Interim Results
12 October 2006 - 5:02PM
UK Regulatory
RNS Number:3491K
MSB International PLC
12 October 2006
Press Release
MSB International PLC
Interim results for the six months ended 31 July 2006
MSB International PLC, the integrated recruitment services provider today
announces its interim results for the six months to 31 July 2006.
Financial and operational highlights:
* Turnover increased 5.8% to #49.8m (2005: #47.1m)
* Profit before tax of #0.7m (2005: #0.2m)
* Earnings per share of 1.60p (2005: 0.54p)
* Actions taken to reduce operational gearing delivered improved
profitability
* Business performed well despite uncertainty caused by takeover
approaches
Commenting on the results Paul Davies, Chairman, said:
"We are pleased to report a substantial turnaround in profitability for the half
year ended 31 July 2006. I would like to express my appreciation to the Group's
staff and management for their continued efforts during what has, at times, been
a most unsettling period."
- Ends -
For further information:
MSB International 020 8315 9000
Andrew Zielinski, Chief Executive
Ian Ketchin, Finance Director
Merlin 020 7653 6620
Vanessa Maydon 07802 961 902
Angus Urquhart 07787 504 447
Attached: Chairman's and Chief Executive's Report
Consolidated Income Statement
Statement of Recognised Income and Expense
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Statement of Changes in Shareholders' Equity
Dividends
Notes to the Interim Report
Chairman's and Chief Executive's Report
The Board announced on 30 March 2006 that it was in talks that may or may not
lead to an offer for the Company. On 4 August 2006 we announced an offer by
Keyman Personnel Limited for the entire issued and to be issued share capital of
MSB of 65p per share in cash. On 29 September 2006 we announced that we had
reached agreement with Networkers International plc on the terms of a competing
cash offer at 73p per share, valuing the Company at #14.97 million.
Against this background we are pleased to report a substantial turnaround in
profitability for the half year ended 31 July 2006.
Although the first half of the year was inevitably influenced by the uncertainty
of corporate activity, the performance of the business has benefited from the
actions that were taken to improve the operational gearing of the business.
In this uncertain period, the Company delivered a robust performance: turnover
increased; gross profit was maintained at prior year levels; and as a result of
the action taken to rectify the cost structure, a solid operating profit was
generated.
Operational and Financial Review
Turnover for the first half year grew by 5.8% to #49.8m (2005: #47.1m). Gross
profit was #7.1m (2005: #7.1m). Operating profit was #0.7m against #0.2m for the
same period last year.
The balance sheet remains strong with net assets of #12.8m maintained at
year-end levels. Working capital has remained stable whilst funding both a 24%
increase in the contractor base since the year-end and the final dividend.
Technology division
The Technology division maintained gross profit compared to the same period last
year. There was marked expansion in our Managed Accounts capability with a new
relationship opened up with Accenture. The Unisys Master Vendor contract that
was successfully renewed last year goes from strength to strength and has
allowed the Company to build on the relationship by expanding its service lines.
Open market
The open market (IT contingency recruitment business) continues to deliver high
levels of productivity, with gross profit generation by individual sales
consultant averaging #66,000 for the 6-month period (2005: #65,000).
Diversified division
The Diversified division grew gross profit by 13% over last year. The disruption
of personnel changes in the first half of last year has been put behind us and
we entered a period of stability with good performance in these newer
businesses.
Interim Dividend
The Board does not recommend the payment of an interim dividend (2005: 0.7p per
share).
People
The Board wishes to thank its employees for their contribution. Under the
current circumstances the Board has the utmost respect for the staff and
management who have displayed resilience, understanding and support during these
uncertain times and sincerely thanks them for their commitment.
Paul Davies Andrew Zielinski
Chairman Chief Executive
12 October 2006
Consolidated Income Statement
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
Six months Six months Year to
Notes to 31 July to 31 July 31 January
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Continuing Operations
Revenue 49,843 47,115 95,660
Cost of sales (42,714) (39,989) (81,501)
--------------------------------------------------------------------------------
Gross profit 7,129 7,126 14,159
Administration
expenses (6,377) (6,952) (14,657)
Operating profit/(loss) 752 174 (498)
--------------------------------------------------------------------------------
Analysed as
Operating profit 752 174 373
before exceptional items - - (871)
Exceptional items
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/(loss) 752 174 (498)
Interest receivable - - 1
Interest payable (57) (11) (61)
--------------------------------------------------------------------------------
Profit/(loss) before taxation 695 163 (558)
Taxation 2 (382) (58) (7)
--------------------------------------------------------------------------------
Profit/(loss) for the period
attributable to 313 105 (565)
equity shareholders
--------------------------------------------------------------------------------
Earnings per share from continuing
operations 4 1.06p 0.54p (2.89p)
Basic and diluted
Statement of Recognised Income and Expense
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
Six months to Six months to Year to
to 31 July 21 July 31 Jamuary
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Profit/(loss)
after tax 313 105 (565)
Net exchange
difference
offset in
reserves net
of tax 7 15 (1)
--------------------------------------------------------------------------------
Total
recognised
gains and
losses for the
period 320 120 (566)
--------------------------------------------------------------------------------
Consolidated Balance Sheet
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
Six months Six months Year to
31 July 31 July 31 January
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Assets
Non current assets
Goodwill 1,397 1,397 1,397
Intangible assets 293 363 319
Property, plant and equipment 331 443 383
Deferred tax assets 123 199 123
--------------------------------------------------------------------------------
2,144 2,402 2,222
--------------------------------------------------------------------------------
Current assets 21,199 19,940 17,846
Trade and
other
receivables 50 150 426
Current tax
receivable - 121 674
Cash and cash equivalents
--------------------------------------------------------------------------------
21,249 20,211 18,946
--------------------------------------------------------------------------------
Current Liabilities
Financial Liabilities (1,772) - -
Trade and other payables (8,245) (8,502) (7,089)
Provisions (459) (209) (833)
--------------------------------------------------------------------------------
(10,476) (8,711) (7,922)
--------------------------------------------------------------------------------
Net current
assets 10,773 11,500 11,024
--------------------------------------------------------------------------------
Non current
liabilities (124) (174) (249)
Provisions
--------------------------------------------------------------------------------
Net assets 12,793 13,728 12,997
--------------------------------------------------------------------------------
Shareholders' equity
Ordinary shares 1,025 1,025 1,025
Share premium 1,263 1,263 1,263
Other reserves 207 - 157
Retained earnings 10,298 11,440 10,552
--------------------------------------------------------------------------------
Shareholders'
equity 12,793 13,728 12,997
--------------------------------------------------------------------------------
Consolidated Cash Flow Statement
--------------------------------------------------------------------------------
Note Unaudited Unaudited Audited
Six months Six months Year to
31 July 31 July 31 January
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Cash
(outflow)/
inflow from
operations 5 (1,748) (551) 409
Interest paid (57) (11) (61)
Interest
received - - 1
Income taxes
paid - (39) (147)
--------------------------------------------------------------------------------
Net cash from
operating
activities (1,805) (601) 202
--------------------------------------------------------------------------------
Cash flows from investing
activities
Purchase of intangible assets (32) (72) (100)
(software) (36) (69) (102)
Purchase of
property,
plant and
equipment - - 1
Proceeds from sale of
property, plant and
equipment
--------------------------------------------------------------------------------
Net cash used
in investing
activities (68) (141) (201)
--------------------------------------------------------------------------------
Cash flows from financing
activities
Dividends paid to (574) (351) (488)
shareholders
--------------------------------------------------------------------------------
Net cash used
in financing
activities (574) (351) (488)
--------------------------------------------------------------------------------
Effects of
exchange rate
changes 1 52 (1)
--------------------------------------------------------------------------------
Net decrease
in cash and
cash
equivalents (2,446) (1,041) (488)
Cash and cash 674 1,162 1,162
equivalents at
1 February
--------------------------------------------------------------------------------
(Financial
liability)/cas
h and cash
equivalents at
31 July / 31
January (1,772) 121 674
--------------------------------------------------------------------------------
Statement of Changes in Shareholders' Equity
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
Six months to Six months to Year to
31 July 31 July 31 January
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Profit/(loss)
attributable
to shareholders 313 105 (565)
Dividend paid (574) (351) (488)
--------------------------------------------------------------------------------
Loss for the
period (261) (246) (1,053)
Exchange
movements in
reserves 7 15 (1)
Share option
reserve
movement 50 55 106
--------------------------------------------------------------------------------
Net change in
shareholders'
funds (204) (176) (948)
Opening
shareholders'
funds 12,997 3,904 13,945
--------------------------------------------------------------------------------
Closing
shareholders'
funds 12,793 13,728 12,997
--------------------------------------------------------------------------------
Dividends
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
Six months Six months to Year to
31 July 31 July 31 January
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Approved and paid during
the period
- 2005 Final dividend:1.8p - 351 351
per share - - 137
- 2006 Interim dividend:0.7p 574 - -
per share
- 2006 Final dividend:
2.8p per share
--------------------------------------------------------------------------------
574 351 488
--------------------------------------------------------------------------------
Notes to the Interim Report
1. The interim financial information for the six months ended 31 July 2006 has
been prepared in accordance with IAS34, "Interim Financial Reporting" and
the disclosure requirements of the Listing Rules. It does not include all
the information required for full annual financial statements and should be
read in conjunction with the consolidated financial statements of the Group
for the year ended 31 January 2006.
The interim financial information does not constitute statutory accounts and is
unaudited. It has, however been reviewed by the auditors. Full year figures for
the year ended 31 January 2006 have been extracted from the annual report and
financial statements for that year, which received an unqualified audit opinion
and have been filed with the Registrar of Companies.
The interim financial information is for the six months ended 31 July 2006 and
has been prepared using the same accounting policies as for the financial
statements for the year ended 31 January 2006. The interim report is being sent
to shareholders. Further copies can be obtained from the Company's registered
office at Hanover Place, 8 Ravensbourne Road, Bromley, Kent BR1 1HP.
2. Segment Information.
The Group's primary reporting format is by business segments. Turnover and
profit before taxation for the six months ended 31 July 2006 were generated from
one business segment, the Group's principal activity: recruitment services. The
secondary reporting format is geographical segments based on location of assets.
More than 90% of the Group's turnover, results and net assets relate to assets
located in the United Kingdom, the home of the parent company and accordingly,
no further breakdown is given by geographical segment.
3. The taxation charge for the six months ended 31 July 2006 is based on the
estimated effective tax rate for the full year. The effective rate is higher
than the standard rate of Corporation Tax owing to the effect of
disallowable expenses, prior period tax adjustments and the movement in the
deferred tax asset.
4. The directors do not propose to pay an interim dividend.
5. Basic and diluted earnings per share have been calculated using 19,516,979
shares (31 July 2005: 19,516,979, 31 January 2006: 19,516,979), being the
average number of shares in issue during the period excluding those shares
held by MSB Incentive Scheme Trustee Limited.
6. A reconciliation of profit before tax to cash generated from operating
activities is shown below.
--------------------------------------------------------------------------------
Unaudited Unaudited Audited
six months six months year to 31
to 31 July to 31 July January
2006 2005 2006
#000 #000 #000
--------------------------------------------------------------------------------
Cash flows
from operating
activities 695 163 (558)
Profit/(loss)
before
taxation 88 93 181
Adjustments for:
- Depreciation - - 4
- Loss on disposal of
property, plant and
equipment 58 49 121
- Amortisation
of intangibles 50 55 106
- Share option charge - - (1)
- Interest income 57 11 61
Interest expense (3,353) (3,390) (1,187)
- Increase in trade and 1,156 2,513 1,028
other receivables (499) (45) 654
- Increase in trade and
other payables
- (Decrease)/increase in provision
--------------------------------------------------------------------------------
Net cash
(outflow)/infl
ow from
operations (1,748) (551) 409
--------------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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