Interim Results

ATA Group PLC 1 September 2004 ATA GROUP PLC INTERIM RESULTS FOR THE SIX MONTH PERIOD TO 30 JUNE 2004 Highlights •Turnover £8.5m (2002: £7.5m) an increase of 14 per cent. •Profit before tax £0.55m (2003 before exceptional credit : £0.45m) an increase of 22 per cent. •Earnings per share rose 24% to 4.60p (2003 excluding exceptional credit : 3.71p) •Dividend per share 2.5p (2003: 2.1p) •Positive cash generation of £0.475m since 31 December 2003 •Group net cash at £805,000 (31 December 2003: £225,000) Bill Douie, Chairman commented: 'Economic conditions continue to improve, as does the trading environment, although the buoyant markets of the late nineties have yet to return, particularly in recruitment. Nonetheless, Group turnover in the six months to 30 June 2004 increased 14% to £8.5m (2003 £7.5m). Profit before tax and before exceptional credit rose 22% to £0.55m (2002 £0.45m). Earnings per share before exceptional credits rose 24% to 4.60p (2003 3.71p) Since the period end we have completed the acquisition of a track welding specialist company, GemWeld (UK) Limited - based in Prestwick, Scotland, thus adding a further service to the ATA Group Railway portfolio. Whilst this remains a time for prudence, your Directors have concluded that cash generation within the businesses continues to remain at satisfactory levels and therefore your Board has decided to declare an interim dividend of 2.5p. Outlook Further steady development of contract recruitment is anticipated enabling more intensive use to be made of our nationwide network of branches, where a stronger performance in permanent recruitment is expected to gather pace. Ganymede Tracklayers is continuing steady development and expects to extend further its client base both inside and outside Network Rail. After a short period of adjustment and integration, GemWeld will also extend its business in a similar manner. The second half is expected to produce a steady performance from both Catalis and Rail Training Audit Services although, further ahead, continued adjustment to changes at Network Rail and the need to secure a further continuation of their contract with Rail Training Audit Services will present challenges.' 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 2004. Trading General Economic conditions continue to improve, as does the trading environment, although the buoyant markets of the late nineties have yet to return, particularly in recruitment. Nonetheless, Group turnover in the six months to 30 June 2004 increased 14% to £8.5m (2003 £7.5m). Profit before tax and before exceptional credit rose 22% to £0.55m (2002 £0.45m). Earnings per share before exceptional credits rose 24% to 4.60p (2003 3.71p). Recruitment Recruitment turnover in the period was £4.50m (2003 £3.09m), a rise of 46%. Operating results improved to a profit of £0.16m (2003 loss (£0.11m)). During the period performance improved steadily in permanent recruitment and further progress was made in contract. Ganymede Tracklayers, having completed its re-organisation, has secured its first contract with Network Rail to supply labour in the Thames Valley maintenance area which commenced April. Progress has been made in securing similar business both with Renewals Companies serving Network Rail and with Tube Lines, part of the London Underground network, which will mainly impact in the second half of 2004. The combined effect of these achievements has been to generate a profit of £30,000 in the first half of 2004 (2003 loss (£106,000)). Training Training turnover in the period was £4.02m (2003 £4.39m) a fall of 8%. Operating profit was £0.43m (2003 £ 0.59m). Trading patterns in the period have been affected by disruption caused by the return of all infrastructure maintenance to Network Rail but the position is stabilising and we now have greater clarity of outlook. Satisfactory progress has also been made in impacting on the London Underground system, with the securing of a ten year contract with Tube Lines for technical officer training. Rail Training Audit Services continues to trade at budgeted levels and we are working towards renewal of our contract with Network Rail in April of next year. Dividends Whilst this remains a time for prudence, your Directors have concluded that cash generation within the businesses continues to remain at satisfactory levels and therefore your Board has decided to declare an increased interim dividend of 2.5p (2003 2.1p), payable on 13 December 2004 to shareholders on the register on 19 November 2004. CHAIRMAN'S STATEMENT continued Acquisition Since the period end we have completed the acquisition of a track welding specialist company, GemWeld (UK) Limited - based in Prestwick, Scotland, thus adding a further service to the ATA Group Railway portfolio. Although small - the purchase consideration of £15,000 was satisfied in cash and there are opportunities to extend the geographical area covered by GemWeld to all of the UK and to extend to non national rail customers. There are also clear opportunities to develop together with Ganymede Tracklayers Limited as present geographical and client areas are complementary. Outlook Further steady development of contract recruitment is anticipated enabling more intensive use to be made of our nationwide network of branches, where a stronger performance in permanent recruitment is expected to gather pace. Ganymede Tracklayers is continuing steady development and expects to extend further its client base both inside and outside Network Rail. After a short period of adjustment and integration, GemWeld will also extend its business in a similar manner. The second half is expected to produce a steady performance from both Catalis and Rail Training Audit Services although further ahead continued adjustment to changes at Network Rail and the need to secure a further continuation of their contract with Rail Training Audit Services will present challenges. W.J.C.Douie, Chairman. 1st September 2004. CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 Months 6 Months 12 Months to 30 Jun 2004 to 30 Jun 2003 to 31 Dec 2003 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 £'000 £'000 £'000 Turnover Continuing operations 8,519 7,377 14,789 Discontinued operations - 106 117 ------ ------ ------ ------ ------ ------ 2 8,519 7,483 14,906 ------ ------ ------ ------ ------ ------ Operating Profit Continuing operations 586 534 1,276 Discontinued operations - (46) (59) ------ ------ ------ ------ ------ ------ 2 586 488 1,217 Exceptional item 3 - 53 53 Net interest payable (35) (35) (47) ------ ------ ------ ------ ------ ------ (35) 18 6 Profit on ordinary activities before taxation 551 506 1,223 Tax on profit on ordinary activities 4 (176) (152) (393) ------ ------ ------ ------ ------ ------ Profit on ordinary activities after taxation 375 354 830 Dividends 5 (204) (170) (488) ------ ------ ------ ------ ------ ------ Retained profit for the financial period 171 184 342 ------ ------ ------ ------ ------ ------ Earnings per share (pence) 6 4.60 4.36 10.21 ------ ------ ------ ------ ------ ------ Earnings per share (pence) before exceptionals 6 4.60 3.71 9.75 CONSOLIDATED BALANCE SHEET As at As at As at 30 Jun 2004 30 Jun 2003 31 Dec 2003 (unaudited) (unaudited) (audited) £'000 £'000 £'000 FIXED ASSETS Intangible assets 1,083 1,123 1,116 Tangible assets 1,771 2,174 1,843 ---------- ---------- --------- 2,854 3,297 2,959 ---------- ---------- --------- CURRENT ASSETS Stock 12 12 12 Debtors falling due after more than one year 817 834 826 Debtors falling due within one year 3,372 3,897 3,819 Cash at bank 1,314 531 839 ---------- ---------- --------- 5,515 5,274 5,496 ---------- ---------- --------- CREDITORS: Due within one year (4,202) (4,460) (4,372) ---------- ---------- --------- NET CURRENT ASSETS 1,313 814 1,124 ---------- ---------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 4,167 4,111 4,083 CREDITORS: Due after more than one year (161) (405) (257) PROVISIONS FOR LIABILITIES AND CHARGES (150) (201) (150) ---------- ---------- --------- NET ASSETS 3,856 3,505 3,676 ---------- ---------- --------- CAPITAL AND RESERVES Called up share capital 82 81 81 Share premium account 1,784 1,763 1,776 Capital redemption reserve 50 50 50 Profit and loss account 1,940 1,611 1,769 ---------- ---------- --------- SHAREHOLDERS' FUNDS 3,856 3,505 3,676 ---------- ---------- --------- CONSOLIDATED CASH FLOW STATEMENT 6 Months to 6 Months to 12 Months to 30 Jun 2004 30 Jun 2003 31 Dec 2003 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 CASH INFLOW FROM 7 1,186 801 2,109 OPERATING ACTIVITIES Returns on investments and servicing of finance (35) (35) (47) Taxation (326) (200) (518) Payments to acquire tangible fixed (190) (470) (459) assets Receipts on disposal of tangible fixed assets 20 447 473 Purchase of subsidiary - - (6) undertaking Equity dividends paid - - (479) --------- --------- --------- Net cash inflow before use of 655 543 1,073 liquid resources and financing Issue of ordinary share 9 - 13 capital Decrease in medium term loans (136) (129) (262) Capital element of finance lease rental payments (53) (14) (116) --------- --------- --------- INCREASE IN CASH BALANCES 475 400 708 --------- --------- --------- ATA GROUP PLC NOTES TO THE INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2004 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 2003. 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 2003 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. The report of the auditors was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. 2. SEGMENTAL ANALYSIS 6 Months to 6 Months to 12 Months to 30 Jun 2004 30 Jun 2003 31 Dec 2003 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 TURNOVER Recruitment 4,504 3,091 6,334 Training and consultancy 4,015 4,392 8,572 --------------- --------------- --------------- 8,519 7,483 14,906 --------------- --------------- --------------- OPERATING PROFIT Recruitment 161 (106) (61) Training and consultancy 425 594 1,278 --------------- --------------- --------------- 586 488 1,217 ========= ========= =========== Operating profit is stated after amortisation of goodwill of £33,000 in the period (2003: £36,000). Discontinued operations relate to Fairbourne Hotel Ltd and Fairbourne Adventure Ltd. 3. EXCEPTIONAL ITEM A profit of £53,000 arose on the disposal of the Fairbourne Hotel on 10 June 2003. 4. TAX ON PROFIT ON ORDINARY ACTIVITIES The tax on profit on ordinary activities for the period to 30 June 2004 has been provided at the estimated rate applicable to the group for the period. 5. DIVIDENDS An interim dividend of 2.5p per ordinary share net will be paid on 13 December 2004 to shareholders on the register of members at 19 November 2004. 6. EARNINGS PER SHARE The earnings per share have been calculated on the profit on ordinary activities after taxation, both before and after exceptional items, and on the number of shares in issue (8,148,096) during the period. The fully diluted earnings per share is not materially different from the basic earnings per share and has not been disclosed. 7. CASH FLOW RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2004 £'000 Operating profit 586 Amortisation 33 Depreciation 332 Profit on sale of fixed assets (6) Decrease in debtors 456 Decrease in creditors (215) --------------- --------------- Net cash inflow from operating activities 1,186 =============== ANALYSIS OF CHANGES IN NET FUNDS At 1 Other At 30 Jan 2004 Cash Flows Movements Jun 2004 £'000 £'000 £'000 £'000 Net Cash: Cash in hand and at bank 839 475 1,314 Debt: Debt due within 1 year (275) 136 (161) (300) Debt due after 1 year (219) - 161 (58) HP and finance leases (120) 53 (84) (151) -------- --------- --------- --------- Net Funds 225 664 (84) 805 ======== ========= ========= ========= 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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