Final Results
ATA Group PLC
4 April 2002
ATA GROUP PLC
4 APRIL 2002
ATA Group plc ('ATA')
Preliminary results for the year ended 31 December 2001
ATA Group Plc ('ATA') is a human resource support services group, which provides
employment solutions and training services to client companies situated mainly
in the United Kingdom.
HIGHLIGHTS
- Turnover £13.09m (2000: £8.31m)
- Pre-tax profit £1.07m (2000: £0.85m)
- Earnings per share 9.61 pence (2000: 9.02 pence)
- Maintained final dividend of 3.80 pence making a total of 5.80 pence (2000:
5.80 pence) for the year
- Strong performance from the training division
- Appointment of K E K T Chapman as Non Executive Director
Commenting on the results Bill Douie, Chairman, said:
'The progress made in integrating and reorganising Catalis Rail Training Limited
has been particularly pleasing and has facilitated a satisfactory gain in
profits in this difficult year.'
3 April 2002
ENQUIRIES:
ATA Group Plc Tel: (0117) 924 1600
Bill Douie, Chairman
Clive Chapman, Chief Executive
Peter McWeeney, Finance Director
CHAIRMAN'S STATEMENT
HIGHLIGHTS
- Group pre-tax profits at £1,071,000 have increased by 26.5% compared with
2000.
- Undiluted earnings per share have risen to 9.61 pence, an increase of 6.5%.
- Dividends for the year have been maintained at 5.80 pence.
- Cash generation has remained satisfactory.
- The Catalis Group, acquired in early November 2000, has been extensively
reorganised and the training division has made a gratifying contribution of
£415,000 to profits before tax.
- 2001 has, as expected, proved to be a singularly testing year for our
recruitment companies and profits before tax generated by the recruitment
division fell to £656,000 (2000: £959,000). Tightening economic conditions
have provided a restructuring opportunity to produce significant overall
cost savings for the future.
FINANCIAL
The period under review includes for the first time a full year of trading for
the Catalis Group of companies, acquired in November 2000, and there are
consequently no useful comparative figures available. We are immensely pleased
with the speed with which Catalis Rail Training Limited has been restructured,
with the significant improvements in profitability achieved and with the
continuing progress at Rail Training Audit Services Limited. Turnover of these
two companies, together with Sloan Shrago Limited, Fairbourne Adventure Limited
and The Fairbourne Hotel Limited, has reached £6,735,000, and a maiden
contribution to profits before tax of £415,000 has been made.
The earn-out formula attendant upon the acquisition of the Catalis Group of
companies was concluded by mutual agreement with the vendors resulting in a
repayment to ATA Group Plc of £30,000.
In recruitment, profitability in this very difficult year has remained
satisfactory with turnover holding up well at £6,351,000 (2000: £6,683,000),
although profits declined to £656,000 (2000: £959,000).
Accordingly, Group pre-tax profits at £1,071,000 (2000: £847,000) have risen by
26.5%, and undiluted earnings per share at 9.61 pence (2000: 9.02 pence) have
risen by 6.5%.
Continuing progress has been made in reducing Group indebtedness, and at the
year end the cash / debt position had returned to a net positive figure of
£97,000 (2000: (£317,000) net debt). Details may be found in note 22 of the
Annual Report.
TRADING
Recruitment
The year started well but conditions deteriorated steadily during the period
with a significant acceleration in the last quarter. Exceptionally, our
recently established rail recruitment company is experiencing strong demand and
has performed creditably since its launch last June. In response to the tighter
situation, a full review of the recruitment businesses took place in the final
months of the year, and a restructuring of the separate recruitment based
companies, with the exception of rail recruitment, into ATA Selection Limited
took place on 1 January 2002. Although there have been some costs of
reorganisation taken in the year under review, these have been modest and the
benefits of major cost reductions will be enjoyed in the current year.
Training
2001 was the first full year of trading for the Catalis Group of companies since
their acquisition by ATA in November 2000. As foreshadowed in my Interim
Report, reorganisation of this division is complete and costs have been
materially reduced. Demand has shown gratifying increases, particularly in
signal engineer training and conferencing, and profitability has outstripped our
most optimistic expectations for this year. Increases in demand coupled with
tight cost control have resulted in a near doubling of profitability at Rail
Training Audit Services Limited.
Economic conditions, exacerbated by the foot and mouth epidemic, adversely
affected Sloan Shrago Limited, Fairbourne Adventure Limited and The Fairbourne
Hotel Limited. The Fairbourne Hotel nevertheless posted a satisfactory profit.
The Sloan Shrago occupational psychology business has relocated to our Derby
premises and is now making progress in gaining railway business.
Dividends
Your Directors are recommending a maintained final dividend for the year of 3.8
pence payable on 29 July 2002 to shareholders on the register on 12 April 2002,
making 5.8 pence in total, covered 1.66 times by earnings. In spite of the
general view that economic conditions are improving, caution and cash
conservation remain high priorities and accordingly shareholders are being
offered the opportunity to take their final dividend in the form of a scrip
issue of shares. Full details of this option will be presented together with
the Annual Report.
Outlook
The adverse conditions pertaining during the last part of 2001 have continued
into 2002 and consequently the recruitment division is still finding trading
difficult. Following cost reductions achieved during the last quarter of 2001
the effects of the downturn have been substantially mitigated but it is likely
that recruitment will make a much reduced contribution to Group profits in the
first half of 2002. Beyond that the pace of recovery depends on improving World
economic conditions
Rail recruitment continues to prosper, where demand remains buoyant.
The training division is continuing to expand and a good performance is
expected, with particularly good gains in Railway and Conferencing.
Staff
I should like to extend my thanks to all staff and management for their
commitment during an important and testing year in the development of our Group.
W.J.C.Douie, Chairman
3 April 2002
CHIEF EXECUTIVE'S REVIEW
GROUP CONCEPT
The strategic concept of the Group is to provide the client organisation with a
range of integrated human resource services based on a consultancy, added value,
approach. This concept has been achieved through the provision of an holistic
range of services to the client organisation in recruitment, training and
consultancy.
The range of services, derived from organic start-ups and acquisitions, creates
a unique blend of high priority deliverables for our clients and a balanced set
of earnings streams for the Group. This simple tactic has provided a resilient
return in troubled markets and an excellent platform for growth in an up-cycle.
SUMMARY OF 2001 TRADING
TURNOVER PROFIT BEFORE TAX
2001 2000 2001 2000 2001 2000 2001 2000
£'000 £'000 % % £'000 £'000 % %
Recruitment 6,351 6,683 48.53 80.38 656 959 61.25 113.22
Training &
Consultancy 6,735 1,631 51.47 19.62 415 (112) 38.75 (13.22)
------ ------ ------- ------- ------ ------- ------- --------
GROUP TOTAL 13,086 8,314 100.00 100.00 1,071 847 100.00 100.00
------ ------ ------- ------- ------ ------- ------- --------
RECRUITMENT
These services form the historical base of the Group and focus specifically on
the provision of permanent employees in the core recruitment markets of sales
staff and technical engineering staff. In addition to these services the Group
provides permanent and contract staff to the Rail Industry utilising the
significant resource of a large database of candidates in the historical
mainstream engineering fields.
During the second half of 2001 the historical recruitment services were
consolidated together for management purposes as ATA Selection, with ATA Rail as
a trading division. From 2002 they were restructured into two legal trading
entities, ATA Selection Limited and ATA Rail Limited. Maximising profitability
from the shared resources of these recruitment business activities was a key
focus for the Group in 2001 whilst general demand levels deteriorated.
The outcome is a leaner management structure and subsequent cost base,
consistent with the current demand profile from client organisations, whilst
retaining the structural capacity to capitalise on resurgent markets.
TRAINING AND CONSULTANCY
The expansion of the services in this area of the Group has been based entirely
on acquisitions, commencing in 1998 and latterly with the Catalis Group of
companies in 2000. Activities include a significant presence in rail related
training in technical disciplines, commercial needs and specialist audit
services, with outdoor experiential learning and business human resource
consultancy across a broader industry remit.
This acquisitive strategy has achieved a balanced delivery of revenue and
earnings for the Group, whilst cementing the concept of holistic outcomes for
client organisations. The provision of a full range of recruitment, training and
consultancy services to key clients has bolstered the attractive nature of our
concept delivery without detracting from the individual member company value of
stand-alone delivery. This is a robust business model that stood up very well to
recent challenges and bodes well for future growth.
INFORMATION TECHNOLOGY
The Group remains fully committed to the benefits to be derived from an
effective IT strategy consistent with the business goals of the Group. There is
still much to be gained from harnessing the information assets that exist in the
shared resources of the individual member companies.
Whilst the opportunities and threats of the Internet revolution did not emerge
in 2001, the Group has achieved a great deal of learning based on a prudent
level of investment. This investment has provided clarity in respect of the
real opportunities, and further investment will reap those rewards.
SHARE OPTIONS
The Government scheme for EMI was adopted in 2001 in addition to the existing
approved and unapproved schemes established in 1998. The Board continues to
support the ownership of shares by the staff and has granted further options
within the EMI scheme in 2001.
The key staff will continue to be the focus of such incentives.
PROSPECTS
The successful amalgamation of the rail training and audit service companies
into the Group offering has resulted in an excellent platform with balance and
breadth in terms of the mix and diversity of revenue streams. Further
development is now possible based on the synergies that exist enhancing
productivity ratios, exploiting efficiency gains and reducing costs. New service
offerings and improved customer service will facilitate the organic growth
prospects of current business activities.
The Group is well placed in its chosen fields of recruitment and training to
execute further acquisitions and derive full benefit from an improvement in
general market confidence and demand for Group services.
Clive Chapman, Chief Executive
3 April 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2001
2001 2000
£'000 £'000 £'000 £'000
TURNOVER 13,086 8,314
Cost of Sales (6,759) (4,799)
----- ------- ----- -------
GROSS PROFIT 6,327 3,515
Administrative expenses (5,234) (2,678)
OPERATING PROFIT 1,093 837
Interest receivable and similar income 49 65
Interest payable and similar charges (71) (55)
----- ------- ----- -------
(22) 10
----- ------- ----- -------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,071 847
Tax on profit on ordinary activities (294) (241)
----- ------- ----- -------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 777 606
Dividends (469) (437)
----- ------- ----- -------
RETAINED PROFIT FOR THE FINANCIAL YEAR 308 169
----- ------- ----- -------
EARNINGS PER SHARE 9.61p 9.02p
FULLY DILUTED EARNINGS PER SHARE 9.58p 9.00p
There were no recognised gains or losses other than those reported in the Profit
and Loss Account.
All amounts relate to continuing operations.
CONSOLIDATED CASH FLOW STATEMENT
at the year ended 31 December 2001
2001 2000
£'000 £'000 £'000 £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,709 1,296
RETURN ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 49 65
Interest paid (71) (189)
------ ------ ------- ------
NET CASH OUTFLOW FROM RETURN ON INVESTMENTS AND SERVICING
OF FINANCE (22) (124)
TAXATION
UK corporation tax paid (452) (165)
CAPITAL EXPENDITURE
Sale of tangible fixed assets 78 59
Purchase of tangible fixed assets (409) (458)
------ ------ ------- ------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (331) (399)
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertaking 4 (1,514)
Net cash acquired with subsidiary - 566
------ ------ ------- ------
NET CASH INFLOW/(OUTFLOW) FROM ACQUISITIONS AND DISPOSALS 4 (948)
EQUITY DIVIDENDS PAID (469) (376)
------ ------ ------- ------
NET CASH INFLOW/(OUTFLOW) BEFORE USE OF FINANCING 439 (716)
Net proceeds from issue of share capital - 1,315
Decrease in loans (372) (558)
Capital element of finance lease payments (25) (17)
------ ------ ------- ------
NET CASH (OUTFLOW)/INFLOW FROM FINANCING (397) 740
INCREASE IN CASH 42 24
------ ------ ------- ------
CONSOLIDATED BALANCE SHEET
at 31 December 2001
2001 2000
£'000 £'000 £'000 £'000
FIXED ASSETS
Intangible assets 1,224 1,120
Tangible assets 2,261 2,478
------- ------ ------- -------
3,485 3,598
CURRENT ASSETS
Stock 30 14
DEBTORS
Amounts falling due after one year 860 1,036
Amounts falling due within one year 2,289 2,210
Cash at bank and in hand 1,177 1,185
------- ------ ------- -------
4,356 4,445
CREDITORS
Amounts falling due within one year (4,132) (4,190)
------- ------ ------- -------
NET CURRENT ASSETS 224 255
------- ------ ------- -------
Total assets less current liabilities 3,709 3,853
CREDITORS
Amounts falling due after more than one year (666) (1,033)
PROVISION FOR LIABILITIES AND CHARGES (206) (291)
------- ------ ------- -------
NET ASSETS 2,837 2,529
------- ------ ------- -------
CAPITAL AND RESERVES
Called up share capital 81 81
Share premium account 1,732 1,732
Capital redemption reserve 50 50
Profit and loss account 974 666
------- ------ ------- -------
EQUITY SHAREHOLDERS' FUNDS 2,837 2,529
------- ------ ------- -------
Approved by the board of directors on 3 April 2002
WJC Douie Chairman
P McWeeney Financial Director
NOTES
1. Dividends
An interim dividend of 2.0 pence per share (2000: 2.0 pence) was paid on 5
October 2001. A final dividend is proposed of 3.8 pence per share (2000: 3.8
pence) payable on 29 July 2002 to shareholders on the register on 12 April 2002.
2. Earnings per Share
The calculations of earnings per share and of the fully diluted earnings per
share are based on a profit after taxation of £777,000 (2000: £606,000) and a
weighted average of 8,082,400 (2000: 6,718,466) shares in issue. The 171,504
options remaining out of the 241,069 options granted on 3 May 2000 and the
95,000 options granted on 27 September 2001 under the Approved Schemes are
considered to be dilutive. These options increase the weighted average number
of shares by 26,278 (2000: 19,286).
3. Report & Accounts
The above results do not represent the statutory accounts. The statutory
accounts for 2000 have been filed with the Registrar of Companies, received an
unqualified audit report and did not contain a statement under Section 237 (2)
or (3) of the Companies Act 1985. The audited accounts for 2001 will be mailed
to shareholders shortly and will be available from the Company's registered
office: 20 Portland Square, Bristol, BS2 8SJ.
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