RNS Number:5871R
Ashton Penney Holdings PLC
21 February 2007
FOR IMMEDIATE RELEASE 21 February 2007
ASHTON PENNEY HOLDINGS PLC ("the Company")
INTERIM RESULTS
FOR THE PERIOD ENDED 31 DECEMBER 2006
Chairman's Statement
In my statement for the Annual Report dated 29 September 2006 I outlined our
restructuring plan which, although slower to implement than anticipated, had
placed your company on a stronger footing. I am pleased to report that five
months later there has been a significant improvement in the performance of the
company.
Results
The group's results for the six months ending 31 December 2006 show a loss of
#60,195 (year ended 31 December 2005, a loss of #328,105) Revenue grew by 16% to
#2,871,000 for the six months ended 31 December 2006 (2005: #2,478,000)
The principal Key Performance Indicators for the six months ending 31 December
2006 compared with those of the same period in 2005 demonstrate the success of
the plan to change the business model from dependence upon self employed
consultants to a mix of employed and self employed consultants, thus improving
margins. The directors believe this model will continue to result in a higher
level of gross profit.
In the period to 31 December 2006 the directors have also carried out a
fundamental review of the support functions and overhead costs resulting in a
reduction in these costs going forward.
2006 2005 2006
6 months ended 6 months ended 15 month period ended
31 December 31 December 30 June
Gross margins % 29% 18% 18%
% increase in number
of active assignments 20% 0% 17%
Our policy is to continue to target higher value business with an increasing
level of repeat business from key clients.
These are the first results that we have reported under IFRS and all numbers
presented for comparative periods have been restated under IFRS. The changes
resulting from the adoption of IFRS do not affect revenue recognition or the
cash flows of the business. The primary areas of change are the change in
treatment of goodwill, which is now subject to annual impairment reviews rather
than amortisation; and the requirement to show a charge to profit for the share
options granted to employees. Full explanation of the transition to IFRS is
presented in the notes to the financial statements.
During the period Renwick Haddow resigned as a Non Executive Director.
Strategy & Outlook
The Directors will continue to pursue their strategy of growing the business
through providing a first class interim executive resourcing service for our
clients, increasing the number of fee earning consultants, seeking opportunities
to make synergistic acquisitions and developing compatible business activities
that can exploit AshtonPenney's strong brand.
James Wheeler, currently CEO, has decided that with the company's restructuring
completed, his talents will now be best directed to managing AshtonPenney's
increasingly complex and diverse existing and potential client relationships. At
his request he has decided to step aside from his current role with immediate
effect. James will remain on the board as an executive director. His role as CEO
will be assumed by Bruce Page, currently Commercial Director, who has worked
closely with James since joining the company some fourteen months ago and has
more than thirty years' experience in executive recruitment and human capital
consulting.
The 'pipeline' of current opportunities is significantly greater than the
comparative period in early 2006 across all sectors and executive disciplines
and whilst the nature of our business makes it difficult to predict the longer
term position, the Directors believe that the economic climate will remain
positive for the sector and that the opportunities for the business to grow will
continue.
The company has continued to make good progress towards sustainable
profitability and I am particularly grateful for the continuing efforts of
everyone working for AshtonPenney.
Graham Cole
Chairman
Date: 21 February 2007
Consolidated Interim Income Statement for the six months ended 31 December 2006
2006 2005 2006
6 Months to 6 Months to 15 month period ended
31 December 31 December 30 June
Unaudited Unaudited* Unaudited
Note #'000 #'000 #'000
Revenue 1 2,871 2,478 5,513
Cost of sales (2,034) (2,032) (4,497)
Gross profit 837 446 1,016
Operating expenses 5 (882) (754) (2,234)
Operating loss
before financing
costs (45) (308) (1,218)
Financial income - 2 4
Financial expenses (15) (22) (35)
Net financing costs (15) (20) (31)
Loss before tax (60) (328) (1,249)
Taxation - - -
Loss for the financial
period (60) (328) (1,249)
Earnings per share 3
Basic (0.18p) (1.08p) (4.20p)
Diluted (0.18p) (1.08p) (4.20p)
* The loss for the 9 month period ended 31 December 2005 was #589,000
Consolidated Statement of changes in equity as at 31 December 2006
Share Capital Share Capital Total
Profit and Loss Share Premium Ordinary Deferred Equity
account account shares of shares of
#0.01 #0.001
#'000 #'000 #'000 #'000 #'000
Unaudited Unaudited Unaudited Unaudited Unaudited
As at 1 April 2005 (2,589) 263 27 2,206 (93)
Loss for the period 1 April
- 30 June 2005 (261) - - - (261)
Loss for the 6mth period
to 31 December 2005 (328) - - - (328)
Cost of share based payments 1 - - - 1
Shares issued - 1,532 309 - 1,841
Less issue costs - (308) - - (308)
As at 31 Dec 2005 (3,177) 1,487 336 2,206 852
Loss for the 6mth period to
30 June 2006 (660) - - - (660)
Cost of share based payments 21 - - - 21
As at 30 June 2006 (3,816) 1,487 336 2,206 213
Loss for the 6mth period
to 31 December 2006 (60) - - - (60)
Cost of share based payments 21 - - - 21
Shares issued - 80 20 - 100
As at 31 December 2006 (3,855) 1,567 356 2,206 274
Consolidated Interim Balance Sheet as at 31 December 2006
2006 2005 2006
31 December 31 December 30 June
Unaudited Unaudited Unaudited
Note #'000 #'000 #'000
Assets
Intangible assets 5
- Goodwill 911 911 911
- Trademarks and databases 165 185 175
1,076 1,096 1,086
Tangible assets 5 136 173 125
Total non-current assets 1,212 1,269 1,211
Trade receivables 1,031 598 785
Cash 49 125 11
Total current assets 1,080 723 796
Total assets 2,292 1,992 2,007
Equity
Issued capital 2 2,562 2,542 2,542
Share premium 1,567 1,487 1,487
Retained earnings (3,855) (3,177) (3,816)
Total equity 274 852 213
Liabilities
Interest - bearing loans 106 106 106
Finance leases 48 - 109
Total non-current
liabilities 154 106 215
Bank loans 596 381 438
Trade payables 1,208 653 1,141
Other loans 60 - -
Total current liabilities 1,864 1,034 1,579
Total liabilities 2,018 1,140 1,794
Total equity and
liabilities 2,292 1,992 2,007
Consolidated Interim statement of Cash Flows for the six months ended 31
December 2006.
2006 2005 2006
6 Months to 6 Months to 15 month period ended
31 December 31 December 30 June
Unaudited Unaudited Unaudited
#'000 #'000 #'000
Cash flows from operating activities
Cash receipts from customers 2,997 3,086 7,013
Cash paid to suppliers and
employees (3,070) (3,518) (7,869)
Cash generated from operations (73) (432) (856)
Interest Paid (15) (22) (29)
Net cash from operating activities (88) (454) (885)
Cash flows from investing activities
Interest received - 2 4
Payments to acquire tangible fixed
assets (25) (139) (39)
Acquisition of shares in group
undertakings - - (200)
Net cash acquired with subsidiaries - - (278)
Net cash from investing activities (25) (137) (513)
Cash flows from financing activities
Issue of ordinary share capital 100 822 1,208
Expenses paid in connection with share
issues - - (16)
New short term loans received 60 100 100
Capital element of finance lease
repayments (9) - (13)
Payment of transaction costs - (308) (308)
Net cash from financing activities 151 614 971
Net increase in cash and cash
equivalents 38 23 (427)
Cash and cash equivalents at
01 Jan/ 01 July 11 102 438
Cash and cash equivalents 49 125 11
at 31 December/30 June
Notes to the Accounts for the six months ended 31 December 2006
1. Significant accounting policies
Ashton Penney Holdings plc (the "Company") is a company domiciled in England and
whose registered office address is 81 - 82 Gracechurch Street, London, EC3V 0AU.
The condensed consolidated interim financial statements of the Company for the
six months ended 31 December 2006 comprise the Company and its subsidiaries
(together referred to as the "Group").
The condensed consolidated interim financial statements do not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
financial information for the 15 month period ended 30 June 2006 has been
extracted from the statutory accounts for that period. The auditors' report on
these statutory accounts was unqualified and did not contain a statement under
section 237 of the Companies Act 1985. A copy of these financial statements has
been filed with the Registrar of Companies. The Group's date of transition to
IFRS was 1 April 2005 and the condensed consolidated interim financial
statements have been prepared in accordance with the first time adoption
provisions set out in IFRS 1 First-time Adoption of International Financial
Reporting Standards. The condensed consolidated interim financial statements do
not include all of the information required for full annual financial
statements.
The condensed consolidated interim financial statements were authorised for
issuance on 21 February 2007
1.1 Statement of compliance
The interim accounts to 31 December 2006 and 31 December 2005 are unaudited and
have been prepared in accordance with International Financial Reporting
Standards (IFRSs) for interim financial statements adopted by the EU, and those
parts of the Companies Act 1985 applicable to companies reporting under IFRS.
An explanation of how the transition to IFRSs has affected the reported
financial position, financial performance and cash flows of the Group is
provided in note 5. This note includes reconciliations of equity and profit or
loss for comparative periods reported under UK GAAP (previously GAAP) to those
reported for those periods under IFRSs.
1.2 Basis of preparation
The financial statements are prepared on the historical cost basis.
The preparation of interim financial statements in conformity with IAS 34
Interim Financial Reporting requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. Actual results may differ from
these estimates.
The condensed consolidated interim financial statements have been prepared on
the basis of IFRSs in issue that are effective or available for early adoption
at the Group's first IFRS annual reporting date, 30 June 2007. Based on these
IFRSs, the Board of Directors have made assumptions about the accounting
policies expected to be adopted (accounting policies) when the first IFRS annual
financial statements are prepared for the year ending 30 June 2007.
The IFRSs that will be effective or available for voluntary early adoption in
the interim financial statements for the period ended 31 December 2006 are still
subject to change and to the issue of additional interpretation(s) and therefore
cannot be determined with certainty. Accordingly, the accounting policies for
that annual period that are relevant to this interim financial information will
be determined only when the first IFRS financial statements are prepared as at
30 June 2007.
The accounting policies set out below have been applied consistently to all
periods presented in these condensed consolidated interim financial statements.
They also have been applied in preparing an opening IFRS balance sheet at 1
April 2005 for the purposes of the transition to IFRSs, as required by IFRS 1.
1.3 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group
has the power, directly or indirectly, to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. In assessing
control, potential voting rights that presently are exercisable or convertible
are taken into account. The financial statements of subsidiaries are included in
the condensed consolidated interim financial statements from the date that
control commences until the date that control ceases.
The purchase method of accounting is used for the acquisition of subsidiaries by
the Group. The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or assumed at
the date of exchange, plus costs directly attributable to the acquisition.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair values at the
acquisition date, irrespective of the extent of any minority interest. The
excess of the cost of acquisition over the fair value of the Group's share of
the identifiable net assets acquired is recorded as goodwill. If the cost of
acquisition is less than the fair value of the subsidiary acquired, the
difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
1.4 Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation.
Depreciation is charged to profit or loss on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and equipment.
The estimated useful lives are as follows:-
* Leasehold improvements 5 years
* Fixtures and fittings 5 years
* Computer equipment 3 years
The carrying value of tangible fixed assets is reviewed for impairment annually
when events or changes of circumstances indicate the carrying value may not be
recoverable.
1.5 Intangible assets
(a) Goodwill
Goodwill represents the excess of the costs of an acquisition over the fair
value of the Group's share of the net identifiable assets of the acquired
subsidiary at the date of acquisition. Goodwill on acquisition of subsidiaries
is included in 'intangible assets'. Separately recognised goodwill is tested
annually for impairment and carried at cost less accumulated impairment losses.
Impairment losses on goodwill are not reversed. Gains and losses on the disposal
of an entity include the carrying amount of goodwill relating to the entity
sold.
Goodwill is allocated to cash-generating units and is tested at least annually
for impairment or more frequently when there is an indication that the
cash-generating unit may be impaired.
Goodwill was tested for impairment at 1 April 2005, the date of transition to
IFRSs, even though no indication of impairment existed.
(b) Trademarks, licences and databases
Acquired trademarks, licences and databases are shown at historical cost.
Trademarks licences and databases have a finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated using the
straight line method to allocate the cost of trademarks, licences and databases
over their estimated useful lives (10 years)
1.6 Employee benefits
Share-based payment transactions
The EMI share option scheme allows the Group to award employees with equity
settled share based payments in respect of options over Ordinary Shares of 1p
each of the Company. IFRS2 has been applied to all share based payments made by
the Group, none of which were granted prior to 7 November 2002. The fair value
of options granted is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and spread over the
period during which the employees become unconditionally entitled to the
options. The fair value of the options granted is measured using a binomial
lattice model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is adjusted to reflect
the actual number of share options that vest except where forfeiture is only due
to share prices not achieving the threshold for vesting.
1.7 Revenue
Services rendered
The revenue shown in the profit and loss account represents the value of
services provided during the period, stated net of value added tax and typically
arises from the provision of interim managers. Revenue is recognised at the
contractual rate agreed for actual days worked.
1.8 Expenses
Operating lease payments
Payments made under operating leases are recognised in profit or loss on a
straight-line basis over the term of the lease. Lease incentives received are
recognised in profit or loss as an integral part of the total lease expense.
Finance lease payments
Minimum lease payments are apportioned between the finance charge and the
reduction of the outstanding liability. The finance charge is allocated to each
period during the lease term so as to produce a constant periodic rate of
interest on the remaining balance of the liability.
2. Capital and reserves
Share capital and share premium
The Group recorded the following amounts within shareholders' equity as a result
of the issuance of ordinary shares.
Authorised share capital
31 December 2006 31 December 2005 30 June 2006
# # #
600,000,000
ordinary shares of 1p each 6,000,000 6,000,000 6,000,000
4,000,000,000 deferred shares of
0.1p each 4,000,000 4,000,000 4,000,000
Allotted, called up and fully paid Nos Nos Nos
Ordinary shares of 1p each 35,606,125 33,606,125 33,606,125
Deferred shares of 0.1p each 2,206,110,131 2,206,110,131 2,206,110,131
#'000 #'000 #'000
Ordinary shares of 1p each 356 336 336
Deferred shares of 0.1p each 2,206 2,206 2,206
Total 2,562 2,542 2,542
On 5 December 2006 the company issued 2,000,000 ordinary shares of 1p for an
aggregate consideration of #100,000.
3. Earnings per share
Basic earnings per share
The calculation of basic earnings per share for the six months ended 31 December
2006 was based on the loss attributable to ordinary shareholders of #60,195 (six
months ended 31 December 2005: #328,105) and a weighted average number of
ordinary shares outstanding during the six months ended 31 December 2006 of
33,899,602 (six months ended 31 December 2005 : 30,271,895)
The employee share options are non dilutive as the current price is below the
exercise price.
4. Share-based payments
At 1 January 2006, the Group had established a share option programme that
enabled key management personnel and senior employees to be granted shares in
the entity. The terms and conditions of the share option programme and grants
made from the date of commencement of the scheme up to the period ended 31
December 2006 are set out below. Exercise prices are based on the market price
of the shares at date of grant and are agreed with HM Revenue & Customs.
The terms and conditions of the grants made from the date of commencement of the
scheme up to the period ended 31 December 2006 are as follows; all option
exercises are settled by physical delivery of shares:
Average exercise price in # Vesting period and
per share conditions
At 1 April 2005 - -
Granted 250,000 0.0800 3 years of service
At 1 January
2006 250,000 0.0800
Granted 710,000 0.0775 3 years of service
At 30 June 2006 960,000 0.0782
Granted - -
At 31 December
2006 960,000 0.0782
All share options granted vest after 3 years and there are no conditions
applying other than the individual must still be in the Group's employment at
vesting date
The fair values of services received in return for share options granted to
employees are measured by reference to the fair value of share options granted.
The estimate of the fair value of the services received is measured based on a
binomial lattice model. The contractual life of the option (10 years) is used as
an input into this model. Expectations of early exercise are incorporated into
the binomial lattice model.
Fair value of share options and assumptions
For the six months ended 31 December 2006
2006
Fair value at measurement date 13p
Share price at grant date 8p
Exercise price 8p
Number of employees 3
Vesting period 3 years
Shares under option 960,000
Grant dates 2005/2006
Expected volatility (expressed as weighted average volatility used
in the modelling under binomial lattice model) 50%
Option life (expressed as weighted average life used in the modelling 4 years
under binomial lattice model)
Expected dividends nil
Risk-free interest rate (based on national government bonds) 4.18
The expected volatility is based on the historic volatility (calculated based on
the weighted average remaining life of the share options), adjusted for any
expected changes to future volatility due to publicly available information.
There are no market conditions associated with the share option grants.
5. Explanation of transition to IFRSs
As stated in note 1, these are the Group's first condensed consolidated interim
financial statements for part of the period covered by the first IFRS annual
consolidated financial statements prepared in accordance with IFRSs.
The accounting policies in note 1 have been applied in preparing the condensed
consolidated interim financial statements for the six months ended 31 December
2006, the financial statements for the period ended 30 June 2006 and the
preparation of an opening IFRS balance sheet at 1 April 2005 (the Group's date
of transition).
In preparing its opening IFRS balance sheet, comparative information for the six
months ended 31 December 2005 and financial statements for the period ended 30
June 2006, the Group has adjusted amounts reported previously in financial
statements prepared in accordance with previous GAAP.
An explanation of how the transition from previous GAAP to IFRSs has affected
the Group's financial position, financial performance and cash flows is set out
in the following tables and the notes that accompany the tables.
Reconciliation of balance sheet
Effect of Effect of
transition to transition to
Previous IFRSs IFRSs Previous IFRSs IFRSs
GAAP 01 April 2005 GAAP 30 June 2006
Unaudited Unaudited Audited Unaudited
Note #'000 #'000 #'000 #'000 #'000 #'000
Fixed Assets
Goodwill 5(a) - - - 981 (200)
5(a) 130 911
Other intangible assets
Fixed assets - - - 125 - 125
Intangible
Assets 5(a) 200
5(a) (25) 175
_______ _______ _______ _______ _______ _______
Total
non-current
assets - - - 1,106 105 1,211
_______ _______ _______ _______ _______ _______
Current Assets
Trade
receivables 0 0 0 785 0 785
Cash at Bank 0 0 0 11 0 11
_______ _______ _______ _______ _______ _______
Total current
assets 0 0 0 796 0 796
_______ _______ _______ _______ _______ _______
Total assets 0 0 0 1,902 105 2,007
_______ _______ _______ _______ _______ _______
Equity
Issued capital 2,233 0 2,233 2,542 0 2,542
Share premium 263 0 263 1,487 0 1,487
Profit and Loss
Account 5(a) (2,589) 0 (2,589) (3,921) 105 (3,816)
_______ _______ _______ _______ _______ _______
Total equity (93) 0 (93) 108 105 213
_______ _______ _______ _______ _______ _______
Interest
bearing loans 0 0 0 106 0 106
Finance leases 0 0 0 108 0 109
_______ _______ _______ _______ _______ _______
Total
non-current
liabilities 0 0 0 214 0 215
_______ _______ _______ _______ _______ _______
Liabilities
Bank loans 0 0 0 438 0 438
Trade payables 93 0 93 1,142 0 1,141
Other Loans 0 0 0 0 0 0
_______ _______ _______ _______ _______ _______
Total current
liabilities 93 0 93 1,580 0 1,579
_______ _______ _______ _______ _______ _______
Total
liabilities 93 0 93 1,794 0 1,794
_______ _______ _______ _______ _______ _______
Total equity
and liabilities 0 0 0 1,902 105 2,007
_______ _______ _______ _______ _______ _______
Reconciliation of profit and loss account
Effect of Effect of
Previous transition to Previous transition to
GAAP IFRSs IFRSs GAAP IFRSs IFRSs
2005 2006
to 6 Months 2005 to 15 months 30 June 2006
31 December
Unaudited Unaudited Audited Unaudited
Note #'000 #'000 #'000 #'000 #'000 #'000
Revenue 2,478 - 2,478 5,513 - 5,513
Cost of sales (2,032) - (2,032) (4,497) - (4,497)
Gross profit 446 - 446 1,016 - 1,016
Operating
expenses (815) 61 (754) (2,317) 83 (2,234)
Amortisation
of Goodwill
written back 5(a) 77 130
Amortisation
of Intangibles 5(a) (15) (25)
Cost of share
based payments 5(b) (1) (22)
Operating loss
before
financing
costs (369) 61 (308) (1,301) 83 (1,218)
Financial
income 2 - 2 4 - 4
Financial
expenses (22) - (22) (35) - (35)
Net financing
costs (20) - (20) (31) - (31)
Loss for the
financial
period (389) 61 (328) (1,332) 83 (1,249)
Deficit transferred
to retained
earning (389) 61 (328) (1,332) 83 (1,249)
Earnings per
share (1.29p) 0.20p (1.08p) (4.45p) 0.28p (4.20p)
Notes to the reconciliation
(a) Goodwill
The Group has applied IFRS 3 to all business combinations that have occurred
since 1 April 2005 (the date of transition to IFRS). UK GAAP required intangible
assets other than goodwill to be separable from the business acquired to qualify
for separate recognition. IFRSs require all intangible assets arising from legal
or contractual rights to be recognised separately if their fair value can be
established reliably regardless of whether the asset is separable. Accordingly
the Group has revised the measurement of certain assets to fair value at the
date of the business combination in which they were acquired. Additionally,
goodwill on re-stated business combinations is not amortised under IFRSs, but is
tested annually for impairment.
Previously amounts amortised in respect of goodwill totalling #130,000 have been
written back to reserves.
Intangible Assets
The effect is to increase other intangible fixed assets by #200,000 at 31
December 2005 and 30 June 2006. The policy for amortising this asset is to write
it off over 10 years.
A charge of #15,000 has been made to the Profit & Loss Account in respect of
amortisation up to 31 December 2005; a charge of #10,000 has been made in
respect of the six months to 30 June 2006.
(b) The Group has applied IFRS2 to its share-based payment
arrangements at 31 December 2005 and 30 June 2006. The scheme came into being in
October 2005 and the first options were awarded at that time.
UK GAAP only requires a charge to be measured where the exercise price is lower
than the market price at date of grant. IFRSs requires a charge to be measured
based on the fair value of the option granted
The effect of accounting for employee share options at fair value is to increase
staff costs by #1,000 for the six month period ended 31 December 2005 and by
#21,000 for the 15 month period ended 30 June 2006.
Copies of this statement are being sent to all shareholders and are available to
the public on request from the Company's registered office at 81-82 Gracechurch
Street, London EC3V 0AU and on the company's website: www.ashtonpenney.com
Contact: Ashton Penney Holdings Plc
Bruce Page
Tel: +44 (0)20 7337 6900
Beaumont Cornish Limited
Roland Cornish
Tel: +44 (0)20 7628 3396.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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