TIDMSTBR
RNS Number : 1560R
Southern Bear PLC
17 August 2010
17 August 2010
Southern Bear plc
("Southern Bear" or the "Group")
Results for the Year Ended 31 March 2010
Southern Bear Plc, the AIM quoted support services and fire prevention
specialists, today announces its preliminary statement of results for the year
ended 31 March 2010.
Key points
· Revenue from continuing operations increased 52% to GBP19.0 million
(2009: GBP12.5 million)
· Gross profit increased 15% to GBP5.5 million (2009: GBP4.8 million)
· Loss for the year of GBP17.2 million (2009: profit of GBP802,000), most
of which is due to writing down the assets and goodwill of sold and purchased
businesses
· Cash at year end GBP116,000 (2009: - GBP291,000)
· February 2010 disposed of loss making engineering businesses, to focus on
the legislation led support services sector
· Continuing businesses consist of BGC Limited ("BGC"), Fenhams Limited
("Fenhams") and Intumescent Protective Coatings Limited ("IPCL")
Post Period End
· Nigel Wray, Chairman, provided a short term loan of GBP2.2 million to
repay all bank debt.
· Appointments of Mark Sims as Chief Executive Officer and Janet Domin as
Non-Executive Director
· Neil Chapman and Christopher Arnott, specialist in the fire prevention
market, joined the Board as Non-Executive Directors
Commenting on the results Chairman Nigel Wray said:
"It has been a testing 12 months, but the Board has reacted quickly to the
economic conditions and decided to refocus the business on the Support Services
and Fire Prevention markets. These markets are largely legislation led and as a
consequence I believe they are more robust in these unstable markets.
"With our new focus now in place and the management of each of the three
divisions significantly invested in the business we believe that the Group is
well placed to move forward with confidence and take advantage of the
opportunities that are beginning to arise."
Southern Bear plc
Mark Sims - Chief Executive
Tel: +44 (0) 01782 826939
Nominated Adviser:
Grant Thornton Corporate Finance
Gerry Beaney
Tel: +44 (0) 20 7383 5100
Broker:
Seymour Pierce
Jeremy Stephenson
Tel: +44 (0) 20 7107 8000
Financial PR:
Bishopsgate Communications
Gemma O'Hara/Siobhra Murphy
Tel: +44 (0)20 7562 3358
Chairman's Statement
When I became Chairman of Southern Bear in mid January, the restructured board
realised straightaway that urgent action was needed. You will have already read,
of course, of our decision to sell off all the engineering businesses which have
fundamentally been haemorrhaging cash for a considerable time. In addition, we
found that bank covenants had been breached and that the full bank debt needed
to be repaid. In the first instance, I guaranteed this debt in order for the
Group to have time to put its affairs in order and subsequently on 14 June 2010
I provided a short term loan of GBP2.2 million to repay all bank debt.
The ongoing business will be based on three subsidiaries essentially involved in
Support Services and Fire Prevention, all entrepreneurial businesses in what I
believe are legislation led, growth sectors of the economy.
We also intend to create a structure whereby all the entrepreneurs of the three
businesses are significant shareholders in the PLC and can also earn additional
shares against hitting certain agreed targets in their own businesses. In my
opinion their interests and ours, as shareholders, will therefore be closely
aligned which is the way things should be. Formal proposals will be announced in
due course.
You will note that we have made a very substantial loss indeed for the year
ended March but I should point out that most of this is of a non cash nature
i.e. we are substantially writing down the assets and goodwill of sold and
purchased businesses. The first quarter for this year is also below expectations
but, for my part, whilst the road ahead I am sure will be bumpy, I firmly
believe that we now have three businesses run by very good, committed people in
whom I am very happy to invest substantially myself.
In order to repay my loan and provide sufficient working capital for the
business, we have launched a deeply discounted issue to raise GBP3.6 million,
before issue costs, which is being fully underwritten by myself and some of my
fellow Directors. This is explained more fully in the circular issued with these
financial statements.
We will also be changing the name from Southern Bear Plc to Environ Group
(Investments) Plc in order to more accurately reflect what we are doing and in
addition we will be consolidating the shares on a 40 for 1 basis.
There are, of course, no guarantees in life but the majority of your Board of
directors will be shareholders in the business and hugely motivated to make it
successful.
Nigel Wray
Business review and future developments
On 23 February, the group disposed of its engineering businesses in order to
focus on the legislation led support services sector. The group experienced a
downturn in trading at the end of the year resulting from a combination of
postponement of sales orders into the following year, continuing adverse weather
conditions preventing access to sites and the continuing unexpected poor trading
results from some of the engineering businesses.
As a division, the engineering businesses had been haemorrhaging cash and, apart
from Phoenix Dynamics Limited, had not been trading profitably. The Board
reviewed the position at the end of January, including profit and more
importantly cash flow forecasts and decided to dispose to the management in each
case, who would be then free to obtain new finance.
The discontinued businesses result disclosed in the profit and loss account is
made up of the trading losses, exceptional costs relating to the business sales
and restructuring of the group and writing down goodwill and intangible assets
relating to those businesses.
The continuing businesses consist of BGC Limited ("BGC"), Fenhams Limited
("Fenhams") and Intumescent Protective Coatings Limited ("IPCL").
Both BGC and Fenhams had excellent starts to the year but postponement of orders
from major customers and the poor weather conditions contrived to drive away all
the first half gains. Both companies have been forced to address their
structures, which has resulted in reduction in staff numbers and overhead costs.
However, each business is now well placed to take advantage of the expected
levels of work due from its existing major customers and both are having success
in the diversification plans the Board set in January of this year.
IPCL offers the group entry into new sectors with support services. Again its
markets are broadly legislation led and it has been successfully integrated into
the group. Trading for the first three months was hampered by the adverse
weather conditions, and it has actually recorded a small loss. However, it is
now trading profitably
Outlook
It has been a testing 12 months, but the Board has reacted quickly to the
economic conditions and decided to refocus the business on the Support Services
and Fire Prevention markets. These markets are largely legislation led and as a
consequence I believe they are more robust in these unstable markets.
With our new focus now in place and the management of each of the three
divisions significantly invested in the business we believe that the Group is
well placed to move forward with confidence and take advantage of the
opportunities that are beginning to arise.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2010
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | Year | | Year |
| | | ended | | ended |
| | | 31 March | | 31 March |
| | | 2010 | | 2009 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | GBP'000 | | GBP'000 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Continuing operations | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Revenue | | 19,085 | | 12,458 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Cost of sales | | (13,568) | | (7,687) |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Gross profit | | | | |
| | | 5,517 | | 4,771 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Other administrative expenses | | (6,260) | | (3,441) |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Operating (Loss)/Profit before exceptional | | | | 1,330 |
| items | | (743) | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Exceptional items | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Goodwill impairment | | (6,062) | | - |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Restructuring costs | | (849) | | - |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Acquisition costs | | (161) | | - |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| (Loss)/Profit from operating activities | | (7,815) | | 1,330 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Net finance expense | | (392) | | (357) |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| (Loss)/Profit before taxation | | (8,207) | | 973 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Income Taxes | | | | (269) |
| | | 82 | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| (Loss)/Profit from continuing operations | | (8,125) | | 704 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| (Loss)/Profit from discontinued operations | | (9,035) | | 98 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| (Loss)/Profit for the year | | (17,160) | | 802 |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
| Continuing operations | | | | |
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Basic loss per ordinary share | | (1.1)p | | 0.15p |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Diluted loss per ordinary share | | (0.8)p | | 0.13p |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
| Discontinued operations | | | | |
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Basic loss per ordinary share | | (1.2)p | | 0.02p |
+---------------------------------------------+----------+-------------+--+-----------------------+
| | | | | |
+---------------------------------------------+----------+-------------+--+-----------------------+
| Diluted loss per ordinary share | | (0.9)p | | 0.02p |
+---------------------------------------------+----------+-------------+--+-----------------------+
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2010
+---------------+--------+----------+----------+
| | | 2010 | 2009 |
+---------------+--------+----------+----------+
| | | GBP'000 | |
| | | | GBP'000 |
+---------------+--------+----------+----------+
| Non | | | |
| current | | | |
| assets | | | |
+---------------+--------+----------+----------+
| Property, | | 270 | 435 |
| plant and | | | |
| equipment | | | |
+---------------+--------+----------+----------+
| Goodwill | | 12,000 | 19,860 |
| | | | |
+---------------+--------+----------+----------+
| Other | | - | 4,429 |
| intangible | | | |
| assets | | | |
+---------------+--------+----------+----------+
| Deferred | | - | 45 |
| tax | | | |
| asset | | | |
+---------------+--------+----------+----------+
| Investments | | - | 62 |
+---------------+--------+----------+----------+
| Total | | 12,270 | 24,831 |
| non | | | |
| current | | | |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Current | | | |
| assets | | | |
+---------------+--------+----------+----------+
| Inventories | | 111 | 1,320 |
+---------------+--------+----------+----------+
| Trade | | 3,631 | 4,922 |
| and | | | |
| other | | | |
| receivables | | | |
+---------------+--------+----------+----------+
| Cash | | 116 | 174 |
| and | | | |
| cash | | | |
| equivalents | | | |
+---------------+--------+----------+----------+
| Total | | 3,858 | 6,416 |
| current | | | |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Total | | 16,128 | 31,247 |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Current | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Trade | | (5,731) | (4,701) |
| and | | | |
| other | | | |
| payables | | | |
+---------------+--------+----------+----------+
| Current | | (289) | (418) |
| tax | | | |
| payable | | | |
+---------------+--------+----------+----------+
| Finance | | (52) | (90) |
| leases | | | |
+---------------+--------+----------+----------+
| Bank | | (2,282) | (1,220) |
| borrowings | | | |
+---------------+--------+----------+----------+
| Deferred | | (388) | (100) |
| cash | | | |
| consideration | | | |
+---------------+--------+----------+----------+
| Total | | (8,742) | (6,529) |
| current | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Non | | | |
| current | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| Bank | | - | (2,652) |
| borrowings | | | |
+---------------+--------+----------+----------+
| Finance | | (8) | (49) |
| leases | | | |
+---------------+--------+----------+----------+
| Deferred | | - | (1,444) |
| tax | | | |
| liability | | | |
+---------------+--------+----------+----------+
| Convertible | | (3,205) | - |
| Loan Notes | | | |
+---------------+--------+----------+----------+
| Other | | - | (250) |
| payables | | | |
+---------------+--------+----------+----------+
| Deferred | | (188) | (1,750) |
| cash | | | |
| consideration | | | |
+---------------+--------+----------+----------+
| Total | | (3,401) | (6,145) |
| non | | | |
| current | | | |
| liabilities | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Total | | (12,143) | (12,674) |
| liabilities | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Net | | 3,985 | 18,573 |
| assets | | | |
+---------------+--------+----------+----------+
| | | | |
+---------------+--------+----------+----------+
| Equity | | | |
+---------------+--------+----------+----------+
| Called | | 4,402 | 3,623 |
| up | | | |
| share | | | |
| capital | | | |
+---------------+--------+----------+----------+
| Share | | 13,916 | 12,626 |
| premium | | | |
| account | | | |
+---------------+--------+----------+----------+
| Other | | 1,843 | 1,340 |
| reserves | | | |
+---------------+--------+----------+----------+
| Profit | | (16,176) | 984 |
| and | | | |
| loss | | | |
| account | | | |
+---------------+--------+----------+----------+
| Equity | | 3,985 | 18,573 |
| Attributable | | | |
| to Equity | | | |
| Holders of | | | |
| the Parent | | | |
+---------------+--------+----------+----------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2010
+-----------------------------+----------+----------+----------+----------+---------------+
| | Called | Share | | | |
| | up | premium | Other | Profit | Total |
| | share | account | reserves | and loss | equity |
| | capital | | | account | |
+-----------------------------+----------+----------+----------+----------+---------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+----------+----------+----------+----------+---------------+
| | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Balance at 31 March 2008 | 1,582 | 7,369 | 716 | 182 | 9,849 |
+-----------------------------+----------+----------+----------+----------+---------------+
| Issue of shares (net of | 2,041 | 5,257 | (656) | - | 6,642 |
| issue costs) | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Profit for the year | - | - | - | 802 | 802 |
+-----------------------------+----------+----------+----------+----------+---------------+
| Shares to be issued | - | - | 1,250 | - | 1,250 |
+-----------------------------+----------+----------+----------+----------+---------------+
| Share based payments; | - | - | 30 | - | 30 |
| services provided | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Balance at 31 March 2009 | 3,623 | 12,626 | 1,340 | 984 | 18,573 |
+-----------------------------+----------+----------+----------+----------+---------------+
| | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Issue of shares (net of | 779 | 1,290 | - | - | 2,069 |
| issue costs) | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Loss for the year | - | - | - | (17,160) | (17,160) |
+-----------------------------+----------+----------+----------+----------+---------------+
| Adjustment to contingent | - | - | (1,250) | - | (1,250) |
| consideration | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Shares to be issued in | | | | - | |
| respect of acquisitions | - | - | 1,003 | | 1,003 |
+-----------------------------+----------+----------+----------+----------+---------------+
| Amounts relating to earlier | - | - | 400 | - | 400 |
| acquisitions | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Liabilities to be exchanged | - | - | 300 | - | 300 |
| for shares | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Share based payments; | - | - | 50 | - | 50 |
| services provided | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| | | | | | |
+-----------------------------+----------+----------+----------+----------+---------------+
| Balance at 31 March 2010 | 4,402 | 13,916 | 1,843 | (16,176) | 3,985 |
+-----------------------------+----------+----------+----------+----------+---------------+
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 31 March 2010
+---------------------------------------+----+-----------+-+----------------------+
| | | Year | | Year |
| | | ended | | ended |
| | | 31 March | | |
| | | 2010 | | 31 March |
| | | | | 2009 |
+---------------------------------------+----+-----------+-+----------------------+
| | | GBP'000 | | |
| | | | | GBP'000 |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Net cash from operating activities | | (1,325) | | 1,285 |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Interest and loan arrangement costs | | (337) | | (432) |
+---------------------------------------+----+-----------+-+----------------------+
| Income taxes paid | | (291) | | (354) |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Net cash (outflow)/inflow from | | (1,953) | | 499 |
| operating activities | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Cashflow from investing activities | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Acquisition of subsidiary | | (1,166) | | (3,736) |
| undertakings (net of cash) | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Amounts paid in respect of previous | | (801) | | - |
| acquisitions | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Disposal of subsidiary undertakings | | 1,289 | | - |
| (net of cash) | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Expenditure on research and | | - | | (518) |
| development | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Purchases of property, plant and | | (160) | | (82) |
| equipment | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Proceeds from disposal of property, | | 23 | | 20 |
| plant and equipment | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Interest received | | - | | 3 |
+---------------------------------------+----+-----------+-+----------------------+
| Purchases of investments | | - | | (62) |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Net cash outflow from investing | | (815) | | (4,375) |
| activities | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Financing | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Proceeds from issue of shares | | 956 | | 3,605 |
+---------------------------------------+----+-----------+-+----------------------+
| Proceeds from issue of convertible | | 3,205 | | - |
| loan notes | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Costs of share issue | | (111) | | (833) |
+---------------------------------------+----+-----------+-+----------------------+
| Proceeds of new bank and other loans | | 575 | | 1,000 |
+---------------------------------------+----+-----------+-+----------------------+
| Repayment of bank loans | | (1,352) | | (657) |
+---------------------------------------+----+-----------+-+----------------------+
| Finance lease repayments | | (98) | | (122) |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Net cash from financing activities | | 3,175 | | 2,993 |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Net increase/(decrease) in cash and | | 407 | | (883) |
| cash equivalents | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Cash and cash equivalents at start of | | (291) | | 592 |
| year | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Cash and cash equivalents at end of | | 116 | | (291) |
| year | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Comprising of: | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Cash and cash equivalents per the | | 116 | | 174 |
| balance sheet | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Less: | | | | |
+---------------------------------------+----+-----------+-+----------------------+
| Bank overdraft | | - | | (207) |
+---------------------------------------+----+-----------+-+----------------------+
| Invoice Discounting | | - | | (258) |
+---------------------------------------+----+-----------+-+----------------------+
| Cash, cash equivalents and short term | | 116 | | (291) |
| borrowings | | | | |
+---------------------------------------+----+-----------+-+----------------------+
The above summary of results for the year ended 31 March 2010 does not
constitute statutory financial statements within the meaning of section 434 of
the Companies Act 2006 and has not been delivered to the Registrar of Companies.
Statutory financial statements will be filed with the Registrar of Companies in
due course; the independent auditors' report on those financial statements under
Section 495 of the Companies Act 2006 is unqualified and does not contain a
statement under Section 498(2) or (3) of the Companies Act 2006.
Southern Bear's annual report has been posted to shareholders and will be made
available on the Group's website www.southernbeargroup.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KMGMRKVKGGZM
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