Final Results
Stagecoach Theatre Arts PLC
02 August 2002
Stagecoach Theatre Arts plc - Final Results
2nd August 2002
Stagecoach Theatre Arts plc ('Stagecoach Theatre Arts', 'Stagecoach' or the
'Company')
Preliminary Announcement of Final Results for the year ended 31st May 2002
Stagecoach Theatre Arts has enjoyed a very successful year, including its
admission to the London Stock Exchange's Alternative Investment Market in
December 2001. Stagecoach Theatre Arts was founded in 1988 and operates the UK's
largest franchise network of part-time performing arts schools for young people
aged between 4 and 19.
A summary of the Company's results and achievements during the year is as
follows:
• Introduction to AIM raising approximately £2.5m (before expenses) for the
Company
• Franchise network turnover of approximately £12.5m (unaudited) (2001:
£10.4m)
• Company turnover increased by over 50% to £3.5m (2001: £2.3m)
• Profit of £0.71m (2001: £0.67m)
• 380 Stagecoach schools and 344 Early Stages classes as at the year end
• 22,300 students across the UK (2001: 18,600)
• Acquired related businesses at flotation, including SportsCoach
• Acquired Stagecoach USA on 3rd June 2002
• A number of high profile successful events and productions
Stephanie Manuel and David Sprigg, Joint Managing Directors, commented:
'We are delighted with the continued growth of the Company this year, and are
pleased to report on an excellent set of maiden results as a public company.
This has been a busy year for us and we have managed the Company through a
number of important changes, including the flotation, the acquisition of
SportsCoach, and the acquisition of Stagecoach in the USA, together with the
strengthening of our Board. These changes have created the platform for future
growth of the Company.'
Enquiries:
Stagecoach Theatre Arts: Tel: 01932 254 333
Stephanie Manuel, Joint Managing Director
David Sprigg, Joint Managing Director
Richard Dawson, Finance Director
Beeson Gregory: Tel: 020 7488 4040
Tom Price
Henry Turcan
Chairman's Statement
I am pleased to announce the Company's first annual results as a public company,
for the year ended 31st May 2002. Stagecoach Theatre Arts was founded in 1988
and operates the UK's largest network of part-time performing arts schools for
young people aged between 4 and 19. Stagecoach Theatre Arts was admitted to the
Alternative Investment Market of the London Stock Exchange on 14th December
2001, raising £2.5m (before expenses).
Stagecoach Theatre Arts has grown by way of franchising to a network of 380
Stagecoach Schools and 344 Early Stages classes across the UK, offering
part-time tuition in dance, drama and singing. The Company has a track record of
sustained growth in turnover and profits and currently tutors over 22,300
students in the UK.
The unaudited network turnover for the year to 31st May 2002 is £12.5 million
(2001: £10.4 million), which reflects the underlying school fees throughout the
franchisee network. Company turnover in the period increased by over 50 per cent
to £3.5 million (2001: £2.3 million). This substantial increase reflects both
organic growth and the acquisition of related businesses at flotation. Profit
before tax for the year was £0.71 million (2001: £0.67 million). Earnings per
share is 6.0 pence for the year (earnings per share of 6.7 pence to 31st May
2001 is not a comparable figure, due to the acquisitions at flotation and the
issue of new shares).
Our corporate strategy, as set out in our flotation prospectus of 23rd November
2001, is to:
• continue the expansion of Stagecoach in the UK;
• develop SportsCoach in the UK;
• expand Stagecoach and SportsCoach overseas; and
• expand merchandising and publishing.
I am delighted to report that we have made excellent progress in developing this
strategy. We continue to open new schools, and are receiving more new franchisee
enquiries per month and have conducted more new franchisee interviews than ever
before. Already we have contracted or have received firm indications from new
and existing franchisees to open another 40 schools in September 2002.
We continue to develop SportsCoach, having acquired 100 per cent of the business
at flotation. The third pilot SportsCoach school was launched in the Summer Term
2002, and we have received a number of applications from further prospective
SportsCoach franchisees.
On 3rd June 2002, the Company acquired the remaining 51 per cent of Stagecoach
Theatre Arts Schools Limited ('Stagecoach USA'), a company which operates five
Stagecoach schools and owns all the Stagecoach operations in the United States
of America. The Company now owns 100 per cent of Stagecoach USA, and we aim to
commence franchising in the USA in the second half of 2003.
Further details of the operations of the business are set out in the Joint
Managing Directors' Operating Review below.
Following the flotation of the Company on 14th December 2001, the Board
comprised two experienced non-executive directors, the two founders of
Stagecoach Theatre Arts as Joint Managing Directors, and the Finance Director. I
am also delighted to welcome to the Board Manzoor Ishani, a franchise lawyer
with over 25 years experience in the franchising industry, who was appointed as
Franchise Development Director on 1st August 2002. I would also like to take
this opportunity to thank all the staff of the Company for their continued hard
work and dedication to the Company throughout the year.
The brand name of Stagecoach Theatre Arts is at its strongest ever, and we look
forward to continuing to grow the business whilst maintaining the quality of the
tuition that we provide to all our students. In summary, the prospects of the
Company remain very positive.
Graham Cole
Chairman
Joint Managing Directors' Operating Review
We are delighted to report on our first annual results as a public company, for
the year ended 31st May 2002.
Operations
The principal indicator of the Company's growth is the number of schools opened
during the year. Our franchisees open new schools only at the beginning of the
Summer Term in April and the Autumn Term in September. This year has been
another successful year in the continuing growth of the number of schools. We
are pleased to report that the number of Stagecoach Theatre Arts schools and of
students attending them has increased over the year to 380 schools as at the
year end with over 17,400 students (2001: 326 schools and 14,600 students). In
addition, the number of Early Stages classes increased to 344 as at the year end
with over 4,900 students (2001: 294 Early Stages classes and 4,000 students).
This represents an increase over the year of 20.4 per cent in the total of
number of students attending a Stagecoach Theatre Arts school (for 6 to 19 year
olds) or an Early Stages class (for 4 to 6 year olds) from approximately 18,600
to 22,300 students.
The number of franchisees has also increased over the period under review from
138 to 156, demonstrating that the growth in schools has come from both new
franchisees joining the network and existing franchisees expanding their
individual businesses.
One of the reasons for flotation was to raise funds to buy back parts of
territories from existing franchisees who, due to their personal circumstances,
are unable or unwilling to open further schools within their territory, despite
strong demand for additional schools. The purpose of this is to create
additional territories that can be sold to prospective franchisees and enhance
the opportunities for further Stagecoach Theatre Arts schools in the UK. The
initial phase of this buy back programme has proved successful, with parts of
fourteen territories having been acquired by 31st May 2002. Of these territories
two have already been re-sold as new territories to new franchisees.
The reorganisation of the Company at flotation involved the transferring of the
operation of 39 Stagecoach Schools under direct management from Stagecoach
Performing Arts Limited to the Company, which then immediately entered into a
franchise agreement with an independent third party, Surrey Performing Arts
Limited, in relation to the ongoing operation of these schools. In addition, the
Company contracted to provide the administration for these Surrey Performing
Arts schools, including managing the teaching staff and accounting functions.
In conjunction with the growth in number of schools, and as a result of the
acquisitions at flotation, the Company has increased its number of employees
(full time equivalents) to 40 as at 31st May 2002 from 12 as at 31st May 2001.
Of the increase in staff numbers, 10 are new employees and 18 are from the
acquired companies.
Financial Review
Due to the acquisition of a number of entities by the Company on flotation, the
financial statements for the year ended 31st May 2001 of Stagecoach Theatre Arts
(Regional Schools) Limited, as the Company was formerly known, are not directly
comparable with this year's results.
The Company raised £2.5 million, before expenses, at flotation. Immediately upon
flotation, following the acquisition of the trade, assets and intellectual
property of the three related businesses, the Company had cash balances of £1.3
million and net assets of £1.8 million. Following flotation, the Company is now
sufficiently capitalised to fulfil its current strategic objectives for growth
of the business.
We are delighted to report an increase in franchise network turnover for the
year to 31st May 2002 to £12.5 million (2001: £10.4 million), whilst Company
turnover in the period increased to £3.5 million (2001: £2.3 million). Profit
before tax for the year was £0.71 million (2001: £0.67 million). As at 31st May
2002, the net cash balances of the Company stood at £1.6 million.
Acquired activities shown in the profit and loss account reflect the results of
the acquisition of the businesses of related parties Stagecoach Performing Arts
Limited, Manuel and Sprigg Trading as Stagecoach Partnership, and SportsCoach.
Discontinued activities shown in the profit and loss account reflect changes in
merchandise purchasing and distribution.
As set out in the prospectus at flotation no final dividend is being proposed
for the year. The Directors do intend that the Company will declare and pay
dividends according to the Company's financial results each year, its future
cash requirements, future prospects, profits legally available for distribution,
and other factors deemed by the Directors to be relevant at the time.
Creative and Educational Department
During the year, the Company has strengthened its Creative Department with the
appointment of an Events Manager. This has already helped enhance the PR and
brand profile of the Company through major events.
The Company staged a number of very successful events during the year, which
included:
• 2,000 Stagecoach students performed at HRH Queen Elizabeth's Golden
Jubilee Celebration at Buckingham Palace on June 4th 2002.
• In March 2002, 1,600 Stagecoach students from across the UK performed in a
charity gala at the Royal Albert Hall to help raise money for 'Support for
Africa'.
• The annual show case production, last summer being 'Jane Eyre' at the
Epsom Play House, featured 70 Stagecoach students from throughout the UK and
one from the USA.
The Company is committed to investment in and development of its Creative and
Educational department, which remains at the heart of the operations of the
business.
Merchandising and publishing
The merchandising and publishing divisions, which are only a minor part of our
business, continue to grow and be further improved. The main development during
this year was to outsource the Stagecoach Theatre Arts branded clothing and
merchandise, such that the Company no longer deals with the production and
supply but receives a commission on all sales.
SportsCoach
SportsCoach launched its third pilot school in April 2002, taking the total
number of students to 117, filling 81 per cent of the places available. The
fourth and final SportsCoach pilot school is to be opened in the Autumn Term
2002. SportsCoach head office operations now employ two full time personnel,
including the co-founder of SportsCoach, who was appointed as managing director
of the SportsCoach division at flotation. The Company has commenced selling
SportsCoach franchises to open schools in April 2003.
Overseas Operations
On 3rd June 2002, the Company acquired the remaining 51 per cent of Stagecoach
Theatre Arts Schools Limited ('Stagecoach USA'), a company which operates five
Stagecoach schools and owns all the Stagecoach operations in the United States
of America. The Company now owns 100 per cent of Stagecoach USA.
Stagecoach USA has demonstrated that Stagecoach Theatre Arts schools can be run
successfully using the same format as schools in the UK. Stagecoach USA's
schools currently have 222 students aged 6 to 16 from a maximum capacity of 225,
and five Early Stages classes all of which are fully recruited. Stagecoach USA
also runs Summer Workshops. For the year ended 31st August 2001, Stagecoach USA
reported turnover of $270,203 and profit before tax of $6,995.
Following this acquisition, the Company intends to invest the necessary capital
into Stagecoach USA in order to expand the Stagecoach Theatre Arts business
throughout the USA predominantly via franchising.
The Company continues to support its other overseas operations and interests.
The combined contributions to turnover and profit of the overseas operations
remain minimal, however, the overseas markets, particularly USA and Germany,
present great opportunities for future growth.
Summarising the activities of the Company for the period under review, this has
been a very successful year, during which we have achieved further growth in the
core business and secured additional funding to strengthen the balance sheet and
develop the business further.
Stephanie Manuel Joint Managing Director
David Sprigg Joint Managing Director
Stagecoach Theatre Arts plc
Profit and Loss Account
Notes 2002 2001
£'000 £'000 £'000 £'000
Turnover 2
Continuing activities 2,655 1,984
Acquired activities 466 -
Discontinued activities 334 348
3,455 2,332
Cost of sales 3 (1,776) (859)
Gross profit 1,679 1,473
Administrative expenses 3 (1,158) (896)
Other operating income 3 168 97
Operating profit
Continuing activities 855 825
Acquired activities (40) -
Discontinued activities (126) (151)
689 674
Interest receivable and similar income 27 3
Interest payable and similar charges (3) (7)
Profit on ordinary activities before taxation 713 670
Tax on profit on ordinary activities 4 (218) (203)
Profit on ordinary activities after taxation 495 467
Dividends 5 (747) (100)
Retained profit/(loss) for the financial year (252) 367
Earnings per share, pence - Basic 6 6.0 6.7
- Diluted 6 5.9 6.7
All recognised gains and losses are included in the profit and loss account.
Stagecoach Theatre Arts plc
Balance Sheet
Notes 2002 2001
£'000 £'000 £'000 £'000
Fixed assets
Intangible fixed assets 705 -
Tangible fixed assets 110 63
815 63
Current assets
Stocks 159 108
Debtors 921 597
Cash at bank and in hand 1,615 807
2,695 1,512
Creditors
Amounts falling due within one year (1,330) (835)
Net current assets 1,365 677
Total assets less current liabilities 2,180 740
Creditors:
Amount falling due after more than one year (32) (6)
Provisions for liabilities and charges - (2)
2,148 732
Capital and reserves
Share capital 484 15
Share premium 1,534 -
Profit and loss account 130 717
Equity shareholders' funds 2,148 732
Stagecoach Theatre Arts plc
Cash Flow Statement
Notes 2002 2001
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 7 73 679
Returns on investments and servicing of finance
Interest received 18 1
Interest element of finance lease rental payments (3) (5)
15 (4)
Taxation
Corporation tax paid (207) (60)
Capital expenditure
Payments to acquire tangible fixed assets (56) (5)
Sale proceeds from disposal of tangible fixed assets 45 -
(11) (5)
Acquisitions and disposals
Purchase of trades (35) -
Net cash acquired with trades 73 -
38 -
Equity dividends paid (747) (100)
Net cash inflow / (outflow) before financing (839) 510
Financing
Gross proceeds from the issue of shares 2,500 -
Flotation costs offset against share premium (832) -
Gross proceeds from bank loans - 28
Capital element of finance lease payments (9) (3)
Capital element of bank loan payments (12) (16)
Cash inflow from financing 1,647 9
Increase in cash 808 519
Reconciliation of net cash flow to movement in net funds (note 8)
2002 2001
£'000 £'000 £'000 £'000
Increase in cash balances 808 517
Gross proceeds from bank loans - (28)
Capital element of finance lease payments 9 3
Capital element of bank loan payments 12 16
829 508
Finance leases acquired with trade (48) -
Opening balances of net funds 788 280
Closing balances of net funds 1,569 788
Stagecoach Theatre Arts plc
Notes to the Financial Statements
1. Basis of preparation
The financial statements have been prepared in accordance with
applicable Accounting Standards under the historical cost convention. In
preparing these accounts, the Company has adopted the Financial
Reporting Standards FRS 15, FRS 18 and FRS 19 for the first time, which
have no material impact on these financial statements.
The financial statements reflect the results of Stagecoach Theatre Arts
plc (referred to as the 'Company') for the year ended 31st May 2002. The
financial information presented in this preliminary announcement does
not constitute statutory accounts within the meaning of the Companies
Act 1985. The information has however been extracted from the Company's
statutory accounts for the year ended 31st May 2002 which were approved
by the Board on 1st August 2002 and on which the Company's auditors have
given an unqualified opinion.
2. Turnover by geographical location
2002 2001
£'000 £'000
UK 3,433 2,295
Europe 22 17
Rest of the world - 20
Total turnover 3,455 2,332
It is not material or practical to provide a similar analysis of
operating profit and net assets.
3. Continuing, acquired and discontinued activities
2002 2001
£'000 £'000 £'000 £'000
Cost of sales: (905) (531)
Continuing activities (506) -
Acquired activities (365) (328)
Discontinued activities
Total cost of sales (1,776) (859)
Administrative expenses: (1,049) (691)
Continuing activities (109) (205)
Discontinued activities
Total administrative expenses (1,158) (896)
Other operating income: 154 63
Continuing activities 14 34
Discontinued activities
Total other operating income 168 97
4. Taxation
Analysis of the tax charge
The tax charge on the profit on ordinary activities for the year was as follows:
2002 2001
£'000 £'000
Current tax:
UK corporation tax 217 204
Adjustments in respect of previous periods 3 (1)
Current tax charge for year 220 203
Deferred taxation - reversal of timing differences (2) -
Tax on profit on ordinary activities 218 203
UK corporation tax has been charged at 30% (2001 - 29.76%).
b) Reconciliation of the tax charge
2002 2001
£'000 £'000
Profit on ordinary activities before tax 713 670
Profit on ordinary activities at standard rate 214 201
of UK corporation tax of 30%
Effects of:
Expenses not deductible for tax purposes 10 6
Capital allowances for period in excess of depreciation (7) (1)
Marginal relief - (2)
Adjustment to tax charge in respect of previous periods 3 (1)
Current tax charge for year 220 203
5. Dividends
2002 2001
£'000 £'000
Equity shares:
Paid - interim dividend (£49.80 per share) 747 100
No final dividend is being proposed for the year.
6. Earnings per share
Basic earnings per share, calculated in accordance with FRS14 (Earnings per
share) of 6.0 pence (2001: 6.7 pence), is based upon the profit on ordinary
activities after tax of £0.50 million (2001: profit £0.47 million) apportioned
over the weighted average number of ordinary shares that were in issue for the
period of 8,244,660 (2001: 7,000,000). Fully diluted earnings per share is
calculated at 5.9 pence (2001: 6.7 pence), based upon weighted average number of
ordinary shares, including options granted to employees, of 8,356,312 (2001:
7,000,000).
7. Reconciliation of operating profit to operating cash flows
2002 2001
£'000 £'000
Operating profit 689 674
Depreciation and amortisation of goodwill 43 21
Profit on sale of fixed assets (15) -
(Increase) in Stocks (30) (33)
(Increase) in debtors (679) (227)
Increase in creditors 65 244
Net cash inflow from operating activities 73 679
There was a non-cash transaction during the year amounting to £473,000, being
the waiver of debt on acquisition of the business of Manuel and Sprigg Trading
as Stagecoach Partnership.
8. Analysis of changes in net funds Opening Cash Acquisi- Closing balance
balance flow -tion
£'000 £'000 £'000 £'000
Cash at bank and in hand 807 808 - 1,615
Finance leases and loans (19) 21 (48) (46)
Total net funds 788 829 (48) 1,569
9. Post balance sheet events
On 3rd June 2002 the Company acquired the outstanding 51 per cent of Stagecoach
Theatre Arts Schools Limited, formerly Stagecoach Theatre Arts (Minnesota)
Limited ('Stagecoach USA') for $151,000 payable over three years, such that the
Company now owns 100 per cent of Stagecoach USA. Operating under an
International Licence Agreement from the Company, Stagecoach USA owns five
Stagecoach schools and five Early Stages classes and manages all the Stagecoach
operations in the United States of America.
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