RNS Number : 0540C
Synarbor PLC
27 August 2008
27 August 2008
Synarbor PLC
Interim Report 2008 for the 26-week period ended 29 June 2008
Highlights
* Net debt reduced by 19% to �10.2m (2007: �12.6m)
* Conversion of net fee income to normalised EBITA* of 32% (2007: 36%)
* Profit before tax �2.2m (2007: �0.6m)
* Normalised profit before tax** �2.2m (2007: �2.2m)
* Profit from operations �2.4m (2007: �1.2m)
* Basic earnings per share of 3.1p (2007: (0.4)p)
* Adjusted earnings per share 3.1p (2007: 4.2p)
*Normalised EBITA is profit from operations before exceptional items
**Normalised profit before tax is profit before tax adjusted for exceptional items
Contact: Dean Kelly
Chief Executive Officer, Synarbor PLC
Daniel Urmson
Group Finance Director, Synarbor PLC
Robert Kelsey
Moorgate Group
Telephone: Moorgate, +44 (0) 20 7953 7772 until 18:00
Thereafter: Synarbor PLC, +44 (0) 114 283 4925
Chairman's Statement
In such uncertain times having a business model that is dependent on the less volatile flow of government spending must be a good thing.
Yet this is only a partial safe haven. Unlike the 2000/01 downturn, government spending in the coming years is likely to be constrained. And
government priorities can change - these days as rapidly as any business. That said, in 2007 Synarbor changed its business model to realign
itself more closely with the government's priorities for education and social care, before even the government itself managed such a
realignment with respect to its government departments. Having this vision, and being this nimble, makes me confident that Synarbor can
weather the worsening economic outlook.
Indeed, these interim figures reflect both our vision and the current mixed economic environment. Our revenues remain robust at �29.8
million (down from �31.7 million in the corresponding 2007 period) despite the poor trading environment, and our normalized profitability
before tax has remained static at �2.2 million. Given this, adjusted earnings per share at 3.1p (against 4.2p in 2007) are a little above
our expectations, although we remain cautious with respect to the remainder of the year.
Perhaps our most significant fiscal achievement has been the continued decline in our net debt, which now stands at �10.2 million (down
from �12.6 million at this point in 2007). Indeed, the core conclusion of the figures is that Synarbor remains in a state of positive change
- improving its balance sheet while adjusting to a new business model, a new board and an altered and relaunched offering, and all the while
coping with challenging market conditions.
New contract wins - such as the partnership with training enterprise Computer Gym - and the award of preferred supplier status for
recruitment solutions to Birmingham City Council and Kent County Council, as well as the NSPCC, show the way forward for Synarbor. In that
respect we have had a solid six months, with further positive announcements, hopefully, in the pipeline in the medium term.
Luke Johnson
Chairman
27 August 2008
Synarbor PLC
Consolidated income statement for the twenty-six week period ended 29 June 2008
_________________________________________________________________________ ________________________________
Note Twenty-six week Twenty-six week Year ended 31
period ended 29 June period ended 30 June December
2008(unaudited)�*000 2007(unaudited)�*000 2007(audited)�*000
Continuing Operations
Revenue 29,831 31,733 56,383
Cost of sales (22,408) (23,843) (42,172)
_______ _______ _______
Gross profit 7,423 7,890 14,211
Administrative expenses (5,018)______ (6,682)______ (10,962)_______
Profit from operations before 2,405 2,835 5,062
exceptional items
Exceptional items 3 - (1,627) (1,813)
Profit from operations 2,405 1,208 3,249
Finance costs (480) (952) (1,522)
Finance income 239_______ 321_______ 23_______
Profit before tax 2,164 577 1,750
Tax expense (779) (217) (137)
_______ _______ _______
Profit for the period from 1,385 360 1,613
continuing operations
Discontinued Operations
Loss for the period from 4 -_______ (518)_______ (789)_______
discontinued operations
Profit/(loss) for the 1,385_______ (158)_______ 824_______
periodattributable to the
equity holders of the parent
Basic earnings per share 6
(pence)
- continuing operations 3.1 1.0 4.0
- discontinued operations -_______ (1.4)_______ (2.0)_______
- basic earnings per share 3.1_______ (0.4)_______ 2.0_______
Diluted earnings per share 6
(pence)
- continuing operations 3.1 1.0 4.0
- discontinued operations -_______ (1.4)_______ (2.0)_______
- diluted earnings per share 3.1_______ (0.4)_______ 2.0_______
Synarbor PLC
Consolidated balance sheet at 29 June 2008
As at29 June As at30 June As at31 December
2008(unaudited)�*000 2007(unaudited)�*000 2007(audited)�*000
Assets
Non-current assets
Property, plant and equipment 356 383 391
(PPE)
Intangible assets 36,538 36,960 36,770
Deferred tax assets 10 50 75
_______ _______ _______
Total non-current assets 36,904 37,393 37,236
Current assets
Trade and other receivables 7,259 8,340 6,976
Other financial assets 120 207 -
Cash and cash equivalents 38 1,384 353
_______ _______ _______
Total current assets 7,417 9,931 7,329
_______ _______ _______
Total assets 44,321 _______ 47,324 _______ 44,565 _______
Liabilities
Current liabilities
Short term borrowings (308) (2,022) (2,428)
Current element of long term (2,053) (2,727) (1,826)
borrowings
Trade and other payables (4,202) (5,480) (3,444)
Other financial liabilities - - (97)
Current tax liabilities (692) (381) (12)
_______ _______ _______
Total current liabilities (7,255) (10,610) (7,807)
Non-current liabilities
Long term borrowings (7,883) (9,251) (8,561)
Trade and other payables - (665) (399)
_______ _______ _______
Total non-current liabilities (7,883)_______ (9,916)_______ (8,960)_______
Total liabilities (15,138)_______ (20,526)_______ (16,767)_______
TOTAL NET ASSETS 29,183 26,798 27,798
_______ _______ _______
Synarbor PLC
Consolidated balance sheet at 29 June 2008 (Continued)
As at29 June As at30 June As at31 December
2008(unaudited)�*000 2007(unaudited)�*000 2007(audited)�*000
Capital and reserves
attributable to equity holders
of the company
Share capital 4,511 4,511 4,511
Share premium reserve 15,996 15,996 15,996
Share scheme reserve 60 42 60
Other reserves 3,610 3,610 3,610
Retained earnings 5,006 2,639 3,621
_______ _______ _______
TOTAL EQUITY 29,183 _______ 26,798 _______ 27,798_______
Synarbor PLC
Consolidated statement of changes in equity for the twenty-six week period ended 29 June 2008
Attributable to equity holders of the parent
Share capital�*000 Share premium�*000 Share scheme Merger reserve�*000 Other reserve�*000
Retained Total equity�*000
reserve�*000
earnings�*000
Balance as at 1 January 2007 3,291 12,316 41 (425) 4,790
2,042 22,055
Changes in equity for 2007
Loss and total recognised - - - - -
(158) (158)
income and expense for the
period
Issue of share capital 1,220 3,780 - - -
- 5,000
Costs of share issue - (100) - - -
- (100)
Release of merger and other - - - 425 (1,180)
755 -
reserves on disposal of
discontinued operations
Share scheme charge - ______ - _______ 1 _______ - ______ - _______
- _______ 1 _______
Balance as at 30 June 2007 4,511 15,996 42 - 3,610
2,639 26,798
Changes in equity for 2007
Profit and total recognised - - - - -
982 982
income and expense for the
period
Share scheme charge - ______ - _______ 18 _______ - ______ - _______
- _______ 18 _______
Balance as at 31 December 4,511 15,996 60 - 3,610
3,621 27,798
2007
Changes in equity for 2008
Profit and total recognised - ______ - _______ - _______ - ______ - _______
1,385 _______ 1,385 _______
income and expense for the
period
Balance at 29 June 2008 4,511______ 15,996 ______ 60 ______ - ______ 3,610 ______
5,006 ______ 29,183 ______
Synarbor PLC
Consolidated cash flow statement for the twenty-six week period ended 29 June 2008
Note Twenty-six Twenty-six Year ended31
weekperiod ended29 weekperiod ended30 December
June June 2007(audited)�*000
2008(unaudited)�*000 2007(unaudited)�*000
Operating activities
Profit from continuing 2,405 1,208 3,249
operations
Profit from discontinued 4 - 116 30
operations
Adjustments for:
Depreciation 111 133 250
Share based payments - 1 19
Loss on sale of property, - _______ 7 _______ 1 _______
plant and equipment
Operating cash flow before 2,516 1,465 3,549
changes in working capital and
provisions
Increase in trade and other (298) (2,122) (739)
receivables
Increase/(decrease) in trade 774 296 (1,275)
and other payables
_______ _______ _______
Cash generated from/(used in) 2,992_______ (361)_______ 1,535 _______
operations
Income taxes paid (34) (223) (517)
_______ _______ _______
Cash flows from operating 2,958 (584) 1,018
activities
Investing activities
Disposal of subsidiary, net of - 5,387 5,387
cash disposed
Purchases of property, plant (75) (125) (276)
and equipment
Saleof property, plant and - - 30
equipment
Development costs (130) (42) (312)
Interest received 22 _______ 23 _______ 23 _______
2,775 4,659 5,870
Financing activities
Issue of ordinary shares - 5,000 5,000
Costs of share issue - (100) (100)
Repayment of loan notes - (2,553) (2,553)
Movement in short term debt (2,120) (2,536) (2,331)
Repayment of bank borrowings (699) (2,774) (4,436)
Repayment of finance lease - (3) (3)
creditors
Interest paid (271) (660) (1,445)
_______ _______ _______
(Decrease)/increase in cash (315) _______ 1,033 _______ 2_______
and cash equivalents
Synarbor PLC
Notes to the Interim Report for the twenty-six week period ended 29 June 2008
1. Basis of preparation
The interim financial information for the twenty-six week period ended 29 June 2008 has been prepared in accordance with the accounting
policies that will apply for the year ended 31 December 2008 which will follow the International Financial Reporting Standards (IFRS) and
interpretations as endorsed by the European Union.
2. Financial information
The interim financial information for the twenty-six week period ended 29 June 2008 does not constitute statutory accounts within the
meaning of section 240 of the Companies Act 1985. The comparatives for the full year ended 31 December 2007 are not the company's full
statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and did not contain a statement under section 237(2)-(3) of the Companies Act 1985.
The interim financial information has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
3. Exceptional items
Twenty-six week Twenty-six week Year ended 31
period ended 29 June period ended 30 June December 2007
2008(unaudited)�*000 2007(unaudited)�*000 (audited)�*000
Termination and office - _______ 1,627 _______ 1,813 _______
closure costs
4. Discontinued operations
In April 2007, the group sold Public Recruitment Group Holdings Limited. The income statement includes the following amounts relating
to discontinued operations:
Twenty-six week Year ended 31
period ended 30 June December 2007
2007(unaudited)�*000 (audited)�*000
Revenue 10,150 10,150
Cost of sales (8,946)_______ (8,946)_______
Gross profit 1,204 1,204
Administrative expenses (1,088)_______ (1,174)_______
Profit from operations 116 30
Finance costs (55)_______ (55)_______
Profit before tax 61 (25)
Tax expense (1) 24
Loss on disposal of (578)_______ (788)_______
discontinued operations
Loss for the period on (518)_______ (789)_______
discontinued operations
Synarbor PLC
Notes to the Interim Report for the twenty-six week period ended 29 June 2008 (Continued)
5. Dividends
There were no dividends declared or paid during the period.
6. Basic, diluted and adjusted earnings per share
Twenty-six Twenty-six Year ended 31
weekperiod ended 29 weekperiod ended 30 December
June June 2007(audited)Pence
2008(unaudited)Pence 2007(unaudited)Pence
Basic earnings per share
(pence)
Continuing operations 3.1 1.0 4.0
Discontinued operations - _______ (1.4)_______ (2.0) _______
Basic earnings per share 3.1 (0.4) 2.0
Exceptional items (net of - 3.2 3.2
tax)
Loss from discontinued - _______ 1.4 _______ 2.0_______
operations
Adjusted earnings per share 3.1 4.2 7.2
_______ _______ _______
Diluted earnings per share
(pence)
Continuing operations 3.1 1.0 4.0
Discontinued operations - _______ (1.4)_______ (2.0)_______
Diluted earnings per share 3.1 (0.4) 2.0
_______ _______ _______
Calculation of basic and
adjusted earnings
�*000 �*000 �*000
Profitfrom continuing 1,385 360 1,613
operations
Loss - _______ (518)_______ (789)_______
fromdiscontinuedoperations
Basic earnings 1,385 (158) 824
Exceptional items (net of tax) - 1,141 1,269
Loss from discontinued - _______ 518 _______ 789_______
operations
Adjusted earnings 1,385 1,501 2,882
_______ _______ _______
Synarbor PLC
Notes to the Interim Report for the twenty-six week period ended 29 June 2008 (Continued)
6. Basic, diluted and adjusted earnings per share (Continued)
Twenty-six Twenty-six Year ended 31
weekperiod ended 29 weekperiod ended30 December
June June 2007 2007(audited)Number
2008(unaudited) (unaudited)Number
Number
Calculation of number of 000*s 000*s 000*s
shares
Weighted average number of 45,108 35,325 40,230
shares in issue during the
period
_______ _______ _______
Certain employee options have not been included in the calculation of diluted EPS because their exercise is contingent on the
satisfaction of certain criteria that had not been met at the end of the period. In addition, certain employee options have also been
excluded from the calculation of diluted EPS as their exercise price is greater than the weighted average share price during the period
(i.e. they are out-of-the-money) and therefore would not be advantageous for the holders to exercise those options.
7. Analysis of net debt
As at29 June As at30 June As at31 December
2008(unaudited)�*000 2007(unaudited)�*000 2007(audited)�*000
Cash at bank and in hand 38 _______ 1,384 _______ 353 _______
Net cash 38 _______ 1,384 _______ 353 _______
Debt due within one year (2,361) (4,749) (4,254)
Debt due after one year (7,883) (9,251) (8,561)
Finance leases - _______ - _______ -_______
Debt (10,244)_______ (14,000)_______ (12,815)_______
Net debt (10,206)_______ (12,616)_______ (12,462)_______
This information is provided by RNS
The company news service from the London Stock Exchange
END
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