REAL Real Office

 

TIDMREAL 
 
RNS Number : 3619D 
Real Office Group PLC 
01 December 2009 
 

 
                                      1 December 2009 
 
 
Real Office Group plc ("ROG" or "the Company") 
 
 
Unaudited final results for the period ended 31 July 2009 
 
 
Real Office Group, the AIM quoted global design and build business, today 
announces its unaudited final results for the period ended 31 July 2009. 
 
 
On 30 October 2009, Real Office Group plc stated that it intended to issue its 
final results for the period ended 31 July 2009 during the week commencing 23 
November 2009. Whilst the Company has prepared its unaudited accounts it is 
still working with its auditors to complete the audit. The Company is therefore 
issuing its unaudited accounts for the period ended 31 July 2009 today. The 
audit will be completed as soon as practicable. 
 
 
The Board has prepared its accounts on a going concern basis. However, a 
combination of lower than projected sales for the first quarter to 31 October 
2009, increased credit taken by certain customers, the additional cost of taking 
over the former business of Welconstruct coupled with the delay in commencement 
of some of its contracts has put pressure on working capital resources. New bank 
facilities are required to provide assurance that the business can deal 
effectively with the impact of any unexpected delays on its cash flow going 
forward. Early stage discussions are in process with the Company's bankers, the 
outcome of which are uncertain at this time. 
 
 
Highlights 
 
 
  *  Multi-jurisdictional mergers completed 
  *  Three new geographies opened and trading smoothly 
  *  New service lines coming on stream 
  *  Debt free business 
  *  Solid platform for growth 
 
Commenting on the results, Roger Smee, Executive Chairman and Chief Executive 
Officer of ROG, said: 
"Given the economic backdrop, we are pleased to have made such major strides 
over a very short period of time towards realising our core strategic objectives 
of creating a global office design and build group. The group has a long track 
record of running debt free. However, the Board considers it prudent that the 
Group should put in place bank facilities that allow it to withstand 
fluctuations in the volume of business and enable it to finance acquisitions 
should they arise. The philosophy of running debt free remains a core focus. 
 
 
"An impressive international platform is now in place and our projections for 
2010 are underpinned by an order book of GBP12.8 million. This is an extremely 
exciting and formative time for the Group and I look forward to the future with 
confidence." 
 
 
Contacts: 
 
Real Office Group plc                                                    020 
7822 0989 
Roger Smee, Executive Chairman and Chief Executive Officer 
Philip Brady, Group Finance Director 
 
 
Cenkos Securities plc (Nominated adviser and broker)      020 7397 8900 
Nicholas Wells / Elizabeth Bowman 
 
 
Smithfield                                                                   020 
7360 4900 
Reg Hoare / Rebecca Whitehead 
  Chairman's Statement 
 
 
It has been an excellent year for the Real Office Group. Having regard to the 
significant set up costs of creating the Group and expanding our global network 
against a backdrop of challenging economic circumstances, I am pleased to be 
reporting that group turnover for the year to 31 July 2009 reached GBP44.9 
million with profits of GBP2.796 million, before writing off all of the one off 
costs of buying out minority shareholders, acquiring subsidiaries and relisting 
the company of some GBP2.1 million. 
 
 
Over the last twelve months we have made significant progress towards fulfilling 
our strategic objective, namely to create a global office design and build group 
capable of providing a 'one stop shop' to major national and international 
companies. Our integrated offering allows occupants to focus on their core 
business knowing that their office requirements are being managed centrally to 
ensure a consistently high standard wherever they are in the world. 
 
 
In April we re-listed on AIM and acquired three new companies, Pacific Interiors 
Limited and ISIS Projects Limited (formerly CFC Group Limited), two profitable 
and established UK businesses, and Pacific Middle East Limited, a two year old 
Qatari based business with an active presence throughout the Middle East. The 
integration process for the individual businesses is underway with significant 
knowledge-sharing already occurring across the group. Further plans are in place 
to develop group procurement and treasury management systems to ensure that both 
best practice and best price operate across the group. 
 
 
Meanwhile the 'engine room' of the group, Pacific Interiors in the UK has 
delivered strong performance in a difficult marketplace. Its top tier design 
expertise has acted as a unique selling point for other parts of the group and 
been instrumental in helping to win business in other locations around the 
globe. 
 
 
The Real Office Group global network now includes London, Reading and Birmingham 
in the UK, Doha in Qatar, Dubai and Abu Dhabi in the United Arab Emirates and 
Bangalore, Delhi and Mumbai in India. This expanded platform allows us to 
deliver office fit out solutions at a consistently high level of quality across 
multiple locations. Going forward, we will look to further expand our 
international network so that national and international companies can call on 
our expertise for projects from Saratoga to Sydney. As ever, our strategic 
growth plans focus on countries where significant GDP growth remains and the 
next geographic focus will be further penetration into the Asian and Far Eastern 
markets. 
 
 
Our diversified global base has helped us to cope with the challenging economic 
climate. Whilst trading has been slow to develop in Qatar, we have established a 
new strategic alliance with Rumaillah Group which will allow Pacific Middle East 
to accelerate its growth. As the burgeoning office space of Doha comes on 
stream, the country is increasingly in need of quality design and finishes to 
match other financial capitals of the world. 
 
 
Rumaillah Group is an established market-leading construction services group in 
Doha, that is well connected with those at the top of the Qatari business world. 
Pacific Middle East had worked with Rumaillah for two years and we decided to 
combine our complimentary capabilities into one vehicle that expands the level 
of quality and scope of service of the separate companies. In the United Arab 
Emirates the team have been further strengthened by the arrival of a number of 
experienced design and build professionals and there is a strong pipeline of 
work in both Abu Dhabi and Dubai. 
 
 
Having gained real momentum over the last 12 months, Pacific India is poised for 
growth over the next year. Further strategic alliances with key players in the 
Indian commercial property market are currently being explored to ensure that 
Real Office Group is the first design and build outfit to achieve truly national 
coverage of the country. 
Across India we are seeing increasing demand from international corporates who 
want the same level of reliability, quality and high-end design that they have 
seen in Western markets. We plan to rapidly build up a powerful national 
presence and target the untapped end of the market whose needs are often not met 
by the larger property players and architects. 
 
 
Finally, the newly rebranded ISIS Projects is building a strong order book and 
in October established a Birmingham office and expanded its London operation. 
The new Birmingham office will be staffed by eight project specialists from the 
fit-out and build arm of the recently collapsed Welconstruct Group. ISIS has 
also taken on responsibility for a number of client projects whose project 
launches are imminent. In addition, ISIS has taken on a further eight 
Welconstruct staff for its London office. This enlarged team of over 20 staff 
will help drive continued growth in the London office. 
 
 
In addition to geographic growth, we have worked hard to broaden out the range 
of fitout services offered to clients. As part of this strategy we have launched 
Incotec Global, a specialist IT consultancy capable of delivering bespoke data 
and telecommunications solutions for our clients. The launch of other 
complimentary service lines such as furniture and environmental services will be 
considered as the year progresses. 
 
 
This year we have also been delighted to welcome Andrew Huntley to the Board as 
a non-executive director. He brings over forty years experience in the 
commercial property sector, both in the UK and internationally and his insight 
will be invaluable as the group expands. 
 
 
Given the economic backdrop, we are pleased to have made such major strides over 
a very short period of time towards realising our core strategic objectives of 
creating a global office design and build group. The group has a long track 
record of running debt free. However, the Board considers it prudent that the 
Group should put in place bank facilities that allow it to withstand 
fluctuations in the volume of business and enable it to finance acquisitions 
should they arise. The philosophy of running debt free remains a core focus. 
 
 
An impressive international platform is now in place and our projections for 
2010 are underpinned by an order book of GBP12.8 million. This is an extremely 
exciting and formative time for the Group and I look forward to the future with 
confidence. 
 
 
Roger Smee 
Executive Chairman and Chief Executive Officer 
1 December 2009 
 
 
 
UNAUDITED FINANCIAL STATEMENTS 
Group Income Statement 
For the period ended 31 July 2009 
 
 
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|                                                       |        |          |        2009 |          |      2008 | 
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