Interim Results

Christie Group PLC 10 September 2004 CHRISTIE GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2004 Chairman's Interim Statement to 30 June 2004 I am pleased to report that our operating profit for the half year to 30 June 2004 has risen to £1.4 million (2003 - £0.8 million) on increased sales of £35.7 million (2003 - £31.6 million). This improvement has been reflected in our eps of 2.41p (2003 - 1.37p). The Board have declared an interim dividend which remains at 1p per share. Some highlights are detailed below, but the mix includes 16% sales growth in our Professional Business Services Division; a good performance from the recently acquired retail stocktaking business, Orridge, but lower sales from the software businesses which have faced difficult market conditions. As reported at the time of releasing our figures for 2003, the integration and revitalisation of the Orridge Retail Stocktaking business is proceeding well. This is illustrated by the improvement in our Stock and Inventory Services Division to a profit of £0.5 million from a loss of £0.1 million in the corresponding period last year. Impressively, turnover has risen from £8.6 million to £11.3 million for the half year as we continue to add new contracts. Our Software Solutions Business has seen an increase in retail exports through our newly established offices in Italy and the UK with recent signings such as Rangers Football Club and Sarah Lee (branded apparel) in Italy, and elsewhere in territories such as Israel and China with the assistance of local distributors. Our Hospitality business has been amalgamated in the UK with our Retail business, which has facilitated a reduction in future costs through some rationalisation of services. The costs of our new software product development for this division for the 2004 year and subsequent periods are being capitalised as a precursor to the new International Financial Reporting Standards being introduced in 2005. The figure capitalised in the half year was £206,000 (2003 - nil). The development programme will generate new income from 2006. Our Professional Services business enjoyed a strong first half, with turnover up 16% and profits increased by 38%. For the first time, all branches of our newly completed Financial Services UK network made a contribution. Agency sales remained buoyant throughout the first half in all of our chosen sectors of activity. Our corporate advisory teams were busy in the period providing transactional, investment and valuation advice to clients including QMH, Thistle Hotels, Network Rail and Travelodge. During the period, we relocated both the Group and Christie & Co's head offices to larger and more modern premises adjacent to our former Victoria Street location. We believe that the Greater London agency business (where our Group has its origins) offers scope for increased levels of profitable trade. To gain further share of the London market, we will be opening two further London sales offices under the Christie & Co brand and utilising the christie.com website. These offices will be located 'North and South'. Our International agency offices have increased turnover and moved closer to profitability whilst remaining a long way from maturity. The heralding of higher interest rates keeps us watchful of our weekly sales indicators, but we are experiencing no weakening of our sales volumes. Enquiries: Christie Group +44 20 7227 0707 Philip Gwyn, Chairman David Rugg, Chief Executive Robert Zenker, Finance Director www.christiegroup.com Brunswick +44 20 7404 5959 Regina Kilfoyle CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Unaudited Audited half year to half year to year to 30 June 2004 30 June 2003 31 Dec 2003 Notes £000 £000 £000 Turnover 2 35,694 31,617 62,457 Staff costs 3 (19,969) (16,861) (34,933) 15,725 14,756 27,524 Other operating charges before goodwill amortisation (14,082) (13,661) (24,279) Goodwill amortisation (269) (267) (551) Total other operating charges (14,351) (13,928) (24,830) Operating profit 1,374 828 2,694 Finance charges net (112) (96) (206) Profit on ordinary activities before taxation 1,262 732 2,488 Tax on profit on ordinary activities 4 (668) (397) (1,469) Profit on ordinary activities after taxation 594 335 1,019 Dividends 5 (228) (244) (722) Retained profit for the period 366 91 297 Earnings per share - basic 6 2.41p 1.37p 4.15p - fully diluted 6 2.37p 1.37p 4.14p - basic before goodwill amortisation 6 3.50p 2.46p 6.39p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Unaudited Audited half year to half year to year to 30 June 2004 30 June 2003 31 Dec 2003 £000 £000 £000 Profit on ordinary activities after taxation 594 335 1,019 Gain/(loss) on foreign currency translation 39 (26) (240) Total gains and losses recognised relating to the period 633 309 779 CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30 June 2004 30 June 2003 31 Dec 2003 £000 £000 £000 Fixed assets Tangible assets 2,573 3,122 2,631 Investments 424 278 424 Intangible assets 3,874 4,277 3,953 6,871 7,677 7,008 Current assets Stocks 272 241 312 Debtors - due within one year 16,391 14,655 12,635 - due after one year 445 283 445 Investment held for resale 504 - 504 Cash at bank and in hand 2,312 1,563 4,346 19,924 16,742 18,242 Creditors - amounts falling due within one year (18,692) (12,980) (17,518) Net current assets 1,232 3,762 724 Total assets less current liabilities 8,103 11,439 7,732 Creditors - amounts falling due after more than one year (79) (3,915) (152) Net assets 8,024 7,524 7,580 Capital and reserves Called up share capital 495 490 493 Share premium 3,822 3,718 3,780 Merger reserve 945 945 945 Capital redemption reserve 10 10 10 Profit and loss account 2,749 2,354 2,346 Shareholders' funds - equity interests 8,021 7,517 7,574 Minority interest 3 7 6 8,024 7,524 7,580 CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited Audited 30 June 2004 30 June 2003 31 Dec 2003 £000 £000 £000 Net cash (outflow)/inflow from operating activities (1,313) (905) 4,151 Returns on investments and servicing of finance (112) (96) (206) Taxation paid (750) (795) (1,067) Capital expenditure and financial investment (671) (520) (1,262) Equity dividends (paid)/received (480) 1 (597) Cash (outflow)/inflow before financing (3,326) (2,315) 1,019 Financing 62 (99) (170) (Decrease)/increase in cash in the period (3,264) (2,414) 849 NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The financial information in this interim report does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2003, upon which the auditors gave an unqualified opinion, have been delivered to the Registrar of Companies. With the exception of software development costs the unaudited results continue to be prepared in accordance with the accounting policies set out in the financial statements for the year ended 31 December 2003. Anticipating the International Financial Reporting Standard the group has capitalised software development costs. This represents a change of accounting policy from prior periods when development costs were written off in the year in which they arose. Software development costs capitalised in the period to 30 June 2004 amounted to £206,000. There is no impact on the results in respect of prior periods. A subsidiary company bank loan of £3,824,000, which is currently being renegotiated, is included within current liabilities. 2. Segmental information Turnover and operating profit/(loss) Unaudited half year to Unaudited half year to Audited year to 30 June 2004 30 June 2003 31 Dec 2003 Turnover Operating Turnover Operating Turnover Operating Profit/(loss) Profit/(loss) Profit/(loss) Division £000 £000 £000 £000 £000 £000 Professional Business Services 18,298 1,752 15,794 1,272 34,122 4,595 Software Solutions 6,131 *(843) 7,269 (364) 15,812 (374) Stock and Inventory Services 11,265 **465 8,554 (80) 12,523 (1,527) Total 35,694 1,374 31,617 828 62,457 2,694 *The operating loss for Software Solutions includes goodwill amortisation of £248,000 (2003: £248,000). **The operating profit for Stock and Inventory Services includes goodwill amortisation of £21,000 (2003: £19,000). 3. Particulars of employees and staff costs Half year to Half year to Year to 30 June 2004 30 June 2003 31 Dec 2003 The average number of people employed by the Group (including 1,316 1,131 1,066 directors) Their aggregate remuneration (£000) 19,969 16,861 34,933 4. Taxation The tax charge for the six months has been based on the estimated effective tax rate for the year to 31 December 2004 of 42%. A deferred tax asset of £445,000 was recognised at 31 December 2003 and there has been no material change in the position at 30 June 2004 (30 June 2003: £283,000). 5. Dividend The dividend of 1p per share will be payable to shareholders on the record on 29 October 2004. The ex-dividend date will be 27 October 2004. The dividend will be paid on 26 November 2004. 6. Earnings per share Half year to Half year to Year to 30 June 2004 30 June 2003 31 Dec 2003 Earnings per share - basic Profit attributable to shareholders (£000) 594 335 1,019 Average number of ordinary shares of 2p each in issue during the period 24,677,307 24,513,162 24,559,471 Earnings per share - fully diluted Profit attributable to shareholders (£000) 594 335 1,019 Average number of ordinary shares of 2p each in issue during the period after allowing for the exercise of outstanding share options 25,114,770 24,378,821 24,595,162 Earnings per share - basic before goodwill amortisation Profit attributable to shareholders before goodwill amortisation (£000) 863 602 1,570 Average number of ordinary shares of 2p each in issue during the period 24,677,307 24,513,162 24,559,471 7. Interim report Copies of the interim report are available from Christie Group plc, 39 Victoria Street, London SW1H 0EU. GROUP COMPANIES PROFESSIONAL BUSINESS SERVICES SOFTWARE SOLUTIONS STOCK AND INVENTORY SERVICES The expertise offered by Christie & Co The two arms of VcsTimeless Orridge and Venners are the and Christie First covers all aspects specialise in sophisticated IT leading specialists in stock of valuing, buying, selling, financing systems and solutions designed to control and inventory management and insuring a wide variety of capture and control the complex sales services. Employing businesses. Its scope is complemented and other data connected with the state-of-the-art technologies and by the comprehensive appraisal and management of cinemas, hotels, bespoke software, the division is project management services available restaurants, leisure complexes, focused on Europe, where both from Pinders. warehouses and retail outlets companies have a major share of internationally. the retail and leisure sectors. CHRISTIE & CO www.christie.com VCSTIMELESS (HOSPITALITY) ORRIDGE www.orridge.co.uk The leading firm of surveyors, valuers www.vcstimeless.com Europe's longest established and agents specialising in the Specialists in software for leisure stocktaking business specialising leisure, retail and care sectors. and hospitality businesses in all fields of retail International operations based in internationally, including cinemas, stocktaking including high street, Barcelona, Frankfurt and Paris. visitor attractions, hotels, bars and warehousing and factory. In Offices throughout the UK with restaurants. Solutions include EPoS, addition, it has a specialised valuation, agency, development and chip and pin, stock control, back pharmacy division providing investment teams focused on its key office, head office and ticketing valuation and stocktaking sectors. software. services. A full range of stocktaking and inventory management solutions is provided for a wide range of clients in the UK and Europe. VCSTIMELESS (RETAIL) CHRISTIE FIRST www.christiefirst.com www.vcstimeless.com VENNERS www.venners.com The market leader in finance and Leading specialists in integrated Leading supplier of stocktaking, insurance for the leisure, retail and software solutions and related inventory, control audit and care sectors. Services include finance services for the non-food retail related stock management services for business purchase or re-financing industry - including fashion, sports to the hospitality and retail arranged in conjunction with major and home improvements - dedicated to sectors. Bespoke software and financial institutions, and the single and multi-channel retailers. systems enable real time provision of tailored insurance Solutions include head office, management reporting to its schemes. in-store, chip and pin, manufacturing customer base using the most and retail business intelligence up-to-date technology. software. PINDERS www.pinders.co.uk and www.pinderpack.com The UK's leading independent specialist business appraisal company, undertaking valuations, consultancy, building surveying and professional services for a broad range of clients in the leisure, retail and care sectors. This information is provided by RNS The company news service from the London Stock Exchange

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