Preliminary Results

Intermodal Resource Plc 16 March 2006 16 March 2006 Intermodal Resource plc Preliminary announcement of results for the year ended 31 December 2005 2005 Highlights • Strong revenue and profit performance, revenues up 120% with EBITDA up 64% • A year of significant strategic achievement including the successful acquisition of Tailored Hire • Continued growth of UK fleet from 12 to 505 • Increase in utilisation of German fleet to 92.4% • Strengthened balance sheet and reduced gearing • Successful launch of Assetcare, the trailer rental industry's first online maintenance service • Expansion of infrastructure has created platform for anticipated future growth Financial Summary 2005 2004 % Change £000 £000 (Audited) (Unaudited proforma) Turnover 5,186 2,361 + 120 EBITDA 1,565 952 + 64 Profit before exceptionals and amortisation 505 315 + 60 Basic earnings per share (p) 0.74 - - Gearing 110% 132% -22 *Since the Group was only formed in August 2004, in order that an annualised comparison of results and a comparison of financial position can be made, unaudited profit and loss account information is used for the year ended 31 December 2004. Robert Montague, Chief Executive of Intermodal Resource plc, commented: 'I am delighted that Intermodal Resource has delivered further growth in both its UK and German operations. In the UK, we continued to drive strong organic growth, augmented by acquisition. In Germany, Axis delivered a robust performance driven by improved utilisation levels. 'The businesses are well placed for further growth and the securing of additional new contracts. Looking ahead, we have a clear vision for the Group and look forward to reporting further progress in 2006.' Enquiries: Intermodal Resource plc 01993 883148/07795 085808 Robert Montague, Chief Executive Officer Sharan Huliat, Communications Executive JOINT STATEMENT OF THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER We are pleased to report a period of growth for the Group in 2005. Group profits on a proforma comparable basis (before exceptionals and amortisation) were up 60% driven by improved utilisation levels at Axis, the acquisition of Tailored Hire and increased activity in the UK businesses. Our objective remains to expand our contract hire business in the UK and Europe in a low risk manner, generating positive cash flow and minimising our residual value exposure. This approach differs from our competitors' business models in this industry. Our strategy, combined with the continuing demand for contract hire equipment, means the Group is well positioned to continue to grow strongly in 2006. Review of operations Axis Revenues at the German business, Axis, increased during the year largely as a result of an improvement in utilisation levels to 92.4 per cent. We continue to increase the number of long term contracts and these now represent in excess of 70 per cent of Axis' revenues. A strong emphasis on customer service and an advanced understanding of their requirements has led to a high renewal rate of existing contracts. As with previous years, we have disposed of a number of older chassis and introduced further new units, thereby lowering the average age of the chassis fleet. However, focus will remain on the growth of the swapbody fleet, as we see this as the key driver for expansion going forward. We have almost completed the refurbishment programme of our older swapbodies lengthening units from 7.15m to the client preferred 7.45m. There will be some continuation of this in 2006 but the emphasis will be on the acquisition of new equipment in line with the expected increase in demand. In January 2005 the 'MAUT' toll was introduced in Germany for freight transported by road. This has further encouraged the use of rail and barge transport facilities and increased the demand for intermodal equipment such as swapbodies. Axis' enhanced profile, highly developed understanding of the industry and improving trading conditions indicate that the business will continue to grow in 2006. United Kingdom In the UK we now operate a fleet of 217 road trailers and 288 trucks following the acquisition and successful integration of Tailored Hire in July. The development of the UK business has not only broadened our market appeal but extended our commercial relationships to include Dennison trailers as well as several other truck manufacturers. Approximately 450,000 trucks above 7.5 tonnes are in commercial use in the UK today. Of these, approximately 81,000 are either rented or on contract hire. Additionally, there are approximately 190,000 trailers currently operated by UK based companies and some 16,000 of these are replaced every year. Approximately 30 per cent of all UK trailers are rented and therefore there is ample opportunity for Trailerent and Tailored Hire to achieve their targets for the current year. We continue to focus on long term contracts of typically between three and five years duration. In the first two months of 2006, the Group has secured contracts to increase the UK fleet by 57 units. During the year Assetcare developed its unique online facility. Assetcare has proved a great success with the majority of Trailerent's customers opting for the maintenance package. Looking forward, and following the acquisition of the minority interest, we plan to extend the success of Assetcare by marketing its services to third parties. Board Changes As a result of the growth of the Group we are pleased to report the appointment of Andrew Frome as a director and he will assume the role of Group Finance Director with effect from 1 April 2006. Andrew brings with him a wealth of experience gained in both financial and operational roles. We would like to take this opportunity to thank Stephen Ball for his efforts as Group Finance Director and look forward to his continuing involvement as an Executive Director. Outlook The Group is now well established and positioned to grow in 2006. Despite the unpredictable ordering patterns we are seeing as a result of current market conditions within the UK trailer contract hire industry, we are convinced that the combination of our team, knowledge, partnerships, products and services will enable us to reach our targets in both the UK and mainland Europe. In line with our strategy, we look forward to continuing to drive our businesses forward through both acquisition and organic growth and remain focused on increasing profitability and shareholder value. Christopher Rogers Chairman Robert J Montague CBE Chief Executive Officer 15 March 2006 FINANCIAL REVIEW Profit and loss account Year ended 31 December Audited Audited Unaudited proforma 2005 2004 2004 £000 £000 £000 Turnover 5,186 1,086 2,361 ----------------------------- ------- -------- -------- Profit before interest tax depreciation and amortisation 1,565 285 952 Net interest (271) (79) (208) Depreciation (789) (178) (429) ----------------------------- ------- -------- -------- Profit before exceptionals and amortisation 505 28 315 Exceptional items - - 358 Amortisation (116) (28) (28) ----------------------------- ------- -------- -------- Profit before tax 389 - 645 Tax (14) - 233 ----------------------------- ------- -------- -------- Profit after tax 375 - 878 Equity minority interests 1 - - ----------------------------- ------- -------- -------- Retained profit 376 - 878 ----------------------------- ------- -------- -------- Since the Group was only formed in August 2004 in order that an annualised comparison of results can be made, unaudited profit and loss account information is used for the year ended 31 December 2004 as well as audited statutory information. Trading analysis Group turnover has increased to £5,186,000 with profit before exceptionals and amortisation increasing to £505,000. During 2005 Group overheads have increased due to additional costs associated with both expansion and the acquisition and subsequent integration of Tailored Hire. This strengthening of infrastructure has created a solid platform for future growth and enhanced shareholder value. Interest cover has increased to 2.9x. Balance sheet At 31 December 2005 2004 £000 £000 Fixed assets 6,515 4,232 Debtors 1,386 208 Cash 4 6 Creditors and accruals (1,356) (761) Debt - short term (2,457) (1,206) Long term debt and provisions (2,696) (1,645) --------------------------------- --------- --------- 1,396 834 Goodwill 3,121 1,327 --------------------------------- --------- --------- Net assets 4,517 2,161 --------------------------------- --------- --------- Balance sheet The overall net asset position has improved substantially during 2005, as a result of the issue of equity share capital in March and July and with the benefit of the retained profit for the year. This has resulted in a reduced gearing ratio of 110 per cent (2004: 132 per cent). Bank debt, loans and amounts due under finance leases have increased from £2,851,000 to £4,991,000 at 31 December 2005. Whilst we continue to work with various banks in order to secure asset funding for our UK operations, a recent extension of our commercial relationship with Bank of Scotland Asset Finance through the signing of an agency agreement will enable the Group to fund a substantial proportion of the planned expansion of our UK truck and trailer businesses. Acquisition The acquisition of Tailored Hire Limited was completed in July 2005 at an overall cost of £2,149,000 and has been consolidated from that date. Foreign exchange The Group is exposed to fluctuations in the value of the Euro. Overseas trading results have been translated using a euro exchange rate of 1.455. The movement in the exchange rate during 2005 had a marginal impact on the results for the year. Dividend The Board's intention is for the Group to retain its earnings to finance the growth and expansion of its business. Accordingly they do not intend to pay a dividend for 2005. Share price and earnings per share The price of the Company's ordinary shares as quoted on AIM at the close of business on 31 December 2005 was 8.25p. The basic earnings per share for 2005 amounted to 0.74pence (2004:nil). GROUP PROFIT AND LOSS ACCOUNT For the year ended 31 December 2005 Year ended 31 Dec 05 1 Dec 03 to Continuing Acquisitions Total 31 Dec 04 £000 £000 £000 £000 Turnover 2,767 2,419 5,186 1,086 Cost of sales 1,138 1,838 2,976 512 ---------------------- -------- --------- -------- -------- Gross profit 1,629 581 2,210 574 Administrative expenses - Other 1,222 212 1,434 467 - Amortisation of goodwill 68 48 116 28 ---------------------- -------- --------- -------- -------- Operating profit before taxation 339 321 660 79 Net interest payable 271 79 ---------------------- -------- --------- -------- -------- Profit on ordinary activities before taxation 389 - Tax on profit on ordinary activities 14 - ---------------------- -------- --------- -------- -------- Profit on ordinary activities after taxation 375 - Equity minority interests 1 - ---------------------- -------- --------- -------- -------- Profit for the financial year 376 - ---------------------- -------- --------- -------- -------- Basic earnings per share - pence 0.74 - Diluted earnings per share - pence 0.71 - GROUP BALANCE SHEET As at 31 December 2005 Group Group 2005 2004 £000 £000 Fixed assets Intangible assets 3,121 1,327 Tangible assets 6,515 4,232 ----------------------------- ----------- ----------- 9,636 5,559 Current assets Debtors 1,386 208 Cash at bank and in hand 4 6 ----------------------------- ----------- ----------- 1,390 214 Creditors - amounts falling due within one year 3,813 1,967 ----------------------------- ----------- ----------- Net current liabilities (2,423) (1,753) ----------------------------- ----------- ----------- Total assets less current liabilities 7,213 3,806 Creditors - amounts falling due after more than one 2,534 1,645 year Provision for liabilities 162 - ----------------------------- ----------- ----------- 4,517 2,161 ----------- ----------- Capital and reserves Called up share capital 2,943 2,038 Share premium account 1,070 123 Other reserve 180 - Profit and loss account 325 - ----------------------------- ----------- ----------- Shareholders' funds 4,518 2,161 Equity minority interests (1) - ----------------------------- ----------- ----------- Capital employed 4,517 2,161 ----------------------------- ----------- ----------- GROUP CASH FLOW STATEMENT For the year ended 31 December 2005 Period from Year ended 1 Dec 03 to 31 Dec 05 31 Dec 04 £000 £000 Net cash inflow from operating activities 1,128 429 ------------------------------ --------- --------- Returns on investments and servicing of finance ------ ------ Interest received 1 1 Interest paid (153) (41) Finance lease interest paid (119) (39) ------ ------ Net cash outflow from investments and servicing of finance (271) (79) Capital expenditure Purchase of tangible fixed assets (750) (115) Sale of tangible fixed assets 444 197 ------------------------------ --------- --------- Net cash (outflow) inflow from capital expenditure (306) 82 ------------------------------ --------- --------- Acquisitions and disposals Purchase of subsidiary undertakings (1,849) - Net overdrafts acquired with subsidiary undertakings (91) (358) ------------------------------ --------- --------- Net cash outflow from acquisitions and disposals (1,940) (358) ------------------------------ --------- --------- Cash (outflow) inflow before financing (1,389) 74 ------------------------------ --------- --------- Financing Issues of shares 1,819 520 Expenses relating to issues of shares (87) (724) Net movement on other loan finance (63) 55 Net movement on bank loans 270 (69) Capital element of finance leases (714) (208) ------------------------------ --------- --------- Net cash inflow (outflow) from financing 1,225 (426) ------------------------------ --------- --------- Decrease in cash (164) (352) Movement in overdraft 91 358 Effect of exchange rate fluctuations 71 - ------------------------------ --------- --------- (Decrease) increase in cash at bank and in hand (2) 6 ------------------------------ --------- --------- NOTES 1. Publication of non-statutory accounts The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The summarised balance sheet at 31 December 2005 and the summarised profit and loss account, summarised cash flow statement and associated notes for the year then ended have been extracted from the Group's 2005 statutory financial statements upon which the auditors opinion is unqualified and does not include any statement under Section 237 of the Companies Act 1985. These financial statements have not yet been delivered to the registrar of companies. 2. Subsidiary undertakings The subsidiary undertakings are owned directly by Intermodal Resource plc. All subsidiaries have been consolidated. Date Nature of Acquired acquired business --------------------- -------- --------- --------- Trailerent Limited 100% 5 Aug 2004 Contract hire Axis Intermodal GmbH (incorporated in Germany) 100% 6 Aug 2004 Contract hire Tailored Hire Limited 100% 11 Jul 2005 Contract hire Asset Care Transport Solutions Limited 51% 30 Sep 2004 Maintenance --------------------- -------- --------- --------- The investment in Asset Care Transport Solutions Limited represents a subcription in 51 shares of £1 each. The group has used acquisition accounting to account for the purchase of Tailored Hire Limited. Book value Fair value Fair value of adjustments net assets acquired £000 £000 £000 --------------------- -------- --------- --------- Tangible fixed assets 2,816 - 2,816 Debtors 908 (7) 901 Bank overdraft (91) - (91) Creditors (532) (106) (638) Finance leases (2,556) - (2,556) Provision for liabilities and charges (193) - (193) --------------------- -------- --------- --------- Net assets at date of acquisition 352 (113) 239 Goodwill arising 1,910 --------------------- -------- --------- --------- Consideration 2,149 --------------------- -------- --------- --------- Satisfied by: Cash 1,849 New issued shares 300 --------------------- -------- --------- --------- 2,149 -------- --------- --------- The consolidated results of Tailored Hire Limited after tax prior to acquisition were as follows: Period from 1 Apr 05 to Year ended 30 Jun 05 31 Mar 05 £000 £000 ----------------------- --------- --------- Turnover 1,060 3,569 ----------------------- --------- --------- (Loss) profit on ordinary activities before (112) 317 taxation Tax - (97) Dividends (525) (150) ----------------------- --------- --------- (637) 70 --------- --------- The contribution of Tailored Hire Limited to group cash flows are summarised as follows: £000 --------- Net cash inflow from operating activities 419 Net interest paid (78) Capital expenditure (55) Overdraft on acquisition (91) Financing 157 ----------------------- --------- Increase in cash 352 ----------------------- --------- 3. Reconciliation of movement in shareholders' funds Share Share Other Profit and Total Total capital premium reserve loss account 2005 2004 £000 £000 £000 £000 £000 £000 ---------------- ------ -------- ------- ------- ------- ------- At 1 January 2005 2,038 123 - - 2,161 - Issued on share for share exchange - - - - - 573 Issued pursuant to convertible loan agreements - - - - - 1,792 AIM Listing expenses - - - - - 260 Shares placed at AIM Listing - - - - - 520 Issued - March 2005 231 369 - - 600 - Issued - July 2005 - to fund Tailored Hire acquisition 674 665 180 - 1,519 - Net exchange adjustment relating to intercompany trade and investment in Axis Intermodal GmbH - - - (51) (51) - Costs of issuing shares - (87) - - (87) (984) Retained profit for the year - - - 376 376 - ---------------- ------ -------- ------- ------- ------- ------- 2,943 1,070 180 325 4,518 2,161 ------ -------- ------- ------- ------- ------- 4. Net cash inflow from operating activities Period from Year ended 01 Dec 03 to 31 Dec 05 31 Dec 04 £000 £000 -------------------------------- --------- --------- Operating profit for the year 660 79 Depreciation 789 178 Amortisation of goodwill 116 28 (Profit) loss on sale of tangible fixed assets (73) 11 (Increase) decrease in debtors (277) 170 Decrease in creditors (87) (37) -------------------------------- --------- --------- 1,128 429 --------- --------- 5. Reconciliation of net cash flow to movement in net debt Period from Year ended 01 Dec 03 to 31 Dec 05 31 Dec 04 £000 £000 -------------------------------- --------- --------- Decrease in cash for the year (164) (352) Net movement on other loans 63 (55) Net movement on bank loans (270) 69 Cash outflow from finance leases 714 208 -------------------------------- --------- --------- Change in net debt from cash flows 343 (130) Exchange rate fluctuations 71 - Finance leases acquired with subsidiary undertaking (2,556) (1,289) Loans acquired with subsidiary undertaking - (1,426) -------------------------------- --------- --------- Movement in net debt in the year (2,142) (2,845) Net debt at 1 January 2005 (2,845) - -------------------------------- --------- --------- Net debt at 31 December 2005 (4,987) (2,845) -------------------------------- --------- --------- 6. Earnings per ordinary share The calculation of the basic earnings per ordinary share is based upon the profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the period. 7. Annual Report The annual report and financial statements will be posted to shareholders on, 31 March 2006. Further copies will be available after that date from the Company Secretary, 8 Fenlock Court, Lower Road, Long Hanborough, Oxfordshire, OX29 8LN 8. Annual General Meeting The Annual General Meeting of Intermodal Resource plc will be held at 1 Westminster Way, Oxford OX2 0PZ on Thursday, 4 May 2006 at 11.00am. This information is provided by RNS The company news service from the London Stock Exchange

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