Half Yearly Report

RNS Number : 7571N
Aukett Fitzroy Robinson Group PLC
17 June 2010
 

EMBARGOED UNTIL 7AM ON THURSDAY 17 JUNE 2010

 

 

 

Aukett Fitzroy Robinson Group Plc

Interim Results

For the Six Months ended 31 March 2010

 

 

 

Aukett Fitzroy Robinson Group Plc ("AFR" or the "Group"), the international practice of architects and interior design specialists, is pleased to announce its interim results for the period ended 31 March 2010.

 

 

Highlights

 

·      Continuing improvement in financial performance

 

·      Pre tax loss reduced to £299,000 (2009: loss of £1,216,000).

 

·      £488,000 reduction in net debt through cash generation

 

·      UK operations generated profit of £22,000 (2009: loss of £1,794,000)

 

·      German operation in Berlin performing strongly

 

·      Improved order pipeline of projects with an estimated future fee value of up to £80m

 

·      Balance sheet remains strong despite reduced revenues

 

·      Cost reductions of £3,500,000 achieved

 

 

Nicholas Thompson, Chief Executive Officer of Aukett Fitzroy Robinson said:

 

"We have maintained a strong and highly skilled team of people which has enabled us to continue to win commissions in a difficult market. This, coupled with the awards we have won demonstrates the regard with which our work is held within the industry.

 

With a stable cash position, strong brand and track record in commercial markets that are experiencing signs of recovery, we believe that we are well placed to benefit from any sustained upturn as confidence and funding returns to the property development market."

 

 

Enquiries

 

Aukett Fitzroy Robinson - 020 7636 8033

Nicholas Thompson, Chief Executive Officer

Duncan Harper, Group Finance Director

 

finnCap - 020 7600 1658

Corporate Finance Clive Carver / Rose Herbert

Corporate Broking Simon Starr / Stephen Norcross

 

Hermes Financial PR

Chris Steele - 07979 604687

Trevor Phillips - 07889 153628

 



Interim statement

 

 

Overview

 

We are delighted to report a substantially improved financial position with half year losses before tax reduced by 75% to £299,000 (2009: loss of £1,216,000).

 

Whilst revenues have continued to fall, due to the reduced demand for professional services and the ongoing standstill on some projects, we have managed our expenditure downwards by more than the revenue fall.

 

During this period we have continued to add to our order pipeline which includes some 20 schemes with a total construction value of £2.1bn and an estimated future fee value of up to £80m, on projects each over £10m in construction value.

 

Summary of results

 

Group revenues for the six months to 31 March 2010 fell by half to £4,081,000 (2009: £8,177,000) principally due to a slow down in our Russian workload and a reduced level of activity in our Middle East commercial markets.

 

Our operating loss reduced substantially to £392,000 (2009: loss of £1,284,000). After accounting for net interest receivable of £28,000 (2009: net interest payable £5 000), our share of profits after tax from associates and joint ventures of £65,000 (2009: £73,000) and a taxation credit of £60,000 (2009: credit of £358,000) the loss for the period was £239,000 (2009: loss of £858,000).

 

During the six months we have been pro-active in cash management and have generated £488,000 of additional cash flow to reduce net debt to £905,000 at the end of March 2010.

 

Operations

 

In previous reports we have stated that we would trade through these difficult times and retain a skill base appropriate to the size of our organisation required by our client base. This has been achieved over the past two years by staff and overhead reductions in most of our network. In the current environment we are optimising our use of resources both across projects and by offices working jointly on projects to avoid unnecessary costs.

 

The UK operation achieved a profit in the period of £22,000 (2009: loss of £1,794,000) even though UK commercial activity was subdued during the first half. This successful result was due to the continued cost reduction and expenditure recovery measures such that overall costs fell by 66% compared to the revenue fall of 41%. Revenue fell to £3,253,000 (2009: £5,512,000).

 

UK project-based fee income performed well during the period achieving 77% of prior year revenues. Our six largest projects account for only 40% of UK revenues. This demonstrates the spread of revenue, across a number of commercial sectors including offices, hotels and retail thus giving comfort to the sustainability of our income generation. The main fall in UK revenue came from the delay in UAE instructed projects and provisions totalling £531,000 resulting in a reduction in revenue to £503,000 (2009: £1,722,000).

 

The anticipated reduction in public sector spending over the next few years is unlikely to have any direct impact on the UK operation as less than 5% of revenue is from this source.

 

Russia endured the most difficult conditions within the group with a loss of £342,000 (2009: profit of £595,000). Revenue fell to £181,000 (2009: £1,908,000) as clients had to put projects on hold or were taken over by the funding bank. This occurred in both Moscow and the wider CIS market. Action was taken locally to reduce staffing levels and costs. Expenditure fell by an underlying 80% compared to the revenue fall of 90%, however, one-off cost provisions restricted the cost reduction to nearer 60% in the period.

 

Continental Europe, comprising operations in Poland, Czech Republic and Slovakia had a mixed set of results producing a second year of first half losses at £72,000 (2009: loss of £85,000) on revenues down 15% at £647,000 (2009: £757,000).

 

The results also include our share in other overseas operations. In Germany our associate office in Berlin performed well for the second year running and our joint venture in Frankfurt broke even during the period. These offices contributed £65,000 (2009: £73,000) of profit after tax.

 

People

 

We are grateful to the staff across our network who, in many cases, have sacrificed part of their personal remuneration to assist the group in these straitened times. This has contributed significantly to our ability to maintain a first-class service to our clients.

 

Awards

 

As a practice we are proud of the fact that we have won two Awards from the British Council for Offices ("BCO") in their regional competitions. Queens Anne's Gate is a £100m refurbishment of a building in the West End for Land Securities. Interestingly we were commissioned by Land Securities in 1972 to build out the original development. This refurbishment won the both an "excellent" BREEAM rating for environmental standards and the BCO award for refurbishment and renewal at the London and South East Awards in April 2010. Then in May 2010 our new corporate HQ for NAPP Pharmaceuticals won the BCO award in the Midlands and Eastern region for Corporate Workplace.

 

Prospects

 

Cash generation and debt recovery were a focal activity as the recession took hold. Since the half year we have continued to recover some of our older outstanding monies with some £1.0m being recovered in April and May in addition to normal cash recovery activities. We also anticipate recovering the majority of the monies due from our successful litigation once the properties upon which we have secured charges are sold. This will add over £1.2m of new cash flow when received.

 

Given the steps taken in cost reduction we do not foresee any further, significant reductions in operating expenditure beyond the savings of £3.5m achieved to date.

 

We see the UK market becoming more focused on the capital and in particular the commercial office refurbishment market. We have an enviable track record in this sector of the market and a portfolio of sixty completed buildings in the City of London dating back to the early 1980's.  Demand for renewal of this space will coincide with the predicted recovery in commercial office rents by 2012. This provides a considerable opportunity for AFR. Additionally we work with an impressive London client base that includes Land Securities, Great Portland Estates, GE Capital, Grosvenor, Imperial College, The Mercers' Company, Fenwick and many other prestigious organisations. 

 

We have maintained a strong and highly skilled team of people which has enabled us to continue to win commissions in a difficult market. This, coupled with the awards we have won demonstrates the regard with which our work is held within the industry.

 

With a stable cash position, strong brand and track record in commercial markets that are experiencing signs of recovery, we believe that we are well placed to benefit from any sustained upturn as confidence and funding returns to the property development market.

 

 

16 June 2010



Consolidated income statement

 

For the six months ended 31 March 2010

 

 


Note

Unaudited

six months

 to 31 March

2010

£'000

 

Unaudited

six months

to 31 March

2009

£'000

Audited

year to

30 September

2009

£'000

Revenue

2

4,081

8,177

14,948






Sub consultant costs


(651)

(2,172)

(3,868)

Revenue less sub consultant costs


3,430

6,005

11,080






Personnel related costs


(2,723)

(5,138)

(9,135)

Office related costs


(637)

(1,388)

(2,200)

Other operating expenses


(522)

(1,111)

(2,164)

Other operating income


60

348

290

Operating loss


(392)

(1,284)

(2,129)






Finance income


60

16

219

Finance costs


(32)

(21)

(57)

Loss after finance costs


(364)

(1,289)

(1,967)






Share of results of associate & joint ventures


65

73

91

Loss before income tax


(299)

(1,216)

(1,876)






Income tax


60

358

459

Loss for the period attributable to

equity holders of the company


 

(239)

 

(858)

 

(1,417)






Basic losses per share

3

(0.16)p

(0.59)p

(0.97)p

Diluted losses per share

3

(0.16)p

(0.59)p

(0.97)p






Dividends per share

4

-

0.11p

0.11p

 

 

 

 

 

Consolidated statement of recognised income and expense

 

For the six months ended 31 March 2010

 

 



Unaudited

six months

 to 31 March

2010

£'000

 

Unaudited

six months

to 31 March

2009

£'000

Audited

year to

30 September

2009

£'000

Currency translation differences


55

1

53

Net income recognised directly in equity


55

1

53






Loss for the period


(239)

(858)

(1,417)

Total gains and losses recognised in period

attributable to equity holders of the company


 

(184)

 

(857)

 

(1,364)

 


Consolidated balance sheet

 

At 31 March 2010

 

 


Note

Unaudited

As at 31

March

 2010

£'000

 

Unaudited

As at 31

March

2009

£'000

Audited

As at 30

September

2009

£'000

Non current assets





Goodwill


1,596

1,596

1,596

Property, plant & equipment


425

550

473

Investment in associate


103

136

175

Investment in joint venture


2

16

-

Deferred tax


282

123

398

Total non current assets


2,408

2,421

2,642






Current assets





Trade and other receivables


6,850

10,207

9,609

Current tax


60

585

622

Cash and cash equivalents

6

467

1,176

472

Total current assets


7,377

11,968

10,703






Total assets


9,785

14,389

13,345






Current liabilities





Trade and other payables


(3,811)

(7,687)

(6,230)

Current tax


-

(2)

(128)

Short term borrowings

6

(672)

(150)

(1,058)

Provisions


(255)

(626)

(435)

Total current liabilities


(4,738)

(8,465)

(7,851)






Non current liabilities





Investment in joint venture


-

-

(7)

Long term borrowings

6

(700)

(788)

(807)

Deferred tax


(142)

(240)

(291)

Total non current liabilities


(842)

(1,028)

(1,105)






Total liabilities


(5,580)

(9,493)

(8,956)






Net assets


4,205

4,896

4,389











Capital and reserves





Share capital

7

1,456

1,456

1,456

Foreign currency translation reserve

7

238

131

183

Retained earnings

7

69

867

308

Other distributable reserve

7

2,442

2,442

2,442

Total equity attributable to

equity holders of the company

 

7

 

4,205

 

4,896

 

4,389

 

 

 


Consolidated cash flow statement

 

For the six months ended 31 March 2010

 

 


Note

Unaudited

six months

 to 31 March

2010

£'000

 

Unaudited

six months

to 31 March

2009

£'000

Audited

year to

30 September

2009

£'000

Cash flows from operating activities





Cash (used in) / generated from operations

5

(62)

564

(860)

Interest paid


(32)

(21)

(57)

Income taxes received / (paid)


448

(348)

(385)

Net cash from / (used in) operating activities


354

195

(1,302)






Cash flows from investing activities





Purchase of property, plant & equipment


(11)

(399)

(433)

Sale of property, plant & equipment


-

-

3

Acquisition of subsidiary (net of cash acquired)


-

-

8

Interest received


14

16

28

Dividends received from associate


123

43

44

Net cash from / (used in) investing activities


126

(340)

(350)






Cash flows from financing activities





Repayment of bank loan


(75)

(75)

(173)

Inception of asset finance arrangements


-

-

184

Payment of asset finance liabilities


(31)

-

(27)

Dividends paid


-

-

(160)

Net cash used in financing activities


(106)

(75)

(176)






Net change in cash & cash equivalents


374

(220)

(1,828)






Cash, cash equivalents and bank

Overdraft at start of period


 

(373)

 

1,423

 

1,423

Currency translation differences


8

(27)

32

Cash, cash equivalents and bank

overdraft at end of period

 

6

 

9

 

1,176

 

(373)

 

 



Notes to the interim results

 

 

1          Basis of preparation

 

The financial information presented in this interim report has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ('IFRS') as adopted by the EU that are expected to be applicable to the financial statements for the year ending 30 September 2010 and on the basis of the accounting policies expected to be used in those financial statements.

 

 

2          Segmental reporting

 

The group's operations currently comprise a single business segment and three separately reportable geographical segments.

 

Geographical segments are based on the location of the group's offices from which the services are delivered. Group level activities (such as finance and marketing) are integrated within the United Kingdom operations and hence their costs are reported within the United Kingdom segment.

 

Currently, the majority of the work performed on projects located in the Middle East, is delivered from our London office, and therefore is included within the United Kingdom segment rather than being shown as a separate Middle East segment.

 

The group's associate and joint ventures are all based in Continental Europe.

 

 

Segment revenue


Unaudited

Six months

 to 31 March

2010

£'000

 

Unaudited

Six months

to 31 March

2009

£'000

Audited

Year to

30 September

2009

£'000

United Kingdom


3,253

5,512

10,094

Continental Europe


647

757

1,348

Russia and former CIS


181

1,908

3,506

Total revenue


4,081

8,177

14,948

 

 

Segment result


Unaudited

Six months

 to 31 March

2010

£'000

 

Unaudited

Six months

to 31 March

2009

£'000

Audited

Year to

30 September

2009

£'000

United Kingdom


22

(1,794)

(3,188)

Continental Europe


(72)

(85)

(208)

Russia and former CIS


(342)

595

1,267

Operating loss


(392)

(1,284)

(2,129)






Net finance income / (costs)


28

(5)

162

Share of results of associate & joint ventures


65

73

91

Loss before income tax


(299)

(1,216)

(1,876)

 



The geographical split of revenue based on the location of project sites was:

 



Unaudited

Six months

 to 31 March

2010

£'000

 

Unaudited

Six months

to 31 March

2009

£'000

Audited

Year to

30 September

2009

£'000

United Kingdom


2,717

3,530

5,955

Continental Europe


680

994

1,710

Russia and former CIS


181

1,931

3,511

Middle East


503

1,722

3,772

Total revenue


4,081

8,177

14,948

 

 

3          Earnings per share

 

The calculations of basic and diluted earnings per share are based on the following data:

 

Earnings


Unaudited

Six months

 to 31 March

2010

£'000

 

Unaudited

Six months

to 31 March

2009

£'000

Audited

Year to

30 September

2009

£'000

Loss for the period


(239)

(858)

(1,417)

 

 

Number of shares


Unaudited

Six months

 to 31 March

2010

'000

 

Unaudited

Six months

to 31 March

2009

'000

Audited

Year to

30 September

2009

'000

Weighted average number of shares


145,619

145,619

145,619

Effect of dilutive options


-

-

-

Diluted weighted average number of shares


145,619

145,619

145,619

 

 

4          Dividends

 



Unaudited

Six months

 to 31 March

2010

£'000

 

Unaudited

Six months

to 31 March

2009

£'000

Audited

Year to

30 September

2009

£'000

2007/08 final dividend of 0.11p per share


-

160

160

Total dividends


-

160

160

 

 



 

5          Reconciliation of profit before income tax to net cash (used in) /

generated from operations

 



Unaudited

Six months

 to 31 March

2010

£'000

 

Unaudited

Six months

to 31 March

2009

£'000

Audited

Year to

30 September

2009

£'000

Loss before income tax


(299)

(1,216)

(1,876)

Finance income


(60)

(16)

(219)

Finance costs


32

21

57

Share of results of associate & joint ventures


(65)

(73)

(91)

Depreciation


59

122

253

Loss on disposal of property, plant & equipment


-

-

3

Goodwill written off


-

-

9

Change in trade & other receivables


2,938

484

1,323

Change in trade & other payables


(2,487)

616

(754)

Change in provisions


(180)

626

435

Net cash (used in) / generated from operations


(62)

564

(860)

 

 

6          Analysis of net (debt) / funds

 



Unaudited

As at 31

March

 2010

£'000

 

Unaudited

As at 31

March

2009

£'000

Audited

As at 30

September

2009

£'000

Cash and cash equivalents


467

1,176

472

Secured bank overdraft


(458)

-

(845)

Cash, cash equivalents and bank overdraft


9

1,176

(373)






Secured bank loan


(788)

(938)

(863)

Asset finance liabilities


(126)

-

(157)

Net (debt) / funds


(905)

238

(1,393)

 

 



Unaudited

As at 31

March

 2010

£'000

 

Unaudited

As at 31

March

2009

£'000

Audited

As at 30

September

2009

£'000

Cash and cash equivalents


467

1,176

472

Short term borrowings


(672)

(150)

(1,058)

Long term borrowings


(700)

(788)

(807)

Net (debt) / funds


(905)

238

(1,393)

 

 



7          Consolidated statement of changes in equity

 

For the six months ended 31 March 2010

 


 

 

Share

capital

£'000

Foreign

currency

translation

reserve

£'000

 

 

 

Retained

earnings

£'000

 

Other

distributable

reserves

£'000

 

 

Unaudited

Total

£'000

At 1 October 2009

1,456

183

308

2,442

4,389

Loss for the period

-

-

(239)

-

(239)

Currency translation

differences

 

-

 

55

 

-

 

-

 

55

At 31 March 2010

1,456

238

69

2,442

4,205

 

For the six months ended 31 March 2009

 


 

 

Share

capital

£'000

Foreign

currency

translation

reserve

£'000

 

 

 

Retained

earnings

£'000

 

Other

distributable

reserves

£'000

 

 

Unaudited

Total

£'000

At 1 October 2008

1,456

130

1,725

2,602

5,913

Loss for the period

-

-

(858)

-

(858)

Currency translation

differences

 

-

 

1

 

-

 

-

 

1

Dividends paid

-

-

-

(160)

(160)

At 31 March 2009

1,456

131

867

2,442

4,896

 

 

For the year ended 30 September 2009

 


 

 

Share

capital

£'000

Foreign

currency

translation

reserve

£'000

 

 

 

Retained

earnings

£'000

 

Other

distributable

reserves

£'000

 

 

Audited

Total

£'000

At 1 October 2008

1,456

130

1,725

2,602

5,913

Loss for the period

-

-

(1,417)

-

(1,417)

Currency translation

differences

 

-

 

53

 

-

 

-

 

53

Dividends paid

-

-

-

(160)

(160)

At 30 September 2009

1,456

183

308

2,442

4,389

 

 



8          Status of interim results

 

The interim results cover the six months ended 31 March 2010 and were approved by the board of directors on 16 June 2010. The interim results are unaudited.

 

The interim condensed set of consolidated financial statements in the interim report are not statutory accounts as defined by Section 434 of the Companies Act 2006.

 

Comparative figures for the year ended 30 September 2009 have been extracted from the statutory accounts of the group for that period.

 

The statutory accounts for the year ended 30 September 2009 have been reported on by the group's auditors and delivered to the Registrar of Companies. The audit report thereon was unqualified, did not include references to matters which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under Section 498 of the Companies Act 2006.

 

 

9          Further information

 

Copies of the interim report will be dispatched to holders of 10,000 or more shares in due course. Copies will also be available on the company's website (www.aukettfitzroyrobinson.com) and from the registered office of the company (36-40 York Way, London, N1 9AB).

 

 

10        Nominated Adviser / Broker

 

The Company has been advised that, with effect from 30 April 2010, its Nominated Adviser and Broker has changed its name to finnCap Ltd.

 


This information is provided by RNS
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