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Quayle Munro Hldgs (QYM)

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Thursday 20 September, 2012

Quayle Munro Hldgs

Results for the year ended 30 June 2012

RNS Number : 6794M
Quayle Munro Holdings PLC
20 September 2012
 

 

 

Quayle Munro Holdings PLC

 

("Quayle Munro" or the "Group")

 

Results for the year ended 30 June 2012

 

Highlights

 

 

 

·      Revenue from continuing operations of £5.3m compared with £11.5m last year.

 

·      Re-stated profit before tax £0.01m (2011 - £3.0m).

 

·      Statutory (loss)/profit before tax, including the impact of share awards, bonus payments and goodwill impairment charges £(8.1)m (2011 - £0.2m).

 

·      Final dividend of 22p per share. Total dividends 33p per share (2011 - 32p per share).

 

·      Net asset value per share at 30 June 2012, 696p per share, (2011 - 908p per share), including cash balances of £14.9m, 327p per share (2011 - 384p per share).

 

                ·      Basic losses (183.4)p per share (2011 - (23.2)p) with fully diluted losses of (169.3)p per share (2011 - (21.2)p).

                ·      Completion of disposal of Edinburgh advisory business to its management, after the year end.

·      Advised on a number of major transactions, for companies including Virgin Group, Doctors.net.uk Limited, Sagient Research Systems Inc and Firstassist Legal Expenses.

 

·      Good pipeline of work, starting the current year with a high level of revenues.

 

 

 

Andrew Tuckey, Chairman, commented:

 

"Last year's results were adversely affected by the timing of deal completions; a number of these deals have now completed and as a result the current financial year has begun strongly. This, taken together with an encouraging pipeline of new business and a significantly lower cost base, promises well for the year and we are confident in achieving a good result for our shareholders".

 

 

 

For further information:

 

Quayle Munro Holdings PLC

Andrew Tuckey, Chairman                                               020 7907 4200

 

Nplus1 Brewin LLP (Nominated Advisor)                     

Sandy Fraser                                                                        0131 529 0272

 

Smithfield (Financial PR)  

John Kiely                                                                            020 7360 4900   

 



Chairman and Chief Executive's statement

 

Results

Last year was a difficult year for the Group: revenues were significantly down, we reorganised our operations in Edinburgh and decided to impair part of the goodwill carried on our balance sheet.

 

A summary of the Group's results is shown below. As in the previous year, we show the (loss)/profit before tax both as set out in the statutory accounts and as adjusted for the share scheme component in our remuneration. Under IFRS 2 (the accounting standard) we are required to amortise the costs of share issues over the awards vesting period; however, the Board regards the decision to award shares as a substitute for a cash bonus as a commitment at the time it is made because these awards have been allocated from the bonus pool in each year. Accordingly, the table below shows the effect on profits if all the commitments to award shares are charged against the year when they are made. In addition, the table shows the Group's pre tax (loss)/profit adjusted for non recurring items:


2012

2011

2010


£'000

£'000

£'000





(Loss)/profit before tax - under IFRS

(8,071)

162

10,860





*Illustrative adjustment to account for LTIP, JOE and deferred cash  schemes being charged against the year in which the commitments  are made

470

775

(1,517)

Re-stated (loss)/profit before tax

(7,601)

937

9,343

 

(Loss)/profit before tax adjusted to normalise for non recurring items:




Impairment of goodwill

5,815

-

-

Reorganisation and redundancy expenses

1,372

202

1,200

Loss from discontinued operations

440

-

95

Investment gains

(15)

(167)

(7,107)

Impairment of investments held as available for sale

-

2,019

125

Share of associates profit

-

-

(602)

Re-stated profit before tax

11

2,991

3,054

*In accordance with IFRS 2, the current year results include charges in respect of the Long Term Incentive plan (LTIP), the Jointly Owned Equity plan (JOE) and the Deferred Cash Award (DCA). The effect of the adjustment above is to account for the cost of the LTIP first tranche in 2011 and second tranche in 2012, leaving further LTIP grants to be accounted for in future financial years. In addition, the adjustment above accounts for the full JOE award in 2010 and the DCA in 2011. No JOE or DCA bonus was granted in the current year. 

 

Group administrative expenses (after bonus and before exceptional items and share based reward costs) were £5.4m, a 21% decrease from £6.8m in 2011. Other operating expenses were £0.9m, decreasing from £2.2m in the previous year, reflecting charges for the 2011 share based bonus award (which was converted from a JOE scheme to a deferred cash award) and charges for both the 2010 LTIP and JOE schemes.

 

Total bonuses for the year, as approved by the Remuneration Committee of the Board, amounted to £0.3m (2011 - £3.8m), including £Nilm (2011 - £0.7m) of deferred cash based bonus, chargeable against future profits. No bonuses were paid to Managing Directors and Directors and no LTIP tranche was granted in relation to the FY11/12.

 

Faced with continuing losses we concluded that our Edinburgh based advisory business was not viable within our existing corporate and cost structure. Accordingly, it was announced on 26 July that we had initiated discussions with a senior management team in Scotland with regard to the potential management buyout of the Scottish business. We are pleased that this transaction has now completed, with further details available in the announcement made earlier today. Under this arrangement the existing Scottish advisory business will be carried out by a new entity, Quayle Munro Project Finance LLP, and controlled by former senior management of Quayle Munro's Edinburgh office. Quayle Munro will continue to hold a minority stake and we expect to continue to work collaboratively with the new entity. Your Board believes this new structure will improve the profitability of the Group and that the new company will thrive with a lower cost structure and the motivation of equity ownership. Re-organisation and redundancy costs of £1.4m have been charged of which £1.2m relates to the Edinburgh operation, which contributed a loss of £0.4m. The £1.2m relating to the Edinburgh operation comprises, £0.4m redundancy costs, £0.5m property provision costs and £0.3m professional fees and other costs.

 

Following the annual goodwill impairment review, performed in compliance with International Accounting Standard (IAS) 36, we have impaired £5.8m of goodwill, being half the amount carried on the balance sheet. Drawing on the financial result for the year and with the departure of certain key individuals and consequent cessation of certain advisory activities in specialist sectors, the Board has concluded that an impairment charge was appropriate. This is an accounting entry with no cash or other economic consequences.

 

After the costs associated with the restructuring of the Group's Edinburgh based business, impairment of goodwill and share option charges, the basic loss per share was (183.4) p (2011 loss - (23.2) p), with fully diluted loss per share of (169.3) p (2011 loss - (21.2) p).

 

Advisory business

The difficult M&A market has been widely reported in the press and our advisory business is not immune to the economic environment. In particular, the timing of completion of transactions is unpredictable, and can have an impact on the results of the business.

 

Notwithstanding the comments above, we advised on a number of significant deals which concluded during the year, including:

 

·      The acquisition by Virgin Money of  Northern Rock, a transaction on which Quayle Munro advised the Virgin Group over a number of years;

·      The sale of Doctors.net.uk Limited to M3, Inc., a publicly listed company on the Tokyo stock exchange;

·      The sale of Sagient Research Systems Inc to Informa plc, and;

·      The sale of Firstassist Legal Expenses to Burford Capital Limited.

 

In the public market we advised the Board of LMS Capital plc on the company's new investment strategy and board composition.

 

We also advised the shareholders of Wood Mackenzie on a recapitalisation in July 2012 in which Hellman & Friedman took a majority stake in the business. The deal placed an enterprise value on Wood Mackenzie of £1.1bn. The fees from this transaction will be recognised in the current year ending 30 June 2013.

 

Although market conditions generally remain tough, our pipeline of business is good, and we continue to maintain our rigorous standards as we build the advisory business and reputation of Quayle Munro. We have added high calibre staff to the advisory team across all levels and will continue to do so.  Julian Moore joined recently as a Managing Director from the Royal Bank of Scotland Plc where he was head of Media, EMEA.

 

We are optimistic about the prospects for the current year.

 

Morris

While the housing market has continued to demonstrate some signs of recovery, macroeconomic conditions remain challenging and the market place is constrained accordingly. The restriction of availability of finance for buyers along with fragile consumer confidence continues to constrain sales activity and the volume of housing transactions in the UK. Despite this, Morris performed well for the year ended 31 March 2012. Audited results reported: sales of £150m (2011 - £136m); pre-exceptional operating profits of £24m (2011 - £22m); and pre-exceptional profits before tax of £3m (2011 - £3m).

 

Morris is well positioned to address the market challenges, largely due to the strength of its management team, its established brand of affordable, but high quality homes and its renewed bank facility.

 

In line with previous years, Morris has commenced the current financial year cautiously, with some slippage in volume, albeit that this is largely offset by strong operating margins.

 

In considering the valuation of our holding in Morris, we believe that discounting the net tangible worth remains an appropriate valuation basis rather than using price earnings multiples. Using this approach (and applying a discount of 44% recognising gearing and that Morris is unlisted) results in an un-changed valuation of £5.1m for our equity interest, which when combined with our loan stock (fair valued at par) gives an un-changed total valuation of £9.3m (2011 - £9.3m).

 

Other investments

We continue to hold a number of other small unquoted investments and made two further investments during the year.

 

AMG, the video and data transmission security business, continues to perform well, against a difficult economic background in some of its overseas markets. Under its AMG Panogenics brand, its exciting new 360 degree security camera has now been launched and has already attracted significant interest and new orders.

 

Moneybarn (formerly Duncton) continues to make steady progress as the demand for loans for car purchases shows resilience against an unfavourable economic background. We took the opportunity to invest a further small amount in Moneybarn during the year when one of the founding shareholders sold a portion of his shares.

 

Nevis Range, the outdoor sports facility, has found the economic climate to be challenging and a poor ski season did not help.  However some very successful mountain bike events and investments such as the 'high ropes' courses and attractive base station coffee shop have helped keep visitors coming and, more importantly, spending.

 

We have supported Vascular Flow Technology Ltd (formerly Tayside Flow Technology Ltd) (VFT) over many years. VFT continues to make slow but steady progress under its new CEO, Bill Allan, and with the financial support of a new investor.

 

During the year we made two further investments in companies where we believe there are exciting growth opportunities. MLex, a specialist provider of regulatory market intelligence and analysis for financial and legal professionals, is a company we have worked with for a number of years. We invested £0.1m in a small working capital fundraise by the Company during the year.

 

Duvet & Pillow Warehouse Limited is one of the fastest growing on line retailers in the home furnishings sector in the UK. During the year we provided the Company with an £0.5m injection of working capital by means of a convertible loan ahead of a further fundraise in the autumn to be managed by Quayle Munro. This is an exciting growth story and we look forward to working with the management team to deliver its business plan.

 

We have reviewed the valuations of our small unquoted investments and have made one small adjustment to the carrying valuation of AMG.

 

 



 

Net assets and liquidity

At 30 June 2012, net asset value per share was 696p (2011 - 908p) which reflects the goodwill impairment referred to earlier.

 

As at 30 June 2012, the Group has cash resources of  £14.9m. We will continue to buy in shares when opportunities arise and where this is financially beneficial to the Company. Given the low level of market activity in our shares, this also provides liquidity for shareholders. Over many years the Company has been successful in making investments in businesses in which we have some involvement and, very selectively, we expect to continue this policy in the future.

 

Dividend

The Company paid a final dividend of 22p per share during November 2011 and an interim dividend of 11p per share in April this year. It is now proposed to pay a final dividend of 22p per share, in line with last year. The final dividend will be paid on 15 November 2012 to shareholders who are on the register on 19 October 2012.

 

Board and management

Andrew Adams was appointed Chief Executive in March this year and following the re organisation of our business in Edinburgh, Rob Cormie resigned from the Board in July.

 

The process to identify and appoint a new non-executive Chairman to take over from Andrew Tuckey is well advanced and we expect to make an announcement by the time of the AGM in November. As previously announced Andrew will step down from the Board following the AGM and will remain with the Group as a Senior Adviser.

 

Staff

We are fortunate to have a high quality and dedicated team of both professional and support staff and on your behalf we would like to thank them for all their hard work during the past year.

 

Prospects

As indicated above, last year's results were adversely affected by the timing of deal completions; we have therefore started the current financial year with a high level of revenues. This, taken together with a strong pipeline of new business and a significantly lower cost base, promises well for the year and we are confident in achieving a good result.

 

 

 

 

Andrew Tuckey                                                   Andrew Adams

 

 

 

19 September 2012                                              

  


 

Group statement of comprehensive income

For the year ended 30 June 2012




2012


2011





£'000


£'000


Continuing operations







Revenue



5,339


11,474









Administrative expenses



(5,433)


(6,776)


Impairment of goodwill



(5,815)


-


Impairment of investments held as available-for-sale



-


(2,019)


Gain on sale of available-for-sale investments



15


-


Gain on sale of associate



-


167


Exceptional expenses



(198)


(202)


Other operating expenses and gains



(936)


(2,198)





(12,367)


(11,028)









Group operating (loss)/profit



(7,028)


446









Finance income



524


439


Other finance income - pensions



47


32





571


471









(Loss)/Profit for the year from continuing operations



(6,457)


             917


Discontinued operations







Loss for the year from discontinued operations



(1,614)


(755)









(Loss)/Profit on ordinary activities before tax



(8,071)


162


Tax credit/(expense)



544


(1,123)


Loss on ordinary activities after tax



(7,527)


(961)
















 

 

 

Group statement of comprehensive income (continued)

For the year ended 30 June 2012

 


Note


2012


2011

 




£'000


£'000

 

 

 

Loss for the year attributable to equity holders of the Company



(7,527)


(961)

 

Other comprehensive income / (expense)






 

Gain on valuation of available-for-sale financial assets



190


368

 

Actuarial (loss)/gain on defined benefit pension scheme



(846)


213

 

Total  comprehensive expense for the year



(8,183)


(380)

 






















Earnings per share (pence)







Basic loss per share

3


(183.4)

p

(23.2)

p

Diluted loss per share

3


(169.3)

p

(21.2)

p

 

 

  

 

 

 Group statement of financial position

 At 30 June 2012




2012


2011





£'000



Non-current assets







Property, plant and equipment



388


742


Intangible assets



5,815


11,630


Financial assets



10,925


10,070


Defined benefit pension scheme surplus



109


785


Deferred tax asset



110


-





17,347


23,227


Current assets







Trade and other receivables



1,642


5,571


Current tax asset



690


49


Cash and short-term deposits



14,932






17,264


23,114


Total assets



34,611


46,341


 

Current liabilities







Trade and other payables



1,311


4,137


Current tax liabilities



-


456


Provisions



654






1,965



Non-current liabilities







Financial liabilities



583


260


Deferred tax liability



-


50


Long-term provisions



302






885


310


Total liabilities



2,850



Net assets



31,761


41,438


 

Capital and reserves







Equity share capital



11,145


11,145


Revaluation reserve



9,493


9,303


Other reserves



2,895


2,953


Retained earnings



8,228



Total equity



31,761



 

 

 

 

 

Andrew Tuckey

Chairman

19 September 2012

 

 

 

 

 

 

 

Group statement of changes in equity

For the year ended 30 June 2012


 

Equity share capital

£'000

 

 

Revaluation reserve

£'000

 

Capital redemption reserve

£'000

 

 

Merger reserve

£'000

Share option expense reserve

£'000

Own shares reserve

£'000

 

Total other reserves

£'000

 

 

Retained earnings

£'000

 

Total equity and reserves

£'000

Balance at 30 June 2010

9,277

6,916

155

1,229

2,080

(730)

2,734

24,179

43,106











Loss for the year

-

-

-

-

-

-

-

(961)

(961)











Gain on revaluation of investments

-

368

-

-

-

-

-

-

368











Actuarial gain on defined benefit pension scheme

-

-

-

-

-

-

-

213

213

Total comprehensive income for the year

-

368

-

-

-

-

-

(748)

(380)











Re-classification of previous impairment

-

2,019

-

-

-

-

-

-

2,019











Transactions with owners










Share based payments

-

-

-

-

2,372

-

2,372

-

2,372











Issue of shares

1,868

-

-

-

-

-

-

-

1,868











Movement of shares in Employee Benefit Trust

-

-

-

-

-

(2,153)

(2,153)

29

(2,124)











Equity dividends paid

-

-

-

-

-

-

-

(5,423)

(5,423)

Balance at 30 June 2011

11,145

9,303

155

1,229

4,452

(2,883)

2,953

18,037

41,438











Loss for the year

-

-

-

-

-

-

-

(7,527)

(7,527)











Gain on revaluation of investments

-

190

-

-

-

-

-

-

190











Actuarial loss on defined benefit pension scheme

-

-

-

-

-

-

-

(846)

(846)

Total comprehensive income for the year

-

190

-

-

-

-

-

(8,373)

(8,183)











Transactions with owners










Share based payments

-

-

-

-

362

-

362

-

362











Movement of shares in  Employee Benefit Trust

-

-

-

-

-

(420)

(420)

-

(420)











Equity dividends paid

-

-

-

-

-

-

-

(1,436)

(1,436)

Balance at 30 June 2012

11,145

9,493

155

1,229

4,814

(3,303)

2,895

8,228

31,761



 Group statement of cash flows

 For the year ended 30 June 2012



2012


2011



£'000


£'000

Operating activities





(Loss)/Profit before tax


(8,071)


162

 

Adjustments to reconcile (loss)/profit before tax to net cash flow used in operating activities





Finance income


(524)


(439)

Depreciation


161


180

Share-based payments


572


2,372

(Loss)/Gain on disposal of equipment


10


(6)

Gains on disposals of financial assets


(15)


(167)

Impairment of goodwill


5,815


-

Impairment of financial assets


-


2,019

Movement in pensions


(51)


(181)

Decrease/(Increase) in assets


3,929


(3,271)

(Decrease)/Increase in liabilities


(1,547)


570

Cash generated from operations


279


1,239

Income taxes paid


(691)


(1,545)

Net cash flow used in operating activities


(412)


(306)






Investing activities





Finance income received


392


334

Proceeds from sales of available-for-sale financial assets


16


167

Proceeds on disposal of equipment


2


93

Payments to acquire plant and equipment


(38)


(278)

Payments to acquire available-for-sale financial assets


(666)


(47)

Net cash flow (used in)/generated from investing activities


(294)


269






Financing activities





Dividends paid to equity shareholders of the parent


(1,436)


(5,423)

Own shares purchased


(420)


(283)

Net cash flow used in financing activities


(1,856)


(5,706)






Decrease in cash and cash equivalents


(2,562)


(5,743)

Cash and cash equivalents at the beginning of the year


17,494


23,237

Cash and cash equivalents at the end of the year


14,932


17,494



Notes to the Group financial statements

At 30 June 2012

 

1.             The financial statements of Quayle Munro Holdings PLC and its subsidiaries (the "Group and Parent Company financial statements") for the year ended 30 June 2012 were authorised for issue by the Board of Directors on 19 September 2012 and the statement of financial position was signed on the Board's behalf by Andrew Tuckey. Quayle Munro Holdings PLC is a public limited company incorporated and domiciled in Scotland. The Company's ordinary shares are traded on the Alternative Investment Market.

 

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union as they apply to the financial statements of the Group for the year ended 30 June 2012.

 

2.             The Group is managed primarily by class of business and presents the segmental analysis on that basis. The Group's activities are organised in two primary divisions: Advisory and Other (Head Office). The following table presents revenue and results information regarding the Group's business segments for the years ended 30 June 2012 and 2011.

 

 

 

 

 

Advisory   

 

 

 

   Other

Year ended 30  June 2012

Total

 

 

 

Advisory

 

 

 

Other

Year ended 30  June 2011

          Total

 

£'000

£'000

           £'000

£'000

£'000

£'000

 

Segment revenue

 

5,280

 

59

 

5,339

 

11,202

 

272

 

11,474

 

Segment  (loss)/ profit before tax

 

(2,280)

 

(5,791)

 

(8,071)

 

2,358

 

(2,196)

 

162

 

3.             Basic losses per share is calculated by dividing losses for the year of £(7.5)m (2011 - losses £(1)m) attributable to ordinary equity holders of the parent by 4.1m, being the weighted average number of shares in issue during the year (2011 - 4.1m). Diluted losses per share is calculated by dividing the losses attributable to ordinary equity holders of the parent by 4.4m, being the weighted average of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares (2011 - 4.5m).

 

4.             In view of the Group's continuing strong liquidity and a satisfactory level of continuing activity, the Directors recommend a final dividend of 22p per share. The final dividend will be paid on 15 November 2012 to shareholders who are on the register on 19 October 2012.

 

5.             The statement of comprehensive income and statement of financial position for the year ended 30 June 2012 do not constitute statutory accounts within the meaning of s240 Companies Act 2006.  They are an extract from the full Group accounts, which will be the subject of an unqualified audit report.

 

6.             The net asset value per share was 696p (2011 - 908p) based on net assets of £31.8m (2011 - £41.4m) and on 4.6m (2011 - 4.6m) ordinary shares being in issue at 30 June 2012 and 2011.

 

7.             The Annual Report will be circulated to all shareholders and, thereafter, copies will be available from the Company Secretary at 102 West Port, Edinburgh EH3 9DN.

 

8.             Notice is hereby given that the thirty second Annual General Meeting of the Company will be held at 22 Berners Street, London, W1T 3LP on 14 November 2012, at 12 noon.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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