Interim Results

ATA GROUP PLC 26 August 1999 ATA Group plc Interim results for the six months ended 2 July 1999 ATA Group plc ('ATA') is a human resource support services group, which provides employment solutions and training services to client companies in England, Scotland and Wales. ATA floated on the Alternative Investment Market in June 1998. HIGHLIGHTS * Turnover £3.1m (1998: £3.4m) * Pre-tax profit £0.19m (1998: £0.55m) * Earnings per share 2.03p (1998: 6.25p) * Maintained interim dividend of 2.0p Commenting on the results Bill Douie, Chairman, said: 'The difficult conditions experienced in manufacturing in the first half have inevitably impacted on the interim results. Nonetheless, the Directors are encouraged by a continuing recovery in operating ratios and look forward to a more positive second half.' ENQUIRIES: ATA Group plc Tel: (0117) 924 1600 Bill Douie, Chairman Clive Chapman, Chief Executive College Hill Tel: (0171) 457 2020 Richard Pearson Giles Cooper ATA GROUP PLC CHAIRMAN'S STATEMENT FOR THE SIX MONTHS ENDED 2 JULY 1999 I am pleased to present the interim report of the company for the period to 2 July 1999. PROGRESS As expected, conditions have been difficult, particularly in manufacturing, and inevitably there has been a knock on effect on the results of our most significant recruitment business, Engineering Technology. There can be no doubt that the continuing strength of sterling has provided a testing environment for companies who are major exporters or who suffer from import competition. Encouragingly, there is some evidence that industry is learning to live with a strong currency and confidence is returning, helped by a more robust world economy. More importantly, consultant numbers have been maintained and significant advances in the development of management skills at all levels in our company have resulted in enhanced performance in our Sales and Advertising selection recruitment businesses towards the end of the period. Additionally, as recently reported, we have opened a further location south of London, in Croydon, and early signs are encouraging. Development of our training business continues steadily although securing Corporate courses has progressed at a slower rate than planned. There are encouraging signs of acceleration of bookings for the second half and beyond and expansion of accommodation capacity at The Fairbourne Hotel is at the planning permission stage. Since the period end terms have been agreed for the acquisition of a majority interest in the business of Sloan Shrago, an occupational psychology consultancy. Services are provided to Corporate clients to assist in the establishment of human resource tactics to ensure achievement of strategic objectives. In addition to the existing provision of teambuilding, leadership and personal development training, ATA Group intends to establish a range of services in organisational development to provide for the client needs identified by Sloan Shrago. Shareholders will also have noted our recent announcement of the appointment of Peter McWeeney as finance director. TRADING RESULTS As previously announced difficult conditions have adversely affected the trading performance in the first half and pre tax profits in the period have fallen to £191,459 (1998 £546,853). Earnings after corporation tax of £60,021 are £131,438 and earnings per share, calculated on the average number of shares in issue in the period, are 2.03 (1998 6.25p) DIVIDENDS I am pleased with the success with which the Group has handled a difficult period and the Directors remain confident that a manufacturing recovery will continue during the second half. Accordingly a maintained interim dividend of 2.0p per share net will be paid on 17 September 1999 to shareholders on the register of members on 10 September 1999. OUTLOOK FOR THE REMAINDER OF 1999 ATA's predominant market place in recruitment remains manufacturing industry and, whilst confidence has recovered to an extent, the positive environment during recovery from recession following the departure from ERM is unlikely to re-emerge in the near future. Nonetheless, the Directors are encouraged by a continuing recovery in operating ratios and look forward to a more positive second half. Although the two training companies are at an early stage in their development and are unlikely to form a significant part of 1999 results, both expected performance in the second half and the accelerating pace of long term developments encourage the Board to view their future with confidence. W.J.C.Douie, Chairman 26 August 1999. ATA GROUP PLC GROUP PROFIT AND LOSS ACCOUNT Note 6 Months 6 Months 12 Months to to to 2/7/99 3/7/98 31/12/98 (unaudited)(unaudited) (audited) £'000 £'000 £'000 TURNOVER 2 3101.4 3404.2 6863.3 OPERATING PROFIT 172.1 538.0 1043.4 Net interest receivable 19.3 9.3 41.8 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 191.4 547.3 1085.2 Taxation 3 (60.0) (175.8) (333.0) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 131.4 371.5 752.2 Dividends 4 129.6 129.6 376.0 RETAINED PROFIT 1.8 241.9 376.2 EARNINGS PER SHARE (pence) 5 2.03 6.25 12.12 ATA GROUP PLC GROUP BALANCE at 2/7/99 at 3/7/98 at 31/12/98 (unaudited) (unaudited) (audited) £'000 £'000 £'000 FIXED ASSETS Tangible assets 789.4 690.4 779.1 Intangible assets 89.2 73.6 95.9 878.6 764.0 875.0 CURRENT ASSETS Stock 13.0 11.3 14.6 Debtors 805.5 873.3 687.8 Short term deposits 950.0 1150.0 750.0 Cash at bank 110.5 86.3 607.0 1879.0 2120.9 2059.4 CREDITORS: Due within one year (1622.7) (1831.8) (1750.4) NET CURRENT ASSETS (LIABILTIES) 256.3 289.1 309.0 TOTAL ASSETS LESS CURRENT LIABILITIES 1134.9 1053.1 1184.0 CREDITORS: Due after more than (183.8) (243.2) (234.7) one year NET ASSETS 951.1 809.9 949.3 CAPITAL AND RESERVES Called up share capital 64.8 64.8 64.8 Capital redemption reserve 50.0 50.0 50.0 Share premium account 433.2 428.7 433.2 Profit and loss account 403.1 266.4 401.3 SHAREHOLDERS' FUNDS 951.1 809.9 949.3 ATA GROUP PLC GROUP CASH FLOWSTATEMENTS 6 Months 6 Months 12 Months to to to 2/7/99 3/7/98 31/12/98 (unaudited) (unaudited) (audited) £'000 £'000 £'000 CASH INFLOW FROM OPERATING ACTIVITIES 68.3 604.7 1282.5 Returns on investments and servicing of finance 28.7 9.3 30.2 Taxation - (147.1) (287.6) Capital expenditure (119.5) (140.0) (328.0) Acquisitions - (461.0) (473.7) Equity dividends paid (246.3) (176.5) (306.1) Net cash inflow (outflow) before use of liquid resources (268.8) (310.6) (82.7) and financing (Increase) decrease in short (200.0) (425.0) (25.0) term deposits Net proceeds from issue of - 522.7 439.2 share capital Increase (decrease) in medium (27.7) 293.2 269.5 term loan INCREASE (DECREASE) IN CASH (496.5) 80.3 601.0 BALANCES ATA GROUP PLC NOTES TO THE INTERIM REPORT FOR THE SIX MONTHS ENDED 2 JULY 1999 1 ACCOUNTING POLICIES The accounting policies used in the preparation of the interim accounts are consistent with those used in the preparation of the audited annual accounts for the year ended 31 December 1998. The group financial information consolidates the accounts of ATA Group plc and all of its material subsidiary undertakings using the acquisition method. The comparative figures for the year ended 31 December 1998 do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1995, but they have been derived from the audited financial statements for that year, which have been filed with the Registrar of Companies, and on which our auditors gave an unqualified report. 2 SEGMENTAL ANALYSIS 6 Months 6 Months 12 Months to to to 2/7/1999 3/7/1998 31/12/1998 (unaudited) (unaudited) (audited) £'000 £'000 £'000 TURNOVER Recruitment and 2,789.1 3,233.0 6,385.1 consultancy Training 312.3 171.2 478.2 3,101.4 3,404.2 6,863.3 OPERATING PROFIT Recruitment and 206.7 529.6 1,053.7 consultancy Training (34.6) 8.4 (10.3) 172.1 538.0 1,043.4 3 TAXATION ON PROFIT ON ORDINARY ACTIVITIES The taxation charge for the period to 2 July 1999 has been provided at the estimated rate applicable to the group for the year. 4 DIVIDENDS An interim dividend of 2.0p per ordinary share will be paid on 17 September 1999 to shareholders on the register of members on 10 September 1999. 5 EARNINGS PER SHARE The earnings per share have been calculated on the profit on ordinary activities after taxation and on the weighted average number of shares in issue during the period. The fully diluted earnings per share (arising from the share option schemes detailed in the Prospectus) are not materially different from the basic earnings per share and have not been disclosed.

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