TIDMSAVG
RNS Number : 7513S
Savile Group PLC
12 November 2013
Savile Group plc
("Savile" or the "Group")
PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2013
Financial summary 2013
Revenue on continuing operations GBP8.11m (2012: GBP7.4m)
Operating profit/(loss) before exceptional items GBP0.11m (2012:
Loss GBP0.04m)
Operating loss GBP0.33m after exceptional costs of GBP0.45m
(2012: Loss GBP0.1m after exceptional costs of GBP0.06m)
No bank debt (2012: nil) at year end
Fully diluted loss per share on continuing operations at 2.13
pence (2012: 0.62 pence loss per share)
David Harrel, Non Executive Chairman of Savile, commented:
"The Group has faced another challenging year, especially in the
first half, with an improvement in performance in the second half
in which the Group returned to profit.
Career transition revenue increased year on year and this
segment of the business was profitable. However the talent
management segment was loss making, with the re-launch of Cedar not
gaining the traction we had hoped for despite our continued
investment in this area. In addition IDDAS had an extremely poor
first half and, despite improving in the second half, was loss
making for the year and this resulted in an impairment in the
carrying value of the investment in the Company's balance
sheet.
Against this difficult trading environment cash levels were
reduced and given the difficult trading environment the Group put
in place a financing facility which remained undrawn at the year
end.
During the year Career Management Consultants Limited (CMC) was
integrated into the Group and in April 2013 the trade of CMC was
transferred into Fairplace. The Group now operates its career
transition business under the Fairplace brand.
At the year end our career transition business had a more
efficient operational infrastructure and a streamlined cost base
and the IDDAS business has also been remodeled with a more flexible
cost base.
However, as noted in our recent trading update, the first
quarter of the new financial year has been extremely disappointing
and below the Directors' expectations, with a significant downturn
in activity in the Group's career transition business.
Trading during July and August was below the Directors'
expectations in what are traditionally quiet months and the usual
recovery in September was much weaker than in previous years.
Trading has continued at lower levels than for the equivalent
period last year in career transition, reflecting subdued career
transition activity in the financial services sector as the economy
recovers.
The Board has taken steps to align costs with lower activity
levels. The reduced sales and losses have had a commensurate
adverse impact on the Group's cash reserves".
Enquiries to:
Savile Group plc Cairn Financial Advisers
LLP
David Harrel Tony Rawlinson
Chairman Nominated advisor
Tel: 020 7204 6990 Tel: 020 7148 7901
Chairman's statement
The Group has faced another challenging year, especially in the
first half, with an improvement in performance in the second half
in which the Group returned to profit.
Career transition revenue increased year on year and this
segment of the business was profitable. However the talent
management segment was loss making, with the re-launch of Cedar not
gaining the traction we had hoped for despite our continued
investment in this area. In addition IDDAS had an extremely poor
first half and, despite improving in the second half, was loss
making for the year and this resulted in an impairment in the
carrying value of the investment in the Company's balance
sheet.
Against this difficult trading environment cash levels were
reduced and given the difficult trading environment the Group put
in place a financing facility which remained undrawn at the year
end.
During the year Career Management Consultants Limited (CMC) was
integrated into the Group and in April 2013 the trade of CMC was
transferred into Fairplace. The Group now operates its career
transition business under the Fairplace brand.
Results for 2012/13
Group revenue on continuing operations for the year ended 30
June 2013 was GBP8.11m (2012: GBP7.39m). The operating loss was
GBP333,000 (2012: GBP102,000 loss).
This result is after the Group incurred reorganisation costs of
approximately GBP446,000 (2012: GBP62,000) relating to the career
transition business.
Following an operating loss in the first half of the financial
year, the Group returned to operating profit in the second
half.
Board
During the year Clare Chalmers joined the board as CEO of IDDAS
and brings a wealth of experience with her.
Helen Pitcher left the board at the end of the year and we thank
her for all her efforts for the Group.
Alex Wilson will not be seeking reappointment at the AGM.
Staff
As ever, our people remain the major asset of each business.
There has been a lot of change during the year with the integration
of CMC and the reorganisation of the career transition business and
I would like to thank all our staff for their support and hard work
throughout the year.
Outlook
At the year end our career transition business had a more
efficient operational infrastructure and a streamlined cost base
and the IDDAS business has also been remodeled with a more flexible
cost base.
However, as noted in our recent trading update, the first
quarter of the new financial year has been extremely disappointing
and below the Directors' expectations, with a significant downturn
in activity in the Group's career transition business.
Trading during July and August was below the Directors'
expectations in what are traditionally quiet months and the usual
recovery in September was much weaker than in previous years.
Trading has continued at lower levels than for the equivalent
period last year in career transition, reflecting subdued career
transition activity in the financial services sector as the economy
recovers.
The Board has taken steps to align costs with lower activity
levels. The reduced sales and losses have had a commensurate
adverse impact on the Group's cash reserves.
David Harrel
Chairman
11 November 2013
Group statement of comprehensive income
for the year ended 30 June 2013
Audited Audited
2013 2012
Notes GBP'000 GBP'000
Revenue 8,105 7,390
Operating expenses (7,992) (7,430)
--------- ---------
Operating loss before exceptional
items 113 (40)
Exceptional items 2 (446) (62)
--------- ---------
Operating loss (333) (102)
Finance income 10 10
Finance expenses
(3) -
--------- ---------
Loss before taxation (326) (92)
Taxation 8 -
--------- ---------
Loss after taxation on continued
operations (318) (92)
Loss on discontinued operations 3 - (1,136)
--------- ---------
Loss and total comprehensive
income for the period attributable
to equity owners of the parent (318) (1,228)
--------- ---------
Loss per ordinary share (total) Pence Pence
Basic 6 (2.13) (8.22)
--------- ---------
Diluted 6 (2.13) (8.22)
--------- ---------
Loss per ordinary share (continued Pence Pence
operations)
Basic 6 (2.13) (0.62)
--------- ---------
Diluted 6 (2.13) (0.62)
--------- ---------
Group Balance Sheet
as at 30 June 2013
2013 2012
GBP'000 GBP'000
Assets
Non current assets:
Property, plant and equipment 256 312
Intangible assets 399 505
655 817
--------- ---------
Current assets:
Inventories 7 11
Trade and other receivables 2,113 2,796
Cash and cash equivalents 703 1,043
--------- ---------
2,823 3,850
--------- ---------
Total assets 3,478 4,667
--------- ---------
Liabilities:
Current liabilities
Trade and other payables 2,005 2,878
Total liabilities 2,005 2,878
--------- ---------
Net assets 1,473 1,789
--------- ---------
Capital and reserves
Share capital 448 448
Share premium account 1,853 1,851
Merger reserve 329 329
Capital redemption reserve 800 800
Retained earnings (1,957) (1,639)
Total equity 1,473 1,789
--------- ---------
Statement of Changes in Equity
for the year ended 30 June 2013
Share Capital
Share premium Merger redemption Retained Total
Group capital account reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2011 448 1,851 329 800 (415) 3,013
Loss and total
comprehensive
income for the
year - - - - (1,228) (1,228)
Credit to equity
for share-based
payments - - - - 4 4
At 30 June 2012 448 1,851 329 800 (1,639) 1,789
---------- ---------- ----------- ------------- ------------ ---------
Loss and total
comprehensive
income for the
year - - - - (318) (318)
Share-based payments - 2 - - - 2
---------- ---------- ----------- ------------- ------------ ---------
At 30 June 2013 448 1,853 329 800 (1,957) 1,473
---------- ---------- ----------- ------------- ------------ ---------
Group Cash Flow Statement
for the year ended 30 June 2013
Notes 2013 2012
GBP GBP
Cash flow from operating activities
Loss before tax
Continuing operations (326) (92)
Discontinued operations 3 - (1,136)
------- ---------
(326) (1,228)
Amortisation and impairment
of intangibles 106 809
Depreciation 98 85
Loss on disposal of fixed
assets 6 95
Share-based payment charge - 4
Interest paid 3
Interest received (10) (10)
------- ---------
203 983
------- ---------
Changes in working capital:
Decrease in inventories 4 3
Decrease in trade and other
receivables 683 587
Decrease in trade and other
payables (873) (477)
------- ---------
(186) 113
------- ---------
Tax Paid 8 (26)
Cash used from operations (301) (158)
Investing activities
Purchase of property, plant
and equipment (48) (104)
Acquisition of CMC Limited
(net of cash acquired) 4 - 97
Interest received 10 10
------- ---------
Net cash (used)/generated
from investing activities (38) 3
------- ---------
Financing activities
Interest paid (3) -
Issue of ordinary shares 2 -
------- ---------
Net cash used from financing (1) -
activities
------- ---------
Net decrease in cash and
cash equivalents (340) (155)
Cash and cash equivalents
at beginning of year 1,043 1,198
Cash and cash equivalents
at end of year 703 1,043
------- ---------
Notes to the preliminary announcement
for the year ended 30 June 2013
1. Accounting policies
The financial information set out in these preliminary results
does not constitute the company's statutory accounts for the years
ended 30 June 2013 or 30 June 2012.
Statutory accounts for the year ended 30 June 2012 have been
filed with the Registrar of Companies and those for the year ended
30 June 2013 will be delivered to the Registrar in due course; both
have been reported on by the Independent Auditors. The independent
auditors' reports on the Annual Report and accounts for the years
ended 30 June 2012 and 30 June 2013 were unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
The financial information in these preliminary results has been
prepared using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively Adopted IFRSs). The principal
accounting policies adopted are set out below, they have been
consistently applied to all the years presented and are consistent
with the policies used in the preparation of the statutory accounts
for the year ended 30 June 2013.
Basis of consolidation
The financial information in these preliminary results
consolidates the accounts of the Company and all its subsidiary
undertakings drawn up to 30 June each year using the purchase
method. In the balance sheet, the acquiree's identifiable assets,
liabilities and contingent liabilities are initially recognised at
their fair values at the acquisition date. The results of acquired
operations are included in the income statement from the date on
which control is obtained.
Business combinations that took place prior to 1 July 2006 have
not been restated.
Goodwill
Goodwill represents the excess of the cost of a business
combination over the interest in the fair value of identifiable
assets, liabilities and contingent liabilities acquired. Cost
comprises the fair values of assets given, liabilities assumed and
equity instruments issued. For business combinations prior to 1
July 2009, any direct costs of acquisition were included as part of
the cost of acquisition. Following IFRS 3 (revised) becoming
effective, direct costs of acquisition are expensed.
Goodwill is capitalised as an intangible asset with any
impairment in carrying value being charged to the statement of
comprehensive income.
From the date of transition to IFRS (1 July 2006) Savile Group
plc discontinued the amortisation of goodwill and implemented
annual impairment tests for goodwill. The current year accounts do
not include comparatives for the transitional period.
Impairment of non-financial assets
Impairment tests on goodwill are undertaken annually at the
financial year end. Other non-financial assets are subject to
impairment tests whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Where
the carrying value of an asset exceeds its recoverable amount (i.e.
the higher of value in use and fair value less costs to sell), the
asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of
an individual asset, the impairment test is carried out on the
asset's cash-generating unit (i.e. the lowest group of assets in
which the asset belongs for which there are separately identifiable
cash flows). Goodwill is allocated on initial recognition to each
of the Group's cash-generating units that are expected to benefit
from the synergies of the combination giving rise to the
goodwill.
Impairment charges are included in the operating expenses line
item in the income statement. An impairment loss recognised for
goodwill is not reversed. Previously recognised impairment losses
on assets other than goodwill are reversed when there is an
increase in the estimated service potential of an asset.
Financial assets and Liabilities
Financial assets and liabilities are recognised initially at
their fair value and are subsequently measured at amortised cost.
For trade receivables, trade payables and other short-term
financial liabilities this generally equates to original
transaction value.
Intangible assets
Intangible assets are recognised on business combinations if
they are separable from the acquired entity or give rise to other
contractual or legal rights. The amounts ascribed to such
intangibles are arrived at by using valuation techniques.
The significant intangibles recognised by the Group, their
useful economic lives and the methods used to determine the cost of
intangibles acquired in a business combination are as follows:
Intangible asset Useful economic life Valuation method
Brand value Between 5 and 10 years Estimated royalty stream if
the rights were to be
licensed
Customer relationships 1 year Excess earnings
The amortisation charge is included in 'operating expenses'
within the statement of comprehensive income.
2. Exceptional items
Exceptional items comprised costs incurred by the Group arising
from the integration of the career transition business.
2013 2012
GBP'000 GBP'000
Personnel 184 43
Property 169 15
Project management 93 -
Legal - 4
------------------- -------------------
446 62
------------------- -------------------
3. Discontinued operations
The post tax loss on disposal of discontinued
operations was determined as follows:
2013 2012
GBP'000 GBP'000
Costs relating to 7 Days Limited
Revenue - 98
Operating expenses - (454)
Exceptional costs:
Impairment of goodwill - (661)
Write off of intangible assets - (144)
Remuneration costs relating to shares - -
issued
Net liabilities on liquidation - 82
Legal and professional - (5)
Leasing obligations - (52)
Loss before taxation - (1,136)
Taxation - -
----------- ----------
Loss after taxation - (1,136)
----------- ----------
Loss per share from discontinued operations 2012 2012
Pence Pence
Basic and diluted loss per share - (7.60)
----------- ----------
Statement of cash flows
The statement of cash flows includes 2013 2012
the following amounts relating to GBP'000 GBP'000
discontinued operations:
Operating activities - (207)
Investing activities - -
Net cash used from discontinued operations - (207)
----------- ----------
4. Acquisitions of Career Management Consultants Limited
On 31 May 2012 the Group acquired 100% of the share capital of
Career Management Consultants Limited (CMC), a company which was
engaged in the provision of career transition services. The
consideration was satisfied by GBP85,000 in cash. The acquisition
was made to strengthen the geographical and sector reach of the
Group's services.
Book value Fair value Fair value
adjustment
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 62 (62) -
Brand - 65 65
Customer relationships - 10 10
Leasehold property 208 (208) -
Fixtures and fittings 19 - 19
------------ ------------- ------------
289 (195) 94
------------ ------------- ------------
Current assets
Trade receivables and other
debtors 715 - 715
Cash 182 - 182
------------ ------------- ------------
897 - 897
------------ ------------- ------------
Current liabilities 1,216 - 1,216
------------ ------------- ------------
Net liabilities acquired (30) (195) (225)
------------ -------------
Goodwill on acquisition 310
Purchase consideration 85
------------
The purchase consideration
comprised:
Cash 85
------------
The main elements which supported the value of the goodwill
which arose on acquisition were the people and contacts of CMC
which were acquired. The commercial justification of the
consideration paid in excess of the net assets, was that to hire
such a team in the open market to generate the potential earnings
for the Group, with their contacts and reputation, as well as the
synergies and cross selling opportunities, would equate to the
value of the goodwill.
It was not possible for the Directors to quantify the effect of
the acquisition on the Group revenue and profit had the acquisition
been made on 1 July 2011 as CMC's financial year end had previously
been 30 April and it was not possible retrospectively to establish
the position at 1 July 2011 . However draft figures for the 14
months ended 30 June 2012 showed revenue of GBP3.85m and a pre tax
loss of GBP0.76m. During this period the cost base of CMC was
significantly reduced and this continued after the acquisition. The
contribution of CMC to the results of the Group for the period
between the date of acquisition and the year ended 30 June 2012 was
revenue of GBP0.2m and profit before tax, exceptional items and
management charges of approximately GBP36,000.
The trade and certain assets and liabilities of CMC were
transferred to Fairplace Cedar Limited on 30 April 2013. CMC
appointed a liquidator in July 2013.
5. Taxation
Current taxation has been provided for at 23.75% (2012:
25.5%).
6. Earnings 2013 2012
per share
GBP'000 GBP'000
Numerator
Loss for the
year (318) (1,228)
------------ ------------
Denominator Number Number
Weighted average of shares
used in basic and diluted
EPS 14,942,955 14,941,822
------------ ------------
Employee share options of 34,035 (2012: 71,074) were not
included within the diluted EPS due to them being
anti-dilutive.
Employee options whose exercise price is greater than the
weighted average share price during the year (i.e. they are out of
the money) are excluded from the earnings per share
calculations.
7. Debtors
Included in other debtors is an amount of GBP41,000 resulting
from the reversal of shares purchased pursuant to the authority to
make market purchases, which was in contravention of the relevant
legislation, and therefore void.
8. Annual General Meeting
The Annual General Meeting will be held at 10.30am Thursday 12
December 2013 at the Company's offices 36 - 38 Cornhill, London
EC3V 3PQ.
9. Report and Accounts
Copies of the Report and Accounts for the year ended 30 June
2013 will be sent to shareholders in due course. Further copies
will be available from the Company's website at www.savile.com or
at the Company's registered office at 36 - 38 Cornhill, London EC3V
3PQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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