TIDMMBE TIDMMWB
RNS Number : 5078R
MWB Business Exchange Plc
20 November 2012
MWB BUSINESS EXCHANGE PLC
REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
Registered number: 5628635
CONTENTS
Highlights for Year Ended 30 June 2012
Chief Executive's Report
Key Financial Highlights
Directors and Principal Advisers
Directors' Biographies
Report of the Directors
Report on Corporate Governance
Report on Remuneration of Directors
Statement of Directors' Responsibilities in Respect of the
Report and Financial Statements
Independent Auditors' Report to the Members of MWB Business
Exchange Plc
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Parent Company Balance Sheet
Notes to Parent Company Financial Statements
Group Business Centres at 30 June 2012
Notice of Annual General Meeting
MWB BUSINESS EXCHANGE PLC - HIGHLIGHTS
FOR YEAR ENDED 30 JUNE 2012
-- Revenue GBP121.1m for the year to 30 June 2012, compared to
GBP165.2m for the previous 18 month period, 10% higher on an
annualised basis.
-- EBITDA(ALPHA>) increased to GBP4.3m for year, compared to
GBP0.9m for the 18 months to 30 June 2011.
-- Overall loss before tax for year was GBP14.8m, against
GBP12.9m loss for the previous period. Provisions against assets
due from MWB Group Holdings Plc total GBP11.5m of this amount.
-- Loss after tax for year was GBP6.4m, against GBP12.9m loss
for the previous period, due to recognition of GBP8.5m deferred tax
asset.
-- Revenue Per Available Workstation (BETA>) (REVPAW)
increased 3% to GBP7,530 at 30 June 2012 from GBP7,318 at 30 June
2011.
-- Revenue Per Occupied Workstation (BETA>) (REVPOW) up 4% to
GBP9,029 at 30 June 2012, compared to GBP8,663 at 30 June 2011.
-- Occupancy (BETA>) 83% at 30 June 2012, against 84% a year earlier.
"London's leading position among global cities gives us a unique
advantage as the capital's largest serviced office provider. As
awareness of our service offering grows, we are increasingly
confident about the prospects for the market over the short and
medium term and remain focused on delivering profitable
growth."
John Spencer, Chief Executive
(ALPHA>) As defined in note 2 to the financial statements.
(BETA>) Statistics relate to leased centres only.
CHIEF EXECUTIVE'S REPORT
Since our previous financial statements, MWB Business Exchange
has performed well against the continued weak macro-economic
background. The improvements that we reported in the second half of
2011 have continued.
Revenue was GBP121.1m for the year to 30 June 2012, compared to
GBP165.2m for the previous 18 month period, an increase of 10% on
an annualised basis. Occupancy has reduced slightly to 83%,
compared to 84% in June 2011. However, our focus on driving yield
has been extremely successful, and as a result revenue per occupied
workstation (REVPOW) has increased by 4% to GBP9,029, with revenue
per available workstation (REVPAW) increasing by 3% to GBP7,530.
Overall earnings before interest, taxation, depreciation and
amortisation (EBITDA) have grown to GBP4.3m, up from GBP0.9m last
year. Our Meeting and Training Venues division has also performed
well, delivering revenue of GBP10.7m, up 6% on an annualised basis
from the previous period.
Our business model of offering unbranded centres in prestigious
locations, coupled with excellent customer service, continues to be
an attractive, unique and sustainable proposition with opportunity
for further growth.
The market
Our position as London's largest serviced office provider
continues to give us a strong advantage over our competitors. The
global focus that London achieved during the summer as a result of
the Olympics has helped maintain and attract a high level of
foreign investment into London as many international businesses
seek to use the capital as their entry point into the UK and
European markets. A consistent driver for our 39 London centres is
the number of business start-ups the city attracts, many of which
are in the technology, media and telecoms sector and seek flexible,
low-risk property solutions. With 160,000 start-ups in London in
2011 (MBD Report 2012), we remain confident that underlying demand
for our services is supported by the continual flow of new
businesses looking to launch themselves from the capital.
Furthermore, in a recent client survey, 75% of our existing clients
said that they expected their business to expand in the next 12
months.
We have also seen growth in the number of corporate clients who
have taken space from us as an alternative to conventional offices.
In October, in conjunction with Reading University, we published a
report on the status of corporate property portfolios in 2012:
"Flexible Real Estate - Perception vs. Reality". The report shows
that serviced office space offers extremely good value compared
with conventional office space. Combined with the reduced business
risk that our flexible office space solution offers, Business
Exchange continues to provide a compelling alternative for this
sector.
Innovation
We have continued to develop our product, and, after a
successful trial, have rolled out our 'Signature Office' range,
which allows clients to customise their own office space. Not only
has this proven extremely popular amongst new and existing clients
but it also commands a premium price.
In January 2012, we re-launched the branding of our Business
Exchange business, with a new, modern identity, a refreshed look,
feel and accompanying website. This has helped us to drive
enquiries, as we communicate a differentiated offer to the market
and build preference for Business Exchange. We have re-branded our
CEC centres as MWB Essential, strengthening the brand and
emphasising the choices available to our clients. We continue to
invest in targeted marketing to drive leads into the business and,
to that end will develop our online platform further in 2013.
We strive to offer the best customer experience and we believe
we offer the highest staff-to-client ratio in the industry. We
understand that a high standard of service is crucial to our
clients as they decide whether or not to renew, refer or repeat
business with us. We recognise that we are part of the hospitality
industry and have invested heavily in our employee training and
culture to reinforce this. The net result is greater client
retention, longer stays and increased REVPAW and REVPOW.
We continue to upgrade our IT & Telecoms offering, and we
have seen an 11% increase in our IT revenue per occupied
workstation (REVITPOW) year-on-year, as clients take more add-on
products and services from us. In addition, we have started the
process of replacing our Customer Relationship Management system,
which will roll out in 2013.
Portfolio development
We are confident in the London market and, after a period of
consolidation, we are now looking to expand Business Exchange with
minimal capital outlay. We have just opened an extra floor in our
Berkeley Street centre which offers a new super-premium product,
adding further choice to our range. We are also imminently
transferring the Canary Wharf centre from an operating and
management contract to a lease, which will give us significantly
more upside as its occupancy grows.
In addition, we are currently reviewing a number of
opportunities for new centres in London to reinforce our leading
position in the capital.
During 2011 our Meeting & Training Venues in our top London
centres benefitted from a refurbishment programme that helped
deliver revenue growth of over 25% for these venues. We are
planning to repeat this process in more centres over the next 12
months.
Our people
Our people are fundamental to Business Exchange and we have
recently re-launched our training programme for all staff in order
to further improve our clients' experience.
I would like to thank all our employees for their hard work,
dedication and loyalty. Their passion and commitment is pivotal to
driving Business Exchange forward.
Majority shareholder
As shareholders may be aware, the Company's majority shareholder
MWB Group Holdings Plc ('Holdings') issued an announcement on 16
November 2012 in which it confirmed it was appointing
administrators with immediate effect. Holdings' announcement
referred to Holdings being unable to meet its liabilities as they
fall due. Business Exchange operates independently from Holdings
and the announcement made by Holdings will have no adverse impact
on the customers or suppliers of Business Exchange, nor any effect
on any of the contractual arrangements of Business Exchange.
Business Exchange generates its own cash flow, has no outstanding
bank borrowings and does not rely on funding provided by Holdings.
Business Exchange has sufficient working capital for its present
requirements and had total assets in excess of GBP78m at 30 June
2012. The appointment of administrators to Holdings is not expected
to have any future impact on the financial position of Business
Exchange or on its operational performance, or on its management
and staff. We are a completely independent and separate business
from Holdings and it remains very much business as usual at
Business Exchange. In light of Holdings' announcement, provision
has been made against the outstanding intercompany balance of
approximately GBP8.3m due by Holdings and its subsidiaries to
Business Exchange.
Outlook
Since 30 June 2012 the Group has performed in line with or
better than budget, sustaining the positive momentum generated in
the second half of the 2011/12 financial year, when EBITDA rose to
GBP3.3m against GBP1.1m in the first half. In particular our
Meeting and Training Venues division has been delivering some
excellent results.
London's leading position among global cities gives us a unique
advantage as the capital's largest serviced office provider. As
awareness of our service offering grows, we are increasingly
confident about the prospects for the market over the short and
medium term and remain focused on delivering profitable growth.
John Spencer
Chief Executive
20 November 2012
KEY FINANCIAL HIGHLIGHTS
The key performance indicators for the business, its trading
performance and other selected information for the year ended 30
June 2012 and the 18 months ended 30 June 2011, are summarised
below:-
Year ended 18 months
30 June 2012 ended
30 June 2011
Operating statistics
Revenue GBP'000 121,080 165,205
Occupancy at year / period end (ALPHA>) % 83 84
Annualised revenue per available
workstation (REVPAW) at year / period
end (ALPHA>) GBP 7,530 7,318
Annualised revenue per occupied
workstation (REVPOW) at year / period
end (ALPHA>) GBP 9,029 8,663
EBITDA (BETA>) GBP'000 4,304 905
Leased centres at year / period
end Number 47 48
Operating and Management Agreement
centres at year / period end Number 7 8
Management contract centres at year
/ period end Number 10 9
Year ended 18 months
30 June 2012 ended
30 June 2011
Financial performance
Loss before tax GBP'000 (14,854) (12,902)
Loss after tax GBP'000 (6,389) (12,908)
Basic loss per share Pence (9.6) (17.5)
At At
30 June 2012 30 June 2011
Other selected information
Property, plant and equipment GBP'000 37,951 43,220
Net cash GBP'000 1,082 (1,865)
Equity attributable to shareholders GBP'000 8,633 14,881
(ALPHA>) Statistics relate to leased centres only.
(BETA>) As defined in note 2 to the financial statements.
DIRECTORS AND PRINCIPAL ADVISERS
DIRECTORS AUDITORS
BDO LLP
J.R. Spencer BEd (Hons) 55 Baker Street
CHIEF EXECUTIVE London W1U 7EU
A.F. Blurton FCA SOLICITORS
CORPORATE FINANCE DIRECTOR Mayer Brown International LLP
201 Bishopsgate
M. Murray BSc (Hons) London EC2M 3AF
NON-EXECUTIVE DIRECTOR
BANKERS
E.F. Sanderson LLB, CA, FCIBS Bank of Scotland Plc
NON-EXECUTIVE DIRECTOR Head Office
The Mound
HEAD OFFICE Edinburgh EH1 1YZ
1 West Garden Place
Kendal Street Barclays Bank Plc
London W2 2AQ 27(th) Floor
One Churchill Place
Telephone: 020 7868 7200 London E14 5HP
Business Centres: 0808 100 1800
Website: www.mwbex.com REGISTRARS & TRANSFER OFFICE
Capita Registrars
NOMINATED ADVISER AND BROKER: Northern House
Nplus1 Singer Advisory LLP Woodsome Park
1 Bartholomew Lane Fenay Bridge
London EC2N 2AX Huddersfield
West Yorkshire HD8 0LA
SECRETARY
Filex Services Limited Telephone: 0871 664 0300 from the
UK (calls cost
10p per minute plus network
extras)
REGISTERED OFFICE Overseas: +44 20 8639 3399
179 Great Portland Street
London W1W 5LS COMPANY NUMBER
5628635
ISIN CODE
GB00B0S53N07
DIRECTORS' BIOGRAPHIES
John Spencer, Chief Executive (aged 54)
Joined the Group as Chief Executive in April 2004. For the
eleven years prior to joining the Group, John worked for Chubb Plc,
the last four of those as managing director of Chubb Fire Limited.
He has been a Director of the principal operating companies in
Business Exchange since he joined the Group in 2004 and he has been
a Director of the Company since November 2005. He is responsible
for running the business and for formulating and implementing the
Board's strategy for delivering profitability and shareholder
value. He is also responsible for liaison between the Company and
its shareholders. John is a member of the Nominations
Committee.
Andrew Blurton, Corporate Finance Director (aged 58)
Andrew Blurton qualified as a Chartered Accountant in 1975 with
Deloitte Haskins & Sells. He has been an executive director of
seven separate UK listed and quoted companies since 1986,
culminating in him being joint finance director of MWB Group
Holdings Plc until his retirement from the board of that company in
January 2010. Andrew joined the board of MWB Business Exchange Plc
in November 2012 as Corporate Finance Director. He has also been
chairman of Manroy Plc, an AIM listed company, since June 2004.
Andrew has many years' experience in corporate finance, equity
raisings, restructurings, corporate management, corporate
governance and UKLA and Stock Exchange regulations. In his role at
Business Exchange, he is providing comprehensive guidance and
assistance on all corporate aspects of the Group, as well as on the
content of financial statements and circulars to be issued by the
Company.
Malcolm Murray, Independent Non-Executive Alternate Chairman
(aged 57)
Joined the Board in February 2011. Prior to that he had thirty
one years' experience in investment management. During his career
he has been involved in most international markets but has always
retained a keen interest in the UK small- and mid-cap sectors. The
majority of his career was spent at Phillips and Drew where he held
various positions and helped develop their distinctive philosophy
of taking significant stakes in companies and working closely with
management on long-term strategy. This approach also delivered one
of the first clearly stated policies on corporate governance. He
has also spent many years as a trustee and given advice on
investment strategy to a number of large pension funds. Malcolm is
Chairman of the Remuneration and Audit Committees and a member of
the Nominations Committee.
Eric Sanderson, Non-Executive Alternate Chairman (aged 61)
Eric Sanderson is a director of Schroder UK Mid Cap Fund Plc. He
is also Chairman of the Court of the University of Dundee. He was
formerly chairman of My Travel Group Plc and of Kwik-Fit Insurance
Services Limited, Chief Executive of the British Linen Bank Limited
and on the management board of Bank of Scotland. He joined the
board of directors of the MWB Group in November 2002 and was
chairman of the MWB Group Audit Committee until his appointment as
Chairman of MWB Group Holdings Plc in April 2005. He was appointed
a Director of the Company in April 2012 and is Chairman of the
Nominations Committee and a member of the Audit and Remuneration
Committees.
REPORT OF THE DIRECTORS
for the year ended 30 June 2012
Introduction
The Directors present their Report and the audited financial
statements of the Group for the year ended 30 June 2012. On 28
April 2011, the Company announced its intention, in line with and
at the request of its majority shareholder MWB Group Holdings Plc,
to change its accounting reference date from 31 December to 30
June. Accordingly comparative figures are for the 18 months ended
30 June 2011 and are thus not directly comparable.
Principal Activities
The Group is a leading provider of flexible serviced offices
with 64 business centres throughout the United Kingdom. The Group's
business centres represent an extremely viable alternative to
conventional office space. They offer advantages of convenience,
flexibility and immediate availability for small and medium-sized
enterprises (SMEs), corporate and other clients.
As set out in note 2 to the financial statements, Segment
Reporting, during 2011/12 the Group changed its brand and reporting
structures. It formerly operated under two distinct brands: four
and five star Business Exchange centres and mid-market City
Executive Centres. It now operates two brands entitled Business
Exchange and MWB Essential which follow the broad lines set out
above, but which are managed and reported on a unified basis.
Within these brands the main revenue lines are serviced offices and
related income; meeting and conference rooms (which are primarily
marketed under the Meeting and Training Venues sub-brand); and
corporate property partnerships, either as operating and management
agreements (OMAs) or as centres managed on behalf of third
parties.
Directors
The Directors who served during the year and to the date of this
Report, except as otherwise stated, were as follows:
J.R. Spencer Chief Executive
R. Aspland-Robinson Executive Director Resigned 13 November 2012
A.F. Blurton Finance Director Appointed 13 November 2012
K. Pankhania Finance Director Resigned 13 November 2012
R.G. Balfour-Lynn Non-Executive Chairman Resigned 31 March 2012
M. Murray Non-Executive Alternate
Chairman
E.F. Sanderson Non-Executive Alternate Appointed 4 April 2012
Chairman
J. Singh Non-Executive Director Resigned 9 May 2012
The articles of association of the Company require that all
Directors appointed by the Board during the year and prior to the
next Annual General Meeting (AGM) retire at the next AGM. Eric
Sanderson was appointed in April 2012 and Andrew Blurton was
appointed in November 2012, both will accordingly put themselves up
for election at the forthcoming AGM.
Details of service contracts between the Company and its
Executive Directors are set out in the Report on Remuneration of
Directors. The Non-Executive Directors do not have service
contracts, but do have Letters of Appointment, with the Company.
Details of the terms of engagement of the Non-Executive Directors
with the Company are set out in the Report on Remuneration of
Directors.
The biographies of the Directors are shown above.
Details of Directors' interests and shareholdings are given in
the Report on Remuneration of Directors.
Corporate Strategy
The Directors have developed a clear strategy for the Group,
which is to build long-term financial returns through the
development of sustainable income streams, whilst reducing
operational risk. Strong organic and acquisitive programmes are
underwritten by dedicated risk mitigation strategies.
The Directors plan that serviced office revenues will grow
organically, primarily by improving yield; however, acquisitions
will be considered when opportunities present themselves. The
principal drivers are occupancy and rate charged. The strategy is
to maintain occupancy at 80% or above and to increase revenues not
only from existing but also from new clients by improved service
delivery. The Board continues to reduce operational risk, both by
reducing the number of clients that occupy more than 15% of any
business centre and by continually reviewing sector reliance.
Virtual offices are offered to organisations who do not wish to
maintain a physical presence at a centre, enabling such clients to
have a prestigious address at low cost.
The Group has always provided meeting and conference rooms at
selected business centres and the Board sees this as a core growth
opportunity. The Board's strategy for Meeting and Training Venues
is to continue to develop the brand and to grow occupancy by
generating bookings from both serviced office clients and the
external market, increasing yield by the provision of add-on
facilities which make the rooms more attractive.
The Board sees corporate property partnerships as a further way
of increasing the profile and revenues of the Group at minimal
risk, since the capital investment in OMAs and managed centres is
made by the other party to the agreement and the Group's revenues
derive from management fees and a share in the profits of centres,
once a specified level of profitability has been achieved.
Business Review
The results for the year are set out in the Statement of
Comprehensive Income and the financial position of the Group is set
out in the Statement of Financial Position. A detailed review of
the Group's operations is set out in the Chief Executive's
Report.
Key Performance Indicators (KPIs) monitored by the Board
The Directors use a number of KPIs which they consider are
effective in measuring the delivery of the business strategy and
assist the Directors in its management. The main KPIs used by the
Directors are as follows:-
Occupancy
Occupancy is calculated on a pro rata basis on the number of
days a room is occupied in a month. This KPI indicates the level of
utilisation of the Group's properties. Occupancy at 30 June 2012
was 83% for leased premises, the comparable figure for the previous
period end was 84%. Since the year end, overall occupancy levels
have been maintained at a minimum of 82% as per the Group's yield
management strategy.
Revenue per available workstation (REVPAW)
REVPAW is the total revenue generated across all available
workstations in the Group's leased premises. This is an annualised
figure based on a month's performance and is a key indicator of
overall yield across the network. REVPAW has increased over the
period by 3% to GBP7,530 in June 2012 compared to GBP7,318 for June
2011. The major reason for this improvement is due to the higher
rates now being obtained from the London leased centres.
Revenue per occupied workstation (REVPOW)
REVPOW is the revenue generated from each occupied workstation
in the Group's leased premises. This is an annualised figure based
on a month's performance and is a key indicator of occupied yield
across the network. REVPOW showed a 4% increase at GBP9,029 in June
2012 compared to GBP8,663 for June 2011, for the reasons explained
under 'REVPAW' above.
The quarterly figures for REVPAW and REVPOW are affected each
year by seasonality. The average REVPAW and REVPOW for the quarter
ended 30 June 2012 were GBP7,573 and GBP9,053 for leased premises
respectively compared to GBP6,946 and GBP8,264 for the same quarter
a year earlier.
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
The Directors consider that EBITDA is a good indicator of the
Group's performance. Note 2 in the financial statements shows how
this is calculated. EBITDA increased to GBP4.3 million for the year
ended 30 June 2012, compared to GBP0.9 million for the 18 months to
30 June 2011.
Substantial interests in the share capital of the Company
The Company has been notified of the following interests which
represent 3% or more of the issued share capital of the Company at
20 November 2012.
Number Percentage
of ordinary
shares held
MWB Group Holdings Plc and certain wholly
owned subsidiaries 48,863,129 75.2%
Pyrrho Investments 7,521,176 11.6%
Global Undervalued Securities Master Fund
LP 3,324,870 5.1%
Duart Capital Offshore 2,534,870 3.9%
62,244,045 95.8%
Our risks and how we manage them
The Board and the Senior Executive team identify and evaluate
risks and uncertainties in the period covered by the Group Business
Plan and design controls to mitigate these. Responsibility for
management of each key risk is identified and delegated by the
Board to specific Executive Directors and Senior Executives within
the Group's operating segments.
The table below describes the principal risks which could
materially affect the Group's business, its operating profits,
earnings, net assets, liquidity and capital resources. The risks
below are not the only ones that the Group faces and some that the
Group does not currently believe to be material could later turn
out to be material.
Risks and Impact Mitigating Actions
--------------------------------------------- ------------------------------------------------------------------
Strategy and finance
--------------------------------------------- ------------------------------------------------------------------
Economic outlook - should economic
conditions deteriorate in the UK * Continual review of office space rates, promotions
this may impact our ability to and marketing in order to adapt to a changing market.
deliver our market share and margin
ambitions. Any adverse impact on
operational performance could affect
the ability of the Group to achieve * Continual review of costs, supplier bases and efforts
value through the increase in its to improve efficiency.
market value which is core to its
strategy.
--------------------------------------------- ------------------------------------------------------------------
Financial flexibility - the Group
has no bank borrowing facilities. * Regular forecasting of cash flows.
* Careful management of the timing of both receipts and
payments.
--------------------------------------------- ------------------------------------------------------------------
Brand values
--------------------------------------------- ------------------------------------------------------------------
Brands - failure of the operating
businesses to meet customers' expectations * Continual review of brand offerings and regular
or loss of customer appeal could customer feedback reviews to ensure customer
adversely impact the value of each preferences are met and revenues maintained.
business as well as its ability
to drive future earnings growth.
* Recruitment of individuals appropriately qualified
and skilled in their field to deliver product
offering and drive profitability.
--------------------------------------------- ------------------------------------------------------------------
Operational
--------------------------------------------- ------------------------------------------------------------------
Differing revenue and cost base
profiles - the length of the leases * Occupancy levels are controlled and strategies drawn
relating to the majority of the up to ensure property occupation is maximised.
properties out of which the Group
operates are nearly always longer
than the duration of the period
of occupation by particular clients. * The ability to sublet has been retained.
If revenues decline, it may not
be able to reduce its property
related cost base to the same degree.
* Business is also derived from Operating and
Management Agreements and Management Contracts
generating income streams regardless of lease
occupancy costs.
--------------------------------------------- ------------------------------------------------------------------
Reliance on the London market -
with the majority of workstations * The position and the market is continually monitored.
in the capital, a downturn in the Dedicated marketing and sales resources are deployed
London market would have a disproportionate to ensure occupancies and revenues are maintained.
impact on the business.
--------------------------------------------- ------------------------------------------------------------------
Results
The results of the Group for the year ended 30 June 2012 are
summarised as follows:
Year ended 18 months ended
30 June 2012 30 June 2011
GBP'000 GBP'000
Loss for the year / period after taxation (6,389) (12,908)
Basic loss per share, based on weighted
average number of shares in issue during
the year / period (9.6p) (17.5p)
Dividend paid in year / period - -
Further details of the results are set out in the Statement of
Comprehensive Income. The exceptional items of GBP15.2 million
(2011/12) and GBP4.1 million (2010/11) are described in note 5 to
the financial statements. There is further commentary in the Chief
Executive's Report on the provision of GBP11.5 million against
assets due from subsidiaries of MWB Group Holdings Plc, the
Company's majority shareholder, which forms the major part of the
2011/12 exceptional items.
Intangible assets
Goodwill of GBP7.6 million arose during 2007 from the
acquisition of Stanhope Business Centres Limited. The goodwill
recognised arose from the efficiencies and improved performance
gained from the assimilation of the new centres into the Group's
network and the strengthening of its brand to become the dominant
provider of serviced office accommodation in the London region.
An impairment review was undertaken by the Directors at 30 June
2012 comparing the carrying value of goodwill with the recoverable
amount of the cash-generating units to which goodwill was
allocated. As a result of this review, the Directors have
determined that there has been no impairment to the Stanhope
Business Centres Limited goodwill during the year ended 30 June
2012.
Cash flow
The Statement of Cash Flows shows the funds generated by the
Group, those raised from or repaid to external sources, the
investments made and the effect thereof on the Group's cash
position.
This can be summarised as follows:-
Year ended 18 months ended
30 June 2012 30 June 2011
GBP'000 GBP'000
Net cash inflow from operating activities 5,219 3,814
Net cash outflow from investing activities (2,272) (11,655)
Net cash used in financing activities - (457)
Net increase / (decrease) in cash and cash
equivalents 2,947 (8,298)
Opening cash and cash equivalents (1,865) 6,433
Closing cash and cash equivalents 1,082 (1,865)
Going concern
The Group has financial resources together with a broad range of
customers across many sectors and long-term contracts with its
principal suppliers. As a consequence, the Directors believe that
the Group is well placed to manage its business risks successfully
despite the current uncertain economic outlook.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future, based on detailed cash flow projections
extending to December 2013 (see note 1 to the financial statements
and the Report on Corporate Governance). Thus they continue to
adopt the going concern basis in preparing the annual financial
statements.
Employment policies
The Group's employment and remuneration policies are summarised
below.
Donations
The Group made GBP1,000 of charitable donations during the year
(2010/11: GBP55,265). No political donations were made in either
2011/12 or 2010/11.
Environmental responsibility and health and safety
The Company considers that corporate social responsibility and
effective corporate governance are important components of its
businesses. Thus the entire Group is committed to fair treatment of
all stakeholders in the business, responsible employment policies
and, where appropriate, involvement in the communities in which its
businesses operate.
The Group's risk review assists the Board in identifying and
assessing risks that could affect the businesses of the Group. This
in turn enables them to implement appropriate social, ethical and
environmental policies in conjunction with the financial policies
of the Group. The Group does not operate in areas of high
environmental risk. One of its principal environmental impacts
arises from energy consumption, which the Group continues to
monitor and to set reduction targets where practicable. The Group
also seeks to reduce the impact of paper usage by recycling and by
the increasing use of online transmissions and electronic data
collection.
The Board continues to operate the business in pursuit of good
environmental standards at properties managed and occupied by the
Group. Environmental considerations by the Group include the
following:
-- Respecting the environment in which it operates, whilst
maintaining commercial viability and long-term profitability.
-- Setting objectives and targets and monitoring performance to
ensure adherence. Raising environmental awareness of employees,
agents and clients. Working in partnership with suppliers and
contractors to ensure effective management of environmental and
social impacts and to minimise any adverse impact of the Group's
operations on the environment.
-- Compliance with relevant legislation and related requirements.
-- Undertaking environmental risk assessments as part of the due
diligence process prior to entering new agreements or on acquiring
new properties.
-- Designing energy efficiency into new buildings that are
acquired, operated or managed by the Group and ensuring that energy
is used wisely in all of the Group's operations.
The Group employs project managers and building surveyors who
are responsible for monitoring adherence to the Group's
environmental policy in relation to the specific projects and
properties which they handle. Ultimate responsibility for
environmental issues within the Group rests with John Spencer, the
Chief Executive of the Company.
The Board continues to adopt high levels of health and safety at
work. Health and safety considerations are addressed as
follows:-
-- Providing a good working environment for employees and
treating them all with fairness, dignity and respect.
-- Promoting a high standard of health and safety for clients, staff and contractors.
-- Operating an equal opportunities policy to ensure all job applicants are treated equally.
-- Compliance with relevant legislation and related requirements.
-- Ensuring that health and safety is a high priority and is
factored into the design of new buildings and developments
undertaken by the Group.
-- Introducing measures to protect workers, visitors and clients
from unacceptable risks and hazards.
-- Ensuring that a safe and healthy working environment is
maintained for the well-being of all employees.
-- Providing first aid training to selected senior employees at
each Group location to ensure the Group has senior employees able
to handle issues in an efficient and beneficial manner.
The Group ensures that health and safety issues in relation to
buildings and developments are the responsibility of the health and
safety manager, project managers and building surveyors. Overall
responsibility for health and safety issues within the Group rests
with John Spencer, the Chief Executive of the Company.
Payment policy for creditors
The Group's policy is to use its purchasing power fairly and,
wherever possible, to pay in accordance with terms agreed with
suppliers.
The Group agrees payment terms with suppliers when it orders
items or commits expenditure. It is the Group's policy to make
payments for purchases on agreed terms, provided that the relevant
invoice is presented to the Group in a timely fashion and is
complete. It seeks to adhere to these arrangements providing it is
satisfied that the supplier has provided the goods or services in
accordance with the agreed terms and conditions. In instances where
delays in payments occur, remedial action is sanctioned by an
executive of the Company. Amounts due to creditors of the Group are
paid on average within 26 (2010/11: 27) days from receipt of
invoice.
Directors' indemnities and Directors' and Officers' liability
insurance
In accordance with the Company's articles of association, the
Directors are granted an indemnity from the Company to the extent
permitted by law in respect of liabilities incurred as a result of
their office as Directors. In accordance with the provisions of
Section 234 of the Companies Act 2006, liability insurance cover
has also been maintained during the year by the Group in respect of
Directors and senior executives of the Group.
Information to auditors
The Directors who held office at the date of approval of this
Report of the Directors confirm that, so far as they are aware,
there is no relevant audit information of which the Company's
auditors are unaware and each Director has taken all the steps that
he ought to have taken as a Director to make himself aware of any
relevant audit information and to establish that the Company's
auditors are aware of that information.
Significant agreements
The Long-Term Incentive Scheme, is described in the Report on
Remuneration of Directors.
There are a number of commercial contracts in the Group that
could alter in the event of a change of control of the Company,
although none is considered to be material in terms of its
potential impact on the Group as a whole.
Auditors
A resolution proposing the re-appointment of BDO LLP as auditors
of the Company and authorising the Directors to agree their
remuneration will be proposed at the Annual General Meeting. It is
the Board's opinion that the appointment of the auditors and the
fees payable to the auditors are inter-related issues and they are
therefore dealt with as part of one resolution.
Annual General Meeting
The Company holds an Annual General Meeting (AGM) in each
calendar year, which it normally aims to hold approximately one
month after publication of its audited financial statements. The
Company's 2011 AGM was held on 15 December 2011. The Notice of the
2012 AGM of the Company is set out below.
Action to be taken
A proxy form for use in connection with the 2012 AGM will be
enclosed with the annual report sent to shareholders. Whether or
not you intend to be present at the AGM, you are asked to complete
and return the proxy form in accordance with the instructions
thereon as soon as possible and, in any event, so that it is
received not later than 48 hours before the time of the 2012 AGM.
The completion and return of the proxy form will enable you to vote
at the meeting without having to be present at the meeting, but
will not preclude you from attending the AGM and voting in person
if you so wish.
Recommendations
The Directors consider that the ordinary business to be
considered in resolutions 1 to 5 and the special business referred
to in resolutions 6 to 8, is in the best interests of shareholders
as a whole. Accordingly, the Directors unanimously recommend
shareholders to vote in favour of all resolutions to be proposed at
the 2012 AGM.
The Directors and persons connected with them intend to vote in
favour of all resolutions in respect of their own shareholdings,
amounting to 304,166 ordinary shares, representing approximately
0.5% of the current issued ordinary share capital of the
Company.
By order of the Board
Filex Services Limited
Secretary
MWB Business Exchange Plc
Registered number 5628635
179 Great Portland Street,
London W1W 5LS
20 November 2012
REPORT ON CORPORATE GOVERNANCE
Introduction
MWB Business Exchange's policy is to adhere to best practice
standards in its business operations. These procedures are
documented in detail, the more important of which are referred to
below. This section of the report and financial statements,
together with the section entitled 'Report on Remuneration of
Directors for the year ended 30 June 2012', describes how the
Company has applied the principles set out in The UK Corporate
Governance Code.
Although the Company is listed on AIM rather than the main
market, the Board fully supports the principles of good governance
through the operation of the Board. The Company and its
subsidiaries have a policy of seeking to comply with established
best practice in the field of corporate governance. Accordingly, it
has adopted elements of the Code: notably the Board has adopted
core values and Group standards which set out the behaviours
expected of staff in their dealings with shareholders, customers,
colleagues, suppliers and other stakeholders of the Group.
The Board
Composition
The Company is run by the Board, which leads and controls the
Group. The current Board comprises two Executive Directors and two
Non-Executive Directors; all of the Directors bring a wide range of
experience and skills to the Company. The names of the Directors at
the date of this report, together with their biographical details,
are set out on above.
The division of responsibilities between the Alternate Chairmen
of the Board, Eric Sanderson and Malcolm Murray, and the Chief
Executive, John Spencer, is clearly defined and has been approved
by the Board. This ensures there is a balance of power and
authority within the Board.
The Alternate Chairmen lead the Board in the determination of
its strategy and in the achievement of its objectives. The Chairmen
are responsible for organising the business of the Board, ensuring
its effectiveness and setting its agenda. The Chairmen have no
involvement in the day-to-day business of the Group. The Chairmen
facilitate the effective contribution of Non-Executive Directors
and ensure that constructive relations exist between Executive and
Non-Executive Directors. The Finance Director, Andrew Blurton, is
responsible for ensuring that Directors receive accurate, timely
and clear financial information.
The Chief Executive is responsible for running the business and
for formulating and implementing Board strategy and policy. He also
has direct charge and overall control of the Group on a day-to-day
basis and is accountable to the Board for the financial and
operational performance of the Group.
The terms of appointment of the Executive and Non-Executive
Directors are available for inspection at the place of the
Company's AGM, both before and after the meeting.
Responsibility
The Board's main roles are to define the Group's strategic
objectives, to provide entrepreneurial leadership of the Group, to
create value for shareholders and to ensure that the necessary
financial and other resources are made available to enable the
Group and the Board to meet those objectives.
The specific responsibilities reserved to the Board include: the
setting of Group strategy; the growth of the Company; approving
annual budgets and medium-term projections; reviewing operational
and financial performance; approving corporate acquisitions,
leases, management agreements and capital expenditure; the setting
of borrowing limits; treasury policy; reviewing the Group's systems
of financial control and risk management; ensuring that appropriate
management development and succession plans are in place; reviewing
the environmental, health and safety performance of the Group;
approving appointments to the Board and of the Company Secretary;
approving policies relating to Directors' remuneration and the
severance of Directors' service contracts; and ensuring that a
satisfactory dialogue takes place with shareholders over the
Group's results and its aspirations for the future.
The Board has delegated certain responsibilities to the
Executive Directors. These include development and recommendation
of strategic plans for consideration by the Board that reflect the
longer-term objectives and priorities established by the Board,
including the dividend policy; implementation of the strategies and
policies of the Group as determined by the Board; monitoring the
operating and financial results against plans and budgets;
monitoring acquisitions and business operations against objectives;
prioritising the allocation of capital, the management and control
of borrowing limits and treasury policy; technical and human
resources; and developing and implementing risk management
systems.
Business and professional development
On appointment, Directors receive information about the Group,
the role of the Board and the matters reserved for its decision,
the terms of reference and membership of the principal Board
Committees, the powers so delegated, the Group's corporate
governance practices and procedures and up to date financial
information on the Group. This is supplemented by visits to key
locations and meetings with senior executives. The Directors are
updated on the Group's business, the competitive and regulatory
environments in which it operates, other changes affecting the
Group and the sectors in which it operates, by written briefings to
all members of the Board and by regular meetings with senior
executives. Directors are also advised in writing on appointment of
their legal and other duties and obligations as a Director of a
listed company. They are formally reminded of these duties when the
Company issues circulars to shareholders, which occurs more than
once each year. Furthermore, they are updated by the Group's
Nominated Adviser and Broker on changes to the legal and governance
requirements of the Group and of themselves as Directors.
Regular reports and papers are circulated to the Directors in a
timely manner in advance of Board meetings and Committee meetings.
These papers are supplemented by information specifically requested
by the Directors from time to time. The Non-Executive Directors
also receive regular management information which enables them to
scrutinise the Group's and management's performance against agreed
objectives.
Board Committees
During the year ended 30 June 2012, the Directors performed
their functions through the Board and through its separate
committees. The Board has established Audit, Remuneration and
Nominations Committees, each of which operates within defined terms
of reference. Minutes of the meetings of these Committees are
circulated to all members of the Board.
The Audit Committee is chaired by Malcolm Murray, a
Non-Executive Director. Its other member is Eric Sanderson. This
Committee determines the terms of engagement of the Company's
auditors and, in consultation with them, the scope of the audit. It
receives and reviews reports from management and the Company's
auditors relating to the interim and annual financial statements
and the accounting and internal control systems in use by the
Group. The Audit Committee has unrestricted access to the Company's
auditors. Under its terms of reference, the Audit Committee
monitors, amongst other matters, the integrity of the Group's
financial statements. The Committee is responsible for monitoring
the effectiveness of the external audit process and making
recommendations to the Board in relation to the re-appointment of
the external auditors. It is responsible for ensuring that an
appropriate business relationship is maintained between the Group
and the external auditors, including reviewing non-audit services
and fees. The Committee meets with Executive Directors and
management as well as meeting privately with the external
auditors.
The Remuneration Committee is chaired by Malcolm Murray and
reviews the scale and structure of the Executive Directors'
remuneration, including the Long-Term Incentive Scheme, the grant
of options and the terms of their service contracts. Its other
member is Eric Sanderson. The Board as a whole determines the
remuneration of Non-Executive Directors. The Report on Remuneration
of Directors appears below.
The Nominations Committee is chaired by Eric Sanderson, and its
other members are Malcolm Murray and John Spencer. This committee
is responsible for reviewing the structure, size and composition of
the Board.
Rotation of Directors
Each Director's appointment is subject to the Company's articles
of association, the Companies Act and satisfactory performance by
the Director concerned. All Directors are appointed for an initial
term. At the first Annual General Meeting (AGM) after a Director's
appointment and also prior to the third AGM after he is elected,
the Board discusses with the Director concerned whether it is
appropriate for a further term to be served. If re-election is
agreed, that Director will be proposed for election or re-election
at the next AGM of the Company.
The Company Secretary and external professional advice
The Company Secretary is responsible for advising the Board
through the Chairman on all governance matters. All Directors have
access to the advice and services of the Company Secretary. The
Company's articles of association and the schedule of matters
reserved to be decided only by the Board provide that the
appointment and removal of the Company Secretary is a matter for
the Board. Subject to prior written approval and due consideration
at a meeting of the Board, the Directors are given access to
secondary external professional advice at the Group's expense, if
the Board deems this necessary in order to enable them to carry out
their responsibilities.
Internal control and risk management
The Directors operate the Company in accordance with its
articles of association which set out the overall operating
framework of the Group. The Board acknowledges its responsibility
to maintain sound systems of internal control which safeguard
shareholder investment in the Company and control the Company's
assets.
The Group's overriding corporate objective is to maximise
shareholder value whilst matching the expectations of its
customers, employees and business partners. In so doing, the
Directors recognise that creating value is often the reward for
taking and accepting some level of risk. The Board has overall
responsibility for the Group's approach to assessing risk, for the
related systems of internal control and for monitoring their
effectiveness in providing shareholders with a return that is
consistent with a responsible assessment and mitigation of risks.
This includes reviewing financial, operational and compliance
controls and risk management procedures. The senior executive team
is charged with implementing the Board's policies on risk and
control and with providing assurance on compliance with these
policies. Employees are aware that they are accountable for
operating within these policies.
The Board has established procedures that monitor the
effectiveness of the Group's internal controls. These include risk
management and the regular review of internal controls by Directors
at Board and management meetings. The results of these reviews are
documented and monitored on a regular basis throughout the year.
Ongoing reporting, monitoring and improvement of internal controls
are performed by the finance department under the overall control
of the Finance Director.
The Board is responsible for the Group's systems of internal
control and risk management and for reviewing the effectiveness of
those systems. These systems are designed to manage, rather than to
eliminate, the risks within each division, as a balanced level of
risk can enhance the rate of return achieved for the benefit of
shareholders. These systems are structured to enable business
objectives to be met, whilst accepting that any system can provide
only reasonable and not absolute assurance against material
misstatement or loss. Within this environment, the Board places
reliance on adherence to the Group's control framework by employees
and senior executives of the Group.
The Directors are also responsible for the Group's internal
financial controls. These are structured to ensure that
transactions are executed in accordance with management authority,
transactions are appropriately recorded to permit the preparation
of reliable financial statements that are free from material
misstatement, the Company's assets are protected and that fraud
should be prevented or detected.
The Group's management structure has delegated authority levels,
functional reporting lines and accountability within the Group. The
Group operates a comprehensive budgeting and financial reporting
system, which compares actual performance to budget on a monthly
and quarterly basis. These comparisons are undertaken both at
regional and at Group levels. Variances against forecasts and
budgeted performance are examined and business enhancements are
implemented where feasible. This allows management to monitor
financial and operational performance on a continuing basis and to
identify and respond to business risks before and as they
arise.
The Group has policies for health and safety which ensure that
appropriate standards are maintained. These policies, together with
environmental considerations, have been integrated into the day to
day business management of the Group, its operating businesses and
its properties. Further details of these are summarised in the
Report of the Directors.
The Executive Directors review management controls and internal
controls at their weekly management meetings and accordingly the
Directors have reviewed the effectiveness of the Group's internal
controls throughout the year. Due to the Group's small size,
internal audit functions are not an established feature of the
Group. However, major elements of its operations are subject to
significant independent checking and review. When reviewing the
Group's interim and final financial statements, the Board receives
detailed analytical reports on its results and financial position
from the Finance Director.
The Directors have reviewed the Group's systems of internal
control and the framework for this control. They have reviewed this
throughout the year and considered its appropriateness for the
Group for succeeding years. Systems have been established for many
years in respect of the principal financial areas of the Group.
These systems will be monitored and reviewed by members of the
Audit Committee in their own meetings during the year, at meetings
of the Board in their roles as Non-Executive Directors and in their
meetings with the external auditors.
The principal financial controls which are in operation across
the Group are as follows:
-- A defined control environment. There is a clear
organisational structure with defined lines of responsibility,
authorisation procedures and delegation of authority. Formal
policies, including the documentation of key systems and
procedures, are in place and are regularly controlled.
-- The assessment of risk and the associated improvement of
returns. The Board is responsible for identifying business risks
affecting the Group and for assessing the likelihood of their
impact. The Board's approach to risk management and internal
control aims to assist the Group in meeting the challenge of
balancing commercial success with cost efficiency. This is managed
by the Executive Directors through regular and formal
decision-making processes for each major division of the Group.
-- In-depth property appraisals. The Group has defined
guidelines for capital expenditure, taking on new leases or
management agreements or acquiring new buildings. Before investing
in any major asset, assessments of maximum capital expenditure,
maximum cash requirements, forecast levels of profitability and the
risk profile of the asset to be acquired, leased or managed are
quantified and analysed by the Executive Directors. Where actual
results are materially different from those previously forecast,
remedial action is taken which may, if necessary, involve the early
disposal of the asset concerned.
-- Financial management and results. Monthly rolling forecasts
and six month budgets are prepared, against which actual results
are monitored and controlled by the Executive Directors. Variances
arising are investigated and business process changes implemented
where appropriate.
-- Financial reporting. Monthly management accounts are provided
to all members of the Board. These give detailed analyses of the
financial performance, sales, Statement of Financial Position, cash
flow and profitability projections and related KPI-based
information for the Group on both monthly and year to date bases.
This enables members of the Board to appraise actual and projected
performance for the current and future years and to consider
improvements where appropriate.
-- Employment. Experienced and qualified staff take
responsibility for the human resource requirements of the Group.
Annual appraisal procedures assess performance against agreed
objectives and where necessary identify changes to improve the
Group's performance.
Investor relations
The investor relations activities of the Group are designed to
provide a balanced level of communication between the Company and
its shareholders. Procedures are in place to ensure the timely
release to the stock market of price sensitive information relating
to the Group as soon as the matter concerned has been finalised.
The Group publishes half-yearly and annual results within the time
periods stipulated by the AIM Rules. The Group's public relations
activity ensures that all press releases and related announcements
issued by the Group are provided to the Company's institutional
shareholders, financial analysts and the press at the same time as
they are released to the stock market, thus improving the wider
investment market's awareness of the objectives and achievements of
the Group.
The Chief Executive and the Finance Director meet with
institutional shareholders and analysts to explain transactions
being undertaken by the Group; matters that are of benefit to
shareholders in assessing the Group's performance; methodology of
the Group's operations; aspirations and strategy being adopted by
the Board; interim results of the Group and those for the full
year; and the Board's expectations for the future. In addition, the
Group responds to individual ad hoc requests for discussions from
institutional shareholders throughout the year.
The Annual General Meeting (AGM) is attended by Directors and
shareholders are invited to ask questions during the meeting and to
meet with Directors after the formal proceedings have been
concluded.
The Directors appreciate the importance of private shareholders
in the Company and will use the Company's General Meetings (GMs)
and AGM as further opportunities to communicate with private
investors. The Company provides fund managers and financial
institutions with copies of its interim financial reports, annual
financial statements and press releases.
It is the Company's policy to involve shareholders fully in the
affairs of the Group and to give them the opportunity at the AGM
and at any GMs called during the year to ask questions about its
activities and prospects. The Board will also structure these
meetings so that shareholders can vote separately on each matter by
proposing separate resolutions for each item to be considered. It
is the Board's opinion that the re-appointment of the auditors and
the fees payable to the auditors are inter-related issues and these
are therefore dealt with as part of one resolution.
The proxy votes for and against each resolution will be counted
before the AGM. The results will be provided to the meeting after
each resolution has been voted upon by shareholders, thus enabling
shareholders present to vote independently of the results of proxy
votes already received. The same procedures will be followed for
any GMs of the Company.
The Chairmen of the Audit Committee, the Remuneration Committee
and the Nominations Committee, as well as other Directors, will be
available to answer questions from shareholders at the 2012 AGM, to
be held on Friday 21 December 2012.
In accordance with the provisions of the Code, the notice of the
2012 AGM is being sent to shareholders at least 20 working days
before the meeting. Shareholders will have the opportunity to vote
separately on each proposal at the AGM either in person or by
proxy.
Going concern review
The provisions of the Code recommend that Directors confirm
whether, after making appropriate enquires, they have reasonable
expectations that the Company and the Group have adequate financial
resources to continue in operational existence for the foreseeable
future.
As part of the regular financial management of the Group, the
Directors review the detailed cash flow projections of the Group.
These cash flow projections include capital expenditure proposals
and the financial effect of planned business expansion and
disposals, as well as modelling the cash effects from all principal
operations of the Group.
After making such enquiries as they believe appropriate, the
Directors consider that there is a reasonable expectation that the
Group has adequate resources to continue in business for the
foreseeable future. They have therefore adopted the going concern
basis in the preparation of the financial statements for the year
ended 30 June 2012.
Management philosophy
MWB Business Exchange Plc is managed by the Board, utilising the
services of its experienced management team. The Executive
Directors and senior management of the Group work closely together
to ensure that the Company's strategy is implemented and monitored
on a continuous basis. The Executive Directors are responsible for
acquisitions, disposals, new lease or management agreements, equity
and debt funding and management across the Group. They also
co-ordinate the assessment and reporting of financial disciplines,
controls and results.
The Executive Directors have ensured that, below Board level,
there is a strong team employed to ensure that the Group's
day-to-day activities are properly managed and controlled. The
Board is confident that the Group continues to have strength in
depth, both at senior executive and at middle management
levels.
Employment policies
It is Group policy to keep employees informed of the aims,
objectives, activities and financial performance of the Group and
to encourage them to take a wider interest in its affairs. This is
achieved in a variety of ways, including regional and segmental
reporting, briefing sessions, quarterly reviews, monthly
newsletters and distribution of information by electronic media.
Copies of all financial statements, circulars and press releases
are also made available to members of staff. Directors and senior
management regularly visit the Group's business centres and they
discuss with employees matters of current interest and concern to
the business.
The health and safety of employees is important to the Group.
Safety awareness is promoted in the working environment. A health
and safety manager is employed to ensure that the Group adopts good
health and safety practices and complies with all relevant
legislation. Further details relating to the Group's health and
safety policies are set out in the Report of the Directors.
The Group is an equal opportunities employer and is committed to
developing a working culture which enables all employees to make
their own distinctive contribution. Employment policies are
designed to be fair and equitable and to be consistent with the
abilities of the employees and the needs of the Group. Applications
for employment by disabled persons are fully considered, bearing in
mind the aptitudes of the applicant concerned. In the event of any
member of staff becoming disabled, effort would be made to enable
their employment with the Group to continue. It is the policy of
the Group that the training, career development and promotion of
disabled persons should, as far as possible, be similar to that of
other employees. Where the needs of the Group change, or an
individual's capability becomes different from those required by
the Group, senior management would endeavour to amend working
practices to accommodate all existing employees. Where this is not
possible, separate arrangements are made to ensure that employees
who are departing the Group are fairly treated.
Pensions and life assurance
The Group operates defined contribution personal pension plans
and life assurance cover for most employees of the Group. The
arrangements continued throughout 2011/12 but are now being amended
to fall into line with the forthcoming NEST (National Employment
Savings Trust) legislation. Separate pension fund reports are
provided on an annual basis to all members of the Group's defined
contribution schemes.
Contributions by employees to the defined contribution personal
pension plans are set at a minimum level of 3% of basic salary for
employees. Depending on the plan offered, which varies with
seniority, the employer's contribution is set in the range 1% to
4.25% initially, rising to a maximum of 3% to 6.25% in the third
and subsequent years. Only basic salary is pensionable; other forms
of remuneration are not pensionable.
The personal pension plans provide employees with a pension and
lump sum on retirement, the value of which is dependent on the
contributions made and the rate of return achieved. These combine
to produce a value of funds for each individual that is accumulated
until retirement of the employee concerned. A separate life
assurance scheme paid for by the Group provides a lump sum of four
times basic salary to an employee's estate and a dependent's
pension of 25% of a member's basic salary in the event of death in
service. Other than the employee contributions referred to above,
all costs of the defined contribution pension schemes and the life
assurance arrangements are borne by the Group.
REPORT ON REMUNERATION OF DIRECTORS
for the year ended 30 June 2012
Introduction
The statement of Group remuneration policies embodies the
principles of good governance set out in Section 1 of the Code. The
principal Group remuneration policies referred to therein set out
the arrangements which have been put in place to incentivise
employees of the Group to produce enhanced performance for the
benefit of shareholders. The policies set out therein are
applicable to senior members of staff including the Executive
Directors of the Company, but the Non-Executive Directors do not
participate in these arrangements.
Structure of the Remuneration Committee
The Remuneration Committee is formally constituted with written
terms of reference. Malcolm Murray is Chairman of the Committee and
its other members included Jagtar Singh during the year up to the
date of his retirement and Eric Sanderson since 6 September 2012.
Further details relating to the Committee and its principal
responsibilities are set out above.
Remuneration policy for Executive Directors
Basic salaries and benefits are reviewed on 1 January in each
year. In considering appropriate levels of remuneration for
Executive Directors, the Remuneration Committee reviews the value
being contributed to the Group by the Directors concerned, the
other incentive arrangements that are in place and the overall
endeavour to restrict the cost incurred by the Group where
possible. The performance of Executive Directors is measured
primarily by reference to measures that the Remuneration Committee
considers are expected to enhance reported EBITDA of the Group.
In setting the remuneration of Executive Directors, the Board
considers a number of factors and objectives, including:-
-- The value contributed to the Group by the Director concerned;
-- Control over the Group's finances and financial statements,
cost mitigation and net asset value enhancement, administrative and
human resources;
-- The success of acquisitions of new business components for the Group;
-- Financing obtained and capital market success;
-- The importance of a reasonably competitive remuneration
package to attract, retain and motivate management of the
appropriate calibre and experience for the benefit of the
Group;
-- The degree of influence that performance related rewards can
have on returns to shareholders and on the performance of the
business; and
-- The size and nature of the business, whilst having regard to
the interests of shareholders and the financial health of the
Group.
In implementing this policy, the Board uses published data and
market research to ensure that the total remuneration payable to
each Executive Director is not excessive, with regard to companies
of a similar size in other industries, whilst at the same time
remaining competitive.
Remuneration payable to Executive Directors comprises the
following:-
-- An annual salary and car allowance.
-- An annual bonus payable on achievement of targets that will
be set on an annual basis by the Remuneration Committee.
-- Participation in the Long-Term Incentive Scheme provided by
the Company. Further details are set out below.
-- Contributions to defined contribution pension plans and
private health insurance at a similar level at which such benefits
are provided for other employees. No contributions are made by the
Group on behalf of Directors to defined benefit pension
schemes.
The Executive Directors are not provided with Company cars.
Service contracts of Executive Directors
The unexpired term of the service contracts of all Executive
Directors is restricted to one year. The total remuneration of the
Executive Directors borne by the Group for the year ended 30 June
2012 is set out below:
Director Responsibility Salary / Bonus Pension LTIS
consultancy contributions payments
J.R. Spencer Chief Executive GBP284,850 - GBP16,231 GBP1,200,000
R. Aspland-Robinson Executive Director GBP218,200(1) - GBP17,178 GBP1,000,000(2,3)
K. Pankhania Finance Director GBP237,309 GBP25,000 - GBP1,000,000(3)
GBP740,359 GBP25,000 GBP33,409 GBP3,200,000
(1) This amount (2011: GBP120,670) was paid to Aspland
Properties LLP, an entity controlled by Mr Aspland-Robinson and in
which he has a beneficial interest, in accordance with his
direction.
(2) GBP700,000 was paid to Willen House Limited, an entity
controlled by Mr Aspland-Robinson and in which he has a beneficial
interest, in accordance with his direction.
(3) GBP300,000 and GBP1,000,000 were paid to the Mercator Trust
Company Limited with non-binding wishes of allocation to Mr
Aspland-Robinson and Mr Pankhania respectively.
The Directors' service contracts are reviewed annually, the next
review being due on 1 January 2013. Each agreement is terminable by
either party giving 12 months' written notice.
Mr Murray, the Independent Non-Executive Director, received no
emoluments during the year. A fee of GBP30,000 has accrued during
the year in line with Mr Murray's terms of engagement.
Directors' pension benefits for the year ended 30 June 2012
During the year ended 30 June 2012, two Executive Directors
received pension contributions into a defined contribution personal
pension plan. These contributions were made partly by the Company
and partly by the Director concerned. These were at the same rates
as those received by other members of staff and were on the same
basis as in previous years. The pension consequences and associated
costs to the Company of basic salary increases and other changes in
remuneration are borne in mind by the Remuneration Committee in
setting salary levels.
The Long-Term Incentive Scheme (LTIS)
On 16 December 2005 the Company adopted a Long-Term Incentive
Scheme which was amended and updated at the 2007 Annual General
Meeting. Pursuant to this, relevant participants were entitled to
receive payments under the LTIS upon specific events, including a
sale or takeover of the Company, or a participant called valuation
of the Company prepared as at 30 June 2010.
In recognition of a waiver of the participant valuation call
(above) and ongoing services to the Company and Group, an amount
equivalent to the GBP3.2m LTIS Stage 1 amount was fully accrued as
at 30 June 2011 and authorised for payment, and paid, during the
period 1 January 2010 to 30 June 2012. See above.
Terms of engagement of Non-Executive Directors
None of the Non-Executive Directors has a service contract with
the Company. Their services are the subject of detailed terms of
engagement and, in the same manner as the Executive Directors, the
Non-Executive Directors are subject to retirement by rotation.
Their remuneration takes into account the level of responsibility,
experience and abilities required from each Director, together with
the marketplace for similar positions in comparable companies. The
dates and period of their appointments are as follows:
M. Murray Letter of appointment dated 11 February 2011 under
which he was appointed as Independent Non-Executive
Director with immediate effect at a fee of GBP30,000
per annum. The appointment can be terminated at
any time on three months' written notice for no
consideration. The appointment will terminate automatically
upon Mr Murray vacating office, being removed from
office, not being re-elected to office or material
breach. His duties include attending and participating
in Board meetings, committee meetings and general
meetings of the Company, as well as other general
Board duties. He alternates as Chairman of the Board.
E.F. Sanderson Letter of appointment dated 4 April 2012 in respect
of his appointment as Non-Executive Director. The
term extends to 31 December 2012 but can be terminated
at any time on three months' written notice for
no consideration. The appointment will terminate
automatically upon Mr Sanderson vacating office,
being removed from office, not being re-elected
to office or material breach. No fee is payable
under this appointment as Mr Sanderson is remunerated
by MWB Group Holdings Plc. His duties include attending
and participating in Board meetings, committee meetings
and general meetings of the Company, as well as
other general Board duties. He alternates as Chairman
of the Board.
Remuneration of Non-Executive Directors
The remuneration of Non-Executive Directors, who are members of
the Remuneration Committee, is a matter reserved for the Board.
Their services are the subject of detailed terms of engagement and,
in the same manner as the Executive Directors, the Non-Executive
Directors are subject to retirement by rotation.
None of the Non-Executive Directors received, or will receive,
any pension or other benefits from the Company, nor do they
participate in the Long-Term Incentive Scheme of the Company.
Termination arrangements of Directors' service contracts and
letters of engagement
Other than as set out above, there are no provisions in the
service contracts of the Executive Directors or the terms of
engagement of the Non-Executive Directors for compensation to be
payable on early termination of engagement with any of the
Directors. Richard Balfour-Lynn and Jagtar Singh left the company
during the year to 30 June 2012 and were replaced by Eric
Sanderson. No Directors left the Company during the 18 months ended
30 June 2011; Malcolm Murray was appointed during this period.
Since 30 June 2012 there have been the following Board changes.
Rick Aspland-Robinson and Keval Pankhania both resigned from the
Company on 13 November 2012 and will receive appropriate
compensation for loss of office. Andrew Blurton was appointed as
Finance Director on the same date.
Equity interests of Directors in the Company
The interests of the Directors and of their families, which are
beneficial unless otherwise referred to below, in the issued
ordinary shares of the Company as shown in the register of
Directors' interests, or which are interests of persons connected
with any of the Directors and the existence of which is known to,
or could with reasonable diligence be ascertained by that Director,
at 30 June 2012 and at the previous financial period end are as
follows:-
30 June 2012 30 June 2011
Ordinary shares Ordinary shares
R.G. Balfour-Lynn N/a 577,500
J.R. Spencer 46,666 46,666
R. Aspland-Robinson 41,666 41,666
A.F. Blurton (appointed 13 November 2012) N/a N/a
K. Pankhania 61,666 61,666
E.F. Sanderson - N/a
J. Singh N/a 162,500
M. Murray - -
149,998 889,998
At the date of his appointment to the Board of Directors Andrew
Blurton held, and still holds, 257,500 ordinary shares of the
Company.
Equity interests of the Directors in MWB Group Holdings Plc
MWB Group Holdings Plc has an interest of 75.2% (2011: 72.3%) in
the issued share capital of MWB Business Exchange Plc.
The interests of the Directors and of their families, which are
beneficial unless otherwise referred to below, in the issued units
of the ultimate parent company, MWB Group Holdings Plc, as shown in
the register of Directors' interests, or which are interests of
persons connected with any of the Directors and the existence of
which is known to, or could with reasonable diligence be
ascertained by that Director, at 30 June 2012 and at the previous
financial period end are as follows:-
30 June 2012 30 June 2011
Units Units
R.G. Balfour-Lynn N/a 16,433,655
J. Singh N/a 3,503,284
R. Aspland-Robinson 1,911,385 1,911,385(1)
1,911,385 21,848,324
Percentage of issued share capital 1.2% 13.3%
(1) The shareholding of Mr Aspland-Robinson at 30 June 2011 has
been adjusted based upon updated information (previously disclosed
as 1,861,385).
At the date of his appointment to the Board of Directors on 13
November 2012 Andrew Blurton held, and still holds, 4,027,463 units
of MWB Group Holdings Plc.
The other Directors of the Company do not have an interest in
the share capital of MWB Group Holdings Plc.
Directors' interests in share options
At 30 June 2012 and at the previous period end, no Director had
an interest in any options granted by the Company over its ordinary
shares. Further details of share-based payments made by the Company
are set out in note 21 to the financial statements.
Approval
The proposed adoption of this Report on Remuneration of
Directors is included as resolution 2 in the notice for the 2012
Annual General Meeting.
Malcolm Murray
Chairman of the
Remuneration Committee of the Board
London
20 November 2012
Statement of directors' responsibilities in respect of the
REPORT and FINANCIAL STATEMENTS
The Directors are responsible for preparing the Report of the
Directors and the group and parent company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare group and parent
company financial statements for each financial year. As required
by the AIM Rules of the London Stock Exchange they are required to
prepare the group financial statements in accordance with IFRSs as
adopted by the EU and applicable law and have elected to prepare
the parent company financial statements in accordance with UK
Accounting Standards and applicable law (UK Generally Accepted
Accounting Practice).
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and parent company and of
their profit or loss for that period. In preparing each of the
group and parent company financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them
consistently;
-- make judgments and estimates that are reasonable and
prudent;
-- for the group financial statements, state whether they have
been prepared in accordance with IFRSs as adopted by the EU;
-- for the parent company financial statements, state whether
applicable UK Accounting Standards have been followed, subject to
any material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and the parent
company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
company's transactions and disclose with reasonable accuracy at any
time the financial position of the parent company and enable them
to ensure that its financial statements comply with the Companies
Act 2006. They have general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the group
and to prevent and detect fraud and other irregularities.
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
We, the Directors of the Company, confirm that to the best of
our knowledge:-
-- the financial statements of the Group have been prepared in
accordance with IFRSs as adopted by the EU, and for the Company
under UK GAAP, in accordance with applicable United Kingdom law and
give a true and fair view of the assets, liabilities, financial
position and profit of the Group; and
-- the Report of the Directors includes a fair review of the
development and performance of the business and the position of the
Group, together with a description of the principal risks and
uncertainties that face the Group.
By order of the Board
John Spencer
Chief Executive
20 November 2012
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MWB BUSINESS
EXCHANGE PLC
We have audited the financial statements of MWB Business
Exchange Plc for the year ended 30 June 2012 which comprise the
consolidated statement of financial position, the parent company
balance sheet, the consolidated statement of comprehensive income,
the consolidated statement of cash flows, the consolidated
statement of changes in equity and the related notes. The financial
reporting framework that has been applied in the preparation of the
group financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union. The financial reporting framework that has been applied in
preparation of the parent company financial statements is
applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and the parent company's affairs as at 30 June
2012 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company's financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion the information given in the directors' report
for the financial period for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
John Le Poidevin (senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
55 Baker Street
London
W1U 7EU
United Kingdom
20 November 2012
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2012
Year ended 18 months ended
30 June 2012 30 June 2011
Notes GBP'000 GBP'000
--------------------------------------- ------ -------------- ----------------
Revenue 2 121,080 165,205
Cost of sales (119,838) (170,747)
--------------------------------------- ------ -------------- ----------------
Gross profit / (loss) 1,242 (5,542)
Other operating income 2 2,000 -
--------------------------------------- ------ -------------- ----------------
Administrative expenses - other (2,830) (2,987)
Administrative expenses - exceptional
items 5 (15,165) (4,131)
--------------------------------------- ------ -------------- ----------------
Administrative expenses (17,995) (7,118)
--------------------------------------- ------ -------------- ----------------
Results from operating activities (14,753) (12,660)
Finance income 6 33 221
Finance expense 6 (134) (463)
--------------------------------------- ------ -------------- ----------------
Loss before taxation 7 (14,854) (12,902)
Taxation 8 8,465 (6)
--------------------------------------- ------ -------------- ----------------
Loss and total comprehensive income
for the year / period (6,389) (12,908)
======================================= ====== ============== ================
Attributable to:
Owners of the parent company (6,248) (11,433)
Non-controlling interests 20 (141) (1,475)
--------------------------------------- ------ -------------- ----------------
(6,389) (12,908)
======================================= ====== ============== ================
Basic and diluted loss per share 9 (9.6p) (17.5p)
======================================= ====== ============== ================
All amounts relate to continuing operations.
There are no other recognised gains or losses in the year /
period other than the loss for the year / period shown above.
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 30 June 2012
30 June 30 June
2012 2011
Notes GBP'000 GBP'000
---------------------------------------- ------ --------- ---------
Non-current assets
Intangible asset - goodwill 10 7,587 7,587
Property, plant and equipment 11 37,951 43,220
Deferred tax asset 17 5,899 -
Other receivables 12 940 1,002
---------------------------------------- ------ --------- ---------
52,377 51,809
---------------------------------------- ------ --------- ---------
Current assets
Trade and other receivables 12 19,946 27,087
Deferred tax asset 17 2,566 -
Cash and cash equivalents 13 3,360 2,824
---------------------------------------- ------ --------- ---------
25,872 29,911
---------------------------------------- ------ --------- ---------
Total assets 78,249 81,720
---------------------------------------- ------ --------- ---------
Current liabilities
Overdraft at bank 13 (2,278) (4,689)
Trade and other payables 14 (46,317) (42,134)
---------------------------------------- ------ --------- ---------
(48,595) (46,823)
---------------------------------------- ------ --------- ---------
Non-current liabilities
Other payables and accruals 14 (18,861) (20,513)
Provisions 15 (4,870) (2,072)
---------------------------------------- ------ --------- ---------
(23,731) (22,585)
---------------------------------------- ------ --------- ---------
Total liabilities (72,326) (69,408)
---------------------------------------- ------ --------- ---------
Net assets 5,923 12,312
======================================== ====== ========= =========
Equity
Share capital 18 65 65
Share premium account 35,459 35,459
Capital redemption reserve 19 4 4
Merger reserve 19 38,831 38,831
Retained earnings (65,726) (59,478)
---------------------------------------- ------ --------- ---------
Total equity attributable to owners of
the parent company 8,633 14,881
Non-controlling interests 20 (2,710) (2,569)
---------------------------------------- ------ --------- ---------
Total equity 5,923 12,312
======================================== ====== ========= =========
The notes form part of these financial statements. Approved by
the Board of Directors on 20 November 2012 and signed on its behalf
by:-
John Spencer
Chief Executive
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2012
Share Share Capital Merger Retained Total Non- Total
capital premium redemp-tion reserve earnings control-ling equity
reserve interests
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ---------- ---------- ------------- ---------- ----------- --------- ------------- ---------
18 months ended
30 June 2011
----------------- ---------- ---------- ------------- ---------- ----------- --------- ------------- ---------
At 31 December
2009 66 35,459 3 38,831 (47,766) 26,593 (1,094) 25,499
Loss and total
comprehensive
income for
the period - - - - (11,433) (11,433) (1,475) (12,908)
Acquisition
of
non-controlling
interest in
subsidiary - - - - (150) (150) - (150)
Shares purchased
and cancelled (1) - 1 - (307) (307) - (307)
Share-based
payment charge - - - - 178 178 - 178
================= ========== ========== ============= ========== =========== ========= ============= =========
At 30 June
2011 65 35,459 4 38,831 (59,478) 14,881 (2,569) 12,312
================= ========== ========== ============= ========== =========== ========= ============= =========
Year ended
30 June 2012
----------------- ---------- ---------- ------------- ---------- ----------- --------- ------------- ---------
Loss and total
comprehensive
income for
the year - - - - (6,248) (6,248) (141) (6,389)
================= ========== ========== ============= ========== =========== ========= ============= =========
At 30 June
2012 65 35,459 4 38,831 (65,726) 8,633 (2,710) 5,923
================= ========== ========== ============= ========== =========== ========= ============= =========
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2012
--------------------------------------------------------------------------------------
Notes Year ended 18 months ended
30 June 2012 30 June 2011
GBP'000 GBP'000
------------------------------------------- ------- -------------- ----------------
Loss for the year / period (6,389) (12,908)
Adjustments
Taxation 8 (8,465) 6
Exceptional items 5 15,165 4,131
Finance income 6 (33) (221)
Finance expense 6 134 463
Depreciation of property, plant and
equipment 7 6,330 9,297
Loss on disposal of fixed assets 7 48 137
Equity settled share-based obligations 4 - 178
Cash flows from operations before
changes in working capital 6,790 1,083
Change in trade and other receivables (4,281) 1,933
Change in trade and other payables 5,244 2,068
Cash settled share-based obligations
paid (2,400) (800)
------------------------------------------- ------- -------------- ----------------
Cash generated from operations 5,353 4,284
Corporation tax paid - (6)
Interest paid (134) (464)
------------------------------------------- ------- -------------- ----------------
Net cash from operating activities 5,219 3,814
------------------------------------------- ------- -------------- ----------------
Cash flows from investing activities
Interest received 36 217
Purchase of property, plant and equipment 11 (2,591) (12,091)
Proceeds from disposal of fixed assets 283 219
------------------------------------------- ------- -------------- ----------------
Net cash used in investing activities (2,272) (11,655)
------------------------------------------- ------- -------------- ----------------
Cash flows from financing activities
Acquisition of non-controlling interest
in subsidiary - (150)
Purchase of own shares, inclusive
of costs 19 - (307)
Net cash used in financing activities - (457)
------------------------------------------- ------- -------------- ----------------
Net increase / (decrease) in cash
and cash equivalents 2,947 (8,298)
Opening cash and cash equivalents (1,865) 6,433
------------------------------------------- ------- -------------- ----------------
Closing cash and cash equivalents 13 1,082 (1,865)
=========================================== ======= ============== ================
The notes form part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
Basis of preparation
MWB Business Exchange Plc (the Company) is a company domiciled
in the United Kingdom.
On 28 April 2011, the Company announced its intention, in line
with its majority shareholder MWB Group Holdings Plc, to change its
accounting reference date from 31 December to 30 June. Accordingly
the audited financial statements of the Group cover the year ended
30 June 2012 whilst the comparative figures cover the 18 months
ended 30 June 2011.
The consolidated financial statements of the Company as at and
for the year ended 30 June 2012 comprise the Company and its
subsidiaries (together: the Group). The Group is primarily involved
in the provision of flexible serviced office space.
Consistent with previous years, the Group financial statements
have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU. The Company has
elected to prepare its Parent Company financial statements in
accordance with UK GAAP - see below.
The results have been prepared on the basis of the accounting
policies adopted in the Group's financial statements for the period
ended 30 June 2011, with the addition of a new standard that has
come into effect during the year under review and which is listed
below.
Going concern
The Directors have prepared detailed cash flow projections for
the period to 31 December 2013 (the Projections) which are based on
certain assumptions. The resultant Projections, both on base case
and sensitised case scenarios, show that the Group is capable of
operating without the need for financing facilities and can remain
cash positive throughout the period covered by the Projections.
Whilst there is always some inherent uncertainty in cash flow
projections, the Directors have concluded that it is appropriate to
continue to adopt the going concern basis in preparing these
financial statements. In coming to this conclusion they rely, inter
alia, on the facts that client deposits, whilst shown as current
liabilities, can only be repaid in accordance with contractual
terms and are frequently renewed, and that deferred income is
released as a credit to income rather than being cash settled. The
financial statements do not include any adjustments that would be
required if the going concern basis were not appropriate.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control
exists when the Group has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that are currently exercisable or
convertible are taken into account.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases. Where necessary,
accounting policies of subsidiaries are changed on acquisition to
align them with the policies adopted by the Group.
Intra-group balances and transactions and any unrealised income
and expenses arising from intra-group transactions are eliminated
in preparing the consolidated financial statements. Operations
conducted by Group subsidiaries on an agency basis for third
parties are excluded from the consolidation, both as regards the
Statement of Comprehensive Income and the Statement of Financial
Position.
Use of estimates and judgements
The preparation of financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in
any future periods affected.
In particular, information about significant areas of
estimation, uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the
amount recognised in the financial statements are described in the
following notes:-
Note 10 measurement of recoverable amounts of cash-generating units containing goodwill
Note 11 measurement of impairment of property, plant and equipment
Note 15 measurement of provisions for dilapidations and onerous leases
Note 16 measurement of financial instruments
Note 17 recognition of deferred tax asset
Revenue recognition
Revenue principally comprises licence fees billed to clients for
their office accommodation, rentals charged and service charges for
items such as telephone lines and calls invoiced to tenants.
Licence fee income is invoiced in advance, deferred and recognised
on provision of the accommodation on a monthly basis. Service and
ad hoc income is recognised in the month the relevant service is
provided. Management fee income from Operating and Management
Agreements (OMAs) where the company is not owned by the Group is
recognised when the services are provided to the landlord. Losses
arising under OMAs are recognised to the extent required by the
underlying contract.
In all instances, revenue is shown net of discounts and VAT.
Revenue is measured at the fair value of consideration received or
receivable.
Lease incentives and leased assets
Lease incentives, such as rent free periods received or granted,
are amortised on a straight-line basis over the lease term.
Assets held under operating leases are not recognised as assets
of the Group. Rentals payable and incentives received under
operating leases are recognised in the Statement of Comprehensive
Income on a straight-line basis over the non-cancellable period of
the lease.
Retirement benefits
Obligations for contributions to defined contribution pension
plans are recognised as an expense in the Statement of
Comprehensive Income as incurred.
Finance income and expense
Finance income comprises interest receivable on funds invested.
Interest income is recognised in the Statement of Comprehensive
Income as it accrues, using the effective interest method.
Finance expense comprises bank charges, interest payable and
finance charges on finance leases that are recognised in the
Statement of Comprehensive Income.
Share-based payment transactions
The share option programme allows certain employees to acquire
shares in the Company and for such equity settled share-based
payments the fair value of options granted to employees is
recognised as an employee expense, with a corresponding increase in
equity, over the period in which the employees become
unconditionally entitled to the options. The fair value of the
options granted is measured using an option valuation model, taking
into account the terms and conditions upon which the options were
granted. Except where forfeiture is due only to share prices not
achieving the threshold for vesting, the amount recognised as an
expense is adjusted to reflect the actual number of share options
that vest.
Long-Term Incentive Scheme
The fair value of the amount payable to employees in respect of
the Long-Term Incentive Scheme, which is settled in cash, is
recognised as an expense with a corresponding increase in
liabilities over the period that the employees become entitled to
payment. The liability is remeasured at each reporting date and at
settlement date. Any changes in the fair value of the liability are
recognised as personnel expense in the Statement of Comprehensive
Income.
Taxation
Income tax expense comprises current and deferred tax. Income
tax expense is recognised in profit or loss except to the extent
that it relates to items recognised directly in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the balance sheet liability
method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences: the initial
recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor
taxable profit or loss, and differences relating to investments in
subsidiaries and jointly controlled entities to the extent that it
is probable that they will not reverse in the foreseeable future.
In addition, deferred tax is not recognised for taxable temporary
differences arising on the initial recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be
applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the
reporting date. Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent
that it is no longer probable that the related tax benefit will be
realised.
Goodwill
For business combinations completed before 1 January 2010,
goodwill represents the excess of the cost of a business
combination over the Group's interest in the fair value of
identifiable assets, liabilities and contingent liabilities
acquired. Cost comprises the fair value of assets given,
liabilities assumed and equity instruments issued, plus any direct
costs of acquisition. For business combinations completed after 1
January 2010, the requirements of IFRS 3(R) will apply; there have
however been no business combinations since that date.
Goodwill is capitalised as an intangible asset, with any
impairment in carrying value being charged to the Statement of
Comprehensive Income.
Impairment
The carrying amounts of the Group's non-financial assets other
than deferred tax assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any
indication exists, the asset's recoverable amount is estimated. For
goodwill that has an indefinite useful life, the recoverable amount
is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value, less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of
money, and the risks specific to the asset. For the purpose of
impairment testing, assets are grouped together into the smallest
group of assets that generates cash inflows from continuing use
which is largely independent of the cash inflows of other assets or
groups of assets (cash-generating unit). For the purpose of
impairment testing, the goodwill acquired in a business combination
is allocated to cash-generating units that are expected to benefit
from the synergies of the combination.
An impairment loss is recognised whenever the carrying amount of
an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the Statement of
Comprehensive Income. Impairment losses recognised in respect of
cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce
the carrying amount of other assets in the unit on a pro-rata
basis.
Property, plant and equipment
Leasehold improvements relating to operating leases, fixtures
and equipment are measured at cost less accumulated depreciation
and any impairment losses. Cost includes expenditure that is
directly attributable to the acquisition of an asset and includes
professional fees.
The gain or loss on disposal or derecognition of property, plant
and equipment is determined by comparing the sale proceeds with the
carrying amount of the asset at the date of disposal or
derecognition, and is recognised in the Statement of Comprehensive
Income.
Depreciation is charged so as to write off the cost of property,
plant and equipment, less residual amounts, using the straight line
method, over the following estimated useful lives:-
Operating leasehold improvements: The shorter of 20 years and the
Machinery and electrical term of the lease
Ceilings, floors and partitions The shorter of 15 years and the
term of the lease
Client alterations The shorter of 10 years and the
term of the lease
Front of house The shorter of 7 years and the
term of the lease
Other plant, machinery, fixtures 5 to 10 years
and equipment
Operational properties in the course of development are not
depreciated. Depreciation commences once a centre is available for
use.
Provisions
A provision is recognised in the Statement of Financial Position
when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
Leasehold dilapidations relate to the estimated cost of
returning leasehold properties to their original state, where this
is required in the lease terms. The cost is either recognised as
depreciation of the leasehold improvements over the remaining term
of the lease or as the accrued cost of reparation liabilities over
the lease term.
Financial instruments
Financial instruments comprise trade and other receivables, cash
and cash equivalents, loans and borrowings and trade and other
payables. Such financial instruments are recognised initially at
fair value. Subsequent to initial recognition, financial
instruments, excluding cash and cash equivalents, are measured at
amortised cost using the effective interest method, less any
impairment losses.
Cash and cash equivalents comprise cash balances and call or
short-term deposits. Bank overdrafts that are repayable on demand
and form an integral part of the Group's cash management are
included as a component of cash and cash equivalents for the
purpose of the Statement of Cash Flows.
Interest-bearing bank loans and overdrafts are initially
recorded at fair value. The net amount of any premium or discount
over the nominal value, less issue costs, is amortised over the
life of the instrument using the effective interest method at a
constant cost of financing over its life and charged or credited to
interest payable in the Statement of Comprehensive Income.
Ordinary share capital is classified as equity. Incremental
costs directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity, net of any
tax effects. When share capital recognised as equity is purchased
by the Company, the amount of consideration paid including directly
attributable costs, net of any tax effects, is recognised as a
deduction from total equity.
New standards and interpretations adopted for the first time
A number of new standards, amendments to standards and
interpretations have been issued which are effective for the
financial year ended 30 June 2012. The following is the only
standard, amendment to standard or interpretation that became
effective and may be relevant to the Group. It had no significant
impact during 2011/12.
IFRS 7 (amendment) Disclosures: Transfers of Financial Assets
------------------- -------------------------------------------
The changes to this standard are designed to allow users of
financial statements to improve their understanding of transactions
involving the transfer of financial assets (eg securitisations),
including understanding the possible effects of any risks that may
remain with the entity transferring the assets.
New standards and interpretations not yet adopted
There are no new standards or interpretations not yet adopted
that would have a material impact on the Group's financial
statements.
2 SEGMENT REPORTING
Segmental information is presented in respect of the Group's
businesses. The primary format is based on the Group's internal
reporting structure.
As noted in the Report of the Directors, during the financial
year 2011/12 the Group changed its brand and reporting structure
and the 2010/11 figures have been restated accordingly. The Group
now comprises the following main business segments:
o Leased Centres: four and five star serviced office
accommodation under the Business Exchange brand and three star
serviced office accommodation under the MWB Essential brand.
o Other Centres: those run under Operating and Management
Agreements (OMAs) within Group-owned special purpose vehicles. For
these centres the Group-owned company acts as principal and there
is a profit sharing arrangement with the landlord.
The income from non-consolidated centres run as Agencies or
under Management Agreements, i.e. those for which the Group earns a
fee by acting as agent for the landlord, is included under Leased
Centres, as reported internally.
Segment results include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis.
Inter-segment pricing is determined on an arm's length basis. The
Group does not report internally segmental Statement of Financial
Position information.
Year ended 30 June 2012 Leased Centres Other Consolidated
Centres
GBP'000 GBP'000 GBP'000
Serviced office revenue 99,112 10,475 109,587
Meeting and training room revenue 9,586 1,092 10,678
Managed centres revenue 815 - 815
Revenue per Statement of Comprehensive
Income 109,513 11,567 121,080
Other operating income 2,000 - 2,000
Segment EBITDA (ALPHA>) 3,991 313 4,304
Provision against balances with
subsidiaries of MWB Group Holdings
Plc (note 5) (11,479) - (11,479)
Depreciation and amortisation (ALPHA>) (7,287) (291) (7,578)
Results from operating activities (14,775) 22 (14,753)
Net finance expense (94) (7) (101)
Taxation 8,465 - 8,465
Profit / (Loss) for the year (6,404) 15 (6,389)
Leased centres at year end 47 - 47
OMAs at year end 1 6 7
Managed centres at year end 10 - 10
REVPAW at year end (BETA>) GBP7,530 N/a GBP7,530
REVPOW at year end (BETA>) GBP9,029 N/a GBP9,029
Occupancy at year end (BETA>) 83% N/a 83%
The 'other operating income' shown above represents the premium
received on the surrender, at the landlord's request, of the lease
of the business centre at Lasenby House in March 2012. As a
consequence of this lease termination fixed assets with a net book
value of GBP163,000 were written off, which amount is included in
the 'loss on disposal of fixed assets' shown in note 7.
18 months ended 30 June 2011 (restated) Leased Other Consolidated
Centres Centres
GBP'000 GBP'000 GBP'000
Serviced office revenue 136,208 12,829 149,037
Meeting and training room revenue 13,455 1,646 15,101
Managed centres revenue 1,067 - 1,067
Revenue per Statement of Comprehensive
Income 150,730 14,475 165,205
Segment EBITDA (ALPHA>) 270 635 905
Exceptional item (see note 5) (4,131) - (4,131)
Depreciation and amortisation (ALPHA>) (8,971) (463) (9,434)
Results from operating activities (12,832) 172 (12,660)
Net finance expense (223) (19) (242)
Taxation (6) - (6)
Profit / (Loss) for the period (13,061) 153 (12,908)
Leased centres at period end 48 - 48
OMAs at period end 1 7 8
Managed centres at period end 9 - 9
REVPAW at period end (BETA>) GBP7,318 N/a GBP7,318
REVPOW at period end (BETA>) GBP8,663 N/a GBP8,663
Occupancy at year end (BETA>) 84% N/a 84%
(ALPHA>) = EBITDA is defined as earnings before interest,
tax, depreciation, amortisation and accelerated depreciation on
impairment of fixed assets. Profits or losses on the disposal of
fixed assets are also excluded and are shown above as part of
'depreciation and amortisation'. The 2011/12 provision against
balances receivable from the Group's ultimate parent company is
also shown below EBITDA.
(BETA>) = Leased centres only.
All operations are carried out in Great Britain.
3 REMUNERATION OF DIRECTORS
Year ended 18 months
30 June 2012 ended
30 June 2011
GBP'000 GBP'000
Remuneration of Executives 735 978
Fees of Non-Executive Directors 30 12
LTIS charge - -
Benefits in kind and round sum expense
allowances 41 68
806 1,058
Pension contributions 33 45
839 1,103
Arrangements were put in place by means of a Long-Term Incentive
Scheme (LTIS) to incentivise certain executives of the Company to
realise value for shareholders in cash or cash equivalents at
levels significantly in excess of their current book values. For
further details concerning the LTIS, please see the Report on
Remuneration of Directors ('Report') and note 21. There was no
charge relating to the LTIS in the Statement of Comprehensive
Income for either 2011/12 or 2010/11.
The amounts shown above for the year ended 30 June 2012 differ
from those shown in the Report due to the following factors:
-- Benefits in kind totalling GBP11,000 are not required to be disclosed in the Report;
-- As noted in the Report, the Independent Non-Executive
Director did not draw any accrued emoluments in the year;
-- The LTIS was fully accrued before the commencement of the
prior period and therefore did not impact on either the Statement
of Comprehensive Income for the current year or the prior
period.
4 STAFF NUMBERS, COSTS AND INCENTIVE ARRANGEMENTS
The average number of staff employed by the Group (including
Directors) during the year, analysed by category, was as
follows:-
Year ended 18 months
30 June 2012 ended
Number 30 June 2011
Number
On-site staff 297 268
Head office, procurement and administration 188 184
485 452
The aggregate payroll costs of the Group were as follows:-
GBP'000 GBP'000
Wages and salaries 16,285 20,900
Social security costs 2,183 2,159
Share-based payment transactions (see
note 21) - 178
Defined contribution pension costs 253 325
18,721 23,562
Incentive arrangements and share-based obligations
In addition to the LTIS arrangements mentioned in note 3, the
Company operated an employee share option scheme. As stated in note
21, the scheme has lapsed and no options are currently
outstanding.
5 EXCEPTIONAL ITEMS
Year ended 18 months
30 June 2012 ended
30 June 2011
GBP'000 GBP'000
The exceptional items comprise:-
Provision against amounts due from subsidiaries 8,312 -
of MWB Group Holdings Plc
Provision against part-paid asset due 3,167 -
from subsidiaries of MWB Group Holdings
Plc
Impairment charge - goodwill (see note
10) - 2,825
Impairment of fixed assets (see note 11) 1,200 1,306
Provision for onerous leases (see note 2,486 -
15)
Total charge 15,165 4,131
At 30 June 2012 the Group was owed GBP8,312,000 by subsidiaries
of its ultimate parent company, MWB Group Holdings Plc
('Holdings'). In the light of an announcement issued by Holdings on
16 November 2012, when it went into administration, the Directors
of the Group believe there is considerable uncertainty as to
whether this sum will be recoverable and have therefore established
a provision against the entire balance. See also note 22.
For the same reason, a provision has also been established
against an asset the Group was purchasing from Holdings by monthly
payments, which at 30 June 2012 totalled GBP3,167,000. It is now
believed that Holdings will not be able to deliver the asset.
Subsequent to the year end, two further payments totalling
GBP1,583,000 were made; these payments are not provided against in
the financial statements at 30 June 2012. The potential contracted
amount is GBP9,500,000.
At 30 June 2012 a review was performed of all leases held by the
Group. As described in note 15 provisions have been established
against those business centres likely not to be profitable through
to the end of their leases. The relevant fixed assets for those
same business centres were deemed to be fully impaired, see note
11.
Following the impairment review described in note 10 it was
ascertained at 30 June 2011 that the goodwill and fixed assets of
the MWB Executive Centres (Holdings) Ltd sub-group were permanently
impaired and their full value was thus charged to the Statement of
Comprehensive Income in the period to that date.
6 FINANCE INCOME AND EXPENSE
Year ended 18 months
30 June 2012 ended
30 June 2011
GBP'000 GBP'000
Finance income arose on:-
Bank deposits 33 59
Non-bank deposits and sundry interest
credits - 37
Loan to subsidiary of MWB Group Holdings
Plc - 125
Interest income on cash deposits for the
year / period 33 221
Finance expense arose on:-
Bank loan and overdraft - 207
Bank charges 131 253
Other items 3 3
Total finance expense for the year / period 134 463
7 LOSS BEFORE TAXATION
Year ended 18 months
30 June 2012 ended
GBP'000 30 June 2011
GBP'000
The loss before taxation is stated after
charging the following:-
Exceptional item - provision against assets 11,479 -
due from subsidiaries of MWB Group Holdings
Plc
Exceptional item - goodwill impairment - 2,825
Exceptional item - onerous lease provision 2,486 -
Exceptional item - accelerated depreciation
/ impairment 1,200 1,306
Depreciation - property, plant and equipment
owned 6,330 9,297
Loss on disposal of fixed assets 48 137
Operating lease expense - minimum rental
payments 39,015 60,832
Operating lease expense - contingent rents 3,289 2,470
Auditors' remuneration charged:-
Fees payable to the Company's auditors
for the audit of the Company's annual
accounts 83 79
Fees payable to the Company's auditors
and their associates for other services:-
Audit of the Company's subsidiaries, pursuant
to legislation 19 37
All other services 5 20
Fees paid to the Company's auditors, BDO LLP and associates, for
non-audit services to the Company itself are not disclosed
separately above because the Company's consolidated financial
statements are required to disclose such fees on a consolidated
basis. They are however not material.
8 TAXATION
The taxation credit / (charge) for the year / period in the
Statement of Comprehensive Income arose as follows:-
Year ended 18 months
30 June 2012 ended
GBP'000 30 June 2011
GBP'000
Current taxation
UK corporation tax
Arising on loss for the year / period - -
Adjustment in respect of prior years - (6)
Deferred taxation credit
Deferred tax asset arising on accelerated 2,851 -
capital allowances
Deferred tax asset arising on trading 5,614 -
losses
Total corporation tax credit / (charge)
for the year / period 8,465 (6)
No tax was recognised directly in equity during the year ended
30 June 2012 or during the previous period.
Taxation differs from the amount that would arise from applying
the prevailing corporation tax rate to the loss before taxation in
the Statement of Comprehensive Income, as follows:-
Year ended 18 months
30 June 2012 ended
GBP'000 30 June 2011
GBP'000
UK corporation tax credit at 25.5% (2010/11:
27.67%) for the year / period on the loss
before taxation in Statement of Comprehensive
Income 3,788 3,570
Excess of depreciation charged over capital
allowances claimed (1,538) (2,971)
Expenditure permanently disallowed for
taxation purposes (3,399) (5,315)
Brought forward losses utilised 1,149 -
Allowable charges not reflected in the
financial statements - 4,716
- -
Adjustment in respect of prior years - (6)
Taxation (charge) for the year / period - (6)
Deferred tax asset arising on accelerated 2,851 -
capital allowances
Deferred tax asset arising on trading 5,614 -
losses
Total corporation tax credit / (charge)
for the year / period 8,465 (6)
The Group as a whole has approximately GBP25.5 million (2011:
GBP27.3 million) of tax losses available to carry forwards.
9 LOSS PER SHARE
The earnings per share figures are calculated by dividing the
profit or loss attributable to equity shareholders of the Company
for the year / period by the weighted average number of ordinary
shares in issue during the year / period, as follows:-
Year ended 18 months
30 June 2012 ended
GBP'000 30 June 2011
GBP'000
Loss attributable to equity shareholders
of the Company (6,248) (11,433)
Number Number
'000 '000
Weighted average number of ordinary shares
- basic 64,960 65,239
Effect of shares issuable under share - -
option schemes (no effect in either 2011/12
or 2010/11)
Weighted average number of shares - diluted 64,960 65,239
Loss and diluted loss per share (9.6p) (17.5p)
10 INTANGIBLE ASSET - GOODWILL
30 June 2012 30 June 2011
GBP'000 GBP'000
Cost
At 1 July 2011 (1 January 2010) 7,587 10,412
Impairment charge (see note 5) - (2,825)
At 30 June 2012 (30 June 2011) 7,587 7,587
During the year ended 31 December 2007 the Group acquired
Stanhope Business Centres Limited, a serviced office business based
in London. Goodwill of GBP7.6 million arose on this acquisition and
was recognised in the year ended 31 December 2007. An impairment
review of the Stanhope Business Centres goodwill was undertaken by
the Directors on 30 June 2012. This compared the carrying value of
goodwill with the anticipated recoverable amount of the two
business centres owned by Stanhope Business Centres which are the
cash-generating unit to which the goodwill was allocated. The
recoverable amount of the cash-generating unit is based on value in
use, which is calculated from cash flow projections for the
lifetimes of the underlying leases, using data from Board approved
budgets covering the period to 31 December 2013 and extrapolated
thereafter as noted below. The key assumptions for the value in use
calculations were discount rates, licence fee income, client
renewals and occupancy rates. The Directors estimate discount rates
using pre-tax rates that reflect the current market assessments of
the time value of money and risks specific to the cash-generating
units, and they consider the appropriate pre-tax risk adjusted
discount rate is 6.2%, based on the following inputs: risk free
rate, 1.9%; beta, 0.54; a, 8 (2011: 8.4% based on the following
inputs: risk free rate, 2.8%; beta, 0.70; a, 8). Changes in licence
fee income, client renewals and occupancy rates are based on an
expectation of zero growth and direct costs are based on assumed
compound growth rates of 2% to 8%. The Directors have also looked
at past experience and their expectations of future changes in the
market. Based on this review, the Directors concluded that there
had been no impairment to the Stanhope Business Centres goodwill
during the year ended 30 June 2012.
During the year ended 31 December 2009 the Group acquired
business centres from the Administrator of MLS Group PLC (MLS), by
means of a 'pre-pack' arrangement, and by direct negotiation from
MLS's former landlords after they had exercised their repossession
rights. The centres are held in a sub-group led by MWB Executive
Centres (Holdings) Ltd, of which the Group owns 65%. The goodwill
of GBP2.8 million arising from the acquisition derived from the
efficiencies and improved performance gained from the assimilation
of these centres into the Group's network and the strengthening of
its brand to become the dominant provider of serviced office
accommodation in the London region. An impairment review of this
goodwill was undertaken by the Directors on 30 June 2011. The
criteria, assumptions and methodology used were as described above.
Based on this review, the Directors concluded that the goodwill in
MWB Executive Centres (Holdings) Ltd as at 30 June 2011 was fully
impaired and therefore charged the full amount to the Statement of
Comprehensive Income at that date, as further explained in note
5.
11 PROPERTY, PLANT AND EQUIPMENT
Operating Plant, machinery, Total
leasehold fixtures &
improvements equipment
GBP'000 GBP'000 GBP'000
Cost
At 1 July 2011 51,612 18,205 69,817
Additions 1,759 832 2,591
Retirements (750) (2,708) (3,458)
Disposals (597) (133) (730)
At 30 June 2012 52,024 16,196 68,220
Depreciation
At 1 July 2011 (17,547) (9,050) (26,597)
Charge for the year (4,010) (2,320) (6,330)
Impairment (see note 5) (1,142) (58) (1,200)
Retirements 750 2,708 3,458
Disposals 320 80 400
At 30 June 2012 (21,629) (8,640) (30,269)
Net book value
At 30 June 2012 30,395 7,556 37,951
The impairment charge relates to the fixed assets of certain
business centres (cash-generating units) which have been
ascertained as likely not to be profitable through to the end of
their respective leases. These assets have therefore been written
down to their expected value in use. The variables used in this
review are as described in note 10 above, except that revenue
levels have been assessed on a centre-by-centre basis.
2010/11 Operating Plant, machinery, Total
leasehold fixtures &
improvements equipment
GBP'000 GBP'000 GBP'000
Cost
At 1 January 2010 44,675 16,103 60,778
Additions 7,267 4,824 12,091
Retirements - (2,244) (2,244)
Disposals (330) (478) (808)
At 30 June 2011 51,612 18,205 69,817
Depreciation
At 1 January 2010 (11,768) (6,922) (18,690)
Charge for the period (5,529) (3,768) (9,297)
Impairment (see note 5) (443) (863) (1,306)
Retirements - 2,244 2,244
Disposals 193 259 452
At 30 June 2011 (17,547) (9,050) (26,597)
Net book value
At 30 June 2011 34,065 9,155 43,220
12 TRADE AND OTHER RECEIVABLES
30 June 2012 30 June
GBP'000 2011
GBP'000
Due after more than one year
Other receivables 940 1,002
940 1,002
Due within one year
Trade receivables 2,843 5,496
Other receivables 144 122
Amounts due from subsidiaries of MWB Group Holdings
Plc (notes 5 and 22) - 5,894
Prepayments and accrued income 14,126 14,507
Retention balances 2,833 1,068
19,946 27,087
Retention balances predominantly comprise cash funds received
from tenants as security for lease obligations. These are retained
in Group bank accounts which are separate from the main Group
facilities and are not generally available for use in the Group's
operations.
13 CASH AND CASH EQUIVALENTS
30 June 2012 30 June
GBP'000 2011
GBP'000
Cash and current accounts at bank 247 324
Short-term fixed rate deposits at bank 3,113 2,500
Cash and cash equivalents 3,360 2,824
Less: Overdraft at bank (2,278) (4,689)
Cash and cash equivalents per Statement of Financial
Position and Statement of Cash Flows 1,082 (1,865)
The 'overdraft at bank' represents cheques in transit at the
reporting date which were covered by incoming funds by the date
they cleared the bank. At no point either side of the reporting
date was any bank account actually overdrawn.
14 TRADE AND OTHER PAYABLES
30 June 2012 30 June
GBP'000 2011
GBP'000
Current liabilities
Trade payables 1,277 4,606
Client deposits 15,661 13,904
Operating lease incentives 1,647 404
Accruals 15,968 18,625
PAYE, NIC and VAT 2,291 1,780
Deferred income 9,473 2,815
46,317 42,134
Non-current liabilities
Operating lease incentives 18,861 20,513
15 PROVISIONS
Provision Provision Total
for for GBP'000
dilapidations onerous leases
GBP'000 GBP'000
Non-current liabilities:
At 1 July 2011 2,072 - 2,072
Charged in year 439 2,486 2,925
Released in year (127) - (127)
At 30 June 2012 2,384 2,486 4,870
At 1 January 2010 - - -
Charged in period 2,072 - 2,072
At 30 June 2011 2,072 - 2,072
Leasehold dilapidations relate to the estimated cost of
returning leasehold properties to their original state, where this
is required in the lease terms. The cost is either recognised as
depreciation of the leasehold improvements over the remaining term
of the lease or as the accrued cost of reparation liabilities over
the lease term.
The provision for onerous leases relates to certain business
centres which have been ascertained as likely not to be profitable
through to the end of their respective leases. The leases have
therefore been provided to the extent that the centres will not
generate sufficient revenue to cover these costs. The variables
used in this review are as described in note 10 above, except that
revenue levels have been assessed on a centre-by-centre basis. See
also note 5.
16 FINANCIAL INSTRUMENTS
Overall summary
The Group has exposure to the following principal risks in the
operation and management of its business:-
(i) Liquidity risk; and
(ii) Credit risk;
Set out below is information about the Group's exposure to each
of the above risks, the Group's objectives, policies and processes
for measuring and managing risk, and the Group's management of
capital. Further quantitative disclosures are included throughout
these consolidated financial statements.
The Directors have overall responsibility for the establishment
and oversight of the Group's risk management framework. The Audit
Committee of the Board monitors the Group's risk management
policies and reports to the Board on its activities.
The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits.
Risk management policies to provide protection for the Group's
activities are regularly reviewed to reflect changes in market
conditions. The Group, through its management standards and
procedures, aims to develop a disciplined and constructive control
environment in which employees understand their roles and
obligations.
The Audit Committee oversees how management monitors compliance
with the Group's risk management policies and procedures and
reviews the adequacy of the risk management framework in relation
to the risks faced by the Group.
This is managed and controlled through a detailed funding policy
and capital management strategy, details of which are set out
below.
Capital management strategy
The Board's policy is to maintain a strong capital base within
the Group so as to maintain investor and creditor protection, and
to maintain market confidence in the Group. This strategy also
sustains future development potential of the Group. The Directors
monitor return on capital achieved by the Group, which the Board
has defined as EBITDA - see note 2.
The Board seeks to maintain a balance between the higher returns
that might be possible with borrowings and the advantages and
security afforded by a sound capital position. Neither the Company
nor any of its subsidiaries are subject to externally imposed
capital requirements. There were no material changes in the Group's
approach to capital management during the year ended 30 June 2012
or during the previous period.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities as they fall due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The Group uses detailed cash flow reporting, which assists the
Board in monitoring cash flow requirements and optimising cash
returns across the whole Group. The Group typically ensures it has
sufficient forecast cash and available facilities to meet expected
cash outflows for a period of two years, including the servicing of
financial obligations. These forecasts include all generally
predictable events within the Group but necessarily exclude the
potential impact of extreme circumstances such as natural disasters
that cannot reliably be modelled and forecast. The contractual
maturity of the Group's financial liabilities is set out below.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations. The risk to the Group arises
principally from the Group's receivables from customers.
The Group has established credit policies under which each new
customer is analysed individually for creditworthiness before the
Group's standard payment and delivery terms and conditions are
offered. The Group's review includes external ratings when
available, and in some cases bank references. Credit limits are
established for each customer, which represent the maximum open
amount that may be permitted in the day-to-day operations of the
Group without requiring prior approval from a member of middle or
senior management. Customers that fail to meet the Group's
benchmark creditworthiness level may still transact with the Group
but on a restricted, generally only prepayment, basis.
Customers that are graded as high risk are placed on a
restricted customer list, and future sales are only made on a
restricted basis. Customers are normally required to deposit two
months' licence fee at the commencement of the licence as security
for their receivables due to the Group.
Exposure to credit risk
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer. The Board considers
there is not a material risk attached to the customer base of the
Group's serviced office business. This is because the customer base
is intrinsically diversified and management ensures the business
has a broad spread of customers at each of the Group's serviced
offices. Geographically there is a concentration of credit risk in
London, where the Group has or operates 39 (2011: 41) serviced
offices. Total consolidated revenue in London totalled GBP97.7
million (18 months 2010/11: GBP125.7 million) for the year ended 30
June 2012.
The carrying amount of financial assets represents their maximum
credit exposure to the Group, which at 30 June 2012 was as
follows:-
Note 30 June 2012 30 June 2011
GBP'000 GBP'000
Trade and other receivables 12 20,886 28,089
Cash and cash equivalents 13 3,360 2,824
24,246 30,913
The maximum exposure to credit risk at the reporting date is the
carrying value of each class of receivable mentioned above. Credit
risk is mitigated by licence and other regular fees being billed in
advance, by the use of direct debit, which currently accounts for
44% of all trade receipts, and by requesting deposits generally
representing two months' licence fees from licensees, which at 30
June 2012 totalled GBP15.7 million (2011: GBP13.9 million), see
also note 14. The deposits are utilised, where appropriate, to
offset the charge to the Statement of Comprehensive Income that
would otherwise occur from provisions for impairment referred to
below.
The ageing of trade receivables at 30 June 2012 was as
follows:-
30 June 2012 30 June 2011
Gross Impairment Gross Impairment
GBP'000 GBP'000 GBP'000 GBP'000
Current 741 - 3,887 -
1-30 days overdue 1,328 - 1,055 -
31-120 days overdue 826 (91) 790 (236)
More than 120 days overdue 479 (440) 301 (301)
3,374 (531) 6,033 (537)
Based on historical default rates, the Board believes that no
material amount of impairment allowance is necessary in respect of
trade receivables not past due or past due by up to 60 days; the
majority of the balance relates to customers that have good
financial track records with the Group. Factors considered when
evaluating impairment include whether the customer is still
trading, the ageing of unpaid debt, balances held as deposits,
statements provided by the customer and external debt agencies.
The movement on the impairment provision during the year /
period was as follows:-
18 months
Year ended ended
30 June 2012 30 June 2011
GBP'000 GBP'000
Opening provision 537 717
Amounts provided 436 634
Amounts utilised (442) (814)
Closing provision 531 537
Determination of fair values
The following tables show the carrying amounts and fair values
of the Group's financial instruments at 30 June 2012. The carrying
amounts are included in the Statement of Financial Position. The
fair values of the financial instruments are the amounts at which
the instruments could be exchanged in a current transaction between
willing parties.
The carrying amounts and fair values of financial assets and
liabilities at 30 June 2012 were as follows:-
30 June 2012 30 June 2011
Carrying Fair Carrying Fair
amount value amount value
GBP'000 GBP'000 GBP'000 GBP'000
Trade and other receivables 20,886 20,886 28,089 28,089
Cash and cash equivalents 1,082 1,082 (1,865) (1,865)
Trade and other payables excluding
operating lease incentives
and deferred income (35,197) (35,197) (38,915) (38,915)
(13,229) (13,229) (12,691) (12,691)
Liquidity risk
The maturity profile of the Group's non-derivative financial
liabilities is set out below:-
----------------------Contractual cash
flows-----------------------
30 June 2012 Within Between Between Over Total Carrying
one year one and three five GBP'000 amount
or on demand two years and five years GBP'000
GBP'000 GBP'000 years GBP'000
GBP'000
Trade and other payables
excluding operating
lease incentives and
deferred income 35,197 - - - 35,197 35,197
30 June 2011
Trade and other payables
excluding operating
lease incentives and
deferred income 38,915 - - - 38,915 38,915
17 DEFERRED TAXATION
The deferred taxation assets at 30 June 2012 and the previous
period end arose as follows:-
30 June 2012
Total Provided Not provided
GBP'000 GBP'000 GBP'000
Accelerated capital allowances 2,851 2,851 -
Trading tax losses 8,680 5,614 1,326
Other tax losses 309 - 309
11,840 8,465 1,635
30 June 2011
Total Provided Not provided
GBP'000 GBP'000 GBP'000
Accelerated capital allowances 1,666 - 1,666
Trading tax losses 7,730 - 7,730
Other tax losses 335 - 335
9,731 - 9,731
The total provided deferred tax asset is shown in the Statement
of Financial Position as follows:-
30 June 2012 30 June 2011
GBP'000 GBP'000
Non-current assets 5,899 -
Current assets 2,566 -
8,465 -
Deferred tax assets and liabilities provided
At 30 June 2012, the Group had accelerated capital allowances
and trading tax losses from current and prior periods amounting to
GBP35.3 million (2011: GBPnil) that is expected to be available to
reduce future tax liabilities likely to arise in the Group.
This amount has been recognised at 24% (2011: 26%) in the
deferred tax asset of GBP8.5 million at the year end.
Deferred tax assets and liabilities not provided
In addition the Group has trading and other tax losses totalling
GBP6.8 million (2011: GBP37.4 million) that are not expected to be
capable of utilisation because they arise in parts of the Group
that are not expected to be profit making in the foreseeable
future. These are reflected at the prevailing tax rate of 24%
(2011: 26%) in the figure of GBP1.6 million (2011: GBP9.7 million)
disclosed above.
The Group's performance of its obligations regarding the payment
of rent to certain of its landlords is guaranteed by a subsidiary
of its ultimate parent, MWB Group Holdings Plc. In accordance with
the transfer pricing provisions, the arm's length price of these
guarantees for a full year is reflected in the Group's corporation
tax computations.
18 CALLED UP SHARE CAPITAL
30 June 2012 30 June 2011
GBP'000 GBP'000
Allotted, called up and fully paid equity
share capital
64,959,912 (2011: 64,959,912) fully paid
ordinary shares of 0.1p each 65 65
Dividends on ordinary shares
Holders of ordinary shares are entitled to receive dividends per
share as declared from time to time and are entitled to one vote
per share at shareholder meetings of the Company.
During the year ended 30 June 2012 and the previous 18 month
period the Company did not declare or pay a dividend.
Market purchases of ordinary shares
During the year ended 30 June 2012 no shares (18 months to 30
June 2011: 679,914 shares, see note 19) were bought in the
market.
It is intended that a resolution proposing an authority for the
company to purchase up to 9,740,000 ordinary shares will be
considered at the 2012 Annual General Meeting. If passed, this
resolution will provide authority to the Company to make market
purchases within the guidelines laid down by the Investment
Committees of the Insurance and Pension Management Industries and
by the UK Listing Authority, and will be available for use by the
Company until the conclusion of the 2013 Annual General Meeting.
Under the proposed authority, purchases could be made at a minimum
price of 1p per share and a maximum price of 5% above the average
middle market quotation for an ordinary share for the five dealing
days immediately prior to the date of purchase.
Share options
There were no share options extant at 30 June 2012 or the
previous period end.
Unissued share capital
At 20 November 2012, being the date of approval of these
financial statements, no ordinary shares are available for issue by
the Company in accordance with the Company's share option scheme.
Under the general authority granted by shareholders at the 2011
Annual General Meeting 21,650,000 shares are available for
issue.
19 MOVEMENTS ON CAPITAL AND RESERVES
As noted above, no shares were bought in the market during the
year ended 30 June 2012. (During the 18 months to 30 June 2011,
679,914 shares were bought in the market and cancelled for a total
cost of GBP307,000 at an average cost of 45.1p per share,inclusive
of fees and stamp duty. The nominal value of the shares purchased
was GBP680, for which amount a capital redemption reserve was
established, as will be seen in the Statement of Changes in
Equity.)
The merger reserve disclosed in that Statement was established
on the restructuring of the Group immediately prior to the
Company's flotation in December 2005. It reflects the difference
between the previously reported reserves and the restated amounts
at their valuation at the date of the restructuring.
20 NON-CONTROLLING INTERESTS
The movements in non-controlling interests of the Group during
the year ended 30 June 2012 arose as follows:-
Subsidiary Non- At Share of Other At
controlling 30 June result for movements 30 June
interests 2011 the year during the 2012
% GBP'000 GBP'000 year GBP'000
GBP'000
MWB Executive Centres
(Holdings) Ltd 35 (2,569) (141) - (2,710)
21 SHARE-BASED PAYMENTS
Equity settled share-based payments
In December 2005 the Company established the MWB Business
Exchange Plc Executive Share Option Scheme 2005 (the Option Scheme)
after shareholder approval. The Option Scheme enabled the Board to
grant options over shares to certain employees (excluding
Directors), exercisable between three and ten years after the date
of grant. The Scheme has lapsed and no options were outstanding at
either 30 June 2012 or the previous period end.
Cash settled share-based payments
Provision for the Long-Term Incentive Scheme operated by the
Company represents the fair value of the amount payable calculated
by reference to management's best estimate as noted in the Report
on Remuneration of Directors.
22 RELATED PARTY BALANCES AND TRANSACTIONS
30 June 2012 30 June 2011
GBP'000 GBP'000
Current assets
Trade and other receivables (note 12)
Amounts owed by subsidiaries of MWB Group
Holdings Plc - 5,894
During the year ended 30 June 2012, the Group incurred
GBP498,000 of charges (2010/11: GBP376,000) from a subsidiary of
MWB Group Holdings Plc ('Holdings') in respect of accommodation
costs in accordance with the services agreement between the Company
and Holdings dated 16 December 2005, which provides for the Group
to use office space at its head office under licence from Holdings.
In addition to this amount a deposit of GBP425,000 (2011: GBPnil),
which is part of the balance owed to the Group (see below), was
required for use of the same accommodation. All costs charged to
the Group in accordance with this agreement are recharged at cost
and are calculated on an arm's length basis. On the same basis the
Group recharged to Holdings GBP164,000 (2010/11: GBPnil) in respect
of accommodation costs in accordance with the above mentioned
services agreement.
All amounts receivable from subsidiaries of Holdings at 30 June
2012 have been fully provided against. Please see note 5 for
further details.
23 COMMITMENTS
Capital commitments
30 June 2012 30 June 2011
GBP'000 GBP'000
Authorised but not contracted - 41
Contracted but not provided 43 265
43 306
Operating lease commitments
Non-cancellable operating lease rentals of the Group relate to
land and buildings. These expire in years subsequent to 30 June
2012 and involve total payments in future years as follows:-
30 June 2012 30 June 2011
GBP'000 GBP'000
Within one year 40,097 41,008
Between two and five years 130,265 143,110
After more than five years 122,431 137,403
292,793 321,521
24 PARENT UNDERTAKING
The ultimate parent undertaking is MWB Group Holdings Plc
('Holdings'), a company registered in England and Wales and listed
on the London Stock Exchange until 31 October 2012. The financial
statements of the Company are consolidated in the financial
statements of Holdings. The consolidated financial statements of
the Company are available to the public and may be obtained from
the MWB Business Exchange Plc Company Secretary, Filex Services
Limited, 179 Great Portland Street, London W1W 5LS. The financial
statements of Holdings for the 18 months ended 30 June 2011 are
available to the public and may be obtained from the Company
Secretary of Holdings, City Group P.L.C, 30 City Road, London EC1Y
2AG.
PARENT COMPANY BALANCE SHEET
at 30 June 2012
Notes 30 June 2012 30 June 2011
GBP'000 GBP'000
Fixed assets
Investment in subsidiary undertakings 27 24,000 10,000
--------------------------------------- ------- ------------- -------------
Current assets
Debtors 28 9,642 34,919
Current liabilities
Trade and other payables 29 (12,050) (14,648)
(2,408) 20,271
Net assets 21,592 30,271
======================================= ======= ============= =============
Capital and reserves
Called up share capital 18 65 65
Share premium 30 35,459 35,459
Capital redemption reserve 30 4 4
Profit and loss account 30 (13,936) (5,257)
--------------------------------------- ------- ------------- -------------
Equity shareholders' funds 31 21,592 30,271
======================================= ======= ============= =============
The notes form part of these financial statements. Approved by
the Board of Directors on 20 November 2012 and signed on its behalf
by:-
John Spencer
Chief Executive
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
25 ACCOUNTING POLICIES
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the financial statements.
Basis of preparation
The financial statements have been prepared in accordance with
applicable accounting standards (UK GAAP), and under the historical
cost accounting rules.
Under section 408 of the Companies Act 2006, the Company is
exempt from the requirement to present its own profit and loss
account.
Under FRS 1, Cash flow statements, the Company is exempt from
the requirement to prepare a cash flow statement on the grounds
that the Consolidated Statement of Cash Flows included in these
published financial statements includes the cash flow of the
Company.
The Company has taken advantage of the exemption contained in
FRS 8, Related party disclosures, and has therefore not disclosed
transactions or balances with entities which form part of the Group
(or investees of the group qualifying as related parties).
Investment in subsidiary undertakings
The interest of the Company in the shares of subsidiary
undertakings is stated at cost less any provision for impairment.
The carrying values of fixed asset investments are reviewed for
impairment in periods if events or changes in circumstances
indicate the carrying value may not be recoverable. An impairment
is recognised by comparing the carrying amount to the higher of the
recoverable amount and value in use.
Share-based payment transactions
The share option programme allows certain employees to acquire
shares in the Company and for such equity settled share-based
payments the fair value of options granted to employees is
recognised as an employee expense, with a corresponding increase in
equity, over the period in which the employees become
unconditionally entitled to the options. The fair value of the
options granted is measured using an option valuation model, taking
into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect
the actual number of share options that vest except where
forfeiture is due only to share prices not achieving the threshold
for vesting.
Long-Term Incentive Scheme
The fair value of the amount payable to employees in respect of
the LTIS, which will be settled in cash, is recognised as an
expense with a corresponding increase in liabilities over the
period that the employees become entitled to payment. The liability
is remeasured at each reporting date and at settlement date. Any
changes in the fair value of the liability are recognised as
personnel expense in the profit and loss account.
26 DIRECTORS AND EMPLOYEES
The Company has no employees other than its Directors, whose
emoluments are set out in note 3 above.
27 INVESTMENT IN SUBSIDIARY UNDERTAKINGS
The subsidiary undertakings of the Company are all engaged in
serviced office or related activities, or act as intermediary
holding companies for such operations.
30 June 2012 30 June 2011
GBP'000 GBP'000
Investment in subsidiary undertakings 42,898 28,898
Provision for reduction in value (18,898) (18,898)
24,000 10,000
The Company is a holding company. The results of all
subsidiaries of the Company have been included in the consolidated
financial statements. They are all registered in England and Wales
and operate in the United Kingdom. The active subsidiaries of the
Company at the year end and the percentage shareholdings at that
date were as follows:-
Name of undertaking Activity % held Name of undertaking Activity % held
Chainrange Ltd Serviced offices 100 Langcharm Ltd Serviced offices 100
MWB Business Exchange
MWB Business Exchange (Canary Wharf)
(Birmingham) Ltd Serviced offices 100 Ltd Serviced offices 100
MWB Business Exchange
(Disaster Recovery) MWB Business Exchange
Ltd Serviced offices 100 (Houndsditch) Ltd Serviced offices 100
MWB Business Exchange
(Virtual Offices) MWB Business Exchange
Ltd Virtual offices 100 Cannon Centre Ltd Serviced offices 100
MWB Business Exchange MWB Business Exchange
Centres Ltd * Serviced offices 100 City Tower Ltd Serviced offices 100
MWB Business Exchange
Pall Mall Court MWB Business Exchange
Ltd Serviced offices 100 St Clements Ltd Serviced offices 100
MWB Business Exchange MWB Executive Centres
Treasury Services Group treasury (Administration)
Ltd services 100 Ltd Serviced offices 65
MWB Executive Centres
(Austin Friars) MWB Executive Centres
Ltd Serviced offices 100 (Bloomsbury) Ltd Serviced offices 65
MWB Executive Centres MWB Executive Centres
(Floral Street) (Gray's Inn Road)
Ltd Serviced offices 65 Ltd Serviced offices 65
MWB Executive Centres
(Grosvenor Gardens) MWB Executive Centres
Ltd Serviced offices 100 (Guildford) Ltd Serviced offices 65
MWB Executive Centres Intermediate MWB Executive Centres
(Holdings) Ltd holding co. 65 (Hounslow) Ltd Serviced offices 65
MWB Executive Centres MWB Executive Centres
(Monument) Ltd Serviced offices 65 (Noel Street) Ltd Serviced offices 65
MWB Executive Centres MWB Executive Centres
(Paddington) Ltd Serviced offices 65 (Twickenham) Ltd Serviced offices 65
MWB Executive Centres MWB Executive Centres
(Westgate) Ltd Serviced offices 65 (Woking) Ltd Serviced offices 65
MWB Executive Centres
Ltd Serviced offices 100
* Indicates direct subsidiary of the Company. All other
subsidiaries listed are held indirectly.
Inactive and dormant subsidiaries are not shown above. A full
list of subsidiaries will be included with the Company's annual
return.
28 DEBTORS
30 June 2012 30 June 2011
GBP'000 GBP'000
Amounts due from subsidiary undertakings 8,260 27,933
Amounts owed by subsidiaries of MWB Group
Holdings Plc - 5,905
Accrued income 1,382 1,081
9,642 34,919
29 TRADE AND OTHER PAYABLES
30 June 2012 30 June 2011
GBP'000 GBP'000
Current liabilities
Amounts due to subsidiary undertakings 12,050 12,248
Accruals - 2,400
12,050 14,648
30 MOVEMENT ON RESERVES
Share Capital Profit
premium account redemption and loss
GBP'000 reserve account
GBP'000 GBP'000
At 1 July 2011 35,459 4 (5,257)
Loss for the year - - (8,679)
At 30 June 2012 35,459 4 (13,936)
31 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
Year ended 18 months ended
30 June 2012 30 June 2011
GBP'000 GBP'000
Loss for the year / period (8,679) (32,835)
Write back of share option cost through
equity - 178
Shares purchased and cancelled (note 19) - (307)
Net decrease in shareholders' funds (8,679) (32,964)
Opening equity shareholders' funds 30,271 63,235
Closing equity shareholders' funds 21,592 30,271
32 COMPANY COMMITMENTS AND GUARANTEES
The Company has agreed to provide financial support for certain
of its subsidiaries at 30 June 2012. The support provided by the
Company to its subsidiaries has no financial effect on the
financial statements of the Group. Other than guarantees arising in
the ordinary course of the Group's business, there were no other
contingent liabilities or guarantees at 30 June 2012.
The unexpired term of the service contracts of all Executive
Directors of the Company and of all Directors and other senior
executives in the Group is restricted to a maximum of one year.
GROUP BUSINESS CENTRES at 30 June 2012
Contact details for all business centres operated by the
Group:-
Telephone: Freephone 0808 100 1800 Web: www.mwbex.com
Number of
Leased centres Location workstations
43 Temple Row Birmingham B2 5LS 267
Atrium Court, The Ring Bracknell RG12 1BW 422
Lower Castle Street Bristol BS1 3AG 246
Wellington House, East Road Cambridge CB1 1BH 171
9-10 St. Andrew Square Edinburgh EH2 2AF 348
Westpoint, 4 Redheughs Rigg, South
Gyle Edinburgh EH12 9DQ 268
Crossweys, 28-30 High Street Guildford GU1 3EL 164
1 Farnham Road Guildford GU2 4RG 299
Craneshaw House, 8 Douglas Road Hounslow TW3 1DA 163
Vantage House, 21-23 Wellington
Street Leeds LS1 4DE 370
1 Whitehall, Whitehall Road Leeds LS1 4HR 405
Liverpool Street, 55 Old Broad
Street London EC2M 1RX 301
Providian House, 16-18 Monument
Street London EC3R 8AJ 246
107-111 Fleet Street London EC4A 2AB 419
60 Cannon Street London EC4N 6JP 335
Winchester House, 259-269 Old
Marylebone Road London NW1 5RA 366
Alpha House, 100 Borough High
Street London SE1 1LB 268
6 Hays Lane London SE1 2QG 255
10 Greycoat Place London SW1P 1SB 514
14 Basil Street, Knightsbridge London SW3 1AJ 410
Liberty House, 222 Regent Street London W1B 5TR 395
77 Oxford Street London W1D 2ES 309
18 Soho Square London W1D 3QL 283
Cobalt Building, 19-20 Noel Street London W1F 8GW 131
33 Cavendish Square London W1G 0PW 516
Marble Arch Tower, 55 Bryanston
Street London W1H 7AA 324
1 Berkeley Street London W1J 8DJ 364
85 Tottenham Court Road London W1T 4DU 369
83 Baker Street London W1U 6LA 346
One Kingdom Street, Paddington
Central London W2 6BD 306
26-28 Hammersmith Grove London W6 7BA 514
4/4a Bloomsbury Square London WC1A 2RP 157
344-354 Gray's Inn Road London WC1X 8BP 291
88 Kingsway London WC2B 6AA 312
Amadeus House, Floral Street London WC2E 9DP 269
25 Floral Street London WC2E 9DS 288
53-59 Chandos Place London WC2N 4HS 212
Golden Cross House, 8 Duncannon
Street London WC2N 4JF 503
Siena Court, The Broadway Maidenhead SL6 1NJ 191
Trident One, Styal Road Manchester M22 5XB 301
Exchange House, 494 Midsummer
Boulevard Milton Keynes MK9 2EA 240
15 Wheeler Gate Nottingham NG1 2NA 122
John Eccles House, Robert Robinson
Avenue,
Oxford Science Park Oxford OX4 4GP 113
Atlantic House, Imperial Way Reading RG2 0TD 356
Parkshot House, 5 Kew Road Richmond TW9 2PR 455
Staines-upon-Thames TW18
Centurion House, London Road 4AX 217
Regal House, 70 London Road Twickenham TW1 3QS 132
47 leased centres at 30 June 2012 14,253
Number of
Operating and Management Agreement Location Workstations
centres
Level 33, 25 Canada Square, Canary
Wharf London E14 5LB 225
27 Austin Friars London EC2N 2QP 124
133 Houndsditch London EC3A 7AH 350
St. Clement's House, 27/28 Clement's
Lane London EC4N 7AE 418
Westgate House, Westgate Road London W5 1YY 187
Pall Mall Court, King Street Manchester M2 4PD 237
Elizabeth House, Duke Street Woking GU21 5AM 61
7 Operating and Management Agreement
centres at 30 June 2012 1,602
Number of
Management contract centres Location Workstations
Tower Point 44, North Road Brighton BN1 1YR 350
Imperial House, Hornby Street Bury BL9 5BN 407
Europa House, Barcroft Street Bury BL9 5BT 263
Minerva House, Hornby Street Bury BL9 5BW 70
Copthall Bridge House, Station
Bridge Harrogate HG1 1SP 177
Silk House Court, Tithebarn Street Liverpool L2 2LZ 114
1 Sekforde Street, Clerkenwell London EC1R 0BE 256
London Wall City Business Centre
2 London Wall Buildings London EC2M 5UU 156
52 Grosvenor Gardens London SW1W 0AU 242
Cuthbert House, City Road, All Newcastle-upon-Tyne NE1
Saints 2ET 192
10 management contract centres
at 30 June 2012 2,227
Total
64 centres at 30 June 2012 18,082
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2012 Annual General Meeting of
MWB Business Exchange Plc (incorporated and registered in England
and Wales with registered number 5628635) will be held on Friday 21
December 2012 at Marble Arch Tower, 55 Bryanston Street, London W1H
7AA, commencing at 10:00, for the following purposes:-
As Ordinary Business, to consider and, if thought fit, pass the
following resolutions which will be proposed as Ordinary
Resolutions:-
1 To receive the Financial Statements of the Company for the
year ended 30 June 2012, together with the Report of the Directors
and the independent auditors' report thereon.
2 To adopt the Report on Remuneration of Directors for the year ended 30 June 2012.
3 To re-appoint as a Director Andrew Blurton in accordance with
the Articles of Association of the Company.
4 To re-appoint as a Director Eric Sanderson in accordance with
the Articles of Association of the Company.
5 To re-appoint BDO LLP to hold office as auditors of the
Company until the conclusion of the next Annual General Meeting at
which financial statements for the Company are presented and to
authorise the Directors to agree their remuneration.
As Special Business, to consider and, if thought fit, pass the
following resolutions which will be proposed as Special
Resolutions:-
6 That:
(1) in accordance with section 551 of the Companies Act 2006 the
Directors be and are hereby authorised to exercise all powers of
the Company to allot any shares in the Company and to grant rights
to subscribe for or convert any security into shares in the Company
up to an aggregate nominal value of GBP21,650 provided that this
authority will expire (unless renewed, varied or revoked by the
Company in general meeting) at the conclusion of the annual general
meeting of the Company to be held in 2013, save that the Company
shall be entitled to make, prior to the expiry of such authority,
any offer or agreement which would or might require shares to be
allotted or rights to subscribe for or convert any securities into
shares to be granted after the expiry of such authority and the
Directors may allot shares or grant rights to subscribe for or
convert securities into shares in pursuance of such offer or
agreement as if the authority conferred hereby had not expired.
(2) for the purposes of sub-paragraph (1) above, words or
expressions defined in or for the purposes of Part 17 of the
Companies Act 2006 shall bear the same meaning herein.
(3) the authority granted by this resolution shall replace all
existing authorities to allot relevant securities (as defined in
section 80(2) of the Companies Act 1985) or any shares in the
Company previously granted to the Directors pursuant to section 551
of the Companies Act 2006.
7 That:
(1) in accordance with section 570 of the Companies Act 2006 the Directors be and are hereby given power to allot equity securities for cash pursuant to the general authority conferred upon the Directors in resolution 6 referred to in the Notice of General Meeting at which this resolution is being proposed, as if Section 561 of the Companies Act 2006 did not apply to any such allotment, provided that the power hereby granted:
(a) shall be limited to:
(i) the allotment of equity securities in connection with or
pursuant to an offer by way of rights to the holders of Shares in
the capital of the Company and other persons entitled to
participate therein for cash in proportion (as nearly as may be) to
the holdings of Ordinary Shares of such holders (or, as
appropriate, to the number of Ordinary Shares which such other
persons are for these purposes deemed to hold) subject only to such
exclusions or other arrangements as the Directors may consider
necessary or expedient to deal with fractional entitlements or
legal or practical problems under the laws of or the requirements
of any recognised regulatory body in any territory;
(ii) the allotment (otherwise than pursuant to sub-paragraph (a)(i) of this proviso) of equity securities up to 3,248,000 Ordinary Shares with an aggregate nominal value of GBP3,248; and
(b) this authority will expire upon expiry of the general authority conferred by resolution 6 above, save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be sold after such expiry, and the Directors may allot equity securities in pursuance of any such offer or agreement as if the power conferred by this resolution had not expired. The authority granted by this resolution shall replace all existing authorities previously granted to the Directors to allot equity securities for cash as if section 561(1) of the Companies Act 2006 did not apply.
(2) the said power shall allow and enable the Directors to make an offer or agreement before the expiry of that power which would or might require equity securities to be allotted after such expiry.
8 That the Company be and is hereby generally and
unconditionally authorised to make market purchases (within the
meaning of section 693(4) of the Companies Act 2006) of ordinary
shares of 0.1p each in the capital of the Company ('Ordinary
Shares') provided that:-
(a) the maximum number of Ordinary Shares hereby authorised to be purchased is 9,740,000
(b) the minimum price which may be paid for an Ordinary Share is
1p, exclusive of all expenses;
(c) the maximum price which may be paid for an Ordinary Share is
an amount, exclusive of all expenses, equal to 105% of the average
of the middle market quotations of Ordinary Shares as derived from
the Daily Official List of the London Stock Exchange for each of
the five business days immediately preceding the day on which the
Ordinary Share is contracted to be purchased;
(d) the authority hereby conferred shall expire at the
conclusion of the annual general meeting of the Company to be held
in 2013 unless such authority is renewed, varied or revoked prior
to such time; and
(e) the Company may validly make a contract to purchase Ordinary
Shares under the authority hereby conferred prior to expiry of such
authority which will or may be executed wholly or partly after
expiry of such authority, and may validly make a purchase of
Ordinary Shares in pursuance of any such contract.
By Order of the Board
Filex Services Limited Registered Office:
Secretary 179 Great Portland Street
20 November 2012 London W1W 5LS
Notes relating to voting entitlements and proxy form
1. A form of proxy will be enclosed for your use. Further copies
of the form of proxy may be obtained from the registered office of
the Company.
2. Shareholders included on the register of Shareholders (in
relation to Shares held in CREST, pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001) at 18:00 on 19 December
2012 will be entitled to attend and vote at the Annual General
Meeting in respect of the number of Shares registered in their name
at that time. Changes to the register of members after that time
will be disregarded in determining the rights of any person to
attend or vote at the meeting.
3. A member entitled to attend and vote at the Meeting convened
by this Notice is entitled to appoint one or more proxies to
attend, speak and vote in his or her stead. A proxy need not be a
member of the Company. If a member wishes his proxy to speak on his
behalf at the Meeting, he or she will need to appoint his own
choice of proxy (who is not the Chairman) and give instructions
directly to the proxy. The completion and return of a form of proxy
will enable a shareholder to vote at the Annual General Meeting
without having to be present at the General Meeting, but will not
preclude him or her from attending the General Meeting and voting
in person if he or she should subsequently decide to do so.
4. A member may appoint more than one proxy provided each proxy
is appointed to exercise rights attached to different shares. A
member may not appoint more than one proxy to exercise rights
attached to any one share. To appoint more than one proxy, please
sign and date the form of proxy and attach a schedule listing the
names and addresses (in block letters) of all your proxies, the
number of shares in respect of which each proxy is appointed
(which, in aggregate, should not exceed the number of shares held
by you) and indicating how you wish each proxy to vote or abstain
from voting. If you wish to appoint the Chairman as one of your
multiple proxies, insert "Chairman of the Meeting" in the box which
is used to identify the name of the proxy on the relevant proxy
card.
5. To be valid, the form of proxy must be lodged with the
Company's Registrars, Capita Registrars, not later than 48 hours
before the time appointed for the holding of the General Meeting or
at any adjournment thereof.
6. To appoint a proxy or to give or amend an instruction to a
previously appointed proxy via the CREST system, the CREST message
must be received by the issuer's agent RA10. For this purpose, the
time of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST Applications Host)
from which the issuer's agent is able to retrieve the message.
After this time any change of instructions to a proxy appointed
through CREST should be communicated to the proxy by other means.
CREST Personal Members or other CREST sponsored members, and those
CREST Members who have appointed voting service providers, should
contact their CREST sponsor or voting service providers for
assistance with appointing proxies via CREST. For further
information on CREST procedures, limitations and system timings,
please refer to the CREST Manual. In all cases, for a proxy form
via CREST to be valid, the CREST Voting Service Information must be
received by the Company's Registrars no later than 48 hours before
the time appointed for the holding of the General Meeting. MWB
Business Exchange Plc may treat as invalid a proxy appointment sent
by CREST in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
7. Any person to whom this notice is sent who is a person
nominated under section 146 of the Companies Act 2006 to enjoy
information rights (a "Nominated Person") may, under an agreement
between him/her and the Shareholder by whom he/she was nominated,
have a right to be appointed (or to have someone else appointed) as
a proxy for the General Meeting. If a Nominated Person has no such
proxy appointment right or does not wish to exercise it, he/she,
under any such agreement, has a right to give instructions to the
Shareholder as to the exercise of voting rights.
8. The statement of the rights of Shareholders in relation to
the appointment of proxies does not apply to Nominated Persons. The
rights described in this regard can only be exercised by
Shareholders of the Company.
9. In order to facilitate voting by corporate representatives at
the Annual General Meeting, arrangements will be put in place at
the meeting so that (i) if a corporate shareholder has appointed
the Chairman of the meeting as its corporate representative to vote
on a poll in accordance with the directions of the all of the other
corporate representatives for that shareholder at the meeting, then
on a poll those corporate representatives will give voting
directions to the Chairman and the Chairman will vote (or withhold
a vote) as corporate representative in accordance with those
directions; and (ii) if more than one corporate representative for
the same corporate shareholder attends the meeting but the
corporate shareholder has not appointed the Chairman of the meeting
as its corporate representative, a designated corporate
representative will be nominated, from those corporate
representatives who attend, who will vote on a poll and the other
corporate representatives will give voting directions to that
designated corporate representative. Corporate shareholders are
referred to the guidance issued by the Institute of Chartered
Secretaries and Administrators on proxies and corporate
representatives (www.icsa.org.uk) for further details of this
procedure. The guidance includes a sample form of appointment
letter if the Chairman of the meeting is being appointed as
described in (i) above.
10. In the case of joint registered holders, the signature of
one holder will be accepted and the vote of the senior who tenders
a vote, whether in person of proxy, shall be accepted to the
exclusion of the votes of the other joint holders. For this
purpose, seniority shall be determined by the order in which the
names stand on the register of members in respect of the relevant
joint holding.
11. The following documents will be available for inspection at
the Company's registered office, 179 Great Portland Road, London
W1W 5LS during normal business hours on any weekday (Saturdays and
public holidays excepted) from the date of this Notice until the
date of the Annual General Meeting and at the place of the Annual
General Meeting for 15 minutes prior to and during the Meeting:
(i) the register of Directors' interests in the Shares of the Company;
(ii) copies of service contracts of the Executive Directors and
Letters of Appointment of the Non-Executive Directors of the
Company;
(iii) the terms of reference of the Audit Committee, the
Remuneration Committee and the Nominations Committee of the
Board;
(iv) the Articles of Association of the Company;
(v) the rules of the Company's share option scheme; and
(vi) the rules of the Long-Term Incentive Scheme of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KKLFFLFFXFBF
MWB Group (LSE:MWB)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
MWB Group (LSE:MWB)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
