RNS Number : 6745B
Tolent PLC
20 August 2008
Tolent plc ("Tolent" or the "Group")
Unaudited Interim Results for the six months ended 30 June 2008
20 August 2008
Chairman's Statement
Results
As we noted in our Annual General Meeting statement made on 24 June 2008, trading in the first half has been disappointing as a result
of the continuing difficult trading conditions in the economy in general and more specifically within the areas of the construction sector
in which Tolent operates. Group turnover increased to �85 million compared with the same period to June 2007 (�76 million) but was down on
the second half of 2007 (�104 million). This reflects a slowing in the level of enquiries and conversion of these enquiries into firm orders
in the first half of the year, along with a number of projects being deferred or cancelled.
The current secured forward workload is �100 million with a number of larger contracts running through to the end of 2009 providing some
degree of security for the short term. In addition there are further orders totalling approximately �70 million which are expected to be
secured in the near future, with work commencing on site before the end of the year.
Operating profit for the first half of 2008 of �709,000 (2007: �1,173,000) was also down. This result is after making a �750,000
provision against the balance of amounts due from a residential developer, which has been placed, into administration. An accounting
adjustment of �197,500 has also been made reducing the operating profit in respect of Echo Buildings as a consequence of having bought out
our joint venture partner. This provision will reverse when the remaining properties, most of which are let, are sold.
Net interest receivable increased by �35,000 from �356,000 to �391,000.
Profit before taxation of �1.1 million (2007: �1.529 million) was down and earnings per share at 5.8 pence reduced from 8.2 pence per
share over the first half of 2007.
Dividend
The Directors have declared a dividend of 4 pence per share (2007: 5 pence), payable on 10 October 2008 to shareholders on the register
on 12 September 2008.
The level of interim dividend to be paid is at a higher level than is supported by the results for the period, with dividend cover
falling to 1.45 times from around 2 times for the year 31 December 2007. However, taking account of the balance sheet strength and long term
prospects the board is keen to maintain the dividend yield.
Liquidity and Capital Resources
The Group had cash and cash equivalents at 30 June 2008 of �10.7 million, slightly down on the �13.2 million at 30 June 2007. This
figure fluctuates according to circumstances but as reflected in the interest earned we have had significant credit balances for the whole
of the first half of the year. Included in the �10.7 million are deposits of �4.3 million which have been placed in an escrow account and
charged as security as part of the bonding for the performance of a certain contract entered into by the Group in the ordinary course of
business.
On 4 April 2008, the Group acquired the remaining 50% of Echo Buildings Limited, previously a joint venture for a residential
development, for �1. As a result the assets and liabilities of that company are consolidated in the Group balance sheet for the first time
and an intercompany loan of �5.9 million through which the Group has funded the Echo Buildings joint venture is netted off. At 30 June 2008,
the Group balance sheet includes �8.8 million of property assets held for resale and �2.9 million of bank borrowings, after netting off the
intercompany loan. This position compares with �22.1 million of property assets and �17.2 million of bank borrowings at 30 June 2007 and
�13.0 million of property assets and �8.3 million of bank borrowings at 31 December 2007. The assets and bank loans will continue to reduce
as units are sold.
Shareholders funds stand at �12.6 million having reduced from the �13.2 million at 31 December 2007.
Prospects
As noted above we have a number of larger contracts which will contribute to revenues throughout the remainder of this year and into
2009. This, together with the new orders which we hope to secure in the next few months, will give us the stability to trade through this
difficult period for the construction industry and economy in general.
Mike Speakman
20 August 2008
Condensed consolidated interim income statement (unaudited)
Six months to 30th Six months to 30th Twelve months to 31st December 2007
June 2008 June 2007
�000s �000s �000s
Group Revenue 85,084 76,167 180,034
Raw materials and consumables (5,762) (5,253) (11,642)
Other external charges (63,447) (57,174) (137,354)
Group Profit 15,875 13,740 31,038
Staff costs (12,434) (10,428) (22,563)
Depreciation (161) (149) (302)
Other operating charges (2,613) (1,989) (3,578)
667 1,174 4,595
Result from investment property 0 0 367
Share of post tax profit/(loss) in joint ventures 42 (1) (204)
and associates
Operating Profit 709 1,173 4,758
Finance income 391 358 799
Finance cost 0 (2) (14)
Profit before taxation 1,100 1,529 5,543
Taxation (376) (512) (1,719)
Profit after taxation 724 1,017 3,824
Basic and diluted earnings per share 5.8 p 8.2 p 30.7 p
Condensed consolidated interim balance sheet (unaudited)
30th June 30th June 31st December
2008 2007 2007
(restated)
�000s �000s �000s
Assets
Non-Current Assets
Property, plant and equipment 4,425 3,435 4,356
Investment properties 6,755 6,388 6,755
Investments in associates and joint ventures 919 1,070 877
Investments - available for sale 10 10 10
Trade and other receivables 519 640 1,159
12,628 11,543 13,157
Current assets
Amounts recoverable on contracts 19,142 15,564 10,323
Trade and other receivables 16,745 24,040 25,284
Cash and cash equivalents 10,746 13,206 20,188
46,633 52,810 55,795
Total assets 59,261 64,353 68,952
Liabilities
Non-current liabilities
Provisions 100 840 840
Deferred tax liabilities 794 897 822
894 1,737 1,662
Current liabilities
Trade and other payables 41,609 51,015 53,170
Provisions 747 0 0
Borrowings 2,912 0 0
Current tax payable 453 554 889
45,721 51,569 54,059
Total liabilities 46,615 53,306 55,721
Net Assets 12,646 11,047 13,231
Equity
Share capital 1,283 1,283 1,283
Other reserve (256) (256) (256)
Profit and loss account 11,619 10,020 12,204
Total Equity 12,646 11,047 13,231
Condensed consolidated interim statement of changes in equity (unaudited)
Profit
Share Other and Loss Total
Capital Reserve Account Equity
�000s �000s �000s �000s
Balance at 1 January 2007 1,283 (256) 10,462 11,489
Profit after taxation for the period 0 0 1,017 1,017
Dividends 0 0 (1,459) (1,459)
Balance at 30 June 2007 1,283 (256) 10,020 11,047
Balance at 1 July 2007 1,283 (256) 10,020 11,047
Profit after taxation for the period 0 0 2,807 2,807
Dividends 0 0 (623) (623)
Balance at 31 December 2007 1,283 (256) 12,204 13,231
Balance at 1 January 2008 1,283 (256) 12,204 13,231
Profit after taxation for the period 0 0 724 724
Dividends 0 0 (1,309) (1,309)
Balance at 30 June 2008 1,283 (256) 11,619 12,646
Condensed consolidated interim cash flow statement (unaudited)
Six months Six months Twelve months
to 31st
to 30th June to 30th June December
2008 2007 2007
�000s �000s �000s
Cash flows from operating activities
Profit after 724 1,017 3,824
taxation
Depreciation on 161 149 302
property, plant and
equipment
Valuation increases 0 0 (367)
in investment
properties
Taxation expense 376 512 1,719
recognised in income
statement
Finance income and (391) (356) (785)
cost
Decrease/(increase) 4,348 (3,017) (5,271)
in trade and other
receivables
Decrease/(Increase) 1,884 (6,899) (1,658)
in amounts
recoverable on
contracts
(Decrease)/Increase (11,864) 4,363 7,977
in trade and other
payables
Increase in 7 0 490
provisions
Share of (42) 1 204
(profit)/loss after
tax from joint
ventures and
associates
Cash generated from (4,797) (4,230) 6,435
operations
Finance cost paid 0 (2) (14)
Tax paid (840) (867) (1,813)
Net cash from operating activities (5,637) (5,099) 4,608
Cash flows from investing activities
Purchase of (230) (47) (1,121)
property, plant and
equipment
Purchase of 0 (10) (10)
investments -
available for sale
Increase in 0 (631) (641)
investment in joint
venture and
associates
Cash on acquisition 329 0 0
Interest received 391 358 799
Net cash raised/(used) in investing activities 490 (330) (973)
Cash flows from financing activities
Repayment of (2,986) 0 0
borrowings
Dividends paid (1,309) 0 (2,082)
Net cash used in financing activities (4,295) 0 (2,082)
Net (decrease)/increase in cash and cash (9,442) (5,429) 1,553
equivalents
Cash and cash equivalents at beginning of period 20,188 18,635 18,635
Cash and cash equivalents at end of period 10,746 13,206 20,188
Notes
1. General information
The financial information set out in this condensed interim report for the six months ended 30th June 2008 and the comparative figures
for the six months ended 30th June 2007 are unaudited. This financial information does not constitute statutory accounts as defined in
Section 240 of the Companies Act 1985. The Group's statutory financial statements for the year ended 31st December 2007, prepared under
International Financial Reporting Standards (IFRS), received an unqualified audit report, did not contain statements under section 237(2) or
(3) of the Companies Act 1985 and have been filed with the Registrar of Companies.
2. Basis of preparation
These June 2008 condensed consolidated interim financial statements of Tolent PLC are for the six months ended 30 June 2008. They have
been prepared taking into account the requirements of IAS 34, Interim Financial Reporting. They do not include all of the information
required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for
the year ended 31 December 2007, which have been prepared in accordance with IFRS.
The accounting policies applied are largely consistent with those of the annual financial statements for the year ended 31st December
2007, as described in those financial statements. The only exception relates to the taxation policy where for the purpose of the interims
the tax charge on the underlying business performance is calculated by reference to the estimated effective rate for the full year.
The June 2007 balance sheet has been adjusted for changes to the equity position in relation to deferred taxation and the re-disclosure
of provisions which were made in the December 2007 financial statements.
3. Segmental analysis
The Group's primary reporting format is business segment and its secondary is geographical segment by origin of revenue. All
revenue originates from the United Kingdom and is analysed below.
The Group currently reports its primary segment information as follows:
- Construction and building operations;
- Property operations, inclusive of property investment; and
- Group overheads and other, comprising central services, head office administration and other 'not for profit' activities.
Six months Six months Twelve months to
to 30th to 30th 31st December 2007
June 2008 June
2007
�000s �000s �000s
Revenue
Construction and building activities 81,648 75,969 179,627
Property Operations 3,635 363 719
Group overheads and other 49 69 117
85,332 76,401 180,463
Inter-segment sales/eliminations (248) (234) (429)
85,084 76,167 180,034
Result
Construction and building activities 441 1,006 4,309
Property Operations 277 189 370
Group overheads and other (51) (21) (84)
Segment result 667 1,174 4,595
Result from investment property - property operations 0 0 367
Share of post tax profit/(loss) in joint ventures and associates - property operations 42 (1) (204)
Finance income 391 358 799
Finance cost 0 (2) (14)
Profit before taxation 1,100 1,529 5,543
Assets/(liabilities)
Construction and building activities 10,526 8,968 10,256
Property Operations 5,309 4,989 5,209
Group overheads and other (3,189) (2,910) (2,234)
12,646 11,047 13,231
4. Earnings per share
Earnings per share, which is both basic and diluted, is calculated on the basis of profit for the period after tax, divided by
12,467,626 (June and December 2007 - 12,467,626) fully paid ordinary shares, being the weighted average number of ordinary shares in issue
in the period, after adjusting for own shares held by the Employee Share Ownership Plan of 365,000 (June and December 2007 - 365,000). There
are no options or potential ordinary shares in issue.
5. Dividends
During the first six months of 2008 the proposed dividend of �1,309,000, representing 10.5p per ordinary share (2007 �1,459,000 at 11.7p
per ordinary share) was approved for payment at the Annual General Meeting on 24th June 2008.
6. Investments in Joint ventures and associates
As noted in the Chairman's statement Tolent Construction Limited purchased the remaining 50% of the ordinary share capital of Echo
Buildings Limited from Glenrose Developments (Hebburn) Limited on 4th April 2008. The consideration paid was �1. Echo Buildings is now a
wholly owned subsidiary of the Tolent Plc Group. The amounts recognised for each class of the acquired's assets, liabilities and contingent
liabilities recognised at the acquisition date are as follows:
�000s
Assets
Current assets
Amounts recoverable on contracts 10,703
Trade and other receivables 156
Cash and cash equivalents 329
Total assets 11,188
Liabilities
Non-current liabilities
Amounts owed to joint ventures (4,987)
Current liabilities
Trade and other payables (303)
Borrowings (5,898)
(6,201)
Total liabilities (11,188)
Net Assets 0
Consideration 0
Goodwill 0
From the date of acquisition (4 April 2008) to 30 June 2008, the contribution of Echo Buildings Limited to the Group results was a loss
of �8,657. The result of the company for the period 1 January 2008 to the date of acquisition was a profit of �35,614 and as the company was
a joint venture of the Group for this period, 50% of this profit has been included in the Group's results.
Interim results will be circulated to shareholders and copies of the announcement will be available from the Company's registered
office.
Contacts:
Tolent plc 0191 487 0505
Andy Clark, Finance Director
Brewin Dolphin Investment Banking 0845 270 8610
Andrew Emmott
ENDS
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