RNS Number:8446S
Orbis PLC
04 December 2003
Date: 4 December 2003
Contact: Michael Holmes, Chief Executive
Orbis PLC 01895 465 500
David Bick/Chris Steele
Holborn Public Relations 020 7929 5599
david_bick@holbornpr.co.uk
ORBIS PLC
UNAUDITED RESULTS FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2003
INTERIM STATEMENT
Results
The group achieved an operating profit on continuing operations of #6,000 (six
months to 30 September 2002: operating loss of #677,000) on turnover on
continuing operations of #20.0 million (six months to 30 September 2002: #21.3
million). Pre-tax profit for the period, before the amortisation of goodwill
and intangibles and non-operating exceptional items, was #0.2 million (six
months to 30 September 2002: #0.6 million) and the loss per ordinary share from
continuing operations, before amortisation of goodwill and intangibles and
non-operating exceptional items, was 2.95 pence (six months to 30 September
2002: 7.31 pence (restated)). The basic loss per share was 17.65 pence (six
months to 30 September 2002: 23.78 pence(restated)). The board is not declaring
an interim dividend.
Strong cash management resulted in the generation of #4.0 million cash inflow
from operating activities.
The impending introduction of the new International Financial Reporting
Standards ("IFRS") will have an impact on the reporting of goodwill in future.
The group is currently amortising goodwill at a rate of some #4 million per
annum. The new IFRS will use an annual goodwill impairment test. In the absence
of any impairment charge, there would be no charge to the profit and loss
account for goodwill in the financial year. The group is currently reviewing the
potential impact on other areas under the IFRS.
Borrowings
As previously reported, new long-term banking arrangements were agreed with the
senior lenders and approved by shareholders in August 2003. These arrangements
included a #15 million reduction in the previous senior facilities, an extension
of the maturity date by five years to 31 July 2008, a period of two years during
which no principal debt repayments were due and a material reduction in the
annual interest payments.
Share capital
In conjunction with the new banking arrangements, a reorganisation of the
company's share capital was approved in August 2003 and #15 million zero coupon
convertible preference shares were issued to the senior lenders. The company's
listing was transferred to AIM from the Official List in September 2003.
Review of Operations
As reported in the AGM statement in September, trading during the first months
of the year was affected by the uncertainty of the group's financial position
prior to the successful restructuring that was achieved in August. Turnover on
continuing operations was lower than the comparable period in the previous year,
but remained at a similar level to the last six months to March 2003. Progress
was made in improving the efficiency and productivity of the business.
The focus during the second half of the year will be to develop sales of the
broader range of services now provided, aimed at reducing the number of vacant
housing units in our customers' estates, and to continue to progress partnering
discussions with customers. The strengthening of the management team continues
with the appointment of new senior operational and sales executives.
After a slowdown in sales progress in Europe during the first half of the year,
growth has renewed. Following the strengthening of the management team in
France, new branches are being developed in Angers, Toulouse and Metz during the
second half of the year. In Germany, sales expansion into Stuttgart and
Frankfurt is continuing.
Board
Following the successful completion of the new finance facility and the share
re-organisation, John Leach resigned as a director and chairman at the end of
September. The board would like to thank him for the hard work and dedication.
Maurice Brooks also retired as a director at the end of September and the board
wish him well in his retirement. The recruitment of a new chairman is
proceeding.
Prospects
The group now has a financial platform from which to develop its strategy for
the future. The board believes that in the UK continued improvements in the
management and efficiency of the business, together with the development of
long-term partnering agreements with customers, will provide the basis for
future growth.
In Europe, geographical expansion and additional services will provide growth
for the foreseeable future.
Approved by the Board
3 December 2003
Analysis of Unaudited Consolidated Profit & Loss Account
For the six months ended 30 September 2003
Before Exceptional Amortisation After exceptional
exceptional items of goodwill items and
items and and amortisation
amortisation (Note 3) intangibles
#000 #000 #000 #000
Turnover (note 2)
Continuing operations 20,029 - - 20,029
20,029 - - 20,029
Operating profit
Continuing operations 2,058 - (2,052) 6
Discontinued operations 1 - - 1
Profit on ordinary activities before 2,059 - (2,052) 7
interest
Amounts written off investments (2) - - (2)
Interest payable (1,854) (98) - (1,952)
(Loss)/profit on ordinary activities 203 (98) (2,052) (1,947)
before taxation
Taxation (note 4) (474) - - (474)
Loss on ordinary activities after (271) (98) (2,052) (2,421)
taxation
Dividends - - - -
Additional finance costs of non-equity (41) - - (41)
shares
Retained loss for the period (312) (98) (2,052) (2,462)
Summary of Unaudited Consolidated Profit & Loss Account
Six months ended 30 September 2003
Six months ended Six months ended Year ended
30 September 30 September
2003 2002 31 March 2003
#000 #000 #000
Turnover (note 2)
Continuing operations 20,029 21,274 41,943
Discontinued operations - 1,030 1,141
20,029 22,304 43,084
Operating profit/(loss)
Continuing operations 6 (677) (1,346)
Discontinued operations 1 (86) (1,713)
Profit/(loss) on ordinary activities before interest 7 (763) (3,059)
Amounts written off investments (2) (20) (20)
Interest payable (1,952) (2,363) (4,247)
Loss on ordinary activities before taxation (1,947) (3,146) (7,326)
Taxation (note 4) (474) (172) (134)
Loss on ordinary activities after taxation (2,421) (3,318) (7,460)
Dividends - - -
Additional finance costs of non-equity shares (41) - -
Retained loss for the period (2,462) (3,318) (7,460)
pence pence pence
(restated) (restated)
Basic loss per ordinary share (note 5) (17.65) (23.78) (53.48)
Loss per ordinary share from continuing operations (2.95) (7.31) (8.61)
before the amortisation of goodwill and intangibles
and non-operating exceptional items (note 5)
Diluted loss per ordinary shares (note 5) (17.65) (23.78) (53.48)
Unaudited Consolidated Balance Sheet
At 30 September At 30 September As at
2003 2002 31 March 2003
#000 #000 #000
Fixed assets
Goodwill 62,998 66,820 64,911
Intangible asset - 207 -
Tangible assets 8,748 12,741 10,658
Investments 7 9 9
71,753 79,777 75,578
Current assets
Stocks 218 240 288
Debtors 10,186 12,717 11,433
Cash at bank 770 - 519
11,174 12,957 12,240
Creditors - amounts falling due within one year
Bank loans - (57,738) (59,941)
Other (10,824) (15,266) (12,048)
Net current assets/(liabilities) 350 (60,047) (59,749)
Total assets less current liabilities 72,103 19,730 15,829
Creditors - amounts falling due after more than
one year
Bank loans (44,436) - -
Other (1,325) (645) (698)
Provisions for liabilities and charges - - (150)
26,342 19,085 14,981
Capital and reserves
Called up share capital 16,398 17,482 17,482
Share premium 31,193 32,436 32,436
Merger reserve 12,144 12,144 12,144
Capital redemption reserve 16,084 - -
Profit and loss account (49,477) (42,977) (47,081)
26,342 19,085 14,981
Equity 12,544 19,085 14,981
Non-equity 13,798 - -
Total shareholders' funds 26,342 19,085 14,981
Unaudited Consolidated Cash Flow Statement
Six months Six months Year ended
ended 30 ended 30
September 2003 September 2002 31 March 2003
#000 #000 #000
Net cash inflow from operating activities (note 6) 3,976 4,640 9,840
Refinancing fees (530) - -
Interest and other charges (144) (1,022) (5,267)
Returns on investment and servicing of finance (674) (1,022) (5,267)
Tax paid (477) (1,187) (1,932)
Capital expenditure and financial investment (288) (1,239) (1,620)
Acquisitions and disposals - (50) (50)
Net cash inflow before financing 2,537 1,142 971
Issue costs of preference share capital (1,243) - -
New loans - 1,601 2,775
Capital element of finance lease plans (17) - (47)
Repayment of loan stock (100) (1,601) (2,775)
Net cash (outflow)/inflow from financing (1,360) - (47)
Increase in cash 1,177 1,142 924
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Six months Six months Year ended
ended 30 ended 30
September 2003 September 2002 31 March 2003
#000 #000 #000
Loss for the financial year (2,421) (3,318) (7,460)
Exchange difference on retranslation of subsidiary net 205 302 1,369
assets
Exchange difference on loan (180) (301) (1,330)
Total recognised losses relating to the financial year (2,396) (3,317) (7,421)
Unaudited Reconciliation of Movements in Shareholders' Funds
Six months Six months Year ended
ended 30 ended 30
September 2003 September 2002 31 March 2003
#000 #000 #000
Total recognised losses for the year (2,396) (3,317) (7,421)
13,757 - -
Issue of share capital (net)
Net increase/(decrease) in shareholders' funds 11,361 (3,317) (7,421)
Opening shareholders' funds 14,981 22,402 22,402
Closing shareholders' funds 26,342 19,085 14,981
NOTES
1. BASIS OF PREPARATION
The interim financial statement has been prepared on a basis consistent with the
accounting policies disclosed in the Annual Report and Accounts for the year
ended 31 March 2003.
The consolidated results for the year ended 31 March 2003 have been extracted
from the financial statements for that year and do not constitute full statutory
accounts for the group. The group accounts for the year ended 31 March 2003
received an unqualified audit report and did not include a statement under
section 237 (2) or (3) of the Companies Act 1985 and have been filed with the
Registrar of Companies.
2. SEGMENTAL INFORMATION
Turnover Net assets
Six months Six months Year ended Six months Six months Year ended
ended 30 ended 30
ended 30 ended 30 31 March September September 31 March
September September 2003 2002
2003 2002 2003 2003
#000 #000 #000 #000 #000 #000
Void property
protection
Continuing 20,029 21,274 41,943 26,342 19,264 16,217
operations
Discontinued - 1,030 1,141 - (179) (1,236)
operations
20,029 22,304 43,084 26,342 19,085 14,981
Turnover
Six months Six months Year ended
ended 30 ended 30
September September 31 March
2003 2002 2003
#000 #000 #000
Turnover by destination and origin
United Kingdom 13,596 16,544 30,365
Continental Europe 6,433 5,760 12,719
20,029 22,304 43,084
3. EXCEPTIONAL ITEMS
Exceptional items of #98,000 in interest payable relate to corporate
restructuring and refinancing of the company, including professional fees in
respect of the negotiation of the company's banking arrangements which, in
accordance with FRS4, are being charged to the profit and loss account over the
period of the loan facility.
4. TAXATION
The taxation charge for the period is the net result of tax charged in respect
of profits earned overseas and the repayment of tax in respect of earlier
periods.
5. LOSS PER SHARE
Basic loss per share has been calculated on the loss after tax for the year and
the weighted average number of ordinary shares (excluding shares owned by the
company's share ownership trust) in issue during the year as follows:
Six months ended Six months ended Year ended 31
30 September 2003 30 September 2002 March 2003
(restated) (restated)
Loss #000 (2,462) (3,318) (7,460)
Weighted average equity in issue (million) 13.95 13.95 13.95
Basic loss per ordinary share (pence) (17.65) (23.78) (53.48)
Losses per share from continuing operations before amortisation of goodwill and
intangible and before non-operating exceptional items have been presented in
addition to basic earnings per share as defined by FRS 14 since, in the opinion
of the directors, this provides shareholders with a more appropriate
representation of the earnings derived from the group's present businesses. It
can be reconciled to basic loss per share as follows:
Six months ended Six months ended Year ended 31
30 September 2003 30 September 2002 March 2003
(restated) (restated)
pence pence pence
Basic loss per ordinary share (17.65) (23.78) (53.48)
Amortisation of goodwill and intangible 14.71 15.85 32.59
Profit/(loss) per ordinary share from (0.01) 0.62 12.28
discontinued operations
Loss per ordinary share from continuing (2.95) (7.31) (8.61)
operations before the amortisation of goodwill
and intangible and non-operating exceptional
items
The diluted loss per share, as defined in FRS 14, has been calculated on the
following basis:
Six months Six months ended Year ended 31
ended 30 30 September March 2003
September 2002 (restated)
2003 (restated)
Diluted losses on ordinary shares #000 (2,462) (3,318) (7,460)
Weighted average number of ordinary shares (million) 13.95 13.95 13.95
in issue
Share options (million) - - -
Diluted weighted average number of ordinary (million) 13.95 13.95 13.95
shares in issue
Diluted loss per share (pence) (17.65) (23.78) (53.48)
6. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
Six months ended Six months ended Year ended 31
30 September 2003 30 September 2002 March 2003
#000 #000 #000
Operating profit/(loss) 7 (763) (3,059)
Depreciation and loss on disposal of fixed 2,253 3,015 5,735
assets
Amortisation of goodwill and intangibles 2,052 2,256 5,118
EBITDA 4,312 4,508 7,794
Decrease in stocks 70 87 39
Decrease/(increase) in debtors 714 (75) 1,817
(Decrease)/increase in creditors (1,120) 120 190
Net cash inflow from operating activities 3,976 4,640 9,840
7. ANALYSIS OF CHANGES IN NET DEBT
At 31 March Cash flow Exchange Other At 30
2003 movement non-cash September
changes 2003
#000 #000 #000 #000 #000
Cash at bank and in hand 519 251 - - 770
Bank overdrafts (2,743) 926 - - (1,817)
(2,224) 1,177 - - (1,047)
Bank loans due after one year - 530 (180) (44,786) (44,436)
Bank loans due within one year (59,941) - - 59,941 -
Other loans (600) 100 - - (500)
Finance leases (45) 17 - - (28)
(62,810) 1,824 (180) 15,155 (46,011)
INDEPENDENT REVIEW REPORT BY KPMG AUDIT PLC TO ORBIS PLC
Introduction
We have been engaged by the company to review the financial information set out
on pages 4 to 9 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/
4: Review of interim financial information issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and, based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review is substantially less
in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2003.
KPMG Audit Plc
Chartered Accountants
London
3 December 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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