TIDMBQS
RNS Number : 6706V
Baqus Group PLC
05 November 2010
BAQUS GROUP PLC
("Baqus" or "the Group")
Final Results for the year ended 30 June 2010
Baqus Group plc (AIM:BQS), the building consultancy and quantity surveying
group, today announces its final results for the year ended 30 June 2010.
Financial highlights
+----------+-----------------------------------------------------------------+
| · | Revenue GBP7,262,000 (FY 2009: GBP7,853,000) |
| | |
+----------+-----------------------------------------------------------------+
| · | Loss before tax and exceptional items GBP823,000 (FY 2009: |
| | profit of GBP739,000) |
+----------+-----------------------------------------------------------------+
| · | Exceptional items GBP295,000 (FY 2009 GBPnil) |
| | |
+----------+-----------------------------------------------------------------+
| · | Basic loss per share of 0.72p (FY 2009: profit of 0.46p) |
| | |
+----------+-----------------------------------------------------------------+
Operational highlights
+----------+-----------------------------------------------------------------+
| · | New contract wins and increase in new business opportunities |
| | |
+----------+-----------------------------------------------------------------+
| · | Focus on reducing working capital and improving cash generation |
| | |
+----------+-----------------------------------------------------------------+
| · | Cost base reduced by c. GBP857,000 in the last year |
| | |
+----------+-----------------------------------------------------------------+
| · | Successful integration of Nigel Rose Group |
| | |
+----------+-----------------------------------------------------------------+
| · | Investment in workforce |
| | |
+----------+-----------------------------------------------------------------+
Commenting on the results, Clive Sayer, Chief Executive of Baqus Group plc,
said: "Baqus has realigned its strategy over the last year to adjust to the
difficult economic climate. We have focused on reducing costs, building cash
reserves and strengthening relationships with existing and potential clients in
both the public and private sectors. We remain optimistic about the long term
prospects for the Group and believe we have a strong team and strategy in place
to benefit from any upturn in the wider construction industry."
Contact:
+---------------------------------------+--------------------------+
| Baqus Group plc | 01243 792 220 |
+---------------------------------------+--------------------------+
| Clive Sayer (Chief Executive) | |
+---------------------------------------+--------------------------+
| Patrick Lineen (Finance Director) | |
+---------------------------------------+--------------------------+
| | |
+---------------------------------------+--------------------------+
| Seymour Pierce (Nominated Adviser and | 020 7107 8000 |
| Broker) | |
+---------------------------------------+--------------------------+
| Mark Percy / David Foreman (Corporate | |
| Finance | |
+---------------------------------------+--------------------------+
| Katie Ratner (Corporate Broking) | |
+---------------------------------------+--------------------------+
| Cubitt Consulting (Financial Public | 020 7367 5100 |
| Relations Advisers) | |
+---------------------------------------+--------------------------+
| Chris Lane / Samantha Boston | |
+---------------------------------------+--------------------------+
Background Note:
Baqus is a national building consultancy and quantity surveying group offering
construction cost consultancy, project management and building surveying
services to clients in the UK. The Group works across a number of business
sectors including: leisure, hospitality, health, education, affordable housing,
residential, commercial and conservation. Clients include commercial companies
and developers, local authorities, central government, NHS and residential
Housing Associations.
The Quantity Surveying Market in the UK, estimated to be worth in excess of GBP1
billion, is highly fragmented and dominated by a small number of major players,
which the Baqus Group Directors believe make it ripe for consolidation. Since
the Group's admission to AIM, they have been pursuing a strategy of acquiring
small to medium sized quantity surveying practices across the country, the most
recent of which is Nigel Rose Group. Previous activity includes the acquisition
of Sworn King and Partners in 2008. Once acquired, the practices are
incorporated into the wider Group with a particular emphasis on exploiting
opportunities for operational synergies with existing business units.
Chief Executive's Review
The challenging trading environment for the construction industry looks set to
continue for the foreseeable future. However, Baqus has reduced its costs,
increased its client and sector base and has cash in the bank. Combined with an
excellent team of people, I am confident about the long term future for the
business.
I am pleased to introduce my review for the year ended 30 June 2010. The
Financial Director's Report, and trading statements made during the year, have
all shown that it has been a very challenging time for the Group and the
construction industry in general. This has resulted in a loss for the year of
GBP823,000 before exceptional costs which is at the lower end of market
expectations. The loss including exceptional costs is GBP1,118,000.
Last year I said that we had concentrated on trimming costs and improving
efficiencies and, whilst at times short term actions have to be taken, it is
essential to keep a focus on the medium term to ensure that the business is in a
strong enough position to accelerate forward as the market outlook improves.
We have redoubled our efforts to cut costs, resulting in some redundancies and
the closure and merging of certain offices. With the expiration of the leases on
both the Winchester and Wokingham offices, we decided to merge them into a
single office in Basingstoke. Following the acquisition of Nigel Rose we reduced
our costs by closing our former London office and moving the team into the Nigel
Rose London offices whilst the Warrington and Cheltenham offices were closed
with some staff being transferred to our other remaining offices.
As a result of our cost reduction initiatives, we are now trading profitably. We
have introduced new budgetary control procedures devolving more accountability
to managers in each office to give greater visibility as to where profits are
earned and costs incurred.
As a Group we have revised our strategy to adapt to wider challenges in the
sector. In addition to cutting costs and improving efficiencies we have also
worked hard to keep our teams motivated and invested further in the training of
our staff.
The Group continues to manage costs and increase efficiencies between the
founding and acquired firms. Recent acquisitions have also enabled the Group to
work across a broader range of clients and have increased our exposure to
sectors where we have not previously been well represented. The acquisition of
the Nigel Rose Group, for example, has increased the Group's exposure to the
public transport sector, notably the rail and bus industry, and the Group is now
successfully winning new business in these areas.
Over the last year much of our focus has been on improving the performance of
the Group, implementing cost control measures, optimising resources and
continuing to win work against increasingly ferocious competition. The Group's
marketing strategy has worked successfully and we have won commissions from both
new and existing clients in a number of sectors in which we operate.
We have also extended the Group Quality Assurance certification (ISO 9001) to
cover most offices and some offices have now achieved certification under the
Environmental Standard ISO 14001. This is an important step in protecting our
workload in the public and corporate sectors where this independent
accreditation is increasingly sought.
I remain convinced that the difficult business climate will also create a number
of opportunities for Baqus to consider acquiring other quality firms at
competitive prices, many of which would not have been available in easier times.
Results
The loss before taxation was GBP1,118,000 (2009: profit GBP739,000) for the
year to 30 June 2010 on turnover of GBP7.262 million (2009: GBP7.853 million).
Loss per share was 0.72p (2009: profit 0.46p).
Cash balances at 30 June 2010 stood at GBP214,000 following a payment of
GBP600,000 on 14 December 2009 for partial redemption of the outstanding loan
notes.
Dividend
The Board has previously stated that its intention is to pay out approximately
30% of profits as dividends, subject to this being prudent. As the Group was
loss making in the calendar year no dividend is being recommended.
Future outlook
The Group saw a good level of new contract wins this year, which was gratifying
given the on-going difficult climate across the construction industry. We have
engaged in a proactive, highly targeted marketing campaign across our existing,
and, as a result of acquisitions, into new, industry sectors. However, we are
experiencing reduced margins on existing and new business, which we expect to
continue in the short to medium term. Many of the projects that we have won
are also moving forward at a much slower pace than historically has been the
case due to a variety of issues including funding delays and investor
uncertainty. A substantial portion of our work is derived from the public
sector, which has suffered cut-backs and delays, and this is a situation which
may worsen following the Comprehensive Spending Review and one we are preparing
for. The Group is working hard to remain the consultant of choice for existing
clients, whilst also making every effort to gain new client wins. It has been a
'quiet' period with many of our private sector clients over the past year but we
remain in close contact so we can resume our work together once the economic
climate improves. We are beginning to notice some increase in activity in
certain sectors.
Non-Executive Directors
Roger Knowles, our founder Chairman and a Non-Executive Director, resigned on 31
August 2009 and Norman Cave, our other Non-Executive Director, resigned on 31
August 2010. Roger formed the initial idea behind Baqus and worked closely
with myself and Patrick Lineen, our Finance Director to lead the flotation
process. Norman has provided exceptional business experience and acumen, helping
guide the business through difficult times. The Board is very grateful to them
both for their work and support and wishes them well in their future endeavours.
We are in the process of recruiting a new Non-Executive Director.
Staff
Our enthusiastic staff have consistently maintained their high standards, in
spite of the difficult economic climate which has regrettably led to pay freezes
and some redundancies. I should like to personally thank each team member for
all their continued hard work and dedication in these challenging times.
Clive Sayer
Chief Executive Officer
5 November 2010
FINANCIAL DIRECTOR'S REPORT
The loss before taxation and exceptional costs for the year ended 30 June 2010
was GBP823,000 (2009: profit GBP739,000) which is broadly in line with market
expectations on turnover that decreased by 7.5% from GBP7,853,000 to
GBP7,262,000. The loss per share was 0.72p (2009: earnings per share of 0.46p).
This loss reflects the very difficult market conditions which the Company, and
the industry as a whole, face as a result of the recession in the UK economy. A
shortage of work has led to gross profit margins falling from 29% in 2009 to 14%
in the current year.
However, we have responded to the difficult conditions by closing two offices
and merging two offices in London following the acquisition of Nigel Rose on 30
June 2009. We have also reduced our workforce by 26 through redundancies or
staff leaving and not being replaced. The costs of shutting and merging offices
as well as making staff redundant totalled GBP295,000 and have been treated as
exceptional costs in the accounts.
As a result of these measures, we estimate that we have reduced our cost base by
circa GBP857,000 in the last year, although almost half of these savings have
been made in Nigel Rose, which we acquired on 30 June 2009.
Despite the above losses, the Board has concluded, following a review, that
goodwill is not impaired.
We are continuing to look at ways of reducing our working capital requirement
and improving cash generation. We have sought to reduce work-in-progress by
increasing the frequency of billing and have sought to reduce our receivables
through vigorous credit control. As a result, we have reduced our trade and
other receivables by GBP1,000,000 (28%) from GBP3,599,000 at 30 June 2009 to
GBP2,599,000 as at 30 June 2010. Whilst some of this fall reflects the fall in
turnover, a large part is a result of our own efforts, which has helped to
conserve cash.
On 14 December 2009, we made a further repayment of GBP600,000 plus interest (at
base rate plus 2.5%) of loan notes owed to former shareholders of subsidiaries.
The balance still owed to loan note holders is GBP349,000 and this was due for
repayment on 14 December 2010. However, the Board is in discussion with the loan
note holders, to defer as much as possible of the final repayment for one year
until 14 December 2011, in order to conserve cash. The loan notes will however
continue to incur interest.
Prior to any repayment in December 2011, the Board will review the Company's
cash position.
In view of the Company's losses and in order to conserve cash, no dividend is
being paid.
The Company's cash balances at the year end were GBP214,000 and the Company also
has overdraft facilities agreed with its Bank of GBP300,000.
The Board believes that its continued focus on cost reduction and cash
conservation will stand the Company in good stead to weather the downturn and be
ready to take advantage of the upturn, when it arrives.
Patrick Lineen
Financial Director
5 November 2010
Baqus Group plc
Statement of Comprehensive Income
For the year ended 30 June 2010
+----------------------------------+-------+-------+-----------+-----------+
| | | | Year | Year |
| | | | ended | ended |
+----------------------------------+-------+-------+-----------+-----------+
| | | |30-Jun-10 |30-Jun-09 |
+----------------------------------+-------+-------+-----------+-----------+
| Continuing operations | Note | | GBP'000 | GBP'000 |
+----------------------------------+-------+-------+-----------+-----------+
| Revenue | 4 | | 7,262 | 7,853 |
+----------------------------------+-------+-------+-----------+-----------+
| Cost of sales | | | (6,213) | (5,588) |
+----------------------------------+-------+-------+-----------+-----------+
| Gross profit | | | 1,049 | 2,265 |
+----------------------------------+-------+-------+-----------+-----------+
| Operating expenses | | | (1,846) | (1,510) |
+----------------------------------+-------+-------+-----------+-----------+
| Exceptional costs | 6 | | (295) | - |
+----------------------------------+-------+-------+-----------+-----------+
| Operating (loss)/profit | | | (1,092) | 755 |
+----------------------------------+-------+-------+-----------+-----------+
| Investment revenue | 7 | | 1 | 51 |
+----------------------------------+-------+-------+-----------+-----------+
| Finance costs | 7 | | (27) | (67) |
+----------------------------------+-------+-------+-----------+-----------+
| (Loss)/profit before taxation | | | (1,118) | 739 |
+----------------------------------+-------+-------+-----------+-----------+
| Taxation | 8 | | 302 | (220) |
+----------------------------------+-------+-------+-----------+-----------+
| (Loss)/profit for the year | | | (816) | 519 |
| attributable to equity holders | | | | |
| of the parent | | | | |
+----------------------------------+-------+-------+-----------+-----------+
| Total comprehensive (loss)/ | | | (816) | 519 |
| profit for year attributable to | | | | |
| equity holders of the parent | | | | |
+----------------------------------+-------+-------+-----------+-----------+
| | | | | |
+----------------------------------+-------+-------+-----------+-----------+
| Dividend | 9 | | 73 | 181 |
+----------------------------------+-------+-------+-----------+-----------+
| Basic earnings per share (pence) | 10 | | (0.72p) | 0.46p |
+----------------------------------+-------+-------+-----------+-----------+
| Diluted earnings per share | 10 | | (0.66p) | 0.42p |
| (pence) | | | | |
+----------------------------------+-------+-------+-----------+-----------+
Baqus Group plc
Consolidated Balance Sheet
As at 30 June 2010
+--------------------------------------+------+------+-----------+-----------+
| | | | As | As |
| | | | at | at |
+--------------------------------------+------+------+-----------+-----------+
| | | |30-Jun-10 |30-Jun-09 |
+--------------------------------------+------+------+-----------+-----------+
| | Note | | GBP'000 | GBP'000 |
+--------------------------------------+------+------+-----------+-----------+
| Non-current assets | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Intangible assets | 11 | | 8,516 | 8,516 |
+--------------------------------------+------+------+-----------+-----------+
| Property, plant and equipment | 12 | | 341 | 332 |
+--------------------------------------+------+------+-----------+-----------+
| Deferred tax asset | 20 | | 249 | - |
+--------------------------------------+------+------+-----------+-----------+
| | | | 9,106 | 8,848 |
+--------------------------------------+------+------+-----------+-----------+
| Current assets | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Trade and other receivables | 13 | | 2,599 | 3,599 |
+--------------------------------------+------+------+-----------+-----------+
| Cash and cash equivalents | 14 | | 214 | 1,158 |
+--------------------------------------+------+------+-----------+-----------+
| | | | 2,813 | 4,757 |
+--------------------------------------+------+------+-----------+-----------+
| Current liabilities | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Trade and other payables | 15 | | (1,233) | (1,243) |
+--------------------------------------+------+------+-----------+-----------+
| Current income tax liabilities | | | (126) | (218) |
+--------------------------------------+------+------+-----------+-----------+
| Financial liabilities | 16 | | (20) | (35) |
+--------------------------------------+------+------+-----------+-----------+
| Borrowings | 17 | | (349) | (600) |
+--------------------------------------+------+------+-----------+-----------+
| | | | (1,728) | (2,096) |
+--------------------------------------+------+------+-----------+-----------+
| Net current assets | | | 1,085 | 2,661 |
+--------------------------------------+------+------+-----------+-----------+
| Total assets less current | | | 10,191 | 11,509 |
| liabilities | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Non-current liabilities | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Borrowings | 17 | | - | (349) |
+--------------------------------------+------+------+-----------+-----------+
| Trade and other payables | 18 | | - | (127) |
+--------------------------------------+------+------+-----------+-----------+
| Financial liabilities | 16 | | (19) | (40) |
+--------------------------------------+------+------+-----------+-----------+
| Deferred income tax liability | 20 | | (31) | (5) |
+--------------------------------------+------+------+-----------+-----------+
| Provision for other liabilities and | 21 | | (42) | - |
| charges | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Net assets | | | 10,099 | 10,988 |
+--------------------------------------+------+------+-----------+-----------+
| Equity | | | | |
+--------------------------------------+------+------+-----------+-----------+
| Share capital | 22 | | 5,663 | 5,663 |
+--------------------------------------+------+------+-----------+-----------+
| Share premium account | 23 | | 4,690 | 4,690 |
+--------------------------------------+------+------+-----------+-----------+
| Retained earnings | 24 | | (254) | 635 |
+--------------------------------------+------+------+-----------+-----------+
| Total equity | | | 10,099 | 10,988 |
+--------------------------------------+------+------+-----------+-----------+
Company number: 06013357
Baqus Group plc
Consolidated Statement of Cash Flow
for the year ended 30 June 2010
+-------+-------+-------+---------+-----------+-----------+
| | | | | Group | Group |
+-------+-------+-------+---------+-----------+-----------+
| | | | | Year | Year |
| | | | | ended | ended |
+-------+-------+-------+---------+-----------+-----------+
| | | | Note |30-Jun-10 |30-Jun-09 |
+-------+-------+-------+---------+-----------+-----------+
| | | | | GBP'000 | GBP'000 |
+-------+-------+-------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Net cash outflow from | 26 | (84) | (168) |
| operating activities | | | |
+-----------------------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Investing | | | | |
| activities | | | | |
+---------------+-------+---------+-----------+-----------+
| Interest | | | 1 | 51 |
| received | | | | |
+---------------+-------+---------+-----------+-----------+
| Proceeds on disposal of | 21 | 8 |
| property, plant and equipment | | |
+---------------------------------+-----------+-----------+
| Purchase of property, plant and | (177) | (94) |
| equipment | | |
+---------------------------------+-----------+-----------+
| Purchase of | | - | (9) |
| intangible assets | | | |
+-----------------------+---------+-----------+-----------+
| Acquisition of | | - | (373) |
| businesses | | | |
+-----------------------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Net cash used in | | (155) | (417) |
| investing activities | | | |
+-----------------------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Financing | | | | |
| activities | | | | |
+---------------+-------+---------+-----------+-----------+
| Finance lease | | (32) | 15 |
| obligations | | | |
+-----------------------+---------+-----------+-----------+
| Dividends | | | - | - |
| received | | | | |
+---------------+-------+---------+-----------+-----------+
| Dividends | | | (73) | (181) |
| paid | | | | |
+---------------+-------+---------+-----------+-----------+
| Repayments of loan | | (600) | (602) |
| notes | | | |
+-----------------------+---------+-----------+-----------+
| Proceeds of issue of | | - | 45 |
| shares | | | |
+-----------------------+---------+-----------+-----------+
| less issue | | | - | (11) |
| costs | | | | |
+---------------+-------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Net cash used from | | (705) | (734) |
| financing activities | | | |
+-----------------------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Net decrease in cash | | (944) | (1,319) |
| equivalents | | | |
+-----------------------+---------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Cash and cash equivalents at | 1,158 | 2,477 |
| beginning of year | | |
+---------------------------------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
| Cash and cash equivalents at | 214 | 1,158 |
| end of year | | |
+---------------------------------+-----------+-----------+
| | | | | | |
+-------+-------+-------+---------+-----------+-----------+
Baqus Group plc
Consolidated Statement of Changes in Equity
For the year ended 30 June 2010
+-------------------------------------------+---------+---------+----------+---------+
| | Share | Share |Retained | |
| | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| |capital |premium |earnings | Total |
+-------------------------------------------+---------+---------+----------+---------+
| |GBP,000 |GBP'000 | GBP'000 |GBP'000 |
+-------------------------------------------+---------+---------+----------+---------+
| Changes in equity | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| As at 1 July 2009 | 5,663 | 4,690 | 635 | 10,988 |
+-------------------------------------------+---------+---------+----------+---------+
| Equity dividends paid | - | - | (73) | (73) |
+-------------------------------------------+---------+---------+----------+---------+
| Total comprehensive loss for the year | - | - | (816) | (816) |
| attributable to equity holders of the | | | | |
| Parent Company | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| As at 30 June 2010 | 5,663 | 4,690 | (254) | 10,099 |
+-------------------------------------------+---------+---------+----------+---------+
| | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| | Share | Share |Retained | |
| | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| |capital |premium |earnings | Total |
+-------------------------------------------+---------+---------+----------+---------+
| |GBP,000 |GBP'000 | GBP'000 |GBP'000 |
+-------------------------------------------+---------+---------+----------+---------+
| Changes in equity | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| As at 1 July 2008 | 5,625 | 4,693 | 297 | 10,615 |
+-------------------------------------------+---------+---------+----------+---------+
| New shares issued | 38 | 7 | - | 45 |
+-------------------------------------------+---------+---------+----------+---------+
| Issue costs | - | (10) | - | (10) |
+-------------------------------------------+---------+---------+----------+---------+
| Equity dividends paid | - | - | (181) | (181) |
+-------------------------------------------+---------+---------+----------+---------+
| Profit for the year attributable to | - | - | 519 | 519 |
| equity holders of the Parent Company | | | | |
+-------------------------------------------+---------+---------+----------+---------+
| As at 30 June 2009 | 5,663 | 4,690 | 635 | 10,988 |
+-------------------------------------------+---------+---------+----------+---------+
Notes to the Consolidated Financial Statements
for the year ended 30 June 2010
1. General information
Baqus Group plc ("the Company") is a company incorporated in the United Kingdom
under the Companies Act 2006.
The address of the registered office is 2/3 North Mews, London, WC1 2JP. The
principal activities of the Group are set out in the Director's Report.
These financial statements are presented in pounds sterling because that is the
currency of the primary economic environment in which the Group operates.
2. Accounting Policies
The principal accounting policies adopted in the financial statements are set
out below.
Basis of accounting
The Financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs) as they apply to the Group for the year
ended 30 June 2010 applied in accordance with the Companies Act 2006. The
Financial statements have been prepared in accordance with IFRSs adopted for use
in the European Union including International Accounting Standards (IAS) and
Interpretations issued by the International Financial Reporting Interpretations
Committee (IFRIC).
The financial statements have been prepared on the historical cost basis.
Going concern
The Group's business activities, together with factors likely to affect its
future development, are set out in the Chief Executive's Statement. The
financial position of the Group and its cash flow, liquidity position and
borrowing facilities are described in the Financial Director's Report.
Furthermore, the Directors Report sets out the Group's objectives and policies
for managing its capital and its exposure to various risks. In carrying out
their duties in respect of going concern, the directors have completed a review
of the Group's current financial position and completed cash flow forecasts for
a period of 12 months from the date of signing these financial statements. This
review included sensitivity analysis to determine the potential impact on the
Group of reasonably possible scenarios. Under all modelled scenarios, including
deferment of some or all of the loan notes payments, the Group's banking
facilities were sufficient.
Basis of Consolidation
The Group's financial statements consolidate the financial statements of the
Company and entities controlled by the Company (its subsidiaries). Control is
achieved where the company has the power to govern the financial and operating
polices of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring accounting policies used into line with those used by the
Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Business combinations
The acquisitions of subsidiaries are accounted for using the purchase method.
The cost of the acquisition is measured at the aggregate of the fair values, at
the date of the exchange, of assets given, liabilities incurred or assumed and
equity instruments issued by the Group in exchange for control of the acquiree,
plus any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS3 are recognised at their fair values at
the acquisition date.
Goodwill arising on acquisitions is recognised as an asset and initially
measured at cost, being the excess of the cost of the business combination over
the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities recognised.
If, after reassessment, the Group's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities exceeds the cost of
the business combination the excess is immediately recognised in profit and
loss.
Revenue
Revenue represents the invoiced value of services provided net of value added
tax. It comprises the amounts billed to clients in respect of the provision of
quantity surveying services together with the movement in revenue recognised but
not invoiced.
Revenue Recognition
Revenue is recognised as contract activity progresses to reflect the Group's
performance of its contractual obligations. The right to consideration, by
reference to the value of the work performed, is included in the accounts as
accrued income under receivables. Where the amount which the client will accept
or be able to pay is uncertain, provision has been made to reduce the accrued
income to its net realisable value. Where the substance of a contract is that a
right to consideration does not arise until the occurrence of a critical event,
revenue is not recognised until that event occurs. Where fees on a project are
invoiced in advance, the income is treated as deferred and included in payables.
Retirement benefit costs
Retirement benefits to employees are provided by defined contribution schemes
that are funded by the Group and employees. Payments are made to pension trusts
that are financially separate from the Group.
Intangible assets
Goodwill arising from the purchase of subsidiary undertakings, represents the
excess of the cost of acquisition over the Group's interest in the fair value of
the identifiable asset, liabilities and contingent liabilities of the subsidiary
acquired, and is capitalised as an intangible asset in accordance with the
requirements of IFRS 3.
Goodwill is measured at cost less any accumulated impairment losses and will be
reviewed annually for any impairment losses. Any impairment losses are
recognised through the income statement.
Other intangible assets are measured initially at cost and are amortised over
their estimated useful lives. The carrying amount is reduced by any provision
for impairment where necessary. Intangible assets are not amortised until they
are brought into use.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any impairment losses. Depreciation is provided on all property, plant and
equipment at rates calculated to write off the cost, less estimated residual
value of each asset evenly over its expected useful economic life, as follows:
Motor vehicles
25%-33.33% per annum
Fixtures, fittings and equipment 10-20% per
annum
Computer
33-50% per annum
Assets held under finance leases are depreciated over their expected useful
lives on the same basis as owned assets or, where shorter, over the term of the
relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined
as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in income.
Financial Instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of the
instrument. Issue costs are offset against the proceeds of such instruments.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost. Appropriate allowances for estimated irrecoverable
amounts are recognised in the income statement when there is objective evidence
that the asset is impaired.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances with banks.
Trade payables
Trade payables are initially measured at fair value and subsequently at
amortised cost.
Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. After initial recognition borrowings are
measured at amortised cost. Borrowing costs are recognised in profit and loss in
the period in which they are incurred.
Equity
Equity instruments issued by the Group are recorded at the proceeds received net
of direct costs.
Provisions
Provisions are recognised when the Group has a present obligation as a result of
a past event, and it is probable that the Group will be required to settle that
obligation. Provisions are measured at the directors' best estimate of the
expenditure required to settle the obligation at the balance sheet date.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their
fair value or, if lower, at the present value of the minimum lease payments,
each determined at the inception of the lease. The corresponding liability to
the lessor is included in the balance sheet as a finance lease obligation. Lease
payments are apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining balance
of the liability. Financed charges are charged directly against income.
Rentals paid under operating leases are charged against profits on a straight
line basis over the period of the lease.
Taxation expense
The tax expense represents the sum of the tax currently payable and deferred
tax.
Current taxation
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items that are never taxable or deductible. The Group's liability for
current tax is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at tax rates that are expected to apply in the period
when the liability is settled or the asset is realised. Deferred tax is charged
or credited in the income statement, except when it relates to items charged or
credited directly to equity, in which case the deferred tax is also dealt with
in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its currents tax assets and liabilities on a net
basis.
Financial Liability and Equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. The Group has only one class of share in
existence.
Finance costs
Finance costs are recognised in the income statement in the year in which they
are incurred.
Share-based payments
Where equity investments are granted to persons other than employees, the
statement of Comprehensive Income is charged with the fair value of the goods
and services received, except to the extent to which such goods or services form
part of the cost of the acquisition of an asset. In such cases the fair value of
goods and services received is added to the cost of the asset or treated as a
cost of issuing the equity instrument.
The Group issues equity-settled share based payments to certain employees.
Equity-settled share-based payment is expensed on a straight-line basis over the
vesting period, based upon the Group's estimate of shares that will eventually
vest and adjusted for the effect of non-market based vesting conditions.
The Board believes that the current quoted market price in the long run is the
best estimate of fair value. As the current market price is below the share
option price no charge has been made to the income statement.
Critical accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting
estimates may, by definition, vary from the actual results. The Directors
considered the critical accounting estimates and judgements used in the
financial statements and concluded that the main areas of judgement are:
* Revenue recognition policies in respect of contracts which straddle the
year end;
* Valuation of intangible assets.
These estimates are based on historical experience and various other assumptions
that management and the Board of Directors believe are reasonable under the
circumstances and are discussed, to the extent necessary, in more detail in
their respective notes.
3. Adoption of new and revised standards
At the date of authorisation of these financial statements the following
standards and interpretations, which have not been applied in these financial
statements, were in issue but not yet effective:
· IFRS1 'First time adoption-additional exemptions-amendments effective 01
February 2010
· IFRS1 'First time adoption-financial instrument disclosures-amendments
effective 01 July 2010
· IAS24 'Related party disclosures'-amendments effective 01 November 2011
· IFRS9 'Financial instruments-classification and measurement effective 01
January 2013
· IFRIC19 'Extinguishing financial liabilities with equity
instruments'effective 01 July 2010
· IFRIC14 'Prepayments of a minimum funding requirement effective 01
January 2011
· IFRS 2 'Group cash - settled share-based payment transactions' -
amendments, effective 01 January 2010
· IAS 32 'Classification of rights issues' - amendment, effective on or
after 1 February 2010.
· IFRS 7 - 'Transfer of financial assets (amendment) - effective 01 July
2011
· Improvements to IFRSs - effective mostly 01 January 2011
· IAS 32 - Annual improvements (2008-2009) effective 01 January 2010
The Directors anticipate that the adoption of these Standards and
Interpretations in future periods, commencing on or after the effective dates,
will have no material impact on the financial statements of the Group.
4. Revenue
+---------------------------------+-----------+-----------+
| Analysis of the Group's revenue is as | |
| follows: | |
+---------------------------------------------+-----------+
| | Year | Year |
| | ended | ended |
+---------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+---------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+---------------------------------+-----------+-----------+
| Continuing operations | | |
+---------------------------------+-----------+-----------+
| Provision of professional | 7,262 | 7,853 |
| services | | |
+---------------------------------+-----------+-----------+
| Investment income | 1 | 51 |
+---------------------------------+-----------+-----------+
| | 7,263 | 7,904 |
+---------------------------------+-----------+-----------+
For the year ended 30 June 2010, the Group has adopted IFRS 8 'Operating
Segments'. IFRS8 replaces IAS 14 'Segmental Reporting'.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Chief
Operating Decision Maker(CODM) to allocate resources to the segments and to
assess their performance. In contrast, the predecessor Standard(IAS 14 Segment
Reporting) required the Group to identify two sets of segments (business and
geographical), using a risks and rewards approach with the Group's system of
internal financial reporting to key management personnel serving only as the
starting point for the identification of such segments. We report on our segment
information on the same basis as our internal management reporting structure,
which drives how the Group is organised and managed.
The Group is principally engaged in the provision of quantity surveying services
in the UK. The CODM has been identified as the Board. Operational and financial
information, which is primarily at an individual unit level, is received by the
CODM on a monthly basis. Baqus does not distinguish between geography or brand.
The unit information does not meet the quantitive thresholds as required by IFRS
8, as such management have judged it appropriate to aggregate the financial
information relating to all units into a single reportable segment.
5. (Loss)/Profit for the year
+---------------------------------+-----------+-----------+
| (Loss)/Profit for the year has | Year | Year |
| been arrived at after charging: | ended | ended |
+---------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+---------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+---------------------------------+-----------+-----------+
| Depreciation of property, plant | | |
| and equipment: | | |
+---------------------------------+-----------+-----------+
| * Owned assets | 107 | 90 |
+---------------------------------+-----------+-----------+
| * Under finance assets | 24 | 12 |
+---------------------------------+-----------+-----------+
| Operating lease rentals: | | |
+---------------------------------+-----------+-----------+
| * Plant and machinery | 12 | 50 |
+---------------------------------+-----------+-----------+
| * Property | 307 | 284 |
+---------------------------------+-----------+-----------+
6. Exceptional Costs
+--------+----------+-----------+-----------+-----------+
| | | | Year | Year |
| | | | ended | ended |
+--------+----------+-----------+-----------+-----------+
| | | |30-Jun-10 |30-Jun-09 |
+--------+----------+-----------+-----------+-----------+
| | | | GBP'000 | GBP'000 |
+--------+----------+-----------+-----------+-----------+
| | | | | |
+--------+----------+-----------+-----------+-----------+
| Redundancy costs | 112 | - |
+-------------------------------+-----------+-----------+
| Office reorganisation costs | 183 | - |
+-------------------------------+-----------+-----------+
| | | | 295 | - |
+--------+----------+-----------+-----------+-----------+
+--------------------------------------------------------+
| During the period the Group closed some loss-making |
| offices, mainly arising from the acquisition of Nigel |
| Rose and Partners as at 30 June 2009. |
+--------------------------------------------------------+
7. Investment revenue and finance costs
+---------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+---------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+---------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+---------------------------------+-----------+-----------+
| Investment income: | | |
+---------------------------------+-----------+-----------+
| Bank deposits | 1 | 51 |
+---------------------------------+-----------+-----------+
| Finance costs: | | |
+---------------------------------+-----------+-----------+
| Interest on loan notes | (17) | (65) |
+---------------------------------+-----------+-----------+
| Interest on bank borrowings | (10) | (2) |
+---------------------------------+-----------+-----------+
| | (27) | (67) |
+---------------------------------+-----------+-----------+
8. Taxation
+---------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+---------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+---------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+---------------------------------+-----------+-----------+
| | | |
+---------------------------------+-----------+-----------+
| Current tax current year | (80) | 218 |
+---------------------------------+-----------+-----------+
| Deferred tax (note 23) | (222) | 2 |
+---------------------------------+-----------+-----------+
| | (302) | 220 |
+---------------------------------+-----------+-----------+
| | | |
+---------------------------------+-----------+-----------+
| Corporation tax is calculated at 28% (2009:28%) of |
| the estimated assessable profit for the year The |
| charge for the year can be reconciled to the profit |
| per the income statement as follows: |
+---------------------------------------------------------+
| (Loss)/Profit before taxation | (1,118) | 739 |
+---------------------------------+-----------+-----------+
| (Loss)/Profit before taxation | (313) | 207 |
| multiplied by the standard rate | | |
| of corporation tax in the UK | | |
+---------------------------------+-----------+-----------+
| Timing differences | 5 | (41) |
+---------------------------------+-----------+-----------+
| Expenses not deductible for tax | 6 | 54 |
| purposes | | |
+---------------------------------+-----------+-----------+
| | (302) | 220 |
+---------------------------------+-----------+-----------+
9. Dividends
+---------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+---------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+---------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+---------------------------------+-----------+-----------+
| Amounts recognised as | | |
| distributions to equity | | |
| holders in the year | | |
+---------------------------------+-----------+-----------+
| Final dividend for the year | 73 | 125 |
| ended 30 June 2009 of 0.06 | | |
| pence per share(2008:0.11p) | | |
+---------------------------------+-----------+-----------+
| Interim dividend of 0.05 pence | - | 56 |
| per share for the year ended 30 | | |
| June 2009 | | |
+---------------------------------+-----------+-----------+
| | 73 | 181 |
+---------------------------------+-----------+-----------+
| | | |
+---------------------------------+-----------+-----------+
| There is no proposed final dividend for the year |
| ended 30 June 2010. |
+---------------------------------+-----------+-----------+
10. Earnings per share
+---------------------------------+-------------+-------------+
| The calculation of the basic and diluted earnings |
| per share is based on the following data, determined |
| in accordance with the provisions of IAS33: |
+-------------------------------------------------------------+
| | | |
+---------------------------------+-------------+-------------+
| | Year | Year |
| | ended | ended |
+---------------------------------+-------------+-------------+
| | 30-Jun-10 | 30-Jun-09 |
+---------------------------------+-------------+-------------+
| | GBP'000 | GBP'000 |
+---------------------------------+-------------+-------------+
| Earnings | | |
+---------------------------------+-------------+-------------+
| Earnings for the purpose of the | (816) | 519 |
| earnings per share being net | | |
| (loss)/profit attributable to | | |
+---------------------------------+-------------+-------------+
| equity holders of the parent |
+-------------------------------------------------------------+
| Number of shares |
+-------------------------------------------------------------+
| Weighted average number of | 113,250,000 | 113,186,301 |
| ordinary shares for the purpose | | |
| of basic earnings per share | | |
+---------------------------------+-------------+-------------+
| Weighted average number of | 124,256,257 | 124,182,558 |
| ordinary shares for the purpose | | |
| of diluted earnings per share | | |
+---------------------------------+-------------+-------------+
+--------------------------------------------------------+
| Basic earnings per share includes shares subject only |
| to time as if they had been issues at the beginning of |
| the period. |
+--------------------------------------------------------+
11. Intangible assets
+---------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+---------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+---------------------------------+-----------+-----------+
| Goodwill | GBP'000 | GBP'000 |
+---------------------------------+-----------+-----------+
| As at 1 July 2009 | 8,507 | 8,276 |
+---------------------------------+-----------+-----------+
| Recognised on acquisitions | - | 231 |
+---------------------------------+-----------+-----------+
| As at 30 June 2010 | 8,507 | 8,507 |
+---------------------------------+-----------+-----------+
| Other Intangibles | | |
+---------------------------------+-----------+-----------+
| As at 1 July 2009 | 9 | - |
+---------------------------------+-----------+-----------+
| Cost of acquisition of share | - | 9 |
| option | | |
+---------------------------------+-----------+-----------+
| As at 30 June 2010 | 9 | 9 |
+---------------------------------+-----------+-----------+
| | | |
+---------------------------------+-----------+-----------+
| Total as at 30 June 2010 | 8,516 | 8,516 |
+---------------------------------+-----------+-----------+
| | | |
+---------------------------------+-----------+-----------+
| | | |
+---------------------------------+-----------+-----------+
| Goodwill and other intangible assets comprises the |
| following amounts: |
+---------------------------------------------------------+
| | | |
+---------------------------------+-----------+-----------+
| Boxall Sayer | 3,263 | 3,263 |
+---------------------------------+-----------+-----------+
| Fletcher McNeill | 3,107 | 3,107 |
+---------------------------------+-----------+-----------+
| Denley King | 1,894 | 1,894 |
+---------------------------------+-----------+-----------+
| Other | 21 | 21 |
+---------------------------------+-----------+-----------+
| Sworn King | 208 | 208 |
+---------------------------------+-----------+-----------+
| Nigel Rose | 23 | 23 |
+---------------------------------+-----------+-----------+
| | 8,516 | 8,516 |
+---------------------------------+-----------+-----------+
+--------------------------------------------------------+
| The Group tests intangible assets annually for |
| impairment. The recoverable amounts of the |
| cash-generating units (CGUs) are determined from value |
| in use calculations. The key assumptions for the value |
| in use calculations are those regarding the discount |
| rates, growth rates and expected changes in selling |
| prices and direct costs. Management estimates discount |
| rates on the basis of current market assessments of |
| the time value of money and the risks specific to the |
| CGUs. Anticipated growth rates, changes in selling |
| prices and direct costs are based on past practices |
| and expectations of future changes in the market. The |
| Group has prepared forecasts over the next five years, |
| which have then been extrapolated for a further eleven |
| years using estimated growth rates for each CGU, which |
| average 4.5%. These rates do not exceed the long term |
| growth rates for the relevant markets. The rate used |
| to discount the forecast cash flows from all CGUs is |
| 5%. |
+--------------------------------------------------------+
12. Property, plant and equipment
+----------------------------------+-----------+----------+---------+---------+
| Group | Computers | Fixtures | Motor | Total |
| | | | Cars | |
+----------------------------------+-----------+----------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-----------+----------+---------+---------+
| Cost | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| As at 1 July 2009 | 158 | 122 | 151 | 431 |
+----------------------------------+-----------+----------+---------+---------+
| Additions | 68 | 85 | 24 | 177 |
+----------------------------------+-----------+----------+---------+---------+
| Disposals | - | (64) | (76) | (140) |
+----------------------------------+-----------+----------+---------+---------+
| As at 30 June 2010 | 226 | 143 | 99 | 468 |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Depreciation | | | | |
+----------------------------------+-----------+----------+---------+---------+
| As at 1 July 2009 | 43 | 43 | 13 | 99 |
+----------------------------------+-----------+----------+---------+---------+
| Charge for the year | 59 | 29 | 43 | 131 |
+----------------------------------+-----------+----------+---------+---------+
| Disposals | - | (50) | (53) | (103) |
+----------------------------------+-----------+----------+---------+---------+
| As at 30 June 2010 | 102 | 22 | 3 | 127 |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Net book value as at 30 June | 124 | 121 | 96 | 341 |
| 2010 | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Net book value as at 30 June | 115 | 79 | 138 | 332 |
| 2009 | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Group | Computers | Fixtures | Motor | Total |
| | | | Cars | |
+----------------------------------+-----------+----------+---------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-----------+----------+---------+---------+
| Cost | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| As at 1 July 2008 | 67 | 92 | 110 | 269 |
+----------------------------------+-----------+----------+---------+---------+
| Acquisitions of businesses | 35 | 8 | 75 | 118 |
+----------------------------------+-----------+----------+---------+---------+
| Additions | 63 | 31 | - | 94 |
+----------------------------------+-----------+----------+---------+---------+
| Disposals | (7) | (9) | (34) | (50) |
+----------------------------------+-----------+----------+---------+---------+
| As at 30 June 2009 | 158 | 122 | 151 | 431 |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Depreciation | | | | |
+----------------------------------+-----------+----------+---------+---------+
| As at 1 July 2008 | 15 | 15 | 9 | 39 |
+----------------------------------+-----------+----------+---------+---------+
| Charge for the year | 35 | 35 | 32 | 102 |
+----------------------------------+-----------+----------+---------+---------+
| Disposals | (7) | (7) | (28) | (42) |
+----------------------------------+-----------+----------+---------+---------+
| As at 30 June 2009 | 43 | 43 | 13 | 99 |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Net book value as at 30 June | 115 | 79 | 138 | 332 |
| 2009 | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
| Net book value as at 30 June | 52 | 77 | 101 | 230 |
| 2008 | | | | |
+----------------------------------+-----------+----------+---------+---------+
| | | | | |
+----------------------------------+-----------+----------+---------+---------+
13. Trade and other receivables
+----------------------------------+-----------+-----------+
| Trade and other receivables | | |
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| Trade receivables | 1,541 | 1,538 |
+----------------------------------+-----------+-----------+
| Impairment | (85) | (86) |
+----------------------------------+-----------+-----------+
| | 1,456 | 1,452 |
+----------------------------------+-----------+-----------+
| Other receivables | 1 | 174 |
+----------------------------------+-----------+-----------+
| Other taxes | - | 23 |
+----------------------------------+-----------+-----------+
| Prepayments and accrued income | 1,142 | 1,950 |
+----------------------------------+-----------+-----------+
| | 2,599 | 3,599 |
+----------------------------------+-----------+-----------+
+------------------------------------------------------------------+
| Trade receivables comprise amounts receivable from the provision |
| of services. The Directors consider that the carrying value of |
| trade and other assets approximates to their fair value. |
+------------------------------------------------------------------+
14. Cash and cash equivalents
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| Cash at bank | 214 | 1,158 |
+----------------------------------+-----------+-----------+
15. Trade and other payables
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| Trade payables | 358 | 371 |
+----------------------------------+-----------+-----------+
| Other payables | 170 | 224 |
+----------------------------------+-----------+-----------+
| Other taxes and social security | 400 | 389 |
+----------------------------------+-----------+-----------+
| Accruals | 305 | 259 |
+----------------------------------+-----------+-----------+
| | 1,233 | 1,243 |
+----------------------------------+-----------+-----------+
+--------------------------------------------------------------------+
| Trade and other payables principally comprise amounts outstanding |
| for trade purchases and ongoing costs. The average credit period |
| is 41 days (2008:60 days). The Directors consider the carrying |
| amounts recognised in the balance sheet to be a reasonable |
| approximation of their value. Included in other payables are |
| amounts the Directors estimate are payable on the deferred element |
| of the consideration payable for businesses that have been |
| acquired. |
+--------------------------------------------------------------------+
16. Financial liabilities
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| Current | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| Obligations under finance leases | 20 | 35 |
| and hire purchase contracts | | |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| Non-current | | |
+----------------------------------+-----------+-----------+
| Obligations under finance leases | 19 | 40 |
| and hire purchase contracts | | |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| The present value of finance | | |
| liabilities is as follows: | | |
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| Within one year | 23 | 37 |
+----------------------------------+-----------+-----------+
| In the second to fifth years | 23 | 43 |
+----------------------------------+-----------+-----------+
| | 46 | 80 |
+----------------------------------+-----------+-----------+
| Future finance charges in | (7) | (5) |
| finance leases and hire purchase | | |
| contracts | | |
+----------------------------------+-----------+-----------+
| Present value of finance lease | 39 | 75 |
| liabilities | | |
+----------------------------------+-----------+-----------+
+--------------------------------------------------------------------+
| It is the Group's policy to lease certain of its vehicles under |
| finance leases. The average lease term is 3 years. For the year |
| ended 30 June 2010, the average effective borrowing rate was 7.5%. |
| Interest rates are fixed at the contract date. All leases are on a |
| fixed repayment basis and no arrangements have been entered into |
| for contingent rental payments. All lease obligations are |
| denominated in sterling. The fair value of the Group's lease |
| obligations are secured by the lessors' rights over the leased |
| assets. |
+--------------------------------------------------------------------+
17. Borrowings
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| Loan notes as at 1 July 2009 | 949 | 1,551 |
+----------------------------------+-----------+-----------+
| Loan notes repaid | (600) | (602) |
+----------------------------------+-----------+-----------+
| Loan notes as at 30 June 2010 | 349 | 949 |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| | Total | Total |
+----------------------------------+-----------+-----------+
| | GBP,000 | GBP,000 |
+----------------------------------+-----------+-----------+
| Less than one year | 349 | 600 |
+----------------------------------+-----------+-----------+
| Between one and two years | - | 349 |
+----------------------------------+-----------+-----------+
| | 349 | 949 |
+----------------------------------+-----------+-----------+
+---------------------------------------------------------+
| The loan notes were issued on 14 December 2007 |
| following the acquisition by the Group of the three |
| subsidiaries for cash. The vendors loaned the cash |
| element received back to the Group. Loan notes bear |
| interest at National Westminster Bank base rate plus |
| 2.5%. |
+---------------------------------------------------------+
18. Non-current liabilities
+----------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+----------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+----------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+
| | | |
+----------------------------------+-----------+-----------+
| Trade and other payables | - | 127 |
+----------------------------------+-----------+-----------+
Last year non-current liabilities represented amounts the directors estimated
were payable on the deferred element of the consideration payable for businesses
acquired during the year.
19. Retirement benefit obligations
Pension costs represent amounts payable into the Baqus Denley King Construction
Consultants, Baqus Sworn King and Baqus Nigel Rose group personal pension plans.
During the year, GBP93,978 was recognised as a pensions expense.
20. Deferred Tax
+------------------+--------------+------------+--------------+--------------+
| | Year ended | Year ended |
+------------------+---------------------------+-----------------------------+
| | 30-Jun-10 | 30-Jun-09 |
+------------------+---------------------------+-----------------------------+
| | GBP'000 | GBP'000 |
+------------------+---------------------------+-----------------------------+
| | Accelerated |Tax losses | Accelerated | Tax losses |
| | tax | | tax | |
+------------------+--------------+------------+--------------+--------------+
| |depreciation | |depreciation | |
+------------------+--------------+------------+--------------+--------------+
| | | | | |
+------------------+--------------+------------+--------------+--------------+
| Balance as | 4 | - | 3 | - |
| at 1 July | | | | |
| 2009 | | | | |
+------------------+--------------+------------+--------------+--------------+
| Charged/credited | 27 | (249) | 2 | - |
| to Income | | | | |
| Statement | | | | |
+------------------+--------------+------------+--------------+--------------+
| Balance as | 31 | (249) | 5 | - |
| at 30 June | | | | |
| 2010 | | | | |
+------------------+--------------+------------+--------------+--------------+
At the balance sheet date, the Group has unutilised tax losses available for
offset against future profits. A deferred tax asset has been recognised in
respect of these losses. Deferred tax is calculated in full on timing
differences under the liability method using a tax rate of 28% (2009:29%). The
Board has looked at forecasts for the next two years which give them confidence
that these tax losses are likely to be utilised over that period.
21. Provision for other liabilities and charges
+--+--------------------------+-+-+-----------+-----------+
| | | | | Year | Year |
| | | | | ended | ended |
+--+--------------------------+-+-+-----------+-----------+
| | | | |30-Jun-10 |30-Jun-09 |
+--+--------------------------+-+-+-----------+-----------+
| | | | | GBP'000 | GBP'000 |
+--+--------------------------+-+-+-----------+-----------+
| | Obligations under | | | | |
| | onerous lease | | | | |
+--+--------------------------+-+-+-----------+-----------+
| | As at 1 July 2009 | | | - | - |
+--+--------------------------+-+-+-----------+-----------+
| | Charged to the income | | | 42 | - |
| | statement | | | | |
+--+--------------------------+-+-+-----------+-----------+
| | As at 30 June 2010 | | | 42 | - |
+--+--------------------------+-+-+-----------+-----------+
This provision represents the cost of the remainder of a lease of offices to 24
March 2012 at Kidlington, which the Group no longer occupies and have been
unable to sub-let.
22. Share Capital
+------------------------------+-------------+-------------+
| | Year ended | Year ended |
+------------------------------+-------------+-------------+
| | 30-Jun-10 | 30-Jun-09 |
+------------------------------+-------------+-------------+
| | GBP'000 | GBP'000 |
+------------------------------+-------------+-------------+
| | | |
+------------------------------+-------------+-------------+
| Authorised: | | |
+------------------------------+-------------+-------------+
| 250,000,000 ordinary shares | 12,500 | 12,500 |
| of 5p each | | |
+------------------------------+-------------+-------------+
| | | |
+------------------------------+-------------+-------------+
| Issued and fully paid | | |
+------------------------------+-------------+-------------+
| 113,250,000 ordinary shares | 5,663 | 5,663 |
| of 5p each | | |
+------------------------------+-------------+-------------+
+-------------------------------------------------------------+
| During the year ended 30 June 2009 750,000 shares in Baqus |
| Group amounting to GBP37,500 were issued upon the |
| acquisition of Sworn King & Partners on 1 August 2008. |
+-------------------------------------------------------------+
The company has one class of ordinary shares that carries no right to fixed
income. The holders of ordinary shares are entitled to receive dividends as
declared from time to time and are entitled to one vote per share at meetings of
the company. All shares rank equally with regard to the company's residual
assets.
23. Share premium account
+------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------+-----------+-----------+
| | | |
+------------------------+-----------+-----------+
| As at 1 July 2009 | 4,690 | 4,693 |
+------------------------+-----------+-----------+
| Premium on issue of | - | 8 |
| shares | | |
+------------------------+-----------+-----------+
| Expenses of 2007 issue | - | (11) |
+------------------------+-----------+-----------+
| As at 30 June 2010 | 4,690 | 4,690 |
+------------------------+-----------+-----------+
24. Retained earnings
+------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------+-----------+-----------+
| | | |
+------------------------+-----------+-----------+
| As at 1 July 2009 | 635 | 297 |
+------------------------+-----------+-----------+
| (Loss)/profit for the | (816) | 519 |
| year after tax | | |
+------------------------+-----------+-----------+
| Dividends | (73) | (181) |
+------------------------+-----------+-----------+
| As at 30 June 2010 | (254) | 635 |
+------------------------+-----------+-----------+
25. Share based payments
+------------------------+------------+--------+------------+
| | | | Number |
+------------------------+------------+--------+------------+
| Type of arrangement | Date |Option | granted |
| | granted | price | |
+------------------------+------------+--------+------------+
| | | | |
+------------------------+------------+--------+------------+
| EMI Share Options | 21/04/2008 | 8.38p | 6,930,363 |
+------------------------+------------+--------+------------+
| Share Save Scheme: | | | |
+------------------------+------------+--------+------------+
| Three Year Scheme | 18/06/2008 | 5.8p | 1,315,986 |
+------------------------+------------+--------+------------+
| Five Year Scheme | 18/06/2008 | 5.8p | 2,749,908 |
+------------------------+------------+--------+------------+
| Share Save Options | | | (401, 075) |
| forfeited during the | | | |
| year | | | |
+------------------------+------------+--------+------------+
| | | | 10,595,182 |
+------------------------+------------+--------+------------+
| | | | |
+------------------------+------------+--------+------------+
+------------------------+---------+-------------+---------+-------------+
| | 2010 | 2009 |
+------------------------+-----------------------+-----------------------+
| | Number | Weighted | Number | Weighted |
| | of | average | of | average |
| | options | | options | |
+------------------------+---------+-------------+---------+-------------+
| | | exercisable | | exercisable |
| | | price | | price |
+------------------------+---------+-------------+---------+-------------+
| | '000 | | '000 | |
+------------------------+---------+-------------+---------+-------------+
| Outstanding as at 1 | 10,996 | - | 10,996 | - |
| July 2009 | | | | |
+------------------------+---------+-------------+---------+-------------+
| Forfeited | 401 | - | - | - |
+------------------------+---------+-------------+---------+-------------+
| Outstanding as at 30 | 10,595 | - | 10,996 | - |
| June 2010 | | | | |
+------------------------+---------+-------------+---------+-------------+
The EMI options are exercisable by a cash payment between the second and the
fifth anniversary of grant at the exercise price of 8.38pence per share.
Employees who applied under the Sharesave scheme save by way of monthly
contributions from the employee's post-tax salary and can then exercise the
options to purchase shares out of the savings at 5.8pence after three or five
years.
26. Net cash from operations
+------------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+------------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------------------+-----------+-----------+
| (Loss)/profit for the period | (816) | 519 |
+------------------------------------+-----------+-----------+
| | | |
+------------------------------------+-----------+-----------+
| Adjust for: | | |
+------------------------------------+-----------+-----------+
| Income tax (refund)/expense | (302) | 220 |
+------------------------------------+-----------+-----------+
| Investment revenue | (1) | (51) |
+------------------------------------+-----------+-----------+
| Dividends receivable from Group | - | - |
| undertakings | | |
+------------------------------------+-----------+-----------+
| Write down in value of investment | - | - |
| in Group undertakings | | |
+------------------------------------+-----------+-----------+
| Finance costs | 27 | 67 |
+------------------------------------+-----------+-----------+
| Depreciation of property, plant | 131 | 102 |
| and equipment | | |
+------------------------------------+-----------+-----------+
| | | |
+------------------------------------+-----------+-----------+
| Operating cash flows before | (960) | 857 |
| movements in working capital | | |
+------------------------------------+-----------+-----------+
| | | |
+------------------------------------+-----------+-----------+
| Decrease/(increase) in receivables | 1,000 | (216) |
+------------------------------------+-----------+-----------+
| (Decrease) in payables | (150) | (219) |
+------------------------------------+-----------+-----------+
| | | |
+------------------------------------+-----------+-----------+
| Cash (absorbed)/generated by | (111) | 422 |
| operations | | |
+------------------------------------+-----------+-----------+
| | | |
+------------------------------------+-----------+-----------+
| Income taxes paid | - | (523) |
+------------------------------------+-----------+-----------+
| Interest paid | 27 | (67) |
+------------------------------------+-----------+-----------+
| Net cash outflow generated from | (84) | (168) |
| operating activities | | |
+------------------------------------+-----------+-----------+
27. Capital Commitments
+------------------------------------+-----------+-----------+
| | Year | Year |
| | ended | ended |
+------------------------------------+-----------+-----------+
| |30-Jun-10 |30-Jun-09 |
+------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------------------+-----------+-----------+
| | | |
+------------------------------------+-----------+-----------+
| Contracted but not provided for | - | 4 |
+------------------------------------+-----------+-----------+
28. Operating lease arrangements-minimum lease payments
The Group as lessee
+--------------------------------+------------+------------+
| Annual Group and Company obligations under operating |
| leases are as follows: |
+----------------------------------------------------------+
| |Year ended |Year ended |
+--------------------------------+------------+------------+
| | 30-Jun-10 | 30-Jun-09 |
+--------------------------------+------------+------------+
| | GBP'000 | GBP'000 |
+--------------------------------+------------+------------+
| | | |
+--------------------------------+------------+------------+
| Minimum lease payments under operating leases recognised |
| as an expense in the year |
+----------------------------------------------------------+
| Leased movable assets | 96 | 50 |
+--------------------------------+------------+------------+
| Rent | 307 | 284 |
+--------------------------------+------------+------------+
| | 403 | 334 |
+--------------------------------+------------+------------+
At the balance sheet date, the Group had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due as
follows:
+-------------------------------------+--------+------------+
| Within one year | 338 | 95 |
+-------------------------------------+--------+------------+
| Between one and five years | 610 | 466 |
+-------------------------------------+--------+------------+
| More than five years | 51 | 556 |
+-------------------------------------+--------+------------+
| | 999 | 1,117 |
+-------------------------------------+--------+------------+
Operating lease payments primarily represent rentals payable by the Group for
its office properties.
+------------------------------------------------------------------+
| 29. Post balance sheet events |
+------------------------------------------------------------------+
| There were no material post balance sheet events. |
+------------------------------------------------------------------+
+------------------------------------------------------------------+
| 30. Financial instruments |
+------------------------------------------------------------------+
| The Group manages its capital to ensure that entities in the |
| Group will be able to continue as going concerns while |
| maximizing the return to stakeholders through the optimisation |
| of the debt and equity balance. The capital structure of the |
| Group consists of debt, which includes the borrowings disclosed |
| in note 17, cash and cash equivalents and equity distributable |
| to equity holders of the parent, comprising issued capital, |
| reserves and retained earning as disclosed on page. |
| The Group is not subject to externally imposed capital |
| requirements. |
| There are no material differences between book value and fair |
| value of financial instruments as at 30 June 2009 and June 2010 |
| The main risks arising from the Group's financial instruments |
| are interest rate risks and liquidity risk. |
| Interest rate risk - the Group partly finances its operations by |
| loan notes at contracted rates of interest. As noted in note 19 |
| on borrowings, all loan notes are linked to National Westminster |
| Bank plc base rates. |
| Liquidity risk - in addition to positive cash balances of |
| GBP214,000 the Group has an unutilised overdraft facility and |
| the directors consider that the Group's banking facilities are |
| adequate going forward. The Borrowings due after more than one |
| year represent loan notes. |
+------------------------------------------------------------------+
+-------------------------------------+-+-------+---------+------+
| 31. Related party transactions | | | | |
+-------------------------------------+-+-------+---------+------+
| 31.1 S Marsden and R McNeill, Directors of Fletcher McNeill |
| and Partners Ltd, leased the premises of 46 Manchester Road |
| and 23 Roscoe Street to Fletcher McNeill & Partners Ltd. The |
| cost to the Company in the financial year to 30 June 2010 was |
| GBP40,000. |
+----------------------------------------------------------------+
| 31.2 On 14 December 2007 C Sayer, R McNeill and G Williams, |
| Directors of the Company, acquired loan notes from the |
| Company, for cash consideration of GBP420,997, GBP345,665 and |
| GBP5,965 respectively. These loan notes bear interest at |
| National Westminster Bank base rates plus 2.5% and are due to |
| be repaid by 14 December 2010. During the year GBP166,715, |
| GBP131,268 and GBP1,342 of the loan notes were repaid to C |
| Sayer, R McNeill and G Williams respectively. At 30 June 2010 |
| amounts due to C Sayer, R McNeill and G Williams were |
| GBP84,725, GBP65,972 and GBP3,281 respectively. Since 30 June |
| 2010 the Directors have agreed to postpone payment of the loan |
| notes until 14 December 2011. |
+----------------------------------------------------------------+
| 31.3 On 14 December 2007 P Hurford, S Marsden and J West, who |
| are key managers of the Group, also acquired loan notes in the |
| Company for cash consideration of GBP336,798, GBP345,664 and |
| GBP5,965, on the same terms as the Directors above. During the |
| year GBP133,372, GBP131,268 and GBP1,342 of the loan notes |
| were repaid to P Hurford, S Marsden and J West respectively. |
+-------------------------------------+-+-------+---------+------+
+------------------------------------------------------------------+
| 32. Control |
+------------------------------------------------------------------+
| In the opinion of the directors, there is no single controlling |
| party of the Group. |
+------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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