RNS Number:3949Z
Orbis PLC
29 June 2007
Date: 29 June 2007
Contact: Michael Holmes, Chief Executive
Orbis PLC 01895 465 500
ORBIS PLC
(the "Company")
UNAUDITED RESULTS FOR THE SIX MONTHS
ENDED 31 MARCH 2007
INTERIM STATEMENT
Results
The company reports unaudited results for the six month period to 31 March 2007
that show a 1.6% increase in turnover to #19.98m (2006: #19.67m) with stronger
growth in the UK.
Operating profit on continuing operations before other operating items and
amortisation of goodwill and intangibles improved to #2.02m compared to #1.96m
for the six months to 31 March 2006 (restated for changes made in the audited
accounts for the eighteen months to 30 September 2006).
The loss on ordinary activities before taxation reduced to #1.91m compared to a
loss of #2.45m for the six months to 31 March 2006. The basic loss per share
was 15.70 pence (2006: loss per share of 18.36 pence).
Net cash flow from operating activities remained strong, with an inflow of
#2.94m (2006: #4.13m). Interest payments of #1.50m, loan repayments of #0.55m
and refinancing fee payments of #0.6m caused a decrease in cash of #0.83m
(2006: increase in cash of #0.19m).
Review of Operations
UK
Turnover in the UK grew 6.2% to #12.78m, as the benefits of contract wins during
the period started to come through. This helped offset the continued decline in
the traditional steel void property protection revenue of more than 10% compared
with the prior year. This highlights the success in developing the newer
regeneration and re-let services.
Major contracts were won in Sheffield, Nottingham and Lambeth, but these have
required the company to incur additional set-up and mobilisation costs in the
six months to 31 March 2007, prior to commencement of the contracts.
The sales and marketing function has been restructured, with a new sales and
marketing director appointed in June 2007, together with a new dedicated
regeneration manager and two national account managers. The new team will be
responsible for accelerating the growth of services other than in the
traditional steel market.
In recent years the group has made significant investments in technology. The
mobile job scheduling system is being rolled out across the branches to improve
productivity and the development and improvement of alarm equipment has
continued, with a significant reduction in the number of false alarms activated,
reducing call-outs and associated service costs.
Europe
Turnover in Europe declined in the six months to 31 March 2007 to #7.21m from
the prior year turnover of #7.64m.
Industrial action in France in October 2006 caused some reduction in turnover
and profit. This issue has now been resolved and has resulted in better working
practices. Competition has continued in France and has resulted in the loss of
a few small projects as well as causing downward pressure on prices. However,
opportunities for future growth in France remain strong with more Agence
Nationale pour le Renovation Urbaine (ANRU) projects announced. The French
business has already been successful in winning ANRU tenders.
In Germany, government spending limits restricted opportunities for traditional
property protection services but the company has successfully developed its
facilities management contracts and is continuing to look for new opportunities.
A decision has been made to close the small Polish and Czech operations, which
will allow more time to focus on better opportunities.
Corporate Activity
As previously announced, the group is currently in discussions regarding a
capital restructuring prior to the expiry of the current finance arrangements in
July 2008. To date, Orbis has operated within its debt facilities and has
continued to receive support from its lenders to ensure that debt facilities are
matched to existing cash-flows.
Prospects
The board believes that the group's management teams have repositioned the
business to take advantage of outsourcing and private sector opportunities.
They believe that the group is poised to achieve significant growth in the
future.
Approved by the Board
28 June 2007
Analysis of Unaudited Consolidated Profit & Loss Account
For the six months ended 31 March 2007
Before other Other operating Amortisation of After other
operating items items goodwill and operating items
and amortisation (Note 3) intangibles and amortisation
#000 #000 #000 #000
Turnover (note 2)
Continuing operations 19,983 - - 19,983
19,983 - - 19,983
Operating profit/(loss)
Continuing operations 2,023 (76) (2,062) (115)
Profit/(loss) on ordinary activities before 2,023 (76) (2,062) (115)
interest
Interest payable (1,502) (297) - (1,799)
Profit/(loss) on ordinary activities before 521 (373) (2,062) (1,914)
taxation
Taxation (note 4) (276) - - (276)
Profit/(loss) on ordinary activities after 245 (373) (2,062) (2,190)
taxation
Summary of Unaudited Consolidated Profit & Loss Account
Six months ended 31 March 2007
Six months Six months 18 months
ended 31 ended 31 ended 30
March 2007 March 2006 September
2006
(unaudited) (restated) (audited)
#000 #000 #000
Turnover (note 2)
Continuing operations 19,983 19,672 59,280
19,983 19,672 59,280
Operating loss
Continuing operations (115) (647) (1,951)
(115) (647) (1,951)
Loss on ordinary activities before interest (115) (647) (1,951)
Interest payable (1,799) (1,802) (5,173)
Loss on ordinary activities before taxation (1,914) (2,449) (7,124)
Taxation (note 4) (276) (112) (782)
Loss on ordinary activities after taxation (2,190) (2,561) (7,906)
Loss per share (note 5)
pence pence pence
Basic loss per ordinary share (15.70) (18.36) (56.67)
Diluted loss per ordinary shares (15.70) (18.36) (56.67)
Basic loss per share from continuing operations (15.70) (18.36) (56.67)
Diluted loss per share from continuing operations (15.70) (18.36) (56.67)
Unaudited Consolidated Balance Sheet
As at
As at 31 March As at 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
#000 #000 #000
Fixed assets
Goodwill 48,281 52,613 50,339
Tangible assets 6,031 7,277 6,287
54,312 59,890 56,626
Current assets
Stocks 212 220 233
Debtors 9,313 8,610 9,799
Cash at bank 1,361 1,236 1,566
10,886 10,066 11,598
Creditors - amounts falling due within one year (14,740) (12,826) (14,069)
Net current liabilities (3,854) (2,760) (2,471)
Total assets less current liabilities 50,458 57,130 54,155
Creditors - amounts falling due after more than (54,567) (56,088) (56,114)
one year
Provisions for liabilities and charges (307) (337) (268)
(4,416) 705 (2,227)
Capital and reserves
Called up share capital 1,398 1,398 1,398
Share premium 31,524 31,772 31,648
Capital redemption reserve 16,084 16,084 16,084
Own shares reserve (182) (182) (182)
Merger reserve 12,144 12,144 12,144
Profit and loss account (65,384) (60,511) (63,319)
(4,416) 705 (2,227)
Equity (4,416) 705 (2,227)
Non-equity - - -
Total shareholders' (deficit)/funds (4,416) 705 (2,227)
Unaudited Consolidated Cash Flow Statement
Six months Six months 18 months ended
ended 31 March ended 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
#000 #000 #000
Net cash inflow from operating activities 2,937 4,130 10,073
(note 6)
Returns on investment and servicing of finance (1,496) (1,417) (4,907)
Tax paid (216) (709) (1,216)
Capital expenditure and financial investment (913) (1,062) (2,327)
Acquisitions and disposals - - -
Net cash inflow before financing 312 942 1,623
Net cash outflow from financing (1,145) (748) (1,703)
(Decrease)/increase in cash (833) 194 (80)
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Six months Six months 18 months ended
ended 31 March ended 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
#000 #000 #000
Loss for the financial period (2,190) (2,561) (7,906)
Exchange difference on retranslation of 9 292 (162)
subsidiary net assets
Exchange difference on loan (8) (275) 146
Total recognised losses relating to the (2,189) (2,544) (7,922)
financial period
Unaudited Reconciliation of Movements in Shareholders' Funds
Six months Six months 18 months ended
ended 31 March ended 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
#000 #000 #000
Total recognised losses for the period (2,189) (2,544) (7,922)
Effect of adoption of FRS 25 on 1 April 2005 - - (14,172)
Net reduction in shareholders' funds (2,189) (2,544) (22,094)
Opening shareholders' (deficit)/funds (2,227) 3,249 19,867
Closing shareholders' (deficit)/funds (4,416) 705 (2,227)
NOTES
1. BASIS OF PREPARATION
The interim financial statement has been prepared on a basis consistent with the
accounting policies disclosed in the Annual Report and Accounts for the period
ended 30 September 2006.
The interim accounts have been prepared on a going concern basis, which the
directors believe to be appropriate for the following reasons. To the date of
approval of the interim accounts, Orbis has operated within its debt facilities
and has continued to receive support from its lenders to ensure that debt
facilities are matched to existing cash-flows.
It is appropriate for the interim accounts to be prepared on a going concern
basis, as the directors believe that the lenders will continue to provide
support on the same basis as heretofore, and the directors therefore expect the
group to continue in operational existence for the foreseeable future.
The interim accounts do not include any adjustments that would result should
this basis not be appropriate.
The debt facility is due to expire on 28 July 2008 and Orbis is continuing its
discussions regarding a capital restructuring of the group prior to the expiry
of the facility.
FRS 25 Financial instruments: disclosure and presentation, which was issued by
the ASB in 2006, defines equity interests as a residual interest in an entity
after all obligations are paid. As a result, the #1 redeemable convertible
preference shares previously presented as non-equity shareholders funds were
classified as debt in respect of the period ending 30 September 2006.
The consolidated results for the period ended 30 September 2006 have been
extracted from the financial statements for that period and do not constitute
full statutory accounts for the group. The group accounts for the period ended
30 September 2006 received an unqualified audit report and did not include a
statement under section 237 (2) or (3) of the Companies Act 1985 and have been
filed with the Registrar of Companies.
2. SEGMENTAL INFORMATION
All turnover is derived from void property protection services.
Turnover
Six months ended Six months ended 18 months ended 30
31 March 2007 31 March 2006 September 2006
(unaudited) (restated) (audited)
#000 #000 #000
Turnover by destination and origin
United Kingdom 12,777 12,036 37,715
Continental Europe 7,206 7,636 21,565
19,983 19,672 59,280
3. OTHER OPERATING ITEMS
The other operating charge of #76,000 relates principally to the cost of the
reorganisation of the UK business and group restructuring. The item of #297,000
in interest payable relates to the amortisation of professional fees in respect
of the negotiation of the company's banking arrangements in August 2003 which,
in accordance with FRS4, are being charged to the profit and loss account over
the period of the loan facility.
4. TAXATION
The taxation charge of #276,000 for the period relates to the anticipated tax
payable on earnings in Europe. No tax charge for the period is payable in the
UK.
5. LOSS PER SHARE
Basic loss per share has been calculated on the loss after tax for the period
and the weighted average number of ordinary shares (excluding 35,555 ordinary
shares owned by the company's share ownership trust) in issue during the period
as follows:
Six months Six months 18 months
ended ended ended
31 March 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
Loss #000 (2,190) (2,561) (7,906)
Weighted average equity in issue (million) 13.95 13.95 13.95
Basic loss per ordinary share (pence) (15.70) (18.36) (56.67)
Basic loss per share from continuing operations, diluted loss per share, as
defined in FRS 22, and diluted loss per share from continuing operations, as
defined in FRS 22, are the same as the basic loss per share as shown above.
Earnings/(losses) per share from continuing operations before amortisation of
goodwill and intangibles and before other operating items have been presented in
addition to basic earnings per share as defined by FRS 14 since, in the opinion
of the directors, this provides shareholders with a more appropriate
representation of the earnings derived from the group's present businesses. It
can be reconciled to basic loss per share as follows:
Six months Six months 18 months
ended ended ended
31 March 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
Basic loss per ordinary share (15.70) (18.36) (56.67)
Amortisation of goodwill and intangibles 14.78 14.99 44.55
Other operating items on continuing operations 2.67 5.85 25.19
Earnings per ordinary share from continuing 1.75 2.48 13.07
operations before the amortisation of goodwill
and intangibles and other operating items
6. RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING ACTIVITIES
Six months Six months 18 months
ended ended ended
31 March 31 March 30 September
2007 2006 2006
(unaudited) (restated) (audited)
Operating loss (115) (647) (1,951)
Depreciation and loss on disposal of fixed 1,247 1,298 3,967
assets
Amortisation of goodwill and intangibles 2,062 2,091 6,214
EBITDA 3,194 2,742 8,230
Decrease in stocks 21 90 252
Decrease in debtors 412 825 18
(Decrease)/increase in creditors (690) 473 1,573
Net cash inflow from operating activities 2,937 4,130 10,073
7. ANALYSIS OF CHANGES IN NET DEBT
As at Other As at
1 October Exchange non-cash 31 March
2006 Cash flow movement changes 2007
#000 #000 #000 #000 #000
Cash in hand and at bank 1,566 (205) - - 1,361
Bank overdrafts (2,210) (628) - - (2,838)
(644) (833) - - (1,477)
Bank loans (43,418) 545 (8) (173) (43,054)
Net bank debt (44,062) (288) (8) (173) (44,531)
Shares classified as liabilities (14,545) - - (124) (14,669)
(58,607) (288) (8) (297) (59,200)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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