Interim Results

AukettFitzroyRobinson – Press Release

8 June 2007

AUKETT FITZROY ROBINSON GROUP PLC

2007 INTERIM RESULTS ANNOUNCEMENT

 

Aukett Fitzroy Robinson Group Plc (“Aukett Fitzroy Robinson”), the international group of architects and designers, announces its Interim Results for the six months ended 31 March 2007. Aukett Fitzroy Robinson provides creative design, commercial awareness and efficient delivery of high quality projects; with specific expertise in offices, retail, interiors, hotels, transportation, residential, urban and landscape design, industrial, historic buildings, mixed-use and leisure facilities.

 

Financial Highlights
Six months ended 31 March	2007	2006
	unaudited	unaudited
Group turnover	£9.42m	£6.86m
Operating profit	£1,282k	£137k
Profit before tax	£1,264k	£47k
Earnings per share	0.58p	0.01p

 

Key Points of Statement:

 

*	Profit before tax rises to £1,264k from £47k
*	Margin increase to 13.4%
*	Turnover rises 37.4% to £9.42m

 

CEO Nicholas Thompson said:

 

“We see the second half maintaining progress made to date and the Group is expected to exceed market expectations for the current year through margin improvements.”

 

Enquiries:

Aukett Fitzroy Robinson Group Plc www.aukettfitzroyrobinson.com

Aukett Fitzroy Robinson Group Plc	www.aukettfitzroyrobinson.com
Nicholas Thompson, CEO	Tel: 020 7636 8033
Chris Steele, Adventis	Tel: 020 7034 4759
Sam Smith, JM Finn & Co – Corporate Finance	Tel: 020 7600 1660

 

AUKETT FITZROY ROBINSON GROUP PLC

Interim Statement for the six months ended 31 March 2007

 

 

Overview

The Group’s financial performance in the first six months of the year shows a further improvement over prior year with profit before tax increasing to £1,264,000 (interim 2006: £47,000) and net margins increasing from 0.7% to 13.4%. Adjusted profit before tax and before staff bonuses and charge for the exercise of share options was £1,718,000 a net margin of 18.2%.

This result reflects a general improvement in all Group operations with the exception of Poland, where an operating loss of £18,000 (interim 2006: loss £55,000) was recorded for the half year following management’s decision to write off the balance sheet value of net Work in Progress (amounts recoverable on contracts).

Summary of Results

Unaudited Group turnover for the six months has increased to £9,423,000 from £6,860,000 an increase of 37.4% which is in line with management expectations.

Group operating profit has increased to £1,282,000 (interim 2006: £137,000). After accounting for our share of joint venture profits of £34,000 (interim 2006: £nil), exceptional charges of £nil (interim 2006: £15,000), net interest payable of £52,000 (interim 2006: £75,000) and taxation of £415,000 (interim 2006: £38,000) retained profit for the period is £849,000 (interim 2006: £9,000).

Group net borrowings were eliminated during the first half creating a net cash surplus of £463,000 (interim 2006: net borrowings £1,590,000)

Revenue Recognition

Amounts recoverable on contracts at 31 March 2007 of £912,000 (interim 2006: £984,000) represents 18 days (interim 2006: 26 days) of Group turnover on an annualised basis, which management consider is fairly stated. The Group recognises revenue on a prudent basis by careful assessment of its income on a contract-by-contract basis taking into account the work stage complete and any associated commercial risk.

Operations

In order to provide further support to the Group’s expansion plans, the management and operational structure of the Group was reorganised in April 2007. This reorganisation identified four new operational units, three in the UK and one in Europe covering Russia and Central and Eastern Europe with separate support services functions including Innovation, Design & Delivery; Client Relations & Marketing; and Finance. Key staff have been appointed to each operational or services board, based upon our career development programme, which includes non-Directors at board level. As previously announced, the Group appointed Finance Professionals, an executive search firm, to find a replacement for Mr Carter who left the company on 12 th April 2007. A replacement Finance Director has now been found and is due to join the Group on or before 8 th August 2007.

The past six months has seen a regular flow of enquiries from our existing client portfolio including Asda, Castlemore, Fenwick, Macquarie Goodman (which encompasses two development clients: Arlington and Akeler), Marks & Spencer, St Martin’s Property along with continuing instructions under our framework agreements with Thameslink. New European commissions are being undertaken for HSBC and Microsoft. We continue to benefit from our position in the architecture market for high quality, one-off projects as exemplified by the instruction from Dunhill to be the architect for their new concept store in London’s West End. New enquiries received by the Group feature both a larger scale and an increased volume of future project opportunities than previously undertaken.

Corporate Outlook

Two of the Group’s key objectives are to double annual turnover to £25m by 2010 and raise net profit margins. These interim results, which are derived from organic growth, underline our progress towards these two objectives.

The UK market for architectural services remains buoyant and we are currently operating at near full capacity. This level of UK market activity is also mirrored in our Russian and Central and Eastern European operations. Where necessary, management has shortened the interval between remuneration reviews to alleviate near term salary expectations. It is unlikely that such additional costs can be passed on through contract pricing and management attention will remain focused upon lowering operational overheads and improving productivity to balance this equation. Management’s decision to address the half year trading deficit in Poland is a reflection on the location which remains central to both our service offer to European clients through our network of offices and to our off-shoring strategy. We expect the operation to trade at breakeven during the second half of the year,

We now have 9 signed contracts in Russia totalling $800m of construction value covering 5.2 million square feet of building development. We believe that the Russian property market will continue to grow for some years to come based upon internal investment funding led by indigenous Russian developers.

We continue to review opportunities. Our policy is to pursue only those opportunities that can add real commercial value and enhance our existing business offer.

Prospects

In our annual report we referred to an anticipated return to a dividend payment policy. To effect a dividend payment requires a reduction in the capital of the Company and the Court procedure necessary to achieve this was approved by the Board in April of this year. Once this procedure is complete we expect to announce a dividend as a gesture of our confidence in future prospects.

We see the second half maintaining progress made to date and the Group is expected to exceed market expectations for the current year through margin improvements.

8 June 2007

Aukett Fitzroy Robinson Group Plc

14 Devonshire Street

London W1G 7AE

Consolidated profit and loss account
For the six months ended 31 March 2007
	Six months ended 31 March 2007					Six months ended 31 March 2006	Year ended 30 September 2006
				Unaudited		unaudited	audited
				£000		£000	£000
Gross turnover: Group and share of joint ventures				9,751		7,013	16,677
Less share of joint ventures				(328)		(153)	(393)
				———		———	———
Group turnover (note 1)				9,423		6,860	16,284
				———		———	———
Group operating profit (note 2)				1,282		137	840
Share of operating profit in joint ventures and associate				34		–	83
Exceptional charge: Loss on disposal of subsidiary and joint ventures				– ———		(15) ———	(15) ———
Profit on ordinary activities before interest   Interest receivable Interest payable				1,316   7 (59)		122   5 (80)	908 44 (166)
				———		———	———
Profit on ordinary activities before tax (note 3)				1,264		47	786
Tax charge on profit on ordinary activities (note 4)				(415)		(38)	(137)
				———		———	———
Retained profit of the Group				849		9	649
				=====		=====	=====
Earnings per share (note 5):
Basic				0.58p		0.01p	0.45p
Diluted				0.58p		0.01p	0.45p

 

Summarised consolidated balance sheet
At 31 March 2007
	31 March 2007		31 March 2006		30 September 2006
	unaudited		unaudited		audited
	£000		£000		£000
Fixed assets
Intangible assets	1,570		1,622		1,596
Tangible assets	257		339		322
Investment in joint ventures and associate	36		31		25
	———-		———-		———-
	1,863		1,992		1,943
Current assets
Debtors	8,228		6,447		6,432
Cash at bank and in hand	1,873		816		1,341
	———-		———-		———-
	10,101		7,263		7,773
Creditors falling due within one year	(6,903)		(5,675)		(5,588)
	———-		———-		———-
Net current assets	3,198		1,588		2,185
	———-		———-		———-
Total assets less current liabilities	5,061		3,580		4,128
Creditors falling due after one year	(1,087)		(1,200)		(1,162)
	———-		———-		———-
Net assets	3,974		2,380		2,966
	======		======		======
Capital and reserves
Share capital	1,456		1,448		1,448
Share premium account	1,498		1,385		1,385
Merger reserve	1,542		1,542		1,542
Profit and loss account	(522)		(1,995)		(1,409)
	———-		———-		———-
Equity shareholders’ funds	3,974		2,380		2,966
	======		======		======

 

 

Summarised consolidated cash flow statement
For the six months ended 31 March 2007
	Six months ended 31 March 2007 unaudited		Six months ended 31 March 2006 unaudited		Year ended 30 September 2006 audited
	£000		£000		£000
Net cash flow from operating activities	771		13		1,716
Returns on investments and servicing of finance	(52)		(75)		(122)
Tax paid	(68)		–		(65)
Capital expenditure	(42)		(145)		(326)
	———-		———-		———-
Net cash inflow/(outflow) before financing	609		(207)		1,203
Net cash outflow from financing	(77)		(20)		(76)
	———-		———-		———-
Increase/(Decrease) in cash during the period	532		(227)		1,127
======		======		======
Reconciliation of operating loss to net cash flow from operating activities
Group operating profit	1,282		137		840
Depreciation and amortisation of fixed assets	132		182		337
Loss on disposal of fixed assets	–		–		61
Share Options expense	85		–		–
Increase in debtors	(1,816)		(536)		(634)
Increase in creditors	1,088		230		1,112
	———-		———-		———-
Net cash flow from operating activities	771		13		1,716
	======		======		======

 

 

Statement of total recognised gains and losses

For the six months ended 31 March 2007

	Six months ended 31 March 2007 unaudited   £000	Six months ended 31 March 2006 unaudited   £000	Year ended 30 September 2006 audited   £000
Profit for the financial period	849	9	649
Currency translation differences	38	41	(13)
	———-	———-	———-
Total recognised gains and losses since last annual report	887	50	636
	======	======	======

 

 

Reconciliation of movements in shareholders’ funds

For six months ended 31 March 2007

31 March 2007 unaudited £000	30 September 2006 audited £000
Opening shareholders’ funds	2,966	2,330
Foreign exchange gain/(loss)	38	(13)
New shares issued	121	–
Profit attributable to shareholders	849	649
	———-	———-
Closing shareholders’ funds	3,974	2,966
	======	======

 

Notes

 

1 Amounts invoiced to clients and turnover

 

An analysis of amounts invoiced to clients and turnover of the Group by geographical area of destination is as follows:

 

	Six months ended 31 March 2007 unaudited £000		Six months ended 31 March 2006 unaudited £000	Year ended 30 September 2006 audited £000
Amounts invoiced to clients
United Kingdom	8,608		5,545	12,908
Rest of Europe	1,746		1,340	4,024
	———-		———-	———-
Total	10,354		6,885	16,932
	======		======	======
Movements in amounts recoverable on contracts
United Kingdom	(953)		325	127
Rest of Europe	22		(350)	(775)
	———-		———-	———-
Total	(931)		(25)	(648)
	======		======	======
Turnover
United Kingdom	7,655		5,870	13,035
Rest of Europe	1,768		990	3,249
	———-		———-	———-
Total	9,423		6,860	16,284
	======		======	======

 

 

2 Group operating profit

	Six months ended 31 March 2007 unaudited £000	Six months ended 31 March 2006 unaudited £000	Year ended 30 September 2006 audited £000
Amounts invoiced to clients	10,354	6,885	16,932
Movement in amounts recoverable on contracts	(931)	(25)	(648)
	———-	———-	———-
Group turnover	9,423	6,860	16,284
Other income	71	59	27
Staff costs	(4,148)	(3,612)	(7,271)
Amortisation of goodwill	(25)	(25)	(51)
Depreciation	(107)	(157)	(286)
Loss on disposal	–	–	(61)
Other operating charges	(3,932)	(2,988)	(7,802)
	———-	———-	———-
Group operating profit	1,282	137	840
	======	======	======

 

 

3 Profit on ordinary activities before tax

 

An analysis of profit on ordinary activities before tax by geographical area is set out below. Consolidation adjustments are included under the United Kingdom.

 

	Six months ended 31 March 2007 unaudited £000	Six months ended 31 March 2006 unaudited £000	Year ended 30 September 2006 audited £000
United Kingdom	918	60	428
Rest of Europe	346	(13)	358
	———-	———-	———-
Total	1,264	47	786
	======	======	======

 

 

4 Tax charge on profit on ordinary activities

 

	Six months ended 31 March 2007 unaudited £000	Six months ended 31 March 2006 unaudited £000	Year ended 30 September 2006 audited £000
United Kingdom corporation tax at 30%	(301)	–	–
Overseas tax	(103)	(38)	(126)
Share of tax from joint ventures and associate	(11)	–	(1)
Adjustment to prior year provision	–	–	(36)
	———-	———-	———-
Tax charge on profit for period	(415)	(38)	(163)
Deferred tax	–	–	26
	———-	———-	———-
	(415)	(38)	(137)

 

 

5 Earnings per share

 

The earnings per share is calculated on the profit attributable to shareholders of £849,000 for the six months ended 31 March 2007 (2006 interim: £9,000; 2006 final: £649,000) and on 145,077,414 (2006 interim: 144,813,825; 2006 final: 145,413,825)ordinary shares, being the weighted average number of shares in issue during the period. The diluted profit per share attributable to shareholders is calculated on 145,634,369 ordinary shares (2006 interim: 145,413,825; 2006 final: 145,413,825).

 

6 Analysis of net debt

•  

An analysis of the movement in net debt during the period is as follows:

 

 

	At 1 October 2006	Cash flow	Non-cash movements	At 31 March 2007
	£000	£000	£000	£000
Cash at bank and in hand	1,341	532	–	1,873
	———-	———-	———-	———-
	1,341	532	–	1,873
	———-	———-	———-	———-
Bank loans and other loans repayable in:
Less than one year	(150)	75	(75)	(150)
More than one year	(1,162)	–	75	(1,087)
Hire purchase and finance lease creditors	(9)	–	–	(9)
	———-	———-	———-	———-
	(1,321)	75	–	(1,246)
	———-	———-	———-	———-
Net debt	20	607	–	627
	———-	———-	———-	———-
5% loan note repayable in less than one year	(200)	36	–	(164)
	———-	———-	———-	———-
	(200)	36	–	(164)
	———-	———-	———-	———-
Net Cash / (Borrowings)	(180)	643	–	463
	======	======	======	======

 

 

7 Statutory accounts

 

The comparative figures for the year ended 30 September 2006 have been derived from the Company’s statutory accounts for that financial year. Statutory accounts for that financial year have been reported on by the Company’s auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.

8 Basis of preparation

 

The financial statements comply with relevant accounting standards and the Companies Act 1985 and have been prepared on a consistent basis using the same accounting policies as set out in the 2006 Annual Report.

 

9 Further information

 

Further information about the Group, including copies of the 2006 annual report, additional copies of this interim report and recent press releases sent to the London Stock Exchange, may be obtained from the Company’s registered office at 14 Devonshire Street, London W1G 7AE. Such information may also be obtained through the Company’s website at www.aukettfitzroyrobinson.com. The interim report is expected to be mailed to shareholders on or before 30 June 2007.