Final Results

ATA Group PLC 4 April 2002 ATA GROUP PLC 4 APRIL 2002 ATA Group plc ('ATA') Preliminary results for the year ended 31 December 2001 ATA Group Plc ('ATA') is a human resource support services group, which provides employment solutions and training services to client companies situated mainly in the United Kingdom. HIGHLIGHTS - Turnover £13.09m (2000: £8.31m) - Pre-tax profit £1.07m (2000: £0.85m) - Earnings per share 9.61 pence (2000: 9.02 pence) - Maintained final dividend of 3.80 pence making a total of 5.80 pence (2000: 5.80 pence) for the year - Strong performance from the training division - Appointment of K E K T Chapman as Non Executive Director Commenting on the results Bill Douie, Chairman, said: 'The progress made in integrating and reorganising Catalis Rail Training Limited has been particularly pleasing and has facilitated a satisfactory gain in profits in this difficult year.' 3 April 2002 ENQUIRIES: ATA Group Plc Tel: (0117) 924 1600 Bill Douie, Chairman Clive Chapman, Chief Executive Peter McWeeney, Finance Director CHAIRMAN'S STATEMENT HIGHLIGHTS - Group pre-tax profits at £1,071,000 have increased by 26.5% compared with 2000. - Undiluted earnings per share have risen to 9.61 pence, an increase of 6.5%. - Dividends for the year have been maintained at 5.80 pence. - Cash generation has remained satisfactory. - The Catalis Group, acquired in early November 2000, has been extensively reorganised and the training division has made a gratifying contribution of £415,000 to profits before tax. - 2001 has, as expected, proved to be a singularly testing year for our recruitment companies and profits before tax generated by the recruitment division fell to £656,000 (2000: £959,000). Tightening economic conditions have provided a restructuring opportunity to produce significant overall cost savings for the future. FINANCIAL The period under review includes for the first time a full year of trading for the Catalis Group of companies, acquired in November 2000, and there are consequently no useful comparative figures available. We are immensely pleased with the speed with which Catalis Rail Training Limited has been restructured, with the significant improvements in profitability achieved and with the continuing progress at Rail Training Audit Services Limited. Turnover of these two companies, together with Sloan Shrago Limited, Fairbourne Adventure Limited and The Fairbourne Hotel Limited, has reached £6,735,000, and a maiden contribution to profits before tax of £415,000 has been made. The earn-out formula attendant upon the acquisition of the Catalis Group of companies was concluded by mutual agreement with the vendors resulting in a repayment to ATA Group Plc of £30,000. In recruitment, profitability in this very difficult year has remained satisfactory with turnover holding up well at £6,351,000 (2000: £6,683,000), although profits declined to £656,000 (2000: £959,000). Accordingly, Group pre-tax profits at £1,071,000 (2000: £847,000) have risen by 26.5%, and undiluted earnings per share at 9.61 pence (2000: 9.02 pence) have risen by 6.5%. Continuing progress has been made in reducing Group indebtedness, and at the year end the cash / debt position had returned to a net positive figure of £97,000 (2000: (£317,000) net debt). Details may be found in note 22 of the Annual Report. TRADING Recruitment The year started well but conditions deteriorated steadily during the period with a significant acceleration in the last quarter. Exceptionally, our recently established rail recruitment company is experiencing strong demand and has performed creditably since its launch last June. In response to the tighter situation, a full review of the recruitment businesses took place in the final months of the year, and a restructuring of the separate recruitment based companies, with the exception of rail recruitment, into ATA Selection Limited took place on 1 January 2002. Although there have been some costs of reorganisation taken in the year under review, these have been modest and the benefits of major cost reductions will be enjoyed in the current year. Training 2001 was the first full year of trading for the Catalis Group of companies since their acquisition by ATA in November 2000. As foreshadowed in my Interim Report, reorganisation of this division is complete and costs have been materially reduced. Demand has shown gratifying increases, particularly in signal engineer training and conferencing, and profitability has outstripped our most optimistic expectations for this year. Increases in demand coupled with tight cost control have resulted in a near doubling of profitability at Rail Training Audit Services Limited. Economic conditions, exacerbated by the foot and mouth epidemic, adversely affected Sloan Shrago Limited, Fairbourne Adventure Limited and The Fairbourne Hotel Limited. The Fairbourne Hotel nevertheless posted a satisfactory profit. The Sloan Shrago occupational psychology business has relocated to our Derby premises and is now making progress in gaining railway business. Dividends Your Directors are recommending a maintained final dividend for the year of 3.8 pence payable on 29 July 2002 to shareholders on the register on 12 April 2002, making 5.8 pence in total, covered 1.66 times by earnings. In spite of the general view that economic conditions are improving, caution and cash conservation remain high priorities and accordingly shareholders are being offered the opportunity to take their final dividend in the form of a scrip issue of shares. Full details of this option will be presented together with the Annual Report. Outlook The adverse conditions pertaining during the last part of 2001 have continued into 2002 and consequently the recruitment division is still finding trading difficult. Following cost reductions achieved during the last quarter of 2001 the effects of the downturn have been substantially mitigated but it is likely that recruitment will make a much reduced contribution to Group profits in the first half of 2002. Beyond that the pace of recovery depends on improving World economic conditions Rail recruitment continues to prosper, where demand remains buoyant. The training division is continuing to expand and a good performance is expected, with particularly good gains in Railway and Conferencing. Staff I should like to extend my thanks to all staff and management for their commitment during an important and testing year in the development of our Group. W.J.C.Douie, Chairman 3 April 2002 CHIEF EXECUTIVE'S REVIEW GROUP CONCEPT The strategic concept of the Group is to provide the client organisation with a range of integrated human resource services based on a consultancy, added value, approach. This concept has been achieved through the provision of an holistic range of services to the client organisation in recruitment, training and consultancy. The range of services, derived from organic start-ups and acquisitions, creates a unique blend of high priority deliverables for our clients and a balanced set of earnings streams for the Group. This simple tactic has provided a resilient return in troubled markets and an excellent platform for growth in an up-cycle. SUMMARY OF 2001 TRADING TURNOVER PROFIT BEFORE TAX 2001 2000 2001 2000 2001 2000 2001 2000 £'000 £'000 % % £'000 £'000 % % Recruitment 6,351 6,683 48.53 80.38 656 959 61.25 113.22 Training & Consultancy 6,735 1,631 51.47 19.62 415 (112) 38.75 (13.22) ------ ------ ------- ------- ------ ------- ------- -------- GROUP TOTAL 13,086 8,314 100.00 100.00 1,071 847 100.00 100.00 ------ ------ ------- ------- ------ ------- ------- -------- RECRUITMENT These services form the historical base of the Group and focus specifically on the provision of permanent employees in the core recruitment markets of sales staff and technical engineering staff. In addition to these services the Group provides permanent and contract staff to the Rail Industry utilising the significant resource of a large database of candidates in the historical mainstream engineering fields. During the second half of 2001 the historical recruitment services were consolidated together for management purposes as ATA Selection, with ATA Rail as a trading division. From 2002 they were restructured into two legal trading entities, ATA Selection Limited and ATA Rail Limited. Maximising profitability from the shared resources of these recruitment business activities was a key focus for the Group in 2001 whilst general demand levels deteriorated. The outcome is a leaner management structure and subsequent cost base, consistent with the current demand profile from client organisations, whilst retaining the structural capacity to capitalise on resurgent markets. TRAINING AND CONSULTANCY The expansion of the services in this area of the Group has been based entirely on acquisitions, commencing in 1998 and latterly with the Catalis Group of companies in 2000. Activities include a significant presence in rail related training in technical disciplines, commercial needs and specialist audit services, with outdoor experiential learning and business human resource consultancy across a broader industry remit. This acquisitive strategy has achieved a balanced delivery of revenue and earnings for the Group, whilst cementing the concept of holistic outcomes for client organisations. The provision of a full range of recruitment, training and consultancy services to key clients has bolstered the attractive nature of our concept delivery without detracting from the individual member company value of stand-alone delivery. This is a robust business model that stood up very well to recent challenges and bodes well for future growth. INFORMATION TECHNOLOGY The Group remains fully committed to the benefits to be derived from an effective IT strategy consistent with the business goals of the Group. There is still much to be gained from harnessing the information assets that exist in the shared resources of the individual member companies. Whilst the opportunities and threats of the Internet revolution did not emerge in 2001, the Group has achieved a great deal of learning based on a prudent level of investment. This investment has provided clarity in respect of the real opportunities, and further investment will reap those rewards. SHARE OPTIONS The Government scheme for EMI was adopted in 2001 in addition to the existing approved and unapproved schemes established in 1998. The Board continues to support the ownership of shares by the staff and has granted further options within the EMI scheme in 2001. The key staff will continue to be the focus of such incentives. PROSPECTS The successful amalgamation of the rail training and audit service companies into the Group offering has resulted in an excellent platform with balance and breadth in terms of the mix and diversity of revenue streams. Further development is now possible based on the synergies that exist enhancing productivity ratios, exploiting efficiency gains and reducing costs. New service offerings and improved customer service will facilitate the organic growth prospects of current business activities. The Group is well placed in its chosen fields of recruitment and training to execute further acquisitions and derive full benefit from an improvement in general market confidence and demand for Group services. Clive Chapman, Chief Executive 3 April 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2001 2001 2000 £'000 £'000 £'000 £'000 TURNOVER 13,086 8,314 Cost of Sales (6,759) (4,799) ----- ------- ----- ------- GROSS PROFIT 6,327 3,515 Administrative expenses (5,234) (2,678) OPERATING PROFIT 1,093 837 Interest receivable and similar income 49 65 Interest payable and similar charges (71) (55) ----- ------- ----- ------- (22) 10 ----- ------- ----- ------- PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,071 847 Tax on profit on ordinary activities (294) (241) ----- ------- ----- ------- PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 777 606 Dividends (469) (437) ----- ------- ----- ------- RETAINED PROFIT FOR THE FINANCIAL YEAR 308 169 ----- ------- ----- ------- EARNINGS PER SHARE 9.61p 9.02p FULLY DILUTED EARNINGS PER SHARE 9.58p 9.00p There were no recognised gains or losses other than those reported in the Profit and Loss Account. All amounts relate to continuing operations. CONSOLIDATED CASH FLOW STATEMENT at the year ended 31 December 2001 2001 2000 £'000 £'000 £'000 £'000 NET CASH INFLOW FROM OPERATING ACTIVITIES 1,709 1,296 RETURN ON INVESTMENTS AND SERVICING OF FINANCE Interest received 49 65 Interest paid (71) (189) ------ ------ ------- ------ NET CASH OUTFLOW FROM RETURN ON INVESTMENTS AND SERVICING OF FINANCE (22) (124) TAXATION UK corporation tax paid (452) (165) CAPITAL EXPENDITURE Sale of tangible fixed assets 78 59 Purchase of tangible fixed assets (409) (458) ------ ------ ------- ------ NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (331) (399) ACQUISITIONS AND DISPOSALS Purchase of subsidiary undertaking 4 (1,514) Net cash acquired with subsidiary - 566 ------ ------ ------- ------ NET CASH INFLOW/(OUTFLOW) FROM ACQUISITIONS AND DISPOSALS 4 (948) EQUITY DIVIDENDS PAID (469) (376) ------ ------ ------- ------ NET CASH INFLOW/(OUTFLOW) BEFORE USE OF FINANCING 439 (716) Net proceeds from issue of share capital - 1,315 Decrease in loans (372) (558) Capital element of finance lease payments (25) (17) ------ ------ ------- ------ NET CASH (OUTFLOW)/INFLOW FROM FINANCING (397) 740 INCREASE IN CASH 42 24 ------ ------ ------- ------ CONSOLIDATED BALANCE SHEET at 31 December 2001 2001 2000 £'000 £'000 £'000 £'000 FIXED ASSETS Intangible assets 1,224 1,120 Tangible assets 2,261 2,478 ------- ------ ------- ------- 3,485 3,598 CURRENT ASSETS Stock 30 14 DEBTORS Amounts falling due after one year 860 1,036 Amounts falling due within one year 2,289 2,210 Cash at bank and in hand 1,177 1,185 ------- ------ ------- ------- 4,356 4,445 CREDITORS Amounts falling due within one year (4,132) (4,190) ------- ------ ------- ------- NET CURRENT ASSETS 224 255 ------- ------ ------- ------- Total assets less current liabilities 3,709 3,853 CREDITORS Amounts falling due after more than one year (666) (1,033) PROVISION FOR LIABILITIES AND CHARGES (206) (291) ------- ------ ------- ------- NET ASSETS 2,837 2,529 ------- ------ ------- ------- CAPITAL AND RESERVES Called up share capital 81 81 Share premium account 1,732 1,732 Capital redemption reserve 50 50 Profit and loss account 974 666 ------- ------ ------- ------- EQUITY SHAREHOLDERS' FUNDS 2,837 2,529 ------- ------ ------- ------- Approved by the board of directors on 3 April 2002 WJC Douie Chairman P McWeeney Financial Director NOTES 1. Dividends An interim dividend of 2.0 pence per share (2000: 2.0 pence) was paid on 5 October 2001. A final dividend is proposed of 3.8 pence per share (2000: 3.8 pence) payable on 29 July 2002 to shareholders on the register on 12 April 2002. 2. Earnings per Share The calculations of earnings per share and of the fully diluted earnings per share are based on a profit after taxation of £777,000 (2000: £606,000) and a weighted average of 8,082,400 (2000: 6,718,466) shares in issue. The 171,504 options remaining out of the 241,069 options granted on 3 May 2000 and the 95,000 options granted on 27 September 2001 under the Approved Schemes are considered to be dilutive. These options increase the weighted average number of shares by 26,278 (2000: 19,286). 3. Report & Accounts The above results do not represent the statutory accounts. The statutory accounts for 2000 have been filed with the Registrar of Companies, received an unqualified audit report and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. The audited accounts for 2001 will be mailed to shareholders shortly and will be available from the Company's registered office: 20 Portland Square, Bristol, BS2 8SJ. This information is provided by RNS The company news service from the London Stock Exchange

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