RNS Number:6721J
Aquilo PLC
29 September 2006
AQUILO PLC
INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2006
Aquilo Plc ("Aquilo") today announces its half year results for the period ended
30 June 2006.
Financial and Trading Summary
Financial Summary
* Turnover #8m (2005: #11.09m).
* Gross Profit #1.64m (2005: #2.07m).
* Operating Loss before tax and exceptional items of #1.052m (2005: loss
of #0.461m).
* Exceptional items - Loss #0.02m (2005: profit #0.47m).
Trading Summary
* Motor Services - volume has reduced due to major client reducing
outsourcing - revenue #6.1m (2005: #10.0m).
* Business Services - volume has increased 137% - revenue #1.34m (2005:
#0.57m).
* IT Solutions acquired on 22 June 2006. 1 week's trading in these
results produced #433K turnover and #133K gross profit.
* AIRS (Aquilo Inspection and Reinstatement Services) - building repair
start up commenced with cost to date of #0.11m.
* Accidentcare business sold in 2005.
Enquiries:
Clive Nicholls - Chief Executive Officer - Tel: 07734 157841
Alan Frame - Equity Development - Tel: 0207 405 7777
Nairn Black, Alasdair Robinson - Noble & Company Limited - 0131 225 9677
INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2006
Chairman's Statement
The results were below our expectations due mainly to the reduction in Motor
Services volume as a result of our largest client taking more claims in-house
and the delay of new client start-ups into the second half. Our property
services business grew rapidly but again, new client start-ups were slower than
anticipated which meant we were unable to compensate fully for the Motor
Services short fall.
We successfully concluded the acquisition of IT Solutions (GB) Ltd on 22 June
2006, which will have a positive impact on the Group's results from the second
half. We have focused strongly on improving our cash management controls and
cost reduction to deal with the impact of the reduced volume and operating
losses.
Aquilo Strategic Services
The consulting activity of Aquilo Strategic Service continues to expand its
range of clients and the scope of its projects. Its true value to the Group as
a whole is that it provides us with a differentiated services offering that is
an increasingly necessary part of decision making on risk.
Aquilo Motor Services
Revenue and gross profit were both lower than in 2005 due to a major customer
reducing its outsourced volume as a result of revised internal strategies. We
were also affected adversely by the need to re-negotiate certain supplier
agreements to reflect external market realities. However, during the period our
new ICE system has proved its worth and has enabled us to attract new customers
which commenced in the second half of the year (as previously announced).
Aquilo Business Solutions
During the period both the claims handling and supply chain activities expanded
their volume and client base. Our fraud management process, Resolve, continues
to save considerable sums for our customers. Expansion of Resolve is dependent
on growing our base of skilled personnel as it is critical that we maintain high
standards of performance.
We have expanded our validation/supply chain activities in specialist areas such
as jewellery, hi-fi, by organic growth but to exploit fully the opportunity will
require further acquisitions. IT Solutions is such an acquisition.
Aquilo Inspection and Reinstatement Services (AIRS)
The AIRS project, in the provision of building inspection and reinstatement
services to the insurance industry, is proceeding well and we expect to commence
trading with core customers in October 2006. The key element of the service is
to provide both claims validation/valuation and repair management but through
separate facilities so as to exercise tighter control and reduce claims costs.
Start up costs will be higher during the second half as we approach launch.
IT Solutions
This acquisition was completed on 22nd June 2006 and full details of the company
and purchase have been provided to shareholders. These interims include revenue
(#433k) and gross profit (#133k) representing one week's trading. The balance
sheet as at 30th June 2006 also includes the impact of the acquisition and the
take-on position as at completion.
Since completion revenue, gross profit and net profit all exceed the prior
period due, in part, to the impact of new clients which Aquilo has assisted in
securing.
Finance Arrangements
The company has entered into a new finance arrangement with Impact Funding (UK)
Ltd. This has enabled Aquilo to repay its long term debt with Bank of Scotland
and will provide additional invoice discounting facilities to support the growth
of the business.
Board Structure
In order to provide enhanced operational focus the board is being restructured
with Mike Dean (head of Aquilo Business Solutions) and John Ascroft (head of
Aquilo Motor Services) coming off the plc board with effect from 2nd October,
providing a clear distinction between operational management and plc strategy.
Outlook
The Board believes strongly that Aquilo plc has an exciting future in its chosen
areas of activity. However, building the core businesses while dealing with
lower business volume in the motor area is still a serious issue. Motor volumes
and margins are now improving via new clients and improved business models but
still require further expansion to be on a stronger footing.
Our initial plan for 2007 indicates a rapidly improving trend based upon our
current client base, the growth of the AIRS business and the impact of the
acquisition of IT Solutions.
AQUILO PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Notes Unaudited six Unaudited six
months to 30 June months to 30 June
2006 2005
# #
Turnover 8,009,493 11,085,342
Cost of Sales 6,371,341 9,011,109
_________ _________
Gross Profit 1,638,152 2,074,233
Operating/administrative expenses 2,690,484 2,535,374
_________ _________
Operating loss (1,052,332) (461,141)
Exceptional items (19,960) 469,094
_________ _________
Profit/(loss) on ordinary activities before (1,072,292) 7,953
interest
Interest Receivable 5,760 10,765
Interest Payable (66,658) (102,950)
_________ _________
Loss on ordinary activities before taxation (1,133,189) (84,232)
Tax on losses on ordinary activities 0
_________ _________
Retained loss for period (1,133,189) (84,232)
_________ _________
Loss per share
Basic 3 (0.3p) (0.03p)
Fully Diluted 3 (0.3p) (0.03p)
AQUILO PLC
CONSOLIDATED BALANCE SHEET
Notes Unaudited as at Unaudited as at
30 June 2006 30 June 2005
# #
Fixed Assets
Intangible assets - negative goodwill (8,201)
Intangible assets - other 3,166,885 1,139,770
Tangible assets 646,461 670,708
Investments 51,556 176,549
________ ________
3,864,903 1,978,826
________ ________
Current Assets
Stock and work in progress 218,321 144,301
Debtors 4 5,483,242 4,592,135
Cash at bank and in hand 667,400 1,033,142
________ ________
6,368,963 5,769,578
________ ________
Total Assets 10,233,866 7,748,404
________ ________
Creditors:
Amounts falling due within one year 5 8,584,452 4,926,003
Creditors:
Amounts falling due after more than one year 6 1,228,750 1,899,097
Provisions for liabilities and charges 0 48,256
________ ________
9,813,202 6,873,356
Capital and Reserves
Called up share capital 4,374,700 3,219,646
Share premium account 2,182,790 1,133,581
Shares not yet issued 75,000 250,000
Profit and loss account (6,242,676) (3,741,529)
Minority interest * 30,850 13,350
_______ _______
420,664 875,048
________ ________
Total Liabilities 10,233,866 7,748,404
________ ________
* - Minority Interest - relates to 1.33% holding in ABS Bodyshop Services
Limited by repairers.
AQUILO PLC
CONSOLIDATED CASH FLOW STATEMENT
Notes Unaudited six Unaudited six
months to 30 June months to 30 June
2006 2005
# #
Cash Flow Statement
Cash flow from operating activities 7 (1,771,633) (966,213)
Returns on investment and servicing of finance (60,897) (92,185)
Taxation 0 0
Capital expenditure and financial investment (2,607,258) (634,869)
Equity dividends paid 0 0
_________ _________
Cash outflow before management of liquid (4,439,788) (1,693,267)
resources and financing
Financing 3,167,166 2,594,437
_________ _________
Increase in cash in the period (1,272,622) 901,170
_________ _________
Reconciliation of net cash flow movement in
net debt
Increase/(Decrease) in cash in the period (1,272,622) 901,170
Cash outflow from changes in net debt 0 0
Loan stock converted into share capital 0 0
________ ________
Movement in net funds in the period (1,272,622) 901,170
Net funds/(debt) at the start of the period 824,356 9,101
________ ________
Net funds at the end of the period (448,266) 910,271
________ __________
AQUILO PLC
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS
Unaudited six Unaudited six
months to 30 June months to 30 June
2006 2005
# #
Loss for the financial period (1,133,189) (84,232)
Shares issued 1,076,742 312,115
Share premium on shares issued 772,748 234,089
Costs set off against share premium account (0) (227,375)
Disposal of Aquilo Technology Ltd 0 0
Movement in Deferred Consideration (175,000) 0
Minority interests 0 13,350
________ ________
Net addition to shareholders funds 541,301 247,947
Opening shareholders funds (151,487) 627,102
________ ________
Closing shareholders funds 389,814 875,049
________ _________
AQUILO PLC
NOTES TO THE ACCOUNTS
1. Basis of Preparation
The financial information contained in these statements for the six months ended
30 June 2006 and 30 June 2005 is unaudited and does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985.
The financial information for the year ended 31 December 2005 has been extracted
from the statutory accounts for that period which carried an unqualified audit
report and which have been filed with the Registrar of Companies.
The Balance Sheet items include the IT Solutions acquisition in full and the P&L
items only include 1 week's trading.
Copies of the Interim Report are available from the Company Secretary, Meridian
House, Gadbrook Park, Northwich, Cheshire, CW9 7RA.
2. Taxation
There is estimated to be no tax charge for the period.
3. Earnings per share
The earnings per share is based on the loss for the period of #1,142,096 (30
June 2005: #84,232 loss) and the weighted average number of ordinary shares in
issue for the six months ended 30 June 2006 of 350,443,963 (30 June 2005:
319,409,422).
Diluted earnings per share is calculated by increasing the weighted average
number of ordinary shares to 394,186,867 (30 June 2005 330,409,422) in
recognition of share options in existence at the period end.
4. Debtors
Unaudited 30 June Unaudited 30 June
2006 2005
# #
Trade debtors 3,647,300 3,346,272
Other debtors 779,868 730,422
Prepayments and accrued income 1,056,074 515,441
________ ________
5,483,242 4,592,135
________ ________
The figure for trade debtors in 2005 includes #1.6 million net due in relation
to the sale of Meridian House.
5. Creditors: amounts falling due within one year
Unaudited 30 June Unaudited 30 June
2006 2005
# #
Bank overdraft 0 122,871
Bank loan 265,000 265,000
Other loans 103,040 100,681
Trade creditors 4,923,747 3,128,434
Net obligations under finance lease and hire purchase contracts 2,411 10,837
Corporation tax 19,310 10,281
Taxation and social security 269,679 717,949
Other creditors 823,229 302,200
Accruals and deferred income 569,932 267,750
Loan Notes 792,438
CID Facility 815,666
________ ________
8,584,452 4,926,003
________ ________
The amount due for taxation and social security in 2005 includes #542,500 VAT
payable in relation to the sale of Meridian House.
6. Creditors: amounts falling due after on year
Unaudited 30 June Unaudited 30 June
2006 2005
# #
Bank loan 728,750 993,750
Other loans 0 109,122
Loan notes 500,000 792,438
Net obligations under finance lease and hire purchase contracts 0 3,787
________ ________
1,228,750 1,899,097
________ ________
7. Reconciliation of operating loss to operating cash flows
Unaudited 30 June Unaudited 30 June
2006 2005
# #
Operating loss (1,052,332) (461,141)
Depreciation, amortisation and impairment charges 167,564 106,693
Movement in debtors (3,173,150) (3,480,990)
Movement in creditors 2,420,669 3,352,045
Movement in stock and work in progress (114,424) (144,301)
Exceptional items (19,960) (338,519)
_________ _________
Net cash outflow from operating activities (1,771,633) (966,213)
_________ _________
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