REG-Matchtech Group PLC Interim Results - Part 3

Released : 17/03/08 07:02

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RNS Number:1971Q 
Matchtech Group PLC  
Part  3 : For preceding part double-click [nRN1Q1971Q] 
 
 
 
 
(iI) Seasonality 
 
 
With the first half of the financial year including holiday seasons in August 
and at Christmas when recruitment activity is quieter than normal, the second 
half of the year generally produces stronger results. Revenue in the 6 months to 
31 January 2007 excluding discontinued operations represented 46% of the annual 
total. 
 
           4   INCOME TAX EXPENSE 
 
Analysis of charge in the year 
 
                                          6 months      6 months     12 months 
                                       to 31/01/08   to 31/01/07   to 31/07/07 
                                         Unaudited     Unaudited     Unaudited 
                                           £'000         £'000         £'000 
Total income tax expense                   1,729         1,169         2,356 
 
The total tax charge is lower than the standard rate of corporation tax. The 
differences are detailed below: 
 
Profit before tax                          5,671         4,129         9,871 
 
Corporation Tax at current rate of 
30%                                        1,701         1,239         2,961 
 
Deferred tax on timing differences             7           (38)          (16) 
Expenses not deductible for tax 
purposes                                      88            50           114 
Exceptional items not deductible for 
tax purposes                                   0           172           172 
Difference between depreciation and 
capital allowances for the period             10             8             3 
Under provision for previous years             0             0             1 
Tax loss on EBT loss/profit                    0             3             4 
Tax relief on cost of options 
exercised in year                            (77)         (251)         (902) 
Tax effect of IFRS transitional 
arrangements                                   0           (14)           19 
                                          --------      --------      -------- 
Total UK tax charge                        1,729         1,169         2,356 
 
 
 
        5   DISCONTINUED OPERATIONS 
 
On 31st August 2006 Matchtech Group UK Ltd sold the shares of Matchtech Inc for 
consideration of £105,000, giving a profit on disposal of £59,000. The profit 
from Matchtech Inc has been included under discontinued operations in the 
condensed consolidated income statement. The income statement of Matchtech Inc 
is set out below. 
 
DISCONTINUED OPERATIONS                   6 months      6 months     12 months 
                                       to 31/01/08   to 31/01/07   to 31/07/07 
                                         Unaudited     Unaudited     Unaudited 
                                           £'000         £'000         £'000 
Revenue                                        0           135           135 
Cost of Sales                                  0          (117)         (117) 
                                       -----------    ----------     --------- 
GROSS PROFIT                                   0            18            18 
 
Administrative expenses                        0           (10)          (10) 
                                       -----------    ----------     --------- 
OPERATING PROFIT                               0             8             8 
 
Finance income                                 0             0             0 
Finance cost                                   0             0             0 
                                       -----------    ----------     --------- 
PROFIT BEFORE TAX                              0             8             8 
 
Income tax expense                             0            (3)           (3) 
Foreign exchange gain                          0             3             3 
                                       -----------    ----------     --------- 
PROFIT FROM DISCONTINUED OPERATIONS            0             8             8 
                                       ===========    ==========     ========= 
 
 
 
                    6   DIVIDENDS 
 
Dividends on shares classed as equity      6 months     6 months    12 months 
                                        to 31/01/08  to 31/01/07  to 31/07/07 
                                          Unaudited    Unaudited    Unaudited 
                                            £'000        £'000        £'000 
 
Paid during the period 
Equity dividends on ordinary shares         2,148        4,414        4,124 
 
 
 
           7   EARNINGS PER SHARE 
 
Earnings per share has been calculated by dividing the consolidated profit after 
taxation attributable to ordinary shareholders by the weighted average number of 
ordinary shares in issue during the period. 
 
 
Diluted earnings per share has been calculated, on the same basis as above, 
except that the weighted average number of ordinary shares that would be issued 
on the conversion of all the dilutive potential ordinary shares (arising from 
the Group's share option schemes) into ordinary shares has been added to the 
denominator. There are no changes to the profit (numerator) as a result of the 
dilutive calculation. 
 
 
The earnings per share information has been calculated as follows: 
 
Earnings Per Share                            6 months     6 months    12 months 
                                           to 31/01/08  to 31/01/07  to 31/07/07 
                                             Unaudited    Unaudited    Unaudited 
                                               £'000        £'000        £'000 
Profits 
Profit from continuing operations              3,942        2,960        7,515 
Profit from discontinued operations                0           67           67 
                                              --------     --------     -------- 
Profit for the period                          3,942        3,027        7,582 
 
Number of shares                                 000's        000's        000's 
Weighted average number of ordinary 
shares in issue                               23,070       22,277       22,470 
Effect of dilutive potential 
ordinary shares under option                     777          939          556 
                                              --------     --------     -------- 
                                              23,847       23,216       23,026 
 
Earnings per share                               pence        pence        pence 
 
Earnings per share from continuing 
operations 
    - Basic                                    17.09        13.29        33.44 
    - Diluted                                  16.53        12.75        32.64 
 
Earnings per share from discontinued 
operations 
    - Basic                                     0.00         0.30         0.30 
    - Diluted                                   0.00         0.29         0.29 
 
Earnings per share from total operations 
    - Basic                                    17.09        13.59        33.74 
    - Diluted                                  16.53        13.04        32.93 
 
 
 
Earnings Per Share for the purpose of a performance measure for the LTIPs is 
calculated excluding the non-recurring items of the sales and profits of the US 
business sold on 31st August 2006 as well as the non-recurring costs of the 
flotation as calculated below. 
 
 
 
                                              6 months     6 months    12 months 
Adjusted Earnings Per Share                to 31/01/08  to 31/01/07  to 31/07/07 
                                             Unaudited    Unaudited    Unaudited 
                                               £'000        £'000        £'000 
Profits 
Profit for the period                          3,942        3,027        7,582 
                                              --------     --------     -------- 
Costs of Admission to AIM                          0          572          572 
Profit after tax from discontinued 
operations                                         0           (5)          (5) 
Profit on sale of discontinued 
operations                                         0          (59)         (59) 
                                              --------     --------     -------- 
Profit on ordinary activities after 
taxation but before non-recurring 
items                                          3,942        3,535        8,090 
 
Number of shares                                 000's        000's        000's 
Weighted average number of ordinary 
shares in issue                               23,070       22,277       22,470 
Effect of dilutive potential 
ordinary shares under option                     777          939          556 
                                              --------     --------     -------- 
                                              23,847       23,216       23,026 
 
Earnings per share                               pence        pence        Pence 
 
Earnings per share from total operations 
   - Basic                                     17.09        15.86        36.00 
   - Diluted                                   16.53        15.23        35.13 
 
 
 
               8   SHARE CAPITAL 
                                              31/01/08     31/01/07     31/07/07 
                                               £'000        £'000        £'000 
Authorised share capital 
40,000,000 Ordinary shares of £0.01 each         400          400          400 
 
Allotted, called up and fully paid 
Ordinary shares of £0.01 each                    231          225          230 
 
 
 
The company issued the following shares      Ordinary     Share  Consideration 
in the periods: 
                                            shares of   premium       Received 
                                         £0.01 issued  received            £ 
                                              £'000   pence per 
                                                          share 
 
6 months to 31/01/07 
27/10/2006                                  348,254      69.0        243,778 
27/11/2006                                   31,955     365.5        117,115 
27/11/2006                                   31,955         nil          320 
22/12/2006                                      767         nil            8 
30/01/2006                                      736         nil            7 
 
6 months to 31/07/07 
26/02/2006                                      658         nil            7 
30/03/2007                                      668         nil            7 
27/04/2007                                      573         nil            6 
25/05/2007                                      485         nil            5 
01/06/2007                                  539,140      85.6        466,705 
11/06/2007                                      947      87.6            839 
25/06/2007                                    1,447         nil           14 
 
6 months to 31/01/08 
30/08/2007                                      436         nil            4 
28/09/2007                                      447         nil            4 
26/10/2007                                      454         nil            5 
05/11/2007                                   70,872      89.0         63,781 
30/11/2007                                   17,131         nil          171 
 
 
INDEPENDENT REVIEW REPORT TO MATCHTECH GROUP PLC 
 
 
We have been engaged by the company to review the condensed set of financial 
statements in the half-yearly financial report for the six months ended 31 
January 2008 which comprise the condensed consolidated income statement, the 
condensed consolidated balance sheet, the condensed consolidated cash flow 
statement, the condensed consolidated statement of changes in equity and notes 1 
to 8. We have read the other information contained in the interim report which 
comprises only the Chairman's Statement and considered whether it contains any 
apparent misstatements or material inconsistencies with the financial 
information. 
 
 
This report is made solely to the company in accordance with guidance contained 
in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information 
performed by the Independent Auditor of the Entity". Our review work has been 
undertaken so that we might state to the company those matters we are required 
to state to them in a review report and for no other purpose. To the fullest 
extent permitted by law, we do not accept or assume responsibility to anyone 
other than the company, for our review work, for this report, or for the 
conclusion we have formed. 
 
 
Directors' Responsibilities 
 
 
The half-yearly financial report is the responsibility of, and has been approved 
by, the directors. The directors are responsible for preparing the half-yearly 
financial report. 
 
 
As disclosed in note 2, the next annual financial statements of the group will 
be prepared in accordance with International Financial Reporting Standards as 
adopted by the European Union. This interim report has been prepared in 
accordance with International Accounting Standard 34 "Interim Financial 
Reporting" and the requirements of IFRS 1 "First-time Adoption of International 
Financial Reporting Standards" relevant to interim reports. 
 
 
The accounting policies are consistent with those that the directors intend to 
use in the next annual financial statements. 
 
 
Our Responsibility 
 
 
Our responsibility is to express to the Company a conclusion on the condensed 
set of financial statements in the half yearly financial report based on our 
review. 
 
 
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. 
 
 
Review Conclusion 
 
 
Based on our review, nothing has come to our attention that causes us to believe 
that the condensed set of financial statements in the half-yearly financial 
report for the six months ended 31 January 2008 is not prepared, in all material 
respects, in accordance with International Accounting Standard 34 as adopted by 
the European Union. 
 
 
 
GRANT THORNTON UK LLP 
 
Chartered Accountants & Registered Auditors 
 
No. 1 Dorset Street 
 
Southampton 
 
SO15 2DP March 2008 
 
 
 
 
                      This information is provided by RNS 
            The company news service from the London Stock Exchange 
 
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