TIDMYCO
RNS Number : 1867E
YCO Group PLC
28 May 2012
28 May 2012
YCO Group plc
("YCO", the "Company" or the "Group")
Results for the year ended 31 December 2011
YCO Group plc, a leading provider of specialist services to
superyachts, today announces its audited preliminary results for
the year ended 31 December 2011.
Financial Highlights
p Revenue: GBP16.6m (2010: GBP11.7m)
p Gross profit: GBP8.7m (2010: GBP7.7m)
p Operating profit before exceptional items: GBP14,650 (2010:
GBP785,998)
p Exceptional Items: Goodwill impairment: GBP4.1m (2010:
GBP0.18m)
p Loss before tax of GBP4.1m (2010: profit before tax of
GBP0.6m)
p EPS (9.50)p (2010: 1.11p)
Operational Highlights
p Established a US office enabling expansion into key American
markets
p Undertook a significant re-branding and marketing programme
which has gained a good response from industry
p As set out in a separate announcement being released today the
Company's Annual General Meeting on 25(th) June 2012 will include a
proposal to delist the Company's shares from trading on AIM.
Charlie Birkett, Chief Executive of YCO Group, commented:
"Against the backdrop of a challenging environment for the yacht
broking markets, our strategy in 2011 was to continue to build our
international presence and brand in our core markets. We
successfully achieved this and remain well placed with excellent
client services to achieve our growth goals as the market recovers.
We look to the future with cautious optimism."
For further information please contact:
YCO Group plc
Charlie Birkett, Chief Executive Tel: +377 93 50 12 12
Westhouse Securities
Tom Griffiths Tel: + 44 (0)20 7601 6100
Hudson Sandler
Charlie Jack Tel: + 44 (0)20 7796 4133
YCO Group plc
Results for the year ended 31 December 2011
Chairman's Statement
2011 was a year of important development for the business. The
Group continued with its strategy to rationalise the business in
order to focus on its core service offering of superyacht sales,
charter, management and new construction.
As part of this process the Company successfully disposed of its
Yacht Fuel Services business and made continued investment in
building up its core broking teams, extending its geographical
reach in key territories and unveiling its new brand to a receptive
global audience.
The Company remains exposed to a challenging European superyacht
market suffering the effects of the economic turmoil and market
volatility driven by the ongoing euro zone crisis. Nevertheless, I
remain confident that we have the right management, strategy and
highly regarded services that, combined with effectively managing
our cost base, will continue to achieve our growth goals in these
subdued markets and leave us well placed to capitalise when
confidence returns to the industry.
Rear Admiral Scott Lidbetter - Non-Executive Chairman
28 May 2012
YCO Group plc
Results for the year ended 31 December 2011
Chief Executive's Statement
The superyacht industry in 2011 continued to operate in a
challenging environment driven by wider economic unrest.
Nevertheless, YCO Group made strong progress in implementing a
strategy that remains underpinned by our significant market
presence in the yacht management sector. This presence has
continued to give the business a firm financial footing whilst
revenues from our broking operations experienced the fall-out from
the wider economic climate.
Business Overview
In spite of strengthened teams in both sales and charter
brokerage, performance from these departments was impacted by
market conditions, though enquiry levels started to increase
towards the end of the year as the effects of a marketing and
rebranding programme were realised. The market for second hand
yachts continued to suffer from over-supply with lower volumes. On
a like for like basis, the Company increased the number of charter
weeks booked, however these figures still fell short of the Board's
expectations.
YCO continued to steadily increase market share in yacht
management, growing the size of its fleet over the year in line
with the Board's expectations. Sales for new builds were also ahead
of expectations, with the Company signing a number of important
contracts which will contribute to revenues in 2012 and 2013.
The crew recruitment division continued to perform in line with
expectations and compliments our yacht management business. We were
pleased to increase our geographic footprint through the
establishment of an office in Fort Lauderdale. This will provide
key access to the increasingly important North and South American
markets.
As part of our core strategy of increasing market share and to
support the opening of our US office, the Board took the decision
to continue to invest in its global marketing and brand, with the
roll out of new messaging and marketing materials that successfully
highlighted the Group's strong service offering. It has been well
received in the marketplace, with enquiry levels across all
divisions increasing in the latter stages of 2011 and 2012. The
Board now considers this investment complete and we anticipate our
2012/2013 marketing budget will return to normal levels.
Sale of Yacht Fuel Services
As part of the restructuring process that was fully initiated in
2010, it has been the Board's strategy to focus on service areas in
which management has significant expertise and those where there is
clear opportunity to grow market share. The sale of Yacht Fuel
Services was the final step in this process, enabling the Company
to concentrate its growth strategy in the more profitable business
areas of yacht management, brokerage and crew recruitment. The
profit from the Yacht Fuel division for the six months to its
disposal in June 2011 was GBP54,086 in 2011 and it reported a loss
of GBP43,626 for the year ended 31 December 2010.
Financial Overview
As previously highlighted the Company undertook a number of
successful strategic initiatives to increase its market share
during 2011, including its global marketing programme, which will
play a key role in the new business drive through 2012 and into
2013. Whilst the Company is confident of recouping the benefits of
this programme in the medium term, the effects of this programme
combined with the impacted brokerage markets led to an operational
breakeven in 2011.
The results for the year are impacted significantly by the
impairment of goodwill of GBP4.1 million to a carrying value of
GBP9.4 million which is noted as an exceptional item in note 10.
The Company's accounting policies require that the Board review the
carrying value of goodwill on an annual basis and the reduction
reflects the 2011 results which were below the Directors'
expectations and the company's projections. The impairment does not
impact cash reserves which improved in 2011 from GBP0.5 million as
at 31 December 2010 to GBP2.5 million.
Goodwill
In accordance with its accounting policy, the Board has reviewed
the carrying value of goodwill which is described in the main
accounts and has duly impaired the value of goodwill of the
yachting activities to GBP9.4 million which impacted significantly
the 2011 results by GBP4.1 million as an exceptional item. This
recognises the current market conditions as well as the Company's
performance and the Board's consideration of its future value.
Proposed Cancellation of Admission to Trading on AIM
The Board has concluded that the AIM listing no longer provides
strategic rationale for the development of the business. It
believes the lack of market enthusiasm for funding growth
companies, the depressed Ordinary Share price and the absence of
meaningful market liquidity in the Company's Ordinary Shares and
costs associated with the AIM listing mean it is no longer in the
best interests of the Company and its Shareholders for the Company
to maintain a listing on AIM.
Notice of the Annual General Meeting which is to be held on 25
June 2012 at 10.00 am at the offices of SGH Martineau LLP, One
America Square, Crosswall, London EC3N 2SG and its resolutions
regarding the proposed de-listing are being sent to shareholders
via a circular.
Following consultation with the Company's major shareholders,
the Company has received irrevocable undertakings, including from
those Directors who beneficially hold Ordinary Shares in the
Company, to vote in favour of the de-listing resolution at the
Annual General Meeting from Shareholders holding 32,839,688
Ordinary Shares, representing approximately 67.74 per cent of the
current issued share capital of the Company.
OUTLOOK
The backdrop of a volatile economic environment, turbulent stock
markets and the ongoing euro zone crisis has continued to have a
significant impact on the key European superyacht market.
Industry-wide sales continued to be impacted, with volumes lower in
the traditionally important second quarter. This has led to the
erosion of margins as the market has responded with discounted
brokerage commissions. Whilst sales of some smaller superyacht
classes are still maintaining reasonable volumes, these do not
reflect the core superyacht market on which the Group focuses.
However, the response in 2012 to key strategic marketing and new
business initiatives has been pleasing, recognised with enquiry
levels increasing, the number of yachts under management in the YCO
fleet continuing to grow and our anticipation that the Group will
continue to increase its share in the charter market.
The Company remains wholly focused on retaining and growing
organically its market share in its core client services of
superyacht sales, charter, management and new construction is on
track to achieve this. We continue to operate in a very challenging
market and the future demands that we remain focused on strictly
managing our cost base; however we remain well placed with
excellent client services to achieve our growth goals as the market
recovers. We look to the future with cautious optimism.
Charlie Birkett - Chief Executive Officer
28 May 2012
YCO Group PLC
Consolidated Income Statement
for the year ended 31 December 2011
2011 2010
Continuing operations Notes GBP GBP
Revenue 2 16,570,652 11,736,199
Cost of sales (7,913,795) (4,050,469)
Gross profit 8,656,857 7,685,730
Administrative expenses 4 (8,642,207) (6,899,732)
Operating profit before exceptional
items 4 14,650 785,998
Exceptional items 5 (4,063,594) (180,080)
_____________ ____________
Operating (loss)/profit (4,048,944) 605,918
Finance costs 3 (64,130) (16,515)
Finance income 3 - 5,708
(Loss)/profit before tax (4,113,074) 595,111
Income tax charges 7 (481,833) (59,925)
(Loss)/profit for the year from continuing
operations (4,594,907) 535,186
Discontinued operations
Profit/(loss) for the year
from discontinued operations 6 54,086 (43,626)
-------------- -------------
(Loss)/profit for the year (4,540,821) 491,560
Attributable to:
Owners of the company (4,540,821) 491,560
============== =============
Earnings per share
From continuing operations:
Basic - pence 8 (9.50) 1.11
Diluted - pence 8 (9.50) 1.09
From continuing and discontinued
operations:
Basic - pence 8 (9.39) 1.02
Diluted - pence 8 (9.39) 1.00
Earnings per share expressed in pence per share.
YCO Group PLC
Consolidated Income Statement
for the year ended 31 December 2011
Included above are the profit or (loss) of the subsidiaries
since the date of acquisition and up to the date of disposal.
On the 23rd June 2011 YCO Group sold the business and assets of
the Yacht Fuel Services ("YFS") operations. The above Consolidated
Income Statement shows the performance of the continuing operations
of the group, which does not include the Yacht Fuel Services
discontinued operations. The comparatives have therefore been
restated to show the comparable performance of the continuing
operations of the group distinct from the discontinued operations,
which are further explained in note 6.
YCO Group PLC
Consolidated Statement of Financial Position
as at 31 December 2011
2011 2010
GBP GBP
ASSETS
Non-current Assets
Goodwill 9,372,748 15,230,607
Intangibles 321,526 222,071
Property, plant and equipment 798,796 478,210
-------------- --------------
10,493,070 15,930,888
Current Assets
Trade and other receivables 2,343,992 3,341,294
Cash and cash equivalents 2,508,749 505,361
-------------- --------------
4,852,741 3,846,655
LIABILITIES
Current Liabilities
Trade and other payables 4,134,048 4,009,750
Financial liabilities - borrowings
Interest bearing loans and borrowings 13,751 18,128
-------------- --------------
4,147,799 4,027,878
-------------- --------------
Net Current Assets/(Liabilities) 704,942 (181,223)
---------------- --------------
Non-Current Liabilities
Financial liabilities - borrowings
Interest bearing loans and borrowings 38,261 -
---------------- --------------
NET ASSETS 11,159,751 15,749,665
EQUITY AND RESERVES
Called up share capital 169,708 168,584
Share premium 15,378,873 15,208,685
Retained earnings (4,300,519) 240,302
Other reserves - 171,312
Translation reserve (88,311) (39,218)
---------------- --------------
11,159,751 15,749,665
YCO Group PLC
Consolidated Statement of Cash Flows
for the year ended 31 December 2011
2011 2010
Notes GBP GBP
Cash flows from operating activities
Cash generated from operations 9 1,685,888 454,368
Finance costs (64,924) (18,127)
Corporation tax paid (106,408) (19,851)
Net cash inflow from operating activities 1,514,556 416,390
----------- ----------
Cash flows from investing activities
Purchase of intangibles (271,048) (113,620)
Purchase of plant and equipment (588,814) (278,168)
Proceeds from sale of tangible
assets 36,694 12,582
Interest received - 5,708
Net cash inflow on disposal of YFS 1,312,018 -
Net cash inflow/(outflow) from investing
activities 488,850 (373,498)
Cash flows from financing activities
(Repayment)/receipt of loan to related
parties - (65,928)
Proceeds from new bank loans 58,686 -
Repayment of bank loan (6,674) -
Repayment of finance lease (18,128) (22,313)
Net cash inflow/(outflow) from financing
activities 33,884 (88,241)
Increase/(decrease) in cash and cash
equivalents 2,037,290 (45,349)
Cash and cash equivalents at
beginning of year 505,361 560,299
Foreign exchange currency translation (33,902) (9,589)
Cash and cash equivalents at
end of year 2,508,749 505,361
Represented by:
Cash at bank and in hand 2,508,749 505,361
=========== ==========
YCO Group PLC
Notes to the Financial Statements
for the year ended 31 December 2011
1. GENERAL INFORMATION
YCO Group PLC is a company incorporated in England and Wales and
quoted on the Alternative Investment Market of the London Stock
Exchange.
These financial statements have been prepared in accordance with
International Financial Reporting Standards and IFRIC
interpretations issued by the International Accounting Standards
Board (IASB) as adopted by the European Union and with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS. The financial statements have been prepared under the
historical cost convention.
2. SEGMENTAL ANALYSIS
In prior years, segment information reported externally was
analysed on the basis of the types of goods supplied and services
provided by the Group's operating divisions (i.e. client services
and support services). However, following the sale of YFS,
information reported to the Group's chief operating decision maker
for the purposes of resource allocation and assessment of segment
performance is more aggregated than previously, as performance
assessment and management is carried out on the Yachting activities
as a whole, by geographical location. Therefore there is now only
one principal activity of the group, being the provision of
Yachting activities under the unified YCO brand. The Director's
consider there to be no reportable segments under IFRS 8.
The chief operating decision maker reports on geographical
segments, which consists of Europe, Americas and the rest of the
world. The breakdown of the revenue and resources in respect of the
continuing operations are shown below.
Rest of the
Europe Americas world Total
2011 2011 2011 2011
GBP GBP GBP GBP
Revenue 11,759,857 442,553 4,368,242 16,570,652
------------------ ------------------ ------------------ ------------------
Total assets 15,297,710 48,101 - 15,345,811
------------------ ------------------ ------------------ ------------------
Capital Expenditure 843,700 16,162 - 859,862
------------------ ------------------ ------------------ ------------------
Rest of the
Europe Americas world Total
2010 2010 2010 2010
GBP GBP GBP GBP
Revenue 6,469,893 444,384 4,821,922 11,736,199
------------------ ------------------ ---------------- ----------------
Total assets 19,777,543 - - 19,777,543
------------------ ------------------ ---------------- ----------------
Capital Expenditure 391,788 - - 391,788
------------------ ------------------ ---------------- ----------------
3. NET FINANCE COST
Continuing operations 2011 2010
GBP GBP
Finance costs:
Bank interest 28,345 16,515
Bank loan interest 35,785 -
Other interest -
------- --------
64,130 16,515
------- --------
Finance income:
Deposit account interest - (5,708)
Other interest received - -
------- --------
- (5,708)
------- --------
Net finance costs: 64,130 10,807
======= ========
4. OPERATING PROFIT FOR THE YEAR
The operating profit for the year from continuing operations is
stated after charging/(crediting):
Continuing operations 2011 2010
GBP GBP
Rent operating leases 716,209 658,674
Depreciation - owned assets 229,062 157,223
Depreciation - leased assets - 4,329
Amortisation of intangibles 156,402 110,959
Loss on sale of tangible assets 2,472 22,488
Auditors' remuneration (Company GBP24,500;
2010: GBP28,626) 40,300 53,017
Auditors' remuneration (Non-audit work) - 3,000
Compensation for loss of office 15,000 48,000
Foreign exchange differences 141,856 (110,946)
The analysis of administrative expenses on continuing operations
in the consolidated income statement by nature of expense:
2011 2010
GBP GBP
Employment costs 4,732,201 4,037,990
Depreciation and amortisation 385,464 268,648
Advertising costs 811,878 385,431
Travelling and entertaining 395,059 313,493
Establishment costs 716,209 757,646
Other expenses 1,601,396 1,136,524
-------------- --------------
8,642,207 6,899,732
5. EXCEPTIONAL ITEMS
2011 2010
GBP GBP
Exceptional items on continuing operations
Goodwill impairment 4,063,594 102,180
Fixed asset write off - 77,900
Exceptional items on discontinued operations
Loss on disposal of YFS (Note 6) 220,015 -
European VAT provision - 150,000
4,283,609 330,080
---------- --------
As at 31st December 2011 the Directors have undertaken an
impairment review of the Goodwill in accordance with IAS 36 and
have recognised an impairment provision accordingly.
A provision for European VAT was provided by the Board in the
previous year. This represents a potential fiscal liability where
private vessels were fuelled in European waters.
During the previous year, Management took the decision to
liquidate Yacht Help Group Gibraltar to save costs and improve
efficiency. An impairment review of the goodwill associated with
Gibraltar resulted in the prudent decision to write off the
goodwill. The value written off during the previous period was
GBP102,180.
During the previous year the company closed an office in Palma
and Barcelona with the result of a write off of fixed assets of
GBP77,900.
6. DISCONTINUED OPERATIONS
On the 23rd June 2011 YCO Group sold the business and assets of
the Yacht Fuel Services division to World Fuel Services Europe
Ltd
2011 2010
GBP GBP
Loss for the year from discontinued operations
Revenue 9,075,838 15,292,638
Cost of sales (8,577,479) (14,645,611)
------------ -------------
Gross profit 498,359 647,027
Administrative expenses (223,464) (502,077)
Exceptional items - (150,000)
Finance costs (794) (1,613)
------------ -------------
Profit/Loss before tax 274,101 (6,663)
Attributable tax - (36,963)
Loss on disposal (220,015) -
Attributable tax - -
Profit/(loss) for the year from discontinued
operations 54,086 (43,626)
============ =============
7. INCOME TAX EXPENSE
The tax charge on the profit for the year was as follows:
2011 2010
GBP GBP
Current tax:
Corporation tax 481,833 96,888
-------------- --------------
96,888
Deferred tax - -
Total 481,833 96,888
(Loss)/profit before tax (4,113,074) 588,448
2011 2010
GBP GBP
Profit on ordinary activities from
continuing operations before taxation
multiplied by standard rate of UK
corporation tax of 26.5% (2010 - 28%) (1,089,965) 166,631
Effects of:
Non deductible expenses 50,499 35,955
Depreciation add back 7,929 4,379
Capital allowance (7,999) (15,218)
Losses carried forward/(utilised) 63,047 (89,400)
Other tax adjustments 381,470 (42,422)
Exceptional item - Goodwill impairment 1,076,852 -
-------------- --------------
1,571,798 (106,706)
-------------- --------------
Current tax charge 481,833 59,925
Deferred Tax
The Group also has estimated trading losses from foreign
subsidiaries of GBP620,000 (2010 - GBP420,000). The deferred tax
asset not provided at 26% on the grounds that the recovery could
not be foreseen with reasonable certainty was GBP161,000 (2010 -
GBP109,000).
8. EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on
earnings after tax and the weighted average number of ordinary
shares in issue during the year. 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. The
Group has two classes of dilutive potential ordinary shares being
those share options granted to employees and suppliers where the
exercise price is less than the average market price of the Group's
ordinary shares during the year and the shares to be issued to
satisfy the deferred consideration on the acquisition of a
subsidiary.
The earnings and weighted average number of shares used in the
calculation of basic earnings per share and diluted earnings per
share are as follows:
Earnings used in the calculation of Basic 2011 2010
EPS and Diluted EPS
(Loss)/profit for the year attributable
to owners of the Group (4,540,821) 491,560
(Profit)/Loss for the year from discontinued
operations used in the calculation of basic
earnings per share from discontinued operations (54,086) 43,626
Earnings used in the calculation of basic
earnings per share from continuing operations (4,594,907) 535,186
Basic EPS
Weighted average number of shares 48,355,219 48,166,584
Basic EPS - continuing activities (pence) (9.50) 1.11
Basic EPS - continuing and discontinued
activities (pence) (9.39) 1.02
Diluted EPS
Weighted average number of shares 49,177,539 49,168,375
Diluted EPS - continuing activities (pence) (9.50) 1.02
Diluted EPS - continuing and discontinued
activities (pence) (9.39) 1.00
9 RECONCILIATION OF OPERATING PROFIT TO CASH GENERATED FROM OPERATIONS
2011 2010
GBP GBP
(Loss)/profit for the year (4,540,821) 491,560
Adjustments for:
Income tax expense recognised in profit
or loss 481,833 96,888
Finance income recognised in profit or loss - (5,708)
Finance costs recognised in profit or loss 64,924 18,128
Adjustments for:
Depreciation of property, plant and equipment 229,062 161,552
Loss on sale of tangible assets 2,472 22,488
Amortisation of intangibles 156,402 110,959
Goodwill impairment 4,063,594 102,180
Fixed asset write off - 77,900
Revaluation of deferred share consideration - (23,394)
European VAT provision - 150,000
Loss on disposal of YFS 220,015 -
Operating cash inflow before movements in
working capital 677,481 1,202,553
Decrease in inventories - 4,120
Decrease in trade and other receivables 997,302 1,930,654
Increase/(decrease) in trade and other payables 11,105 (2,682,959)
Cash inflow generated from operations 1,685,888 454,368
10. GOODWILL
Group
TOTAL
COST GBP
At 1 January 2010 15,332,787
Disposals (102,180)
------------
At 31 December 2010 15,230,607
Disposals (1,794,265)
At 31 December 2011 13,436,342
============
IMPAIRMENT PROVISION
Impairment provision made during the year ended 31
December 2011 4,063,594
------------
At 31 December 2011 4,063,594
============
CARRYING AMOUNT
At 31 December 2009 15,332,787
------------
At 31 December 2010 15,230,607
At 31 December 2011 9,372,748
============
The group's goodwill principally arose from the acquisition of
YCO S.A.M which included the subsidiary undertakings YCO S.A.R.L.,
YCO Yacht Limited and YCO Limited.
For the purposes of impairment testing, goodwill is allocated to
each of the Group's cash-generating units (CGU) or groups of cash
generating units that are expected to benefit from the synergies of
the acquired subsidiaries.
As part of the group's reorganisation of its management
reporting of the group's operating activities, the CGUs have been
redefined to reflect the overall yachting activities of the group,
being the yachting services the group provides under the YCO brand.
Goodwill has therefore been allocated for impairment testing
purposes to a single CGU, 'Yachting activities'.
Yachting activities
The recoverable amount of this cash generating unit is
determined based on a value in use calculation which uses cash flow
projections based on financial budgets approved by the Directors
covering a three-year period, and a discount rate of 12.0% (2010 -
14.0%). Following the group's sale of YFS and of its decision to
streamline the group's operating activities, the Directors
assessment of goodwill suggested that impairment should be made of
GBP4,063,594. The Directors believe that any reasonably possible
change in the key assumptions on which recoverable amount is based
would not cause the aggregate carrying amount to exceed the
aggregate recoverable amount of the cash-generating unit.
11. AVAILABILITY OF THIS ANNOUNCEMENT
The financial information set out in this preliminary
announcement does not constitute statutory accounts as defined in
section 423 of the Companies Act 2006.
Copies of this announcement are available from the Company's
registered office and from its website, at www.ycogroup.com.
The report and accounts for the year ended 31 December 2011 will
be posted to shareholders in due course and will be available from
the Company's registered office and from its website, at
www.ycogroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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