Interim Results
December 02 2003 - 1:00AM
UK Regulatory
RNS Number:7001S
AdVal Group PLC
02 December 2003
Adval Group plc
Interim Results for the six months to 30 September 2003
Highlights
*Turnover on continuing business #1.4 million (2002 - #1.8 million)
*Loss before tax of #0.5 million (2002 - #0.4 million)
*Disposal of organisational development training division for #25,000
(before expenses) plus net current assets
*Pursuing strategy of aligning costs to revenues and reducing central
costs
*Awarded #2.5 million contract by Alvis Vickers Ltd over two years
*Raised #0.8 (before expenses) million by issue of unlisted Contingently
Convertible Loan Notes and placing of Ordinary shares
Chairman's statement
I am pleased to present Adval Group plc's ("Adval" or the "Group") interim
results for the six months ended 30 September 2003. Turnover on continuing
businesses was #1.368 million (2002: #1.786 million). The loss before interest
and tax, which reflects the cost of making the changes outlined below, was
#0.495million (2002: loss of #0.393 million). The effect of these changes has
been to reduce the monthly cost level going forward into the second half and, in
particular, fixed costs (including salaries).
The main events in the first six months have been covered in my Statements on 22
August (with the preliminary announcement of our results for the year to 31
March 2003), 16 September (with the audited accounts) and, most recently, at the
Annual General Meeting on 24 October.
In brief, the Group Board was reorganised in May when I was appointed Chairman,
Dennis Quilter became Deputy Chairman, Ian Etchells resigned as CEO and Sir
Jeremy Handley resigned as Non-executive director. The costs of these changes
have been borne in the six months under review.
We have disposed of the trade, goodwill and fixed assets of the non-core
organisational development training division, which was not contributing
satisfactorily; this was sold to its senior management for #25,000 (before
expenses), with Adval also retaining the current assets and liabilities. In line
with the strategy of increasing accountability within the Group, we have changed
remuneration structures reduced central costs and are exploring ways of
continuing this process. In particular, we have entered into a sub-contract
commission arrangement on Adval Key Knowledge under which the sub-contractor is
involved in sharing the risk and is rewarded on a commission basis.
We have been awarded a #2.5 million contract over two years by Alvis Vickers Ltd
to support its contract for the introduction of two armoured engineering
vehicles due to go into service with the British Army in 2005. Our contract
encompasses the design, development and production of training material required
to deliver the operation and maintenance courses and also includes the provision
of face to face training. As the first step towards longer-term growth, we have
reinforced our sales effort by recruitment.
Taken together, these actions represent significant progress towards the
immediate objective of achieving modest profitability on a monthly basis by the
end of the financial year and are significant building blocks for the
longer-term. We have recently experienced some slippage in two significant new
contracts but this is normal in the start-up phase of contracts of this size and
complexity and we see it as a timing issue over the year-end rather than having
longer term effects.
As the first step in rebuilding the balance sheet after the losses of recent
years, we have raised #0.768 million (before expenses) through the issue of an
Unlisted Contingently Convertible 5.5% 2008 Loan Note and placing of Ordinary
shares. This was approved at the General Meeting held on 24 October.
Finally, I would like once again to thank our staff, whose positive approach
continues to give grounds for confidence in our future.
Dr Lars Ahrell, Chairman
Background information:
Adval is a business services group offering bespoke e-learning, consulting,
software testing and generic training products.
For further information, please contact:
Adval Group plc
Dr Lars Ahrell, Chairman 01296 388100
Arbuthnot Securities
Guy Peters 020 7002 4600
AdVal Group plc
Unaudited Consolidated Profit and Loss Account
For the 6 months ended 30 September 2003
6 months ended 6 months ended
30 September 2003 30 September 2002
#'000 #'000 #'000 #'000
Turnover
- continuing activities 1,368 1,786
- discontinued activities 340 705
------ -------
1,708 2,491
Cost of sales
- continuing activities (756) (881)
- discontinued activities (305) (560)
------- ------
(1,061) (1,441)
------ ------
Gross profit 647 1,050
Administrative expenses
- continuing activities (1,036) (1,151)
- discontinued activities (91) (287)
------- -------
(1,127) (1,438)
------ -------
Operating loss (480) (388)
Net interest (15) (5)
------ -------
Loss on ordinary activities (495) (393)
before taxation
Tax on loss on ordinary - -
activities ------ -------
Loss on ordinary activities after (495) (393)
taxation
------ -------
Loss per ordinary share (1.64)p (1.32)p
------ -------
AdVal Group plc
Unaudited Consolidated Balance sheet
As at 30 September 2003
30 September 2003 31 March 2003 30 September 2002
#'000 #'000 #'000 #'000 #'000 #'000
Tangible assets 180 227 360
Intangible assets 184 194 3,388
------- ------- -------
364 421 3,748
Current assets
Stock and work in 95 92 411
progress
Debtors 781 899 1,212
Cash at bank 464 163 136
------ ------ ------
1,340 1,154 1,759
Creditors: amounts
falling
Due within one 944 946 941
year
------ ------ ------
Net current assets 396 208 818
------ ------- -------
Total assets less 760 629 4,566
current liabilities
Creditors: amounts
falling
Due after one year
Loan notes 597 - -
Other provisions - 61 166
------- ------- --------
597 61 166
------- ------- -------
163 568 4,400
------- ------- -------
Capital and reserves
Called up share capital 344 300 300
Share premium account 8,050 8,004 8,004
Other reserves (8) (8) (8)
Profit and loss account (8,223) (7,728) (3,896)
------ ------- -------
Shareholders'funds 163 568 4,400
------- ------- -------
AdVal Group plc
Unaudited Consolidated Cash Flow Statement
For the 6 months ended 30 September 2003
6 months ended 6 months ended
30 September 30 September
2003 2002
#'000 #'000
Note
Net cash flow from operating activities 4 57 (369)
Returns from investment and servicing
of finance
Interest (paid)/received (15) (5)
Taxation - -
Capital expenditure and financial
investment
Purchase of tangible fixed assets (29) (15)
--------- ---------
Net cash outflow from capital
expenditure and financial investment (29) (15)
--------- ---------
Financing
Issue of shares net of expenses 102 -
Issue of loan notes net of expenses 597 -
Repayment of borrowings (10) (10)
--------- ---------
689 (10)
--------- ---------
--------- ---------
Increase/(decrease) in cash 702 (399)
--------- ---------
Notes
1. The interim financial statements have been prepared on the basis of the
accounting policies set out in the statutory accounts for the year ended 31
March 2003.
2. The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. These statements do not
require to be reported on by the auditors. The comparative financial information
is based upon non-statutory accounts for the 6-month period ended 30 September
2002.
3 The earnings per ordinary share is based on the loss for the financial
year divided by the weighted average number of called up shares during the year.
The loss for the purposes of calculating the loss per ordinary share was
#495,407, (2002: loss #393,320). The weighted average number of called up
ordinary shares was 30,286,266 (2002: 29,783,617).
4. Net cash inflow from operating activities
2003 2002
#'000 #'000
Operating loss (480) (388)
Depreciation and amortisation 86 176
Decrease/(increase) in stocks (3) 18
Decrease in debtors 118 421
Increase/(decrease) in creditors 336 (596)
------ ------
Net cash inflow/(outflow) from operating activities 57 (369)
------ ------
5. Copies of the interim results are being sent to shareholders. Further
copies can be obtained from the Company's registered office: Ringwood House,
Walton Road, Aylesbury, Bucks HP21 7QP.
This information is provided by RNS
The company news service from the London Stock Exchange
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