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2013-04-18 07:30:00 CEST 2013-04-18 07:30:08 CEST REGULATED INFORMATION Trainer's House Oyj - Interim report (Q1 and Q3)TRAINERS’ HOUSE GROUP’S INTERIM REPORT FOR 1 JANUARY – 31 MARCH 2013Espoo, 2013-04-18 07:30 CEST (GLOBE NEWSWIRE) -- TRAINERS' HOUSE PLC, INTERIM REPORT, 18 APRIL 2013 AT 8:30 Trainers' House posted a positive result for the first quarter of 2013 January - March 2013 in brief (the figures are figures for the company's continuing operations) -- net sales amounted to EUR 2.9 million (EUR 3.9 million) -- operating profit (EBIT) before non-recurring items and depreciation resulting from the allocation of acquisition cost was EUR 0.2 million (EUR 0.5 million), or 5.7% of net sales (14.1%) -- operating result was EUR 0.04 million (EUR 0.1 million), or 1.4% of net sales (3.6%) -- cash flow from operating activities was EUR 1.1 million (EUR 0.3 million) -- earnings per share were EUR 0.00 (EUR 0.00) Key figures at the end of the first quarter of 2013 -- liquid assets totalled EUR 2.6 million (EUR 3.5 million) -- interest-bearing liabilities amounted to EUR 5.2 million (EUR 8.6 million), and interest-bearing net debt totalled EUR 2.6 million (EUR 5.1 million) -- gearing was 15.6% (30.5%) -- the equity ratio was 62.1% (54.4%) OUTLOOK FOR 2013 Trainers' House estimates net sales for 2013 to remain lower than in 2012, and operating profit before non-recurring items and depreciation resulting from the allocation of acquisition cost to be at approximately the same level as in 2012. REPORT OF ARTO HEIMONEN, CEO As expected, the first quarter of 2013 was challenging as regards the operating result but the company posted a positive result. The company is increasing its focus on services related to customers' change projects and quantifiable results. At the same time, the company reorganised and increased the efficiency of its operations after the codetermination negotiations that were concluded in early 2013. The result for the first quarter is burdened by a non-recurring cost of EUR 0.1 million related to the codetermination negotiations. The personnel reductions and other streamlining measures are expected to create annual savings totalling EUR 0.9 million. These cost-saving measures have been successfully launched. The savings will be realised in full during the third quarter. For more information, please contact: Arto Heimonen, CEO, tel. +358 40 412 3456 Mirkka Vikström, CFO, tel. +358 50 376 1115 REVIEW OF OPERATIONS Codetermination negotiations concerning the entire Trainers' House Group were initiated in January and concluded in February. As a result of the negotiations, a total of 9 employment contracts in the Group were terminated. The personnel reductions costs and estimated other non-recurring costs of the restructuring are EUR 0.1 million. During the period, the company has focused on a change in its operating model, as well as the development of a product and service model that provides quantifiable results to customers. The change projects executed by Trainers' House are usually connected with clarifying our customers' business 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 starting point for each change projects is a situation prevailing in the customer organisation, which is used as a basis for setting realistic targets for the desired results and the changes in activities required by these. To support the change, an internal coach network is set up to continue to anchor the change in the organisation. The results of customer projects are verified by auditing customers' everyday work and by bringing in management systems to help monitor the activities and results. In January, the company launched a new version of its Pulssi (Pulse) monitoring system. The service has been well received by the customers. FINANCIAL PERFORMANCE Net sales development in the first quarter was weaker than in 2012. Operating profit in the first quarter before non-recurring items and depreciation resulting from the allocation of acquisition cost was also lower year-on-year. As the depreciation resulting from the allocation of acquisition cost was completed during the last quarter of 2012, operating result before non-recurring items improved year-on-year. The result for the first quarter is burdened by the personnel reductions costs and other non-recurring costs related to the codetermination negotiations in January and February that amounted to EUR 0.1 million. Net sales from continuing operations in the quarter came to EUR 2.9 million (EUR 3.9 million). Operating profit from continuing operations (operating profit before depreciation resulting from the allocation of the acquisition cost of Trainers' House Oy and non-recurring items) was EUR 0.2 million, or 5.7% of net sales (EUR 0.5 million, or 14.1%). Profit for the period was EUR 0.03 million, or 1.1% of net sales (EUR 0.1 million, or 2.6%). 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 cost 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 the company's productivity. The following table itemises the Group's key figures (in thousands of euros unless otherwise noted: 1-3/2013 1-3/2012 Net sales 2,945 3,901 Expenses: Personnel-related expenses -1,576 -1,803 Other expenses -1,132 -1,458 EBITDA 237 640 Depreciation of non-current assets -70 -91 Operating profit before depreciation 167 549 of acquisition cost % of net sales 5.7 14.1 Depreciation of allocation of -410 acquisition cost *) Operating profit before non-recurring 167 140 items Non-recurring items **) -125 EBIT 42 140 % of net sales 1.4 3.6 Financial income and expenses 1 -21 Profit/loss before tax 43 119 Tax ***) -11 -18 Profit/loss for the period 32 101 % of net sales 1.1 2.6 *) Of the purchase price of Trainers' House Oy in 2007, EUR 10.2 million has been allocated to intangible assets with a limited useful life. This item was depreciated in full during the period 2007-2012. **) Non-recurring items in 2013 include a restructuring provision in the amount of EUR 0.1 million. **) The tax included in the income statement is deferred. Taxes recognised in the income statement have no effect on cash flow. On 31 March 2013, the company's balance sheet included deferred tax assets from losses carried forward in the amount of EUR 0.4 million. Of the deferred tax assets, EUR 0.3 million will expire in 2019 and EUR 0.1 million in 2021. The following table itemises the distribution of net sales from continuing operations and shows the quarterly profit/loss from the start of 2012, in thousands of euros. Q112 Q212 Q312 Q412 2012 Q113 ------------------------------------------------- Net sales 3901 3536 2485 3381 13302 2945 ------------------------------------------------- Operating 549 200 -20 453 1182 167 profit before depreciation of acquisition cost *) ------------------------------------------------- Operating 140 -210 -338 317 -91 42 profit ------------------------------------------------- *) excluding non-recurring items LONG-TERM OBJECTIVES The company's long-term objective is profitable growth. FINANCING, INVESTMENTS AND SOLVENCY In connection with the merger of Trainers' House Oy and Satama Interactive Plc, the company concluded a loan agreement in the amount of EUR 40 million. At the end of the reporting period, the company had loans related to this loan agreement negotiated in late 2011 in the amount of EUR 4.9 million. Hybrid bond On 15 January 2010, Trainers' House Plc issued a EUR 5.0 million domestic hybrid bond. Interest of EUR 1.0 million related to the hybrid bond was recognised in shareholders' equity. According to the terms of the hybrid bond, the company has the right to decide, subject to certain limitations specified in the terms, either to pay the interest on the hybrid bond annually or to postpone these payments. Interest in the amount of EUR 0.5 million has been paid to the subscribers on 21 January 2011 and EUR 0.5 million on 20 January 2012. The interest paid reduces the non-restricted equity and is not recognised as income. In accordance with its stock exchange release dated 17 December 2012, Trainers' House has decided to defer interest payments on the hybrid loan for the time being. The purpose of the deferment of interest payments is to strengthen the company's financial position and to ensure that the company fulfils the terms of its loan agreement. According to the terms of the hybrid bond, the company must pay the deferred interest and any interest accrued on it by the latest if, for example, the company pays dividends in excess of the minimum dividend stipulated in the Companies Act, or otherwise distributes equity to its shareholders. The company aims to refinance the hybrid bond in its entirety in the medium term. Cash flow and financing Cash flow from operating activities before financial items totalled EUR 1.1 million (EUR 0.8 million), and after financial items EUR 1.1 million (EUR 0.3 million). Cash flow from investments totalled EUR 0.02 million (no investments in 2012). Cash flow from financing came to EUR -0.1 million (EUR -0.1 million). Total cash flow amounted to EUR 1.1 million (EUR 0.3 million). On 31 March 2013, the Group's liquid assets totalled EUR 2.6 million (EUR 3.5 million). The equity ratio was 62.1% (54.4%). Gearing was 15.6% (30.5%). At the end of the reporting period, the company had interest-bearing liabilities in the amount of EUR 5.2 million (EUR 8.6 million). Financial risks 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. 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. Long-term visibility remains limited due to the general economic situation. 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 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 form losses carried forward in the amount of EUR 0.4 million. Of the deferred tax assets, EUR 0.3 million will expire in 2019 and EUR 0.1 million in 2021. The company's new loan agreement, under which there were loans in the amount of EUR 4.9 million at the end of the reporting period, 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 website, at www.trainershouse.fi > Investors. PERSONNEL At the end of March 2013, the Group employed 94 (119) people. DECISIONS REACHED AT THE ANNUAL GENERAL MEETING The Annual General Meeting of Trainers' House Plc was held in Espoo on 19 March 2013. In accordance with the proposal of the Board of Directors, the Annual General Meeting decided that no dividend be paid. In accordance with the proposal of the Board of Directors, the Annual General Meeting decided that the company's premium fund be decreased by EUR 823,478.02 to cover the parent company's losses. On 31 December 2012, before the offsetting of losses, the parent company's premium fund amounted to EUR 5,355,637.99. After the decrease, the premium fund amounts to EUR 4,532,159.97. The Annual General Meeting adopted the company's Financial Statements and discharged the CEO and the members of the Board of Directors from liability for the period 1 January to 31 December 2012. It was confirmed that the Board of Directors shall consist of five (5) members. Aarne Aktan, Jarmo Hyökyvaara, Tarja Jussila and Jari Sarasvuo were re-elected as members of the Board of Directors. Vesa Honkanen was elected a new member of the Board. In its assembly meeting held after the AGM, the Board of Directors elected Aarne Aktan as the Chairman of the Board. The Annual General Meeting decided on a monthly emolument for a Board member of EUR 1,500 and of EUR 3,500 for the Chairman of the Board. Authorised Public Accountants Ernst & Young Oy were elected as the company's auditors. In accordance with the proposal of the Board of Directors, the Annual General Meeting held on 21 March 2012 decided to authorise the Board of Directors to decide on a share issue, on transfer of own shares and on the granting of special rights entitling to shares, on one or several occasions. The number of shares to be granted or transferred on the basis of the authorisation may not exceed 13,000,000 shares. A share issue, transfer of own shares and the granting of other special rights entitling to shares may take place in deviation of the shareholders' pre-emptive subscription rights (a private placement). The authorisation is valid until 30 June 2015. 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 under review, Trainers' House Plc had issued 68,016,704 shares and the company's registered share capital amounted to EUR 880,743.59. No changes took place in the number of shares or share capital during the period under review. Share performance and trading In the period under review, 2.6 million shares in total, or 3.9% of the average number of all company shares (1.6 million shares, or 2.4%), were traded on the Helsinki stock exchange, for a value of EUR 0.3 million (EUR 0.3 million). The period's highest share quotation was EUR 0.11 (EUR 0.22), the lowest EUR 0.09 (EUR 0.15) and the closing price EUR 0.09 (EUR 0.15). The weighted average price was EUR 0.10 (EUR 0.18). At the closing price on 31 March 2013, the company's market capitalisation was EUR 6.1 million (EUR 10.2 million). PERSONNEL OPTION PROGRAMMES Trainers' House Plc has two option programmes 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 2,000,000, and the option rights shall entitle their holders to subscribe for no more than 2,000,000 new shares or treasury shares in total. The subscription price for the 2010B warrant is EUR 0.29. The subscription period for shares converted under the warrant 2010B is from 1 September 2012 to 31 December 2013. The total number of warrants granted to the personnel is 0.9 million. No shares have been subscribed under the warrants. The Annual General Meeting held on 21 March 2012 decided to initiate an employee option programme for key employees in 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. Of the warrants, 3,000,000 will be titled 2012A and 2,000,000 will be titled 2012B. The subscription price for the warrants is EUR 0.16. The subscription period for shares converted under the 2012A warrant is from 1 September 2013 to 31 December 2014, and for shares converted under the 2012B warrant from 1 September 2014 to 31 December 2015. The options have not yet been offered. CONDENSED FINANCIAL STATEMENTS AND NOTES This report was compiled in accordance with the IAS 34 standard. This interim report has been prepared in accordance with the IFRS standards and interpretations adopted in the EU, valid on 31 December 2012. In producing this interim report, Trainers' House has applied the same accounting principles for key figures as in its 2012 financial statements. The calculation of key figures is described on page 92 of the financial statements included in the Annual Report 2012. The figures given in the interim report are unaudited. INCOME STATEMENT, IFRS (kEUR) Group Group Group 01/01- 01/01- 01/01- 31/03/13 31/03/12 31/12/12 CONTINUING OPERATIONS NET SALES 2,945 3,901 13,302 Other income from operations 177 164 797 Costs: Materials and services -323 -538 -1,562 Personnel-related expenses -1,691 -1,803 -6,696 Depreciation -70 -500 -1,689 Other operating expenses -996 -1,083 -4,244 Operating profit/loss 42 140 -91 Financial income and expenses 1 -21 -303 Profit/loss before tax 43 119 -394 Tax *) -11 -18 151 PROFIT/LOSS FOR THE PERIOD 32 101 -243 TOTAL COMPREHENSIVE 32 101 -243 INCOME FOR THE YEAR Profit/loss attributable to: Owners of the parent company 32 101 -243 Total comprehensive income attributable to: Owners of the parent company 32 101 -243 Earnings per share, undiluted: EPS result for the period from 0.00 0.00 -0.00 continuing operations EPS attributable to hybrid -0.00 -0.00 bond investors EPS continuing operations 0.00 0.00 -0.00 EPS attributable to equity 0.00 0.00 -0.00 holders of the parent company EPS result for the period 0.00 0.00 -0.00 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 31/03/13 31/03/12 31/12/12 ASSETS Non-current assets Property, plant and equipment 321 551 380 Goodwill 9,135 9,135 9,135 Other intangible assets 9,698 10,668 9,710 Other financial assets 202 202 202 Other receivables 1,475 1,607 1,490 Deferred tax receivables 371 484 382 Total non-current assets 21,202 22,646 21,299 Current assets Inventories 10 11 10 Accounts receivables and 2,760 4,540 3,776 other receivables Cash and cash equivalents 2,595 3,534 1,520 Total current assets 5,366 8,085 5,306 TOTAL ASSETS 26,568 30,731 26,605 SHAREHOLDERS' EQUITY AND LIABILITIES Equity attributable to equity holders of the parent company Share capital 881 881 881 Premium fund 4,253 5,077 5,077 Distributable non-restricted 31,872 31,872 31,872 equity fund Other equity fund 4,962 4,962 4,962 Retained earnings -25,542 -26,074 -26,397 Total shareholders' equity 16,426 16,718 16,394 Long-term liabilities Deferred tax liabilities 2,507 2,756 2,507 Other long-term liabilities 3,052 6,433 3,074 Accounts payable and other 4,582 4,825 4,629 liabilities Total liabilities 10,142 14,013 10,211 TOTAL SHAREHOLDERS' EQUITY AND 26,568 30,731 26,605 LIABILITIES CASH FLOW STATEMENT, IFRS (kEUR) Group Group Group 01/01- 01/01- 01/01- 31/03/13 31/03/12 31/12/12 Profit/loss for the period 32 101 -243 Adjustments to profit/loss 150 559 1,726 for the period Change in working capital 934 169 -100 Financial items -1 -519 -774 Cash flow from operations 1,114 309 608 Investments in tangible and -49 intangible assets Repayment of loan receivables 15 1,200 Cash flow from investments 15 1,152 Repayment of long-term loans -3,297 Repayment of finance lease -55 -55 -223 liabilities Cash flow from financing -55 -55 -3,520 Change in cash and cash 1,075 254 -1,760 equivalents Opening balance of cash and 1,520 3,280 3,280 cash equivalents Closing balance of cash and 2,595 3,534 1,520 cash equivalents CHANGE IN SHAREHOLDERS' EQUITY (kEUR) Equity attributable to equity holders of the parent company A. Share capital B. Premium fund C. Distributable non-restricted equity D. Other equity fund E. Retained earnings F. Total A. B. C. D. E. F. ---------------------------------------------------------- Equity 881 13,943 31,872 4,962 -35,031 16,627 01/01/2012 ---------------------------------------------------------- Other 101 101 comprehensive income ---------------------------------------------------------- Hybrid bond -23 -23 ---------------------------------------------------------- Sharebased 13 13 payments ---------------------------------------------------------- Decrease of -8,866 8,866 0 share premium fund to cover losses ---------------------------------------------------------- Equity 881 5,077 31,872 4,962 -26,074 16,718 31/03/2012 ---------------------------------------------------------- ---------------------------------------------------------- Equity 881 5,077 31,872 4,962 -26,397 16,394 01/01/2013 ---------------------------------------------------------- Other 32 32 comprehensive income ---------------------------------------------------------- Decrease of -823 823 0 share premium fund to cover losses ---------------------------------------------------------- Equity 881 4,253 31,872 4,962 -25,542 16,426 31/03/2013 ---------------------------------------------------------- RESTRUCTURING PROVISION (kEUR) Group Group Group 01/01- 01/01- 01/01- 31/03/13 31/03/12 31/12/12 Provisions 1 January 240 258 258 Provisions increased 125 Provisions used -57 -19 Provisions 31 March/December 308 258 240 PERSONNEL Group Group Group 01/01- 01/01- 01/01- 31/03/13 31/03/12 31/12/12 Average number of personnel 101 119 115 Personnel at the end of 94 119 108 the period COMMITMENTS AND CONTINGENT Group Group Group LIABILITIES (kEUR) 31/03/13 31/03/12 31/12/12 Collaterals and contingent 10,317 11,510 10,716 liabilities given for own commitments Interest rate swaps: Fair value 5,214 OTHER KEY FIGURES Group Group Group 31.03.13 31.03.12 31.12.12 Equity-to-assets ratio (%) 62.1 54.4 62.0 Net gearing (%) 15.6 30.5 22.5 Shareholders' equity/share (EUR) 0.24 0.25 0.24 Return on equity (%) -1.9 -70.5 -1.5 Return on investment (%) 0.3 -46.9 0.9 Return on equity and return on investment have been calculated for the previous 12 months. Helsinki 18 April 2013 TRAINERS' HOUSE PLC BOARD OF DIRECTORS For more information, please contact: Arto Heimonen, CEO, tel. +358 40 412 3456 Mirkka Vikström, CFO, tel. +358 50 376 1115 DISTRIBUTION OMX Nordic Exchange, Helsinki Main media www.trainershouse.fi > Investors |
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