RNS Number:3622P
Harrier Group PLC
04 September 2003
HARRIER GROUP PLC
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2003
CHAIRMAN'S STATEMENT
I am pleased to announce an operating profit of #138,731 before exceptional
severance costs, for the six months to 30 June 2003 (2002: #466,542 loss) on
reduced revenue of #4.25m (2002: #5.72m). The return to profitability has been
achieved through a combination of strong cost control and provision of a high
quality service to clients.
Compared to the corresponding period in 2002 we have reduced overheads by a
total of #1.43m by eliminating wastage, increasing staff utilisation and
disposing of excess premises. Our average staff numbers for the six months to 30
June 2003 were 51, down from an average of 88 for the same period to 30 June
2002. The salary reduction scheme introduced in June 2002 was removed in
December 2002, with all staff, except the directors, being returned to full
salary.
Key Fundamentals
30 June 2003 30 June 2002
(#'000) (#'000)
Turnover 4,255 5,721
Gross Margin 49% 51%
Total overheads 1,939 3,371
EBITDA 270 (355)
Operating profit/(loss) before goodwill 139 (467)
amortisation &
exceptional severance costs
Profit/(loss) on Ordinary activities 13 (1,075)
Cash 1,369 1,331
Following a disappointing performance in January, the company has traded
profitably each month since February. This is testament to the dedication and
determination of the Harrier team, and to the fact that the company has modified
and improved the solutions and services provided to clients to keep pace with a
rapidly changing marketplace.
In the first half of this year we have succeeded in considerably strengthening
our relationships with established clients and suppliers, and rebuilding
confidence in the company. We have also identified strategies to enhance our
business with existing clients, and to develop significant new name accounts.
We have already begun to implement those strategies, and we are recruiting for a
number of positions in both commercial and revenue earning areas in order to do
so. The pipeline of new business is growing month on month and while our
marketplace remains very challenging we are cautiously optimistic for the
future. During the second half of 2003 we intend to lay the foundations within
Harrier for strong growth in 2004.
With the ongoing consolidation within the IT industry, we are also aware that
there will be a number of interesting acquisition opportunities which we plan to
pursue in order to enhance shareholder value.
Mark Rowlinson (Non Exec Director) has today resigned from the board and I would
like to take this opportunity to thank him for his support and commitment to
Harrier since his appointment in 1999 and wish him every success for the future.
ALR Morton
4 September 2003
INDEPENDENT REVIEW REPORT TO THE DIRECTORS OF HARRIER GROUP PLC
SIX MONTHS ENDED 30 JUNE 2003
Introduction
We have been instructed by the company to review the financial information set
out on pages 3 to 8 and we have read the other information contained in the
interim report and considered whether it contains any apparent mis-statements or
material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the UK Listing Authority which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists primarily of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review Conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
Saffery Champness
Chartered Accountants
London
4 September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
SIX MONTHS ENDED 30 JUNE 2003
Unaudited Unaudited Audited
six months to six months to Year ended
30 June 30 June 31 December
2003 2002 2002
# # #
Turnover 4,254,722 5,721,206 9,544,298
Cost of sales (2,176,811) (2,816,568) (4,537,280)
--------- --------- ---------
Gross Profit 2,077,911 2,904,638 5,007,018
Administrative expenses (1,939,180) (3,371,180) (5,871,554)
--------- --------- ---------
Operating profit/(loss) before 138,731 (466,542) (864,536)
goodwill amortisation &
exceptional severance costs
Exceptional severance costs (146,926) (134,761) (193,964)
Amortisation of goodwill - (501,751) (17,997,459)
--------- --------- ---------
Operating loss (8,195) (1,103,054) (19,055,959)
Interest receivable 165,512 282,948 541,123
Interest payable (144,505) (254,748) (490,574)
--------- --------- ---------
Profit/(loss) on ordinary 12,812 (1,074,854) (19,005,410)
activities before taxation
Taxation - - -
--------- --------- ---------
Profit/(loss) on ordinary 12,812 (1,074,854) (19,005,410)
activities after taxation
--------- --------- ---------
Profit/(loss) for the financial 12,812 (1,074,854) (19,005,410)
period
========= ========= =========
Basic profit/(loss) per share 0.05p (3.74p) (66.18p)
========= ========= =========
Diluted profit/(loss) per 0.04p (3.38p) (59.18p)
share
========= ========= =========
IIMR "headline" profit/(loss) 0.05p (0.20p) (3.51p)
per share
========= ========= =========
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2003
Unaudited Unaudited Audited
30 June 30 June 31 December
2003 2002 2002
# # #
Fixed assets
Intangible assets - 17,495,709 -
Tangible assets 484,178 732,948 616,285
--------- --------- ---------
484,178 18,228,657 616,285
--------- --------- ---------
Current assets
Stock 33,471 96,118 28,782
Debtors 2,080,895 2,705,390 1,797,308
Cash and bank balances 1,368,943 1,331,007 1,595,654
Term deposit - 12,000,000 12,000,000
--------- --------- ---------
3,483,309 16,132,515 15,421,744
--------- --------- ---------
Creditors
Amounts falling due within one year (2,858,808) (3,334,750) (2,942,163)
--------- --------- ---------
Net current assets 624,501 12,797,765 12,479,581
--------- --------- ---------
Total assets less current 1,108,679 31,026,422 13,095,866
liabilities
Creditors
Amounts falling due after more than - (12,000,000) (12,000,000)
one year
--------- --------- ---------
Net assets 1,108,679 19,026,422 1,095,866
========= ========= =========
Capital and reserves
Called up share capital 287,197 287,197 287,197
Share premium account 23,939,703 23,939,703 23,939,703
Capital redemption reserve 268,972 268,972 268,972
Profit and loss account (23,387,215) (5,469,472) (23,400,028)
--------- --------- ---------
Equity shareholders' funds 1,108,657 19,026,400 1,095,844
Minority interests 22 22 22
--------- --------- ---------
Total shareholders' funds 1,108,679 19,026,422 1,095,866
========= ========= =========
CONSOLIDATED CASH FLOW STATEMENT
SIX MONTHS ENDED 30 JUNE 2003
Note Unaudited Unaudited Audited
six months to six months to Year ended
30 June 30 June 31 December
2003 2002 2002
# # #
Net cash outflow from 4 (245,997) (806,796) (558,766)
operating activities
--------- --------- ---------
Returns on investments
and servicing of
finance
Interest received 165,512 282,948 541,123
Interest paid (144,505) (254,748) (490,574)
--------- --------- ---------
21,007 28,200 50,549
--------- --------- ---------
Taxation
Corporation tax paid - - -
--------- --------- ---------
Capital expenditure and
financial investment
Purchases of tangible (1,721) (46,468) (71,239)
fixed assets
Sales of tangible fixed - - 19,040
assets
--------- --------- ---------
Net cash outflow from (1,721) (46,468) (52,199)
investing activities --------- --------- ---------
Acquisitions and
disposals
Purchase of subsidiary - (119,377) (119,378)
undertakings
--------- --------- ---------
Net cash outflow before (226,711) (944,441) (679,794)
financing
Financing
Loan notes repaid (12,000,000) (2,000,000) -
--------- --------- ---------
(12,000,000) (2,000,000) -
--------- --------- ---------
Decrease in cash (12,226,711) (2,944,441) (679,794)
========= ========= =========
Reconciliation of net
cash flow to movement in
net funds
Decrease in cash in the (12,226,711) (2,944,441) (679,794)
period
Change in net debt from 12,000,000 2,000,000 -
cashflows
--------- --------- ---------
Movement in net funds in (226,711) (944,441) (679,794)
the period
Net funds at start of 1,595,654 2,275,448 2,275,448
period
--------- --------- ---------
Net funds at end of 5 1,368,943 1,331,007 1,595,654
period
========= ========= =========
NOTES TO THE INTERIM RESULTS
SIX MONTHS ENDED 30 JUNE 2003
1. The interim figures for the six month period to 30 June 2003 are
unaudited and do not constitute statutory accounts.
2. The financial information set out in the interim statement has been
prepared in accordance with applicable accounting standards. The accounting
policies have been consistently applied both in 2002 and 2003 and are
described in the 2002 financial statements.
3. The calculation of basic profit per ordinary share of 0.05p each is
based on the profit on ordinary activities after taxation divided by the
weighted average number of ordinary shares in issue during the period of
28,719,702. The diluted profit per share of 0.04p each is based on the
profit on ordinary activities after taxation divided by the number of share
options not exercised plus the weighted average number of ordinary shares in
the period amounting in aggregate to 32,280,822.
The IIMR "headline" profit per share is the basic profit per share
excluding amortisation of goodwill and is therefore based on a profit for
the six months of #12,812 and a weighted average number of shares in issue
of 28,719,702.
4. Reconciliation of loss to net cash outflow from operating activities:
6 months to 6 months to Year ended
30 June 30 June 31 December
2003 2002 2002
# # #
Operating loss (8,195) (1,103,054) (19,055,959)
Amortisation of goodwill - 501,751 17,997,459
Depreciation 131,099 111,728 237,103
Loss/(profit) on disposal of fixed 2,730 - (2,979)
assets
Increase in stock (4,689) (74,978) (7,642)
(Increase)/Decrease in debtors (283,587) 468,321 1,376,403
Decrease in creditors (83,355) (710,564) (1,103,151)
--------- --------- ---------
Net cash outflow from operating (245,997) (806,796) (558,766)
activities
--------- --------- ---------
5. Analysis of net funds:
At beginning of Cashflow Other non cash At end of
period changes period
# # # #
Cash at bank and in 13,595,654 (12,226,711) - 1,368,943
hand
Debt due after one (12,000,000) 12,000,000 - -
year
--------- --------- --------- ---------
1,595,654 (226,711) - 1,368,943
========= ========= ========= =========
6. Minority interests represent non-participating shares in a subsidiary
company Harrier Corporation Limited
7. The results for the year ended 31 December 2002 as shown in this report
do not constitute statutory accounts but are an abridged version of the
company's 2002 accounts which have been filed with the Registrar of
Companies, which did not contain any statement under section 237 (2) or (3)
of the Companies Act 1985 and upon which the auditors' report was
unqualified.
8. The interim report was approved by the directors on 3 September 2003. A
copy of the interim report will be posted to shareholders and will also be
available from the company's registered office at Cromwell House, Bartley
Wood Business Park, Hook RG27 9XA.
This information is provided by RNS
The company news service from the London Stock Exchange
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