TIDMBQS
RNS Number : 4033B
Baqus Group PLC
27 October 2009
FOR RELEASE
7.00 AM
27 OCTOBER 2009
BAQUS GROUP PLC
("Baqus" or "Group")
(National Construction Consultancy and Quantity Surveying Group)
Preliminary Results for the year ended 30 June 2008
CONSOLIDATED INCOME STATEMENT
For the 12 months ended 30 June 2009
+--------------------------------------+----------------------------+--------------+
| |
+----------------------------------------------------------------------------------+
| | | **Proforma |
+--------------------------------------+----------------------------+--------------+
| | Year to | Year to |
+--------------------------------------+----------------------------+--------------+
| | 30 June | 30 June |
+--------------------------------------+----------------------------+--------------+
| | 2009 | 2008 |
+--------------------------------------+----------------------------+--------------+
| | Unaudited | Unaudited |
+--------------------------------------+----------------------------+--------------+
| | GBP'000 | GBP'000 |
+--------------------------------------+----------------------------+--------------+
| REVENUE | 7,853 | 7,702 |
+--------------------------------------+----------------------------+--------------+
| PROFIT BEFORE TAX | 739 | 1,062 |
+--------------------------------------+----------------------------+--------------+
| BASIC EARNINGS PER SHARE (Pence) | 0.46p | 0.58p |
+--------------------------------------+----------------------------+--------------+
| DIVIDENDS | 0.11 | 0.17 |
+--------------------------------------+----------------------------+--------------+
Key points:
* Profit before tax of GBP739,000
* Cash balances of GBP1.158 million at 30 June 2009
* 2% increase in turnover to GBP7,853,000
* Acquisition of Nigel Rose Group on 30 June 2009
* Board recommending a final dividend of 0.06p on top of an interim dividend of
0.05p
* Pressure on margins
* Focus on generating cost efficiencies through the integration of acquired
businesses
* Increased investment in training and retention of skilled staff
* Strong position to expand through further acquisitions
* Given continued economic volatility, the Group is cautious about the outlook for
the current year
** As the Group was only formed on 14 December 2007 the board has included
unaudited proforma numbers for the year to 30 June 2008 to assist the reader in
understanding the underlying trading of the Group 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, the most
recent of which is Nigel Rose Group. Previous activity includes the acquisition
of Sworn King and Partners in 2008. Once acquired, the practices are
incorporated into the wider Group with a particular emphasis on exploiting
opportunities for operational synergies with existing business units.
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2009
Statement by Chief Executive Officer, Clive Sayer
I am pleased to introduce my Review for the Annual Report for the year ended 30
June 2009. As can be seen in the Financial Director's Report, profits and
earnings per share are close to market expectations and the Group has a healthy
balance sheet with net cash of GBP1.158 million.
In last year's Annual Report, I set out the opportunities and challenges that we
faced in a rapidly changing market.
We knew that we were already into a recessionary situation and 'credit crunch'
and that the years ahead were likely to be difficult. As a Group, we prepared
for the challenges and faced up to them. Whilst sometimes short term actions
have to be taken, it is essential to keep a focus on the medium term so as to
have the business trim, fit and ready to accelerate forward as the business
environment improves.
As a result, the Group concentrated on trimming unnecessary costs and improving
efficiencies whilst keeping the team motivated and continuing to invest in
training for up and coming staff. We have managed to avoid the wholesale
redundancies imposed by some of our rivals which have led to demotivated staff,
unhappy clients and heavy redundancy costs at those firms.
We are making a significant investment in training staff for
environmental, sustainability and health and safety matters as these areas
continue to be an important focus for the wider construction industry and will
provide opportunities for future growth..
The integration of the three founding firms and recent acquisitions continues
apace, enabling a reduction in overall costs and driving efficiency across the
Group. One of the major benefits of increasing the national reach of the Group
has been the ability to service clients on a national scale.
The acquisition of Nigel Rose Group on 30th June 2009 brings another set of
opportunities for rationalisation savings as well as opportunities to work in
sectors in which we have not previously been represented.
I remain convinced that the difficult business climate will present a number of
opportunities for Baqus to acquire other quality firms at competitive cost, many
of which would not have been available in easier times.
Results
The profit before taxation was GBP739,000 (2008: Pro forma GBP1,062,000) for the
year to 30 June 2009 on turnover of GBP7.853 million (2008: Proforma GBP7.7
million). Earnings per share were 0.46p (2008: Proforma earnings per share were
0.56p).
The cash balances at 30 June 2009 were strong at GBP1.158 million following
paying GBP600,000 on 14 December 2008 for partial redemption of the outstanding
loan notes. Some cash has been used for the acquisition of Nigel Rose LLP and
Nigel Rose Management Limited but this has been largely offset by cash generated
from trading activities.
Dividend
An interim dividend of 0.05p was paid on 27 April 2009 and the Board is now
recommending that a final dividend of 0.06468p is paid on 18 December 2009 to
those on the share register on 6 November 2009.
Board
Roger Knowles stood down from the Board of the Group on 31 August 2009 for
personal reasons having served as Chairman since the Group was admitted to
trading on AIM in December 2007. It was his vision that laid the foundations for
Baqus to become one of the first publicly quoted quantity surveying companies in
the UK and we are delighted that he has agreed to continue to act as a
consultant to the Group.
The Board now operates under the firm guidance of Norman Cave, the senior
Non-Executive Director, and I would like to thank him for his contribution over
the past year.
Staff
Baqus has an excellent team of people who have continued to work
enthusiastically despite the lack of pay reviews and an atmosphere of depression
in the construction industry generally. I would like to pay tribute to them and
send my thanks for a job well done.
Future Outlook
I am pleased to report that, despite the economic climate, we are continuing to
win new work in the public sector, albeit often at reduced margins. We
acknowledge that the largest projects are facing cutbacks and delays - a
situation which may get worse after the General Election. However, we have
secured appointments on long term framework contracts, which have already led to
a series of new acute and mental health commissions. We have expanded our team
working on NHS Procure 21, succeeded in winning term contracts for hard
facilities management consultancy services on Private Finance Initiative (PFI)
projects and received a number of commissions as a result of our specialist
expertise acting as Technical Advisor to funders on PFI projects.
There has been a reduced level of activity from many private sector clients over
the past year but we are actively maintaining our strong relationships for when
activity picks up. Nevertheless, we benefit from having a diverse client base
and workload across both private and public sectors and we continue to work hard
with existing clients to remain the consultant of choice whilst also
endeavouring to win new clients.
Some ongoing schemes include:
A number of appointments in the affordable housing sector, including a GBP14
million high profile gateway project at the Mayflower Theatre, Southampton,
working collaboratively with the Theatre Trust, Local Authority and Atlantic
Housing Group to provide a major upgrade of the Theatre and 115 apartments
A series of ongoing projects for a number of Local Authorities to expand and
refurbish primary schools. The increase in birth rate is set to drive demand in
this sector and we expect further commissions to follow.
All London theatres are now charging a 'restoration levy' on each seat sold and
we have been appointed to work on the first major refurbishment under this
initiative at the Palace Theatre, Shaftesbury Avenue, commissioned by the Really
Useful Theatre Company.
Building on our reputation for involvement in sustainability issues, we have
been appointed to work on the new build Portsmouth Continental Ferry building,
due to be operational by Spring 2011. This project will incorporate advanced
sustainable features and ground breaking environmental technology.
We continue to work on a number of hotel projects across the country for leading
operators and specialist developers such as Travelodge and Whitbread (Premier
Inn), an example of which is the GBP7.5million 141 room new build Travelodge
Hotel for Patten Properties on the historic world heritage site, The Strand,
Liverpool.
We are already working on a number of HM Government projects on Grade 1
buildings of national importance. Members of the same team have been
commissioned for the refurbishment of The Royal Academy, London.
In the current financial year, we believe that the construction industry will
continue with a subdued level of activity and we have therefore budgeted for
another challenging period. However, our cash position is strong, the
acquisitions have been successfully integrated and we have excellent people
throughout the Group, which gives me confidence in the long-term future of
Baqus.
Clive Sayer
Chief Executive Officer
27 October 2009
FINANCIAL DIRECTOR'S REPORT
The profit before taxation for the year ended 30 June 2009 was GBP739,000 (2008:
Pro forma GBP1,062,000) which is broadly in line with market expectations on
turnover that increased by 2% from GBP7,702,000 to GBP7,853,000. Earnings per
share fell 21% to 0.46p (2008: Pro-forma earnings per share of 0.56p).
Our operating profit margin of 9.61% (2008: 12.33%) dropped from the previous
period reflecting the increased competitive pressures that we faced in the very
difficult market conditions that persisted throughout the year under review.
The benefits to the Group from the acquisition of Sworn King on 1 August 2009
for a maximum consideration of GBP377,000 has been offset by the impact of the
recession in reducing fee income. Cost of sales rose by 9% from GBP5,116,000 to
GBP5,588,000, mainly as a result of the acquisition of Sworn King staff. In
contrast, overheads have only risen by 1.75% from a pro forma figure of
GBP1,485,000 in 2008, to GBP1,511,000, which reflects the Sworn King acquisition
less cost savings achieved.
As a result of the review of goodwill arising from the acquisitions, we have
concluded that the goodwill is unimpaired. The integration of our businesses,
including the new acquisitions, is ongoing with cost savings of circa GBP100,000
per annum being achieved through this process.
We are continuing to look at ways of reducing our working capital and improve
cash generation. Following the first repayment of GBP600,000 plus interest (at
base rate plus 2.5%) of loan notes owed to former shareholders of subsidiaries
on 14 December 2008, net cash at the year end was GBP1,158,000. Further
repayments of GBP600,000 plus interest are due on 14 December 2009 and
GBP351,000 plus interest on 14 December 2010. We have also used, in aggregate,
GBP340,000 of our cash balances in acquiring Sworn King and Nigel Rose during
the year.
The Group is well advanced with the introduction of a time recording and
management system ,which is due to be completed in the current financial year.
This will give senior management better visibility of staff productivity, job
profitability and work-in-progress and enable us to manage the business more
effectively.
The Group is continuing to evaluate potential acquisitions. Our approach in the
current climate is to offer competitive prices with, normally, a significant
element of deferred, performance-related consideration.
Although trading in the markets in which we operate remains highly competitive,
we are fortunate in having a strong balance sheet, which should sustain us
through this difficult period.
Patrick Lineen
Financial Director
27 October 2009
Consolidated Income Statement
For the year ended 30 June 2009
+-----------------------------------------+--------+---------+-----------+---------+--+
| | | | Year | Year to | |
| | | | to | | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| | | | 30 | 30 June | |
| | | | June | | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| | | | 2009 | 2008 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| | | | Unaudited | Audited | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Continuing operations | | Note | GBP'000 | GBP'000 | |
| | | | | | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Revenue | | 4 | 7,853 | 4,363 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Cost of sales | | | (5,588) | (3,195) | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Gross Profit | | | 2,265 | 1,168 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Operating expenses | | | (1,510) | (630) | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Operating profit | | | 755 | 538 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Investment revenue | | 6 | 51 | 48 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Finance costs | | 6 | (67) | (70) | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Profit before taxation | | | 739 | 516 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Taxation | | 7 | (220) | (160) | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Profit for the year attributable to | | | 519 | 356 | |
| equity holders of the parent | | | | | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| | | | | | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Dividend | | 8 | 181 | 59 | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Basic earnings per share (pence) | | 9 | 0.46p | 0.58p | |
+-----------------------------------------+--------+---------+-----------+---------+--+
| Diluted earnings per share (pence) | | 9 | 0.42p | 0.57p | |
+-----------------------------------------+--------+---------+-----------+---------+--+
Consolidated Balance Sheet
As at 30 June 2009
+-----------------------------------------+--------+---------+-----------+---------+
| | | | As at | As at |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | Unaudited | Audited |
+-----------------------------------------+--------+---------+-----------+---------+
| | | Note | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+-----------+---------+
| Non-current assets | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| Intangible assets | | 10 | 8,466 | 8,276 |
+-----------------------------------------+--------+---------+-----------+---------+
| Property, plant and equipment | | 11 | 332 | 230 |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | 8,798 | 8,506 |
+-----------------------------------------+--------+---------+-----------+---------+
| Current assets | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| Trade and other receivables | | 12 | 3,596 | 2,888 |
+-----------------------------------------+--------+---------+-----------+---------+
| Cash and cash equivalents | | 13 | 1,158 | 2,477 |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | 4,754 | 5,365 |
+-----------------------------------------+--------+---------+-----------+---------+
| Current Liabilities | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| Trade and other payables | | 14 | (1,140) | (1,179) |
+-----------------------------------------+--------+---------+-----------+---------+
| Current income tax liabilities | | | (218) | (523) |
+-----------------------------------------+--------+---------+-----------+---------+
| Borrowings | | 15 | (723) | (600) |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | (2,081) | (2,302) |
+-----------------------------------------+--------+---------+-----------+---------+
| Net current assets | | | 2,673 | 3,063 |
+-----------------------------------------+--------+---------+-----------+---------+
| Total assets less current liabilities | | | 11,471 | 11,569 |
+-----------------------------------------+--------+---------+-----------+---------+
| Non-current liabilities | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| Borrowings | | 15 | (349) | (951) |
+-----------------------------------------+--------+---------+-----------+---------+
| Deferred consideration | | 22.2 | (129) | |
+-----------------------------------------+--------+---------+-----------+---------+
| Deferred income tax liability | | | (5) | (3) |
+-----------------------------------------+--------+---------+-----------+---------+
| Net assets | | | 10,988 | 10,615 |
+-----------------------------------------+--------+---------+-----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| Equity | | | | |
+-----------------------------------------+--------+---------+-----------+---------+
| Share capital | | 16 | 5,663 | 5,625 |
+-----------------------------------------+--------+---------+-----------+---------+
| Share premium account | | 17 | 4,690 | 4,693 |
+-----------------------------------------+--------+---------+-----------+---------+
| Retained earnings | | 18 | 635 | 297 |
+-----------------------------------------+--------+---------+-----------+---------+
| Total equity | | | 10,988 | 10,615 |
+-----------------------------------------+--------+---------+-----------+---------+
Consolidated Cash Flow Statement
for the year ended 30 June 2009
+------------------------------------------------+--+---------+-----------+---------+
| | | | Year to | Year to |
+------------------------------------------------+--+---------+-----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| | | | 2009 | 2008 |
+------------------------------------------------+--+---------+-----------+---------+
| | | | Unaudited | Audited |
+------------------------------------------------+--+---------+-----------+---------+
| | | Note | GBP'000 | GBP'000 |
+------------------------------------------------+--+---------+-----------+---------+
| Operating profit | | | 755 | 538 |
+------------------------------------------------+--+---------+-----------+---------+
| Adjustments for: | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| Depreciation charges | | | 102 | 46 |
+------------------------------------------------+--+---------+-----------+---------+
| Increase in trade and other receivables | | | (557) | (7) |
+------------------------------------------------+--+---------+-----------+---------+
| Increase in trade and other payables | | | 213 | 79 |
+------------------------------------------------+--+---------+-----------+---------+
| | | | 513 | 656 |
+------------------------------------------------+--+---------+-----------+---------+
| Interest received | | | 51 | 48 |
+------------------------------------------------+--+---------+-----------+---------+
| Interest paid | | | (67) | (70) |
+------------------------------------------------+--+---------+-----------+---------+
| Tax paid | | | (528) | (23) |
+------------------------------------------------+--+---------+-----------+---------+
| Net cash (outflow) / inflow from operating | | | (31) | 611 |
| activities | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| Investing activities | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| Purchase of property, plant and equipment | | | (212) | (31) |
+------------------------------------------------+--+---------+-----------+---------+
| Sale of property, plant and equipment | | | 13 | 7 |
+------------------------------------------------+--+---------+-----------+---------+
| Acquisition of subsidiaries net of | | | (463) | (756) |
| cash/(overdrafts) acquired | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| Net outflow from investing activities | | | 662 | 780 |
+------------------------------------------------+--+---------+-----------+---------+
| Financing activities | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| Dividends paid | | 8 | (181) | (59) |
+------------------------------------------------+--+---------+-----------+---------+
| Receipts from issue of shares | | | 45 | 1,750 |
+------------------------------------------------+--+---------+-----------+---------+
| Less issue costs | | | (11) | (596) |
+------------------------------------------------+--+---------+-----------+---------+
| (Repayment)/ issue of loan notes | | | (602) | 1,551 |
+------------------------------------------------+--+---------+-----------+---------+
| Net cash (outflow)/inflow from financing | | | (749) | 2,646 |
| activities | | | | |
+------------------------------------------------+--+---------+-----------+---------+
| (Decrease)/Increase in cash equivalents | | | (1,442) | 2,477 |
+------------------------------------------------+--+---------+-----------+---------+
| Cash movement | | | (1,442) | 2,477 |
+------------------------------------------------+--+---------+-----------+---------+
Consolidated Statement of Changes in Equity
For the year ended 30 June 2009
(Unaudited)
+---------------------------------------------+---------+---------+----------+---------+
| | Share | Share | Retained | |
| | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| | capital | premium | earnings | Total |
| | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| Changes in equity | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| As at 1 July 2008 | 5,625 | 4,693 | 297 | 10,615 |
+---------------------------------------------+---------+---------+----------+---------+
| To acquire subsidiaries | 38 | 7 | | 45 |
+---------------------------------------------+---------+---------+----------+---------+
| Issue costs | | (10) | | (10) |
+---------------------------------------------+---------+---------+----------+---------+
| Equity dividends paid | | | (181) | (181) |
+---------------------------------------------+---------+---------+----------+---------+
| Total recognised income and expense for the | | | 519 | 519 |
| year | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| At 30 June 2009 | 5,663 | 4,690 | 635 | 10,988 |
+---------------------------------------------+---------+---------+----------+---------+
| | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| For the year ended 30 June 2008 | | | | |
| (Audited) | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| | 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 |
+---------------------------------------------+---------+---------+----------+---------+
| 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 for the | | | 356 | 356 |
| year | | | | |
+---------------------------------------------+---------+---------+----------+---------+
| At 30 June 2008 | 5,625 | 4,693 | 297 | 10,615 |
+---------------------------------------------+---------+---------+----------+---------+
Notes to the Consolidated Financial Statements
for the year ended 30 June 2009
1. General information
Baqus Group plc ("the Company") is incorporated in the United Kingdom under the
Companies Act 2006.
The address of the registered office is 2/3 North Mews, London, WC1 2JP. The
principal activities of the Group are set out in the Director's Report.
2. Accounting Policies
The principal accounting policies adopted in the financial statements are set
out below.
Basis of preparation
The Financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS). The Financial statements have also been
prepared in accordance with IFRS adopted for use in the European Union and
therefore comply with Article 4 of the EU IAS Regulation.
Basis of Consolidation
The Group's financial statements consolidate the 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 results of subsidiaries acquired or disposed of 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 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.
Business combinations
The acquisitions of subsidiaries are accounted for using the purchase method.
The cost of the acquisition is measured at the aggregate of the fair values, at
the date of the exchange, of assets given, liabilities incurred or assumed and
equity instruments issued by the Group in exchange for control of the acquiree,
plus any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS3 are recognised at their fair values at
the acquisition date.
Goodwill arising on acquisitions is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination over
the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised.
If, after reassessment, the Group's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities exceeds the cost of
the business combination the excess is immediately recognised in profit and
loss.
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.
Intangible assets
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 will be
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.
Taxation expense
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current taxation
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items that are never taxable or deductible. The Group's liability for
current tax is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at tax rates that are expected to apply in the period
when the liability is settled or the asset is realised. Deferred tax is charged
or credited in the income statement, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also dealt with
in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its currents tax assets and liabilities on a net
basis.
Financial Liability 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 income statement in the year in which they
are incurred.
Share-based payments
Where equity investments are granted to persons other than employees, the income
statement is charged with the fair value of the goods and services received,
except to the extent to which such goods or services form part of the cost of
the acquisition of an asset. In such cases the fair value of goods and services
received is added to the cost of the asset or treated as a cost of issuing the
equity instrument.
The Group issues equity-settled share based payments to certain employees.
Equity-settled share-based payment is expensed on a straight-line basis over the
vesting period, based upon the Group's estimate of shares that will eventually
vest and adjusted for the effect of non-market based vesting conditions.
The Board believes that the current quoted market price in the long run is the
best estimate of fair value. As the current market price is below the share
option price no charge has been made to the income statement.
Critical 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
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 are discussed, to the extent necessary, in more detail in
their respective notes.
3. Adoption of new and revised standards
At the date of authorisation of these financial statements the following
standards and interpretations, which have not been applied in these financial
statements, were in issue but not yet effective.
IAS23 Borrowing costs
IAS1 (Revised) Presentation of financial statements
IFRS8 Operating segments
IFRS3 Business combinations
IAS27 Consolidated and separate financial statements
Amendments to IFRS2 Share-based payment: Vesting conditions and cancellations
Amendments to IAS32 Financial instruments - Presentations of financial
statements; Puttable financial
Instruments and obligations arising on liquidation.
Amendments to IFRS1 and IAS27 - Cost of an investment in a subsidiary, jointly
controlled entity or associate
Amendment IAS39 Financial instruments: Recognition and measurement: Eligible
hedged items
IFRIC 12 Service Concession Agreements
IFRIC 13 Customer loyalty programmes
IFRIC 14 IAS 19 The limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
IFRIC 15 Agreements on the construction of real estate
IFRIC 16 Hedges of a net investment in a foreign operation
The Directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the financial
statements of the Group, except for additional segment disclosures when IFRS8
comes into effect for periods commencing on or after 1 January 2009.
4. Revenue
+-----------------------------------------+--------+---------+----------+---------+
| Analysis of the Group's revenue is as | | | | |
| follows: | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Continuing operations | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Provision of professional services | | | 7,853 | 4,363 |
+-----------------------------------------+--------+---------+----------+---------+
| Investment income | | | 51 | 48 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 7,904 | 4,411 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Segmental analysis | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| The Directors do not consider that it would be appropriate to provide primary |
| or segmental information as they take the view that the Group provides one |
| service of Quantity Surveying to the UK market with no secondary business |
| segments. |
+-----------------------------------------+--------+---------+----------+---------+
5. Profit from operations
+-----------------------------------------+--------+---------+----------+---------+
| Profit from operations has been arrived | | | | |
| at after charging: | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Depreciation of property, plant and | | | | |
| equipment | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| - Owned assets | | | 90 | 43 |
+-----------------------------------------+--------+---------+----------+---------+
| - Under finance assets | | | 12 | 3 |
+-----------------------------------------+--------+---------+----------+---------+
| Operating lease rentals: | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| - Plant and machinery | | | 50 | 40 |
+-----------------------------------------+--------+---------+----------+---------+
| - Property | | | 284 | 143 |
+-----------------------------------------+--------+---------+----------+---------+
6. Investment revenue and finance costs
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Investment revenue: | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Bank deposits | | | 51 | 48 |
+-----------------------------------------+--------+---------+----------+---------+
| Finance costs: | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Interest on loan notes | | | 65 | 65 |
+-----------------------------------------+--------+---------+----------+---------+
| Interest on finance leases | | | 2 | |
+-----------------------------------------+--------+---------+----------+---------+
| Interest on bank borrowings | | | - | 5 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 67 | 70 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
7. Taxation
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Current tax current year | | | 218 | 154 |
+-----------------------------------------+--------+---------+----------+---------+
| Deferred tax current year | | | 2 | 6 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 220 | 160 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Factors affecting tax charge for the | | | | |
| year | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Profit before taxation | | | 739 | 516 |
+-----------------------------------------+--------+---------+----------+---------+
| Profit before taxation multiplied by the standard rate of | 207 | 150 |
| corporation tax in the UK | | |
+------------------------------------------------------------+----------+---------+
| Timing differences | | | (43) | 6 |
+-----------------------------------------+--------+---------+----------+---------+
| Expenses not deductible for tax | | | 54 | 4 |
| purposes | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 218 | 160 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
8. Dividends
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Final dividend for the year ended 30 June 2008 of 0.11 | 125 | |
| pence per share | | |
+------------------------------------------------------------+----------+---------+
| Interim Dividend for the year ended 30 June 2009 of 0.05 | 56 | 59 |
| pence per share | | |
+------------------------------------------------------------+----------+---------+
| | | | 181 | 59 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Proposed final dividend for the year ended 30 June 2009 of | | |
| 0.06468 pence per share (2008 - 0.11 pence per share) | | |
+------------------------------------------------------------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| The proposed final dividend is subject to approval by shareholders at the |
| Annual General Meeting and has not been included as a liability in these |
| financial statements. The total estimated dividend to be paid is GBP73,000 |
+-----------------------------------------+--------+---------+----------+---------+
9. 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: |
+---------------------------------------------------------------------------------------+
| | | | Year to | Year |
| | | | | to |
+-----------------------------------------+--------+---------+-------------+------------+
| | | | 30 June | 30 |
| | | | | June |
+-----------------------------------------+--------+---------+-------------+------------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+-------------+------------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+-------------+------------+
| Earnings | | | | |
+-----------------------------------------+--------+---------+-------------+------------+
| Earnings for the purpose of the earnings per share being | | |
| net profit attributable | | |
+------------------------------------------------------------+-------------+------------+
| of the parent | | | 519 | 356 |
+-----------------------------------------+--------+---------+-------------+------------+
| Number of shares | | | | |
+-----------------------------------------+--------+---------+-------------+------------+
| Weighted average number of ordinary shares for the purpose | 113,186,301 | 61,168,034 |
| of basic earnings per share | | |
+------------------------------------------------------------+-------------+------------+
| Weighted average number of ordinary shares for the purpose | 124,182,558 | 62,626,821 |
| of diluted earnings per share | | |
+------------------------------------------------------------+-------------+------------+
| | | | | |
+-----------------------------------------+--------+---------+-------------+------------+
| Basic earnings per share includes shares to be issued subject only to time as |
| if they had been issued at the beginning of the period. |
+-----------------------------------------+--------+---------+-------------+------------+
10. Intangible assets
+-----------------------------------------+--------+----------+---------+---------+
| | | | Year to | Year to |
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+----------+---------+---------+
| | | | GBP'000 | GBP'000 |
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| Goodwill | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| As at 1 July 2008 | | | 8,276 | - |
+-----------------------------------------+--------+----------+---------+---------+
| Recognised on acquisitions | | | 181 | 8,264 |
+-----------------------------------------+--------+----------+---------+---------+
| Other | | | - | 12 |
+-----------------------------------------+--------+----------+---------+---------+
| As at 30 June 2009 | | | 8,457 | 8,276 |
+-----------------------------------------+--------+----------+---------+---------+
| Intangibles | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| Recognised on acquisitions | | | 9 | - |
+-----------------------------------------+--------+----------+---------+---------+
| As at 30 June 2009 | | | 9 | - |
+-----------------------------------------+--------+----------+---------+---------+
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| Goodwill comprises the following | | | | |
| amounts : | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| | | | Year to | Year to |
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+----------+---------+---------+
| | | | GBP'000 | GBP'000 |
| | | | | |
+-----------------------------------------+--------+----------+---------+---------+
| Boxall Sayer | | | 3,263 | 3,263 |
+-----------------------------------------+--------+----------+---------+---------+
| Fletcher McNeill | | | 3,107 | 3,107 |
+-----------------------------------------+--------+----------+---------+---------+
| Denley King | | | 1,894 | 1,894 |
+-----------------------------------------+--------+----------+---------+---------+
| Sworn King | | | 158 | - |
+-----------------------------------------+--------+----------+---------+---------+
| Nigel Rose | | | 23 | - |
+-----------------------------------------+--------+----------+---------+---------+
| Other | | | 12 | 12 |
+-----------------------------------------+--------+----------+---------+---------+
| | | | 8,457 | 8,276 |
+-----------------------------------------+--------+----------+---------+---------+
The Group tests annually for impairment. The recoverable amounts of the
cash-generating unit (CGUs) are determined from value in use calculations. The
key assumptions for the value in use calculations are those regarding the
discount rates, growth rates and expected changes in selling prices and direct
costs. Management estimates discount rates on the basis of current market
assessments of the time value of money and the risks specific to the CGUs.
Anticipated growth rates, changes in selling prices and direct costs are based
on past practices and expectations of future changes in the market. The Group
has prepared forecasts over the next five years, which have then been
extrapolated for a further eleven years using estimated growth rates for each
CGU, which average 5%. These rates do not exceed the long term growth rates for
the relevant markets. The rate used to discount the forecast cash flows from all
GSUs is 5%.
11. Property, plant and equipment
+-----------------------------------------+---------+---+----------+---------+---+---+---+
| | Computers | Fixtures | Motor | Total |
| | | | cars | |
+-----------------------------------------+-------------+----------+---------+-------+
| Cost | | | | |
+-----------------------------------------+-------------+----------+---------+-------+
| As at 1 July 2008 | 67 | 92 | 110 | 269 |
+-----------------------------------------+-------------+----------+---------+-------+
| Acquisition s | 16 | 18 | 84 | 118 |
+-----------------------------------------+-------------+----------+---------+-------+
| Additions | 42 | 52 | 0 | 94 |
+-----------------------------------------+-------------+----------+---------+-------+
| Disposals | (7) | (9) | (34) | (50) |
+-----------------------------------------+-------------+----------+---------+-------+
| As at 30 June 2009 | 118 | 153 | 160 | 431 |
+-----------------------------------------+-------------+----------+---------+-------+
| Depreciation | | | | |
+-----------------------------------------+-------------+----------+---------+-------+
| As at 1 July 2008 | 15 | 15 | 9 | 39 |
+-----------------------------------------+-------------+----------+---------+-------+
| Charge for the year | 35 | 35 | 32 | 102 |
+-----------------------------------------+-------------+----------+---------+-------+
| Disposals | (7) | (7) | (28) | (42) |
+-----------------------------------------+-------------+----------+---------+-------+
| As at 30 June 2009 | 43 | 43 | 13 | 99 |
+-----------------------------------------+-------------+----------+---------+-------+
| Net book value as at 30 June 2009 | 75 | 110 | 147 | 332 |
+-----------------------------------------+-------------+----------+---------+-------+
| Net book value as at 30 June 2008 | 52 | 77 | 101 | 230 |
+-----------------------------------------+---------+---+----------+---------+---+---+---+
12. Trade and other receivables
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Trade receivables | | | 1,680 | 1,406 |
+-----------------------------------------+--------+---------+----------+---------+
| Allowance for specific doubtful debts | | | (86) | (89) |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 1,594 | 1,317 |
+-----------------------------------------+--------+---------+----------+---------+
| Other receivables | | | 255 | 24 |
+-----------------------------------------+--------+---------+----------+---------+
| Prepayments and accrued income | | | 1,747 | 1,547 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 3,596 | 2,888 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Trade receivables comprise amounts receivable from the | | |
| provision of services. | | |
+------------------------------------------------------------+----------+---------+
| The Directors consider that the carrying amount of trade and other assets |
| approximates to their fair value. |
+-----------------------------------------+--------+---------+----------+---------+
13. Cash and cash equivalents
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Cash and cash equivalents | | | 1,158 | 2,477 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Cash and cash equivalents comprise cash held by the Group and short-term bank |
| deposits with an original maturity of three months or less. |
+-----------------------------------------+--------+---------+----------+---------+
14. Trade and other payables: current liabilities
+------------------------------------------+--------+---------+----------+------+------+
| | | | Year to | Year to |
+------------------------------------------+--------+---------+----------+-------------+
| | | | 30 June | 30 June |
+------------------------------------------+--------+---------+----------+-------------+
| | | | 2009 | 2008 |
+------------------------------------------+--------+---------+----------+-------------+
| Current | | | GBP'000 | GBP'000 |
+------------------------------------------+--------+---------+----------+-------------+
| Trade payables | | | 399 | 268 |
+------------------------------------------+--------+---------+----------+-------------+
| Other payables | | | 71 | 51 |
+------------------------------------------+--------+---------+----------+-------------+
| Other taxes and social security | | | 389 | 394 |
+------------------------------------------+--------+---------+----------+-------------+
| Accruals | | | 281 | 466 |
+------------------------------------------+--------+---------+----------+-------------+
| | | | 1,140 | 1,179 |
+------------------------------------------+--------+---------+----------+-------------+
| | | | | |
+------------------------------------------+--------+---------+----------+-------------+
| Trade and other payables principally comprise amounts outstanding for trade |
| purchases and ongoing costs. |
+-------------------------------------------------------------------------------+
| The average credit period is 53 days (38 days). |
+-------------------------------------------------------------------------------+
| The Directors consider the carrying amounts recognised in the balance sheet |
| to be a reasonable approximation of their value. |
+------------------------------------------+--------+---------+----------+------+------+
15. Borrowings
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Loan notes as at 1 July 2008 | | | 1,551 | - |
+-----------------------------------------+--------+---------+----------+---------+
| Loan notes issued during period | | | - | 1,551 |
+-----------------------------------------+--------+---------+----------+---------+
| Loan notes repaid | | | (602) | - |
+-----------------------------------------+--------+---------+----------+---------+
| Loan notes as at 30 June 2009 | | | 949 | 1,551 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | Total | Total |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Less than one year | | | 600 | 600 |
+-----------------------------------------+--------+---------+----------+---------+
| Between one and two years | | | 349 | 600 |
+-----------------------------------------+--------+---------+----------+---------+
| Between two and three years | | | - | 351 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 949 | 1,551 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| The loan notes were issued on 14 December 2007 following the acquisition by the |
| Group of the three subsidiaries for cash. The vendors loaned the cash element |
| received back to the Group. Loan notes bear interest at National Westminster |
| Bank base rate plus 2.5%. |
+-----------------------------------------+--------+---------+----------+---------+
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Other Short Term Borrowings | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Overdraft of acquisition | | | 123 | - |
+-----------------------------------------+--------+---------+----------+---------+
| As at 30 June 2009 | | | 123 | - |
+-----------------------------------------+--------+---------+----------+---------+
| Current borrowings | | | 723 | 600 |
+-----------------------------------------+--------+---------+----------+---------+
| Non-current borrowings | | | 349 | 951 |
+-----------------------------------------+--------+---------+----------+---------+
16. Share Capital
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Authorised: | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| 250,000,000 ordinary shares of 5p each | | | 12,500 | 12,500 |
| (2008 - 250,000,000). | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| Issued and fully paid (2008: | | | | |
| 112,500,000) | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| 113,250,000 of 5p each | | | 5,663 | 5,625 |
+-----------------------------------------+--------+---------+----------+---------+
| As at 30 June 2009 | | | 5,663 | 5,625 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| At the date of incorporation, the authorised share capital of the Company was |
| GBP1,000 divided into 1,000 ordinary shares of GBP1 each, of which 2 ordinary |
| shares of GBP1 were in issue. |
+---------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| By resolution of the shareholders of the Company passed on 10 December 2007 it |
| was resolved to increase the share capital of the Company from GBP1,000 to |
| GBP12,500,000 by the creation of 12,499,000 ordinary shares of GBP1 each. It |
| was also resolved to subdivide and convert each ordinary share of GBP1 into 20 |
| ordinary shares of 5p each. |
+---------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| At the time of the Company's admission onto AIM on 14 December 2007, |
| 112,500,000 ordinary shares were issued for GBP5,625,000 at a nominal value of |
| 5p each. |
+---------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| 750,000 shares in Baqus Group plc amounting to GBP37,500 were issued upon the |
| acquisition of Sworn King & Partners on 1 August 2008. |
+-----------------------------------------+--------+---------+----------+---------+
17. Share premium account
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| Premium on issue of shares | | | 4,693 | 5,625 |
+-----------------------------------------+--------+---------+----------+---------+
| Issue of shares to promoters | | | - | (336) |
+-----------------------------------------+--------+---------+----------+---------+
| Issue of shares | | | 8 | - |
+-----------------------------------------+--------+---------+----------+---------+
| Expenses of 2007 issue received late | | | (11) | (596) |
+-----------------------------------------+--------+---------+----------+---------+
| As at 30 June 2009 | | | 4,690 | 4,693 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
18. Retained earnings
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| As at 1 July 2008 | | | 297 | - |
+-----------------------------------------+--------+---------+----------+---------+
| Net profit for the year | | | 519 | 356 |
+-----------------------------------------+--------+---------+----------+---------+
| Dividends | | | (181) | (59) |
+-----------------------------------------+--------+---------+----------+---------+
| As at 30 June 2009 | | | 635 | 297 |
+-----------------------------------------+--------+---------+----------+---------+
19. Share based payments
+-----------------------------------------+---------+-------------+----------+-------------+
| During the year and after the flotation on AIM, the Group set up the following |
| share-based payment schemes: |
+------------------------------------------------------------------------------------------+
| | | | | |
+-----------------------------------------+---------+-------------+----------+-------------+
| | | Date | Option | Number |
+-----------------------------------------+---------+-------------+----------+-------------+
| Type of arrangement | | granted | price | granted |
+-----------------------------------------+---------+-------------+----------+-------------+
| EMI Share Options | | 21/04/2008 | 8.38p | 6,930,363 |
+-----------------------------------------+---------+-------------+----------+-------------+
| Share Save Scheme: | | | | |
+-----------------------------------------+---------+-------------+----------+-------------+
| Three Year Scheme | | 18/06/2008 | 5.8p | 1,315,986 |
+-----------------------------------------+---------+-------------+----------+-------------+
| Five Year Scheme | | 18/06/2008 | 5.8p | 2,749,908 |
+-----------------------------------------+---------+-------------+----------+-------------+
| | | | | 10,996,257 |
+-----------------------------------------+---------+-------------+----------+-------------+
| | | 2009 | | 2008 |
+-----------------------------------------+---------+-------------+----------+-------------+
| | | Weighted | | Weighted |
+-----------------------------------------+---------+-------------+----------+-------------+
| | | average | | average |
+-----------------------------------------+---------+-------------+----------+-------------+
| | Number | exercisable | Number | exercisable |
+-----------------------------------------+---------+-------------+----------+-------------+
| | of | price | of | price |
| | options | | options | |
+-----------------------------------------+---------+-------------+----------+-------------+
| | '000s | GBP'000s | '000s | GBP'000s |
+-----------------------------------------+---------+-------------+----------+-------------+
| Outstanding as at 1July 2008 | 10,996 | - | - | - |
+-----------------------------------------+---------+-------------+----------+-------------+
| Granted | - | - | 10,996 | - |
+-----------------------------------------+---------+-------------+----------+-------------+
| Forfeited | - | - | - | - |
+-----------------------------------------+---------+-------------+----------+-------------+
| Exercised | - | - | - | - |
+-----------------------------------------+---------+-------------+----------+-------------+
| Outstanding as at 30 June 2009 | 10,996 | - | 10,996 | - |
+-----------------------------------------+---------+-------------+----------+-------------+
| Exercisable as at 30 June 2009 | - | - | - | - |
+-----------------------------------------+---------+-------------+----------+-------------+
20. Reconciliation of net cash flow to movement in debt
+-----------------------------------------+--------+---------+----------+---------+
| | | | Year to | Year to |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 30 June | 30 June |
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| | | | 2009 | 2008 |
+-----------------------------------------+--------+---------+----------+---------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+---------+----------+---------+
| (Decrease)/Increase in cash in the year | | | (1,442) | 2,477 |
+-----------------------------------------+--------+---------+----------+---------+
| Debt repaid/(taken on) in the year | | | 602 | (1,563) |
+-----------------------------------------+--------+---------+----------+---------+
| Change in net debt | | | (840) | 914 |
+-----------------------------------------+--------+---------+----------+---------+
21. Analysis of changes in net debt for the year ended 30 June 2009
+------------------------------------------------+---------+-----------+---------+
| | 01-Jul | | 30 June |
| | | | |
+------------------------------------------------+---------+-----------+---------+
| | 2008 | Cashflows | 2009 |
+------------------------------------------------+---------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------------+---------+-----------+---------+
| Cash at bank | 2,477 | (1,319) | 1,158 |
+------------------------------------------------+---------+-----------+---------+
| Overdraft arising from acquisition | - | (123) | (123) |
+------------------------------------------------+---------+-----------+---------+
| | 2,477 | (1,442) | 1,035 |
+------------------------------------------------+---------+-----------+---------+
| Debt due within 1 year: | | | |
+------------------------------------------------+---------+-----------+---------+
| Loan notes | (602) | - | (602) |
+------------------------------------------------+---------+-----------+---------+
| Debts due after 1 year | | | |
+------------------------------------------------+---------+-----------+---------+
| Loan notes | (949) | 602 | (347) |
+------------------------------------------------+---------+-----------+---------+
| Total | 926 | (840) | 86 |
+------------------------------------------------+---------+-----------+---------+
22. Acquisitions
22.1 Acquisition of Sworn King and Partners
+--------------------------------------+---------+---------+-------------+------+------+
| On 1 August 2008, the Group acquired the fixed assets, work in progress, |
| goodwill and some payables of Sworn King Partnership. The fair value of the |
| consideration given for the acquisition was GBP200,000. This was satisfied |
| by the issue of750,000 shares in Baqus Group plc amounting ot 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. |
+--------------------------------------------------------------------------------------+
| | | | | |
+--------------------------------------+---------+---------+-------------+-------------+
| | | | 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 |
+--------------------------------------+---------+---------+-------------+------+------+
22.2 Acquisition of Nigel Rose LLP
+-----------------------------------------+--------+---------+----------+---------+---+
| | | | | |
+-----------------------------------------+--------+---------+----------+---------+
| On 30 June 2009, the Group acquired the assets and liabilities of Nigel Rose LLP |
| and Nigel Rose Management Ltd. The fair value of the consideration given for the |
| acquisition was GBP152,000. Of this total GBP23,000 has already been satisfied in |
| cash and the balance of GBP129,000 is to be satisfied by deferred consideration |
| payable on 30 September 2010. |
+-----------------------------------------+--------+---------+----------+---------+---+
+--------------------------------------+---------+---------+-------------+---------+
| The fair value of the assets was GBP152,000. |
+----------------------------------------------------------------------------------+
| | | | | |
+--------------------------------------+---------+---------+-------------+---------+
| | | | Fair value | |
+--------------------------------------+---------+---------+-------------+---------+
| | | Book | adjustments | Fair |
| | | value | | value |
+--------------------------------------+---------+---------+-------------+---------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+---------+---------+-------------+---------+
| Net assets acquired | | | | |
+--------------------------------------+---------+---------+-------------+---------+
| Property, plant and equipment | | 73 | - | 73 |
+--------------------------------------+---------+---------+-------------+---------+
| Trade and other receivables | | 478 | - | 478 |
+--------------------------------------+---------+---------+-------------+---------+
| Cash and cash equivalents | | 1 | - | 1 |
+--------------------------------------+---------+---------+-------------+---------+
| Trade and other payables | | (104) | - | (104) |
+--------------------------------------+---------+---------+-------------+---------+
| Obligations under finance leases | | (60) | - | (60) |
+--------------------------------------+---------+---------+-------------+---------+
| Current tax liabilities | | (87) | - | (87) |
+--------------------------------------+---------+---------+-------------+---------+
| Borrowings | | (123) | - | (123) |
+--------------------------------------+---------+---------+-------------+---------+
| Provisions | | | (49) | (49) |
+--------------------------------------+---------+---------+-------------+---------+
| Good will | | | | 23 |
+--------------------------------------+---------+---------+-------------+---------+
| Total consideration | | | | 152 |
+--------------------------------------+---------+---------+-------------+---------+
| Satisfied by: | | | | |
+--------------------------------------+---------+---------+-------------+---------+
| Deferred consideration | | | | 129 |
+--------------------------------------+---------+---------+-------------+---------+
| Cash | | | | 23 |
+--------------------------------------+---------+---------+-------------+---------+
| Total | | | | 152 |
+--------------------------------------+---------+---------+-------------+---------+
The report and accounts for the year ended 30 June 2009 will be posted to
shareholders shortly and will be available on the Company's website,
www.baqus.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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