2011-08-04 07:30:00 CEST
2011-08-04 07:30:08 CEST
REGULATED INFORMATION
Trainer's House Oyj - Interim report (Q1 and Q3)
TRAINERS' HOUSE GROUP'S INTERIM REPORT 1 JANUARY - 30 JUNE 2011
Espoo, Finland, 2011-08-04 07:30 CEST (GLOBE NEWSWIRE) -- TRAINERS' HOUSE PLC,
INTERIM REPORT, 4 AUGUST 2011 AT 8:30
Trainers' House's profit improved further.
January-June 2011 in brief (figures are for continuing operations)
-- Net sales came to €9.1 million (comparative: €8.3 million).
-- Operating profit (EBIT) before non-recurring items and depreciation
resulting from the allocation of acquisition cost was €1.5 million (€1.1
million), or 17.0% of net sales (12.8%).
-- Operating result after these items was €0.7 million (-€0.5 million), or
7.9% of net sales (-5.9%).
-- Cash flow from operating activities was €0.6 million (-€1.0 million).
-- Earnings per share totalled €0.00 (-€0.01).
April-June 2011 in brief (figures are for continuing operations)
-- Net sales came to €4.6 million (comparative: €4.2 million).
-- Operating profit (EBIT) before non-recurring items and depreciation
resulting from the allocation of the acquisition cost was €0.9 million
(€0.5 million), or 19.1% of net sales (11.6%).
-- Operating result after these items was €0.5 million (-€0.6 million), or
10.2% of net sales (-13.8%).
-- Cash flow from operating activities was €0.8 million (-€1.3 million).
-- Earnings per share totalled €0.00 (-€0.01).
Key figures at the end of the second quarter of 2011
-- Liquid assets totalled €4.1 million (comparative: €5.7 million).
-- Interest-bearing liabilities amounted to €9.7 million (€17.3 million), and
interest-bearing net debt totalled €5.6 million (€11.7 million).
-- Net gearing was 15.8% (21.0%).
-- The equity ratio was 69.1% (67.9%).
OUTLOOK FOR 2011
The company expects net sales to grow and operating profit after depreciation
resulting from the allocation of acquisition cost to improve in comparison to
2010.
REPORT OF VESA HONKANEN, CEO
During the second quarter, the company's result improved compared to the first
quarter of 2011 and the equivalent period last year.
New orders focused increasingly on the entire Trainers' House service
portfolio, indicating that the company strategy is working well.New orders also
included orders for projects related to work capacity management.
More professionals have been recruited during the second quarter, and the
company will strengthen resources also during the remainder of the year to
ensure continued positive development.
For more information, please contact:Vesa Honkanen, CEO, tel. +358 500 432 993
Mirkka Vikström, CFO, 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 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 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.
The signs of recovery in the business environment at the end of 2010 have not
yet manifested themselves in a concrete increase in order intake;the value of
company's order intake during the second quarter fell slightly short of the
level 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 half of 2011.The structural changes and savings
measures previously implemented also resulted in improvement of the operations'
profitability in comparison to 2010.
Net sales from continuing operations in the period under review came to €9.1
million (comparative: €8.3 million).Operating profit from continuing operations
before depreciation resulting from the allocation of the acquisition cost of
Trainers' House Oy was €1.5 million, or 17.0% of net sales (€1.1 million, or
12.8%).Profit for the period was €0.3 million, or 3.4% of net sales (-€0.9
million, or -10.9%).
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 company productivity.
The following table itemises the Group's key figures (in thousands of euros):
1-6/2011 1-6/2010
Net sales 9,056 8,348
Expenses:
Personnel-related expenses -4,045 -4,491
Other expenses -3,195 -2,505
EBITDA 1,817 1,352
Depreciation of non-current assets -280 -281
Operating profit before depreciation 1,537 1,071
of acquisition cost
% of net sales 17.0 12.8
Depreciation of allocation of -819 -1,017
acquisition cost *)
Operating profit before non-recurring 718 54
items
Non-recurring items -550
EBIT 718 -496
% of net sales 7.9 -5.9
Financial income and expenses -260 -643
Profit/loss before tax 459 -1,139
Tax **) -149 225
Profit/loss for the period continuing 310 -914
operations
% of net sales 3.4 -10.9
Discontinued operations ***) 195
Profit/loss for the period 310 -719
*) 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 recognised in
the income statement have no effect on cash flow. On 30 June 2011, the
company's balance sheet included deferred tax assets from losses carried
forward in the amount of €1.3 million. Tax loss carry-forwards must be utilised
within 10 years from their recognition. Of the deferred tax assets, €0.8
million will expire in 2011-2012 and the remaining €0.5 million in 2019.
***) Discontinued operations are specified in the notes.
The following table itemises 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 Q211
----------------------------------------------------------------
Net sales 4180 4168 2831 4398 15578 4420 4636
----------------------------------------------------------------
Operating 588 483 -81 118 1107 653 884
profit before
depreciation
of acquisition
cost *)
----------------------------------------------------------------
Operating profit 79 -575 -590 -14,728 -15,814 244 475
----------------------------------------------------------------
*) 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 in the first quarter.The interest paid reduces the
non-restricted equity and is not recognised as income.
Cash flow and financing
Cash flow from operating activities before financial items totalled €1.4
million (-€0.3 million), and after financial items €0.6 million (-€1.0
million).
There were no investments in the reporting period (-€0.1 million).Cash flow
from financing came to -€0.2 million (€4.8 million).
Total cash flow amounted to €0.4 million (€3.8 million).
On 30 June 2011, the Group's liquid assets totalled €4.1 million (€5.7
million).The equity ratio was 69.1% (67.9%).Net gearing was 15.8% (21.0%). At
the end of the period under review, the company had €9.7 million of
interest-bearing debt (€17.3 million).
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.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 due to the overall economic recovery, but long-term
visibility remains weak.
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 ifexternal 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 €1.3
million.If the Group's taxable income does not reach approximately €3.1 million
for 2011-2012, 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, €0.8 million will expire in
2011-2012 and the remaining €0.5 million 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 June 2011, the Group employed 139 (166) people.
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
€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, a total of 5.1 million shares, or 7.6% of the
average number of all company shares (10.2 million shares, or 15.0%), were
traded on the Helsinki stock exchange, for a value of €1.6 million (€4.6
million).The period's highest share quotation was €0.36 (€0.53) and the lowest
€0.26 (€0.35); the closing price was €0.28 (€0.36).The weighted average price
was €0.31 (€0.45).With the closing price for 30 June 2011, the company's market
capitalisation was €19.0 million (€24.5 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 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.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 €0.1 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 2011, 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 (in thousands of euros)
Group Group Group Group Group
01/04- 01/04- 01/01- 01/01- 01/01-
30/06/11 30/06/10 30/06/11 30/06/10 31/12/10
CONTINUING OPERATIONS
NET SALES 4,636 4,168 9,056 8,348 15,578
Other income from operations 163 40 326 60 263
Costs:
Materials and services 537 455 1,206 837 2,231
Personnel-related 2,081 2,578 4,045 4,841 8,522
expenses
Depreciation 544 667 1,099 1,298 2,549
Impairment 14,445
Other operating expenses 1,163 1,084 2,315 1,928 3,908
Operating profit/loss 475 -575 718 -496 -15,814
Financial income and expenses -124 -323 -260 -643 -1,094
Profit/loss before tax 351 -898 459 -1,139 -16,907
Tax *) -117 139 -149 225 689
Profit/loss for the period 234 -759 310 -914 -16,218
continuing operations
Discontinued operations 113 195 -4,781
PROFIT/LOSS FOR THE PERIOD 234 -646 310 -719 -20,999
Other comprehensive income:
Cash flow hedges 31 92 106 84 178
Income tax relating to -8 -24 -28 -22 -46
components of other
comprehensive income
Other comprehensive income 23 68 79 62 132
for the year, net of tax
TOTAL COMPREHENSIVE 257 -578 388 -657 -20,867
INCOME FOR THE YEAR
Profit/loss attributable to:
Owners of the parent company 234 -646 310 -719 -20,999
Total comprehensive income
attributable to:
Owners of the parent company 257 -578 388 -657 -20,867
Earnings per share, undiluted:
EPS result for the period from 0.00 -0.01 0.00 -0.01 -0.24
continuing operations
EPS attributable to hybrid -0.00 -0.01
bond investors
EPS continuing operations 0.00 -0.01 0.00 -0.01 -0.24
EPS result for the period from 0.00 0.00 -0.07
discontinued operations
EPS attributable to equity 0.00 -0.01 0.00 -0.01 -0.31
holders of the parent company
EPS result for the period 0.00 -0.01 0.00 -0.01 -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 (in thousands of euros)
Group Group Group
30/06/11 30/06/10 31/12/10
ASSETS
Non-current assets
Property, plant and equipment 755 1,088 1,032
Goodwill 25,806 50,968 25,806
Other intangible assets 11,989 13,918 12,871
Other financial assets 202 3 202
Other receivables 3,127 587 3,127
Deferred tax receivables 1,335 3,351 1,717
Total non-current assets 43,213 69,914 44,754
Current assets
Inventories 11 12 11
Accounts receivables and 4,122 6,450 4,121
other receivables
Cash and cash equivalents 4,099 5,655 3,686
Total Current assets 8,232 12,118 7,817
TOTAL ASSETS 51,445 82,032 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 -50 -198 -129
Distributable non-restricted 31,872 31,872 31,872
equity fund
Other equity fund 4,592 4,962 4,614
Retained earnings -15,681 4,202 -16,062
Total shareholders' equity 35,557 55,662 35,119
Long-term liabilities
Deferred tax liabilities 3,075 3,535 3,288
Other long-term liabilities 4,540 15,838 4,649
Accounts payable and other 8,273 6,996 9,515
liabilities
Total liabilities 15,888 26,370 17,452
TOTAL SHAREHOLDERS' EQUITY AND 51,445 82,032 52,571
LIABILITIES
CASH FLOW STATEMENT, IFRS (in thousands of euros)
Group Group Group
01/01- 01/01- 01/01-
30/06/11 30/06/10 31/12/10
Profit/loss for the period 310 -719 -20,999
Adjustments to profit/loss 1,581 2,494 22,447
for the period
Change in working capital -499 -2,095 -1,740
Financial items -820 -636 -1,176
Cash flow from operations 572 -956 -1,468
Divestment of business 6,183
Investments in tangible and -61 -118
intangible assets
Cash flow from investments -61 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 -158 -149 -281
liabilities
Cash flow from financing -158 4,814 -2,769
Change in cash and cash 414 3,797 1,828
equivalents
Opening balance of cash and 3,686 1,858 1,858
cash equivalents
Closing balance of cash and 4,099 5,655 3,686
cash equivalents
CHANGE IN SHAREHOLDERS' EQUITY (in thousands of euros)
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 62 -719 -657
comprehensive
income
----------------------------------------------------------------
Hybrid bond 4,962 4,962
----------------------------------------------------------------
Equity 881 13,943 -198 31,872 4,962 4,202 55,662
31/06/2010
----------------------------------------------------------------
----------------------------------------------------------------
Equity 881 13,943 -129 31,872 4,614 -16,062 35,119
01/01/2011
----------------------------------------------------------------
Other 79 310 388
comprehensive
income
----------------------------------------------------------------
Hybrid bond -22 -22
----------------------------------------------------------------
Sharebased 72 72
payments
----------------------------------------------------------------
Equity 881 13,943 -50 31,872 4,592 -15,681 35,557
30/06/2011
----------------------------------------------------------------
RELATED PARTY TRANSACTIONS (in thousands of euros) Group Group Group
01/01- 01/01- 01/01-
30/06/11 30/06/10 31/12/10
Management's emoluments 147 244 400
Salaries and other short-term
employment benefits
RESTRUCTURING PROVISION (in thousands of euros) Group Group Group
01/01- 01/01- 01/01-
30/06/11 30/06/10 31/12/10
Provisions 1 January 389 346 346
Provisions increase 550 675
Provisions used -106 -156 -633
Provisions 30 June/December 282 740 389
PERSONNEL Group Group Group
01/01- 01/01- 01/01-
30/06/11 30/06/10 31/12/10
Average number of personnel 132 171 150
Personnel at the end of 139 166 133
the period
COMMITMENTS AND CONTINGENT Group Group Group
LIABILITIES (in thousands of euros) 30/06/11 30/06/10 31/12/10
Collaterals and contingent 12,460 14,741 12,894
liabilities given for
own commitments
Interest rateswaps:
Fair value -68 -268 -174
Nominal value 6,821 13,605 8,427
DISCONTINUED OPERATIONS (in thousands of euros)
The results of a discontinued operations are as follows:
Group Group Group
01/01- 01/01- 01/01-
30/06/11 30/06/10 13/08/10
Revenue 4,455 4,877
Expenses -4,191 -4,715
Profit/loss before tax 263 162
Tax -68 -42
Profit/loss after tax 195 120
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
Profit/loss for the period from a 195 -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 cashflow 6,183
OTHER KEY FIGURES Group Group Group
30/06/11 30/06/10 31/12/10
Equity-to-assets ratio (%) 69.1 67.9 66.8
Net gearing (%) 15.8 21.0 17.7
Shareholders' equity/share (EUR) 0.52 0.82 0.52
Return on equity (%) -32.9 -8.4 -37.5
Return on investment (%) -24.3 -0.2 -27.8
Return on equity and return on investment have been calculated for the previous
12 months.
Helsinki, 4 August 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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