Interim Results

Christie Group PLC
13 September 2000

 
Christie Group plc 
 
Interim results for the six months to 30 June 2000 
Chairman's statement 
 
 
In the six months to 30 June, Group turnover increased by 13.6% to
£18,502,000, including a three and a half month contribution from Timeless,
our French retail software company (June 1999: £16,284,000), with
like-for-like turnover flat at £16,153,000. Operating profit before goodwill
amortisation in the period was £345,000 (June 1999: £1,194,000). This result
was foreshadowed in my statement at the AGM and was substantially due to the
slowdown in our UK software business. In addition we spent £500,000 more than
in the corresponding period in 1999 investing in both Professional Business
Services, principally in further international development in Christie & Co,
and Information Systems and Services, increasing staff numbers to service the
rapid growth in our Venners stocktaking business. 
 
We propose to pay a maintained interim dividend of 1p per share. 
 
Professional Business Services 
The division achieved turnover of £11,032,000 (June 1999: £10,762,000), and
operating profits of £509,000 (June 1999: £647,000). The total number of
businesses sold by Christie & Co increased over the prior period, but there
was an absence of larger transactions. Due to the well publicised
difficulties of healthcare operators in the sale and leaseback market and
uncertainty concerning future new mandatory standards for care, the sector
was slower in the first half. However, in late July the Government published
the Care Standards Bill setting out these guidelines, and since then we have
seen an improved level of confidence return to the healthcare market. 
 
Christie.com has expanded to feature over 3,000 businesses in the UK and
internationally. Almost a third of our business buyers are actively using our
website as a preferred method of communication. Steady incremental use of the
website since its launch in July 1999 has confirmed it as one of the dynamics
of our future. 
 
Our European office network was further strengthened by the opening of a
Barcelona office in July in addition to our presence in Paris (opened March
1998) and Frankfurt (opened February 1999). The Professional Business
Services division has been strengthened through specialist departments for
Leisure & Development, Investment and Rating services, and continued
development of Christie.com. 
 
Information Systems and Services 
Turnover increased by 35% to £7,470,000, including Timeless (June 1999:
£5,522,000), with like-for-like turnover down by 7% to £5,121,000. The loss
for the period before goodwill of £164,000 (June 1999: profit of £547,000)
includes a positive contribution from Timeless of £275,000, which is in line
with management expectations. The Y2K changeover adversely affected first
half performance at Venners Computer Systems (VCS) with some carry-over into
the second half. 
 
However, I am now pleased to report that VCS has won a number of new
contracts, including the provision of EPoS for Cine UK and Ster Century
European. VCS has also signed an exclusive contract to supply the Vista
ticketing solution which allows ticket purchases over the internet, utilising
ATMs for on-site ticket collection and purchase. This has been taken up by
Spean Bridge Cinemas internationally. Orders are confirmed for our second
half with further business scheduled for 2001. Other successful installations
have included the 'West One' London fashion chain, while internet kiosk sales
included gadgetshop.com's flagship store on London's Oxford Street. 
 
In March we completed the acquisition of Groupe Timeless SA, which expanded
our international software systems offering. Since then, it has moved to new
larger premises on the quai de Jemmapes in Paris. Timeless continues to win
business with its Colombus retail internet enabled software system. Euro
Sante Beaute (pharmaceuticals, cosmetics and health foods), La Compagnie des
Petits (childrenswear), Rodier (fashion) were among others signing up in the
period. 
 
A joint European strategy for VCS and Timeless is now being implemented. 
 
Our stock-auditing business, Venners, made significant business gains which
required an increase of 25% in operational staff in the first quarter of the
year, but suffered considerable disruption as a result. Since early summer,
Venners has been trading at record levels of licensed trade activity. In
addition to our strong licensed stocktaking business, we continue to gain
retail clients, which during the period included Comet. 
 
Interest Charge 
The interest charge at £52,000 compares with interest receivable of £29,000
in 1999 due to increased borrowings to fund the Timeless acquisition. Cash in
hand was £1,578,000 (June 1999: £1,571,000). 
 
Tax Charge 
The tax charge has increased from 36% to 39% (excluding goodwill
amortisation) principally due to a higher proportion of the group's earnings
being outside the UK as a result of the Timeless acquisition in France. 
 
Current Trading 
The second half of this year is difficult to predict with any certainty. 1999
benefited from a particularly strong final quarter which is unlikely to be
repeated this year. The Group has continued with its policy of selected
expansion - which is progressing well - to position it for success in the
developing European market. 
 
 
Philip Gwyn Chairman 
13 September 2000 
 
 
Contacts :      

     Philip Gwyn,           Chairman, Christie Group           020 7227 0707 
     David Rugg,            Chief Executive, Christie Group    020 7227 0707 
     Robert Zenker,         Finance Director, Christie Group   020 7227 0707 
 
     Charlotte Elston,      Brunswick Group Limited            020 7404 5959 
 
 
******** 
 
 
Consolidated profit and loss account 
 
                                                    Continuing    Acquisition 
                                                          £000           £000 
                                                                              
                                          Notes                                 
                                     
  Turnover                                 2            16,153          2,349 
  Net operating costs                                 (16,083)        (2,074) 
  Goodwill amortisation                                  (185)              - 
  Operating profit/(loss)                                (115)            275 
  Net Interest                                            (50)            (2) 
  Profit/(loss) on ordinary activities before            (165)            273 
  tax                                                                         
  Tax on profit on ordinary activities    4                                     

  Profit/(loss) on ordinary activities after tax                              
  Dividends                               5                                     
                           
  Retained profit/(loss) for the period                                       
  Earnings per share excluding goodwill   6                                     
  Earnings per share excluding goodwill - fully                               
  diluted                                                                     
  Earnings/(loss) per share after goodwill 6                                  
  Earnings/(loss) per share after goodwill -                                  
  fully diluted                                                               
 
                                                                              
                                   Unaudited    Unaudited             Audited 
                                   Half year    Half year                Year 
                                       ended        ended               ended 
                                     30 June     30 June     31 December 1999 
                                        2000         1999                     
                        Notes          Total                             £000 
                                        £000         £000                     
  Turnover                    2       18,502       16,284              35,161 
  Net operating costs               (18,157)     (15,090)            (31,717) 
  Goodwill amortisation                (185)            -                   - 
  Operating profit/(loss)                160        1,194               3,444 
  Net Interest                          (52)           29                  53 
  Profit/(loss) on ordinary              108        1,223               3,497 
  activities before tax                 
  Tax on profit on ordinary             (114)        (443)             (1,218)  
 activities                 4                                                   
            
  Profit/(loss) on ordinary              (6)          780               2,279 
  activities after tax                                                        
  Dividends                  5         (264)        (243)               (608) 
  Retained profit/(loss) for           (270)          537               1,671 
  the period                                                                  
  Earnings per share excluding         0.72p        3.24p               9.42p 
  goodwill                   6         
  Earnings per share excluding         0.70p        3.22p               9.28p   
 goodwill - fully diluted                                                    
  Earnings/(loss) per share          (0.02)p        3.24p               9.42p 
  after goodwill             6       
  Earnings/(loss) per share          (0.02)p        3.22p               9.28p   
 after goodwill - fully                                                      
  diluted                                                                     
 
                                                                              
  Statement of Total Recognised         Unaudited    Unaudited        Audited 
  Gains and Losses                      Half year    Half year           Year 
                                            ended        ended          ended 
                                         30 June       30 June    31 December 
                                             2000         1999           1999 
                                             £000         £000           £000 
  Profit/(loss) on ordinary                   (6)          780          2,279 
  activities after taxation                                                   
  Gain/(loss) on foreign currency            (21)           43             14 
  translation                                                                 
  Total Recognised Gains and                 (27)          823          2,293 
  (Losses)                                                                    
 
 
Consolidated balance sheet 

                                                                              
                                        Unaudited    Unaudited        Audited 
                                          30 June      30 June    31 December 
                                             2000         1999           1999 
                                             £000         £000           £000 
  Fixed Assets                                                                
  Tangible assets                           3,109        2,656          2,778 
  Goodwill                                  5,837            -              - 
  Intangible assets                           524            -            247 
  Investment                                   54            -              - 
                                            9,524        2,656          3,025 
  Current assets                                                              
  Stock                                       522          378            207 
  Debtors                                   9,476        8,094          7,785 
  Cash at bank and in hand                  1,578        1,571          3,318 
                                           11,576       10,043         11,310 
  Creditors - amounts falling due         (9,487)      (7,357)        (7,969) 
  within one year                                                             
  Net current assets                        2,089        2,686          3,341 
  Total assets less current                11,613        5,342          6,366 
  liabilities                              
  Creditors - amounts falling due          (3,743)        (262)         (150)   
 after more than one year                                                    
  Net assets                                7,870        5,080          6,216 
  Capital and reserves                                                        
  Called up equity share capital              509          486            487 
  Share premium account                     3,681        3,623          3,653 
  Merger reserve                            1,895            -              - 
  Profit and loss account                   1,785          971          2,076 
  Shareholders' funds - equity              7,870        5,080          6,216 
  interests                                                                   
 
 
 
Consolidated cashflow statement 
 
                                                                             
                                        Unaudited    Unaudited        Audited 
                                          30 June      30 June    31 December 
                                             2000         1999           1999 
                                             £000         £000           £000 
  Net Cash inflow from operating              811          192          4,273 
  activities                                  
  Returns on investments and                 (52)           29             53
  servicing of finance                       
  Taxation paid                             (174)        (104)        (1,240) 
  Capital expenditure                       (549)        (534)        (1,094)  
  Acquisitions                            (7,288)           -           (331)   
 Equity dividends paid                     (368)        (481)          (601)    
 Cash inflow/(outflow) before           (7,620)        (898)         1,060 
  financing                                 
  Financing                                5,828           53           (158)   
  Increase/(decrease) in cash in the     (1,792)        (845)           902 
  period                                                                      
 
 
Notes to the interim report 
 
 
Basis of preparation 
 
The unaudited results continue to be prepared in accordance with the
accounting policies set out in the Financial Statements for the year ended 31
December 1999.  
 
The financial information in this interim report does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985. Statutory accounts for the year ended 31 December 1999, upon which the
auditors gave an unqualified opinion, have been delivered to the Registrar of
Companies. 
 
 
Segmental information 
 
Turnover and Operating Profit 
 

                                                                              
                  Half year ended 30 June 2000    Half year ended 30 June     
                  £000                            1999 
                                                   £000                   
  DIVISION             Turnover        Operating      Turnover       Operating
                    (Unaudited)          Profit    (Unaudited)         Profit 
                                    (Unaudited)                   (Unaudited) 
  Professional           11,032             509         10,762            647 
  Business                                                                    
  Services                                                                    
  Information             7,470           (349)          5,522            547 
  Systems and                                                                 
  Services                                                                    
  TOTAL                  18,502             160         16,284          1,194 
 
                                                                              
                                                Year ended 31 December 1999
                                                             £000              
  DIVISION                                       Turnover    Operating Profit 
                                                (audited)           (audited) 
  Professional Business                            23,275               2,587 
  Services                                                                    
  Information Systems and                          11,886                 857 
  Services                                                                    
  TOTAL                                            35,161               3,444 
 
The £349,000 operating loss under Information Systems and Services for the 6
months ended 30 June 2000 is after charging goodwill amortisation of
£185,000. 
 
 
 
 
Turnover by Destination 
                                                                              
                                       Half year ended 30 June 2000 
                                                  £000                          
                             Total           Professional          Information
                                       Business Services           Systems and
                                                                     Services 
  Europe                    17,966                11,032                6,934 
  Rest of World                536                     -                  536 
  TOTAL                     18,502                11,032                7,470 
 
                                                                              
                                       Half year ended 30 June 1999 
                                                  £000                          
                             Total           Professional          Information
                                       Business Services           Systems and
                                                                     Services 
  Europe                    15,534                10,762                4,772 
  Rest of World                750                     -                  750 
  TOTAL                     16,284                10,762                5,522 
 
                                                                              
                                       Year ended 31 December 1999 
                                                    £000                        
                            Total           Professional          Information
                                       Business Services           Systems and
                                                                     Services 
  Europe                    33,485                23,061               10,424 
  Rest of World              1,676                   214                1,462 
  TOTAL                     35,161                23,275               11,886 
 
 
3.
                                                                              
                           Particulars of Employees and Staff Costs 
 
                            Half year ended    Half year ended     Year ended 
                                    30 June            30 June    31 December 
                                       2000               1999           1999 
  The average number of                                                       
  people employed by the                712                544            555 
  Group (including                                                            
  Directors)                                                                  
  Their aggregate                     8,886              6,646         14,625 
  remuneration - £000                                                         
 
 
4.      Taxation 
 
The tax charge for the six months has been based on the estimated effective
tax rate for the year to 31 December 2000 of 39%.  
 
 
Dividend 
 
The dividend of 1p per share will be payable to shareholders on record on 29
September 2000. The ex-dividend date will be 25 September 2000. The dividend
will be paid on 29 November 2000. 
 
 
6.      Earnings Per Share 
 
                            Half year ended    Half year ended     Year ended 
                                    30 June            30 June    31 December 
                                       2000               1999           1999 
  Earnings per Share                                                          

  Profit attributable to                179                780          2,279 
  shareholders before               
  goodwill - £000                 

  Profit/(loss)                          (6)                780          2,279  
 attributable to                                                             
  shareholders after                                                          
  goodwill - £000                                                             

  Average number of                                                           
  ordinary shares of 2p                                                       
  each in issue during                                                        
  the period                      24,985,964         24,076,306     24,195,511
                                                                  
  Earnings per Share -                                                        
  fully diluted                         

  Profit attributable to                 179                780          2,279  
 shareholders before           
  goodwill - £000
                                                             
  Profit/(loss)                                                               
  attributable to                                                             
  shareholders after                                                          
  goodwill - £000                        (6)                780          2,279  
                                            
  Average number of                                                           
  ordinary shares of 2p                                                       
  each in issue during                                                        
  the period after                                                            
  allowing for the                                                            
  exercise of                                                                 
  outstanding share                                                           
  options                         25,621,249         24,206,191     24,558,493  
                                         
 
Interim report 
 
Copies of the interim report are available from Christie Group plc, 50
Victoria Street, London SW1H ONW.