Interim Results 2009
29 Maggio 2009 - 12:50PM
UK Regulatory
TIDMMPS
RNS Number : 0249T
Minorplanet Systems PLC
29 May 2009
INTERIM RESULTS 2009
Minorplanet Systems plc ("Minorplanet", the "Company" or the "Group"), a leading
global developer and provider of Vehicle Management Information (VMI(TM)),
announces its interim results for the six months to 28 February 2009.
Key points
Period under review:
+-----+--------------------------------------------------------------------+
| * | Turnover of GBP8.8m (2008: GBP11.3m) |
| | |
+-----+--------------------------------------------------------------------+
| * | Pre-tax loss of GBP2.5m (2008: profit of GBP0.3m) |
| | |
+-----+--------------------------------------------------------------------+
| * | Loss per share of 7.7p (2008: earnings per share of 0.9p) |
| | |
+-----+--------------------------------------------------------------------+
| * | Harsh trading conditions with severely restricted availability of |
| | lease finance for customers causing large number of unfulfilled |
| | orders - sales to SME sector in the UK down 40% |
| | |
+-----+--------------------------------------------------------------------+
| * | Aggressive cost reduction programme implemented |
| | |
+-----+--------------------------------------------------------------------+
| * | Increasing penetration of large fleet operators - new contracts |
| | won through enhanced product range and excellent customer service: |
| | |
+-----+--------------------------------------------------------------------+
| | Corporate sector: Coca Cola, Smurfit Kappa and Quattro Group, the |
| | UK's second largest rail plant company |
| | |
+-----+--------------------------------------------------------------------+
| | Public sector: Norfolk, Birmingham and New Forest Councils |
+-----+--------------------------------------------------------------------+
The future:
+-----+--------------------------------------------------------------------+
| * | Immediate priority to cope with unprecedented economic conditions |
| | and secure additional funding |
| | |
+-----+--------------------------------------------------------------------+
| * | Medium term prospects remain healthy: |
| | |
+-----+--------------------------------------------------------------------+
| | Recent enhancements to Minorplanet software and hardware have made |
| | product highly attractive to larger fleet operators |
| | |
+-----+--------------------------------------------------------------------+
| | Pan European presence and strong market position - Group should be |
| | well placed to take advantage of market consolidation |
| | opportunities |
+-----+--------------------------------------------------------------------+
Terry Donovan, CEO of Minorplanet, said: "These are undoubtedly challenging
times for the Group. We are facing an unprecedented downturn in the economy,
which has been exacerbated by limited access to lease finance for our customers.
The Board is working hard to stabilise the Group's financial position. Once
adequately capitalised, the opportunities for Minorplanet in a consolidating
European market will be significant. The Group's product is the best it has ever
been and, as recent contract wins prove, its value is now being recognised by
larger fleet operators, which remain our key target market."
For further information, please contact:
+------------------------------+--------------------------------------------+
| Minorplanet Systems plc | Tel: 0113 346 7733 |
+------------------------------+--------------------------------------------+
| Terry Donovan, Chief | terry.donovan@minorplanet.com |
| Executive | |
+------------------------------+--------------------------------------------+
| Richard Hopkin, Finance | richard.hopkin@minorplanet.com |
| Director | |
+------------------------------+--------------------------------------------+
| | www.minorplanet.com |
+------------------------------+--------------------------------------------+
| | |
+------------------------------+--------------------------------------------+
| Shore Capital & Corporate | Tel: 020 7408 4090 |
| Ltd | |
+------------------------------+--------------------------------------------+
| Guy Peters | |
+------------------------------+--------------------------------------------+
| | |
+------------------------------+--------------------------------------------+
| Rawlings Financial PR | Tel: 01653 618 016 |
| Limited | |
+------------------------------+--------------------------------------------+
| Catriona Valentine | catriona@rawlingsfinancial.co.uk |
+------------------------------+--------------------------------------------+
| | www.rawlingsfinancial.co.uk |
+------------------------------+--------------------------------------------+
CHAIRMAN'S STATEMENT
Overview
In the six months ended 28 February 2009, Minorplanet faced harsh trading
conditions across all of its territories. The recessions prevailing in the UK,
Ireland and New Zealand had a direct impact on customer demand, while a marked
shortage of lease funding affected all subsidiaries, particularly in the SME
sector. The combination of these factors resulted in a sharp decline in
turnover, particularly in the UK, when compared with the first half of 2008, and
the Group has made a substantial loss in the period.
The Board responded quickly to the significant fall in sales volumes,
implementing aggressive cost reduction programmes in the UK and Australasia.
Group headcount was decreased by 10% and the workforces in the UK and Australia
reduced by 15% and 18% respectively.
The severely restricted availability of lease finance in the market for
Minorplanet's customers has been a major issue over recent months, with
rejection rates from the principal funders more than doubling. As our customers'
results have deteriorated, the leasing companies' underwriters have inevitably
taken a more cautious line. We have attempted to remedy this situation by
introducing a number of new funders and identifying alternative financing
structures for our customers. Nevertheless, there has been a large volume of
orders which we have been unable to fulfil through lack of finance. The Board is
hopeful that current Government initiatives will help our customers to secure
funding in the near future.
Despite these difficulties, the Group made good progress in its key target
market - the corporate sector. We won a number of important contracts during the
period; our enhanced product range and excellent customer service enabled us to
hold off strong competition. Several public sector contracts were signed,
including Norfolk, Birmingham and New Forest Councils. Other key wins comprised
Quattro Group, the UK's second largest rail plant company, and Gentoo Group, a
major property company based in Sunderland. The strong functionality of
Minorplanet's AEM6000 data collection unit, together with the constant upgrading
of the VMIgreenlightTM software, has taken the Group's products and services
back to the forefront of the telematics industry. Recent development of a new
engine management system interface and an Application Programming Interface
('API'), to facilitate integration with other software applications, will
further enhance the Company's reputation with larger fleet operators.
Results
The Group incurred a pre-tax loss of GBP2.5m in the first half (2008: profit of
GBP0.3m) on a turnover of GBP8.8m (2008: GBP11.3m). Total revenues reduced by
GBP2.5m (22%), although the prior year figures included GBP0.8m arising from a
one off sale of equipment and lease debtors. The decrease in turnover was
primarily attributable to the UK, where our traditional dependence on the SME
sector proved to be a major disadvantage. Sales to the SME sector fell by 40%
year on year. This reduction was, however, partly offset by gains made in the
larger corporate sector. Gross margins were slightly lower at 72% (2008: 74%),
due to a combination of increased price pressure and a change in sales mix
towards the larger, lower margin deals. Although the Group's overhead base
appears to have risen by GBP0.5m in the current period, the 2008 comparatives
are flattered by provision releases and the impact of more favourable exchange
rates on overheads denominated in foreign currencies. Interest receivable for
the period was marginally down at GBP0.4m (2008: GBP0.6m), as a result of a
slightly reduced internal lease portfolio and increased borrowings. The Group
incurred a loss per share of 7.7p (2008: earnings per share of 0.9p) with no
charges for taxation or minority interests arising in the period.
Cashflow and Balance Sheet
Despite the heavy losses incurred in the period (GBP2.5m) and further repayments
of historic block discount loans (GBP0.6m), net cash outflow was restricted to
GBP1.5m. There was a favourable movement in working capital of GBP2.1m, as both
stocks and debtors fell, while creditors were inevitably stretched as cash
resources came under pressure. At 28 February 2009, the Group had a net
overdraft balance of GBP0.3m and total net debt of GBP2.0m.
Net assets fell to GBP1.7m at 28 February 2009, compared with GBP4.7m at the
start of the financial year, due to the loss incurred during the period and the
movement on reserves related to foreign currency translation.
Operations Review
As noted above, the UK business suffered due to a marked downturn in revenue
from SME businesses, together with severe restrictions on the availability of
lease finance for customers. Despite good growth in the corporate sector,
turnover reduced by GBP2.8m and the subsidiary incurred a loss of GBP1.6m.
Aggressive and carefully targeted marketing campaigns, focused on the clear cost
saving attributes of the Minorplanet product, are being pursued to stimulate
market activity. This, combined with the significant cost reduction actions
already taken, should help the UK business to return to profitability in the
near future.
The Irish business remained profitable despite the very challenging shortage of
lease finance and heavy competitive pricing pressures. There was a switch in
emphasis towards the larger corporate customers, as seen in the UK, and
important new contracts were secured with Coca Cola and Smurfit Kappa.
We made notable progress in reducing losses in our German and Benelux
subsidiaries. Both businesses improved margins by refocusing their sales
activities, while increased sales coverage and marketing initiatives resulted in
higher unit sales. The combined losses of these subsidiaries was reduced by
GBP0.3m, compared with the first half of 2008, and both companies are now
operating at just below break even.
The Australasian business had a disappointing six months, incurring losses of
GBP0.7m on a slightly reduced turnover. This operation is normally loss-making
in the first half due to the low activity months of December and January.
Losses, however, were also reported in the first quarter as a result of heavy
investment in sales and marketing and product development expenditure, which
were partially linked to the Australian Government sponsored Intelligent Access
Program ("IAP") and the development of a new distributor in South East Asia. It
is anticipated that this investment will begin to pay dividends in the second
half, with the benefits of the IAP certification and new contracts in Malaysia
and Singapore helping to return the Australasian operation to profitability.
Prospects
The immediate priority for the Group is to return the business to profitability
and cash generation, through a combination of aggressive cost cutting and
creative sales and marketing. All areas of working capital are being actively
managed, but the Company's cash and working capital position remains under
significant pressure. A number of strategic options are being considered,
including seeking an acquirer for parts of the business, raising further debt
finance against the Company's internal lease book and an equity fundraising.
Further details regarding the financing position are set out in Note 2 to the
Interim Financial Statements.
In the medium term, the Board's strategy is to increase its penetration of the
larger corporate market in both the public and private sectors. Recent
enhancements to Minorplanet's hardware and software have made our product highly
attractive to larger fleet operators who, inevitably in the current economic
climate, are focusing on tangible opportunities for cost reduction and improved
efficiencies. It is intended to further open up the Group's software to other
hardware providers, as well as embedding the Minorplanet software with other
back office systems through increased use of the API. This strategy is already
proving successful with a number of key new private sector gains in this market.
The Group is also building an important track record in the local Government
sector, through its framework agreement with the Yorkshire Purchasing
Organisation and a number of other recent council contract wins.
The Board is keen to take full advantage of Minorplanet's strong market position
and pan European presence in the consolidation of the telematics industry.
Whilst the Group's immediate priority is to cope with the current unprecedented
economic pressures, we should be able to emerge from our current problems with a
stronger, leaner business. Our medium term prospects remain healthy and the
Group should be well positioned to take advantage of the undoubted growth
opportunities.
Lars McBride
Chairman
29 May 2009
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the 6 months ended 28 February 2009
+----------------------------------+---------------+--------------+------------+
| | 6 months | 6 months | Year ended |
| | ended | ended | |
+----------------------------------+---------------+--------------+------------+
| | 28 February | 29 February | 31 August |
| | 2009 | 2008 | 2008 |
+----------------------------------+---------------+--------------+------------+
| | GBP'm | GBP'm | GBP'm |
+----------------------------------+---------------+--------------+------------+
| Continuing operations | | | |
+----------------------------------+---------------+--------------+------------+
| Revenue | 8.8 | 11.3 | 23.4 |
+----------------------------------+---------------+--------------+------------+
| Cost of sales | (2.5) | (2.9) | (5.6) |
+----------------------------------+---------------+--------------+------------+
| Gross profit | 6.3 | 8.4 | 17.8 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Operating expenses | (9.2) | (8.7) | (17.5) |
+----------------------------------+---------------+--------------+------------+
| Interest on internal finance | 0.5 | 0.6 | 1.3 |
| leases | | | |
+----------------------------------+---------------+--------------+------------+
| Net external interest | (0.1) | (0.0) | (0.1) |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| (Loss)/profit before tax | (2.5) | 0.3 | 1.5 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| (Loss)/profit before tax and | (2.3) | 0.2 | 1.5 |
| exceptional items | | | |
+----------------------------------+---------------+--------------+------------+
| Exceptional items, net | (0.2) | 0.1 | 0.0 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| (Loss)/profit before tax | (2.5) | 0.3 | 1.5 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Tax | (0.0) | (0.0) | (0.0) |
+----------------------------------+---------------+--------------+------------+
| (Loss)/profit for the period | (2.5) | 0.3 | 1.5 |
| from continuing operations | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Attributable to: | | | |
+----------------------------------+---------------+--------------+------------+
| Equity holders of the parent | (2.5) | 0.3 | 1.5 |
+----------------------------------+---------------+--------------+------------+
| Minority interest | 0.0 | 0.0 | 0.0 |
+----------------------------------+---------------+--------------+------------+
| | (2.5) | 0.3 | 1.5 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| (Loss)/earnings per share | | | |
| From continuing operations | | | |
+----------------------------------+---------------+--------------+------------+
| - basic and diluted | (7.7p) | 0.9p | 4.6p |
+----------------------------------+---------------+--------------+------------+
UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
For the 6 months ended 28 February 2009
+---------------------------------+---------------+--------------+------------+
| | 6 months | 6 months | Year ended |
| | ended | ended | |
+---------------------------------+---------------+--------------+------------+
| | 28 February | 29 February | 31 August |
+---------------------------------+---------------+--------------+------------+
| | 2009 | 2008 | 2008 |
+---------------------------------+---------------+--------------+------------+
| | GBP'm | GBP'm | GBP'm |
+---------------------------------+---------------+--------------+------------+
| | | | |
+---------------------------------+---------------+--------------+------------+
| Exchange differences on | (0.5) | 0.0 | 0.2 |
| translation of foreign | | | |
| operations | | | |
+---------------------------------+---------------+--------------+------------+
| Net (expense)/income recognised | (0.5) | 0.0 | 0.2 |
| directly in equity | | | |
+---------------------------------+---------------+--------------+------------+
| (Loss)/profit for the period | (2.5) | 0.3 | 1.5 |
+---------------------------------+---------------+--------------+------------+
| Total recognised income and | (3.0) | 0.3 | 1.7 |
| expense for the period | | | |
+---------------------------------+---------------+--------------+------------+
| | | | |
+---------------------------------+---------------+--------------+------------+
| Attributable to: | | | |
+---------------------------------+---------------+--------------+------------+
| Equity holders of the parent | (3.0) | 0.3 | 1.7 |
+---------------------------------+---------------+--------------+------------+
| Minority interests | 0.0 | 0.0 | 0.0 |
+---------------------------------+---------------+--------------+------------+
| | | | |
+---------------------------------+---------------+--------------+------------+
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEET
As at 28 February 2009
+----------------------------------+---------------+--------------+------------+
| | 28 February | 29 February | 31 August |
| | 2009 | 2008 | 2008 |
+----------------------------------+---------------+--------------+------------+
| | GBP'm | GBP'm | GBP'm |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Non-current assets | | | |
+----------------------------------+---------------+--------------+------------+
| Goodwill | 2.4 | 2.4 | 2.4 |
+----------------------------------+---------------+--------------+------------+
| Other intangible assets | 1.6 | 1.1 | 1.4 |
+----------------------------------+---------------+--------------+------------+
| Property, plant and equipment | 0.4 | 0.4 | 0.5 |
+----------------------------------+---------------+--------------+------------+
| Finance lease receivables | 2.6 | 0.7 | 2.0 |
+----------------------------------+---------------+--------------+------------+
| Deferred tax assets | 0.3 | 0.3 | 0.3 |
+----------------------------------+---------------+--------------+------------+
| | 7.3 | 4.9 | 6.6 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Current assets | | | |
+----------------------------------+---------------+--------------+------------+
| Inventories | 1.0 | 1.5 | 1.1 |
+----------------------------------+---------------+--------------+------------+
| Finance lease receivables | 0.9 | 0.7 | 0.7 |
+----------------------------------+---------------+--------------+------------+
| Trade and other receivables | 4.5 | 5.2 | 5.5 |
+----------------------------------+---------------+--------------+------------+
| Cash and cash equivalents | 0.2 | 1.7 | 1.2 |
+----------------------------------+---------------+--------------+------------+
| | 6.6 | 9.1 | 8.5 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Total assets | 13.9 | 14.0 | 15.1 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Current liabilities | | | |
+----------------------------------+---------------+--------------+------------+
| Trade and other payables | (9.4) | (6.7) | (7.6) |
+----------------------------------+---------------+--------------+------------+
| Current tax liabilities | (0.0) | (0.1) | (0.0) |
+----------------------------------+---------------+--------------+------------+
| Obligations under finance leases | (0.1) | (0.1) | (0.1) |
+----------------------------------+---------------+--------------+------------+
| Bank overdraft | (0.5) | - | - |
+----------------------------------+---------------+--------------+------------+
| Other loans | (0.7) | (1.4) | (1.2) |
+----------------------------------+---------------+--------------+------------+
| Provisions | (0.6) | (1.1) | (0.5) |
+----------------------------------+---------------+--------------+------------+
| | (11.3) | (9.4) | (9.4) |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Net current liabilities | (4.7) | (0.3) | (0.9) |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Non-current liabilities | | | |
+----------------------------------+---------------+--------------+------------+
| Other loans | (0.9) | (1.1) | (1.0) |
+----------------------------------+---------------+--------------+------------+
| | (0.9) | (1.1) | (1.0) |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Total liabilities | (12.2) | (10.5) | (10.4) |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Net assets | 1.7 | 3.5 | 4.7 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Equity | | | |
+----------------------------------+---------------+--------------+------------+
| Share capital | 8.6 | 8.6 | 8.6 |
+----------------------------------+---------------+--------------+------------+
| Share premium account | - | 95.5 | - |
+----------------------------------+---------------+--------------+------------+
| Equity reserves | 18.2 | 1.9 | 18.2 |
+----------------------------------+---------------+--------------+------------+
| Retained earnings | (25.4) | (102.8) | (22.4) |
+----------------------------------+---------------+--------------+------------+
| Equity attributable to equity | 1.4 | 3.2 | 4.4 |
| holders of the parent | | | |
+----------------------------------+---------------+--------------+------------+
| Minority interest | 0.3 | 0.3 | 0.3 |
+----------------------------------+---------------+--------------+------------+
| Total equity | 1.7 | 3.5 | 4.7 |
+----------------------------------+---------------+--------------+------------+
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT
For the 6 months ended 28 February 2009
+----------------------------------+---------------+--------------+------------+
| | 6 months | 6 months | Year ended |
| | ended | ended | |
+----------------------------------+---------------+--------------+------------+
| | 28 February | 29 February | 31 August |
| | 2009 | 2008 | 2008 |
+----------------------------------+---------------+--------------+------------+
| | GBP'm | GBP'm | GBP'm |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Net cash used in operating | (0.9) | (2.0) | (2.4) |
| activities | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Investing activities | | | |
+----------------------------------+---------------+--------------+------------+
| Interest received | 0.5 | 0.6 | 1.3 |
+----------------------------------+---------------+--------------+------------+
| Proceeds on disposal of | 0.0 | 0.1 | 0.1 |
| property, plant and equipment | | | |
+----------------------------------+---------------+--------------+------------+
| Purchases of property, plant and | (0.0) | (0.2) | (0.4) |
| equipment | | | |
+----------------------------------+---------------+--------------+------------+
| Purchases of patents and | (0.0) | (0.0) | (0.0) |
| trademarks | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Net cash from investing | 0.5 | 0.5 | 1.0 |
| activities | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Financing activities | | | |
+----------------------------------+---------------+--------------+------------+
| Repayments of borrowings | (0.6) | (0.7) | (1.3) |
+----------------------------------+---------------+--------------+------------+
| Repayment of obligations under | (0.0) | (0.0) | (0.0) |
| finance leases | | | |
+----------------------------------+---------------+--------------+------------+
| Proceeds on issue of shares | - | 0.2 | 0.0 |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Net cash used in financing | (0.6) | (0.5) | (1.3) |
| activities | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Net decrease in cash and cash | (1.0) | (2.0) | (2.7) |
| equivalents | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Cash and cash equivalents at | 1.2 | 3.7 | 3.7 |
| beginning of period | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Effect of foreign exchange rate | (0.5) | - | 0.2 |
| changes | | | |
+----------------------------------+---------------+--------------+------------+
| | | | |
+----------------------------------+---------------+--------------+------------+
| Cash and cash equivalents at end | (0.3) | 1.7 | 1.2 |
| of period, net of bank overdraft | | | |
+----------------------------------+---------------+--------------+------------+
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
For the 6 months ended 28 February 2009
1. General information
The financial information for the six month periods ended 28 February 2009 and
29 February 2008 has been neither audited nor reviewed. The financial
information for the year ended 31 August 2008 is based upon audited financial
statements for that period and does not constitute statutory accounts as defined
in section 240 of the Companies Act 1985. A copy of the statutory accounts for
that year has been delivered to the Registrar of Companies. The auditors' report
on those accounts was not qualified, did not draw attention to any matter by way
of emphasis and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
2. Accounting policies
This set of condensed financial statements has been prepared using accounting
policies consistent with International Financial Reporting Standards (IFRSs).
The same accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in the Group's
latest annual audited financial statements. While the financial figures included
in this half-yearly report have been computed in accordance with IFRSs
applicable in interim periods, this half-yearly report does not contain
sufficient information to constitute an interim financial report as that term is
defined in IAS 34.
Going Concern
As described in the Chairman's Statement, the current economic environment is
challenging and the Group has reported a loss before taxation for the period.
The Directors consider that the outlook presents some significant challenges
particularly in terms of volume in the SME markets and obtaining lease finance
for our customers generally. The Directors have taken steps to reduce the cost
base and are looking to secure additional funding for the Group. However
uncertainties do exist regarding prospective trading and cash flows.
The Company's overdraft facilities are due for renewal in February 2010 and
other loans are scheduled for repayment over the next twelve months. The
Directors have negotiated a temporary increase in the Company's overdraft
facility and also are considering a number of strategic options, including
seeking an acquirer for parts of the business, raising further debt finance
against the Company's internal lease book and an equity fundraising.
The Directors have concluded that the combination of these circumstances
represents a material uncertainty that casts a significant doubt over the
ability of the Group and Company to continue as going concerns. Nevertheless,
considering the cost reduction programmes already completed, the continuing
support from creditors and the fund raising initiatives currently underway, the
Directors have a reasonable expectation that the Group and the Company will have
adequate resources to continue in operational existence for the foreseeable
future. For these reasons, they continue to adopt the going concern basis in
preparing these results.
3. Exceptional items, net
Exceptional items, net, comprise:
+----------------------------------------+----------------+----------------+
| | 6 months ended | 6 months ended |
+----------------------------------------+----------------+----------------+
| | 28 February | 29 February |
| | 2009 | 2008 |
+----------------------------------------+----------------+----------------+
| | GBP'm | GBP'm |
+----------------------------------------+----------------+----------------+
| Profit on sale of equipment and lease | - | 0.3 |
| debtors | | |
+----------------------------------------+----------------+----------------+
| Restructuring and other charges | (0.2) | (0.2) |
| | | |
+----------------------------------------+----------------+----------------+
| | (0.2) | 0.1 |
+----------------------------------------+----------------+----------------+
4. Tax
Corporation tax for the six month period is charged at the prevailing rates,
adjusted for the utilisation of brought forward losses.
5. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
+----------------------------------------+----------------+----------------+
| | 6 months ended | 6 months ended |
+----------------------------------------+----------------+----------------+
| | 28 February | 29 February |
| | 2009 | 2008 |
+----------------------------------------+----------------+----------------+
| | GBP'm | GBP'm |
+----------------------------------------+----------------+----------------+
| (Loss)/earnings | | |
+----------------------------------------+----------------+----------------+
| (Loss)/earnings for the purposes of | (2.5) | 0.3 |
| basic and diluted earnings per share | | |
| being the net (loss)/profit | | |
| attributable to equity holders of the | | |
| parent | | |
+----------------------------------------+----------------+----------------+
| | Number | Number |
+----------------------------------------+----------------+----------------+
| Number of shares | | |
+----------------------------------------+----------------+----------------+
| Weighted average number of ordinary | 32,429,861 | 32,267,663 |
| shares for the purposes of basic and | | |
| diluted earnings per share | | |
+----------------------------------------+----------------+----------------+
6. Notes to the cash flow statement
+----------------------------------------+---------------+----------------+
| | 6 months | 6 months ended |
| | ended | |
+----------------------------------------+---------------+----------------+
| | 28 February | 29 February |
| | 2009 | 2008 |
+----------------------------------------+---------------+----------------+
| | GBP'm | GBP'm |
+----------------------------------------+---------------+----------------+
| | | |
+----------------------------------------+---------------+----------------+
| (Loss)/profit for the period | (2.5) | 0.3 |
+----------------------------------------+---------------+----------------+
| Adjustments for: | | |
+----------------------------------------+---------------+----------------+
| Interest on internal finance leases | (0.5) | (0.6) |
+----------------------------------------+---------------+----------------+
| Interest paid | 0.1 | 0.0 |
+----------------------------------------+---------------+----------------+
| Corporation tax expense | 0.0 | 0.0 |
+----------------------------------------+---------------+----------------+
| Depreciation of property, plant and | 0.1 | 0.1 |
| equipment | | |
+----------------------------------------+---------------+----------------+
| Capitalisation of intangible assets | (0.2) | (0.0) |
| net of related amortisation | | |
+----------------------------------------+---------------+----------------+
| Share-based payment expense | 0.0 | 0.0 |
+----------------------------------------+---------------+----------------+
| Loss/(profit) on disposal of property, | 0.0 | 0.0 |
| plant and equipment | | |
+----------------------------------------+---------------+----------------+
| Increase in provisions | 0.1 | 0.1 |
+----------------------------------------+---------------+----------------+
| Operating cash flows before movements | (2.9) | (0.1) |
| in working capital | | |
+----------------------------------------+---------------+----------------+
| | | |
+----------------------------------------+---------------+----------------+
| Decrease/(increase) in inventories | 0.1 | (0.7) |
+----------------------------------------+---------------+----------------+
| Decrease/(increase) in receivables | 0.2 | (0.6) |
+----------------------------------------+---------------+----------------+
| Increase/(decrease) in payables | 1.8 | (0.6) |
+----------------------------------------+---------------+----------------+
| Cash used by operations | (0.8) | (2.0) |
+----------------------------------------+---------------+----------------+
| | | |
+----------------------------------------+---------------+----------------+
| Interest paid | (0.1) | (0.0) |
+----------------------------------------+---------------+----------------+
| | | |
+----------------------------------------+---------------+----------------+
| Net cash used in operating activities | (0.9) | (2.0) |
+----------------------------------------+---------------+----------------+
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank.
7. Potential litigation
As previously reported in 2008 the Company was notified that the debt
purportedly owing from the Group's former Spanish subsidiary to Banco Popular
Espanol SA, and allegedly guaranteed by the Company, had been assigned to Asbury
Park SA and the latter has commenced proceedings against the Company. The Board
has obtained legal opinion that it has good prospects of defending the claim.
There have been no significant developments in the period under review relating
to any of the other possible claims involving the Group's former overseas
subsidiaries.
8. The half year statement was approved by the Board on 29 May 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAESNALANEFE
Grafico Azioni Minorplanet Systems (LSE:MPS)
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