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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pinnacle | LSE:PCL | London | Ordinary Share | GB00B1899T70 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.875 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMPCL
RNS Number : 8217K
Pinnacle Staffing Group PLC
27 April 2010
Pinnacle Staffing Group plc
Pinnacle Staffing Group plc, (AIM: PCL) the healthcare recruitment group,
announces its full year results for the year ended 3rd January 2010.
Operational highlights of the year include:
+--+--+-------------------------------------------------------+
| | -| Transfer of all group central functions to the head |
| | | office in Luton. |
| | | |
+--+--+-------------------------------------------------------+
| | -| Establishment of the new Doctors division. |
| | | |
+--+--+-------------------------------------------------------+
| | -| Acquisition of The Compliance Company (GB) Limited. |
| | | |
+--+--+-------------------------------------------------------+
| | -| Substantial increase in the level of NHS demand for |
| | | the services of the British Nursing Association |
| | | ("BNA"). |
+--+--+-------------------------------------------------------+
Commenting on the results, David Hope, Chief Operating Officer & Finance
Director of Pinnacle said:
"2009 has been a challenging year for Pinnacle where the focus of the Board has
been on transforming the internal processes of the Group to make it a more
robust and efficient business that is better placed to cope with the increasing
regulatory demands of the temporary healthcare staffing market. The changes that
we have made to the business, combined with revised pricing on the new NHS
Frameworks for Nursing, have enabled us to develop further our relationships
with NHS Organisations. Despite a disappointing final quarter to the year,
caused in part by the severe weather in December, the level of NHS interest in
using reasonably priced quality staff from BNA has been exceptional. The
challenge for the business in 2010 will be to use its resources effectively to
capitalise on these growth opportunities."
Enquiries:
+----------+-------------------------------------+---------------------+
| | Pinnacle Staffing Group Plc | |
+----------+-------------------------------------+---------------------+
| | Tom Charlton, Executive Chairman | 01582 395900 |
| | | |
+----------+-------------------------------------+---------------------+
| | David Hope, Chief Operating Officer | 01582 395900 |
| | and Finance Director | |
| | | |
+----------+-------------------------------------+---------------------+
| | Brewin Dolphin Limited (NOMAD) | 0845 270 8600 |
| | Matt Davis | |
+----------+-------------------------------------+---------------------+
Chairman's Statement
Business Review
The Group has experienced another difficult year of trading as a result of more
challenging market conditions in the UK healthcare sector. Previous hopes of
being able to report a profit for the year were further hit by the adverse
winter weather conditions in December which especially affected our nursing
branches in Northern England and Scotland. Consequently, on 15th January 2010,
the Board announced that it had embarked on a strategic review of Pinnacle's
operations to establish how best to deliver shareholder value.
Financial Results
The results presented are for the 52 weeks ended 3rd January 2010 and the
comparative figures are for the 52 weeks ended 4th January 2009. Group revenue
for the period amounted to GBP40.2m (2008: GBP38.1m) a rise of approximately
5.5%. Gross margins have increased to 20.6% (2008: 19%). Total gross profit
achieved was GBP8.3m (2008: GBP7.3m).
Trading
The Nursing Division had a disappointing second half to the year, delivering
results below budget. On the positive side, our three brands gained positions on
the new National Frameworks for Agency Nursing and we received a substantial
number of enquiries from NHS Organisations interested in putting in place new
service level agreements with BNA. Nevertheless, the immediate impact on revenue
was muted as the number of available nurses to meet strong demand was severely
limited. In some other areas, BNA encountered a temporary ban on the use of
nursing agency staff by a number of NHS hospitals. Fortunately, we experienced
increased demand for nursing services which were provided in patients' homes and
funded by local NHS Primary Care Trusts. Overall, it was a testing time for our
nursing division with our staff facing many challenges.
The purchase of The Compliance Company (GB) Ltd was completed during the year
giving Pinnacle one of the best available systems for monitoring the compliance
status of its workers. This is extremely important for Pinnacle as it builds on
its relationship with the NHS to provide cost-effective flexible staffing
solutions together with the very highest standards of training and compliance.
Pinnacle's doctors recruitment businesses, which trade under the Medic
International and Holt Doctors brand names, were unable to lift their weekly
commission run-rate beyond the level reached in June. Demand for junior doctors,
which had been buoyed by the implementation of the European Working Time
Directive at the start of August 2009, subsequently eased off. Positive
progress was made in developing the sourcing of doctors internationally for
permanent positions in UK hospitals.
Medical Services again performed poorly. The previous lack of investment in
developing a recruitment pipeline to bring qualified overseas candidates to the
UK and the failure of a new initiative to generate any additional candidates
meant that the demand for qualified staff could not be met.
The invoice discounting facility provided to the operating subsidiaries of
Pinnacle by Barclays Bank plc has been extended until 1st September 2010 and
discussions with our bankers regarding renewal of this facility have already
commenced. The guarantee which had been provided by the Executive Chairman as
additional security to our bankers was released in June 2009.
Outlook and Strategic Review
As part of the ongoing review of Pinnacle's business we recognise that the
nursing brands, BNA and Grosvenor, have outstanding opportunities to extend
their geographical reach and to be much more effective in supplying nurses and
healthcare assistants to NHS Organisations. This will mean increasing the size
of certain key branches to cope with substantially increased volumes. At the
same time BNA continues to have a significant number of underperforming branches
which are sub-scale in terms of the number of shifts being booked and where they
also lack a sufficient pool of qualified workers.
BNA has also been slow to recognise the strong underlying growth in its
continuing care supplies to local Primary Care Trusts and has not, to date,
devoted dedicated resource to developing this growth area. Pinnacle needs to
invest in resourcing its key branches and pursuing its growth opportunities
while at the same time managing the decline elsewhere in the branch network.
Medical Services has continued to see revenues decline due to the lack of a
pipeline of new candidates. Our focus here will remain on supplying our existing
clients with their requirements rather than investing further to try and grow
the business.
The doctors business, having developed extremely well in the first six months
under its new management, then saw its commission run-rate level off. The
management team has plans in place to take the business to the next level,
however this has necessitated significant additional investment in personnel
which has added to overhead costs but which should deliver a return in the
future. Pinnacle's clear focus has to be on rebuilding its nursing division
which, with proper investment, can create substantial value for shareholders.
Pinnacle's doctors division, now that it is established, has to demonstrate it
can achieve its growth targets and generate cash to fund its further
development.
The Company announced on 15th January 2010 that it was undertaking a strategic
review to assess how best to deliver shareholder value. This process is ongoing
and further announcements will be made, as appropriate, in due course.
Tom Charlton
Executive Chairman
26th April 2010
Principal activities and Review of Business
The Group is a provider of healthcare workers in the temporary healthcare
staffing market. It supplies nurses, locum doctors, carers and other medical
personnel to a wide client base including the NHS, private hospitals, care homes
and to individuals within their own homes. It is one of the few national
temporary staffing recruitment businesses dedicated to the supply of healthcare
workers. The business has a national presence, operating through 33 branches,
which are supported by the Group infrastructure.
The results for the year show revenue of GBP40.2m (2008: GBP38.1m) and EBITDA*
of GBP1k (2008: GBP(362)k). Operating loss was GBP1,089k (2008: GBP6,974k) and
loss before tax was GBP1,270k (2008: GBP7,214k). The taxation expense for the
period was GBP27k (2008: Credit GBP132k) and the loss after tax was GBP1,297k
(2008: GBP7,082k).
*profit before finance charges, taxation, depreciation, amortisation of
intangible assets and impairment of goodwill and intangible assets
Strategy
The objective of the Group is to achieve profitable growth by capitalising on
its strong brand portfolio and national presence. We aim to achieve this
through:
+--+--+-------------------------------------------------------+
| | -| remaining focused and dedicated to the supply of |
| | | temporary healthcare workers to the NHS and |
| | | independent markets; |
+--+--+-------------------------------------------------------+
| | -| developing local agreements with NHS Organisations to |
| | | cater for their specific, local, requirements with |
| | | focus being placed on the continuing care market; |
+--+--+-------------------------------------------------------+
| | -| the active regeneration of our historic database of |
| | | over 20,000 former healthcare workers; |
+--+--+-------------------------------------------------------+
| | -| development of overseas relationships and offices to |
| | | deliver a larger candidate base; |
+--+--+-------------------------------------------------------+
| | -| continued development of the Group's information |
| | | technology platform to allow remote access for |
| | | customers and candidates, further reducing |
| | | transactional costs; |
+--+--+-------------------------------------------------------+
| | -| investing in our people and our marketing capability. |
+--+--+-------------------------------------------------------+
Financial Review
Statement of comprehensive income
The results presented here are for the year ended 3rd January 2010 ("2009").
Comparative information is presented for the year ended 4th January 2009
("2008").
Revenue
Revenue for the period amounted to GBP40.2m (2008: GBP38.1m). The Group's core
Nursing Division which includes its key brand, BNA, maintained its revenue with
sales for the year of GBP31.4m (2008: GBP31.5m). The Medical Services Division
continued to see substantial falls in revenue to GBP3.7m (2008: GBP6.6m) whilst
the new Doctors division has seen substantial growth during the year with
revenues of GBP5.1m (2008: GBPnil).
Gross Profit
The overall gross profit amounted to GBP8.3m (2008: GBP7.3m). Through the
continued revision of its non-NHS charge rates the business has managed to
reverse some of the downward pressures on its margins which, combined with the
addition of the new higher margin Doctors business and additional focus being
placed on permanent placements in the nursing division, has led to the
improvement of the overall gross margin to 20.6% (2008: 19%).
Operating Expenses
During 2009 management made some significant cost savings however the majority
of these were offset by the additional costs associated with developing the new
Doctors recruitment business and the opening of offices in new geographical
locations. Further expense was incurred on the review and improvement of many of
the Group's internal processes, procedures and handbooks which had suffered from
a degree of historic underinvestment.
Further unbudgeted expenditure was incurred on improving the compliance status
of the temporary workforce including a free nationwide vaccination programme for
Measles, Mumps and Rubella and influenza.
Operating expenses before financing charges, depreciation, amortisation of
intangibles and impairment of goodwill and intangible assets amounted to GBP8.3m
(2008: GBP7.6m).
Following an annual review of the Group's intangible assets and goodwill,
GBP864k has been charged to the statement of comprehensive income in respect of
an impairment of goodwill as detailed in note 6.
Financing Costs
The Group fulfils its financing requirements by way of an invoice discounting
facility, whereby it can borrow up to 80% of outstanding receivable balances
less than 120 days old. Total bank charges in the period amounted to GBP89k
(2008: GBP68k) and interest payable on the invoice discounting facility
borrowings totalled GBP92k (2008: GBP176k).
Loss before tax
The Group made a loss before tax of GBP1,270k (2008: GBP7,214k).
Taxation
The total taxation charge for the year is GBP27k (2008: Credit GBP132k). GBP22k
relates to an under provision for recoverable tax in previous years. GBP49k is
the deferred tax charge for the year (2008: Credit GBP67k). The charge relating
to the loss for the year is GBPnil (2008: GBPnil).
Loss Per Share
Basic loss per share amounted to 1.38 pence (2008: 8.08 pence).
Dividend
The Directors do not recommend the payment of a dividend on ordinary shares at
this time (2008: GBPnil).
Cashflow and borrowings
Closing net borrowings amounted to GBP2.1m (2008: GBP2.2m). Our financial year
end coincides with the slowest point of the year both operationally and from a
cash generation perspective as many of our clients curtail their operations over
the Christmas period. In addition, our December holiday pay year end means that
there is a significant cash outflow as temporary staff claim their rolled-up
holiday pay entitlement. Further, the adverse weather conditions during December
had a negative impact on year end trading and the associated cashflows. Year end
trade debtor days were 45 days (2008: 48 days).
Trade Payables
Trade payables and payroll liabilities of the Group amounted to GBP2.9m (2008:
GBP2.9m). The Company had no trade payables at the year end. It is the Group's
practice to agree credit terms with all suppliers and to pay all approved
invoices within these credit terms.
Treasury Policy and Financial Risk Management
The Group manages its cash and debt position in order to minimise interest
costs. The current level of borrowings mean that the Board believes that it is
unnecessary to have an interest rate hedging policy.
The Group's financial instruments comprise invoice discounting facilities, cash
and other items arising from operating activities such as trade receivables and
trade payables. The main purpose of these financial instruments is to provide
finance for the Group's operations.
The principal financial risks of the Group are identified as follows:
Banking covenants
The Group is committed to maintaining the key financial indicators as set out in
the covenants relating to the invoice discounting facility. The Group continues
to trade within its existing bank facilities and remains in compliance with its
banking covenants. During the previous year, at the request of our bankers,
Executive Chairman Tom Charlton gave a personal guarantee to support the
Company's invoice discounting facility. This guarantee was released on the 12th
June 2009.
Credit Risk Management
It is Group policy to mitigate credit risk arising through client debt by
undertaking credit checks on all new private clients prior to commencement of
trading. Further, the application of rigorous credit control procedures
highlights potentially difficult debt at an early stage so that remedial action
can be taken.
Charitable and Political Donations
The Group made no charitable or political donations in the year (2008: GBPnil).
David Hope
Chief Operating Officer and Finance Director
26th April 2010
Group Statement of Comprehensive Income
for the 52 weeks ended 3rd January 2010
+--------------------+----------------------+------+-------+----------+----------+
| | | | 52 | 52 |
| | | | weeks | weeks |
| | | | to | to |
| | | | 03/01/10 | 04/01/09 |
+-------------------------------------------+------+-------+----------+----------+
| | |Notes | GBP000 | GBP000 |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Revenue | | 3 | 40,201 | 38,116 |
+-------------------------------------------+------+-------+----------+----------+
| Cost of sales | | | (31,916) | (30,848) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Gross profit | | | 8,285 | 7,268 |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Marketing and sales | | | (4,743) | (2,670) |
+-------------------------------------------+------+-------+----------+----------+
| Administrative expenses | | | (4,052) | (5,563) |
+-------------------------------------------+------+-------+----------+----------+
| Impairment of goodwill and intangible | | | (864) | (6,009) |
| assets | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Negative goodwill | | | 285 | - |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Operating loss | | | (1,089) | (6,974) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Finance income | | | | - | 4 |
+--------------------+----------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Finance expense | | | (181) | (244) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Loss before taxation | | | (1,270) | (7,214) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Tax (expense)/credit | | 4 | (27) | 132 |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Loss for the period | | | (1,297) | (7,082) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Other comprehensive income | | | - | - |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Total comprehensive loss for the period | | | (1,297) | (7,082) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Attributable to: | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Equity holders of the company | | | (1,249) | (7,082) |
+-------------------------------------------+------+-------+----------+----------+
| Minority interest | | | (48) | - |
+-------------------------------------------+------+-------+----------+----------+
| | | | (1,297) | (7,082) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Analysis: | | | | |
+-------------------------------------------+------+-------+----------+----------+
| EBITDA | | | 1 | (362) |
+-------------------------------------------+------+-------+----------+----------+
| Depreciation of property, plant and | | | (289) | (317) |
| equipment | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Amortisation of intangible assets | | | (222) | (286) |
+-------------------------------------------+------+-------+----------+----------+
| Impairment of goodwill and intangible | | | (864) | (6,009) |
| assets | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Negative goodwill | | | 285 | - |
+-------------------------------------------+------+-------+----------+----------+
| Operating loss | | | (1,089) | (6,974) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Loss per 10p share | | | | |
+-------------------------------------------+------+-------+----------+----------+
| Basic | | 5 | (1.38p) | (8.08p) |
+-------------------------------------------+------+-------+----------+----------+
| Diluted | | 5 | (1.38p) | (8.08p) |
+-------------------------------------------+------+-------+----------+----------+
| | | | | |
+-------------------------------------------+------+-------+----------+----------+
| | | | | | |
+--------------------+----------------------+------+-------+----------+----------+
The results shown above relate entirely to continuing and acquired operations.
Group and Company Statements of Financial Position
As at 3rd January 2010
+-----------------+-----+-----+------+----------+----------+----------+----------+
| | | | | Group | Company |
+-----------------+-----+-----+------+---------------------+---------------------+
| | | | | 03/01/10 | 04/01/09 | 03/01/10 | 04/01/09 |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| | | | Note | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Assets | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Non-current | | | | | | | |
| assets | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Goodwill | | | 6 | 4,552 | 5,416 | - | - |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Intangible assets | | 6 | 3,100 | 2,801 | - | - |
+-----------------------+-----+------+----------+----------+----------+----------+
| Property, plant and | | 7 | 541 | 533 | - | - |
| equipment | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| Deferred income tax | | | - | 49 | - | - |
| assets | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| Investments in | | | - | - | 14,893 | 15,242 |
| subsidiaries | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total non-current | | | 8,193 | 8,799 | 14,893 | 15,242 |
| assets | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Current assets | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Inventories | | | 14 | - | - | - |
+-----------------------+-----+------+----------+----------+----------+----------+
| Trade and other | | | 5,810 | 5,820 | 21 | 1 |
| receivables | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| Cash and cash | | | 114 | 84 | - | - |
| equivalents | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total current | | | | 5,938 | 5,904 | 21 | 1 |
| assets | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total assets | | | | 14,131 | 14,703 | 14,914 | 15,243 |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Equity | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Capital and reserves | | | | |
| attributable to equity | | | | |
| holders of the company | | | | |
+------------------------------------+----------+----------+----------+----------+
| Share capital | | | | 9,263 | 8,763 | 9,263 | 8,763 |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Share premium | | | | 7,408 | 7,408 | 7,408 | 7,408 |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Share payment reserve | | | - | 11 | - | 11 |
+-----------------------+-----+------+----------+----------+----------+----------+
| Retained losses | | | (9,070) | (7,532) | (7,391) | (6,426) |
+-----------------------+-----+------+----------+----------+----------+----------+
| | | | | 7,601 | 8,650 | 9,280 | 9,756 |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Minority | | | | (48) | - | - | - |
| interest in | | | | | | | |
| equity | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total equity | | | 7,553 | 8,650 | 9,280 | 9,756 |
+-----------------------+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Liabilities | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Current | | | | | | | |
| liabilities | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Trade and other | | | 4,312 | 3,654 | 5,634 | 5,487 |
| payables | | | | | | |
+-----------------------+-----+------+----------+----------+----------+----------+
| Financial | | | | | | | |
| liabilities: | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| - Borrowings | | | | 2,234 | 2,275 | - | - |
| - loans | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Provision for | | | | 32 | 124 | - | - |
| liabilities | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total current | | | | 6,578 | 6,053 | 5,634 | 5,487 |
| liabilities | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total liabilities | | 6,578 | 6,053 | 5,634 | 5,487 |
+-----------------------------+------+----------+----------+----------+----------+
| | | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
| Total equity and | | | 14,131 | 14,703 | 14,914 | 15,243 |
| liabilities | | | | | | |
+-----------------+-----+-----+------+----------+----------+----------+----------+
Group and Company Statements of Changes in Equity
for the 52 weeks ended 3rd January 2010
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Group | Share | Share | Share | Retained | Total | Minority | Total |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| | capital | premium | payment | losses | | Interest | equity |
| | | | reserve | | | | |
| 52 weeks to 4th | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| January 2009 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 7th | 8,763 | 7,408 | 11 | (450) | 15,732 | - | 15,732 |
| January 2008 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Total | - | - | - | (7,082) | (7,082) | - | (7,082) |
| comprehensive loss | | | | | | | |
| for the year | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 4th | 8,763 | 7,408 | 11 | (7,532) | 8,650 | - | 8,650 |
| January 2009 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| 52 weeks to 3rd | | | | | | | |
| January 2010 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 5th | 8,763 | 7,408 | 11 | (7,532) | 8,650 | - | 8,650 |
| January 2009 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Shares issued | 200 | - | - | - | 200 | - | 200 |
| during the period | | | | | | | |
| (note 8) | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Reserve transfer | 300 | - | - | (300) | - | - | - |
| in respect of | | | | | | | |
| shares issued at | | | | | | | |
| below par value | | | | | | | |
| (note 8) | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Share payment | - | - | (11) | 11 | - | - | - |
| reserve transfer | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Transactions with | 9,263 | 7,408 | - | (7,821) | 8,850 | - | 8,850 |
| owners | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Total | - | - | - | (1,249) | (1,249) | (48) | (1,297) |
| comprehensive loss | | | | | | | |
| for the year | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 3rd | 9,263 | 7,408 | - | (9,070) | 7,601 | (48) | 7,553 |
| January 2010 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Company | Share | Share | Share | Retained | Total | Minority | Total |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| | capital | premium | payment | losses | | Interest | equity |
| | | | reserve | | | | |
| 52 weeks to 4th | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
| January 2009 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 7th | 8,763 | 7,408 | 11 | (937) | 15,245 | - | 15,245 |
| January 2008 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Total | - | - | - | (5,489) | (5,489) | - | (5,489) |
| comprehensive loss | | | | | | | |
| for the year | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 4th | 8,763 | 7,408 | 11 | (6,426) | 9,756 | - | 9,756 |
| January 2009 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| 52 weeks to 3rd | | | | | | | |
| January 2010 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 5th | 8,763 | 7,408 | 11 | (6,426) | 9,756 | - | 9,756 |
| January 2009 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Shares issued | 500 | - | - | - | 500 | - | 500 |
| during the period | | | | | | | |
| (note 8) | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Share payment | - | - | (11) | 11 | - | - | - |
| reserve transfer | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Transactions with | 9,263 | 7,408 | - | (6,415) | 10,256 | - | 10,256 |
| owners | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Total | - | - | - | (976) | (976) | | (976) |
| comprehensive loss | | | | | | | |
| for the year | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
| Balance at 3rd | 9,263 | 7,408 | - | (7,391) | 9,280 | - | 9,280 |
| January 2010 | | | | | | | |
+--------------------+---------+---------+---------+----------+----------+----------+---------+
Group Statement of Cash Flows
for the 52 weeks ended 3rd January 2010
+-----------------+-----+-----+----+----------+----------+
| | | | | Group |
+-----------------+-----+-----+----+---------------------+
| | | | | 52 | 52 |
| | | | | weeks | weeks |
| | | | | to | to |
| | | | | 03/01/10 | 04/01/09 |
+-----------------+-----+-----+----+----------+----------+
| | | | | GBP000 | GBP000 |
+-----------------+-----+-----+----+----------+----------+
| Operating | | | | | |
| activities | | | | | |
+-----------------+-----+-----+----+----------+----------+
| Cash generated from | | 511 | 326 |
| operations (note 9) | | | |
+-----------------------------+----+----------+----------+
| Interest paid | | | | (181) | (244) |
+-----------------+-----+-----+----+----------+----------+
| Interest received | - | 4 |
+----------------------------------+----------+----------+
| Income taxes paid | 67 | - |
+----------------------------------+----------+----------+
| Net cash generated from | 397 | 86 |
| operating activities | | |
+----------------------------------+----------+----------+
| | | | | | |
+-----------------+-----+-----+----+----------+----------+
| Investing | | | | | |
| activities | | | | | |
+-----------------+-----+-----+----+----------+----------+
| Purchase of intangible assets | (13) | (2) |
+----------------------------------+----------+----------+
| Purchase of tangible assets | (298) | (365) |
+----------------------------------+----------+----------+
| Purchase of subsidiary | (15) | - |
| undertakings | | |
+----------------------------------+----------+----------+
| Net cash used in investing | (326) | (367) |
| activities | | |
+----------------------------------+----------+----------+
| | | | | | |
+-----------------+-----+-----+----+----------+----------+
| Financing | | | | | |
| activities | | | | | |
+-----------------+-----+-----+----+----------+----------+
| (Decrease)/increase in loans | (41) | 255 |
| from banks | | |
+----------------------------------+----------+----------+
| Net cash (used in)/generated | (41) | 255 |
| from financing activities | | |
+----------------------------------+----------+----------+
| | | | | | |
+-----------------+-----+-----+----+----------+----------+
| Net increase/(decrease) in cash | 30 | (26) |
| and cash equivalents | | |
+----------------------------------+----------+----------+
| | | | | | |
+-----------------+-----+-----+----+----------+----------+
| | | | | | |
+-----------------+-----+-----+----+----------+----------+
| Cash and cash equivalents at | 84 | 110 |
| beginning of the period | | |
+----------------------------------+----------+----------+
| Net increase/(decrease) in cash | 30 | (26) |
| and cash equivalents | | |
+----------------------------------+----------+----------+
| Cash and cash equivalents at end | 114 | 84 |
| of the period | | |
+-----------------+-----+-----+----+----------+----------+
Company
The Company does not hold cash and consequently has not presented a statement of
cash flows.
Notes to the Financial Information
1 Corporate Information
Pinnacle Staffing Group plc is a limited liability
company incorporated and domiciled within the United Kingdom whose shares are
publicly traded. The consolidated preliminary results for the Company as at and
for the year ended 3rd January 2010 comprise the company and its subsidiaries
("the Group").
The consolidated preliminary results for the Group for the year ended 3rd
January 2010 were approved by the directors on 26thApril 2010.
2 Basis of preparation and accounting policies
Basis of preparation
These consolidated preliminary results have been prepared in accordance with the
recognition and measurement criteria of IFRS. They do not include all of the
financial information included in the Group's annual report and should be read
in conjunction with the consolidated financial statements of the Group as at and
for the year ended 3rd January 2010.
Nature of the financial information
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 3rd January 2010 and for the year ended
4th January 2009, but is derived from those accounts. Statutory accounts will
be delivered to the Registrar of companies following the Company's annual
general meeting. The auditors have agreed to the issue of these results and
expect to issue an unqualified audit report on the 2009 accounts following
formal completion of the audit.
Significant accounting policies
The
accounting policies applied by the Group in these consolidated preliminary
results are the same as those applied by the Group in the consolidated financial
statements contained in the annual report and accounts.
3 Segmental reporting
Operations are conducted and managed through three segments - Nursing, Medical
Services and Doctors, with segmental results reported on this basis. The Doctors
business commenced trading in 2009. Costs have been allocated on a specific
basis where possible, and certain central costs allocated on a reasonable and
consistent basis.
The UK was the origin and destination of all of the Group's material revenue in
2009. All revenue is derived from external customers. All of the Group's
material operating profits were earned in the UK, and all of the Group's
material operating assets and net assets were located in the UK, in 2009.
+----+---------------+------------+----+-------+---------------+---------------+
| | | | | 2009 | 2008 |
+----+---------------+-----------------+-------+---------------+---------------+
| | | | | GBP000 | GBP000 |
+----+---------------+-----------------+-------+---------------+---------------+
| Revenue by business segment | | | |
+--------------------------------------+-------+---------------+---------------+
| Nursing | | | 31,417 | 31,497 |
+--------------------+-----------------+-------+---------------+---------------+
| Medical Services | | | 3,660 | 6,619 |
+--------------------+-----------------+-------+---------------+---------------+
| Doctors | | | 5,124 | - |
+--------------------+-----------------+-------+---------------+---------------+
| | | | | | |
+----+---------------+-----------------+-------+---------------+---------------+
| Total | | | 40,201 | 38,116 |
+--------------------+-----------------+-------+---------------+---------------+
| | | | | | |
+----+---------------+-----------------+-------+---------------+---------------+
| | | | | Operating | Operating |
| | | | | profit/(loss) | profit/(loss) |
+----+---------------+-----------------+-------+---------------+---------------+
| | | | | 2009 | 2008 |
+----+---------------+-----------------+-------+---------------+---------------+
| | | | | GBP000 | GBP000 |
+----+---------------+-----------------+-------+---------------+---------------+
| EBITDA by business segment | | | |
+--------------------------------------+-------+---------------+---------------+
| Nursing | | 404 | (130) |
+--------------------------------------+-------+---------------+---------------+
| Medical Services | | 140 | (232) |
+--------------------------------------+-------+---------------+---------------+
| Doctors | | (543) | - |
+--------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------+-------+---------------+---------------+
| Total EBITDA | | 1 | (362) |
+--------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------+-------+---------------+---------------+
| Depreciation | | (289) | (317) |
+--------------------------------------+-------+---------------+---------------+
| Amortisation of intangible assets | | (222) | (286) |
+--------------------------------------+-------+---------------+---------------+
| Impairment of goodwill and | | (864) | (6,009) |
| intangible assets | | | |
+--------------------------------------+-------+---------------+---------------+
| Negative goodwill | | 285 | - |
+--------------------------------------+-------+---------------+---------------+
| Total operating loss | | (1,089) | (6,974) |
+--------------------------------------+-------+---------------+---------------+
| | | | |
+--------------------------------------+-------+---------------+---------------+
| Operating loss by business segment | | | |
+--------------------------------------+-------+---------------+---------------+
| Nursing | | | (91) | (5,733) |
+--------------------+-----------------+-------+---------------+---------------+
| Medical Services | | | (432) | (1,241) |
+--------------------+-----------------+-------+---------------+---------------+
| Doctors | | | (566) | - |
+--------------------+-----------------+-------+---------------+---------------+
| | | | | | |
+----+---------------+-----------------+-------+---------------+---------------+
| Total operating loss | (1,089) | (6,974) |
+----------------------------------------------+---------------+---------------+
| | | | | | |
+----+---------------+------------+------------+---------------+---------------+
| Finance income | | | - | 4 |
+--------------------+------------+------------+---------------+---------------+
| | | | | | |
+----+---------------+------------+------------+---------------+---------------+
| Finance expense | | | (181) | (244) |
+--------------------+------------+------------+---------------+---------------+
| | | | | | |
+----+---------------+------------+------------+---------------+---------------+
| Loss before taxation | | (1,270) | (7,214) |
+---------------------------------+------------+---------------+---------------+
| Tax | | | (27) | 132 |
| (expense)/credit | | | | |
+--------------------+------------+------------+---------------+---------------+
| | | | | | |
+----+---------------+------------+------------+---------------+---------------+
| Loss for the period | | (1,297) | (7,082) |
+---------------------------------+------------+---------------+---------------+
| | | | | | | |
+----+---------------+------------+----+-------+---------------+---------------+
Central costs have been allocated across the business segments on the basis of
activity and on a consistent and reasonable basis.
The segment assets and liabilities at 3rd January 2010 and capital expenditure,
depreciation, amortisation and impairment for the period then ended are as
follows:
+---------+---+-----+-+------------+--+--------------+--------------+------------+
| | | | Segment | Segment | Net |
+---------+-----------+------------+-----------------+--------------+------------+
| | | | assets | liabilities | assets |
+---------+-----------+------------+-----------------+--------------+------------+
| | | | 2009 | 2009 | 2009 |
+---------+-----------+------------+-----------------+--------------+------------+
| | | | GBP000 | GBP000 | GBP000 |
+---------+-----------+------------+-----------------+--------------+------------+
| Analysis of operating assets and liabilities by business segment |
+--------------------------------------------------------------------------------+
| Nursing | | | 7,431 | (5,140) | 2,291 |
+-------------+-------+------------+-----------------+--------------+------------+
| Medical Services | | 917 | (593) | 324 |
+---------------------+------------+-----------------+--------------+------------+
| Doctors | | 1,231 | (845) | 386 |
+---------------------+------------+-----------------+--------------+------------+
| | | | | | |
+---------+-----------+------------+-----------------+--------------+------------+
| Total operating | | | |
| assets/(liabilities) at | 9,579 | (6,578) | 3,001 |
| 3rd January 2010 | | | |
+----------------------------------+-----------------+--------------+------------+
| Goodwill | | | 4,552 |
+----------------------------------+-----------------+--------------+------------+
| Net assets, including | | | |
| goodwill, at 3rd January 2010 | | | 7,553 |
+----------------------------------+-----------------+--------------+------------+
| | | | | | |
+---------+-----------+------------+-----------------+--------------+------------+
| | | | | | |
+---------+-----------+---------------+--------------+--------------+------------+
| | | Capital | | Amortisation | Impairment |
| | | expenditure | Depreciation | of | of |
| | | | | intangibles | goodwill |
+---------+---------+-----------------+--------------+--------------+------------+
| | | 2009 | 2009 | 2009 | 2009 |
+---------+---------+-----------------+--------------+--------------+------------+
| | | GBP000 | GBP000 | GBP000 | GBP000 |
+---------+---------+-----------------+--------------+--------------+------------+
| Analysis of other items by business segments | | |
+----------------------------------------------------+--------------+------------+
| Nursing | | 149 | 202 | 176 | 328 |
+---------+---------+-----------------+--------------+--------------+------------+
| Medical | - | 26 | 37 | 536 |
| Services | | | | |
+-------------------+-----------------+--------------+--------------+------------+
| Doctors | | 162 | 61 | 9 | - |
+---------+---------+-----------------+--------------+--------------+------------+
| | | | | | |
+---------+---------+-----------------+--------------+--------------+------------+
| Total | | 311 | 289 | 222 | 864 |
+---------+---------+-----------------+--------------+--------------+------------+
| | | | | | | | | |
+---------+---+-----+-+------------+--+--------------+--------------+------------+
+---------+---+-----+-+------------+-+--------+-----+-------+------+-------------+
| | | | | | |
+---------+-----------+------------+----------------+--------------+-------------+
| | | | Segment | Segment | Net |
+---------+-----------+------------+----------------+--------------+-------------+
| | | | assets | liabilities | assets |
+---------+-----------+------------+----------------+--------------+-------------+
| | | | 2008 | 2008 | 2008 |
+---------+-----------+------------+----------------+--------------+-------------+
| | | | GBP000 | GBP000 | GBP000 |
+---------+-----------+------------+----------------+--------------+-------------+
| Analysis of operating assets and liabilities by business segment |
+--------------------------------------------------------------------------------+
| Nursing | | | 6,263 | (4,997) | 1,266 |
+-------------+-------+------------+----------------+--------------+-------------+
| Medical Services | | 3,024 | (1,056) | 1,968 |
+---------------------+------------+----------------+--------------+-------------+
| | | | | | |
+---------+-----------+------------+----------------+--------------+-------------+
| Total operating | | | |
| assets/(liabilities) at 4th | 9,287 | (6,053) | 3,234 |
| January 2009 | | | |
+----------------------------------+----------------+--------------+-------------+
| Goodwill | | | 5,416 |
+----------------------------------+----------------+--------------+-------------+
| Net assets, including | | | |
| goodwill, at 4th January 2009 | | | 8,650 |
+----------------------------------+----------------+--------------+-------------+
| | | | | | |
+---------+-----------+------------+----------------+--------------+-------------+
| | | | | | Impairment |
| | | | | | of |
| | | Capital | | Amortisation | goodwill |
| | | expenditure | Depreciation | of | and |
| | | | | intangibles | intangibles |
+---------+---------+----------------+--------------+--------------+-------------+
| | | 2008 | 2008 | 2008 | 2008 |
+---------+---------+----------------+--------------+--------------+-------------+
| | | GBP000 | GBP000 | GBP000 | GBP000 |
+---------+---------+----------------+--------------+--------------+-------------+
| Analysis of other items by business segments | | |
+---------------------------------------------------+--------------+-------------+
| Nursing | | 312 | 267 | 243 | 5,108 |
+---------+---------+----------------+--------------+--------------+-------------+
| Medical | 55 | 50 | 43 | 901 |
| Services | | | | |
+-------------------+----------------+--------------+--------------+-------------+
| | | | | | |
+---------+---------+----------------+--------------+--------------+-------------+
| Total | | 367 | 317 | 286 | 6,009 |
+---------+---------+----------------+--------------+--------------+-------------+
| | | | | | |
+---------+-----------+------------+----------+-------------+--------------------+
| | | | | | | | | | | |
+---------+---+-----+-+------------+-+--------+-----+-------+------+-------------+
The Group derives approximately 64% (2008: 58%) of revenue from the NHS in
England, Scotland, Wales and Ireland. For 2009 this was GBP26m (2008: GBP22m)
and was spread across a large number of NHS Organisations, including Acute,
Mental Health and Primary Care Trusts. Revenue from the NHS is included within
all business segments.
4 Taxation
+----+------------+---------+------------+--------+------------+
| | | | | 2009 | 2008 |
+----+------------+---------+------------+--------+------------+
| | | | | GBP000 | GBP000 |
+----+------------+---------+------------+--------+------------+
| UK Corporation tax on taxable | - | - |
| profit/(loss) for the period | | |
+----------------------------------------+--------+------------+
| Under provision for recoverable tax in | (22) | (65) |
| previous years | | |
+----------------------------------------+--------+------------+
| | | | | | |
+----+------------+---------+------------+--------+------------+
| Current tax credit | | (22) | (65) |
+---------------------------+------------+--------+------------+
| | | |
+----------------------------------------+--------+------------+
| Deferred tax charge/(credit) for the | 49 | (67) |
| period | | |
+----------------------------------------+--------+------------+
| | | | | | |
+----+------------+---------+------------+--------+------------+
| Deferred tax charge/(credit) | 49 | (67) |
+----------------------------------------+--------+------------+
| | | | | | |
+----+------------+---------+------------+--------+------------+
| Total tax | | 27 | (132) |
| expense/(credit) for the | | | |
| period | | | |
+---------------------------+------------+--------+------------+
| | | | | | |
+----+------------+---------+------------+--------+------------+
| The effective tax rate for the period is 0% of corporation |
| tax for the UK (2008: 0%) |
+--------------------------------------------------------------+
| | | | | | |
+----+------------+---------+------------+--------+------------+
| | | | | 2009 | 2008 |
+----+------------+---------+------------+--------+------------+
| | | | | GBP000 | GBP000 |
+----+------------+---------+------------+--------+------------+
| Loss at the standard rate of | (267) | (1,443) |
| corporation tax at 21% (2008: 20%) | | |
+----------------------------------------+--------+------------+
| Expenses not deductible | 177 | 1,272 |
+----------------------------------------+--------+------------+
| Unrelieved current year tax losses | 95 | 171 |
+----------------------------------------+--------+------------+
| Timing differences in respect of | (3) | - |
| trading losses | | |
+----------------------------------------+--------+------------+
| Other short term timing differences | (2) | - |
+----------------------------------------+--------+------------+
| Under provision in respect of prior | (22) | (65) |
| period | | |
+----------------------------------------+--------+------------+
| Timing differences in respect of | 49 | (67) |
| accelerated capital allowances | | |
+----------------------------------------+--------+------------+
| | | | | | |
+----+------------+---------+------------+--------+------------+
| Total tax expense/(credit) for the | 27 | (132) |
| period | | |
+----+------------+---------+------------+--------+------------+
At the balance sheet date, the Group had unused tax losses of GBP1,130,326
(2008: GBP673,158) available for offset against suitable future profits. A
deferred tax asset has not been recognised in respect of such losses due to the
uncertainty of future profit streams. The contingent deferred tax asset is
estimated to be GBP341,677 (2008: GBP188,424)
5 Loss per share
Basic loss per 10p share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue
during the period.
For diluted loss per share, the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all potentially dilutive ordinary
shares. The Group does not have a category of potentially dilutive ordinary
shares.
+----+------------+---------+--------------+-------------+----------+
| | | | | | |
+----+------------+---------+--------------+-------------+----------+
| | | | | | |
| | | | 2009 | | |
| | | | Earnings | 2009 | |
| | | | attributable | Weighted | 2009 |
| | | | to equity | average | Earnings |
| | | | shareholders | number of | per |
| | | | | | share |
+----+------------+---------+--------------+-------------+----------+
| | | | GBP000 | 10p shares | pence |
+----+------------+---------+--------------+-------------+----------+
| | | | | | |
+----+------------+---------+--------------+-------------+----------+
| Loss per share | | (1,249) | 90,764,938 | (1.38) |
+-----------------+---------+--------------+-------------+----------+
| Diluted loss | | (1,249) | 90,764,938 | (1.38) |
| per share | | | | |
+-----------------+---------+--------------+-------------+----------+
| | | | | |
+----+------------+---------+--------------+-------------+----------+
+------------------+---------+--------------+------------+----------+
| | | | | |
| | | 2008 | | |
| | | Earnings | 2008 | |
| | | attributable | Weighted | 2008 |
| | | to equity | average | Earnings |
| | | shareholders | number of | per |
| | | | | share |
+------------------+---------+--------------+------------+----------+
| | | GBP000 | 10p shares | pence |
+------------------+---------+--------------+------------+----------+
| | | | | |
+------------------+---------+--------------+------------+----------+
| Loss per share | | (7,082) | 87,633,070 | (8.08) |
+------------------+---------+--------------+------------+----------+
| Diluted loss per | | (7,082) | 87,633,070 | (8.08) |
| share | | | | |
+------------------+---------+--------------+------------+----------+
6 Goodwill and intangible assets
+------+------------+---------+---------+---------+------------+
| | | | | | Total |
+------+------------+---------+---------+---------+------------+
| | | | | | 2009 |
+------+------------+---------+---------+---------+------------+
| Goodwill | | | GBP000 |
+-----------------------------+---------+---------+------------+
| Group | | | | |
+-------------------+---------+---------+---------+------------+
| Cost | | | | | |
+------+------------+---------+---------+---------+------------+
| At 5th January 2009 | | | 5,416 |
+-----------------------------+---------+---------+------------+
| Impairment | | | | (864) |
| charge | | | | |
+-------------------+---------+---------+---------+------------+
| | | | | | |
+------+------------+---------+---------+---------+------------+
| At 3rd January | | | | 4,552 |
| 2010 | | | | |
+------+------------+---------+---------+---------+------------+
+------+------------+---------+---------+---------+------------+
| | | | | | Total |
+------+------------+---------+---------+---------+------------+
| | | | | | 2008 |
+------+------------+---------+---------+---------+------------+
| Goodwill | | | GBP000 |
+-----------------------------+---------+---------+------------+
| Group | | | | |
+-------------------+---------+---------+---------+------------+
| Cost | | | | | |
+------+------------+---------+---------+---------+------------+
| At 7th January 2008 | | | 9,868 |
+-----------------------------+---------+---------+------------+
| Impairment | | | | (4,452) |
| charge | | | | |
+-------------------+---------+---------+---------+------------+
| | | | | | |
+------+------------+---------+---------+---------+------------+
| At 4th January | | | | 5,416 |
| 2009 | | | | |
+------+------------+---------+---------+---------+------------+
Group goodwill derives from the acquisition of businesses and subsidiary
undertakings in 2006. In 2006, the directors specifically evaluated the carrying
values of goodwill. As a result of the impairment testing as at 3rd January
2010, the value of the goodwill has been impaired by GBP864k to more accurately
reflect a recoverable carrying amount.
The carrying amounts of goodwill by business segment are as follows:
+----+------------+---------+---------+--------------+--------+
| | | | | 2009 | 2008 |
+----+------------+---------+---------+--------------+--------+
| | | | | GBP000 | GBP000 |
+----+------------+---------+---------+--------------+--------+
| Goodwill by business segment/cash | | |
| generating unit (CGU) | | |
+-------------------------------------+--------------+--------+
| Nursing | | | 2,606 | 4,012 |
+-----------------+---------+---------+--------------+--------+
| Medical | | | 1,946 | 1,404 |
| services | | | | |
+-----------------+---------+---------+--------------+--------+
| | | | | | |
+----+------------+---------+---------+--------------+--------+
| Total | | | 4,552 | 5,416 |
+----+------------+---------+---------+--------------+--------+
+----+------------+-+----------+---------+------------+-----------+----------+-+---------+
| Intangible | | Temporary | Customer | Compliance | Total |
| assets | Development Costs | Staff | Contracts | database | 2009 |
| | 2009 | Databases | 2009 | 2009 | GBP000 |
| | GBP000 | 2009 | GBP000 | GBP000 | |
| | | GBP000 | | | |
+-----------------+----------------------+------------+-----------+------------+---------+
| Group | | | | |
+-----------------+----------------------+------------+-----------+----------------------+
| Cost | | | | | |
+-------------------+----------+---------+------------+-----------+----------------------+
| At 5th January | | 82 | 81 | 5,051 | - | 5,214 |
| 2009 | | | | | | |
+-------------------+----------+---------+------------+-----------+----------+-----------+
| Additions | 13 | - | - | - | 13 |
+-----------------+----------------------+------------+-----------+----------+-----------+
| Acquired with | - | - | - | 508 | 508 |
| subsidiary | | | | | |
| (note 8) | | | | | |
+-----------------+----------------------+------------+-----------+----------+-----------+
| | | | | | |
+----+------------+----------------------+------------+-----------+----------------------+
| At 3rd January | 95 | 81 | 5,051 | 508 | 5,735 |
| 2010 | | | | | |
+-----------------+----------------------+------------+-----------+----------+-----------+
| | | | | | |
+----+------------+----------------------+------------+-----------+----------------------+
| Amortisation and impairment | | |
+-----------------------------------------------------+-----------+----------------------+
| At 5th January | 80 | 12 | 2,321 | - | 2,413 |
| 2009 | | | | | |
+-----------------+----------------------+------------+-----------+----------+-----------+
| Amortisation | - | 4 | 154 | 64 | 222 |
| charge | | | | | |
+-----------------+----------------------+------------+-----------+----------+-----------+
| | | | | | |
+----+------------+----------------------+------------+-----------+----------------------+
| At 3rd January | 80 | 16 | 2,475 | 64 | 2,635 |
| 2010 | | | | | |
+-----------------+----------------------+------------+-----------+----------+-----------+
| | | | | | |
+----+------------+----------------------+------------+-----------+----------------------+
| Net book amount | | | | |
+-----------------+----------------------+------------+-----------+----------------------+
| At 3rd January | 15 | 65 | 2,576 | 444 | 3,100 |
| 2010 | | | | | |
+-----------------+----------------------+------------+-----------+----------+-----------+
| | | | | | | | | | |
+----+------------+-+----------+---------+------------+-----------+----------+-+---------+
+------+----------+-------------+-----------+-----------+----------------+
| Intangible | | Temporary | Customer | Total |
| assets | Development | Staff | Contracts | 2008 |
| | | Databases | 2008 | GBP000 |
| | Costs | 2008 | GBP000 | |
| | 2008 | GBP000 | | |
| | GBP000 | | | |
+-----------------+-------------+-----------+-----------+----------------+
| Group | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| Cost | | | | | |
+------+----------+-------------+-----------+-----------+----------------+
| At 7th | 80 | 81 | 5,051 | 5,212 |
| January 2008 | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| Additions | 2 | - | - | 2 |
+-----------------+-------------+-----------+-----------+----------------+
| | | | | | |
+------+----------+-------------+-----------+-----------+----------------+
| At 4th | 82 | 81 | 5,051 | 5,214 |
| January 2009 | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| | | | | | |
+------+----------+-------------+-----------+-----------+----------------+
| Amortisation and impairment | | |
+-------------------------------------------+-----------+----------------+
| At 7th | - | 8 | 562 | 570 |
| January 2008 | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| Amortisation | - | 4 | 282 | 286 |
| charge | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| Impairment | 80 | - | 1,477 | 1,557 |
| charge | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| | | | | | |
+------+----------+-------------+-----------+-----------+----------------+
| At 4th | 80 | 12 | 2,321 | 2,413 |
| January 2009 | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| | | | | | |
+------+----------+-------------+-----------+-----------+----------------+
| Net book | | | | |
| amount | | | | |
+-----------------+-------------+-----------+-----------+----------------+
| At 4th | 2 | 69 | 2,730 | 2,801 |
| January 2009 | | | | |
+------+----------+-------------+-----------+-----------+----------------+
Intangible assets represent the capitalised value of customer contracts and
staff databases acquired via business combinations (acquisitions of businesses
and subsidiary undertakings). Such contracts and databases are capitalised at
fair value and amortised over a period equal to the remaining useful economic
life. During the current year the estimated useful life of the customer
contracts was aligned with the estimated useful life of the staff databases,
which is twenty years. The effect of this change resulted in a GBP128k reduction
in the current year amortisation charge. Amortisation is included in
administrative expenses.
The Group carries out reviews of its intangible assets on an annual basis to
determine whether events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable. Goodwill is tested annually for
impairment, by CGU, and other intangible assets are tested for impairment if an
indication of impairment exists. For the impairment testing, the recoverable
amount of the asset has been estimated based on its value in use; the resultant
loss (the difference between the carrying amount and the recoverable amount) is
recorded as a charge to the Group statement of comprehensive income. The
calculation of replacement costs is based on the current value of overhead costs
attributable to database management. The value in use is calculated as the
present value of the estimated future pre -tax cash flows expected to result
from the use of assets in the business being evaluated. In order to determine
the present value of estimated future cash flows, the Group uses a discount rate
of 11% based on its estimated weighted average cost of capital. Estimated future
cash flows used in the impairment calculations represent management's best view
of likely market conditions including selling prices, volumes and employment
costs over a period of 5 years. Beyond this, the UK long-term growth rate of 2%
has been assumed. Actual cash flows may differ significantly from these
estimates due to the effect of changes in market conditions or to subsequent
decisions on the activities of the business. These differences may have a
material impact on the asset values, impairments and amortisation expense
reported in future periods.
The compliance database refers to the Group owning the rights to the database
management software which was acquired during the acquisition of The Compliance
Company (GB) Ltd (see note 8). The database management software specifically
manages and monitors the compliance status of healthcare staff in line with
industry requirements. The database is amortised over a period equal to the
useful economic life, which is estimated to be five years.
7 Property, plant and equipment
+------+------------+----------+--------------+------------+----------+--------+
| | | | | Plant & | |
+------+------------+----------+--------------+------------+-------------------+
| | | | | equipment, | |
+------+------------+----------+--------------+------------+-------------------+
| | | | Leasehold | fixtures | Motor | |
| | | | | & | | |
+------+------------+----------+--------------+------------+----------+--------+
| | | | improvements | fittings | vehicles | Total |
+------+------------+----------+--------------+------------+----------+--------+
| | | | 2009 | 2009 | 2009 | 2009 |
+------+------------+----------+--------------+------------+----------+--------+
| | | | GBP000 | GBP000 | GBP000 | GBP000 |
+------+------------+----------+--------------+------------+----------+--------+
| Group | | | | |
+-------------------+----------+--------------+------------+-------------------+
| Cost | | | | | |
+------+------------+----------+--------------+------------+-------------------+
| At 5th January 2009 | 108 | 983 | - | 1,091 |
+------------------------------+--------------+------------+----------+--------+
| Additions | 20 | 259 | 19 | 298 |
+------------------------------+--------------+------------+----------+--------+
| Disposals | - | (1) | - | (1) |
+------------------------------+--------------+------------+----------+--------+
| | | | | | |
+------+------------+----------+--------------+------------+-------------------+
| At 3rd January | | 128 | 1,241 | 19 | 1,388 |
| 2010 | | | | | |
+-------------------+----------+--------------+------------+----------+--------+
| | | | | | |
+------+------------+----------+--------------+------------+-------------------+
| Depreciation | | | | |
+-------------------+----------+--------------+------------+-------------------+
| At 5th January 2009 | 18 | 540 | - | 558 |
+------------------------------+--------------+------------+----------+--------+
| Charge for the | | 25 | 258 | 6 | 289 |
| period | | | | | |
+-------------------+----------+--------------+------------+----------+--------+
| | | | | | |
+------+------------+----------+--------------+------------+-------------------+
| At 3rd January | | 43 | 798 | 6 | 847 |
| 2010 | | | | | |
+-------------------+----------+--------------+------------+----------+--------+
| | | | | | |
+------+------------+----------+--------------+------------+-------------------+
| Net book amount | | | | |
+-------------------+----------+--------------+------------+-------------------+
| At 3rd January | | 85 | 443 | 13 | 541 |
| 2010 | | | | | |
+------+------------+----------+--------------+------------+----------+--------+
+------+---------------+---------+---+--------------+------------+----------+
| | | | | Plant & | |
+------+---------------+-------------+--------------+------------+----------+
| | | | | equipment, | |
+------+---------------+-------------+--------------+------------+----------+
| | | | Leasehold | fixtures | |
| | | | | & | |
+------+---------------+---------+------------------+------------+----------+
| | | | improvements | fittings | Total |
+------+---------------+-------------+--------------+------------+----------+
| | | | 2008 | 2008 | 2008 |
+------+---------------+-------------+--------------+------------+----------+
| | | | GBP000 | GBP000 | GBP000 |
+------+---------------+-------------+--------------+------------+----------+
| Group | | | | |
+----------------------+-------------+--------------+------------+----------+
| Cost | | | | | |
+------+---------------+-------------+--------------+------------+----------+
| At 7th January 2008 | 36 | 766 | 802 |
+------------------------------------+--------------+------------+----------+
| Additions | 72 | 293 | 365 |
+------------------------------------+--------------+------------+----------+
| Disposals | | - | (76) | (76) |
+----------------------+-------------+--------------+------------+----------+
| | | | | | |
+------+---------------+-------------+--------------+------------+----------+
| At 4th January 2009 | | 108 | 983 | 1,091 |
+----------------------+-------------+--------------+------------+----------+
| | | | | | |
+------+---------------+-------------+--------------+------------+----------+
| Depreciation | | | | |
+----------------------+-------------+--------------+------------+----------+
| At 7th January 2008 | - | 311 | 311 |
+------------------------------------+--------------+------------+----------+
| Eliminated on | | - | (70) | (70) |
| disposals | | | | |
+----------------------+-------------+--------------+------------+----------+
| Charge for the | | 18 | 299 | 317 |
| period | | | | |
+----------------------+-------------+--------------+------------+----------+
| | | | | | |
+------+---------------+-------------+--------------+------------+----------+
| At 4th January 2009 | | 18 | 540 | 558 |
+----------------------+-------------+--------------+------------+----------+
| | | | | | |
+------+---------------+-------------+--------------+------------+----------+
| Net book amount | | | | |
+----------------------+-------------+--------------+------------+----------+
| At 4th January 2009 | | 90 | 443 | 533 |
+----------------------+-------------+--------------+------------+----------+
| | | | | | | |
+------+---------------+---------+---+--------------+------------+----------+
8 Business combinations
+--------------------------+-----+--+------------+----------------------+
| On 20th May 2009, the Group acquired the entire share capital of The |
| Compliance Company (GB) Limited, a compliance software developer. The |
| vendors were David Hope (a director of the Company) and his wife. |
| |
+-----------------------------------------------------------------------+
| Details of net assets acquired and goodwill arising are as follows: |
+-----------------------------------------------------------------------+
| | GBP000 |
+-----------------------------------+-----------------------------------+
| Cost of acquisition: |
+-----------------------------------------------------------------------+
| Fair value of shares issued as | 200 |
| consideration | |
+--------------------------------+--------------------------------------+
| Expenses of acquisition | | 15 |
| - paid in cash | | |
+--------------------------+---------------------+----------------------+
| | | |
+--------------------------+---------------------+----------------------+
| Total cost of | | 215 |
| acquisition | | |
+--------------------------+---------------------+----------------------+
| | | |
+--------------------------+---------------------+----------------------+
| The book value of the net assets immediately prior to the acquisition |
| was GBP1,657. |
| The fair values of assets and liabilities as of 20th May 2009 |
| acquired are as follows: |
| |
+-----------------------------------------------------------------------+
| Intangible assets (note | | 508 |
| 6) | | |
+--------------------------+---------------------+----------------------+
| Trade and other payables | | (8) |
+--------------------------+---------------------+----------------------+
| Fair value of net assets | | 500 |
| acquired | | |
+--------------------------+---------------------+----------------------+
| Negative goodwill | | (285) |
+--------------------------+---------------------+----------------------+
| Total cost of | | 215 |
| acquisition | | |
+--------------------------+---------------------+----------------------+
| | | |
+--------------------------+---------------------+----------------------+
| The transaction generated negative goodwill of GBP285k, which has |
| been recognised as a credit in the Group's statement of comprehensive |
| income in accordance with requirements of IFRS. 5,000,000 ordinary |
| 10p shares were issued as consideration on 20th May 2009 when the |
| market value was 4p per share, giving a fair value of GBP200,000. A |
| reserves transfer of GBP300,000 between share capital and retained |
| losses has been made to adjust for the shares being issued at below |
| par value. |
+-----------------------------------------------------------------------+
| | | |
+--------------------------+---------------------+----------------------+
| | | | | |
+--------------------------+-----+--+------------+----------------------+
9 Notes to the cash flow statements
+----+-------------------------------------+---------+----------+----------+----------+----------+--------+----------+
| | | Group | | |
+----+-------------------------------------+--------------------+-----------------------------------------+----------+
| | | 2009 | 2008 | | | |
+----+-------------------------------------+---------+----------+---------------------+-------------------+----------+
| | | GBP000 | GBP000 | | | |
+----+-------------------------------------+---------+----------+---------------------+-------------------+----------+
| Reconciliation of loss to cash | | |
| generated from operations | | |
+-------------------------------------------------------------------------------------+-------------------+----------+
| Operating loss | (1,089) | (6,974) | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| | | | | | | |
+----+-------------------------------------+---------+----------+---------------------+-------------------+----------+
| Adjustments for non-cash items: | | | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Depreciation of property, plant and | 289 | 317 | | | |
| equipment | | | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Loss on sale of property, plant and | 1 | 6 | | | |
| equipment | | | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Impairment of goodwill and intangibles | 864 | 6,009 | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Amortisation of intangibles | 222 | 286 | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Negative goodwill | (285) | - | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| | | | | | | |
+----+-------------------------------------+---------+----------+---------------------+-------------------+----------+
| Changes in working capital: | | | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| (Decrease)/increase in provisions | (92) | 25 | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| (Increase)/decrease in trade and other | (37) | 740 | | | |
| receivables | | | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Increase/(decrease) in trade and other | 652 | (83) | | | |
| payables | | | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| Increase in inventories | (14) | - | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| | | | | | | |
+----+-------------------------------------+---------+----------+---------------------+-------------------+----------+
| Cash generated from operations | 511 | 326 | | | |
+------------------------------------------+---------+----------+---------------------+-------------------+----------+
| | | | | | | |
+----+-------------------------------------+---------+----------+---------------------+-------------------+----------+
| | | Group | |
+----+-------------------------------------+-------------------------------+-----------------------------------------+
| | | 2009 | 2008 | | |
+----+-------------------------------------+---------+---------------------+---------------------+-------------------+
| | | GBP000 | GBP000 | | |
+----+-------------------------------------+---------+---------------------+---------------------+-------------------+
| Reconciliation of net cash flow to | |
| movement in net debt | |
+------------------------------------------------------------------------------------------------+-------------------+
| Increase/(decrease) in cash and cash | 30 | (26) | | |
| equivalents | | | | |
+------------------------------------------+---------+---------------------+---------------------+-------------------+
| Decrease/(increase) in loans from banks | 41 | (255) | | |
+------------------------------------------+---------+---------------------+---------------------+-------------------+
| | | 71 | (281) | | |
+----+-------------------------------------+---------+---------------------+---------------------+-------------------+
| Net debt at beginning of the period | (2,191) | (1,910) | | |
+------------------------------------------+---------+---------------------+---------------------+-------------------+
| | | | | | |
+----+-------------------------------------+---------+---------------------+---------------------+-------------------+
| Net debt at end of the period | (2,120) | (2,191) | | |
+------------------------------------------+---------+---------------------+---------------------+-------------------+
| | | | | | | | | |
+----+-------------------------------------+---------+----------+----------+----------+----------+--------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
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