Interim Results
Asfare Group plc
16 December 2004
Press Release 16 December 2004
Interim Results for the six months ended 30 September 2004
Asfare Group plc, the UK's leading manufacturer of ladders for the rescue
services, reports its Interim Results for the six months ended 30 September
2004.
• Turnover 7.5% lower at £1.98 million (1H 2003: £2.14m)
• Profit in line with management expectations
• Net indebtedness down by £215,000 to £822,000
• Increase in the level of order intake and revenue expected in the final
quarter of the current financial year
• Maiden interim dividend of 1.0p per share
• Expected final dividend of 3.0p per share (subject to no unforeseen
circumstances)
• Full year trading anticipated to be in line with broker's expectations
Commenting on the interim results for the six months to 30 September, 2004,
David Chisnall, Chief Executive, said: 'The first half of this year's trading
has been disrupted by the publication of the Government's draft proposals on a
National Procurement Strategy for the Fire and Rescue Service in England.
However we are in discussions with a number of key customers and as a result
anticipate an increase in the level of order intake in the final quarter and
this will ensure that trading for the year will be in line with expectations.'
For further information, please contact:
Enquiries:
Asfare Group plc
David Chisnall, Chief Executive Tel: +44 (0) 2380 861 966
Adrian Jones, Finance Director
Seymour Pierce
Mark Percy Tel: +44 (0) 20 7107 8000
Media enquiries:
Abchurch Communications
Ariane Comstive/Julian Bosdet Tel: +44 (0) 20 7398 7700
ariane.comstive@abchurch-group.com
- Ends -
Chairman's Interim Statement
Asfare Group plc ('the Company'), the UK's leading supplier of ladders and
related equipment to the UK Fire Industry, today announces its interim results
for the six months to 30 September 2004.
Trading Results for the Period
Revenue for the six months ended 30 September 2004 decreased by 7.5% year on
year to £1,982,000, when compared to the comparative unaudited figures for A S
Fire and Rescue Equipment Limited. This first half revenue performance was in
line with our expectations, as we had anticipated a slow down in revenue
resulting from a Government moratorium on capital expenditure within the UK fire
brigades. Pre-tax profit (excluding goodwill amortisation) for the six months to
30 September 2004 was £188,000 compared to £437,000 for the six months ended 30
September 2003 for A S Fire and Rescue Equipment Limited. The Company has
incurred additional ongoing costs amounting to £118,000, which were not incurred
in the previous year, as a result of the AIM presence and in respect of
additional staff recruited to help build the Company in the future. If these
costs were added back, operating profit before goodwill would have amounted to
£306,000.
Borrowings
During the first six months of this financial year the Company's net
indebtedness has fallen by £215,000 and at the 30 September 2004 stood at
£822,000.
National Procurement Strategy for the Fire and Rescue Service in England
During September the Office of the Deputy Prime Minister ('ODPM') issued a draft
strategy document outlining its future plans for procurement within England's
fire brigades. The main thrust of the proposal is to significantly reduce the
overhead cost of procurement within the fire brigades, by the formation of a
centralised body 'FiReBuy.' FiReBuy will be responsible for the national
specification, testing and procurement of key operational equipment including
ladders, shutters and gantries.
We have been actively involved in the development of the final strategy, being
one of only a handful of companies that has hosted a visit from the ODPM. Allied
to this, the major suppliers to the fire brigades are forming a trade body - '
FIRESA' to represent their interests and our Chief Executive, David Chisnall,
has been elected Chairman of the steering committee.
In our official response to the draft strategy we were broadly in agreement with
the proposed changes. In particular we welcomed two major initiatives which will
generate greater clarity and efficiency for all suppliers:
1. A single national specification for key operational equipment.
Currently we produce a significant number of permutations for each of
our products in order to service the needs of each individual fire
brigade. In future there will be a single specification with a limited
number of additional options that each brigade can choose from; and
2. All new products will be tested and assessed by a single body rather
than each individual brigade. This will enable us to reduce the number
of demonstration ladders that we have to produce for testing and
should also reduce the lead time in these new products reaching the
market place. It will also enable us to work far more closely with the
industry in developing new products and services.
We believe, however, that the timetable for the introduction of a single
specification of key operational equipment is too long and we are lobbying for
this to be achieved within a much shorter timescale. The new strategy will give
us the opportunity to develop new products and to provide maintenance services
previously undertaken by the fire brigades themselves.
Operational & Strategic Review
The business strategy of the Group is to build on its strong UK market share by
expanding organically and by acquisition into related market sectors in the UK
and abroad. The hiatus caused by the UK Government's intervention in the
procurement policies in the fire sector demonstrates the validity of this
strategy. The need for our products within the UK fire and rescue sector has not
diminished, nor have we lost any key orders to any other suppliers during the
last twelve months, while our sales in Europe and Australia remain buoyant. The
medium term potential for our traditional business remains strong but is clearly
susceptible to outside influences.
To counteract these influences we are focusing our strategy to become a leading
specialist supplier of high quality equipment and services to the rescue
services worldwide. We are also developing internally, and seeking to acquire,
products that variously are used in rescue or related activities within the
marine, rail, road and commercial sectors as well as in the fire and rescue
sector itself. We have identified a number of potential acquisitions that would
complement our current business activities.
In addition there are new developments within our current markets. For example,
following the terrorist attacks on the World Trade Centre, the UK fire services
have been given wider responsibilities for the coordination of the rapid
response in the event of an attack in the UK. The 'New Dimensions' project
requires a new fleet of vehicles for which AS Fire will supply equipment slides.
Dividend
As a result of our sound cash flow in the first six months of the year, the
directors have approved the Company's maiden interim dividend of 1.0p per share.
The dividend will be paid on 28 January 2005 to shareholders on the register on
24 December 2004 (ex-dividend date 22 December 2004). Subject to there being no
unforeseen circumstances, we expect to pay a final dividend of 3.0p per share in
line with the commitment given in our admission document to AIM.
Outlook
Despite the lifting of the moratorium on 8 September 2004, our order intake has
not yet shown the degree of uplift that we expected would occur in order to
alleviate the order backlog. We are, however, in detailed discussions with a
number of key customers who have indicated that they have large orders to place.
We are anticipating that the final quarter of the current financial year will
see an increase in the level of order intake and revenue and that the trading
for the year will be in line with our broker's expectations.
Tim Wightman
Chairman
15 December 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT Proforma Proforma
(Unaudited) (Unaudited) (Unaudited)
Six Months Six Months Year
Ended Ended Ended
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Turnover 1,982 2,144 4,389
Cost of sales (893) (950) (2,012)
Gross profit 1,089 1,194 2,377
Administration and establishment expenses (937) (771) (2,737)
Operating profit before goodwill amortisation
and exceptional costs included in administration 226 452 781
and establishment expenses
Goodwill amortisation (74) (29) (77)
Exceptional costs - - (1,064)
Operating profit / (loss) 152 423 (360)
Interest receivable 1 3 5
Interest payable (39) (18) (46)
Profit /(loss) on ordinary activities before 114 408 (401)
taxation
Tax on ordinary activities - (129) (165)
Profit/(loss) on ordinary activities after 114 279 (566)
taxation
Dividends (42) - -
Retained profit/(loss) for the financial period 72 279 (566)
Earnings/(loss) per share
Basic earnings/(loss) per share 2.7p 6.6p (13.5p)
Loss per share on goodwill and exceptional items
after taxation 1.8p 0.7p 24.8p
Adjusted earnings per share 4.5p 7.3p 11.3p
Diluted basic earnings per share 2.3p 5.6p -
CONSOLIDATED BALANCE SHEET Proforma
(Unaudited) (Unaudited)
As at As at As at
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
FIXED ASSETS
Intangible assets 2,836 688 2,910
Tangible assets 136 175 156
2,972 863 3,066
CURRENT ASSETS
Stock and work in progress 600 690 635
Debtors 817 817 830
Cash at bank and in hand 161 350 67
1,578 1,857 1,532
CREDITORS: amounts falling due within one year (841) (839) (845)
NET CURRENT ASSETS 737 1,018 687
TOTAL ASSETS LESS CURRENT LIABILITIES 3,709 1,881 3,753
CREDITORS: amounts falling due after more than
one year (752) (362) (868)
NET ASSETS 2,957 1,519 2,885
CAPITAL AND RESERVES
Called up share capital 1,050 76 1,050
Share premium account 1,872 426 1,872
Capital redemption reserve - 69 -
Profit and loss account 35 948 (37)
SHAREHOLDERS' FUNDS 2,957 1,519 2,885
CONSOLIDATED CASH FLOW STATEMENT
Proforma Proforma
(Unaudited) (Unaudited) (Unaudited)
Six Months Six Months Year
Ended Ended Ended
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Net cash inflow from operating activities 258 186 530
Returns on investment and servicing of
finance
Interest received 1 3 5
Interest paid (39) (18) (47)
New loans issue costs - - (44)
(38) (15) (86)
Taxation
Corporation tax paid - (160) (319)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (12) (100) (113)
Sale of tangible fixed assets 7 - 3
(5) (100) (110)
Acquisitions and disposals
Purchase of subsidiary undertakings - - (3,873)
- - (3,873)
Net cash inflow / (outflow) before
management of liquid resources and 215 (89) (3,858)
financing
Financing
Share Issue - - 3,300
Issue Costs - - (378)
New long term loan - - 1,200
Repayment of old long-term loan - - (664)
Repayment of new long-term loan (120) - (60)
Repayment of secured loan - (88) -
Net cash (outflow) / inflow from financing (120) (88) 3,398
Increase / ( decrease ) in cash for the 95 (177) (460)
period
NET CASHFLOW FROM OPERATING ACTIVITIES Proforma Proforma
(Unaudited) (Unaudited) (Unaudited)
Six Months Six Months Year
Ended Ended Ended
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Operating (loss) / profit 152 423 (360)
Depreciation 26 28 57
Goodwill amortisation 74 29 77
Loan cost amortisation 4 - 3
Non cash adjustment to exceptional - - 900
costs
Profit on sale of tangible fixed (1) - (3)
assets
Decrease / (increase) in stock 35 (36) 20
Decrease / (increase) in debtors 13 (177) (185)
(Decrease)/increase in creditors (45) (81) 21
Net cash inflow from operating 258 186 530
activities
RECONCILIATION OF NET CASH
FLOW TO MOVEMENT IN NET DEBT
£000 £000 £000
Increase/ ( decrease ) in cash in the 95 (177) (460)
period
Cash inflow from increase in loans - - (1,200)
Repayment of old long term loan - 88 664
Repayment of new long term loan 120 - 60
Issue costs of new long term loan - - 44
Amortisation of new loans issue costs (4) - (3)
Movement in net debt in the period 211 (89) (895)
Net debt brought forward (1,033) (138) (138)
Net debt carried forward (822) (227) (1,033)
ANALYSIS OF CHANGES IN NET DEBT
Consolidated Cash flow 2004 At 31 Other At 30
March Non-Cash September
2004 Cash Flow Movements 2004
£000 £000 £000 £000
Cash at bank and in hand 67 94 - 161
Bank overdrafts (1) 1 - 0
Cash 66 95 - 161
Loans (1,099) 120 (4) (983)
(1,033) 215 (4) (822)
NOTES TO THE UNAUDITED INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2004
1. BASIS OF PREPARATION OF INTERIM ACCOUNTS
The accounts for the Group for the six months ended 30 June 2004,
which are unaudited, have been prepared on the basis of the accounting
policies set out in the 2004 Annual Report and Accounts.
As reported in the 2004 Annual Report and Accounts, the proforma
results for the year ended 31 March 2004 represents the actual
consolidated results of the Group from the date of incorporation of
the Company plus the results of Speed 5019 Limited and its
subsidiaries from 1 April 2003 until acquisitions by the Company on 12
December 2003. The comparative figures for the six months ended 30
September 2003 also represent the results of Speed 5019 Limited and
its subsidiaries for this period.
The taxation charge is calculated by applying the Directors' best
estimate of the annual tax rate to the profit for the period. Tax
losses of £1.3 million arose in the Company during the period ended 31
March 2004, largely due to the exceptional costs incurred in that
year, together with the cost of raising share capital which was
charged to the share premium account. As a result carried forward tax
losses amount to £936,000 are available to offset against current and
future profits, thereby reducing the tax charge and future tax
payments.
2. EARNINGS PER SHARE
Proforma Proforma
(Unaudited) (Unaudited) (Unaudited)
Six Months Six Months Year
Ended Ended Ended
30 September 30 September 31 March
2004 2003 2004
£000 £000 £000
Profit/(loss) after taxation 114 279 (566)
Adjustments :
Goodwill amortisation 74 29 77
Exceptional items 0 0 1,064
Taxation on exceptional items 0 0 (101)
Adjusted profit 188 308 474
Number Number Number
Basic weighted average number of shares 4,200,000 4,200,000 4,200,000
Dilutive potential ordinary shares:
Share options 355,000 355,000 355,000
Warrants 420,000 420,000 420,000
4,975,000 4,975,000 4,975,000
Basic earnings/(loss) per share
(based on profit / (loss) after taxation) 2.7p 6.6p (13.5p)
Loss per share on goodwill and exceptional items
after taxation 1.8p 0.7p 24.8p
Adjusted earnings per share 4.5p 7.3p 11.3p
Diluted basic earnings per share 2.3p 5.6p -
The adjusted earning per share has been calculated by removing goodwill
amortisation and exceptional items to give a meaningful comparison with the
previous year's results.
3. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the
Companies Act 1985. The financial information for the full preceding
year is based on the statutory accounts for the financial period ended
31 March 2004. Those accounts, upon which the auditors issued an
unqualified opinion, have been delivered to the Registrar of
Companies.
INDEPENDENT REVIEW REPORT TO ASFARE GROUP PLC
INTRODUCTION
We have been instructed by the Company to review the financial information for
the six months ended 30 September 2004 which comprises the balance sheet, profit
and loss account, cash flow statement and the related notes set out on pages 3
to 8. We have read the other information contained in the interim report which
comprises only the Chairman's statement and considered whether it contains any
apparent misstatements or material inconsistencies with the financial
information. Our responsibilities do not extend to any other information.
This report is made solely to the company's members, as a body, in accordance
with guidance contained in APB Bulletin 1999/4 'Review of Interim Financial
Information'. Our review work has been undertaken so that we might state to the
company's members those matters we are required to state to it in a review
report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the
company's members as a body, for our review work, for this report, or for the
conclusion we have formed.
DIRECTORS' RESPONSIBILITIES
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
REVIEW WORK PERFORMED
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of Interim Financial Information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom auditing standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the financial
information.
REVIEW CONCLUSION
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2004.
GRANT THORNTON UK LLP
Chartered Accountants
Portsmouth
15th December 2004
Statements made in this report regarding the Group's or management intentions
may be deemed to be forward-looking statements. The Group's actual results may
differ materially from those projected in forward-looking statements and there
can be no assurance that estimates of future results will be achieved.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 10th January 2025
COMPANIES COVERED:
Latest directors dealings
- 2 days ago FRP Advisory Group
- 2 days ago Marks Electrical Group
- 2 days ago CLS Holdings
- 2 days ago QinetiQ Group
- 2 days ago Spectris