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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nord Anglia ED. | LSE:NAE | London | Ordinary Share | GB0006582729 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 461.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:4960S
NordAnglia Education PLC
26 November 2003
FOR IMMEDIATE RELEASE 26 NOVEMBER 2003
NORD ANGLIA EDUCATION PLC
PRELIMINARY RESULTS ANNOUNCEMENT
for the twelve months ended 31 August 2003
Nord Anglia Education PLC ("Nord Anglia"), the provider of education and related
educational services, is pleased to announce its results for the twelve months
ended 31 August 2003.
Financial Highlights
- Group turnover* up 3.9% to #83.6m (2002: #80.5m)
* including joint share of joint ventures
- Operating profit up 4.7% to #5.1m (2002: #4.9m)
- Operating cash flows increased by #3.7m to #10.2m (2002: #6.5m)
- EBITDA up 4.4% to #8.1m (2002: #7.7m)
- Basic EPS: 9.2p (2002: loss of 79.6p)
- EPS excluding exceptionals and goodwill: 14.5p (2002: 17.5p)*
* 2002 reflects low tax charge due to utilisation of tax losses
- Dividend up 6.3% to 4.25p per share (2002: 4.0p)
Operational Highlights
- Results for year ending August 2003 ahead of expectations
- The appointment of Andrew Fitzmaurice as Chief Executive Officer
- Completion of the strategic review
- The reorganisation of the business into three Divisions
o Schools, Nurseries and Outsourcing
Operational Highlights : Post Year End
- The raising of #10m in an Open Offer and Firm Placing to finance
ongoing expansion
- The acquisition of Petits Enfants for a total consideration of #3.2m,
accelerating the expansion of our Nursery Division
- The reorganisation of Nord Anglia's Board
o Departure of COO: David Johnson
o Appointment of new non-executive: Alan Kelsey
Commenting on performance, Kevin McNeany, Chairman said: "This year the Board's
expectations of financial performance were met and on most measures exceeded. It
was a year of considerable progress with the appointment of a new Chief
Executive Officer, a refocusing of the business and a refinement of Company
strategy.
........The new year has begun well with enrolments and general performance up to
expectations. I am confident that Nord Anglia will have another successful
year."
For further information, please contact:
Kevin McNeany, Chairman
Andrew Fitzmaurice, Chief Executive Officer
Lorene Simpson, Finance Director:
Nord Anglia Education PLC Today on Tel No: 020 7466 5000
www.nordanglia.com : and thereafter on Tel No: 0161 491 4191
Lisa Baderoon (lisab@buchanan.uk.com) / Rebecca Skye Dietrich
(rebeccad@buchanan.uk.com)
Buchanan Communications: Tel No: 020 7466 5000
www.buchanan.uk.com
CHAIRMAN'S STATEMENT
This year the Board's expectations of financial performance were met and on most
measures exceeded. It was a year of considerable progress with the appointment
of a new Chief Executive Officer, a refocusing of the business and a refinement
of Company strategy.
In April I was delighted to welcome Andrew Fitzmaurice as CEO. Thus the dual
role of Chairman and Chief Executive, which I exercised, was split.
Andrew made his presence felt very quickly. He has led on the restructuring of
the business into three areas and on the closing of a non-profitable Direct to
Schools business. Just after the year end there was a successful fundraising
exercise and the acquisition of a nursery chain.
The Company strategy now is to concentrate on three business areas: Schools,
Nurseries and Outsourcing for the delivery of publicly funded services. The
Board believes there is substantial organic growth and exciting opportunities in
all these areas.
Schools
Our International Schools had an excellent year and continue to deliver very
high returns on capital employed. Their success is underpinned by the
credibility of our UK Schools portfolio.
Nurseries
The Nursery Division continued to grow with the opening of four new nurseries at
Bedford, Cheam, Guiseley and Fulham. The acquisition of Petits Enfants has
enhanced volume and scale and gives the Division a greater strategic presence in
the London area.
Outsourcing
The Outsourcing Division continued to make significant progress in financial
performance and quality delivery. The Division is now poised to address
substantial bidding opportunities, notably in Defence.
Results and Dividend
The Board expected a year of investment and consolidation with little growth in
profitability. I am pleased that these expectations have been exceeded. On most
key financial measures there was upward progress.
Turnover (including our share of joint ventures) increased by 3.9% to #83.6m
(2002: #80.5m), while operating profit rose 4.7% to #5.14m (2002: #4.91m).
EBITDA before exceptionals also rose to #8.1m (2002: #7.7m), an increase of
4.4%. Earnings Per Share was 9.23p (2002: loss of 79.64p).
The Board is recommending a final dividend of 2.92p (2002: 2.75p) making a total
for the year of 4.25p (2002: 4.0p). The dividend is covered 3.1 times by
pre-exceptional profit (2002: 4 times). The final dividend will be paid on 9
February 2004 to shareholders on the register 9 January 2004 with an ex-dividend
date of 7 January 2004.
Firm Placing and Open Offer
Although the Company continued to be cash generative (the net cash inflow was
#2.7m (2002: net cash outflow #4.1m), the Board decided to undertake a Firm
Placing and Open Offer immediately following its financial year end. A total of
#9.3m net of expenses was raised. I was pleased that the overwhelming majority
of major shareholders took up their maximum subscription entitlements and that
the Open Offer was three times over-subscribed. The cash raised was used to fund
the nursery acquisition, to reduce gearing and will be applied to the further
development of Princess Christian Nurseries and International Schools.
People
The new CEO has continued to strengthen the senior management team and further
key appointments are expected soon. The Board's policy is to invest in widening
the skills and accomplishments of our large and highly professional work force.
Once again, I am pleased to welcome new colleagues who join us with the newly
acquired nursery business.
The Board
The Chief Operating Officer David Johnson has decided to leave the Company from
the end of January 2004. He has played a major role in the Company's growth
during his 17 years with Nord Anglia. I extend my personal thanks and the thanks
and good wishes of the Board to him for his future career.
I am also pleased to welcome Alan Kelsey, who joins the Board on 16 December, in
a non-executive capacity. Alan brings with him over thirty years of experience
in the City. He has extensive experience of corporate finance and has also held
senior positions as an executive in a major quoted company.
Outlook
The new year has begun well with enrolments and general performance up to
expectations. I am confident that Nord Anglia will have another successful year.
Kevin McNeany
Chairman
26 November 2003
OPERATING REVIEW
Since taking up my post as Chief Executive Officer in April, I have had the
chance to visit a wide range of Nord Anglia operations, and I have been very
impressed with the quality of the businesses within the Group and the dedication
of our people.
Shortly after my arrival, the Board requested that I conduct a review of the
Company's business activities.
The key outcomes of this review were:
- the decision to close the loss-making Direct to Schools business
- the separation of business development from operational delivery
within Outsourcing
- the reorganisation of the business into three operating Divisions -
Schools, Nurseries and Outsourcing
- the raising of #10m (before expenses) in an Open Offer and Firm
Placing to finance ongoing expansion
I believe that the changes resulting from this review will position the Company
to take advantage of the opportunities for profitable growth in the education
and training sector. The Board has set clear minimum financial objectives:
* Turnover growth of 10%
* EBITDA margins in excess of 10%
* EPS growth of 15%
* ROCE 15%
Schools
Our schools business has once again shown strong growth in both turnover and
profitability.
Operating profits in our UK Schools were, as expected, lower than the previous
year as a direct result of substantial increases in the cost of teachers'
pensions and additional National Insurance costs. Fee increases for the current
academic year reflect these costs. Whilst turnover was marginally ahead of last
year at #12.61m (2002: #12.15m) operating profits were lower at #0.8m (2002:
#0.9m).
The slight fall in the profitability of our UK Schools was more than compensated
for by a very strong year from our International Schools, which continue to
perform well. Pupil numbers have increased from 4,900 to 5,200 due to the
success of the new Shanghai school - opened last year - and the expansion of
existing schools.
International Schools' turnover increased to #17.3m (2002: #13.7m) and operating
profits grew to #2.2m (2002: #1.9m).
In August, the new school at Limanowskiego, Warsaw was completed on schedule and
to budget, and we were extremely pleased that His Royal Highness, The Duke of
York agreed to open the school in September - in time for the start of the new
academic year.
A new campus at the prestigious residential development of Rosinka on the
outskirts of Moscow has been added to the six existing school sites in the city.
The international school in Shanghai, which opened in September 2002, reached
break-even during its first year of operation.
Schools: outlook
There are a number of major projects planned for the expansion of our schools
business in the coming year.
We will develop our London schools with the opening of a major new school in
Chelsea in 2005. Demand for independent education remains high in the capital,
and this new leasehold building will enable us substantially to increase pupil
numbers, laying a firm foundation for future growth in scale and profitability.
Contracts have been exchanged to develop new campus sites in both Budapest and
Shanghai. This will provide substantial additional capacity in both schools.
For more than a decade Nord Anglia has delivered high quality British
style-education to 10 markets through our successful and profitable
international schools. It is the Company's intention to build on our proven
models to develop this business further in these 10 markets.
Significant opportunities also exist in new markets where the demand for quality
British-style education is high. Nord Anglia will continue rigorously to assess
appropriate opportunities within new markets.
The recent appointment of Marcel van Miert as the new Managing Director for
Schools further strengthens the Company's senior management team.
Nurseries
The Nursery Division continued to expand, showing an increase in both turnover
and operating profits. Turnover was up to #8.9m (2002: #7.6m) whilst operating
profits increased 41.9% to #0.7m (2002: #0.5m).
The number of Princess Christian Nurseries has now increased to 34.
Three new build units opened at Bedford, Cheam and Guiseley, and in June a
62-place leasehold unit was launched in Fulham - the Group's first nursery in a
central London location.
During the year, the Division's NVQ training scheme was expanded from regional
to national coverage through a new partnership arrangement with the Learning and
Skills Council. There are over 100 trainees on the scheme, guaranteeing a flow
of quality staff for our nurseries countrywide.
Princess Christian Nurseries is committed to the provision of high quality day
care and early years education. This commitment has been recognised recently by
both the Office for Standards in Education (OfSTED) and the Adult Learning
Inspectorate (ALI).
A prime example of this is the result of the recent OfSTED inspection of the
Princess Christian Nursery at Fallowfield, Manchester.
The report found that this nursery provides 'good quality day care' and
commended many aspects of the nursery's practice - from meal arrangements to
museum visits. The inspectors also recognised the inclusive nature of education
at the nursery and welcomed the 'worthwhile' and 'meaningful' links it has made
with the wider community. The new nursery at Guiseley also received a good
OfSTED report recently.
Princess Christian Nurseries was referred to as 'one of the best training
providers in the country' in the ALI chief inspector's annual report.
Nurseries: outlook
Further expansion of the Nursery Division will come from organic growth and
acquisition. An additional unit in West London will open in late summer 2004.
The plan of three nursery units per annum will recommence in 2004/05 when the
successful integration of the Petits Enfants nurseries is expected to be
complete.
The integration plan for Petits Enfants is well under way and the anticipated
improvements in occupancy levels can already be seen.
The acquisition of the Petits Enfants chain of nurseries, with locations in
South West London and Surrey, was completed in early September 2003. The Petits
Enfants chain comprises 527 nursery places and operates from nine leasehold
premises. Total consideration for Petits Enfants was #3.2m.
In mid-October 2003, the popular children's TV presenter Dave Benson Phillips
officially opened another new build nursery at Portishead.
Princess Christian Nurseries will continue to recruit, develop and retain
exceptional nursery staff. The appointment of a new Marketing Manager and a new
Commercial Manager will ensure we continue to capitalise on our excellent
operational performance.
Outsourcing
The turnover of the total Outsourcing Division has increased by #5.5m to #44.5m
(2002: #39m). Operating profits have also increased 16.9% to #2.7m (2002:
#2.3m), despite a difficult year within the Direct to Schools business.
Our exit from the Direct to Schools business was announced at the end of August.
The administrative support contracts have been successfully transferred to
Liberata (UK) Ltd., who will undertake contracted service obligations to the
schools.
Public-private partnership contracts are largely dependent upon Government
policy and relatively few new bidding opportunities became available during the
year.
Following the 2003 bidding round, the Division's contract with OfSTED for school
inspections was increased to 276 inspections from September 2004.
EduAction, the joint venture company established with Amey PLC, continues to
provide support and strategic management for a substantial proportion of the
education services in the London Borough of Waltham Forest.
In October 2003, the Minister of State for School Standards David Miliband wrote
to congratulate the authority on its 'excellent Key Stage 2 results':
"Your results place you amongst the most improved LEAs this year, and I would
like to pass on my congratulations to you and your colleagues ... I am sure that
this year's results are a reflection of the priority that you have placed on
achieving higher standards over the last year, and you will no doubt have plans
in place to build on that success in 2004."
Our relationship with Waltham Forest is strong and this success underlines the
benefits of this Public/Private Partnership.
The non-military training and education of student recruits at the Army
Foundation College, Harrogate continues to be a highly successful partnership
with the Ministry of Defence. An inspection this year by the Adult Learning
Inspectorate (ALI) rated our services as 'excellent' (Grade 1).
Our Lifetime contracts continue to perform well. The five Lifetime companies
span 12 Local Education Authorities and turn over in excess of #23 million per
annum.
Around 600 skilled and professionally qualified staff deliver high quality
support and personal development services to over 200,000 young people in 280
schools, 30 colleges and through 19 Connexions offices.
Our three training companies - Belle Associates, The Interactive College and the
newly acquired Yorkshire Post Training (May 2003) provide specific skills
training for a range of ages and abilities. The Outsourcing Division is
integrating these business units in order to present a co-ordinated training
offer to this growing market, consolidating our existing resources and expanding
the business.
Outsourcing: outlook
The business development team has been involved with the convergence phase and
early bidding process for the MoD's Defence Training Review. It is anticipated
that by September 2005, the MoD will let substantial training service contracts
to the market.
Current bidding activity also includes preparation for the ITT in Prison
Education and school ICT PFIs.
The separation of business development from operational delivery within
Outsourcing will allow Nord Anglia to address and develop major contracting
opportunities more effectively.
People
Nord Anglia is a people business.
As an education and training company, providing services to tens of thousands of
learners - old and young, in the UK and overseas - people are central to who we
are and what we do.
The Company employs in excess of 2,500 people, all of whom are committed to
achieving our key objective - delivering excellence in education and training.
Nord Anglia believes firmly in equality of opportunity and employs people from
all sections of the community. The Company aims to build a diverse and socially
inclusive workforce that is responsive and appropriate to all service users.
Princess Christian Nurseries, the Lifetime businesses and Belle Associates are
already Investors in People (IiP) accredited, and the rest of the Company has
started to work towards achieving the IiP standard.
Quality
In addition to IiP, Nord Anglia will utilise a range of quality marks and models
continuously to improve our business results, provide a better working
environment for our people and deliver the best possible quality, value and
service to our customers.
Our Schools Division employs over 800 headteachers, deputy headteachers,
teachers, classroom assistants and bursars. It is their job to deliver quality
independent education to young people between the ages of three and 18 to enable
them to reach their full potential.
Every day thousands of parents entrust the care and education of their young
children to Princess Christian's experienced team of nursery professionals.
Supported by a highly skilled senior management team, these people are dedicated
to providing pre-school children with an exceptional education while upholding
the best traditions of quality childcare.
Our Outsourcing Division delivers a wide range of quality training and
professional development solutions for learners at key transitional stages in
their lives including: Modern Apprenticeships, skills for business, adult
apprenticeships and professional development as well as the provision of
Connexions services for young people.
Everyone at Nord Anglia is totally committed to our key objective: delivering
excellence in education and training.
Andrew Fitzmaurice
Chief Executive Officer
26 November 2003
Financial Review
The strong results of our continuing businesses have generated excellent
operating profits and cash flows enabling continued investment. Future growth
prospects have been further enhanced by the completion of a #10m share issue in
September 2003, which has been utilised to decrease existing debt and provide
facilities to finance future developments.
Accounting policies
There have been no changes to accounting policies during the year. In accordance
with FRS 15, Fixed assets, a full revaluation was undertaken during the year
giving rise to a net gain of #2.7m, which is reflected in the revaluation
reserve and the statement of total recognised gains and losses for the year.
Turnover
Total turnover (including share of joint ventures) increased by 3.9% to #83.6m
(2002: #80.5m).
Turnover from the Schools Division increased by #4m to #29.9m reflecting the
strong organic growth in International Schools and the opening of the new school
in Shanghai.
Turnover from the Nursery Division increased by #1.3m to #8.9m reflecting the
progress to maturity of the nursery portfolio, together with the opening of
nurseries at Bedford, Cheam, Guiseley and Fulham during the year.
Turnover from the college businesses decreased from #8m to #0.3m reflecting the
closure of The school of Finance and Management during the year and the disposal
of the accountancy tuition and publishing businesses in May 2002.
Turnover from the Outsourcing Division increased by #5.5m to #44.5m reflecting
strong performance by the Lifetime Careers Group in expanding its range of
services and growth in income of #1m from the EduAction (Waltham Forest) joint
venture.
Operating profit
Total operating profit (including share of joint ventures) increased by 4.7% to
#5.14m (2002: #4.91m). Earnings before interest, tax, depreciation and
amortisation (EBITDA) increased by 4.4% to #8.1m (2002: #7.7m).
Operating profit from the Schools Division increased by 4.5% to #3.0m (2002:
#2.8m). Fee income growth was partly offset by increased employment costs and
the absorption of opening year costs for the new Shanghai school.
Operating profit from the Nursery Division increased by 41.9% to #0.7m (2002:
#0.5m) reflecting the progress of the portfolio towards mature operating levels
and the absorption of opening year costs in four nurseries.
The closure of the School of Finance and Management incurred final operating
losses of #0.4m compared with a net loss in the College division of #0.1m in the
prior year.
Operating profit from the Outsourcing Division increased by 16.9% to #2.7m
(2002: #2.3m) reflecting strong performance of the division offset by
disappointing performance of the Services Direct to Schools business.
Unallocated head office costs and goodwill amortisation increased by #0.3m to
#0.9m (2002: #0.6m).
Interest
The Group incurred net interest charges of #0.61m (2002: #0.33m) reflecting net
debt incurred to invest in acquisitions and new nursery developments during the
last two years. This interest cost was covered nine times by operating profits.
Exceptional loss
The Group completed a strategic review of the business during the year and
announced the closure of the Services Direct To Schools business. The School of
Finance & Management was also closed in August 2003.
These closures have given rise to an exceptional loss of #1.2m, which includes
the write off of investments and specific IT systems of #0.8m and the provision
for redundancy and other closure losses of #0.4m. These closures will release
surplus properties and these are currently being marketed for sale.
Taxation
The effective rate of taxation has increased to 38.1% (2002: 22.8%). The prior
year tax charge reflects the utilisation of significant tax losses. The Group's
tax charge will typically exceed the standard rate of 30% due to the impact of
depreciation charges on buildings for which no tax allowances are available.
Earnings per share
The basic earnings per share is 9.23p (2002: loss per share of 79.64p). The
earnings per share on profit before exceptional items and goodwill, which
reflects the underlying performance of the business is 14.48p (2002: 17.52 p).
This decrease reflects the relative low tax charge in 2002 due to the
utilisation of tax losses.
Capital expenditure
Capital expenditure during the year was #7.2m, including #1.7m investment in the
British International School Warsaw, #0.5m in the British International School
Shanghai, #1.25m for the construction of new nurseries and #2m for the purchase
and extension of the new Head Office building, which will be occupied from
January 2004.
Acquisitions
During the year the Group acquired the trade and assets of Yorkshire Post
Training for #0.5m. This business complements the Group's existing training
providers Belle Associates and The Interactive College.
After the year-end in September 2003, the Group acquired Petits Enfants Day
Nurseries Limited for #2.7m. This added nine sites in and around London to the
Princess Christian Nurseries portfolio.
Cash flow
The Group generated net cash inflow of #2.75m (2002: net cash outflow #4.15m).
Advanced fee receipts from our International Schools, contributed to an increase
in operating cash flow of #3.7m to #10.2m (2002: #6.5m). Free cash flow
(representing operating cash flow less interest, tax and dividend payments)
increased by #3.6m to #7.6m (2002: #4m).
Net investment in fixed assets was #7.7m of which #2.8m was financed by net new
loans and the balance of #4.9m was financed from free cash flow.
Net assets
Net assets of the Group at 31 August 2003 were #30.1m (2002: #26.3m). This
includes retained profit for the year of #1.1m and a property revaluation gain
of #2.7m. Net debt at 31 August 2003 was #13.1m, resulting in a gearing ratio of
43.4% (2002: 48.2%).
Following completion of the acquisition of Petits Enfants Day Nurseries Limited
and the share issue in September 2003, proforma net assets increased to #39.9m
and net debt decreased to #6.5m reducing gearing to 16.2%.
Firm Placing and Open offer
On 29 September 2003 the Company raised, in aggregate, #10m before expenses for
the Group through an Open Offer of 1,904,317 new Ordinary shares and a Firm
Placing of 3,651,199 new Ordinary shares both at #1.80 per share. Following this
transaction, together with 110,126 Ordinary shares issued on 4 September 2003 as
part of the acquisition of Petits Enfants Day Nurseries Limited, the total
number of Ordinary Shares in issue has increased to 26,613,609.
The new Ordinary shares issued in connection with the Open Offer and Firm
Placing rank pari passu in all respects with the existing Ordinary shares and
rank in all future dividends declared on the Ordinary shares, except that they
will not rank for any final dividend declared for the year ended 31 August 2003.
Dividend
The Board is recommending a final dividend of 2.92p (2002: 2.75p) per share
taking the total dividend for the year to 4.25p per share (2002: 4p). This gives
a total dividend for the year of #0.89m (2002; #0.84m), an increase of 7.1% and
is covered 3.1 times by pre-exceptional profits (2002: 4 times).
The final dividend will be paid on 9 February 2004 to shareholders on the
register on 9 January 2004 with an ex dividend date of 7 January 2004.
Lorene Simpson
Group Finance Director
26 November 2003
Consolidated Profit and Loss Account
Year ended 31 August 2003
2003 2002
#000 #000 #000 #000
------------------------ ------- ------- ------- -------
Turnover
Group and share of joint ventures 83,561 80,452
Less: Share of joint ventures (9,876) (8,949)
------------------------ ------- ------- -------
Group turnover
Continuing operations 72,449 62,619
Acquistions 210 -
Discontinued operations 1,026 8,884
------- -------
73,685 71,503
Cost of sales (23,632) (25,551)
------------------------ ------- ------- ------- -------
Gross profit 50,053 45,952
Administrative expenses (45,222) (41,148)
------------------------ ------- ------- ------- -------
Operating profit
Continuing operations 5,982 4,875
Acquisitions 13 -
Discontinued operations (1,164) (71)
------- -------
Group operating profit 4,831 4,804
Share of operating profit in continuing 413 170
joint ventures
Share of operating loss in discontinued (109) (68)
joint ventures
------- ------- -------
Total operating profit: group and share
of joint ventures 5,135 4,906
Exceptional item: loss on disposal of (1,200) (20,094)
discontinued operations
-----------------------------
------- ------- ------- -------
Profit / (loss) on ordinary activities 3,935 (15,188)
before interest
Interest receivable and similar income 88 362
(group)
Interest receivable and similar income
(share of joint ventures) 75 97
Interest payable and similar charges (773) (784)
------------------------ ------- ------- ------- -------
Profit / (loss) on ordinary activities 3,325 (15,513)
before taxation
Tax on profit /(loss) on ordinary (1,266) (1,047)
activities ------- ------- ------- -------
------------------------
Profit / (loss) on ordinary activities 2,059 (16,560)
after taxation
Minority interest (125) (119)
------------------------ ------- ------- ------- -------
Profit / (loss) for the period 1,934 (16,679)
Dividends (894) (835)
------------------------ ------- ------- ------- -------
Retained profit / (loss) 1,040 (17,514)
Profit and loss reserves at
1 September 2002 7,312 6,515
Transfer of goodwill previously
written off to reserves on acquisition 0 18,260
Transfer from revaluation reserve of
additional depreciation 51 51
------------------------ ------- ------- ------- -------
Profit and loss reserves at 31 August 8,403 7,312
2003 ------- ------- ------- -------
------------------------
Basic earnings / (loss) per share 9.23 p (79.64) p
Diluted earnings / (loss) per share 9.22 p (79.17) p
Basic earnings per share on profit
before exceptional
items and amortisation of goodwill 14.48 p 17.52 p
Diluted earnings per share on profit before
exceptional items and amortisation of goodwill 14.45 p 17.41 p
Dividends per share 4.25 p 4.00 p
Consolidated Balance Sheet
As at 31 August 2003
2003 2002
#000 #000
------------------------ ------- ------- ------- -------
Fixed Assets
Intangible assets 3,262 3,395
Tangible assets 49,237 42,897
Investments in joint ventures:
Share of gross assets 6,018 7,362
Share of gross liabilities (5,486) (7,212)
Loans to joint ventures - 190
------- -------
532 340
------------------------ ------- ------- ------- -------
53,031 46,632
Current Assets
Debtors 8,781 9,093
Bank deposits 105 1,963
Cash at bank and in hand 2,930 2,215
------------------------ ------- ------- ------- -------
11,816 13,271
Creditors
Amounts falling due within one year (21,227) (22,037)
------------------------ ------- ------- ------- -------
Net current liabilities (9,411) (8,766)
------------------------ ------- ------- ------- -------
Total assets less current 43,620 37,866
liabilities
Creditors
Amounts falling due after more than (13,366) (11,435)
one year
Provisions for liabilities and (161) (151)
charges ------- ------- ------- -------
------------------------
Net assets 30,093 26,280
------------------------ ------- ------- ------- -------
Capital and reserves
Called up share capital 1,047 1,047
Share premium account 15,491 15,491
Revaluation reserve 4,587 1,919
Profit and loss account 8,403 7,312
------------------------ ------- ------- ------- -------
Shareholders' funds 29,528 25,769
Minority interest 565 511
------------------------ ------- ------- ------- -------
30,093 26,280
------------------------ ------- ------- ------- -------
Consolidated Cash Flow Statement
Year ended 31 August 2003
2003 2002
#000 #000
----------------------------- ------- ------------
Net cash inflow from operating activities 10,161 6,475
Returns on investments after servicing of finance (767) (330)
Taxation (907) (1,396)
Capital expenditure and financial investment (7,151) (10,035)
Acquisitions and disposals (2,410) (3,941)
Equity dividends paid (855) (779)
------- ------------
Cash outflow before use of liquid resources and (1,929) (10,006)
financing
Management of liquid resources 1,858 2,953
----------------------------- ------- ------------
Cash outflow before financing (71) (7,053)
----------------------------- ------- ------------
Financing 2,820 2,899
----------------------------- ------- ------------
Increase / (decrease) in cash in the year 2,749 (4,154)
----------------------------- ------- ------------
Reconciliation of net cash flow to movement in net
debt
Increase / (decrease) in cash 2,749 (4,154)
Cash inflow from decrease in liquid resources (1,858) (2,953)
Cash outflow from decrease in debt and lease financing 2,941 4,645
----------------------------- ------- ------------
Change in funds resulting from cash flows 3,832 (2,462)
Loan notes issued 0 (725)
New long term loans (3,902) (3,857)
New finance leases (305) (223)
----------------------------- ------- ------------
Movement in debt in the year (375) (7,267)
Net debt at the beginning of the year (12,672) (5,405)
----------------------------- ------- ------------
Net debt at the end of the year (13,047) (12,672)
----------------------------- ------- ------------
Reconciliation of operating profit to net cash inflow from operating activities
Operating profit 4,831 4,804
Exceptional items (175) 0
Depreciation and amortisation charges 2,778 2,830
(Profit) / loss on sale of fixed assets (23) 130
Decrease in debtors 458 1,579
Increase / (decrease) in creditors 2,292 (2,868)
----------------------------- ------- ------------
Net cash inflow from operating activities 10,161 6,475
----------------------------- ------- ------------
Analysis of net debt
At 1 Sept Cash New Non Cash At 31 Aug
2002 Flows Loans Movement 2003
Cash in hand and at 2,215 715 0 0 2,930
bank
Overdrafts (2,855) 2,034 0 0 (821)
------- ------- ------- ------- -------
(640) 2,749 0 0 2,109
Secured deposits 1,963 (1,858) 105
Debt due after 1 (10,532) 0 (3,640) 1,197 (12,975)
year
Debt due within 1 (2,997) 2,656 (262) (1,197) (1,800)
year
Finance leases (466) 285 0 (305) (486)
-------
2,941
------- ------- ------- ------- -------
Total (12,672) 3,832 (3,902) (305) (13,047)
======= ======= ======= ======= =======
Consolidated statement of total recognised gains and losses
Year ended 31 August 2003
2003 2002
#000 #000
Profit / (loss) for the financial year 1,934 (16,679)
Net gain arising on revaluation of fixed assets 2,719 0
-------- -------
Total recognised gains and losses relating to the year 4,653 (16,679)
Prior year adjustment 0 (108)
-------- -------
Total recognised gains and losses recognised since
last annual report 4,653 (16,787)
======== =======
Notes To The Preliminary Statement
1. Basis of Preparation
The financial statements are prepared under the historical cost convention as
modified by the revaluation of freehold and long leasehold land and buildings
and in accordance with applicable accounting standards.
2. Segmental analysis
2003 2002
#000 #000
Turnover
Schools 29,907 25,861
Nurseries 8,854 7,506
Colleges 251 8,036
Outsourcing 34,673 30,100
------- -------
Group 73,685 71,503
Share of joint ventures 9,876 8,949
------- -------
83,561 80,452
======= =======
Profit /(loss) on ordinary activities before taxation
Schools 2,986 2,855
Nurseries 674 475
Colleges (316) (101)
Outsourcing 2,719 2,326
Less unallocated head office costs and goodwill (928) (649)
amortisation
Less interest payable (610) (325)
------- -------
4,525 4,581
Exceptional loss on closure / disposal of
discontinued operations (1,200) (20,094)
------- -------
3,325 (15,513)
======= =======
3. Exceptional items
The exceptional loss during the current year represents the cost of exiting the
Services Direct to Schools business and the School of Finance and Management.
This includes #0.2m of investments and #0.6m of fixed assets written off,
together with #0.4m of redundancy and closure costs. The exceptional item has
reduced the corporation tax charge by #0.33m.
The exceptional item in the prior year related to the disposal of the
accountancy tuition and publishing business. This exceptional item had no effect
on the corporation tax charge for the prior year. The disposal generated
approximately #18m of capital losses available for utilisation against future
disposals of property and trades.
2003 2002
#000 #000
Loss arising on the closure of discontinued operations 1,200 0
Loss on the disposal of the accountancy tuition and publishing
businesses
Net proceeds less net assets disposed of 0 1,834
Attributable goodwill written off to reserves
immediately on acquisition 0 18,260
-------- -------
1,200 20,094
======== =======
4. Tax on profit / (loss) on ordinary activities
Analysis of charge in year 2003 2002
#000 #000
Current tax
UK Corporation tax on profit / (loss) for the year 888 791
UK Corporation tax on the group's share of
Joint Venture profits for the year 161 57
Adjustments in respect of previous years (54) (128)
-------- -------
995 720
Foreign tax 261 284
-------- -------
Total current tax 1,256 1,004
Deferred tax
Origination and reversal of timing differences 10 43
-------- -------
Tax on profit / (loss) on ordinary activities 1,266 1,047
======== =======
5. Dividends
2003 2002 2003 2002
pence per share #000 #000
Interim dividend paid on 1 July 2003 1.33 1.25 278 259
Proposed final dividend 2.92 2.75 616 576
------- ------- ------- -------
4.25 4.00 894 835
======= ======= ======= =======
6. Earnings per share
The basic earnings per Ordinary share is based on profit after tax and minority
interests of #1,933,915(2002: loss of #16,679,112) and on 20,947,927 Ordinary
shares (2002:20,943,448) being the weighted average number of Ordinary shares in
issue during the year ended 31 August 2003.
Diluted earnings per share is calculated by adjusting the weighted average
number of Ordinary shares for the dilutive effects of options outstanding. This
increases the weighted average number of shares used in the calculation by
35,247 (2002: 124,945). The profit attributable to shareholders is not affected.
An earnings per share figure on profit before exceptional items and amortisation
of goodwill has been calculated to allow the shareholders to gain a clearer
understanding of the underlying trading performance of the group
Attributable earnings / (loss) 1,934 (16,679)
Exceptional items 1,200 20,094
Tax relief on exceptional items (326) 0
Goodwill 225 254
-------- -------
Earnings before exceptional items and goodwill 3,033 3,669
2003 2002
Basic earnings / (loss) per share 9.23 p (79.64) p
Diluted earnings / (loss) per share 9.22 p (79.17) p
Basic earnings per share on profit before exceptional
items
and amortisation of goodwill 14.48 p 17.52 p
Diluted earnings per share on profit before exceptional
items
and amortisation of goodwill 14.45 p 17.41 p
This preliminary announcement does not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The statutory accounts for the
year ended 31 August 2003 will be filed with the Registrar of Companies in due
course together with the auditors' report thereon. The information for the year
ended 31 August 2002 is an extract from the statutory accounts to that date
which have been filed with the Registrar of Companies. Those accounts included
an audit report which was unqualified and which did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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