REG-Matchtech Group PLC Final Results - Part 3

Released : 08/10/09 06:01

                                                                                                                       .
  
Part 3 : For preceding part double-click [nRn2H4314A]  
  
  
There were no capital commitments as at 31 July 2009 (2008: £nil)  
  
12  DEFERRED TAX  
  
 
                                                                 GROUP          
                                                                 2009    2008   
                                                                 £'000   £'000  
  The deferred tax asset is represented by:                                     
                                                                                
  Temporary difference on share based payments                                  
  At start of year                                               292     529    
  Recognised in income                                           (154)   150    
  Recognised in equity                                           (39)    (387)  
  At end of year                                                 99      292    
  
  
The rate of UK corporation tax applied to deferred tax calculations is 28% 
(2008: 28%).  
  
13 INVESTMENTS  
  
 
                                                                          COMPANY        
                                                                                         
                                                                          2009    2008   
                                                                          £'000   £'000  
                                                                                         
  Movement in investment in group companies - Investment in Matchtech     22      0      
  GmbH                                                                                   
  Investment in group companies at end of the year                        272     250    
  
  
Subsidiary Undertakings  
  
 
                                                                                                                               
  Company                       Country of Incorporation      Share Class   % held    Main Activities                          
  Matchtech Group UK Ltd        United Kingdom                Ordinary      99.998%   Provision of recruitment consultancy     
  Matchtech Engineering Ltd     United Kingdom                Ordinary      100%      Non trading                              
  Matchmaker Personnel Ltd      United Kingdom                Ordinary      100%      Non trading                              
  Matchtech GmbH                Germany                       Ordinary      100%      Provision of recruitment consultancy     
                                                                                                                               
  
  
14 TRADE AND OTHER RECEIVABLES  
  
 
                                            GROUP             COMPANY        
                                            2009     2008     2009    2008   
                                            £'000    £'000    £'000   £'000  
                                                                             
  Trade receivables                         32,623   38,298   0       0      
  Amounts owed by group companies           0        0        2,989   2,880  
  Other receivables                         76       49       0       0      
  Prepayments                               204      218      0       0      
  Total                                     32,903   38,565   2,989   2,880  
  
  
The amount owed to group undertakings in the company balance sheet is considered 
to be approximate fair value.   
  
Days sales outstanding at the year end based upon the preceding three months 
revenue were 41.7 days (2008: 40.1 days). The allowance for doubtful debts has 
been determined by reference to previous experience and management assessment of 
debts.  
  
The Directors consider that the carrying amount of trade and other receivables 
approximates the fair value.  
  
Included in the Group's trade receivable balance are debtors with a carrying 
amount of £2,660,000 (2008: £6,293,000) which are past due at the reporting date 
for which the Group has not provided as the Directors do not believe there has 
been a significant change in credit quality and consider the amounts to be 
recoverable in full. The Group does not hold any collateral over these 
balances.  
  
The Group uses a third party credit scoring system to assess the credit 
worthiness of potential new customers before accepting them. Credit limits are 
defined by customer based on this information. All customer accounts are subject 
to review on a regular basis by senior management and actions are taken to 
address debt ageing issues.  
  
The Directors believe that there is no requirement for further provision over 
and above the allowance for doubtful debts.   
  
Ageing of past due but not impaired trade receivables  
  
 
                            2009    2008   
                            £'000   £'000  
                                           
  0-30 days                 2,413   5,558  
  30-60 days                194     619    
  60-90 days                38      29     
  90+ days                  15      87     
                            2,660   6,293  
  
  
Movement in the allowance for doubtful debts  
  
 
                                                  2009    2008   
                                                  £'000   £'000  
                                                                 
  Balance at the beginning of the period          199     183    
  Impairment losses recognised                    161     16     
                                                  360     199    
  
  
Ageing of impaired trade receivables  
  
 
                                            2009    2008   
                                            £'000   £'000  
                                                           
  Not past due at reporting date            126     0      
  0-30 days                                 68      0      
  30-60 days                                66      0      
  60-90 days                                40      0      
  90+ days                                  60      199    
                                            360     199    
  
  
15  TRADE AND OTHER PAYABLES  
  
 
                                         Group            
                                         2009     2008    
                                         £'000    £'000   
                                                          
  Trade payables                         106      149     
  Taxation and Social Security           2,700    5,049   
  Other payables                         5,326    10,667  
  Accruals and deferred income           2,801    3,065   
  Total                                  10,933   18,930  
  
  
16  FINANCIAL ASSETS AND LIABILITIES BALANCE SHEET CLASSIFICATION  
  
The carrying amount of Matchtech's financial assets and liabilities as 
recognised at the balance sheet date of the reporting periods under review may 
also be categorised as follows:  
  
Financial assets are included in the balance sheet within the following 
headings:  
  
 
                                          Group             Company        
                                          2009     2008     2009    2008   
                                          £'000    £'000    £'000   £'000  
                                                                           
  Trade and other receivables                                              
  - Loan and receivables                  32,699   38,347   2,989   2880   
  Cash and cash equivalents                                                
  - Loan and receivables                  307      297      82      211    
  Total                                   33,006   38,644   3,071   3,091  
  
  
Financial liabilities are included in the balance sheet within the following 
headings:  
  
 
                                                              2009    2008    
                                                              £'000   £'000   
                                                                              
  Current liabilities                                                         
  Borrowings                                                                  
  - Financial liabilities recorded at amortised cost          1,470   3,349   
  Trade and other payables                                                    
  - Financial liabilities recorded at amortised cost          8,233   13,881  
                                                                              
  Non current liabilities                                                     
  Borrowings                                                                  
  - Financial liabilities recorded at amortised cost          0       0       
  Total                                                       9,703   17,230  
  
  
The amounts at which the assets and liabilities above are recorded are 
considered to approximate to fair value.    
  
The working capital facility is secured by way of an all assets debenture, dated 
5 August 2002, which contains fixed and floating charges over the assets of 
Matchtech Group UK Limited. The facility held with Barclays Bank allows the 
company to borrow up to 90% of its invoiced debtors up to a maximum of £20 
million. Interest is charged on borrowings at a rate of 1.0% over Barclays Bank 
base rate.  
  
17  COMMITMENTS UNDER OPERATING LEASES  
  
At 31 July 2009 the group had commitments to pay the following amounts under 
non-cancellable operating leases as set out below.  
  
 
                                                                               Group           Company        
                                                                               2009    2008    2009    2008   
                                                                               £'000   £'000   £'000   £'000  
  At 31 July 2009 the group had commitments to pay the following amounts                                      
  undernon-cancellable operating leases as set out below.                                                     
  Land/buildings   Leases falling due:     within 1 year           532                 532                    
                                           within 1 to 5 years     1,323               1,523   0       0      
                                           after 5 years           784                 1,069   0       0      
                                                                                                              
                                                                                                              
  Other            Leases falling due:     within 1 year           11                  3       0       0      
                                           within 1 to 5 years     15                  9       0       0      
  
  
The lease on 1400 Parkway, which expires in March 2017 has a break clause 
exercisable in June 2011. The payments due have therefore been shown in the 
'within 1 year' and 'within 1 to 5 years' categories. There are no applicable 
renewal clauses in the current lease agreements.  
  
18 SHARE CAPITAL  
  
Authorised share capital  
  
 
                                                            2009    2008   
                                                            £'000   £'000  
                                                                           
  40,000,000 Ordinary shares of £0.01 each                  400     400    
  
  
Allotted, called up and fully paid:  
  
 
                                                                          2009    2008   
                                                                          £'000   £'000  
                                                                                         
  23,273,000 (2008: 23,230,000) Ordinary shares of £0.01 each             232     232    
  
  
The number of shares in issue in the company increased as follows:  
  
 
  Date                  Ordinary shares issued             Share premium received      Consideration received  
                                                 pence per share                       £                       
  At 01/08/2008         23,029,195                                                                             
  27/08/2007            436                                0                           4                       
  28/09/2007            447                                0                           4                       
  31/10/2007            454                                0                           5                       
  05/11/2007            70,872                             89                          63,781                  
  23/01/2008            17,131                             0                           171                     
  08/04/2008            9,174                              133                         12,293                  
  15/04/2008            4,587                              145                         6,697                   
  12/05/2008            5,692                              145                         8,310                   
  05/06/2008            75,336                             145                         109,991                 
  28/07/2008            16,619                             145                         24,264                  
  At 31/7/2008          23,229,943                                                     225,520                 
                                                                                                               
  30/11/2008            3,571                              0                           36                      
  05/01/2009            2,218                              0                           22                      
  30/01/2009            2,433                              0                           24                      
  03/03/2009            2,847                              0                           28                      
  31/03/2009            3,050                              0                           31                      
  23/04/2009            19,469                             0                           195                     
  05/05/2009            3,593                              0                           36                      
  02/06/2009            2,912                              0                           29                      
  03/07/2009            2,944                              0                           29                      
                                                                                                               
  Total                 23,272,980                                                     225,950                 
  
  
Share Options  
  
The following options arrangements exist over the Company's shares.   
  
 
                                                                                                                   
                                         2009    2008    Date of grant   Exercise price                            
                                         '000s   '000s                   pence                                     
                                                                                                                   
  Key Share Options                      24      24      18/06/2004      70               18/06/2005   18/06/2014  
  Key Share Options                      0       0       08/11/2004      89               08/11/2005   08/11/2014  
  Key Share Options                      142     142     01/12/2005      146              01/06/2007   01/12/2015  
  Target/Loyalty Share Options           3       3       05/03/2003      70               14/07/2005   05/03/2013  
  Target/Loyalty Share Options           2       2       18/06/2004      70               18/06/2005   18/06/2014  
  Target/Loyalty Share Options           1       2       08/11/2004      89               14/07/2006   08/11/2014  
  Target/Loyalty Share Options           24      26      01/12/2005      146              01/12/2006   01/12/2015  
  Long Term Incentive Plan Options       0       260     26/10/2006      1                27/10/2009   27/10/2016  
  Long Term Incentive Plan Options       0       7       26/01/2007      1                26/01/2010   25/01/2017  
  Long Term Incentive Plan Options       259     292     15/11/2007      1                15/11/2010   14/11/2017  
  Long Term Incentive Plan Options       601     0       14/11/2008      1                14/11/2010   13/11/2018  
  Total                                  1,056   758                                                               
  
  
In the year the company operated an EMI Share Option Scheme. No EMI share 
options were granted or exercised during the year.   
  
The Group also operates a Long Term Incentive Plan (LTIP). LTIP awards are 
nil-cost options granted to senior staff subject to a three year holding period 
and the achievement of performance targets. LTIP options have a life of 10 
years. The movement of LTIP's in the year are shown below.  
  
 
                                   2009                                                                      2008                                                                     
                                   Number   Weighted average exercise price   Weighted average share price   Number   Weighted average exercise price   Weighted average share price  
                                   '000s    (pence)                           (pence)                        '000s    (pence)                           (pence)                       
                                                                                                                                                                                      
  Outstanding at 1 August          758      75.6                                                             660      75.6                                                            
                                                                                                                                                                                      
  Granted                          662      1.0                                                              302      1.0                                                             
  Forfeited/ lapsed                364      3.1                                                              33       29.9                                                            
  Exercised                        -        -                                                                171      122.8                             361.0                         
                                                                                                                                                                                      
  Outstanding at 31 July           1,056    75.6                                                             758      75.6                                                            
                                                                                                                                                                                      
  Exercisable at 31 July           197      134.3                                                            199      134.2                                                           
  
  
The number and weighted average exercise price of future share options vesting 
in the future are shown below.    
  
 
                                                                                                                                                                                                         
                              2009                                                                                  2008                                                                                 
  Exercise Date               Weighted average remaining contract life   Number   Weighted average exercise price   Weighted average remaining contract life   Number   Weighted average exercise price  
                              (months)                                   '000s    (pence)                           (months)                                   '000s    (pence)                          
                                                                                                                                                                                                         
  27/10/2009                  0                                          0        0.0                               15                                         260      1.0                              
  30/01/2010                  0                                          0        1.0                               18                                         7        1.0                              
  06/11/2010                  15                                         259      1.0                               27                                         292      1.0                              
  14/11/2011                  27                                         601      1.0                               0                                          0        0.0                              
  Total                                                                  860                                                                                   559                                       
  
  
The fair values of the LTIPS were calculated using a Monte Carlo simulation 
method along with the assumption as detailed in the table below. In the year the 
Group operated a Share Incentive Plan (SIP). The SIP is an HMRC approved plan 
available to all employees enabling them to purchase shares out of pre-tax 
salary. For each share purchased the company grants an additional share at no 
cost. The fair values of the SIPS were calculated as the market value on the 
date of the grant.  
  
 
  Date of grant        Share Price on the date of grant      Exercise Price   Volatility   Vesting Period   Dividend Yield   Risk Free Rate of interest   Fair Value  
                                          (£)                (£)              (%)          (yrs)            (%)              (%)                          (£)         
                                                                                                                                                                      
  27/11/2006           SIP                3.67               0.01             N/A          3.00             N/A              N/A                          3.67        
  22/12/2006           SIP                3.67               0.01             N/A          3.00             N/A              N/A                          3.67        
  30/01/2007           SIP                3.79               0.01             N/A          3.00             N/A              N/A                          3.79        
  26/02/2007           SIP                4.02               0.01             N/A          3.00             N/A              N/A                          4.02        
  30/03/2007           SIP                4.00               0.01             N/A          3.00             N/A              N/A                          4.00        
  27/04/2007           SIP                4.40               0.01             N/A          3.00             N/A              N/A                          4.40        
  25/05/2007           SIP                4.75               0.01             N/A          3.00             N/A              N/A                          4.75        
  25/06/2007           SIP                4.83               0.01             N/A          3.00             N/A              N/A                          4.83        
  27/07/2007           SIP                4.73               0.01             N/A          3.00             N/A              N/A                          4.73        
  15/11/2007           LTIP               4.24               0.01             30.1%        3.00             10%              4.6%                         2.68        
  30/08/2007           SIP                4.61               0.01             N/A          3.00             N/A              N/A                          4.61        
  28/09/2007           SIP                4.60               0.01             N/A          3.00             N/A              N/A                          4.60        
  26/10/2007           SIP                4.69               0.01             N/A          3.00             N/A              N/A                          4.69        
  30/11/2007           SIP                4.12               0.01             N/A          3.00             N/A              N/A                          4.12        
  02/01/2008           SIP                3.73               0.01             N/A          3.00             N/A              N/A                          3.73        
  25/01/2008           SIP                3.58               0.01             N/A          3.00             N/A              N/A                          3.58        
  29/02/2008           SIP                3.19               0.01             N/A          3.00             N/A              N/A                          3.19        
  28/03/2008           SIP                3.02               0.01             N/A          3.00             N/A              N/A                          3.02        
  25/04/2008           SIP                2.88               0.01             N/A          3.00             N/A              N/A                          2.88        
  30/05/2008           SIP                2.97               0.01             N/A          3.00             N/A              N/A                          2.97        
  27/06/2008           SIP                2.90               0.01             N/A          3.00             N/A              N/A                          2.90        
  25/07/2008           SIP                2.68               0.01             N/A          3.00             N/A              N/A                          2.68        
  14/11/2008           LTIP               2.17               0.01             17.0%        3.00             7%               2.8%                         1.28        
  30/11/2008           SIP                2.10               0.01             N/A          3.00             N/A              N/A                          2.10        
  05/01/2009           SIP                2.02               0.01             N/A          3.00             N/A              N/A                          2.02        
  30/01/2009           SIP                1.92               0.01             N/A          3.00             N/A              N/A                          1.92        
  03/03/2009           SIP                1.59               0.01             N/A          3.00             N/A              N/A                          1.59        
  31/03/2009           SIP                1.52               0.01             N/A          3.00             N/A              N/A                          1.52        
  23/04/2009           SIP                1.52               0.01             N/A          3.00             N/A              N/A                          1.52        
  05/05/2009           SIP                1.29               0.01             N/A          3.00             N/A              N/A                          1.29        
  02/06/2009           SIP                1.44               0.01             N/A          3.00             N/A              N/A                          1.44        
  03/07/2009           SIP                1.42               0.01             N/A          3.00             N/A              N/A                          1.42        
  31/07/2009           SIP                1.30               0.01             N/A          3.00             N/A              N/A                          1.30        
  
  
- The volatility of the Company's share price on each date of grant was 
calculated as the average of annualised standard deviations of daily 
continuously compounded returns on the Company's stock, calculated over 5 years 
back from the date of grant, where applicable.  
  
- The risk free rate is UK risk free rate of appropriate term. Source: Bank of 
England website.  
  
- The IFRS2 credit recognised in the income statement for the year ended 31 July 
2009 is £155,581, (2008: charge of £538,916). The November 2007 LTIP has been 
deemed unlikely to vest due to the growth required in the remaining year being 
very challenging in the current economic climate. We have deemed that as the 
November 2008 LTIP is only one year through the three year target period, it is 
possible that the LTIP will vest in full.   
  
- LTIP awards are subject to a TSR test. This "market" based condition is taken 
into account in the date of grant fair value calculation.  
  
19 TRANSACTIONS WITH DIRECTORS AND RELATED PARTIES  
  
There were no material related party transactions with the directors during the 
period.  
  
With the exception of dividends paid from Matchtech Group UK Limited to 
Matchtech Group PLC of £2,462,000 on 1 December 2008 and £1,163,000 on 17 June 
2009 there are no other related party transactions in the company accounts.  
  
20 FINANCIAL INSTRUMENTS  
  
The financial risk management policies and objectives including those related to 
financial instruments and the qualitative risk exposure details, comprising 
credit and other applicable risks, are included within the Chief Financial 
Officer's report under the heading Group financial risk management.  
  
Maturity of financial liabilities  
  
The group financial liabilities analysis at 31July 2009 was as follows:  
  
 
                                                      GROUP            COMPANY        
                                                      2009    2008     2009    2008   
                                                      £'000   £'000    £'000   £'000  
                                                                                      
  In less than one year or on demand:                                                 
  Bank overdrafts                                     0       110      0       0      
  Working capital facility                            1470    3,239    0       0      
  Trade and other payables                            8,233   13,881   0       0      
                                                      9,703   17,230   0       0      
  
  
Borrowing facilities  
  
(i) The Group has a revolving credit facility whereby it may borrow up to £7.5 
million subject to satisfaction of the requirements of the facility. The 
interest rate of the loan is set at 1.1% above the LIBOR lending rate. The 
maturity date is set by interest period at the commencement of the loan. Each 
advance is repaid on that date but the revolving facility allows any amount 
repaid to be available for redrawing.  
  
 (ii) The undrawn facility available at 31 July 2009 of the Working Capital 
facility in respect of which all conditions precedent had been met was as 
follows:  
  
 
                                            Group            
                                            2009     2008    
                                            £'000    £'000   
                                                             
  Expiring in one year or less              18,530   16,760  
                                                             
  
  
The working capital facility is secured on the total assets of the group as 
explained in note 16.  
  
The working capital facility was reviewed by the facility providers in September 
2009 and renewed for a further twelve months.   
  
The Director's have calculated that the effect on profit of a 1% movement in 
interest rates would be £80,000.   
  
The Directors believe that the carrying value of borrowings approximates to 
their fair value.  
  
Net foreign currency monetary assets  
  
 
                         Group          
                         2009    2008   
                         £'000   £'000  
                                        
  Euros                  38      19     
  
  
21 STANDARDS AND INTERPRETATIONS IN ISSUE, NOT YET EFFECTIVE  
  
 
                                                                                                                                                          
     The following new Standards and Interpretations, which are yet to become mandatory, have not been applied in the Group financial statements.         
                                                                                                                                                          
     Standard                                                                                                  Effective date                             
                                                                                                               (Annual periods beginning on or after)     
     IFRIC 13                    Customer Loyalty Programmes                                                   1 January 2009                             
     IFRIC 12                    Service Concession Arrangements                                               30 March 2009                              
     IAS 23                      Borrowing Costs (revised 2007)                                                1 January 2009                             
     IFRS 8                      Operating Segments                                                            1 January 2009                             
     IAS 27                      Consolidated and Separate Financial Statements (revised 2008)                 1 July 2009                                
     IAS 1                       Presentation of Financial Statements (revised 2007)                           1 January 2009                             
     IAS 32                      Financial Instruments: Presentation                                           1 January 2009                             
     IFRS 2                      Share-based Payment - Vesting Conditions and Cancellations                    1 January 2009                             
     IFRS 3                      Business Combinations (revised 2008)                                          1 July 2009                                
     IFRS 1 & IAS 27             Consolidated and Separate Financial Statements - Costs of Investment in a     1 January 2009                             
                                 Subsidiary, Jointly                                                                                                      
                                 Controlled Entity or Associate                                                                                           
     IAS 39                      Amendment - Financial Instruments: Recognition and Measurement - Eligible     1 October 2008                             
                                 Hedged Items                                                                                                             
     IFRIC 16                    Hedges of a Net Investment in a Foreign Operation                             1 October 2009                             
     IFRS7                       Financial Instruments - Improving Disclosures                                 1 January 2009                             
  
  
Based on the Group's current business model and accounting policies, the 
Directors does not expect material impacts on the figures in the Group's 
financial statements when the interpretations become effective. They do not 
anticipate a significant impact on disclosures in the financial statements 
arising from IAS1 (Revised 2007) which requires changes to the formats of the 
primary statements. IFRS8 requires segmental reporting to be based on the 
internal reporting reviewed regularly by the Chief Operating Decision Maker. The 
Directors do not expect that the segments presented under this new standard will 
differ from those in these financial statements.  
  
The Group does not intend to apply any of these pronouncements early.  
  
22  CAPITAL MANAGEMENT POLICIES AND PROCEDURES  
  
Matchtech Group plc's capital management objectives are:  
  
- to ensure the Group's ability to continue as a going concern; and to provide 
an adequate return to shareholders.  
  
- by pricing products and services commensurately with the level of risk.  
  
The Group monitors capital on the basis of the carrying amount of equity as 
presented on the face of the balance sheet.  
  
The Group sets the amount of capital in proportion to its overall financing 
structure, ie equity and financial liabilities. The Group manages the capital 
structure and makes adjustments in the light of changes in economic conditions 
and risk characteristics of the underlying assets. Capital for the reporting 
period under review is summarised as follows:  
  
 
                                                  2009     2008    
                                                  £'000    £'000   
                                                                   
  Total equity                                    21,235   17,066  
  Cash and cash equivalents                       (307)    (297)   
  Capital                                         20,928   16,769  
                                                                   
  Total equity                                    21,235   17,066  
  Cash and cash equivalents                       1,470    3,349   
  Capital                                         22,705   20,415  
                                                                   
  Capital to overall financing ratio              92%      82%     
  
  
 
This information is provided by RNS  
  
The company news service from the London Stock Exchange  
  
  END  
  
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