TIDMMOGP
RNS Number : 9278S
Mountfield Group plc
30 September 2014
30 September 2014
Mountfield Group Plc
(the "Company" or the "Group")
Half-yearly report to 30 June2014
Mountfield Group plc (the "Group"), the AIM listed construction
company specialising in building, fitting out and refurbishing
commercial buildings and, in particular, data centres, announces
its half-yearly report to 30 June 2014.
-- Gross profit of GBP0.8m (2013: GBP1.0m) on revenue of GBP5.6m (GBP5.2m).
-- Group margins decreased from 19.6% to 15.0%.
-- Mountfield Building Group Limited ("Mountfield") revenues
reduced by 14% to GBP2.2m due to contract starts delayed into H2.
Margins fell from 18.6% to 4.3% due to less payment than
anticipated being received on a major contract and also extra staff
costs of employees recruited to increase the number of contracts
that the Group is able to process.
-- Connaught Access Flooring Limited ("Connaught") revenues
increased by 20% to GBP3.4m with a improvement in margins from
19.9% to 22.1%.
-- Cash used in operations was GBP430k against cash generated
from operations of GBP197k in the corresponding period of 2013.
-- Administrative expenses increased to GBP0.82m (GBP0.76m)
-- Pre-tax profits decreased to GBP4k from GBP236k.
-- Group pipeline and level of activity remain high.
-- Directors confident for Group's prospects for 2014 and beyond.
Graham Read, Chief Executive Officer,said:
"Demand for the Group's services remaining strong in the first
half of 2014 but as a result of margins coming under pressure (in
particular on one of Mountfield's contracts) and starts being
deferred on some others, pre-tax profits during the period were
reduced to a level (GBP4k) below those achieved in the same period
of 2013 (GBP236k). This reduction does not reflect a general
weakening in the Group's business or of its prospects as the change
in strategy for Mountfield that put increased emphasis on fit-out
and building fabric repair work is producing additional work,
contacts and opportunities and demand for its services in the data
centre construction area remain strong. It does however reflect a
lower than expected payment being received from the main contractor
on a major contract.
In addition Connaught has made another strong contribution to
the Group's performance.
The Directors do not believe that the problems that affected the
Group profits in the first half of 2014 will impact on the Group in
the longer term. The Group is currently in late stage negotiations
on a number of significant contracts which, if concluded as
expected, will result in a satisfactory performance for the year as
a whole."
Mountfield Group Plc
Peter Jay, Chairman
Graham Read, Chief Executive
Officer +44 (0)1268 561 516
WH Ireland (Nominated Adviser)
Chris Fielding +44 (0)20 7220 1666
Chairman and CEO's Statement
The reduction in the Group's pre-tax profits in the first half
of 2014 from GBP236k (2013) to GBP4k despite revenue increasing to
GBP5.6m from GBP5.3m (2013) was caused principally by the reduction
in projected margin on a major contract that was undertaken by
Mountfield referred to above and the delayed start on certain of
its other contracts.
The composition of the Group's construction activities continues
to change as it makes increased efforts to acquire business in the
areas of fit-out of office, industrial and leisure premises and on
building fabric repair work. These efforts have led in recent weeks
to Mountfield being awarded contracts for work with an aggregate
value of GBP1.5m. In addition demand for the Group's services, both
in terms of construction (Mountfield) and flooring (Connaught) in
the data centre field, remain high. With the Group's pipeline
remaining at high levels the prospects for the second half of the
year remain extremely encouraging.
The first half of the year saw Group margins slip back to the
figure last seen in 2012 (15.0%) but an improvement is anticipated
in the second half of the year as the Group's undertakes more
higher margin work.
The first half of 2014 has seen another strong performance by
Connaught. Its reputation for completing large flooring projects
has produced contracts in respect of major new office developments
with new ones being already under negotiation.
The Directors do not believe that the problems that affected the
Group profits in the first half of 2014 will impact on the Group in
the longer term. The Group is currently in late stage negotiations
on a number of significant contracts which, if concluded as
expected, will result in a satisfactory performance for the year as
a whole."
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2014
6 months 6 months 12 months
to 30 June to to
2014 30 June 31 December
2013 2013
(unaudited) (unaudited) (audited)
Note GBP GBP GBP
Revenue 5,608,294 5,227,055 12,312,140
Cost of sales (4,765,697) (4,203,485) (9,865,759)
------------ ------------ -------------
Gross profit 842,598 1,023,570 2,446,381
Administrative expenses (824,105) (756,566) (1,601,870)
------------ ------------ -------------
Operating Profit 18,493 267,004 844,512
Net finance (costs)/income (14,102) (31,169) (79,173)
------------ ------------ -------------
Profit before income tax 4,391 235,835 765,339
Income tax expense 3 (7,481) (57,756) (262,279)
------------ ------------ -------------
Total comprehensive (loss)/profit
for the period (3,090) 178,079 502,760
============ ============ =============
Earnings per share 4
Basic & diluted (0.001)p 0.08p 0.22p
There are no recognized gains and losses other than those passing
through the Statement of Comprehensive Income
Condensed consolidated statement of financial position
As at 30 June 2014
30 June 30 June 2013 31 December
2014 2013
(Unaudited)
(Unaudited) (audited)
GBP GBP GBP
ASSETS
Non-current assets
Intangible assets 10,788,521 10,788,521 10,788,521
Property, plant and equipment 111,672 121,814 114,384
Deferred income tax assets 428,756 599,986 428,756
------------------ ------------------ ------------
11,328,949 11,510,321 11,331,661
------------------ ------------------ ------------
Current assets
Inventories 79,474 78,588 80,488
Trade and other receivables 2,688,090 2,851,689 3,243,910
Cash and cash equivalents 678,567 195,038 313,675
3,446,131 3,125,314 3,638,073
------------------ ------------------ ------------
TOTAL ASSETS 14,775,081 14,635,636 14,969,734
================== ================== ============
EQUITY AND LIABILITIES
Share capital and reserves
Issued share capital 254,244 216,744 254,244
Share premium 1,490,682 1,120,432 1,490,682
Share based payments reserve 342,779 329,771 337,279
Merger reserve 12,951,180 12,951,180 12,951,180
Reverse acquisition reserve (2,856,755) (2,856,756) (2,856,756)
Retained earnings (6,326,064) (6,654,170) (6,322,974)
------------------ ------------------ ------------
TOTAL EQUITY 5,856,066 5,107,201 5,853,656
------------------ ------------------ ------------
Current liabilities
Trade and other payables 3,538,910 4,181,966 4,557,390
Short-term borrowings 2,114,600 1,718,892 1,087,665
Finance lease liabilities 8,735 5,439 6,917
Current tax payable 98,831 64,478 91,350
------------------ ------------------ ------------
5,761,076 5,970,775 5,743,322
Non-current liabilities
Loan notes 3,152,893 3,553,475 3,363,029
Finance lease liabilities 5,046 4,184 9,727
TOTAL LIABILITES 8,919,015 9,528,435 9,116,078
------------------ ------------------ ------------
TOTAL EQUITY & LIABILITIES 14,775,081 14,635,636 14,969,734
================== ================== ============
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2014
Share Share premium Other Capital Reverse Merger Retained Total
capital reserves redemption Acquisition reserve earnings
GBP reserve reserve
GBP GBP GBP GBP GBP GBP GBP
Balance at
1 January
2013 216,744 1,120,432 320,960 - (2,856,755) 12,951,180 (6,832,250) 4,920,310
Total
comprehensive
income - - - - - - 178,079 178,079
Share based
payments - - 8,811 - - - - 8,811
--------- ----------------- ---------- --------------------------- --------------- ------------ ------------------- ------------------
Balance at
30 June 2013 216,744 1,120,432 329,771 - (2,856,755) 12,951,180 (6,654,171) 5,107,201
--------- ----------------- ---------- --------------------------- --------------- ------------ ------------------- ------------------
Balance at
1 July 2013 216,744 1,120.432 329,771 - (2,856,755) 12,951,180 (6,654,171) 5,107,201
Total
comprehensive
income - - - - - - 324,681 324,681
Shares issued
in period 45,000 405,000 - - - - - 450,000
Share
cancelled
in period (7,500) - - 7,500 - - - -
Cost of shares
issued - (34,750) - - - - - (34,750)
Share based
payments - - 6,524 - - - - 6,524
Cancelled
share
options - - (6,516) - - - 6,516 -
Balance at
31 December
2013 254,244 1,490,682 329,779 7,500 (2,856,755) 12,951,180 (6,322,974) 5,853,656
--------- ----------------- ---------- --------------------------- --------------- ------------ ------------------- ------------------
Balance at
1 January
2014 254,244 1,490,682 329,779 7,500 (2,856,755) 12,951,180 (6,322,974) 5,853,656
Total
comprehensive
loss - - - - - - (3,090) (3,090)
Share based
payment - - 5,500 - - - - 5,500
--------- ----------------- ---------- --------------------------- --------------- ------------ ------------------- ------------------
Balance at
30 June 2014 254,244 1,490,682 335,279 7,500 (2,856,755) 12,951,180 (6,326,064) 5,856,066
--------- ----------------- ---------- --------------------------- --------------- ------------ ------------------- ------------------
Condensed consolidated cash flow statement
For the six months ended 30 June 2014
6 months to 6 months 12 months
30 June 2014 to to
30 June 2013 31 December
(unaudited) 2013
(unaudited)
(audited)
GBP GBP GBP
Cash from operating activities:
Operating profit 18,493 267,004 844,512
Adjusted for:
Depreciation 7,248 8,299 18,042
Loss on disposal of property, - - -
plant and equipment
Share based payment provision 5,500 8,810 15,335
(Increase)/ decrease in inventories 1,014 (3,021) 1,517
(Increase)/ decrease in trade
and other receivables 555,820 (623,205) (1,015,430)
(Decrease)/ increase in trade
and other payables (1,018,480) 570,540 1,114,529
-------------- -------------- -------------
Cash (used in)/ generated by
operations (430,405) 228,427 978,505
Finance costs (17,565) (34,850) (86,393)
Finance income 3,463 3,681 7,220
Taxation paid - - (6,692)
Net cash (outflow)/inflow from
operating activities (444,507) 197,257 892,640
-------------- -------------- -------------
Cash flows from investing activities
Purchase of equipment (4,538) (13,679) (15,994)
Proceeds from sale of equipment - - -
Net cash flows from used in
investing activities (4,538) (13,679) (15,994)
-------------- -------------- -------------
Cash flows from financing activities:
Proceeds from issue of shares - - 450,000
Costs of shares issued - - (34,750)
Finance lease rentals (2,863) (6,205) 816
Repayment of non-convertible
loan notes (219,636) (165,446) (351,392)
Proceeds from short-term loans 200,000 150,000 30,904
-------------- -------------- -------------
Net cash flows from financing
activities (22,499) (21,651) 95,578
============== ============== =============
Net (decrease)/increase in cash
and cash equivalents (471,544) 161,927 972,224
Cash and cash equivalents brought
forward 214,006 (758,219) (758,218)
-------------- -------------- -------------
Cash and cash equivalents carried
forward (257,538) (596,292) 214,006
============== ============== =============
For the purposes of the cash flow statement, cash and cash
equivalents comprise the following:
As at 30 As at 30 As at 31 December
June 2014 June 2013 2013
GBP GBP GBP
Cash at bank and in hand 678,567 195,038 313,675
Bank overdraft (936,10) (791,330) (99,669)
(257,538) (596,292) (214,006)
============ =========== ==================
1. Notes to theInterim Report
Basis of preparation
The Group's interim financial statements for the six months
ended 30 June 2014 were authorised for issue by the directors on 30
September 2014.
The consolidated interim financial statements, which are
unaudited, do not constitute statutory accounts within the meaning
of Section 434 of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2013 have been filed with the
registrar of companies at Companies House. The audit report on the
statutory accounts for the year ended 31 December 2013 was
unqualified and did not contain any statements under Section 498
(2) or (3) of the Companies Act 2006.
The annual financial statements of Mountfield Group Plc for the
year ended 31 December 2014 will be prepared in accordance with
International Financial Reporting Standards as adopted for use in
the EU ("IFRS"). Accordingly, these interim financial statements
have been prepared using accounting policies consistent with those
which will be adopted by the Group in the financial statements and
in compliance with IAS 34 "Interim financial reporting".
The consolidated interim financial statements have been prepared
in accordance with the accounting policies set out in theannual
financial statements for the year ended 31 December 2013.
Basis of consolidation
The Group financial information consolidates that of the company
and its subsidiaries.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
2. Segmental reporting
Segment information is presented in respect of the Group's
business segments, which are based on the Group's management and
internal reporting structure.
The chief operating decision-maker has been identified as the
Board of Directors (the Board). The Board reviews the Group's
internal reporting in order to assess performance and allocate
resources. Management have determined the operating segments based
on these reports and on the internal report's structure.
Segment performance is evaluated by the Board based on revenue
and profit before tax ("PBT"). Segment results include items
directly attributable to a segment as well as those that can be
allocated on a reasonable basis, such as centrally managed costs
relating to individual segments and costs relating to land used in
more than one individual segment.
Given that income taxes and certain corporate costs are managed
on a centralised basis, these items are not allocated between
operating segments for the purposes of the information presented to
the Board and are accordingly omitted from the analysis below.
The Group comprises the following segments:
Mountfield
Direct contracting and trade contracting services to bothmain
contractors and corporate end users.
Connaught
Providing raised flooring systems to bothmain contractors and
corporateend users.
Land sourcing
Sourcing land and enhancing value.
Segmental operating performance
Six months to 30 Six months to Twelve months to
June 2014 30 June 2013 31 December 2013
Segmental PBT Segmental PBT Segmental PBT
revenue revenue revenue
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ------------------ ---------- --------
Construction 2,244 (413) 2,606 14 6,681 (15)
Fit -out 3,371 546 2,714 359 5,791 365
Land sourcing - - - - - -
-------------------- ------------------ ---------- -------- ---------- --------
5,320 373 12,472 350
Inter-segmental
revenue and
unallocated
costs (7) (129) (93) (138) (160) 415
-------------------- ------------------ ---------- -------- ---------- --------
5,608 4 5,227 236 12,312 765
==================== ================== ========== ======== ========== ========
Business segments assets and liabilities
Six months to Six months to Twelve months
30 June 2014 30 June 2013 to 31 December
2013
Segment Segment Segment Segment Segment Segment
assets liabilities assets liabilities assets liabilities
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------------
Construction 1,764 3,681 1,456 3,935 2,388 4,195
Fit-out 2,151 1,385 2,311 1,543 1,764 1,059
Land sourcing - 2 - 2 - 2
-------- ------------- -------- ------------- -------- -------------
3,915 5,068 3,767 5,480 4,152 5,254
Goodwill - Construction 5,914 - 5,914 - 5,914 -
Goodwill - Fit-out 4,874 - 4,874 - 4,874 -
Goodwill - Land - - - -
sourcing - -
Other unallocated
assets & liabilities 72 3,844 81 4,048 30 3,862
14,775 8,912 14,636 9,528 14,970 9,116
======== ============= ======== ============= ======== =============
Unallocated assets consist of deferred tax, trade and other
receivables and cash held by the Parent Company. Unallocated
liabilities consist of trade and other payables and interest
bearing loans owed by the Parent Company.
Revenue by geographical destination
6 months 6 months 12 months to
to 30 June to 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
United Kingdom 5,431 3,624 9,092
Other EU 177 1,603 3,220
------------ ------------ -------------
5,608 5,227 12,312
============ ============ =============
Total assets including property, plant and equipment and
intangible assets are all held in the UK.
3. Income tax (expense)/credit (continuing operations)
6 months 6 months 12 months to
to 30 June to 30 June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
GBP GBP GBP
Current tax on income for the
period (7,481) (57,756) (91,350)
Deferred tax (expense)/credit - - (171,229)
-------------------------- ---------------------- -------------
Income tax (expense)/credit
in the income statement (7,481) (57,756) (262,579)
========================== ====================== =============
4. Earnings per share
The basic earnings per share is calculated by dividing the
earnings attributable to equity shareholders by theweighted average
number of shares in issue. In calculating the diluted earnings per
share, share options outstanding have been taken into account where
the impact of these is dilutive.
The weighted average number of shares in the period was:
6 months 6 Months 12 months
to 30 June to 30 June to 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
number number number
Basic ordinary shares of 0.1p
each 254,244,454 216,744,454 231,169,112
Dilutive ordinary shares from - - -
warrants & options
------------ ------------ ----------------
Total diluted 254,244,454 216,744,454 231,169,112
------------ ------------ ----------------
In the six months to 30 June 2014, the exercise price of the
options and warrants exceeded the average market price of ordinary
shares in the period, thus there is no dilutive effect on the
weighted average number of ordinary shares or the diluted earnings
per share.
Earning attributable to equity shareholders of the parent
6 months 6 Months 12 months
to 30 June to 30 June to 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
Continuing operations
Basic earnings / (loss) per share (0.001)p 0.08p 0.22p
Diluted earnings / (loss) per
share (0.001)p 0.08p 0.22p
This information is provided by RNS
The company news service from the London Stock Exchange
END
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