Final Results
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Press Release |
09 June 2009 |
Brulines Group plc
('Brulines' or 'the Group')
Final Results
Brulines Group plc (AIM:BRU), the market leading provider of real time monitoring systems and data management services for the UK leisure sector, is pleased to announce its final results for the year ended 31 March 2009.
Highlights
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Revenue increased 11.7% to £19.07 million (2008: £17.06 million) |
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Recurring income streams now at 79% of turnover |
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Operating profit pre-exceptional items increased 26.5% to £5.05 million (2008: £3.99 million) |
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Profit before tax and exceptional items increased 19.6% to £4.98 million (2008: £4.16 million) |
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Gross margins improved to 58% (2008: 53%) |
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Earnings per share increased by 14.8% to 13.59 pence (2008: 11.84 pence) |
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Final dividend of 3.80 pence per share giving a full year total of 5.35 pence per share (2008: 5.0 pence per share) |
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Acquisitions successfully integrated |
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Installation base increased 7% to c. 23,000 |
Commenting on the final results, James Newman, Chairman of Brulines Group plc, said: 'I am delighted with the performance of the Group as we continue to trade strongly and expand successfully. Brulines' business has proven highly robust with another significant increase in profit despite poor economic and industry conditions. The growth of our core business is now supported by new markets and acquired businesses.
'Brulines has applied its core skills to provide greater operational control to customers across these wider markets, consolidating a compelling position in the leisure sector. With our strong balance sheet, cash flow and impressive margins we look forward to the future with confidence as the Group continues to expand.'
- Ends -
Enquiries:
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Brulines Group plc |
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James Dickson, Chief Executive |
Tel: +44 (0) 1642 358 800 |
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Mark Foster, Finance Director |
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Cenkos Securities plc |
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Stephen Keys |
Tel: +44 (0) 20 7397 8900 |
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Media enquiries:
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Abchurch Communications |
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Sarah Hollins / Chris Lane / Jack Ballantyne jack.ballantyne@abchurch-group.com |
Tel: +44 (0) 207 398 7714 |
Chairman's Statement
The last year has been another progressive year of financial growth and positive development activity. The Group has again increased its profits substantially in the year, integrated and developed last year's acquisitions and made further acquisitions in line with the Group's strategy of diversifying its market sectors, utilising its core strengths and competencies.
Results
Turnover for the year at £19.07 million was 11.7% ahead of the £17.06 million achieved in 2007/2008, largely due to revenues generated by the two acquisitions, Edensure and Vianet and the benefit of having Nucleus Data for a full year.
The turnover growth in the core Dispense Monitoring business slowed due to the economic climate, as several of our largest customers had varying degrees of delay impacting new capital projects.
However, including the new acquisitions, the Group is now in the enviable position of having a substantial level of its turnover derived from contractual services. This rose significantly in the year to 79%, which gives the Group even greater transparency in its forward revenue expectations. As a result, gross margins also increased in the year to over 58% from 53% last year.
Administrative overheads continue to be well controlled but were impacted this year by some bad debts, additional costs relating to the new acquisitions, investment in recruitment of senior management and some under utilisation of staff due to the slowing down of the installation rate in the core business.
Despite absorbing losses in the newly acquired companies, Group operating profit before amortisation of goodwill, share option and exceptional costs increased by 15.83% to £5.03 million (2008: £4.34 million). IFRS Group profit before tax at £4.62 million (2008: £4.16 million) was ahead of last year.
Basic earnings per share at 13.59 pence (2008: 11.84 pence) is 14.8% up on last year even after taking into account the new shares issued in the Placing in December 2008.
Dividend
The Board paid an interim dividend of 1.55 pence per share (2008: 1.45 pence) in January 2009 and, in line with the Board's progressive dividend policy, is recommending a final dividend of 3.80 pence (2008: 3.55 pence) per share in respect of the year ended 31 March 2009. This gives a total dividend for the year of 5.35 pence (2008: 5.00 pence) per share. Subject to the approval of shareholders at the Group's Annual General Meeting on 09 July 2009, the final dividend will be paid on 24 July 2009 to shareholders on the register on 19 June 2009.
Acquisitions
During the year the Group continued its strategy of making selective acquisitions utilising the skills and technologies within the Group, so as to enter new markets where there is an opportunity to establish market leading products and services.
In October 2008, the Group announced that it had purchased the entire share capital of Edensure Limited ('Edensure'), a company which provides intelligent forecourt solutions for the petrol forecourt market. The Board believes that this acquisition is a good strategic fit and the Group's data management capabilities will provide Edensure with the platform to grow in this adjacent market.
In December 2008, the Group announced that it had purchased the entire share capital of Vianet Limited ('Vianet') from the Administrators of Vianet plc. Vianet provides market leading telemetry and data capture solutions to the vending industry and M2M telemetry solutions in a growing market sector.
The Board believes that the acquisition of Vianet will provide the Group with the strategic entry into the vending market it has been seeking for some time whilst creating technical and operational synergies with its recently acquired subsidiary, Coin Metrics.
To date both acquisitions have traded better than expected but both were loss making in the post acquisition trading period to 31 March 2009. However, both companies are expected to contribute to Group profits in the next financial year.
Placing
In December 2008, the Board announced that it had conditionally placed 3,786,641 shares at 125 pence each with various institutional investors to raise £4.73 million before expenses (the 'Placing'). The Placing was approved by shareholders at a General Meeting of the Company held on 29 December 2008 and commenced trading on AIM the following day.
The Placing will enable the Group to continue to take advantage of further complementary acquisitions and commercial opportunities as and when they arise. It also strengthens the Group's balance sheet in an uncertain economic climate.
Change of name
At the Annual General Meeting in July 2008, the Company changed its name to Brulines Group plc.
Board and senior management
I am pleased to welcome to the Board, Stewart Darling, who was appointed Commercial Director in November last year. He strengthens the excellent management team in an expanding organisation.
I would also like to thank all of my Board colleagues for their continued efforts on behalf of the Group in difficult economic conditions.
Outlook
The Group's strategic intent is to profitably extend its data handling penetration and footprint in the leisure, vending and petrol forecourt sectors, where we believe there are considerable synergies given the Group's technical and operational expertise in data management and monitoring systems.
Following the Placing, the Group is well placed to continue its organic growth in its core sectors and further penetrate its new markets by building, via selective acquisitions, market leading positions using its core capabilities as well as creating value through financial synergies.
Consequently, despite the demanding market conditions created by the current economic climate, the Board is confident that the Group will continue to grow organically in all its markets and further develop its growth by acquisition strategy during the next financial year.
James H Newman
Chairman
09 June 2009 Chief Executive Officer's Statement
Group profit
Trading in H2 2009 financial year has been robust despite a slow down in new installations and the Group results for the year to 31 March 2009 are in line with management and market expectations.
The Group revenue at £19.07 million was 11.7% ahead of last year whilst, on a comparable year-on-year basis, the core business turnover including Nucleus for the year increased modestly by 3.8% to £16.68 million (2008: £16.07 million) as a consequence of installations being delayed due to the tightening of capital availability for our customers.
The revenue mix continued to improve, moving towards recurring revenue as income from support service contracts was generated from the increasing installation base. Recurring revenue currently accounts for over 70% of Group revenue and management expects this to continue to rise for the foreseeable future.
Gross margin has risen from 53% for 2007/2008 to 58% for 2008/2009 as a result of the increased recurring revenue, operational improvements and demand for higher margin bespoke reporting services. On a consolidated basis we anticipate that gross margins are sustainable at around 55%.
After absorbing costs associated with the integration and support of Coin Metrics, Edensure, and Vianet, the Group profit before taxation for 2008/2009 at £5.03 million is £0.68 million greater than the same period last year, delivering a 14.7% increase in earnings per share to 13.59 pence.
LEISURE MARKET
The Group's core market is the leisure market where our primary offerings are data capture and services for draught beer and gaming machines.
Dispense monitoring customers and contracts
New installations, system replacements and upgrades have progressed satisfactorily in the year with over 1,400 new installations and almost 500 existing system upgrade replacements taking our total installation base including Nucleus Data to c.23,000 sites, providing year-on-year growth in recurring revenue and increased margins associated with support services.
Pressure on consumer spend and the instability in financial markets have had an adverse impact on new orders and our installation pipeline as several customers delayed their investment programmes until there was increased clarity on capital availability. The Group has seen this as an opportunity by developing a rental model as an alternative to the standard capital purchase model which our customers have historically used. Management is confident of customer interest in this offer within both the managed and leased pub sectors.
Against a demanding commercial environment for our customers, we have made good progress with both national and regional operators, increasing our market share and broadening our customer base together with deeper penetration within existing customers' estates.
Brulines has been working with Trading Standards to establish what, if any, steps might be taken to improve our methodology, calibration or operating processes with a view to establishing some form of approval regardless of whether our services fall under the Weights and Measures Act.
Nucleus Data acquisition integrated
Following a successful outcome from the OFT investigation into the merger of the Nucleus acquisition, which was completed on 4 January 2008, the integration has gone to plan with the anticipated financial and commercial synergies being realised and the acquisition being earnings enhancing in the year to 31 March 2009.
The merged business has focused resources to accelerate technology development and improved sourcing whilst achieving increased efficiency. Customers are benefiting from the scale and reaction times of the Group's nationwide in-house field service engineering resources.
i - draught (formerly 'BQM') development
Good progress has been made in the year as we have developed the proposition with existing customers and have expanded the customer base for commercial evaluation of i-draught to include an increasing number of national managed pub operations and regional brewers plus four bar chains in the USA. St Austell Brewery in Cornwall recently purchased and installed 40 systems in their tenanted estate.
Quality at the point of dispense becomes increasingly important due to pub owners and brewers competing for market share against a background of falling on-premises beer consumption.
The Group now has in excess of three hundred i-draught systems installed including over 100 in Punch Taverns where we have a five year support service contract. The Group is confident that our i-draught extension of the core volume monitoring product will continue to gain traction and be recognised for its commercial contribution during the next two years.
Gaming machine monitoring
In 2006, the Group entered the gaming telemetry and data services market and has successfully integrated two acquisitions to create the leading data capture and machine management position in the leisure sector.
Machine Insite - leading position in gaming machine data management and consultancy
Machine Insite provides gaming machine data management and consultancy services to operators within the pub, club and leisure markets and is trading well having sustained profit levels year-on-year despite an additional £0.1 million of costs associated with a newly appointed Managing Director and exceptional write off associated with Cains going into administration.
New business has been gained with SA Brain, Spirit, Orchid, Trust Inns, and Charles Wells during the past year and we now provide data management for approximately 34,000 AWP machines in over 4,000 outlets across 30 groups and customers within the pub and leisure markets.
Coin Metrics - remote data capture for gaming and vending machines
In February 2009, at a cost of £33,686 the Group acquired a further 17% holding in Coin Metrics Limited ('CML') taking our interest to 83%.
The core CML product is Site Guardian, a wireless data product that allows owners of gaming centres or family entertainment centres in the gaming sector to constantly monitor the financial performance of their gaming sites and assets accurately and in real time.
CML real time data capture capability allows Machine Insite to provide advanced machine reporting and machine to machine services enabling the Group to accelerate the growth of the AWP data management business to market leadership. Key business gains have been MOTO Motorway services, Welcome Break and Odeon.
Coin Metrics is now trading at a monthly break even position and the Group anticipates a net contribution in 2009/2010 following a loss of £0.15 million in 2008/2009.
Market drivers
The Group recognises the uncertain economic conditions and tight capital and credit markets coupled with the associated difficult trading environment generally in the licensed on trade and for some of the Group's customers.
Whilst this environment is certainly challenging, the Group believes that reports on the demise of the pub sector, compounded by the early impact of legislation and the smoking ban in particular, are not as severe as is widely reported.
Although 4,000 pubs may close over the next few years, it is probable that under normal circumstances many of these pubs would have closed over the course of the next five years anyway, whilst other pubs continue to open at the top end.
The current commercial environment for our customers has resulted in challenges for the Group. However on balance this has so far had a neutral impact on Group performance as:
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There has been increased demand for the operational transparency that the Group's systems provide as pub operators focus on reducing shrinkage and maximising their operations.
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There have been delays in installations due to organisational and structural change as customers realign their businesses to meet the commercial challenges they face.
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The tightening of capital supply may result in higher demand for the rental model option, which the Group has been developing as an alternative to the capital purchase model currently being used.
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The increasing requirements on all leisure operators to improve the quality and efficiency of their offering will tend to increase demand for the Group's products despite any potential consumer slow down.
Business & Enterprise Committee (BEC) Report on the leased Pubco model
On 13 May 2009 the Business and Enterprise Committee (BEC) published a report claiming that the beer ties which contract tenants to buy beer from their landlords are anti competitive and had created a system which allows big companies to profit whilst individual landlords struggle. The BEC recommended that there be an urgent referral to the OFT and Competition Commission. The report also made critical reference to Brulines' role in helping pub companies enforce the tie.
The report is a recommendation by a committee of MPs, not a ruling, and therefore has no legal status. On its own admission the BEC report states that it had 'neither the resources nor investigative powers to reach firm conclusions on every issue'. Press reports suggest that the OFT has already rejected the report stating that there is no significant competition problem in relation to the beer and pub market.
The Government has two months to respond to the report, and may not follow the BEC recommendation for a market investigation. However, there is a chance that they may refer the report to the Competition Commission as a distraction to the current government woes. In the event that this is referred to the Competition Commission, the Group believes that in any case the chances of the 'tie' being found anti-competitive are small.
We believe there are strong grounds for the Government to reject the Committee's recommendation for a market investigation by the Competition Commission as competition authorities have already looked at this market a number of times. In particular, the European Commission and the European Courts considered the UK pub tie in detail and concluded that it was not anti-competitive. And more recently, the Office of Fair Trading ('OFT') provided evidence to the 2004 Select Committee suggesting that there was no basis for further investigation of the tie. Nonetheless, if the Government does decide to refer this matter to the competition authorities, we are confident that the outcome will reconfirm the competitive nature of the pub sector once and for all. The Group was extremely disappointed by comments in the BEC Report made in relation to the Brulines business. It is particularly important to note that at no time during the enquiry did any member of the BEC enquiry seek clarification from Brulines on either the claims made, or examples quoted concerning the beer monitoring system or processes used.
Brulines produces over one million reports annually on the dispense and delivery volumes of c.23,000 public houses. The BEC enquiry appears to have relied upon one specific example (and some unstated others) and assumed that this is representative of 23,000 public houses. The Group believes this presents an imbalanced view and a gross misrepresentation of the facts.
STRATEGY FOR GROWTH
Our core beer dispense monitoring business on its own has the potential market to maintain satisfactory growth for several years. However, incremental contribution and margin growth will also be achieved from the wider leisure market with complementary products and technologies such as i-draught, gaming machines, soft drinks monitoring, fridge/freezer temperature reporting, wines and spirits monitoring, and market data provision. Our strong customer and recurring revenue base provides a solid foundation for significant growth as we commercialise development products, extend into new markets and make selective acquisitions.
The Group believes that our ability to provide a wider range of effective operational and market data will increase our value to existing customers. Our customers within the tenanted/leased and managed sectors continue to benefit from Brulines' services and the greater operational control that we offer is allowing entry to the hotels, clubs, and independent sectors.
We will continue to pursue organic development of our core business whilst leveraging our key competencies and broadening our offering through strategic acquisitions in remote data capture and data management for the leisure, vending and petrol forecourt sectors.
Whilst maintaining our investment in the core leisure market the Group has the opportunity to establish market leading data handling positions in the vending and petrol forecourt sectors where we have identified considerable technology, operational and commercial overlap.
Placing
With the Group well placed to sustain its organic path for growth within the leisure sector, the Directors believe that the Placing will enable the Group to take advantage of further complimentary acquisitions and commercial opportunities as and when they arise, as well as strengthening the Group's balance sheet considerably. Such acquisitions would enable the Group to extend its core capabilities into adjacent markets, where the Directors believe there exists an opportunity to establish market leading products and services, as well as consolidating in sectors in which the Group already operates. The Group's strategic intent is to profitably extend its data handling penetration and footprint in the leisure, vending and petrol forecourt sectors where there is considerable overlap, and to achieve market leading positions using its core capabilities and market leading products.
USA Opportunity
During the period, the Group commenced evaluation of its i-draught beer quality monitoring in the USA market with four national bar chains. The evaluation, which has run through H2 2008/2009 into H1 2009/2010, is based in the Denver area and consists of twelve sites where we are providing quality and till variance analysis.
In the event that the evaluation is successful, the intention would be to develop the business through national chains and third party installers.
Vianet - vending telemetry
On 11 December 2008 the Group completed the acquisition of the entire issued share capital of Vianet Limited ('Vianet') from the administrators of Vianet plc for an undisclosed fee.
Based in Dunfermline, Scotland, Vianet provides market leading telemetry and data capture solutions to the vending industry, as well as providing market leading M2M telemetry solutions in a growing market place. Vianet reported a loss of £1.44 million for the year ended 31 December 2007 on a turnover of £1.06 million and at that date had gross assets of £0.98 million. In the three months to 31 March 2009 the losses were reduced to £0.12 million and the Group anticipates Vianet achieving break-even in the year to March 2010.
The acquisition is a compelling strategic fit with the Group for the following reasons:
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The Group has been pursuing an increased presence in the vending marketplace, especially since its acquisition of Coin Metrics, as it is a market that fits very well with the core competencies of the Group. This acquisition gives the Group a significant and immediate presence in this growing market place without the need to expend management time and resources developing a product offering.
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The Group can provide key data management expertise and resources in terms of sales, marketing and operations to help drive Vianet's market penetration.
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There are significant technical, communication, organisational and customer synergies.
Furthermore, there are significant synergies to be achieved in the enlarged business across a number of technical areas including devices, applications and connectivity.
The acquisition of Vianet is a natural extension of the Group's core capabilities into a growing adjacent remote data capture and management market where there is an opportunity to establish market leading products and services. Vianet immediately provides the Group with a pan-European customer opportunity which we will further consolidate as we work towards expanding the Group's existing activities into Europe as well. Since the date of acquisition several customers have accelerated their involvement with Vianet's vending telemetry, including Glaxo Smith Kline.
The Vianet M2M business has a customer base which is spread across many sectors and has widely varying needs. As the M2M business acquired in conjunction with the acquisition of Vianet is a very different business to our strategic growth areas the Group is in discussions with the M2M management team for its disposal.
This will provide increased focus and ensure that Vianet's resources are focused on growing a profitable international vending telemetry business.
Edensure fuel stock analysis
The acquisition of Edensure is a natural extension of the Group's core capabilities into an adjacent market where there is an opportunity to establish market leading products and services.
Edensure supplies key information to independent, multi branded owner and supermarket petrol forecourt operators in the UK. In the period since acquisition Edensure has grown share from 2% to 5% of the UK petrol forecourt data management service market. Edensure has the European licence for the leading fuel stock analysis software product, which is currently in demand from many national forecourt operators.
The Group's operational scale and data management expertise will provide a solid platform to grow the Edensure business. The acquisition of Edensure, whilst relatively small, will produce enhanced earnings next year and is an important strategic development in the Group's growth plans as it provides a commercial platform from which to accelerate our entry into the 9,000 site petrol forecourt market.
The Group has already identified potential acquisitions to increase Edensure's market penetration, and also spread the Edensure footprint on petrol forecourts, enabling the provision of a one stop shop for data services to forecourt operators.
In the five months to 31 March 2009, the Edensure losses amounted to £0.16 million however the recent gain of WM. Morrison supermarkets for fuel stock analysis has taken Edensure close to break-even.
Management and employees
During the year, the Group has continued to make good progress in both the recruitment of new talent and in ongoing personnel development, including the successful integration of the Nucleus, Edensure and Vianet operations, in order to strengthen the management team at all levels.
The appointment in September 2008 of Stewart Darling as Commercial Director, with primary responsibility for the Group's UK Leisure sector sales, brings considerable commercial and industry experience to the Group's management team and is already providing significant benefits as we expand from our historic leased and managed sectors of the licensed on trade. Stewart's experience with British Coal, the Ministry of Defence and Scottish & Newcastle will provide the Group with the high calibre experience required as it develops its activities and commercial base.
We have a dedicated and ambitious management team, who are well supported by a strong workforce which is committed to the Group, our customers, and our values. Once again I thank everyone for their contribution during the last twelve months.
Outlook
The Group is performing well in a difficult environment. As the leisure market becomes increasingly focused on profitability and cash generation from core operations, our products are becoming more important to our customers than ever before. There is also a continued and growing demand for the operational control that our services provide. The Board continues to explore ways to grow the business including the evaluation of acquisition opportunities as they arise. Future growth prospects are encouraging and, in light of market expectations, the management team continues to view the future with confidence.
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James Dickson Chief Executive |
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09 June 2009 |
Financial Review
Group trading result
I am pleased to report that the results of the Group have taken a further positive step forward. Revenue increased by 11.7% whilst operating profit (pre-exceptional costs) increased by £1.06 million (26.5%) as a result of the revenue mix now being at 79% recurring, improved cost control, a full year contribution from the Nucleus acquisition, and after absorbing post acquisition losses for Vianet Limited and Edensure of £0.27 million. Exceptional costs of £0.36 million relating to restructuring costs principally connected with the acquisitions, resulted in final Group operating profit growth of £0.69 million being 17.4%.
Subsidiary performance
In the year, Brulines Limited completed 1,428 new installations (including 46 i-draught systems) and 491 replacement upgrade systems. The economic circumstances highlighted in the Chief Executive Officer's statement have impacted the installation traction attained, but despite this we are pleased to report the results achieved. Revenue increased by £0.61 million (3.8%) and profit before taxation increased by £1.31 million (31.8%).
Our machine monitoring subsidiaries, Machine Insite Limited and Coin Metrics Limited, contributed £1.00 million in revenue and £52,000 in profit before taxation. Machine Insite sustained its profit position year-on-year whilst Coin Metrics moved to monthly break-even and profit in the last two months of 2008/2009. Both sets of results were impacted by the recruitment and investment in senior management, restructuring costs and a bad debt in one customer due to administration, all totalling £0.15 million. This was set against a difficult trading environment and delays resulting from implementation of the Gambling Act amendments. The recent restructuring and market opportunities available should result in an increased contribution to profits in 2009/2010.
Like-for-like results across these subsidiaries when compared to the year ended March 2008 in respect of revenue increased by £0.62 million (3.6%) and profit before taxation increased by £1.10 million (29.0%).
The acquisitions of Vianet and Edensure, operating in the vending telemetry and petrol forecourt market places, contributed £1.39 million in revenue and £0.28 million loss before taxation. These results are better than expected in the post acquisition period, resulting from contract wins by both companies and cost restructuring measures which are ongoing. It is expected that both will be earnings neutral on a monthly basis by March 2010.
Overall group result
Overall Group results, pre-amortisation of intangible assets and option costs, were a profit of £5.03 million being some 15.8% ahead of March 2008, and in line with expectations. The table below shows the performance of the Group, pre and post-exceptional costs, as follows;
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FY 2009 £'000 |
FY 2008 £'000 |
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Revenue |
19,067 |
17,063 |
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Gross Profit |
11,219 (58%) |
9,117 (53%) |
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EBIT |
4,683 |
3,988 |
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PBT post exceptional costs |
4,624 |
4,165 |
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PBT pre exceptional costs |
4,987 |
4,165 |
Gross margin
Gross margin improved during the year to 58%, resulting from the improvement in recurring revenue mix to approximately 79% and the impact of lower than expected installations referred to above.
Had we achieved the installation traction referred to above, the underlying gross margin would have been nearer the expected 55% level.
Actual Group profit
The Group pre-tax profit post-exceptional costs increased by 11.0% to £4.62 million (2008: £4.16 million), reflecting the comments made above.
Taxation
The taxation charge of £1.18 million represented an effective tax rate of 25.6% on the reported profit before taxation of £4.62 million post Group relief and amounts in respect of prior periods.
Earnings per share
Basic earnings per share for the year ended 31 March 2009 amounted to 13.59 pence. This compares favourably to 11.84 pence last year and represents a 14.8% growth in basic earnings per share. Fully diluted earnings per share, which takes account of all outstanding share options, amounted to 13.12 pence which again compares favourably to 11.53 pence last year and represents a 13.8% growth in fully diluted earnings per share
Balance sheet
The balance sheet has been significantly strengthened not only by the good trading performance achieved, but also by the acquisitions of Vianet Limited and Edensure Limited as well as the share placement in December 2008 raising £4.48 million net of costs. As a result, including the goodwill arising, the net asset position of the Group increased by £6.80 million to £20.06 million.
Operationally, the Group generated £4.37 million in cash which represents a 94.6% profit before taxation to cash conversion. The funds generated in the year were utilised to acquire the above companies and to service borrowings, dividends and taxation. The positive cash flows and net placing monies have meant that at the year end we have a net cash position of £4.26 million (2008: net debt position of £0.82 million).
It is anticipated, given the strength of the Group's balance sheet, cash balances and cash generating capacity, this strong base will continue to provide an advantageous position to seek growth opportunities both through complimentary acquisition and investment in subsidiary and core company organic growth.
Mark Foster
Finance Director
09 June 2009
Consolidated Income Statement
for the year ended 31 March 2009
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Before Exceptional 2009 £000 |
Exceptional 2009 £000 |
Total 2009 £000 |
Total 2008 £000 |
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Note |
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|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
Revenue |
|
19,067 |
- |
19,067 |
17,063 |
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Cost of Sales |
|
(7,848) |
- |
(7,848) |
(7,946) |
|
|
|
|
|
|
|
|
Gross profit |
|
11,219 |
- |
11,219 |
9,117 |
|
|
|
|
|
|
|
|
Administrative expenses |
|
(6,173) |
(363) |
(6,536) |
(5,129) |
|
|
|
|
|
|
|
|
Operating profit |
|
5,046 |
(363) |
4,683 |
3,988 |
|
|
|
|
|
|
|
|
Finance income |
|
138 |
- |
138 |
249 |
|
Finance costs |
|
(197) |
- |
(197) |
(72) |
|
|
|
|
|
|
|
|
Profit before taxation |
|
4,987 |
(363) |
4,624 |
4,165 |
|
|
|
|
|
|
|
|
Taxation |
2 |
(1,277) |
93 |
(1,184) |
(1,303) |
|
|
|
|
|
|
|
|
Profit for the year attributable to equity shareholders |
|
3,710 |
(270) |
3,440 |
2,862 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share for profit attributable to equity shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total and continuing earnings per share |
|
|
|
|
|
|
- Basic |
3 |
14.65p |
(1.06)p |
13.59p |
11.84p |
|
|
|
|
|
|
|
|
- Diluted |
3 |
14.13p |
(1.01)p |
13.12p |
11.53p |
Consolidated Balance Sheet
at 31 March 2009
|
|
|
|
|
||
|
|
|
|
|
2009 £000 |
2008 £000 |
|
Assets |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Goodwill |
|
|
|
13,348 |
12,767 |
|
Other intangible assets |
|
|
|
1,048 |
847 |
|
Property, plant and equipment |
|
|
|
3,439 |
3,383 |
|
|
|
|
|
17,835 |
16,997 |
|
Current assets |
|
|
|
|
|
|
Inventories |
|
|
|
1,371 |
1,122 |
|
Trade and other receivables |
|
|
|
4,646 |
3,737 |
|
Cash and cash equivalents |
|
|
|
7,697 |
3,058 |
|
|
|
|
|
13,714 |
7,917 |
|
Liabilities |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
|
|
(7,038) |
(6,435) |
|
Borrowings |
|
|
|
(420) |
(394) |
|
Current tax liabilities |
|
|
|
(348) |
(708) |
|
Provisions |
|
|
|
(89) |
(89) |
|
|
|
|
|
(7,895) |
(7,626) |
|
|
|
|
|
|
|
|
Net current assets |
|
|
|
5,819 |
291 |
|
Non-current liabilities |
|
|
|
|
|
|
Borrowings |
|
|
|
(3,021) |
(3,485) |
|
Provisions |
|
|
|
(232) |
(303) |
|
Deferred tax |
|
|
|
(340) |
(242) |
|
|
|
|
|
(3,593) |
(4,030) |
|
|
|
|
|
|
|
|
Net assets |
|
|
|
20,061 |
13,258 |
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
Issued share capital |
|
|
|
2,813 |
2,434 |
|
Share premium |
|
|
|
11,126 |
7,024 |
|
Share based payment reserve |
|
|
|
176 |
104 |
|
Own shares |
|
|
|
(864) |
(877) |
|
Merger reserve |
|
|
|
310 |
310 |
|
Retained earnings |
|
|
|
6,500 |
4,263 |
|
Total equity attributable to equity holders of the parent |
|
|
|
20,061 |
13,258 |
Consolidated Cash Flow Statement
for the year ended 31 March 2009
|
|
|
|
|
|
|
Note |
Group 2009 £000 |
Group 2008 £000 |
|
|
|
|
|
|
Profit after tax |
|
3,440 |
2,862 |
|
Amortisation of intangible assets |
|
337 |
108 |
|
Depreciation |
|
321 |
223 |
|
(Profit)/loss on sale of property, plant and equipment |
|
(1) |
2 |
|
Share based payments |
|
72 |
72 |
|
Change in inventories |
|
(196) |
286 |
|
Change in receivables |
|
(628) |
(198) |
|
Change in payables |
|
(24) |
89 |
|
Change in provisions |
|
(71) |
392 |
|
Interest receivable |
|
138 |
249 |
|
Interest payable |
|
(197) |
(72) |
|
Taxation expense recognised in income statement |
|
1,184 |
1,303 |
|
Cash generated from operations |
|
4,375 |
5,316 |
|
Interest paid |
|
197 |
72 |
|
Interest received |
|
(138) |
(249) |
|
Income taxes paid |
|
(1,596) |
(1,122) |
|
Net cash generated from operating activities |
|
2,838 |
4,017 |
|
Cash flows from Investing activities |
|
|
|
|
Proceeds on disposal of property, plant and equipment |
|
5 |
2 |
|
Purchases of property, plant and equipment |
|
(218) |
(2,909) |
|
Purchase of subsidiary undertakings |
|
(1,054) |
(4,363) |
|
Cash acquired with subsidiary |
|
215 |
155 |
|
Net cash used in investing activities |
|
(1,052) |
(7,115) |
|
Cash flows from financing activities |
|
|
|
|
Repayments of borrowings |
|
(438) |
(71) |
|
Bank funding |
|
- |
3,950 |
|
Dividends paid |
4 |
(1,203) |
(1,055) |
|
Options exercised/Purchase of own shares |
|
13 |
(726) |
|
Repayments of obligations under finance leases and hire purchase contracts |
|
- |
(21) |
|
Issue of ordinary share capital |
|
4,481 |
- |
|
Net cash from financing activities |
|
2,853 |
2,077 |
|
Net increase/(decrease) in cash and cash equivalents |
|
4,639 |
(1,021) |
|
Cash and cash equivalents at beginning of period |
|
3,058 |
4,079 |
|
Cash and cash equivalents at end of period |
|
7,697 |
3,058 |
|
|
2009
£000
|
2008
£000
|
|
Current tax expense
|
|
|
|
– UK corporation tax on profits of the period
|
1,347
|
1,320
|
|
– Amounts in respect of prior periods
|
(111)
|
-
|
|
|
1,236
|
1,320
|
|
|
|
|
|
Deferred tax expense :
|
|
|
|
– Temporary differences
|
(52)
|
(17)
|
|
|
|
|
|
Income tax expense
|
1,184
|
1,303
|
|
|
2009
£000
|
2008
£000
|
|
Profit before taxation
– Continuing operations
|
4,624
|
4,165
|
|
|
|
|
|
Profit before taxation multiplied by rate of corporation tax in the UK of 28% (2008: 30%)
|
1,295
|
1,250
|
|
Effects of:
|
|
|
|
Other expenses not deductible for tax purposes
|
25
|
61
|
|
Goodwill amortisation
|
84
|
21
|
|
Depreciation in excess of capital allowances
|
(29)
|
(5)
|
|
Loss utilisation
|
(80)
|
2
|
|
Prior period adjustment
|
(111)
|
-
|
|
Rate difference
|
-
|
(26)
|
|
Total tax expense
|
1,184
|
1,303
|
|
|
2009
|
2008
|
||||
|
|
Earnings
£000
|
Basic earnings per share
|
Diluted earnings per share
|
Earnings
£000
|
Basic earnings per share
|
Diluted earnings per share
|
|
Profit attributable to equity shareholders
|
3,440
|
13.59p
|
13.12p
|
2,862
|
11.84p
|
11.53p
|
|
|
2009
Number
|
2008
Number
|
|
Weighted average number of ordinary shares
|
25,319,392
|
24,165,880
|
|
Dilutive effect of share options
|
1,450,902
|
1,279,544
|
|
Diluted weighted average number of ordinary shares
|
26,770,294
|
25,445,424
|
|
|
2009
£000
|
2008
£000
|
|
Final dividend for the year ended 31 March 2008 of 3.55p (year ended 31 March 2007: 3.0p)
|
837
|
717
|
|
Interim dividend paid in respect of the year of 1.55p (2008:1.45p)
|
366
|
338
|
|
Amounts recognised as distributions to equity holders
|
1,203
|
1,055
|
|
|
2009
£000
|
2008
£000
|
|
Restructuring costs
|
363
|
-
|
|
|
363
|
-
|
|
|
|
|
This information is provided by RNS
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