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RNS Number : 3284E
Christie Group PLC
25 September 2008
CHRISTIE GROUP PLC
25 SEPTEMBER 2008
Interim Results for the six months ended 30 June 2008
Enquiries:
Christie Group 020 7227 0707 David Rugg, Chief Executive
Robert Zenker, Finance Director
Weber Shandwick 020 7067 0728 Richard Hews
Nick Oborne
Rachel Martin
Charles Stanley Securities (Nominated adviser) 020 7953 2457 Philip Davies
Note to Editors
Christie Group plc (CTG.L) is quoted on AIM. It is a leading business services
and software group with 39 offices across the UK, Europe and Canada, operating
in three business divisions: Professional Business Services, Software Solutions
and Stock & Inventory Services. These three complementary businesses focus on
the leisure, retail and care markets.
For more information, please go to: www.christiegroup.com
The 2008 interim statement will be posted to shareholders in October 2008, and
will be available from the Company's head office at 39 Victoria Street, London
SW1H OEU.
CHAIRMAN'S STATEMENT
HALF YEAR TO 30 JUNE 2008
I am pleased to report that our continuing operations produced a profit before
tax of £914k despite a reduction in turnover of 8% (from £38.8 million to £35.7
million) and in the face of a materially adverse business climate. I announced
at our Annual General Meeting that we were taking steps to reduce our cost base
in both our Agency and the associated finance business. The steps we took have
reduced our annual run rate of costs to enable us to trade profitably with
reduced revenues. We expect still lower operating costs in 2009.
Stock & Inventory Services
Our stock and inventory business continues to grow and, in addition to renewing
several important contracts during the period, we have added new customers such
as Enterprise Inns, Calvin Klein Jeans, Gucci and Foyles.
Professional Business Services
The effects of the credit crunch and subsequent slow-down in the residential and
commercial property markets have been widely reported. Deal volumes have been
muted but steady and with pipelines at a level at which we can trade profitably,
barring any further deterioration. Valuation and consultancy work has been
relatively busy as we continue to advise both business operators and their
lenders. During the first half, our business mortgage activities were unduly
disrupted whilst lenders vacillated on their availability of funding or required
criteria. Subsequently, a clearer picture has emerged of those banks still
willing and able to lend. Borrowers introduced through Christie Finance enjoy a
reputation of being "quality business". We retain a panel of over 10
institutions actively seeking to support our lending propositions. We expect our
loan volume to increase in the second half which should be a profitable period
for our financial services activities, including insurance broking.
Software Solutions
As we announced last week, after evaluating all options for this business, your
Board decided that in the current circumstances, despite the progress being
made, it would not be prudent to continue funding the software development
programme and its adherent losses. We therefore contracted the disposal of
VCSTIMELESS, which is shortly scheduled to complete. We will take a diminution
to our interim income statement of £8.3 million in 2008 with a consequent £8.3
million reduction in our consolidated distributable reserves. We believe that by
husbanding our resources and focusing our executive management on our core
activities, we will produce the best returns for shareholders in the periods
ahead.
Future Prospects
These half-year figures confirm a profitable ongoing business, debt-free,
diversified across five European economies and pre-eminent in the hospitality,
care and selected retail areas. Our income is generated from professional,
financial and business services to these niche areas where our leading brands
enjoy strong recognition. Our income is derived from a wide and loyal client
base. In a difficult financial environment, I believe we are well placed to take
advantage of our markets when they recover.
The directors have declared a reduced interim dividend of 0.5 pence per share.
I should like to thank all our staff who continue to rise magnificently to the
challenges put before them.
Philip Gwyn
Chairman
Index to the consolidated interim financial statements
Half year to 30 June 2008
Consolidated interim income statement
Consolidated interim statement of changes in shareholders'
equity
Consolidated interim balance sheet
Consolidated interim cash flow statement
Notes to the consolidated interim financial statements
General information
Basis of preparation
Critical accounting estimates and judgements
Segment information
Taxation
Discontinued operations
Earnings per share
Dividends per share
Share capital
Retirement benefit obligations
Note to the cash flow statement
Post balance sheet events
Consolidated interim income statement
Half year to 30 June Half year to 30 June Year ended 31 December 2007
2008 2007 £'000
£'000 £'000
(Unaudited) (Unaudited)
Note
Continuing operations
Revenue 4 35,665 38,770 74,473
Employee benefit expenses (23,210) (22,717) (43,783)
12,455 16,053 30,690
Depreciation and amortisation (431) (533) (1,027)
Other operating expenses (11,174) (10,618) (19,389)
Operating profit 4 850 4,902 10,274
Finance costs (63) (72) (148)
Finance income 127 440 993
Total finance credit 64 368 845
Profit before tax 914 5,270 11,119
Taxation 5 - (1,867) (3,218)
Profit from continuing operations 914 3,403 7,901
Discontinued operations
- Loss from discontinued operations 6 (10,897) (821) (3,253)
(Loss)/profit for the period (9,983) 2,582 4,648
Earnings per share - pence
(Loss)/profit attributable to the equity holders of
the Company
- Basic 7 (40.79) 10.64 19.12
- Diluted 7 (40.48) 10.24 18.65
Profit from continuing operations attributable to the
equity holders of the Company
- Basic 7 3.73 14.02 32.50
- Fully diluted 7 3.71 13.49 31.70
Consolidated interim statement of changes in shareholders' equity
Attributable to the equity holders of the Company
Share capital Fair value and other reserves Cumulative Retained earnings Total equity
£'000 £'000 translation £'000 £'000
adjustments
£'000
Balance at 1 January 2007 504 4,410 (382) 8,001 12,533
Currency translation adjustments - - 213 - 213
Net income recognised directly in equity - - 213 - 213
Profit for the period - - - 2,582 2,582
Total recognised income for the period - - 213 2,582 2,795
Issue of share capital 1 33 - - 34
Movement in respect of employee share scheme - (1,425) - 467 (958)
Employee share option scheme:
-value of services provided - 66 - - 66
Balance at 1 July 2007 505 3,084 (169) 11,050 14,470
Exchange difference on repayment of foreign exchange - - (27) 27 -
loan
Currency translation adjustments - - 333 - 333
Net income recognised directly in equity - - 306 27 333
Profit for the period - - - 2,066 2,066
Total recognised income for the period - - 306 2,093 2,399
Movement in respect of employee share scheme - 567 - (497) 70
Employee share option scheme:
-value of services provided - 55 - - 55
Dividends paid - - - (1,030) (1,030)
Balance at 1 January 2008 505 3,706 137 11,616 15,964
Currency translation adjustments - - 620 - 620
Net income recognised directly in equity - - 620 - 620
Loss for the period - - - (9,983) (9,983)
Total recognised income/(loss) for the period - - 620 (9,983) (9,363)
Movement in respect of employee share scheme - 247 - (147) 100
Employee share option scheme:
- value of services provided - 60 - - 60
Dividends paid - - - (670) (670)
Balance at 30 June 2008 505 4,013 757 816 6,091
Consolidated interim balance sheet
At 30 June 2008 At 30 June 2007 At 31 December 2007
£'000 £'000 £'000
(Unaudited) (Unaudited)
Note
Assets
Non-current assets
Intangible assets - Goodwill 1,011 4,096 4,096
Intangible assets - Other 34 3,904 4,555
Property, plant and equipment 1,870 1,985 1,796
Deferred tax assets 1,742 1,894 2,664
Available-for-sale financial assets 300 300 300
Other receivables 1,109 969 1,088
6,066 13,148 14,499
Current assets
Inventories - 307 404
Trade and other receivables 14,469 17,426 13,248
Current tax assets 408 - -
Cash and cash equivalents 1,492 9,009 10,593
16,369 26,742 24,245
Assets of disposal group 6a 5,945 - -
Total assets 28,380 39,890 38,744
Equity
Capital and reserves attributable to the Company's equity holders
Share capital 9 505 505 505
Fair value and other reserves 4,013 3,084 3,706
Cumulative translation reserve 757 (169) 137
Retained earnings 816 11,050 11,616
Total equity 6,091 14,470 15,964
Liabilities
Non-current liabilities
Borrowings 1,045 1,620 1,275
Retirement benefit obligations 10 3,916 5,807 4,343
Provisions for other liabilities and charges 584 260 432
5,545 7,687 6,050
Current liabilities
Trade and other payables 11,530 16,533 15,545
Borrowings 467 460 468
Current tax liabilities - 740 700
Provisions for other liabilities and charges 41 - 17
12,038 17,733 16,730
Liabilities of disposal group 6a 4,706 - -
Total liabilities 22,289 25,420 22,780
Total equity and liabilities 28,380 39,890 38,744
These consolidated interim financial statements have been approved for issue by
the Board of Directors on 25 September 2008.
Consolidated interim cash flow statement
Half year to 30 June 2008 Half year to 30 June 2007 Year to
£'000 £'000 31 December 2007
(Unaudited) (Unaudited) £'000
Note
Cash flow from operating activities
Cash (used in)/generated from operations 11 (4,649) 496 7,952
Interest paid (63) (72) (149)
Tax paid (812) (440) (2,036)
Net cash (used in)/generated from operating activities (5,524) (16) 5,767
Cash flow from investing activities
Purchase of property, plant and equipment (PPE) (927) (290) (786)
Proceeds from sale of PPE 111 5 41
Intangible assets expenditure (1,136) (876) (2,485)
Investment in an available-for-sale financial asset - - (9)
Interest received 128 179 363
Net cash used in investing activities (1,824) (982) (2,876)
Cash flow from financing activities
Proceeds from issue of share capital - 34 34
Payments to the ESOP (178) (1,049) (1,976)
Repayments of borrowings (230) (123) (477)
Payments of finance lease liabilities (1) (15) (9)
Dividends paid (670) - (1,030)
Net cash used in financing activities (1,079) (1,153) (3,458)
Net decrease in net cash (including bank overdrafts) (8,427) (2,151) (567)
Cash and bank overdrafts at beginning of period 10,593 11,160 11,160
Cash and bank overdrafts at end of period 2,166 9,009 10,593
Cash and cash equivalents 1,492 9,009 10,593
Cash and cash equivalents included within disposal group - -
assets 6a 674
2,166 9,009 10,593
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 and Inventory Services. Professional Business
Services principally covers business valuation, consultancy and agency, mortgage
and insurance services, and business appraisal. Stock and Inventory Services
covers stock audit and counting, compliance and food safety audits and inventory
preparation and valuation.
2. Basis of preparation
These interim consolidated financial statements of Christie Group plc are for
the six months ended 30 June 2008. The interim financial statements have been
prepared using accounting policies set out in the Annual Report and Financial
Statements for the year ended 31 December 2007 and in accordance with those IFRS
and IFRIC interpretations issued and effective or issued and early adopted as at
the time of preparing these statements (September 2008). These consolidated
interim financial statements have been prepared under the historical cost
convention, with the exception of the disposal group assets and liabilities
(see note 6a) which have been prepared in accordance with IFRS 5 - 'Non-current
Assets held for Sale
and Discontinued Operations'.
These consolidated interim financial statements have been prepared in accordance
with IAS 34 'Interim Financial Reporting'. They do not include all of the
information required for full annual financial statements and should be read in
conjunction with the consolidated financial statements for the year ended 31
December 2007. The financial information included in this interim report for the
six months ended 30 June 2008 does not constitute statutory financial statements
as defined by Section 240 of the Companies Act 1985 and is unaudited. The
comparative information for the six months ended 30 June 2007 is also unaudited.
The comparative figures for the year ended 31 December 2007 have been extracted
from the Group's financial statements as filed with the Registrar of Companies,
on which the auditors gave an unqualified opinion and did not make a statement
under Section 237 (2) or (3) of the Companies Act 1985.
The preparation of financial statements in accordance with IFRS requires the use
of certain critical accounting estimates. It also requires management to
exercise judgement in the process of applying the Company's accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated interim financial
statements, are disclosed in Note 3.
Interpretations and amendments effective in 2008
The following amendments and interpretations to standards are mandatory for the
Group's accounting periods beginning on or after 1 January 2008.
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.
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 2007.
On recognition of the assets and liabilities of the Software Solutions business
as a disposal group in accordance with IFRS 5 'Non-current Assets held for Sale
and Discontinued Operations', an adjustment to fair values was recognised in
respect of the Goodwill and Software development as detailed in Note 6a.
4. Segment information
a. Primary reporting format - business segments
The Group is organised into two main business segments: Professional Business
Services and Stock and Inventory Services. The third segment, Software
Solutions, has been classified as discontinued operations as detailed in Note
6a.
The segment results for the period ended 30 June 2008 are as follows:
Professional Business Services Stock and Inventory Services Total continuing operations
£'000 £'000 £'000 Discontinued operations
Other £'000 Group
£'000 £'000
Total gross segment sales 22,313 13,404 1,491 37,208 7,677 44,885
Inter-segment sales (52) - (1,491) (1,543) - (1,543)
Revenue 22,261 13,404 - 35,665 7,677 43,342
Operating profit/(loss) 111 702 37 850 (10,897) (10,047)
Net finance credit 64
Loss before tax (9,983)
Taxation -
Loss for the period after tax (9,983)
The segment results for the period ended 30 June 2007 are as follows:
Professional Business Services Stock and Inventory Services Total continuing operations
£'000 £'000 £'000 Discontinued operations
Other £'000 Group
£'000 £'000
Total gross segment sales 26,291 12,479 1,875 40,645 7,333 47,978
Inter-segment sales - - (1,875) (1,875) - (1,875)
Revenue 26,291 12,479 - 38,770 7,333 46,103
Operating profit/(loss) 5,061 646 (805) 4,902 (683) 4,219
Net finance credit 107
Profit before tax 4,326
Taxation (1,744)
Profit for the period after tax 2,582
The segment results for the year ended 31 December 2007 are as follows:
Professional Business Services Stock and Inventory Services Total continuing operations
£'000 £'000 £'000 Discontinued operations
Other £'000 Group
£'000 £'000
Total gross segment sales 51,253 23,320 2,913 77,486 12,899 90,385
Inter-segment sales (100) - (2,913) (3,013) - (3,013)
Revenue 51,153 23,320 - 74,473 12,899 87,372
Operating profit/(loss) 10,261 544 (531) 10,274 (3,273) 7,001
Net finance credit 214
Profit before tax 7,215
Taxation (2,567)
Profit for the period after tax 4,648
Other segment items included in the income statement are as follows:
Stock and Inventory Services
Professional Business Services £'000 Total continuing operations
£'000 £'000 Discontinued operations
Other £'000 Group
£'000 £'000
For the period ended 30 June 2008
Depreciation and amortisation 178 228 25 431 146 577
Impairment of trade receivables 612 (8) - 604 166 770
For the period ended 30 June 2007
Depreciation and amortisation 209 276 48 533 110 643
Impairment of trade receivables 95 (4) - 91 (231) (140)
For the year ended 31 December 2007
Depreciation, amortisation and impairment 402 549 1,027 1,546 2,573
76
Impairment of trade receivables 469 14 - 483 (121) 362
Segment assets consist primarily of property, plant and equipment, intangible
assets, inventories, receivables and operating cash. They exclude taxation.
Segment liabilities comprise operating liabilities. They exclude items such as
taxation and corporate borrowings.
Capital expenditure comprises additions to property, plant and equipment and
intangible assets.
The segment assets and liabilities at 30 June 2008 and capital expenditure for
the period then ended are as follows:
Professional Business Services Stock and Inventory Services Total continuing operations
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