RNS Number : 1730K
Wyatt Group PLC
16 December 2008
WYATT GROUP PLC
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT
FOR THE PERIOD ENDED 30 SEPTEMBER 2008
CHAIRMAN'S STATEMENT
I am reporting on what has been a challenging period for the Group. In the 6 months to 30 September 2008 the Group made an operating
loss on continuing activities before joint venture losses and interest of �332,195 (2007: �567,602 profit ). This was on a turnover of
�468,288 (2007: �1,557,818). The marked decline in results is due to the partial withdrawal of a highly lucrative tax scheme administrated
by Group company, Premier Employer Solutions Limited ('PES'), which is detailed further below.
Employment Services
The main trading companies in the Group are PES, PES Employee Benefits Limited, Health & Safety Department Limited and TEBC Limited.
These businesses work closely together to provide a range of integrated employment services to organisations across the UK.
TEBC was acquired on 1 August 2008 for an initial consideration of �150,000 that could rise to �600,000 dependant upon performance. It
is authorised to provide support to businesses on pensions and other regulated employee benefits. This will be fully integrated with our
existing regulated business, PES Employee Benefits Limited and will trade under this name going forward. This integration process will be
completed by the end of this calendar year.
I am delighted with the progress that TEBC has made since joining the Group. The business is profitable and the management has
integrated well with that of PES. There are some very exciting opportunities in the pipeline working with some high quality blue chip
clients. Current market conditions are leading companies to review their employee benefits arrangements and the combined TEBC and PES
Employee Benefits team is well placed to offer support. This, coupled with the opportunities presented by the current PES client bank, gives
us every reason to be optimistic about the growth potential of this business.
PES provides a range of employment related consultancy and support services focused around human resources, reward and employment tax.
On 31 July, I reported that a change in tax legislation had had an adverse effect on this business. This, coupled with the current economic
climate has led to a particularly challenging period for PES. A number of its SME clients have been casualties of the tough economic climate
and one or two areas have under performed.
We are however seeing a drive towards outsourcing and we remain confident about the Group's long term prospects. The management team
has been working hard to rebuild the core business. We have recently completed a cost reduction exercise across the whole business and have
made some progress in growing the recurring income streams. As a whole, our Employment Services business is on target to show a much
improved trading performance in the early part of 2009.
Some of the recent developments to note include:
* Partnership with GP Care to provide an exclusive HR service to GP Practices in the South West.
* Partnership with Vision Risk Management to exclusively provide their clients with HR and Health & Safety support in the South
West. Vision Risk Management is part of Liberty Group and provides a range of Legal Expenses Insurance Products.
* Launch of our HR Franchise. We believe that it is a perfect time to expand our franchise business giving us:
- A wider geographical coverage
- Additional revenue streams
- Routes to market for the wider range of PES / PES Employee Benefits products and services
We have partnered with a national recruitment business and have already had a tremendous response; with a large number of potential
franchisees already in the pipeline.
* We are now one of only 3 preferred partners of GWE Business West, giving us access to 5,000 SME clients all across the South
West.
The Health & Safety Department Limited is being integrated into PES and by the end of this current financial year there will be just 2
operating divisions in the Employment Services business namely PES and PES Employee Benefits.
Prospects
Despite the challenging market conditions the Group continues to make progress following its recent divestment of non-performing
activities. However, the Board recognises the need for growth and to start to reward the patience of our shareholders. In addition to the
improvements in our existing businesses, we are still actively investigating acquisition opportunities and anticipate further news in this
area in the fourth quarter of our financial year.
R Holt
Chairman
15 December 2008
Enquiries:
Wyatt Group PLC www.wyattgroup.co.uk
Bob Holt, Chairman 07778798816
David Curtis, Finance Director 0845 450 9110
Blue Oar Securities Plc www.blueoarsecurities.co.uk
Nick Lovering 020 7448 4400
UNAUDITED CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
For the period ended 30 September 2008
Note 6 months to 6 months to 12 months to 31
30 September 2008 30 September 2007 March
� � 2008
�
Continuing operations
Revenue 468,288 1,557,818 2,249,136
Cost of sales (279,688) (358,856) (661,571)
Gross profit 188,600 1,198,962 1,587,565
Administrative expenses (520,795) (631,360) (1,096,023)
Operating (loss)/profit
(332,195) 567,602 491,542
Share of operating loss in (1,193) (16,114) (37,891)
joint venture
Finance costs (37,510) - (38,625)
(Loss)/profit from continuing 415,026
operations before taxation (370,898) 551,488
Income tax expense - (12,908) -
(Loss)/profit after taxation
(370,898) 538,580 415,026
Discontinued operations
Profit/(loss) for the period
from discontinued operations 4,306 (364,782) (935,461)
(Loss)/profit for the period
(366,592) 173,798 (520,435)
Attributable to:
Equity holders of the company (366,592) 188,955 (450,694)
Minority interests - (15,157) (69,741)
(Loss)/profit for the period (366,592) 173,798 (520,435)
Basic and diluted 2 0.03p (2.88p) (6.49p)
earnings/(loss) per share on
discontinued activities
Basic and diluted 2 (2.64p) 4.25p 3.11p
(loss)/earnings per share on
continuing activities
Basic and diluted 2
(loss)/earnings per share on (2.61p) 1.37p (3.38p)
all activities
UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
As at 30 September 2008
Note As at 30 September As at 30 September 2007 As at 31 March
2008 � 2008
� �
ASSETS
Non-current assets
Intangible assets 770,585 1,285,007 1,223,578
Property, plant and equipment 65,183 183,121 101,449
Investments - 24,127 -
835,768 1,492,255 1,325,027
Current assets
Inventories 20,759 33,274 31,516
Trade and other receivables 315,770 748,446 628,850
Total current assets 336,529 781,720 660,366
Total assets 1,172,297 2,273,975 1,985,393
LIABILITIES
Current liabilities
Trade and other payables (704,591) (900,447) (705,926)
Share of joint venture net (35,423) - (34,230)
liabilities
Current tax liabilities (27,238) (12,908) -
Borrowings (835,169) (527,680) (821,058)
Provisions - (200,000) -
Total current liabilities (1,602,421) (1,641,035) (1,561,214)
Non-current liabilities
Borrowings (132,912) - (29,128)
Provisions (329,340) (920,835) (920,835)
Total non-current liabilities (462,252) (920,835) (949,963)
Total liabilities (2,064,673) (2,561,870) (2,511,177)
Net liabilities (892,376) (287,895) (525,784)
EQUITY
Share capital 140,654 126,594 140,654
Share premium account 1,902,700 1,902,700 1,902,700
Merger reserve 227,742 41,802 227,742
Other reserve - (45,640) -
Profit and loss account (3,163,472) (2,157,231) (2,796,880)
(892,376) 131,775 (525,784)
Minority interests - (156,120) -
Total Equity (892,376) (287,895) (525,784)
UNAUDITED CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT
For the period ended 30 September 2008
Note 6 months to 6 months to 12 months to 31
30 September 2008 30 September 2007 March
� � 2008
�
Cash flows from operating
activities
(Loss)/profit after taxation (366,592) 173,798 (520,435)
Depreciation & Impairment 46,145 133,796 575,696
charges
Share of JV operating loss 1,193 16,114 37,891
Interest expense 39,709 20,016 79,130
Decrease/(increase) in trade 330,359 (161,542) (31,377)
and other receivables
Decrease/(increase) in 10,757 (17,774) (16,016)
inventories
(Decrease)/increase in trade (19,354) 52,084 (146,994)
and other payables
Loss on disposal of fixed - - 20,010
assets
Cash generated from operations 42,217 216,492 (2,095)
Interest paid (39,709) (20,016) (79,130)
Income taxes paid - - -
Net cash from operating 2,508 196,476 (81,225)
activities
Cash flows from investing
activities
Acquisition of subsidiary (177,720) (24,127) (29,807)
Net cash acquired with 57,317 - (30,604)
subsidiary
Purchase of property, plant - (42,031) (50,552)
and equipment
Net cash used in investing (120,403) (66,158) (110,963)
activities
Cash flows from financing
activities
Proceeds from long term 101,035 (26,569) (23,543)
borrowings
Net cash used in financing 101,035 (26,569) (23,543)
activities
Net increase/(decrease) in 3 (16,860) 103,749 (215,731)
cash and cash equivalents
Cash and cash equivalents at (794,418) (578,687) (578,687)
beginning of the period
Cash and cash equivalents at (811,278) (474,938) (794,418)
end of the period
UNAUDITED NOTES TO THE ACCOUNTS
For the period ended 30 September 2008
1. BASIS OF PREPARATION
These interim condensed consolidated financial statements are for the six months ended 30 September 2008. They have been prepared in
accordance with the requirements of International Financial Reporting Standards. 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 of the Group for the year
ended 31 March 2008.
These condensed consolidated interim statements have been prepared under the historical cost convention.
These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the
accounting policies set out below which are based on the recognition and measurement principles of IFRS in issue as adopted by the European
Union (EU).
2. EARNINGS PER SHARE
The basic earnings per share is based upon an equity loss of �366,592 (2007: �188,955 profit) and 14,050,013 (2007: 12,659,446) ordinary
shares of 1p each, being the weighted average number of shares in issue during the period.
The diluted earnings per share is identical to the basic earnings per share because the exercise price of all the share options in issue
during the period was greater than the average market price of the share throughout the period. Therefore, the share options are not
considered to be dilutive.
3. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
6 months to 6 months to 12 months to 31
30 September 2008 30 September 2007 March
� � 2008
�
(Decrease)/increase in cash
and cash equivalents in the (16,860) 103,749 (215,731)
period
Cash (inflow)/outflow from (101,035) 26,569 23,543
borrowings
Change in net debt resulting (117,895) 130,318 (192,188)
from cash flows
Net debt at 1 April 2008 (850,186) (657,998) (657,998)
Net debt at 30 September 2008 (968,081) (527,680) (850,186)
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNDER IFRS
The significant accounting policies adopted in the preparation of the Group's IFRS financial information are set out in the consolidated
financial statements of the Group for the year ended 31 March 2008.
5. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in the report does not constitute statutory accounts as defined in section 240 of the Companies Act
1985.
6. INTERIM FINANCIAL STATEMENTS
Further copies of the interim statements are available from the registered office of Wyatt Group PLC at Parkway House, Hambrook Lane,
Stoke Gifford, Bristol BS34 8QB and on the Group's website, www.wyattgroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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