RNS Number:4794P
Beaufort International Group PLC
08 September 2003
8 September 2003
ANNOUNCEMENT
BEAUFORT INTERNATIONAL GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2003
Chairman's Statement
The year ended 31 March 2003 was a disappointing year for Beaufort due mainly to
a general downturn in the level of business commissioned by companies for
consultancy services and increased competition from larger consultancies.
However, the Management Consultancy activities under the day-to-day management
of Harry Cowan, the Group CEO, have been strengthened by making some key
personnel changes; the objective being that Beaufort International rebuilds
itself as an established niche consultancy company. The acquisition of new
skills through recruiting experienced consultancy personnel has also introduced
new service offerings and client contacts to the Group. We have also gained
in-depth skills and technique in the rapidly growing areas of Knowledge
Development, Business Process Review and Activity Based Analysis. There are
currently assignments being delivered to new clients using all of these
techniques and we firmly believe that these will generate the levels of revenue
to restore profitability and therefore act as the platform for the recovery of
your Group.
FINANCIAL REVIEW
As reported in the interim report of December 2002 the major focus of management
attention was to re-focus the business back into the UK following the closure/
sale of the European businesses.
In the year to 31 March 2003 the Group generated income of #3.56m (2002: #4.42m)
and operating losses of #2.18 million after providing for #1.01 million of
exceptional expenses (2002: loss #1.20 million) as it continued to re-direct its
operations.
Losses before taxation for the year amounted to #2.17 million (2002: loss #0.99
million) after providing for additional exceptional costs of #32,000 in relation
to the disposal/ closure of subsidiaries and net interest and similar income of
#42,000, resulting in a loss per share of 0.341 pence (2002: loss 0.228 pence
per share).
At the year-end your Board reviewed the carrying value of its investments and
the cost of capitalised expenditure in the balance sheet. As a result it has
adopted a prudent approach and, as exceptional expenditure, written down the
investment in Dynamic.com plc by #805,000 and written off the remaining #200,000
of capitalised costs of the software product "Corporate Tea Leaves".
Your board is therefore, regrettably, unable to recommend a dividend for this
financial year.
As a result of this performance it has been necessary to review the financial
and managerial structure.
We are pleased to announce the appointment of Alan Chamberlain who will be
taking specific responsibility for the financial affairs of the Group. Alan is
an executive of considerable experience and is also a qualified chartered
accountant. His experience as Chairman of Gaskell plc, Non-Executive director
of Chime Communications plc and his overall financial expertise will bring
considerable strength to the Group.
At the same time our two current non-executive directors Andy Moore and Henry
Wolfond have resigned and we thank them for their help and contribution during
their period of office.
Robin Abeyesinhe who has been the Finance Director since April 1998 feels that
it is now appropriate for him to leave Beaufort to explore other opportunities.
We are appreciative of the input he has provided during his time with Beaufort
and wish him well for the future.
In order to ensure that the ongoing activities and business of the Group are
sufficiently funded we have today arranged a placing of 435 million shares at
0.1p per share through our brokers to raise #435,000 before costs.
Following the issue of these new shares we believe the capital structure of the
Group needs to again be restructured and simplified. It is our intention to
review this during the current year.
OUTLOOK
The market for consultancy services remains challenging as we continue to meet
competition from the larger consultancies who have embarked upon campaigns that
revolve around significant rate reductions for work that traditionally would not
have been of interest to them. We have responded positively by continuing to
enhance our offerings in terms of services and skills in the key areas of
Strategy development, Solutions delivery and enhancing the Skills of client
personnel.
In addition to the increased business development activity your Group has
conducted an in-depth review of its cost structure and has identified and
implemented significant cost reduction actions, carefully evaluated in order to
avoid critically affecting our ability to grow the business to the levels needed
to return to profitability.
The Management Consultancy team continues to be strengthened by the addition of
some senior personnel from outside the Group, who bring new skills and client
relationships, the benefits of which have been reported above.
Focus on business development, at all levels within the organisation, continues
to be a priority and any additions of personnel to the Management Consulting
division will have this as a first priority.
The Company has experienced difficult times which have continued into the
current year but with the structural and financial changes outlined above we
anticipate that the Group can regain its financial health and we hope we will be
able to detail this when we next report.
Ken Harvey
Chairman
8 September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 MARCH 2003
Notes 2003 2002
# #
Turnover
Continuing operations 3,320,412 3,630,908
Discontinued operations 307,670 819,722
3,628,082 4,450,630
Rechargeable expenses (72,452) (29,022)
Fee income 3,555,630 4,421,608
Cost of sales - exceptional 3 (200,455) -
- other (3,607,746) (3,837,653)
Gross (loss) / profit (252,571) 583,955
Administrative expenses - exceptional 3 (805,389) -
- other (1,098,727) (1,694,637)
Selling and marketing expenses (26,582) (84,901)
Operating loss
Continuing operations (2,003,378) (451,559)
Discontinued operations (179,891) (744,024)
(2,183,269) (1,195,583)
Exceptional items
(Losses) / profits arising on disposal/closure of subsidiaries (32,195) 168,241
Loss on ordinary activities before interest (2,215,464) (1,027,342)
Interest receivable and similar income 89,232 57,816
Interest payable and similar charges (46,998) (20,819)
Loss on ordinary activities before taxation (2,173,230) (990,345)
Taxation 823 (26,166)
Loss on ordinary activities after taxation (2,172,407) (1,016,511)
Minority interests - (43,873)
Retained loss for the year (2,172,407) (1,060,384)
Loss per share 4 (0.341p) (0.228p)
Fully-diluted loss per share 4 (0.341p) (0.228p)
CONSOLIDATED BALANCE SHEET as at 31 MARCH 2003
2003 2002
# #
Fixed assets
Intangible assets 774,450 1,933,267
Tangible assets 102,450 77,066
876,900 2,010,333
Current assets
Debtors 941,524 1,166,753
Cash at bank 459,302 152,694
1,400,826 1,319,447
Creditors: amounts falling due within one year (2,246,328) (1,263,565)
Net current (liabilities)/assets (845,502) 55,882
Total assets less current liabilities 31,398 2,066,215
Creditors: amounts falling due after more than one year (4,981) -
Net assets 26,417 2,066,215
Capital and reserves
Called up share capital 3,420,881 3,408,189
Share premium account 3,850,467 3,491,829
Profit and loss account (6,294,931) (4,122,524)
Merger reserve (950,000) (950,000)
Other reserve - 238,721
Shareholders' funds 26,417 2,066,215
COMPANY BALANCE SHEET as at 31 MARCH 2003
2003 2002
# #
Fixed assets
Tangible assets 54,108 38,750
Investments 1,961,209 2,865,793
2,015,317 2,904,543
Current assets
Debtors 95,403 286,473
Cash at bank 1,891 1,098
97,294 287,571
Creditors: amounts falling due within one year (1,114,243) (637,582)
Net current liabilities (1,016,949) (350,011)
Total assets less current liabilities 998,368 2,554,532
Creditors: amounts falling due after more than one year (4,981) -
Net assets 993,387 2,554,532
Capital and reserves
Called up share capital 3,420,881 3,408,189
Share premium account 3,850,467 3,491,829
Profit and loss account (6,277,961) (4,584,207)
Other reserve - 238,721
Shareholders' funds 993,387 2,554,532
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 MARCH 2003
Notes 2003 2002
# #
Cash outflow from operating activities (22,859) (1,214,207)
Returns on investments and servicing of finance
Interest received 89,232 57,816
Interest paid (45,756) (12,475)
Interest element of finance lease payments (1,242) (8,344)
Dividend payable to minority - (27,200)
Net cash inflow/(outflow) from returns on investments and servicing of finance 42,234 9,797
Taxation
UK corporation tax paid (6,524) -
Capital expenditure
Purchase of tangible fixed assets (104,864) (54,564)
Development expenditure - (27,813)
Net cash outflow for capital expenditure (104,864) (82,377)
Acquisitions and disposals
Sale of investments in subsidiary undertakings - 457,102
Purchase of investment in subsidiary undertakings - (100,000)
Net cash in disposed subsidiaries - (143,397)
Cash inflow/(outflow) from acquisitions and disposals - 213,705
Cash outflow and financing (92,013) (1,073,082)
Financing
Issue of ordinary share capital 200,600 1,646,130
Cost of share issue (7,522) (332,333)
Capital element of finance lease payments (17,240) (70,164)
Net cash inflow from financing 175,838 1,243,633
(Decrease)/ increase in cash in the year 83,825 170,551
NOTES
1. The financial information set out above does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
Statutory accounts for the previous year ended 31 March 2003 have been delivered
to the Registrar of Companies. Statutory accounts for the year to 31 March 2002
will be delivered to the Registrar of Companies and sent to shareholders. An
unqualified auditors' report has been given on such accounts.
2. The Directors have not recommended the payment of a dividend.
3. Exceptional items
2003 2002
# #
Impairment in the carrying value of development costs 200,455 -
The directors undertook a review of the carrying value of development
expenditure and concluded that a significant impairment had occurred resulting
in a write down in the carrying value. This resulted in a cost in the profit
and loss account of a net amount of #200,455.
2003 2002
# #
Impairment in the carrying value of goodwill 805,389 -
Following the review and the subsequent write down in the carrying of the
Dynamic.com plc investment, goodwill arising from the Dynamic acquisition has
been written down by #805,389.
4. Loss per share
The loss per share is based upon a loss of #2,172,407 (2002: loss of #1,060,384)
and the weighted average number of shares ranking for dividend during the year
of 636,436,714 (2002: 464,355,317).
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per ordinary
share are identical to those used for basic earnings per ordinary share as the
exercise of share options would have the effect of reducing the loss per
ordinary share and therefore is not dilutive under the terms of Financial
Reporting Standard 14 "Earnings per share".
5. The Annual Report and Accounts will be mailed to registered
shareholders at their registered address and will be available to the public
free of charge for one month at the Company's registered office, 152 Buckingham
Palace Road, London SW1W 9TR and at the offices of City Financial Associates
Limited, Pountney Hill House, 6 Laurence Pountney Hill, London EC4R 0BL.
6. The Annual General Meeting of the Company will be held at 3.00
pm on 14 October 2003 at the Company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
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