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1700 Group PLC (1700)

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Monday 21 July, 2008

1700 Group PLC

Preliminary Statement of Resu

RNS Number : 4924Z
1700 Group PLC
21 July 2008
 



   

1700 Group Plc


Preliminary unaudited statement of results for the period to 31 March 2008



1700 Group Plc ('the Group'), the specialist media and publishing recruitment business, today announces its inaugural preliminary unaudited statement of results for the period to 31 March 2008.


Highlights


  • The Group's shares were successfully admitted to trading on AIM on 10 January 2008, raising £1.1 million before expenses;


  • Trading results reflect the period since the acquisition of its two trading subsidiaries, Hamblyn Selection Ltd and Inspired Selection Ltd, on 14 November 2007 and 10 January 2008 respectively;


  • Turnover for the period was £617,000 and profit before tax of £20,000;


  • Cash balance at 31 March 2008 was £329,000 and net debt of £971,000;

     

  • On a pro-forma basis, assuming a full year contribution from Hamblyn Selection and Inspired Selection, the turnover for the Group would have been £2,080,000 with profit before tax of £326,000; and


  • Slower trading in the period immediately after flotation in January 2008 has improved and turnover for the first quarter of 2008/9 was £700,000 with a profit before tax of £175,000, in line with expectations.



Commenting on the result, Steve Hyde, Chief Executive of 1700 Group Plc, said:


'These results, covering the period to 31 March 2008, reflect the period up to and initially after the float. Since that time, I am pleased to say that sales have improved and the business has performed in line with expectations'.


Enquiries:


1700 Group Plc    

Steve Hyde, Group Chief Executive    020 7440 1505


Grant Thornton UK LLP (Nominated Advisor)

Gerry Beaney / Fiona Kindness          020 7383 5100


SVS Securities plc (Broker)

Ian Callaway / Peter Manfield           020 7638 5600

  Chairman's Statement



This is my first report to you as Chairman of your board of directors, following the successful admission of the Group's shares to trading on AIM on 10 January 2008.


1700 Group Plc was incorporated on 9 May 2007 but did not trade until the acquisition of its first trading subsidiary, Hamblyn Selection Ltd ('Hamblyn') on 14 November 2007. The subsequent acquisition of the Group's second trading subsidiary, Inspired Selection Ltd ('Inspired'), was completed on 10 January 2008. These results, therefore, only include four and a half months trading for Hamblyn and two and a half months for Inspired.


Both Hamblyn and Inspired specialise in recruitment for the media sector, the former operating in the sub sectors for the media planning and buying, auditing, media sales, brand marketing, digital and online communications and the latter operating as a successful niche recruitment business focused on book and journal publishing companies in the UK.


Financial Highlights


The Group's results for the period to 31 March 2008 were sales of £617,000 and a profit before tax of £20,000.  


If the Group had acquired and consolidated its operating subsidiaries from the 1 April 2007 and traded for the full year to 31 March 2008, the pro forma results for this period would have been sales of £2,080,000 and a profit before tax of £326,000. These results were slightly below expectations, in part due to challenging market conditions in the sectors Hamblyn operates during the run up to Christmas last year, which continued across January and February of 2008.


The Group's sales in March were notably stronger and this has continued into the first quarter of 2008/09 with sales for the quarter being £700,000 and profit before tax of £175,000, in line with expectations.


Change of name


As we announced on 20 March 2008, shareholders approved a change in the Group's name, from Steppingstone Associates Plc to 1700 Group plc. 


Employees


I would like to express my thanks to the Group's employees across its trading brands, for their loyalty and efforts throughout the period they have been employed by the Group and for their continued dedication during the period of acquisition and flotation.


 


Chairman's Statement



Prospects


Your board remains conscious of the factors affecting the medium term outlook for the UK economy and believes that, although there has been no obvious negative effect on the Groups trading experienced to date, the Group's revenues could be susceptible to any prolonged downturn in the wider economy.


With this background in mind, the Group's operating costs continue to be carefully reviewed against anticipated revenue. This cost control, however, has not limited investment in areas for organic growth and the Group continues to evaluate opportunities for acquisition.



David Mansfield

Chairman

16 July 2008


  Consolidated Income Statement

For the period from 9 May 2007 to 31 March 2008




Period to 



31 March


Notes

2008



£'000




Revenue


617




Cost of sales


(305)




Gross profit


312




Administrative expenses


(267)




Profit from operations


45




Finance income


3

Finance costs


(28)




Profit on ordinary activities before tax


20




Taxation


(7)




Profit for the period attributable to equity holders


13




Profit per share



  Basic profit per share (pence)

2.

-



All activities are derived from acquired and continuing operations.


There are no recognised gains or losses in the period, other than as shown above.


There is no material difference between the profit on ordinary activities before taxation and the retained profit for the period stated above and their historical cost equivalents.

  Consolidated Statement of Changes in Equity

For the period to 31 March 2008




Share

Share 

Retained 



capital

premium

earnings

Total


£'000

£'000

£'000

£'000






Balance at 9 May 2007

-

-

-

-






Acquisition of Hamblyn

100

2,200

-

2,300

Selection Limited










Acquisition of Inspired

24

951

-

975

Selection Limited










Placing of shares

36

1,072


1,108






Cost of share placing 


(572)


(572)






Retained profit for period

-

-

13

13






Balance at 31 March 2008

160

3,651

13

3,824



  Consolidated Balance Sheet

As at 31 March 2008




31 March


Notes

2008



£'000




Non-current assets



Intangible assets - goodwill


4,783

Property. plant and equipment


85

Total non-current assets


4,868




Current assets



Trade and other receivables


527

Cash and cash equivalents

4.

329

Total current assets


856




Total assets


5,724




Current liabilities



Trade and other payables


486

Borrowings

4.

400

Current tax liability


110

Total current liabilities


996




Non-current liabilities



Borrowings

4.

900

Deferred Tax


4



904




Total liabilities


1,900




Net assets


3,824




Equity



Share capital

5.

160

Share premium account


3,651

Retained earnings


13

Total equity attributable to equity holders


3,824



  Consolidated Cash Flow

For the period from 9 May 2007 to 31 March 2008




Period to 



31 March


Notes

2008



£'000




Net cash flow from operating activities



Profit from operations


45




Adjustments for:



Depreciation


13

Increase in trade and other receivables


(220)

Increase in trade and other payables


308

Cash generated by operations


146




Interest paid


(28)

Net cash from operating activities


118




Net cash used in investing activities



Purchase of subsidiary companies


(1,750)

Net cash acquired on purchase of 



subsidiary companies


542

Purchase of property, plant and equipment


(30)

Interest received


3

Net cash used in investing activities


(1,235)




Net cash from financing activities



Bank loans received


1,200

Repayment of loan note


(389)

Increase in other borrowings


100

Net proceeds from issuance of ordinary shares


535



1,446




Net increase in cash and cash equivalents


329




Cash and cash equivalents at beginning of period


-




Cash and cash equivalents at end of period

4.

329



  Notes to Preliminary Statement

For the period from 9 May 2007 to 31 March 2008


 

1.                 Basis of preparation and accounting policies


 

Basis of accounting


The board approved the preliminary statement on the 16 July 2008.  


The financial information set out in the preliminary statement does not constitute the Group's statutory accounts for the period ended 31 March 2008, within the meaning of section 240 of the Companies Act 1985. These accounts will be finalised and audited on the basis of the financial information presented by the directors in this preliminary statement and will be delivered to shareholders together with the notice of the Company's annual general meeting.


Whilst the financial information included in this preliminary statement has been prepared under the historical cost convention and in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this preliminary statement does not itself contain sufficient information to comply with IFRSs and further information will be included in the Group's statutory accounts to ensure compliance.


Basis of consolidation


The preliminary statement incorporates the financial statements of 1700 Group Plc and its subsidiary companies, Hamblyn Selection Limited and Inspired Selection Limited. Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition is measured as the cash paid or share capital issued, assets given and liabilities assumed or incurred at the date of exchange, plus costs directly attributable to the acquisition.


Goodwill


Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset at cost less accumulated impairment losses. Goodwill, which is recognised as an asset, is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.


Revenue


Revenue, which excludes value added tax, comprises the value of services undertaken by the Group under its principal activity, which is the provision of recruitment consultancy services. Revenue is recognised to the extent that it is probable that the economic benefit will flow to the entity and is predominately recognised at the point of acceptance of employment.





 

 

 

Notes to Preliminary Statement

For the period from 9 May 2007 to 31 March 2008


Finance income


Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable.


Finance costs


All borrowing costs are recognised in the income statement in the period in which they are incurred.


Leasing 


Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.


Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter in to an operating lease are also spread on a straight-line basis over the lease term.


Taxation


The tax expense or asset represents the sum of tax currently payable and deferred tax.


The tax currently payable is based on the taxable profit for the period. Taxable profit differed from net profit reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.


Deferred tax is the asset expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognised if the temporary differences arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit 


Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

 

 

Notes to Preliminary Statement

For the period from 9 May 2007 to 31 March 2008


Tangible fixed assets


Tangible fixed assets are stated at cost less depreciation and any recognised impairment losses. Provision is made for depreciation at rates calculated to write off the cost less estimated residual value, of each asset over is expected useful life, as follows:


Computer equipment                     33% per annum straight line

Fixtures, fittings and equipment      25% per annum straight line

Motor vehicles                             25% per annum straight line

Leasehold improvements                remaining life of lease (or 5 years if shorter)


The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in income.


Impairment of assets


At each balance sheet date, the Group reviews the carrying amounts of its other intangible and tangible assets to determine whether there is any evidence that those assets have suffered an impairment loss. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value is use. For the purposes of impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).


Financial instruments


Financial assets and liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.


 

2.                 Profit per share


 

Basic profit per share is calculated by dividing the Group's loss after taxation of £13,000 by the weighted average number of shares in issue during the period from 9 May 2007 to 31 March 2008 of 57,453,903.


 

3.                 Dividend


 

The directors do not recommend a dividend for the period.


  Notes to Preliminary Statement

For the period from 9 May 2007 to 31 March 2008


 

4.                 Cash and cash equivalents


 




31 March




2008








£'000





Cash at bank and in hand



329





Borrowings due within one year:




Bank loan



(400)





Borrowings due after one year:




Bank loan



(800)

Other loan



(100)









Net indebtedness



(971)


 

5.                 Share capital


 




31 March




2008




£'000

Authorised share capital




350,000,000 ordinary shares of 0.1p each


350





Issued and fully paid




160,200,250 ordinary shares of 0.1p each


160






The Company was incorporated on 9 May 2007. One ordinary share of £1 nominal value was issued on incorporation. On the 14 November 2007, the ordinary share capital of the company was increased to £350,000 and each ordinary share was subdivided into 1,000 ordinary shares of £0.001 each.


On 14 November 2007 a total of 100,192,210 new ordinary shares were issued on the acquisition of Hamblyn Selection Limited for a total consideration of £2,300,000.

On 27 December 2007, the Company was re-registered as a public limited company.


On 10 January 2008, a total of 24,375,000 new ordinary shares were issued on the acquisition of Inspired Selection Limited, which, together with a cash consideration of £1,725,000, amounted to a total consideration of £2,700,000.


On 10 January 2008, a total of 35,632,040 new ordinary shares were issued for a cash consideration of £1,108,010.

 

 

Notes to Preliminary Statement

For the period from 9 May 2007 to 31 March 2008



 

6.                 Annual General Meeting


 

The annual general meeting of the Company is due to be held on 18 September 2008 at the offices of Grant Thornton LLP, 30 Finsbury Square, London EC2A 1AG.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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