REG - Maintel Holdings PLC - Interim Results for the 6 months to 30 June 2015 <Origin Href="QuoteRef">MAIH.L</Origin> - Part 2
08/09/2015 07:01
- Part 2: For the preceding part double click ID:nRSH3394Ya
(1)
Depreciation charge 103 91 184
Interest received - - (2)
Interest payable 139 46 135
Operating cash flows before changes in working capital 3,452 2,916 5,597
Decrease/(increase) in inventories 50 (360) (94)
(Increase)/decrease in trade and other receivables (159) (410) 1,403
(Decrease)/increase in trade and other payables (3,456) 394 197
Cash (consumed by)/generated from operating activities (113) 2,540 7,103
Tax paid (761) (572) (1,049)
Net cash flows from operating activities (874) 1,968 6,054
Investing activities
Purchase of plant and equipment (51) (40) (87)
Proceeds from disposal of plant and equipment 2 7 6
Purchase price in respect of business combination - - (11,994)
Net cash acquired with subsidiary undertaking - - 3,526
- - (8,468)
Interest received - - 2
Net cash flows from investing activities (49) (33) (8,547)
Financing activities
Proceeds from borrowings - - 10,000
Repayment of borrowings (800) (500) (2,750)
Interest payable (139) (46) (135)
Issue of new ordinary shares 54 - 88
Equity dividends paid (1,243) (961) (1,954)
Net cash flows from financing activities (2,128) (1,507) 5,249
Net (decrease)/increase in cash and cash equivalents (3,051) 428 2,756
Cash and cash equivalents at start of period 3,347 544 544
Exchange differences 54 - 47
Cash and cash equivalents at end of period 350 972 3,347
Cash and cash equivalents at end of period
350
972
3,347
Maintel Holdings Plc
Notes to the interim financial information
1. Basis of preparation
The financial information in these interim results is that of the holding
company and all of its subsidiaries (the Group). It has been prepared in
accordance with the recognition and measurement requirements of International
Financial Reporting Standards as adopted for use in the EU (IFRSs) but does
not include all of the disclosures that would be required under IFRSs. The
accounting policies applied by the Group in this financial information are the
same as those applied by the Group in its financial statements for the year
ended 31 December 2014 and which will form the basis of the 2015 financial
statements.
A number of amendments to and interpretations of existing standards have
become effective for periods beginning on 1 January 2015, but no new
standards; none of these is expected to materially affect the Group.
The Group's results are not materially affected by seasonal variations.
The comparative financial information presented herein for the year ended 31
December 2014 does not constitute full statutory accounts for that period. The
Group's annual report and accounts for the year ended 31 December 2014 have
been delivered to the Registrar of Companies. The Group's independent
auditor's report on those statutory accounts was unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a statement
under 498(2) or 498(3) of the Companies Act 2006.
The financial information for the half-years ended 30 June 2015 and 30 June
2014 is unaudited but has been subject to a review in accordance with
International Standard on Review Engagements (UK and Ireland) 2410, ''Review
of Interim Financial Information Performed by the Independent Auditor of the
Entity''.
In preparing the interim financial statements the Directors have considered
the Group's financial projections, borrowing facilities and other relevant
financial matters, and the Board is satisfied that there is a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. For this reason the Directors continue
to adopt the going concern basis in preparing the financial statements.
2. Segmental information
For management reporting purposes and operationally, the Group consists of
three business segments: (i) telecommunications managed service and technology
sales, (ii) telecommunications network services, and (iii) mobile services.
Each segment applies its respective resources across inter-related revenue
streams which are reviewed by management collectively under these headings.
The businesses of each segment and a further analysis of revenue are described
under their respective headings in the business review. The Datapoint business
is reported under the managed service and technology division as it is managed
and measured as part of that division; Proximity is similarly reported apart
from £264,000 of revenue and its associated margin which relates to the
network services segment.
Six months to 30 June 2015 (unaudited)
Managed service and technology Network services Mobile Central/ inter- company Total
£000 £000 £000 £000 £000
Revenue 19,180 4,267 1,430 (127) 24,750
Operating profit before customer relationship intangibles amortisation and exceptional costs 2,668 527 258 (4) 3,449
Customer relationship intangibles amortisation (126) - - (992) (1,118)
Exceptional costs (98) - - - (98)
Operating profit 2,444 527 258 (996) 2,233
Interest (139)
Profit before taxation 2,094
Taxation (287)
Profit after taxation 1,807
(287)
Profit after taxation
1,807
Further analysis of revenue streams is shown in the business review.
Intercompany trading consists of telecommunications services, and recharges of
sales, engineering and rent costs, £86,000 (H1 2014: £43,000) attributable to
the managed service and technology segment, £38,000 (H1 2014: £39,000) to the
network services segment and £3,000 (H1 2014: £4,000) to the mobile segment.
Managed service and technology Network services Mobile Central/ inter- company Total
£000 £000 £000 £000 £000
Other
Capital expenditure 51 - - - 51
Depreciation 103 - - - 103
-
-
-
51
Depreciation
103
-
-
-
103
Six months to 30 June 2014 (unaudited)
Managed service and technology Network services Mobile Central/ inter- company Total
£000 £000 £000 £000 £000
Revenue 15,942 3,448 1,358 (86) 20,662
Operating profit before customer relationship intangibles amortisation and exceptional costs 1,995 535 386 (11) 2,905
Customer relationship intangibles amortisation (126) (24) - (517) (667)
Exceptional costs (78) - - - (78)
Operating profit 1,791 511 386 (528) 2,160
Interest (net) (46)
Profit before taxation 2,114
Taxation (446)
Profit after taxation 1,668
(446)
Profit after taxation
1,668
£000 £000 £000 £000 £000
Other
Capital expenditure 40 - - - 40
Depreciation 91 - - - 91
Depreciation
91
-
-
-
91
Year ended 31 December 2014 (audited)
Managed service and technology Network services Mobile Central/ inter- company Total
£000 £000 £000 £000 £000
Revenue 31,993 7,156 2,907 (166) 41,890
Operating profit before customer relationship intangibles amortisation and exceptional costs 4,418 1,027 764 14 6,223
Customer relationship intangibles amortisation (252) (28) - (1,192) (1,472)
Exceptional costs (312) - - (497) (809)
Operating profit 3,854 999 764 (1,675) 3,942
Interest (net) (133)
Profit before taxation 3,809
Taxation (865)
Profit after taxation 2,944
(865)
Profit after taxation
2,944
£000 £000 £000 £000 £000
Other
Capital expenditure 87 - - - 87
Depreciation 183 - 1 - 184
Depreciation
183
-
1
-
184
Revenue is wholly attributable to the principal activities of the Group and
other than sales of £3,291,000 to EU countries and £378,000 to the rest of the
world, arises within the United Kingdom.
Intercompany trading consists of telecommunications services, and recharges of
sales, engineering and rent costs, £81,000 attributable to the managed service
and technology segment, £79,000 to the network services segment and £6,000 to
the mobile segment.
3. Earnings per share
Earnings per share is calculated by dividing the profit after tax for the
period by the weighted average number of shares in issue for the period, these
figures being as follows:
6 months to 30 June 2015 6 months to 30 June 2014 Year to 31 December 2014
£000 £000 £000
(unaudited) (unaudited) (audited)
Earnings used in basic and diluted EPS, being profit after tax 1,807 1,668 2,944
Adjustments: Amortisation of intangibles 1,118 667 1,472
Exceptional costs (note 6) 98 78 809
Tax relating to above adjustments (264) (167) (396)
Deferred tax charge on Datapoint profits 179 - 161
Adjusted earnings used in adjusted EPS 2,938 2,246 4,990
The adjustments above have been made in order to provide a clearer picture of the trading performance of the Group. Datapoint
has brought forward tax losses, so that it will pay no tax in respect of its 2015 profits. On acquisition, however, a deferred
tax asset was recognised in respect of its tax losses, and a deferred tax charge has been recognised in the income statement in
respect of the period's profits. As this does not reflect the reality and benefit to the Group of the non-taxable profits, the
deferred tax charge is adjusted above.
6 months to 30 June 2015 6 months to 30 June 2014 Year to 31 December 2014
Number 000s Number 000s Number 000s
Weighted average number of ordinary shares of 1p each 10,739 10,675 10,676
Potentially dilutive shares 140 186 165
10,879 10,861 10,841
Year to 31 December 2014
Number 000s
Number 000s
Number
000s
Weighted average number of ordinary shares of 1p each
10,739
10,675
10,676
Potentially dilutive shares
140
186
165
10,879
10,861
10,841
Earnings per share
Basic 16.8p 15.6p 27.6p
Basic and diluted 16.6p 15.4p 27.2p
Adjusted - basic but after the adjustments in the table above 27.4p 21.0p 46.7p
Adjusted - basic and diluted after the adjustments in the table above 27.0p 20.7p 46.0p
27.0p
20.7p
46.0p
In calculating diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all dilutive
potential ordinary shares. The Group has one category of potentially dilutive
ordinary share, being those share options granted to employees where the
exercise price is less than the average price of the Company's ordinary shares
during the period.
4. Earnings before interest, tax, depreciation and amortisation (EBITDA)
The following table shows the calculation of EBITDA and adjusted EBITDA:
6 months to 30 June 2015 6 months to 30 June 2014 Year to 31 December 2014
£000 £000 £000
(unaudited) (unaudited) (audited)
Profit before tax 2,094 2,114 3,809
Interest payable 139 46 133
Depreciation of property, plant and equipment 103 91 184
Amortisation of customer relationship intangibles 1,118 667 1,472
EBITDA 3,454 2,918 5,598
Exceptional Costs 98 78 809
Adjusted EBITDA 3,552 2,996 6,407
5,598
Exceptional Costs
98
78
809
Adjusted EBITDA
3,552
2,996
6,407
5. Dividends
6 months to 30 June 2015 6 months to 30 June 2014 Year to 31 December 2014
£000 £000 £000
(unaudited) (unaudited) (audited)
Dividends paid
Final 2013, paid 24 April 2014
- 9.0p per share - 961 961
Interim 2014, paid 3 October 2014
- 9.3p per share - - 993
Final 2014, paid 1 May 2015
- 11.6p per share 1,243 - -
1,243 961 1,954
1,243
961
1,954
The directors propose the payment of an interim dividend for 2015 of 12.8p
(2014: 9.3p) per ordinary share, payable on 7 October 2015 to shareholders on
the register at 18 September 2015. The cost of the proposed dividend, based
on the number of shares in issue as at 7 September 2015, is £1.4m (2014:
£993,000).
6. Exceptional costs
On 24 October 2014 the Company acquired the entire issued share capital of
Proximity Communications Limited. Legal and professional costs of £497,000
were incurred in 2014 in relation to the acquisition of Proximity, together
with redundancy costs of £312,000 as a result of synergies achieved following
the acquisition and that of Datapoint the previous year. Further
redundancy-related costs of £98,000 were incurred in H1 2015 and these costs
have also been treated as exceptional in the income statement as they are not
normal operating expenses.
7. Borrowings
30 June 2015 30 June 2014 31 December 2014
£000 £000 £000
(unaudited) (unaudited) (audited)
Non-current bank loan - secured 7,200 1,250 7,500
Current bank loan - secured 2,000 1,000 2,500
9,200 2,250 10,000
9,200
2,250
10,000
On 24 October 2014 the Group entered into a £13.0m facility agreement with
Lloyds Bank plc to support the acquisition of Proximity, replacing its
previous facilities with Lloyds. This was split between a £6.0m term loan and
a £7.0m revolving credit facility, the latter incorporating a £1.0m overdraft
facility.
The term loan - shown above - is repayable in quarterly instalments over a 3
year period. The revolving credit facility is due for renewal on 24 October
2017 and the overdraft facility is due for renewal on 1 November 2015.
The current element of the bank loan of £2.0m (30 June 2014: £1.0m) is
included within trade and other payables.
Independent review report to Maintel Holdings Plc
Introduction
We have been engaged by the company to review the financial information in the
interim results for the six months ended 30 June 2015 which comprises the
consolidated statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of changes in equity, the
consolidated statement of cash flows, and explanatory notes.
We have read the other information contained in the interim results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim results, including the financial information contained therein,
are the responsibility of and have been approved by the directors. The
directors are responsible for preparing the interim results in accordance with
the rules of the London Stock Exchange for companies trading securities on AIM
which require that the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the financial
information in the interim results based on our review.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting the requirements of the rules of the London
Stock Exchange for companies trading securities on AIM and for no other
purpose. No person is entitled to rely on this report unless such a person is
a person entitled to rely upon this report by virtue of and for the purpose of
our terms of engagement or has been expressly authorised to do so by our prior
written consent. Save as above, we do not accept responsibility for this
report to any other person or for any other purpose and we hereby expressly
disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'', issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the financial information in the interim results for the six
months ended 30 June 2015 is not prepared, in all material respects, in
accordance with the rules of the London Stock Exchange for companies trading
securities on AIM.
BDO LLP
Chartered Accountants and Registered Auditors
London
7 September 2015
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127)
This information is provided by RNS
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