Interim Results
30 September 2009 - 3:09PM
UK Regulatory
TIDMGAR
30 September 2009
GARNER PLC
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2009
CHAIRMAN'S STATEMENT
The interim results to 30th June 2009 are that we made a Group loss after tax
of GBP672,000 (2008: profit of GBP20,000) based on an increased turnover of GBP
3,431,000 (2008: GBP1,259,000). This has resulted in a Group loss per share of
0.95p (2008: earnings per share 0.05p).
The increase in revenues compared to the same period in 2008 was driven by the
recent combination of the Garner and Norman Broadbent businesses. Comparing
like with like, turnover from continuing operations was down 22% to GBP984,000
(2008: GBP1,259,000).
As stressed in my Chairman's statement accompanying the 2008 year end results,
trading conditions in the second half of 2008 and the beginning of 2009 have
been very tough. Although management have identified and executed a number of
cost saving initiatives to streamline the business, the impact of which will
not be fully realised until the last quarter, we have had to incur additional
restructuring expenses that have added to the pressure on the bottom line.
Once this program is complete, these one-off costs will total GBP200,000,
however, on a more positive note, they are expected to result in annualised
cost savings of approximately GBP1,500,000 across the Group.
Clearly the losses incurred over the last six months have had a negative impact
on working capital, which, coupled with the necessary capital investment in our
IT systems, has resulted in a net cash outflow of GBP592,000. Net debt
(excluding the long term deferred consideration on the Norman Broadbent
acquisition) has increased from GBP334,000 at 31st December 2008 to GBP1,230,000 at
30th June 2009. However, trading since the end of the period has stabilised
which, coupled with the action taken in the first half to reduce our overheads,
has stemmed the cash outflow.
The last six months has also seen the net asset position of our balance sheet
decrease from GBP1,044,000 at 31st December 2008 to GBP372,000 at 30th June 2009.
Working capital remains tight and the Board is reviewing a number of
opportunities to strengthen the balance sheet and increase the working capital
headroom as a matter of priority. A further announcement will be made to
shareholders in due course.
Whilst trading has stabilised in the third quarter, economic conditions remain
challenging and our first year as the enlarged group will be worse than we
could have anticipated. Despite this, we continue to be positive about the
acquisition of Norman Broadbent and we believe that we will be well placed to
grow once trading conditions improve.
A Garner
Chairman
For further information, please contact:
Andrew Garner, Chairman Garner Plc 020 7629 8822
Lindsay Mair, Antony Legge Dowgate Capital Advisers 020 7492 4777
CONSOLIDATED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 30 JUNE 2009
Year
Six months Six months ended 31
ended 30 ended 30 December
June 2009 June 2008 2008
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Revenue 3,431 1,259 3,274
Cost of operations (4,074) (1,187) (3,031)
GROUP OPERATING (LOSS)//PROFIT (643) 72 243
Net finance costs (17) (43) 107
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION
(660) 29 350
Tax expense (12) (9) 7
(LOSS)/PROFIT FOR THE FINANCIAL PERIOD (672) 20 357
(Loss)/Earnings per share - basic (0.95)p 0.05p 0.88p
(Loss)/Earnings per share - diluted (0.91)p 0.05p 0.81p
There are no recognised gains and losses other than as stated above.
Accordingly, no Statement of Total Recognised Income & Expense is given.
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2009
As at 30 June 2009 As at 30 June 2008 As at 31
December 2008
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Goodwill 7,049 959 7,049
Property, plant and equipment 223 14 198
TOTAL NON-CURRENT ASSETS 7,272 973 7,247
Trade and other receivables 1,505 1,069 2,013
Cash and cash equivalents 51 - 643
TOTAL CURRENT ASSETS 1,556 1,069 2,656
TOTAL ASSETS 8,828 2,042 9,903
TOTAL CURRENT LIABILITIES (4,239) (2,990) (4,384)
Non-current liabilities (4,217) (323) (4,475)
TOTAL LIABILITIES (8,456) (3,313) (8,859)
TOTAL ASSETS LESS TOTAL
LIABILITIES 372 (1,271) 1,044
Issued share capital 5,709 4,944 5,709
Share premium account 4,868 3,853 4,868
Retained earnings (10,205) (10,068) (9,533)
TOTAL EQUITY 372 (1,271) 1,044
CONSOLIDATED CASHFLOW STATEMENT & NOTES
Year
Six months Six months ended 31
ended 30 ended 30 December
June 2009 June 2008 2008
(unaudited) (unaudited) (audited)
Notes GBP000 GBP000 GBP000
Net cash from operating activities (i) (673) (192) 894
Cash flows from investing activities and servicing of finance
Interest paid (17) (43) 107
Payments to acquire tangible assets (58) (3) (3)
Acquisition of subsidiary, inclusive of cash acquired - - (566)
Net cash used in investing activities (75) (46) (462)
Cash flows from financing activities
Net cash inflow from equity placing - 10 633
Repayment of secured loans (102) - (94)
Payment/(repayment) of advances from directors 160 90 88
Payment of transaction costs - (272)
Increase in invoice discounting 246 78 (198)
Repayment of deferred consideration (148) - -
Net cash from financing activities 156 178 157
Net movement in cash and cash equivalents (592) (60) 589
Net cash and cash equivalents at beginning of period
643 56 54
Net cash and cash equivalents at end of period 51 (4) 643
Analysis of net funds
Cash and cash equivalents 51 - 643
Bank overdraft - (4) -
51 (4) 643
Borrowings due within one year (810) (932) (556)
Borrowings due after one year (211) (323) (321)
Directors loan account (260) (156) (100)
Deferred consideration (5,066) - (5,214)
Net funds (6,296) (1,415) (5,548)
Note (i)
Reconciliation of operating profit to net cash from operating activities
Year
Six months Six months ended 31
ended 30 ended 30 December
June 2008 June 2008 2008
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Operating profit (643) 72 243
Depreciation of property plant and equipment 34 3 10
Amortisation of loan arrangements fees - 3 -
(Increase) in trade and other receivables 508 (257) 508
(Decrease) in trade and other payables (514) 77 232
Taxation paid (58) (90) (99)
Net cash from operating activities (673) (192) 894
NOTES TO THE UNAUDITED INTERIM REPORT
1. BASIS OF PREPARATION
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
group's statutory financial statements for the year ended 31 December 2008,
prepared under International Financial Reporting Standards (IFRS), have been
filed with the Registrar of Companies. The auditor's report on those
statements was unqualified.
The interim financial information for the six months ended 30 June 2009, has
been prepared in accordance with International Financial Reporting Standards
(IFRS) and on the same basis and using the same accounting policies as used in
the financial statements for the year ended 31 December 2009. The interim
financial statements have not been audited.
BASIS OF CONSOLIDATION
The group financial statements consolidate those of the Company and of its
subsidiary undertakings Garner International Limited, BNB Recruitment
Consultancy Limited, Bancomm Limited and BNB Recruitment Overseas Holdings
Limited, companies incorporated in England and Wales. Profits or losses on
intra-group transactions are eliminated in full.
2. earnings PER ORDINARY SHARE
The calculation of the losses per share is based on the loss attributable to
ordinary shareholders of GBP672,000 (2008: profit of GBP20,000) and the weighted
average number of ordinary shares in issue during the period, being 70,855,519
(2008: 38,061,315).
3 COPIES OF THE UNAUDITED INTERIM REPORT
Copies of this report are available on request from the Company's registered
office at 6 Derby Street, London, W1J 7AD and are also available on the
Company's website www.garnerinternational.com.
END
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