RNS Number:8623N
Orbis PLC
14 December 2006
Date: 14 December 2006
Contact: Robert Morgan, Chairman
Michael Holmes, Chief Executive
Orbis PLC
01895 465 500
Chris Steele
Adventis
020 7034 4759
ORBIS PLC
UNAUDITED PRELIMINARY RESULTS
FOR THE EIGHTEEN MONTHS ENDED 30 SEPTEMBER 2006
Eighteen months to 30
September 2006
#000
* Turnover 59,280
* Operating profit (before amortisation of goodwill and intangible assets 6,857
and other operating items)
* Operating loss (after amortisation of goodwill and intangible assets (1,951)
and other operating items)
* Net cash inflow from operating activities 10,073
CHAIRMAN'S STATEMENT
Overview
It has been an encouraging eighteen months. We have repositioned the Group and
grown new revenue streams as our traditional market changes.
CHAIRMAN'S STATEMENT continued
In the UK, we have repositioned the business to provide a range of services to
assist in the regeneration of social housing and to respond to the decrease in
the market for steel security provision. Combined with major improvements in
the efficiency of the business, this strategy has consistently delivered better
results at operating profit level over recent months.
Winning and retaining traditional security contracts with major customers will
still be important in future as these provide the base to build sales of
additional services. Developing new opportunities to provide services in
partnership with regeneration contractors will also be important.
In France, a new management team is providing fresh impetus to challenge its
competitors and to win new business. We plan to maintain this momentum by
extending into new geographical markets outside the Paris region and by
developing alarm related services. In Germany, the traditional security
business has slowed as government expenditure has been cut. As a result, we are
pleased that new opportunities for facilities management services are
successfully being pursued in new commercial sectors.
Financial results
As announced in May 2006, the Group has changed its reporting year end to 30
September. The financial results for 2006 are therefore for an eighteen month
period.
Operating profit (before amortisation of goodwill and intangible assets and
other operating items) in the eighteen month period increased to #6.86 million
(2005: #3.11 million). The operating loss after amortisation of goodwill and
intangible assets and other operating items was #1.95 million compared to a loss
of #2.10 million for the year ended 31 March 2005. The loss after tax for the
eighteen month period ended 30 September 2006, was #7.91 million, compared to a
loss of #6.00 million for the year to 31 March 2005, on turnover of #59.28
million (2005: #39.96 million). The board is not declaring a dividend for the
period (2005: nil).
Cashflow remained strong, with #10.07 million net cash inflow from operating
activities for the 18 month period, compared with #5.53 million for the year
ended 31 March 2005. The net cash inflow before financing was #1.62 million,
compared with a net cash outflow of #1.92 million in 2005.
During the period the Group has adopted the presentation rules of FRS 25 "
Financial instruments: presentation and disclosure" for the first time under
which the #15 million convertible preference shares issued in 2003 are treated
as a liability rather than equity in the balance sheet. This change in
presentation has resulted in the consolidated balance sheet showing negative
shareholders' funds, and the consolidated profit and loss account showing
additional finance costs of non-equity shares being presented as interest
payable under other operating items.
CHAIRMAN'S STATEMENT continued
Other operating items, excluding other operating interest payable, increased to
#2.59 million in the eighteen month period (2005: #1.05 million). This includes
the costs of Mike Warriner's settlement agreements; other redundancy and
termination costs incurred in the Group's business restructuring; and corporate
restructuring costs.
Board
In November 2005, Gerry Connolly joined the Board as a non-executive director.
Gerry is a chartered accountant and he is also chairman of the audit committee
and the remuneration committee. In August 2006, Mike Warriner formally ceased
his full time executive duties with the European business and resigned as a
director of Orbis PLC. Mike was responsible for building the business in France
and Northern Europe and we wish him well in the future.
Prospects
We have completed the important phases of our strategy to reposition the Group.
The core business is stabilised and is working efficiently. Our challenge now
is to develop new markets for our range of services and to change the perception
of the Group from a provider of 'last resort' security for empty properties, to
an integrated service company providing solutions to assist regeneration and the
improvement of the housing environment for landlords and tenants alike.
-oOo-
Unaudited Consolidated Profit & Loss Account
Eighteen months
ended 30 September 2006 Year ended 31 March 2005
Before other Other TOTAL Before other Other TOTAL
operating operating operating operating
items items items items
(note 3) (note 3)
Notes #000 #000 #000 #000 #000 #000
Turnover 2
Continuing operations 59,280 - 59,280 39,958 - 39,958
59,280 - 59,280 39,958 - 39,958
Operating profit/(loss)
Before amortisation of
goodwill and
intangible assets
Continuing operations 6,857 (2,594) 4,263 3,105 (1,051) 2,054
6,857 (2,594) 4,263 3,105 (1,051) 2,054
Amortisation of
goodwill and
intangible assets
Continuing operations (6,214) - (6,214) (4,158) - (4,158)
Operating (loss)/profit
Continuing operations 643 (2,594) (1,951) (1,053) (1,051) (2,104)
(Loss)/profit on ordinary 643 (2,594) (1,951) (1,053) (1,051) (2,104)
activities before interest
Interest payable and similar (4,253) (920) (5,173) (2,741) (332) (3,073)
charges
Loss on ordinary activities (3,610) (3,514) (7,124) (3,794) (1,383) (5,177)
before taxation
Taxation on loss on ordinary 4 (782) (821)
activities
Loss on ordinary activities (7,906) (5,998)
after taxation
pence pence
Basic loss per share 5 (56.67) (44.78)
Earnings/(loss) per share 5 13.06 (5.06)
from continuing operations
before the amortisation of
goodwill and intangible
assets and before other
operating items
Diluted loss per share 5 (56.67) (44.78)
Unaudited Consolidated Balance Sheet
As at As at
30 September 2006 31 March 2005
#000 #000
Fixed assets
Goodwill 50,339 56,621
Intangible assets - 29
Tangible assets 6,287 7,955
56,626 64,605
Current assets
Stocks 233 485
Debtors 9,799 9,842
Cash at bank 1,566 884
11,598 11,211
Creditors - amounts falling due within one year (14,069) (12,868)
Net current liabilities (2,471) (1,657)
Total assets less current liabilities 54,155 62,948
Creditors - amounts falling due after more than one year (56,114) (43,081)
Provision for liabilities and charges (268) -
Net (liabilities)/assets (2,227) 19,867
Capital and reserves
Called up share capital 1,398 16,398
Share premium 31,648 31,193
Capital redemption reserve 16,084 16,084
Own shares reserve (182) (182)
Merger reserve 12,144 12,144
Profit and loss account (63,319) (55,770)
(2,227) 19,867
Equity (2,227) 5,695
Non-equity - 14,172
Total shareholders'(deficit)/funds (2,227) 19,867
Unaudited Consolidated Cash Flow Statement
Eighteen months Year ended
ended 31 March 2005
30 September 2006
Note #000 #000
Net cash inflow from operating activities 6 10,073 5,526
Returns on investment and servicing of finance
Bank and loan interest paid and similar charges (4,907) (2,969)
(4,907) (2,969)
Tax paid (1,216) (945)
Capital expenditure
Purchase of tangible fixed assets (2,345) (3,576)
Sale of tangible fixed assets 18 45
(2,327) (3,531)
Acquisitions and disposals
Purchase of intangible asset - (1)
- (1)
Net cash inflow/(outflow) before financing 1,623 (1,920)
Financing
Refinancing fees (200) (100)
Capital element of finance lease payments (5) (6)
Repayment of loan (1,498) -
Repayment of loan stock - (500)
Net cash outflow from financing (1,703) (606)
Decrease in cash in the period (80) (2,526)
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Eighteen months ended
30 September 2006 Year ended
#000 31 March 2005
#000
Loss for the financial period (7,906) (5,998)
Exchange difference on retranslation of subsidiary net (162) 333
assets
Exchange difference on loan 146 (316)
Total losses recognised for the period (7,922) (5,981)
Unaudited Reconciliation of Movements in Shareholders' Funds
Eighteen months ended
30 September 2006 Year ended
#000 31 March 2005
#000
Total recognised losses for the period (7,922) (5,981)
Shares reclassified as liabilities under FRS25 (14,172) -
Effect of adoption of FRS 25 on 1 April 2005 (with 2005 not - (249)
restated)
Add back of non-equity finance charge (2005 only) - 249
Net reduction in shareholders' funds (22,094) (5,981)
Opening shareholders' funds 19,867 25,848
Closing shareholders' (deficit)/funds (2,227) 19,867
NOTES
1. BASIS OF PREPARATION
The unaudited financial information set out in this preliminary announcement,
which was approved by the directors on 13 December 2006, has been prepared on
the basis of accounting policies set out in the accounts for the year to 31
March 2005, except for the adoption of FRS 25: "Financial Instruments:
Presentation and Disclosure" under which the #15 million zero-coupon convertible
redeemable preference shares and associated issue costs are treated as financial
liabilities and not as shareholders' funds. The Group has taken advantage of
the transitional arrangements of FRS 25 not to restate corresponding amounts.
The financial information does not amount to full accounts within the meaning of
section 240 of The Companies Act 1985 and the full accounts for the eighteen
months ended 30 September 2006 have not been delivered to the Registrar of
Companies.
Full accounts of Orbis PLC for the year ended 31 March 2005, on which the
auditors gave an unqualified report, have been delivered to the Registrar of
Companies.
2. segmental analysis
For the periods ending 2006 and 2005 all activities were classified as
continuing operations and all the results and assets relate to the continuing
operation of void property protection. Included within turnover is #31.2
million (2005: #31.2 million) rental income from operating leases.
Turnover by destination and origin Eighteen months Year ended 31
ended 30 September March 2005
2006
#000 #000
United Kingdom 37,715 26,503
Continental Europe 21,565 13,455
59,280 39,958
3. OTHER OPERATING ITEMS
The other operating items comprise:
Eighteen months Year ended 31
ended 30 September March 2005
2006
#000 #000
Director's settlement 831 -
Business restructuring 1,105 179
Corporate restructuring 658 536
Leased vehicle dilapidation costs - 336
2,594 1,051
The director's settlement includes compensation for loss of office in respect of
Mr Warriner.
Business restructuring includes redundancy and exit costs associated with the
reorganisation of the UK and European businesses and an impairment charge for an
element of the IT project.
The corporate restructuring includes refinancing costs, costs associated with
the simplification of the group's UK corporate structure and other corporate
financial charges.
The other operating interest payable comprises the following:
Eighteen months Year ended 31 March
ended 30 September 2005
2006
#000 #000
Amortisation of bank arrangement 319 180
Amortisation of loan refinancing fees 228 152
Amortisation costs of the issue costs for the preference shares 373 -
(FRS25)
920 332
4. TAXATION ON LOSS ON ORDINARY ACTIVITIES
Current tax Eighteen months Year ended 31 March
ended 30 September 2005
2006
#000 #000
UK corporation tax
Current tax on income for the year - -
Adjustments in respect of prior periods (133) -
(133) -
Foreign tax
Current tax on income for the year 950 845
Adjustments in respect of prior periods (35) (24)
Total current tax 782 821
Tax on loss on ordinary activities 782 821
4. TAXATION ON LOSS ON ORDINARY ACTIVITIES (continued)
Factors affecting tax charge for the year
The tax assessed for both years is higher than the standard rate of
corporation tax in the UK (30%).
The differences are explained below:
Eighteen months Year ended 31 March
ended 30 September 2005
2006
#000 #000
Loss on ordinary activities before tax (7,124) (5,177)
Loss on ordinary activities multiplied by the standard rate of (2,137) (1,553)
corporation tax in the UK of 30%
Effect of:
Expenses not deductible for tax purposes (including goodwill 2,327 1,344
amortisation)
Depreciation in excess of capital allowances 608 650
Higher tax rates on overseas earnings 91 201
Loss carried forward 61 203
Adjustment to tax charge in respect of previous periods (168) (24)
Current tax charge for period (see above) 782 821
5. LOSS PER SHARE
Basic loss per share has been calculated on the loss after tax for the
period and the weighted average number of ordinary shares, excluding shares
owned by the company's share ownership trust, in issue during the period as
follows:
Eighteen months Year ended 31
ended 30 September March 2005
2006
Loss on ordinary activities after taxation #000 (7,906) (5,998)
Additional finance costs of non-equity shares #000 - (249)
Loss for the period #000 (7,906) (6,247)
Weighted average shares in issue (million) 13.95 13.95
Basic loss per share (pence) (56.67) (44.78)
Earnings per share from continuing operations before amortisation of goodwill
and intangible assets and before other operating items have been presented in
addition to basic earnings per share as defined by FRS 22 since, in the opinion
of the directors, this provides shareholders with a more appropriate
representation of the earnings derived from the group's present businesses. It
can be reconciled to basic loss per share as follows:
(Loss)/earnings per share (Loss)/earnings
Eighteen Year ended 31 Eighteen Year ended
months ended March 2005 months ended 31 March
30 September 30 September 2005
2006 2006
(pence) (pence) #000 #000
Basic loss per share (56.67) (44.78) (7,906) (6,247)
Amortisation of goodwill and intangible assets on 44.54 29.81 6,214 4,158
continuing operations
(Loss)/earnings per share from continuing operations (12.13) (14.97) (1,692) (2,089)
before the amortisation of goodwill and intangible
assets
Loss from other operating items on continuing 25.19 9.91 3,514 1,383
operations
Earnings/(loss) per share from continuing operations 13.06 (5.06) 1,822 (706)
before the amortisation of goodwill and intangible
assets and before other operating items
5. LOSS PER SHARE (continued)
The diluted loss per share, as defined in FRS 22, has been calculated on the
following basis:
Eighteen months Year ended 31 March
ended 30 September 2005
2006
#000
#000
Diluted losses #000 (7,906) (6,247)
Weighted average number of shares in issue (million) 13.95 13.95
Diluted weighted average number of shares in issue (million) 13.95 13.95
Diluted loss per share (pence) (56.67) (44.78)
6. RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Eighteen months Year ended 31 March
ended 30 September 2005
2006
#000 #000
Operating loss (1,951) (2,104)
Depreciation 3,937 3,367
Loss/(profit) on disposal of fixed assets 30 (27)
Amortisation of goodwill and intangible assets 6,214 4,158
EBITDA 8,230 5,394
Decrease/(increase) in stocks 252 (98)
Decrease in debtors 18 706
Increase/(decrease) in creditors 1,573 (476)
Net cash inflow from operating activities 10,073 5,526
This information is provided by RNS
The company news service from the London Stock Exchange
END
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