RNS Number:7524Q
NBA Quantum PLC
10 October 2003
10 October 2003
NBA QUANTUM PLC ("NBA" or the "Company")
PRELIMINARY RESULTS FOR THE PERIOD ENDED 30 JUNE 2003
NBA, the specialist construction claims consultancy group, today announces its
results for the year ended 30 June 2003. The salient features are:
* Turnover of #2. 567 m
* Profit before tax and amortisation is #104,000
* Earnings per share (before amortisation) of 0.71p
* Sound future order book
Commenting on the results, Peter Elliott-Hughes, Managing Director of NBA
Quantum, said:
"The current year has begun well after the mixed performance in 2002-3. NBA has
opened with a strong order book for all of its operating companies. This
demonstrates that we are starting to achieve the growth that we predicted last
year.
Our reputation for professional excellence is undiminished and we are now
looking forward to the forthcoming year with confidence."
ENQURIES:
Peter Elliott-Hughes, Managing Director, NBA Quantum PLC 020 7318 9780
Mark Brady, Brewin Dolphin Securities 0113 2410130
Chairman's Statement
Introduction
NBA Quantum (the "Group"), has developed significantly since its inception.
During the last year the Board has quietly but determinedly set about ensuring
that the overall framework for future prosperity based upon a sound business
strategy is in place.
Although it has been a mixed year for the Group, it is now able to take
advantage of the improvement in both the UK and overseas economies, particularly
as the construction industry usually benefits from moves out of recession.
Turnover at #2.567m for the year was down on the previous year (2002:#2.871m)
and profit before tax and amortisation is lower at #104,000 (2002: #501,000).
After the amortisation charge, which does not alter the cash position of the
group as it arises from acquisitions made by the group and paid for prior to the
balance sheet date, there is a loss before tax of #121,000 (2002: profit
#278,000).
Overheads have always been kept low and there was little scope to reduce these
during the year. The reduction in turnover was therefore directly reflected in
the results. This shows that even through poor market conditions the business
remains very robust.
The current year has opened with a sound order book and, with the developments
implemented by the Group, the Board believes that the prospects for the current
year and beyond are very good.
Given the nature of revenues within a consultancy business, NBA Quantum has
always maintained a solid balance sheet and, while the future prospects are
good, there is still a financing requirement for future growth. The Board,
therefore, does not believe that the results for 2002-3 justify the payment of a
dividend. This is particularly so as the amortisation charge and the movement on
the foreign exchange translation of overseas net assets have been a significant
charge to reserves.
Whilst we have not paid interim dividends previously, the Board will review the
position at the time of the next interim report and give an indication of the
dividend that the Directors would consider appropriate for 2003-4.
Business Review
The core business of the Group remains the provision of consultancy services to
the construction industry, both nationally and internationally.
NBA Quantum International ("International")
After a difficult first half, turnover has been stabilised and it is now
increasing on a monthly basis. Additional management resources have been
introduced to International and the effect is beginning to be seen. We remain
committed to providing a high quality strategic consultancy service and seek to
increase turnover with profitable work from quality clients.
S. E. Asia has continued to provide a satisfactory workload for the Group and
will provide a good contribution to the Group's business for the current year.
DMS International ("DMS")
DMS had another successful year with a record $ turnover in the second half.
However, the exchange rate has been adverse since last year end so there was
only a minor addition to its contribution to the Group turnover although it did
represent 36% of that turnover against 32% in 2002.
Active consideration has been given to the expansion of DMS's activities and it
remains the Group's policy that, as NBA develops, the geographic contribution by
the various parts remain broadly in step.
Bionic Productions Limited ("BPL")
During its first full year of trading BPL performed well although, after the
strong performance through to December 2002, the subsequent period fell below
expectations and in hindsight it would appear that there is a greater
seasonality to the business than had been appreciated. In addition certain
projects were delayed in their implementation. The prospects for the current
year are good and should see an improvement on last year.
Group Outlook
During the four years since it became a quoted company NBA has changed and
developed substantially as an organisation and, given this, the fall in turnover
last year was disappointing even if there were sound commercial reasons for not
chasing business at any cost in the short term.
As part of a recent survey it was commented that, "An Initial Public Offering
should be viewed not as a one off cash raising transaction or a quick win, but
as a long term business transformation process and many of the benefits take
time to emerge" (Source: Ernst & Young 7/8/03). Our own shareholders know that
value comes from building up a strong company and the Board is dedicated to this
objective.
It is the Board's primary consideration to ensure that such benefits do accrue
to NBA shareholders and as part of that process we announced in May 2003 that
David Ridley was joining the board. David was previously Chairman of a major
quantity surveying practice and his experience is already proving valuable both
in the building up of the business and in developing our acquisition strategy.
We have also recently appointed Brewin Dolphin Securities Limited as our stock
exchange advisers and brokers. The foundations have been laid and the main
building blocks will be added as sound opportunities present themselves.
We have designed a new web site, www.nbagroup.com, which will be up and running
shortly and this will have direct links to DMS and BPL. The share price is
available through most of the online financial sites under NBAQ.
We are confident that we have taken the necessary steps to raise the Company's
profile and ensure that our obligations to our shareholders are met.
Last year I provided a full explanation of the Group's activities as our
business still appears to be shrouded in some mystery to those not intimately
involved with the construction industry. I was determined therefore to keep this
year's statement short and concise.
We have started the new financial year positively and we have retained our
strong financial base with net cash of #856,000 in our balance sheet We have an
excellent reputation within the industry with a widening list of high quality,
blue chip clients both in the UK and internationally and we can look forward
confidently to the challenges that 2003-4 will bring.
I have greatly appreciated the support of my colleagues at all levels,
particularly that of my Chief Executive, Peter Elliott-Hughes, as the Group
could not operate without their consistent and wholehearted commitment. I would
like to thank them all for their continued hard work.
R G Jervis
Chairman
Consolidated Profit And Loss Account
For the year ended 30 June 2003
Results before
amortisation of Amortisation
goodwill of goodwill 2003 2002
(Restated)
# # # #
Turnover 2,567,102 - 2,567,102 2,870,650
Group's share of joint venture's turnover (229,156) - (229,156) -
_________ _________ _________ _________
Group Turnover 2,337,946 - 2,337,946 2,870,650
_________ _________ _________ _________
Staff costs 1,074,865 - 1,074,865 870,291
Depreciation 54,527 225,374 279,901 274,787
Other operating charges 1,123,204 - 1,123,204 1,477,251
_________ _________ _________ _________
2,252,596 225,374 2,477,970 2,622,329
_________ _________ _________ _________
Operating profit/(loss) 85,350 (225,374) (140,024) 248,321
Group share of operating profit in joint venture
9,997 - 9,997 -
_________ _________ _________ _________
95,347 (225,374) (130,027) 248,321
Interest receivable and similar income 18,524 - 18,524 40,013
_________ _________ _________ _________
113,871 (225,374) (111,503) 288,334
Interest payable and similar charges 9,806 - 9,806 10,498
_________ _________ _________ _________
Profit/(loss) on ordinary activities before
taxation 104,065 (225,374) (121,309) 277,836
Taxation on profit on ordinary activities 60,992 - 60,992 151,700
_________ _________ _________ _________
Profit/(loss) on ordinary activities after taxation
Dividends 43,073 (225,374) (182,301) 126,136
- - - 210,993
_________ _________ _________ _________
Retained loss for the Group and its share of the
joint venture for the financial year
#43,073 #(225,374) #(182,301) # (84,857)
Earnings/(loss) per share 0.71p (3.02)p 2.09p
Turnover and operating profit are derived from continuing operations.
The exchange movement on translation of overseas results and net assets for 2003
was (#53,061), 2002 (#43,788).
Consolidated Balance Sheet
As at 30 June 2003
2003 2002
# # # #
Fixed Assets
Intangible assets 3,566,600 3,789,716
Tangible assets 225,714 107,059
Investments in joint venture:
Share of gross assets and goodwill 141,824 - -
Share of gross liabilities (89,964) - -
_________ _________
Total investment in joint venture: 51,860 -
_________ _________
3,844,174 3,896,775
Investments 806 35,027
_________ _________
3,844,980 3,931,802
Current Assets
Debtors 1,370,014 1,513,374
Investments 62,459 64,465
Cash at bank and in hand 855,586 958,416
_________ _________
2,288,059 2,536,255
Creditors: Amounts falling due within one year
395,904 557,278
_________ _________
Net Current Assets 1,892,155 1,978,977
_________ _________
Total Assets Less Current Liabilities 5,737,135 5,910,779
Creditors: Amounts falling due after more than one year
89,445 13,349
_________ _________
5,647,690 5,897,430
Provisions for liabilities and charges 91,500 105,878
_________ _________
Net Assets #5,556,190 #5,791,552
_________ _________
Capital and Reserves
Called up share capital 602,837 602,837
Share premium account 5,013,295 5,013,295
Profit and loss account (59,942) 175,420
_________ _________
Equity Shareholders' Funds #5,556,190 # 5,791,552
_________ _________
Consolidated Cash Flow Statement
For the year ended to 30 June 2003
2003 2002
# # # #
Net Cash inflow from operating activities 318,368 730,892
Returns on investment, and servicing of finance
Interest received 18,524 40,013
Interest element of finance lease payments (9,806) (10,498)
________ ________
Net cash inflow for returns on investment and servicing of
finance 8,718 29,515
Taxation - UK Corporation Tax paid (16,910) (174,011)
USA Tax paid (40,772) (88,293)
________ ________
(57,682) (262,304)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (56,992) (35,624)
Receipts from disposal of tangible fixed assets 65,150 46,800
________ ________
Net cash inflow/(outflow) for capital expenditure and
financial investment 8,158 11,176
Acquisitions and disposals
Payment to acquire investment in joint venture
Deferred consideration in respect of prior (10,136) (35,027)
year acquisition
- (176,554)
________ ________
Net cash ouflow for acquisitions and disposals (10,136) (211,581)
Equity dividends paid (210,993) (210,993)
_________ _________
Cash inflow before use of liquid resources
and financing 56,433 86,705
Management of liquid resources
Increase in short term deposits and investments (2,854) (5,279)
_________ _________
Net cash inflow before financing 53,579 81,426
Financing
Capital element of finance leases (114,117) (80,210)
_________ _________
(Decrease)/Increase in cash #(60,538) # 1,216
NOTES
1 The financial information set out above does not constitute the Company's
statutory accounts for the year ended 30 June 2003. The auditors have
reported on the accounts to 30 June 2002. Their report was unqualified and
did not contain a statement under Section 237 (2) or (3) of the Companies
Act 1985. The statutory accounts for 2003 will be finalised on the basis of
the preliminary information presented by the Directors in this preliminary
statement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
2 The calculation of earnings per share before and after amortisation is
based on a profit of #43,073 and (#182,301) respectively and the weighted
number of shares in issue for the period of 6,028,370 (2002, #349,252,
#126,136 and 6,028,370).
3 Segmental analysis
The table below sets out turnover for each geographic area of operation.
2003 2002
# #
UK 1,347,610 1,634,071
USA 933,450 931,001
Rest of the World 286,042 305,578
__________ __________
#2,567,102 #2,870,650
__________ __________
4 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2003 2002
# #
Retained loss for the period (182,301) (84,857)
Exchange movement on translation of overseas net assets
(53,061) (43,788)
_________ _________
Net reductions to shareholders' funds (235,362) (128,645)
Opening shareholders' funds 5,791,552 5,920,197
_________ _________
Closing shareholders' funds #5,556,190 #5,791,552
_________ _________
5 CONSOLIDATED CASH FLOW STATEMENT
a) Reconciliation of operating profit to net cash inflow from operating
activities
2003 2002
# #
Operating (loss)/profit (140,024) 248,321
Depreciation charges 54,527 51,671
Loss/(profit) on disposal of fixed assets 5,429 (6,274)
Amortisation of goodwill 225,374 223,116
Decrease in debtors 106,855 241,989
Increase/(decrease) in creditors 75,526 (35,342)
(Decrease)/increase in provisions (6,319) 7,411
________ ________
Net cash inflow from operating activities #318,368 #730,892
________ ________
b) Reconciliation of net cash flow to movement in net funds/(debt)
2003 2002
# #
Decrease/(increase) in cash in year (60,538) 1,216
Cash outflow from repayment of hire purchase loans 114,117 80,210
Increase in short term deposits and investments 2,854 5,279
Currency translation difference (46,636) (32,965)
Other non-cash changes (197,543)
_________ _________
Movement in net funds in year (187,746) 53,740
Net funds at 1 July 2002 984,774 931,034
_________ _________
Closing net funds #797,028 #984,774
_________ _________
6 COPIES OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The Annual Report and Financial Statements will be sent to shareholders in due
course. Further copies will be available from the company's registered office,
14 Half Moon Street, London W1J 7BD
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ILFFDILLAIIV