TIDMBQS
RNS Number : 8858B
Baqus Group PLC
28 February 2011
BAQUS GROUP PLC
("Baqus" or "the Group")
Interim results for the 6 months ended 31 December 2010
Baqus Group plc (AIM:BQS), the building consultancy and quantity
surveying group, today announces its interim results for the six
months ended 31 December 2010.
Financial highlights
-- Revenue GBP3,510,000 (H1 2009: GBP3,845,000)
-- Gross profit GBP893,000 (H1 2009: GBP606,000)
-- Profit before tax GBP120,000 (H1 2009: loss of GBP470,000)
-- Profit after tax GBP86,000 (H1 2009: loss of GBP339,000)
-- Basic EPS of 0.08p (H1 2009: loss of 0.3p)
Operational highlights
-- Order book is at GBP5.7 million (H1 2009: GBP8.0
million)
-- Consolidation of London and St Albans offices in
London
Commenting on the results, Clive Sayer, Chief Executive of Baqus
Group plc, said: "I am encouraged that the Group's diverse client
base spread across both the public and private sectors has enabled
Baqus to enter the second half of the current financial year with a
steady flow of work.
Baqus is still experiencing a regular supply of enquiries from
our clients (and potential clients) and I am confident that going
forward the Group will be successful in converting a number of
these leads into firm orders at sensible margins. However the Board
remains very cautious as the long term outlook is far from certain,
but with skilled and pro-active teams in each office, Baqus is well
positioned to benefit from any upturn in the wider construction
industry."
Contact:
Baqus Group plc
Clive Sayer (Chief Executive) 01243-792220
Patrick Lineen (Finance Director) 01606-891617
Seymour Pierce (Nominated Adviser and Broker)
Mark Percy / David Foreman (Corporate
Finance) 0207-107-8000
Katie Ratner (Corporate Broking)
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am pleased to report Baqus Group's interim results for the six
months ended 31 December 2010.
You may recall that the Group took significant action during
2009/10 to combat the effects of extremely tough trading conditions
in the wider economy and the construction sector in particular. The
effects of this have started to show through and, despite activity
in the industry continuing at a subdued level, with projects in
both the public and private sectors subject to delay and
cancellation, the business has moved back 'into the black'.
Public sector work continues to be much reduced (and is widely
expected to do so for a considerable period) and private sector
work remains held back by a lack of available funding. As a result,
in the public sector especially, there is increased competition for
what work there is, leading to ongoing tight margins.
The Board has acted carefully to balance the need to make
savings with the requirement to retain and train skilled staff so
that the Group is able to respond effectively to new enquiries and
opportunities.
Results
The unaudited accounts show a profit before taxation of
GBP120,000 for the half year ended 31 December 2010 (2009:
GBP470,000 loss) on turnover of GBP3,510,000 (2009: GBP3,845,000).
The earnings per share were 0.08p (2009: loss per share 0.30p).
Baqus had a cash position of GBP661,000 at 31 December 2010
being an increase of GBP447,000 during the six month period. As a
measure of prudence, the final redemption of the loan notes that
was due to take place on 14 December 2010 was deferred in most
cases until 14 December 2011 with the agreement of the note holders
concerned.
Operating Review
The Baqus Group comprises five businesses: Boxall Sayer,
Fletcher McNeill, Denley King, Sworn King and Nigel Rose.
Overall the businesses are enjoying a good level of enquiries in
an environment which continues to be competitive and challenging
and where margins have come under pressure. Baqus has looked to
minimise the impact of these pressures by exploiting a number of
synergies within the business to reduce operating costs.
Whilst the order book is healthy, it has been increasingly
evident that clients are committing to projects stage by stage as
they progress as opposed to instructing us for entire projects at
the outset. The order book therefore has the appearance of being
significantly down against prior year, but in reality, the volume
of work is more comparable than would first appear.
Office Consolidation
Following the consolidation of offices last year, work is in
hand to consolidate the St Albans office staff into the London
office thereby making a modest cost saving but also greatly
improving the strength of the office in the capital.
Dividend
The Board regularly reviews the Group's dividend policy but,
given the accumulated losses of the Group, is not in a position to
propose a dividend. The Group, however, would like to state that it
remains committed to paying dividends when profits are available
and will resume payments once the trading environment has
improved.
Staff
I would like to take the opportunity to thank my fellow
Directors and the staff throughout the Group for their commitment
and hard work during a very difficult time. The Board is proud of
their resilience and the way in which the staff of the individual
businesses have responded to being part of a larger group, many of
whom see it as an opportunity to enhance their careers.
Current Outlook and Trading
I am encouraged that the Group's diverse client base spread
across both the public and private sectors has enabled Baqus to
enter the second half of the current financial year with a steady
flow of work.
Baqus is still experiencing a regular supply of enquiries from
our clients (and potential clients) and I am confident that going
forward the Group will be successful in converting a number of
these leads into firm orders at sensible margins. However the Board
remains very cautious as the long term outlook is far from certain,
but with skilled and pro-active teams in each office, Baqus is well
positioned to benefit from any upturn in the wider construction
industry.
The Board has been successful in reducing Group overheads,
particularly in terms of rationalising the number of its offices
and select redundancies. Given the current and continuing difficult
trading conditions, the Board continues to consider options
available to further reduce overheads and maximise shareholder
value; this includes re-evaluating the net benefit of maintaining a
listing on AIM, particularly given the financial and management
time costs involved against the current market capitalisation of
the Group and appreciating the ongoing lack of liquidity for all
but the smallest trades of shares in the Company.
Clive Sayer
28 February 2011
BAQUS GROUP PLC
Consolidated Statement of
Comprehensive Income
for the six months ended 31
December 2010
Six months Six months Year
ended ended ended
31-Dec-10 31-Dec-09 30-Jun-10
(unaudited) (unaudited) (audited)
Continuing operations Note GBP'000 GBP'000 GBP'000
------------ ------------ ----------
Revenue 3,510 3,845 7,262
Cost of sales (2,617) (3,239) (6,213)
------------ ------------ ----------
Gross profit 893 606 1,049
Operating expenses (766) (938) (1,845)
Exceptional costs 0 (123) (295)
------------ ------------ ----------
Operating profit 127 (455) (1,091)
Investment revenue 2 - 1 1
Finance costs 2 (7) (16) (27)
------------ ------------ ----------
Profit before taxation 120 (470) (1,117)
Taxation 3 (34) 131 302
Profit/(loss) for year attributable
to equity holders of the parent 86 (339) (815)
------------ ------------ ----------
Dividend 4 - 73 73
Basic earnings per share
(pence) 5 0.08p (0.30p) (0.72p)
Diluted earnings per share
(pence) 5 0.07p (0.27p) (0.66p)
BAQUS GROUP PLC
Consolidated Balance Sheet
As at 31 December 2010
As at As at As at
31-Dec-10 31-Dec-09 30-Jun-10
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ ----------
Non-current assets
Intangible assets 6 8,542 8,516 8,516
Property, plant and equipment 282 336 341
Deferred tax 198 - 251
9,022 8,852 9,108
------------ ------------ ----------
Current assets
Trade and other receivables 2,282 3,349 2,599
Cash and cash equivalents 661 189 214
2,943 3,538 2,813
------------ ------------ ----------
Current liabilities
Trade and other payables (1,273) (582) (1,235)
Current income tax liabilities (101) (823) (126)
Financial liabilities (21) (28) (20)
Borrowings 7 (297) (349) (349)
(1,692) (1,782) (1,730)
------------ ------------ ----------
Net current assets 1,251 1,756 1,083
------------ ------------ ----------
Total assets less current
liabilities 10,273 10,608 10,191
------------ ------------ ----------
Non-current liabilities
Financial liabilities (8) (28) (19)
Deferred income tax liability (38) (4) (31)
Provision (42) - (42)
Net assets 10,185 10,576 10,099
------------ ------------ ----------
Equity
Share capital 5,663 5,663 5,663
Share premium account 4,690 4,690 4,690
Retained earnings (168) 223 (254)
Total equity 10,185 10,576 10,099
------------ ------------ ----------
BAQUS GROUP PLC
Consolidated Cash Flow Statement
for the six months ended 31 December
2010
Six months Six months Year
ended ended ended
Note 31-Dec-10 31-Dec-09 30-Jun-10
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ ----------
Net cash inflow/(outflow) from
operating activities 8 532 (210) (84)
Investing activities
Interest received - 1 1
Proceeds on disposal of property,
plant and equipment 17 6 21
Purchase of property, plant
and equipment (15) (74) (177)
Purchase of intangible
assets (25) - -
Net cash used in investing
activities (23) (67) (155)
------------ ------------ ----------
Financing activities
Finance lease obligations (10) (19) (32)
Dividends paid - (73) (73)
Repayments of loan notes (52) (600) (600)
Net cash used in financing
activities (62) (692) (705)
------------ ------------ ----------
Net increase/(decrease) in
cash equivalents 447 (969) (944)
------------ ------------ ----------
Cash and cash equivalents at
beginning of period 214 1158 1158
------------ ------------ ----------
Cash and cash equivalents at
end of period 661 189 214
------------ ------------ ----------
BAQUS GROUP PLC
Consolidated Statement of Changes
in Equity
for the six months ended 31 December 2010
(unaudited)
Share Share Retained
capital premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- --------- --------
Changes in equity
As at 1 July 2010 5,663 4,690 (254) 10,099
Equity dividends paid - - - -
Profit for the period attributable
to equity holders of the parent
company - - 86 86
As at 31 December 2010 5,663 4,690 (168) 10,185
-------- -------- --------- --------
for the six months ended 31 December 2009
(unaudited)
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)
Loss for the period attributable
to equity holders of the parent
company - - (339) (339)
As at 31 December 2009 5,663 4,690 223 10,576
-------- -------- --------- --------
for the year ended 30 June 2010
(audited)
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)
Loss for the year attributable
to equity holders of the parent
company - - (816) (816)
As at 30 June 2010 5,663 4,690 (254) 10,099
-------- -------- --------- --------
Note 1 Accounting Policies
Basis of preparation
The results for the period ended 31 December 2010, which are neither
audited not reviewed, have been prepared on the basis of accounting
policies consistent with those set out in the Annual Report to shareholders
of Baqus Group plc for the year ended 30 June 2010.
The condensed consolidated interim financial statements do not include
all of the information and disclosures required for full annual financial
statements, do not comprise statutory accounts within the meaning of
Section 435 of the Companies Act 2006, and should be read in conjunction
with the 2010 Annual Report of Baqus Group plc.
Statutory accounts for the year ended 30 June 2010 were approved by
the Board of Directors on 5 November 2010 and delivered to the Registrar
of Companies. The report of the auditors on those accounts was unqualified,
did not included a reference to any matters to which the auditors drew
attention by way of emphasis with qualifying their report and did not
contain statements under section 498(2) or (3) of the Companies Act
2006.
The interim financial statements have been prepared on the historical
cost basis and the principal accounting policies adopted are set out
below.
Basis of consolidation
The Group's interim financial statements consolidate the interim 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 acquisitions of subsidiaries are accounted
using the purchase method.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition.
Goodwill represents the excess of acquisition cost over the fair value of the
Group's share of the identifiable net assets of the acquired subsidiary at
the date of acquisition. Any deficiency of the cost of acquisition below the
fair value of the identifiable net assets acquired (i.e. discount on
acquisition) is credited to the income statement in the period of
acquisition.
The results of subsidiaries acquired 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 interim 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.
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.
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.
Goodwill
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 is reviewed annually for any impairment losses. Any impairment
losses are recognised through the income statement.
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
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.
Leasing
Rentals paid under operating leases are charged against profits on
a straight line basis over the period of the lease.
Deferred taxation
Deferred tax is recognised in respect of all temporary differences
which have originated but not reversed at the balance sheet date. Temporary
differences are differences between taxable profits and the results
as stated in the interim financial statements which arise from the
inclusion of gains and losses in tax assessments in periods different
from those in which they are recognised in the interim financial statements.
Financial liabilities 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 interim income statement in the
year in which they are incurred.
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 interim 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 discussed, to the extent necessary,
in more detail in their respective notes.
BAQUS GROUP PLC: Notes to the accounts for the period ended 31
December 2010
Investment revenue and finance
2 costs
Six months Six months
ended ended Year ended
31/12/2010 31/12/2009 30/06/2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Investment income:
Bank deposits - 1 1
------------ ------------ -----------
Finance costs:
Interest on loan notes 5 16 17
Interest on bank borrowings 2 - 10
7 16 27
------------ ------------ -----------
3 Taxation
The taxation charge for the period ended 31 December 2010 represents
the Directors' estimate of the corporation tax charge based on
the results for the period.
4 Dividends
Six months Six months
ended ended Year ended
31/12/2010 31/12/2009 30/06/2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Amounts recognised as distributions
to equity holders in the period - 73 73
(approved)
- 73 73
------------ ------------ -----------
5 Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following date, determined in accordance with IAS
33:
Six months Six months
ended ended Year ended
31/12/2010 31/12/2009 30/06/2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ ------------
Earnings
Earnings for the purpose of the
earnings per share being net
profit/(loss) attributable to
equity holders of the parent 86 (339) (815)
------------ ------------ ------------
Number of shares
Weighted average number of
ordinary shares for the purpose
of basic earnings per share 113,250,000 113,250,000 113,250,000
Weighted average number of
ordinary shares for the purpose
of diluted earnings per share 124,256,257 124,256,257 124,256,257
------------ ------------ ------------
6 Intangible assets
Six months Six months
ended ended Year ended
31/12/2010 31/12/2009 30/06/2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Goodwill
As at 1 July 2010 8,516 8,516 8,516
Additions 26 - -
As at 31 December 2010 8,542 8,516 8,516
------------ ------------ -----------
Goodwill comprises the
following amounts:
Boxall Sayer 3,263 3,263 3,263
Fletcher McNeill 3,107 3,107 3,107
Denley King 1,894 1,894 1,894
Other 21 21 21
Sworn King 234 208 208
Nigel Rose 23 23 23
8,542 8,516 8,516
------------ ------------ -----------
7 Borrowings
Six months Six months
ended ended Year ended
31/12/2010 31/12/2009 30/06/2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Loan notes as at 1 July 2010 349 949 949
Loan notes repaid (52) (600) (600)
Loan notes as at 31 December 2010 297 349 349
------------ ------------ -----------
Total Total Total
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Less than one year 297 349 349
------------ ------------ -----------
Notes to the cash flow
8 statement
Six months Six months
ended ended Year ended
31/12/2010 31/12/2009 30/06/2010
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
------------ ------------ -----------
Profit/(loss) for the period 86 (339) (816)
Adjust for:
Income tax expense(refund) 34 (131) (302)
Investment income - (1) (1)
Finance costs 7 16 27
Depreciation of property, plant
and equipment 63 59 131
Operating cash flows before
movements in working capital 190 (396) (961)
Decrease in receivables 317 346 1,000
Increase/(decrease) in payables 32 (144) (96)
Cash generated/(absorbed) by
operations 539 (194) (57)
Income taxes paid - - -
Interest paid (7) (16) (27)
Net cash inflow/(outflow)from
operating activities 532 (210) (84)
------------ ------------ -----------
This information is provided by RNS
The company news service from the London Stock Exchange
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