Half Yearly Report

    RNS Number : 7694K
  ADL PLC
  24 December 2008
   

    ADL plc

    Interim Report for the six months to 30 September 2008

    Financial Highlights

    *     £361,000 Operating Profit before deducting £110,000 exceptional costs (30 September 2007: £631,000 before exceptional costs of
£417,000)- a reduction of 43%

    *     (£53,000) Retained loss after exceptional items (30 September 2007: Retained profit £78,000)

    *     (0.54)p Earnings per Ordinary Share (30 September 2007: (1.49)p) 

    *     82.1p Net Assets per Ordinary Share (30 September 2007: 85.1p) - a decrease of 3.5% (Allowing for the transition from UK GAAP to
IFRS)

    *     Trading in the second half is showing a similar performance to that experienced in the first half

    Sir William Wells, Chairman, commented "The past six months in particular have presented extraordinary challenges for our business and I
am delighted that, with the end of the legal action, we have been vindicated. Your management team, who have borne these challenges with
fortitude, are now determined to work to rebuild shareholder value"  



    For further information please contact:

 ADL plc
 Jeremy Davies, Managing Director  07860 717458

 Blue Oar Securities
 Andrew Raca                       0207 448 4400

      
    Chairman's statement

    Financial Results

    I have pleasure in presenting ADL's Interim Report for the six months ended 30 September 2008. In this period turnover was £2.925
million (30 September 2007: £3.023 million and year to 31 March 2008 £6.043 million). The profit on ordinary activities before interest,
taxation and exceptional costs fell to £361,000 from £631,000 in the six months to 30 September 2007.

    Our net assets at the period end were £8.117m, equivalent to 82.1p per share. Our relationship with our bankers remains positive. Our
banking facilities at 30th September 2008 were £9m and no repayments are due until October 2009.  

    Your board does not consider it appropriate at the present time to declare an interim dividend.

    The reduction in turnover within the Company is primarily due to the impact of the closure of The Knoll noted below.

    Despite exceptional expenditure of £110,000 in relation to the legal action against the Company and its directors, and the distraction
caused in this respect, the Company has managed to minimise the overall loss for the Company to £53,000 for the six months.

    Review of Business

    Progress over the last six months has been difficult owing to the considerable resources and senior management time which were deployed
in the defence against the criminal charges brought against the Company under the Mental Health Act 1983. These charges were (as previously
announced) stayed by His Honour Judge Ticehurst in Bristol Crown Court on the 21st November 2008.

    This legal action followed the dawn raid by Police and the Commission for Social Care Inspection ("CSCI") on the 26th July 2005 at
Newsham House Nursing Home in Gloucester and this has undoubtedly affected the performance of the group since that date. Direct costs
incurred in defending the Company, its Directors and employees since 2005 are in excess of £430,000.

    Clearly the issues at Newsham House have affected the Company's relationship with both the regulatory body and other associated bodies
throughout the country. In the Company's view this was a contributory factor in the emptying of The Knoll (a 42 bed facility in Bradford) by
the local authority on the 4th July 2008. The six month period under review shows the impact of its closure on income and the redundancy
costs incurred.

    At the time of the Company and its Directors being charged it was our intention to acquire a compatible group of five homes to
complement our provision in the northern area. Previously arranged funding was withdrawn as a result of the Company being charged. As a
consequence in the year end accounts the costs incurred of £310,112 were written off.

    The court case has impacted the CSCI ratings of our homes throughout the country and impacted group earnings.

    Your Board is currently in consultation with its legal team and are assessing the quantum of the claim for consequential damages which
they believe could be in excess of £1 million.
      
    CSCI insisted on the removal of the Acting Manager at Gloucester following her being charged in September 2007, and your Directors were
precluded from general access to the home. This action led to CSCI seeking to close the home. As a result and to protect the home, its
residents and the Company's investment, a management agreement has been entered into with Lifeline Homes Limited until re-registration takes
place in their name. Following that it is your Company's intention to lease the home to this company on a 35 year lease and to subsequently
seek a sale of the resultant investment.

    As previously reported it is the Company's policy to de-gear and reduce bank debt by selected asset sales.

    Development Opportunities

    Completion of the sale of surplus land at Gloucester has been delayed due to planning problems by the developers. Building work on the
new car park is virtually complete. Financial completion of the sale is expected in early 2009.

    The developer who acquired Morton Manor managed to sell four of the six units prior to the market collapse. Your Directors have taken a
lease of one of the remaining flats in satisfaction of the developer's outstanding debt of some £250,000. This will be let in the short term
with the intention of a sale once market conditions allow.

    The developers of surplus land at Allambie Court, Nuneaton have withdrawn from the conditional contract to develop some eight flats in
view of deteriorating demand. The Company has received planning consent to extend the property to provide six single rooms in view of the
lack of demand for twin rooms. Now the court case has ceased and as cash flow allows, this extension will be built.

    In addition the Company is currently analysing demand in the area with a view to seeking planning permission for a further extension to
bring the home up to 60 beds.

    Outlook

    It is your Board's intention to seek to rebuild relationships with both the regulator, CSCI, throughout the country and purchasing
authorities, thus stabilising the business. Once this has been achieved we will seek appropriate opportunities to grow the business.

    Sir William Wells
    Chairman
    24 December 2008

      
 Unaudited Income Statement       6 months to 30 Sept  6 months to 30 Sept 07         Year to
 for the six months ended                          08               Unaudited       31 Mar 08
 30 September 2008                          Unaudited                   £'000         Audited
                                                £'000                                   £'000
 Turnover

 Continuing operations                          2,925                   3,023           6,043
 Acquisitions                                       -                       -               -
                                                2,925                   3,023           6,043
 Cost of sales

 Continuing operations                        (2,015)                 (1,830)         (3,764)
 Acquisitions                                       -                       -               -
                                              (2,015)                 (1,830)         (3,764)

 Gross profit                                     910                   1,193           2,279

 Administrative expenses -                      (596)                   (643)         (1,497)
 continuing operations
 Administrative expenses -                         -                        -               -
 acquisitions
 Exceptional loss                               (110)                   (417)               -
 Other operating income                            48                      81             136
                                                (658)                   (979)         (1,361)

 Operating profit                                 251                     214             918

 Continuing operations                            251                     214           (651)
 Acquisitions                                       -                       -           (150)
                                                  251                     214           (801)

 Interest receivable                                8                       7              20
 Interest payable                               (312)                   (299)           (614)

 (Loss) / Profit on ordinary                     (53)                    (78)           (477)
 activities before taxation

 Tax charge on profit on                            0                    (69)              14
 ordinary activities

 Retained profit for the period                  (53)                   (147)           (463)

 Earnings per ordinary share -                (0.54)p                 (1.49)p         (4.68)p
 basic and diluted

 Weighted average number of                 9,885,694               9,885,694       9,885,694
 shares

      
 Consolidated Unaudited Balance       30 Sept 08      30 Sept 07     31 Mar 08
 Sheet as at                           Unaudited       Unaudited       Audited
 30 September 2008                         £'000           £'000         £'000
 Non-current assets

 Intangible assets                           753             950           891
 Tangible assets                          16,442          16,281        16,180
 Investments                                   2               2             2
 Deferred tax assets                          37              44            37
                                          17,234          17,277        17,110

 Current assets

 Inventories                                   9              11             9
 Debtors                                     553             787           852
 Assets held for resale                      500             700           500
 Cash and cash equivalents                   273             446           567
                                           1,335           1,944         1,928

 Current liabilities                       (772)         (1,016)       (1,240)

 Net current assets                          563             928           688

 Non-current liabilities                 (9,680)         (9,792)       (9,628)

 Net assets                                8,117           8,413         8,170


 Equity

 Called-up equity share capital            1,522           1,522         1,522
 Share premium account                     3,712           3,712         3,712
 Revaluation reserve                       2,876           2,362         2,876
 Retained earnings                             7             817            60

 Total equity                              8,117           8,413         8,170

 Net assets per ordinary share             82.1p           85.1p         82.6p

      
 Consolidated Unaudited Cash      6 months to 30 Sept   6 months to 30 Sept         Year to
 Flow Statement                          08 Unaudited                    07       31 Mar 08
 for the Six Months ended                       £'000             Unaudited         Audited
 30 September 2008                                                    £'000           £'000

 Net cash inflow from operating                   213                   397             729
 activities

 Returns of investments and
 servicing of finance

 Interest received                                  8                     7              20
 Interest paid                                  (312)                 (299)           (614)
 Finance charges paid                                                                     -

 Net cash inflow from returns
 on investments
  and servicing of finance                      (304)                 (292)           (594)

 Taxation

  UK Corporation tax paid                         (4)                     -             (9)

 Capital expenditure and
 financial investment

 Asset purchased for 3rd party                  (249)                     -               -


 Net cash outflow from                          (249)                     -               -
 investing activities

 Cash inflow before financing                   (344)                   105             126
 activities

 Financing

 New secured loans                                 50                     -             100
 Repayment of amounts borrowed                      -                     -               -

 Net cash inflow from financing                    50                     -             100
 activities

 Increase in cash and cash                      (294)                   105             226
 equivalents

 Reconciliation of operating
 profit to net cash inflow from
 operating activities

 Operating profit                                 251                   214             117
 Amortisation                                     138                    56             115
 Amortisation of finance costs                      -                    18              19
 Depreciation                                       -                     1               2
 Profit on disposal of fixed                        -                     -              50
 assets                                             -                     -             100
 Fair value of non current
 assets held for sale 
 (Increase)/decrease in debtors                   292                    96            (11)
 (Decrease)/increase in                             -                     -               2
 inventories
 (Decrease)/increase in                         (468)                    12             335
 creditors

 Net cash inflow from operating                   213                   397             729
 activities

      
 Consolidated Statement of            Share  Share Premium   Revaluation  Retained Earnings       Total
 Changes in Equity                  Capital          £'000       Reserve              £'000      Equity
 For the six months ended             £'000                        £'000                          £'000
 30 September 2008

 Balance at 1 April 2007              1,522          3,712         2,968                408       8,610

 Recognised income and expenses           -              -             -              (463)       (463)
 Transfer to profit/loss                  -              -         (115)                115           -
 Revaluation of net tax                   -              -            23                  -          23

 Balance at 31 March 2008             1,522          3,712         2,876                 60       8,170

 Recognised income and expenses           -              -             -               (53)        (53)

 Balance at 30 September 2008         1,522          3,712         2,876                  7       8,117

      
    Notes

    1.  Accounting Policies

    Basis of Accounting

    These unaudited interim financial statements were approved for issue by the ADL plc Board of Directors on 23 December 2008.

    These consolidated interim financial statements for the six months ended 30 September 2008 have been prepared in accordance with the
Listing Rules of the Financial Services Authority and with IAS 34. 'Interim Financial Reporting' as adopted by the European Union ("EU").
The interim financial statements should be read in conjunction with the financial statements for the year ended 31 March 2008 which have
been prepared in accordance with UK Generally Accepted Accounting Practice ("UK GAAP").

    The Group now prepares its consolidated financial statements in accordance with applicable International Financial Reporting Standards
("IFRS") as adopted by the EU. This is the first financial information on the Group to have been prepared under IFRS and the disclosures
required by IFRS 1 "First time adoption of IFRS" concerning the transition from UK GAAP to IFRS have been included in these notes.

    The Group has applied consistent accounting policies in preparing the consolidated interim financial statements for the six months ended
30 September 2008, the comparative information for the six months ended 30 September 2007, the financial statements for the year ended 31
March 2008 and the preparation of the opening IFRS balance sheet as at 1 April 2007, the date of transition.

    These interim financial results are unaudited and do not constitute statutory financial statements as defined in section 240 of the
Companies Act 1985. The functional currency of the Group is UK Sterling and accordingly the amounts in the interim results are denominated
in that currency.

    The statutory financial statements for ADL plc for the year ended 31 March 2008 received an unqualified Auditor's Report and have been
filed with the Registrar of Companies.

    Basis of Consolidation

    The consolidated interim results incorporate the interim results of the Company and all Group undertakings. These are adjusted, where
appropriate, to conform to Group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill arising on
consolidation is capitalised and the value of this goodwill is reviewed on a periodic basis. The results of companies acquired are included
in the Group profit and loss account after the date that control passed.

      
    2.  Operating Profit

    Operating profit is stated after charging / (crediting):

                                                 6 months to 30 Sept  6 months to 30 Sept 07         Year to
                                                                  08               Unaudited       31 Mar 08
                                                           Unaudited                   £'000         Audited
                                                               £'000                                   £'000

 Director's remuneration                                          67                     106             168
 Amortisation - intangible assets                                138                      74             134

 Depreciation of owned fixed assets                                0                       1               -
 Auditors' remuneration   - as auditors                            0                      27              34
                           - non-audit                             0                      55              81
                          services
 Exceptional costs                                               110                     417             651

    3.  The retained loss per ordinary share have been calculated on the loss on ordinary activities after taxation of £53,128 (30 September
2007: Retained profit £77,567, 31 March 2008: Retained profit £462,650) using the weighted average number of shares in issue during the six
months ended 30 September 2008 of 9,885,694 shares (30 September 2007: 9,885,694, 31 March 2008 9,885,694).

    4.  Net assets per ordinary share have been calculated on net assets of £8,117,000 (30 September 2007: £8,413,000, 31 March 2008
£8,170,000) divided by 9,885,694 ordinary shares in issue at 30 September 2008, 30 September 2007 and 31 March 2008.

    5.  Comparative period

    The corresponding amounts in the prior interim period for the six months ended 30 September 2007 and the audited financial statements
for the year ended 31 March 2008 have been adjusted for the effects of changes to accounting policies on transition to IFRS as follows:

    a)  Goodwill arising on the acquisition of Newsham House Limited, Woodland Healthcare Limited and Solutions (Yorkshire) Limited of
£9,543 in the 6 months ended 30 September 2006 and £23,577 in the year to 31 March 2007 has been written back to the profit and loss account
and Goodwill on the balance sheet.

    b)  Deferred tax arising on the revaluation of properties as at 30 September 2006 of £824,792 and £1,446,000 as at 31 March 2007 has
been provided in full and deducted from the Revaluation Reserve.


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