2011-04-21 07:30:00 CEST
2011-04-21 07:30:06 CEST
REGULATED INFORMATION
Trainer's House Oyj - Interim report (Q1 and Q3)
TRAINERS' HOUSE GROUP'S INTERIM REPORT FOR 1 JANUARY - 31 MARCH 2011
ESPOO, 2011-04-21 07:30 CEST (GLOBE NEWSWIRE) -- TRAINERS' HOUSE PLC, STOCK
EXCHANGE RELEASE, 21 APRIL 2011 AT 8:30
Trainers' House showed a profit for the first quarter
January-March 2011 in brief
-- Net sales from continuing operations came to €4.4 million (comparative:
€4.2 million).
-- Operating profit (EBIT) from continuing operations before non-recurring
items and depreciation resulting from the allocation of the acquisition
cost was €0.7 million (€0.6 million), or 14.8% of net sales (14.1%).
-- The operating result from continuing operations after these items was €0.2
million (€0.1 million), or 5.5% of net sales (1.9%).
-- Cash flow from operating activities was -€0.2 million (€0.3 million).
-- Earnings per share for continuing operations totalled €0.00 (-€0.0).
Key figures at the end of the first quarter of 2011
-- Liquid assets totalled €3.4 million (Q1/2010 comparative: €7.0 million).
-- Interest-bearing liabilities amounted to €9.9 million (€16.7 million), and
interest-bearing net debt totalled €6.4 million (€9.7 million).
-- Net gearing was 18.2% (17.3%).
-- The equity ratio was 68.2% (68.6%).
OUTLOOK FOR 2011
The company expects net sales to grow and operating profit after depreciation
resulting from the allocation of acquisition costs to improve year on year.
REPORT OF VESA HONKANEN, CEO
The result for the period under review showed a profit. Trainers' House net
sales and operating profit showed a year-on-year improvement in the first
quarter of 2011.
The training market is changing. Customers' demand is directed at services that
support success and learning in the results-oriented everyday work.
A prerequisite for successful business operations is healthy personnel with
good work capacity, who enjoy their work. Trainers' House's new work capacity
management methods provide companies with the means of reducing work-related
ill-being.
More professionals have been recruited during the period under review. To
ensure continued positive development, resources will be strengthened also
during the remainder of the year.
For more information, please contact
Vesa Honkanen, CEO, at tel. +358 500 432 993
Mirkka Vikström, CFO, at tel. +358 50 376 1115
REVIEW OF OPERATIONS
Trainers' House is a training and marketing company that helps its customers
grow by supporting their everyday leadership.
This task is executed by offering customers business-critical training based on
the utilisation of marketing systems (Ignis) and management systems (SaaS).
Trainers' House projects are usually connected with clarifying our customers'
strategies; marketing the strategies; and implementing them by spurring sales,
by enhancing customer service (for example, through service design), and by
developing the work of leaders and supervisors along with the skills of their
subordinates. Managing work capacity through physical and mental coaching holds
an important role in an increasing number of customer projects.
The results of customer projects are verified by auditing customers' everyday
work and by bringing in management systems to help monitor the activities.
Trainers' House implements some 600 bespoke customer projects each year, in
close co-operation with the customers. In addition, the company coaches
hundreds of its customers' representatives each year in personal management
training programmes.
The 2010 financial year was a time of significant structural changes for the
company. Now we strive for growth from an even more well-defined foundation.
The signs of recovery in the business environment at the end of last year have
not yet manifested themselves in a concrete increase in order intake; the
company's order intake was at the same level as in the equivalent period of
last year.
FINANCIAL PERFORMANCE
Trainers' House net sales and operating profit showed a year-on-year
improvement in the first quarter of 2011. The structural changes and savings
measures previously implemented also resulted in improvement of the operations'
profitability in comparison to the last quarter of 2010. After eight
loss-making quarters, the company made a profit.
Net sales from continuing operations in the period under review came to €4.4
million (comparative: €4.2 million). Operating profit from continuing
operations before depreciation resulting from the allocation of the acquisition
cost of Trainers' House Oy was €0.7 million, or 14.8% of net sales (€0.6
million, or 14.1% of net sales). Profit for the period was €0.1 million, or
1.7% of net sales (-€0.1 million, or -1.7%).
Result
The comparative figures used for reporting on operating profit include the
operating profit reported as well as operating profit before depreciation of
allocated acquisition costs related to the acquisition of Trainers' House Oy
and non-recurring items (i.e., operating profit, EBIT). According to the
company's management, these figures provide a more accurate view of company
productivity.
The following table itemizes the Group's key figures (in thousands of euros):
1-3/2011 1-3/2010
Net sales 4,420 4,180
Costs:
Personnel-related expenses -1,963 -2,263
Other expenses -1,658 -1,206
EBITDA 798 711
Depreciation of non-current assets -145 -123
Operating profit before depreciation 653 588
of acquisition cost
% of net sales 14.8 14.1
Depreciation of allocation of -410 -508
acquisition cost *)
EBIT 244 79
% of net sales 5.5 1.9
Financial income and expenses -136 -320
Profit/loss before tax 108 -241
Tax **) -32 86
Profit/loss for the period continuing 76 -155
operations
% of net sales 1.7 -3.7
Discontinued operations ***) 82
Profit/loss for the period 76 -73
*) Of the purchase price for Trainers' House Oy in 2007, €10.2 million has been
allocated to intangible assets with a limited useful life. This item is
depreciated over five years. The total remaining portion of this item will be
depreciated as follows: €1.6 million in 2011 and €1.4 million in 2012.
**) The tax included in the income statement is deferred. Taxes recognized in
the income statement have no effect on cash flow. On 31 March 2011, the
company's balance sheet included deferred tax assets from losses carried
forward in the amount of €1.5 million. Tax loss carry-forwards must be utilised
within 10 years from their recognition. Of the deferred tax assets, €1.0
million will expire in 2011-2012 and the remaining €0.5 million in 2019.
***) Discontinued operations are specified in the notes.
The following table itemizes the distribution of net sales from continuing
operations and shows the quarterly profit/loss from the beginning of 2010 (in
thousands of euros.
Q110 Q210 Q310 Q410 2010 Q111
--------------------------------------------------------
Net sales 4180 4168 2831 4398 15578 4420
--------------------------------------------------------
Operating 588 483 -81 118 1107 653
profit before
depreciation
of acquisition
cost *)
--------------------------------------------------------
Operating profit 79 -575 -590 -14728 -15814 244
--------------------------------------------------------
*) excluding non-recurring items
LONG-TERM OBJECTIVES
The company's long-term objective is profitable growth.
FINANCING, INVESTMENTS, AND SOLVENCY
Hybrid bond
On 15 January 2010, Trainers' House Plc issued a €5.0 million domestic hybrid
bond. Interest in the amount of €0.5 million has been paid on the hybrid bond
to the subscribers. The interest paid reduces the non-restricted equity and is
not recognised as income.
Cash flow and financing
Cash from operating activities before financial items totalled €0.3 million
(€0.4 million), and after financial items -€0.2 million (€0.3 million).
There were no investments in the first quarter of 2011 (-€0.1 million). Cash
flow from financing came to -€0.1 million (€4.9 million).
Total cash flow amounted to -€0.3 million (€5.1 million).
On 31 March 2011, the Group's liquid assets totalled €3.4 million (€7.0
million). The equity ratio was 68.2% (68.6%), and net gearing was 18.2%
(17.3%). At the end of the period under review, the company had €9.9 million
(€16.7 million) of interest-bearing debt.
Financial risks
Currency risks are insignificant, because Trainers' House operates principally
in the euro area. Interest rate risk is managed by covering some of the risk
with hedging agreements. A bad-debt provision, which is booked on the basis of
ageing and case-specific risk analyses, covers risks to accounts receivable.
SHORT-TERM BUSINESS RISKS AND FACTORS OF UNCERTAINTY
Risks in the company's operating environment have remained unchanged in the
first quarter. On account of the project-based nature of the company's
operations, the order life cycle is short, which makes it more difficult to
estimate future developments. The situation has improved with the overall
economic recovery, but long-term trends remain unclear.
Short-term risks
The Group's goodwill and deferred tax assets recognised in the balance sheet
were re‑tested for impairment at the end of the first quarter. No goodwill
write-downs were judged necessary from the results of this impairment testing.
If the company's profitability should fail to develop as predicted, or if
external factors beyond the company's control, such as interest rates, should
change significantly, there is a risk that some of the Group's goodwill may
have to be written down. Such a write-down would not affect the company's cash
flow.
At the end of the period under review, Trainers' House Plc's balance sheet
included deferred tax assets from losses carried forward in the amount of €1.5
million. If the Group's taxable income does not reach approximately €4.6
million for 2010-2012, there is a risk of some of the deferred tax assets
recognised in the consolidated balance sheet being unable to be utilised and
therefore having to be written down. Of the deferred tax assets, €0.5 million
will expire in 2019. However, any such write-down would not affect the
company's cash flow.
In connection with the merger of Trainers' House Oy and Satama Interactive Plc,
the company concluded a loan agreement in the amount of €40 million. At the end
of the period under review, the company had loans related to this loan
agreement in an amount of €9.2 million. The loan agreement includes standard
covenants, including one concerning the ratio of net debt to EBITDA.
If the company's profitability should fail to develop as expected, there would
be a risk of the company being unable to fulfil the covenants, which would
increase financial expenses.
Risks are discussed in more detail in the annual report and on the company's
Web site, at www.trainershouse.fi > Investors.
PERSONNEL
At the end of March 2011, the Group employed 132 people (from 163 in March
2010).
DECISIONS REACHED AT THE ANNUAL GENERAL MEETING
The Annual General Meeting of Trainers' House Plc was held on 23 March 2011.
In accordance with the proposal of the Board of Directors, the Annual General
Meeting decided that no dividend be paid for the 2010 financial year.
The Annual General Meeting adopted the company's financial statements for 2010
and discharged the members of the Board of Directors and the CEO from liability
for the period 1 January to 31 December 2010.
It was confirmed that the Board of Directors shall consist of six members.
Aarne Aktan, Tarja Jussila, Kai Seikku, and Matti Vikkula were re-elected as
members of the Board of Directors. Jari Sarasvuo and Jarmo Hyökyvaara were
elected as new members of the Board. The Annual General Meeting decided on a
monthly emolument for a Board member of €1,500 and of €3,500 for the chairman
of the Board.
In its assembly meeting held after the AGM, the Board of Directors elected
Aktan as its chairman. Authorised Public Accountants Ernst & Young Oy were
elected as the company's auditors.
ACTING MANAGEMENT
Vesa Honkanen acts as the CEO of Trainers' House Plc, and Mirkka Vikström as
the company's CFO.
The Board of Directors of Trainers' House Plc appointed Vesa Honkanen, M.Tech.,
as the new chief executive officer of the company with effect from 25 January
2011.
Honkanen has been with the company since 1997 in numerous positions, most
recently as deputy CEO, responsible for the training business of Trainers'
House Plc. His previous responsibilities also include acting as the CEO of
Trainers' House Oy.
SHARES AND SHARE CAPITAL
The shares of Trainers' House Plc are listed on NASDAQ OMX Helsinki Ltd under
the symbol TRH1V.
At the end of the period reviewed, Trainers' House Plc had issued 68,016,704
shares and the company's registered share capital amounted to €880,743.59. No
changes took place in the share capital or number of shares during the period
under review.
Share performance and trading
In the period under review, 3.5 million shares in total, or 5.1% of the average
number of all company shares (6.2 million shares, or 9.1%), were traded on the
Helsinki stock exchange, for a value of €1.1 million (€2.8 million). The
period's highest share quotation was €0.36 (€0.53) and the lowest €0.27
(€0.43); the closing price was €0.28 (€0.47). The weighted average price was
€0.32 (€0.46). With the closing price for 31 March 2011, the company's market
capitalisation was €19.0 million (€32.0 million).
PERSONNEL OPTION PROGRAMMES
Trainers' House Plc has one option programme for its personnel, included in the
personnel's commitment and incentive scheme.
The Annual General Meeting held on 25 March 2010 decided to initiate an
employee option programme for key employees at Trainers' House and its
subsidiaries.
The number of option rights granted shall not exceed 5,000,000, and the option
rights shall entitle their holders to subscribe for no more than 5,000,000 new
shares or treasury shares in total. The subscription price for the 2010A
warrant is €0.46 and for the 2010B warrant €0.29. The subscription period for
shares converted under the 2010A warrant runs from 1 September 2011 to 31
December 2012, and that for shares converted under the 2010B warrant is 1
September 2012 to 31 December 2013.
The total number of warrants granted to the personnel is 1.8 million. A total
cost of €0.04 million has been expensed for the 2011 financial year.
CONDENSED FINANCIAL STATEMENTS AND NOTES
The Group divested its IT project business in August 2010, and the comparative
figures for 2010 have been adjusted to correspond to the structure of the
continuing and divested operations.
This report was compiled in accordance with the IAS 34 standard.
Amendments to and interpretations of published standards, as well as the new
standards in effect as of 1 January 2010, are presented in detail in the
financial statements for 2010. Adoption of the standards did not cause any
impact on the accounting principles applied for the financial statements that
would have called for retroactive changes to previous years' figures.
In producing this interim report, Trainers' House has applied the same
accounting principles for key figures as in its 2010 financial statements. The
calculation of key figures is described on page 50 of the financial statements
included in the Annual Report 2010.
The figures given in the interim report are unaudited.
INCOME STATEMENT, IFRS (kEUR)
Group Group Group
01/01- 01/01- 01/01-
31/03/11 31/03/10 31/12/10
CONTINUING OPERATIONS
NET SALES 4,420 4,180 15,578
Other income from operations 163 21 263
Costs:
Materials and services 669 383 2,231
Personnel-related 1,963 2,263 8,522
expenses
Depreciation 555 631 2,549
Impairment 14,445
Other operating expenses 1,152 844 3,908
Operating profit/loss 244 79 -15,814
Financial income and expenses -136 -320 -1,094
Profit/loss before tax 108 -241 -16,907
Tax*) -32 86 689
Profit/loss for the period 76 -155 -16,218
continuing operations
Discontinued operations 82 -4,781
PROFIT/LOSS FOR THE PERIOD 76 -73 -20,999
Other comprehensive income:
Cash flow hedges 75 -8 178
Income tax relating to components -20 2 -46
of other comprehensive income
Other comprehensive income 56 -6 132
for the year, net of tax
TOTAL COMPREHENSIVE 131 -79 -20,867
INCOME FOR THE YEAR
Profit/loss attributable to:
Owners of the parent company 76 -73 -20,999
Total comprehensive income
attributable to:
Owners of the parent company 131 -79 -20,867
Earnings per share, undiluted:
EPS result for the period from 0.00 -0.00 -0.24
continuing operations
EPS attributable to hybrid -0.00 -0.01
bond investors
EPS continuing operations 0.00 -0.00 -0.24
EPS result for the period from 0.00 -0.07
discontinued operations
EPS attributable to equity 0.00 -0.00 -0.31
holders of the parent company
EPS result for the period 0.00 -0.00 -0.31
Diluted earnings per share are the same as undiluted earning per share.
*) The tax included in the income statement is deferred.
BALANCE SHEET IFRS (kEUR)
Group Group Group
31/03/11 31/03/10 31/12/10
ASSETS
Non-current assets
Property, plant and equipment 932 478 1,032
Goodwill 25,806 50,968 25,806
Other intangible assets 12,430 14,470 12,871
Other financial assets 202 3 202
Other receivables 3,127 589 3,127
Deferred tax receivables 1,567 3,397 1,717
Total non-current assets 44,063 69,906 44,754
Current assets
Inventories 11 12 11
Accounts receivables and 4,216 5,130 4,121
other receivables
Cash and cash equivalents 3,424 6,977 3,686
Total current assets 7,651 12,119 7,817
TOTAL ASSETS 51,714 82,025 52,571
SHAREHOLDERS' EQUITY AND
LIABILITIES
Equity attributable to equity
holders of the parent company
Share capital 881 881 881
Premium fund 13,943 13,943 13,943
Hedging reserve -73 -267 -129
Distributable non-restricted 31,872 31,872 31,872
equity fund
Other equity fund 4,592 4,962 4,614
Retained earnings -15,947 4,849 -16,062
Total shareholders' equity 35,268 56,240 35,119
Long-term liabilities
Deferred tax liabilities 3,182 3,668 3,288
Other long-term liabilities 4,619 15,331 4,649
Accounts payable and other 8,646 6,787 9,515
liabilities
Total liabilities 16,447 25,785 17,452
TOTAL SHAREHOLDERS' EQUITY AND 51,714 82,025 52,571
LIABILITIES
CASH FLOW STATEMENT, IFRS (kEUR)
Group Group Group
01/01- 01/01- 01/01-
31/03/11 31/03/10 31/12/10
Profit/loss for the period 76 -73 -20,999
Adjustments to profit/loss 752 889 22,447
for the period
Change in working capital -499 -452 -1,740
Financial items -507 -59 -1,176
Cash flow from operations -179 305 -1,468
Divestment of business 6,183
Investments in tangible and -50 -118
intangible assets
Cash flow from investments -50 6,065
Repayment of long-term loans -6,200
Repayment of short-term loans -1,250
Withdrawal of hybrid bond 4,962 4,962
Repayment of finance lease -83 -98 -281
liabilities
Cash flow from financing -83 4,864 -2,769
Change in cash and cash -261 5,119 1,828
equivalents
Opening balance of cash and 3,686 1,858 1,858
cash equivalents
Closing balance of cash and 3,424 6,977 3,686
cash equivalents
CHANGE IN SHAREHOLDERS' EQUITY (kEUR)
Equity attributable to equity holders of the parent company
A. Share capital
B. Premium fund
C. Hedging reserve
D. Distributable non-restricted equity
E. Other equity fund
F. Retained earnings
G. Total
A. B. C. D. E. F. G.
----------------------------------------------------------------
Equity 881 13,943 -260 31,872 4,921 51,357
01/01/2010
----------------------------------------------------------------
Other -6 -73 -79
comprehensive
income
----------------------------------------------------------------
Hybrid bond 4,962 4,962
----------------------------------------------------------------
Equity 881 13,943 -267 31,872 4,962 4,849 56,240
31/03/2010
----------------------------------------------------------------
----------------------------------------------------------------
Equity 881 13,943 -129 31,872 4,614 -16,062 35,119
01/01/2011
----------------------------------------------------------------
Other 56 76 131
comprehensive
income
----------------------------------------------------------------
Hybrid bond -22 -22
----------------------------------------------------------------
Sharebased 39 39
payments
----------------------------------------------------------------
Equity 881 13,943 -73 31,872 4,592 -15,947 35,268
31/03/2011
----------------------------------------------------------------
RESTRUCTURING PROVISION (kEUR) Group Group Group
01/01- 01/01- 01/01-
31/03/11 31/03/10 31/12/10
Provisions 1 January 389 346 346
Provisions increase 675
Provisions used -67 -32 -633
Provisions 31 March/December 321 314 389
PERSONNEL Group Group Group
01/01- 01/01- 01/01-
31/03/11 31/03/10 31/12/10
Average number of personnel 128 155 150
Personnel at the end of 132 163 133
the period
COMMITMENTS AND CONTINGENT Group Group Group
LIABILITIES (kEUR) 31/03/11 31/03/10 31/12/10
Collaterals and contingent 12,477 16,131 12,894
liabilities given for
own commitments
Interest rate swaps:
Fair value -99 -359 -174
Nominal value 8,427 15,926 8,427
DISCONTINUED OPERATIONS (kEUR)
The results of a discontinued operations are as follows:
Group Group Group
01/01- 01/01- 01/01-
31/03/11 31/03/10 13/08/10
Revenue 2,168 4,877
Expenses -2,057 -4,715
Profit/loss before tax 111 162
Tax -29 -42
Profit/loss after tax 82 120
Profit from a divested operation 7,860
before tax
Share of the divested operation -10,717
in the goodwill
Loss from a divested operation -2,857
before tax
Tax -2,044
Loss for the period from a 82 -4,781
discontinued operations
Earnings per share discontinued operations:
Undiluted earnings/share (EUR) 0.00 -0.07
Diluted earnings/share (EUR) 0.00 -0.07
Impact on Group's financial position:
Group
13/08/10
Other intangible assets 22
Receivables 1,419
Accounts payable and other -301
liabilities
Receivables and liabilities total 1,140
Cash received 6,183
Cash and cash equivalents 0
of a divested business
Impact on cash flow 6,183
OTHER KEY FIGURES Group Group Group
31/03/11 31/03/10 31/12/10
Equity-to-assets ratio (%) 68.2 68.6 66.8
Net gearing (%) 18.2 17.3 17.7
Shareholders' equity/share (EUR) 0.52 0.83 0.52
Return on equity (%) -34.9 4.3 -37.5
Return on investment (%) -26.2 0.5 -27.8
Return on equity and return on investment have been calculated for the previous
12 months.
Helsinki, 21 April 2011
TRAINERS' HOUSE PLC
BOARD OF DIRECTORS
For more information, please contact:
Vesa Honkanen, CEO, tel. +358 500 432 993
Mirkka Vikström, CFO, tel. +358 50 376 1115
DISTRIBUTION
OMX Nordic Exchange, Helsinki
Main media
www.trainershouse.fi > Investors
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