Interim Results

ATA Group PLC 09 September 2002 ATA GROUP PLC 9 SEPTEMBER 2002 - EMBARGOED FOR 7AM INTERIM RESULTS FOR THE SIX MONTH PERIOD TO 30 JUNE 2002 Highlights • Turnover £6.2m (2001: £6.6m) a decrease of 5 per cent. • Profit before tax including exceptional item £0.64m (2001: £0.42m) • Profit before tax and before exceptional item £0.38m (2001: £0.42m) a decrease of 8.6 per cent. • Earnings per share excluding exceptional item 3.28p (2001: 3.46p) a decrease of 5 per cent. • Additional exceptional earnings 2.21p (2001: zero) • Dividend per share 2.0p (2001: 2.0p) • Benefits from training division re-organisation achieved • Successful re-organisation of the recruitment division implemented Bill Douie, Chairman commented: 'As expected recessionary trends have caused tougher conditions to pertain in ATA Selection, the Sales and Engineering recruitment business. These have been countered by streamlining the operations resulting in significant cost savings and by the rapid and pleasing progress enjoyed in Rail Recruitment. Further development in Railway Training has consolidated and enhanced profitability and opportunities for business expansion have been identified. The period to 30 June 2002 represents a solid performance in difficult times and the outlook is for continuing growth in Training and Rail Recruitment with recovery to come at ATA Selection.' Enquiries: Bill Douie, Chairman Clive Chapman, Chief Executive ATA Group Plc Head Office, Telephone 01454 310069 CHAIRMAN'S STATEMENT I am pleased to present the interim report of the Company for the six months to 30 June 2002. Progress Against the backdrop of a continuing uncertain economic environment I am pleased to report that the group has continued to perform creditably and has dealt with difficult conditions in a satisfactory manner. We are now well entrenched in the Railway Industry and further gains are being achieved at Catalis Rail Training and Rail Training Audit Services. The second phase of re-organisation following the acquisition of the Catalis group of companies is now complete and ATA Rail Recruitment and Sloan Shrago are now located in our Derby premises. Management strengths in the training division have further improved and the outdoor training companies, Fairbourne Adventure and The Fairbourne Hotel, are now the responsibility of the Senior Management Team at Derby. Shareholders will note that since the period end Head Office has moved to new premises in Yate. Trading General Economic conditions and deterioration in business confidence have created tough trading conditions, particularly in non-rail recruitment. Recruitment Following a severe deterioration in markets towards the end of 2001 we consolidated all non-rail recruitment activities into one company with streamlined and efficient management. This consolidation has resulted in a much-improved cost structure. Following modest short-term net reductions, consultant numbers have stabilised and are now on a gently rising trend with productivity measures improving and trading is generally satisfactory. From a standing start in July 2001, Rail Recruitment has made satisfactory progress and is now trading on a significantly profitable basis in permanent recruitment. Contract recruitment has now commenced and is showing promising early signs. Training Trading has been up to expectations taking the period as a whole. June was disappointing eroding some of the good gains made in the first quarter. Since the period end, satisfactory results have resumed. Following their move into our Derby premises there has been a pleasing upturn in business generation at Sloan Shrago. This upturn has been based on tapping into demand from traditional customers of Catalis Rail Training. The Company has moved into material profitability in recent months, a position which has been maintained following the period end, and has been assisted by cost reductions resulting from the move and management re-organisation. The rapid development of our Rail Recruitment activities would not have been possible without the cross fertilisation with Rail Training. The move of Rail Recruitment into our Derby premises in the second half is expected to further enhance this development. Steady development at Rail Training Audit Services continues with trading at above budgeted levels. Additional opportunities for future business have been identified and will be processed in the second half. Trading results Exceptional item During the period final agreement has been reached with the Rating Valuation Office concerning the rateable value of our Derby premises. Accordingly results for the first half have been amplified by £260,000 before taxation and earnings per share by 2.21p. This item has been shown as a separate line in the statement. A full review of accruals and provisions will be made in the second half which may result in further non recurring releases. Accordingly, after taking account of the exceptional item described above, profit before taxation for the period increased to £644,000. Earnings after corporation tax of £200,000 (2001: £140,000) are £444,000 (2001: £280,000) resulting in earnings per share of 5.49p (2001: 3.46p) on share capital of 8,082,400 shares. Pretax operating profits on trading before the exceptional item and taxation have fallen slightly to £384,000 (2001: £420,000) on turnover of £6,244,000 (2001: £6,559,000), resulting in earnings per share of 3.28p (2001: 3.46p) after corporation tax of £119,000 (2001: £140,000). Your directors are content with profitability achieved in the first half. Dividends Whilst this remains a time for prudence your Directors have concluded that cash generation within the businesses is likely to remain at satisfactory levels and therefore your Board has decided to declare an unchanged interim dividend of 2.0p, payable on 16 December 2002 to shareholders on the register on 29 November 2002. Share Capital Consequent upon the issue of 40,412 shares in connection with the selection of shares in lieu of cash by certain shareholders for the final dividend in respect of the year to 31 December 2001, issued share capital has risen to 8,122,812 shares. (2001: 8,082,400). The issue took place after the period end and therefore earnings calculations are based on the lower figure. The interim dividend of 2.0p is payable on the capital as increased. Outlook For The Remainder Of 2002 Whereas there must be remaining concerns over the range of possible economic trends for the rest of 2002 and some of our activities cannot but be affected by any second dip into recession, current activity levels have stabilised and are now on a gradually improving trend in non-rail recruitment areas. Progress in Rail Recruitment is expected to be maintained in the second half. Activity levels within the training division continue to perform strongly. Your Directors remain pleased with the timely move into training and recruitment in industries which are less directly affected by the changing economic climate than those traditionally served by the Sales and Engineering permanent recruitment businesses where significant recovery in markets is yet to emerge. The extension of our recruitment activities into the Railway Industry has proved to be particularly rewarding. ATA Group is in a particularly strong position to deal with any extension of the recessionary trading climate and is well placed to take advantage of re-established favourable economic conditions. W.J.C.Douie, Chairman. CONSOLIDATED PROFIT AND LOSS ACCOUNT Note 6 Months to 6 Months to 12 Months to 30 June 2002 30 June 2001 31 December 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 TURNOVER 2 6,244 6,559 13,086 --------- --------- ----------- OPERATING PROFIT 416 430 1,093 Net interest receivable / (payable) (32) (10) (22) --------- --------- ----------- PROFIT ON ORDINARY ACTIVITIES BEFORE EXCEPTIONAL ITEM AND TAXATION 384 420 1,071 Exceptional Item 3 260 - - --------- --------- ----------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 644 420 1,071 Taxation 4 (200) (140) (294) --------- --------- ----------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 444 280 777 Dividends 5 (162) (162) (469) --------- --------- ----------- RETAINED PROFIT 282 118 308 ========= ========= =========== EARNINGS PER SHARE (pence) - after exceptional item 6 5.49 3.46 9.61 EARNINGS PER SHARE (pence) - before exceptional item 3.28 3.46 9.61 ========= ========= =========== GROUP BALANCE SHEET 30 June 2002 30 June 2001 31 December 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 FIXED ASSETS Intangible assets 1,185 1,100 1,224 Tangible assets 2,154 2,412 2,261 --------- --------- ----------- 3,339 3,512 3,485 --------- --------- ----------- CURRENT ASSETS Stock 26 14 30 Debtors falling due after more than one year 860 1,036 860 Debtors falling due within one year 2,996 2,432 2,289 Cash at bank and in hand 654 687 1,177 --------- --------- ----------- 4,536 4,169 4,356 CREDITORS: Due within one year (3,987) (3,882) (4,132) --------- --------- ----------- NET CURRENT ASSETS 549 287 224 --------- --------- ----------- TOTAL ASSETS LESS CURRENT LIABILITIES 3,888 3,799 3,709 CREDITORS: Due after more than one year (538) (874) (666) Provisions for liabilities and charges (231) (278) (206) --------- --------- ----------- NET ASSETS 3,119 2,647 2,837 --------- --------- ----------- CAPITAL AND RESERVES Called up share capital 81 81 81 Share premium account 1,732 1,732 1,732 Capital redemption reserve 50 50 50 Profit and loss account 1,256 784 974 --------- --------- ----------- SHAREHOLDERS' FUNDS 3,119 2,647 2,837 ========= ========= =========== CONSOLIDATED CASH FLOW Note 6 Months to 6 Months to 12 Months to 30 June 2002 30 June 2001 31 December 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 CASH (OUTFLOW) / INFLOW FROM OPERATING ACTIVITIES (203) 376 1,709 Returns on investments and servicing of finance (32) (10) (22) Taxation - (30) (452) Capital expenditure (97) (240) (331) Acquisitions - - 4 Equity dividends paid - (307) (469) ---------- --------- ----------- Net cash (outflow) inflow before use of liquid resources and financing (332) (211) 439 Net proceeds from issue of share capital - - - (Decrease) / increase in medium term loans (188) (188) (372) Capital element of finance lease rental payments (3) (16) (25) ---------- --------- ----------- INCREASE (DECREASE) IN CASH BALANCES (523) (415) 42 ========== ========= =========== NOTES TO THE INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2002 1. ACCOUNTING POLICIES The accounting policies used in the preparation of the interim accounts are consistent with those used in the preparation of the audited annual accounts for the year ended 31 December 2001. The Group financial information consolidates the accounts of ATA Group Plc and all its material subsidiary undertakings using the acquisition method. The comparative figures for the year ended 31 December 2001 do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1995, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies, and on which our auditors gave an unqualified report. 2. SEGMENTAL ANALYSIS 30 June 30 June 31 December 2001 2002 2001 (unaudited) (unaudited) (audited) £'000 £'000 £'000 TURNOVER Recruitment 2,416 3,367 6,351 Training and consultancy 3,828 3,192 6,735 --------- --------- ------------ 6,244 6,559 13,086 --------- --------- ------------ OPERATING PROFIT Recruitment 21 303 656 Training and consultancy 395 127 437 --------- --------- ------------ 416 430 1,093 ========= ========= ============ Operating profit is stated after amortisation of goodwill of £39,000 in the period (£36,000: 2001). 3. EXCEPTIONAL ITEM Following agreement with the Rating Valuation Office, the interim accounts include the release of an overprovision for rates in the sum of £260,000 previously provided. 4. TAXATION ON PROFIT ON ORDINARY ACTIVITIES The taxation charge for the period to 30 June 2002 has been provided at the estimated rate applicable to the group for the period. 5. DIVIDENDS An interim dividend of 2.0p per ordinary share net will be paid on 16 December 2002 to shareholders on the register of members at 29 November 2002. 6. EARNINGS PER SHARE The earnings per share have been calculated on the profit on ordinary activities after taxation, both before and after exceptional item, and on the number of shares in issue (8,082,400) during the period. The fully diluted earnings per share are not materially different from the basic earnings per share and have not been disclosed. No account has been taken of the shares issued in lieu of the 2001 final dividend on 29 July 2002 (40,412 shares). ATA GROUP PLC Registered Office Kingston House, Oaklands Business Park, Armstrong Way, Yate, South Gloucestershire BS37 5NA Approved and authorised for release for and on behalf of ATA Group Plc This information is provided by RNS The company news service from the London Stock Exchange

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