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RNS Number : 0750Y
Christie Group PLC
27 August 2009
27 August 2009
Christie Group plc
Interim Results for the six months ended 30 June 2009
Christie Group plc ('Christie' or the 'Group'), the leading provider of
Professional Business Services and Stock & Inventory Systems & Services to the
Leisure, Retail and Care markets, is pleased to announce its interim results for
the six months ended 30 June 2009.
Key points:
Transactions in progress increased
Stock & Inventory Services Division expected to return to normal trading
levels in second half
Further cost reductions delivered in Professional Services Division
Group has no net debt
Commenting on the results, David Rugg, Chief Executive of Christie Group said:
"Although trading in our markets remains challenging, we have taken the
necessary steps to ensure that our cost base is reflective of these pressures.
We have achieved the significant reduction in operating costs, whilst continuing
to develop our range of services and without compromising our geographical
coverage.
"We believe that the worst is behind us. With a pipeline of transactions in
progress, which has increased since Mayday, we look forward to a better second
half."
Enquiries:
David Rugg 020 7227 0707
Chief Executive
Christie Group plc
Philip Davies 020 7149 6000
Charles Stanley Securities
Nominated Adviser
Tom Cooper 0797 122 1972
Winningtons
Notes to Editors
Christie Group plc (CTG.L), quoted on AIM, is a leading professional business
services group with 37 offices across the UK, Europe and Canada, catering to its
specialist markets in the Leisure, Retail and Care sectors.
Christie Group operates in two complementary business divisions: Professional
Business Services (PBS) and Stock & Inventory Systems & Services (SISS). These
divisions trade under the brand names:
PBS - Christie + Co, Christie Finance, Christie Insurance and Pinders: SISS -
Orridge, Venners and Vennersys.
Tracing its origins back to 1846, the Group has a long established reputation
for offering essential services to client companies in agency, valuation
services, investment, consultancy, project management, multi-functional trading
systems and online ticketing services, stock audit and inventory management. The
diversity of these services provides a natural balance to the Group's core
agency business.
For more information, please go to www.christiegroup.com.
CHAIRMAN'S STATEMENT
Turnover for the period to 30 June was £25.2m (2008 continuing operations:
£36.4m). Our loss before exceptional items and after attributable tax for the
same period amounted to £1.1m (2008 continuing activities: profit £1.0m). Prompt
management action has reduced operating costs to £27.9m (2008 continuing
activities: £35.4m) - a reduction of 21%, with further reductions implemented
that will benefit the second half of this year. Of the operating costs, £0.8m
relates to depreciation (net of capital expenditure), amortisation, share
schemes and other non-cash charges in the period. As I indicated in my statement
to shareholders at the time of the AGM in June, Christie Group ended the period
with no net borrowings. The directors have not declared an interim dividend.
Importantly, we have achieved a significant reduction in operating costs, whilst
continuing to develop our range of services and without compromising our
geographical coverage.
Stock and Inventory Systems & Services Division
Revenue for the division was reduced in comparison to the previous year at
£13.0m (2008: £14.1m), reflecting retailers' reduced stock holdings. This
resulted in a reduction in operating profit to £0.2m (2008: £0.8m). Our
Netherlands-based retail stocktaking operations incurred operating losses of
£315,000 in the last 12 months and an operating loss of £149,000 for the period
to 30 June 2009 and has now been closed. As previously, we now service our
clients in Holland through our European operations centre in Brussels. Following
closure of our Dutch office, profits in our retail stocktaking business are
expected to return to normal levels in the second half of the year.
We continue to win new clients in the UK and Europe, including Wembley Stadium,
BAE Systems, and Autogrill Catering.
Professional Business Services Division
Revenue for the division was £12.2m (2008: £22.3m). Costs were reduced by 34%
against the first half of 2008, and we substantially reduced the rate of loss
from that incurred in the second half of 2008. As a result of management actions
already implemented, monthly costs will be further decreased in the second half
of 2009.
As widely reported, the transactional market for the sale of businesses
generally continues at a low ebb. Our Agency practice has, however, attracted
new corporate instructions to dispose of surplus businesses, including Nearby
Stores, former Real Hotels Company properties and numerous pub packages,
including the conversion of managed houses to leases. The pub market has
reverted to a more fragmented state than in recent years, but pub businesses
continue to attract buyers. The Christie network and market-leading position
ensures that we are uniquely placed to successfully dispose of large pub, retail
and care portfolios through a series of multiple, individual or smaller group
transactions to niche operators, selectively adding to existing portfolios.
This, we anticipate, will produce a future uplift in our completed sales
volumes.
The volume of sales instructions in our Bank Support and Business Recovery Unit,
working directly for banks and insolvency practitioners, or jointly reporting to
the borrower and their lender, has now risen to account for a material element
of our current sales instructions, from a virtual standing start in January of
this year.
We have one of the few UK-headquartered valuation practices still insured to
value businesses worth in excess of £100 million.
The new business elements of our feasibility, mortgage, insurance, valuation and
building surveying services are transaction-related. Therefore, whilst currently
at a low base, they too will increase in volume, as markets recover. Our
operating costs have been pared to a level that ensures that we have high
operational gearing. Our property services and related businesses are therefore
well placed to strongly recover profits when transactional volumes increase.
Outlook
Inevitably, markets such as these will witness the disappearance of some
financially leveraged competitors, and we remain alert to opportunities to
capture additional business flows. We have also been able to attract a number of
high calibre recruits, to add to our complement of keen professionals, whom I
consider to be the best in our areas of operation. I thank them on behalf of all
shareholders for their sterling efforts and achievements in these difficult
times.
Philip Gwyn
Consolidated interim statement of comprehensive income
Half year to 30 June Half year to 30 June Year ended 31 December 2008
2009 2008 £'000
£'000 £'000
(Unaudited) (Unaudited)
Note
Continuing operations
Revenue 4 25,186 36,360 63,422
Employee benefit expenses* (20,058) (23,495) (45,045)
5,128 12,865 18,377
Depreciation and amortisation (444) (432) (906)
Other operating expenses* (7,407) (11,503) (22,140)
Operating (loss)/profit 4 (2,723) 930 (4,669)
Finance costs (70) (63) (162)
Finance income 81 131 227
Total finance credit 11 68 65
(Loss)/profit before tax (2,712) 998 (4,604)
Taxation 5 1,331 - 1,182
(Loss)/profit from continuing operations (1,381) 998 (3,422)
Discontinued operations
- Loss from discontinued operations 6 - (10,981) (10,163)
Loss for the period after tax (1,381) (9,983) (13,585)
Other comprehensive (losses)/income:
Exchange differences on translating foreign operations (241) 620 1,102
Actuarial (losses)/gains defined benefit pension plans (72) - 31
Income tax relating to components of other comprehensive 20 - (9)
income
Other comprehensive (losses)/income for the period, net (293) 620 1,124
of tax
Total comprehensive losses for the year (1,674) (9,363) (12,461)
Earnings per share - pence
(Loss)/profit attributable to the equity holders of the
Company
- Basic 7 (5.59) (40.79) (55.48)
- Fully diluted 7 (5.59) (40.79) (55.48)
(Loss)/profit from continuing operations attributable to
the equity holders of the Company
- Basic 7 (5.59) 4.08 (13.98)
- Fully diluted 7 (5.59) 4.08 (13.98)
*These include £426,000 (2008: £nil) of exceptional reorganisation costs and
losses on the exchange of Euro denominated deposits. Consolidated interim
statement of changes in shareholders' equity
Attributable to the equity holders of the Company
Share capital Share premium £'000 Own shares £'000 Capital redemption reserve £'000 Cumulative Retained earnings Total equity
£'000 translation £'000 £'000
Share adjustments
Merger reserve £'000 based payments £'000
£'000
Balance at 1 January 2008 505 4,073 (1,800) 10 137 11,616 15,964
945 478
Movement in respect of employee share scheme - - 243 - - (147) 100
- 4
Employee share option scheme:
-value of services provided - - - - - - 60
- 60
Dividends paid - - - - - - - (670) (670)
Total comprehensive income/(losses) for the period - - - - 620 (9,983) (9,363)
- -
Balance at 1 July 2008 505 4,073 945 542 (1,557) 10 757 816 6,091
Exchange difference on repayment of foreign exchange - - - - (758) 758 -
loan
- -
Movement in respect of employee share scheme - - (24) - - 119 (56)
- (151)
Employee share option scheme:
-value of services provided - - - - - - 38
- 38
Dividends paid - - - - - - (124) (124)
Total comprehensive income/(losses) for the period - - - - 482 (3,580) (3,098)
- -
Release of merger reserve - - - - - - 945 -
(945)
Balance at 1 January 2009 505 4,073 (1,581) 10 481 (1,066) 2,851
- 429
Movement in respect of employee share scheme - - 493 - - (409) 84
- -
Employee share option scheme:
- value of services provided - - - - - - 40
- 40
Total comprehensive losses for the period - - - - (241) (1,433) (1,674)
- -
Balance at 30 June 2009 505 4,073 (1,088) 10 240 (2,908) 1,301
- 469
Consolidated interim statement of financial position
At 30 June 2009 At 30 June 2008 At 31 December 2008
£'000 £'000 £'000
(Unaudited) (Unaudited)
Note
Assets
Non-current assets
Intangible assets - Goodwill 1,011 1,011 1,011
Intangible assets - Other 56 34 60
Property, plant and equipment 1,063 1,870 1,409
Deferred tax assets 2,572 1,742 2,063
Available-for-sale financial assets 381 300 300
Other receivables 1,192 1,109 1,108
6,275 6,066 5,951
Current assets
Trade and other receivables 10,230 14,469 9,506
Current tax assets - 408 596
Cash and cash equivalents 1,455 1,492 2,328
11,685 16,369 12,430
Assets of disposal group 6a - 5,945 -
Total assets 17,960 28,380 18,381
Equity
Capital and reserves attributable to the Company's equity holders
Share capital 9 505 505 505
Fair value and other reserves 3,464 4,013 2,931
Cumulative translation reserve 240 757 481
Retained earnings (2,908) 816 (1,066)
Total equity 1,301 6,091 2,851
Liabilities
Non-current liabilities
Borrowings - 1,045 -
Retirement benefit obligations 10 3,379 3,916 3,225
Provisions for other liabilities and charges 1,981 584 1,751
5,360 5,545 4,976
Current liabilities
Trade and other payables 9,967 11,530 9,289
Borrowings 706 467 706
Provisions for other liabilities and charges 626 41 559
11,299 12,038 10,554
Liabilities of disposal group 6a - 4,706 -
Total liabilities 16,659 22,289 15,530
Total equity and liabilities 17,960 28,380 18,381
These consolidated interim financial statements have been approved for issue by
the Board of Directors on 26 August 2009.
Consolidated interim statement of cash flows
Half year to 30 June 2009
£'000 Half year to 30 June 2008 Year to
(Unaudited) £'000 31 December 2008
(Unaudited) £'000
Note
Cash flow from operating activities
Cash used in operations 11 (1,914) (4,649) (5,254)
Interest paid (70) (63) (163)
Tax received/(paid) 1,299 (812) (21)
Net cash used in operating activities (685) (5,524) (5,438)
Cash flow from investing activities
Purchase of property, plant and equipment (PPE) (82) (927) (1,103)
Proceeds from sale of PPE - 111 204
Intangible assets expenditure (24) (1,136) (1,590)
Proceeds from sale of Software businesses (net of costs) - - 1,797
Cash included in disposal of Software businesses - - (749)
Investment in an available-for-sale financial asset - - (19)
Interest received 81 128 227
Net cash used in investing activities (25) (1,824) (1,233)
Cash flow from financing activities
Net payments to the ESOP - (178) (172)
Repayments of borrowings - (230) (1,735)
Proceeds from invoice discounting 3 - 700
Payments of finance lease liabilities (3) (1) (2)
Dividends paid - (670) (794)
Net cash used in financing activities - (1,079) (2,003)
Net decrease in net cash (710) (8,427) (8,674)
Cash and cash equivalents at beginning of period 2,328 10,593 10,593
Exchange (losses)/gains on euro bank accounts (163) - 409
Cash and cash equivalents at end of period 1,455 2,166 2,328
Cash and cash equivalents 1,455 1,492 2,328
Cash and cash equivalents included within disposal group -
assets 6a - 674
1,455 2,166 2,328
Notes to the consolidated interim financial statements
1. General information
Christie Group plc is the parent undertaking of a group of companies covering a
range of related activities. These fall into two divisions - Professional
Business Services and Stock & Inventory Systems & Services. Professional
Business Services principally covers business valuation, consultancy and agency,
mortgage and insurance services, and business appraisal. Stock & Inventory
Systems & Services covers stock audit and counting, compliance and food safety
audits and inventory preparation and valuation, hospitality and cinema software.
2. Basis of preparation
The interim financial information in this report has been prepared using
accounting policies consistent with IFRS as adopted by the European Union. IFRS
is subject to amendment and interpretation by the International Accounting
Standards Board (IASB) and the International Financial Reporting Interpretations
Committee (IFRIC) and there is an ongoing process of review and endorsement by
the European Commission. The financial information has been prepared on the
basis of IFRS that the Directors expect to be adopted by the European Union and
applicable as at 31 December 2009.
Except as described below, the accounting policies applied are consistent with
those of the annual financial statements for the year ended 31 December 2008.
The presentation of the primary financial statements has been modified in order
to comply with IAS 1 (revised). However the revised standard has no impact on
the reported results or financial position of the group. Taxes on
income/(losses) in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
Non-statutory accounts
These consolidated interim financial statements have been prepared in accordance
with IAS 34 'Interim Financial Reporting'. The financial information for the
year ended 31 December 2008 set out in this interim report does not constitute
the Group's statutory accounts for that period. The statutory accounts for the
year ended 31 December 2008 have been delivered to the Registrar of Companies.
The auditors reported on those accounts; their report was unqualified, did not
contain a statement under either section 237 (2) or Section 237 (3) of the
Companies Act 1985 and did not include references to any matters to which the
auditor drew attention by way of emphasis. The financial information for the 6
months ended 30 June 2009 and 30 June 2008 is unaudited.
Interpretations and amendments effective in 2009
The following amendments and interpretations to standards are mandatory for the
Group's accounting periods beginning on or after 1 January 2009:
IFRIC 11, 'IFRS 2 - Group and treasury share transactions'. IFRIC 11 provides
guidance on whether share-based transactions involving treasury shares or
involving group entities (for example, options over a parent's shares) should be
accounted for as equity-settled or cash-settled share-based payments
transactions in the stand-alone accounts of the parent and group companies. This
interpretation does not have an impact on the Group's financial statements.
IFRS 8 requires operating segments to be identified on the basis of internal
reports used to assess performance and allocate resources. The adoption of this
standard has not resulted in any change to the segments reported previously.
IFRIC 14, 'IAS 19 - The limit on a defined benefit asset, minimum funding
requirements and their interaction'. IFRIC 14 provides guidance on assessing the
limit in IAS 19 on the amount of the surplus that can be recognised as an asset.
It also explains how the pension asset or liability may be affected by a
statutory or contractual minimum funding requirement. This interpretation does
not have an impact on the Group's financial statements.
3. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are consistent with those applied to the consolidated
financial statements for the year ended 31 December 2008.
4. Segment information
The Group is organised into two main business segments: Professional Business
Services and Stock & Inventory Systems & Services.
The reportable segment results for the period ended 30 June 2009 are as
follows:
Stock &
Professional Business Services Inventory
£'000 Systems & Services
£'000 Other Group
£'000 £'000
Total gross segment revenue 12,224 13,016 1,155 26,395
Inter-segment revenue (54) - (1,155) (1,209)
Revenue 12,170 13,016 - 25,186
Operating (loss)/profitbefore exceptional items (2,434) 171 (34) (2,297)
Exceptional items (293) (2) (131) (426)
Operating (loss)/profitafter exceptional items
(2,727) 169 (165) (2,723)
Net finance credit 11
Loss before tax (2,712)
Taxation 1,331
Loss for the period after tax (1,381)
The reportable segment results for the period ended 30 June 2008 are as
follows:
Stock &
Professional Business Services Inventory Total continuing operations
£'000 Systems & Services £'000 Discontinued operations
£'000 Other £'000 Group
£'000 £'000
Total gross segment revenue 22,313 14,099 1,491 37,903 6,982 44,885
Inter-segment revenue (52) - (1,491) (1,543) - (1,543)
Revenue 22,261 14,099 - 36,360 6,982 43,342
Operating (loss)/profit 111 782 37 930 (10,978) (10,048)
Net finance credit 68 (3) 65
(Loss)/profit before tax 998 (10,981) (9,983)
Taxation - - -
(Loss)/profit for the period after tax
998 (10,981) (9,983)
The reportable segment results for the year ended 31 December 2008 are as
follows:
Stock &
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