RNS Number : 8395I
Supporta PLC
25 November 2008
Supporta Plc
("Supporta" or the "Company")
Half yearly report for the six months ended 30 September 2008
Supporta Plc, the domiciliary care and white collar outsourced services provider to the public sector, announces its half yearly results
for the six months ended 30 September 2008.
Financial Highlights for the six months ended 30 September 2008
Revenue increased by 16% to �28.35m (2007: �24.35m)
Operating profit* increased by 24% to �1.94m (2007: �1.56m)
Operating profit margin* increased by 8% to 6.8% (2007: 6.3%)
Loss before tax from continuing operations �0.55m (2007: profit of �0.39m)
Earnings per share* reduced by 28% to 0.87p (2007:1.20p)
Cash generated from operations improved by 453% to �1.79m (2007:�0.39m)
Order book increased by 10% to �96.3m (2007:�87.9m)
* before share based payment charge, amortisation and exceptional items.
John Jasper, Chief Executive, said:
"I am pleased with the performance in the first six months of the year. Our Care business is operating in a strong market and has again
delivered an exceptional profit performance again during the first six months of this year. Our Professional Services businesses are facing
tougher market conditions. TerraQuest continues to perform well whilst the economic conditions within the property sector have led to a slow
start to the year for Architecture and Engineering. Trading in the year to date is in line with management expectations."
For further enquiries please contact:
Supporta Plc
John Jasper, Group Chief Executive Tel: (01926) 516 600
Darren Xiberras, Group Finance Director Tel: (01926) 516 600
Bell Pottinger Corporate & Financial
David Rydell / Nick Lambert Tel: 020 7861 3232
Brewin Dolphin Investment Banking Tel: 0845 213 4852
Matt Davis / Andrew Emmott
Group Chief Executive's Report
Supporta's underlying business has overall continued to deliver a robust performance during the first six months of the financial year
notwithstanding the turbulent market conditions being faced by some parts of our Group. A number of initiatives are helping us achieve these
results:
* 4,000 hours of new Care contracts implemented
* 11,000 hour increase in Care delivered compared to equivalent period last year
* 13,300 hours of Care contracts renewed.
* Strengthened Care management team
* Hallam acquisition integrated and now performing in line with expectations
* PLC costs significantly reduced
* Warwick offices closed
* Excellent first six months for Supporta TerraQuest offset by slow starts for Architecture and Engineering and bad debt provisions
Supporta Care
Supporta Care has delivered an exceptional set of results showing an 18% organic increase in operating profits* on organic turnover
growth of 23%. Operating margins* deteriorated slightly to 10.7% compared to 11.2% in the same period last year and 11.5% in the year ended
31 March 2008. This deterioration in margin was driven by investment in the management team and new services to allow us to deliver strong
future growth.
The business has had a relatively slow six months of contract wins as we have focused on implementing the new contracts we have recently
won and ensuring renewals of existing contracts. Contracts won include:
Surrey 1,000 hrs
Norfolk additional hours 1,000 hrs
Brighton & Hove extracare 450 hrs
2,450 hrs
These contracts are expected to begin service delivery in the second half of the year.
The Order book for Supporta Care stands at �76.3m at the beginning of November an increase of 12.2% over the position at 30 September
2007.
Supporta Professional Services
Supporta TerraQuest has had an excellent start to the year with operating profits* increasing by 10% on the same period last year
despite the more difficult economic climate.
Supporta Architecture and Engineering have had slow starts to the year and profits have been impacted by a �0.19m bad debt charge
resulting from two customers, Chase Norton and City Lofts, entering administration.
Supporta Document Solutions' capability has been enhanced with the opening of a new storage facility at its Upper Heyford Site. The new
facility will depress margins initially until its utilisation increases.
Supporta Healthcare agreed a mutual termination of contract with the Oxford Radcliffe Hospitals NHS Trust in May 2008 for a fee of �0.2m
equivalent to one year's profits.
Action has been taken in November to reduce overhead costs significantly and some operational capacity has been reduced within
Architecture and Engineering reflecting the current economic situation within the Property sector.
The order book for Supporta Professional Services (including amounts expected from framework agreements) stands at �20.0m which is a 1%
increase over the position at 30 September 2007.
* before share based payment charge, amortisation and exceptional items.
Corporate Development
We decided to close the PLC headquarters office at the end of August 2008. We are currently in negotiation to surrender the lease to the
landlord. We have therefore made a provision for an onerous lease at the half year of �0.86m as an exceptional charge. We expect cashflow in
the second half of the year to be impacted by approximately �0.63m being the lease surrender premium and settling finance and operating
leases outstanding. The balance of the charge will be accounted for by a write off of fixed assets. This compared favourably to the option
of retaining the premises to the first break in the lease which was in 2015. The annualised cost of the running the building is �0.38m. The
remainder of the amount charged as exceptional relates principally to costs incurred resulting from the offers received by the Group in the
first half of the year, redundancies and charges relating to discontinued businesses.
At the 31 December 2008 Michael Curran, Chief Executive Officer of the Supporta Professional Services Division will retire from his role
on the Board. We would like to take this opportunity to thank Michael formally for his excellent contribution to the management of the
company over the past five years and especially in managing the costs within the SPS division over the last twelve months as it faced the
most testing market conditions. The Managing Directors of the business units will now report through directly to me.
Possible Offer
On 4 September 2008, the Board announced that it had received an approach that may or may not lead to an offer being made for the
Company. As at 24 November 2008, being the latest practicable date prior to the publication of this document, discussions with interested
parties remain on-going. Shareholders however should note that there can be no guarantee that any offer for the Company will be
forthcoming.
I would once again like to take the opportunity to thank all of our staff who have contributed to the solid performance of the business
during the first six months of the year.
John Jasper
Group Chief Executive
25 November 2008
FINANCE DIRECTOR'S REPORT
The Group's overall results for the period ended 30 September 2008 and percentage change from the period ended 30 September 2007 are:
Revenue �28.35m +16%
Operating Profit �0.31m -59%
Operating Profit Margin 1.5% -66%
Loss Before Tax From Continuing operations �0.34m
Cash Generated From Operations �1.81m +464%
Loss Per Share from continuing operations 0.67p
Segmental Analysis
Unaudited 6 months to 30 September Unaudited 6 months to 30 September
2008 2007 Year to 31 March 2008
Turnover Operating Profit* Turnover Operating Profit* Turnover Operating Profit*
�'000 �'000 �'000 �'000 �'000 �'000
Care 20,828 2,224 16,054 1,791 34,326 3,955
Professional Services 7,847 730 8,296 1,030 17,013 2,121
PLC/Other (326) (1,018) - (1,265) (576) (2,053)
28,348 1,936 24,350 1,556 50,763 4,023
* before share based payment charge, amortisation and exceptional items.
Group profit before tax in the six months to 30 September 2008 reduced principally as a result of the provision for the lease
termination of the headquarters building and increased interest charges. The increase in finance charges relates principally to the impact
of deferred consideration having now been paid increasing the level of bank debt compared to the six month period ending 30 September 2007.
The Group entered into a hedging arrangement in May 2008 to fix the remainder of the Group's current term debt at a rate of 5.445% until
31 December 2011 plus the applicable margin which is currently 3%.
Net debt decreased slightly at 30 September 2008 to �17.29m from �17.40m at 31 March 2008.
All deferred consideration in relation to the TerraQuest acquisition has now been settled with �1.11m of cash and �1.11m of Supporta
shares paid (being 4,908,902 shares issued based on a market price of 22.625p) to the vendors of the business in June 2008. Deferred
consideration of �0.14m for Bay Associates was still outstanding at the balance sheet date but paid to the vendor in early October 2008.
�1.01m in cash was received from an escrow account established upon the acquisition of Hallam Healthcare in September 2008 as a result of
the business not achieving certain targets agreed within the Share Purchase Agreement. No deferred consideration is being recognised for the
Hallam Healthcare acquisition. A small acquisition of the private patient business of Helpful Hands an operation trading in Harrow was
completed for consideration of �0.08m in April 2008.
The Directors are of the opinion that there are no material indicators of a permanent diminution in the carrying value of Goodwill at
the balance sheet date. Our property related businesses are more exposed to the current downturn in the economic cycle and an impairment
review will be carried out at the end of the year.
The actuarial gain of �0.36m on the defined benefit pension scheme recognised in the statement of recognised income and expense arises
principally as a result of a change in the discount rate for liabilities from 6.4% to 6.9% agreed with the scheme trustees and an
improvement in corporate bond yields over the period, offset by a deterioration in asset values resulting from recent global equity
performance.
Darren Xiberras
Group Finance Director
25 November 2008
Notes Unaudited6 months Unaudited6 months Yearto 31 March
to30 September to30 2008�*000
2008�*000 September2007�*000
CONTINUING OPERATIONS
Revenue 28,348 24,350 50,763
Cost of sales (20,365) (18,366) (36,793)
GROSS PROFIT 7,983 5,984 13,970
Administrative expenses before (6,047) (4,428) (9,943)
share based payment charge,
amortisation and exceptional
items
OPERATING PROFIT BEFORE SHARE 1,936 1,556 4,027
BASED PAYMENT CHARGE,
AMORTISATION AND EXCEPTIONAL
ITEMS
Share based payment charge, 2 (1,627) (510) (3,004)
amortisation and exceptional
items
OPERATING PROFIT/(LOSS) 309 1,046 1,023
Finance income 279 282 484
Finance costs (1,140) (936) (1,880)
PROFIT/(LOSS) BEFORE TAXATION (552) 392 (373)
Taxation (16) (33) (277)
PROFIT / (LOSS) FOR THE PERIOD (568) 359 (650)
FROM CONTINUING OPERATIONS
DiscontinuED operations
(Loss)/profit for the period - (795) (942)
from discontinued operations
(LOSS)/PROFIT FOR THE PERIOD (568) (436) (1,592)
ATTRIBUTABLE TO THE EQUITY
HOLDERS OF THE PARENT
EARNINGS/(LOSS) PER SHARE
Continuing and discontinuing
operations
- basic (0.67)p (0.65)p (2.24)p
- diluted (0.67)p (0.64)p (2.24)p
Continuing operations
- basic (0.67)p 0.53p (0.91)p
- diluted (0.67)p 0.53p (0.91)p
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 September 2008
Notes Unaudited30 Unaudited30 September 31 March2008�*000
September 2007�*000
2008�*000
NON-CURRENT ASSETS
Goodwill 43,015 41,199 43,852
Other intangible assets 4 2,801 3,076 3,071
Property, plant and equipment 925 648 975
Deferred tax asset 806 877 891
Derivative financial - 98 22
instruments
47,547 45,898 48,811
CURRENT ASSETS
Trade and other receivables 12,312 13,128 12,956
Cash and cash equivalents 245 433 52
12,557 13,561 13,008
Non-current assets classified - - 185
as held for sale
TOTAL ASSETS 60,104 59,459 62,004
CURRENT LIABILITIES
Financial liabilities (3,364) (5,973) (7,795)
Trade and other payables (7,065) (7,198) (8,012)
Current tax liabilities (928) (1,479) (696)
Provisions (1,082) (98) (150)
(12,439) (14,748) (16,653)
Non-current liabilities
Financial liabilities (14,311) (15,957) (12,280)
Provisions (77) (216) (172)
Deferred tax liabilities (632) (784) (817)
Derivative financial (84) - -
instruments
Retirement benefit obligations (2,875) (2,565) (3,181)
(17,979) (19,522) (16,450)
TOTAL LIABILITIES (30,418) (34,270) (33,103)
NET ASSETS 29,686 25,189 28,901
EQUITY
Share capital 1 4,322 3,370 4,077
Share premium 1 35,738 30,320 34,873
Share based payment reserve 1 730 526 637
Retained earnings 1 (11,020) (9,125) (10,708)
Hedging reserve 1 (84) 98 22
EQUITY ATTRIBUTABLE TO EQUITY 29,686 25,189 28,901
HOLDERS OF THE PARENT
ACCOUNTING POLICIES (continued)
Notes Unaudited 6 months Unaudited 6 months Year
to30 September to30 September to 31 March
2008�*000 2007�*000 2008�*000
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash generated from operations 5 1,785 394 1,898
Finance income 103 11 75
Finance costs (871) (609) (1,383)
Income taxes 16 (336) (952)
NET CASH FLOWS FROM OPERATING 1,033 (540) (362)
ACTIVITIES
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisition of subsidiary net (84) - (3,683)
of cash acquired
Purchase of property, plant (507) (521) (887)
and equipment and intangibles
Proceeds from sale of - 1 97
equipment
Proceeds from sale of 172 3,330 3,515
subsidiary
Payments in respect of (1,615) (942) (4,462)
previous acquisitions
NET CASH FLOWS FROM INVESTING (2,034) 1,868 (5,420)
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of share 1,110 - 5,260
capital
(Payments)/Proceeds of 480 (14) (335)
long-term borrowings
(Decrease)/increase in (592) (1,801) 4
overdraft
Proceeds/(Payment) of finance 196 (20) (35)
lease liabilities
Reduction in loan note - (888) (888)
NET CASH FLOWS FROM FINANCING 1,194 (2,723) 4,006
ACTIVITIES
NET INCREASE/(DECREASE) IN 193 (1,395) (1,776)
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 52 1,828 1,828
BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT 245 433 52
END OF PERIOD
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION
For the period ended 30 September 2008
1 CHANGES IN Sharecapital�*000 Sharepremiumaccount� Share
Hedgingreserve�*000 Total�*000
SHAREHOLDERS* EQUITY *000 basedpaymentreserves Retainedearnings�*
�*000 000
At1 April 2007 3,370 30,320 375 (9,460)
109 24,714
Total recognised - - - 335
(11) 324
income and expense
Share based payment - - 151 -
- 151
reserves movement
Issue of shares in - - - -
- -
the period
Premium on allotment - - - -
- -
during the period
At 30 September 2007 3,370 30,320 526 (9,125)
98 25,189
Total recognised - - - (1,583)
(76) (1,659)
income and expense
Share based payment - - 111 -
- 111
reserves movement
Issue of shares in 707 - - -
- 707
the period
Premium on allotment - 4,553 - -
- 4,553
during the period
At31 March 2008 4,077 34,873 637 (10,708)
22 28,901
Total recognised - - - (312)
(106) (418)
income and expense
Share based payment - - 93 -
- 93
reserves movement
Issue of shares in 245 - - -
- 245
the period
Premium on allotment - 865 - -
- 865
during the period
At 30 September 2008 4,322 35,738 730 (11,020)
(84) 29,686
All of the amounts above are attributable to the shareholders of the parent.
Share capital
The share capital account includes the par value for all shares issued and outstanding.
Share premium account
The share premium account comprises the premium over nominal value on issued shares less related issue costs. The use of this reserve is
restricted by the Companies Act 1985.
Retained earnings
The retained earnings reserve includes the accumulated profit and losses arising from the consolidated income statements and certain
items from the statements of recognised income and expense attributable to equity shareholders less distributions to shareholders.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION
For the period ended 30 September 2008
1 CHANGES IN SHAREHOLDERS* EQUITY (CONTINUED)
Share based payment reserve
The share based payment represents the cumulative amount which has been recognised directly in equity in connection with share based
payments, less any amount transferred to retained earnings in the exercise of share warrants.
Hedging reserve
The hedging reserve represents the cumulative amount which has been recognised in connection with interest rate swaps.
2 SHARE BASED PAYMENT Unaudited 6 Unaudited Year
CHARGE, AMORTISATION months to30 6 months to 30 to 31 March
AND EXCEPTIONAL September September 2008
ITEMS 2008 2007
�*000 �*000 �*000
Share based payment 93 151 262
charge
Amortisation of 449 262 983
other intangible
assets
Impairment provision - - 218
Exceptional items 1,085 97 1,541
1,627 510 3,004
Exceptional items are defined as material items that the directors feel are relevant to the understanding of the Group's performance.
3 EARNINGS PER SHARE Unaudited6 months Unaudited6 months Year
to31
to30 September to30
March2008�000*s
2008�000*s September2007�000*s
For adjusted
earnings per share:
Profit/(loss) for (568) (436)
(1,592)
the financial period
Remove loss for the -
942
period from -
discontinued
operations
Add back share based 93 151
262
payment charge
Add back amortisationof other intangible assets 449 186
983
Add back impairment - -
218
provision
Add back tax on - 690
-
disposal
ofdiscontinued
operations
Add back exceptional 760 143
1,079
items (adjusted for
tax)
Adjusted profit for 734 810
1,892
the financial period
Basic adjusted 0.87 pence 2.66
pence
earnings/(loss) per 1.20 pence
share
Diluted adjusted earnings/(loss) per share 0.86 pence 1.20 pence 2.66
pence
Discontinued operations:
Basic adjusted (loss)/earnings per share - (1.18) pence (1.33)
pence
Diluted adjusted (loss)/earnings per share - (1.18) pence (1.33)
pence
Weighted average number of shares for basic earnings per share 84,659 67,402
71,089
(000*s of shares)
Effect of dilutive potential ordinary shares:
Share options 469 250
-
(000*s of shares)
Weighted average number of shares for diluted earnings per share 85,128 67,652
71,089
(000*s of shares)
4 OTHER INTANGIBLE Software�*000 Customerrelated�*000 Total�*000
ASSETS
Cost:
At 1 April 2007 982 2,518 3,500
Additions 416 - 416
At 30 September 2007 1,398 2,518 3,916
Acquisition of - 793 793
subsidiary
undertakings
Additions - - -
Disposals (77) - (77)
At 31 March 2008 1,321 3,311 4,632
Additions 402 (223) 179
At 30 September 2008 1,723 3,088 4,811
Amortisation:
At 1 April 2007 342 236 578
Amortisation for the 61 201 262
period
At 30 September 2007 403 437 840
Amortisation for the 408 313 721
period
At 31 March 2008 811 750 1,561
Amortisation for the 144 305 449
period
At 30 September 2008 955 1,055 2,010
Net book value:
At 1 April 2007 640 2,282 2,922
At 30 September 2007 995 2,081 3,076
At 31 March 2008 510 2,561 3,071
At 30 September 2008 768 2,033 2,801
5 CASH GENERATED FROM Unaudited 6months Unaudited 6months
OPERATIONS to30 to30 Yearto 31
September2008�*000 September2007�*000 March2008�*000
Profit/(loss) before (552) 392 (373)
tax on continuing
operations
Profit/(loss) before - (105) (529)
tax on discontinuing
operations
Profit/(loss) before (552) 287 (902)
tax
Adjustments for:
Depreciation of 155 244 383
property, plant and
equipment
Impairment of - - 218
goodwill -
continuing
Amortisation of 449 262 983
intangible assets
Share based payment 93 151 262
charge
(Gain)/loss on - (2) (19)
disposal of
property, plant and
equipment
(Gain)/loss on - - (167)
disposal of
operation
Finance costs 861 654 1,396
Operating cash flows 1,006 1,596 2,154
before movements in
working capital
Decrease/(increase) 656 (241) (331)
in receivables
Increase/(decrease) 123 (961) 75
in payables
Cash generated by 1,785 394 1,898
operations
6 RECONCILIATION OF Unaudited 6months Unaudited 6months Yearto 31
NET CASH FLOW TO to30 to30 March2008�*000
MOVEMENT IN NET DEBT September2008�*000 September2007�*000
Decrease in cash in 193 (1,395) (1,776)
the period
Cash outflow from (480) 21 335
financing
Cash outflow from (196) 20 35
finance lease
liabilities
Decrease/(Increase) 592 1,801 (4)
in overdraft
Change in net debt 109 447 (1,410)
resulting from
cashflows
Repayment of loan - 888 888
notes
Movement in net debt 109 1,335 (522)
in the period
Net debt at start of (17,399) (16,877) (16,877)
the period
Net debt at the end (17,290) (15,542) (17,399)
of the period
This information is provided by RNS
The company news service from the London Stock Exchange
END
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