Business Highlights
* Turnover of �1.662 million, an increase of just over 50% on same period in
2006
* Pre tax profits of �313,000, an increase of 34% on the same period in 2006
* Earnings per share for the period 0.58p per share
For further information please contact:
Garner plc
J Bartle Chairman
Andrew Garner Chief Executive
Tel: 020 7629 8822
City Financial Associates Limited
Ross Andrews
Tel: 020 7492 4777
CHAIRMAN'S STATEMENT
I am pleased to report further progress by the Company in the first 6 months of
2007.
Turnover has increased by just over 50% compared with the same period in 2006,
to �1.662million from �1.104million.
Our costs have increased more or less in line with this growth, primarily
reflecting our headcount increases in the second half of last year but,
overall, we have seen strong progress in trading revenues and another
significant increase in profitability. Our operating profit in this period was
28% higher than the same period last year (�367,000 versus �286,000) and our
profit before tax was 34% higher (�313,000 versus �234,000).
So, whilst we continue to address diligently our cash management, debt
reduction/ balance sheet issues, we continue to see strong trading progress.
Witness four consecutive six-month periods of pre-tax profits with each
six-months showing growth over the preceding six months.
We continue to build a stronger and more dynamic Company, so we see no reason
why this significant progress should not continue for the immediate future. I
congratulate all in the Company on this very positive performance and in the
turnaround in the Company's fortunes that it represents.
J BARTLE
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Note Six months Six months Year ended
ended ended 31 December
30 June 2007 2006
30 June 2006
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Turnover 1,662 1,104 2,612
Administrative expenses 4 (1,295) (818) (1,978)
-------- --------- ---------
Total operating profit 367 286 634
Interest payable and similar (54) (52) (116)
charges
-------- -------- ---------
Profit on ordinary activities 4 313 234 518
before taxation
Taxation (94) - (153)
-------- -------- ---------
Profit for the financial period 4 219 234 365
Dividends - - -
-------- -------- ---------
Retained profit for the financial 4 219 234 365
period
-------- -------- ---------
Earnings per share (pence) - Basic 2 0.58p 0.04p 1.19p
and diluted
-------- -------- ---------
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2007
At 30 June 2007 At 30 June 2006 At 31 December 2006
(unaudited) (unaudited) (audited)
Note �'000 �'000 �'000 �'000 �'000 �'000
Fixed assets
Tangible assets 22 1 16
Investments 5 959 959 959
-------- -------- --------
981 960 975
Current assets
Debtors 991 573 671
Cash at bank and in hand - - -
-------- -------- --------
991 573 671
Creditors: amounts falling (3,035) (3,243) (2,845)
due within one year
-------- -------- --------
Net current liabilities (2,044) (2,670) (2,174)
--------- --------- ---------
Total assets less current (1,063) (1,710) (1,199)
liabilities
Creditors: amounts falling (421) (593) (504)
due after more than one
year
Provisions for liabilities - - -
and charges
--------- --------- ---------
Total assets less current (1,484) (2,303) (1,703)
liabilities
====== ===== =====
Capital and reserves
Called up share capital 4,942 4,795 4,942
Share premium account 3,845 3,523 3,845
Profit and loss account 5 (10,271) (10,621) (10,490)
---------- --------- --------
Shareholders' funds (1,484) (2,303) (1,703)
====== ===== =====
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Note Six months Six months Year ended
ended 30 31
ended 30 June 2006 December
2006
June 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Net cash inflow/(outflow) from i 12 (36) 90
operating activities
Returns on investments and servicing of (54) (52) (116)
finance
Taxation - - -
Capital expenditure and financial (9) - (20)
investment
Acquisitions and disposals - - -
---------- ---------- ----------
Net cash flow before use of liquid (51) (88) (46)
resources and financing
Financing (112) 58 67
---------- ---------- ----------
Increase / (decrease) in cash ii (163) (30) 21
====== ====== ======
NOTES TO THE CASH FLOW STATEMENT
i RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH FLOW
Six months Six months Year ended
ended 30 31 December
ended 30 June 2006 2006
June 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Operating profit for the period 367 286 634
Depreciation of tangible fixed assets 3 - 4
Amortisation - - 2
(Increase) / decrease in debtors (320) (270) (368)
(Decrease) / increase in creditors (38) (52) (182)
--------- --------- ---------
Net cash inflow / (outflow) from operating 12 (36) 90
activities
====== ====== ======
Note 6 below contains a reconciliation between the 30 June 2006 and 31 December
2006 numbers previously reported and those reported in above note. This change
is due to the requirement of the company to adopt International Financial
Reporting Standards
ii RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Six months Six months Year ended
ended 30 31
ended 30 June 2006 December
2006
June 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
(Decrease) / increase in cash in the period (163) (30) 21
Directors' loan advance - (82) 300
Net movement on secured loans 110 101 76
---------- ---------- ----------
Change in net debt resulting from cash flows (53) (11) 397
Net debt at the beginning of the period (1,287) (1,683) (1,684)
---------- ---------- ----------
Net debt at the end of the period (1,340) (1,694) (1,287)
====== ====== ======
iii ANALYSIS OF CHANGES IN NET DEBT
At 31 December Cash flow At 30 June
2006 2007
�'000 �'000 �'000
Cash at bank and in hand - - -
Bank overdraft (25) (163) (188)
----------- ---------- -----------
Total for cash at bank and in hand (25) (163) (188)
Debt due within one year (662) 28 (634)
Debt due after more than one year (503) 82 (421)
Directors loan account (97) - (97)
------------ ---------- ------------
(1,287) (53) (1,340)
======= ====== =======
NOTES TO THE UNAUDITED INTERIM REPORT
1. BASIS OF PREPARATION
The results for the six months ended 30 June 2007, which are unaudited, have
been prepared in accordance with applicable accounting standards and under the
historical cost convention.
The financial information set out in this document which has been neither
audited nor reviewed by the auditors does not comprise the statutory accounts
of the Company within the meaning of section 240(5) of the Companies Act 1985.
BASIS OF CONSOLIDATION
The group financial statements consolidate those of the Company and of its
subsidiary undertaking Garner International Limited, a company incorporated in
England and Wales. Profits or losses on intra-group transactions are eliminated
in full.
2. EARNINGS PER ORDINARY SHARE
The calculation of the earnings per share is based on the profit attributable
to ordinary shareholders of �219,000 (2006: �234,000) and the weighted average
number of ordinary shares in issue during the period, being 37,968,937 (2005:
1,167,118,360).
The 30 June 2006 profit attributable to ordinary shareholders had been reported
as �200,000 and used as the basis for calculating earnings per share. This
number has now been restated to �234,000 due to the requirement for the company
to comply with International Financial Reporting Standards. Note 4 below
contains the details regarding this change.
The requirement for the company to comply with International Financial
Reporting Standards has also resulted in the restatement of the profit
attributable to ordinary shareholders for the year ended 31 December 2006 and
therefore the earnings per share figure covering that period. Note 4 below
contains details regarding this change.
3. COPIES OF THE UNAUDITED INTERIM REPORT
Copies of this report are available on request from the Company's registered
office at 6 Derby Street, London, W1J 7AD.
4. RECONCILIATION OF PROFIT
Reconciliation for the 6 months ended 30 June 2006
Note Previous UK Effect of IFRS
GAAP transition
to IFRSs
�'000 �'000 �'000
Turnover 1,104 - 1,104
Administrative expenses 1 (852) 34 (818)
------------ ------------ -----------
Total operating profit 252 34 286
Interest payable and similar (52) - (52)
charges
------------ ------------ -----------
Profit on ordinary activities 200 34 234
before taxation
Taxation - - -
------------ ------------ ------------
Profit for the financial period 200 34 234
Dividends - - -
------------ ------------ ------------
Retained profit for the financial 200 34 234
period
======= ======= =======
Reconciliation for the year ended 31 December 2006
Note Previous UK Effect of IFRS
GAAP transition
to IFRSs
�'000 �'000 �'000
Turnover 2,612 - 2,612
Administrative expenses 1 (2,045) 67 (1,978)
------------ ------------ -----------
Total operating profit 567 67 634
Interest payable and similar (116) - (116)
charges
------------ ------------ -----------
Profit on ordinary activities 451 67 518
before taxation
Taxation (153) - (153)
------------ ------------ ------------
Profit for the financial period 298 67 365
Dividends - - -
------------ ------------ ------------
Retained profit for the financial 298 67 365
period
======= ======= =======
Note 1: Goodwill has been adjusted by �34,000 for the 6 months ended 30 June
2006 and by �67,000 for the year ended 31 December 2006, being the amortisation
charge for each period. In line with International Financial Reporting
Standards, goodwill has not been amortised from the transition date, but has
instead been subject to an impairment review. The review has indicated that
goodwill is not impaired.
5. RECONCILIATION OF EQUITY
Reconciliation of equity as at 30 June 2006
Previous UK GAAP Effect of IFRSs
transition to
IFRSs
�'000 �'000 �'000 �'000 �'000 �'000
Fixed assets
Tangible assets 1 - 1
Investments 925 34 959
-------- -------- --------
926 34 960
Current assets
Debtors 573 - 573
Cash at bank and in hand - - -
-------- -------- --------
573 - 573
Creditors: amounts falling (3,243) - (3,243)
due within one year
-------- -------- --------
Net current liabilities (2,670) - (2,670)
--------- --------- ---------
Total assets less current (1,744) 34 (1,710)
liabilities
Creditors: amounts falling (593) - (593)
due after more than one
year
Provisions for liabilities - - -
and charges
--------- --------- ---------
Total assets less current (2,337) 34 (2,303)
liabilities
====== ===== =====
Capital and reserves
Called up share capital 4,795 - 4,795
Share premium account 3,523 - 3,523
Profit and loss account (10,655) 34 (10,621)
---------- --------- --------
Shareholders' funds (2,337) 34 (2,303)
====== ===== =====
Investments, which represent goodwill, have been adjusted by �34,000, being the
amortisation charge for the year. In line with International Financial
Reporting Standards, goodwill has not been amortised from the transition date,
but has instead been subject to an impairment review. The review has concluded
that goodwill is not impaired.
Reconciliation of equity as at 31 December 2006
Previous UK GAAP Effect of IFRSs
transition to
IFRSs
�'000 �'000 �'000 �'000 �'000 �'000
Fixed assets
Tangible assets 16 - 16
Investments 892 67 959
-------- -------- --------
908 67 975
Current assets
Debtors 671 - 671
Cash at bank and in hand - - -
-------- -------- --------
671 - 671
Creditors: amounts falling (2,845) - (2,845)
due within one year
-------- -------- --------
Net current liabilities (2,174) - (2,174)
--------- --------- ---------
Total assets less current (1,266) 67 (1,199)
liabilities
Creditors: amounts falling (504) - (504)
due after more than one
year
Provisions for liabilities - - -
and charges
--------- --------- ---------
Total assets less current (1,770) 67 (1,703)
liabilities
====== ===== =====
Capital and reserves
Called up share capital 4,942 - 4,942
Share premium account 3,845 - 3,845
Profit and loss account (10,557) 67 (10,490)
---------- --------- --------
Shareholders' funds (1,770) 67 (1,703)
====== ===== =====
Investments, which represent goodwill, have been adjusted by �67,000, being the
amortisation charge for the year. In line with International Financial
Reporting Standards, goodwill has not been amortised from the transition date,
but has instead been subject to an impairment review. The review has concluded
that goodwill is not impaired.
6. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
As at 30 June 2006
Previous UK Effect of IFRSs
GAAP transition
to IFRSs
�'000 �'000 �'000
Operating profit for the period 252 34 286
Depreciation of tangible fixed assets - - -
Amortisation 34 (34) -
(Increase) / decrease in debtors (270) - (270)
(Decrease) / increase in creditors (52) - (52)
--------- --------- ---------
Net cash inflow / (outflow) from operating (36) - (36)
activities
====== ====== ======
As at 31 December 2006
Previous UK Effect of IFRSs
GAAP transition
to IFRSs
�'000 �'000 �'000
Operating profit for the period 567 67 634
Depreciation of tangible fixed assets 4 - 4
Amortisation 69 (67) 2
(Increase) / decrease in debtors (368) - (368)
(Decrease) / increase in creditors (182) - (182)
--------- --------- ---------
Net cash inflow / (outflow) from operating 90 - 90
activities
====== ====== ======
Aim Compliance Committee
In accordance with AIM Rule 31 the Company is required to have in place
sufficient procedures, resources and controls to enable its compliance with the
AIM Rules; seek advice from its nominated adviser ("Nomad") regarding its
compliance with the AIM Rules whenever appropriate and take that advice into
account; provide the Company's Nomad with any information it requests in order
for the Nomad to carry out is responsibilities under the AIM Rules for
Companies and the AIM Rules for Nominated Advisers; ensure that each of the
Company's directors accepts full responsibility, collectively and individually,
for compliance with the AIM Rules; and ensure that each director discloses
without delay all information which the Company needs in order to comply with
AIM Rule 17 (Disclosure of Miscellaneous Information) insofar as that
information is known to the director or could with reasonable diligence be
ascertained by the director.
In order to ensure that these obligations are being discharged, the Board has
established a committee of the Board (the "AIM Committee"), chaired by Richard
Robinson, a non executive director of the Company.
Having reviewed relevant Board papers, and met with the Company's Executive
Board and the Nomad to ensure that such is the case, the AIM Committee is
satisfied that the Company's obligations under AIM Rule 31 have been satisfied
during the period under review.
GARNER PLC
interim report For the 6 months to 30 June 2007
1
END
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