RNS Number:8630S
Staffing Ventures PLC
04 December 2003
Chairman's Statement
I am pleased to present the results for Staffing Ventures plc for the six months
ended 30 September 2003. Operating loss before goodwill amortisation and
exceptional items was #89,697 (2002: profit #32,478) on turnover of #4,221,877
(2002: #4,689,935). Exceptional items amounted to #511,049 (2002: #nil).
Pre-tax losses amounted to #698,403 (2002: #41,045).
The six-month result represented a reasonable performance at an operating level
by the individual trading divisions in such a competitive environment. As has
been stated in previous Chairman's Statements, Staffing Ventures has been
looking to expand its back office and payroll outsourcing division which will
allow the Company to build a profitable platform for future growth. Without such
an acquisition and as highlighted by these results the Company will continue to
struggle to achieve a significant level of operating profit.
As such the search for a suitable acquisition target was stepped up and on-going
discussions with the owners of Parys Snowdon Group Limited have now resulted in
that company agreeing to sell us their payroll services division, which provides
payroll, pensions, and other related services principally to NHS organisations
throughout the United Kingdom. Details of the acquisition and the related
fundraising are contained in a separate announcement.
Full details of the acquisition, which is subject to shareholder approval at an
Extraordinary General Meeting to be held on 6 January 2004, are included in a
Circular which will be sent to shareholders along with these Interim Results. As
a consequence of the size of the acqusition, which constitutes a reverse
takeover of the Company under the AIM Rules, dealings in the ordinary shares of
Staffing Ventures, were suspended, at the Board's request on 24 October 2003.
This suspension is expected to be lifted on today's release of these interim
results and the announcement of the acquisition and related fundraising.
Other developments during the six months ended 30 September 2003 included the
continuing development of our "Supporta" back office payroll and credit control
service, which was officially launched on 9 September and the opening of our new
Wrencare office in Birmingham, which will supply social workers in the Midlands
region as a sister business to our Wrencare division in London.
As I reported on 30 September 2003, our new Chief Executive, Gavin Kaye, is
currently undertaking a detailed review of the individual operations within the
Group to improve the overall efficiency and performance and to maximise each
business's ability to benefit from the beginnings of an up-turn in the
recruitment sector. Over the last two months, I am pleased to report that the
Transcend brewery transport agency business has now been brought into the group
as a wholly-owned new trading division following the liquidation of Transcend
Recruitment Limited, in which we held a minority interest. The underlying
business itself is solid and provides excellent opportunities to develop
further. In London we have recently taken occupation of new offices in Bakers
Yard, London EC1 which has given us an opportunity to consolidate under one roof
the Wrencare, Capital Healthcare Associates and Next Generation I.T. businesses,
which will not only lead to cost savings but improve efficiency and provide
other synergistic benefits. We anticipate further rationalisation of the
remaining recruitment business during the remainder of the current financial
year.
With Parys Snowdon Payroll Services Limited joining the Group (subject to
shareholder approval) in early January, we believe that 2004 offers Staffing
Ventures exciting opportunities and growth potential, both organically and by
further acquisitions.
In order to reflect the Group's widening support services base, we are proposing
to change the name of the parent company to Supporta plc at the Extraordinary
General Meeting on 6 January 2004.
Bob Holt
4 December 2003
Unaudited Unaudited Unaudited
6 months to 6 months to Year ended
30 Sept 03 30 Sept 02 31 Mar 03
Note
Turnover 4,221,877 4,689,935 9,434,046
Cost of sales (3,307,231) (3,604,251) (7,315,246
Gross profit 914,646 1,085,684 2,118,800
Administrative expenses (1,562,467) (1,096,227) (2,374,193)
-------- -------- --------
Operating loss (647,821) (10,543) (255,393)
----------------------- ------ -------- -------- --------
Operating loss before exceptional
items and goodwill amortisation (89,697) 32,478 48,352
Exceptional items 5 (511,049) - (209,595)
Amortisation of goodwill (47,075) (43,021) (94,150)
----------------------- ------ -------- -------- --------
Operating loss (647,821) (10,543) (255,393)
Loss on disposal of fixed assets (25,000) - -
Net Interest (25,582) (30,502) (84,258)
-------- -------- --------
Loss on ordinary activities
before taxation (698,403) (41,045) (339,651)
Tax on loss on ordinary
activities (760) - -
Loss on ordinary activities
after taxation (699,163) (41,045) (339,651)
Equity minority interests 4,727 (1,716) 2,634
-------- -------- --------
Loss transferred from reserves (694,436) (42,761) (337,017)
-------- -------- --------
Loss per share 1 (9.05p) (0.90p) (7.04p)
Basic and diluted (2002 restated)
Unaudited Unaudited Unaudited
6 months to 6 months to Year ended
30 Sept 03 30 Sept 02 31 Mar 03
# # #
Fixed assets
Intangible assets 1,860,549 1,916,155 1,907,624
Tangible assets 105,646 236,152 111,170
Investments 304,876 205,000 329,876
-------- -------- --------
2,271,071 2,357,307 2,348,670
Current Assets
Debtors 1,279,629 1,959,201 1,753,602
Cash at bank and in hand 455,710 - 1,420,941
-------- -------- --------
1,735,339 1,959,201 3,174,543
Creditors: amounts falling due
within one year (2,003,302) (2,550,656) (2,796,740)
Net current (liabilities)/assets (267,963) (591,455) 377,803
-------- -------- --------
Total assets less current
liabilities 2,003,108 1,765,852 2,726,473
Creditors: amounts falling due
after more than one year (45,880) (103,598) (70,082)
-------- -------- --------
1,957,228 1,662,254 2,656,391
-------- -------- --------
Capital and reserves 383,761 237,477 383,761
Called up share capital 3,102,122 1,955,663 3,102,122
Profit and loss account (1,485,781) (497,089) (791,345)
Equity shareholders' funds 2,000,102 1,696,051 2,694,538
Minority interests (42,874) (33,797) (38,147)
-------- -------- --------
1,957,228 1,662,254 2,656,391
-------- -------- --------
Unaudited Unaudited Unaudited
6 months to 6 months to Year ended
30 Sept 03 30 Sept 02 31 Mar 03
# # #
Note
Net cash (outflow) / inflow from
operating activities 4 (479,392) (558,812) 105,187
Returns on investments and servicing
of finance
Interest received 12,242 - 23,645
Interest paid (37,824) (30,502) (107,903)
Net cash outflow from returns on
investments and servicing of finance (25,582) (30,502) (84,258)
Taxation
Tax paid (43,193) - -
Capital expenditure and
financial investment (33,492) (46,281) (61,384)
Purchase of tangible fixed assets (33,492) (46,281) (61,384)
Purchase of shares in investee
companies - (32,968) -
Loans to participating interests - - (31,731)
-------- -------- --------
Net cash outlflow from capital
expenditure and financial investment 33,492 79,249 93,115
Acquisitions and disposals
Purchase of subsidiary undertakings - - (25,000)
Payments in respect of previous
acquisitions - - (24,588)
Purchase of investments (32,844)
Net cash outflow from acquisitions
and disposals - - (82,432)
-------- -------- --------
Financing
Issue of ordinary share capital
(net of expenses) - - 1,292,743
Repayment of loan notes - (1,068,500) (1,068,500)
Movement in net borrowings (424,927) 577,317 285,351
Capital element of finance lease
rentals (3,519) (5,306) (9,487)
-------- -------- --------
Net cash (outflow) / inflow from
financing (428,446) (496,489) 500,107
-------- -------- --------
(Decrease) / increase in cash (1,010,105) (1,165,052) 345,489
Reconciliation of net cashflow
to movement in net funds / (debt)
Increase / (decrease) in cash (1,010,105) (1,165,052) 345,489
Cash inflow / (inflow) from financing 424,927 (577,317) (285,351)
Cash outflow from hire purchase contracts 3,519 5,306 9,487
Cash outflow from repayment of loan notes - 1,068,500 1,068,500
Movement in net (debt) / funds (581,659) (668,563) 1,138,125
Opening net funds / (debt) 298,398 (839,727) (839,727)
-------- -------- --------
Closing net (debt) / funds (283,261) (1,508,290) 298,398
-------- -------- --------
1 The calculation of earnings per share is based on the loss for the period of
#694,436 and on the weighted average number of shares in issue during the
period of 7,675,878 (six months to 30 September 2002 - 4,749,549 year ended
31 March 2003 - 4,789,635). The number of shares for the six months to 30
September 2002 have been adjusted to reflect the 1 for 100 share
consolidation that took place on 24 March 2003.
2 The interim financial statement has been prepared on the basis of accounting
policies set out in the Group's statutory accounts for the year ended 31
March 2003. The interim report was approved by the Board on 4 December 2003
but has neither been audited or reviewed by the Group's auditors.
3 These accounts do not constitute statutory accounts. The comparative figures
for the year ended 31 March 2003 have been extracted from the statutory
accounts for that year. These statutory accounts have been delivered to the
Registrar of Companies, the auditors' report on which was unqualified and
did not contain a statement under section 237(2) or (3) of the Companies Act
1985.
4 Reconciliation of operating profit to net outflow from operating
activities
Unaudited Unaudited Unaudited
6 months to 6 months to year ended
30 Sept 03 30 Sept 02 31 March 03
Operating loss (647,821) (10,543) (255,393)
Depreciation and amortisation 86,091 66,383 130,905
Decrease / (increase) in debtors 473,973 (579,298) (328,185)
(Decrease) / increase in creditors (391,635) (35,354) 557,860
-------- --------- ----------
Net cash (outflow) / inflow from (479,392) (558,812) 105,187
operating activities
-------- --------- ----------
5 Exceptional items Unaudited
6 months to
30 Sept 03
Supporta costs 267,152
Write off loan to investee 158,018
Litigation costs 35,774
Payment to former director 50,105
--------
511,049
--------
6 This report is being sent out to shareholders and copies will be made
available at the Company's registered office, 22a Theobalds Road London WC1X
8PF.
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END
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