TIDMBQS
RNS Number : 2519P
Baqus Group PLC
23 March 2009
FOR RELEASE
7.00 AM
23 MARCH 2009
BAQUS GROUP PLC
("Baqus" or "the Group")
(the building consultancy and quantity surveying group)
Interim results for the 6 months ended 31 December 2008
+-----------------------------+---------+----------------------+--------------------+
| | 6 months to | Pro-forma |
| | | 6 months to |
+-----------------------------+--------------------------------+--------------------+
| | 31 December 2008 | 31 December 2007 |
+-----------------------------+--------------------------------+--------------------+
| | Unaudited | Unaudited |
+-----------------------------+--------------------------------+--------------------+
| | GBP'000 | GBP'000 |
+-----------------------------+--------------------------------+--------------------+
| Revenue | 3,980 | 3,681 |
+-----------------------------+--------------------------------+--------------------+
| Operating profit | 371 | 504 |
+-----------------------------+--------------------------------+--------------------+
| Profit before tax and | 365 | 472 |
| exceptional items | | |
+-----------------------------+--------------------------------+--------------------+
| Profit before tax | 365 | 440 |
+-----------------------------+--------------------------------+--------------------+
| Basic earnings per share (pence) | 0.23p | 0.22p |
+---------------------------------------+----------------------+--------------------+
| Dividend (pence) | 0.05p | 0.05p |
+-----------------------------+---------+----------------------+--------------------+
Key Points
* Strong cash balance of GBP1.55 million at 28 February 2009
* Board recommends dividend of GBP56,625, equivalent to 0.05p per share
* Implemented cost cutting measures to mitigate effects of the Global downturn
* Advanced stage of acquisition negotiations
* Sworn King successfully integrated into the Group
* Cautiously optimistic about the future
Contact:
Baqus Group plc
Clive Sayer (Chief Executive)07967 132 221
Patrick Lineen (Finance Director) 07818 034 452
Seymour Pierce (Nominated Adviser and Broker)
Mark Percy 020 7107 8000
Cubitt Consulting (Financial Public Relations Advisers)
Brian Coleman-Smith / James Verstringhe 020 7367 5100
Background Note:
Baqus was admitted to trading on AIM on the 14 December 2007, having raised
GBP1.75 million through a placing of 17,500,000 Ordinary Shares.
Baqus is a national building consultancy and quantity surveying group offering
construction cost consultancy, project management and building surveying
services to clients in the UK. The Group works across a number of business
sectors including: health, education, leisure, hospitality, affordable housing,
residential, commercial and conservation. Clients include local authorities,
central government, NHS, residential Housing Associations, commercial companies
and developers.
The Quantity Surveying Market in the UK, estimated to be worth in excess of GBP1
billion, is highly fragmented and dominated by a small number of major players,
which the Baqus Group Directors believe make it ripe for consolidation. Since
the Group's admission to AIM, they have been pursuing a strategy of acquiring
small to medium sized Quantity Surveying practices across the country, having so
far successfully boosted Baqus's share of the education and public sector market
through the acquisition of Sworn King and Partners and also signed a share
option agreement with Liverpool based transport and infrastructure specialist,
Brian Hannaby & Associates. Once acquired, the practices are incorporated into
the wider Group with a particular emphasis on exploiting opportunities for
operational synergies with existing business units.
BAQUS GROUP plc
Interim Report 2009
CHAIRMAN'S STATEMENT
I am pleased to report Baqus Group's interim results for the six months ended 31
December 2008.
We are now well into our second year's trading following a successful flotation
in December 2007 and have made steady progress against a background of growing
global economic uncertainty. Very few companies have avoided the effects of the
global downturn, although some have been more affected than others.
At Baqus, due to our range of work sectors we are still enjoying a flow of new
projects, and are weathering the storm reasonably well. However, we remain
cautious in our outlook and are cognisant of the downturn's effect on our
forward order book of GBP8.2m, which remains healthy, but is down on last year's
total of GBP10.1m at 31st December 2007. We have taken direct action to mitigate
this by strengthening our business development team and have allocated one of
our main board directors to a full-time sales role.
Results
The unaudited accounts show the profit before taxation of GBP365,000 for the
half year ended 31st December 2008 (GBP472,000 pro-forma 31st December 2007) on
turnover of GBP3,980,000 (GBP3,681,000 pro-forma 31st December 2007). Earnings
per share are 0.23p (0.22p pro-forma 31st December 2007).
We finished the half year with a reasonable cash position. The cash position has
been affected by the redemption of GBP602,000 of loan notes that were due for
repayment on 14th December 2008. This resulted in the Group having cash of
GBP1.55 million at the 28th February 2009.
Dividend
The board is recommending an interim dividend of GBP56,625 being 0.05p per share
which will be paid out on 27th April 2009 to those shareholders on the register
at 3rd April 2009.
This dividend reflects the confidence the board has in the ongoing performance
of the Group.
Operating Review
The four companies which comprise Baqus namely: Boxall Sayer, Fletcher McNeill,
Denley King and Sworn King are all currently trading well. We are still enjoying
a good level of enquiries but competition for work is fierce and it has been
necessary to reduce margins to secure work. This has meant that cost-cutting
measures have been introduced and cost control has been more vigorous to ensure
that the work remains profitable.
Acquisitions
We expect that the integration of the four companies will be completed within
the next few months so that the accounting processes, IT and marketing will all
benefit.
Sworn King, which was acquired in August of last year, has been successfully
integrated into the Group and is trading profitably. Our policy is to continue
to grow by acquisition and we are at an advanced stage of negotiations to
acquire another company.
Staff
I would like to take the opportunity of thanking my fellow Directors and the
staff throughout the Group for their commitment and hard work. We are
particularly pleased with the way in which the staff of the individual companies
have responded to being part of a larger Group, many of whom see it as an
opportunity to enhance their careers.
Current Outlook and Trading
Although the intake of orders has slowed, we are seeing a good flow of enquiries
from our clients and I am confident that we will be successful in converting a
number of these leads into firm orders at sensible margins. Against this
background, we remain cautiously optimistic that we will achieve our objectives
for this year and beyond.
Roger Knowles
23 March 2009
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| BAQUS GROUP plc - Half year results for the six months ended 31 December 2008 |
+--------------------------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------------------------+
| Condensed Consolidated Income Statement |
+--------------------------------------------------------------------------------------------------+
| for the six months ended 31 December 2008 |
+--------------------------------------------------------------------------------------------------+
| | | | | Pro-forma | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | Six | Six | Six | Year |
| | | months | months | months | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | ended | ended | ended | ended |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | 31-Dec-08 | 31-Dec-07 | 31-Dec-07 | 30-Jun-08 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (unaudited) | (audited) |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Continuing operations | Note | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Revenue | | 3,980 | 341 | 3,681 | 4,363 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Cost of sales | | (2,849) | (207) | (2,206) | (3,195) |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Gross profit | | 1,131 | 134 | 1,475 | 1,168 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Operating expenses | | (760) | (79) | (971) | (630) |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Operating profit | | 371 | 55 | 504 | 538 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Investment revenue | 2 | 43 | 3 | 45 | 48 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Finance costs | 2 | (49) | (6) | (77) | (70) |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Profit before taxation | | 365 | 52 | 472 | 516 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Exceptional items | | - | - | (32) | - |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Taxation | 3 | (103) | (12) | (198) | (160) |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Profit for half year attributable | | 262 | 40 | 242 | 356 |
| to equity holders of the parent | | | | | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | | | | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Dividend (GBP'000) | 4 | 125 | - | 35 | 59 |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Dividend per share | | 0.11p | - | 0.03p | 0.05p |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Basic earnings per share (pence) | 5 | 0.23p | 0.38p | 0.22p | 0.58p |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| Diluted earnings per share (pence) | 5 | 0.21p | - | - | 0.57p |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | | | | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | | | | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
| | | | | | |
+------------------------------------+-------+-------------+-------------+-------------+-----------+
+------------------------------------+------+----------+-------------+-------------+-----------+
| Condensed Consolidated Balance Sheet |
+----------------------------------------------------------------------------------------------+
| at 31 December 2008 |
+----------------------------------------------------------------------------------------------+
| | | | As at | As at | As at |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | 31-Dec-08 | 31-Dec-07 | 30-Jun-08 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | (unaudited) | (unaudited) | (audited) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | Note | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Non-current assets | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Intangible assets | 6 | | 8,443 | 8,236 | 8,276 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Property, plant and equipment | | | 283 | 246 | 230 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | 8,726 | 8,482 | 8,506 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Current assets | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Trade and other receivables | | | 3,257 | 2,986 | 2,888 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Cash and cash equivalents | | | 998 | 1,816 | 2,477 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | 4,255 | 4,802 | 5,365 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Current liabilities | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Trade and other payables | | | (929) | (495) | (1,179) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Current income tax liabilities | | | (314) | (837) | (523) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Borrowings | 7 | | (600) | (617) | (600) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | (1,841) | (1,949) | (2,302) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Net current assets | | | 2,414 | 2,853 | 3,063 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Total assets less current | | | 11,140 | 11,335 | 11,569 |
| liabilities | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Non-current liabilities | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Borrowings | 7 | | (349) | (951) | (951) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Deferred income tax liability | | | (3) | - | (3) |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Net assets | | | 10,786 | 10,384 | 10,615 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Equity | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Share capital | | | 5,662 | 5,625 | 5,625 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Share premium account | | | 4,690 | 4,719 | 4,693 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Retained earnings | | | 434 | 40 | 297 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| Total equity | | | 10,786 | 10,384 | 10,615 |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
| | | | | | |
+------------------------------------+------+----------+-------------+-------------+-----------+
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| |
+------------------------------------------------------------------------------------------------+
| Condensed Consolidated Cash Flow Statement |
+------------------------------------------------------------------------------------------------+
| for the six months to 31 December 2008 |
+------------------------------------------------------------------------------------------------+
| | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | | | Pro-forma | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | Six | Six | Six | |
| | | months | months | months | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | ended | ended | ended | Year |
| | | | | | ended |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | 31-Dec-08 | 31-Dec-07 | 31-Dec-07 | 30-Jun-08 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (unaudited) | (audited) |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Operating profit | | 371 | 55 | 504 | 538 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Adjustments for: | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Depreciation charges | | 40 | 2 | 43 | 46 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Increase in trade and other | | (369) | (48) | (285) | (7) |
| receivables | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Increase in trade and other payables | | (250) | (208) | (37) | 79 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | (208) | (199) | 225 | 656 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Exceptional costs | | | | (32) | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Interest received | | 43 | 2 | 16 | 48 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Interest paid | | (49) | (6) | (13) | (70) |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Tax paid | | (316) | - | (166) | (23) |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Net cash (outflow)/ inflow from | | (530) | (203) | 30 | 611 |
| operating activities | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Investing activities | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Purchase of property, plant and | | (52) | - | (28) | (31) |
| equipment | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Sale of property, plant and | | 5 | - | - | 7 |
| equipment | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Acquisitions net of cash acquired | | (175) | (756) | - | (756) |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Net Cash outflow from investing | | (222) | (756) | (28) | (780) |
| activities | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Financing activities | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Dividends paid | | (125) | - | (35) | (59) |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Receipts from issue of shares | | - | 1,750 | 1,750 | 1,750 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Less issue costs | | - | (526) | (526) | (596) |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Repayment of loan notes | | (602) | - | - | - |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Receipts from issue of loan notes | | - | 1,551 | - | 1,551 |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Net cash(outflow)/ inflow from | | (727) | 2,775 | 1,189 | 2,646 |
| financing activities | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| (Decrease)/Increase in cash | | (1,479) | 1,816 | 1,191 | 2,477 |
| equivalents | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Denley King Partnership overdraft | | - | - | 84 | - |
| retained by partners | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Cash and Cash Equivalents at | | 2,477 | - | 541 | - |
| beginning of period | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| Cash and cash equivalents at end of | | 998 | 1,816 | 1,816 | 2,477 |
| period | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
| | | | | | |
+--------------------------------------+---+-------------+-------------+-------------+-----------+
+--------------------------------------+---+-----------+-----------+-----------+----------+
| |
+-----------------------------------------------------------------------------------------+
| Condensed Consolidated Statement of Changes in Equity |
+-----------------------------------------------------------------------------------------+
| For the six months ended 31 December | | | | | |
| 2008 | | | | | |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| | | Share | Share | Retained | |
| | | | | | |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| | | capital | premium | earnings | Total |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| | | unaudited | unaudited | unaudited | audited |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| Changes in equity | | | | | |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| As at 1 July 2008 | | 5,625 | 4,693 | 297 | 10,615 |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| To fund acquisitions | | 37 | - | 7 | 44 |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| Issue Costs | | - | (10) | - | (10) |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| Equity dividends paid | | - | - | (125) | (125) |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| Total recognised income and expense | | - | - | 262 | 262 |
| for the period | | | | | |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| As at 31 December 2008 | | 5,662 | 4,690 | 434 | 10,786 |
+--------------------------------------+---+-----------+-----------+-----------+----------+
| | | | | | |
+--------------------------------------+---+-----------+-----------+-----------+----------+
+--------------------------------------+---+----------+----------+----------+----------+
| For the year ended 30 June 2008 | | Share | Share | Retained | |
| | | | | | |
+--------------------------------------+---+----------+----------+----------+----------+
| | | capital | premium | earnings | Total |
+--------------------------------------+---+----------+----------+----------+----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+---+----------+----------+----------+----------+
| Changes in equity | | | | | |
+--------------------------------------+---+----------+----------+----------+----------+
| As at 1 July 2007 | | - | - | - | - |
+--------------------------------------+---+----------+----------+----------+----------+
| Issued for cash | | 875 | 875 | - | 1,750 |
+--------------------------------------+---+----------+----------+----------+----------+
| Non-cash consideration : | | | | | |
+--------------------------------------+---+----------+----------+----------+----------+
| To fund acquisitions | | 4,582 | 4,582 | - | 9,164 |
+--------------------------------------+---+----------+----------+----------+----------+
| To promoters | | 168 | 168 | - | 336 |
+--------------------------------------+---+----------+----------+----------+----------+
| Issue Costs | | - | (932) | - | (932) |
+--------------------------------------+---+----------+----------+----------+----------+
| Equity dividends paid | | - | - | (59) | (59) |
+--------------------------------------+---+----------+----------+----------+----------+
| Total recognised income and expense | | - | - | 356 | 356 |
| for the period | | | | | |
+--------------------------------------+---+----------+----------+----------+----------+
| As at 30 June 2008 | | 5,625 | 4,693 | 297 | 10,615 |
+--------------------------------------+---+----------+----------+----------+----------+
| | | | | | |
+--------------------------------------+---+----------+----------+----------+----------+
Note 1. Accounting Policies
Basis of preparation
The results for the period ended 31 December 2008, which are neither audited not
reviewed, have been prepared on the basis of accounting policies consistent with
those set out in the Annual Report to shareholders of Baqus Group plc for the
year ended 30 June 2008.
The condensed consolidated interim financial statements do not include all of
the information and disclosures required for full annual financial statements,
do not comprise statutory accounts within the meaning of Section 435 of the
Companies Act 2006, and should be read in conjunction with the 2008 Annual
Report of Baqus Group plc.
Statutory accounts for the year ended 30 June 2008 were approved by the Board of
Directors on 27 October 2008 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not included a
reference to any matters to which the auditors drew attention by way of emphasis
with qualifying their report and did not contain statements under section 498(2)
or (3) of the Companies Act 2006.
The unaudited results for the six months ended 31 December 2007 reflect a
trading period of only 17 days from the date Baqus Group plc acquired Boxall
Sayer, Denley King and Fletcher McNeill. Proforma comparative information for
the six months ended 31December 2007 has been included representing the
underlying trading performance. The pro-forma comparative information is
unaudited.
The interim financial statements have been prepared on the historical cost basis
and the principal accounting policies adopted are set out below.
Basis of consolidation
The Group's interim financial statements consolidate the interim financial
statements of the Company and entities controlled by the Company (its
subsidiaries). Control is achieved where the company has the power to govern the
financial and operating polices of an investee entity so as to obtain benefits
from its activities. The acquisitions of subsidiaries are accounted using the
purchase method.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition.
Goodwill represents the excess of acquisition cost over the fair value of the
Group's share of the identifiable net assets of the acquired subsidiary at the
date of acquisition. Any deficiency of the cost of acquisition below the fair
value of the identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition.
The results of subsidiaries acquired during the year are included in the
consolidated income statement from the effective date of acquisition or up to
the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the interim financial statements of
subsidiaries to bring accounting policies used into line with those used by the
Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Revenue
Revenue represents the invoiced value of services provided net of value added
tax. It comprises the amounts billed to clients in respect of the provision of
quantity surveying services together with the movement in revenue recognised but
not invoiced.
Revenue recognition
Revenue is recognised as contract activity progresses to reflect the Group's
performance of its contractual obligations. The right to consideration, by
reference to the value of the work performed, is included in the accounts as
accrued income under receivables. Where the amount which the client will accept
or be able to pay is uncertain, provision has been made to reduce the accrued
income to its net realisable value. Where the substance of a contract is that a
right to consideration does not arise until the occurrence of a critical event,
revenue is not recognised until that event occurs.
Retirement benefit costs
Retirement benefits to employees are provided by defined contribution schemes
that are funded by the Group and employees. Payments are made to pension trusts
that are financially separate from the Group.
Goodwill
Goodwill arising from the purchase of subsidiary undertakings, represents the
excess of the cost of acquisition over the Group's interest in the fair value of
the identifiable asset, liabilities and contingent liabilities of the subsidiary
acquired, and is capitalised as an intangible asset in accordance with the
requirements of IFRS 3.
Goodwill is measured at cost less any accumulated impairment losses and is
reviewed annually for any impairment losses. Any impairment losses are
recognised through the income statement.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment losses. Depreciation is provided on all property, plant and
equipment at rates calculated to write off the cost, less estimated residual
value of each asset evenly over its expected useful economic life, as follows:
Motor vehicles 25%-33.33% per annum
Fixtures, fittings and equipment 10-20% per annum
Computer 33-50% per annum
Financial Instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of the
instrument. Issue costs are offset against the proceeds of such instruments.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost. Appropriate allowances for estimated irrecoverable
amounts are recognised in the income statement when there is objective evidence
that the asset is impaired.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances with banks.
Trade payables
Trade payables are initially measured at fair value and subsequently at
amortised cost.
Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. After initial recognition borrowings are
measured at amortised cost. Borrowing costs are recognised in profit and loss in
the period in which they are incurred.
Equity
Equity instruments issued by the Group are recorded at the proceeds received net
of direct costs.
Leasing
Rentals paid under operating leases are charged against profits on a straight
line basis over the period of the lease.
Deferred taxation
Deferred tax is recognised in respect of all temporary differences which have
originated but not reversed at the balance sheet date. Temporary differences are
differences between taxable profits and the results as stated in the interim
financial statements which arise from the inclusion of gains and losses in tax
assessments in periods different from those in which they are recognised in the
interim financial statements.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. The Group has only one class of share in
existence.
Finance costs
Finance costs are recognised in the interim income statement in the year in
which they are incurred.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting
estimates may, by definition, vary from the actual results. The Directors
considered the critical accounting estimates and judgements used in the interim
financial statements and concluded that the main areas of judgement are:
* Revenue recognition policies in respect of contracts which straddle the year
end;
* Valuation of intangible assets.
These estimates are based on historical experience and various other assumptions
that management and the Board of Directors believe are reasonable under the
circumstances and discussed, to the extent necessary, in more detail in their
respective notes.
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| Notes to the Unaudited Interim Report | | | | |
+------------------------------------------+-------------+-------------+-------------+-----------+
| for the 6 months ended 31 December 2008 | | | | |
+------------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| 2 | Investment revenue and finance | | | | |
| | costs | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | Pro-forma | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | Six | Six | Six | |
| | | months | months | months | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | ended | ended | ended | Year |
| | | | | | ended |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | 31-Dec-08 | 31-Dec-07 | 31-Dec-07 | 30-Jun-08 |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (unaudited) | (audited) |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | Investment income: | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | Bank deposits | 43 | 3 | 45 | 48 |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | Finance costs: | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | Interest on loan notes | (49) | (6) | (64) | (65) |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | Interest on bank borrowings | - | - | (13) | (5) |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | (49) | (6) | (77) | (70) |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | |
+----+-------------------------------------------------------------------------------------------+
| 3 | Taxation |
+----+-------------------------------------------------------------------------------------------+
| | The taxation charge for the period ended 31 December 2008 represents the |
| | Director's estimate of the corporation tax liabilities based on the results |
| | for the period. |
+----+-------------------------------------------------------------------------------------------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| 4 | Dividends | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | Pro-forma | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | Six | Six | Six | |
| | | months | months | months | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | ended | ended | ended | Year |
| | | | | | ended |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | 31-Dec-08 | 31-Dec-07 | 31-Dec-07 | 30-Jun-08 |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (unaudited) | (audited) |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | Amounts recognised as distributions | 125 | - | 35 | 59 |
| | to equity holder in the period | | | | |
| | (approved) | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | 125 | - | 35 | 59 |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+-----------+
+----+-------------------------------------+-------------+-------------+-------------+------------+
| 5 | Earnings per share |
+----+--------------------------------------------------------------------------------------------+
| | The calculation of the basic and diluted earnings per share is based on the |
| | following data, determined in accordance with the provisions of IAS33: |
+----+--------------------------------------------------------------------------------------------+
| | |
+----+--------------------------------------------------------------------------------------------+
| | | | | Pro-forma | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | Six | Six | Six | |
| | | months | months | months | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | ended | ended | ended | Year |
| | | | | | ended |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | 31-Dec-08 | 31-Dec-07 | 31-Dec-07 | 30-Jun-08 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | (unaudited) | (unaudited) | (unaudited) | (audited) |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Earnings | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Earnings for the purpose of the | 262 | 40 | 242 | 356 |
| | earnings per share being net profit | | | | |
| | attributable to equity holders of | | | | |
| | the parent | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Number of shares |
+----+--------------------------------------------------------------------------------------------+
| | Weighted average number of ordinary | 113,123,641 | 10,508,244 | 112,500,000 | 61,168,034 |
| | shares for the purpose of basic | | | | |
| | earnings per share | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Weighted average number of ordinary | 124,119,898 | - | - | 62,626,821 |
| | shares for the purpose of diluted | | | | |
| | earnings per share | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | |
+----+--------------------------------------------------------------------------------------------+
| | Basic earnings per share includes shares subject only to time as if they had |
| | been issues at the beginning of the period. |
+----+--------------------------------------------------------------------------------------------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| 6 | Intangible assets | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | Six | Six | Year |
| | | | months | months | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | ended | ended | ended |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | 31-Dec-08 | 31-Dec-07 | 30-Jun-08 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | (unaudited) | (unaudited) | (audited) |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Goodwill | | GBP'000 | GBP'000 | GBP'000 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | As at 1 July 2008 | | 8,276 | - | - |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Recognised on acquisitions in | | 158 | 8,236 | 8,264 |
| | period | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Other | | 9 | - | 12 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | As at 31 December 2008 | | 8,443 | 8,236 | 8,276 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Goodwill comprises the following | | | | |
| | amounts: | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | | | |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Boxall Sayer | | 3,263 | 3,263 | 3,263 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Fletcher McNeill | | 3,107 | 3,107 | 3,107 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Denley King | | 1,894 | 1,866 | 1,894 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Other | | 13 | - | 12 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Sworn King | | 158 | - | - |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | Brian Hannaby | | 8 | - | - |
+----+-------------------------------------+-------------+-------------+-------------+------------+
| | | | 8,443 | 8,236 | 8,276 |
+----+-------------------------------------+-------------+-------------+-------------+------------+
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| 7 | Borrowings | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | Six | Six | Year |
| | | | months | months | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | ended | ended | ended |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | 31-Dec-08 | 31-Dec-07 | 30-Jun-08 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | (unaudited) | (unaudited) | (audited) |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | GBP'000 | GBP'000 | GBP'000 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Loan notes as at 1July 2008 | | 1,551 | - | - |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Loan notes issued during period | | | 1,551 | 1,551 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Loan notes repaid | | (602) | - | - |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Loan notes as at 31 December 2008 | | 949 | 1,551 | 1,551 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | Total | Total | Total |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | GBP,000 | GBP,000 | GBP,000 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Less than one year | | 600 | 617 | 600 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Between one and two years | | 349 | 600 | 600 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Between two and three years | | - | 351 | 351 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | 949 | 1,551 | 1,551 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| 8 | Acquisitions | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Acquisition of Sworn King | | | | |
| | Partnership | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | On 1 August 2008, the Group acquired the fixed assets, work in progress and |
| | goodwill of Sworn King Partnership. The fair value of the consideration given |
| | for the acquisition was GBP200,000. This was satisfied by the issue of 750,000 |
| | shares in Baqus Group plc amounting to GBP37,500 at a premium of GBP7,500. |
| | Baqus paid GBP155,000, with a further GBP50,000 deferred over a period of |
| | three years and GBP162,000 subject to Sworn King achieving certain profit |
| | targets over a three year period. |
+----+----------------------------------------------------------------------------------------+
| | |
+----+----------------------------------------------------------------------------------------+
| | The fair value of the assets was GBP42,000 resulting in goodwill of GBP158,000 |
| | which has been capitalised as an intangible asset. |
+----+----------------------------------------------------------------------------------------+
| | |
+----+----------------------------------------------------------------------------------------+
| | Since acquisition, Sworn King has recorded a profit before tax of GBP17,000. |
+----+----------------------------------------------------------------------------------------+
| | | | | Fair | |
| | | | | value | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | Book | adjustments | Fair |
| | | | value | | value |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | GBP'000 | GBP'000 | GBP'000 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Net assets acquired | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Property, plant and equipment | | 45 | - | 45 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Trade and other receivables | | 17 | - | 17 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Trade and other payables | | (20) | - | (20) |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | | | 42 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Goodwill | | | | 158 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Total consideration | | | | 200 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Satisfied by: | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Shares issued | | | | 45 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | Cash | | | | 155 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | | | 200 |
+----+-------------------------------------+----------+-------------+-------------+-----------+
| | | | | | |
+----+-------------------------------------+----------+-------------+-------------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKKKKOBKDPNB
Baqus Group (LSE:BQS)
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Baqus Group (LSE:BQS)
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