Half Yearly Report

    RNS Number : 9856J
  Forest Support Services PLC
  15 December 2008
   

    Forest Support Services Plc

    Half Yearly Report

    Chairman's Statement

    The overall performance, during the traditionally weaker first half, has been ahead of our expectations.
    The Company has recorded a profit of £41,991, before taxation, on revenues of £3,463,476. 

    Strong earnings have been recorded at Newport and at our newly expanded depot at Bristol, with both depots benefiting from their
involvement in framework contracts, which have provided a firm foundation to workload. Some weaknesses in Government spending within the
Winchester region have caused that depot to trade at a lower level. 

    The Company has been able to maintain its gross margin and grow revenues despite upward pressure on costs during the period,
particularly with fuel prices, which have been negated by improvements made in operational efficiency.

    Results

    The Group has recorded a profit of £41,991, before taxation, for the period. This compares with a loss of £63,036 for the equivalent
period last year. The earnings per share, on the weighted average number of shares in issue during the year, was 0.13p per share. Turnover
for the period was £3,463,476 (equivalent period last year: £3,031,092), an increase of 14.3%. 

    As in previous years, the Group will not pay an interim dividend but expects to continue its progressive dividend policy.

    Current Trading and Future Prospects

    The Company is well positioned within its principle markets, having long established relationships with its key customers underpinned by
term framework contracts. Demand for the Company's services arises from spending by local government, central government and utilities
companies on the repair, maintenance and improvement (RMI) of existing infrastructure. This demand has historically been resilient and
stable. 

    Newport and Bristol depots have continued to trade well. Plans to relocate Bristol depot are well advanced and this will facilitate
further growth in the region.

    Trading during the second half at Winchester has suffered from delays in start dates for work that has been secured. However there has
been a marked increase in the volume and value of tenders in this region. It is expected that trading at Winchester will improve during the
fourth quarter and the longer term prospects for this region continue to look favourable.

    It is expected that the Company will achieve a satisfactory conclusion to the full year. 

    Conclusion

    As reported previously, the Company will continue to focus on organic growth by pursuing opportunities that can be served by the
existing depot network. The market segments served provide resilience against the broader macroeconomic uncertainty and provide the Company
with a stable platform for future growth.




    Forest Support Services plc

    Consolidated Income Statement

    for the six months ended 30 September 2008

                                                 Unaudited                    Unaudited           Audited
                                             Six months to                Six months to           Year to
                                         30 September 2008            30 September 2007          31 March
                                                         £                            £              2008
                                                                                                        £
                        REVENUE                  3,463,476                    3,031,092         6,811,353
                  Cost of sales                (2,462,133)                  (2,161,664)       (4,803,699)

                   GROSS PROFIT                  1,001,343                      869,428         2,007,654
        Administrative expenses                  (941,242)                    (923,721)       (1,841,673)
     Goodwill impairment charge                          -                            -         (497,492)

        OPERATING PROFIT/(LOSS)                     60,101                     (54,293)         (331,511)
                  Finance costs                   (24,809)                     (16,500)          (48,894)
                 Finance income                      6,699                        7,757            14,701

  PROFIT/(LOSS) BEFORE TAXATION                     41,991                     (63,036)         (365,704)
                   Taxation                       (17,019)                            -          (39,792)

   PROFIT/(LOSS) FOR THE PERIOD                     24,972                     (63,036)         (405,496)

                                                     0.13p                      (0.34p)           (2.17p)
 (LOSS)/EARNINGS PER SHARE     
                               
          Basic and diluted    



    Forest Support Services plc

    Consolidated Balance Sheet

    as at 30 September 2008


                                         Unaudited          Unaudited       Audited
                                 30 September 2008  30 September 2007      31 March
                                                 £                  £          2008
                                                                                  £
 NON-CURRENT ASSETS
 Goodwill                                  544,291          1,041,783       544,291
 Property, plant and equipment           1,008,061          1,215,131     1,168,663
 Deferred tax asset                         59,974            118,443        81,815

                                         1,612,326          2,375,357     1,794,769
 CURRENT ASSETS
 Trade and other receivables             1,932,955          1,637,161     1,695,165
 Cash and cash equivalents                 376,676            434,754       546,037

                                         2,309,631          2,071,915     2,241,202
 TOTAL ASSETS                            3,921,957          4,447,272     4,035,971
 CURRENT LIABILITIES
 Trade and other payables                1,013,397            925,556     1,023,454
 Current tax liabilities                         -             18,129             -
 Obligations under finance                 110,180            109,450        76,915
 leases
 Bank loan                                  74,175            170,545       136,090

                                         1,197,752          1,223,680     1,236,459

 NON-CURRENT LIABILITIES
 Obligations under finance                 174,774            250,204       266,370
 leases
 Bank loan                                 286,545            325,669       295,228

                                           461,319            575,873       561,598

 TOTAL LIABILITIES                       1,659,071          1,799,553     1,798,057

 NET ASSETS                              2,262,886          2,647,719     2,237,914
 EQUITY
 Share capital                             935,350            935,350       935,350
 Share premium                           1,513,530          1,513,530     1,513,530
 Retained earnings                       (185,994)            198,839     (210,966)

                                         2,262,886          2,647,719     2,237,914



    Forest Support Services plc

    Consolidated Cash Flow Statement

    for the six months ended 30 September 2008

                                      Six months to       Six months to       Year to
                                  30 September 2008   30 September 2007      31 March
                                                  £                   £          2008
                                                                                    £
 NET CASH FROM/(USED IN)                     34,574              79,282       527,892
 OPERATING ACTIVITIES
 INVESTING ACTIVITIES
 Interest received                            6,699               7,757        14,701
 Purchases of property, plant              (81,705)           (208,064)     (366,050)
 and equipment

                                           (75,006)           (200,307)     (351,349)
 FINANCING ACTIVITIES
 Dividends paid                                   -                   -      (67,345)
 Repayment of borrowings                   (70,598)            (72,783)     (137,680)
 New bank loans raised                            -             350,000       350,000
                                           (58,331)            (40,668)      (94,711)
 Repayment of obligations under
 finance leases

                                          (128,929)             236,549        50,264

 NET (DECREASE)/INCREASE IN               (169,361)             115,524       226,807
 CASH AND CASH EQUIVALENTS

 CASH AND CASH EQUIVALENTS AT               546,037             319,230       319,230
 BEGINNING OF PERIOD 

 CASH AND CASH EQUIVALENTS AT               376,676             434,754       546,037
 END OF PERIOD


 NET CASH FROM/(USED IN)             Six months to       Six months to       Year to
 OPERATING ACTIVITIES            30 September 2008   30 September 2007      31 March
                                                 £                   £          2008
                                                                                   £

 Operating profit/(loss)                    60,101            (54,293)     (331,511)
 Adjustments for:
 Goodwill impairment charge                      -                   -       497,492
 Share based payment expenses                    -               7,985         7,985
 Depreciation on property,                 242,310             222,425       458,227
 plant and equipment

 OPERATING CASHFLOWS BEFORE                302,411             176,117       632,193
 MOVEMENTS IN WORKING CAPITAL

 (Increase)/decrease in debtors          (232,971)             121,507        63,501
 Decrease in creditors                    (10,057)           (201,842)     (103,943)

 CASH GENERATED FROM OPERATIONS             59,383              95,782       591,751

 Interest paid                            (24,809)            (16,500)      (48,894)
 Tax paid                                        -                   -      (14,965)

 NET CASH GENERATED FROM                    34,574              79,282       527,892
 OPERATIONS



    Forest Support Services plc

    Notes to the condensed interim financial statements

    1. General Information

    Forest Support Services Plc (the "Company") is a company domiciled in England and Wales whose registered office address is Forest House,
Broad Quay Road, Felnex Industrial Estate, Newport NP19 4PN. The condensed consolidated interim financial statements of the Company for the
six months ended 30 September 2008 comprise the Company and its subsidiaries (together referred to as the "Group").

    The condensed consolidated interim financial statements do not constitute statutory accounts as defined in Section 240 of the Companies
Act 1985.

    The financial information for the year ended 31 March 2008 has been extracted from the statutory accounts. The auditors' report on the
statutory accounts was unqualified and did not contain a statement under Section 237 of the Companies Act 1985. A copy of those financial
statements has been filed with the Registrar of Companies.  The condensed consolidated interim financial statements do not include all of
the information required for full annual financial statements.

    The accounting policies used in the preparation of the condensed consolidated interim financial statements are the same as those applied
in the year ended 31 March 2008. As permitted, this interim report has been prepared in accordance with the AIM Rules for companies and is
not compliant in all respects with IAS 34 'Interim Financial Statements'. The condensed consolidated financial statements do not include all
of the information required for full annual financial statements and therefore cannot be considered as in full compliance with IFRS.

    The condensed consolidated interim financial statements were authorised for issue on [date].


    2. Earnings per share

    Basic earnings per share is based on the earnings for the year attributable to shareholders and on the weighted average number of shares
in issue during the year. The number of shares used for calculating basic earnings per share was 18,706,961. As the exercise price of the
share options granted by the company exceeded the average market price of the shares during the six months ended 30 September 2008, and
given the losses reported for the six months ended 30 September 2007 and the year ended 31 March 2008, there is no dilutive impact on
earnings per share in the period.


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
IR BSBDDSUBGGIB