Interim Results
Prime People PLC
03 September 2004
For Immediate release 3rd September 2004
Prime People Plc('the Company')
Interim results for the six months ended 30 June 2004
KEY POINTS
• On 23rd June 2004 the Company moved from the official list of the London
Stock Exchange to the Alternative Investment Market (AIM)
• On 4th August 2004 the Company sold its principal trading subsidiary,
Portfolio International Limited ('Portfolio') to PSD Group plc for a cash
consideration of £1.95m, which was paid upon completion.
• The Group returns a small profit on ordinary activities before taxation of
£58,851
• Operating loss from continuing operations of £136,130 (2003: £18,470
loss), includes non recurring costs of £50,000 arising from the
disposal of Portfolio and the Company's move to AIM
• An operating profit from discontinued operations of £165,767 (2003:
loss of £356,557)
• Share of operating profit of £15,770 from associate company Cameron
Kennedy compared to the previous period's loss of £79,133
• The group retains a strong balance sheet with net cash funds of £1.23m
(2003: £0.83m) which, following the sale of Portfolio, has increased to
£2.9m
• The group will reinvest its cash funds in new businesses when the
appropriate opportunity arises
Press enquiries:-
Press enquiries
Richard Lee, Chairman, Prime People Plc 0161 832 6644
Chris Heayberd, Finance Director, Prime People Plc 020 7520 5000
Prime People Interim Report 2004
Chairman's Statement
________________________________________________________________________________
Chairman's statement
I am pleased to report that the Group has returned to profitability, recording a
small profit on ordinary activities after taxation of £58,851 (2003: loss of
£357,200).
In accordance with our stated intention in last year's annual report the Company
has implemented the move from the official list of the London Stock Exchange to
AIM, which your directors feel is more appropriate for the current size of the
Company. As a consequence, our shares are no longer eligible to be held in PEPs
or ISAs and shareholders with such arrangements should consult their financial
advisers.
After the period end we held discussions with PSD Group plc and we agreed to
sell our trading subsidiary Portfolio International Limited ('Portfolio') for a
cash consideration of £1.95m, which was paid upon completion. Initially, these
funds have been placed on deposit. Details of the sale of Portfolio are set out
in note 10 of this interim statement. The Board was advised by the Company's
Nominated Adviser, W. H. Ireland Limited.
For our continuing businesses, revenue for the period was slightly up, although
attributable operating losses have increased from £18,470 to £136,130. A
substantial portion of this loss arises from costs incurred from moving from the
Official List to AIM and from non recurring re-organisation costs that we
anticipate will arise as a consequence of the disposal of Portfolio.
Our associate company, Cameron Kennedy reported an improvement in trading and we
are able to take in our share of a small profit for this period of £15,770
(2003: loss of £79,133).
The group, following the disposal of Portfolio, has net cash of £2.9m, which we
anticipate will be used to assist with the acquisition of new businesses should
the opportunities arise.
Richard E M Lee
Chairman
3rd September 2004
Prime People Interim Report 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2004
Six months Six months Year
ended ended ended
30 June 30 June 31December
2004 2003 2003
Notes Unaudited Unaudited Audited
£ £ £
Turnover
- Continuing operations 374,883 367,179 705,220
- Discontinued operations 1,377,640 1,167,842 2,384,662
1,752,523 1,535,021 3,089,882
Cost of Sales
- Continuing operations (107,052) (79,619) (149,174)
- Discontinued operations (7,240) (2,852) (11,305)
(114,292) (82,471) (160,479)
Gross Profit 1,638,231 1,452,550 2,929,403
Administrative expenses (1,608,594) (1,827,577) (3,267,186)
Group operating profit / (loss)
- Continuing operations (136,130) (18,470) 62,800
- Discontinued operations 165,767 (356,557) (400,583)
29,637 (375,027) (337,783)
Share of operating profit / (loss) in associate 15,770 (79,133) (205,343)
Amortisation of goodwill (6,000) (6,000) (12,000)
Profit / (loss) on ordinary activities before
interest 39,407 (460,160) (555,126)
Interest receivable and similar income 19,444 17,025 29,382
Profit / (loss) on ordinary activities before
taxation 58,851 (443,135) (525,744)
Tax on profit / (loss) on ordinary activities 2 - 85,935 82,576
Profit / (loss) on ordinary activities after
taxation transferred to reserves 5 58,851 (357,200) (443,168)
Earnings / (loss) per ordinary share
- Basic 4 0.16p (0.98)p (1.21)p
- Diluted 0.16p (0.98)p (1.21)p
Prime People Interim Report 2004
CONSOLIDATED BALANCE SHEET
as at 30 June 2004
30 June 30 June 31 December
2004 2003 2003
Notes Unaudited Unaudited Audited
£ £ £
Fixed assets
Tangible assets 57,167 80,746 61,656
Investment in associate 346,314 552,454 336,544
403,481 633,200 398,200
Current assets
Debtors 1,000,499 1,022,827 1,122,696
Cash at bank and in hand 1,275,690 845,282 996,494
2,276,189 1,868,109 2,119,190
Creditors: Amounts falling due within one year (593,875) (388,397) (490,446)
Net current assets 1,682,314 1,479,712 1,628,744
Net assets 2,085,795 2,112,912 2,026,944
Capital and reserves
Called up share capital 368,467 368,467 368,467
Share premium account 5 909,925 909,925 909,925
Merger reserve 5 173,077 173,077 173,077
Profit and loss account 5 634,326 661,443 575,475
Shareholders' funds 6 2,085,795 2,112,912 2,026,944
Prime People Interim Report 2004
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2004
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2004 2003 2003
Notes Unaudited Unaudited Audited
£ £ £
Net cash inflow / (outflow) from operating
activities 7 203,412 (367,071) (233,078)
Dividend from associated undertaking - - 83,700
Return on investment and servicing of
finance
Interest received 19,444 17,025 29,382
Taxation 74,350 - (107,873)
Capital expenditure and financial investment
Purchase of tangible fixed assets (19,845) (11,750) (28,375)
Sale of tangible fixed assets 800 6,500 17,388
(19,045) (5,250) (10,987)
Net cash inflow / (outflow) before
management of liquid resources and financing 278,161 (355,296) (238,856)
Management of liquid resources
(Purchase) / sale of treasury deposits (229,000) 285,000 104,000
Financing
Issue of ordinary share capital - 30,000 30,000
Increase / (decrease) in cash 8 49,161 (40,296) (104,856)
Prime People Interim Report 2004
NOTES TO THE INTERIM FINANCIAL STATEMENTS
for the six months ended 30 June 2004
1. Accounting Policies
The interim results have been prepared on the same basis and using the same
accounting policies as those used in the preparation of the accounts for
the year ended 31 December 2003.
2. Taxation on profit on ordinary activities
Group
2004 2003
£ £
UK corporation tax - 79,000
Share of associate's tax - 6,935
- 85,935
3. Dividends
The directors recommend that no interim dividend be paid.
4. Earnings per share
The earnings per share is calculated based on a weighted average number of
shares of 36,846,692 (2003: 36,513,359) and the profit of £ 58,851
(2003: loss of £357,200) giving earnings per share of 0.16 p (2003: loss
per share of 0.98p).
Diluted loss per share is based on the above earnings and adjusts the basic
weighted average number of shares as a result of dilutive share options.
There are no dilutive potential ordinary shares in the period to 30 June
2004.
5. Reserves
Share Premium Merger Reserve Profit and Loss
Account Account
£ £ £
At 1 January 2004 909,925 173,077 575,475
Transfer from Profit and Loss Account - - 58,851
At 30 June 2004 909,925 173,077 634,326
Prime People Interim Report 2004
NOTES TO THE INTERIM FINANCIAL STATEMENTS
continued
6. Reconciliation of movement in shareholders' funds
30 June 2004 30 June 2003 31 December 2003
Unaudited Unaudited Audited
£ £ £
Profit / (loss) for the period 58,851 (357,200) (443,168)
Issue of share capital - 30,000 30,000
58,851 (327,200) (413,168)
Opening shareholders' funds 2,026,944 2,440,112 2,440,112
Closing shareholders' funds 2,085,795 2,112,912 2,026,944
7. Reconciliation of operating (loss) / profit to net cash (outflow) / inflow
from operating activities
Six months ended Six months ended Year ended
30 June 2004 30 June 2003 31 December 2003
Unaudited Unaudited Audited
£ £ £
Group operating profit / (loss) 29,637 (375,027) (337,783)
Depreciation 24,334 47,994 83,709
(Profit) / loss on sale of tangible fixed assets (800) 18,959 8,071
Decrease in debtors 47,855 212,799 187,274
Increase / (decrease) in creditors 102,386 (271,796) (174,349)
Net cash inflow / (outflow) from operating
activities 203,412 (367,071) (233,078)
Prime People Interim Report 2004
NOTES TO THE INTERIM FINANCIAL STATEMENTS
continued
8. Reconciliation of net cash outflow to movement in net funds
Six months ended Six months ended Year ended
30 June 2004 30 June 2003 31 December 2003
Unaudited Unaudited Audited
£ £ £
Increase / (decrease) in cash in the period 49,161 (40,296) (104,856)
Cash outflow / (inflow) from increase / (decrease)
in liquid resources 229,000 (285,000) (104,000)
Increase / (decrease) in net funds resulting from
cash flows 278,161 (325,296) (208,856)
Opening net funds 947,770 1,156,626 1,156,626
Closing net funds 1,225,931 831,330 947,770
9. Analysis of net funds
At 1 January Cash flow At 30 June
2004 2004
£ £ £
Cash at bank and in hand 494 50,196 50,690
Bank Overdraft (48,724) (1,035) (49,759)
(48,230) 49,161 931
Liquid resources 996,000 229,000 1,225,000
TOTAL 947,770 278,161 1,225,931
Prime People Interim Report 2004
NOTES TO THE INTERIM FINANCIAL STATEMENTS
continued
10. Disposal
On 4 August 2004 the Group disposed of the entire issued share capital of
Portfolio International Limited for a cash consideration of £1.95m.
During the period Portfolio contributed £8,453 towards the group's cash
after receiving a corporation tax repayment of £74,342, utilised £18,460
for capital expenditure and received interest of £1,342 in respect of the
corporation tax recovered.
11. Nature of the financial information
The interim financial information for the six months ended 30 June 2004,
was approved by the board on 2nd September 2004.
The financial information set out above does not constitute full accounts
within the meaning of Section 254 of the Companies Act 1985. The results
for the year to 31 December 2003 are extracts from the published accounts
for that year which have received an unqualified audit report and have
been filed with the Registrar of Companies.
Copies of the interim results are being sent to shareholders. Further
copies can be obtained from the company's registered office at: 7 Bream's
Buildings, Chancery Lane, London EC4A 1DT.
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