MPAY.L Regulatory News (MPAY)

26 Mar 2008 07:01

Autoclenz Holdings PLC26 March 2008 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Wednesday, 26 March 2008 Embargoed: 7.00am AUTOCLENZ HOLDINGS PLC The UK's leading outsourced car valeting and vehicle preparation provider Preliminary Results for the year ended 31 December 2007 Highlights • Group sales up 2.2% year on year to £27 million (12 months to 31 December 2006: £26.4 million); • Profit before tax, amortisation of intangible assets and share based costs of £1.5 million (2006: £2.0 million)*; • Adjusted earnings per share before amortisation of intangible assets and share based costs of 9.78 per share (2006: 13.63 pence per share)**; • Reduction of bank debt of 11% to £4.3 million (2006: £4.8 million); • AC Movements "Collection & Delivery" service commenced 15 November 2007 with revenue in the period to 31 December 2007 of £573,000; • Net cash flow from operating activities £2.5 million (2006: £3.0 million); and • Dividend per share up 22.2% to 5.5 pence per share (2006: 4.5 pence per share) * Reported statutory loss after tax is detailed below under financial results ** Reported statutory earnings per share are detailed in the Finance Director's report "Against the background of a tougher economic and trading environment, we havesuccessfully focused on a range of operational efficiencies, on-going tight costcontrols and important, new business development opportunities which, althoughat an early stage, are already enabling us to expand our presence within the carrental market, thereby reducing our dependence on the automotive sector. "The Directors see 2008 as a year where the Group has the structure, control,energy and the range of services to take advantage of any opportunity that maypresent itself." John Bell, Chairman FULL STATEMENT ATTACHED Enquiries: Grahame Rummery, Chief ExecutiveTrevor Clingo, Group Finance Director Keith Gabriel or Fiona TooleyAutoclenz Holdings PLC Citigate Dewe RogersonTel: 08707 510 410 Tel: 0121 455 8370www.autoclenz.co.uk Mobile: 07958 985395 (KG) Julian BluntKBC Peel HuntTel: 020 7418 8900 Notes to Editors: Founded in the 1960s, Autoclenz is widely recognised as the leading name in carvaleting and vehicle preparation in the UK. The Company provides the completepackage for the total valeting operation that includes labour, chemicals,equipment, materials, management and quality control systems that are requiredto achieve quality vehicle preparation. A commitment to a high quality, costeffective service has made Autoclenz a key partner to many of the best knownnames in the fleet, daily rental, auction and dealer network across the country.Key customers to Autoclenz include Helphire, Premier First, AVIS and majorautomotive groups. -2- AUTOCLENZ HOLDINGS PLC Preliminary Results for the year ended 31 December 2007 STATEMENT BY THE CHAIRMAN, JOHN BELL IntroductionIn what is our second full year as a PLC, 2007 provided mixed fortunes for theGroup. Against the background of a tougher economic and trading environment, we havesuccessfully focused on a range of operational efficiencies, on-going tight costcontrols and important, new business development opportunities which, althoughat an early stage, are already enabling us to expand our presence within the carrental market, thereby reducing our dependence on the automotive sector. Financial ResultsWe are, therefore, pleased to announce that we have achieved a profit beforetax, amortisation of intangible assets and share based costs in-line withrevised expectations, whilst cash generation continued to remain strong. Revenue for the year amounted to £27.0 million (12 months to 31 December 2006:£26.4 million). The Group incurred a loss after tax of £0.1 million (2006:profit after tax of £0.3 million) whilst adjusted profit before tax amounted to£1.6 million after adding back amortisation of intangible assets of £1,069,000and share based costs of £86,000 (2006 adjusted profit before tax on the samebasis is £2.0 million). Overall, it has been a creditable performance despitethe loss of revenue and contribution from British Car Auctions (BCA), which isestimated to be in excess of £300,000 in terms of contribution to profits. If we factor this lost contribution together with the investment we made in thelast quarter of 2007 (as noted in our Trading Update on 14 December 2007) theGroup would have achieved its original 2007 target. The gross margin in the year being reported declined from the 2006 level of27.6% to 26% in 2007. This was caused by four major factors: • Price pressure within the core valeting business; • Loss of the British Car Auction contribution; • Lower than expected growth and profitability within AC SMART; and • Higher than anticipated growth within the Ready to Rent division. Total cash inflow during 2007 amounted to £467,000 (2006: £191,000), an increaseof 244%. Bank debt outstanding at 31 December was £4,330,000 (2006: £4,840,000)a decrease of 11%. Adjusted basic earnings per share excluding amortisation and share based costsfor the year amounted to 9.78 pence compared to 13.63 pence in 2006. Dividend In-line with our current dividend policy, the Board of Directors is declaring afinal dividend of 3.7 pence per share. This, together with the interim dividendof 1.8 pence brings the total dividend for the year to 5.5 pence. continued... -3- Subject to approval by shareholders at the Annual General Meeting on 22 May 2008,the final dividend of 3.7 pence per share will be paid on 30 May 2008 toshareholders on the Register as at 2 May 2008. Review The business has seen a very mixed year. However, we are pleased to report thatsome brands within the Group have strengthened their profile and position in themarketplace. Ready to Rent Ready to Rent is a stand-alone Division created to meet the demands of blue-chipnames in the daily rental industry. The Division has had a very successful year securing both new customers andenhancing existing business with a number of our key customers including PremierFirst (an amalgamation of National Car Rental & Europcar), Avis and Helphire. Sales in the period under review were up to £4.1 million from £3.4 million in2006, an increase of 21%. We are confident that we are in a strong position within this competitive marketand have the skills to maximise the opportunities arising from within thisspecialist market. AC Movements This is an exciting new initiative that commenced in 2007 that has grown out ofservicing our "Collection & Delivery" contracts. This Division is primarily focused within the car rental market place. Duringthe latter part of 2007, we invested in start-up costs of £270,000 relating toinfrastructure, personnel and specialist IT software, all of which werewritten-off in the year. It is anticipated that this new opportunity will start to contribute to Groupprofitability during the second half of 2008. By combining the two activities, namely "Collection & Delivery" within therental marketplace, we are able to offer a service that is almost unparalleledwithin our sector as well as it being a natural bolt-on to our existingsuccessful Ready to Rent Division. Additionally, the Directors see this Division as a major development for theGroup to enable it to offer this value-added service throughout our wholeDealership, Auction and Volume Car preparation business. AC SMART AC SMART achieved sales growth of 11% which was lower than we had planned for,but should be viewed in the light of sales decline in the automotive sectoroverall. The year has been one of rationalisation. We have focused on providing on-siteoperators to our volume customers, rather than a mobile offering. This hasallowed us to achieve better utilisation of resources and reduce unproductivetime. We have continued to invest in operators, operator training, infrastructure andon-site facilities. This has provided a broader appeal to our customers andunderpins the quality service we already offer. continued... -4- As a consequence, this has led to a higher than budgeted capital investment inportable buildings and therefore increased levels of depreciation during 2007.We do however expect to see an improvement in both revenue and profitability asthe service matures and we focus on higher volume on site customers. React React once again experienced a fairly flat year and whilst it continued to tradeprofitably there was a decline in sales of 5%. We have, as with all other operating divisions, reviewed both React's offeringand its marketplace and identified a need for a high quality cleaning servicethat is provided on a regular basis to React's traditional customer base. This new mid-range service product that we have begun to market this year ispositioned between traditional contract cleaning and React's specialistdecontamination and hygienic deep clean services and we expect it to start tohave an impact on this Division's productivity during this new financial year. Pinnacle Pinnacle, our specialist vehicle preparation service for the prestige marqueshas seen an element of slow-down within its market. Nevertheless, by wideningits account base to a more diverse set of customers and manufacturers it hasachieved a very creditable sales growth of almost 6% and profit contribution of11%. We have achieved this by focusing our selling to a more diverse set ofcustomers and expanding the offering to take in such services as "Meet andGreet" and "Collection and Delivery" across all of our customer base. Plans are now in place, together with a marketing programme, to expand thegeographical footprint of the Pinnacle business. This programme was started inQ4 2007 when most dealerships and dealer groups were preparing their budgets. Autoclenz Autoclenz's core valeting business experienced a very challenging year against abackground of generally reduced volumes and prices, and an increased expectationof higher service levels. The loss of the BCA business impacted in this areagreatly and, during Q4 2007, we rationalised this part of our business. Theimpact of the loss affected Q4 performance. Our business is all about service and recognition and it is very pleasing toreport to shareholders that, once again, Autoclenz has been recognised for itshigh levels of customer service to the automotive industry. Autoclenz hasreceived the accolade of 'UK Contract Valeting Company of the Year', for anunprecedented third consecutive year (and fourth time in all) from the Instituteof Transport Management. Autoclenz's reputation derives from the Company's customer-facing structure anda management team that brings a wealth of experience spanning decades of changewithin the industry. Despite these tougher times we remain at the forefront ofthe sector and will continue to look at ways to enhance our service offering. Broadening and Enhancing the Range of ServicesThe new contracts secured within AC Movements and our dealership-based SMARTTechnicians will give a much broader product service offering than any of ourcompetitors and we believe will provide us with greater scope to appeal topotential new and existing customers. continued... -5- The "Collection & Delivery" of customers' vehicles is a requirement that most ofour current customers have a need for, particularly within the prestige marquesand gives us further potential to cross-sell our brands. This service gives a further extension to the range and the combined sales ofour "Ready to Rent" and "AC Movements" Divisions. Going forward this gives ustotal sales in the rental marketplace in excess of £8.0 million. People We have strengthened our sales team and appointed a Group Head of Sales tospearhead and co-ordinate our sales and marketing team within our traditionalbusiness and new sectors in 2008. We have made a further internal promotion togive us more focus on dealer groups and volume vehicle preparation sites; ourwhole sales process is now more driven to exploit every opportunity that maypresent itself. This will allow us to build stronger, more meaningfulrelationships at higher levels. Both these appointments took place late in 2007and we are already seeing the benefits of this more focused sales approach. We also welcome staff who joined us in the year, and on behalf of the Board andstakeholders, we would like to thank everyone for their energy, commitment andenthusiasm which saw us through a challenging year for the Group and for theindustry in general. Outlook The high profile of 'credit crunch' will undoubtedly have an impact on carsales. However, our investment in AC Movements will help to change the balanceof our business and this will hopefully reduce the impact of any furtherdownturn in sales within our dealership customers. The Group remains very focused on growth, cost control, profitability anddelivering ever-improving customer service during what is likely to proveanother challenging trading year. The Directors see 2008 as a year where the Group has the structure, control,energy and the range of services to take advantage of any opportunity that maypresent itself whilst at the same time being able to meet and satisfy the needsof both existing and new customers. For these reasons we are optimistic that we can deliver an almost unrivalledrange of services that will stand us in good stead going forward. -6- AUTOCLENZ HOLDINGS PLC CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2007 Year ended 16-month period ended 31 December 2007 31 December 2006 (As restated) Notes £'000 £'000Revenue 1 27,013 28,015Cost of sales (19,994) (20,322) --------------------------------Gross profit 7,019 7,693Distribution costs (636) (561)Administration expenses (5,683) (5,779) Operating profit 700 1,353Finance costs (307) (397) Profit before tax 393 956Tax (531) (627) --------------------------------(Loss)/profit for the year (138) 329 ================================Basic (Loss)/Earnings per share 3 (1.33)p 3.16pDiluted (Loss)/Earnings per share 3 (1.29)p 2.97p The results for the period are derived from continuing operations. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE For the year ended 31 December 2007 Year ended 16-month period ended 31 December 2007 31 December 2006 £'000 £'000Transfers:Transferred profit/(loss) from equity oncash flow hedges 27 (9)(Loss)/profit for the period (165) 338 ----------------------------------Total recognised income and expense forthe period (138) 329 ==================================Attributable to: ----------------------------------Equity holders of the parent (138) 329 ================================== -7- AUTOCLENZ HOLDINGS PLC CONSOLIDATED BALANCE SHEET As at 31 December 2007 As at As at 31 December 2007 31 December 2006 (As restated) £'000 £'000Assets Non-current assetsGoodwill 6,292 6,292Other intangible assets 7,173 8,242Property, plant and equipment 847 721Deferred tax asset 179 200 ------------------------------------ 14,491 15,455Current assetsInventories 11 2Trade and other receivables 4,274 4,003Called up share capital not paid - 38Cash and cash equivalents 658 191 ------------------------------------ 4,943 4,234 ------------------------------------Total assets 19,434 19,689 ------------------------------------Current liabilitiesTrade and other payables (2,211) (1,388)Current tax liabilities (1,113) (1,057)Borrowings (1,850) (1,400) Non-current liabilitiesBorrowings (2,480) (3,440) ------------------------------------Total liabilities (7,654) (7,285) ------------------------------------Net assets 11,780 12,404 ====================================EquityShare capital 1,040 1,040Share premium account 11,383 11,383Share option reserve 206 120Retained earnings (849) (139) ------------------------------------Total equity 11,780 12,404 ==================================== -8- AUTOCLENZ HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2007 Year ended 16-month period ended 31 December 2007 31 December 2006 Note £'000 £'000 £'000 £'000 Net cash inflow from operating 5 2,540 3,029activities Investing Activities Interest Received 27 - Proceeds on disposal ofproperty, plant 70 76and equipment Purchases of property, plantand (786) (716)equipment Acquisition of subsidiary - (18,000) Overdraft acquired withsubsidiary - (868) Net cash used in investingactivities (689) (19,508) ------------- -------------Financing Activities Proceeds on issue of ordinaryshare 12,423capital (net of expenses) Proceeds on term loan (net ofexpenses) 4,800 Dividends paid (500) (156) Repayment of borrowings (550) - Interest Paid (334) (397) Net cash outflow from financing (1,384) 16,670activities ------------- -------------Increase in cash 467 191 ============= ============= -9- AUTOCLENZ HOLDINGS PLC NOTES TO THE CONSOLIDATED FINANCIAL ACCOUNTING STATEMENTS 1. Segmental analysis 2007 2006 (As restated) £'000 £'000RevenueAutoclenz 22,838 24,347Movements 573 -REACT 1,517 1,712AC SMART 2,085 1,956 -----------------------------------Total 27,013 28,015 -----------------------------------ResultsAutoclenz 5,560 6,138Movements 139 -REACT 879 995AC SMART 517 560Distribution costs (636) (561)Administration expenses (5,759) (5,779)Finance cost (307) (397) -----------------------------------Profit before tax 393 956 -----------------------------------Tax (531) (627) -----------------------------------(Loss)/profit after tax (138) 329 =================================== The Group does not allocate all operating costs to the segments identifiedabove, and these unallocated costs are separately identified above. Assets and Liabilities are not split by segment. The nature of the servicesprovided is such that the return on capital is not a useful measure. The lowvalue assets are not apportioned across the various businesses and the ledgersfor payables and receivables are not segmented. Geographically, the Groupoperates solely in the UK and as such revenue, costs, assets and liabilities alloriginate and are held in the UK. continued... -10- 2. Profit on ordinary activities before taxation Profit on ordinary activities before taxation is stated after charging/(crediting): 2007 2006 £'000 £'000 Depreciation of owned property, plant and equipment 633 581 Amortisation of intangible assets 1,069 1,089 Amortisation of finance cost 40 40 Fees payable to the Company's auditors for the audit of theCompany 10 6accounts Fees payable to the Company's auditors for the audit of theGroup accounts 32 13 The audit of the Company's subsidiary pursuant to legislation 22 20 ----------------Total Audit Fees 64 33 Recruitment and remuneration services - 4 Corporate Finance Services 15 - ----------------Total non audit fees 15 4 Profit on disposal of property, plant and equipment (48) (54) ================ 3. (Loss)/earnings per share 2007 2006 (As restated under IFRS) Basic Diluted Basic Diluted shares shares shares sharesWeighted average number ofordinary 10,400,020 10,400,020 10,400,020 10,400,020shares Effect of dilutivepotential ordinary shares: - 256,966 - 660,038share options Total 10,400,020 10,656,986 10,400,020 11,060,058 (Loss)/earnings (£'000) (138) (138) 329 329 (Loss)/earnings per share(pence) (1.33) (1.29) 3.16 2.97 Earnings per share(excluding 9.78 9.54 13.63 12.82amortisation/impairment) (pence) 4. Dividends 2007 2006 £'000 £'000Dividends on equity shares- interim of 1.8p (2006: 1.5p) per ordinary share 187 156- final of 3.7p (2006: 3.0p) per ordinary share 385 312 ----------------------- 572 468 ======================= continued... -11- 5. Cash flow Reconciliation of operating profit to net cash inflow from operating activities 2007 2006 £'000 £'000 (Loss)/profit for the period (138) 329Adjustments for:Finance income (27) -Finance costs 334 397Income tax expense 531 627Depreciation of property, plant and equipment 633 581Amortisation of intangible assets 1,069 1,089Amortisation of finance costs 40 40Share based payment expense 86 120Gain on disposal of property, plant and equipment (48) (54)Operating cash flows before movements in working capital 2,480 3,129(Increase)/decrease in inventories (9) 3(Increase)/decrease in receivables (227) 545Increase/(decrease) in payables 958 (11)Cash generated by operations 722 537Income taxes paid (662) (637) --------------------Net cash from operating activities 2,540 3,029 -------------------- 6. Reconciliation of movement in shareholders' funds 2007 2006 £'000 £'000 (Loss)/profit for the year (138) 329Dividends (572) (468) --------------------Net reduction in shareholders' funds (710) (139)Opening shareholders' funds 12,404 -New shares issued - 1,040Share premium account - 11,383Share option reserve 86 120 --------------------Closing shareholders' funds 11,780 12,404 ==================== 7. Reconciliation of net cash flow to movement in net debt 2007 2006 £'000 £'000 Increase in cash in the period 467 191Cash inflow/(outflow) from movements in debt 550 (5,000) --------------------Change in net debt resulting from cash flows 1,017 (4,809)Net debt at beginning of period (4,809) - --------------------Net debt at end of period (3,792) (4,809) ==================== continued... -12- 8. Analysis of changes in net debt At 1 January 2007 Cash flow At 31 December 2007 £'000 £'000 £'000Cash at bank 191 467 658Debt due within one year (1,400) (450) (1,850)Debt due after one year (3,600) 1,000 (2,600) ------------------------------------------------Net debt (4,809) 1,017 (3,792) ================================================ 9. The financial information set out above does not constitute the Company'sstatutory accounts for the period ended 31 December 2007, but is derived fromthose accounts. Statutory accounts for the period will be delivered to theRegistrar of Companies following the Company's Annual General Meeting. Theauditors have reported on those accounts; their report was unqualified and didnot contain statements under s237(2) or (3) Companies Act 1985. 10. The Annual Report is to be published and sent to shareholders shortly.Copies will be also available on request from The Company Secretary, AutoclenzHoldings PLC, Stanhope Road, Swadlincote, Derbyshire, DE11 9BE and will also beavailable on the Company web-site: www.autoclenz.co.uk 11. The Annual General Meeting of the Company is to be held at the offices ofKBC Peel Hunt, 111 Old Broad Street, London, EC2N 1PH at 11.00am on 22 May 2008. This information is provided by RNS The company news service from the London Stock Exchange