RNS Number : 8067X
Claimar Care Group PLC
30 June 2008
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
HIGHLIGHTS
2008 2007(*)
Turnover
�24.1m �9.1m
Gross profit
�7.5m �3.3m
Operating profit before amortisation and acquisition related costs �1.6m �0.8m
(Loss)/profit for the period �(0.1)m
�0.5m
Basic (loss)/earnings per share (0.20)p
2.19p
Fully diluted (loss)/earnings per share (0.20)p
2.18p
Shareholders' funds �37.9m
�12.4m
Commenting on the results, John Crabtree, Chairman, said:
"The first half of this year has been both challenging and disappointing. We are disappointed that recent trading has been adversely
affected by a shortage of suitable staff across the group, but more noticeably in the Complete Care Group, our complex care business, and
our inability to pass on the full charge of increased staff costs principally arising from the implementation of the working time directive
and rising fuel claims. Management has set in train a rapid recovery plan to deal with these issues".
Whilst the Board believes that turnover and profit will continue to grow throughout the reminder of the trading year they will fall
short of current market expectations hence the trading statement announced to the market on June 23.
On current trading and prospects, Mr Crabtree added:
"Trading since the interim period end has been challenging, however the Board have introduced a number of measures to respond to the
issues raised in our trading statement made last week. During the last 12 months the Group has diversified its revenue streams, by
developing new opportunities that offer the group higher gross margins and other means of generating revenues from its core activities.
Despite the current setbacks the Board continues to be optimistic concerning the long term outlook for the business based upon an ageing
population and the increasing number of people choosing to be cared for at home".
Enquiries:
Mark Hales, Chief Executive
Claimar Care Group Plc Tel: 0121 410 4080
Chris Fielding
Arden Partners Plc Tel: 0207 3981638
Paul Vann / Tom Cooper
Winningtons Financial Tel: 0203 043 4162
* 2007 figures have been restated to reflect first time reporting under IFRS.
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
CHAIRMAN'S STATEMENT
Trading statement issued June 23, 2008.
Last week the Group issued a trading statement to the market because it had identified a number of unexpected factors that had started
to impact the Group materially over recent weeks. In conjunction with the preparation and independent review by Claimar Care's auditors of
its interim results for the six months ended 31 March 2008, the Group undertook a detailed review of current trading and expected
performance for the full year, ending on 30 September 2008.
* Complete Care has experienced a delay in entering into of a number of new complex care contracts, and the Board is not confident
the recent shortfall in performance will be recovered by the financial year end;
* The Group has not yet been able to recover from local authorities the increased cost of providing its care services, including in
particular the increased costs of fuel and the costs associated with implementing the working time directive; and
* The conversion rate of applicants for franchises from SureCare has fallen away significantly as a result primarily of the
tightening of the credit markets, which has impacted the ability or willingness of applicants to meet the upfront franchise payments and
working capital requirements.
Taking into account the above factors, the Board anticipates that, whilst turnover and pre tax profit will exceed the equivalent prior
year numbers, earnings per share will fall below those of the prior year and be materially below current market expectations.
Notwithstanding these issues, the Board continues to believe, against the background of an ageing population and the wishes of many
elderly people to live in their own homes, that the Group has good prospects.
Results for the period
These are the group's third interim results since our admission to AIM in January 2006. These unaudited results have been independently
reviewed by the group's auditors and prepared in accordance with International Financial Reporting Standards ('IFRS') for the first time and
are covered by IFRS1, First-time adoption of IFRS. The comparative figures previously reported under UK Generally Accepted Accounting
Practice ('UK GAAP') have been restated for the transition to IFRS and the disclosures required under IFRS1 are given in note 4.
In the six months to 31 March 2008, turnover increased by 164% to �24.1m (2007 �9.1m) and gross profit increased by 127% to �7.5m (2007
�3.3m).
A key performance indicator used by the group in determining its financial performance is operating profit before amortisation and
acquisition related costs. The group's profit at this level is unaffected by the transition to IFRS and was �1,593,000 for the six months
ended 31 March 2008 compared to �802,000 for the comparable six month period, an increase of 99%. On an annualised basis the half year
operating profit before amortisation and acquisition related costs shows an increase of 35% from the previous full financial year,
reflecting the groups overall performance and the effect of its acquisitions..
Interest costs have risen from �99,000 to �642,000 representing the financing cost of increased borrowing which was used to partly fund
the two acquisitions in the period plus provide working capital for day to day operations.
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
CHAIRMAN'S STATEMENT (continued)
The income statement shows a loss of �148,000 on the market value of an interest rate hedge. The requirement to show the fair value of
this financial instrument is a consequence of IFRS reporting the Board having decided to hedge a large proportion of the Group's long term
borrowings to limit exposure to future interest rate fluctuations. Were Claimar's accounts drawn up to today's date the overall fair value
adjustment would now be a credit to income of a few thousand pounds.
Under UK GAAP our purchased goodwill was depreciated on a straight-line basis over 20 years. Under IFRS the Group now makes an
assessment of the fair value of individual intangible assets arising on business acquisitions which would previously have formed part of
goodwill under UK GAAP. An intangible asset will be recognised as long as the asset is identifiable and its fair value can be measured
reliably. Amortisation is provided on the deemed cost of that asset and recognised on a straight line basis over its useful life. The
principal intangible assets we purchased with our company acquisitions were the pre-existing contractual relationships which those
businesses had in place with local authorities, Health Trusts and individuals which we believe have an economic life of between seven and
ten years.,
Goodwill, which has grown considerably as a consequence of acquisitions in this period, is the excess of the fair value of the cost of
acquisitions over the value of the identifiable assets and liabilities acquired is capitalised and tested for impairment on an annual basis
rather than being amortised on a regular basis as under UK GAAP.
Based upon the matters disclosed above basic earnings per share have reduced from 2.19 pence to a loss of 0.20 pence for the period.
In October 2007, the group successfully placed 18.25 million new shares at 137p each to raise �23 million net of expenses to enable us
to acquire the Complete Care Group and Ravenscroft. That placing was achieved at a minimal discount to the share price at the time
indicating a high level of support for the Board's strategy.
Operating Review
We have continued to follow our growth strategy both organically and by making selective acquisitions of complementary businesses within
the health and social care sector. The main drive this year has been to focus on alternative revenue streams that can be obtained by cross
selling to our growing service user base. We strongly believe that this approach places us in a strong position to respond to changes in the
way that services are delivered across the sector.
Existing Business and the Market.
In our core business Claimar Care Limited. which provides mostly services to older adults we, together with the rest of the sector have
seen significant change. Several new initiatives launched by the government are starting to create uncertainty regarding the short term
method of procurement. Historically Local Authorities have either delivered care services themselves, or increasingly have outsourced to
independent providers. Overall the market continues to grow with the number of hours commissioned growing by 4% between 2006-2007 to
approximately 3.9 million hours per week. According to data available from the Department of Health the independent sector now provides 78%
of all homecare in England. Contracts appear to be getting bigger as local authorities seek to work with fewer but larger providers, making
life for the small independent provider much harder as they find it increasingly difficult to bid for, win and then deliver larger
contracts, however in some cases contracts are either being delayed or shortened as commissioners seek clarification regarding the impact of new initiatives such as Person Centered Planning, Direct Payments
and in particular the use of individual budgets discussed later. All of these initiatives are designed to give service users more choice and
control over how their service is delivered, and will we believe lead to a greater number of people choosing to remain in their own home,
rather than be cared for in a residential home, or nursing home.
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
CHAIRMAN'S STATEMENT (continued)
Direct Payments whilst not a new initiative have seen a rise as local authorities are targeted on the number of service users that
choose this method of service procurement. They were first introduced around 6 years ago, but despite several innovative approaches Direct
Payments still appear to be unattractive, particularly for people over the age of 65. Whilst the number of people opting for Direct Payments
has increased 4 fold over the last 6 years funding for Direct Payments still only represent around 1% of the gross expenditure, from the
most recent data available only 32,021 people out of a possible 346,745 accessed Direct Payments. In some cases Direct Payments have been
promoted as a means of maintaining a relationship between a service user and the provider where local authorities have ceased to contract
with that provider following a tender exercise.
One of the most significant initiatives during 2007 was the pilot within 13 local authority areas of Individual Budgets. Individual
Budgets differ to Direct Payments in that they bring together a number of income streams of which Direct Payments are only one. Other income
included within an individual Budget could include Supported People funding (Money spent on housing related support, including developing
life skills, such as budgeting and cooking); Independent Living Fund (this money is used to help disabled people live in the community);
Integrated Community Equipment Services (this pays for equipment such as grab rails, or ramps etc.); Disabled Facilities Grant (his pays for
changes to accommodation such as a stair lift); Council provided social care for adults (money that Social Services spend on day centre's,
residential care, meals on wheels and other kinds of social care including home care.)
Of the 13 Local Authorities chosen to pilot the scheme most if not all chose different strategies and service user groups to pilot, in
some cases local authorities chose not to involve older people focusing instead on younger adults with a learning disability or physical
disability. The outcome of the pilot is yet to be reported although we expect the findings to be reported later this year.
We view the implementation of Individual Budgets positively, it is likely that local authorities whilst allowing service users more
choice will still wish to closely monitor how the money is spent and the safeguards that exist to protect them, whilst this will inevitably
lead to new methods of contracting we are confident that our mix of business and geographical presence puts us in a very strong position to
benefit from these initiatives.
As mentioned in our trading statement we have found the recruitment and retention of care staff increasingly difficult across the group.
In response to this we have implemented new processes to better track the number of enquiries, starters and leavers. A principle reason for
the increase in turnover of staff is the time spent travelling to their assignments and the cost of fuel. In part we have been forced to pay
our staff at a higher rate than previously due to fuel costs increasing as they have in recent months. We had hoped to contain the rate at
which we pay our staff travel expenses whilst we negotiated with our purchasers, and through our trade body The United Kingdom Home Care
Association (of which our CEO is a board member) central government. However, it recently became clear that for us not to recognise the
additional costs facing our workforce was impacting both recruitment and retention for the group. We continue to raise this issue at every
opportunity.
In addition to the above we are well underway with the implementation of a new automated rostering, pay and billing system which will
allow us to better manage travel time and distance by amongst other things identifying the nearest carer to a call, identifying the shortest
route for staff to follow, and accurately calculating their travel expense based upon the shortest journey from assignment to assignment.
The Senior Management team has been restructured with the creation of a new Operations Director role for the North, and also the
separation of Quality and Compliance now reporting directly to the Managing Director.
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
CHAIRMAN'S STATEMENT (continued)
In SureCare our domiciliary Care franchise business whilst we have seen a steady increase in the royalties paid to us by our franchisees
we have seen a significant fall in the number of anticipated franchise sales. The fall in sales is attributable we believe to the following
factors:
A tightening of the credit market, and a fall in the value of property (taking equity from the home was one of the main sources of
funding used by prospective franchisees to purchase the franchise and fund working capital during the early stages of the businesses
development).
SureCare has also suffered from a delay of approximately 3 months in the production of its new rapid response alarm aimed at the
homecare market. The device has been specifically designed for the group and prototypes have undergone a process of robust testing. We now
anticipate the launch of this device towards the end of this financial year.
In Primary Care Training our training business following significant contractual delays experienced in the first half of the year,
resulting in a small loss for the interim period we are now seeing significant growth. Primary Care Training not only provides services to
all group companies but also sells training services to external providers and Local Authorities. Almost all revenue for PCT is funded by
government initiatives and principally is aimed at funding the development of a workforce through the provision of National Vocational
Qualifications. Under current regulations targets are set for the number of people either working towards or having achieved an NVQ in care.
Since April PCT have signed up 300 candidates and expect to reach 500 by the end of July.
New Business
Since the end of the period we have been awarded and commenced a number of new contracts. They are:
Manchester 3500 hours per week (previously around 1700 per week)
Rotherham 1500 hours per week
Leicester Emergency Response
Blackburn & Darwen Renewal and extension of existing contract.
Lancashire 2 new extra care sites.
We are confident that the strong organic growth achieved previously will continue.
Acquisitions
Complete Care Group ('Complete')
Complete, a leading provider of bespoke care packages to adults and children with severe disabilities is based in Telford and employs
approximately 700 carers. It was acquired in October 2007 for �33.1 million. The consideration for the acquisition was satisfied by the
payment of �30.8 million in cash and the allotment of Claimar shares to the value of �2.3 million. Claimar also placed 18,248,176 new
Ordinary Shares to raise �23.0 million (net of expenses) to help fund the Acquisition.
The consideration was funded partly by the placing, the issue of shares and by the granting to the Company of new banking facilities by
the Royal Bank of Scotland plc. The proceeds from the Placing were used to repay existing borrowings and to have sufficient retained
liquidity to take advantage of other suitable acquisition opportunities.
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
CHAIRMAN'S STATEMENT (continued)
Complete is Claimar's largest acquisition to date. It is recognised within the industry as a market-leading provider of bespoke
full-time care packages to adults and children with severe disabilities including acquired brain injury, acquired spinal cord injury,
cerebral palsy, multiple sclerosis, muscular dystrophy and various other neurological disorders.
Complete's key focus is the promotion of independent supported living in the client's home and improving the quality of life of their
clients wherever possible. The acquisition of Complete continues the Group's diversification of revenues by adding high-value specialist
services to the business.
The care provided by Complete is split into two divisions - standard and complex. The business provides care at a level beyond that
provided by most other providers in the market. Normally each client has a dedicated team of around the clock carers.
Within the standard division clients with profound disabilities are looked after by a team of 3 to 5 and the average annualised package
per client is in the region of �60,000. Care is normally funded by social services.
In the complex division care is typically more clinically driven than that provided in the standard division. The average annualised
package value is in the region of �175,000 involving a dedicated staff team of 8 to10 individuals. Care is normally funded by Primary Care
Trusts ('PCT), the NHS or insurers.
Complete has struggled, in recent weeks, to recruit the necessary number of skilled staff to allow it to achieve its growth strategy and
as a result of higher than usual levels of growth immediately prior to its sale substantially increased the use of agency staff to maintain
a service to its service users. A recovery plan is in place but management is uncertain that the trading shortfall can be made up before the
end of the current trading period.
Following our statement last week a decision has also been taken to relinquish a small number of loss making contracts which will
generate savings of circa �30,000 per month.
Ravenscroft
The Ravenscroft group of companies, headquartered in Preston, was acquired toward the end of January for a maximum consideration,
payable in cash, of �2.85 million. �2.7 million was paid upon completion and the balance, which falls due for payment in April 2009, is
subject to certain performance criteria being met.
At the date of acquisition Ravenscroft employed nearly 400 carers delivering nearly 9,000 hours per week to Lancashire County Council.
Combined with our pre-existing relationships with the Council the Claimar Group has become the largest provider of domiciliary care to
Lancashire. The acquisition brings the opportunity to rationalise the total number of branches whilst reaching critical mass in a number of
smaller locations.
Other acquisitions
There continues to be a strong pipeline of acquisition opportunities within the sector. The Group has been in discussions with a number
of possible vendors but in focusing increasingly on the quality of earnings of the existing businesses and also the need to consolidate its
current position has decided not to pursue these acquisitions. Aborted bid costs in the sum of �75,000 have been charged to income as a
consequence.
Dividend
The Board does not propose the payment of an interim dividend (2007 - 0.25p)
CLAIMAR CARE GROUP PLC
UNAUDITED Interim Results
For the six months ended 31 March 2008
CHAIRMAN'S STATEMENT (continued)
Current Trading and Outlook
Following the consolidation of our acquisitions and the opening of new branches to service significant new contracts we now operate from
39 branches located principally throughout the Midlands and the North of England.
Excluding the franchise operations, our workforce totals some 3000 including 2800 care staff currently delivering almost 90,000 hours
per week. Despite the consolidation taking place in the market and the fact that we are one of the largest providers in the market the group
currently only has around 2.3% market share.
We announced two major contract wins on May 8 which will have an aggregate value of approximately �13,728,000 during the expected five
year term of the contracts. One of the contracts has been awarded by Manchester City Council an existing local authority where we have
gained a 50% increase in volume, the other contract is in Rotherham, a new client for the group, Once up to full capacity we anticipate that
we will be providing approximately 1500 hours per week. Since the period end we have also received news of two further contract awards both
with existing purchasers. One of these new contracts with Leicester is for a new service providing emergency cover and monitoring services,
a sign of the partnership that exists between both organisations.
As stated in our last report we believe the medium and longer term outlook is that Local Authorities will continue to reduce their own
provision, and many are already taking steps to reduce the size of their workforce by not replacing staff through natural wastage, and
referrals in the new local authority financial year appear to be back in line with the trend to outsource this service..
Availability of credit from banks has lead to an increasingly difficult environment for the franchising business. Whilst we have taken a
number of deposits from interested individuals these have yet to convert. The process of fundraising is a time consuming business caused by
tightening lines of credit.
Notwithstanding a number of challenges facing Claimar and the wider care market, the Board of Claimar Care believes that the business
has good medium and long term prospects given the population demographics, industry trends of consolidation, the increasing barriers to
entry and the strong, motivated and ambitious management team.
Board Changes
David Jackson, who joined the Board as Group Financial Director and Company Secretary on August 9 2007 resigned on May 8. On June 23 we
announced that Nick Townend, who is currently responsible for the finance function at Anchor Trust, the largest not-for-profit provider of
housing, support and care for the elderly in England, with turnover of approximately �250m and a staff of over 11,000 will join the Board as
Group Finance Director and Company Secretary on August 11. At Anchor he has responsibility for all aspects of cash-flow and treasury
management, budgets, financial planning and forecasting, and statutory and regulatory reporting. He joined Anchor Trust in 2005 as Head of
Finance of its Care Services division, having previously held senior positions at Tetra Pak and Royal & Sun Alliance.
John Crabtree
Chairman
30 June 2008
CLAIMAR CARE GROUP PLC - Half Year Report 2008
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 March 2008
Unaudited Unaudited Audited
Six Six Year
months months To 30 Sep
To 31 Mar To 31 Mar 2007
2008 2007 �000
�000 �000
Continuing operations
Revenue 24,068 9,123 22,318
Cost of sales (16,557) (5,812) (14,055)
Gross profit 7,511 3,311 8,263
Administrative expenses (5,918) (2,509) (5,908)
Operating profit before amortisation and 1,593 802 2,355
acquisition related costs
Amortisation of intangible assets (676) (67) (243)
Profit on sale of freehold premises - 97 97
Re-organisation and restructuring costs (138) (43) (359)
Professional fees related to aborted (75) - (5)
acquisitions
Operating profit 704 789 1,845
Finance income 6 - 64
Finance costs (642) (99) (321)
Fair value movement on derivative (148) - -
financial instruments
(Loss)/profit before taxation (80) 690 1,588
Taxation (13) (198) (394)
(Loss)/profit for the period attributable (93) 492 1,194
to the equity holders of the parent
Basic (loss)/earnings per share (0.20)p 2.19p 4.59p
Fully diluted (loss)/earnings per share (0.20)p 2.18p 4.54p
CLAIMAR CARE GROUP PLC - Half Year Report 2008
CONSOLIDATED BALANCE SHEET
At 31 March 2008
Unaudited Unaudited Audited
at at at
at 31 Mar 30 Sep 2007
2007 �000
at 31 Mar �000
2008
�000
Non-current assets
Goodwill 40,715 7,667 18,818
Other intangible assets 15,606 914 3,571
Property, plant and equipment 863 587 689
Deferred tax asset 32 - 9
57,216 9,168 23,087
Current assets
Trade and other receivables 9,214 3,251 5,509
Cash and cash equivalents 1,039 7,238 630
10,253 10,489 6,139
Total assets 67,469 19,657 29,226
Current liabilities
Financial liabilities (987) (1,113) (1,465)
Trade and other payables (5,042) (1,667) (4,115)
Current tax liabilities (502) (671) (287)
Derivative financial (148) - -
instruments
(6,679) (3,451) (5,867)
Non-current liabilities
Financial liabilities (19,100) (3,599) (8,395)
Deferred tax liabilities (3,743) (254) (978)
(22,843) (3,853) (9,373)
Total liabilities (29,552) (7,304) (15,240)
NET ASSETS 37,947 12,353 13,986
Equity
Share capital 4,999 2,937 3,011
Share premium account 32,826 9,607 10,533
Share based payment reserve 70 41 47
Merger reserve (1,600) (1,600) (1,600)
Retained earnings 1,652 1,368 1,995
EQUITY ATTRIBUTABLE TO EQUITY 37,947 12,353 13,986
HOLDERS OF THE PARENT
CLAIMAR CARE GROUP PLC - Half Year Report 2008
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Retained Share based payment Total
Capit Premiu Reserve Earnings reserve
al m
Accoun
t
�000 �000 �000 �000 �000 �000
At 1 October 2006 2,232 3,255 (1,600) 988 17 4,892
Total recognised income and - - - 492 - 492
expense
Dividends paid - - - (112) - (112)
Share-based payment reserve - - - - 24 24
movement
Issue of shares in the period 705 - - - - 705
Premium on allotment during - 6,352 - - - 6,352
the period
At 31 March 2007 2,937 9,607 (1,600) 1,368 41 12,353
Total recognised income and - - - 702 - 702
expense
Dividends paid - - - (75) - (75)
Share-based payment reserve - - - - 6 6
movement
Issue of shares in the period 74 - - - - 74
Premium on allotment during - 926 - - - 926
the period
At 30 September 2007 3,011 10,533 (1,600) 1,995 47 13,986
Total recognised income and - - - (93) - (93)
expense
Dividends paid - - - (250) - (250)
Share-based payment reserve - - - - 23 23
movement
Issue of shares in the period 1,988 - - - - 1,988
Premium on allotment during - 22,293 - - - 22,293
the period
At 31 March 2008 4,999 32,826 (1,600) 1,652 70 37,947
CLAIMAR CARE GROUP PLC - Half Year Report 2008
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 March 2008
Unaudited Unaudited Audited
Six Six Year
months months To 30 Sep 2007
To 31 Mar To 31 Mar �000
2008 2007
�000 �000
Net cash flows from operating 218 613 892
activities
Cash flows used in investing
activities
Acquisition of subsidiaries net of (33,534) (2,909) (14,122)
cash acquired
Purchase of property, plant and (107) (87) (232)
equipment
Proceeds from sales of property, - 188 189
plant and equipment
Payments in respect of previous (387) (394) (973)
acquisitions
Net cash flows used in investing (34,028) (3,202) (15,138)
activities
Cash flows from financing activities
Proceeds from issue of share capital 24,281 7,058 7,058
Proceeds of long-term borrowings 10,705 2,749 7,544
Repayment of obligation under finance (64) (15) (51)
lease liabilities
Payment of dividends (250) (112) (187)
Net cash flows from financing 34,672 9,680 14,364
activities
Net increase in cash and cash 862 7,091 118
equivalents
Cash and cash equivalents at 177 59 59
beginning of period
Cash and cash equivalents at end of 1,039 7,150 177
period
CLAIMAR CARE GROUP PLC - Half Year Report 2008
ACCOUNTING POLICIES
For the six months ended 31 March 2008
1. ACCOUNTING POLICIES
GENERAL INFORMATION
Claimar Care Group Plc is a public limited company incorporated in the United Kingdom, whose shares are publicly traded on the
Alternative Investment Market (AIM). The company is domiciled in the United Kingdom and its registered address is 16 Highfield Road,
Edgbaston, Birmingham, B15 3DU, United Kingdom.
The principal activity of the group is the provision of care services to the public sector and private individuals.
Basis of accounting
The financial information has been prepared on the historical cost basis, modified to include the fair valuation of derivative financial
instruments. The accounting policies set out below have been applied consistently to all periods presented in this consolidated half yearly
report and in preparing an opening International Financial Reporting Standards ('IFRS') balance sheet at 1st October 2006 for the purposes
of the transition to IFRS.
Basis of preparation
These half year interim consolidated financial statement for the period ended 31 March 2008 have been prepared on the basis of IFRS and
IFRIC interpretations adopted for use in the European Community that the directors expect to be in issue and effective at 30 September 2008,
the group's first annual reporting date in accordance with IFRS.
This half yearly report has been prepared in accordance with the accounting policies set out below (which are expected to be applied in
preparing the annual financial statements), taking into account the requirements and options in IFRS 1 "First-time adoption of International
Financial Reporting Standards" (IFRS 1), as detailed below. The group has not adopted the reporting requirements of International Accounting
Standard (IAS) 34 "Interim Financial Reporting". The transition date for the group's application of IFRS is 1 October 2006 and the
comparative figures for the six month period ended 31 March 2007 and the annual period ended 30 September 2007 have been restated
accordingly. Reconciliations of the income statement (previously profit and loss account), the balance sheet and the cash flow statement
from previously reported UK GAAP to IFRS are shown in note 4.
The information relating to the six months ended 31 March 2008 and 31 March 2007 is unaudited and does not constitute statutory
accounts. The comparative figures for the financial year ended 30 September 2007 are based on the UK GAAP financial statements of Claimar
Care Group Plc for that financial year. Those financial statements have been reported on by the company's auditors and delivered to the
registrar of companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
Transition to IFRS
IFRS 1 grants certain exemptions from the full requirements of IFRS in the transition period. The following exemptions have been taken
in these consolidated financial statements:-
i IFRS 3 - Business Combinations
The group has elected not to apply IFRS 3 "Business Combinations" retrospectively to acquisitions that took place prior to 1 October
2006. As a result, the carrying amount of goodwill in the UK GAAP balance sheet at 30 September 2006 is brought forward to the IFRS opening
balance sheet without adjustment.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
ACCOUNTING POLICIES continued
For the six months ended 31 March 2008
ii IFRS 2 - Share Based Payment
IFRS 2 has not been applied to share-based payments granted before 7 November 2002 nor those granted after 7 November 2002 that had
vested prior to 1 October 2006. The adoption of IFRS 2 has not required numerical adjustments to be made to the balance sheet at 1 October
2006 or to the income statement for the year ended 30 September 2007.
Basis of consolidation
The consolidated financial information incorporates that of Claimar Care Group Plc and all of its subsidiary undertakings for the
period.
In preparing this half yearly report, any intra-group balances, unrealised gains and losses or income and expenses arising from
intra-group trading are eliminated. Where accounting policies used in individual financial statements of a subsidiary company differ from
group policies, adjustments are made to bring these policies in line with group policies.
Subsidiaries are entities over which the group has the power to govern the financial and operating policies to obtain economic benefit
to the group. Subsidiary companies acquired during the year are consolidated using the purchase method. The results of subsidiary companies
acquired are included in the consolidated income statement from the effective date of acquisition.
The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.
The excess of cost of acquisition over the fair values of the group's share of identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the fair value of identifiable net assets acquired (i.e. discount on acquisition)
is recognised directly in the Income Statement.
Revenue recognition
Group revenue is the fair value of the consideration received or receivable by the group for services provided in the normal course of
business, excluding VAT and trade discounts.
Revenue generated in Claimar Care Group Plc is primarily attributable to the provision of home care services.
Interest income is accrued on a time-apportioned basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset's net carrying amount.
Goodwill and intangible assets
Goodwill
Goodwill on acquisitions being the excess of the fair value of the cost of acquisition over the group's interest in the fair value of
the identifiable assets and liabilities acquired is initially recognised as an asset at cost and is subsequently measured at cost less any
accumulated impairment losses. Goodwill is reviewed for impairment at least annually.
Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to
being tested for impairment at that date.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
ACCOUNTING POLICIES continued
For the six months ended 31 March 2008
Intangible assets recognised as part of business combinations
The group makes an assessment of the fair value of intangible assets arising on business combinations. An intangible asset will be
recognised as long as the asset meets the identifiability criteria in accordance with IAS 38 'Intangible Assets' and its fair value can be
measured reliably. Amortisation is provided on the deemed cost to the group and calculated on a straight line basis over its useful life as
follows. Those intangible assets which are considered to have an indefinite useful life are not amortised but are subject to annual
impairment review.
Customer related assets 7 - 10 years
Brands Indefinite
Computer Software Costs
Where computer software is not an integral part of a related item of computer hardware, the software is treated as an intangible asset.
Computer software is treated as an intangible asset and is capitalised on the basis of costs incurred to acquire and bring to use the
specific software. Amortisation is provided by equal annual instalments over its expected useful life of 3 years, down to its residual
value.
Computer software licences capitalised are amortised by equal annual instalments over their expected useful life of 3 years, down to
their residual values.
Property, plant and equipment
Property, plant and equipment assets are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is charged so as to write off the cost of fixed assets on a straight line basis over their estimated useful lives as
follows. No depreciation is charged on the group's freehold property as the carrying value is supported by an impairment review.
Long term leasehold property Over the period of the lease
Fixtures and fittings 20% straight line
Office equipment 33% straight line
Motor vehicles 25% straight line
Impairment of assets
At each balance sheet date the group reviews the carrying value of its property, plant and equipment and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss.
Goodwill and other intangible assets with indefinite lives are reviewed for impairment annually or more frequently if events or changes
in circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount
of the cash generating unit (or group of cash generating units) to which the goodwill relates. Where the recoverable amount of the
generating unit is less than the carrying amount of the cash generating unit to which goodwill has been allocated, an impairment loss is
recognised. Impairment losses relating to goodwill cannot be reversed in future periods.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
ACCOUNTING POLICIES continued
For the six months ended 31 March 2008
Where the asset does not generate cash flows that are independent from other assets the Group estimates the recoverable amount of the
cash generating unit to which the asset belongs. A cash generating unit is the smallest identifiable group of assets that generates cash
inflows that are largely independent of the cash inflows from other assets or groups of assets.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use the estimated future
cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset, for which the estimates of future cash flows have not been adjusted. Any resulting changes are
recognised in the income statement in the period to which they relate.
Except in the case of goodwill, an impairment loss is only reversed if there is a subsequent increase in the recoverable amount that can
be related objectively to an event occurring after the impairment loss was recognised. An impairment loss in respect of goodwill is not
subsequently reversed.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the group. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the group at their fair value or, if lower, at the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability is included in the balance sheet as a
finance lease obligation. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and
is charged to the income statement over the period of the lease.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the lease.
Borrowing costs
Borrowing costs are recognised as an expense when incurred in accordance with the benchmark accounting treatment under IAS 23.
Taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The corporation tax payable is based on an estimation of the amount due on the taxable profit for the year. Taxable profit is different
from net profit as reported in the income statement because it excludes items of income or expenditure which are not taxable or deductible
in the year as a result of either the nature of the item or the fact that it is taxable or deductible in another period. The group's
liability for current tax is calculated by using tax rates that have been enacted or substantially enacted by the balance sheet date.
Deferred tax is accounted for on the basis of temporary differences arising from the differences between the tax base and accounting
base of assets and liabilities.
Deferred tax is recognised for all taxable temporary differences, except to the extent where it arises from the initial recognition of
an asset or liability in a transaction that is not a business combination. Deferred tax is not provided for on the initial recognition of
goodwill. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against
which temporary differences can be utilised.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
ACCOUNTING POLICIES continued
For the six months ended 31 March 2008
Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in
which case it is dealt with within equity. It is calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled.
Financial instruments
Financial assets or liabilities are recognised when, and only when the group becomes a party to the contractual provisions of the
instrument.
Trade Receivables
Trade receivables do not carry interest and are stated at their nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand and at bank. For the purpose of the cash flow statement, cash and cash equivalents
includes overdrafts.
Financial Liabilities and Equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Bank Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges are
allocated to the income statement using an effective interest rate, on the outstanding carrying value of the instrument.
Trade Payables
Trade payables are not interest bearing and are initially measured at fair value and thereafter at their amortised cost using the
effective interest method.
Derivative Financial Instruments and Hedge Accounting
The group's activities expose it primarily to the financial risks of changes in interest rates. The group uses interest rate swap
contracts to manage these exposures.
Interest rate swaps held by the group do not quality for hedge accounting therefore changes in the fair value of these derivative
instruments are recognised in the income statement as they arise.
Share-based payment
The group has applied the requirements of IFRS 2 Share-Based Payment.
The group issues equity-settled share-based payments to certain employees, whereby employees render services in exchange for share
options. Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by
reference to the fair value of the instrument granted to the employee. This fair value is appraised at the grant date using an
option-pricing model (Black-Scholes) and excludes the impact of the non-market vesting conditions.
Equity-settled share-based payments are expensed in the income statement with a corresponding credit to a "share-based payment reserve".
Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where
appropriate share premium.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
ACCOUNTING POLICIES continued
For the six months ended 31 March 2008
Standards, Interpretations and Amendments to Published Standards that are not yet effective
Certain new standards, amendments and interpretations to existing standards applicable to the group have been published that are
mandatory for the group's accounting periods beginning on or after 1 January 2007 or later periods but which the group has not early
adopted, as follows:
IAS 1, Presentation of financial statements, revised 2007 (effective 1 January 2009)
IAS 1, Presentation of financial statements, revised 2008 (effective 1 January 2009)
IAS 23, Borrowing Costs, revised 2007 (effective 1 January 2009)
IAS 27, Consolidated and Separate Financial Statements, revised 2008 (effective 1 July 2009)
IAS 27, Consolidated and Separate Financial Statements, revised 2008 (effective 1 January 2009)
IAS 28, Investment in Associates, revised 2008 (effective 1 July 2009)
IAS 31, Interests in Joint Ventures, revised 2008 (effective 1 July 2009)
IAS 32, Financial Instruments: Presentation, revised 2008 (effective 1 January 2009)
IFRS 1, First-time Adoption of International Financial Reporting Standards, revised 2008 (effective 1 January 2009)
IFRS 2, Share-based Payment, revised 2008 (effective 1 January 2009)
IFRS 3, Business Combinations, revised 2008 (effective 1 January 2009)
IFRS 8, Operating Segments (effective 1 January 2009)
IFRS 11, IFRS 2: Group and Treasury Share Transactions (effective 1 March 2007)
IFRIC 12, Service Concession Agreement (effective 1 January 2008)
IFRIC 13, Customer Loyalty Programmes (effective 1 July 2008)
IFRIC 14, IAS 19:The Limited on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective 1 January 2008)
The Directors also do not consider that the adoption of the amendments resulting from the May 2008 Annual Improvements project will
result in a material impact on the financial information of the group. These amendments are effective for accounting periods beginning on or
after 1 January 2009, with the exception of the amendment to IFRS 5 which is effective for accounting periods beginning on or after 1 July
2009.
Critical accounting judgement and key sources of estimation uncertainty
In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about
the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
For the six months ended 31 March 2008
2 Earnings per share
Unaudited Unaudited Audited
Six months Six months Year
To 31 Mar To 31 Mar To 30 Sep 2007
2008 2007 �000
�000 �000
(Loss)/profit for the financial (93) 492 1,194
period
Weighted average number of shares 46,937,330 22,445,183 26,019,013
for basic earnings per share
Effect of dilutive potential
ordinary shares:
Share options 291,026 89,825 292,048
Weighted average number of shares 47,228,356 22,535,008 26,311,061
for diluted earnings per share
Basic (loss)/earnings per share (0.20)p 2.19p 4.59p
Diluted (loss)/earnings per share (0.20)p 2.18p 4.54p
Share options in the period ended
31 March 2008 have an anti-dilutive
effect on loss per share therefore
basic and diluted loss per share
for the period are the same.
3 Cash Generated from Operations
Unaudited Unaudited Audited
Six Six Year
months months To 30 Sep 2007
To 31 Mar To 31 Mar �000
2008 2007
�000 �000
(Loss)/profit before tax (80) 690 1,588
Adjustments:
Depreciation of property, plant and 193 78 206
equipment
Amortisation of intangible assets 676 67 243
Gain on disposal of property, plant 0 (97) (97)
and equipment
Share-based payment charge 23 - 30
Finance costs 642 99 321
Finance revenue (6) - (64)
Derivative financial instruments 148 - -
provision
Operating cash flows before movements 1,596 837 2,227
in working capital
(Increase)/decrease in receivables 91 (171) (1,069)
Increase/(decrease) in payables (431) 246 804
Cash generated from operations 1,256 912 1,962
Interest paid (642) (99) (321)
Interest received 6 - 64
Income taxes paid (402) (200) (813)
Net cash flow from operating 218 613 892
activities
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION continued
For the six months ended 31 March 2008
4 Reconciliation between UK GAAP and IFRS
For all periods up to and including the year ended 30th September 2007 the group prepared its financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice (UK GAAP). The group's financial statements for the year ending 30th September 2008
will be the first annual statements that will comply with International Financial Reporting Standards (IFRS). These statements for the six
months ended 31st March 2008 have been prepared on the basis set out in the accounting policies. In preparing its opening IFRS balance sheet
at 1st October 2006 (the group's date of transition to IFRS), and comparative information for the six months ended 31st March 2007 and the
year ended 30th September 2007, the group has adjusted amounts previously reported in the financial statements prepared in accordance with
UK GAAP.
This section explains the principal adjustments made by the group in restating its UK GAAP balance sheet at 1st October 2006, its half
year results for the six months ended 31st March 2007 and its previously published UK GAAP financial statements for the year ended 30th
September 2007.
Supplementary to the reconciliation tables required by IFRS 1 as detailed above, the Directors have also provided, for illustrative
purposes only, a table reconciliating the results for the six month period ended 31st March 2008 as it would have been presented under UK
GAAP to IFRS.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION continued
For the six months ended 31 March 2008
Reconciliation of profit for the period ended 31 March 2008
UK GAAP IFRS 3 IAS 12 IAS 38 IAS 39 IFRS
Business Income Intangible Derivatives
Combinations Taxes Assets
�000 �000 �000 �000 �000 �000
Revenue 24,068 - - - - 24,068
Cost of sales (16,557) - - - - (16,557)
Administrative expenses (5,918) - - - - (5,918)
Operating profit before
amortisation 1,593 - - - - 1,593
and acquisition related costs
Amortisation of goodwill (1,197) 1,197 - - - -
Re-organisation and (138) - - - - (138)
restructuring costs
Fees related to aborted (75) - - - - (75)
acquisitions
Amortisation of intangible - - - (676) - (676)
assets
Operating profit/(loss) 183 1,197 - (676) - 704
Finance income 6 - - - - 6
Finance costs (642) - - - - (642)
Other finance charges - - - - (148) (148)
(Loss)/profit before tax (453) 1,197 - (676) (148) (80)
Taxation (202) - 189 - - (13)
(Loss)/profit for the period (655) 1,197 189 (676) (148) (93)
Reconciliation of profit for the year ended 30 September 2007
UK GAAP IFRS 3 IAS 12 IAS 38 IFRS
Business Income Intangible
Combinations Taxes Assets
�000 �000 �000 �000 �000
Revenue 22,318 - - - 22,318
Cost of sales (14,055) - - - (14,055)
Administrative expenses (5,908) - - - (5,908)
Operating profit before
amortisation 2,355 - - - 2,355
and acquisition related costs
Amortisation of goodwill (636) 636 - - -
Profit on sale of freehold 97 - - - 97
premises
Re-organisation and (359) - - - (359)
restructuring costs
Professional fees related to (5) - - - (5)
aborted acquisitions
Amortisation of intangible - - - (243) (243)
assets
Operating profit/(loss) 1,452 636 - (243) 1,845
Finance income 64 64
Finance costs (321) - - - (321)
Profit/(loss) before tax 1,195 636 - (243) 1,588
Taxation (462) - 68 - (394)
Profit/(loss) for the period 733 636 68 (243) 1,194
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION continued
For the six months ended 31 March 2008
4 Reconciliation between UK GAAP and IFRS continued
Reconciliation of profit for the period ended 31 March 2007
UK GAAP IFRS 3 IAS 12 IAS 38 IFRS
Business Income Intangible
Combinations Taxes Assets
�000 �000 �000 �000 �000
Revenue 9,123 - - - 9,123
Cost of sales (5,812) - - - (5,812)
Administrative expenses (2,509) - - - (2,509)
Operating profit before
amortisation 802 - - - 802
and acquisition related costs
Amortisation of goodwill (209) 209 - - -
Profit on sale of freehold 97 - - - 97
premises
Re-organisation and (43) - - - (43)
restructuring costs
Amortisation of intangible - - - (67) (67)
assets
Operating profit/(loss) 647 209 - (67) 789
Finance costs (99) - - - (99)
Profit/(Loss) before tax 548 209 - (67) 690
Taxation (217) - 19 - (198)
Profit/(Loss) for the period 331 209 19 (67) 492
Reconciliation of equity at 30 September 2007
UK GAAP IFRS 3 IAS 12 IAS 38 IFRS
Business Income Intangible
Combinations Taxes Assets
�000 �000 �000 �000 �000
Non-current assets
Goodwill 20,872 (2,054) - - 18,818
Other intangible assets - 3,736 - (206) 3,530
Property, plant and equipment 767 - - (37) 730
Deferred tax asset - - 9 - 9
21,639 1,682 9 (243) 23,087
Current assets
Trade and other receivables 5,518 - (9) - 5,509
Cash and cash equivalents 630 - - - 630
6,148 - (9) - 6,139
Total assets 27,787 1,682 - (243) 29,226
Current liabilities
Financial liabilities (1,465) - - - (1,465)
Trade and other payables (4,115) - - - (4,115)
Current tax liabilities (287) - - - (287)
(5,867) - - - (5,867)
Non-current liabilities
Financial liabilities (8,395) - - - (8,395)
Deferred tax liabilities - (1,046) 68 - (978)
(8,395) (1,046) 68 - (9,373)
Total liabilities (14,262) (1,046) 68 - (15,240)
NET ASSETS 13,525 636 68 (243) 13,986
Equity
Share capital 3,011 - - - 3,011
Share premium account 10,533 - - - 10,533
Merger reserve (1,600) - - - (1,600)
Retained earnings 1,534 636 68 (243) 1,995
Share based payment reserve 47 - - - 47
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT 13,525 636 68 (243) 13,986
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION continued
For the six months ended 31 March 2008
4 Reconciliation between UK GAAP and IFRS continued
Reconciliation of equity at 31 March 2007
UK GAAP IFRS 3 IAS 12 IAS 38 IFRS
Business Income Intangible
Combinations Taxes Assets
�000 �000 �000 �000 �000
Non-current assets
Goodwill 8,138 (471) - - 7,667
Other intangible assets - 944 - (30) 914
Property, plant and equipment 624 - - (37) 587
Deferred tax asset - - - - -
8,762 473 - (67) 9,168
Current assets
Trade and other receivables 3,251 - - - 3,251
Cash and cash equivalents 7,238 - - - 7,238
10,489 - - - 10,489
Total assets 19,251 473 - (67) 19,657
Current liabilities
Financial liabilities (1,113) - - - (1,113)
Trade and other payables (1,667) - - - (1,667)
Current tax liabilities (671) - - - (671)
(3,451) - - - (3,451)
Non-current liabilities
Financial liabilities (3,599) - - - (3,599)
Deferred tax liabilities (9) (264) 19 - (254)
(3,608) (264) 19 - (3,853)
Total liabilities (7,059) (264) 19 - (7,304)
NET ASSETS 12,192 209 19 (67) 12,353
Equity
Share capital 2,937 - - - 2,937
Share premium account 9,607 - - - 9,607
Merger reserve (1,600) - - - (1,600)
Profit and loss account 1,207 209 19 (67) 1,368
Share based payment reserve 41 - - - 41
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT
12,192 209 19 (67) 12,353
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION continued
For the six months ended 31 March 2008
4 Reconciliation between UK GAAP and IFRS continued
Reconciliation of equity at 1 October 2006
UK GAAP IAS 38 IFRS
Intangible
Assets
�000 �000 �000
Non-current assets
Goodwill 5,269 - 5,269
Other intangible assets - 31 31
Property, plant and equipment 433 (31) 402
Deferred tax asset - - -
5,702 - 5,702
Current assets
Trade and other receivables 2,573 - 2,573
Cash and cash equivalents 97 - 97
2,670 - 2,670
Total assets 8,372 - 8,372
Current liabilities
Financial liabilities (1,056) - (1,056)
Trade and other payables (1,188) - (1,188)
Current tax liabilities (391) - (391)
(2,635) - (2,635)
Non-current liabilities
Financial liabilities (844) - (844)
Deferred tax liabilities (1) - (1)
(845) - (845)
Total liabilities (3,480) - (3,480)
NET ASSETS 4,892 - 4,892
Equity
Share capital 2,232 - 2,232
Share premium account 3,255 - 3,255
Merger reserve (1,600) - (1,600)
Profit and loss account 988 - 988
Share based payment reserve 17 - 17
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT 4,892 - 4,892
CLAIMAR CARE GROUP PLC - Half Year Report 2008
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION continued
For the six months ended 31 March 2008
4 Reconciliation between UK GAAP and IFRS continued
Notes to the reconciliation of profits and equity
The following describes the most significant adjustments arising from the transition to IFRS.
Goodwill arising on Business Combinations (IFRS 3)
Under IFRS 3, goodwill is not amortised on a straight-line basis but instead is subject to annual impairment testing.
Consequently, the goodwill balances were considered at 1 October 2006 and 20 September 2007 and no impairment adjustments were
identified.
In terms of adjustments to the Income Statement for the year ended 30 September 2007 and the six months ended 31 March 2007, the
non-amortisation of goodwill results in an increase of pre-tax profits of �636,000 and �209,000 respectively. There are no associated tax
impacts.
Under IFRS 3, resulting from business combinations that the group has entered into, other intangible assets comprising customer lists
and brands were identified with a fair value on acquisitions of �3,736,000 and �944,000 for acquisitions in the year ended 30 September 2007
and the six months ended 31 March 2007 respectively.
Intangible assets (IAS 38)
Under UK GAAP, software costs were included within tangible fixed assets on the Balance Sheet. Under IAS 38, "Intangible Assets", such
items are disclosed separately on the face of the Balance Sheet.
As a result, there is a reclassification of �31,000 in the opening Balance Sheet, and �37,000 in the Balance Sheet as at 31 March 2007
and 30 September 2007, between property, plant and equipment and intangible assets. There is no impact on the Income Statement from this
reclassification.
Following on from the recognition of separate other intangible assets as a result of business combinations in the period from the date
of transition, there is amortisation of these balances resulting in a decrease of pre-tax profit of �243,000 and �67,000 for the year ended
30 September 2007 and the six months ended 31 March 2007 respectively; and a related decrease in the deferred tax liability, impacting on
profit for the year ended 30 September 2007 and the six months ended 31 March 2007 of �68,000 and �19,000 respectively.
Derivative Financial Instrument (IAS 39)
Under UK GAAP, the group did not elect to adopt FRS 26 "Financial Instruments: measurement", therefore the interest rate swaps were not
presented on the balance sheet. Under IFRS, there is a requirement to measure derivative financial instruments that have not been designated
as hedging instruments at fair value with movements in their fair value going to the income statement.
As a Result, a derivative financial liability of �148,000 has been recognised on the balance sheet at 31 March 2008.
Notes to the reconciliation of cash flows
None of the adjustments arising from IFRS relate to cash, and therefore there is no impact on reported cash flows.
CLAIMAR CARE GROUP PLC - Half Year Report 2008
For the six months ended 31 March 2008
INDEPENDENT REVIEW REPORT TO CLAIMAR CARE GROUP PLC
We have been engaged by Claimar Care Group Plc to review the condensed financial information for the six months ended 31 March 2008
which comprises the consolidated profit and loss account, the consolidated balance sheet, the consolidated statement of changes in equity,
the consolidated cash flow statement and related notes 1 to 4. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material inconsistencies with the condensed financial information.
This report is made solely to the company in accordance with International Standard on Review Engagements 2410 issued by the Auditing
Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Respective responsibilities of directors and auditors
The interim report, including the condensed financial information contained therein, is the responsibility of, and has been approved by,
the Directors. The Directors are responsible for preparing the interim report in accordance with the AIM Rules issued by the London Stock
Exchange, which requires that the interim report must be prepared and presented in a form consistent with that which will be adopted in the
company's annual accounts having regard to the accounting standards applicable to such annual accounts.
Our responsibility is to express to the company a conclusion on the condensed consolidated financial information in the interim 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 United
Kingdom. 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 consolidated financial information
in the interim report for the six months ended 31 March 2008 is not prepared, in all material respects, in accordance with the AIM Rules
issued by the London Stock Exchange.
Mazars LLP
Chartered Accountants
Birmingham 30 June 2008
CLAIMAR CARE GROUP PLC - Half Year Report 2008
For the six months ended 31 March 2008
Notes:
(a) The maintenance and integrity of the Claimar Care Group Plc web site is the responsibility of the Directors; the work carried out by
us does not involve consideration of these matters and, accordingly, we accept no responsibility for any changes that may have occurred to
the interim report since it was initially presented on the web site.
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ from legislation
in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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