Released: 27/08/2009
Part 2 : For preceding part double-click [nRn1a0731Y]
£000 £000 £000
Total segment assets 101,843 110,604 100,675
Cash and cash equivalents 1 1 159
Total assets per balance sheet 101,844 110,605 100,834
5. Seasonality
The Group operates in markets where no significant seasonal or cyclical
variations in sales are experienced during the financial year.
6. Exceptional and non-recurring costs
Exceptional and non-recurring costs are those significant items which are
separately disclosed by virtue of their size or incidence to enable a full
understanding of the Group's financial performance. Transactions which may give
rise to exceptional and non-recurring costs are principally restructuring
related costs (including non capitalised costs incurred in respect of business
combinations and potential business combinations) and costs in respect of key
management changes.
The amounts recognised as exceptional and non-recurring costs are as follows:
Six months Six months Year
ended ended ended
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Redundancy and compensation payments 842 - 921
Non capitalised costs in respect of business combinations - - 163
Business and strategic review costs 415 - 728
1,257 - 1,812
Redundancy and compensation payments relate to amounts paid to ex-employees of
Group companies.
Business and strategic review costs relate to costs incurred by the Group in
relation to management's commitment to improve operational efficiency. These
costs are considered to be exceptional in nature and not reflective of the
underlying operating performance of the Group.
7. Income taxes
Income tax expense is recognised based on management's best estimate of the
average annual income tax rate expected for the full financial year, as adjusted
to reflect estimated disallowable expenses. The estimated average annual tax
rate used for the six month period to 30 June 2009 of 25.1% (30 June 2008:
29.3%) is based on the prevailing current tax rate of 28% (six months ended 30
June 2008: 29%) as adjusted for the estimated impact of expenses permanently
disallowable for income tax and other permanent differences.
8. Earnings per share
(a) Basic
Basic earnings per share is calculated by dividing profit attributable to equity
holders of the Company by the weighted average number of Ordinary shares in
issue during the period, excluding Ordinary shares held by the employee benefit
trust which do not qualify for receipt of dividends.
Six months Six months Year
ended ended ended
30 Jun 09 30 Jun 08 31 Dec 08
Profit attributable to equity holders of the Company 3,257 3,989 6,612
(£000)
Weighted average number of Ordinary shares in issue 35,751 35,688 35,695
(thousands)
Basic earnings per share (pence per share) 9.1 11.2 18.5
(b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of Ordinary shares outstanding to assume conversion of all dilutive
potential Ordinary shares. The Company has one category of dilutive potential
Ordinary shares, being share options. For share options, a calculation is
undertaken to determine the number of shares that could have been acquired at
fair value (determined as the average market share price of the Company's shares
during the period) based on the monetary value of the subscription rights
attached to outstanding share options. The number of shares calculated as above
is compared with the number of shares that would have been issued assuming the
exercise of the share options.
Six months Six months Year
ended ended ended
30 Jun 09 30 Jun 08 31 Dec 08
Profit attributable to equity holders of the Company 3,257 3,989 6,612
(£000)
Weighted average number of Ordinary shares in issue 35,751 35,688 35,695
(thousands)
Adjusted for share options (thousands) 89 163 121
Weighted average number of Ordinary shares for diluted 35,840 35,851 35,816
earnings per share (thousands)
Diluted earnings per share (pence per share) 9.1 11.1 18.5
9. Capital expenditure
Property, plant and equipment* Intangible assets*
£000 £000
Six months ended 30 June 2009
Opening net book amount as at 1 January 2009 2,599 59,263
Additions 1,796 61
Depreciation and amortisation (435) (488)
Closing net book amount as at 30 June 2009 3,960 58,836
Six months ended 30 June 2008
Opening net book amount as at 1 January 2008 1,740 13,607
Acquisition of subsidiaries 1,393 46,252
Additions 90 -
Depreciation and amortisation (328) (78)
Closing net book amount as at 30 June 2008 2,895 59,781
*Restated to reflect final goodwill and fair value adjustments arising on
acquisitions made in the six month period ended 30 June 2008 (see note 2).
In the six months to 30 June 2008, the Group acquired intangible assets in
relation to its acquisitions of TripleArc plc and Accord Office Supplies Limited
of £46,252,000.
10. Borrowings and loans
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Non-current (23,623) (25,410) (25,374)
Current (8,492) (8,462) (6,978)
(32,115) (33,872) (32,352)
Opening amount as at 1 January (32,352) (587) (587)
Acquisition of subsidiaries - (14,684) (14,684)
Increase in finance lease borrowings (1,075) - (42)
Decrease/(increase) in borrowings 1,312 (18,601) (17,039)
Closing amount at period end (32,115) (33,872) (32,352)
The Group arranged a loan on the 16 April 2008 of £25m for the purpose of
funding the Group's acquisition strategy. The loan is repayable in instalments
over five years commencing from April 2010, with interest charged at a floating
rate linked to LIBOR. In addition the Group has a committed confidential invoice
discounting facility of £20m which expires in April 2013.
The Group has the following undrawn borrowing facilities:
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Gross undrawn committed confidential invoice discounting 20,000 20,000 20,000
facility
Cash book overdraft (5,550) (7,058) (6,697)
Net undrawn facilities 14,450 12,942 13,303
The gross committed confidential invoice discounting facility of £20m is subject
to the availability of qualifying trade receivables.
11. Retirement benefit liability
The Group is the contributing employer to a defined benefit pension scheme which
is closed to new members. The contributions paid in the period were £272,000
(2008: £160,000).
The latest full actuarial valuation was carried out on 31 July 2007 and updated
to 30 June 2009 by a qualified independent actuary. The pension disclosures have
been determined on the basis of the results of this valuation.
The amounts recognised in the balance sheet are determined as follows:
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Present value of funded obligations (10,333) (12,370) (10,487)
Fair value of plan assets 7,157 7,939 7,128
(3,176) (4,431) (3,359)
Unrecognised actuarial losses 2,203 3,333 2,315
Liability in the balance sheet (973) (1,098) (1,044)
The amounts recognised in the income statement are as follows:
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Current service cost (96) (139) (256)
Scheme's interest cost (289) (289) (578)
Expected return on plan assets 219 303 605
Amortisation of net loss over 20 years (32) - -
Expenses recognised in income statement as administrative (198) (125) (229)
expenses
The principal actuarial assumptions were as follows:
30 Jun 09 30 Jun 08 31 Dec 08
% pa % pa % pa
Discount rate 6.3 5.5 5.5
Expected rate of return on plan assets 6.1 7.0 6.1
Future salary increases 2.9 3.2 2.9
Future pension increases 2.9 3.2 2.9
Inflation 3.5 3.6 2.9
12. Cash generated from/(used in) operations
Six months Six months Year
ended ended ended
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Profit before income tax 4,504 5,644 9,607
Adjustments for:
Amortisation 488 78 624
Depreciation charge 435 328 854
Interest receivable - (181) (190)
Interest and similar charges payable 501 452 1,549
Share option expense/(income) 107 (40) 45
Increase in inventories (151) (1,788) (898)
(Increase)/decrease in trade and other receivables (698) (1,399) 5,352
Increase/(decrease) in trade payables and provisions 818 (3,985) (11,307)
Total net cash inflow/(outflow) from operations 6,004 (891) 5,636
13. Dividends
Six months Six months Year
ended ended ended
30 Jun 09 30 Jun 08 31 Dec 08
£000 £000 £000
Amounts recognised as a distribution in the period in
respect of:
Ordinary shares - final dividend 2008 - 7.5p per share (2,681) - -
Ordinary shares - interim dividend 2008 - 3.5p per share - - (1,249)
Ordinary shares - final dividend 2007 - 6.8p per share - (2,427) (2,427)
(2,681) (2,427) (3,676)
The Directors have declared, post 30 June 2009, an interim dividend of 3.6p per
Ordinary share, payable on 13 November 2009 to shareholders on the register at
the close of business on 9 October 2009. This dividend has not been included as
a liability as at 30 June 2009.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that the interim financial information included in the
half yearly financial report has been prepared in accordance with IAS 34 as
adopted by the European Union and that the Chairman's Statement includes a fair
review of the information required by Disclosure and Transparency Rules 4.2.7
and 4.2.8, namely:
* An indication of the important events that have occurred
during the first six months and their impact on the half
yearly financial report, and a description of the
principal risks and uncertainties for the remaining six
months of the financial year; and
* Material related party transactions in the first six
months of the year and any material changes in the
related party transactions described in the last annual
report.
The Directors of office2office plc are listed in the Annual Report and Accounts
for the year ended 31 December 2008, since when there have been no changes. A
list of current Directors is maintained on the office2office plc website:
www.office2office.co.uk.
By order of the Board
S R Moate M A Cunningham
Chief Executive Finance Director
26 August 2009
Forward-looking statements
Certain statements in this half yearly report are forward-looking. Although the
Group believes that the expectations reflected in these forward-looking
statements are reasonable, it can give no assurance that these expectations will
prove to have been correct. As these statements involve risks and uncertainties,
actual results may differ materially from those expressed or implied by these
forward-looking statements. The Group undertakes no obligation to update any
forward-looking statements whether as a result of new information, future events
or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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