RNS Number:3493T
Vantis PLC
17 December 2003
For Immediate Release 17 December 2003
("Vantis" or the "Group")
Interim Results for the Six Months Ended 31 October 2003
Vantis, the AIM listed accountancy and professional services group, announces
interim results for the six months ended 31 October 2003.
Key points
* Turnover increased 30% to #10.2m (2002: #7.8m);
* Profit before interest, tax and goodwill amortisation increased 29% to
#1.8m (2002: #1.4m);
* Operating margin maintained at 17.5%;
* Adjusted basic eps 3.26p (2002: 3.30p). Prior to the issue of new shares
for cash, adjusted basic eps was up 6% to 3.47p;
* Interim dividend proposed of 1p per share (2002: 0.935p), an increase of
7%;
* Integration of Wheawill & Sudworth, acquired in October 2003, has
proceeded well;
* Gearing reduced to 53% at 31 October 2003 (61% at 30 April 2003);
* On outlook, Paul Gourmand, Chairman said:
"Prospects are encouraging despite a challenging environment and we have made
further appointments of high calibre staff in a number of key areas to enhance
service excellence. We are well positioned for further growth and will continue
our strategy of selecting suitable businesses from a strong pipeline of
acquisition opportunities, which in the opinion of the board will be earnings
enhancing."
For further information:
Paul Gourmand, Chairman
Paul Jackson, Chief Executive
Vantis plc 020 7417 0417
Richard Darby, Suzanne Dunne
Buchanan Communications 020 7466 5000
Notes to Editors
1. Vantis plc is the AIM listed accounting and business advisory group that
specialises in helping business people improve the performance of their
businesses.
2. The Vantis group offers a range of specialist skills, including taxation
services, accountancy, management consultancy, business recovery, corporate
finance, outsourcing, asset finance and independent financial advice.
3. The Vantis group has over 380 staff operating from 13 offices throughout
England and is a member of INPACT, the international network of professional
accountants, which has worldwide representation of 155 firms in 61
countries.
CHAIRMAN'S STATEMENT
I am pleased to report further solid progress across all areas of the business
during the six months ended 31 October 2003. Our results are in line with
expectations despite trading conditions for SMEs, our core target market,
remaining sluggish. This reflects the strength of our management team.
Results
During the period under review, the Group increased turnover by 30% to #10.2
million (2002: #7.8 million) and achieved profit before interest, tax and
goodwill amortisation of #1.789 million (2002: #1.389 million), an increase of
29%. This result is after charging branding and integration costs of #381,000
in the period, such costs having been treated as exceptional in the results for
the year to 30th April 2003 in the sum of #550,000. Similarly, these results
are also after charging the share option discount of #68,000 (2003 full year
#152,000) which is included in group payroll costs. Amortisation of goodwill
arising from acquisitions has been deducted in arriving at the profit before tax
for the period, and this has increased from #138,000 (6 months to 31st October
2002) to #335,000 (6 months to 31st October 2003) in line with expectation.
The operating margin before goodwill amortisation but after higher branding and
integration costs (as above) has been maintained at 17.5% for the period (17.7%
for the 6 months to 31st October 2002), this period being seasonally weaker than
the second half of the year.
The adjusted basic earnings per share excluding exceptional items and goodwill
amortisation amounted to 3.26 pence (2002: 3.30 pence). The equivalent basic
earnings per share being reported was 3.30 pence (there were no funds raised
from share placings in this comparative period), although the equivalent prior
to the issue of new shares for cash in this period was 3.47 pence, an increase
of 6%.
The Directors are pleased to announce that an interim dividend of 1p. per share
is (2002: 0.935p per share) to be paid on 9th February 2004 to shareholders on
the register on 16 January 2004, an increase of 7%.
Integration
In common with our strategy of integrating teams of people and businesses
together, we have continued to recruit additional high calibre key personnel.
In October 2003, we announced the successful acquisition of the non-audit
business of Wheawill & Sudworth, a seven-partner firm based in London. This
acquisition has brought complementary strengths in forensic accounting
(particularly expert witness and litigation), IT and the restaurant/catering
sectors together with expertise in accountancy outsourcing, business and
taxation services.
I am pleased to report that the integration of Wheawill & Sudworth, which was
announced on 13 October 2003, has proceeded well with the firm being relocated
to Vantis' City of London office. Wheawill & Sudworth historically had a
presence in the Thames Valley and we are working to strengthen existing client
relationships and increase our presence in this important geographical area. The
client base is already accessing the wider range of specialist services already
available within Vantis.
Finance
The acquisition of Wheawill & Sudworth was for a maximum consideration of #4.25
million, of which up to #2.814 million is deferred over a two year period to 30
September 2005, subject to performance criteria. Under the terms of the
acquisition, we have acquired net assets of #0.564 million and the non-audit
business of this firm with an estimated turnover of #2.5 million per annum.
We have raised a total of #3.09 million from the placing of new ordinary shares
with institutional investors in August and September. The proceeds from both
placings have been used to augment our existing working capital facilities and
the continuing development of the business.
In August, #400,000 of Unsecured Convertible Loan Notes were converted into
Ordinary shares at 106.5p per share as opposed to the cash alternative available
to the holders. The Unsecured Loan Notes were issued as part consideration for
the purchase of The Custom House (Duty Recovery and Advisory Services), the
acquisition of which was announced on 1 August 2002.
At 31st October 2003, Group borrowings amounted to #7.5 million; gearing was
53%, down from 61% at the 30th April 2003. The diluted weighted number of
Ordinary shares in issue at the half year was 34.831 million, an increase of
4.430 million shares over the period under review, equivalent to 12.7% of the
issued ordinary share capital.
Outlook
I am pleased to report that the Group has continued to perform in line with our
expectations since the end of the half year. Prospects are encouraging despite a
challenging environment and we have made further appointments of high calibre
staff in a number of key areas to enhance service excellence. We are well
positioned for further growth and will continue our strategy of selecting
suitable businesses from a strong pipeline of acquisition opportunities, which
in the opinion of the board will be earnings enhancing.
Paul Gourmand
Chairman
17 December 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2003
Unaudited six months to 31 October 2003
Notes Before
goodwill Goodwill Audited Unaudited six
amortisation amortisation Total year to months to
30 April 31 October
2003 2002
#'000 #'000 #'000 #'000 #'000
Turnover 10,220 - 10,220 18,646 7,838
Movement in work in progress 1,470 - 1,470 1,022 1,229
Other operating income 26 - 26 39 20
External charges: direct expenses (953) - (953) (1,663) (764)
Staff costs and similar charges (6,774) - (6,774) (10,832) (5,338)
Depreciation (171) - (171) (277) (121)
Amortisation - (335) (335) (342) (138)
Depreciation and amortisation (171) (335) (506) (619) (259)
Other operating charges (2,029) - (2,029) (3,378) (1,475)
Operating profit 1 1,789 (335) 1,454 3,215 1,251
Interest receivable and similar - - - 17 15
income
Interest payable and similar (174) - (174) (162) (45)
charges
Profit on ordinary activities 1,615 (335) 1,280 3,070 1,221
before taxation
Taxation on profit on ordinary 2 (505) 56 (449) (1,018) (388)
activities
Profit on ordinary activities 1,110 (279) 831 2,052 833
after taxation
Dividends 3 (365) - (365) (930) (276)
Retained profit for the period 745 (279) 466 1,122 557
Earnings per share (pence per 4
share)
Basic 2.44 6.88 2.83
Diluted 2.39 6.75 2.79
Adjusted basic before goodwill 3.26 7.95 3.30
amortisation
Adjusted diluted before goodwill 3.19 7.80 3.26
amortisation
All amounts relate to continuing activities
CONSOLIDATED BALANCE SHEET
AS AT 31 OCTOBER 2003
Unaudited Audited Unaudited
31 October 2003 30 April 31 October 2002
#'000 2003 #'000
#'000
Fixed assets
Intangible assets 16,516 12,123 6,700
Tangible assets 1,141 1,175 954
Investments 5 5 5
17,662 13,303 7,659
Current assets
Work in progress 4,719 3,116 2,476
Debtors 10,805 8,872 5,227
Cash at bank and in hand 177 25 270
15,701 12,013 7,973
Creditors: amounts falling due within one year (12,803) (10,394) (7,077)
Net current assets 2,898 1,619 896
Total assets less current liabilities 20,560 14,922 8,555
Creditors: amounts falling due after more than one year (6,426) (5,398) (1,431)
Net assets 14,134 9,524 7,124
Capital and reserves
Called up share capital 3,696 3,240 2,949
Share premium account 7,887 4,267 2,662
Merger reserve 732 732 795
Shares to be issued 11 11 86
Other reserves 220 152 75
Profit and loss account 1,588 1,122 557
Equity shareholders' funds 14,134 9,524 7,124
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 OCTOBER 2003
Notes Unaudited Audited Unaudited
six months to year to six months to
31 October 2003 30 April 31 October 2002
#'000 2003 #'000
#'000
Cash flow from operating activities 5 (1,363) (2,561) (2,243)
Returns on investments and servicing of finance
Interest received - 17 15
Interest paid (161) (127) (23)
Interest paid on finance leases (13) (35) (22)
Net cash outflow from returns on investments and (174) (145) (30)
servicing of finance
Taxation (180) (77) (58)
Capital expenditure and financial investment
Purchase of tangible fixed assets (139) (485) (115)
Sale of tangible fixed assets 77 11 -
Net cash outflow from capital expenditure and financial (62) (474) (115)
investments
Acquisitions
Purchase of subsidiary undertakings (2,826) (4,692) (2,370)
Net cash acquired with subsidiary undertakings - 77 155
Net cash outflow from acquisitions (2,826) (4,615) (2,215)
Equity dividends paid (659) (271) -
Cash outflow before management of liquid resources and (5,264) (8,143) (4,661)
financing
Financing
Issue of ordinary shares for cash 3,789 3,229 3,193
Expenses of share issues (112) (701) (672)
Repayment of loans (12) (38) (18)
New loans 1,690 3,267 -
Capital element of finance lease repayments (97-) (166) (83)
Net cash inflow from financing 5,258 5,591 2,420
Decrease in cash in the period 6 (6) (2,552) (2,241)
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 OCTOBER 2003
1. Operating profit
Operating profit includes costs for branding and integration of
#381,000 (30 April 2003 #550,000, 31 October 2002 #200,000) and a
share option discount charge of #68,000 (30 April 2003 #152,000,
31 October 2002 #75,000), central overheads of #728,000 (30 April 2003
#1,225,000, 31 October 2002 #556,000) and plc costs of #579,000
(30 April 2003 #1,129,000, 31 October 2002 #547,000). Whilst the
majority of these are, to some extent, variable to the Group's
activities, they are not expected to increase at the same rate as
other direct costs. The systems that the Group operate are scalable
and capable of dealing with greater volumes.
2. Taxation on profit on ordinary activities
Provision for taxation is based upon taxable profits for the period at
the anticipated effective tax rate for the year of 30%.
3. Dividends
Unaudited Audited Unaudited
six months to year to six months to
31 October 2003 30 April 31 October 2002
#'000 2003 #'000
#'000
Interim 365 271 276
Final - 659 -
365 930 276
4. Earnings per share
Unaudited Audited Unaudited
six months to Year to six months to
31 October 2003 30 April 31 October 2002
#'000 2003 #'000
#'000
Earnings before goodwill amortisation 1,110 2,372 971
Goodwill amortisation (279) (320) (138)
Earnings after goodwill amortisation 831 2,052 833
'000 '000 '000
Weighted average number of shares in issue 34,056 29,833 29,449
Dilution effect of share options 334 168 154
Dilution effect of convertible loan stock 338 362 214
Dilution effect of contingent consideration 103 38 -
Diluted weighted average number of shares 34,831 30,401 29,817
Pence Pence Pence
Basic earnings per share 2.44 6.88 2.83
Diluted earnings per share 2.39 6.75 2.79
Adjusted basic earnings per share before goodwill amortisation 3.26 7.95 3.30
Adjusted diluted earnings per share before goodwill amortisation 3.19 7.80 3.26
The weighted average number of shares used for the basic earnings per share
calculation excludes shares held by the Vantis Employee Benefit Trust which
have not unconditionally vested in identified beneficiaries.
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 OCTOBER 2003
5. Net cash outflow from operating activities
Unaudited Audited Unaudited
six months to year to six months to
31 October 2003 30 April 31 October 2002
#'000 2003 #'000
#'000
Operating profit 1,454 3,215 1,251
Amortisation of goodwill 335 342 138
Depreciation of tangible fixed assets 171 277 121
Profit on assets disposal (7) - -
Share based employee remuneration 68 152 75
Increase in work in progress (1,484) (1,423) (1,006)
Increase in debtors (1,918) (7,494) (4,204)
Increase in creditors 18 2,370 1,382
Net cash outflow from operating activities (1,363) (2,561) (2,243)
6. Analysis of movement in net debt
Audited Unaudited Unaudited Unaudited
30 April cash flow non-cash items 31 October
2003 #'000 2003
#'000 #'000 #'000
Cash balances
Cash at bank and in hand 25 152 - 177
Less:
Bank overdrafts (2,564) (158) - (2,722)
Net cash balances (2,539) (6) - (2,545)
Debt
Loan stock due within one year (89) - (264) (353)
Loan stock due after one year (1,722) - 664 (1,058)
Bank loans due within one year (24) 12 (812) (824)
Bank and other loans due after one year (3,279) (1,690) 812 (4,157)
Finance leases due within one year (133) 23 (13) (123)
Finance leases due after one year (115) 74 (30) (71)
(5,362) (1,581) 357 (6,586)
Net Debt (7,901) (1,587) 357 (9,131)
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 OCTOBER 2003
7. Basis of preparation
The accounting policies and presentation of figures in this
preliminary announcement have been prepared on the same basis as set
out in the group's financial statements for the year ended 30 April
2003.
The financial information set out in the announcement does not
constitute the Company's statutory accounts within the meaning of
section 240 of the Companies Act 1985.
The financial information for the year ended 30 April 2003 is derived
from the statutory accounts which have been delivered to the Registrar
of Companies and on which the auditors gave an unqualified opinion.
These interim results were approved by the board on 12 December 2003.
INDEPENDENT REVIEW REPORT TO VANTIS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 October 2003 which comprises the consolidated profit
and loss account, the consolidated balance sheet, the consolidated cash flow
statement and the related notes 1 to 7. 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 to assist the company in meeting the requirements of the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market. 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. Where a company
is fully listed, the directors are responsible for preparing the interim report
in accordance with the Listing Rules of the Financial Services Authority which
require that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
annual accounts except where any changes, and the reasons for them, are
disclosed. The directors of Vantis Plc have voluntarily complied with this
requirement in preparing the interim report.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom by auditors
of fully listed companies. 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 excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom 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 31 October 2003.
BDO Stoy Hayward
Chartered Accountants
Epsom
17 December 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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