services 78,003 69,390
Acquisitions Business Services 7,444 -
391,222 323,015
Analysis of operating profit before goodwill
amortisation:
Continuing Activities Business Services 16,492 11,568
Commercial Services 10,084 6,723
Integrated Services 8,315 6,406
Professional Services 8,448 6,604
Acquisitions Business Services 952 -
Operating profit before goodwill amortisation 44,291 31,301
The results of the Group are reported under four divisions, which differ
from those in the accounts for the year ended 31st December 2001. The
effect on the comparatives for the period to 30th June 2001 is first to
reduce business services turnover by £30,060,000 and operating profit before
goodwill by £23,000, secondly to increase commercial services turnover by
£10,175,000 and reduce operating profit before goodwill by £2,157,000,
thirdly to increase integrated services turnover by £54,147,000 and
operating profit before goodwill by £6,406,000, and lastly to reduce
professional services turnover by £34,262,000 and operating profit before
goodwill by £4,226,000.
2. The interim financial statements have been prepared on the basis of the
accounting policies set out in the Group's 2001 statutory accounts except
for the Group's adoption of FRS 19. The statements were approved by a
duly appointed and authorised committee of the Board of Directors on
24th July 2002.
The full year accounts, on which the auditors gave an unqualified report,
have been filed with the Registrar of Companies. The figures for the six
months to 30th June 2001 and 2002 are unaudited.
3. Earnings per share have been calculated on an average number of shares in
issue during the period of 662,847,000 (30th June 2001: 655,174,000). The
diluted earnings per share have been calculated on the diluted profit for
the period of £28,535,000 (30th June 2001 (restated): £20,639,000) and an
average diluted number of shares of 693,514,000 (30th June 2001:
677,507,000). As at 25th July 2002, there were 665,677,000 shares in issue.
4. The interim dividend of 1.00p per share will be payable on 11th October 2002
to Ordinary shareholders on the register at the close of business on
13th September 2002.
5. During the period the Group has adopted Financial Reporting Standard 19
'Deferred Tax' (FRS19). Consequently the comparatives for the period to
30th June 2001 have been restated. The impact of these changes on the
profit for the period ended 30th June 2001 is to increase the taxation
charge by £282,000, and reduce goodwill amortisation by £30,000. The impact
of these changes on the balance sheet as at 30th June 2001 is to reduce
intangible assets by £1,361,000, increase debtors by £4,218,000 and to
increase shareholders' funds by £2,857,000.
This information is provided by RNS
The company news service from the London Stock Exchange
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