TIDMREAL
RNS Number : 1179L
Real Office Group PLC
30 April 2010
Real Office Group plc
Unaudited Interim Results
Real Office Group plc
30 April 2010
Real Office Group plc - Unaudited Interim Results for the six months ended 31
January 2010
Real Office Group, the AiM quoted global design and build business, today
announces its unaudited interim results for the six months ended 31 January
2010. The interim results will be made available on the Company's website
today.
Financial highlights - for continuing activities only
· Revenue for the six months ended 31 January 2010 was GBP8.6m (six months
ended 31 January 2009: GBP11.4m) with gross profit margins of 15.5% achieved in
challenging economic circumstances;
· Operating loss before tax and exceptional items of GBP0.5m (Six months
ended 31 January 2009: Profit of GBP0.6m);
· Cash and cash equivalents at period end GBP0.4m (31 January 2009:
GBP1.3m);
+----------------------------------------+------------------------+
| | |
| Enquiries: | |
+----------------------------------------+------------------------+
| Real Office Group plc | 0207 822 0989 |
+----------------------------------------+------------------------+
| Roger Smee, Chairman | |
+----------------------------------------+------------------------+
| Philip Brady, Finance Director | |
+----------------------------------------+------------------------+
| Cenkos, Nominated Advisor to the | 0207 397 8900 |
| Company | |
+----------------------------------------+------------------------+
| Nick Wells/Elizabeth Bowman | |
+----------------------------------------+------------------------+
CHAIRMAN'S STATEMENT
The figures reflect a difficult trading period. Since the end of the period we
have sold ISIS Projects, which incurred significant losses during the period
under review. Furthermore, the Middle East proved to be a very difficult market
to enter and sustain a viable and ongoing operation. Pacific Middle East also
incurred significant losses in recent months with no prospect of recovery and as
a consequence the business has been closed.
The results have been presented to reflect ISIS Projects and Pacific Middle East
as discontinued activities. Together they generated operating losses of
GBP1.047m and their sale and closure has resulted in an exceptional charge of
GBP8.849m.
The Board going forward are focusing upon the Group's core activities.
Roger Smee
Chairman
30 April 2010
· The Group was formed in 28 April 2009. Consistent with pooling of
interests accounting principles statutory consolidated accounts were prepared
for the two years ended 31 July 2009 as if the group had existed throughout that
period. For income and cash flow statements the Board has decided that interim
accounts for the corresponding six month period 31 January 2009, presented as if
the group had existed at that time (i.e. with the Company as the parent company
for the existing and disposed of or closed subsidiaries) provides the most
meaningful comparative data.
· The balance sheet, after disposal and closure of subsidiaries, compares
the financial position as at 31 January 2010 with the financial position at 31
January 2009 and at 31 July 2009 after closure and disposal of subsidiaries.
Income Statements
For the period ended 31 January 2010
+------------------------------+--+------------+------------+------------+
| | | Six month | Six month | Twelve |
| | | period | period | month |
| | | ended | ended | period |
| | | | | ended |
+------------------------------+--+------------+------------+------------+
| | | 31 January | 31 January | 31 July |
| | | 2010 | 2009 | 2009 |
+------------------------------+--+------------+------------+------------+
| Continuing activities: | | Unaudited | Unaudited | Audited |
+------------------------------+--+------------+------------+------------+
| | | GBP000 | GBP000 | GBP000 |
+------------------------------+--+------------+------------+------------+
| Revenue |3 | 8,553.2 | 11,404.0 | 18,722.7 |
| | | | | |
+------------------------------+--+------------+------------+------------+
| Cost of sales | | (7,222.7) | (9,684.5) | (15,302.6) |
+------------------------------+--+------------+------------+------------+
| Gross profit | | 1,330.5 | 1,719.5 | 3,420.1 |
+------------------------------+--+------------+------------+------------+
| | | | | |
+------------------------------+--+------------+------------+------------+
| Administrative expenses - | | (1,836.8) | (1,134.5) | (3,147.5) |
| excluding exceptional items | | | | |
+------------------------------+--+------------+------------+------------+
| Finance revenue | | - | 55.5 | 39.3 |
+------------------------------+--+------------+------------+------------+
| Finance costs | | (2.4) | (1.7) | - |
+------------------------------+--+------------+------------+------------+
| Other income | | - | - | 172.9 |
+------------------------------+--+------------+------------+------------+
| (Loss)/profit before |3 | (508.7) | 638.8 | 484.8 |
| exceptional items | | | | |
+------------------------------+--+------------+------------+------------+
| Administrative expenses - |4 | (8,849.1) | - | - |
| exceptional items | | | | |
+------------------------------+--+------------+------------+------------+
| Operating (loss)/profit | | (9,357.8) | 638.8 | 484.8 |
+------------------------------+--+------------+------------+------------+
| (Loss)/profit on |5 | (1,045.5) | 1,433.8 | 765.7 |
| discontinued activities | | | | |
+------------------------------+--+------------+------------+------------+
| (Loss)/profit before tax | | (10,403.3) | 2,072.6 | 1,250.5 |
+------------------------------+--+------------+------------+------------+
| Tax | | (42.9) | (418.6) | (349.4) |
+------------------------------+--+------------+------------+------------+
| Minority interest | | 49.3 | (98.8) | (138.0) |
+------------------------------+--+------------+------------+------------+
| (Loss)/profit after tax | | (10,396.9) | 1,555.2 | 763.1 |
+------------------------------+--+------------+------------+------------+
| Attributable to:- | | | | |
+------------------------------+--+------------+------------+------------+
| Equity holders of the | | (10,396.9) | 1,555.2 | 763.1 |
| parent | | | | |
+------------------------------+--+------------+------------+------------+
| Minority interests | | (49.3) | 98.8 | 138.0 |
+------------------------------+--+------------+------------+------------+
| | | | | |
+------------------------------+--+------------+------------+------------+
| Earnings per share - basic |6 | (7.24) | 8.89 | 1.79 |
| (pence) | | | | |
+------------------------------+--+------------+------------+------------+
| Earnings per share - diluted |6 | (7.24) | 8.89 | 1.30 |
| (pence) | | | | |
+------------------------------+--+------------+------------+------------+
The accompanying notes are an integral part of this consolidated interim
financial information.
Balance Sheets
As at 31 January 2010
+-------------------------+--+------------+-----------+------------+
| | | As at | As at | As at |
+-------------------------+--+------------+-----------+------------+
| | | 31 | 31 | 31 July |
| | | January | January | 2009 |
| | | 2010 | 2009 | |
+-------------------------+--+------------+-----------+------------+
| Continuing activities: | | Unaudited | Unaudited | Audited |
+-------------------------+--+------------+-----------+------------+
| | | GBP000 | GBP000 | GBP000 |
+-------------------------+--+------------+-----------+------------+
| Non-current assets | | | | |
+-------------------------+--+------------+-----------+------------+
| | | | | |
+-------------------------+--+------------+-----------+------------+
| Investments | | - | 716.0 | - |
+-------------------------+--+------------+-----------+------------+
| Property, plant and | | 223.2 | 176.1 | 233.0 |
| equipment | | | | |
+-------------------------+--+------------+-----------+------------+
| | | 223.2 | 892.1 | 233.0 |
+-------------------------+--+------------+-----------+------------+
| Current assets | | | | |
+-------------------------+--+------------+-----------+------------+
| Trade and other |7 | 2,702.0 | 5,103.2 | 1,696.2 |
| receivables | | | | |
+-------------------------+--+------------+-----------+------------+
| Cash and short term | | 424.2 | 1,342.5 | 879.8 |
| deposits | | | | |
+-------------------------+--+------------+-----------+------------+
| | | 3,126.2 | 6,445.7 | 2,576.0 |
+-------------------------+--+------------+-----------+------------+
| Total assets | | 3,349.4 | 7,337.8 | 2,809.0 |
+-------------------------+--+------------+-----------+------------+
| Current liabilities | | | | |
+-------------------------+--+------------+-----------+------------+
| Trade and other |8 | (5,629.0) | (3,633.1) | (4,970.3) |
| payables | | | | |
+-------------------------+--+------------+-----------+------------+
| Finance lease | | - | - | - |
| obligations | | | | |
+-------------------------+--+------------+-----------+------------+
| | | | | |
+-------------------------+--+------------+-----------+------------+
| | | (5,629.0) | (3,633.1) | (4,970.3) |
+-------------------------+--+------------+-----------+------------+
| Net current | | (2,502.8) | 2,812.6 | (2,394.3) |
| (liabilities)/assets | | | | |
+-------------------------+--+------------+-----------+------------+
| Non-current liabilities | | | | |
+-------------------------+--+------------+-----------+------------+
| Other payables | | - | - | (998.7) |
+-------------------------+--+------------+-----------+------------+
| Finance lease | | - | - | - |
| obligations | | | | |
+-------------------------+--+------------+-----------+------------+
| | | | | |
+-------------------------+--+------------+-----------+------------+
| Total liabilities | | (5,629.0) | (3,633.1) | (5,969.0) |
+-------------------------+--+------------+-----------+------------+
| Net | | (2,279.6) | 3,704.7 | (3,160.0) |
| (liabilities)/assets | | | | |
+-------------------------+--+------------+-----------+------------+
| | | | | |
| Equity | | | | |
+-------------------------+--+------------+-----------+------------+
| Share capital | | 14,366.9 | 1,750.0 | 14,366.9 |
+-------------------------+--+------------+-----------+------------+
| Share premium | | 1,646.6 | 1,646.6 | 1,646.6 |
+-------------------------+--+------------+-----------+------------+
| Convertible loan | | - | - | 1,902.7 |
+-------------------------+--+------------+-----------+------------+
| Unity of interest | | (7,983.0) | 1,356.2 | (19,975.2) |
| reserve | | | | |
+-------------------------+--+------------+-----------+------------+
| Translation reserve | | (5.8) | (0.3) | (148.1) |
+-------------------------+--+------------+-----------+------------+
| Minority interest | | (49.3) | - | - |
+-------------------------+--+------------+-----------+------------+
| Retained earnings | | (10,255.0) | (1,047.8) | (952.9) |
+-------------------------+--+------------+-----------+------------+
| Total equity | | (2,279.6) | 3,704.7 | (3,160.0) |
+-------------------------+--+------------+-----------+------------+
The accompanying notes are an integral part of this consolidated interim
financial information.
Statements of Changes in Equity
As at 31 January 2010
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Continuing | Share | Share | C'tible | Unity | Forex | Retained | Minority | Total |
| activities: | Capital | Premium | Loan | of | Reserve | Earnings | interest | |
| | | | | Interest | | | | |
| | | | | Reserve | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| At 1 | 1,750.0 | 1,646.6 | - | 753.4 | - | (794.9) | - | 3,355.1 |
| August | | | | | | | | |
| 2008 | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Profit for | | | | | | 1,555.2 | | 1,555.2 |
| the period | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Discontinued | | | | | | (1,323.9) | | (1,323.9) |
| activities | | | | | | | | |
| after tax | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Transfer | | | | 484.2 | | (484.2) | | - |
| to unity | | | | | | | | |
| reserve | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Minority | | | | 118.6 | | | | 118.6 |
| interest | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Forex | | | | | (0.3) | | | (0.3) |
| translation | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| At 31 | 1,750.0 | 1,646.6 | - | 1,356.2 | (0.3) | (1,047.8) | - | 3,704.7 |
| January | | | | | | | | |
| 2009 | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| At 31 July | 14,366.9 | 1,646.6 | 1,902.7 | (19,975.2) | (148.1) | (952.9) | - | (3,160.0) |
| 2009 | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| (Loss) for | | | | | | (10,347.6) | (49.3) | (10,396.9) |
| the period | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Discontinued | | | | | | 1,045.5 | | 1,045.5 |
| activities | | | | | | | | |
| after tax | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Intercompany | | | | 2,033.8 | | | | 2,033.8 |
| balances | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Convertible | | | (19.6) | | | | | (19.6) |
| loan | | | | | | | | |
| repayment | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Convertible | | | (1,883.1) | | | | | (1,883.1) |
| loan | | | | | | | | |
| write-off | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Forex | | | | | 142.3 | | | 142.3 |
| translation | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| Reversal | | | | 9,958.4 | | | | 9,958.4 |
| on | | | | | | | | |
| impairment | | | | | | | | |
| of PME | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
| At 31 | 14,366.9 | 1,646.6 | - | (7,983.0) | (5.8) | (10,255.0) | (49.3) | (2,279.6) |
| January | | | | | | | | |
| 2010 | | | | | | | | |
+--------------+----------+---------+-----------+------------+---------+------------+----------+------------+
The accompanying notes are an integral part of this consolidated interim
financial information.
Cash Flow Statements
For the period ended 31 January 2010
+------------------------+--+-----------+-----------+-----------+
| | | Six month | Six | Twelve |
| | | period | month | month |
| | | ended | period | period |
| | | | ended | ended |
+------------------------+--+-----------+-----------+-----------+
| | | 31 | 31 | 31 July |
| | | January | January | 2009 |
| | | 2010 | 2009 | |
+------------------------+--+-----------+-----------+-----------+
| Continuing activities: | | Unaudited | Unaudited | Audited |
+------------------------+--+-----------+-----------+-----------+
| | | GBP000 | GBP000 | GBP000 |
+------------------------+--+-----------+-----------+-----------+
| Net cash flow from |9 | (438.1) | (4,350.9) | (1,589.5) |
| activities | | | | |
+------------------------+--+-----------+-----------+-----------+
| | | | | |
+------------------------+--+-----------+-----------+-----------+
| Cash flows from | | | | |
| investing activities | | | | |
+------------------------+--+-----------+-----------+-----------+
| Capital expenditure | | (8.7) | (7.1) | (80.4) |
+------------------------+--+-----------+-----------+-----------+
| Acquisitions | | (12.1) | (2,010.8) | (2,452.7) |
+------------------------+--+-----------+-----------+-----------+
| Investment income | | - | 55.5 | 39.3 |
| received | | | | |
+------------------------+--+-----------+-----------+-----------+
| Net cash used in | | (20.8) | (1,962.4) | (2,493.8) |
| investing activities | | | | |
+------------------------+--+-----------+-----------+-----------+
| | | | | |
+------------------------+--+-----------+-----------+-----------+
| Cash flows from | | | | |
| financing activities | | | | |
+------------------------+--+-----------+-----------+-----------+
| Interest paid | | (2.4) | (1.7) | - |
+------------------------+--+-----------+-----------+-----------+
| Net cash flows from | | (2.4) | (1.7) | - |
| financing activities | | | | |
+------------------------+--+-----------+-----------+-----------+
| | | | | |
+------------------------+--+-----------+-----------+-----------+
| Net (decrease) in cash | | (461.3) | (6,315.0) | (4,083.3) |
| and cash equivalents | | | | |
+------------------------+--+-----------+-----------+-----------+
| Effect of foreign | | 5.7 | 1.5 | (7.9) |
| exchange rate changes | | | | |
+------------------------+--+-----------+-----------+-----------+
| Cash and cash | | 879.8 | 4,971.0 | 4,971.0 |
| equivalents at start | | | | |
| of the period | | | | |
+------------------------+--+-----------+-----------+-----------+
| Cash and cash | | 424.2 | 1,342.5 | 879.8 |
| equivalents at the end | | | | |
| of the period | | | | |
+------------------------+--+-----------+-----------+-----------+
The accompanying notes are an integral part of this consolidated interim
financial information.
Notes to the interim financial statements
for the six months ended 31 January 2010
1. Basis of preparation
Real Office Group plc (the "Company") and its subsidiaries (together the
"Group") is a global office design and fit out group specialising in commercial
real estate. The Company is incorporated and domiciled in the United Kingdom
under the provisions of The Companies Act 2006 with the registered number
06195939. The Company's registered office is Thavies Inn House, 3 - 4 Holborn
Circus, London EC1N 2HA.
The financial statements have been prepared on a going concern basis which
assumes that the Group will be able to meet its liabilities as they fall due for
at least 12 months following the date of approval of these financial statements.
This financial information comprises a consolidated balance sheet as of 31
January 2010 and related consolidated income statement, consolidated statement
of recognised income and expenses, consolidated cash flow statements and related
notes for the six months then ended of Real Office Group plc (hereinafter
referred to as 'financial information').
The interim financial results are unaudited and do not comprise statutory
accounts within the meaning of Section 434 of the Companies Act 2006. S tatutory
accounts for the twelve months ended 31 July 2009 were approved by the Board of
Directors on 28 January 2010 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was qualified and did not contain a
statement under Section 498 of the Companies Act 2006.
The acquisitions of the subsidiaries are deemed to be 'combinations under common
control' as ultimate control before and after the acquisition was the same. As
a result, these acquisitions are outside the scope of IFRS 3 "Business
combinations" and have been consolidated under the principals of the pooling of
interest method of accounting from 10 November 2008, the date common control was
established by the acquisition of the Company.
The Directors have reconsidered their capitalisation of "acquisition costs
settled in cash" as per the audited accounts to 31 July 2009 released on 30
January 2010 and reiterated in the further commentary release on 1 February
2010. They remain of the view that this is the correct treatment and these
interim financial statements have been prepared on that basis.
2. Accounting policies
The accounting policies adopted in the financial information are consistent with
those of the annual financial statements for the twelve months ended 31 July
2009, as described in those financial statements.
The preparation of financial statements in conformity with IFRS requires the use
of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the accounting policies.
3. Segmental information
Geographical segments
The Group operates on a global basis with companies in the United Kingdom and
India.
Business segments
The Group operates in only one business segment, the provision of office design
and fit out services.
+--------------------------------+------------------+------------------+
| Income | Six month period | Six month period |
| | ended | ended |
+--------------------------------+------------------+------------------+
| Continuing activities: | 31 January 2010 | 31 January 2009 |
+--------------------------------+------------------+------------------+
| | Unaudited | Unaudited |
+--------------------------------+------------------+------------------+
| | GBP000 | GBP000 |
+--------------------------------+------------------+------------------+
| Geographical analysis by | | |
| revenue | | |
+--------------------------------+------------------+------------------+
| United Kingdom | 8,598.3 | 11,357.6 |
+--------------------------------+------------------+------------------+
| India | 276.3 | 46.4 |
+--------------------------------+------------------+------------------+
| | 8,874.6 | 11,404.0 |
+--------------------------------+------------------+------------------+
| Inter-company | (321.4) | - |
+--------------------------------+------------------+------------------+
| Total | 8,553.2 | 11,404.0 |
+--------------------------------+------------------+------------------+
+--------------------------------+------------------+------------------+
| Operating (loss)/profit - pre | Six month period | Six month period |
| exceptional costs | ended | ended |
+--------------------------------+------------------+------------------+
| Continuing activities: | 31 January 2010 | 31 January 2009 |
+--------------------------------+------------------+------------------+
| | Unaudited | Unaudited |
+--------------------------------+------------------+------------------+
| | GBP000 | GBP000 |
+--------------------------------+------------------+------------------+
| Geographical analysis by | | |
| operating (loss)/profit | | |
+--------------------------------+------------------+------------------+
| United Kingdom | (86.7) | 641.7 |
+--------------------------------+------------------+------------------+
| India | (100.6) | (2.9) |
+--------------------------------+------------------+------------------+
| | (187.3) | 638.8 |
+--------------------------------+------------------+------------------+
| Inter-company | (321.4) | - |
+--------------------------------+------------------+------------------+
| Total | (508.7) | 638.8 |
+--------------------------------+------------------+------------------+
4. Exceptional items
Included in the Group's financial statements are a number of costs that are
considered to be exceptional. These are disclosed separately on the face of the
income statements. A breakdown of these costs is set out below:
+--------------------------------+----------------+----------------+
| Exceptional items | Six month | Six month |
| | period ended | period ended |
+--------------------------------+----------------+----------------+
| | 31 January | 31 January |
| | 2010 | 2009 |
+--------------------------------+----------------+----------------+
| | Unaudited | Unaudited |
+--------------------------------+----------------+----------------+
| | GBP000 | GBP000 |
+--------------------------------+----------------+----------------+
| | | |
+--------------------------------+----------------+----------------+
| Impairment of investment in | 7,637.1 | - |
| PME | | |
+--------------------------------+----------------+----------------+
| Write-off of non-recoverable | 1,212.0 | - |
| intercompany balances | | |
+--------------------------------+----------------+----------------+
| Total | 8,849.1 | - |
+--------------------------------+----------------+----------------+
5. Discontinued activities
As part of a short term strategy of disposing of or closing down unprofitable
activities, on 28 January 2010 the company disposed of its investment in Isis
Projects Limited. After a major customer in the Middle East defaulted on its
contractual obligations, on 28 February 2010 the decision was taken to close
down the operations in the Pacific Middle East LLC. The impact of these
decisions has been reflected in the interim results by excluding the loss from
these discontinued activities in the income statement in accordance with IAS 34
and by providing for the impairment of the investment in Pacific Middle East LLC
(see note 4). The results from discontinued activities were as follows:-
+--------------------------+-----------+------------+------------+
| Income statements for | Six | Six month | Twelve |
| discontinued activities | month | period | month |
| | period | ended | period |
| | ended | | ended |
+--------------------------+-----------+------------+------------+
| | 31 | 31 January | 31 July |
| | January | 2009 | 2009 |
| | 2010 | | |
+--------------------------+-----------+------------+------------+
| | Unaudited | Unaudited | Audited |
+--------------------------+-----------+------------+------------+
| Discontinued activities: | GBP000 | GBP000 | GBP000 |
+--------------------------+-----------+------------+------------+
| Revenue | 5,140.6 | 13,919.8 | 26,288.3 |
+--------------------------+-----------+------------+------------+
| Cost of sales | (4,997.5) | (10,462.2) | (21,526.0) |
+--------------------------+-----------+------------+------------+
| Gross profit | 143.1 | 3,457.6 | 4,762.3 |
+--------------------------+-----------+------------+------------+
| | | | |
+--------------------------+-----------+------------+------------+
| Administrative expenses | (1,189.2) | (2,053.0) | (4,029.9) |
+--------------------------+-----------+------------+------------+
| Operating (loss)/profit | (1,046.1) | 1,404.6 | 732.4 |
+--------------------------+-----------+------------+------------+
| Finance revenue | 1.8 | 29.9 | 33.3 |
+--------------------------+-----------+------------+------------+
| Finance costs | (1.2) | (0.7) | - |
+--------------------------+-----------+------------+------------+
| (Loss)/profit on | (1,045.5) | 1,433.8 | 765.7 |
| discontinued activities | | | |
| before tax | | | |
+--------------------------+-----------+------------+------------+
Note 5 discontinued activities continued
+-+-------------------------+----+-----------+-----------+------------+----------+
| Balance sheets for | Six month | Six month | Twelve month period |
| discontinued activities | period ended | period | ended |
| | | ended | |
+---------------------------+----------------+-----------+-----------------------+
| | 31 January | 31 | 31 July 2009 |
| | 2010 | January | |
| | | 2009 | |
+---------------------------+----------------+-----------+-----------------------+
| | Unaudited | Unaudited | Audited |
+---------------------------+----------------+-----------+-----------------------+
| Discontinued activities: | GBP000 | GBP000 | GBP000 |
+---------------------------+----------------+-----------+-----------------------+
| Non-current assets | 199.7 | 322.7 | 240.2 |
+---------------------------+----------------+-----------+-----------------------+
| Current assets | 4,160.6 | 3,486.5 | 7,531.5 |
+---------------------------+----------------+-----------+-----------------------+
| Total assets | 4,360.3 | 3,809.2 | 7,771.7 |
+---------------------------+----------------+-----------+-----------------------+
| Current liabilities | (4,535.1) | (2,127.5) | (6,694.3) |
+---------------------------+----------------+-----------+-----------------------+
| Net current | (374.5) | 1,359.0 | 837.2 |
| (liabilities)/assets | | | |
+---------------------------+----------------+-----------+-----------------------+
| Non-current liabilities | - | (9.1) | (4.7) |
+---------------------------+----------------+-----------+-----------------------+
| Net assets | (174.8) | 1,672.6 | 1,072.7 |
+---------------------------+----------------+-----------+-----------------------+
| Share capital | 1,110.9 | 39.4 | 1,110.9 |
+---------------------------+----------------+-----------+-----------------------+
| Share premium | 23.4 | 19.2 | 23.4 |
+---------------------------+----------------+-----------+-----------------------+
| Other reserves | (1,309.1) | 1,614.0 | (61.6) |
+---------------------------+----------------+-----------+-----------------------+
| Total equity | (174.8) | 1,672.6 | 1,072.7 |
+---------------------------+----------------+-----------+-----------------------+
| | | | | |
+---------------------------+----------------+-----------+------------+----------+
| Cash flows for | Six month | Six month | Twelve | |
| discontinued activities | period ended | period | month | |
| | | ended | period | |
| | | | ended | |
+---------------------------+----------------+-----------+------------+----------+
| | 31 January | 31 | 31 July | |
| | 2010 | January | 2009 | |
| | | 2009 | | |
+---------------------------+----------------+-----------+------------+----------+
| | Unaudited | Unaudited | Audited | |
+---------------------------+----------------+-----------+------------+----------+
| Discontinued activities: | GBP000 | GBP000 | GBP000 | |
+---------------------------+----------------+-----------+------------+----------+
| | (Loss)/profit before tax | (1,045.5) | 1,433.8 | 765.7 | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Finance income | (1.8) | (29.9) | (34.3) | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Finance expense | 1.2 | 0.7 | 1.0 | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Other non-cash items | 24.3 | 16.6 | 18.7 | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Loss on disposal of | - | 8.9 | 3.5 | |
| | property, plant and | | | | |
| | equipment | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Depreciation of tangible | 59.1 | 51.4 | 108.0 | |
| | fixed assets | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | | (962.7) | 1,481.5 | 862.6 | |
+-+------------------------------+-----------+-----------+------------+----------+
| | (Increase)/decrease in | 680.4 | 5.6 | (684.1) | |
| | inventories | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | (Increase)/decrease in | 2,040.9 | 672.9 | (887.7) | |
| | operating receivables | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Increase/(decrease) in | (2,360.1) | (3,040.9) | 1,120.8 | |
| | operating payables | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | | (601.5) | (880.9) | 411.6 | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Dividends paid | - | - | - | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Tax paid | (40.2) | (1.9) | (6.4) | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Net cash flow from | (641.7) | (882.8) | 405.2 | |
| | activities | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Cash flow from investing | (13.7) | (83.0) | (1,501.4) | |
| | activities - discontinued | | | | |
| | activities | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Cash flow from financing | (6.5) | (21.7) | (15.1) | |
| | activities - discontinued | | | | |
| | activities | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Net (decrease) in cash and | (661.9) | (987.5) | (1,111.3) | |
| | cash equivalents | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Effect of foreign exchange | 5.8 | 314.9 | 281.9 | |
| | rate changes | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Cash and cash equivalents at | 774.7 | 1,604.1 | 1,604.1 | |
| | start of the period | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | Cash and cash equivalents at | 118.6 | 931.5 | 774.7 | |
| | the end of the period | | | | |
+-+------------------------------+-----------+-----------+------------+----------+
| | | | | | | |
+-+-------------------------+----+-----------+-----------+------------+----------+
6. Earnings per share
Basic
Basic earnings per share is calculated by dividing the net (loss)/profit
attributable to equity holders of the Company by the weighted average number of
ordinary shares in issue during the year.
+-------------------------------------+--------------+--------------+
| | Six month | Six month |
| | period ended | period ended |
+-------------------------------------+--------------+--------------+
| | 31 January | 31 January |
| | 2010 | 2009 |
+-------------------------------------+--------------+--------------+
| Continuing activities: | Unaudited | Unaudited |
+-------------------------------------+--------------+--------------+
| (Loss)/profit attributable to | (10,396.9) | 1,555.2 |
| equity holders (in GBP'000) | | |
+-------------------------------------+--------------+--------------+
| Weighted average number of ordinary | 143,669.1 | 17,500.0 |
| shares in issue (000's) | | |
+-------------------------------------+--------------+--------------+
| Basic (loss)/earnings per share (in | (GBP0.07) | GBP0.09 |
| GBP) | | |
+-------------------------------------+--------------+--------------+
| | | |
+-------------------------------------+--------------+--------------+
7. Trade and other receivables
+-----------------------------------+------------+------------+------------+
| | As at | As at | As at |
+-----------------------------------+------------+------------+------------+
| | 31 January | 31 January | 31 July |
| | 2010 | 2009 | 2009 |
+-----------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
+-----------------------------------+------------+------------+------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------------+------------+------------+------------+
| Trade receivables | 1,112.4 | 904.1 | 704.0 |
+-----------------------------------+------------+------------+------------+
| Related company receivables | - | 2,196.5 | - |
+-----------------------------------+------------+------------+------------+
| Amounts due from customers for | 1,379.3 | 786.5 | 777.4 |
| contract work | | | |
+-----------------------------------+------------+------------+------------+
| Prepayments | 210.3 | 1,216.1 | 214.8 |
+-----------------------------------+------------+------------+------------+
| | 2,702.0 | 5,103.2 | 1,696.2 |
+-----------------------------------+------------+------------+------------+
8. Trade and other payables
+-----------------------------------+------------+-----------+-----------+
| | As at | As at | As at |
+-----------------------------------+------------+-----------+-----------+
| | 31 January | 31 | 31 July |
| | 2010 | January | 2009 |
| | | 2009 | |
+-----------------------------------+------------+-----------+-----------+
| | Unaudited | Unaudited | Audited |
+-----------------------------------+------------+-----------+-----------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------------+------------+-----------+-----------+
| Trade payables | 2,689.2 | 2,416.4 | 1,509.0 |
+-----------------------------------+------------+-----------+-----------+
| Related company payables | 479.9 | - | 159.2 |
+-----------------------------------+------------+-----------+-----------+
| Amounts payable to suppliers for | 1,007.3 | 901.3 | 1,134.9 |
| contract work | | | |
+-----------------------------------+------------+-----------+-----------+
| Other payables | 623.8 | 315.4 | 1,665.4 |
+-----------------------------------+------------+-----------+-----------+
| Deferred purchase consideration | 828.8 | - | 501.8 |
+-----------------------------------+------------+-----------+-----------+
| | 5,629.0 | 3,633.1 | 4,970.3 |
+-----------------------------------+------------+-----------+-----------+
9. Cash flow generated from continuing activities
+--------------------------+------------+------------+------------+
| Continuing activities: | Six month | Six month | Twelve |
| | period | period | month |
| | ended | ended | period |
| | | | ended |
+--------------------------+------------+------------+------------+
| | 31 January | 31 January | 31 July |
| | 2010 | 2009 | 2009 |
+--------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Audited |
+--------------------------+------------+------------+------------+
| Cash flows from | | | |
| operating activities | | | |
+--------------------------+------------+------------+------------+
| (Loss)/profit before tax | (9,357.8) | 638.8 | 484.8 |
+--------------------------+------------+------------+------------+
| Adjustments for: | | | |
+--------------------------+------------+------------+------------+
| Finance income | - | (55.5) | (39.3) |
+--------------------------+------------+------------+------------+
| Finance expense | 2.4 | 1.7 | - |
+--------------------------+------------+------------+------------+
| Impairment of trade | - | - | 85.6 |
| receivable | | | |
+--------------------------+------------+------------+------------+
| Impairment of investment | 8,849.1 | - | - |
+--------------------------+------------+------------+------------+
| Depreciation of tangible | 25.1 | 34.9 | 51.2 |
| fixed assets | | | |
+--------------------------+------------+------------+------------+
| | (481.2) | 619.9 | 582.3 |
+--------------------------+------------+------------+------------+
| (Increase)/decrease in | (579.0) | 985.4 | 690.1 |
| inventories | | | |
+--------------------------+------------+------------+------------+
| (Increase)/decrease in | (415.2) | (32.1) | 1,195.8 |
| operating receivables | | | |
+--------------------------+------------+------------+------------+
| Increase/(decrease) in | 1,156.4 | (5,510.3) | (3,412.0) |
| operating payables | | | |
+--------------------------+------------+------------+------------+
| | (319.0) | (3,937.1) | (943.8) |
+--------------------------+------------+------------+------------+
| Dividends paid | - | - | (153.7) |
+--------------------------+------------+------------+------------+
| Tax paid | (119.1) | (413.8) | (492.0) |
+--------------------------+------------+------------+------------+
| Net cash flow from | (438.1) | (4,350.9) | (1,589.5) |
| activities | | | |
+--------------------------+------------+------------+------------+
Aggregate cash flows arising from business combinations are presented separately
on the face of the cash flow statement and are classified as investing
activities, in accordance with IAS 7 'Cash Flow Statements'. Therefore,
movements in working capital included within operating cash flows and presented
above exclude working capital changes arising from business combinations.
10. Business combinations
Details of net assets disposed of are as follows:
+-----------------------------------------------+-----------+
| | Fair |
+-----------------------------------------------+-----------+
| | value |
+-----------------------------------------------+-----------+
| | GBP'000 |
+-----------------------------------------------+-----------+
| Cash and cash equivalents | 88.7 |
+-----------------------------------------------+-----------+
| Property, plant and equipment | 68.0 |
+-----------------------------------------------+-----------+
| Trade and other receivables | 932.9 |
+-----------------------------------------------+-----------+
| Trade and other payables | (1,403.7) |
+-----------------------------------------------+-----------+
| Intercompany balances | 985.6 |
+-----------------------------------------------+-----------+
| Net assets disposed | 671.5 |
+-----------------------------------------------+-----------+
11. Subsequent events
As stated in the trading statement issued on 1 February 2010 Real Office Group
plc had management issues and difficulties over deferred and late contract
payments by customers. The decision was taken on 28 February 2010 to scale back
operations and to reduce costs. However during March a major customer defaulted
on its contractual obligations and the Board has now resolved at a meeting on
28th April 2010 that it will for the time being cease all direct business
through its subsidiary companies in the Middle East. These subsidiaries will be
put into a process for formal liquidation by the shareholders.
In accordance with IAS 35 "Discontinuing Activities" the effects of
discontinuing of these businesses, principally Pacific Middle East LLC has been
reflected in discontinued activities at note 5. All costs associated with this
liquidation and the effect of the impairment on the investments held by the
company has been recognised in these interims.
In order to offset the impact of losses arising by way of impairment in the cost
of investment in the subsidiaries closed of GBP7.637m and the irrecoverable
intercompany debt of GBP1.212m the Board is considering, subject to shareholder
approval, an application to the Court for a reduction of capital of GBP9.0m.
12. Contingent liability
A former employee of the Middle East subsidiary company, Pacific Middle East LLC
has brought a claim against the subsidiary. The board of Real Office Group plc
and their advisers monitor the situation closely but do not currently believe
the claim to have any substance. Whilst the outcome of litigation in
overseasjurisdictions is uncertain, in view of the decision to liquidate Pacific
Middle East LLC this claim is unlikely to result in any loss to the Group.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Real Office (LSE:REAL)
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