TIDMWORK
RNS Number : 8557K
Work Group plc
27 September 2016
WORK GROUP PLC
(the "Company" or the "Group")
Unaudited Interim Results for the six months ended 30 June
2016
Headlines
-- Following the sale of overseas and UK business to Capita plc
on 31 December 2015, Work Group plc was re-admitted to trading on
the AIM market as an "Investing Company" under AIM Rule 15.
-- Loss before taxation: GBP227,000 (2015: GBP659,000).
-- Net cash / (borrowing) at 30 June 2016: GBP812,000 (2015: GBP(36,000)).
-- Focus on finding suitable candidate for acquisition to fulfil stated investing strategy.
Enquiries:
Work Group Tel: +44 (0)20 3700 9210
Simon Howard, Executive
Chairman
Allenby Capital Limited Tel: +44 (0)20 3328 5656
(Nominated Adviser &
Broker)
Jeremy Porter
James Thomas
Chairman's Statement
Following the completion of the sale of our subsidiaries and UK
business operations at last year end, the first six months of the
current financial year have been spent managing the remaining
assets and liabilities to maximize our cash resources.
We vacated our Marble Arch Tower premises at the end of January
and moved into short term serviced accommodation in Hanover Square.
Our overseas offices, together with premises in Birmingham and
Colchester, transferred as part of the sale arrangements leaving
only our lease in Hale, Manchester. We have tried to find a
solution to disposing of this lease which runs until April 2017,
but to date we have no satisfactory answer.
We have strived to reduce our operating costs to the minimum
commensurate with our obligations as a public company and have been
focused on finding a suitable acquisition to allow us to fulfil our
stated investing strategy.
We continue to make progress with this and a full announcement
will be made at the appropriate time. Any acquisition will be
subject to the approval of our shareholders at a General
Meeting.
Simon Howard
Executive Chairman
27 September 2016
Consolidated income statement
for the six-month period ended 30 June 2016
Note Six months Six months Year
ended ended ended
30-Jun-16 30-Jun-15 31-Dec-15
(restated)
Unaudited Unaudited Audited
----------- ------------ ----------
GBP'000 GBP'000 GBP'000
----------- ------------ ----------
Continuing operations
Gross profit (net fee - - -
income)
Net operating expenses (232) (361) (896)
Operating Loss (232) (361) (896)
-------------------------------- ----- ----------- ------------ ----------
Analysed as:
Operating Loss before
exceptional items (232) (361) (692)
Exceptional items 2 - - (204)
-------------------------------- ----- ----------- ------------ ----------
Finance costs - (8) (16)
-------------------------------- ----- ----------- ------------ ----------
Loss before taxation (232) (369) (912)
Income tax expense 3 - - (22)
-------------------------------- ----- ----------- ------------ ----------
Loss from continuing
operations (232) (369) (934)
-------------------------------- ----- ----------- ------------ ----------
Discontinued operation
Profit/(loss)from discontinued
operation, net of tax 5 (290) 1,506
-------------------------------- ----- ----------- ------------ ----------
Profit/(loss)from the
period/year attributable
to owners of the company (227) (659) 572
-------------------------------- ----- ----------- ------------ ----------
Basic profit(loss)
per share (pence)
From continuing operations (0.81) (1.29) (3.26)
From discontinued operation 0.02 (1.01) 5.26
4 (0.79) (2.30) 2.00
-------------------------------- ----- ----------- ------------ ----------
Consolidated statement of comprehensive income
for the six-month period ended 30 June 2016
30-Jun-16 30-Jun-15 31-Dec-15
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- ----------
Loss for the period (227) (659) 572
Other comprehensive income
Currency translation differences (8) (4) (57)
Total comprehensive loss
for the period (235) (663) 515
---------------------------------- ---------- ---------- ----------
Consolidated balance sheet
as at 30 June 2016
30-Jun-16 30-Jun-15 31-Dec-15
Unaudited Unaudited Audited
---------------------------------- ---------- ---------- ----------
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and
equipment 5 89 2
Intangible assets - 89 -
Deferred tax asset - 21 -
5 199 2
---------------------------------- ---------- ---------- ----------
Current assets
Inventories - (313) -
Trade and other receivables 159 1,485 482
Cash and cash equivalents 812 (36) 1,699
971 1,136 2,181
---------------------------------- ---------- ---------- ----------
Liabilities
Current liabilities
Trade and other payables (409) (1,432) (1,388)
Current tax liabilities - (309) -
(409) (1,741) (1,388)
---------------------------------- ---------- ---------- ----------
Net current assets/(liabilities) 562 (605) 793
----------------------------------- ---------- ---------- ----------
Net assets/(liabilities) 567 (406) 795
----------------------------------- ---------- ---------- ----------
Shareholders' equity
Ordinary share capital 572 572 572
Share premium 8,239 8,239 8,240
Special reserve 2,826 2,826 2,826
Shares held by EBT (312) (334) (312)
Foreign exchange - 53 -
reserves
Retained earnings/(losses) (10,758) (11,762) (10,531)
Total equity 567 (406) 795
----------------------------------- ---------- ---------- ----------
Consolidated cash flow statement
for the six-month period ended 30 June 2016
Six months ended Year
ended
30-Jun-16 30-Jun-15 31-Dec-15
Unaudited Unaudited Audited
------------------------------- -------------- ------------- ----------
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Cash used in operations (890) (157) (123)
Interest paid 0 (11) (22)
Tax received/(paid) - -
------------------------------- -------------- ------------- ----------
Net cash used in operating
activities (890) (168) (145)
------------------------------- -------------- ------------- ----------
Cash flows from investing
activities
Purchase of property,
plant and equipment (3) (9) (14)
Proceed from disposal
of property, plant and
equipment 6 - 36
Proceeds from disposal
of business - - 1,682
Net cash generated from
/ (used in) investing
activities 3 (9) 1,704
------------------------------- -------------- ------------- ----------
Net increase / (decrease)
in cash and cash equivalents
in the period/year (887) (177) 1,559
------------------------------- -------------- ------------- ----------
Cash and cash equivalents
at start of period/year 1,699 140 140
------------------------------- -------------- ------------- ----------
Cash and cash equivalents
at end of period/year 812 (36) 1,699
------------------------------- -------------- ------------- ----------
Notes to the interim financial information
for the six-month period ended 30 June 2016
1 Financial information and presentation
The Company is a limited liability company incorporated and
domiciled in the United Kingdom. The address of its registered
office is suite 2.01, 17 Hanover Square, London, W1S 1BN.
The Company has its primary listing on AIM, a market operated by
the London Stock Exchange.
This condensed consolidated Interim Report does not comprise
statutory accounts within the meaning of section 435 of the
Companies Act 2006. Statutory accounts for the year ended 31
December 2015 were approved by the Board of Directors and delivered
to the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain any statement under
section 498 of the Companies Act 2006.
Going Concern
The accounts have been prepared on the basis on the principle of
going concern.
In preparing those accounts on a going concern basis, the
directors have had to consider the possibility that the Company
will not fulfil its investing strategy and instead should liquidate
the remaining assets and pay off all liabilities thereby returning
any proceeds to its shareholders. The potential impact of not
adopting a going concern basis is that the Company should, in
addition to the impairments it has already undertaken, consider
additional impairments and provide for the costs associated with
the liquidation of the Company.
For the year ended 31 December 2015 following the disposal of
the overseas trading subsidiaries and the trade and asserts of Work
Group Resources Limited as at 31 December 2015, any remaining
assets have been fully impaired.
2 Principal accounting policies
Basis of preparation
These condensed consolidated financial information is for the
half-year ended 30 June 2016 and has been prepared in accordance
with AIM Rules and accounting policies set out in the Group's 2015
Annual Report as amended for the new standards effective during the
period where relevant. These accounting policies are based on the
EU-adopted IFRS and IFRIC interpretations that are applicable at
the balance sheet date. IFRS and IFRIC interpretations that are
applicable at 31 December 2016, including those that will be
applicable on an optional basis have not been applied. It is
therefore possible that further changes may be required before
publication of the 2016 annual report and accounts.
Exceptional items
Exceptional items are those income or costs recognized as
one-off or non-recurring in nature, and substantive in size. There
are no exceptional items for the six-month period ended 30 June
2016.
3 Taxation
The deferred tax asset for the six-month period ended 30 June
2015 is based on the estimated expected effective tax rate of 21.49
per cent. (2014 actual rate: 20 per cent.). No taxation has been
provided on profits of overseas subsidiaries because of prior year
losses brought forward.
4 Earnings per share
6 months ended 6 months ended Year ended
30-Jun-16 30-Jun-15 31-Dec-15
Unaudited Unaudited Audited
------------------------------------- ------------------------------------ --------------------------------
Loss Weighted Per Loss Weighted Per Profit Weighted Per
average share average share average share
number amount number amount number amount
of shares of shares of shares
GBP'000 '000 pence GBP'000 '000 pence GBP'000 '000 pence
--------------- ---------- -------------- --------- ------------ ----------- --------- ---------- ----------- -------
Basic
Profit/(loss)
per share
including
shares held
by
EBT (227) 28,622 (0.79) (659) 28,622 (2.30) 572 28,622 2.00
--------------- ---------- -------------- --------- ------------ ----------- --------- ---------- ----------- -------
Less weighted
average
shares
held by EBT - (3,595) (0.11) - (3,595) (0.33) - (3,595) 0.16
--------------- ---------- -------------- --------- ------------ ----------- --------- ---------- ----------- -------
Basic
Profit/(loss)
per share
excluding
shares held
by
EBT (227) 25,028 (0.91) (659) 25,028 (2.63) 572 25,028 2.16
--------------- ---------- -------------- --------- ------------ ----------- --------- ---------- ----------- -------
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year excluding
treasury shares and shares held by the EBT which are treated as
treasury shares.
5 Reconciliation of operating loss to cash used in
operations
Six-month period Year
ended ended
30-Jun-16 30-Jun-15 31-Dec-15
---------- ---------- ----------
Unaudited Unaudited Audited
---------- ---------- ----------
GBP'000 GBP'000 GBP'000
Profit /(loss) attributable
to shareholders (227) (659) 572
Foreign exchange loss on
Intercompany recharges 1 1 -
Adjustments:
Taxation - (1) 22
Finance costs - 11 16
Depreciation of plant property
and equipment/write off of
assets - 65 111
Amortisation of intangible
assets - - 100
Proceeds from disposal of (6) - -
assets
Treasury shares movement - (21) -
Debtor (creditor) accrual (147) - -
release
Decrease in inventories - 420 108
Decrease in trade and other
receivables 382 132 1,158
Decrease in trade and other
payables (894) (106) (475)
Discontinued operations - - (1,735)
Cash used in operations (890) (157) (123)
---------- ---------- ----------
6 Post balance sheet events
There is no major post balance sheet event.
Statement of directors' responsibilities
The directors confirm that this Interim Report has been prepared
in accordance with AIM rules and accounting policies set out in the
Group's 2015 annual report as amended for new standards effective
during the period.
The directors are also responsible for the maintenance and
integrity of the Company website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The directors of Work Group plc are listed in the Company's
Annual Report for 31 December 2015. A list of current directors is
maintained on the Work Group plc website: www.workgroupplc.com.
7 Principal risks and uncertainties
At present, following the disposal of the Company's trading
operations on 31 December 2015, the focus of monitoring risk and
KPI's relate solely to the preservation of cash and the search for
a suitable reverse acquisition opportunity.
To preserve cash, the Group has sought to eliminate all
unnecessary overheads, reduced property rental obligations and
concentrated on the collection of all sums owed to the Group
following the sale of the business and the search for a new
occupant for the Hale property that has stayed empty.
The search for a suitable acquisition opportunity that meets the
Company's investing policy has involved wide ranging contact with
brokers and other professional advisers operating in the AIM
market.
The principal risk faced by the Group would be the failure to
execute its chosen strategy of finding a suitable candidate for a
reverse takeover before 31 December 2016.
The principal uncertainty will relate to stock market and
general economic conditions which would affect the ability to
complete a transaction.
The directors are aware that to maximize shareholders' value
requires a combination of preserving cash and optimizing a reverse
takeover. This would thereby increase the value compared to the
alternative of liquidating itself and returning remaining cash
shareholders.
By order of the Board
Simon Howard
Executive Chairman
27 September 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
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