Styles & Wood Group Regulatory News (STY)

22 Mar 2007 07:02

Styles & Wood Group PLC22 March 2007 22 March 2007 STYLES & WOOD GROUP PLC ("STYLES & WOOD" OR "THE GROUP") PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006 Styles & Wood Group plc, a leading provider of retail property services topremier UK retailers, announces its maiden set of preliminary results since itssuccessful flotation on the London Stock Exchange in November 2006. Financial Highlights • Revenue up 57% to £268.6m (2005: £170.7m) • Operating profit up 88% to £10.9m (2005: £5.8m) • Profit before tax up 84% to £7.5m (2005: £4.1m) • Adjusted profit margin increased to 4.2% (2005: 3.5%) • Earnings per share up 56% to 8.1p (2005: 5.2p) • 13th consecutive year of Revenue and Profit growth *Adjusted profit comprises operating profit adjusted for the costs of flotation,non-recurring profit on relocation of head office and prior year restructuringcosts. Operational Highlights • Successful IPO in November 2006 • All four business divisions performed ahead of plan with 25% profit contribution from Support Service divisions • Over 90% of business generated from existing customers with 100% of existing framework arrangements maintained • Record opening order book of £121.4m (1 Jan 2007) • Projected order book from client framework arrangements at a record £713.5m (1 Jan 2007) • Record account values achieved with Barclays, Marks and Spencer, Tesco and John Lewis Gerard Quiligotti, Chairman, Styles & Wood Group plc said: "I am delighted with the Group's performance in 2006. The strength of ourbrands coupled with our expertise in providing high quality service for ourcustomers, has enabled us to deliver a record 2006 performance. "2007 has started well. Our markets are providing strong growth opportunitieswhich are expected to continue into 2007 and beyond. We have entered the yearwith a record opening and projected order book and the Group's prospects arevery encouraging. "I am confident that this year will be one of further good progress for theGroup." - Ends - Enquiries: Styles & Wood Group plc, Tel: 0161 926 6000 Gerard Quiligotti, Executive ChairmanNeil Davies, Chief ExecutiveGraham Clark, Director of Finance FD, Tel: 020 7831 3113 Billy Clegg / Susanne Walker NOTES TO EDITORS Styles & Wood employs approximately 380 staff and operates from four officeslocated in Altrincham (its headquarters), London, Nottingham and Milton Keynes. Styles & Wood provides its store development services to premier UK retailersthrough four distinct divisions: StoreFit is the Group's core operation and the UK's leading fit-out business tothe retail sector in revenue terms. The division provides project managementand implementation services for new store fit-out, existing store refurbishmentand extension programmes to its customers typically through long term frameworkarrangements. StorePlanning is Styles & Wood's retail design development division providing arange of services including surveying, space planning, design development andarchitectural services. StoreCare provides project management solutions that support retailers in theuse of their store portfolio once the new store or store refurbishment becomesoperational including planned maintenance, new merchandising layouts andpromotional activities. StoreData provides retailers with technology based property informationsolutions that can manage significant amounts of data about their propertyportfolios, including the provision of online information on design standards,cost and programme tracking. Styles & Wood floated on the London Stock Exchange in November 2006. For further information please visit the company website,www.stylesandwood.co.uk CHAIRMAN'S STATEMENT I am delighted to report another set of record results for the business in 2006- this represents thirteen consecutive years of profitable growth. The resultsfor the year are significantly ahead of 2005 with revenue up 57% to £268.6m(2005: £170.7m) and profit before tax of £7.5m (2005: £4.1m), an 84% increase onlast year. The adjusted profit margin, as described in note 3, increased to 4.2% (2005:3.5%). Basic and diluted earnings per share were both 8.1p (2005: 5.2p). Asoutlined at the time of the flotation, the Board is not recommending the paymentof a dividend for the year ended 31 December 2006, but expects to commencedeclaration of dividends with an interim dividend for the year ending 31December 2007. Flotation In November 2006, the Group completed a successful flotation on the London StockExchange at a share price of 150 pence per share valuing the Group at £96.7m andraising £16m net of expenses. The directors believe the listing raises thestanding of the Group in its market place and encourages improved allocationsfrom framework clients who recognise the Group's stronger financial covenant. Board of Directors In October 2006, three new non executive directors joined the Group Board - JimMartin, Robert Hough and Paul Mitchell. I look forward to their contribution andwise counsel as the business begins life as a public company. The Market The Group continues to serve a large and growing number of blue chip clients inthe retail sector across the UK where its focus is on major department storesand multiple retail outlets as well as food retail and the banking sector. The Group has a well earned reputation for superior customer service and highquality delivery reinforced by an innovative approach to retail propertysolutions. This approach ensures a strong base of Customers for Life who in 2006provided repeat and negotiated framework revenue of around 90%. We have alsoexperienced growing demand for the provision of support services from ourStorePlanning, StoreData and StoreCare businesses which together with ourStoreFit operation has created a compelling overall service offer. In 2006, these support services businesses contributed 25% to Group operatingprofits as well as bolstering and extending the long term framework arrangementswe have with clients. The result is significantly enhanced earnings visibilityand a strong projected order book. People We are continually seeking sustainable competitive advantage in the service weprovide our clients. Investment in people through training and development andinformation systems enhancement were key to last year's success. The Styles &Wood Academy continues to be an essential part of our training programme andprovides all colleagues with a wide and varied selection of personal developmentcourses which are closely aligned with the needs of our clients. On behalf of the board I would like to thank all colleagues for their hard workand high level of commitment in delivering this latest set of record resultswhich have significantly advanced the progress and prospects of our business. Outlook The Group is in excellent shape with strong and well respected brands performingdynamically in chosen market segments. Since the flotation, we have traded inline with expectations and entered 2007 with a record opening order book at£121.4m and record projected order book of £713.5m and as a result long termprospects are encouraging. The markets in which we operate remain demanding but they continue to offersubstantial opportunity. The strategy we have consistently pursued can continueto deliver profitable growth from a wider client and service base and our peopleare more than capable of sustaining that growth. I am confident that this yearwill be one of further excellent progress for the Group as we continue todeliver high quality earnings for our shareholders and long term prosperity forall stakeholders. Gerard E QuiligottiChairman21 March 2007 CHIEF EXECUTIVE REVIEW Introduction Styles & Wood has delivered a strong financial performance in a year ofsignificant progress in customer account management, process development andteam strengthening that will equip the business well for the future. The strategy of keeping existing customers and growing their investment with usthrough our Customer for Life programme continues to drive growth. We achievedrecord levels of repeat business, retention of all our existing frameworkarrangements and saw more customers engaging more of our services. We also attracted new customers in 2006 including Britannia, Lloyds TSB,Primark, Nationwide and Toys R Us - all important gains that will contribute to2007 and beyond. We have undoubtedly strengthened our position as a leading provider of propertysupport to Britain's major retailers through each of our services. All divisionsincreased their revenue and profit contributions with the newer fee basedbusinesses of StorePlanning, StoreCare and StoreData contributing 25% of Groupoperating profit. Operational Review STOREFIT StoreFit is the Group's core operation. It provides project management of newstore fit-out, existing store refurbishment and store extension programmes tomajor retailers. The majority of its business is secured under long termframework arrangements. 2006 2005 £m £m_____________________________________________________________________________________ Revenue 248.4 159.1Operating profit 8.4 4.5Adjusted operating margin 3.4% 2.8%_____________________________________________________________________________________ StoreFit delivered a very strong performance during the year driving anexceptional level of organic growth at 56%. It completed a record number ofprojects for customers in 2006, many whilst the retail operation of the storewas maintained. In Multiple Retail, we continued our relationship with Argos by completing aprogramme of six new ArgosExtra stores as well as installing new mezzaninetrading facilities into four existing stores. For Homebase we delivered threenew stores. We extended our relationship with Alliance Boots and during the yearcreated two new Boots Edge of Town stores as well as commencing a major roll outof store modernisations. We also created two trials called Best of Bothfeaturing elements of both the Alliance and Boots brands. We were successful in growing sales to the Food Sector in 2006. For Tesco, wecompleted a number of Two Tier Trading schemes using a new light weightmezzanine solution pioneered by Styles & Wood which delivered both cost and timebenefits to Tesco. We were also entrusted with the remodelling of Tesco'sflagship store in Kensington and were appointed sole supplier to Tesco for thecreation of four new Homeplus format stores. In December our efforts wererecognised by Tesco through their selection of Styles & Wood as Top PerformingProperty Supplier 2006 which will have a positive impact on work allocation aswe enter a new trading period. StoreFit had a record year with Waitrose, successfully delivering four major newacquisition stores and a total of 15 store modernisation schemes to a verydemanding programme. We were also very pleased to add J. Sainsbury to ourgrowing list of Food Retail clients. In Retail Banking, another strong performance was underpinned by a record yearwith Barclays as StoreFit was again awarded the major share of their branchdevelopment work. During the year, we completed the Woolwich to Barclaysconversion programme and undertook network schemes for Barclays WealthManagement. We secured and commenced delivery of a new three year frameworkarrangement with HBOS covering the modernisation of their office network and forHSBC we successfully completed three significant Retail Branch projects as partof their major three year network development programme. We were appointed as sole supplier to Britannia Building Society for the projectmanagement of the conversion of over 40 Bristol and West branches to theBritannia brand. The Royal Bank of Scotland and Lloyds TSB also featured tocomplete a year of significant growth in this important sector. In 2006 we strengthened our position in the Department Stores Sector as we wereagain entrusted with some of the largest and most prestigious developments. Marks and Spencer was the Group's biggest customer in 2006. The relationship isled by StoreFit and during the year we completed a total of 12 major storedevelopments all under business as usual conditions to give Marks and Spencercustomers a superb new shopping experience. We were pleased to secure Primark asa new customer and during the year delivered six brand new department storeswhich were all previously Littlewoods premises. For John Lewis Partnership, wedelivered the first important phase of Project Beacon which is the three yearprogramme of modernisation to their Oxford Street flagship as well as five othermajor store refurbishment projects around the UK. To complete a successful yearwith John Lewis Partnership we were awarded a major new store development atCambridge where work will commence in 2007. We anticipate continued progress for StoreFit in 2007 with further tradinggrowth expected in Food Retail and Retail Banking. STORECARE StoreCare supports the retailer in the use of their stores. It project managesthe installation of retail trading initiatives such as new merchandisinglayouts, seasonal promotions and decorations, as well as planned storemaintenance. With a team of regionally based project managers it delivers theseschemes whilst the store maintains normal trading conditions. 2006 2005 £m £m_____________________________________________________________________________________ Revenue 12.6 5.8Adjusted operating profit 1.6 0.5Adjusted operating margin 12.6% 8.4%_____________________________________________________________________________________ StoreCare delivered another exceptional year of growth in 2006 with growth inturnover of over 117%. Its service offer became more widely used by existingcustomers and growth was further fuelled with the securing of a number of newframework arrangements. In Multiple Retail, StoreCare continued to expand its framework arrangement withAlliance Boots completing a number of demanding programmes. These includedProject Hunter which saw StoreCare manage dilapidation improvements to over 400stores as well as the creation of 85 Night Time Pharmacy drug dispensarycentres. StoreCare increased its business with Food Retail customers in 2006 inparticular for Asda where it commenced work under a new three year frameworkarrangement. It secured a high volume of projects across a number of Asdaworkstreams including 24 hour Signage and the reconfiguration of over 50 storesto improve flow of goods. For Tesco StoreCare undertook car park developmentworks to improve traffic flow. In Retail Banking, StoreCare had a record year with Barclays Bank and commencedroll out works under a new three year arrangement with HBOS delivering a varietyof project management services to the bank's combined Halifax and Bank ofScotland estate. StoreCare has renewed its contract with Marks and Spencer in 2006 and expandedits role to include the management of Capital Expenditure, Retail InstoreInitiatives, Back of House upgrades to 100 stores as well as installation ofChristmas decorations. Overall, StoreCare performed exceptionally well in 2006 and we predict furthergrowth in this business as customers increasingly outsource project managementof annual store improvement and planned maintenance programmes. STOREPLANNING StorePlanning provides an outsourced store design service to major retailers.The service includes feasibility and technical surveys, space planning,architectural services and management of the design process. 2006 2005 £m £m_____________________________________________________________________________________ Revenue 6.0 4.6Adjusted operating profit 0.8 0.8Adjusted operating margin 13.5% 17.3%_____________________________________________________________________________________ StorePlanning grew its business by over 31% in 2006 which is satisfactory buthad a challenging year in terms of margins. Management changes implemented atthe start of 2006 are benefiting the business and improved commercial proceduresare seeing margins improve in 2007. During the year StorePlanning provided architectural and space planning servicesto Alliance Boots in support of a number of workstreams including their Edge ofTown store roll out programme, Best of Both trial stores and Late NightPharmacy. For Marks and Spencer business grew significantly as StorePlanningsupported their 2006 development programme producing store product layouts andspace planning services on a number of major refurbishment projects. In the Food Sector, StorePlanning increased volume with both Tesco and J.Sainsbury and in Retail Banking retained and grew our position as a leaddesigner to Barclays Bank. StorePlanning will continue to benefit from the improvements initiated in 2006and with a renewed focus on service delivery we anticipate continued growth in2007 and beyond. STOREDATA StoreData provides major retailers with technology based property informationsolutions that store and communicate critical data relating to their storeportfolio and associated property activity. This data can include design models,standards and specifications, asset registers as well as project specific data. 2006 2005 £m £m_____________________________________________________________________________________ Revenue 1.6 1.2Adjusted operating profit 0.4 0.2Adjusted operating margin 26.7% 15.7%_____________________________________________________________________________________ StoreData outperformed its Plan in 2006 although its penetration of newcustomers was slower than expected. We extended the Tesco property data system known as My Property to over 6,000licensed users to make this the largest system of its kind in the UK. During theyear we added new functionality to the system and extended the range ofproperties we manage. We also implemented the system into Ireland with theprospect of wider international coverage now emerging. StoreData secured a newframework arrangement with Nationwide to develop and support a new PropertyInformation System and for Barclays we created 'Barclays on a Page' which helpsin the coordination of activities throughout their 1,600 branch network. We anticipate continued progress for this business in 2007 as we are nowconfident in securing new customers who see the benefits, particularly costrelated, that can be gained from efficient storage and management of propertydata. Strategy Our Pathway series of strategic plans has provided the route map for the growthand development of Styles & Wood. As a management team we are proud of the waywe set out our objectives clearly - and then deliver them. In PathwayThree, our current plan, covering the three years to 31 December 2008,we have retained the business approach and procedures that have helped us reportthirteen years of unbroken sales and profit growth. • Purpose, Values and Aims The Management Team will continue to conduct business aligned to a set ofprinciples built around People, Customers and Service Innovation. • Group Financial Targets We have set out clear Cost and Revenue targets for every part of our businessfor each of the three years of PathwayThree. • Putting our People First Success will depend upon the performance of our people at all levels. We plan toinvest in them through The Styles & Wood Academy and expect them to continue toexcel. • Securing Customers for Life Everything we do is geared to attracting and retaining quality customers. Ourestablished Customer for Life Programme will be extended to secure long termcustomer relationships. We have also set challenging customer account targetsand set out how we plan to become the leading Food Sector and Retail Bankingsupplier. • Setting New Service Standards A new Five Point Plan will drive Right First Time Delivery in our business. Wewill raise our standards even further in five critical parts of servicedelivery: Right First Time Design, Project Information, Project Planning, ZeroDefects Completion and Smarter Handover. • The Service Model We will further develop our service model to become a leading Support Servicebusiness with both consultancy and delivery expertise. We will do this bybuilding the StorePlanning, StoreData and StoreCare businesses linking them evenmore closely to our StoreFit operation to create a single source propertysolution. We have called this programme of development The Think:Do ServiceModel. • Corporate and Social Responsibility Through our established Health, Safety and Environmental Management Systems andby extending the Styles & Wood in the Community Programme we will increase ourcommitment to the Corporate and Social Responsibility agenda. Successful IPO The Group's successful IPO in November 2006 has given us added opportunity topursue our strategic objectives. We have identified a number of new closelyrelated property support services we wish to add to our portfolio of services.Although at this stage we have excluded them from our financial targets we doexpect to pursue these successfully in the future. We may follow the sameorganic approach that we used for StorePlanning, StoreData and StoreCare or itmay be that these new business streams provide appropriate acquisition targetsfor us. Prospects During 2006 we have seen strong performances from all divisions with StoreFitand StoreCare performing particularly well. As our business grows, so too does the nature and breadth of opportunities thatare open to us. There are a number of strong market trends that I expect tocontinue into 2007 and beyond. These include more outsourcing by retailers ofproperty management, an acceleration in the store refurbishment cycle and anincrease in multi format retailing led by the supermarket operators. Add to thisa significant new shopping centre development programme which will see ourcustomers continue to acquire additional retail space. We will continue to focus on our customers' needs and build further on ourmarket leading position by delivering innovative property solutions. Our OpeningOrder Book and Projected Order Book are both at record levels. We have an established and talented management team at Styles & Wood and I amconfident we will continue to make strong progress. Neil A DaviesChief Executive21 March 2007 FINANCE DIRECTOR'S REVIEW Introduction This is the Group's first set of results as a listed company and the first yearthat the Group has prepared its financial statements under InternationalFinancial Reporting Standards ("IFRS"). Divisional Performance 2006 Store Planning StoreFit Store Care Store Data Total £'000 £'000 £'000 £'000 £'000________________________________________________________________________________________________________ Revenue 5,994 248,386 12,620 1,594 268,594________________________________________________________________________________________________________ Adjusted operating profit 810 8,403 1,584 425 11,222________________________________________________________________________________________________________ Adjusted margin 13.5% 3.4% 12.6% 26.7% 4.2%________________________________________________________________________________________________________ 2005 Store Planning StoreFit Store Care Store Data Total £'000 £'000 £'000 £'000 £'000________________________________________________________________________________________________________ Revenue 4,559 159,148 5,813 1,150 170,670________________________________________________________________________________________________________ Adjusted operating profit 787 4,501 488 181 5,957________________________________________________________________________________________________________ Adjusted margin 17.3% 2.8% 8.4% 15.7% 3.5%________________________________________________________________________________________________________ Financial performance Revenue increased by 57.3% to £268.6m (2005: £170.7m). Gross profit increased by57.4% to £23.5m (2005: £14.9m). Operating profit increased by 87.8% to £10.9m(2005: £5.8m) whilst adjusted operating profit increased by 88.4% to £11.2m(2005: £6.0m). Profit before tax increased by 84.4% to £7.5m (2005: £4.1m). The adjusted profit margin increased to 4.2% (2005: 3.5%). Basic and diluted earnings per share were both 8.1p (2005: 5.2p), an increase of55.8%. Cash generated from operating activities was £9.0m (2005: £12.2m), which equatesto a cash conversion ratio over the two year period to 31 December 2006 of123.3%. A summary of the financial performance of the divisions is shown in the tableabove. Other pleasing highlights of the year were the growth in both the StoreFit andStoreCare service provisions and the improvement in underlying margins inStoreFit, StoreCare and StoreData. StoreFit revenue increased by 56.1% to£248.4m (2005: £159.1m) whilst StoreCare revenue increased by 117.1% to £12.6m(2005: £5.8m). Each division increased its revenue and margin over 2005. The predominantly fee based services of StorePlanning, StoreCare and StoreDatatogether increased their contribution to the adjusted operating profit to 25%(2005: 24%). In a year of significant StoreFit revenue growth, this relativelysmall increase in contribution is a good achievement. During the year the Group relocated its Altrincham Head Office operations fromMerlin Court to Aspect House. As a result, a non recurring profit of £0.3m wascredited to the Income Statement. Costs directly attributable to the flotation of £0.6m were charged to the IncomeStatement with a further £0.4m charged against the share premium account and£0.3m charged against future cost of debt. Net finance costs rose by 95.8% to £3.4m as a result of the restructuring whichtook place on 1 December 2005. Future net finance costs will reducesignificantly because of the 39% reduction in financial liabilities in the yeartogether with the 1% reduction in margin negotiated with the Group's bankers atflotation. The flotation The flotation was undertaken primarily to establish a more appropriate capitalstructure for the next phase of the Group's growth strategy. The Directors alsobelieve that it will raise the profile of the Group within its commercialenvironment and incentivise staff at all levels. The total amount of new money raised at the flotation was £17.8m (gross ofexpenses). These funds were utilised as follows: £m____________________________________________________________________________________________________________ Repayment of loan stock 16.0____________________________________________________________________________________________________________ Payment of fees and expenses 1.8____________________________________________________________________________________________________________ Cash flow Cash and cash equivalents, before restricted cash balances, rose 17.9% to £9.0m(2005: £7.6m). Net debt reduced to £22.6m (2005: £43.1m). Cash of £9.0m (2005: £12.2m) was generated from operating activities, before thecash impact of the Head Office move. This equates to a cash conversion over thetwo year period to 31 December 2006 of 123.3%. It is more appropriate to viewthe two year period of cash generation as there was significant cash movementaround 31 December 2005, which was favourable to that year at the expense of theyear to 31 December 2006. Capital expenditure in the year was £0.9m (2005: £0.3m), which was higher thancan be expected in the future due to £0.5m spent on office equipment and IT atthe Group's new Head Office. The Group renegotiated terms with its bankers at flotation with the Royal Bankof Scotland plc agreeing to provide an overall facility of £32m. This newfacility, together with proceeds of the flotation allowed the repayment of£29.9m loan stock. Taxation The tax charge in the year amounted to £3.1m (2005: £1.3m). This represents aneffective tax charge on profit before tax of 41.2% (2005: 32.5%). This is higherthan the UK statutory rate 30.0%. The most significant factors affecting therate are the effect of non deductible expenses, primarily costs relating toadmission, and non deductible interest payable on the loan stock which has nowbeen repaid. In future years, the effective tax rate is expected to be more consistent withthe 2005 rate. Tax paid in the year increased to £1.7m (2005: £1.3m). Earnings per share Basic and diluted earnings per share were both 8.1p (2005: 5.2p), an increase of55.8%. The calculation of earnings per share has been adjusted retrospectivelyin both 2006 and 2005 for the bonus issue of 538 shares for each share inexistence at 1 November 2006. Details of the earnings per share calculation may be found in note 4. Post balance sheet events There are no significant post balance sheet events. Dividends The Board is not recommending the payment of a dividend for the year ended 31December 2006, but expects to commence declaration of dividends as a listedcompany with an interim dividend for the year ending 31 December 2007. Financial reporting In preparing the Group's financial statements under IFRS for the first time,reverse acquisition accounting has been applied. £57.9m of Goodwill shown in thebalance sheet under UK GAAP has been transferred to a reverse acquisitionreserve. In addition under reverse acquisition accounting, revenue reserves are£8.8m greater giving a total reverse acquisition reserve of £66.7m. All prior year comparatives have been restated and a full reconciliation of theIncome Statement for 2005 and the Balance Sheets for 2004 and 2005 were shown inthe Prospectus for Admission. The adoption of IFRS has no impact on the Group's strategy or its ability todeliver shareholder value in the future. Outlook The continued improvement in financial performance reflects the strategicactions that have been taken to focus the Group. These include the continuedgrowth of the contribution to operating profit from the StorePlanning, StoreCareand StoreData services together with the sustained organic growth of StoreFit. Cash management and cost control are essential to the Group's financialstrategy. The Group's financial position has been strengthened significantlyfollowing the flotation. Graham A ClarkDirector of Finance21 March 2007 Consolidated Income StatementFor the year ended 31 December 2006 2006 2005 Notes £'000 £'000______________________________________________________________________________________________________ Continuing operationsRevenue 2 268,594 170,670Cost of sales (245,075) (155,728)______________________________________________________________________________________________________ Gross profit 23,519 14,942Administrative expenses (12,634) (9,146)______________________________________________________________________________________________________ Operating profit 2,3 10,885 5,796Interest payable and similar charges (3,524) (1,897)Interest receivable 119 158______________________________________________________________________________________________________ Profit on ordinary activities before taxation 7,480 4,057Taxation (3,085) (1,317)______________________________________________________________________________________________________ Profit for the year attributable to equity shareholders 4,395 2,740______________________________________________________________________________________________________ Basic and diluted earnings per share expressed in pence per share 4 8.1p 5.2p______________________________________________________________________________________________________ Consolidated Balance SheetAs at 31 December 2006 2006 2005 £'000 £'000______________________________________________________________________________________________________ Non current assetsIntangible assets - software 197 173Property, plant and equipment 924 601Deferred tax asset 121 86______________________________________________________________________________________________________ 1,242 860______________________________________________________________________________________________________ Current assetsTrade and other receivables 36,806 19,189Cash and cash equivalents 11,120 9,888______________________________________________________________________________________________________ 47,926 29,077______________________________________________________________________________________________________ Current liabilitiesTrade and other payables (49,650) (34,464)Financial liabilities: borrowings (2,833) (2,390)Current tax liabilities (1,957) (563)______________________________________________________________________________________________________ (54,440) (37,417)______________________________________________________________________________________________________ Net current liabilities (6,514) (8,340)______________________________________________________________________________________________________ Total assets less current liabilities (5,272) (7,480)______________________________________________________________________________________________________ Non current liabilitiesFinancial liabilities: borrowings (30,841) (50,575)______________________________________________________________________________________________________ Net liabilities (36,113) (58,055)______________________________________________________________________________________________________ Shareholders' equityOrdinary share capital 645 1Share premium 17,339 -Reverse acquisition reserve (66,665) (66,665)Retained earnings 12,568 8,609______________________________________________________________________________________________________ Total shareholders' deficit (36,113) (58,055)______________________________________________________________________________________________________ Consolidated Cash Flow StatementFor the year ended 31 December 2006 2006 2005 Notes £'000 £'000______________________________________________________________________________________________________ Cash generated from operations 5 8,956 12,220Income taxes paid (1,727) (1,275)______________________________________________________________________________________________________ Net cash generated from operating activities 7,229 10,945______________________________________________________________________________________________________ Cash flows from investing activitiesPurchase of property, plant and equipment (792) (220)Purchase of intangible assets - software (128) (30)Proceeds from sale of property, plant and equipment 79 46Net cash impact on relocation of head office 366 -______________________________________________________________________________________________________ Net cash used in investing activities (475) (204)______________________________________________________________________________________________________ Cash flows from financing activitiesInterest received 119 27Interest paid (3,579) (1,677)Proceeds from issue of preference shares 50 -Redemption of loan stocks (29,890) (3,482)Redemption of preference shares (50) -Repayment of borrowings (1,875) (6,000)Net proceeds on issue of share capital 17,900 66Bank loans drawn down 12,625 -Cost of debt (339) -Cost of equity (353) -______________________________________________________________________________________________________ Net cash used in financing activities (5,392) (11,066)______________________________________________________________________________________________________ Net increase/(decrease) in cash and cash equivalents 1,362 (325)Cash and cash equivalents at beginning of period 7,610 7,935______________________________________________________________________________________________________ 8,972 7,610______________________________________________________________________________________________________ Notes to the Financial Statements 1. Basis of preparation The preliminary results have been prepared on the basis of the IFRS accountingpolicies set out in the Group's prospectus prepared for the Admission to theofficial list in November 2006. These accounting policies differ from those setout in the Group's 2005 UK GAAP financial statements following the transition toInternational Financial Reporting Standards ('IFRS'). 2005 comparative figureshave been adjusted to reflect IFRS policies. The financial information set out in this announcement does not constitute theGroup's statutory financial statements for the year ended 31 December 2006, butis extracted from those financial statements. The auditors have reported onthose financial statements and have given an unqualified report which does notcontain a statement under section 237 (2) or 237 (3) of the Companies Act 1985. 2. Segmental reporting Year ended 31 December 2006 Store Planning StoreFit StoreCare Store Data Unallocated Group £'000 £'000 £'000 £'000 £'000 £'000______________________________________________________________________________________________________________ Revenue 5,994 248,386 12,620 1,594 - 268,594______________________________________________________________________________________________________________ Segment result 810 8,403 1,584 425 (337) 10,885Interest expense (3,524)Interest income 119______________________________________________________________________________________________________________ Profit before tax 7,480Taxation (3,085)______________________________________________________________________________________________________________ Profit for the year from 4,395continuing operations______________________________________________________________________________________________________________ Net profit attributable to 4,395equity shareholders______________________________________________________________________________________________________________ Segment assets 1,367 27,376 6,896 308 - 35,947Unallocated assets - - - - 13,221 13,221______________________________________________________________________________________________________________ Total assets 1,367 27,376 6,896 308 13,221 49,168______________________________________________________________________________________________________________ Segment liabilities (709) (41,381) (4,037) (234) - (46,361)Unallocated liabilities - - - - (38,920) (38,920)______________________________________________________________________________________________________________ Total liabilities (709) (41,381) (4,037) (234) (38,920) (85,281)______________________________________________________________________________________________________________ 2. Segmental reporting (continued) Year ended 31 December 2005 Store Planning StoreFit StoreCare Store Data Unallocated Group £'000 £'000 £'000 £'000 £'000 £'000______________________________________________________________________________________________________________ Revenue 4,559 159,148 5,813 1,150 - 170,670Segment result 787 4,501 488 181 (161) 5,796Interest expense (1,897)Interest income 158______________________________________________________________________________________________________________ Profit before tax 4,057Taxation (1,317)______________________________________________________________________________________________________________ Profit for the year from 2,740continuing operations______________________________________________________________________________________________________________ Net profit attributable to 2,740equity shareholders______________________________________________________________________________________________________________ Segment assets 707 3,834 57 - - 4,598Unallocated assets - - - - 25,339 25,339______________________________________________________________________________________________________________ Total assets 707 3,834 57 - 25,339 29,937______________________________________________________________________________________________________________ Segment liabilities (245) (30,273) (1,614) - - (32,132)Unallocated liabilities - - - - (55,860) (55,860)______________________________________________________________________________________________________________ Total liabilities (245) (30,273) (1,614) - (55,860) (87,992)______________________________________________________________________________________________________________ The Group does not allocate property, plant and equipment or software tosegments and as a result cannot disclose depreciation or capital expenditure bysegment. As at 31 December 2006, the Group has allocated trade debtors across thesegments. However, there is insufficient information to provide this split forthe year to 31 December 2005. As a result, trade debtors for the prior year arereported as unallocated. Unallocated assets and liabilities also includes property, plant and equipment,software, cash and cash equivalents, interest payable, current and deferred taxliabilities and borrowings. The unallocated segment result reflects the Group's depreciation charge, net ofany gains or losses on the disposal of property, plant and equipment 3. Adjusted operating profit 2006 2005 £'000 £'000_____________________________________________________________________________________________________ Operating profit 10,885 5,796Restructuring costs - 161Non recurring profit on relocation of Head Office (note 4) (278) -Costs directly attributable to Admission 615 -_____________________________________________________________________________________________________ Adjusted operating profit 11,222 5,957_____________________________________________________________________________________________________ 4. Earnings per share Reconciliations of the earnings and the number of shares used in the calculationare set out below: Earnings per share calculation 2006 2005_____________________________________________________________________________________________________ Earnings attributable to equity holders of the Group (£'000) 4,395 2,740Weighted average number of shares 54,408,234 52,617,250_____________________________________________________________________________________________________ Basic and diluted earnings per share (pence per share) 8.1 5.2_____________________________________________________________________________________________________ The calculation of earnings per share has been adjusted retrospectively in 2006and 2005 for the bonus issue of 538 ordinary shares for each ordinary share heldon 1 November 2006. In 2005, reverse acquisition accounting was used to account for the insertion ofthe new holding company, Styles & Wood Group plc. For the purposes ofcalculating earnings per share for 2005, the number of shares deemed to beoutstanding for the period from 1 January 2005 to 1 December 2005 (the date ofthe acquisition) is taken to be the number of shares issued by Styles & WoodGroup plc at the time of the acquisition. Under IAS 33 "Earnings per share" any contingently issuable shares are treatedas outstanding and are included in the calculation of basic earnings per shareonly from the date when all necessary conditions are satisfied. The Group has nocontingently issuable shares. Accordingly, there is no difference between basicand diluted earnings per share. 5. Notes to the cash flow statement Group 2006 2005 £'000 £'000_____________________________________________________________________________________________________ Profit for the year 4,395 2,740Adjustments for:Interest payable and similar charges 3,524 1,897Taxation 3,085 1,317Interest receivable (119) (158)Depreciation and amortisation 406 411Net profit on relocation of Group Head Office (366) -Loss/(profit) on disposal of property, plant and equipment 88 (20)_____________________________________________________________________________________________________ Operating cash flows before movement in working capital 11,013 6,187Changes in working capital:(Increase)/decrease in trade and other receivables (17,617) 1,042Increase in trade and other payables 15,560 4,991_____________________________________________________________________________________________________ Cash generated from operations 8,956 12,220_____________________________________________________________________________________________________ This information is provided by RNS The company news service from the London Stock Exchange