TIDMMPS
RNS Number : 7190H
Minorplanet Systems PLC
26 February 2010
PRELIMINARY RESULTS 2009
Minorplanet Systems plc ("Minorplanet" or the "Company" or the "Group"), the
provider of Vehicle Management Information ("VMI(TM)") systems, announces its
preliminary results for the year ended 31 August 2009.
Key points:
· Exceptionally difficult year - Group exposed to recession driven fall in
demand from SMEs, which was exacerbated by major shortage in lease funding, due
to banks tightening their lending criteria
· Extensive cost reduction programme undertaken in response:
-
Reduction of 40% in headcount and 45% in overhead cost in the UK
- Full review of loss making European operations completed and actions
taken
· Strong support from major shareholders, lease funders and banks during
refinancing
Post year end activity:
· Financial climate remains very difficult, with funding challenges for the
Group which give rise to material uncertainties. The Directors are confident
that these can be adequately addressed. Further details are set out in Note 2
of the financial information.
· Strong sales drive highlighting the cost saving and "green" nature of the
product (with full investment payback in under one year) attractive to large
organisations in the private and Government sectors, delivering results with new
contract wins including:
- AGA Rangemaster
- York City Council
· Strategic move to separate maintenance and extended warranty contracts,
already generating cash and increasing recurring revenues
· In negotiation for the sale of Australasian subsidiary
· January 2010 sales performance was a big improvement in the UK on the
previous months and this is expected to continue as the pipeline and platform
increase
· Working capital injection of GBP300,000 through loan from Chief Executive
Terry Donovan, Chief Executive of Minorplanet, said: "The past five years have
been a rollercoaster ride for the Group, its employees and its shareholders. We
completed a turnaround, stabilising sales and returning the business to
profitability prior to 2009, and improved Minorplanet's product and service
beyond recognition. Our strategy to shift focus from SMEs to large corporates
was starting to gain foothold, when unprecedented economic turmoil hit the
world.
"The Group's reliance on the SME market and its historic business model left us
particularly vulnerable in the ensuing downturn and, regrettably, the Group's
financial results for 2009 bear witness to this.
"Although the climate is expected to remain difficult, I firmly believe that the
longer-term prospects for Minorplanet remain sound. Our cost base is now
repositioned, our product is a highly valuable, cost saving, resource efficiency
tool and we are making tangible progress in our chosen markets. Our major
shareholders and the Board continue to back this vision with substantial
investments in Minorplanet to assist it in getting through the worst economic
conditions experienced in decades. The extensive support and goodwill shown by
our other partners, including lease funders, creditors and banks, during this
incredibly difficult year also demonstrated their faith in this business and
their understanding of the growth potential inherent in our markets.
"The short term economic difficulties present funding challenges for the Group,
but substantial long-term potential remains. All our efforts are focused on
delivering that potential. The Company is evolving into a stronger, leaner,
more focused organisation which can continue to take a leading position in this
exciting market."
+------------------------+--------------------------------------+
| Minorplanet Systems | Tel: 0113 346 7733 |
| plc | |
+------------------------+--------------------------------------+
| Terry Donovan, Chief | terry.donovan@minorplanet.com |
| Executive | |
+------------------------+--------------------------------------+
| Richard Hopkin, | richard.hopkin@minorplanet.com |
| Finance Director | |
+------------------------+--------------------------------------+
| | www.minorplanet.com |
+------------------------+--------------------------------------+
| | |
+------------------------+--------------------------------------+
| Shore Capital & | Tel: 020 7408 4090 |
| Corporate Ltd | |
+------------------------+--------------------------------------+
| Guy Peters | |
+------------------------+--------------------------------------+
| | |
+------------------------+--------------------------------------+
| Rawlings Financial PR | Tel: 01653 618 016 |
| Limited | |
+------------------------+--------------------------------------+
| Catriona Valentine | catriona@rawlingsfinancial.co.uk |
+------------------------+--------------------------------------+
| | www.rawlingsfinancial.co.uk |
+------------------------+--------------------------------------+
CHAIRMAN'S STATEMENT
This has been a frustrating year for Minorplanet and its stakeholders with the
Company making a loss for the first time since 2005. The considerable progress
made during and after the turnaround of the Group has been overshadowed by the
recent severe reduction in demand from our traditional SME customers; a problem
which was compounded by a major shortage of lease funding.
I am pleased to report that the Board's strategy to focus on larger
organisations is making headway. The Group's sales operation is now focused on
targeting service operators in certain sectors and this is proving successful.
We have also introduced separate maintenance and warranty contracts to provide
regular cash flow for the Group.
Results
For the year ended 31 August 2009, the Group incurred a loss for the year of
GBP7.2m (2008 - profit of GBP1.5m), although this incorporated a loss (including
goodwill write offs) of GBP3.2m attributable to the discontinued operations in
Germany and Australasia. More details of the Group's results are set out in the
Financial Review.
Cost reduction programme
As the economic climate worsened, with the inevitable impact on revenue and
margins, management took swift action to mitigate the steep decline in SME sales
to preserve and support the Group's core business. Additional working capital
of GBP1.6m was raised; we placed the historically loss making German operation
into administration and put our Australasian subsidiary up for sale. We have
re-acquired the valuable parts of the German business and integrated these with
the Benelux operation such that these various markets can be serviced
effectively from a much reduced cost base.
Further cost reduction activity was rapidly implemented, including major
headcount reductions, particularly in the UK, and the elimination of
discretionary overhead spend. We also have major projects underway to reduce
product costs and other elements of cost of sales.
Refinancing and funding
The Group raised additional working capital of GBP1.6m in September 2009,
through a Placing and Open Offer to existing shareholders totalling GBP1.2m, net
of costs and GBP0.4m of new block discount loan facilities. A share capital
consolidation of 1 for 20 was also effected as part of the Refinancing. The
Group's existing bank overdraft facility of GBP0.75m was converted into a five
year Enterprise Finance Guarantee Loan and an agreement was reached with Her
Majesty's Customs and Revenue ("HMRC") in respect of a phased repayment of sums
outstanding.
In February 2010, a GBP300,000 secured loan was obtained from our Chief
Executive, Terry Donovan, to assist the working capital requirements of the
Group. However, a number of funding challenges remain, as set out in Note 2 of
the financial information.
Minorplanet is in negotiation for the sale of its Australasian subsidiary,
Minorplanet Asia Pacific Pty Limited ("MAP"). After settlement of MAP's
liabilities and costs, the transaction is expected to result in substantial net
proceeds to the Company. This disposal would provide a vital cash injection to
the Group and allow management and product development resources to be focused
on the growth of Minorplanet's European operations.
The Directors continue to focus on the requirements to raise additional working
capital and believe that there is a potential opportunity through the
refinancing of its internal lease book provided that mutually acceptable terms
can be reached.
Business model
The impact of the credit crunch was exacerbated by the one-off external leasing
(inclusive of maintenance) sales model. In response to the economic environment
and in conjunction with the Group's main leasing funders, since the financial
year end we have moved to a new model with separate contracts covering
maintenance and warranty income. Our action has already had a positive impact
on the Group's regular monthly income and forms part of a determined strategy to
ensure that Minorplanet's recurring income substantially covers its overheads.
Litigation
On 1 September 2009, we announced the settlement of the longstanding Spanish
litigation with Asbury Park S.A. ("Asbury"). Minorplanet agreed to pay Asbury
the sum of EUR170,000, secured by a debenture, in instalments over the period to
March 2011. The Company also granted Asbury a transferable warrant to subscribe
for up to 450,000 shares at an exercise price of 30p per share, exercisable by
not later than 14 September 2012. The Board is satisfied that the settlement
was in the best interests of the Company in that it eliminated a significant
uncertainty relating to future costs and the potential liability attributable to
this dispute.
I am pleased to report that another claim for GBP8m, also relating to the former
Spanish subsidiary, was finally struck out by the courts during the year.
In January 2010, we were formally notified of a claim which had previously been
threatened against the Company by Popular de Renting S.A. totalling EUR2.1m. As
previously reported, the Board intends to vigorously defend the claim, more
details of which are set out in Note 7 of the financial information.
Strategy and outlook
Our strategy to increase the Group's penetration of the large corporate market
and public sector remains unchanged and we are beginning to make headway. The
pipeline of potential new business in this sector is strong with conversion
rates, from initial leads to signed orders, improving. The Company is currently
in early stage discussions on several very large contracts and, through its
improved product and service proposition, is demonstrating, unequivocally,
Minorplanet's ability to reduce field service costs dramatically.
The SME market will remain challenging in the short term due to financing
issues. The Group's cash position remains tight and a number of funding
uncertainties remain. Whilst we are very encouraged by the inroads the Group is
making into the large corporate market, there remain other possible
opportunities to raise further working capital should it be required.
The long term prospects for telematics are good and Minorplanet is evolving to
maintain its position as one of the leaders in that market.
Lars McBride
Chairman
25 February 2010
CHIEF EXECUTIVE'S REVIEW
Our Chairman has accurately described this as a frustrating year for the Group.
Whilst the sales focus of the business has been improved enormously, the
Company's results for the year ended 31 August 2009 reflect the legacy of our
non-recurring sales finance model and reliance on more vulnerable SME customers.
Despite the funding challenges (more details of which are set out in Note 2 of
the financial information), my belief in a bright future for this business is
evidenced by my recent financial support of the Group. A great deal more
improvement is planned and we will work ceaselessly to ensure Minorplanet's key
role in what is currently a very difficult market for both us and our
competitors.
Review of Operations
UK
It is disappointing to report how severely the credit crunch and related
recession affected sales to our traditional SME customers in the UK during the
year. This decline was partly offset by successes in the larger corporate
sector but, nevertheless, UK revenues reduced by around 40% to GBP8m; the major
contributory factor being the shortage of lease finance to SME businesses. As
trading conditions worsened, we undertook an aggressive cost reduction programme
to mitigate, as far as possible, the impact of the credit crunch on our business
with, inter alia, a 45% reduction in the UK overhead cost. More details of
these cost reductions are reported in the Financial Review.
The finance issue has continued into the current year. However, our strategy to
penetrate the larger corporate and public sector markets, which are less
affected by funding issues, is beginning to make strides. We have also taken
action to move the business towards a recurring income model to generate regular
revenue and cash inflow, as explained in more detail below.
Ireland
Our Irish business, Monitcom, remained profitable in the first half of the year,
despite a downturn in sales created by the frustrating shortage of lease
finance, as well as competitive pricing pressures. Sales continued to be
affected by these pressures in the second half, as well as Ireland's more
general economic problems. Overall, revenue reduced by GBP0.5m in 2009 to
GBP1.3m and, despite strong gross margins and tight cost control, the company
fell below break even for the full year for the first time since 2005. We are
the market leaders in this territory and are working hard to maintain sales.
Monitcom has made inroads into the public sector but this has yet to produce
revenues. The economy in Ireland remains very tough.
Benelux and Germany
I am pleased to report that, under the guidance of General Manager, Robert Weij,
our Benelux operation made some progress in 2009. A slight reduction in sales
was more than offset by gains in margin and losses were reduced to a negligible
level.
In contrast, despite considerable efforts, Germany continued to report losses
and we took the decision to place the business in administration in July 2009.
The valuable parts of the business, including the internal lease book, were then
acquired by a new Dutch subsidiary, Minorplanet Europa BV. This company will
continue to service and, hopefully, grow our customer base in Germany. We
believe the combined territories, operating on a much reduced cost base and with
a clear sales focus, can become a profitable enterprise and provide a platform
for growth in Continental Europe.
Our other European operations, including Spain, France and Italy, are all
serviced by distributors and are under review. Our new proposition is appealing
to European-wide operators and the review will cover the best way to sell to and
service these customers.
Australasia
Minorplanet Asia Pacific Pty Ltd incurred a loss before tax of GBP0.8m in the
year on reduced turnover of GBP5.8m. Although progress was being made on the
Australian Government sponsored Intelligent Access Program and the development
of a new distributor in South East Asia, the impact of these initiatives in 2009
was less than anticipated.
Prevailing difficult trading conditions, combined with the distraction of a
proposed sale of the business, have had a negative impact on the current year's
performance and, as outlined in the Chairman's Statement, we expect to complete
the sale of the business in the near future. This should generate a welcome
injection of cash into the Group's core business.
Strategy, sales and marketing and business model
Our strategy to penetrate the larger corporate and public sector markets is
making tangible progress and Minorplanet is evolving to exploit the
opportunities in this market. The sales and marketing team has been retrained
and reorganised to focus on a select number of service operators in vertical
markets within these sectors. Minorplanet has a compelling, cost saving,
resource efficient, "green" service proposition, supported by KPI statistics
generated from use of the product within our own engineering fleet. This is
proving highly attractive to larger organisations and we have already secured
new contracts with AGA Rangemaster and York City Council.
This new, invigorated sales and marketing focus is being rolled out across all
our key territories.
The Group's extensive sales and support coverage provides major opportunities to
acquire contracts with businesses operating across all of Europe's key economies
and a number of discussions are already being held with such organisations.
We have created a new revenue stream from separate maintenance and extended
warranty contracts, which were introduced towards the end of 2009. Such
revenues were previously incorporated in the "one off" external lease income.
The unbundling of these revenues not only provides additional comfort to our
customers and lease providers, but also creates an income stream which, together
with other recurring revenues, should in time substantially cover our reduced
overhead base.
Product development
Minorplanet places great emphasis on the ongoing development of its leading edge
technology. Therefore, despite the large reduction in headcount within the
business, we have ring-fenced our core development team. They are a valuable
asset and play a key role in the future of this business.
Innovative products for the trailer and plant tracking markets have recently
been launched, as well as a new fixed data terminal, VCom, which provides
significantly enhanced communications between the driver and back office. Our
VMIgreenlight(TM) software is being continually enhanced through regular
upgrades and now plays host to over 30,000 units across Europe. A new low cost
data collection unit will also be launched to the "track and trace market" in
March 2010.
Operations
The Group's UK Operations team continues to perform strongly, aided by a highly
reliable product set, most of which are now maintained and upgraded "over the
air". Average installation times and response times on maintenance requests
have been reduced further. We have established a dedicated customer care team,
focused on maintaining regular contact with our valued and extensive customer
base. I believe that this will have a positive impact on our renewal
performance.
Markets and outlook
The past five years have been a rollercoaster ride for the Group, its employees
and its shareholders. We completed a turnaround, stabilising sales and
returning the business to profitability prior to 2009, and improved
Minorplanet's product and service beyond recognition. Our strategy to shift
focus from SMEs to large corporates was starting to gain foothold, when
unprecedented economic turmoil hit the world.
The Group's reliance on the SME market and its historic business model left us
particularly vulnerable in the ensuing downturn and, regrettably, the Group's
financial results for 2009 bear witness to this.
Although the climate is expected to remain difficult, I firmly believe that the
longer-term prospects for Minorplanet remain sound. Our cost base is now
repositioned, our product is a highly valuable, cost saving, resource efficiency
tool and we are making tangible progress in our chosen markets. Our major
shareholders and the Board continue to back this vision with substantial
investments in Minorplanet to assist it in getting through the worst economic
conditions experienced in decades. The extensive support and goodwill shown by
our other partners including lease funders, creditors and banks during this
incredibly difficult year also demonstrated their faith in this business and
their understanding of the growth potential inherent in our markets.
The short term economic difficulties present funding uncertainties for the
Group, but substantial long-term potential remains. All our efforts are focused
on delivering that potential. The Company is evolving into a stronger, leaner,
more focused organisation, which can continue to take a leading position in this
exciting market.
Terry Donovan
Chief Executive
25 February 2010
FINANCIAL REVIEW
Results for the year
For the year ended 31 August 2009, the Group incurred a pre-exceptional loss on
continuing operations of GBP3.2m (2008 - profit of GBP1.7m) on a turnover of
GBP9.7m (2008 - GBP15.3m) and a loss for the year of GBP7.2m (2008 - profit of
GBP1.5m).
Total revenues on continuing operations were GBP5.6m (37%) down on the previous
year due to adverse variances in all subsidiaries, although a significant
proportion of the shortfall arose in the UK for the reasons outlined in the
Chairman's Statement and Chief Executive's Review. Gross margins on continuing
operations of 72% were 5% down on 2008 due to increased price pressure and some
change in mix towards the larger, lower margin deals.
Total Group overheads relating to continuing operations were GBP11.7m (2008 -
GBP11.1m), but the prior year comparatives were reduced by provision releases
(GBP1.2m) and the current year has increased by GBP0.4m due to the impact of
exchange rates on overheads denominated in foreign currencies. The Group's
average headcount fell by 12% from 327 in 2008 to 288 in 2009. Interest
receivable, net on continuing operations, was GBP0.9m (2008 - GBP1.1m), with the
reduction reflecting lower internal lease interest and increased borrowings.
Exceptional items totalled GBP0.6m in 2009 (2008 - credit of GBP0.1m) and
largely comprised redundancy and other restructuring costs.
Losses from discontinued operations (Germany and Australasia) totalled GBP3.2m
(2008 - GBP0.3m) including a goodwill write off of GBP2.1m. The Group incurred
a net loss per share on continuing operations of GBP2.42 (2008 - earnings per
share of GBP1.10) and on discontinued operations a loss per share of GBP1.98
(2008 - GBP0.18).
Cost reductions
The UK business has undertaken a major cost reduction programme over the last 18
months. Headcount has decreased from 167 in September 2008 to 122 in August
2009 and, since the year end, to the current level of around 100. Discretionary
overhead spend has also been cut, resulting in a reduction in the UK monthly
overhead cost from over GBP900,000 to approximately GBP500,000.
Projects have also been initiated to reduce significantly material costs and
other elements of cost of sales, to improve gross margins and support more
aggressive pricing strategies on major public and private sector contracts.
Balance sheet
The Group had net liabilities of GBP2.5m at 31 August 2009, compared with net
assets of GBP4.7m at the start of the year. This adverse movement arose
primarily from the loss for the financial year of GBP7.2m, which included
exceptional items of GBP0.6m and losses from discontinued operations of GBP3.2m.
The Group's net assets subsequently increased by GBP1.2m, as a result of
the equity element of the Refinancing completed after 31 August 2009, which is
outlined in the Chairman's Statement.
Taxation
The Group's current taxation charge was GBPnil for 2009 (2008: GBPnil) due to
tax losses brought forward and there was a deferred tax charge of GBP0.2m. Total
tax losses across the worldwide Group available for future offset are
approximately GBP57m. A deferred tax asset of GBP0.1m (2008: GBP0.3m) was
recognised in respect of a small proportion of these losses but has not been
recognised in relation to the remaining losses, due to the unpredictability of
future profit streams.
Cashflow
The Group incurred a net cash outflow of GBP1.8m in 2009 (2008: GBP2.7m), as a
result of the trading losses outlined above, partly offset by a favourable
movement in working capital. Stocks and debtors fell during the year due to
lower sales activity and tight working capital controls, while creditors rose by
GBP2.0m, as supplier credit and liabilities due to HMRC were stretched.
Repayments of historic block discount loans totalled GBP0.1m in the period.
Borrowings
Loans totalling GBP1.5m in respect of the former minority shareholder in our
Australian subsidiary remained outstanding at year end but will be repaid as
part of the planned disposal of this company outlined in the Chairman's
Statement. The principal other remaining loans (GBP0.6m) related to the
historic block discounting arrangements utilised by the Group partly to
refinance the internal leasebook, with repayments scheduled over the next two
years. Leasing and hire purchase liabilities were GBP0.1m. Similar facilities
will continue to be used, where necessary, to supplement the Group's funding
arrangements for specific items of capital expenditure. The Group had an
overdraft facility of GBP0.75m with Yorkshire Bank at 31 August 2009 of which
GBP0.5m was utilised at year end. The Yorkshire Bank overdraft has been
converted to an Enterprise Finance Guarantee Loan of GBP0.75m, repayable over
five years, and this has been fully drawn down since the year end. A new loan
of GBP0.3m, repayable by May 2012, was advanced by Terry Donovan in February
2010.
Treasury
The Group operates a central treasury function which is primarily responsible
for managing cash balances and foreign currency risks. Forward exchange
contracts and similar instruments will be used, if appropriate, on a selective
basis to hedge against currency exposures.
Accounting policies and basis of preparation
This Preliminary Announcement has been prepared in accordance with the
measurement criteria of International Financial Reporting Standards.
Note 2 sets out the Directors' Statement on going concern. This Statement
refers to certain events and circumstances which represent a material
uncertainty and which may cast significant doubt on the Group's and Company's
ability to continue as a going concern. These events and circumstances are
outlined in detail in Note 2. However, after making enquiries, the Directors
have a reasonable expectation that the Group and the Company have adequate
resources to continue in operational existence for the foreseeable future.
Richard Hopkin
Finance Director
25 February 2010
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the year ended 31 August 2009
+-------------------------------------+--------------+-----------+
| | Year ended | Year |
| | | ended |
+-------------------------------------+--------------+-----------+
| | 31 August | 31 August |
| | 2009 | 2008 |
+-------------------------------------+--------------+-----------+
| | GBP'm | GBP'm |
+-------------------------------------+--------------+-----------+
| Continuing operations | | |
+-------------------------------------+--------------+-----------+
| Revenue | 9.7 | 15.3 |
+-------------------------------------+--------------+-----------+
| Cost of sales | (2.7) | (3.5) |
+-------------------------------------+--------------+-----------+
| Gross profit | 7.0 | 11.8 |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| Operating expenses | (11.7) | (11.1) |
+-------------------------------------+--------------+-----------+
| Interest on internal finance leases | 1.0 | 1.1 |
+-------------------------------------+--------------+-----------+
| Net external finance costs | (0.1) | (0.0) |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| (Loss)/profit before tax | (3.8) | 1.8 |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| (Loss)/profit before tax and | (3.2) | 1.7 |
| exceptional items | | |
+-------------------------------------+--------------+-----------+
| Exceptional items, net | (0.6) | 0.1 |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| (Loss)/profit before tax | (3.8) | 1.8 |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| Tax | (0.2) | (0.0) |
+-------------------------------------+--------------+-----------+
| (Loss)/profit for the year from | (4.0) | 1.8 |
| continuing operations | | |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| Discontinued operations | | |
+-------------------------------------+--------------+-----------+
| Loss for the year from discontinued | (3.2) | (0.3) |
| operations | | |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| (Loss)/profit for the year | (7.2) | 1.5 |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| Attributable to: | | |
+-------------------------------------+--------------+-----------+
| Equity holders of the parent | (7.1) | 1.5 |
+-------------------------------------+--------------+-----------+
| Minority interest | (0.1) | 0.0 |
+-------------------------------------+--------------+-----------+
| | (7.2) | 1.5 |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| (Loss)/earnings per share | | |
| From continuing operations | | |
+-------------------------------------+--------------+-----------+
| - basic and diluted | (GBP2.42) | GBP1.10 |
+-------------------------------------+--------------+-----------+
| | | |
| From discontinued operations | | |
+-------------------------------------+--------------+-----------+
| - basic and diluted | (GBP1.98) | (GBP0.18) |
+-------------------------------------+--------------+-----------+
| | | |
+-------------------------------------+--------------+-----------+
| From continuing and discontinued | | |
| operations | | |
+-------------------------------------+--------------+-----------+
| - basic and diluted | (GBP4.40) | GBP0.92 |
+-------------------------------------+--------------+-----------+
UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the year ended 31 August 2009
+--------------------------------------+------------+-----------+
| | Year ended | Year |
| | | ended |
+--------------------------------------+------------+-----------+
| | 31 August | 31 August |
+--------------------------------------+------------+-----------+
| | 2009 | 2008 |
+--------------------------------------+------------+-----------+
| | GBP'm | GBP'm |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Exchange differences on translation | 0.1 | 0.2 |
| of foreign operations | | |
+--------------------------------------+------------+-----------+
| Net income recognised directly in | 0.1 | 0.2 |
| equity | | |
+--------------------------------------+------------+-----------+
| (Loss)/profit for the year | (7.2) | 1.5 |
+--------------------------------------+------------+-----------+
| Total recognised income and expense | (7.1) | 1.7 |
| for the year | | |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Attributable to: | | |
+--------------------------------------+------------+-----------+
| Equity holders of the parent | (7.0) | 1.7 |
+--------------------------------------+------------+-----------+
| Minority interests | (0.1) | 0.0 |
+--------------------------------------+------------+-----------+
| | (7.1) | 1.7 |
+--------------------------------------+------------+-----------+
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 31 August 2009
+--------------------------------------+------------+-----------+
| | 31 August | 31 August |
| | 2009 | 2008 |
+--------------------------------------+------------+-----------+
| | GBP'm | GBP'm |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Non-current assets | | |
+--------------------------------------+------------+-----------+
| Goodwill | 0.3 | 2.4 |
+--------------------------------------+------------+-----------+
| Other intangible assets | 1.1 | 1.4 |
+--------------------------------------+------------+-----------+
| Property, plant and equipment | 0.2 | 0.5 |
+--------------------------------------+------------+-----------+
| Finance lease receivables | 1.9 | 2.0 |
+--------------------------------------+------------+-----------+
| Deferred tax assets | 0.1 | 0.3 |
+--------------------------------------+------------+-----------+
| | 3.6 | 6.6 |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Current assets | | |
+--------------------------------------+------------+-----------+
| Inventories | 0.2 | 1.1 |
+--------------------------------------+------------+-----------+
| Finance lease receivables | 0.6 | 0.7 |
+--------------------------------------+------------+-----------+
| Trade and other receivables | 1.6 | 5.5 |
+--------------------------------------+------------+-----------+
| Cash and cash equivalents | 0.0 | 1.2 |
+--------------------------------------+------------+-----------+
| Assets held for resale | 5.0 | - |
+--------------------------------------+------------+-----------+
| | 7.4 | 8.5 |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Total assets | 11.0 | 15.1 |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Current liabilities | | |
+--------------------------------------+------------+-----------+
| Trade and other payables | (7.4) | (7.6) |
+--------------------------------------+------------+-----------+
| Current tax liabilities | - | (0.0) |
+--------------------------------------+------------+-----------+
| Obligations under finance leases | (0.1) | (0.1) |
+--------------------------------------+------------+-----------+
| Bank overdraft | (0.5) | - |
+--------------------------------------+------------+-----------+
| Borrowings | (0.3) | (1.2) |
+--------------------------------------+------------+-----------+
| Provisions | (1.1) | (0.5) |
+--------------------------------------+------------+-----------+
| Liabilities directly associated with | | |
| assets classified as held for sale | (3.8) | - |
+--------------------------------------+------------+-----------+
| | (13.2) | (9.4) |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Net current liabilities | (5.8) | (0.9) |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Non-current liabilities | | |
+--------------------------------------+------------+-----------+
| Borrowings | (0.3) | (1.0) |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Total liabilities | (13.5) | (10.4) |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Net (liabilities)/assets | (2.5) | 4.7 |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Equity | | |
+--------------------------------------+------------+-----------+
| Share capital | 8.6 | 8.6 |
+--------------------------------------+------------+-----------+
| Equity reserves | 18.2 | 18.2 |
+--------------------------------------+------------+-----------+
| Retained earnings | (29.5) | (22.4) |
+--------------------------------------+------------+-----------+
| Equity attributable to equity | (2.7) | 4.4 |
| holders of the parent | | |
+--------------------------------------+------------+-----------+
| Minority interest | 0.2 | 0.3 |
+--------------------------------------+------------+-----------+
| Total equity | (2.5) | 4.7 |
+--------------------------------------+------------+-----------+
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT
For the year ended 31 August 2009
+--------------------------------------+------------+-----------+
| | Year ended | Year |
| | | ended |
+--------------------------------------+------------+-----------+
| | 31 August | 31 August |
| | 2009 | 2008 |
+--------------------------------------+------------+-----------+
| | GBP'm | GBP'm |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Net cash used in operating | (2.9) | (2.4) |
| activities | | |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Investing activities | | |
+--------------------------------------+------------+-----------+
| Interest received | 1.3 | 1.3 |
+--------------------------------------+------------+-----------+
| Proceeds on disposal of property, | 0.1 | 0.1 |
| plant and equipment | | |
+--------------------------------------+------------+-----------+
| Purchases of property, plant and | (0.2) | (0.4) |
| equipment | | |
+--------------------------------------+------------+-----------+
| Purchases of patents and trademarks | (0.0) | (0.0) |
+--------------------------------------+------------+-----------+
| Acquisition of subsidiary | (0.0) | - |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Net cash from investing activities | 1.2 | 1.0 |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Financing activities | | |
+--------------------------------------+------------+-----------+
| Repayments of borrowings | (0.1) | (1.3) |
+--------------------------------------+------------+-----------+
| Repayments of obligations under | (0.0) | (0.0) |
| finance leases | | |
+--------------------------------------+------------+-----------+
| Proceeds on issue of shares | - | 0.0 |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Net cash used in financing | (0.1) | (1.3) |
| activities | | |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Net decrease in cash and cash | (1.8) | (2.7) |
| equivalents | | |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Cash and cash equivalents at | 1.2 | 3.7 |
| beginning of period | | |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Effect of foreign exchange rate | 0.1 | 0.2 |
| changes | | |
+--------------------------------------+------------+-----------+
| | | |
+--------------------------------------+------------+-----------+
| Cash and cash equivalents at end of | (0.5) | 1.2 |
| period | | |
+--------------------------------------+------------+-----------+
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the year ended 31 August 2009
1. General information
The financial information contained in this announcement does not constitute the
Group's financial statements for the years ended 31 August 2009 and 31 August
2008. The financial statements for the year ended 31 August 2008 have been
delivered to the Registrar of Companies and distributed to shareholders. These
financial statements contained an unqualified auditor's report which did not
contain any statements under Section 237 (2) or (3) of the Companies Act 1985.
As at the date of this announcement, the Auditors have not reported on the
financial statements for the year ended 31 August 2009, nor have such financial
statements been delivered to the Registrar of Companies. The audit report on
the 31 August 2009 financial statements is expected to be modified by the
inclusion of an emphasis of matter with regard to the material uncertainties and
significant doubt concerning the Group and the Company's ability to continue as
a going concern (explained in Note 2 below). The financial statements for 2009
will be distributed to shareholders prior to the Annual General Meeting and
filed with the Registrar of Companies following that meeting.
2. Basis of preparation
This financial information has been prepared using the measurement bases
contained within International Financial Reporting Standards (IFRS).
As described in the Chairman's Statement, Chief Executive's Review and Financial
Review, the current economic environment is challenging and the Group has
reported a loss of GBP7.2m for the year. In assessing the appropriateness of the
going concern basis, the Directors have prepared forecasts for a period of 12
months from the date of these financial statements and have considered downside
sensitivity scenarios. These forecasts take into account the current economic
environment as well as the Directors' view with regard to the Group's future
prospects. The forecasts show that the Group should be able to meet its
obligations as they fall due, but they also demonstrate that there is limited
headroom, although the Directors believe that there are enough alternative
options to maintain this position. A number of material uncertainties exist and
these have been summarised below. Failure to achieve the assumed outturn in
respect of any of these uncertainties would result in a shortfall of funds.
· During February 2010, the Group's UK trading subsidiary Minorplanet
Limited agreed a revised 12 month payment schedule with HMRC regarding
approximately GBP2.1m of taxation balances. The ability of the Group to generate
sufficient funds to meet this payment schedule is dependent upon the outcome of
the uncertainties explained below. If the Group were to be unable to meet this
repayment plan then HMRC may agree to a revised payment schedule or may seek
recovery through legal action which could ultimately result in the execution of
a winding up petition against the Company. However, as explained below, the
Directors are confident of a successful outturn with regard to these matters and
hence of meeting the obligations under the repayment plan.
· The forecasts assume an improvement in sales performance. The Directors
acknowledge that such an improvement is uncertain in the current economic
conditions. However, based on the sales pipeline, recent large account wins,
the renewals capability and service proposition, the Directors consider the
prospects for the Group to be sound and that the forecast sales levels are
realistic. The sales pipeline for new business is now strong and the Directors
believe that, with the Group's new proposition, it can close the necessary
proportion of this business to achieve forecast sales.
· It is assumed that the Group will finalise a successful disposal of the
Australian subsidiary for substantial net proceeds. In preparing the forecasts
the Directors have assumed a net cash benefit of GBP1m, after deduction of
liabilities and costs, realised by 30 April 2010. This sale is uncertain both in
terms of timing and value. However, the Directors are in discussions with
certain interested parties and are confident that the transaction will be
satisfactorily completed by 30 April 2010.
· The Group has breached the terms of a loan obligation of approximately
GBP500,000. Under the terms of the loan agreement, the balance is payable on
demand as a result of this breach and currently no formal waiver or revised
repayment plan is agreed. In preparing the forecasts, the Directors have assumed
that repayments can be made over a period of approximately 2 years. No formal
agreement exists with regard to repayment and hence an uncertainty exists over
the required repayment timings. However, the Directors note that during informal
discussions the counterparty has indicated that such arrangements are acceptable
and that immediate repayment will not be requested.
· The Group has been notified of a material claim with regard to guarantees
purportedly given in relation to obligations of a former subsidiary (see Note
7). Should any settlement be required, its quantum and timing are uncertain.
However, the claim will be vigorously defended and the Directors are of the view
that, based on legal advice, there is unlikely to be a judgement or commercial
settlement in the next twelve months. Any settlement would be agreed on terms
that the Group was able to meet.
The Directors have concluded that a combination of these circumstances
represents a material uncertainty related to events or circumstances which may
cast significant doubt on the Group's and Company's ability to continue as a
going concern and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business. Nevertheless, after
making enquiries and considering the uncertainties described above, the
Directors are of the view that these matters can be managed to a satisfactory
resolution and consequently the impact of the uncertainties can be mitigated.
In light of the above, together with other possible fund-raising opportunities,
the Directors have a reasonable expectation that both the Group and Company will
have adequate resources to continue in operational existence for the foreseeable
future.
3. Exceptional items, net
Exceptional items, net, comprise:
+--------------------------------+-------------+-------------+
| | Year ended | Year ended |
+--------------------------------+-------------+-------------+
| | 31 August | 31 August |
| | 2009 | 2008 |
+--------------------------------+-------------+-------------+
| | GBP'm | GBP'm |
+--------------------------------+-------------+-------------+
| Profit on sale of equipment | - | 0.3 |
| and lease debtors | | |
+--------------------------------+-------------+-------------+
| Restructuring and other | (0.6) | (0.2) |
| charges | | |
+--------------------------------+-------------+-------------+
| | (0.6) | 0.1 |
+--------------------------------+-------------+-------------+
4. Tax
Corporation tax for the year is charged at the prevailing rates, adjusted for
the utilisation of brought forward losses.
5. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
+--------------------------------+-------------+-------------+
| | Year ended | Year ended |
+--------------------------------+-------------+-------------+
| | 31 August | 31 August |
| | 2009 | 2008 |
+--------------------------------+-------------+-------------+
| | GBP'm | GBP'm |
+--------------------------------+-------------+-------------+
| Earnings | | |
| From continuing operations | | |
+--------------------------------+-------------+-------------+
| Earnings for the purposes of | | |
| basic and diluted earnings per | (3.9) | |
| share being the net | | 1.8 |
| (loss)/profit attributable to | | |
| equity holders of the parent | | |
| from continuing operations | | |
+--------------------------------+-------------+-------------+
| | | |
| | | |
+--------------------------------+-------------+-------------+
| Earnings | | |
| From discontinued operations | | |
+--------------------------------+-------------+-------------+
| Earnings for the purposes of | | |
| basic and diluted earnings per | | |
| share being the net loss | (3.2) | (0.3) |
| attributable to equity holders | | |
| of the parent from | | |
| discontinued operations | | |
+--------------------------------+-------------+-------------+
+--------------------------------+-------------+-------------+
| | Number | Number |
+--------------------------------+-------------+-------------+
| Number of shares | | |
+--------------------------------+-------------+-------------+
| Weighted average number of | 1,617,476 | 1,617,476 |
| ordinary shares for the | | |
| purposes of basic and diluted | | |
| earnings per share | | |
+--------------------------------+-------------+-------------+
The (loss)/earnings per share figures have been restated to reflect the 1 for 20
share capital consolidation which was effected subsequent to the year end.
6. Notes to the cash flow statement
+-------------------------------+--------------+--------------+
| | Year ended | Year ended |
+-------------------------------+--------------+--------------+
| | 31 August | 31 August |
| | 2009 | 2008 |
+-------------------------------+--------------+--------------+
| | GBP'm | GBP'm |
+-------------------------------+--------------+--------------+
| | | |
+-------------------------------+--------------+--------------+
| (Loss)/profit for the year | (7.2) | 1.5 |
+-------------------------------+--------------+--------------+
| Adjustments for: | | |
+-------------------------------+--------------+--------------+
| Interest on internal finance | (1.3) | (1.3) |
| leases | | |
+-------------------------------+--------------+--------------+
| Interest paid | 0.2 | 0.1 |
+-------------------------------+--------------+--------------+
| Corporation tax expense | 0.2 | 0.0 |
+-------------------------------+--------------+--------------+
| Loss on disposal of | 0.1 | - |
| discontinued operations | | |
+-------------------------------+--------------+--------------+
| Depreciation of property, | 0.2 | 0.2 |
| plant and equipment | | |
+-------------------------------+--------------+--------------+
| Capitalisation of intangible | | |
| assets net of related | (0.2) | (0.3) |
| amortisation | | |
+-------------------------------+--------------+--------------+
| Share-based payment expense | 0.0 | 0.0 |
+-------------------------------+--------------+--------------+
| Impairment of goodwill | 2.1 | - |
+-------------------------------+--------------+--------------+
| Movement in asset held for | (0.1) | - |
| sale | | |
+-------------------------------+--------------+--------------+
| Gain on disposal of property, | | |
| plant and equipment | (0.0) | (0.0) |
+-------------------------------+--------------+--------------+
| Increase/(decrease) in | 0.6 | (0.5) |
| provisions | | |
+-------------------------------+--------------+--------------+
| Operating cash flows before | | |
| movements in working capital | (5.4) | (0.3) |
+-------------------------------+--------------+--------------+
| | | |
+-------------------------------+--------------+--------------+
| Decrease/(increase) in | 0.5 | (0.3) |
| inventories | | |
+-------------------------------+--------------+--------------+
| Decrease/(increase) in | 0.2 | (2.2) |
| receivables | | |
+-------------------------------+--------------+--------------+
| Increase in payables | 2.0 | 0.6 |
+-------------------------------+--------------+--------------+
| Cash used in operations | (2.7) | (2.2) |
+-------------------------------+--------------+--------------+
| | | |
+-------------------------------+--------------+--------------+
| Corporation tax paid | - | (0.1) |
+-------------------------------+--------------+--------------+
| Interest paid | (0.2) | (0.1) |
+-------------------------------+--------------+--------------+
| | | |
+-------------------------------+--------------+--------------+
| Net cash used in operating | (2.9) | (2.4) |
| activities | | |
+-------------------------------+--------------+--------------+
Cash and cash equivalents (which are presented as a single class of assets
on the face of the balance sheet) comprise cash at bank.
7. Potential litigation
In January 2010, the Company was notified of a formal claim of EUR2.09m by
Popular de Renting SA against the Company in relation to guarantees purportedly
given to Minorplanet Systems SA, the former Spanish subsidiary, in relation to
leasing facilities. As previously disclosed, the Company intends to vigorously
defend the claim.
8. Board Approval of this Preliminary Announcement
This report was approved by the Board on 25 February 2010.
9. Annual Report and Accounts
The report and accounts will be sent to shareholders shortly. Copies will be
available by writing to the Company Secretary, Minorplanet Systems plc,
Greenwich House, 223 North Street, Leeds, LS7 2AA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEAFUIFSSESE
Minorplanet Systems (LSE:MPS)
Historical Stock Chart
From Apr 2024 to May 2024
Minorplanet Systems (LSE:MPS)
Historical Stock Chart
From May 2023 to May 2024
