RNS Number : 0257C
1st Dental Laboratories PLC
27 August 2008
1st Dental Laboratories plc ("1st Dental" or the "Company")
Interim Results
1st Dental Laboratories plc (AIM:FDT), the UK's leading quoted provider of laboratory
services to the dental industry, announces interim
results for the six months to 31 May 2008.
The results for the first six months of our trading year, which reflect the business
disruptions that I mentioned earlier in the year
are disappointing. These disruptions resulted in a downturn in both turnover and margin at our
Stourport and Blackpool laboratories.
However, we are pleased to report that at Stourport turnover and margin has now returned
to 84% of the pre-disruptions level.
With the assistance of a dedicated sales and marketing team we also hope to rebuild the
Blackpool business to previous levels within the
year; we have already seen a number of clients returning to us.
The underlying business continues to perform as well as it did in the second half of last
year with certain laboratories showing good
growth especially in the Midlands and Yorkshire areas. This growth comes from an increase in
private prescriptions and areas of NHS growth,
an indicator that the PCT changes are behind us.
e-teeth continues to grow at an impressive rate and since its launch we have seen
month-on-month compound turnover growth of 16%.e-teeth has become a very successful business unit having now over taken three of our smaller
laboratories in terms of turnover. This
business is made up of new clients and we see no migration from existing accounts across to
e-teeth. We are looking forward to further
increases in performance throughout the year.
Financial results and highlights
Turnover £4,874k (2007: £5,376k)
Gross profit £1,634k (2007: £1,919k)
Gross margin 33.5% (2007: 35.7%)
Loss for period £141k (2007: Loss £195k, restated profit under IFRS £63k)
Net profit contributions from Laboratories £487k (2007: £781k)
Head office costs £428k (2007: £519k)
Group Administrative cost £1,697k (2007: £1,768k)
Bank debt reduction in period of £358k to £1,390k (2007: £1,748k)
Outlook
These results are disappointing following the 2007 financial statements. However, this is
due to the disruptions as previously mentioned
and these laboratories are now recovering. At the half year we see a loss of £141k and at the
same period before restatement in 2007 we
reported a loss of £195k. From this position we went onto produce last year's results of
recurring EBITDA* of £1,029k and operating profit
before goodwill amortisation of £555k. We should note there has been positive cash generation
in the first half of this year.
Despite the business interruptions at the start of the year, the core laboratory business
units are performing well, added to the
continuing growth of e-teeth, a strengthened management team and Board, the executives believe
the Company's prospects to the end of the
year are good.
* recurring is defined as profit from the laboratory business
Andrew Garner
Chairman
27th August 2008
For Further information:
Andrew Garner 01509 650 111
Chairman 1st Dental Laboratories plc
Nicola Marrin
Seymour Pierce Limited 020 7107 8000
1st Dental Laboratories plc
Consolidated Income Statement
for the 6 months ended 31 May
2008
Unaudited 6 months Restated Unaudited 6
Restated Unaudited
ended months ended
year ended
31 May 08 31 May 07
30 Nov 07
Continuing operations £'000 £'000
£'000
Revenue 4,874 5,376
11,022
Cost of sales (3,240) (3,457)
(6,840)
Gross profit 1,634 1,919
4,182
33.5% 35.7%
37.9%
Total administrative expenses (1,697) (1,768)
(3,629)
Operating (loss) / profit (63) 151
553
Finance costs
Finance income 22 27
53
Finance costs (100) (115)
(227)
(Loss) / profit on ordinary (141) 63
379
activities before tax
Tax on (loss) / profit on - -
-
ordinary activities
(Loss) / profit for the period (141) 63
379
from continuing operations
(Loss) / earnings per share:
Basic and diluted (0.34) p 0.15 p
0.90 p
1st Dental Laboratories plc
Consolidated Balance Sheet
Unaudited Restated unaudited
Restated unaudited
31 May 08 31 May 07
30 Nov 07
Assets £'000 £'000
£'000
Non Current Assets
Intangible assets 7,087 7,084
7,087
Property, plant and equipment 1,894 1,897
1,832
8,981 8,981
8,919
Current Assets
Inventories 302 302
321
Trade & other receivables 1,367 1,696
1,553
Cash and cash equivalent 712 752
1,067
2,381 2,750
2,941
Total Assets 11,362 11,731
11,860
Current Liabilities
Trade creditors & other (731) (899)
(946)
payables
Interest bearing loans & (642) (488)
(632)
borrowings
(1,373) (1,387)
(1,578)
Non Current Liabilities
Interest bearing loans & (1,460) (2,011)
(1,625)
borrowings
Total Liabilities (2,833) (3,398)
(3,203)
Net Assets 8,529 8,333
8,657
Equity
Called up share capital 4,202 4,202
4,202
Share premium account 6,358 6,358
6,358
Equity reserve 99 78
86
Profit and loss account (2,130) (2,305)
(1,989)
Total Equity 8,529 8,333
8,657
These financial statements were approved by the board of directors on 27th August 2008 and
were signed on its behalf by:
Roger Smallwood
Director
1st Dental Laboratories plc
Consolidated Statement of Changes in Equity
as at 31 May 2008
Share capital Share premium Equity
reserve Profit and loss Total
account
£'000 £'000
£'000 £'000 £'000
Balance at 1 December 2006 4,202 6,358
71 (2,368) 8,263
Profit for the period - -
- 379 379
Change in equity reserve - -
15 - 15
Balance as at 30 November 2007 4,202 6,358
86 (1,989) 8,657
Loss for the period - -
- (141) (141)
Change in equity reserve - -
13 - 13
Balance as at 31 May 2008 4,202 6,358
99 (2,130) 8,529
The Equity reserve relates to share based payments reserve and represents the increase in
equity that corresponds to the
expense recognised in the income statement in respect of the Group's share option scheme.
1st Dental Laboratories plc
Consolidated Cashflow
Statement
for the year ended 31 May 2008
Unaudited for the 6 Restated Unaudited 6 Restated
Unaudited
months ended months ended
year ended
31 May 08 31 May 07
30 Nov 07
£'000 £'000
£'000
Cash flows from operating
activities
Cash generated from operations 86 315
1,103
Income taxes received - 53
52
Finance income 22 27
53
Finance costs (100) (115)
(227)
Net cash from operating 8 280
981
activities
Cash outflows from investing
activities
Purchase of property, plant & (154) (82)
(169)
equipment
Proceeds from sale of 13 5
22
property, plant & equipment
Acquisition of subsidiary - -
(75)
Net cash used in investing (141) (77)
(222)
activities
Cash flows from financing
activities
Payment of finance lease (67) (31)
(60)
liabilities
Repayment of borrowings (155) (596)
(808)
Net cash used in financing (222) (627)
(868)
activities
Net decrease in cash and cash (355) (424)
(109)
equivalents
Cash and cash equivalents at 1,067 1,176
1,176
beginning of period
Cash and cash equivalents at 712 752
1,067
end of period
Reconciliation of (loss) / Unaudited for the 6 Restated Unaudited 6 Restated
Unaudited
profit before tax to cash months ended months ended
year ended
flows from operating
activities
31 May 08 31 May 07
30 Nov 07
(Loss) / profit after tax (141) 63
379
Adjustments for
depreciation 133 134
264
equity settled share based 13 7
15
payment expenses
(profit)/loss on sale of 13 (1)
4
property, plant and equipment
net finance cost 78 88
174
Changes in working capital
stock 19 34
15
trade and other receivables 186 241
384
trade and other payables (215) (251)
(132)
Cash generated from operations 86 315
1,103
1st Dental Laboratories plc
Notes to the interim financial statements
for the six months ended 31 May 2008
1. Significant accounting policies
Basis of preparation
The interim results have been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU. These
are the Group's first interim financial statements prepared under IFRS and are in accordance
with IAS 34 "Interim Financial Reporting". The
disclosures required by IFRS1 "First time adoption of IFRS" concerning the transition from UK
GAAP to IFRS have been included in these
notes.
These interim results are unaudited and have not been reviewed by the Group's auditors.They were approved by the Board of Directors on
27th August 2008.
The statutory accounts for the period ended 30 November 2007, which were prepared under UK
GAAP, have been reported on by the Group's
auditors and delivered to the registrar of companies. The report of the auditors was
unqualified and did not contain the statements under
section 237(2) or (3) of the Companies Act 1985. The interim financial information does not
constitute statutory accounts as defined under
Section 240 of the Companies Act 1985.
The accounting policies applied by the Group resulting from changes for IFRS are set out
below. In all other respects, they are the same
as those applied in the consolidated financial statements for the period ended 30 November
2007.
Goodwill
Acquisitions are accounted for using the acquisition method. Goodwill is stated at cost
less any accumulated impairment losses.
Holiday pay accrual
Holiday pay accrual is reflected in both current interim and prior years.
2. Seasonality
In the directors' opinion there are no seasonal variations in business operations.
3. Segmental reporting
There is one geographical market segment - UK and one business segment relating to the
principal activity, being the manufacture of
dental appliances.
4. Taxation
There is no taxation in the periods.
5. (Loss) / earnings per share
The calculation of loss per share is based on restated loss of £141k in May 2008, profit
of £379k in November 2007 and loss of £63k in
May 2007, and 42 million shares (Nov 2007: 42m, May 2007: 42m), being the average number of
shares in issue. The share options are
non-dilutive.
6. Property, plant and equipment £'000
Net book value at 1 December 2007 1,832
Additions 208
Disposals (13)
Depreciation (133)
Net book value at 31 May 2008 1,894
7. Explanation of transition to IFRS
1st Dental Laboratories plc's consolidated financial statements were prepared in
accordance with United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice) until 30 November 2007. The date of
transition to IFRS was 1 December 2006. The
comparative figures in respect of 2007 have been restated to reflect changes in accounting
policies as a result of adoption of IFRS. IFRS 1
permits companies adopting IFRS for the first time to take certain exemptions from the full
requirements of IFRS in the transition period.These interim financial statements have been prepared on the basis of taking the following
exemptions:
- Business combinations prior to 1 December 2006 have not been restated to comply with
IFRS 3 "Business combinations".
Accordingly there has been no adjustment to the accounting treatment adopted by the Group
for previous acquisitions.
- Share based payments - IFRS 2. Share based payments has only been applied to awards
granted after 7 November 2007.
8. Material adjustments to the Balance Sheet and Income statement
Note Restated Unaudited 6 months ended Restated Unaudited
year ended
31 May 07
30 Nov 07
£'000
£'000
Income Statement
Loss for the period under UK (195)
(44)
GAAP
Amortisation (a) 209
425
Holiday pay accrual (b) 49
(2)
Profit for the period under 63
379
IFRS
1st Dental Laboratories plc
Restatement of Balance Sheet as at 31 May 2008
At 31 May 2008
At 31 May 2007
At 30 November 2007
Unaudited
Restated unaudited
Restated unaudited
Note Under IAS Under UK GAAP Effect under
Under IAS Under UK GAAP Effect
under transition Under IAS
transition
Assets £'000 £'000
£'000 £'000 £'000
£'000 £'000
Non Current Assets
Intangible assets (a) 7,087 6,875 209
7,084 6,662
425 7,087
Property, plant and equipment 1,894 1,897 -
1,897 1,832
- 1,832
8,981 8,772 209
8,981 8,494
425 8,919
Current Assets
Inventories 302 302 -
302 321
- 321
Trade & other receivables 1,367 1,696 -
1,696 1,553
- 1,553
Cash and cash equivalent 712 752 -
752 1,067
- 1,067
2,381 2,750 -
2,750 2,941
- 2,941
Total Assets 11,362 11,522 209
11,731 11,435
425 11,860
Current Liabilities
Trade creditors & other (b) (731) (882) (17)
(899) (878)
(68) (946)
payables
Interest bearing loans & (642) (488) -
(488) (632)
- (632)
borrowings
(1,373) (1,370) (17)
(1,387) (1,510)
(68) (1,578)
Non Current Liabilities
Interest bearing loans & (1,460) (2,011) -
(2,011) (1,625)
- (1,625)
borrowings
Total Liabilities (2,833) (3,381) (17)
(3,398) (3,135)
(68) (3,203)
Net Assets 8,529 8,141 192
8,333 8,300
357 8,657
Equity
Called up share capital 4,202 4,202 -
4,202 4,202
- 4,202
Share premium account 6,358 6,358 -
6,358 6,358
- 6,358
Equity reserve (c) 99 - 78
78 -
86 86
Profit and loss account (d) (2,130) (2,419) 114
(2,305) (2,260)
271 (1,989)
Total Equity 8,529 8,141 192
8,333 8,300
357 8,657
Explanation
(a) The Group has applied IFRS 3 to all business combinations that have occurred since 1
December 2006 (the date of transition to IFRS).Goodwill in all business combinations is not amortised under IFRS*s but is tested annually for
impairment.
The goodwill amortisation charge has been written back, the effect being to increase
intangible assets by £209k and £425k at 31 May 2007 and
30 November 2007 respectively with a corresponding increase in the profit for the period and
retained earnings.
(b) The Group has not previously recorded holiday pay accruals, being the estimated
liability for employees* outstanding contracted
holiday entitlement. Under IFRS, the Group has accounted for this liability resulting in
increased creditors of £17k and £68k at 31 May 2007
and 30 November 2007 and a corresponding reduction in profit and retained earnings. The
opening retained earnings at 1 December 2006 include
an accrual for holiday pay of £66k at the date of transition to IFRS.
(c) The Group has previously accounted for share options under UK GAAP. The IFRS balance
sheet has transferred the cumulative expense
recognised in the income statement to a separate equity reserve rather than presenting in the
profit and loss reserve as under UK GAAP.
(d) The effect of the IFRS adjustment on retained earnings is as follows:
31 May 2007 30 Nov 2007 1 Dec 2006
£'000 £'000 £'000
Goodwill amortisation 209 425 -
Holiday pay accrual (17) (68) (66)
Share based payment
expenses transferred to equity (78) (86) (71)
reserve
Total adjustments 114 271 (137)
The transition has not had any material impact on the Group's cashflow.
9. Copies of the Interim Report
Copies of the interim report are being sent to shareholders and are also available to the
public from the company's website and head
office - Company Secretary, 1st Dental Laboratories plc, 112 Wetherby Road, Harrogate HG2
7AB.
This information is provided by RNS
The company news service from the London Stock Exchange
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