TIDMBQS
RNS Number : 0533J
Baqus Group PLC
24 March 2010
FOR RELEASE
7.00 AM
24 MARCH 2010
BAQUS GROUP PLC
("Baqus" or "the Group")
Interim results for the 6 months ended 31 December 2009
Baqus Group plc (AIM:BQS), the building consultancy and quantity surveying
group,
today announces its interim results for the six months ended 31 December 2009.
Financial highlights
+----------+-----------------------------------------------------------------+
| · | Revenue GBP3,845,000 (H1 2008: GBP3,980,000) |
| | |
+----------+-----------------------------------------------------------------+
| · | Gross profit GBP606,000 (H1 2008: GBP1,131,000) |
| | |
+----------+-----------------------------------------------------------------+
| · | Loss before tax and exceptional items GBP347,000 (H1 2008: |
| | profit of GBP365,000) |
+----------+-----------------------------------------------------------------+
| · | Exceptional items GBP123,000 (H1 2008: NIL) |
| | |
+----------+-----------------------------------------------------------------+
| · | Loss after tax GBP339,000 (H1 2008: profit of GBP262,000) |
| | |
+----------+-----------------------------------------------------------------+
| · | Basic EPS of (0.3)p (H1 2008: 0.23p) |
| | |
+----------+-----------------------------------------------------------------+
Operational highlights
+----------+-----------------------------------------------------------------+
| · | Cost base reduced by GBP0.5 million per annum |
| | |
+----------+-----------------------------------------------------------------+
| · | Order book maintained at GBP8.0 million (H1 2008: GBP8.2 |
| | million) |
+----------+-----------------------------------------------------------------+
| · | Successful integration of Nigel Rose group |
| | |
+----------+-----------------------------------------------------------------+
Commenting on the results, Clive Sayer, Chief Executive of Baqus Group plc,
said: "Although trading in the construction industry remains challenging, the
Group's diverse client base spread across both the public and private sectors
has enabled Baqus to enter the second half of the current financial year with a
steady forward order book.
"With the recent acquisition of Nigel Rose now fully integrated, the Group's
cost base reduced and a positive cash position, Baqus is well positioned to
benefit from any upturn in the construction industry in general."
Contact:
+---------------------------------+---------------------------------+
| Baqus Group plc | |
+---------------------------------+---------------------------------+
| Clive Sayer (Chief Executive) | 07967 132 221 |
| | |
+---------------------------------+---------------------------------+
| Patrick Lineen (Finance | 07818 034 452 |
| Director) | |
+---------------------------------+---------------------------------+
| | |
+---------------------------------+---------------------------------+
| Seymour Pierce (Nominated Adviser and Broker) |
+-------------------------------------------------------------------+
| Mark Percy / David Foreman | 020 7107 8000 |
| | |
+---------------------------------+---------------------------------+
| | |
+---------------------------------+---------------------------------+
| Cubitt Consulting (Financial Public Relations Advisers) |
+-------------------------------------------------------------------+
| Chris Lane / James Verstringhe | 020 7367 5100 |
+---------------------------------+---------------------------------+
Background Note:
Baqus was admitted to trading on AIM on the 14 December 2007, having raised
GBP1.75 million through a placing of 17,500,000 Ordinary Shares.
Baqus is a national building consultancy and quantity surveying group offering
construction cost consultancy, project management and building surveying
services to clients in the UK. The Group works across a number of business
sectors including: health, education, leisure, hospitality, affordable housing,
residential, commercial and conservation. Clients include local authorities,
central government, NHS, residential Housing Associations, commercial companies
and developers.
The Quantity Surveying Market in the UK, estimated to be worth in excess of GBP1
billion at the time of flotation, is highly fragmented and dominated by a small
number of major players, which the Baqus Group Directors believe make it ripe
for consolidation. Since the Group's admission to AIM, they have been pursuing a
strategy of acquiring small to medium sized Quantity Surveying practices across
the country, the most recent of which is Nigel Rose Group. Previous activity
includes the acquisition of Sworn King and Partners in 2008. Once acquired, the
practices are incorporated into the wider Group with a particular emphasis on
exploiting opportunities for operational synergies with existing business units.
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am pleased to report Baqus Group's interim results for the six months ended 31
December 2009.
The Group has taken significant action during the period to combat the effects
of extremely tough trading conditions in the wider economy and the construction
sector in particular. Although activity in the industry has continued at a
subdued level, projects in both the public and private sectors have been subject
to delay and in some cases cancellation, largely due to Government cutbacks and
a lack of bank lending. Added to this, the combination of increased competition
and an overall reduction in new contracts has led to a general reduction in
margins.
Against this background the Group continues to make progress. The forward order
book remains steady at GBP8.0 million, the same level as at 31 December 2008 and
we have acted quickly and decisively to manage our cost base, which we have
reduced by GBP0.5 million per annum.
The Board has acted carefully to balance the need to make savings with the
requirement to retain and train skilled staff so that the Group is primed to
respond to an upturn in the industry.
Results
Following the trading update in February 2010, the Group is now trading in line
with revised forecasts for the year ending 30 June 2010.
The unaudited accounts show a loss before taxation and exceptional items of
GBP347,000 for the half year ended 31st December 2009 (31st December 2008:
GBP365,000 profit) on turnover of GBP3,845,000(31st December 2008:
GBP3,980,000). The loss per share was 0.3p (31st December 2008: earnings per
share 0.23p). As a result of the cost reduction programme, the Group has
incurred GBP123,000 of exceptional costs on redundancies and office closures.
Baqus finished the half year with a reasonable cash position of GBP189,000 at
the 31 December 2009. This takes into account the redemption of GBP600,000 of
loan notes on 14 December 2009.
Operating Review
The Baqus Group comprises five businesses: Boxall Sayer, Fletcher McNeill,
Denley King, Sworn King and Nigel Rose, which was acquired on 30 June 2009.
Overall the businesses are enjoying a good level of enquiries in an increasingly
competitive environment where margins have either come under pressure or been
reduced. Baqus has looked to minimise the impact of these pressures by
exploiting a number of synergies between the businesses to reduce operating
costs.
Office Consolidation
Following the acquisition of Nigel Rose Group in June 2009, the Warrington and
Cheltenham offices have been closed and staff relocated to the Liverpool and
Oxford offices respectively. The former Baqus London head office has been closed
and staff moved into the Nigel Rose London office while the Winchester and
Wokingham offices are being consolidated into a more efficient space in
Basingstoke.
In addition, the Poole office was relocated to smaller, more efficient modern
space in Bournemouth.
Dividend
The Board regularly reviews the Group's dividend policy and, given the current
exceptional trading environment, has decided on this occasion not to recommend
the payment of a dividend. The Group, however, would like to state that it
remains committed to paying dividends and will resume payments once the trading
environment has improved.
Staff
I would like to take the opportunity to thank my fellow Directors and the staff
throughout the Group for their commitment and hard work during a very difficult
time. The Board is proud of their resilience and the way in which the staff of
the individual businesses have responded to being part of a larger Group, many
of whom see it as an opportunity to enhance their careers.
Current Outlook and Trading
I am encouraged that the Group's diverse client base spread across both the
public and private sectors has enabled Baqus to enter the second half of the
current financial year with a steady forward order book.
Although the intake of orders has slowed, Baqus is experiencing a good flow of
enquiries from our clients and I am confident that going forward the Group will
be successful in converting a number of these leads into firm orders at sensible
margins.
With the recent acquisition of Nigel Rose now fully integrated, the Group's cost
base significantly reduced and a positive cash position, Baqus is well
positioned to benefit from any upturn in the wider construction industry.
Clive Sayer
24 March 2010
+------------------------------+------+---------------------+-------------+-----------+
| BAQUS GROUP plc | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| Condensed Consolidated | | | | |
| Statement of Comprehensive | | | | |
| Income | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| For the six months ended 31 | | | | |
| December 2009 | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| | | Six | Six | Year |
| | | months | months | |
+------------------------------+------+---------------------+-------------+-----------+
| | | ended | ended | ended |
+------------------------------+------+---------------------+-------------+-----------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+------------------------------+------+---------------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+------------------------------+------+---------------------+-------------+-----------+
| Continuing operations |Note | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+------+---------------------+-------------+-----------+
| Revenue | | 3,845 | 3,980 | 7,853 |
+------------------------------+------+---------------------+-------------+-----------+
| Cost of sales | | (3,239) | (2,849) | (5,588) |
+------------------------------+------+---------------------+-------------+-----------+
| Gross profit | | 606 | 1,131 | 2,265 |
+------------------------------+------+---------------------+-------------+-----------+
| Operating expenses | | (938) | (760) | (1,510) |
+------------------------------+------+---------------------+-------------+-----------+
| Exceptional items | 3 | (123) | - | - |
+------------------------------+------+---------------------+-------------+-----------+
| Operating (loss)/profit | | (455) | 371 | 755 |
+------------------------------+------+---------------------+-------------+-----------+
| Investment revenue | 2 | 1 | 43 | 51 |
+------------------------------+------+---------------------+-------------+-----------+
| Finance costs | 2 | (16) | (49) | (67) |
+------------------------------+------+---------------------+-------------+-----------+
| (Loss)/Profit before | | (470) | 365 | 739 |
| taxation | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| Taxation | 4 | 131 | (103) | (220) |
+------------------------------+------+---------------------+-------------+-----------+
| (Loss)/Profit for half year | | (339) | 262 | 519 |
| attributable to equity | | | | |
| holders of the parent | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| Dividend (GBP,000) | 5 | 73 | 125 | 181 |
+------------------------------+------+---------------------+-------------+-----------+
| Basic earnings per share | 6 | (0.30)p | 0.23p | 0.46p |
| (pence) | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| Diluted earnings per share | 6 | (0.27)p | 0.21p | 0.42p |
| (pence) | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| | | | | |
+------------------------------+------+---------------------+-------------+-----------+
| | | | | |
+------------------------------+------+---------------------+-------------+-----------+
+------------------------------+------+--------+-------------+-------------+-----------+
| Condensed Consolidated Statement of Financial Position |
+--------------------------------------------------------------------------------------+
| at 31 December 2009 |
+--------------------------------------------------------------------------------------+
| | | | As at | As at | As at |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | (unaudited) | (unaudited) | (audited) |
+------------------------------+------+--------+-------------+-------------+-----------+
| |Note | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Non-current assets | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Intangible assets | 7 | | 8,516 | 8,443 | 8,516 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Property, plant and | | | 336 | 283 | 332 |
| equipment | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | 8,852 | 8,726 | 8,848 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Current assets | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Trade and other receivables | | | 3,349 | 3,257 | 3,599 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Cash and cash equivalents | | | 189 | 998 | 1,158 |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | 3,538 | 4,255 | 4,757 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Current liabilities | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Trade and other payables | | | (582) | (928) | (1,243) |
+------------------------------+------+--------+-------------+-------------+-----------+
| Current income tax | | | (823) | (314) | (218) |
| liabilities | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Financial liabilities | | | (28) | - | (35) |
+------------------------------+------+--------+-------------+-------------+-----------+
| Borrowings | 8 | | (349) | (600) | (600) |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | (1,782) | (1,842) | (2,096) |
+------------------------------+------+--------+-------------+-------------+-----------+
| Net current assets | | | 1,756 | 2,413 | 2,661 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Total assets less current | | | 10,608 | 11,139 | 11,509 |
| liabilities | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Non-current liabilities | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Borrowings | 8 | | - | (349) | (349) |
+------------------------------+------+--------+-------------+-------------+-----------+
| Trade and other payables | | | - | - | (127) |
+------------------------------+------+--------+-------------+-------------+-----------+
| Financial liabilities | | | (28) | - | (40) |
+------------------------------+------+--------+-------------+-------------+-----------+
| Deferred income tax | | | (4) | (3) | (5) |
| liability | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Net assets | | | 10,576 | 10,787 | 10,988 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Equity | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| Share capital | | | 5,663 | 5,663 | 5,663 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Share premium account | | | 4,690 | 4,690 | 4,690 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Retained earnings | | | 223 | 434 | 635 |
+------------------------------+------+--------+-------------+-------------+-----------+
| Total equity | | | 10,576 | 10,787 | 10,988 |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
| | | | | | |
+------------------------------+------+--------+-------------+-------------+-----------+
+--------------------------------+-+-------------+-------------+-----------+
| Condensed Consolidated Cash | | | | |
| Flow Statement | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| for the six months to 31 | | | | |
| December 2009 | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| | | Six | Six | |
| | | months | months | |
+--------------------------------+-+-------------+-------------+-----------+
| | | ended | ended | Year |
| | | | | ended |
+--------------------------------+-+-------------+-------------+-----------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--------------------------------+-+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+--------------------------------+-+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-+-------------+-------------+-----------+
| Net cash outflow from | | (210) | (573) | (168) |
| operating activities | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Investing activities | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Interest received | | 1 | 43 | 51 |
+--------------------------------+-+-------------+-------------+-----------+
| Purchase of property, plant | | (74) | (52) | (94) |
| and equipment | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Sale of property, plant and | | 6 | 5 | 8 |
| equipment | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Purchase of intangible assets | | - | - | (9) |
+--------------------------------+-+-------------+-------------+-----------+
| Acquisitions net of cash | | - | (175) | (373) |
| acquired | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Net cash used in investing | | (67) | (179) | (417) |
| activities | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Financing activities | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Dividends paid | | (73) | (125) | (181) |
+--------------------------------+-+-------------+-------------+-----------+
| Repayments of obligations | | (19) | - | 15 |
| under finance leases | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Receipts from issue of shares | | - | - | 45 |
+--------------------------------+-+-------------+-------------+-----------+
| Less issue costs | | - | | (11) |
| | | | - | |
+--------------------------------+-+-------------+-------------+-----------+
| Repayment of loan notes | | (600) | (602) | (602) |
+--------------------------------+-+-------------+-------------+-----------+
| Net cash used in financing | | (692) | (727) | (734) |
| activities | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Net decrease in cash | | (969) | (1,479) | (1,319) |
| equivalents | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Cash and Cash Equivalents at | | 1,158 | 2,477 | 2,477 |
| beginning of period | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| Cash and cash equivalents at | | 189 | 998 | 1,158 |
| end of period | | | | |
+--------------------------------+-+-------------+-------------+-----------+
| | | | | |
+--------------------------------+-+-------------+-------------+-----------+
+--------------------------------+-+---------+---------+----------+---------+
| |
+---------------------------------------------------------------------------+
| Condensed Consolidated Statement of Changes in Equity |
+---------------------------------------------------------------------------+
| For the six months ended 31 | | | | | |
| December 2009(unaudited) | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| | | Share | Share | Retained | |
| | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| | | capital | premium | earnings | Total |
+--------------------------------+-+---------+---------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-+---------+---------+----------+---------+
| Changes in equity | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| As at 1 July 2009 | | 5,663 | 4,690 | 635 | 10,988 |
+--------------------------------+-+---------+---------+----------+---------+
| Equity dividends paid | | - | - | (73) | (73) |
+--------------------------------+-+---------+---------+----------+---------+
| Total recognised income and | | - | - | (339) | (339) |
| expense for the period | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| As at 31 December 2008 | | 5,663 | 4,690 | 223 | 10,576 |
+--------------------------------+-+---------+---------+----------+---------+
| | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
+--------------------------------+-+---------+---------+----------+---------+
| |
+---------------------------------------------------------------------------+
| For the six months ended 31 | | | | | |
| December 2008(unaudited) | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| | | Share | Share | Retained | |
| | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| | | capital | premium | earnings | Total |
+--------------------------------+-+---------+---------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-+---------+---------+----------+---------+
| Changes in equity | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| As at 1 July 2008 | | 5,625 | 4,693 | 297 | 10,615 |
+--------------------------------+-+---------+---------+----------+---------+
| New shares issued | | 38 | 7 | - | 45 |
+--------------------------------+-+---------+---------+----------+---------+
| Issue costs | | - | (10) | - | (10) |
+--------------------------------+-+---------+---------+----------+---------+
| Equity dividends paid | | - | - | (125) | (125) |
+--------------------------------+-+---------+---------+----------+---------+
| Total recognised income and | | - | - | 262 | 262 |
| expense for the period | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| As at 31 December 2008 | | 5,663 | 4,690 | 434 | 10,787 |
+--------------------------------+-+---------+---------+----------+---------+
| | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
+--------------------------------+-+---------+---------+----------+---------+
| For the year ended 30 June | | Share | Share | Retained | |
| 2009(audited) | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| | | capital | premium | earnings | Total |
+--------------------------------+-+---------+---------+----------+---------+
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-+---------+---------+----------+---------+
| Changes in equity | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| As at 1 July 2008 | | 5,625 | 4,693 | 297 | 10,615 |
+--------------------------------+-+---------+---------+----------+---------+
| New shares issued | | 38 | 7 | - | 45 |
+--------------------------------+-+---------+---------+----------+---------+
| Issue costs | | - | (10) | - | (10) |
+--------------------------------+-+---------+---------+----------+---------+
| Equity dividends paid | | - | - | (181) | (181) |
+--------------------------------+-+---------+---------+----------+---------+
| Total recognised income and | | - | - | 519 | 519 |
| expense for the period | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
| As at 30 June 2009 | | 5,663 | 4,690 | 635 | 10,988 |
+--------------------------------+-+---------+---------+----------+---------+
| | | | | | |
+--------------------------------+-+---------+---------+----------+---------+
Notes to the Unaudited Interim Report
for the 6 months ended 31 December 2009
1. Accounting Policies
Basis of preparation
The results for the period ended 31 December 2009, which are neither audited nor
reviewed, have been prepared on the basis of accounting policies consistent with
those set out in the Annual Report to shareholders of Baqus Group plc for the
year ended 30 June 2009.
The condensed consolidated interim financial statements do not include all of
the information and disclosures required for full annual financial statements,
do not comprise statutory accounts within the meaning of Section 435 of the
Companies Act 2006, and should be read in conjunction with the 2009 Annual
Report of Baqus Group plc, which have been prepared in accordance with IFRSs as
adopted by the European Union.
Statutory accounts for the year ended 30 June 2009 were approved by the Board of
Directors on 18 November 2009 and delivered to the Registrar of Companies. The
report of the auditors on those accounts was unqualified, did not included a
reference to any matters to which the auditors drew attention by way of emphasis
with qualifying their report and did not contain statements under section 498(2)
or (3) of the Companies Act 2006.
The directors have reviewed the financial resources available to the Group and
have concluded that the Group is a going concern. This conclusion is based upon,
amongst other matters, a review of the Group's financial projections for a
period of twelve months following the date of this announcement, together with a
review of the cash and committed borrowing facilities available to the Group.
Accordingly, the going concern basis has been used in preparing these half year
condensed consolidated financial statements.
IAS 34 'Interim financial reporting' is not applicable to these half year
condensed consolidated financial statements and has therefore not been applied.
The interim financial statements have been prepared on the historical cost basis
and the principal accounting policies adopted are set out below.
Basis of consolidation
The Group's interim financial statements consolidate the interim financial
statements of the Company and entities controlled by the Company (its
subsidiaries). Control is achieved where the company has the power to govern the
financial and operating polices of an investee entity so as to obtain benefits
from its activities. The acquisitions of subsidiaries are accounted using the
purchase method.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition.
Goodwill represents the excess of acquisition cost over the fair value of the
Group's share of the identifiable net assets of the acquired subsidiary at the
date of acquisition. Any deficiency of the cost of acquisition below the fair
value of the identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition.
The results of subsidiaries acquired during the year are included in the
consolidated income statement from the effective date of acquisition or up to
the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the interim financial statements of
subsidiaries to bring accounting policies used into line with those used by the
Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Revenue
Revenue represents the invoiced value of services provided net of value added
tax. It comprises the amounts billed to clients in respect of the provision of
quantity surveying services together with the movement in revenue recognised but
not invoiced.
Revenue recognition
Revenue is recognised as contract activity progresses to reflect the Group's
performance of its contractual obligations. The right to consideration, by
reference to the value of the work performed, is included in the accounts as
accrued income under receivables. Where the amount which the client will accept
or be able to pay is uncertain, provision has been made to reduce the accrued
income to its net realisable value. Where the substance of a contract is that a
right to consideration does not arise until the occurrence of a critical event,
revenue is not recognised until that event occurs.
Retirement benefit costs
Retirement benefits to employees are provided by defined contribution schemes
that are funded by the Group and employees. Payments are made to pension trusts
that are financially separate from the Group.
Goodwill
Goodwill arising from the purchase of subsidiary undertakings, represents the
excess of the cost of acquisition over the Group's interest in the fair value of
the identifiable asset, liabilities and contingent liabilities of the subsidiary
acquired, and is capitalised as an intangible asset in accordance with the
requirements of IFRS 3.
Goodwill is measured at cost less any accumulated impairment losses and is
reviewed annually for any impairment losses. Any impairment losses are
recognised through the income statement.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment losses. Depreciation is provided on all property, plant and
equipment at rates calculated to write off the cost, less estimated residual
value of each asset evenly over its expected useful economic life, as follows:
+---------------------------------+---------------------------------+
| Motor vehicles | 25%-33.33% per annum |
+---------------------------------+---------------------------------+
| Fixtures, fittings and | 10-20% per annum |
| equipment | |
+---------------------------------+---------------------------------+
| Computer | 33-50% per annum |
+---------------------------------+---------------------------------+
Financial Instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of the
instrument. Issue costs are offset against the proceeds of such instruments.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost. Appropriate allowances for estimated irrecoverable
amounts are recognised in the income statement when there is objective evidence
that the asset is impaired.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances with banks.
Trade payables
Trade payables are initially measured at fair value and subsequently at
amortised cost.
Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. After initial recognition borrowings are
measured at amortised cost. Borrowing costs are recognised in profit and loss in
the period in which they are incurred.
Equity
Equity instruments issued by the Group are recorded at the proceeds received net
of direct costs.
Leasing
Rentals paid under operating leases are charged against profits on a straight
line basis over the period of the lease.
Deferred taxation
Deferred tax is recognised in respect of all temporary differences which have
originated but not reversed at the balance sheet date. Temporary differences are
differences between taxable profits and the results as stated in the interim
financial statements which arise from the inclusion of gains and losses in tax
assessments in periods different from those in which they are recognised in the
interim financial statements.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. The Group has only one class of share in
existence.
Finance costs
Finance costs are recognised in the interim income statement in the year in
which they are incurred.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting
estimates may, by definition, vary from the actual results. The Directors
considered the critical accounting estimates and judgements used in the interim
financial statements and concluded that the main areas of judgement are:
· Revenue recognition policies in respect of contracts which straddle the
year end;
· Valuation of intangible assets.
These estimates are based on historical experience and various other assumptions
that management and the Board of Directors believe are reasonable under the
circumstances and discussed, to the extent necessary, in more detail in their
respective notes.
Segmental Reporting
For the period ended 31 December 2009, the Group has adopted IFRS 8 'Operating
Segments'. IFRS8 replaces IAS 14 'Segmental Reporting'.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Chief
Operating Decision Maker(CODM) to allocate resources to the segments and to
assess their performance. In contrast, the predecessor Standard(IAS 14 Segment
Reporting) required the Group to identify two sets of segments (business and
geographical), using a risks and rewards approach with the Group's system of
internal financial reporting to key management personnel serving only as the
starting point for the identification of such segments.
We report on our segment information on the same basis as our internal
management reporting structure, which drives how the Group is organised and
managed.
The Group is principally engaged in the provision of quantity surveying services
in the UK. The CODM has been identified as the Board. Operational and financial
information, which is primarily at an individual unit level, is received by the
CODM on a monthly basis. Baqus does not distinguish between geography or brand.
The unit information does not meet the quantitive thresholds as required by IFRS
8, as such management have judged it appropriate to aggregate the financial
information relating to all units into a single reportable segment.
All revenue is earned from sales to external customers.
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | |
+----------------------------------+-------------+-------------+-----------+
| | | | |
+----------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
|2 | Investment revenue and | | | |
| | finance costs | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
+--+-------------------------------+-------------+-------------+-----------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+-------------+-------------+-----------+
| | Investment income: | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | Bank deposits | 1 | 43 | 51 |
+--+-------------------------------+-------------+-------------+-----------+
| | Finance costs: | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | Interest on loan notes | (16) | (49) | (65) |
+--+-------------------------------+-------------+-------------+-----------+
| | Interest on bank borrowings | - | - | (2) |
+--+-------------------------------+-------------+-------------+-----------+
| | | (16) | (49) | (67) |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
|3 | Restructuring Costs | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
+--+-------------------------------+-------------+-------------+-----------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+-------------+-------------+-----------+
| | Redundancy costs | 103 | - | - |
+--+-------------------------------+-------------+-------------+-----------+
| | Office reorganisation costs | 20 | - | - |
+--+-------------------------------+-------------+-------------+-----------+
| | | 123 | - | - |
+--+-------------------------------+-------------+-------------+-----------+
| | During the period the Group closed down some |
| | loss-making offices arising from the acquisition of |
| | Nigel Rose and Partners as at 30 June 2009 |
+--+-----------------------------------------------------------------------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
|4 | Taxation | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | The taxation income for the period ended 31 December |
| | 2009 represents the Directors' estimate of the |
| | corporation tax credit based on the results for the |
| | period |
+--+-----------------------------------------------------------------------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
|5 | Dividends | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | |
+--+-------------------------------+-------------+-------------+-----------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+-------------+-------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | Amounts recognised as | 73 | 125 | 181 |
| | distributions to equity | | | |
| | holder in the period | | | |
| | (approved) | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | 73 | 125 | 181 |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
| | | | | |
+--+-------------------------------+-------------+-------------+-----------+
+--+-------------------------------+--------------------+-------------+--------------------+
| | |
+--+---------------------------------------------------------------------------------------+
| | |
+--+---------------------------------------------------------------------------------------+
| | |
+--+---------------------------------------------------------------------------------------+
| 6| Earnings per share | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | Six | Six | Year |
| | | months | months | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | ended | ended | ended |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Earnings | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Earnings for the purpose of | (339) | 262 | 519 |
| | the earnings per share being | | | |
| | net profit attributable to | | | |
| | equity holders of the parent | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | |
+--+---------------------------------------------------------------------------------------+
| | Weighted average number of | 113,250,000 | 113,123,641 | 113,186,301` |
| | ordinary shares for the | | | |
| | purpose of basic earnings per | | | |
| | share | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Weighted average number of | 124,246,257 | 124,119,898 | 124,182,558 |
| | ordinary shares for the | | | |
| | purpose of diluted earnings | | | |
| | per share | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | |
+--+---------------------------------------------------------------------------------------+
| | |
+--+---------------------------------------------------------------------------------------+
| | | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
|7 | Intangible assets | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | Six | Six | Year |
| | | months | months | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | ended | ended | ended |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Goodwill | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | As at 1 July 2009 | 8,516 | 8,276 | 8,276 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Recognised on acquisitions in | | 158 | 231 |
| | period | - | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Other | | 9 | 9 |
| | | - | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | As at 31 December 2009 | 8,516 | 8,443 | 8,516 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Goodwill comprises the | | | |
| | following amounts: | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | | | |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Boxall Sayer | 3,263 | 3,263 | 3,263 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Fletcher McNeill | 3,107 | 3,107 | 3,107 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Denley King | 1,894 | 1,894 | 1,894 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Other | 21 | 21 | 21 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Sworn King | 208 | 158 | 208 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | Nigel Rose | 23 | - | 23 |
+--+-------------------------------+--------------------+-------------+--------------------+
| | | 8,516 | 8,443 | 8,516 |
+--+-------------------------------+--------------------+-------------+--------------------+
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
|8 | Borrowings | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | Six | Six | Year |
| | | | months | months | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | ended | ended | ended |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Loan notes as at 1July 2009 | | 949 | 1,551 | 1,551 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Loan notes repaid | | (600) | (602) | (602) |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Loan notes as at 31 December | | 349 | 949 | 949 |
| | 2009 | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | Total | Total | Total |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | GBP,000 | GBP,000 | GBP,000 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Less than one year | | 349 | 600 | 600 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Between one and two years | | - | 349 | 349 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | 349 | 949 | 949 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
|9 | Cash Flow Statement | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | Six | Six | Year |
| | | | months | months | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | ended | ended | ended |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | 31-Dec-09 | 31-Dec-08 | 30-Jun-09 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | GBP'000 | GBP'000 | GBP'000 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | (Loss)/Profit for the period | | (339) | 262 | 519 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Adjust for: | | | | |
| | | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Income tax expense | | (131) | 103 | 220 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Investment revenue | | (1) | (43) | (51) |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Finance costs | | 16 | 49 | 67 |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Depreciation of property, | | 59 | 40 | 102 |
| | plant and equipment | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Operating cash flows before | | (396) | 411 | 857 |
| | movements in working capital | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Decrease/(increase) in | | 346 | (369) | (216) |
| | receivables | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Decrease/(increase) in | | (144) | (250) | (219) |
| | payables | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Cash (absorbed)/generated by | | (194) | (208) | 422 |
| | operations | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Income taxes paid | | - | (316) | (523) |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Interest paid | | (16) | (49) | (67) |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
| | Net cash from operating | | (210) | (573) | (168) |
| | activities | | | | |
+--+-------------------------------+--------+--------------------------------------+-------------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR JJMFTMBJTBPM
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