RNS Number:4516K
ADL PLC
21 December 2007
ADL plc
Interim Report for the six months to 30 September 2007
Financial Highlights
* �631k Operating Profit before deducting �417k exceptional costs
(30 September 2006: �538k before exceptional costs of �100k)- an increase
of 17.3%
* �(147)k Retained loss after exceptional items (30 September 2006:
Retained profit �142k)
* (1.49)p Earnings per Ordinary Share (30 September 2006: 1.44p)
* 85.10p Net Assets per Ordinary Share (30 September 2006: 77.78p) - an
increase of 9.4% (Allowing for the transition from UK GAAP to IFRS)
* Interim dividend passed (2006: 1p per Ordinary Share)
* Trading in the second half is showing a similar performance to that
experienced in the first half
For further information please contact:
ADL plc
Jeremy Davies, Managing Director 07860 717458
Blue Oar Securities Plc
John Wakefield, Corporate Finance Director 0117 933 0020
Chairman's statement
Financial Results
I have pleasure in presenting ADL's Interim Report for the six months ended 30
September 2007. Turnover was �3.023 million (30 September 2006: �2.741 million
and year to 31 March 2007 �5.648 million). The profit on ordinary activities
before interest, taxation and exceptional costs increased by 17% to �631,241
from �538,547 in the six months to 30 September 2006 (year to 31 March 2007
�1,647,158).
In September 2007 the company and two of its directors, Jeremy Davies and Pearl
Jackson were charged with wilful neglect under the Mental Health Act following
police enquiries emanating from the raid on Newsham House in July 2005.
Although these charges are being strenuously defended, this action effectively
places an embargo on the further development of the company generally and in
particular on the proposed acquisition of a group of five homes in the Bradford
area which the company had been progressing well and which was nearing
completion. Accordingly your board has written off some �310,112 in corporate
finance costs incurred to date on this project.
In the period your company also incurred a further �51,554 in legal fees
defending itself from the charges raised against it by the Crown.
Further exceptional costs of �55,000 were incurred following the unsuccessful
defence by the company of a claim for wrongful dismissal by a former executive
director of the group, who had relocated to the USA.
After deduction of these exceptional costs of �416,666, the company incurred a
loss on ordinary activities after taxation of �146,567 (2006: Profit of
�142,798, year to 31 March 2007: Profit of �857,295).
During the period the company adopted International Financial Reporting
Standards (IFRS) in accordance with AIM regulations and has restated its
previous results which were prepared under UK Generally Accepted Accounting
Principles (UK GAAP). This has resulted in the add back of amortisation of
goodwill of �9,543 in the comparative six month period to 30 September 2006 and
�23,577 in the year to 31 March 2007, and the full provision of deferred tax of
�1,446,000 as at 30 September 2007 (30 September 2006 �948,792, year to 31st
March 2007 �1,446,000). In addition, �700,000, being the valuation of
properties held for resale has been recognised in the Profit and Loss and
transferred out of the revaluation reserve in the year to 31st March 2007.
Property rationalisation
Morton Manor
The developer of the six apartments at Morton Manor has sold four of the
properties but has had no interest in two. The development company owes ADL plc
�250,000 and it is proposed that ADL plc takes one of the remaining apartments
independently valued at �280,000 in settlement of the debt.
Allambie Court
Planning permission has been granted for the extension to the home. The
purchaser of the adjacent land, subject to planning permission for eight flats,
awaits detailed planning consent.
Newsham House
The Company has agreed to sell the surplus land for �400,000 with its existing
planning permission as it is unlikely that consent for any further units will be
forthcoming. The developer has agreed to carry out the accommodation works,
providing a new access and car parking area at their expense, costs which under
the previous arrangement would have been borne by ADL plc.
The Knoll
The developer of the surplus land at The Knoll is continuing negotiations with
the local planning authority and if successful will sign a contract to purchase
the land.
Banking
As a result of the company being charged under the Mental Health Act, the
company's bankers have indicated that at the present time they would be
unwilling to increase the current level of borrowing despite the low level of
gearing.
The company has been informed by its lawyers that the costs of defending the
charges against it at Newsham House could be as high as �1 million. As a result,
the company has agreed a standby facility of �1 million with Jeremy Davies,
Managing Director.
Review of Business
From a trading point of view, the business continues to operate satisfactorily,
with occupancy levels being maintained.
However, the future of the business is difficult to predict as a result of the
uncertainty caused by the legal action against the Company and two of its
Directors.
Sir William Wells
Chairman
20 December 2007
Unaudited Income Statement 6 months to 30 6 months to 30 Year to
for the six months ended Sept 07 Sept 06 31 Mar 07
30 September 2007 �'000 �'000 �'000
Turnover
Continuing operations 3,023 2,491 4,973
Acquisitions - 250 675
Cost of Sales 3,023 2,741 5,648
Continuing operations 1,830 1,577 3,166
Acquisitions - 137 409
1,830 1,714 3,575
Gross profit 1,193 1,027 2,073
Administrative expenses - continuing operations (643) (567) (1,239)
Administrative expenses - acquisitions - (19) (89)
Exceptional loss 2 (417) (100) (255)
Other gains Note 5d - - 700
Other operating income 81 97 202
(979) (589) (681)
Operating profit 214 438 1,392
Continuing operations 214 344 1,215
Acquisitions - 94 177
214 438 1,392
Interest receivable 7 4 11
Interest payable (299) (243) (527)
(Loss) / Profit on ordinary activities before taxation (78) 199 876
Tax charge on profit on ordinary activities (69) (57) (18)
Retained (loss)/profit for the period (147) 142 858
Earnings per ordinary share - basic and diluted (1.49)p 1.44p 8.68p
Weighted average number of shares 9,885,694 9,885,694 9,885,694
Consolidated Unaudited Balance Sheet as at 30 Sept 07 30 Sept 06 31 Mar 07
30 September 2007 �'000 �'000 �'000
Assets
Non-current assets
Intangible assets 950 1,022 1,006
Tangible assets 16,281 15,839 16,332
Investments 2 2 2
Deferred tax assets 44 51 44
17,277 16,914 17,384
Current assets
Inventories 11 11 11
Debtors 787 857 891
Cash and cash equivalents 446 538 341
1,244 1,406 1,243
Non-current assets held for sale 700 500 700
Total Assets 19,221 18,820 19,327
Liabilities
Current liabilities (1,016) (1,045) (934)
Non-current liabilities (9,792) (10,085) (9,783)
Total liabilities (10,808) (11,130) (10,717)
Net Assets 8,413 7,690 8,610
Equity
Called-up equity share capital 1,522 1,522 1,522
Share premium account 3,712 3,712 3,712
Revaluation reserve 2,362 2,245 2,468
Retained earnings 817 211 908
Total Equity 8,413 7,690 8,610
Net assets per ordinary share 85.10 77.78 87.10
Consolidated Unaudited Cash Flow Statement 6 months to 30 6 months to 30 Year to
for the Six Months ended Sept 07 Sept 06 31 Mar 07
30 September 2007 �'000 �'000 �'000
Net Cash Inflow from Operating Activities 397 666 1,128
Returns of Investments and Servicing of Finance
Interest received 7 4 11
Interest paid (299) (243) (527)
Finance charges paid (127)
Net Cash Outflow from Returns on Investments
and servicing of finance (292) (239) (643)
Taxation
UK Corporation tax paid - - (46)
Capital Expenditure and Financial Investment
Purchase of Solutions (Yorkshire) Ltd - (2,245) (2,469)
Sale of Nightingale Nursing Home - - 800
Net cash outflow from Investing Activities - (2,245) (1,669)
Dividends - - (99)
Cash Inflow/(outflow) before Financing Activities 105 (1,818) (1,329)
Financing
New secured loans - 9,137 9,250
Repayment of amounts borrowed - (6,789) (6,900)
Net Cash Inflow from Financing Activities - 2,348 2,350
Increase in Cash and Cash Equivalents 105 530 1,021
Reconciliation of Operating profit to Net Cash Inflow from
Operating Activities
Operating profit 214 438 1,392
Amortisation 56 56 80
Amortisation of Finance costs 18 100 119
Depreciation 1 12 18
Profit on disposal of fixed assets - - (1)
Fair value of non-current assets held for sale - - (700)
(Increase)/decrease in debtors 96 (86) 100
Increase in creditors 12 146 120
Net Cash Inflow from Operating Activities 397 666 1,128
Consolidated Statement of Changes in Share Share Revaluation Retained Total
Equity Capital Premium Reserve Earnings Equity
For the six months ended �'000 �'000 �'000 �'000 �'000
30 September 2007
Balance at 1 April 2006 1,522 3,712 1,926 69 7,229
Recognised income and expenses - 142 142
Revaluation net of tax 319 - 319
Balance at 30 September 2006 1,522 3,712 2,245 211 7,690
Recognised income and expenses - 16 16
Transfer to profit and loss (80) 80 -
Revaluation net of tax 1,003 - 1,003
Transfer of land for resale (700) 700 -
Dividends - (99) (99)
Balance at 31 March 2007 1,522 3,712 2,468 908 8,610
Recognised income and expenses - (147) (147)
Transfer to profit and loss (56) 56 -
Impairment (50) - (50)
Balance at 30 September 2007 1,522 3,712 2,362 817 8,413
Notes
1. Accounting Policies
Basis of Accounting
These unaudited interim financial statements were approved for issue by the ADL
plc Board of Directors on 20 December 2007.
These consolidated interim financial statements for the six months ended 30
September 2007 have been prepared in accordance with the Listing Rules of the
Financial Services Authority and IFRS. The interim financial statements should
be read in conjunction with the financial statements for the year ended 31 March
2007 which have been prepared in accordance with UK Generally Accepted
Accounting Practice ("UK GAAP").
The Group now prepares its consolidated financial statements in accordance with
applicable International Financial Reporting Standards ("IFRS") as adopted by
the EU. This is the first financial information on the Group to have been
prepared under IFRS and the disclosures required by IFRS 1 "First time adoption
of IFRS" concerning the transition from UK GAAP to IFRS have been included in
these notes.
The Group has applied consistent accounting policies in preparing the
consolidated interim financial statements for the six months ended 30 September
2007, the comparative information for the six months ended 30 September 2006,
the financial statements for the year ended 31 March 2007 and the preparation of
the opening IFRS balance sheet as at 1 April 2006, the date of transition.
These interim financial results are unaudited and do not constitute statutory
financial statements as defined in section 240 of the Companies Act 1985. The
functional currency of the Group is UK Sterling and accordingly the amounts in
the interim results are denominated in that currency.
The statutory financial statements for ADL plc for the year ended 31 March 2007
received an unqualified Auditor's Report and have been filed with the Registrar
of Companies.
Basis of Consolidation
The consolidated interim results incorporate the interim results of the Company
and all Group undertakings. These are adjusted, where appropriate, to conform
to Group accounting policies. Acquisitions are accounted for under the
acquisition method and goodwill arising on consolidation is capitalised and the
value of this goodwill is reviewed on a periodic basis. The results of
companies acquired are included in the Group profit and loss account after the
date that control passed.
2. Operating Profit
Operating profit is stated after charging exceptional costs of �416,666 (2006:
�100,000).
This cost comprises three elements; �310,112 in corporate finance costs which
had previously been prepaid and were incurred on the abortive acquisition of a
group of 5 care homes in Bradford, �51,554 in legal fees incurred by the company
in defending itself and two directors from charges raised by the Crown, and
exceptional costs of �55,000 that were incurred as a result of the unsuccessful
defence by the company of a claim for wrongful dismissal by a former executive
director of the group, who had relocated to the USA.
3. The retained loss per ordinary share have been calculated on
the loss on ordinary activities after taxation of �146,567 (30 September 2006:
Retained profit �142,798, 31 March 2007: Retained profit �857,295) using the
weighted average number of shares in issue during the six months ended 30
September 2007 of 9,885,694 shares (30 September 2006: 9,885,694, 31 March 2007:
9,885,694).
4. Net assets per ordinary share have been calculated on net
assets of �8,412,578 (30 September 2006: �7,689,240, 31 March 2007 �8,609,144)
divided by 9,885,694 ordinary shares in issue at 30 September 2007, 30 September
2006 and 31 March 2007.
5. Comparative period
The corresponding amounts in the prior interim period for the six months ended
30 September 2006 and the audited financial statements for the year ended 31
March 2007 have been adjusted for the effects of changes to accounting policies
on transition to IFRS as follows:
(a) Goodwill arising on the acquisition of Newsham House Limited, Woodland
Healthcare Limited and Solutions (Yorkshire) Limited of �9,543 in the 6 months
ended 30 September 2006 and �23,577 in the year to 31 March 2007 has been
written back to the profit and loss account and Goodwill on the balance sheet.
(b) Deferred tax arising on the revaluation of properties as at 1 April 206 of
�824,792, as at 30 September 2006 of �948,792 and �1,446,000 as at 31 March 2007
has been provided in full and deducted from the Revaluation Reserve.
(c) Dividends proposed of �98,857 but not paid as at 30 September 2006 have
been added back to reserves as at that date in accordance with IAS32, "Financial
Instruments: Presentation".
(a) Non-current assets held for sale comprise surplus land at Newsham House,
Morton Manor, Allambie Court and the Knoll which has been transferred from
non-current assets as at 31 March 2007 in accordance with IFRS 5, "Non-current
Assets Held for Sale and Discontinued Operations". �700,000 has been transferred
from the revaluation reserve and included in income for the year ended 31 March
2007 accordingly.
Independent Review Report to the Directors of ADL plc
Introduction
We have reviewed the accompanying Balance Sheet of ADL Plc as of 30 September
2007 and the related statements of income, changes in equity and cash flows for
the six month period then ended, and other explanatory notes. Management is
responsible for the preparation and presentation of this interim financial
information in accordance with EU-endorsed International Financial Reporting
Standards (IFRS and IFRIC interpretations) applicable to companies reporting
under IFRS and the listing rules of the Financial Services Authority. Our
responsibility is to express a conclusion on this interim financial information
based on our review.
The Report is made solely to the Company in accordance with the International
Standard on Review Engagements 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by Auditing Practices
Board. Our work has been undertaken so that we may state to the Company those
matters we are required to state to them in an Independent Review 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, for our review work, for
this Report, or for the conclusion we have formed.
Scope of review
We conducted our review in accordance with the International Standard on Review
Engagements 2410 "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity." A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial information does not present fairly, in
all material respects, the financial position of the entity as at 30 September
2007.
CLB Littlejohn Frazer
Chartered Accountants
1 Park Place
Canary Wharf
London E14 4HJ
20 December 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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