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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Real Hotel Grp | LSE:RHG | London | Ordinary Share | GB00B3D2NR11 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 1.875 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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RNS Number:9038H Reed Health Group PLC 25 February 2003 25 February 2003 Reed Health Group plc ("Reed Health Group" or the "Company") Interim Results for the six months ended 31 December 2002 Reed Health Group plc, a provider of healthcare staffing services in the Health, Social Care and Education sectors in the UK, announces interim results for the six months ended 31 December 2002. Interim Interim Change 2002 2001 Turnover #58.3m #37.9m +54% Operating profit #3.3m #2.2m +50% Profit before tax #3.1m #2.2m +41% Earnings per share 3.22p 3.37p -4% Earnings per share pre exceptional items and goodwill amortisation 5.08p 3.72p +37% Interim dividend 0.73p 0.66p +11% - Group turnover increased by 54% to #58.3 million (2001: #37.9 million) - Health Professionals, Nursing and Medical - Turnover of #38.5 million - Reed Nurse awarded four contracts in the period - Two regional contracts awarded since the period end - In January 2003, appointed supplier under the second phase of the London Agency Project - Locum Medical selected for National Framework contract for medical locums - Social Care - Turnover increased by 20% to #17.6 million - Contract won with Leeds City Council, adding 2,000 hours per week - Education - Turnover of #2.2 million - Difficult first half due to intense competition and pressure on margins - Appointment of David Fennell as Chief Executive and Mark Garratt as Group Finance Director in January 2003. Departure of previous Chief Executive and Group Finance Director in November 2002 having minimal effect on business to date - Appointment of Thomas Fraser and Barry Hartop as Non- Executive Directors and Susan Dael as Director of Human Resources and resignation of Alan Dexter and Daphne Statham as Non- Executive Directors with immediate effect - Continued integration of The Locum Group - Interim dividend of 0.73p per share (2001: 0.66p) Lord Tom Sawyer, Chairman of Reed Health Group, commented: "The Board believes that Reed Health Group has successfully managed the initial impact of NHS Professionals on its nursing division and believes it continues to be sensible for the NHS to enter into competitively priced contracts with experienced private sector healthcare staffing providers. In addition, we have been awarded a place in the second phase of the London Agency Project for nurses, as well as in the National Framework Agreement for medical locums. During the first six months of the current financial year, the Group has improved its presence in its key markets of health professions and social care. "We are confident that, as demand for staff in the health and social services professions increases, the markets in which we operate will remain positive. Reed Health Group will continue to be a leading player in its markets and the Board views the prospects of the Group with confidence." For further information, please contact: Reed Health Group plc 020 7834 3181 David Fennell, Chief Executive Mark Garratt, Group Finance Director Weber Shandwick Square Mile 020 7067 0700 Louise Robson or Graham Herring 25 February 2003 Reed Health Group plc ("Reed Health Group", the "Company" or the "Group") Interim Results for the six months ended 31 December 2002 The Board of Reed Health Group is pleased to announce interim results for the six months ended 31 December 2002. The events at the Annual General Meeting on 26 November 2002, where the Reed family and associated trusts voted against the re- election of Christa Echtle and Desmond Doyle as Chief Executive and Group Finance Director respectively, gave rise to an unsettled period for the Company. However, the Company has maintained its position within its markets and looks forward to the future with confidence. At a time of increasing competitor pressure, both from the NHS and the private sector, Reed Health Group has continued to make encouraging progress in all areas of its business. The contribution from The Locum Group, which was acquired in May 2002, has enabled the Group to increase turnover significantly and has strengthened the Group's position in its key markets of healthcare, social care and education. Financial Review Total Group turnover for the six months to 31 December 2002, which includes a full six month contribution from The Locum Group, increased by 54% to #58.3 million, compared with #37.9 million for the same period last year. Operating profit was up 50% to #3.3 million (2001: #2.2 million), with pre-tax profit increasing by 41% to #3.1 million (2001: #2.2 million). Basic earnings per share were 3.22p (2001: 3.37p). This is due to the "Compensation for loss of office" and connected costs associated with the AGM in 2002 and the acquisition of The Locum Group which have both increased the number of shares in issue and created goodwill, thus generating an amortisation charge of #786,000. This amortisation is not tax deductible so has increased the effective tax charge compared to last year. However, adjusted earnings per share increased by 37% to 5.08p (2001: 3.72p). The Board is recommending an interim dividend of 0.73p (2001: 0.66p) payable on 10 April 2003 to shareholders on the register on 7 March 2003. REVIEW OF OPERATIONS Health Reed Health Group operates separate divisions serving the medical, nursing and allied health professions on a nationwide basis. We are market leaders in the provision of allied health professions to NHS Trust hospitals, clinics and GP surgeries. Total turnover in these divisions, which is now the largest sector in the Group, was #38.5 million (2001: #23.2 million), with a divisional contribution of #3.9 million (2001: #1.5 million). Allied Health Professions. Turnover in this business area was #21.0 million (2001: #6.6 million). We have maintained both the Reed Health and Locum Group brands as candidates' terms of engagement and the services offered by our consultants differ somewhat. As competitors in our field have demonstrated, brand equity may be worth more than any efficiencies to be gained by merging the two brands. However, we are reviewing this position to see whether one brand may be more appropriate going forward. Medical. Turnover in this business area was #6.5 million. The Locum Group Medical division retained its place in the new National Framework Agreement for Medical Locums, the successor to the "national contract". Despite fierce competition we have confirmed our position as one of the leading players in the hospital doctors market. We have special priority agreements with 28 NHS Trusts, but are approved for every Trust in England and Wales. We are pursuing opportunities for bespoke contracts in Scotland through our new Glasgow branch. Nursing. Reed Nurse entered this financial year with uncertainties as to the impact NHS Professionals would have and the need to re-tender for the London Agency Project. Consequently, sales of #11.3 million were achieved, compared with #16.6 million for the same period last year. In the first six months of the year, we are pleased to have been awarded the following contracts with NHS Trusts: Central and North West London, where we are sole provider, commenced in August 2002; Barnet and Chase Farm, again where we are sole provider, which started in November 2002; Royal Berks and Battle, which started in December 2002, where we are master vendor; and Heatherwood and Wexham Park, as one of two providers, which started in January 2003. As the bookings from these contracts come through, in the second half of the year we expect to show volume growth in this division. We have been approved as suppliers under the second phase of the London Agency Project ("LAP 2"). This project, which comes into effect in the Spring of 2003, allows us to operate with better rates in the London market. We have been asked by three large NHS Trusts to negotiate special Service Level Agreements, which promise further turnover growth. Additionally, Reed Health successfully bid for a place on the North West Agency Project and as a result from April 2003 will open branches in Liverpool and Manchester. Finally, bookings have already started in Surrey where we are among the agencies approved to supply all the Trusts there through NHS Professionals. Social Care This division supplies qualified social workers and residential social workers on a temporary and contract basis, primarily to Local Authorities and social care organisations in the independent sector, across specialist services ranging from child to elderly care. Turnover in this division increased by 20% to #17.6 million (2001: #14.7 million), while the divisional contribution was #3.2 million (2001: #2.0 million). This includes a full six month contribution from the Locum Group Care division, which operates solely in London. During the period, the Group has raised the average hourly rate in line with the competition with the result that some volume was lost to competitors. This is being remedied by carefully applying more competitive charge rates to particular clients. Reed Social Care is also starting to make good use of Locum Group's Australian source of qualified candidates both for permanent and temporary positions. We have won a new contract with Leeds City Council for 2,000 hours per week and Reed Health is now one of their two largest suppliers. By 2005 at least 50% of residential care workers will need to have NVQ2 or 3 level qualifications and managers will have to have NVQ4 qualifications. Therefore, in order to enable us to be the first to provide what our customers will demand we are commencing a programme of NVQ training for our candidates. Education The Education division, which was part of The Locum Group, concentrates on the supply of temporary and permanent teachers to primary and secondary schools. The division achieved first half sales of #2.2m, with a divisional contribution of #0.05 million. The sector is currently experiencing intense competition and pressure on margins, which is consequently having an effect on our Education division. Education, however, is the smallest division in the Group, representing only 4% of turnover, and occupies all but one of its five branches jointly with other divisions. We continue to believe that this is a market which fits the overall strategy of the Group, to supply professionally qualified personnel to the public sector and that it brings seasonal complementarity to our markets. International Our recruitment offices in Australia and New Zealand continue to play an important part in attracting suitable staff to work in each of our markets and the office in Canada, which we established in the latter part of 2002 initially to supply teachers to the UK, is already a significant advantage to the Group. A key task for the current financial year is to improve our conversion rates of candidates from Australia, New Zealand, Canada, Germany and via our websites. We have appointed an International Manager to co-ordinate more closely with our overseas offices and candidates to ensure that we take advantage of opportunities offered by our international offices. Board Changes Following the Annual General Meeting on 26 November 2002, Christa Echtle and Desmond Doyle were not re-elected as Chief Executive and Group Finance Director respectively and consequently left the Company. A compensation package has been agreed with Desmond Doyle and we are currently finalising the severance package for Christa Echtle. All costs expected regarding these terminations have been provided for and are shown as exceptional items in these interim accounts. On 29 January 2003, the appointments of David Fennell, acting Chief Executive, as Chief Executive to the Board and Mark Garratt as Group Finance Director were announced. David joined Reed Health Group following the acquisition of The Locum Group, where he was Chief Executive. He has spent his career within specialist personnel recruitment and for the last decade has been specifically involved in the health care sector. He joined The Locum Group as Chief Executive in November 1997, a position he held until its acquisition by Reed Health Group. Mark Garratt joined Reed Health Group from Cater Barnard plc, a company listed on AIM, where he was Group Finance Director. Mark has spent his commercial career in financial management in Business to Business service organisations including, for the past eight years, as a Finance Director. Previously, he has been Finance Director of AIM listed Envesta plc, Glendinning Management Consultants, which is now part of WPP, and Interior plc, now part of Interior Services Group plc. Mark has extensive plc experience and will bring added expertise to the Board. At a Board Meeting held yesterday, Alan Dexter and Daphne Statham announced their resignations as Non-Executive Directors of the Company with immediate effect. The Board would like to thank Alan and Daphne for their contributions to the Board, both since their appointments and, in particular, since the Annual General Meeting. The Board also announces the appointment of Barry Hartop and Thomas Fraser as Non-Executive Directors and Susan Dael as Director of Human Resources to the Board with immediate effect. Thomas Fraser, aged 43, a qualified accountant, has spent his career in the financial services sector. He was Managing Director of AMP UK Financial Services until 2002 and prior to that was Managing Director Europe of CGNU and a director of Norwich Union plc. Whilst at Norwich Union he played a key role in setting up their private medical insurance and private health insurance businesses and his knowledge of this industry will be important for Reed Health Group in years to come. Thomas has been appointed the Senior Independent Non-Executive Director. Barry Hartop, aged 60, is currently Chief Executive Officer of Telenor Business Solutions Limited. He was Non-Executive Chairman of The Locum Group for five years prior to its acquisition by Reed Health Group in May 2002 and consequently has considerable knowledge of the markets in which Reed Health Group operates. In addition, Barry has held a number of senior management appointments in both the public and private sector. Susan Dael, IPD, aged 35, joined Reed Health Group as Associate Director of Human Resources in May 2002 following the acquisition of The Locum Group and we are pleased to appoint her to the Board. She joined Locum Group in September 1997 and was appointed HR Director in January 2000. Prior to this she has worked as recruitment manager with Burger King. The Board can confirm that neither Mr Fraser nor Mr Hartop have not been at any time in the previous five years, a Director of any publicly quoted company not listed above and there is no relevant information to disclose under paragraphs 6.F.2 (b) to (g) of the Listing Rules in relation to the above appointments. The Board believes that all three new directors are highly qualified and experienced individuals. Their appointments will enhance the composition of the board, and their contribution will be invaluable to the future performance of the Group. Relationship Agreement Following the events at the Annual General Meeting, the Board has taken leading Counsel's opinion regarding the relationship agreement between Alec Reed and his related interests, Reed Executive plc and the Group. Counsel has confirmed, in writing, that the action taken by Alec Reed and his related interests at the Annual General Meeting does not breach, either in the letter or the spirit, the relationship agreement entered into by Reed Health Group at the time of its demerger from Reed Executive PLC. Employees In the past six months we have seen considerable change within Reed Health Group and the Board would like to thank all our colleagues for their hard work and determination in contributing to the success of the Group during this period. Group Strategy Reed Health Group continues to focus on the supply of the most highly qualified personnel to the health and care markets and to develop in these markets without altering its current business model. In addition, it will continue to seek premium business in all its key markets. The Board believes that the Group is extremely well placed to pursue the considerable opportunities available in its markets. We are in detailed discussions with parties bidding for the Department of Health's proposed NHS Diagnostic and Treatment Centres. We are uniquely placed to provide medical, nursing and allied health professionals for these centres. Success in this project will help us increase our market share in the years ahead. Additionally, the parties with which we are in discussion are developing further opportunities within the NHS and we hope to take advantage of these. Outlook The Board believes that Reed Health Group has successfully managed the initial impact of NHS Professionals on its nursing division and believes it continues to be sensible for the NHS to enter into competitively priced contracts with experienced private sector healthcare staffing providers. In addition, we have been awarded a place in the second phase of the London Agency Project for nurses, as well as in the National Framework Agreement for medical locums. During the first six months of the current financial year, the Group has improved its presence in its key markets of health professions and social care. The Group will continue to focus on business development, both with the NHS Trusts and private suppliers of health services, who the Board believes will play an increasing role in the provision of healthcare services in the UK. We are confident that, as demand for staff in the health and social services professions increases, the markets in which we operate will remain buoyant. Reed Health Group will continue to be a leading player in its markets. The Board views the prospects of the Group with confidence. - ends - For further information, please contact: Reed Health Group plc 020 7834 3181 David Fennell, Chief Executive Mark Garratt, Group Finance Director Weber Shandwick Square Mile 020 7067 0700 Louise Robson or Graham Herring Summarised Consolidated Profit and Loss Account Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 Notes #'000 #'000 #'000 Turnover: continuing 58,272 37,884 78,345 operations Cost of sales (45,033) (31,100) (63,180) __________________________________________________________________________________________ Gross profit 13,239 6,784 15,165 Administrative expenses (9,930) (4,625) (10,274) Operating profit before goodwill amortisation and 4,555 2,315 5,179 exceptional items Goodwill amortisation (786) - (132) Exceptional items 3 (460) (156) (156) __________________________________________________________________________________________ Operating profit 3,309 2,159 4,891 __________________________________________________________________________________________ Net interest (payable)/receivable (172) 22 48 __________________________________________________________________________________________ Profit on ordinary activities 3,137 2,181 4,939 before taxation Taxation 4 (1,216) (672) (1,588) __________________________________________________________________________________________ Profit for the period 1,921 1,509 3,351 Dividends paid and proposed 5 (435) (295) (1,094) __________________________________________________________________________________________ Retained profit for the period 1,486 1,214 2,257 __________________________________________________________________________________________ Earnings per share - basic pre exceptional item 6 5.08p 3.72p 7.89p and goodwill amortisation - basic 6 3.22p 3.37p 7.27p - diluted 6 3.22p 3.35p 7.22p Dividend per share - interim 0.73p 0.66p 0.66p - final - - 1.34p Statement of Total Recognised Gains and Losses There were no recognised gains and losses in the period, or in the prior periods shown, other than the results shown above. Summarised Consolidated Balance Sheet Unaudited Unaudited Audited as at as at as at 31 Dec 02 31 Dec 01 30 Jun 02 Notes #'000 #'000 #'000 Intangible fixed assets 30,647 - 31,437 Tangible fixed assets 1,220 770 1,075 __________________________________________________________________________________________ 31,867 770 32,512 Current assets Debtors 16,527 11,924 19,702 Cash at bank and in hand 141 4,411 1,139 __________________________________________________________________________________________ 16,668 16,335 20,841 Creditors: amounts falling due within one year (15,526) (8,458) (19,692) __________________________________________________________________________________________ Net current assets 1,142 7,877 1,149 __________________________________________________________________________________________ Total assets less current liabilities 33,009 8,647 33,661 Creditors due in more than one year - - (2,131) Provision for liabilities and charges (12) (6) (12) __________________________________________________________________________________________ Net assets 32,997 8,641 31,518 __________________________________________________________________________________________ Equity shareholders' funds 7 32,997 8,641 31,518 __________________________________________________________________________________________ Summarised Consolidated Cash Flow Statement Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 Net cash inflow from operating activities 4,550 4,876 7,212 Returns on investment and servicing (177) 22 48 of finance Tax (595) (369) (926) __________________________________________________________________________________________ 3,778 4,529 6,334 Capital expenditure (354) (414) (476) Purchase of subsidiary undertakings - - (34,462) __________________________________________________________________________________________ 3,424 4,115 (28,604) Equity dividend (799) - (295) Financing (3,623) - 29,742 __________________________________________________________________________________________ (Decrease)/increase in cash during the period (998) 4,115 843 __________________________________________________________________________________________ Reconciliation of operating profit to net cash inflow from operating activities Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 Operating profit 3,309 2,159 4,891 Depreciation of tangible fixed 209 82 237 assets Amortisation 786 - 132 Loss on disposal of tangible fixed assets - - 7 Decrease/(increase) in debtors 3,175 (990) (1,068) (Decrease)/increase in creditors (2,929) 3,625 3,013 __________________________________________________________________________________________ Net cash inflow from operating activities 4,550 4,876 7,212 __________________________________________________________________________________________ Reconciliation of net cash flow to movement in net (debt)/ funds Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 (Decrease)/increase in cash in the period (998) 4,115 843 New loan - - (9,000) Repayment of loans 8,000 - 1,000 _____________________________________________________________________________________________ Amounts owed under invoice discounting facility (4,377) - - Reduction/(increase) in net (debt)/funds 2,625 4,115 (7,157) _____________________________________________________________________________________________ Net (debt)/funds at the start of period (6,861) 296 296 Net (debt)/funds at end of period (4,236) 4,411 (6,861) _____________________________________________________________________________________________ Analysis of Net (Debt)/Funds Unaudited Unaudited Audited 6 months 6 months 12 months as at as at as at 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 Cash at bank and in hand 141 4,411 1,139 Bank overdraft - - - _____________________________________________________________________________________________ Cash 141 4,411 1,139 _____________________________________________________________________________________________ Loans - - (8,000) Finance leases - - - Amounts owed under invoice (4,377) - - discounting facility _____________________________________________________________________________________________ Borrowings (4,377) - (8,000) _____________________________________________________________________________________________ Net (debt)/funds (4,236) 4,411 (6,861) _____________________________________________________________________________________________ Notes to the interim accounts 1. Accounting Policies There have been no changes to the accounting policies as set out in the Annual Report and Financial Statements 2002 for Reed Health Group plc. 2. Turnover The turnover for the Group is derived in the UK. 3. Exceptional Items Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 The profit on ordinary activities before taxation is stated after charging the following exceptional items: Costs in connection with the AGM 2002 460 - - Costs in connection with the demerger of the Group - 156 156 ______________________________________________________________________________________ 4. Taxation Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 UK corporation tax Current tax on income for the year 1,216 669 1,591 Deferred taxation net (reversal)/origination of timing differences - 3 (3) ______________________________________________________________________________________ Tax on profit on ordinary activities 1,216 672 1,588 ______________________________________________________________________________________ Profit on ordinary activities before taxation 3,137 2,181 4,939 ______________________________________________________________________________________ Theoretical UK corporation tax rate of 30% 941 654 1,482 Goodwill amortisation not tax deductible 236 - 40 Other expenditure not tax deductible 39 18 66 Accelerated capital allowances - (3) 3 ______________________________________________________________________________________ 1,216 669 1,591 ______________________________________________________________________________________ 5. Dividends The interim dividend of 0.73p per share will be paid on 10 April 2003 to ordinary shareholders on the register at the 7 March 2003. 6. Earnings per Share Unaudited Unaudited Audited 6 months 6 months 12 months to to to 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 These have been calculated on earnings of: - earnings per the accounts 1,921 1,509 3,351 - exceptional items 460 156 156 - tax relief (138) - - - goodwill amortisation 786 - 132 _____________________________________________________________________________________ - earnings pre-exceptional items and goodwill amortisation 3,029 1,665 3,639 _____________________________________________________________________________________ Number of Number of Number of shares shares shares The weighted average number of shares used was: Basic 59,644,772 44,733,579 46,126,000 Diluted - 255,754 281,000 ______________________________________________________________________________________ For diluted earnings per share 59,644,772 44,989,333 46,407,000 ______________________________________________________________________________________ 7. Reconciliation of Movements in Shareholders' Funds Unaudited Unaudited Audited As at As at as at 31 Dec 02 31 Dec 01 30 Jun 02 #'000 #'000 #'000 Total recognised gains relating to the period 1,921 1,509 3,351 Dividend (435) (295) (1,094) ______________________________________________________________________________________ Additional net (expenses)/proceeds of share issue (7) - 21,783 ______________________________________________________________________________________ Net addition to shareholders' funds 1,479 1,214 24,040 Opening shareholders' funds 31,518 7,427 7,478 ______________________________________________________________________________________ Closing shareholders' funds 32,997 8,641 31,518 ______________________________________________________________________________________ 8. Interim Report The interim report was approved by the Board on 24 February 2003. The figures for the year to 30 June 2002 were derived from the statutory accounts for that year. The statutory accounts for the year ended 30 June 2002 have been delivered to the Registrar of Companies and received an audit report which was unqualified and did not contain statements under s237 (2) or (3) of the Companies Act 1985. The interim report will be posted to shareholders and copies will be available in due course from the Company's Registered Office: 7-9 St George's Square, Pimlico, London, SW1V 2HX. This information is provided by RNS The company news service from the London Stock Exchange END IR NKQKKFBKDDBB
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