TIDMCAE 
 
RNS Number : 3900X 
Charteris PLC 
06 December 2010 
 
                                  CHARTERIS PLC 
                  ("Charteris" or "the Company" or "the Group") 
 
 
                              PRELIMINARY RESULTS 
 
Charteris plc, the business and IT consultancy, announces its preliminary 
results for the year ended 31 July 2010. 
 
Key points 
 
·    Revenue of GBP15.4m (2009: GBP20.3m) 
·    Loss before taxation and exceptional charges was GBP840k (2009: GBP438k 
profit) 
·    Diluted loss per share before exceptional charges of 2.03p (2009: 1.18p 
earnings) 
·    Restructuring and cost saving measures implemented, reducing costs by 19% 
year on year - a key factor in the Group's return to break-even performance 
before exceptional costs in Q4 
·    Work for local authorities based on Citizen Centric Business Change model 
developed significantly 
·    Microsoft Dynamics business performed strongly, particularly benefiting 
from existing and new contracts in the manufacturing, distribution and 
commercial sectors 
 
Commenting on the results, Cliff Preddy, Chairman, said: 
 
"The continuing effects of the recent recession in several of the consulting 
markets in which we operate meant that trading conditions for Charteris were 
challenging throughout the financial year ended 31 July 2010.  Sales and 
revenues improved progressively through the second half, leading to an 
underlying break-even performance for the business in the last quarter before 
exceptional costs. 
 
Following the improving trend in the final quarter of FY10, performance in the 
first quarter of FY11 has been encouraging with stronger utilisation of 
professional staff and a building sales pipeline.  The trend should give 
progressive improvement in business performance from our lower cost base, 
assuming that markets maintain reasonable resilience to any further economic 
pressure." 
 
 
 
 
+-------------------------------------------+------------------+ 
|                                                              | 
| Press enquiries:                                             | 
|                                                              | 
+--------------------------------------------------------------+ 
| Charteris plc                             |                  | 
| David Pickering, Chief Executive          | Tel: 020 7600    | 
| Patrick Carter, Finance Director          | 9199             | 
|                                           |                  | 
+-------------------------------------------+------------------+ 
| Oriel Securities Limited (Nominated       |                  | 
| Adviser)                                  | Tel: 020 7710    | 
| Michael Shaw / Emma Griffin               | 7600             | 
+-------------------------------------------+------------------+ 
CHAIRMAN'S STATEMENT 
 
The continuing effects of the recent recession in several of the consulting 
markets in which we operate meant that trading conditions for Charteris were 
challenging throughout the financial year ended 31 July 2010 (FY10).  Efforts 
were largely concentrated on achieving key sales, whilst adjusting and 
constraining costs in line with forecasts for near and medium term revenue. 
 
In the interim report for the year, released at the end of March, the Directors' 
expectation was that the second half financial performance would show an 
improvement on the first half but that overall business volumes were unlikely to 
rise appreciably until the fourth quarter.  This proved to be the case, and 
whilst longer than expected client decision timescales meant slower improvement, 
sales and revenues improved progressively through the second half, leading to an 
underlying break-even performance for the business in the final quarter before 
exceptional costs. 
 
Results 
Revenue in the year ended 31 July 2010 was GBP15.4m (2009: GBP20.3m). 
 
Loss before taxation and exceptional items was GBP0.8m. (2009: profit GBP0.4m). 
Exceptional charges consisted of redundancy costs of GBP0.2m (2009: redundancy 
costs GBP0.6m; impairment of goodwill of GBP1.0m and share-based payment charge 
of GBP0.04m). Loss before taxation was GBP1.0m (2009: GBP1.2m). Fully diluted 
loss per share was 2.49p (2009: 2.85p loss). 
 
The cash balance at 31 July 2010 was GBP0.9m (31 July 2009: GBP1.5m; 31 January 
2010: GBP0.8m). Net debt on 31 July 2010 was GBP1.4m (31 July 2009: GBP0.7m). 
 
Dividend 
In order to conserve cash during less certain trading, the directors have 
decided not to recommend an annual dividend (2009: 0.2p per share). 
 
Business Overview 
The Company's strategy is to concentrate on those activities that the Board 
believes have the greatest potential for the building of long-term client 
relationships, delivery of reliable margins and improvement of shareholder 
value. 
The chosen service specialisations, delivered in selected market sectors, are: 
 
Business Change Consulting: change and transformation programmes driven by the 
needs of our clients' customers and users of services (Customer Centric Business 
Change), supported by deep experience in the Charteris professional team of 
organisational change consultancy and major programme management.  Business 
consulting revenues in the Public Sector made a solid contribution over the 
year. We continued to support a number of organisations engaged in homeland 
security.  Our work for local authorities based on our Citizen Centric Business 
Change model developed significantly.  In the Retail Sector, though overall 
revenues were lower this year, towards the end of the period new business based 
on Customer Centric Business Change was secured. 
 
Microsoft Dynamics: maximising business efficiency, productivity and flexibility 
through the design and implementation of Enterprise Resource Planning (ERP) and 
Customer Relationship Management (CRM) business systems, based upon the 
Microsoft Dynamics range of application software products.  The Microsoft 
Dynamics business performed strongly, particularly benefiting from existing and 
new contracts in the manufacturing, distribution and commercial sectors. 
 
Microsoft Technologies: the provision of Advanced Microsoft Consulting skills 
for the design and implementation of IT systems and infrastructure based on 
Microsoft's "classic stack" technology, and Cloud Computing.  Revenues for 
infrastructure services held up well during the year and, in the second half, 
there was encouraging renewal of demand for our Advanced Microsoft Consulting 
services in the financial services sector. 
 
Outlook 
Despite the challenges of the past year, the Company retains a clear direction 
which will position the business for improved performance as market conditions 
stabilise. 
 
Charteris enters the new business year with a better balance of business across 
our market sectors.  Our three core service areas are well aligned to the needs 
of clients operating in a cost constrained, yet competitive economic 
environment.  Whilst there is still likely to be a tendency for clients to 
proceed cautiously in this environment, the need for timely business change is 
increasing.  Our track record in delivering reliable IT-enabled change and 
carefully targeted services will progressively differentiate Charteris in this 
evolving market. 
 
Following the improving trend in the final quarter of FY10, performance in the 
first quarter of FY11 has been encouraging with stronger utilisation of 
professional staff and a building sales pipeline.  The trend should give 
progressive improvement in business performance from our lower cost base, 
assuming that markets maintain reasonable resilience to any further economic 
pressure. 
 
The fundamentals of Charteris remain strong with a quality client base and a 
high calibre team. 
 
Cliff Preddy 
Non-Executive Chairman 
3 December 2010 
 
CHIEF EXECUTIVE'S STATEMENT 
 
In difficult trading conditions the imperative over the period has been to take 
the steps necessary to ensure that the business is on course for recovery from 
the effects of the recession.  These steps have concentrated on maximising 
effectiveness in the market positioning and sales of our services, as well as 
further improving operational cost efficiency. 
 
Although a number of our markets remained sluggish for much of the year, 
concerted efforts in the promotion and targeting of our services have led to a 
growing sales pipeline through the second half and an increased rate of sales 
closures.  Remaining highly client focussed has enabled us to build upon both 
existing and new account relationships that have the potential to develop 
considerably over the coming year. 
 
We have taken the necessary actions to keep the Company's cost base aligned with 
currently projected business volumes.  In taking these steps we have preserved 
the core strengths of the business, which will be vital to the anticipated 
future growth of Charteris as market conditions improve. 
 
Government & Legal 
Our work in the Public Sector has been an important contributor to the business 
throughout the year.  In homeland security we continued to provide advisory and 
programme management services to some of the most significant long-term change 
programmes in this domain. 
 
Over several years we have built a demonstrable track record in delivering 
operational efficiency improvements in Local and Regional Government using our 
Customer (Citizen) Centric Business Change (CCBC) techniques.  Demand for this 
proposition has increased in a market where tight budgetary constraints make 
cost control with efficient service delivery the top priority. 
 
Following our successful CCBC projects at Wiltshire Council - reducing cost 
while improving services in Adult Social Care - we have successfully engaged in 
a number of new projects for the council.  Helping people to live longer at home 
while maintaining sustainable budgets is a key focus of change.  The CCBC 
approach has also been used in other council service areas including Waste 
Management, Highways, Amenities and Transport.  These activities are leading to 
close partnership working to meet the challenge of budgetary constraints while 
protecting vital customer services. 
 
Building on this success we have engaged in new projects to deliver similar 
benefits to a number of new local authority clients during the period.  These 
include the South West Regional Improvement and Efficiency Partnership (RIEP), a 
partnership of sixteen local authorities in the South West that supports those 
authorities in delivering efficiency savings and in improving their ability to 
provide services to their citizens.  We have also worked with Plymouth CC, 
Cornwall CC, Warrington CC, Worcestershire CC, Surrey CC and a number of other 
local councils and Health Services. 
 
The drive for greater efficiencies and reduced operating costs throughout the 
public sector also continued to create demand for our Advanced Microsoft 
Consulting services.  This was also stimulated by Microsoft's wave of new 
product releases in desktop, collaboration and communication technologies. 
Towards the end of the period, the growth in clients' interest in 'Cloud' or 
Software-as-a-Service solutions strengthened the pipeline of opportunity for our 
combined skills in IT-enabled business change.  Our work in this area included 
consolidation of the corporate and education IT infrastructure at Perth and 
Kinross Council and the implementation of a cloud based collaboration platform 
for a public sector body in Scotland. 
 
In the legal sector, during the year, our experts have again acted in some of 
the highest profile IT cases before the English and Irish courts. The most 
significant IT/legal event of the year was the handing down of the judgment in 
Sky v. EDS, a landmark ruling in the Technology and Construction Court.  A team 
of Charteris experts acted for the defendants in the case. Charteris experts 
also acted in two significant intellectual property cases and other cases in the 
High Courts in London and Dublin.  We have also provided expert mediators who 
helped the parties resolve their disputes without resorting to litigation. 
 
Retail & Services 
On-line and multi-channel retail continues to be an important area for 
Charteris.  Through the year we worked with a number of major retailers, helping 
them gain advantage from new multi-channel retail opportunities. 
 
Prevailing economic conditions meant that the traditionally quieter period for 
the supply of services to the Retail sector through the winter was strongly 
pronounced this year - leading to lower revenues in this business area through 
the second and third quarters. 
 
Our experience in multi-channel retail led in Q4 to Charteris being selected as 
an IT services partner by a leading high street retailer.  This has resulted in 
the initiation of several new projects in the online retailing area over recent 
months.  Also during the second half we were appointed to apply our retail and 
change management skills in the strategic review of the online operations of a 
value retailer.  The result was a three-year roadmap for change in support of 
their e-Business growth plans. 
 
The combination of our retail experience and Business Solutions offerings have 
also led to a new contract to implement an ERP solution, based on Dynamics AX, 
for a mail order clothing retailer. 
 
During the year we were appointed one of just four UK-based Microsoft 
go-to-market partners for their new Dynamics AX Retail product.  We anticipate 
that this product will stimulate further demand for our multi-channel retail and 
Dynamics skills. 
 
In the services sector we worked on a variety of projects including the 
migration of an organisation providing psychometric testing services to a 
cloud-based infrastructure, and re-platforming of the core systems of a pension 
services provider.  We also won a project with a utility services regulator to 
help them specify and procure a regulatory system and subsequently were 
appointed to undertake an IT strategy review. 
 
During the second half we saw a resurgence in demand in the financial services 
market.  We are now engaged on major new programmes within a Tier 1 bank, using 
our Advance Microsoft Consulting skills, in the enhancement of the systems which 
underpin their wholesale banking credit risk management and reporting processes. 
 
Charteris Business Solutions 
This business area, which is centred on business and IT solutions based on 
Microsoft Dynamics, performed strongly throughout the year.  High levels of 
project activity were maintained - particularly related to ERP solutions based 
on Dynamics AX. 
 
For leading animal feeds manufacturer, AB Agri, we successfully delivered one of 
the most complex and sophisticated Dynamics AX solutions in the UK.  This 
provides an integrated solution to support the entire business processes of the 
organisation (including sales, purchasing, finance and manufacturing functions). 
 
In May we were selected by Southern Cross, the UK's largest Care homes provider, 
to implement a Dynamics AX system to replace their core payroll and Human 
Resources systems, serving over 44,000 employees. 
 
We also continued the development of our CRM business, based on Microsoft 
Dynamics CRM.  With customer retention a top-priority issue for business in 
current markets, effective customer relationship management is critical.  We 
successfully implemented Dynamics CRM at Moodys, one of the leading Oil and Gas 
professional services companies worldwide. 
 
As a result of progress this year, Charteris achieved membership of Microsoft's 
President's Club for Microsoft Dynamics which recognizes the top Microsoft 
Dynamics partners globally. 
 
Charteris Team 
The reputation of Charteris is built on the high calibre of its team and the 
quality of delivery of our services to our clients.  By its nature, our work 
entails delivering strategic advisory services and the implementation of 
solutions that operate at the heart of our clients' businesses.  The benefits 
and success that these services have enabled again this year are a great credit 
to the Charteris team. 
 
I would like to thank everyone in the team, whether in front-line delivery or in 
support functions, for their dedication and hard work over the year.  The 
importance of this commitment is truly seen when considered in the context of 
the value delivered to our clients. 
 
David Pickering 
Chief Executive 
3 December 2010 
 
 
FINANCE DIRECTOR'S REPORT 
 
Overview 
The FY10 results reflect the continuing challenging economic climate and 
business environment for consulting services. The Group returned to an 
underlying break-even position before exceptional items in Q4 but, due to losses 
in the preceding two quarters, recorded an overall loss before tax and 
exceptional charges of GBP0.84m (2009: GBP0.44m profit).  Set out below is an 
explanation of the key financial elements of the Group's performance. 
 
Trading 
The year has seen a decline in overall Group revenues of 24% as a result of 
lower business volumes, especially in the retail sector, mitigated by the 
positive contribution from our Dynamics AX practice acquired in 2008.  The 
business has accordingly taken action to keep its costs aligned to forecast 
revenues and continues to do so.  Consulting resources have been adjusted in 
line with projected demand for our services and overhead staff and costs also 
reduced proportionally.  Dependence on associates has been kept to a minimum. 
 
The business has seen a steady increase in business through the second half and 
into FY11 and selective recruitment is now being undertaken in specific growth 
markets as we try to meet growing demand for our services. 
 
Key performance indicators 
The key performance indicators used by the Group are utilisation and fee rates. 
As a professional services business, where staffing is the principal cost, it is 
vital to ensure that the available resource is matched with workload. This is 
primarily done through close monitoring of the historic and forecast utilisation 
of consultants and taking action accordingly.  Fee rates have come under 
pressure in some areas during the year due to increased competition in certain 
markets. 
 
Cash flow and Borrowings 
There was a cash outflow of GBP0.7m (2009: GBP1.4m outflow) primarily relating 
to trading performance in FY10.  The Group's trade receivable days at year end 
has risen to 62 (2009: 56) due to debt owed by one significant customer, which 
has subsequently been settled.  Cash at 31 July was GBP0.9m compared with 
GBP1.5m last year. During the year, the Group received a net corporation tax 
refund of GBP0.08m (2009: GBP0.5m payment) and paid a dividend of GBP0.08m 
(2009: GBP0.20m). 
 
Capital expenditure was kept to a minimum at GBP0.10m (2009: GBP0.02m) 
reflecting essential IT asset renewals. Additionally, the Group took advantage 
of a capital repayment holiday on its mortgage loan (2009: GBP0.59m repayment). 
 
As at the year end the Group had an agreed overdraft facility with Natwest Bank 
plc of GBP1.5m (2009: GBP1.5m) and a GBP2.3m (2009: GBP2.3m) loan facility with 
Natwest Bank plc secured against the value of the Group's property. 
 
Subsequent to the year end, the Group has renegotiated its banking facilities 
and repaid an additional GBP350,000 of its loan with Natwest Bank plc with a 
further instalment of GBP100,000 due at the end of July 2011.  In addition, also 
following the year end, the Group refinanced the overdraft with a GBP1.5m 
invoice discounting facility.    The nature of the Group's business is such that 
there is inherent uncertainty over the commencement of major projects and timing 
of cash flows arising from clients thereafter (see note 2).However, the 
Directors believe that the Group will continue to operate within the agreed 
facilities. 
 
Patrick Carter 
Finance Director 
 
 
3 December 2010 
 
CONSOLIDATED INCOME STATEMENT 
FOR THE YEAR ENDED 31 JULY 2010 
 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         | Notes |      2010 |      2009 | 
| Continuing operations                   |       |   GBP'000 |   GBP'000 | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Revenue                                 |       |    15,423 |    20,253 | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |     _____ |     _____ | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Other external charges                  |       |   (2,872) |   (4,314) | 
+-----------------------------------------+-------+-----------+-----------+ 
| Staff costs                             |       |  (11,423) |  (14,065) | 
+-----------------------------------------+-------+-----------+-----------+ 
| Other administrative expenses           |       |   (2,099) |   (3,040) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |    ______ |    ______ | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |  (16,394) |  (21,419) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Operating (loss)/profit before          |       |     (783) |       486 | 
| exceptional items                       |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Redundancy costs                        |       |     (188) |     (617) | 
+-----------------------------------------+-------+-----------+-----------+ 
| Impairment of goodwill                  |       |         - |   (1,000) | 
+-----------------------------------------+-------+-----------+-----------+ 
| Share-based payment charge              |       |         - |      (35) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Operating loss                          |       |     (971) |   (1,166) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Finance income                          |       |         - |        36 | 
+-----------------------------------------+-------+-----------+-----------+ 
| Finance costs                           |       |      (57) |      (84) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| (Loss)/profit before taxation and       |       |     (840) |       438 | 
| exceptional items                       |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Redundancy costs                        |       |     (188) |     (617) | 
+-----------------------------------------+-------+-----------+-----------+ 
| Impairment of goodwill                  |       |         - |   (1,000) | 
+-----------------------------------------+-------+-----------+-----------+ 
| Share-based payment charge              |       |         - |      (35) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Loss before taxation                    |       |   (1,028) |   (1,214) | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Taxation                                |       |        10 |        49 | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |     _____ |     _____ | 
+-----------------------------------------+-------+-----------+-----------+ 
| Loss for the financial year             |       |   (1,018) |   (1,165) | 
| attributable to owners of the parent    |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |     _____ |     _____ | 
+-----------------------------------------+-------+-----------+-----------+ 
| Loss per share                          |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
| Basic                                   |  4    |   (2.49)p |   (2.85)p | 
+-----------------------------------------+-------+-----------+-----------+ 
| Diluted                                 |  4    |   (2.49)p |   (2.85)p | 
+-----------------------------------------+-------+-----------+-----------+ 
|                                         |       |           |           | 
+-----------------------------------------+-------+-----------+-----------+ 
 
A dividend of 0.2p per ordinary share totalling GBP82,000 was declared and paid 
in the year ended 31 July 2010 in respect of the financial year ended 31 July 
2009.  No dividend is proposed in respect of the financial year ended 31 July 
2009. 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 
+---------------------------------+-------+-------+-----------+-----------+ 
|                                 |       |       |      2010 |      2009 | 
|                                 |       |       |   GBP'000 |   GBP'000 | 
+---------------------------------+-------+-------+-----------+-----------+ 
|                                 |       |       |           |           | 
+---------------------------------+-------+-------+-----------+-----------+ 
| Loss for the financial year     |       |       |   (1,018) |   (1,165) | 
+---------------------------------+-------+-------+-----------+-----------+ 
| Deferred tax being income       |       |       |         5 |        50 | 
| recognised directly in equity   |       |       |           |           | 
+---------------------------------+-------+-------+-----------+-----------+ 
|                                 |       |       |           |           | 
+---------------------------------+-------+-------+-----------+-----------+ 
| Total comprehensive income for  |       |       |   (1,013) |   (1,115) | 
| the year attributable to owners |       |       |           |           | 
| of the parent                   |       |       |           |           | 
+---------------------------------+-------+-------+-----------+-----------+ 
|                                 |       |       |           |           | 
+---------------------------------+-------+-------+-----------+-----------+ 
CONSOLIDATED BALANCE SHEET 
31 JULY 2010 
 
+----------------------------------------+-------+----------+------------+ 
|                                        | Notes |    2010  |      2009  | 
|                                        |       | GBP'000  |   GBP'000  | 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Non-current assets                     |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Goodwill                               |       |    6,079 |      6,179 | 
+----------------------------------------+-------+----------+------------+ 
| Other intangible assets                |       |       77 |         11 | 
+----------------------------------------+-------+----------+------------+ 
| Property, plant and equipment          |       |    3,143 |      3,208 | 
+----------------------------------------+-------+----------+------------+ 
| Investments                            |       |        - |          1 | 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Deferred tax asset                     |       |       29 |         33 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |    9,328 |      9,432 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Current assets                         |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Trade and other receivables            |       |    3,958 |      4,759 | 
+----------------------------------------+-------+----------+------------+ 
| Current tax credit                     |       |       16 |         83 | 
+----------------------------------------+-------+----------+------------+ 
| Cash and cash equivalents              |       |      864 |      1,539 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |    4,838 |      6,381 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |   ______ |     ______ | 
+----------------------------------------+-------+----------+------------+ 
| Total assets                           |       |   14,166 |     15,813 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Current liabilities                    |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Trade and other payables               |       |  (3,868) |    (4,343) | 
+----------------------------------------+-------+----------+------------+ 
| Borrowings                             |       |    (185) |       (86) | 
+----------------------------------------+-------+----------+------------+ 
| Provisions                             |       |     (33) |        (8) | 
+----------------------------------------+-------+----------+------------+ 
| Deferred consideration                 |       |    (100) |          - | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |  (4,186) |    (4,437) | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Total assets less current liabilities  |       |    9,980 |     11,376 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Non-current liabilities                |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Borrowings                             |       |  (2,126) |    (2,199) | 
+----------------------------------------+-------+----------+------------+ 
| Deferred consideration                 |       |        - |      (200) | 
+----------------------------------------+-------+----------+------------+ 
| Deferred tax liability                 |       |    (152) |      (155) | 
+----------------------------------------+-------+----------+------------+ 
| Provisions                             |       |        - |       (25) | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |  (2,278) |    (2,579) | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Net assets                             |       |    7,702 |      8,797 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Equity                                 |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Called up share capital                |       |      432 |        432 | 
+----------------------------------------+-------+----------+------------+ 
| Share premium account                  |       |    2,568 |      2,568 | 
+----------------------------------------+-------+----------+------------+ 
| Merger reserve                         |       |    2,573 |      2,573 | 
+----------------------------------------+-------+----------+------------+ 
| ESOP reserve                           |       |    (194) |      (194) | 
+----------------------------------------+-------+----------+------------+ 
| Other reserve                          |       |       26 |         26 | 
+----------------------------------------+-------+----------+------------+ 
| Retained earnings                      |       |    2,297 |      3,392 | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
| Total equity attributable to owners of |  5    |    7,702 |      8,797 | 
| the parent                             |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
|                                        |       |          |            | 
+----------------------------------------+-------+----------+------------+ 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED 31 JULY 2010 
 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |     2010 |     2009 | 
|                                        |       |  GBP'000 |  GBP'000 | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Loss before taxation                   |       |  (1,028) |  (1,214) | 
+----------------------------------------+-------+----------+----------+ 
| Adjustments for:                       |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Depreciation of property, plant and    |       |       88 |      154 | 
| equipment                              |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Amortisation of intangible assets      |       |       12 |    1,032 | 
+----------------------------------------+-------+----------+----------+ 
| Share-based payments                   |       |        - |       35 | 
+----------------------------------------+-------+----------+----------+ 
| Net interest expense                   |       |       55 |       48 | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |   ______ |   ______ | 
+----------------------------------------+-------+----------+----------+ 
| Operating cash flows before movements  |       |    (873) |       55 | 
| in working capital                     |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Decrease in receivables                |       |      801 |    1,706 | 
+----------------------------------------+-------+----------+----------+ 
| Decrease in payables                   |       |    (473) |  (2,236) | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |   ______ |   ______ | 
+----------------------------------------+-------+----------+----------+ 
| Cash generated by operations           |       |    (545) |    (475) | 
+----------------------------------------+-------+----------+----------+ 
| Income taxes repaid/(paid)             |       |       83 |    (509) | 
+----------------------------------------+-------+----------+----------+ 
| Interest paid                          |       |     (55) |     (84) | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Net cash from operating activities     |       |    (517) |  (1,068) | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Investing activities                   |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Interest received                      |       |        - |       36 | 
+----------------------------------------+-------+----------+----------+ 
| Purchase of property, plant, equipment |       |    (101) |     (17) | 
| and software                           |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Acquisition of SIG Consulting Limited  |       |        - |  (1,992) | 
| (net of cash)                          |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Cash used in investing activities      |       |    (101) |  (1,973) | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Financing activities                   |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Dividends paid                         |       |     (82) |    (204) | 
+----------------------------------------+-------+----------+----------+ 
| Drawdown of loan (net of fees)         |       |       25 |    2,465 | 
+----------------------------------------+-------+----------+----------+ 
| Repayment of borrowings                |       |        - |    (593) | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Net cash from financing activities     |       |     (57) |    1,668 | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Decrease in cash and cash equivalents  |       |    (675) |  (1,373) | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Cash and cash equivalents at the       |       |    1,539 |    2,912 | 
| beginning of the year                  |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
| Cash and cash equivalents at the end   |       |      864 |    1,539 | 
| of the year                            |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
|                                        |       |          |          | 
+----------------------------------------+-------+----------+----------+ 
 
 
 
NOTES: 
 
+----+-------------------------------------------------------------+ 
| 1. | BASIS OF PREPARATION                                        | 
|    |                                                             | 
|    | The financial information in this announcement does not     | 
|    | constitute statutory financial statements as defined in     | 
|    | section 434 of the Companies Act 2006. The statutory        | 
|    | accounts for the year ended 31 July 2010 form the basis for | 
|    | the financial information presented by the directors in     | 
|    | this preliminary announcement and will be delivered to the  | 
|    | Registrar of Companies following the Company's Annual       | 
|    | General Meeting. The audit report on these financial        | 
|    | statements contained an Emphasis of Matter paragraph as     | 
|    | follows:                                                    | 
|    |                                                             | 
|    | "Without qualifying our opinion, we draw attention to note  | 
|    | 2 which indicates continued uncertainty over the level of   | 
|    | demand for the Group's services and the timing of the       | 
|    | settlement of outstanding receivables on major projects. In | 
|    | response to this uncertainty, the directors have considered | 
|    | the actions they would take in response to a fall in the    | 
|    | anticipated level of revenues and/or timing of settlement   | 
|    | of receivable balances.  On this basis, the directors       | 
|    | believe that the Group will continue to operate within the  | 
|    | agreed banking facilities.  These conditions, along with    | 
|    | other matters as set forth in note 2 indicate the existence | 
|    | of a material uncertainty which may cast significant doubt  | 
|    | about the group's ability to continue as a going concern.   | 
|    | The financial statements do not include any adjustments     | 
|    | that would result if the Company were unable to continue as | 
|    | a going concern."                                           | 
|    |                                                             | 
+----+-------------------------------------------------------------+ 
|    |                                                             | 
+----+-------------------------------------------------------------+ 
| 2. | SIGNIFICANT ACCOUNTING POLICIES - GOING CONCERN             | 
+----+-------------------------------------------------------------+ 
|    | Subsequent to the year end, Natwest Bank Plc's call for a   | 
|    | formal valuation of its property security revealed a        | 
|    | decline in the property's market value and a resultant      | 
|    | breach of the Loan to Value Covenant on the loan.  The      | 
|    | breach was waived by the Bank but has led to the Company's  | 
|    | facilities being renegotiated and a requirement to repay an | 
|    | additional GBP350,000 of the loan in November 2010 with a   | 
|    | further instalment of GBP100,000 due at the end of July     | 
|    | 2011.  The revised loan facility is repayable by            | 
|    | instalments with interest being charged at a variable rate  | 
|    | of 3.0% to 4.5% over Libor.                                 | 
|    |                                                             | 
|    | The Group has also replaced its Natwest Bank overdraft      | 
|    | facility with a GBP1.5m invoice discounting facility which  | 
|    | bears interest at 2.25% over base rate and is secured       | 
|    | against a fixed and floating charges over the assets of the | 
|    | Company and its subsidiaries                                | 
|    |                                                             | 
|    | The Directors have prepared projected cash flow information | 
|    | for the next twelve months taking account of the            | 
|    | stabilisation of Company revenues over the past six months  | 
|    | and the improvement in the Company's weighted pipeline of   | 
|    | sales opportunities.  The Directors have taken into         | 
|    | consideration actions they could take in response to        | 
|    | reasonable cash flow sensitivities arising from adverse     | 
|    | movements in trading performance and/or timing of           | 
|    | settlement of receivables.  On this basis, the Directors    | 
|    | believe that the Group will continue to operate within the  | 
|    | agreed facilities.                                          | 
|    |                                                             | 
|    | Whilst the Directors believe the going concern basis is     | 
|    | appropriate, the nature of the Group's business is such     | 
|    | that in the current economic conditions there is inherent   | 
|    | uncertainty over the commencement of major projects and     | 
|    | timing of cash flows arising from clients thereafter.       | 
|    | Formally, these circumstances represent a material          | 
|    | uncertainty that may cast significant doubt upon the        | 
|    | Company's ability to continue as a going concern and        | 
|    | therefore it may be unable to realise its assets and        | 
|    | discharge its liabilities in the normal course of business. | 
|    | Nevertheless, after making enquiries and considering the    | 
|    | uncertainties described above, the Directors have a         | 
|    | reasonable expectation that the Company has adequate        | 
|    | resources to continue in operational existence for the      | 
|    | foreseeable future. For these reasons, they continue to     | 
|    | adopt the going concern basis of accounting in preparing    | 
|    | the annual financial statements.                            | 
+----+-------------------------------------------------------------+ 
|    |                                                             | 
+----+-------------------------------------------------------------+ 
| 3. | DIVIDEND                                                    | 
+----+-------------------------------------------------------------+ 
|    | The Directors do not recommend that a dividend is paid.     | 
+----+-------------------------------------------------------------+ 
 
+-----+----------+------------------------------------------+----------+----------+----------+----------+----------+----------+ 
|   4.           | (LOSS)/EARNINGS PER SHARE                                                            |                     | 
+----------------+--------------------------------------------------------------------------------------+---------------------+ 
|     | The calculations of (loss)/earnings per share are based on the following profits and numbers of |                     | 
|     | shares.                                                                                         |                     | 
|     |                                                                                                 |                     | 
+-----+-------------------------------------------------------------------------------------------------+---------------------+ 
|     |                                                                |                2010 |     2009 |                     | 
|     |                                                                |            GBP'000  | GBP'000  |                     | 
+-----+----------------------------------------------------------------+---------------------+----------+---------------------+ 
|     | (Loss)/profit after tax for the financial year before          |               (830) |                            487 | 
|     | exceptional charges                                            |                     |                                | 
+-----+----------------------------------------------------------------+---------------------+--------------------------------+ 
|     | Redundancy costs                                               |               (188) |                          (617) | 
+-----+----------------------------------------------------------------+---------------------+--------------------------------+ 
|     | Share-based payment charges                                    |                   - |                           (35) | 
+-----+----------------------------------------------------------------+---------------------+--------------------------------+ 
|     | Impairment of goodwill                                         |                   - |                        (1,000) | 
+-----+----------------------------------------------------------------+---------------------+--------------------------------+ 
|     |                                                     |                     |                                |          | 
+-----+-----------------------------------------------------+---------------------+--------------------------------+----------+ 
|     | Loss after tax for the financial year                          |             (1,018) |                        (1,165) | 
+-----+----------------------------------------------------------------+---------------------+--------------------------------+ 
|     |                                                                |                     |                                | 
+-----+----------------------------------------------------------------+---------------------+--------------------------------+ 
|     |          |                                          |          |          |          |          |          |          | 
+-----+----------+------------------------------------------+----------+----------+----------+----------+----------+----------+ 
 
+------+------------------------------------------+-----------+-----------+ 
|      |                                          |     2010  |     2009  | 
|      |                                          |   No. of  |   No. of  | 
|      |                                          |   shares  |   shares  | 
|      | Weighted average number of shares        |     '000  |     '000  | 
+------+------------------------------------------+-----------+-----------+ 
|      |                                          |           |           | 
+------+------------------------------------------+-----------+-----------+ 
|      | For basic earnings per share             |    40,857 |    40,838 | 
+------+------------------------------------------+-----------+-----------+ 
|      | Dilutive effect of share options         |     2,367 |       316 | 
+------+------------------------------------------+-----------+-----------+ 
|      |                                          |         _ |           | 
|      |                                          |           |           | 
+------+------------------------------------------+-----------+-----------+ 
|      | For diluted earnings per share           |    43,224 |    41,154 | 
+------+------------------------------------------+-----------+-----------+ 
|      |                                          |           |           | 
+------+------------------------------------------+-----------+-----------+ 
The weighted average number of shares for the purposes of basic and diluted 
earnings per share excludes those owned by the Group's employee benefit trust. 
 
+------+------------------------------------------+-----------+-----------+ 
|      | (Loss)/earnings per share                |      2010 |      2009 | 
+------+------------------------------------------+-----------+-----------+ 
|      |                                          |           |           | 
+------+------------------------------------------+-----------+-----------+ 
|      | Basic                                    |   (2.49)p |   (2.85)p | 
+------+------------------------------------------+-----------+-----------+ 
|      | Diluted                                  |   (2.49)p |   (2.85)p | 
+------+------------------------------------------+-----------+-----------+ 
|      | Basic before exceptional charges         |   (2.03)p |     1.18p | 
+------+------------------------------------------+-----------+-----------+ 
|      | Diluted before exceptional charges       |   (2.03)p |     1.18p | 
+------+------------------------------------------+-----------+-----------+ 
|      |                                          |           |           | 
+------+------------------------------------------+-----------+-----------+ 
 
+------+-----------------------------------------+-----------+-----------+ 
| 5    | STATEMENT OF CHANGES IN EQUITY          |                       | 
+------+-----------------------------------------+-----------------------+ 
|      |                                         |     2010  |     2009  | 
|      |                                         |  GBP'000  |  GBP'000  | 
+------+-----------------------------------------+-----------+-----------+ 
|      |                                         |           |           | 
+------+-----------------------------------------+-----------+-----------+ 
|      | 1 August 2009                           |     8,797 |    10,055 | 
+------+-----------------------------------------+-----------+-----------+ 
|      | Loss for the year                       |   (1,018) |   (1,165) | 
+------+-----------------------------------------+-----------+-----------+ 
|      | Share based payments                    |         - |        35 | 
+------+-----------------------------------------+-----------+-----------+ 
|      | Dividends                               |      (82) |     (204) | 
+------+-----------------------------------------+-----------+-----------+ 
|      | Deferred tax                            |         5 |        50 | 
+------+-----------------------------------------+-----------+-----------+ 
|      | Issue of new shares                     |         - |        26 | 
+------+-----------------------------------------+-----------+-----------+ 
|      |                                         |     _____ |     _____ | 
+------+-----------------------------------------+-----------+-----------+ 
|      | 31 July 2010                            |     7,702 |     8,797 | 
+------+-----------------------------------------+-----------+-----------+ 
|      |                                         |           |           | 
+------+-----------------------------------------+-----------+-----------+ 
 
6.             This preliminary announcement was approved by the Board on 3 
December 2010.  Copies of this announcement will be available on the Company's 
website:  www.charteris.com. 
 
 
7.             Copies of the Company's report and financial statements will be 
sent to shareholders shortly and will be available at the registered office of 
the Company and on the Company's website www.charteris.com. 
 
8.             The AGM will take place at 10:00am on Wednesday, 12 January 2011 
at Charteris House, 39/40 Bartholomew Close, London, EC1A 7JN. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 FR KKNDQCBDDFBK 
 

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