Preliminary Results

RNS Number : 5703T

Mavinwood PLC

09 June 2009

 



Mavinwood Plc

('Mavinwood' or 'the Company')

Preliminary results for the year ended 31 December 2008

Financial key points	2008	2007
Continuing operations:
Revenue	£22.3m	£23.2m
Earnings before interest,
tax, exceptional items, amortisation and impairment
of intangible assets and share based payments charge (EBITA)	£2.6m	£3.7m
Operating (loss)/profit	£(7.0)m	£1.9m
Loss before tax	£(10.1)m	£(0.6)m
Basic loss per share from continuing operations	(1.95)p	(0.31)p
Adjusted profit after tax*	£0.7m	£0.8m
Adjusted fully diluted earnings per share*	0.13p	0.15p
Basic (loss) /earnings per share	(8.08)p	0.56p

* before discontinued operations, exceptional items, amortisation and impairment of intangible assets, share based payments charge and notional interest on contingent consideration

Enquiries:

Mavinwood plc

Charles Skinner, Chief Executive                              07966 234075

Mike Vincent, Finance Director                                020 7661 9651

Collins Stewart

Adrian Hadden                                                           020 7523 8353

Threadneedle PR

John Coles                                                                   020 7653 9848

EXECUTIVE DIRECTOR'S REVIEW 

RESULTS

Revenue for continuing operations in 2008 was £22,336,000 (2007: 23,156,000) and the loss before tax from continuing operations was £10,082,000 after impairment of intangible assets of £6,893,000 (2007: £nil). The loss from continuing operations before amortisation and impairment of intangible assets, exceptional items, share based payments charge and notional interest on contingent consideration was £322,000 (see Profit before tax section for analysis) (2007 profit: £1,296,000). The basic loss per ordinary share for continuing operations was 1.95p (2007: 0.31p).

The Mavinwood Group comprises two divisions, Emergency Repair and Document Handling. At 31 December 2008, the Emergency Repair division (excluding Ansa Building Services Limited, 'ABS') has been classified as held for resale. The Document Handling division and ABS have been classified as continuing operations.

PROFIT BEFORE TAX

The loss before tax for the year ended 31 December 2008 for continuing operations was £10,082,000 (2007: £618,000). However, the Directors believe that an adjusted measure of (loss)/profit before tax and earnings per share provides shareholders with a more appropriate representation of the underlying earnings derived from the Mavinwood Group's business. The items adjusted for in arriving at that underlying level are as follows:

	2008		2007
	£'000		£'000
Emergency Repair	(475)		1,327
Document Handling	4,736		3,886
Central costs	(1,671)		(1,483)
Share based payments charge	(1,682)		(1,658)
Impairment of intangible fixed assets	(6,893)		-
Exceptional items	(824)		-
Amortisation of intangible fixed assets	(240)		(194)
Operating (loss)/profit	(7,049)		1,878
Net finance costs	(3,033)		(2,496)
Loss before tax	(10,082)		(618)
Share based payments charge	1,682		1,658
Impairment of intangible assets - ABS	6,893		-
Exceptional items	824		-
Amortisation of intangible assets	240		194
Notional interest on contingent consideration	121		62
Adjusted (loss)/profit before tax - continuing operations	(322)		1,296

EMERGENCY REPAIR

The major event in 2008 has been the weak performance of our Emergency Repair division.

In September 2008 we sold Mono Services Limited for £0.4m at a loss of £1.6m. This business comprised a number of social housing building fabric repair contracts. At this point, we retained the insurance building fabric contract and placed it in a subsidiary renamed ANSA Building Services limited (ABS). The performance of ABS has continued to disappoint in 2009 with weak volumes and we will be exiting from this business by 31 December 2009.  At 31 December 2008, ABS has been classified as part of continuing operations.

The weak performance of the remainder of the division was due mostly to losing a large drainage contract with one major insurer. We took the decision to seek a buyer for the Emergency Repair division and entered into a full auction process towards the end of 2008. As a result of this, the division (with the exception of ABS) has been classified as held for sale at 31 December 2008. Peter Cox operates a nationwide network of branches providing damp control, timber preservation and masonry stabilisation services for private, public sector and commercial property, principally housing. The company increased its service offerings and extended activities in the public and commercial sectors in response to the reducing activities in the private housing transaction market.  Sales in 2008 were £16.7m and operating profit was £0.7m. At 31 December 2008, Peter Cox has been written down to its attributable realisable value.

POST BALANCE SHEET EVENTS

We announced today that we have exchanged contracts for the sale of both the Ansa and Independent businesses to the incumbent management team backed by Lloyds TSB Development Capital Limited (LDC). Cash proceeds are £19.55m before expenses estimated at £0.7m. 

The sale has meant that we have had to write down the attributable goodwill on the Emergency Repair business significantly and present the assets as assets held for re-sale in the December 2008 balance sheet. The carrying value of ANSA and Independent at 31 December 2008 reflects the realisable value from the transaction announced today. The net cash proceeds from the sale of ANSA and Independent will be used to pay down debt. Full details of the transaction are given in the circular to shareholders being posted today. Changes to the composition of the Board were announced on 8 June 2009. 

As announced on 12 February 2009 we have put in place a back stop position whereby our principal shareholder has underwritten an equity issue of up to £10m on 30 June 2009. In addition, our principal shareholder agreed to make available to the company a short term loan facility of £2.5m. These arrangements have now been extended to 30 September 2009, assuming the sale is completed at a cost of £0.15m. This extension provides the Group with the flexibility either to refinance with another bank or reduce the debt by other disposals by 30 September, before the need to issue any equity arises.

DOCUMENT HANDLING

					Year  ended  31 December 2008		Year  ended  31 December 2007
					£'000		£'000
Revenue	Restore and Wansdyke				10,148		8,934
	DCS			*	4,582		3,022
	Total				14,730		11,956
EBITA**	Restore and Wansdyke				3,492		2,808
	DCS			*	1,244		1,078
	Total				4,736		3,886
* DCS 9 months in 2007
** excluding share based payments charge

RESTORE AND WANSDYKE

Restore and Wansdyke serve a wide range of customers, including law firms, corporates of varying sizes, financial services companies, councils and health trusts. Our customers are mostly based in London and the South across to Bristol and South Wales. The majority of sales are the storage and retrieval of archive boxes but also individual files and other material such as magnetic media and film. 

Scanning of documents on a selective basis is also offered to clients. Shredding or pulping of documents at the end of their useful lives is currently outsourced, although this would form a logical product extension.

The key customer satisfaction measures are:

• % accuracy in retrieving items

• % of items retrieved in accordance with terms of service, such as same day or next day delivery

We operate a combination of freehold and leasehold sites at Wansdyke and Restore respectively. Due to the absence of rental charges, the return on sales at Wansdyke is higher than that at Restore. 

Wansdyke's sales grew strongly in 2008, by 14%. We are gradually filling up our underground storage facilities near Bath and we estimate we have enough spare space for the medium term expansion for the business through to 2013.

Restore's sales grew by 13% albeit with some lower margin business. 

DOCUMENT CONTROL SERVICES (DCS)

DCS is a quality national operation, scanning and indexing documents with high intellectual property content. The business has a blue chip customer base including Network Rail, Highways Agency, The Crown Estate, oil and gas companies, city councils and property companies. DCS made a very strong contribution the first half of 2008 although it did suffer in the last quarter from some deferral of projects into 2009.

DOCUMENT HANDLING SUMMARY

The market for the physical storage of archives continues to grow well in excess of GDP, with especially strong growth in sectors such as professional services. Overall, on a true like for like basis comparing each business with a comparable period of trading in 2007, sales advanced by 16% and operating profit by 17%. 

Inevitably, the recession is reducing business and business activity and we are seeing some softening in the volume of retrievals of boxes and files. However, this is being offset by continued good organic growth from existing customers and some new contract wins.

CENTRAL COSTS

Central costs have increased from £1,483,000 to £1,671,000.

TAX

The amortisation and impairment of intangible assets, the notional interest on the contingent consideration and the share based payments charge do not attract any tax relief. However, the underlying tax rate during 2008 was 28.5%, as a percentage of adjusted profit before taxation. (2007: 30.4%).

EARNINGS PER SHARE (EPS)

					Year  ended  31 December 2008		Restated Year  ended  31 December 2007
Loss per share from continuing operations (pence)
Basic					(1.95)p		(0.31p)
Diluted					(1.95)p		(0.31p)
Adjusted earnings per share from continuing operations (pence)
Basic					0.15p		0.17p
Diluted					0.13p		0.15p

Basic EPS is (8.08)p, which compares with 0.56p in 2007. Basic EPS adjusted as above was 0.15p (2007: 0.17p). Assuming the exercise of all options and awards under the LTIP in 2008 at an average price of 11.4p plus the conversion of the convertible A shares (2007: 18.4p), the fully diluted adjusted EPS becomes 0.13p (2007:0.15p). 

  DIVIDENDS

Mavinwood intends to re-invest profits in the business and the Board do not recommend declaring a dividend (2007: Nil).

SHARE ISSUES

New equity was issued on two occasions in 2008. 0.5 million shares were issued on exercise of awards under the LTIP to the previous head of Document Handling who retired due to ill health in late 2007. 3.3 million shares were allotted at 12.0p per share on 5 June 2008 as part funding of the contingent consideration for DCS.

BALANCE SHEET

Net assets decreased to £15.2m mainly as a result of the write-down of goodwill relating to our Emergency Repair division and sale of Mono Services Limited as described earlier and also reflecting the loss for the year plus the share issues. Goodwill and intangibles on the retained business at 31 December 2008 was £21.8m (2007: retained business £29.2m, discontinued operations £41.4m). 

Property, plant and equipment totalled £10.9m (2007: £12.2m) principally comprising the freehold underground storage facilities at Wansdyke, but also computer systems, storage racking and vehicles. 

Operating working capital from continuing operations (excluding cash) amounted to a net £1.8m at 31 December 2008. Net debt at 31 December 2008 totalled £35.1m (2007: £30.9m) after deferred financing costs of £0.3m (2007: £0.3m).  

CASH FLOW

The net cash inflow from continuing operations before capital expenditure was £1,790,000 (2007: £569,000). This inflow is after taking account of an outflow of £1.3m on working capital. Capital expenditure on the continuing business totalled £1,056,000 (2007: £1,397,000) compared to depreciation of £460,000 (2007: £513,000).  Significant expenditure comprised the fitting out of empty space in the underground storage areas at Wansdyke and installing new racking at both Restore and Wansdyke. 

Deferred and contingent consideration in respect of the acquisitions of Peter Cox and DCS respectively of £3.5m was paid in the year.

BOARD

There were no changes to the Board in the year to 31 December 2008.

OUTLOOK

This has been a very mixed year for our two divisions. Document Handling has continued to grow significantly with operating profit up by 17%. Emergency Repair has however suffered in a difficult market as insurance companies have reacted to the developing 'credit crunch' by reducing prices.  

Document handling continues to expand and we will be focussing on the business going forward.

Kevin Mahoney

Executive Director                                       9 June 2009

  Consolidated Income Statement

for the year ended 31 December 2008

					Unaudited		Unaudited Restated
					Year ended		Year ended
					31 December 2008		31 December 2007
					£'000		£'000
Continuing operations
Revenue					22,336		23,156
Cost of sales					(13,390)		(13,405)
Gross profit					8,946		9,751
Administrative expenses					(8,278)		(7,873)
Exceptional items					(824)		-
Impairment of Intangible assets					(6,893)		-
Operating (loss)/profit					(7,049)		1,878
Investment income					6		25
Finance costs					(3,039)		(2,521)
Loss before tax					(10,082)		(618)
Income tax credit/(expense)					999		(823)
Loss from continuing operations					(9,083)		(1,441)
Discontinued operations (Loss)/profit from discontinued operations					(28,472)		4,025
(Loss) /profit for the year					(37,555)		2,584
Attributable to
Equity holders of the Company					(37,555)		2,584
(Loss)/earnings per share (pence)
	Basic				(8.08)p		0.56p
	Diluted				(8.08)p		0.48p
Loss per share from continuing operations (pence)
	Basic				(1.95)p		(0.31p)
	Diluted				(1.95)p		(0.31p)

  Statement of Changes in Shareholders' Equity

for the year ended 31 December 2008

	Share capital		Share premium		Share based payments reserve		Retained earnings		Total equity
	£'000		£'000		£'000		£'000		£'000
Balance at 1 January 2007	503		40,060		1,102		2,572		44,237
Profit for the year	-		-		-		2,584		2,584
	503		40,060		1,102		5,156		46821
Issue of shares during the year	5		995		-		-		1,000
Contingent consideration	4		896						900
Share based payments charge	-		-		1,892		-		1,892
Balance at 31 December 2007	512		41,951		2,994		5,156		50,613
Balance at 1 January 2008	512		41,951		2,994		5,156		50,613
Loss for the year	-		-		-		(37,555)		(37,555)
	512		41,951		2,994		(32,399)		13,058
Issue of shares during the year	4		483		-		-		487
Issue costs	-		(38)		-		-		(38)
Share based payments charge	-		-		1,780		-		1,780
Awards under the LTIP exercised	-		-		(86)		-		(86)
Balance at 31 December 2008	516		42,396		4,688		(32,399)		15,201

  Consolidated Balance Sheet

at 31 December 2008

				Unaudited
				31 December 2008		31 December 2007
				£'000		£'000
Assets
Non-current assets
Intangible assets				21,818		70,634
Property, plant and equipment				10,892		12,220
Investments				-		556
Deferred tax asset				21		179
				32,731		83,589
Current assets
Inventories				131		381
Trade and other receivables				7,529		23,140
Cash and cash equivalents				575		1,108
				8,235		24,629
Assets held for sale				35,115		-
Total assets				76,081		108,218
Liabilities
Current liabilities
Trade and other payables				(4,939)		(15,554)
Bank overdrafts and loans				(35,714)		(4,337)
Current tax liabilities				(20)		(1,229)
Other financial liabilities				(3)		(45)
Provisions				(171)		(3,698)
				(40,847)		(24,863)
Liabilities directly associated with assets classified as held for sale				(15,981)		-
Net current liabilities				(13,478)		(234)
Non-current liabilities
Bank loans				-		(27,643)
Deferred tax liability				(3,338)		(5,099)
Provisions				(714)		-
				(4,052)		(32,742)
Net assets				15,201		50,613
Shareholders equity
Called up share capital				516		512
Share premium account				42,396		41,951
Share based payments reserve				4,688		2,994
Retained earnings				(32,399)		5,156
Attributable to  equity holders of the Company				15,201		50,613

   Consolidated Statement of Cash Flows

for the year ended 31 December 2008

				Unaudited		Unaudited Restated
				Year ended		Year ended
				31 December 2008		31 December 2007
				£'000		£'000
Cash inflow from operating activities
	Continuing operations
	Loss for the year			(9,083)		(1,441)
	Depreciation of property, plant and equipment			460		515
	Amortisation of intangible assets			240		194
	Impairment of intangible assets			6,893		-
	Finance costs recognised in profit and loss			3,033		2,496
	Income tax expense recognised in profit and loss			(999)		827
	Share based payments charge			1,682		1,658
	Exceptional items			824		-
	Gain on disposal of property, plant and equipment			1		-
	Movement in working capital
	Change in inventories			(114)		15
	Change in trade and other receivables			(2,980)		(4,267)
	Change in trade and other payables			1,833		572
Net cash generated  from continuing operations				1,790		569
	Discontinued operations
	(Loss)/profit for the period			(28,472)		4,025
	Depreciation of property, plant and equipment			631		328
	Amortisation of intangible assets			78		94
	Impairment of intangible assets			27,493		-
	Finance costs recognised in profit and loss			(51)		(124)
	Income tax expense recognised in profit and loss			236		1,636
	Share based payments charge			98		234
	Loss on disposal of division			318		-
	Gain on disposal of property, plant and equipment			(34)		(33)
	Movement in working capital
	Change in inventories			142		(3)
	Change in trade and other receivables			1,315		(1,678)
	Change in trade and other payables			3,090		739
Net cash generated  from discontinued operations				4,844		5,218

Net cash generated from operations

6,634

5,787

  Consolidated Statement of Cash Flows (continued)

for the year ended 31 December 2008

				Unaudited		Unaudited Restated
				Year ended		Year ended
				31 December 2008		31 December 2007
				£'000		£'000
Net cash generated from operations				6,634		5,787
	Net finance costs			(3,049)		(1,575)
	Income taxes paid			(1,547)		(2,782)
Net cash generated  from operating activities				2,038		1,430
Cash flows from investing activities
	Purchases of property, plant and equipment			(2,726)		(2,582)
	Proceeds from share issues			449		-
	Contingent consideration			(3,502)		(106)
	Loan note receipts			150		-
	Acquisition of subsidiary, net of cash acquired			-		(6,988)
Cash flows used in investing activities				(5,629)		(9,676)
Cash flows from financing activities
	Repayment of borrowings			(4,000)		(2,000)
	Drawdown/(repayment)of indebtedness			8,000		(4,794)
	New bank loans raised			-		14,300
	Deferred financing costs			(106)		(192)
	Increase in bank overdrafts			138		337
	Finance lease principal repayments			(102)		(147)
Net cash generated in financing activities				3,930		7,504
Net increase/(decrease) in cash and cash equivalents				339		(742)
	Cash and cash equivalents at start of period			1,108		1,850
	Less: Net cash and cash equivalents included in discontinued operations			(872)		-
Cash and cash equivalents at the end of year				575		1,108

  Notes to the Preliminary Announcement 

for the year ended 31 December 2008 

1    Basis of preparation

Mavinwood plc and its subsidiaries specifically focus on Emergency Repair and Document Handling. The Group operates in the UK. During the year, the Company took the decision to dispose of the Emergency Repair division. The Company is a public limited company incorporated and domiciled in the United Kingdom.

These financial statements were authorised for issue by the board of directors on 9 June 2009.

The financial information has been prepared using the recognition and measurement principles of International Financial Reporting Standards ('IFRS'), as adopted in the European Union and as applied in accordance with the provisions of the Companies Act 1985.  

The financial information is presented in pounds sterling, prepared on a historical cost basis and, unless otherwise stated, rounded to the nearest thousand. The financial information set out in this announcement is abridged and does not constitute statutory accounts for the year ended 31 December 2008 but is derived from those draft financial statements. The financial information is not audited. The statutory accounts for the year ended 31 December 2008 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's annual general meeting. 

The financial information contained in the preliminary announcement of results has been prepared on the basis of the accounting policies as outlined in the 2007 Report and Accounts. 

The comparative financial information for the year ended 31 December 2007 was derived from information extracted from the annual report and accounts for that period, which have been filed with the UK Registrar of Companies, but the income statement has been restated to show certain revenue and costs relating to discontinued operations. The auditors have reported on those accounts, their report was unqualified and did not contain statements under sections 237 (2) or (3) of the Companies Act 1985.

The directors have considered the going concern position of the group and believe that it is appropriate to present the financial information on the going concern basis as the group's cashflow projections show that it will be able to meet its liabilities as and when they fall due for the foreseeable future. As discussed in the Executive Director's review, the major shareholder in the group, has entered into an agreement to underwrite the issue of new share capital up to an amount of £10m should this be required.

2    Segmental information

For management purposes, the Group is organised into two main segments, Emergency Repair and Document Handling. The Emergency Repair segment was classified as held for sale at 31 December 2008 (note 6). 

The business segment is the primary segment. All trading of the Group is undertaken within the United Kingdom and the Company has no foreign operations. The secondary segment based on geography is solely the United Kingdom. Segment assets include goodwill, property, plant and equipment, inventory, debtors and operating cash. Central assets include investments, deferred tax and head office assets. Segment liabilities comprise operating liabilities. Central liabilities include income tax, corporate borrowings and head office liabilities. Capital expenditure comprises additions to computer software, property, plant and equipment and includes additions resulting from acquisitions through business combinations. Segment assets and liabilities are allocated between segments on an actual basis. 

  2    Segmental information (continued)

			Unaudited		Unaudited
			Year ended		Year ended
			31 December 2008		31 December 2007
			£'000		£'000
Revenue - Continuing operations
Emergency Repair			7,606		11,200
Document Handling			14,730		11,956
			22,336		23,156
Results - Continuing operations
Emergency Repair			(475)		1,327
Emergency Repair - Impairment of intangible assets			(6,893)		-
Emergency Repair - Exceptional items			(824)		-
Document Handling			4,736		3,886
Central costs			(1,671)		(1,483)
Share based payments charge			(1,682)		(1,658)
Amortisation of intangible assets			(240)		(194)
Operating (loss)/profit			(7,049)		1,878
Net finance cost			(3,033)		(2,496)
Loss before tax			(10,082)		(618)
Income tax credit/( expense)			999		(823)
Loss for the year from continuing operations			(9,083)		(1,441)

In 2008, of the £1,682,000 share based payments charge shown above, £6,000 (2007: £6,000) has been allocated to the Emergency Repair division and £32,000 (2007: £81,000) has been allocated to the Document Handling division, the remainder of this charge is allocated to central costs.  The exceptional item of £824,000 relates to a provision charged for onerous lease costs.

			Unaudited		Unaudited
			Year ended		Year ended
			31 December 2008		31 December 2007
			£'000		£'000
Results - Discontinued operations
Emergency Repair			1,263		5,869
Impairment of intangible assets			(27,493)		-
Share based payments charge			(98)		(234)
Amortisation of intangible assets			(78)		(94)
Loss on disposal of operations (note 6)			(1,563)		-
Provision for loss on disposal of operations (note 6)			(318)		-
Operating (loss)/profit			(28,287)		5,541
Net finance income			51		124
(Loss)/profit before tax			(28,236)		5,665
Income tax expense			(236)		(1,640)
(Loss)/profit after tax  for the year from discontinued operations			(28,472)		4,025

  2    Segmental information (continued)

			31 December 2008		31 December 2007
			£'000		£'000
Segmental assets:
Emergency Repair			3,163		71,433
Document Handling			38,018		36,533
Central			(215)		252
Discontinued operations			35,115		-
Total			76,081		108,218
Segmental liabilities:
Emergency Repair			(3,307)		(14,297)
Document Handling			(14,496)		(5,004)
Central			(27,096)		(38,304)
Discontinued operations			(15,981)		-
Total			(60,880)		(57,605)
Segmental net assets:
Emergency Repair			(144)		57,136
Document Handling			23,522		31,529
Central			(27,311)		(38,052)
Discontinued operations			19,134		-
Total			15,201		50,613

Property, plant and equipment and software additions			2,726		2,582
Depreciation of property, plant and equipment and amortisation of intangible assets			1,409		1,131

3    Tax

The underlying tax charge is based on the expected effective tax rate for the full year to 31 December 2008 and is calculated as 28.5% on profit before tax. 

4    Earnings per ordinary share

Basic earnings per share have been calculated on the loss after tax for the year and the weighted average number of ordinary shares in issue during the year.

Adjusted earnings per share that are before share based payments charge, amortisation of intangible assets and notional interest on contingent consideration have been presented in addition to the basic earnings per share since, in the opinion of the Directors, this provides shareholders with a more appropriate representation of the underlying earnings derived from the Group's businesses.

  4    Earnings per ordinary share (continued)

			Unaudited		Unaudited
			Year  ended		Year  ended
			31 December 2008		31 December 2007
			No. of shares		No. of shares
Weighted average number of shares in issue			464,794,897		457,684,786
(Loss)/profit for the period			(37,555)		2,584
Total basic (loss)/ earnings per ordinary share			(8.08)p		0.56p
			£'000		£'000
Loss after taxation on ordinary activities			(9,082)		(1,441)
Adjustments
Amortisation of intangible assets			240		194
Impairment of intangible assets			6,893		-
Exceptional items			824		-
Share based payments charge			1,682		1,658
Tax effect of share based payments charge			-		312
Notional interest on contingent consideration			121		62
Adjusted profit			678		785
Basic loss per ordinary share from continuing operations			(1.95)p		(0.31)p
Adjusted basic earnings per ordinary share (before amortisation of intangible assets, exceptional items share based payments charge and notional interest on contingent consideration)			0.15p		0.17p

			No. of shares		No. of shares
Weighted average number of Shares in issue			464,794,897		457,684,786
Convertible 'A' shares, Share options  and
awards under the LTIP			50,863,370		76,584,355
Weighted average fully diluted number of shares in issue			515,658,267		534,269,141
Total fully diluted (loss)/earning per ordinary share			(8.08)p		0.48p
Fully diluted loss per ordinary share from continuing operations			(1.95)p		(0.31)p
Adjusted fully diluted earning per ordinary share (before amortisation of intangible assets,  exceptional items, share based payments charge and notional interest on contingent consideration)			0.13p		0.15p

The diluted earnings per share are the basic earnings per share adjusted for the dilutive effect of the conversion into fully paid shares of the outstanding share options and awards under the LTIP. They are also adjusted for the conversion of the A shares into ordinary shares at the average price for the period of 11.4p (2007: 18.4p). 

The number of allotted, issued and fully paid ordinary shares at 31 December 2008 was 466,271,145 (2007: 462,417,811).  5      Intangible Assets

	Goodwill	Customer relationships	Trade names	Applications software and IT	Total
	£'000	£'000	£'000	£'000	£'000
Cost
1 January 2007	49,753	8,662	-	790	59,205
Acquired with subsidiary	-	2,662	1,222	116	4,000
Additions	11,003	-	-	396	11,399
Disposals	-	-	-	(35)	(35)
Adjustments	(3,292)	-	-	27	(3,265)
	57,464	11,324	1,222	1,294	71,304
Cost
1 January 2008	57,464	11,324	1,222	1,294	71,304
Acquired with subsidiary	-	-	-	-	-
Additions	-	-	-	139	139
Disposals	-	-	-	(127)	(127)
Transfers to assets held for resale	(37,178)	(2,818)	(958)	(710)	(41,664)
Adjustments	9	-	-	14	23
31 December 2008	20,295	8,506	264	610	29,675
Accumulated amortisation
1 January 2007	-	-	-	382	382
Acquired with subsidiary	-	-	-	20	20
Charged for the year	-	137	-	151	288
Disposals	-	-	-	(20)	(20)
31 December 2007	-	137	-	533	670
Accumulated amortisation
1 January 2008	-	137	-	533	670
Impairment	31,503	3,097	-	120	34,720
Charged for the year	-	175	-	65	240
Disposals	-	-	-	(11)	(11)
Transfers to assets held for resale	(27,493)	-	-	(272)	(27,765)
Adjustments	-	-	-	3	3
31 December 2008	4,010	3,409	-	438	7,857
Carrying amount
31 December 2008	16,285	5,097	264	172	21,818
31 December 2007	57,464	11,187	1,222	761	70,634

6    Discontinued operations

The sale of Mono Services Limited ('the company') was completed on 27 September 2008. Prior to this date, the insurance building repair business was transferred to another group entity 'Ansa Building Services Limited' leaving the social housing contracts in the company. The consideration for the sale was £450,000. 

The social housing business has been shown within discontinued operations. The retained insurance related operations continue to be shown as continuing operations and will be closed during 2009. 

At the year end, the Group decided to sell its Emergency Repair division and the results of this division (excluding Ansa Building Services Limited) are also shown as discontinued operations and the assets are classified as held for resale at the 31 December 2008. 

The results for the year attributable to discontinued operations were as follows:

			Unaudited		Unaudited
			Year ended		Year ended
			31 December 2008		31 December 2007
			£'000		£'000
Revenue			50,565		44,997
Profit before tax for the year			1,138		5,665
Taxation			(236)		(1,640)
Provision for loss on disposal of division			(318)		-
Impairment of intangible assets			(27,493)		-
Loss on disposal of Mono Services  Limited (includes impairment of goodwill of £335,000)			(1,563)		-
			(28,472)		4,025

An analysis of the net assets held for resale at 31 December 2008 is as follows:

					£'000
Intangible assets Property, plant and equipment					13,374 2,582
Investments					406
Deferred tax asset					383
Inventories					222
Trade and other receivables					17,276
Cash and cash equivalents					872
Trade and other payables					(10,491)
Bank loans and overdrafts					(193)
Current tax liabilities					345
Provisions					(579)
Long term liabilities					(3,887)
Deferred tax liabilities					(1,176)
Net assets classified as held for resale					19,134

Adjustments have been made to the asset value in respect of this division in order that it is held at its estimated realisable value at 31 December 2008. This has resulted in a provision for loss on disposal of £0.3m. Intangible assets of £27.5m have also been written off. The final result on sale will be booked in the accounts for the year ended 31 December 2009.

ENDS

 

END

 

 

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