Final Results

Mavinwood PLC 12 March 2008 Mavinwood plc ('Mavinwood' or 'the Company') Preliminary Announcement Preliminary results for the year ended 31 December 2007 - Another year of good progress and strong growth - Profit before tax up 35% to Â£5.0m (2006: Â£3.7m) - Adjusted fully diluted earnings per share up 19% - Integration delivering results - Successfully completed acquisitions of Document Control Services Limited and Peter Cox Limited - Board strengthened - Clear strategy for growth Financial highlights: 2007 2006 Increase Â£'000 Â£'000 Turnover 68,153 42,453 +61% Adjusted profit before taxation1 12 7,289 5,044 +45% Profit before taxation 2 5,047 3,751 +35% Basic earnings per share 0.56p 0.66p Adjusted fully diluted earnings per share1 2 0.96p 0.81p +19% 1 before amortisation of intangible assets, share based payment charge and notional interest on contingent consideration 2 after integration costs of Â£0.3m on acquiring Peter Cox Limited Kevin Mahoney, Chief Executive of Mavinwood said: 'These are good results with all the key numbers showing healthy increases. On a like for like basis both divisions, Emergency Repair and Document Handling, achieved double digit growth in sales and on aggregate 19% increase in operating profit. Since Mavinwood was launched at the end of 2004 we have made seven principal acquisitions and built strong positions in our chosen markets. We accelerated integration plans across the Mavinwood Group in 2007, improving systems and reducing costs. We also increased capital expenditure in both divisions to help drive future organic growth. 2008 has started in line with expectations and we are confident that the investments we made in 2007 will ensure that we continue our track record of strong organic growth.' Enquiries: Mavinwood plc Kevin Mahoney , Chief Executive 020 7661 9650 Mike Vincent, Finance Director 020 7661 9651 Threadneedle Communications John Coles 020 7936 9604 Collins Stewart Europe Limited Adrian Hadden 020 7523 8353 BACKGROUND Mavinwood was admitted on AIM on 5 November 2004 and is pursuing a buy and build strategy in the support services sector. The strategy is to acquire and develop support services businesses which have the potential for growth, either organically or in combination with other complementary businesses. The focus is on the Emergency Repair (especially where there is an insured repair) and Document Handling sectors. PROFIT BEFORE TAX The profit before tax for the year ended 31 December 2007 was Â£5,047,000 (2006: Â£3,751,000). However, the Directors believe that an adjusted measure of profit before tax and earnings per share provides shareholders with a more appropriate representation of the underlying earnings derived from the Mavinwood Group's business. The items adjusted for in arriving at that underlying level are as follows: 2007 2006 Â£'000 Â£'000 Emergency Repair 7,152 4,832 Document Handling 3,886 2,459 Central costs (1,439) (969) Share based payments charge (1,892) (1,039) Amortisation of intangible fixed assets (288) (96) -------- -------- Operating profit 7,419 5,187 Net finance costs (2,372) (1,436) -------- -------- Profit before tax 5,047 3,751 Amortisation of intangible assets 288 96 Share based payments charge 1,892 1,039 Notional interest on contingent consideration 62 158 -------- -------- Adjusted profit before tax 7,289 5,044 ======== ======== EMERGENCY REPAIR 2007 2006 Â£'000 Â£'000 Sales ANSA, Independent Inspections and Mono Services * 51,965 34,515 Peter Cox ** 4,232 - -------- -------- Total 56,197 34,515 ======== ======== EBITA*** ANSA, Independent Inspections and Mono Services * 6,853 4,832 Peter Cox ** 299 - -------- -------- Total 7,152 4,832 ======== ======== * Independent Inspections five and a half months and Mono Services four months in 2006 ** Peter Cox three months in 2007 *** Excluding share based payments charge The significant increase in sales and profit in this division is principally due to the fact that Independent Inspections and Mono Services were only included for part of 2006 compared to a full twelve months in 2007. The 2007 figures include Peter Cox for three months. This division includes three businesses which serve principally the insured repair sector. Approximately 80% of sales in 2007 were to leading insurance companies and we also service a range of housing associations and commercial companies. Peter Cox currently carries out little insurance work and most of its sales leads come from referrals or trade directories. All four businesses share a common business process which is: â€¢ Take the emergency call from the customer or via an insurer â€¢ Arrange a survey to validate or repudiate the claim and cost out the repair â€¢ Undertake the repair either by directly employed labour or sub contractors ANSA specialises in drainage surveys and repair, Independent Inspections in flooring surveys and restoration and Mono Services in building fabric surveys and repairs, often due to water damage. ANSA, Independent Inspections and Peter Cox are national businesses and Mono Services is a regional business in the North West. There is some customer overlap between the businesses but one of our opportunities moving forward is to offer all our services to a wider range of customers. All these businesses operate to high service standards. Examples of customer satisfaction measures that are monitored on a continuous basis are: â€¢ Response times in terms of contacting a policyholder after they report an insured event â€¢ Courtesy of staff and customer satisfaction â€¢ Average cost per claim There are integration benefits to flow between the businesses. A range of integration projects are underway including: â€¢ Optimising the IT platform across all the operations â€¢ Purchasing initiatives â€¢ Optimising back office functions â€¢ Reviewing marketing opportunities and widening the service offering As well as good organic growth within the division, we will continue to look for bolt on acquisitions which would further enhance our offering. Turning to the highlights within each operation: ANSA After a strong start to the year, ANSA's volume of insurance instructions dropped overall comparing 2007 with calendar 2006. The heavy flooding over the summer reduced the number of blockages we needed to attend. This wet weather was then followed by one of the driest autumns on record. This had the effect of reducing root ingress into the drains. Without the build up of water a number of householders would not have been aware their drains were blocked. Right at the year end, December saw a sharp drop in volumes. This pattern was a feature of the whole drainage industry in the second half of the year. ANSA did benefit from an improved mix of business with an increased proportion of larger jobs in 2007. During January and February 2008, volumes of instructions received from the insurers have returned back to the levels seen during the first half of 2007. ANSA has extended its drainage services to a wider range of customers in the commercial sector. This is still a relatively small part of the ANSA business but after extensive trialling in 2007 we have national coverage and are growing a number of regional and national accounts. Operating profit at ANSA has increased due to an improved mix of business, cost reductions and productivity gains. Customers have benefited from strong performance in claims validation, service delivery and cost control. From October we renewed a contract with one leading insurer and this arrangement will run for three years. In February 2007, ANSA acquired ESG Limited, a small drainage contractor for Â£0.2m. This acquisition has helped to increase the proportion of repair work that is being carried out by direct labour as opposed to sub contractors. ANSA also owned a small business offering Health and Safety training. Revenue in the first six months of 2007 was Â£617,000. The trade and assets of this operation were sold to the training management team on 29 June 2007 at net book value of Â£556,000. INDEPENDENT INSPECTIONS After suffering through low volumes in the first quarter, a series of cost reduction and profit improvement initiatives were made. The summer floods were positive for Independent Inspections as a large number of floor coverings were destroyed or damaged. New income streams were developed later in the year which have broadened the base of the business. MONO SERVICES Mono Services' sales have increased by approximately one fifth compared to 2006 due to winning new business, helped by the storm damage over the 2006/7 winter and the summer floods. Some of Mono Services' business has been re-directed via an insurer's joint venture partner that has caused some disruption to our operations. This resulted in transition and set up costs that reduced margins during the year. The acquisition of Peter Cox with its network of branches and its integration with Mono Services will enable us to build a national building fabric solution for insurers. PETER COX Peter Cox was acquired on 28 September 2007. It is a national provider of damp and water proofing, timber preservation and wall stabilisation for property in the United Kingdom. Peter Cox has a network of 17 branches in England and Scotland and employs 287 people. Its revenue is generated from yellow pages and the commercial sector, with at present little or no insurance work. Peter Cox contributed revenue and operating profit of Â£4.2 million and Â£0.3 million in its first three months. Revenue was 6% up on the comparable period and operating profit significantly increased. We have commenced the integration of the back office system of Peter Cox into the Emergency Repair division very promptly after completion of the acquisition. This was partly driven by the need to move out of the shared services environment of the vendor group. The central functions of Peter Cox have been relocated to the same offices as ANSA and Mono Services, in Oldham. During the last quarter of 2007 there were double running costs of operating the two environments plus investment in the IT integration. We estimate the double running and integration costs incurred by Peter Cox and Mono Services were Â£0.3 million in aggregate. EMERGENCY REPAIR SUMMARY Overall, on a true like for like basis comparing each business with the comparable period of trading in 2006, sales advanced by 10% and operating profit by 18%. After a soft end to the year in volume terms the division has bounced back in the first quarter of 2008. We have built a division which competes effectively as a claims fulfilment business to insurance companies. We are integrating the operations under one divisional management team headed by Steve Watkins and beginning to eliminate duplication in function across the division. The implementation of one IT platform across the division will improve efficiency during 2008 and especially 2009. The integration of Peter Cox with Mono Services will be a key initiative for 2008. DOCUMENT HANDLING 2007 2006 Â£'000 Â£'000 Sales Restore and Wansdyke * 8,934 7,938 Document Control Services ** 3,022 - -------- -------- Total 11,956 7,938 ======== ======== EBITA*** Restore and Wansdyke * 2,808 2,459 Document Control Services ** 1,078 - -------- -------- Total 3,886 2,459 ======== ======== * Wansdyke eleven months in 2006 ** Document Control Services nine months in 2007 *** Excluding share based payments charge RESTORE AND WANSDYKE Restore and Wansdyke serve a wide range of customers, including law firms, corporates of varying sizes, financial services companies, councils and health trusts. Our customers are mostly based in London and the South across to Bristol and South Wales. The majority of sales are the storage and retrieval of archive boxes but also individual files and other material such as magnetic media and film. Scanning of documents on a selective basis is also offered to clients. Shredding or pulping of documents at the end of their useful lives is currently outsourced, although this would form a logical product extension. The key customer satisfaction measures are: â€¢ % accuracy in retrieving items â€¢ % of items retrieved in accordance with terms of service, such as same day or next day delivery We continue to integrate Restore and Wansdyke and the companies share the same management team. Approximately Â£0.1m of integration costs have been charged against Wansdyke's profits in 2007. The Restore operating system of bar coding is being applied at Wansdyke and the back office functions are increasingly being integrated. Total employees at Wansdyke have dropped from 75 at February 2006 to 66 at 31 December 2007 by natural wastage as systems have become more automated. We operate a combination of freehold and leasehold sites at Wansdyke and Restore respectively. Due to the absence of rental charges, the return on sales at Wansdyke is higher than that at Restore. Having repositioned the business in 2006, Wansdyke's sales grew strongly in 2007, by 10%. We are filling up our underground storage facilities near Bath and in the first half of 2007 acquired an adjoining underground space of 16 acres for Â£0.5m. Once fitted out this space will provide medium term expansion for the business through to 2013. Restore suffered from some disruption and dealt with a high volume of archive box intake but the flow through from this new volume means it is well placed for 2008. DOCUMENT CONTROL SERVICES (DCS) We acquired 100% of the share capital of Stapledon Holdings Limited, the parent company of DCS on 26 March 2007. DCS is a quality national operation scanning and indexing documents with high intellectual property content. The business has a blue chip customer base including Network Rail, Highways Agency, The Crown Estate, oil and gas companies, city councils and property companies. DCS made a very strong contribution in its first nine months. DOCUMENT HANDLING SUMMARY The market for the physical storage of archives continues to grow well in excess of GDP, with especially strong growth in sectors such as professional services. Overall, on a true like for like basis comparing each business with a comparable period of trading in 2006, sales advanced by 11% and operating profit by 21%. The division is well placed to capitalise on its pipeline of new business while maximising the utilisation of its freehold space. Restore and Wansdyke are effectively being run as one business and the appointment of Ed Marshall from DCS as divisional Chief Executive will help to bind all three operations together. CENTRAL COSTS Central costs have increased from Â£969,000 to Â£1,439,000 as we now operate two much larger divisions compared to 2006. INTEREST Net interest payable amounted to Â£2,372,000 (2006: Â£1,436,000) as we borrowed to fund the acquisitions of Mono Services from September 2006 and DCS and Peter Cox in 2007. Included within the finance cost is Â£62,000 representing the notional interest on contingent consideration due on the acquisitions of Independent Inspections, Mono Services and DCS. The discount rate applied in this calculation was 7.9%. TAXATION The amortisation of intangible assets, the notional interest on the contingent consideration and the share based payments charge do not attract any tax relief. Due to these distortions, the reported tax charge is 49% (2006: 32%). The headline tax rate is significantly higher in 2007 as we have assumed that the share based payments charge will not attract a tax deduction. In addition, we have written off the deferred tax asset of Â£312,000 relating to the share based payment charge in 2006. However, the underlying tax rate during 2007 was 30%, as a percentage of adjusted profit before taxation. (2006: 30%). EARNINGS PER SHARE (EPS) Basic EPS in 2007 is 0.56p, which compares with 0.66p in 2006. The reason for the reduction in basic EPS is the absence of tax relief assumed on the share based payments charge. If we are able to assume tax relief of 30%, the basic EPS would have been 0.76p. Basic EPS adjusted for the amortisation of intangible assets, the share based payments charge and the notional interest on the contingent consideration was 1.11p (2006: 0.90p). Assuming the exercise of all options and awards under the LTIP plus the conversion of the convertible A shares at an average price in 2007 of 18.4p (2006: 13.93p), the fully diluted adjusted EPS becomes 0.96p (2006: 0.81p) an increase of 19%. DIVIDENDS The directors do not recommend a dividend for the year (2006: Â£nil). SHARE ISSUES New equity was issued on two occasions in 2007: â€¢ 5.4 million shares were allotted on 26 March 2007 at 18.5p per share as part of the consideration for DCS. â€¢ 4.5 million shares were allotted on 16 October 2007 at 20p per share to the vendors of Mono Services in settlement of contingent consideration due. The balance of Â£0.1 million was settled in cash. ACQUISITIONS External Services Group Limited (ESG), a drainage sub contractor to ANSA, was acquired on 2 February 2007 for cash of Â£206,000. DCS was acquired for an initial sum of Â£1.3 million, including Â£1 million in Mavinwood shares. In addition, debt of Â£4.8 million was repaid. Contingent consideration of up to Â£2 million is also payable in cash linked to the growth in EBITA above Â£0.93 million for the year ending 30 June 2008. The full Â£2m is payable assuming EBITA reaches Â£1.23 million. Peter Cox Limited was acquired for an initial sum of Â£6 million. Contingent consideration of Â£1,050,000 was also paid on 21 February 2008 linked to the achievement of EBITA for the year ended 30 November 2007. BALANCE SHEET Net assets increased to Â£50,613,000 in the year reflecting the profit before tax for the year of Â£5,047,000 plus the share issues to part fund the acquisition of DCS and the contingent consideration for Mono Services. Intangible assets relating to the acquisitions at 31 December 2007 was Â£70,634,000 (2006: Â£58,823,000). Property, plant and equipment totalled Â£12,220,000 (2006: Â£10,826,000) principally comprising the freehold underground storage facilities at Wansdyke but also computer systems, storage racking and vehicles. Operating working capital (excluding cash) amounted to a net Â£7,967,000 at 31 December 2007. Net debt at 31 December 2007 totalled Â£30,917,000 (2006: Â£17,649,000) after deferred financing costs of Â£357,000 (2006: Â£310,000). Interest cover in the year was 4.1 times. Due to Independent Inspections' slow start in the first half of 2007, the Directors consider it unlikely that the business will make the hurdles to trigger earn out payments to the vendor in respect of 2007 and 2008 so these amounts of Â£4m have been written back to opening intangible assets. CASH FLOW The net cash inflow from operating activities before investing and financing activities was Â£1,430,000 (2006: Â£2,793,000). This inflow is after taking account of an outflow of Â£4.6m on working capital. We expect an outflow as the business expands and would have expected this to be around Â£2.1 million. However, working capital increased due to a number of other factors: â€¢ Â£1.1 million due to the re-direction of work for a large insurer via a joint venture management company and other changes in Mono Services' business model â€¢ Â£0.5 million due to reducing the number of sub-contractors in ANSA and bringing more work in house The above factors are permanent changes in the size of our working capital. In addition, we have suffered from other slippages in our Document Handling business and in Emergency Repair as some of our larger customers took longer to settle during 2007. A large portion of this amount of Â£0.9 million has been recouped since the year end. Capital expenditure totalled Â£2,683,000 (2006: Â£1,168,000). Two major projects accounted for Â£1 million of the expenditure. Â£0.5 million was spent acquiring further underground storage at Wansdyke and a similar amount was spent on the first phase of the major IT project in Emergency Repair. This project integrates the finance and operating systems of Peter Cox and Mono and helps build the IT platform for the entire Emergency Repair division. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) We have adopted IFRS with effect from 1 January 2006. Comparative figures for the year ended 31 December 2006 have been presented. The principal differences relates to the write back of goodwill amortisation in 2006 and providing full deferred taxation on the property at Wansdyke and other intangibles. OUTLOOK The Mavinwood Group ended the year with two well established divisions and a current market capitalisation in excess of Â£70 million. Integration benefits are coming through in the two divisions as well as good underlying organic growth. After a few months of lower than normal volumes at the end of 2007, particularly in drainage, the Emergency Repair business has started 2008 well with instructions back to their early 2007 levels. The Document Handling industry continues to grow strongly in 2008 and our business is well placed within the industry. We plan to add further complementary businesses to both divisions on a selective basis and given the cash generative qualities of the Group, there is scope over time to acquire further businesses for cash. Kevin Mahoney Chief Executive Officer 12 March 2008 CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2007 Year ended Year ended Note 31 December 31 December 2007 2006 Â£'000 Â£'000 Continuing operations REVENUE 1 68,153 42,453 Cost of sales (41,771) (26,200) ---------- ----------- Gross profit 26,382 16,253 Administrative expenses (18,963) (11,066) ---------- ----------- OPERATING PROFIT 7,419 5,187 Finance income 106 82 Finance costs (2,478) (1,518) ---------- ----------- PROFIT BEFORE TAX 5,047 3,751 Income tax expense 2 (2,463) (1,195) ---------- ----------- PROFIT FOR THE YEAR 2,584 2,556 ========== =========== ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY 2,584 2,556 ========== =========== EARNINGS PER SHARE (PENCE) Basic 3 0.56p 0.66p ========== =========== Diluted 3 0.48p 0.59p ========== =========== CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY For the year ended 31 December 2007 Share capital Share premium Share based Retained Total payments earnings Equity reserve Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Balance at 1 January 2006 383 26,459 85 16 26,943 Profit for the year - - - 2,556 2,556 ------- ------- -------- -------- --------- 383 26,459 85 2,572 29,499 Issue of shares during the financial year 120 14,255 - - 14,375 Issue costs - (654) - - (654) Share based payments charge - - 1,017 - 1,017 ------- ------- -------- -------- --------- Balance at 31 December 2006 503 40,060 1,102 2,572 44,237 ======= ======= ======== ======== ========= Balance at 1 January 2007 503 40,060 1,102 2,572 44,237 Profit for the year - - - 2,584 2,584 ------- ------- -------- -------- --------- 503 40,060 1,102 5,156 46,821 Issue of shares on acquisition of DCS (note 4) 5 995 - - 1,000 Contingent consideration in respect of Mono Services 4 896 - - 900 Share based payments charge - - 1,892 - 1,892 ------- ------- -------- -------- --------- Balance at 31 December 2007 512 41,951 2,994 5,156 50,613 ======= ======= ======== ======== ========= CONSOLIDATED BALANCE SHEET At 31 December 2007 31 December 31 December 2007 2006 Â£'000 Â£'000 ASSETS NON-CURRENT ASSETS Intangible assets 70,634 58,823 Property, plant and equipment 12,220 10,826 Investments 556 - Deferred tax asset 179 8 --------- ---------- 83,589 69,657 --------- ---------- CURRENT ASSETS Inventories 381 311 Trade and other receivables 23,140 13,369 Cash and cash equivalents 1,108 1,850 --------- ---------- 24,629 15,530 --------- ---------- --------- ---------- TOTAL ASSETS 108,218 85,187 --------- ---------- LIABILITIES CURRENT LIABILITIES Trade and other payables (15,554) (11,114) Bank loans and overdrafts (4,337) (3,600) Other financial liabilities (45) (109) Current tax liabilities (1,229) (1,969) Provisions (3,698) (500) --------- ---------- (24,863) (17,292) --------- ---------- NET CURRENT LIABILITIES (234) (1,762) --------- ---------- NON-CURRENT LIABILITIES Bank loans and overdrafts (27,643) (15,790) Deferred tax liability (5,099) (3,985) Provisions - (3,883) --------- ---------- (32,742) (23,658) --------- ---------- NET ASSETS 50,613 44,237 ========= ========== EQUITY Share capital 512 503 Share premium account 41,951 40,060 Share based payments reserve 2,994 1,102 Retained earnings 5,156 2,572 --------- ---------- ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY 50,613 44,237 ========= ========== CONSOLIDATED CASH FLOW For the year ended 31 December 2007 Year ended Year ended Note 31 December 31 December 2007 2006 Â£'000 Â£'000 CASH INFLOW FROM OPERATING ACTIVITIES Continuing operations Profit for the year 2,584 2,556 Depreciation of property, plant and equipment 843 833 Amortisation of intangible assets 288 96 Finance costs recognised in profit and loss 2,372 1,436 Income tax expense recognised in profit and loss 2,463 1,195 Share based payments charge 1,892 1,039 Gain on sale or disposal of property, plant and equipment (33) (54) Movements in working capital Change in inventories 12 59 Change in trade and other receivables (5,945) (2,570) Change in trade and other payables 1,311 142 -------- ------- CASH GENERATED FROM OPERATING ACTIVITIES 5,787 4,732 Finance costs (1,681) (1,037) Investment income 106 82 Income taxes paid (2,782) (984) -------- ------- NET CASH GENERATED FROM OPERATING ACTIVITIES 1,430 2,793 -------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds on disposal of property, plant and equipment 101 845 Purchases of property, plant and equipment (2,287) (1,089) Purchases of applications software (396) (79) Acquisition of subsidiaries net of cash acquired 4 (6,988) (24,432) Contingent consideration (106) (1,075) -------- -------- NET CASH FLOWS USED IN INVESTING ACTIVITIES (9,676) (25,800) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings (2,000) (3,500) Repayment of indebtedness acquired (4,794) (881) New bank loans raised 14,300 18,043 Deferred financing costs (192) (268) Increase in bank overdrafts 337 - Net proceeds from issue of shares - 11,346 Finance lease principal repayments (147) (687) -------- -------- NET CASH GENERATED IN FINANCING ACTIVITIES 7,504 25,833 -------- -------- NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (742) 1,013 Cash and cash equivalents at start of year 1,850 837 -------- -------- CASH AND CASH EQUIVALENTS AT THE END OF YEAR 5 1,108 1,850 ======== ======== NOTES TO THE PRELIMINARY ANNOUNCEMENT Mavinwood plc and its subsidiaries specifically focus on Emergency Repair and Document Handling. The Group operates in the UK. During the year, the Group acquired control of External Services Group, a drainage services company, Document Control Services, a value added scanning company and Peter Cox, a damp course, water damage and timber treatment services company. The Company is a public limited company incorporated and domiciled in the United Kingdom. These financial statements were authorised for issue by the board of directors on 12 March 2008. BASIS OF PREPARATION The financial information has been prepared using the recognition and measurement principles of IFRS. The financial information is presented in pounds sterling, prepared on a historical cost basis and, unless otherwise stated, rounded to the nearest thousand. The financial information set out in this announcement is abridged and does not constitute statutory accounts for the year ended 31 December 2007 but is derived from those draft financial statements. The financial information is not audited. The statutory accounts for the year ended 31 December 2007 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting. The financial information contained in the preliminary announcement of results has been prepared on the basis of the accounting policies as outlined in the interim announcement made on 12 September 2007. This announcement also published the results for the year ended 31 December 2006 as reported under International Financial Reporting Standards. The comparative financial information for the year ended 31 December 2006 was derived from information extracted from the annual report and accounts for that period, which was prepared under UK GAAP and which has been filed with the UK Registrar of Companies. The auditors have reported on those UK GAAP accounts, their report was unqualified and did not contain statements under sections 237 (2) or (3) of the Companies Act 1985. 1 SEGMENTAL ANALYSIS For management purposes, the Group is organised into two main segments, Emergency Repair and Document Handling. The business segment is the primary segment. All trading of the Group is undertaken within the United Kingdom and the Company has no foreign operations. The secondary segment based on geography is solely the United Kingdom. Segment assets include goodwill, property, plant and equipment, inventory, debtors and operating cash. Central assets include investments, deferred tax and head office assets. Segment liabilities comprise operating liabilities. Central liabilities include income tax, corporate borrowings and head office liabilities. Capital expenditure comprises additions to computer software, property, plant and equipment and includes additions resulting from acquisitions through business combinations. Segment assets and liabilities are allocated between segments on an actual basis. Year ended Year ended 31 December 31 December 2007 2006 Â£'000 Â£'000 REVENUE The revenue was derived from the Group's principal activities in the UK as follows: Emergency Repair 56,197 34,515 Document Handling 11,956 7,938 --------- ---------- 68,153 42,453 ========= ========== RESULTS The profit after tax was derived from the Group's principal activities in the UK as follows: Emergency Repair 7,152 4,832 Document Handling 3,886 2,459 Central costs (1,439) (969) Share based payments charge (1,892) (1,039) Amortisation of intangible assets (288) (96) --------- ---------- Operating profit 7,419 5,187 Net finance cost (2,372) (1,436) --------- ---------- Profit before tax 5,047 3,751 Income tax expense (2,463) (1,195) --------- ---------- Profit after tax 2,584 2,556 ========= ========== 2007 2006 Â£'000 Â£'000 Segmental assets: Emergency Repair 71,433 59,326 Document Handling 36,533 25,620 Central 252 241 --------- ---------- Total 108,218 85,187 Segmental liabilities: Emergency Repair (14,297) (13,422) Document Handling (5,004) (5,071) Central (38,304) (22,457) --------- ---------- Total (57,605) (40,950) Segmental net assets: Emergency Repair 57,136 45,904 Document Handling 31,529 20,549 Central (38,052) (22,216) --------- ---------- Total 50,613 44,237 ========= ========== Property, plant and equipment additions 2,287 1,059 Amortisation of intangible assets 288 96 Depreciation of property, plant and equipment 843 833 ========= ========== 2 TAXATION Year ended Year ended 31 December 31 December 2007 2006 Â£'000 Â£'000 Current tax: UK corporation tax on profits for the year 2,245 1,571 Adjustments in respect of previous periods (187) (11) ---------- --------- Total current tax 2,058 1,560 ---------- --------- Deferred tax: Current year 405 (365) ---------- --------- Total deferred tax 405 (365) ---------- --------- Total tax charge 2,463 1,195 ========== ========= The charge for the year can be reconciled to the profit per the Consolidated Income Statement as follows: Year ended Year ended 31 December 31 December 2007 2006 Â£'000 Â£'000 Profit on ordinary activities before tax 5,047 1,589 ---------- --------- Profit on ordinary activities multiplied by the rate of corporation tax of 30% 1,514 1,125 Effects of: Expenses not deductible for tax purposes 95 70 Tax relief not recognised on share based payments charge 574 - Tax losses not utilised 19 2 Effect of different tax rate used for deferred tax (23) - Adjustments in respect of current income tax of previous years (187) 1 Adjustments in respect of deferred income tax of previous years 471 (3) ---------- --------- Total tax charge as reported in the Consolidated Income Statement 2,463 1,195 ========== ========= The effective tax rate is 49% due to the distortion caused by the non deductibility of the amortisation of intangible assets, the notional interest on the contingent consideration and the share based payments charge. After adjusting for these the effective rate becomes 30% (2006: 30%). 3 EARNINGS PER ORDINARY SHARE Basic earnings per share have been calculated on the profit after taxation for the year and the weighted average number of ordinary shares in issue during the year. Adjusted earnings per share which are before amortisation of intangible assets, share based payments charge and notional interest on contingent consideration have been presented in addition to the basic earnings per share since, in the opinion of the directors, this provides shareholders with a more appropriate representation of the underlying earnings derived from the Group's businesses. Year ended Year ended 31 December 31 December 2007 2006 No. of shares No. of shares Weighted average number of shares in issue 457,684,786 388,920,578 ========= ========= Â£'000 Â£'000 Profit after taxation on ordinary activities 2,584 2,556 Adjustments Share based payments charge 1,892 1,039 Tax effect 312 (312) Amortisation of intangible assets 288 96 Tax effect (36) (26) Notional interest on contingent consideration 62 158 --------- --------- Adjusted earnings 5,102 3,511 ========= ========= Basic earnings per ordinary share 0.56p 0.66p ========= ========= Adjusted basic earnings per ordinary share (before goodwill amortisation, share based payments charge and notional interest on contingent consideration) 1.11p 0.90p ========= ========= No. of shares No. of shares Weighted average number of shares in issue 457,684,786 388,920,578 Convertible 'A' Shares, Share Options and awards under the LTIP 76,521,253 44,082,349 --------- --------- Weighted average fully diluted number of shares in issue 534,206,039 433,002,927 ========= ========= Fully diluted earnings per ordinary share 0.48p 0.59 p ========= ========= Adjusted fully diluted earnings per ordinary share (before goodwill amortisation, share based payments charge and notional interest on contingent consideration) 0.96p 0.81 p ========= ========= The diluted earnings per share are the basic earnings per share adjusted for the dilutive effect of the conversion into fully paid shares of the outstanding share options and awards under the LTIP. They are also adjusted for the conversion of the A shares into ordinary shares at a price of 18.4p, being the average price per ordinary share in the year ended 31 December 2007 (2006: 13.93p). 4 ACQUISITIONS On 2 February 2007, 100% of the share capital of External Services Group Limited (ESG), a drainage sub contractor to ANSA, was acquired for cash of Â£206,000. Book value at Fair value Fair value at acquisition adjustment acquisition External Services Group Limited (ESG) Â£'000 Â£'000 Â£'000 Inventories 14 - 14 Debtors 214 - 214 Creditors (166) - (166) Taxation (12) - (12) Finance leases (27) - (27) --------- ---------- ---------- Net assets acquired 23 - 23 ========= ========== Goodwill capitalised 183 ---------- Consideration 206 ========== Satisfied by: Cash to vendors 206 ========== The goodwill of Â£0.2 million represents the value attributable to new business and the assembled and trained workforce. On 26 March 2007, the Company acquired 100% of the share capital of Stapledon Holdings Limited, the parent company of Document Control Services Limited (DCS) for an initial sum of Â£1.3 million which was satisfied by cash of Â£0.3million and the issue of 5,405,405 ordinary shares in Mavinwood plc at an issue price of 18.5p at mid market value. Contingent consideration of up to Â£2 million is also payable in cash linked to the growth in EBITA for the year ending 30 June 2008. The full Â£2 million is payable assuming EBITA reaches Â£1.23 million. Book value at Fair value Fair value at acquisition adjustment acquisition Stapledon Holdings Limited Â£'000 Â£'000 Â£'000 Intangible assets - 2,901 2,901 Property, plant and equipment 104 - 104 Debtors 916 - 916 Creditors (342) - (342) Taxation (147) (812) (959) Cash 6 - 6 Finance leases (56) - (56) --------- ---------- ---------- Net assets acquired 481 2,089 2,570 ========= ========== Goodwill capitalised 5,588 ---------- Consideration 8,158 ========== Satisfied by: Cash to vendors 291 Loans repaid 4,794 Share issues 1,000 Discounted contingent consideration 1,777 Related costs of acquisition 296 ---------- 8,158 ========== The goodwill of Â£5.6 million represents the value attributable to new business and the assembled and trained workforce. The intangible asset fair value adjustment has been made to recognise the value attributable to existing customer relationships, the trade name, technology and software. Deferred tax at 28% has been provided on the value of the intangible assets. On 28 September 2007, the Company acquired 100% of the share capital of Peter Cox Limited for an initial consideration of Â£6.4 million. Book value at Fair value Fair value at acquisition adjustment acquisition Peter Cox Limited Â£'000 Â£'000 Â£'000 Intangible assets - 1,079 1,079 Property, plant and equipment 224 - 224 Inventories 68 68 Debtors 3,007 - 3,007 Creditors (1,560) - (1,560) Deferred taxation 559 (302) 257 Cash 745 - 745 Long term liabilities (656) - (656) --------- ---------- ---------- Net assets acquired 2,387 777 3,164 ========= ========== Goodwill capitalised 5,232 ---------- Consideration 8,396 ========== Satisfied by: Cash to vendors 6,350 Deferred consideration 400 Contingent consideration 1,050 Related costs of acquisition 596 ---------- 8,396 ========== The deferred consideration of Â£0.4 million and contingent consideration of Â£1.0 million were paid on 3 January 2008 and 21 February 2008 respectively. The goodwill of Â£5.2m represents the value attributable to the assembled and trained workforce. The intangible asset fair value adjustment has been made to recognise the value attributable to existing customer relationships and the trade name. Deferred tax at 28% has been provided on the value of the intangible assets. Post acquisition profits ESG DCS Peter Cox Â£'000 Â£'000 Â£'000 ====== ====== ====== Profit before tax since acquisition included in the Consolidated Income Statement 185 1,073 299 ====== ====== ====== If the acquisitions had been completed on the first day of the financial year, Group revenues for the year would have been Â£81,477,000 and Group profit before tax would have been Â£5,257,000. The total consideration paid for Group acquisitions during the year was Â£16.8 million, which was satisfied as follows: ESG DCS Peter Cox Total Â£'000 Â£'000 Â£'000 Â£'000 Cash to vendors 206 291 6,350 6,847 Loans repaid - 4,794 - 4,794 Related costs of acquisition - 296 596 892 Contingent consideration not yet due - 1,777 1,450 3,227 Issue of shares to vendors - 1,000 - 1,000 ------ ------- ------ ------ 206 8,158 8,396 16,760 ====== ======= ====== ====== 5 ANALYSIS OF NET DEBT The movement in net debt is analysed as follows 2007 2006 Â£'000 Â£'000 At 1 January (17,649) (4,335) Net cash generated from operating activities 1,430 2,760 Net cash flows used in investing activities (9,676) (25,833) Repayment of indebtedness acquired (4,794) (881) Net proceeds from issue of shares - 11,346 Finance leases acquired (83) (621) Payment of deferred financing costs (192) (268) Other 47 183 -------- -------- At 31 December (30,917) (17,649) ======== ======== Analysis of net debt Cash at bank and in hand 1,108 1,850 Bank loans due within one year (4,337) (3,600) Bank loans due after one year (28,000) (16,100) Finance leases due within one year (45) (109) Deferred financing costs 357 310 -------- -------- (30,917) (17,649) ======== ======== END This information is provided by RNS The company news service from the London Stock Exchange

Companies

Restore (RST)

Monday, 6th January 2025

COMPANIES COVERED:

FXPO AXL S247

Smarttech 247 jumps on full year results update and Ukrainian based Ferrexpo tops the FTSE-250, whilst Arrow Exploration puts in a shaky start despite upbeat drilling results from Colombia.

Full Archive

UK 100

Latest directors dealings

10 hours ago Tirupati Graphite
11 hours ago CMC Markets
11 hours ago Invesco Perpetual UK Smaller Companies Inv Trust
12 hours ago Pearson
12 hours ago Gran Tierra Energy Inc. (CDI)

All directors dealings today