REG-Matchtech Group PLC Final Results - Part 1

Released : 14/10/08 06:00

http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20081014:RnsN7516F
                                                                                                                       .
RNS Number : 7516F  
  
Matchtech Group PLC  
  
14 October 2008  
  
14 October 2008  
  
Matchtech Group plc  
  
Preliminary Results for the year ended 31 July 2008  
  
Matchtech Group plc ("Matchtech" or the "Group"), one of the UK's leading 
specialist technical recruitment companies, is pleased to announce its 
Preliminary Results for the year ended 31 July 2008.  
  
Financial Highlights  
  
 
  * Revenue £258.8m (2007: £202.8m)*                         up 28%  
  * Net fee income (Gross Profit) £33.2m (2007: £26.9m)*     up 23%  
  * Operating profit £13.8m (2007: £11.3m)*                  up 22%  
  * Adjusted Profit Before Tax (before nonrecurring items)   up 22%  
  £12.8m (2007: £10.5m) *                                            
  * Reported Profit Before Tax (after nonrecurring items)    up 29%  
  £12.8m (2007: £9.9m)                                               
  * Adjusted Basic EPS (before nonrecurring items) 39.34p    up 21%  
  (2007: 32.42p) *                                                   
  * Reported Basic EPS (after nonrecurring items) 39.34p     up 30%  
  (2007: 30.16p)                                                     
  * Total dividend for year of 15.6 pence per share (2007:   up 14%  
  13.7 pence). Dividend cover of 2.5 times.                          
  * Cash flow from operating activities £14.9m (2007:        up 84%  
  £8.1m)                                                             
  * Net debt reduced by £6.7m to £3.1m, with gearing at              
  just 18.1%                                                         
  
  
*2007 results exclude sales and profits from the US business sold on 31 August 
2006 as well as the non-recurring costs of the IPO.  
  
The financial statements have been prepared under International Financial 
Reporting standards; see IFRs below.  
  
Operating Highlights  
  
 
 * Substantial organic growth across every sector 
 * Strong growth throughout the year - Net fee income growth H1 up 22%, H2 up 
24% 
 * Healthy balance of Contingency, Preferred and Master Vendor business 
 * Maintained good net fee income mix - contract 67%, permanent 33% 
 * Permanent fees up 28%, permanent placements up 31% 
 * Contract net fee income up 21% and number of contractors working at the year 
end up 11% 
 * Sales force headcount increased by 26%  
  
Current Trading and Proposed Share Buybacks  
  
 
 * Net fee income in the first two months of the current financial year up 13%. 
Contractors working at the end of September were 4,595, up 5% since end July. 
 * Seeking shareholder approval at the forthcoming AGM for buybacks of up to 10% 
of share capital   
  
Commenting on the results, George Materna, Chairman of Matchtech said:  
  
"Our strong second half performance maintained our momentum and ensured that we 
built on our track record of sustained organic growth. We have delivered record 
turnover in the year converting into record profits across every sector of the 
business.    
  
"This excellent performance has strengthened our position as the UK's biggest 
single-site recruitment agency and we have continued to build on our already 
strong presence in our core industry sectors.   
  
"The clients and sectors that we serve continue to exhibit strong structural 
growth characteristics. We are involved in the recruitment process throughout a 
project's life-cycle from the initial design and conception phase, through the 
construction and implementation stages and finally to the delivery and 
maintenance of the asset or infrastructure. Many of these projects, such as the 
construction of the two new Aircraft Carriers for the Royal Navy which are due 
in service in 2014 and 2015, and the construction of the Olympic site, due in 
2012, operate on long life cycles and are not materially impacted by the current 
financial turmoil. Moreover we have a highly diversified and expanding customer 
base, which provides further opportunities for growth and adds an additional 
element of protection to our business.   
  
"The technical markets continue to suffer from skills shortages, which, in turn, 
create demand for qualified candidates despite the macro economic turbulence. By 
providing high levels of service across the entire UK from our single site 
location, we are gaining new clients and winning business from our competitors.  
  
"Our clear defensive strategy of pursuing organic growth in our well established 
areas through working with our highly diversified client base is working and 
offers scope for further growth.  Whilst there will be competitive and market 
challenges ahead, we are well positioned, with the flexibility offered by our 
single site, to respond quickly and effectively to any deterioration in market 
conditions.   
  
"Overall trading in the first two months of the current year has been good, with 
net fee income up 13% on the same period last year and contractor numbers up 5% 
since the end of July. We are determined and consistent at what we do and 
believe we can deliver another successful year."   
  
For further information please contact:  
  
 
  Matchtech Group plc                           01489 898989   
  George Materna, Chairman                                     
  Adrian Gunn, Group Managing Director                         
  Tony Dyer, Group Finance Director                            
                                                               
  Hogarth Partnership                           020 7357 9477  
  John Olsen / James Longfield / Fiona Noblet                  
                                                               
  Arbuthnot Securities                                         
  Mark Brown/Katie Shelton/Richard Tulloch      020 7012 2000  
  
  
IFRS  
  
The financial statements have been prepared in accordance with applicable 
International Financial Reporting Standards ('IFRS') as adopted by the European 
Union (EU) and which are effective at 31 July 2008, our first annual reporting 
date at which we are required to use IFRS accounting standards as adopted by the 
EU.  
  
Matchtech Group plc's consolidated and company financial statements were 
prepared in accordance with United Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice) until 31 July 2007. The date of 
transition to IFRS was 1 August 2006. The comparative figures in respect of 2007 
have been restated to reflect changes in accounting policies as a result of 
adoption of IFRS. The disclosures required by IFRS 1 concerning the transition 
from UK GAAP to IFRS are given in the reconciliation schedules, presented and 
explained in note 2 to the financial statements.   
  
Background on Matchtech   
  
Matchtech specialises in the provision of contract and permanent staff in the 
Engineering, Built Environment and Support Services sectors across the UK.   
  
It was established in 1984 and has grown organically to become the UK's 2nd 
largest technical recruitment specialist and the UK's 17th largest recruitment 
company (Source: Recruitment International Top 100 Report - 2008).   
  
Operating from a single site near Southampton, Matchtech provides predominantly 
professionally-qualified candidates to clients in a broad range of industries 
including oil and petrochemicals, pharmaceutical, marine, aerospace, automotive, 
water, electronics, civil engineering, building structures and transport 
infrastructure.   
  
Group Chairman's Statement  
  
This has been another excellent year for Matchtech. Our strong second half 
performance maintained our momentum and ensured that we built on our track 
record of sustained organic growth. We have delivered record turnover in the 
year converting into record profits across every sector of the business.  
  
For comparison purposes 2007 results exclude the sales and profits from the US 
business sold on 31 August 2006 as well as the non-recurring costs of admission 
to AIM.   
  
Turnover was £258.8 million, up 28% on 2007, with net fee income (gross profit) 
of £33.2 million up 23%.   
  
Operating profit and profit before tax were both up 22% to £13.8 million and 
£12.8 million respectively, with the First Half profit before tax up 21% and the 
Second Half up 22%. Adjusted basic earnings per share increased to 39.3 pence, 
up 21%.   
  
This excellent performance has strengthened our position as the UK's biggest 
single-site recruitment agency and we have continued to build on our strong 
presence in our core industry sectors.  
  
The Board has a progressive dividend policy and I am pleased to confirm a 
proposed final dividend for the year of 10.6 pence per share, which when added 
to the interim dividend of 5.0 pence per share, makes a total dividend for the 
year of 15.6 pence per share, a 14% increase on last year. The final dividend, 
if approved by shareholders at the Annual General Meeting to be held on 21 
November 2008 will be payable on 5 December 2008 to shareholders on the register 
on 7 November 2008.   
  
Cash generation has again been strong and our net debt has fallen to £3.1m on 31 
July 2008 from £9.8m at the 31 July 2007.  
  
The recruitment and retention of our high quality staff, at all levels and in 
all areas, along with the ability to align their interests with shareholders and 
to provide the best service and results possible is essential for sustained 
organic growth. There is a high performance culture across the group created by 
the enthusiasm, the dedication, the professionalism and the desire to succeed of 
all our staff.   
  
This is a people business and our people have shown a commitment to clients, 
candidates and contractors that gives a significant competitive advantage. On 
behalf of the Board, I would like to thank the whole of the Matchtech team for 
their continued commitment and hard work.   
  
The clients and sectors that we serve continue to exhibit strong structural 
growth characteristics. We are involved in the recruitment process throughout a 
project's life-cycle from the initial design and conception phase, through the 
construction and implementation stages and finally to the delivery and 
maintenance of the asset or infrastructure. Many of these projects, such as the 
construction of the two new Aircraft Carriers for the Royal Navy which are due 
in service in 2014 and 2015, and the construction of the Olympic site, due in 
2012, operate on long life cycles and are not materially impacted by the current 
financial turmoil. Moreover we have a highly diversified and expanding customer 
base, which provides further opportunities for growth and adds an additional 
element of protection to our business.  
  
The technical markets continue to suffer from skills shortages, which, in turn, 
create demand for qualified candidates despite the macro-economic turbulence. By 
providing high levels of service across the entire UK from our single site 
location, we are gaining new clients and winning business from our competitors.  
  
Our clear defensive strategy of pursuing organic growth in our well established 
areas through working with our highly diversified client base is working and 
offers scope for further growth. Whilst there will be competitive and market 
challenges ahead, we are well positioned, with the flexibility offered by our 
single site, to respond quickly and effectively to deterioration in market 
conditions.  
  
Overall trading in the first two months of the current year has been good, with 
net fee income up 13% on the same period last year and contractor numbers up 5% 
since the end of July. We are determined and consistent at what we do and 
believe we can deliver another successful year.  
  
George Materna FREC FCIPD  
  
Group Managing Director's Report  
  
Matchtech has continued to deliver consistent growth in both the First and 
Second Half of the year despite a slowing UK economy. This is testament to the 
structure and strength of the business, the markets in which we operate and the 
high quality of our staff and management.   
  
In a period when the growth of the UK economy has slowed, Matchtech has 
continued to grow in excess of 20%. We are pleased to report that our results 
have produced pre-tax profits of £12.8m compared to £10.5m (excluding 
non-recurring items) in 2007, up 22%.  
  
Our business mix was essentially unchanged. We remain a contract led 
organisation; contract recruitment accounts for 67% of the Company's net fee 
income and permanent recruitment 33%. Both areas continue to show good growth, 
with contract recruitment up 22% and permanent up 28%. Most pleasingly, this 
growth has been consistent in both H1 and H2.  
  
We have again demonstrated our ability to grow organically across all three of 
our sectors. Long term publicly funded projects, continuing skills shortages of 
highly technical candidates and a strategy of expanding our geographical reach 
within the UK aided growth within our Engineering and the Built Environment 
sectors.  
  
In our Support Service Sector our strategy of expanding the range of skill types 
placed has taken us into new markets and diversified our client base.  
  
We continued to deliver a healthy mix of contract and permanent business 
supplying our clients on a Contingency, Preferred Supplier and Managed Agency 
basis.   
  
Our top 50 clients generated 54% (2007: 50%) of our net fee income. Babcock 
International, VT Group and Mouchel Group are our largest three clients, each 
generating around 4% of our net fee income. The highlight of the year was the 
re-signing of a 5 year contract with Babcock International and extending the VT 
Group Managed Service Provider contract for a further three years. The largest 
new contract win in the period was the contract with Ricardo, which is our first 
Master Vendor win in the Automotive sector.  
  
We have delivered net fee income growth from our strategy of up-selling services 
with existing clients. This, along with a competitive marketplace, has put a 
slight downward pressure on our percentage margins which reduced to 12.8% from 
13.3% in 2007.  
  
Quality candidates remain in short supply but we have demonstrated our ability 
to source and place the best. This year we have placed 2,868 candidates into 
permanent positions, 31% up on 2007's 2,192 and we have filled over 6,800 
contract/temporary assignments, up 8% on 2007's 6,300. Contractor care continues 
to be high on our agenda. This is demonstrated by our stance of continuing to 
pay our contractors and consultancies weekly. Internal service levels agreements 
are in place to ensure the contractor receives a high level of service from our 
consultants and our support staff.  
  
I would like to thank all contractors and consultancies that have worked with 
Matchtech this year. With the quality service they deliver we are able to foster 
and maintain strong relationships with our clients.  
  
We increased headcount in all three sectors to keep up with growth, especially 
within Support Services. Total numbers have risen from 245 to 296 staff, up 21% 
and sales force from 166 to 209 staff, up 26%.  
  
This strong investment in increased headcount and slight change in business mix 
between contract and permanent recruitment has reduced our NFI conversion 
marginally to 41.6% (2007:42.0%). However, we aim to see the benefits from our 
staff investment next year together with increased staff productivity through 
training and development geared around service delivery.  
  
The Group's remuneration strategy for sales consultants remains strongly biased 
towards variable over fixed remuneration, encouraging staff to over perform.  
  
Our leading edge IT technology continued to deliver operational efficiency and 
our proven single site strategy ensured our cost base remained under control.  
  
We have further strengthened our business continuity strategy by achieving the 
new BS25999 Business Continuity standard and as such became the first UK 
recruitment company to obtain this certification.  
  
Once again our experienced management team and high quality staff have produced 
another set of excellent results demonstrating their ability to perform in a 
less buoyant environment. I would like to thank all our staff for their hard 
work.  
  
Their industry knowledge has ensured we are involved at the early stages of new 
business development opportunities and their ability to coach and mentor new 
staff is driving each sector's future growth plans.  
  
We have demonstrated our ability to grow in demanding economic times. Our 
responsive service delivery model has won contingency business from our 
competitors and our Managed Service offering has developed an enviable 
reputation within the industry.  
  
Our growth strategy remains unchanged along with our ability to maintain a low 
flexible cost base.  
  
Our business development pipeline remains healthy and the management team will 
be working hard to increase the number of Managed Agency accounts as well as 
increasing the revenue generated by our existing accounts.  
  
Finally we believe there has been little change in the long term growth drivers 
in the Engineering and Built Environment sectors and are committed to our 
strategy to diversify our Support Services sector.  
  
We have a seasoned management team and our single site strategy means we are 
well positioned to respond quickly and effectively in the event of a weakening 
in market demand. This gives us confidence in uncertain economic times that 
Matchtech is well placed to continue to deliver solid performance in the 
future.  
  
Adrian Gunn FREC  
  
Group Finance Director's Review  
  
This year Matchtech has again delivered consistent growth across all our sectors 
and the conversion to International Financial Reporting Standard's ("IFRS") has 
had minimal impact on our reported results.  
  
International Reporting Standards ("IFRS")   
  
The Financial Statements for year ending 31 July 2008 are the first set of 
annual results prepared under IFRS. The transitional arrangements are detailed 
in Note 2 to the accounts on page 28.  
  
The principle impact of the conversion relates to IAS12 Income Taxes, where the 
provision for the full potential future tax deduction in respect of share 
options resulted in an increase in the deferred tax asset recognised by £0.4m 
and the requirement to take to equity the excess tax effect of gains and losses 
on the exercise of share options in the period over and above the previously 
expensed share options cost under IFRS 2. The impact is a £0.8m increase in 2007 
income tax expense and a resultant £0.8m decrease in profits after tax for that 
period. Consequently the comparative fully diluted EPS of continuing operations 
is 29.43p which was previously reported as 32.66p under UK GAAP. The two other 
areas affected are IAS 17 Leases and IAS 19 Employee Benefits; neither 
materially affects the results.  
  
Group non-recurring items  
  
For comparison purposes we have excluded from the 2007 results the non-recurring 
items of the sales and profits of the US business sold on 31st August 2006 of 
£0.07m as well as the nonrecurring costs of the admission to AIM of £0.6m.  
  
Group Income Statement  
  
Matchtech has continued to build on its resilient business model, once again 
posting record results.  
  
With all sectors showing growth on last year turnover increased 28% to £258.8m 
(2007: £202.8m).  
  
Net fee income increased 23% to £33.2m (2007:£26.9m) reflecting a slight fall in 
our gross profit margin to 12.8% (2007: 13.3%).  
  
A strong permanent marketplace in the sectors in which we operate has resulted 
in faster growth in permanent fees than contract net fee income and a slight 
shift in mix, with 67% (2007: 69%) of net fee income derived from recurring 
contract income and 33% (2007: 31%) from permanent placements. We continue, 
however, to be a contract led business, maintaining a healthy balance between 
contract and permanent business.  
  
Investment in new staff slightly impacted the net fee income conversion to 
operating profit which was 41.6% (2007: 42.0%).  
  
Operating profit rose by 22% to £13.8m (2007: £11.3m). Profit before tax also 
rose by 22% to £12.8m (2007: £10.5m).  
  
Profit after tax of £9.1m was up 25% (2007: £7.3m).  
  
Group Earnings Per Share  
  
Basic Earnings Per Share were up 30.4% to 39.34p (2007: 30.16p) and Diluted 
Earnings Per Share up by 30.0% to 38.25p (2007: 29.43p).  
  
Excluding the non-recurring items in 2007, underlying Basic and Diluted Earnings 
Per Share were up 21.3% and 20.9% respectively.  
  
Group Dividends  
  
The Board has proposed a final dividend for the year of 10.6 pence per share, 
payable on 5 December 2008 to those shareholders registered on 7 November 2008. 
This makes a total dividend for the year of 15.6 pence per share (2007: 13.7 
pence per share), up 14%.  
  
Group Balance Sheet  
  
Group net assets stood at £17.1m (2007: £10.8m). Net debt fell by £6.7m to £3.1m 
(2007: £9.8m) and debtor days fell by 3.3 days to 40.1 days (2007: 43.4 days). 
At 31 July 2008 £0.3m (2007: £0.3m) of the debtor book of £38.3m was greater 
than 90 days overdue, less than 0.8%.  
  
Group Financing and Cashflow  
  
The Group operates a Confidential Invoice Discounting facility with Barclays 
Bank plc. The facility ceiling currently stands at the lower of £20m or 90 per 
cent. of qualifying invoiced debtors.  
  
On 27 May 2008, the Group entered into a £7.5m Revolver Credit facility with 
Barclays Bank plc. The Revolver Credit facility replaced the previously held £5m 
three year loan with Barclays Bank and on 31 July 2008 Matchtech repaid the 
entire balance on the £5m loan.  
  
At 31 July 2008 the balance on the Confidential Invoice Discounting Facility was 
£3.3million and the borrowings from the Revolver Credit facility were zero.  
  
The utilisation of all borrowing facilities as at 31July 2008 was 12%.  
  
The Group continues to be cash generative at an operating level. Operating cash 
conversion in 2008, as defined by cash generated from operations as a percentage 
of operating profit, was 108% (2007: 76%).  
  
Group Financial Risk Management   
  
The Board reviews and agrees policies for managing financial risks. The Group's 
finance function is responsible for managing investment and funding requirements 
including banking and cash flow monitoring. It seeks to ensure that adequate 
liquidity exists at all times in order to meet its cash requirements  
  
The Group's strategy is to finance its operations through a mixture of cash 
generated from operations and, where necessary, equity finance and borrowings by 
way of bank loan and confidential sales ledger financing.  
  
The Group's financial instruments comprise borrowings, cash and various items, 
such as trade receivable and trade payables, that arise from its operations. The 
main purpose of these financial instruments is to finance the Group's 
operations. The Group does not trade in financial instruments. The main risks 
arising from the Group's financial instruments are described below.  
  
* Liquidity and Interest rate risk  
  
The Group had net debt of £3.1m at the year end, comprising £3.4m (debt) less 
£0.3m (cash).  
  
The Group's exposure to market risk for changes in interest rates related 
primarily to the Group's bank loan and sales financing facility debt 
obligations. Bank interest is charged on a floating rate basis.  
  
As a guide, a 1% increase in interest rates, will cost an approximate £0.1m in 
additional interest.  
  
The interest rate on the current Confidential Invoice Discounting Facility is 
linked to Barclays Bank base rate and the Revolver Credit Facility is linked to 
LIBOR.   
  
Barclays Bank has the right, at any time, to set-off the amount of any liability 
owed to the bank against any amounts owed by the bank.  
  
* Credit risk  
  
The Group seeks to trade only with recognised, creditworthy third parties. 
Receivable balances are monitored on an ongoing basis with the result that the 
Group's exposure to bad debts has not been significant. There are no significant 
concentrations of credit risk within the Group, with no debtor as at 31 July 
2008 accounting for more than 5% (2007: 7%) of total receivable balances..  
  
* Foreign currency risk  
  
The Board considers that the Group does not have any material risks arising from 
the effects of exchange rate fluctuations.  
  
Tony Dyer FMCA  
  
CONSOLIDATED INCOME STATEMENT  
  
for the year ended 31st July 2008  
  
 
                                               2008        2007       
  CONTINUING OPERATIONS                 Note   £'000       £'000      
                                                                      
  Revenue                                      258,830     202,779    
  Cost of Sales                                (225,596)   (175,902)  
  GROSS PROFIT                          3      33,234      26,877     
                                                                      
                                                                      
  Cost of admission to AIM                     0           (572)      
  Other administrative expenses                (19,442)    (15,623)   
  Total administrative expenses                (19,442)    (16,195)   
                                                                      
  OPERATING PROFIT                      4      13,792      10,682     
                                                                      
  Finance income                               79          20         
  Finance cost                          7      (1,074)     (831)      
  PROFIT BEFORE TAX                            12,797      9,871      
                                                                      
  Income tax expense                    10     (3,705)     (3,162)    
  PROFIT FROM CONTINUING OPERATIONS     3      9,092       6,709      
                                                                      
  Discontinued operations                                             
  Profit from discontinued operations   5      0           67         
  PROFIT FOR THE PERIOD                        9,092       6,776      
                                                                      
                                                                      
  EARNINGS PER ORDINARY SHARE                                         
                                                                      
                                               2008        2007       
                                        Note   pence       pence      
                                                                      
  Basic      Continuing operations      11     39.34       29.86      
  Discontinued operations               11     0.00        0.30       
  Total                                        39.34       30.16      
                                                                      
  Diluted    Continuing operations      11     38.25       29.14      
  Discontinued operations               11     0.00        0.29       
  Total                                        38.25       29.43      
  
  
STATEMENT OF CHANGES IN EQUITY  
  
for the year ended 31st July 2008  
  
 
  A) GROUP                                 Foreign Currency Translation Reserve   Share Capital   Share premium   Other reserve   Share based payment reserve   Retained Earnings   Total    
                                           £'000                                  £'000           £'000           £'000           £'000                         £'000               £'000    
                                                                                                                                                                                             
  At 1 August 2006                         0                                      221             2,009           229             338                           4,884               7,681    
                                                                                                                                                                                             
  Currency translation differences from                                                                                                                                                      
  foreign operations                       3                                      0               0               0               0                             0                   3        
                                                                                                                                                                                             
  Net income recognised directly                                                                                                                                                             
  in equity                                3                                      0               0               0               0                             0                   3        
  Profit for the year                      (3)                                    0               0               0               0                             6,776               6,773    
  Total recognised income/expense                                                                                                                                                            
  for the year                             0                                      0               0               0               0                             6,776               6,776    
                                                                                                                                                                                             
  Dividends in the year                    0                                      0               0               0               0                             (5,428)             (5,428)  
  Deferred tax movement re share options   0                                      0               0               0               0                             644                 644      
  IFRS2 credit                             0                                      0               0               0               321                           0                   321      
  IFRS2 reserves transfer                  0                                      0               0               0               (273)                         273                 0        
  EBT reserve movement                     0                                      0               0               (5)             0                             5                   0        
  New share capital                        0                                      9               820             0               0                             0                   829      
                                           0                                      9               820             (5)             48                            (4,506)             (3,634)  
                                                                                                                                                                                             
  At 31st July 2007                        0                                      230             2,829           224             386                           7,154               10,823   
                                                                                                                                                                                             
                                                                                                                                                                                             
  At 1 August 2007                         0                                      230             2,829           224             386                           7,154               10,823   
                                                                                                                                                                                             
  Profit for the year                      0                                      0               0               0               0                             9,092               9,092    
  Total recognised income/expense                                                                                                                                                            
  for the year                             0                                      0               0               0               0                             9,092               9,092    
                                                                                                                                                                                             
  Dividends in the year                    0                                      0               0               0               0                             (3,310)             (3,310)  
  Deferred tax movement re share                                                                                                                                                             
  options                                  0                                      0               0               0               0                             (296)               (296)    
  IFRS2 credit                             0                                      0               0               0               539                           0                   539      
  IFRS2 reserves transfer                  0                                      0               0               0               (131)                         131                 0        
  New share capital                        0                                      2               216             0               0                             0                   218      
                                           0                                      2               216             0               408                           (3,475)             (2,849)  
                                                                                                                                                                                             
  At 31st July 2008                        0                                      232             3,045           224             794                           12,771              17,066   
                                                                                                                                                                                             
                                                                                                                                                                                             
                                                                                                                  Share Capital   Share premium                 Retained Earnings   Total    
  B) COMPANY                                                                                                      £'000           £'000                         £'000               £'000    
                                                                                                                                                                                             
  At 1st August 2006                                                                                              221             2,009                         (1,289)             941      
                                                                                                                                                                                             
  Profit for the year                                                                                             0               0                             6,765               6,765    
  Total recognised income/expense                                                                                                                                                            
  for the year                                                                                                    0               0                             6,765               6,765    
                                                                                                                                                                                             
  New share capital                                                                                               9               820                           0                   829      
  Dividends paid in the year                                                                                      0               0                             (5,428)             (5,428)  
  At 31st July 2007                                                                                               230             2,829                         48                  3,107    
                                                                                                                                                                                             
                                                                                                                                                                                             
  At 1st August 2007                                                                                              230             2,829                         48                  3,107    
                                                                                                                                                                                             
  Profit for the year                                                                                             0               0                             3,321               3,321    
  Total recognised income/expense                                                                                                                                                            
  for the year                                                                                                    0               0                             3,321               3,321    
                                                                                                                                                                                             
  New share capital                                                                                               2               216                           0                   218      
  Dividends paid in the year                                                                                      0               0                             (3,310)             (3,310)  
  At 31st July 2008                                                                                               232             3,045                         59                  3,336    
  
  
A dividend will be declared from Matchtech Group UK Limited prior to the payment 
of the proposed dividend outlined in note 8.  
  
BALANCE SHEETS   
  
as at 31st July 2008  
  
 
                                                                 GROUP                 COMPANY        
                                                                 2008       2007       2008    2007   
                                                          Note   £'000      £'000      £'000   £'000  
  NON-CURRENT ASSETS                                                                                  
  Intangible assets                                       12     170        133        0       0      
  Property, plant and equipment                           13     1,809      1,699      0       0      
  Investments                                             15     0          0          250     250    
  Deferred tax asset                                      14     292        529        0       0      
  Total Non-Current Assets                                       2,271      2,361      250     250    
                                                                                                      
  CURRENT ASSETS                                                                                      
  Trade and other receivables                             16     38,565     31,984     2,880   2,203  
  Cash and cash equivalents                                      297        836        211     656    
  Total Current Assets                                           38,862     32,820     3,091   2,859  
                                                                                                      
  TOTAL ASSETS                                                   41,133     35,181     3,341   3,109  
                                                                                                      
  LIABILITIES                                                                                         
  Current Liabilities                                                                                 
  Trade and other payables                                17     (18,930)   (12,617)   0       0      
  Current tax liability                                          (1,788)    (1,068)    (5)     (2)    
  Bank loans and overdrafts   - short term borrowings            (3,349)    (6,924)    0       0      
                              - current portion of long                                               
                              term borrowings                    0          (1,666)    0       0      
                                                                 (24,067)   (22,275)   (5)     (2)    
  Non-current liabilities                                                                             
  Long term borrowings                                    19     0          (2,083)    0       0      
  TOTAL LIABILITIES                                              (24,067)   (24,358)   (5)     (2)    
                                                                                                      
  NET ASSETS                                                     17,066     10,823     3,336   3,107  
                                                                                                      
                                                                                                      
  CAPITAL AND RESERVES                                                                                
  Called-up equity share capital                          21     232        230        232     230    
  Share premium account                                          3,045      2,829      3,045   2,829   
  
  
More to follow, for following part double-click [nRn2N7516F]