Top Ten Holdings Plc News Announcement
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Top Ten Holdings PLC - Interim Results
RNS Number:8413T
Top Ten Holdings PLC
09 November 2005
TOP TEN HOLDINGS PLC
Interim Results for 26 weeks ended 25 September 2005
Top Ten Holdings plc ('Top Ten' or the 'Group') is the third largest UK bingo
operator with 38 bingo clubs. It is pleased to announce record Interim Results
for the 26 weeks to 25 September 2005.
2005 2004 % change
Turnover (£m) 10.16 6.93 +46.7%
Pre-tax profit (£m) 1.38 1.06 +30.8%
Earnings per Share (post exceptional items (p)) 0.26 0.21 +23.8%
Key Points:
* Substantial increases in profitability and sales together with
successful integration of the acquisition, Walkers Clubs
* The Company remains strongly cash generative with EBITDA of £2.3
million (2004 £1.5 million).
* Continual refurbishment and upgrading programme for our clubs
* Continue to seek acquisitions in a fragmented market place
* 4p of net asset backing
* Well set for the future with strong balance sheet and a strong start
to the year
9 November 2005
Commenting on the results Sir Aubrey Brocklebank, Chairman, said,
'These are an excellent set of results demonstrating the management's ability to
both integrate the largest acquisition we have yet made and to continue to drive
the existing business forward.
We have the infrastructure and the management capability to run a larger company
and we continue to seek further acquisitions in a fragmented market'
For Further Information:
Top Ten Holdings plc 01727 850793
Sir Aubrey Brocklebank, Chairman
Graham Kerr, Chief Executive
College Hill 020 7457 2020
Alex Walters
Matthew Smallwood
CHAIRMAN'S STATEMENT
Introduction
On behalf of the board I am pleased to present the interim statement for 26
weeks ending 25th September 2005. Top Ten continues to expand its operations
through selective acquisitions and improved performance through a range of
measures including club refurbishments and group-wide promotions.
Results
A significant increase in profitability has been achieved in the six months
ended 25th September 2005. Profit before tax increased from £1,056,933 to
£1,382,050 in the period, an increase of 31%, from turnover 47% higher at
£10,162,398 (2004 - £6,926,968). Turnover included £2,512,316 (3 months) from
the Walker sites and a VAT rebate of £329,385. EPS rose by 24% to 0.26p.
In the period, there was a strong performance from the newly refurbished clubs
at Silksworth, Darlington and Billingham. In addition the club at Tonypandy,
which was acquired at the end of last year, has made a positive contribution.
Like for like sales were marginally lower than the same period last year largely
because of the particularly good first quarter in 2004 (including Easter and a
major, industry-wide promotion) - there was also some disruption caused by
refurbishment work (Sunderland and Tonypandy) from which we are now seeing
increased sales and spend. Three clubs have been affected by local competition
and action has been taken to remedy these local difficulties - which should be
reflected in the second half.
The profit on sale of fixed assets in the profit and loss account is the profit
element from the sale of the car park at the Derby club of £149,110. The
comparative figure included £282,224 relating to the sale of the leasehold at
Tiverton.
Acquisitions
During the period Top Ten acquired Westvale Leisure Limited ('Walkers') which
operates 13 bingo clubs in the Midlands in Derbyshire, Nottinghamshire,
Staffordshire and Yorkshire for a consideration of £5.4 million in cash and
shares plus bank debt.
The consideration for the acquisition was satisfied by the payment of £4.1
million in cash and £1.30 million by the issue to two of the vendors of
26,000,000 new ordinary shares at an issue price of 5p per share. Both these
vendors remain employees of Top Ten. The cash consideration has been financed
from additional bank facilities. The audited accounts of Westvale at 31st March
2005 showed net tangible assets of £578,000 net of bank and shareholders loans
of £10.5 million which were repaid at completion.
In September Top Ten completed the separate acquisition of a further club in
Moreton in Cheshire.
The Group now has 38 clubs and is the third largest bingo operator in the UK.
Management Changes
Following the acquisition of Walkers, and a review of the Group's management
structure, we announced on 29 September 2005 that Graham Kerr has been appointed
Group Managing Director, Alan Weston resumes as full time Finance Director and
Bruce Roberts as Operations Director. The board is assisted by the appointment
of Gary Bennett as Company Secretary and Financial Controller.
The Group operates four regions in the NorthWest, the Midlands and Wales and the
SouthWest. Top Ten employs four regional managers and 38 managers and 40
assistant managers.
I believe that we have the management strength, depth and geographic coverage to
cater for the rapid expansion that we foresee.
Fund Raising
On 9 September 2005, Top Ten issued 20 million new ordinary shares at 5.1p per
share to raise £970,000 net of expenses. These funds have been employed to
supplement the Group's resources as we continue to improve and upgrade our
portfolio.
Refurbishments
During the period the clubs at Southwick (Sunderland) and Tonypandy were
refurbished and as part of the acquisition agreement the Walkers Club in
Birmingham was refurbished shortly before completion. I am pleased to be able to
report that in all cases we have seen an uplift in trading and an increase in
spend per head of the order of £1 per customer.
The group has an active refurbishment programme and will continue to upgrade
facilities where it can see a significant financial and operational benefit. In
the second half refurbishments at Durham and Gateshead should be completed.
Legislation
Elements of the much publicised Gambling Act have now in part come into force
though much of the new codes of conduct of the legislation have yet to be
written. Although still early days, we have not seen widespread competition from
Casinos as had once been vaunted. The 24 hour rule, whereby a new member was not
allowed to play for 24 hours after becoming a member, has now been abolished.
Whilst it is too early to measure the effects of this we do not expect it to
generate significant increases in profitability. We do, however, look forward to
the beneficial impact of the wider provisions of the Act when they are
implemented.
There has been a great deal of publicity concerning a possible smoking ban in
all public places. This has already happened in Ireland and will be enacted next
in Scotland. In England it is unlikely to be enacted before 2007. It is far
from clear whether it will encompass Bingo clubs or whether there will be
exemptions for part of buildings etc. If it is enacted and we are included then
it will be a challenge which we believe can be overcome by changing some of the
ways in which we operate.
Prospects
We have successfully integrated the Walkers clubs and your board continues to
examine further acquisition opportunities.
The Group now has the management team to run a substantially larger group. The
business is stable and historically has been sheltered from the vagaries of the
economy. We continue to evaluate the opportunities of new and innovative games
for our customers and are considering a number of options including an online
bingo product. We are a cash generative and asset backed business and have a
strategy to grow both organically and by selective acquisition.
Top Ten has had a good start to the year and the board looks forward with
confidence to reporting further progress for the rest of the year.
Sir Aubrey Brocklebank
Chairman
9 November 2005
Summary consolidated Profit and Loss Account
26 weeks to 26 weeks to 52 weeks to
25 September 26 September 27 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Turnover 10,162,398 6,926,968 13,887,069
Cost of sales (1,390,120) (889,577) (1,797,356)
Gross Profit 8,772,278 6,037,391 12,089,713
Distribution costs (6,349,524) (4,348,592) (9,135,369)
Administration costs (750,379) (773,855) (1,296,703)
Profit on sale of fixed assets 149,110 282,224 281,092
Interest (439,435) (140,235) (294,003)
Profit on Ordinary Activities before 1,382,050 1,056,933 1,644,730
Taxation
Taxation (337,539) (253,624) (285,557)
Profit on Ordinary Activities After 1,044,511 803,309 1,359,173
Taxation
Dividend - - (228,781)
Retained Profit 1,044,511 803,309 1,130,392
Basic and diluted earnings per ordinary 0.26 0.21 0.36
share (pence)
Summary consolidated Balance Sheet
25 September 26 September 27 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Fixed assets
Intangible assets 13,611,461 10,060,544 10,335,025
Tangible assets 23,996,615 7,260,100 8,069,846
37,608,076 17,320,644 18,404,871
Current assets
Stocks 383,270 152,711 194,164
Debtors 1,288,387 564,186 314,512
Cash 2,394,361 853,456 1,039,861
4,066,018 1,570,353 1,548,537
Creditors: amounts falling due within one year (3,005,330) (1,666,371) (2,079,729)
Net current assets/(liabilities) 1,060,688 (96,018) (531,192)
Long term liabilities (21,238,417) (3,546,036) (3,827,227)
Provisions for liabilities and charges (53,464) - (40,779)
17,376,884 13,678,590 14,005,673
Share Capital 10,651,180 8,324,480 8,324,480
Profit and Loss Account 6,725,704 5,354,110 5,681,193
17,346,884 13,678,590 14,005,673
Summary Consolidated Cash Flow Statement
26 weeks to 26 weeks to 52 weeks to
25 September 26 September 27 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Net cash inflow from operating activities 1,851,224 1,564,694 2,792,461
Returns on investment and servicing of
finance
Interest received 907 7,833 9,087
Interest paid (440,342) (147,004) (303,090)
Net cash outflow from returns on (439,435) (139,171) (294,003)
investments and servicing of finance
Taxation (285,557) (120,204) (295,494)
Capital expenditure and financial
investment
Payments to acquire intangible assets - - (274,481)
Payments to acquire tangible assets (1,426,114) (1,360,569) (2,382,415)
Receipts from sales of tangible assets 273,364 303,500 321,084
Net cash outflow for capital expenditure (1,152,750) (1,057,069) (2,335,812)
Acquisitions and disposals
Purchase of subsidiary undertaking (4,780,116) - -
Net cash acquired with subsidiary 97,089 - -
(4,683,027) - -
Equity dividends paid (228,781) (190,651) (190,651)
Net cash (outflow)/inflow before (4,938,326) 57,599 (323,499)
management of liquid resources and
financing
Financing
Issue of ordinary share capital 479,000 - -
Share premium 1,847,700 - -
Cost of share issue (40,800) - -
Bank loans advanced 20,100,924 - 1,083,846
Bank loans repaid (4,237,474) (444,196) (733,041)
Loan arrangement fees (350,000) - -
Vendor loans repaid on acquisition of (7,753,006) - -
subsidiary
Bank loans repaid on acquisition of (3,564,642) - -
subsidiary
New finance leases - 252,735 -
Capital element of finance leases paid (188,876) (54,014) (28,776)
Net cash inflow/(outflow) from financing 6,292,826 (245,475) 322,029
Increase/(decrease) in cash in the period 1,354,500 (187,876) (1,470)
NOTES
1. Publication of non-statutory accounts
The financial information contained in this interim statement does not
constitute accounts as defined by section 240 of the Companies Act 1985. The
financial information for the full preceding year is based on the statutory
accounts for the financial year ended 27 March 2005. Those accounts, upon which
the auditors issued an unqualified opinion, have been delivered to the Registrar
of Companies.
2. Basis of preparation of interim financial information
The accounting policies used in the interim statement are consistent with those
used in the financial statements for the 52 weeks ended 27 March 2005.
3. The board is not declaring an interim dividend. (2004: £Nil)
4. The earnings per share is calculated by reference to the results and the
weighted average of 389,186,261 shares in issue during the period (2004:
381,301,261). The number of shares in issue at 25 September 2005 was
429,201,261. 4,205,000 (2004: 2,345,000) potential ordinary shares have been
treated as dilutive.
5. There are no recognised gains and losses other than those passing through
the profit and loss account.
6. The interim statement will be sent to shareholders. Copies may be obtained
from the Company Secretary, Top Ten Holdings PLC, Unit 8, Verulam Industrial
Estate, 224 London Road, St Albans, Hertfordshire AL1 1JF.
This information is provided by RNS
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