Interim Results

Triad Group Plc 19 December 2006 TRIAD GROUP PLC Interim Statement 2006/2007 Chairman's statement Results Revenue is Â£17.8m for the six months ended 30 September 2006 (H1 2005/06: Â£22.7m). Pre tax losses are Â£1,720,000 (H1 2005/06 loss: Â£489,000). The pre tax losses are after charging exceptional administrative expenses of Â£1,550,000 (H1 2005/06: Â£309,000); see note 4 to the Consolidated Income Statement below. Dividends No interim dividend has been declared or paid (2005/06 interim - 0.00p). Mira Makar On 4 November 2006, a full and final settlement was reached of the claim brought against the Company by Mira Makar in the Employment Tribunal. A sum of Â£400,000 was paid to Ms Makar by way of a contribution to costs incurred by her in connection with the discharge of her duties as a director and employee of the Company. This amount, together with a further Â£1,150,000 of legal and professional costs incurred by the Company in defending the claim, has been included in the operating loss for this period. No further costs are expected. Now that this situation has been resolved, and the very substantial drain of time and money has come to an end, I look forward to concentrating on taking the Company forward. Business Performance We have successfully continued to concentrate on achieving higher gross margins in all areas of the business. This has resulted in a reduction in revenue for the period since we have ceased to pursue volume business at unsatisfactory margins. Utilisation in the IT systems and consultancy business is now high and I am very pleased with the way the second half of the financial year is currently developing. We continue to provide high-quality services within the public sector and are increasing our presence in other market sectors. Our consultants have been involved in strategic business and IT architecture consulting. Recent development projects have involved secure web portals, business process management and electronic forms processing. We expect further growth in the demand for these and related services. The migration of the resourcing business away from low margin activities is all but complete. Key niche markets which have evolved over the last 12 months, and which are now the mainstay of our business, include Retail System Rollouts including Chip & Pin, Business Systems Consultancy, GIS Mapping, Security, Health, Storage, Pharmaceuticals and Billing systems. We are continuing actively to recruit high quality permanent technical staff and our efforts are being met with increasing success. There are also some early signs of valued ex-employees showing interest in rejoining us. Staff morale is very high and staff attrition very low. The new senior management team in the systems and consultancy business (which was appointed from within the Company several months ago) is proving very effective. Despite the very substantial cashflow impact of the costs relating to the tribunal hearing, the Company's finances continue to be robust and will not place any restriction on our ability to rebuild. Steven Sanderson I am pleased to report that Steven Sanderson will be joining the Board as independent non-executive Director with effect from 1 January 2007. Steven, a Chartered Accountant, is 45 years old and has extensive experience at executive director level in the IT services and telecommunications sectors. His background includes public flotations, plc directorship, merger, acquisition and disposal activities. I am sure that the Company will benefit greatly from having Steven's wealth of experience available to our Board. John Rigg Chairman 18 December 2006 Consolidated income statement Note Unaudited Unaudited Audited Six months Six months Year ended ended ended 30 September 30 September 31 March 2006 2005 2006 Â£'000 Â£'000 Â£'000 Revenue 17,779 22,722 42,725 -------------- -------------- -------------- Operating loss pre exceptional legal and professional fess (303) (101) (249) Exceptional legal and professional fees 4 (1,550) (309) (391) -------------- -------------- -------------- Operating loss 4 (1,853) (410) (640) Operating loss 4 (1,853) (410) (640) Finance income 16 10 43 Finance costs (2) (17) (49) Other finance gains/(losses) 119 (72) (145) -------------- -------------- -------------- Loss before tax (1,720) (489) (791) Tax expense 5 (206) (33) (16) -------------- -------------- -------------- Loss for the period attributable to equity shareholders of the parent (1,926) (522) (807) -------------- -------------- -------------- Basic earnings per share 6 (12.71)p (3.45)p (5.33)p --------- --------- --------- There is no recognised income or expense except for the loss for the periods stated above therefore no separate Statement of recognised income and expense has been prepared. Consolidated balance sheet Note Unaudited Unaudited Audited 30 September 2006 30 September 31 March Â£'000 2005 2006 Â£'000 Â£'000 Non-current assets Intangible assets 71 74 65 Property, plant and equipment 707 740 778 Deferred tax 5 - 180 206 -------------- -------------- -------------- 778 994 1,049 -------------- -------------- -------------- Current assets Trade and other receivables 8,739 10,602 8,336 Cash and cash equivalents 392 1,244 1,767 -------------- -------------- -------------- 9,131 11,846 10,103 -------------- -------------- -------------- Total assets 9,909 12,840 11,152 Current liabilities Trade and other payables (5,435) (7,028) (5,631) Financial liabilities (20) - (18) Short term provisions (1,322) - (229) -------------- -------------- -------------- (6,777) (7,028) (5,878) -------------- -------------- -------------- Non-current liabilities Financial liabilities (16) - (18) Long term provisions (1,487) (1,976) (1,701) -------------- -------------- -------------- (1,503) (1,976) (1,719) -------------- -------------- -------------- Total liabilities (8,280) (9,004) (7,597) -------------- -------------- -------------- Net assets 1,629 3,836 3,555 -------------- -------------- -------------- Shareholders' equity Share capital 151 151 151 Share premium account 562 562 562 Capital redemption reserve 104 104 104 Retained earnings 812 3,019 2,738 -------------- -------------- -------------- Total shareholders' equity 7 1,629 3,836 3,555 -------------- -------------- -------------- Consolidated cash flow statement Unaudited Unaudited Audited Six months Six months Year ended ended Ended 30 September 30 September 31 March 2006 2005 2006 Â£'000 Â£'000 Â£'000 Net loss (1,926) (522) (807) Adjustments for: Tax 206 33 16 Depreciation of property, plant and equipment 185 195 396 Profit on disposal of property, plant and equipment (6) (12) (20) Amortisation of intangible assets 26 26 50 Interest income (16) (10) (43) Interest expense 2 17 49 Share-based payment expense - - 4 Changes in working capital (Increase)/decrease in trade and other receivables (403) 1,400 3,666 (Decrease)/increase in trade and other payables (196) 165 (1,232) Increase/(decrease) in provisions 879 (30) (76) -------------- -------------- -------------- Cash generated from operations (1,249) 1,262 2,003 Interest paid (2) (17) (49) Interest received 16 10 43 Tax paid - - (9) -------------- -------------- -------------- Net cash flows from operating activities (1,235) 1,255 1,988 -------------- -------------- -------------- Cash flows from investing activities Purchase of intangible assets (32) (12) (27) Purchase of property, plant and equipment (158) (173) (503) Proceeds from sale of property plant and equipment 50 70 169 -------------- -------------- -------------- Net cash flows from investing activities (140) (115) (361) -------------- -------------- -------------- Cash flows from financing activities Assets acquired under finance leases 7 - 60 Finance lease principal payments (7) - (24) -------------- -------------- -------------- Net cash from financing activities - - 36 -------------- -------------- -------------- Net (decrease)/ increase in cash and cash equivalents (1,375) 1,140 1,663 Cash and cash equivalents at beginning of the period 1,767 104 104 -------------- -------------- -------------- Cash and cash equivalents at end of the period 392 1,244 1,767 -------------- -------------- -------------- Notes to the interim report 1. General information The interim financial information, set out above and overleaf, does not constitute statutory accounts and is unaudited. It has been approved by the Board of Directors on 18 December 2006. This financial information has been prepared in accordance with the accounting policies set out in the statutory accounts of Triad Group Plc for the year ended 31 March 2006. The interim report is being sent to shareholders. Further copies can be obtained from the company's registered office at Weyside Park, Catteshall Lane, Godalming, Surrey, GU7 1XE. 2. Basis of preparation The comparative figures for the year ended 31 March 2006 are not the group's statutory accounts for the financial year. Those accounts have been reported on by the group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under Section 237 (2) or (3) of the Companies Act 1985. These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU that the group expects to be applicable as at 31 March 2007. IFRS are subject to amendment and interpretation by the International Accounting Standards Board (IASB) and there is an ongoing process of review and endorsement by the European Commission. 3. Dividend No interim dividend has been declared or paid (2005/06: 0.00p) 4. Operating Loss The operating loss is after charging exceptional administrative expenses of Â£1,550,000 (2005/06: Â£309,000). These are legal and professional fees which the company has been obliged to incur as a result of the situation regarding Mira Makar, which has now been settled, and a contribution to costs incurred by Ms Makar in connection with the discharge of her duties as a director and employee of the Company. 5. Deferred tax asset Due to accumulated losses the directors believe that it is more likely than not there will be insufficient profits in the short term to enable them to continue to recognise the deferred tax asset in relation to timing differences. The amount charged to the consolidated income statement in relation to the deferred tax asset is Â£206,000 (2005/06: Â£33,000). The deferred tax asset in relation to operating losses has not been recognised in the current or the comparative periods. 6. Earnings per share Earnings per share have been calculated on the loss for the period divided by the weighted average number of shares in issue during the period based on the following: Unaudited Unaudited Audited 30 September 30 September 31 March 2006 2005 2006 Loss for the period Â£(1,926,000) Â£(522,000) Â£(807,000) -------------- -------------- -------------- Average number of shares in issue 15,149,579 15,149,579 15,149,579 Effect of dilutive options - - - -------------- -------------- -------------- Average number of shares in issue plus dilutive options 15,149,579 15,149,579 15,149,579 -------------- -------------- -------------- Basic earnings per share (12.71)p (3.45)p (5.33)p --------- --------- --------- Diluted earnings per share (12.71)p (3.45)p (5.33)p --------- --------- --------- The share options have no dilutive effect in any of these periods. 7. Changes in shareholders' equity Unaudited Unaudited Audited Six months Six months Year Ended ended ended 30 September 30 September 31 March 2006 2005 2006 Â£'000 Â£'000 Â£'000 Opening shareholders' equity 3,555 4,358 4,358 Loss for the period (1,926) (522) (807) Share-based payments - - 4 -------------- -------------- -------------- Closing shareholders' equity 1,629 3,836 3,555 -------------- -------------- -------------- This information is provided by RNS The company news service from the London Stock Exchange

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