REG-Matchtech Group PLC Interim Results - Part 2
Released: 17/03/2008
RNS Number:1971Q
Matchtech Group PLC
Part 2 : For preceding part double-click [nRNSQ1971Q]
Dividend
Reflecting the performance of our business in the first half, the Board has
declared an interim dividend of 5.0 pence per share, an increase of 14% (2007:
H1 4.4p).
The interim dividend will be paid on 24 June 2008 to those shareholders on the
register at close of business on 6 June 2008.
Risk
The Group considers strategic, financial and operational risks and identifies
actions to mitigate those risks. Key risks and their mitigation are disclosed
in the 2007 Annual Report and no significant new risks have been identified in
the period.
Growth strategy
Our unique single site model continues to provide a stable, low cost platform
for growth. The growth strategy is being implemented by an experienced
management team and is based around a balanced contract/perm mix in our target
recruitment markets. We aim to further segment and subdivide our markets and to
deepen our niche specialisations over time.
Outlook
General business sentiment in our markets has remained positive to date, and the
sectors that we serve continue to exhibit strong structural growth
characteristics. Moreover we have a highly diversified and expanding customer
base, which provides further opportunities for growth and adds protection to our
business.
Candidates and Contractors remain in short supply, with wage inflation
continuing in each of the sectors in which we operate. This demonstrates that
the market continues to be candidate driven, allowing Matchtech to utilise its
superior service delivery capabilities to gain market share.
We believe that there are strong opportunities for continued growth, both from
the significant investment made in our sales headcount at the start of the year
through our graduate program, which is expected to show through in the second
half, and from our existing business development pipeline. The Board remains
confident in its outlook for the year and expects to be able to report sound
progress in the second half.
George Materna
Chairman
17 March 2008
MATCHTECH GROUP PLC
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31ST JANUARY 2008
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 January 2008
Note 6 months 6 months 12 months
to 31/01/08 to 31/01/07 to 31/07/07
Unaudited Unaudited Unaudited
CONTINUING OPERATIONS £'000 £'000 £'000
Revenue 3 116,562 93,438 202,779
Cost of Sales (101,290) (80,933) (175,902)
--------- -------- --------
GROSS PROFIT 3 15,272 12,505 26,877
Cost of Admission to AIM 0 (572) (572)
Other administrative expenses (9,119) (7,427) (15,623)
--------- -------- --------
Total administrative expenses (9,119) (7,999) (16,195)
--------- -------- --------
OPERATING PROFIT 3 6,153 4,506 10,682
Finance income 18 13 20
Finance cost (500) (390) (831)
--------- -------- --------
PROFIT BEFORE TAX 5,671 4,129 9,871
Income tax expense 4 (1,729) (1,169) (2,356)
--------- -------- --------
PROFIT FROM CONTINUING OPERATIONS 3,942 2,960 7,515
DISCONTINUED OPERATIONS
Profit from discontinued
operations 5 0 67 67
--------- -------- --------
PROFIT FOR THE PERIOD 3,942 3,027 7,582
========= ======== ========
EARNINGS PER ORDINARY SHARE
6 months 6 months 12 months
to 31/01/08 to 31/01/07 to 31/07/07
Unaudited Unaudited Unaudited
Continuing operations pence pence Pence
- Basic 7 17.09 13.29 33.44
- Diluted 7 16.53 12.75 32.64
Total operations
- Basic 7 17.09 13.59 33.74
- Diluted 7 16.53 13.04 32.93
CONDENSED CONSOLIDATED BALANCE SHEET
Note 31/01/08 31/01/07 31/07/07
Unaudited Unaudited Unaudited
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 2,014 1,590 1,699
Intangible assets 186 113 133
Deferred tax assets 502 879 529
--------- -------- --------
2,702 2,582 2,361
Current Assets
Trade and other receivables 29,039 25,672 31,984
Cash and cash equivalents 91 353 836
--------- -------- --------
29,130 26,025 32,820
--------- -------- --------
TOTAL ASSETS 31,832 28,607 35,181
========= ======== ========
LIABILITIES
Current liabilities
Trade and other payables (11,677) (8,881) (12,617)
Current tax liability (1,773) (904) (1,068)
Bank loans and overdrafts
- short term borrowings (2,556) (7,292) (6,924)
- current portion of long term borrowings (1,666) (1,666) (1,666)
--------- -------- --------
(17,672) (18,743) (22,275)
Non-current liabilities
Long term borrowings (1,251) (2,917) (2,083)
--------- -------- --------
TOTAL LIABILITIES (18,923) (21,660) (24,358)
========= ======== ========
NET ASSETS 12,909 6,947 10,823
========= ======== ========
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Called-up equity share capital 231 225 230
Share premium account 2,892 2,367 2,829
Other reserves 859 685 610
Retained earnings 8,927 3,670 7,154
--------- -------- --------
TOTAL EQUITY 12,909 6,947 10,823
========= ======== ========
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Note 6 months 6 months 12 months
to 31/01/08 to 31/01/07 to 31/07/07
Unaudited Unaudited Unaudited
£'000 £'000 £'000
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit after taxation 3,942 3,027 7,582
Adjustments for:
-Depreciation 306 226 499
-Profit on disposal of discontinued 5 0 (59) (59)
operation
-Foreign exchange gain on 0 (3) (3)
disposal of discontinued
operation
-Profit on disposal of property, (3) 0 0
plant and equipment
-Interest income (18) (13) (20)
-Interest expense 500 390 831
-Taxation expense recognised in 1,729 1,172 2,359
profit and loss
-Increase)/decrease in trade and 2,950 (1,240) (7,516)
other receivables
-Increase in trade and other (939) 473 4,118
payables
-Share based payment charge 250 125 321
--------- -------- --------
Cash generated from operations 8,717 4,098 8,112
Interest paid (500) (390) (831)
Income taxes paid (1,024) (1,256) (2,205)
--------- -------- --------
NET CASH FROM OPERATING ACTIVITES 7,193 2,452 5,076
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of Matchtech Inc 0 105 105
Purchase of plant and equipment (708) (532) (960)
Proceeds from sale of plant 37 0 28
Interest received 18 13 20
--------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (653) (414) (807)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital 64 361 829
Proceeds from long-term borrowings (5,096) 1,918 699
Dividends paid (2,148) (4,414) (5,428)
--------- -------- --------
NET CASH USED IN FINANCING ACTIVITIES (7,180) (2,135) (3,900)
NET INCREASE IN CASH AND CASH EQUIVALENTS (640) (97) 369
--------- -------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 659 290 290
--------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 19 193 659
========= ======== ========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign Share Share Other Share Retained Total
Currency Capital Premium reserve based Earnings £'000
translation
reserve £'000 £'000 £'000 payment £'000
£'000 reserve
£'000
Balance at
1 0 221 2,009 229 338 4,884 7,681
August 2006 -------- ------- -------- ------- -------- -------- ------
Currency
translation 3 0 0 0 0 0 3
differences
-------- ------- -------- ------- -------- -------- ------
Net income
recognised 3 0 0 0 0 0 3
directly in
equity -------- ------- -------- ------- -------- -------- ------
Profit for
the (3) 0 0 0 0 3,027 3,024
period ======== ======= ======== ======= ======== ======== ======
Total
recognised
income 0 0 0 0 0 3,027 3,027
and expense
for the ======== ======= ======== ======= ======== ======== ======
period
Dividends 0 0 0 0 0 (4,414) (4,414)
IAS 12
adjustment 0 0 0 0 0 168 168
to
deferred
tax asset
EBT reserve
movement 0 0 0 (5) 0 5 0
Share based
payment 0 0 0 0 123 0 123
reserve
movement
New share
capital 0 4 358 0 0 0 362
-------- ------- -------- ------- -------- -------- ------
0 4 358 (5) 123 (4,241) (3,761)
-------- ------- -------- ------- -------- -------- ------
Balance at
31 0 225 2,367 224 461 3,670 6,947
January ======== ======= ======== ======= ======== ======== ======
2007
Balance at
1 0 221 2,009 229 338 4,884 7,681
August 2006 -------- ------- -------- ------- -------- -------- ------
Currency
translation 3 0 0 0 0 0 3
differences
-------- ------- -------- ------- -------- -------- ------
Net income
recognised 3 0 0 0 0 0 3
directly in
equity -------- ------- -------- ------- -------- -------- ------
Profit for
the (3) 0 0 0 0 7,582 7,579
year ======== ======= ======== ======= ======== ======== ======
Total
recognised
income 0 0 0 0 0 7,582 7,582
and expense
for the ======== ======= ======== ======= ======== ======== ======
year
Dividends 0 0 0 0 0 (5,428) (5,428)
IAS 12
adjustment 0 0 0 0 0 111 111
to
deferred
tax asset
EBT reserve
movement 0 0 0 (5) 0 5 0
Share based
payment 0 0 0 0 48 0 48
reserve
movement
New share
capital 0 9 820 0 0 0 829
-------- ------- -------- ------- -------- -------- ------
0 9 820 (5) 0 (5,312) (4,440)
-------- ------- -------- ------- -------- -------- ------
Balance at
31 0 230 2,829 224 386 7,154 10,823
July 2007 ======== ======= ======== ======= ======== ======== ======
Balance at
1 0 230 2,829 224 386 7,154 10,823
August 2007 -------- ------- -------- ------- -------- -------- ------
Profit for
the 0 0 0 0 0 3,942 3,942
period ======== ======= ======== ======= ======== ======== ======
Total
recognised
income 0 0 0 0 0 3,942 3,942
and expense
for the ======== ======= ======== ======= ======== ======== ======
year
Dividends 0 0 0 0 0 (2,149) (2,149)
Share based
payment 0 0 0 0 249 (20) 229
reserve
movement
New share
capital 0 1 63 0 0 0 64
-------- ------- -------- ------- -------- -------- ------
0 1 63 0 249 (2,169) (1,856)
-------- ------- -------- ------- -------- -------- ------
Balance 31
January 0 231 2,892 224 635 8,927 12,909
2008 ======== ======= ======== ======= ======== ======== ======
Notes
Forming part of the financial statements
1. THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
i The business of the Group
Matchtech Group plc is a human capital resources business dealing with contract
and permanent recruitment in the Private and Public sector. The Group is
organised in three sectors, Engineering, Built Environment and Support Services,
with niche activities within each sector.
ii Basis of preparation of interim financial information
These interim condensed consolidated financial statements are for the six months
ended 31 January 2008. They have been prepared in accordance with IAS 34
"Interim Financial Reporting" and the requirements of IFRS 1 "First-time
Adoption of International Financial Reporting Standards" relevant to interim
reports, because they are part of the period covered by the Group's first IFRS
financial statements for the year ended 31 July 2008. They do not include all of
the information required for full annual financial statements, and should be
read in conjunction with the consolidated financial statements for the year
ended 31 July 2007 which have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under section 237 (2) and (3) of the Companies Act 1985.
These condensed consolidated interim financial statements (the interim financial
statements) have been prepared in accordance with the accounting policies set
out below which are based on the recognition and measurement principles of IFRS
in issue as adopted by the European Union (EU) and are effective at 31 July 2008
or are expected to be adopted and effective at 31 July 2008, our first annual
reporting date at which we are required to use IFRS accounting standards as
adopted by the EU.
Matchtech Group plc's consolidated financial statements were prepared in
accordance with United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) until 31 July 2007. The date of transition to IFRS
was 1 August 2006. The comparative figures in respect of 2006 have been restated
to reflect changes in accounting policies as a result of adoption of IFRS. The
disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS
are given in the reconciliation schedules, presented and explained in note 2.
These financial statements have been prepared under the historical cost
convention. The accounting policies have been applied consistently throughout
the Group for the purposes of preparation of these condensed interim financial
statements. A summary of the principal accounting policies of the group are set
out below.
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. These
interim financial statements have been prepared on the basis of taking the
following exemptions:
- business combinations prior to 1 August 2006, the Group's date of transition
to IFRS, have not been restated to comply with IFRS 3 "Business Combinations".
- cumulative translation differences on foreign operations are deemed to be nil
at 1 August 2006. Any gains and losses recognised in the consolidated income
statement on subsequent disposal of foreign operations will exclude translation
differences arising prior to the transition date.
- the Group has not applied IFRS 2, share based payments to share options awards
granted prior to 7 November 2002, nor to those granted subsequent to that date
but which had vested by 1 August 2006, the date of transition.
iii Basis of consolidation
The group financial statements consolidate those of the company and all of its
subsidiary undertakings drawn up to the balance sheet date. Subsidiaries are
entities over which the group has power to control the financial and operating
policies so as to obtain benefits from its activities. The group obtains and
exercises control through voting rights.
Acquisitions of subsidiaries are dealt with by the purchase method. The purchase
method involves the recognition at fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary, at the
acquisition date, regardless of whether or not they were recorded in the
financial statements of the subsidiary prior to acquisition. On initial
recognition, the assets and liabilities of the subsidiary are included in the
consolidated balance sheet at their fair values, which are also used as the
bases for subsequent measurement in accordance with group accounting policies.
iv Revenue
Revenue is measured by reference to the fair value of consideration received or
receivable by the group for services provided, excluding VAT and trade
discounts. Revenue on temporary placements is recognised upon receipt of a
client approved timesheet or equivalent. Revenue from permanent placements,
which is based on a percentage of the candidate's remuneration package, is
recognised when candidates commence employment.
v Property, plant and equipment
Property, plant and equipment is stated at cost or valuation, net of
depreciation and any provision for impairment.
Depreciation is calculated so as to write off the cost of an asset, less its
estimated residual value, over the useful economic life of that asset as
follows:
Motor Vehicles 25.00% Reducing balance
Computer equipment 25.00% Straight line
Equipment 12.50% Straight line
Residual value estimates are updated as required, but at least annually, whether
or not the asset is revalued.
vi Intangible assets
Separately acquired software licences are included at cost and amortised on a
straight-line basis over the useful economic life of that asset at 20%-33%.
Provision is made against the carrying value of intangible assets where an
impairment in value is deemed to have occurred. Amortisation is recognised in
the income statement under administrative expenses.
vii Disposal of assets
The gain or loss arising on the disposal of an asset is determined as the
difference between the disposal proceeds and the carrying amount of the asset
and is recognised in the income statement.
viii Operating lease agreements
Rentals applicable to operating are charged against profits on a straight line
basis over the lease term. Lease incentives are spread over the term of the
lease.
ix Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor on the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax
assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to offset against future taxable
income. Current and deferred tax assets and liabilities are calculated at tax
rates that are expected to apply to their respective period of realisation,
provided they are enacted or substantively enacted at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that are
charged or credited directly to equity (such as the revaluation of land) in
which case the related deferred tax is also charged or credited directly to
equity.
x Pension costs
The company operates a defined contribution pension scheme for employees. The
assets of the scheme are held separately from those of the company. The annual
contributions payable are charged to the income statement as they accrue.
xi Share based payment
All share-based remuneration is ultimately recognised as an expense in the
income statement with a corresponding credit to "share-based payment reserve".
All goods and services received in exchange for the grant of any share-based
remuneration are measured at their fair values. Fair values of employee services
are indirectly determined by reference to the fair value of the share options
awarded. Their value is appraised at the grant date and excludes the impact of
non-market vesting conditions (for example, profitability and sales growth
targets).
If vesting periods or other non-market vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the
number of share options expected to vest. Estimates are subsequently revised if
there is any indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised are different
to that estimated on vesting. Upon exercise of share options, proceeds received
net of attributable transaction costs are credited to share capital and share
premium.
xii Exceptional items
Non-recurring items which are sufficiently material are presented separately
within their relevant consolidated income statement category. This helps to
provide a better understanding of the group's financial performance.
xiii Business combinations completed prior to date of transition to IFRS
The group has elected not to apply IFRS 3 Business Combinations retrospectively
to business combinations prior to 1 August 2006.
Accordingly the classification of the combination (merger) remains unchanged
from that used under UK GAAP. Assets and liabilities are recognised at date of
transition if they would be recognised under IFRS, and are measured using their
UK GAAP carrying amount immediately post-acquisition as deemed cost under IFRS,
unless IFRS requires fair value measurement. Deferred tax is adjusted for the
impact of any consequential adjustments after taking advantage of the
transitional provisions.
xiv Discontinued operations
A discontinued operation is a cash-generating unit, or a group of
cash-generating units, that either has been disposed of, or is classified as
held for sale, and:
- represents a separate line of business or geographic area of operations
- is part of a single co-ordinated plan to dispose of a separate major line of
business or
geographical area of operations or
- is a subsidiary acquired exclusively with a view to resale.
The disclosures for discontinued operations in the prior period relate to all
operations that have been discontinued by the balance sheets date for the latest
period presented.
xv Financial assets
All financial assets are recognised when the group becomes a party to the
contractual provisions of the instrument. Financial assets are recognised at
fair value plus transaction costs.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Trade receivables
are classified as loans and receivables. Loans and receivables are measured
subsequent to initial recognition at amortised cost using effective interest
method, less provision for impairment. Any change in their value through
impairment or reversal of impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence
that the group will not be able to collect all amounts due to it in accordance
with the original terms of those receivables. The amount of the write-down is
determined as the difference between the asset's carrying amount and the present
value of estimated future cash flows.
A financial asset is derecognised only where the contractual rights to cash
flows from the asset expire or the financial asset is transferred and that
transfer qualifies for derecognition. A financial asset is transferred if the
contractual rights to receive the cash flows of the asset have been transferred
or the group retains the contractual rights to receive the cash flows of the
asset but assumes a contractual obligation to pay the cash flows to one or more
recipients. A financial asset that is transferred qualifies for derecognition if
the group transfers substantially all the risks and rewards of ownership of the
asset, or if the group neither retains nor transfers substantially all the risks
and rewards of ownership but does transfer control of that asset.
xvi Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets and
are recognised when the group becomes a party to the contractual provisions of
the instrument and comprise trade and other payables and bank loans. Financial
liabilities are recorded initially at fair value, net of direct issue costs and
are subsequently measured at amortised cost using the effective interest rate
method.
A financial liability is derecognised only when the obligation is extinguished,
that is, when the obligation is discharged or cancelled or expires.
xvii Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, on demand deposits and bank
overdrafts.
xviii Dividends
Dividend distributions payable to equity shareholders are included in "other
short term financial liabilities" when the dividends are approved in general
meeting prior to the balance sheet date.
xix Equity
Equity comprises the following:
- "Share capital" represents the nominal value of equity shares.
- "Share premium" represents the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the share issue.
- "Share based payment reserve" represents equity-settled share-based employee
remuneration until such share options are exercised.
- "Other reserve" represents the equity balance arising on the merger of
Matchtech Engineering and Matchmaker Personnel.
- "Profit and loss reserve" represents retained profits.
xx Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet
date. Non-monetary items that are measured at historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction.
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined.
Any exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
initially recorded are recognised in the profit or loss in the period in which
they arise. Exchange differences on non-monetary items are recognised in equity
to the extent that they relate to a gain or loss on that non-monetary item taken
to equity, otherwise such gains and losses are recognised in the income
statement.
The assets and liabilities in the financial statements of foreign subsidiaries
are translated at the rate of exchange ruling at the balance sheet date. Income
and expenses are translated at the actual rate. The exchange differences arising
from the retranslation of the opening net investment in subsidiaries are taken
directly to the "Foreign currency reserve" in equity. On disposal of a foreign
operation the cumulative translation differences (including, if applicable,
gains and losses on related hedges) are transferred to the income statement as
part of the gain or loss on disposal.
As permitted by IFRS 1, the balance on the cumulative translation adjustment on
retranslation of subsidiaries' net assets has been set to zero at the date of
transition to IFRS.
xxi Employee benefit trust
The assets and liabilities of the Employee Benefit Trust (EBT) have been
included in the group accounts. Any assets held by the EBT cease to be
recognised on the group balance sheet when the assets vest unconditionally in
identified beneficiaries.
The costs of purchasing own shares held by the EBT are shown as a deduction
against equity. The proceeds from the sale of own shares held increase equity.
Neither the purchase nor sale of own shares leads to a gain or loss being
recognised in the group income statement.
2 TRANSITIONAL ARRANGEMENTS
These are the Group's first condensed consolidated interim financial statements
for part of the period covered by the first annual consolidated financial
statements prepared in accordance with IFRS.
An explanation of how the transition from UK GAAP to IFRS has affected the
Group's financial position, financial performance and cash flows is set out
below.
Reconciliation of equity at 1 August 2006
UK GAAP IAS 12 IAS 17 IAS 19 IFRS
£'000 Income Leases Employee as
Taxes £'000 Benefits restated
£'000 £'000 £'000
EQUITY
Called-up equity share 221 0 0 0 221
capital
Share premium account 2,009 0 0 0 2,009
Other reserves 567 0 0 0 567
Retained earnings 4,454 566 (64) (72) 4,884
---------- --------- -------- --------- --------
TOTAL EQUITY 7,251 566 (64) (72) 7,681
========== ========= ======== ========= ========
Reconciliation of consolidated balance sheet and equity at 31 January 2007
UK GAAP IAS 1 IAS 12 IAS 17 IAS 19 IFRS
£'000 Presentation Income Leases Employee as
of financial Taxes £'000 Benefits restated
statements £'000 £'000 £'000
£'000
NON-CURRENT
ASSETS
Intangible 113 0 0 0 0 113
assets
Property, plant
and 1,590 0 0 0 0 1,590
equipment
Deferred tax 0 879 0 0 0 879
assets
CURRENT ASSETS
Trade and other
receivables 25,819 (879) 732 0 0 25,672
Cash and cash
equivalents 353 0 0 0 0 353
CURRENT
LIABILITIES
Trade and other
payables (8,793) 0 0 (57) (31) (8,881)
Tax liability (904) 0 0 0 0 (904)
Bank loans and
overdrafts (8,958) 0 0 0 0 (8,958)
NON-CURRENT
LIABILITIES
Bank loan (2,917) 0 0 0 0 (2,917)
-------- ----------- -------- -------- -------- --------
NET ASSETS 6,303 0 732 (57) (31) 6,947
======== ========== ======== ======== ======== ========
EQUITY
Called-up equity
share
capital 225 0 0 0 0 225
Share premium
account 2,367 0 0 0 0 2,367
Other reserves 685 0 0 0 0 685
Retained earnings 3,026 0 732 (57) (31) 3,670
-------- ----------- -------- -------- -------- --------
TOTAL EQUITY 6,303 0 732 (57) (31) 6,947
======== ========== ======== ======== ======== ========
Reconciliation of consolidated balance sheet and equity at 31 July 2007
UK GAAP IAS 1 IAS 12 IAS 17 IAS 19 IFRS
£'000 Presentation Income Leases Employee as
of financial Taxes £'000 Benefits restated
statements £'000 £'000 £'000
£'000
NON-CURRENT
ASSETS
Intangible 133 0 0 0 0 133
assets
Property,
plant and 1,699 0 0 0 0 1,699
equipment
Deferred tax 0 529 0 0 0 529
assets
CURRENT ASSETS
Trade and
other 32,108 (529) 405 0 0 31,984
receivables
Cash and cash
equivalents 836 0 0 0 0 836
CURRENT
LIABILITIES
Trade and
other (12,474) 0 0 (67) (76) (12,617)
payables
Tax liability (1,068) 0 0 0 0 (1,068)
Bank loans and
overdrafts (8,590) 0 0 0 0 (8,590)
NON-CURRENT
LIABILITIES
Bank loan (2,083) 0 0 0 0 (2,083)
--------- --------- -------- -------- -------- --------
NET ASSETS 10,561 0 405 (67) (76) 10,823
========= ========= ======== ======== ======== ========
EQUITY
Called-up
equity share 230 0 0 0 0 230
capital
Share premium 2,829 0 0 0 0 2,829
account
Other reserves 610 0 0 0 0 610
Retained 6,892 0 405 (67) (76) 7,154
earnings --------- --------- -------- -------- -------- --------
TOTAL EQUITY 10,561 0 405 (67) (76) 10,823
========= ========= ======== ======== ======== ========
Reconciliation of consolidated income statement for the period ended 31 January
2007
UK GAAP IAS 1 IAS 17 IAS 19 IAS 21 IFRS
£'000 Presentation Leases Employee Foreign as restated
of financial £'000 Benefits Exchange £'000
statements £'000 Rates
£'000 £'000
Revenue 93,573 (135) 0 0 0 93,438
Cost of sales (81,050) 117 0 0 0 (80,933)
-------- --------- -------- --------- --------- ---------
Gross profit 12,523 (18) 0 0 0 12,505
Administration
Costs (7,485) 10 7 41 0 (7,427)
Cost of
admission to
AIM (572) 0 0 0 0 (572)
Profit on sale
of 59 (59) 0 0 0 0
discontinued
operation
Finance Income 13 0 0 0 0 13
Finance Cost (390) 0 0 0 0 (390)
-------- --------- -------- --------- --------- ---------
Profit before
tax 4,148 (67) 7 41 0 4,129
-------- --------- -------- --------- --------- ---------
Taxation (1,172) 3 0 0 (1,169)
-------- --------- -------- --------- --------- ---------
Profit for the
period 2,976 (64) 7 41 0 2,960
-------- --------- -------- --------- --------- ---------
-------- --------- -------- --------- --------- ---------
Profit from
discontinued 0 64 0 0 3 67
operations
======== ========= ======== ========= ========= =========
Profit for the
period 2,976 0 7 41 3 3,027
from total
operations ======== ========= ======== ========= ========= =========
Reconciliation of consolidated income statement for year ended 31 July 2007
UK GAAP IAS 1 IAS 17 IAS 19 IAS 21 IFRS
£'000 Presentation of Leases Employee Foreign as
financial Benefits Exchange Rates
statements
£'000 £'000 £'000 £'000 restated
£'000
Revenue 202,914 (135) 0 0 0 202,779
Cost of sales (176,019) 117 0 0 0 (175,902)
-------- --------- -------- --------- --------- ---------
Gross profit 26,895 (18) 0 0 0 26,877
Administration
Costs (15,627) 10 (2) (4) 0 (15,623)
Cost of
admission to
AIM (572) 0 0 0 0 (572)
Profit on sale
of
discontinued
operation 59 (59) 0 0 0 0
Finance Income 19 0 0 0 0 19
Finance Cost (830) 0 0 0 0 (830)
-------- --------- -------- --------- --------- ---------
Profit before
tax 9,944 (67) (2) (4) 0 9,871
-------- --------- -------- --------- --------- ---------
Taxation (2,359) 3 0 0 0 (2,356)
-------- --------- -------- --------- --------- ---------
Profit for the
period 7,585 (64) (2) (4) 0 7,515
-------- --------- -------- --------- --------- ---------
-------- --------- -------- --------- --------- ---------
Profit from
discontinued 0 64 0 0 3 67
operations
-------- --------- -------- --------- --------- ---------
Profit for the
period from
total
operations 7,585 0 (2) (4) 3 7,582
======== ========= ======== ========= ========= =========
Notes to the reconciliations
IAS 1 Presentation of financial statements
Under UK GAAP, the deferred tax asset was classified as a current asset. Under
IFRS the deferred tax asset is classified as a non-current asset.
Under UK GAAP, the income statement provided full disclosure of each line item
relating to discontinued operations. Under IFRS, only the profit from the
discontinued operation is disclosed on the income statement.
IAS 12 Income Taxes
Under FRS 19, deferred tax was recognised only on timing differences; in
contrast IAS 12 "Income Taxes" requires the recognition of deferred tax on all
temporary differences which specifically impacts the recognition of deferred tax
in relation to share based payments.
Under FRS 19, the deferred tax asset on the cost of options recognised was
restricted to the amount calculated by applying the prevailing corporation tax
rate to the total cost in the year calculated under FRS20. Under IFRS the
deferred tax asset recognised is the cost of options outstanding based on the
fair value at the period end date multiplied by the prevailing rate of
corporation tax. The deferred tax asset has been adjusted in line with IFRS
requirements.
IAS 17 Leases
Under UK GAAP, the rent-free period lease incentive was spread over the period
from the start of the lease to the first break clause. Under IFRS, the lease
incentive is spread over the full lease term.
IAS 19 Employee benefits
Under UK GAAP, the company chose not to accrue for outstanding staff holiday pay
at the balance sheet date. IFRS requires that the accrual be calculated at each
balance sheet date.
IAS 21 The Effects of Changes in Foreign Exchange Rates
On the disposal of Matchtech Inc the cumulative translation differences are
transferred to the income statement as part of the gain or loss on disposal.
Under UK GAAP the difference was shown as a movement in reserves.
Cash Flow statement
Application of IFRS has resulted in reclassification of certain items in the
cash flow statement as follows:
Profit after taxation has been adjusted as per the reconciliation above.
(Operating profit was used in the Interim and Annual Reports for 2007 in the
reconciliation to net cash inflow from operating activities)
Movements in trade and other receivables and trade and other payables have been
adjusted to account for the IFRS adjustments to the provisions on the balance
sheet as shown in the reconciliations of consolidated balance sheets and income
statements above. These relate to the reclassification of the deferred tax asset
between trade and other receivables and non current assets and the adjustments
to the rent free period and staff holiday reserves.
3 SEGMENTAL INFORMATION
The revenue and profit before tax are attributable to the one principal activity
of the company.
(i) Segmental
A segmental analysis of revenue is given 6 months 6 months 12 months
below:
to 31/01/08 to 31/01/07 to 31/07/07
Unaudited Unaudited Unaudited
£'000 £'000 £'000
Engineering 67,276 59,990 129,299
Built Environment 31,463 18,629 40,046
Support Services 17,823 14,819 33,434
-------- -------- --------
Continuing operations 116,562 93,438 202,779
Discontinued Operations 0 135 135
-------- -------- --------
Total 116,562 93,573 202,914
======== ======== ========
A segmental analysis of gross profit is
given below:
Engineering 7,803 6,394 14,833
Built Environment 4,226 3,274 6,000
Support Services 3,243 2,837 6,044
-------- -------- --------
Continuing operations 15,272 12,505 26,877
Discontinued Operations 0 18 18
-------- -------- --------
Total 15,272 12,523 26,895
======== ======== ========
A segmental analysis of operating profit
is given below:
Engineering 3,468 2,563 5,896
Built Environment 1,820 1,118 2,384
Support Services 865 825 2,402
-------- -------- --------
Continuing operations 6,153 4,506 10,682
Discontinued Operations 0 8 8
-------- -------- --------
Total 6,153 4,514 10,690
======== ======== ========
More to follow, for following part double-click [nRN2Q1971Q]