TIDMOFF
RNS Number : 1682Q
Office2office PLC
28 August 2014
office2office plc
Half Yearly Results
office2office plc (o2o, the Company or the Group), a leading
provider of office supplies and business solutions, announces its
half yearly results for the six month period ended 30 June 2014
(the period).
Operational highlights
-- Revenue in Business Critical Services fell marginally by 1.4%
to GBP42.8m (2013: GBP43.4m) and segmental adjusted EBITA (being
underlying profit before income tax and before charging Group
administration and finance costs as detailed was stable at GBP3.7m
(2013: GBP3.8m)
-- Managed Procurement revenue decreased 5.2% to GBP71.8m (2013:
GBP75.7m), and adjusted EBITA declined to GBP3.6m (2013:
GBP4.8m).
Financial performance
-- Group revenue was down 4% to GBP114.6m (2013: GBP119.2m)
-- Underlying profit before tax of GBP1.6m (2013: GBP2.0m)
-- Profit before tax was GBP0.1m (2013: GBP1.2m) reflecting a
higher level of non-recurring charges GBP0.8m (2013: GBP0.3m)
-- Underlying earnings per share were 3.3p (2013: 3.9p), and
basic earnings per share were 0.0p (2013: 2.3p)
-- Continued cash generation progress of GBP1.6m (2013:
GBP6.5m)
-- Net debt managed down to GBP20.4m (2013: GBP23.3m)
-- No interim dividend recommended (2013: nil)
Jim Cohen, Chairman of o2o, said,
"On 21 August the Board recommended shareholders to accept an
offer from EVO Business Supplies Limited of 51p per share. We did
so in the full knowledge that only a week later we would be
announcing results for the first half of 2014 that are on track for
the year as a whole and in line with the market's and our own
expectations, and with net debt reduced further since the year
end."
Further enquiries:
office2office
Simon Moate, CEO 01603 691 102
Hugh Cawley, Group Finance Director
MHP Communications
Reg Hoare/ Katie Hunt 020 3128 8793 / 8794
CHAIRMAN'S STATEMENT
On 21 August your Board recommended shareholders to accept an
offer from EVO Business Supplies Limited (EVO) of 51p per share. We
did so in the full knowledge that only a week later we would be
announcing results for the first half of 2014 that are on track for
the year as a whole and in line with the market's and our own
expectations, and with net debt reduced further since the year
end.
In recommending the offer, the Board took into account a number
of factors including the structural change and need for
consolidation in the Group's principal, but declining, business
supplies sector; current trading and prospects of the Group; the
Group's financial position and the feasibility of other strategic
options.
Our current on-track performance does not mask the fact that the
trading environment for Managed Procurement is challenging.
Customer buying habits have changed, with a focus on making smaller
purchasing orders on a more frequent basis, buying lower cost
products and reducing their direct costs generally. Your Board
believes this is a permanent shift in buying behaviour, which has
increased the Group's cost-to-serve and negatively impacted the
Group's financial performance. We have therefore implemented a
strategy to improve the performance of Managed Procurement by
cutting costs, reducing debt and remodelling the business through
changes to its logistics platform.
The Board believes there is also a need for industry
consolidation, requiring a material commitment of resources, to
reduce costs and duplication in the business supplies sector.
Hence, in combination with its operational initiatives, the Board
decided to explore a number of consolidation opportunities. We have
concluded that combining office2office with another business in the
office supplies industry is the best way of creating value for our
shareholders, and that this can best be achieved by EVO acquiring
office2office.
The Group has also in recent years focused on expanding its
Business Critical Services activity, a process which the Board
believes has been successful to date. However, the Group does not
have sufficient funds to invest further in this activity in order
to fulfil its growth potential while at the same time restructuring
the Group's role in the declining business supplies sector.
The Group is currently in discussions to refinance its GBP12.5
million term loan, GBP3 million revolving credit facilities and
GBP30 million asset-backed lending facility, which are all
committed to June 2015. Whilst these discussions are constructive,
the terms of such a refinancing and when it would be completed
depend in part on the Group's finalising its strategic plans to
address change in the business supplies sector.
At this stage, EVO's offer remains subject to Competition
Markets Authority clearance as well as shareholder approval.
Management and the Board remain committed to driving the business
forward, pending approval of EVO's offer.
With our six month average share price pre-announcement of
25.88p the offer price of 51p represents a premium of 97.1%.
Results
In the six months to 30 June 2014, Group revenue was GBP114.6m
(2013: GBP119.2m), underlying profit before tax was GBP1.6m (2013:
GBP2.0m), non-recurring costs were GBP0.8m (2013: GBP0.3m) and
profit before tax was GBP0.1m (2013: GBP1.2m). Underlying earnings
per share were 3.3p (2013: 3.9p) and basic earnings per share were
0.0p (2013: 2.3p).
The Group has continued to reduce its net borrowings, which at
30 June 2014 stood at GBP20.4m (2013:GBP23.3m). In the first half
of this year cash generation continued the progress made last year
at GBP1.6m (2013 GBP6.5m).
Segmental review
Managed Procurement
Managed Procurement revenue decreased 5.2% to GBP71.8m (2013:
GBP75.7m), and adjusted EBITA (being underlying profit before
income tax and before charging Group administration and finance
costs as detailed in note 6) declined to GBP3.6m (2013:
GBP4.8m).
Business Critical Services
Revenue in Business Critical Services decreased 1.4% to GBP42.8m
(2013: GBP43.4m) and segmental adjusted EBITA (as discussed above
and in note 6) was stable at GBP3.7m (2013: GBP3.8m).
Dividend policy
The Board is not recommending an interim dividend (2013:
nil).
Employees
I would like to take this opportunity to thank the many
employees who have helped contribute to the Group's success. The
Board recognises that a change of owner and industry consolidation
will introduce fresh challenges. Consolidation is, however,
inevitable, and a combined group will be better able to stand up to
the market than we could alone.
As mentioned in our 2013 Annual Report & Accounts, the half
yearly financial report will be published on the o2o website and
hard copies will be provided only on request.
J L Cohen
Chairman
28 August 2014
UNAUDITED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2014
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Jun 30 Jun 13 31 Dec 13
14
Note GBP000 GBP000 GBP000
Revenue 6 114,562 119,174 231,887
Cost of sales (85,416) (89,674) (173,427)
--------------------------------- ---- ----------- ----------- -----------
Gross profit 29,146 29,500 58,460
Distribution costs (11,343) (11,732) (23,367)
Administrative expenses (16,858) (15,938) (31,863)
Other operating income 252 564 925
--------------------------------- ---- ----------- ----------- -----------
Operating profit 1,197 2,394 4,155
Finance costs (1,111) (1,227) (2,332)
Profit before income tax 6 86 1,167 1,823
Analysed as:
Underlying profit before
income tax (#) 1,608 1,969 4,192
Share option credit /(expense) 94 167 (48)
Non-recurring costs 8 (757) (333) (834)
Amortisation of intangibles (859) (636) (1,487)
Profit before income tax 86 1,167 1,823
---- ----------- -----------
Income tax expense 9 (79) (327) (503)
Profit for the period 7 840 1,320
Earnings per Ordinary share attributable to owners
of the Company:
Basic 10 0.0p 2.3p 3.6p
Diluted 10 0.0p 2.3p 3.6p
(#) Profit before income tax, non-recurring costs, amortisation
of intangibles and share option credit/(expense).
UNAUDITED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2014
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Jun 30 Jun 13 31 Dec 13
14
GBP000 GBP000 GBP000
Profit for the period 7 840 1,320
Other comprehensive income
Items that will never be reclassified
to profit or loss:
Remeasurements of the defined
benefit liability (191) (368) (1,147)
Tax on items that will never
be reclassified to profit or
loss 38 73 206
Items that are or may be reclassified
subsequently to profit or loss:
Currency translation differences (68) 85 25
----------------------------------------- ----------- ----------- -----------
Total comprehensive income
for the period (214) 630 404
----------------------------------------- ----------- ----------- -----------
UNAUDITED CONSOLIDATED BALANCE SHEET
as at 30 June 2014
Unaudited Unaudited Audited
30 Jun 14 30 Jun 13 31 Dec 13
GBP000 GBP000 GBP000
------------------------------- ---------- ---------- ----------
Assets
Non-current assets
Intangible assets 56,712 57,429 57,561
Property, plant and equipment 1,866 3,233 2,232
Deferred income tax asset 1,130 1,012 1,135
59,708 61,674 60,928
------------------------------- ---------- ---------- ----------
Current assets
Inventories 8,373 8,594 8,637
Trade and other receivables 33,152 36,550 34,985
Current income tax asset 731 - 550
Cash and cash equivalents 2,441 5,267 1,906
44,697 50,411 46,078
------------------------------- ---------- ---------- ----------
Total assets 104,405 112,085 107,006
------------------------------- ---------- ---------- ----------
Equity
Capital and reserves attributable to owners of
the Company
Ordinary shares 363 363 363
Share premium account 5,009 5,009 5,009
Other reserves (2) 126 66
Retained earnings 8,895 11,807 9,092
Total equity 14,265 17,305 14,530
------------------------------- ---------- ---------- ----------
Liabilities
Non-current liabilities
Borrowings 54 9,883 10,943
Deferred income tax liability 735 1,018 830
Provisions 289 496 432
Retirement benefit liability 1,722 1,004 1,646
2,800 12,401 13,851
------------------------------- ---------- ---------- ----------
Current liabilities
Trade and other payables 64,279 62,213 65,741
Borrowings 22,779 18,636 12,733
Provisions 282 62 151
Proposed dividends - 1,302 -
Current income tax liabilities - 166 -
87,340 82,379 78,625
------------------------------- ---------- ---------- ----------
Total liabilities 90,140 94,780 92,476
------------------------------- ---------- ---------- ----------
Total equity and liabilities 104,405 112,085 107,006
------------------------------- ---------- ---------- ----------
The half yearly financial report was approved by the Board of
Directors on 28 August 2014.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Unaudited
Ordinary premium Other Retained total
shares account reserves earnings equity
Note GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- ---- ---------- -------- ---------- ---------- ---------
Balance at 1 January 2013 363 5,009 41 12,883 18,296
Profit for the period - - - 840 840
Other comprehensive income - - 85 (295) (210)
------------------------------------- ---- ---------- -------- ---------- ---------- ---------
Total comprehensive income
for the period ended 30
June 2013 - - 85 545 630
Net expenditure recognised
directly in equity
Employee share options:
* value of employee services - - - (103) (103)
* deferred tax on share options - - - (216) (216)
Dividends and other appropriations:
* Ordinary shares 12 - - - (1,302) (1,302)
- - 85 (1,076) (991)
Balance at 30 June 2013 363 5,009 126 11,807 17,305
------------------------------------- ---- ---------- -------- ---------- ---------- ---------
for the six months ended 30 June 2014
Share Unaudited
Ordinary premium Other Retained total
shares account reserves earnings equity
Note GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------- ----- ---------- -------- ---------- ---------- ---------
Balance at 1 January 2014 363 5,009 66 9,092 14,530
-------------------------------------------- ---------- -------- ---------- ---------- ---------
Profit for the period - - - 7 7
Other comprehensive income - - (68) (153) (221)
-------------------------------------------- ---------- -------- ---------- ---------- ---------
Total comprehensive income
for the period ended 30
June 2014 - - (68) (146) (214)
Net expenditure recognised
directly in equity
Employee share options:
* value of employee services - - - (79) (79)
* deferred tax on share options - - - 28 28
- - (68) (197) (265)
Balance at 30 June 2014 363 5,009 (2) 8,895 14,265
-------------------------------------------- ---------- -------- ---------- ---------- ---------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2014
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Jun 14 30 Jun 31 Dec
13 13
Note GBP000 GBP000 GBP000
----------------------------------------- ---- ------------- ----------- --------
Cash flows from operating activities
Cash generated from operations 11 2,808 7,759 12,966
Interest paid (948) (1,253) (2,522)
Income tax received/(paid) (284) 2 (324)
Net cash generated from operating
activities 1,576 6,508 10,120
----------------------------------------------- ------------- ----------- --------
Cash flows from investing activities
Purchase of property, plant and
equipment (25) (499) (307)
Capitalised software (10) (187) (1,170)
Net cash used in investing activities (35) (686) (1,477)
----------------------------------------- ---- ------------- ----------- --------
Cash flows from financing activities
Finance lease principal payments (12) (96) (143)
Repayment of borrowings - (3,000) (5,000)
Dividends paid to Company's shareholders 12 - - (1,302)
Net cash used in financing activities (12) (3,096) (6,445)
----------------------------------------------- ------------- ----------- --------
Net increase in cash and cash equivalents 1,529 2,726 2,198
Cash, cash equivalents and bank
overdrafts at 1 January (9,546) (11,744) (11,744)
Cash, cash equivalents and bank overdrafts
at period end (8,017) (9,018) (9,546)
----------------------------------------------------- ------- ----------- --------
Net debt at period end comprises:
GBP000 GBP000 GBP000
-------------------------------- -------- -------- --------
Cash, cash equivalents and bank
overdrafts (8,017) (9,018) (9,546)
Finance leases (77) (136) (89)
Bank loans (12,298) (14,098) (12,135)
Net debt at period end (20,392) (23,252) (21,770)
-------------------------------- -------- -------- --------
NOTES TO THE INTERIM FINANCIAL INFORMATION
for the six months ended 30 June 2014
1. General information
office2office plc (the Company) and its subsidiaries (the Group)
provide managed procurement and business critical services. The
Group operates in the United Kingdom and Republic of Ireland. The
Company is a public limited company incorporated and domiciled in
the United Kingdom and its shares are listed on the London Stock
Exchange. The address of its registered office is St Crispins, Duke
Street, Norwich, NR3 1PD.
The half yearly financial report does not comprise statutory
accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2013 were
approved by the Board of Directors on 2 April 2014 and delivered to
the Registrar of Companies. The report of the auditors on those
financial statements was unqualified, did not contain an emphasis
of matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
The half yearly financial report has been reviewed, not audited
and was approved for issue by the Directors on 28 August 2014.
2. Basis of preparation
This half yearly financial report for the six months ended 30
June 2014 has been prepared in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct
Authority and with IAS 34, 'Interim financial reporting' as adopted
by the European Union. The half yearly financial report should be
read in conjunction with the annual report and financial statements
for the year ended 31 December 2013, which have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union.
The Directors, in their detailed consideration of going concern,
have reviewed the Group's future cash forecasts, covenant forecasts
and revenue projections, which they believe are based on prudent
market data and past experience, and believe based on these
forecasts and projections, underpinned by the continuing support of
RBS, that it is appropriate to prepare the financial statements of
the Group on a going concern basis.
The announcement dated 21 August, which outlined an agreed offer
for the entire issued share capital of the Group, does not, in the
opinion of the Directors influence the Group's ability to continue
as a going concern. The Board has been exploring strategic options
for the Group and in this context it was not felt appropriate, at
this time, to put in place long term funding that would prove
costly and potentially ultimately unnecessary in light of that
announcement. As a consequence the Group has not currently agreed
refinancing arrangements with the Group's bankers for the period
beyond June 2015, when, in the absence of such agreement, the
current facilities would be due to expire.
Since the April 2008 refinancing, RBS, as sole providers to the
Group, have demonstrated their continuing support of the business
and, indeed, they have confirmed in writing that it is their
intention to continue their constructive dialogue with the Board in
the event that the sale in contemplation were not to complete.
Consequently, the Directors have a reasonable expectation that
the Group will continue to comply with the covenants in their
facilities and they have adequate resources to meet their
liabilities as they fall due for a period of at least 12 months
from the date of approval of the financial statements. For this
reason, they continue to adopt the going concern basis in preparing
the financial statements.
3. Accounting policies
The accounting policies applied are consistent with those of the
annual report and financial statements for the year ended 31
December 2013, as described in the Annual Report and Accounts.
4. Financial assets and liabilities
Financial assets and financial liabilities are recognised on the
Group's balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
The Group classifies its financial assets and liabilities in the
following categories: loans and receivables, and other financial
liabilities. The classification depends on the purpose for which
the financial assets or liabilities were acquired. Management
determines the classification of its financial assets and
liabilities at initial recognition. The classification of financial
liabilities is determined in accordance with IFRS 7, 'Financial
instruments: Disclosures', taking account of the repayment profile
of the liability. For those with fixed or determinable payment
profiles the amounts are recognised as either current liabilities
or, where amounts are not due for more than 12 months after the
reporting period, as non-current liabilities.
Trade receivables: Trade receivables are recognised initially at
fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. A
provision for impairment of trade receivables is established when
there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments (more than 60
days overdue) are considered indicators that the trade receivable
is impaired. The amount of the provision is the difference between
the asset's carrying amount and the present value of estimated
future cash flows. The carrying amount of the asset is reduced
through the use of an allowance account and the amount of the loss
is recognised in the income statement within revenue. When a trade
receivable is uncollectable, it is written off against the
allowance account for trade receivables. Subsequent recoveries of
amounts previously written off are credited against revenue in the
income statement.
Borrowings: Borrowings are recognised initially at fair value
net of transaction costs. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the
effective interest method.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Trade payables:Trade payables are not interest bearing and are
recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
Equity instruments:Equity instruments issued by the Company are
recorded at the proceeds received, net of direct issue costs. Where
any Group company purchases the Company's equity share capital
(treasury shares), the consideration paid, including any directly
attributable incremental costs (net of income taxes) is deducted
from equity attributable to the Company's owners until the shares
are cancelled or reissued. Where such shares are subsequently
reissued, any consideration received, net of any directly
attributable incremental transaction costs and the related income
tax effects, is included in equity attributable to the Company's
owners.
The Group assesses at each balance sheet date whether there is
objective evidence that a financial asset or a group of financial
assets is impaired.
The above financial assets and liabilities are grouped as
follows:
-- Cash and cash equivalents and trade and other receivables
(excluding prepayments) are classified as loans and receivables for
the purpose of IFRS 7, 'Financial instruments: Disclosures'.
-- Borrowings, finance leases and trade and other payables
(excluding statutory liabilities) are classified as other financial
liabilities at amortised cost for the purpose of IFRS 7, 'Financial
instruments: Disclosures'.
5. Principal risks and uncertainties
The principal risks and uncertainties facing the Group arise
from: the impact of the economic downturn on customers, leading to
reduced demand, and on suppliers, leading to sourcing issues; the
impact of operating in a highly competitive market leading to the
loss of a large customer or a reduction in gross margins; an
interruption of the Group's operations or IT services; exposure to
product cost increases and a variety of financial risks. A full
review of these is included in the 2013 Annual Report. These remain
unchanged but continue to be regularly monitored to ensure that any
mitigating actions are prompt and appropriate.
6. Segmental information
IFRS 8, 'Operating Segments', requires a 'management approach',
under which segment information is presented on the same basis as
that used for internal reporting purposes. The operating segments
are identified on the basis of internal reports regularly reviewed
by the Board of Directors, the Board of Directors being the chief
operating decision-maker, in order to allocate resources to the
segments and to assess their respective performance.
The Board considers the business from a service perspective. The
Group is organised into two main business segments:
-- Managed Procurement; and
-- Business Critical Services.
The business units of each reportable segment, Banner Business
Services and Truline in respect of Managed Procurement and Banner
Managed Communication and Banner Document Services in respect of
Business Critical Services, do not qualify as reportable segments
as decisions about the allocation of resources and the assessment
of performance are not made at this level.
The Board assesses the performance of the operating segments
based on a measure of adjusted earnings before interest, income tax
and amortisation (adjusted EBITA). This measurement basis excludes
the effects of non-recurring expenditure from the operating
segments, such as restructuring costs. Other information provided
to the Board, except as noted below, is measured in a manner
consistent with that in the financial statements.
Business
Managed Critical
Procurement Services Total
GBP000 GBP000 GBP000
Six months ended 30 June
2014
Revenue 71,762 42,800 114,562
Adjusted EBITA 3,567 3,749 7,316
--------------------------- ------------- --------- -------
Six months ended 30 June
2013
Revenue 75,738 43,436 119,174
Adjusted EBITA 4,813 3,840 8,653
--------------------------- ------------- --------- -------
Total assets
30 June 2014 50,514 53,621 104,135
30 June 2013 55,148 56,615 111,763
--------------------------- ------------- --------- -------
A reconciliation of total adjusted EBITA to profit before income
tax is provided as follows:
Six months Six months
ended ended
30 Jun 30 Jun
14 13
GBP000 GBP000
Adjusted EBITA for reportable segments 7,316 8,653
Group costs (4,597) (5,457)
--------------------------------------- ---------- ----------
Underlying profit before
income tax and finance
costs 2,719 3,196
Finance costs (1,111) (1,227)
--------------------------------------- ---------- ----------
Underlying profit before
income tax 1,608 1,969
Share option expense 94 167
Non-recurring costs (757) (333)
Amortisation (859) (636)
--------------------------------------- ---------- ----------
Profit before income tax 86 1,167
--------------------------------------- ---------- ----------
Reportable segments' assets are reconciled to total assets as
follows:
30 June 30 June
2014 2013
GBP000 GBP000
Total segment assets 104,135 111,763
Unallocated:
Cash and cash equivalents 5
Short leasehold land and buildings - head
office 265 322
------------------------------------------ ------- -------
Total assets per balance sheet 104,405 112,085
------------------------------------------ ------- -------
7. Seasonality
The Group operates in markets where no significant seasonal or
cyclical variations in sales are experienced during the financial
year.
8. Non-recurring costs
The amounts recognised as non-recurring costs are as
follows:
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
14 13 13
GBP000 GBP000 GBP000
Compensation payments 725 333 589
Business review costs 32 - 245
----------------------- ----------- ----------- ---------
757 333 834
----------------------- ----------- ----------- ---------
Compensation payments relate to amounts paid to ex-employees of
Group companies. Business review costs relate to costs incurred by
the Group in relation to management's commitment to improve
operational efficiency.
9. Income taxes
Income tax expense is recognised based on management's best
estimate of the average annual income tax rate expected for the
full financial year, as adjusted to reflect estimated disallowable
expenses. The estimated average annual tax rate used for the six
month period to 30 June 2014 of 91.9% (30 June 2013: 28.0%) is
based on the prevailing current tax rate of 21.5% (six months ended
30 June 2013: 23.5%) as adjusted for the estimated impact of
expenses permanently disallowable for income tax and other
permanent differences.
10. Earnings per share
(a) Basic
Basic earnings per share is calculated by dividing profit
attributable to owners of the Company by the weighted average
number of Ordinary shares in issue during the period, excluding
Ordinary shares held by the employee benefit trust which do not
qualify for receipt of dividends.
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
14 13 13
Profit attributable to equity
holders of the Company (GBP000) 7 840 1,320
Weighted average number of Ordinary
shares in issue (thousands) 36,171 36,171 36,171
Basic earnings per share (pence
per share) 0.0 2.3 3.6
------------------------------------- ----------- ----------- --------
(b) Diluted
Diluted earnings per share is calculated by adjusting the
weighted average number of Ordinary shares outstanding to assume
conversion of all dilutive potential Ordinary shares. The Company
has one category of dilutive potential Ordinary shares, being share
options. For share options, a calculation is undertaken to
determine the number of shares that could have been acquired at
fair value (determined as the average market share price of the
Company's shares during the period) based on the monetary value of
the subscription rights attached to outstanding share options. The
number of shares calculated as above is compared with the number of
shares that would have been issued assuming the exercise of the
share options.
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
14 13 13
Profit attributable to equity
holders of the Company (GBP000) 7 840 1,320
---------------------------------------- ----------- ----------- --------
Weighted average number of Ordinary
shares in issue (thousands) 36,171 36,171 36,171
Adjusted for share options (thousands) - - -
Weighted average number of Ordinary
shares for diluted earnings
per share (thousands) 36,171 36,171 36,171
Diluted earnings per share (pence
per share) 0.0 2.3 3.6
---------------------------------------- ----------- ----------- --------
(c) Underlying earnings per share
Underlying earnings per share is calculated by dividing profit
on ordinary activities after tax (before the after tax effect of
non-recurring costs, share option expense and amortisation of
intangibles) by the weighted average number of Ordinary shares in
issue during the period excluding Ordinary shares held by the
employee benefit trust.
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
14 13 13
Profit attributable to owners
of the Company (GBP000) 7 840 1,320
------------------------------------- ----------- ----------- --------
Non-recurring costs (net of tax
GBP000) 594 255 1,141
Share option (credit)/expense
(GBP000) (94) (167) 48
Amortisation of intangibles (net
of tax GBP000) 674 487 640
Underlying profit attributable
to owners of the Company (GBP000) 1,181 1,415 3,149
------------------------------------- ----------- ----------- --------
Weighted average number of Ordinary
shares in issue (thousands) 36,171 36,171 36,171
Underlying earnings per share
(pence per share) 3.3 3.9 8.7
------------------------------------- ----------- ----------- --------
11. Cash generated from operations
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
14 13 13
GBP000 GBP000 GBP000
Profit before income tax 86 1,167 1,823
Adjustments for:
Amortisation of intangible assets 859 636 1,487
Depreciation of property, plant
and equipment 391 491 926
Loss on disposal of property, plant
and equipment - - 374
Finance costs 1,111 1,227 2,332
Share option (credit)/expense (79) (103) 161
Decrease in inventories 264 451 408
Decrease in trade and other receivables 1,833 1,289 2,854
(Decrease)/increase in trade payables
and provisions (1,657) 2,601 2,601
---------------------------------------- ---------- ---------- -------
Total net cash inflow from operations 2,808 7,759 12,966
---------------------------------------- ---------- ---------- -------
12. Dividends
Six months Six months Year
ended ended ended
30 Jun 30 Jun 31 Dec
14 13 13
GBP000 GBP000 GBP000
Amounts recognised as a distribution
in the period in respect of:
Ordinary shares - final dividend
2012 - 3.6p per share - (1,302) (1,302)
- (1,302) (1,302)
------------------------------------- ------------ ---------- -------
13. Financial instruments
The fair values of financial assets and financial liablilities,
together with the carrying amounts in the consolidated balance
sheet, are as follows:
Carrying Fair
amount value
30 June 2014 GBP000 GBP000
Non-current financial liabilities
Borrowings (54) (54)
---------------------------------- -------- --------
Current financial liabilities
Trade and other payables (64,279) (64,279)
Borrowings (22,779) (22,779)
---------------------------------- -------- --------
(87,058) (87,058)
---------------------------------- -------- --------
Current financial assets
Trade and other receivables 33,152 33,152
Cash and cash equivalents 2,441 2,441
---------------------------------- -------- --------
35,593 35,593
---------------------------------- -------- --------
The Directors confirm that the interim financial information
included in the half yearly financial report has been prepared in
accordance with IAS 34 as adopted by the European Union and that
the Chairman's Statement includes a true and fair view of the
information required by Disclosure and Transparency Rules 4.2.7 and
4.2.8, namely:
-- An indication of the important events that have occurred
during the first six months and their impact on the half yearly
financial report, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- Material related party transactions in the first six months
of the year and any material changes in the related party
transactions described in the last annual report.
The Directors of office2office plc are listed in the Annual
Report and Accounts for the year ended 31 December 2013, since when
there have been no changes. A list of current Directors is
maintained on the office2office plc website:
www.office2office.co.uk.
By order of the Board
Simon Moate Hugh Cawley
Chief Executive Group Finance Director
28 August 2014
Forward-looking statements
Certain statements in this half yearly report are
forward-looking. Although the Group believes that the expectations
reflected in these forward-looking statements are reasonable, it
can give no assurance that these expectations will prove to have
been correct. As these statements involve risks and uncertainties,
actual results may differ materially from those expressed or
implied by these forward-looking statements. The Group undertakes
no obligation to update any forward-looking statements whether as a
result of new information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QDLFLZVFBBBZ
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