RNS Number:5683E
Bristol & London PLC
27 September 2007
BRISTOL & LONDON
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 JULY 2007
CHAIRMAN'S STATEMENT
Overview
The difficult trading conditions mentioned in my last annual statement have
continued into the first half of the current year resulting in a loss before tax
for the six months of #0.67m.
In my annual statement I mentioned the fact that Bristol & London had incurred
substantial costs in increasing the number of exotic vehicles in our fleet such
as Aston Martin, Rolls Royce, Bentley, Ferrari and Lamborghini in anticipation
of a significant level of new business with a major UK motor insurance company.
Despite initial revenues being below expectations, the board was confident that
this arrangement would eventually generate significant income. However a formal
contract did not materialise and it became apparent that this business was not
going to grow as anticipated.
In order to reduce costs, the decision was made to dispose of a number of these
vehicles, which had been considerably under-utilised, resulting in continuing
losses. This decision was vindicated when in July; we were informed that the
arrangement to supply exotic vehicles would be terminated with effect from April
2008.
Outlook
Whilst the current year has continued to prove challenging, we are at least
encouraged by the initial success of the fleet management opportunities, which
it is believed will provide the potential to develop a substantial revenue
stream away from our traditional sources. Bristol & London has also continued to
gain new dealership/bodyshop accounts in addition to several new contracts to
provide full accident management programmes to fleet owners and operators.
In view of the position that the Company now finds itself in, the Directors are
of the opinion, following consultation with our advisers that it would be in the
Company's best interest for it to de-list from AIM and to offer existing
shareholders the opportunity to sell their shares back to the Company. A
circular outlining the detailed proposals is being sent to shareholders shortly.
The background to the proposal is the substantial reduction in the price at
which the Company's shares have been trading on AIM, which has occurred since
the announcement in August 2006 that the company's profits for the year ended
January 2007 would not reach market expectations. Since that announcement, there
have been further announcements concerning difficulties which the Company has
encountered, including the failure to enter into arrangements with the major UK
insurance company outlined above. The board has formed the view that the market
has lost confidence in the Company and that, accordingly, any recovery which may
occur in the Company's financial performance is unlikely to be properly
reflected in the price at which the Company's shares trade on AIM.
The market in the Company's shares is illiquid and the Company's share price has
fallen to a low of 8.5 p. Additionally, The Board has reached the conclusion
that the advantages which attach to the facility to trade the Company's shares
on AIM do not outweigh the costs and other disadvantages.
The board is confident that the prospects for the Company remain strong and
believe that the business will have greater opportunity in the longer term to
develop and expand away from a publicly quoted environment.
Post Balance Sheet Event
The decision to de-list as mentioned above was taken post period end. Given the
results for the half year to 31 July 2007 and to fund the buy back of its shares
the board has proposed to sell its head office property at an open market
valuation of #1.85m. If shareholder approval is obtained for the above
transactions, a loss on the sale of the property of #0.5m will be recognised in
the second half of the year. This has not been recognised as an impairment
charge during the first half of the year as the decision to sell the property
was not taken by the board until after the period end.
Dividend
In view of the loss incurred in the period, the Board is not recommending the
payment of an interim dividend and is of the view that it is unlikely at the
present time that any final dividend for the year will be proposed.
27 September 2007
Bob Woods
Executive Chairman
FINANCE DIRECTOR'S REVIEW
Turnover for the half year to 31 July 2007 fell to #3.87 million compared to
#3.96 million for the first six months of last year, partly through the failure
of certain new initiatives to produce anticipated business levels.
Direct costs at #2.65 million (2006 #2.08 million), were however significantly
higher than for the same period last year. Costs in the period under review were
severely impacted by losses incurred on vehicles acquired surplus to actual
requirement, primarily under reciprocal referral arrangements with car
dealerships, and the increase in vehicle depreciation from 20 per cent straight
line to 25 per cent reducing balance.
Administrative costs were also higher in the period with expenditure for the six
months to 31 July 2007 amounting to #1.5 million compared to #1.21 million in
the corresponding period last year. The increase was primarily due to higher
staff costs arising from a combination of higher commission payments, personnel
specifically recruited for the newly initiated fleet accident management
programmes and redundancy costs incurred as part of cost reduction exercises.
Interest charges for the period were higher than in the previous year at #0.39
million (2006 #0.33 million) reflecting the increase in interest rates from last
year.
As a consequence, this has resulted in a loss before tax amounting to #0.67
million for the half year to 31 July 2007 compared to a profit of #0.34 million
in the first half of 2006.
Earnings per share for the six months amounted to a negative of 1.9p compared to
positive earnings of 1.0p for the six months to 31 July 2006.
In view of the loss sustained for the period, the payment of a dividend is not
being recommended.
27 September 2007
Lewis Ross Finance Director
PROFIT AND LOSS ACCOUNT
for the six months ended 31 July 2007 Notes Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
#'000 #'000 #'000
Turnover - continuing 3,865 3,961 8,634
Cost of sales (2,651) (2,076) (4,900)
Gross profit 1,214 1,885 3,734
Administrative expenses (1,496) (1,215) (2,520)
Operating (loss)/profit (282) 670 1,214
Other interest receivable and similar income - 2 2
Interest payable and similar charges (389) (333) (710)
(Loss)/profit on ordinary activities before
taxation (671) 339 506
Tax on profit on ordinary activities 2 211 (99) (185)
(Loss)/profit on ordinary activities after taxation (460) 240 321
(Loss)/earnings per share 4
Basic (1.9)p 1.0p 1.3p
Diluted (1.9)p 1.0p 1.3p
There were no recognised gains or losses other than included above.
BALANCE SHEET
at 31 July 2007 Unaudited Unaudited Audited
six months six months Year
ended ended ended
31 July 2007 31 July 2006 31 January 2007
#'000 #'000 #'000 #'000 #'000 #'000
Fixed assets
Tangible assets 7,701 10,101 10,218
Current assets
Debtors 5,098 3,995 5,203
Cash at bank and in hand 11 8 12
5,109 4,003 5,215
Creditors
Amounts falling due within one year (4,771) (4,658) (4,579)
Net current assets/(liabilities) 338 (655) 636
Total assets less current liabilities 8,039 9,446 10,854
Creditors
Amounts falling due after more than one year (5,559) (7,177) (7,865)
Provision for liabilities and charges
Deferred tax (446) (483) (446)
Net assets 2,034 1,786 2,543
Capital and reserves
Called up share capital 242 242 242
Share premium account 726 726 726
Profit and loss account 1,066 1,653 1,575
Equity shareholders' funds 2,034 2,621 2,543
RECONCILIATON OF MOVEMENTS IN SHAREHOLDERS FUNDS
for the six months ended 31 July 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
(Loss)/profit for the period (460) 240 321
Dividends (60) (278) (457)
Retained loss for the period (520) (38) (136)
Credit in relation to share based payments 11 3 23
Net reduction to shareholders' funds (509) (35) (113)
Opening shareholders funds 2,543 2,656 2,656
Closing shareholders funds 2,034 2,621 2,543
CASH FLOW STATEMENT
for the six months ended 31 July 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
#'000 #'000 #'000
Net cash inflow from operating activities 1,400 1,669 3,377
Returns on investments and servicing of
finance (389) (331) (708)
Taxation paid (102) (287) (415)
Receipts from sales of tangible fixed assets 2,954 1,905 3,028
Equity dividends paid (60) (278) (457)
Financing (4,275) (3,133) (5,448)
Decrease in cash in period (472) (455) (623)
NOTES TO THE CASH FLOW STATEMENT
RECONCILIATION OF NET CASH FLOWS TO MOVEMENTS IN NET DEBT
for the six months ended 31 July 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
#'000 #'000 #'000
Decrease in cash in period (472) (455) (623)
Cashflow from decrease in debt less finance lease
repayments 4,275 3,133 5,448)
New finance leases (1,575) (3,437) (5,896)
Movement in net debt in the period 2,228 (759) (1,071)
Net debt at start of period (10,561) (9,490) (9,490)
Net debt at end of period (8,333) (10,249) (10,561)
RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM
OPERATING ACTIVITIES
for the six months ended 31 July 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
#'000 #'000 #'000
Operating (loss)/profit (282) 670 1,214
Depreciation charges 962 922 2,005
Share based payment charge 11 3 23
Decrease/(increase) in debtors 316 (23) (397)
Increase/(decrease) in creditors 217 (81) 217
Loss on disposal of fixed assets 176 178 315
Net cash inflow from operating activities 1,400 1,669 3,377
NOTES TO THE FINANCIAL INFORMATION
1 Basis of Preparation
The unaudited profit and loss account, balance sheet and cashflow statement have
been prepared on a basis consistent with the accounts for the year ended 31
January 2007.
The figures for the full year ended 31 January 2007 have been extracted from the
audited accounts approved at the Annual General Meeting. These accounts included
an unqualified audit report which did not contain a statement under section 237
(2) or section 237(3) of the Companies Act 1985 and have been delivered to the
Registrar of Companies.
This interim report does not constitute statutory accounts within the meaning of
section 240 of the Companies Act 1985.
2 Taxation
The tax charge provided for the period is based on the estimated effective tax
rate applied to the taxable profits for the period.
3 Dividends
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
#'000 #'000 #'000
Dividend on equity shares - final paid 60 278 278
- interim paid - - 179
60 278 457
4 Earnings Per Share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue
during the period. For diluted earnings per share, the weighted average number
of ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares.
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 July 31 July 31 January
2007 2006 2007
#'000 #'000 #'000
(Loss)/profit for the period (460) 240 321
31 July 31 July 31 January
2007 2006 2007
No No No
Basic weighted average number of shares 24,197,352 24,197,352 24,197,352
Dilutive potential ordinary shares
Employee share options 858,967 910,540 882,749
25,056,319 25,107,892 25,080,101
Diluted earnings per share can not be less than basic earnings per share due to
a loss being reported. For this reason diluted earnings per share for the six
months ended 31 July 2007 is quoted as a negative 1.9p per share.
5 Post Balance Sheet Event
Subsequent to the period end, the board has proposed that the Company should
de-list from AIM and allow shareholders to sell their shares back to the
Company. Given the results for the half year to 31 July 2007 and in order to
fund the potential buyback of shares, the board has also proposed to sell the
head office property at an open market value of #1.85 million. If shareholder
approval is obtained for the above transactions, a loss on sale of the property
of #0.5 million will be recognised within the second half of the year. This has
not been recognised as an impairment charge during the first half of the year as
the decision to sell the property was not taken by the board until after the
period end.
INDEPENDENT REVIEW REPORT TO BRISTOL & LONDON PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly report for the six months ended 31 July 2007 which
comprises of the Profit and Loss Account, the Balance Sheet, the Cash Flow
Statement and the related explanatory notes. We have read the other information
contained in the half-yearly report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the
condensed set of financial statements.
This report is made solely to the company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the half-yearly financial
report in accordance with the AIM rules.
As disclosed in note 1, the annual financial statements of the company are
prepared in accordance with UK Accounting Standards and applicable law (UK
Generally Accepted Accounting Practice). The condensed set of financial
statements included in this half-yearly report has been prepared in accordance
with the Statement Half-Yearly Financial Reports as issued by the UK Accounting
Standards Board.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly report for the
six months ended 31 July 2007 is not prepared, in all material respects, in
accordance with the Statement Half-Yearly Financial Reports as issued by the UK
Accounting Standards Board and the AIM Rules for Companies.
Emphasis of matter - prior period financial information
In forming our review opinion, which is not qualified, we note that whilst the
company has previously produced an interim review report, that report has not
previously been subject to an interim review. As a consequence, the review
procedures set out above have not been performed in respect of the comparative
period for the six months ended 31 July 2006.
27 September 2007
KPMG Audit Plc
Chartered Accountants
Registered Auditor
100 Temple Street
Bristol
BS1 6AG
This information is provided by RNS
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