2016-04-21 07:30:01 CEST
2016-04-21 07:30:01 CEST
SÄÄNNELTY TIETO
Trainer's House Oyj - Interim report (Q1 and Q3)
INTERIM REPORT FOR TRAINERS’ HOUSE GROUP 1 JANUARY – 31 MARCH 2016
Espoo, 2016-04-21 07:30 CEST (GLOBE NEWSWIRE) -- TRAINERS' HOUSE PLC, INTERIM
REPORT, 21 APRIL 2016 AT 8:30
Trainers’ House posted an excellent result for the first quarter of 2016.
January – March 2016 in brief (the figures refer to the company’s continuing
operations)
-- Net sales amounted to EUR 2.2 million (EUR 1.8 million), which is 24.0%
higher in comparison with the corresponding period in the previous year.
-- Operating profit (EBIT) before non-recurring items was EUR 0.6 million (EUR
0.1 million), or 26.4% of net sales (3.7%).
-- Operating profit was EUR 0.6 million, or 26.4% of net sales (EUR -0.2
million, -10.7%).
-- Cash flow from operating activities was EUR 0.4 million (EUR -0.0 million).
-- Earnings per share were EUR 0.00 (EUR -0.00).
Key figures at the end of the first quarter of 2016
-- Liquid assets totalled EUR 1.8 million (EUR 1.6 million).
-- Interest-bearing liabilities amounted to EUR 1.4 million (EUR 7.1 million),
and interest-bearing net debt totalled EUR -0.3 million (EUR 5.5 million).
-- Net gearing was -5.1% (296.8%).
-- The equity ratio was 60.0% (14,9%).
OUTLOOK FOR 2016
The company anticipates that the economic climate will remain difficult in
2016. Due to the nature of the business, the company's order book only
stretches a few months forward. For these reasons, the outlook for the future
contains a high degree of uncertainty.
In the remainder of the year, the company will invest in enabling stronger
growth, which will lead to higher costs. For this reason, the company expects
profitability for the remainder of the year to weaken in comparison with the
first quarter. A large amount of the costs will be incurred during the second
quarter. The company expects operating profitability for the whole of 2016 to
remain the same or improve slightly on 2015.
REPORT OF ARTO HEIMONEN, CEO
The results were pleasing.
In 2015, Trainers’ House turned its business around. Our positive growth became
stronger in the first quarter of 2016.
The company's operating result before non-recurring items improved by EUR 0.5
million in the review period in comparison with the corresponding period in the
previous year. Sales of customer projects also clearly surpassed sales figures
in the first quarter of 2015. The Group's cash balance also became stronger.
The Group had more liquid assets than interest-bearing liabilities at the end
of the review period. The equity ratio increased to 60%. Overall, the execution
of the corporate restructuring programme continued in good collaboration with
stakeholders.
The operating profit of EUR 0.6 million for the first quarter was exceptionally
high. Net sales were strengthened considerably by successful sales in the last
quarter of 2015. Additionally, the earlier dissolution of provisions for
expenses had the effect of improving operating profitability in Q1/2016 by EUR
0.2 million.
The remainder of the year may be challenging due to international uncertainty,
weak growth prospects for the Finnish economy, the cautious approach of
customer companies towards investments and the project-based and seasonal
nature of the company's business. Additionally, the company is investing in
tools for realising change. The company is also opening a new marketing
services unit in Oulu and continuing to recruit new personnel. In the short
term, the aforementioned factors will have a significantly negative overall
effect on the company's profitability.
The key reasons for the turnaround in the business are proven customer results,
reduced costs thanks to the solution implemented in 2015 in relation to the
company's office premises, improvements in the company's reputation towards the
end of the year and good sales work.
In 2016, the company will continue to do determined work to fulfil the
obligations of the corporate restructuring programme. The company has also
shifted its focus towards growth.
For more information, please contact:
Arto Heimonen, CEO, tel. +358 404 123 456
Saku Keskitalo, CFO, tel. +358 404 111 111
REVIEW OF OPERATIONS
The focus of the first quarter of 2016 was completing the customer projects
that were sold at the end of the previous year. The personnel pulled out all
the stops to ensure first-rate customer results.
During the reporting period, the company paid one of its biannual instalments
to reduce its debt in accordance with the corporate restructuring programme.
Despite this, the Group's cash balance became stronger.
In the first quarter, the company began a project to develop tools for
realising change. During the reporting period, the company also produced
content for a digital sales training programme and made preparations to launch
the product during the second quarter.
FINANCIAL PERFORMANCE
Net sales for the reporting period were higher than in the previous year.
Operating profit before non-recurring items and the overall result also
improved in comparison with the previous year.
Net sales from continuing operations during the reporting period came to EUR
2.2 million (EUR 1.8 million). Operating profit (EBIT) from continuing
operations before non-recurring items was EUR 0.6 million, or 26.4% of net
sales (EUR 0.1 million, or 3.7 %). Operating profit from continuing operations
was EUR 0.5 million or 20.6% of net sales (EUR -0.3 million, -14.1%).
Result
The comparative figures used for reporting on operating profit include the
reported operating profit as well as operating profit before non-recurring
items (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):
1-3/2016 1-3/2015
Net sales 2,250 1,814
Expenses:
Personnel-related expenses -1,217 -1,004
Other expenses -437 -707
EBITDA 595 104
Depreciation of non-current assets -2 -37
Operating profit before non-recurring 593 67
items
Non-recurring items *) -261
EBIT 593 -194
% of net sales 26.4 -10.7
Financial income and expenses -8 -61
Profit/loss before tax 585 -256
Tax **) -121 1
Profit/loss for the period 464 -255
% of net sales 20.6 -14.1
*) Non-recurring items in 2015 include expenses related to the codetermination
negotiation and the corporate restructuring programme.
**) The tax included in the income statement is deferred. Taxes recognised in
the income statement have no effect on cash flow. On 31 March 2016, the
company’s balance sheet included deferred tax assets from losses carried
forward in the amount of EUR 0.3 million. The deferred tax assets will expire
between 2019 and 2024.
The following table itemises the distribution of net sales from continuing
operations and shows the quarterly profit/loss from the beginning of 2015 (in
thousands of euros):
Q115 Q215 Q315 Q415 Q116
--------------------------------------------
Net sales 1814 1792 1289 2002 2250
--------------------------------------------
Operating 67 -64 6 332 593
profit
before
non-recurring
items
--------------------------------------------
Operating -194 -1782 6 332 593
profit
--------------------------------------------
LONG-TERM OBJECTIVES
The company’s long-term objective is profitable growth.
FINANCING, INVESTMENTS AND SOLVENCY
On 2 September 2015, Espoo District Court approved the restructuring programme
filed by Trainers’ House Plc. The payment programme will last approximately
four years, ending in 2019. As a consequence of the corporate restructuring
programme, the Group's external debt decreased from approximately EUR 9.1
million to approximately EUR 2.5 million.
Secured debt
When Trainers’ House Oy and Satama Interactive Plc merged, a loan agreement was
made with a value of EUR 40 million. The loan capital outstanding at the end of
the 2014 financial period – EUR 1.7 million – is entirely restructured debt.
The company will repay its remaining debt in full in accordance with the
approved payment programme. Payments will be made twice per year. At the end of
the period, EUR 1.3 million of loan capital remained outstanding.
Lowest priority debt
The company has a subordinated loan worth EUR 0.1 million. The interest rate of
the subordinated loan is 3.0% until 31 December 2016. The interest is
capitalised at the end of each year. From 1 January 2017, a cash interest
payment of 5.0% will be made subject to the availability of distributable
assets. The capital loan will mature on 31 December 2018.
Cash flow and financing
Cash flow from operating activities before financial items totalled EUR 0.4
million (EUR -0.0 million), and after financial items EUR 0.4 million (EUR -0.0
million).
Cash flow from investments in the period under review totalled EUR -0.0 million
(EUR 0.0 million). Cash flow from financing came to EUR -0.2 million (EUR -0.0
million).
Total cash flow amounted to EUR 0.2 million (EUR -0.0 million).
On 31 March 2016, the Group’s liquid assets totalled EUR 1.8 million (EUR 1.6
million). The equity ratio was 60.0% (14.9%). Net gearing was -5.1% (296.8%).
At the end of the period under review, the company had EUR 1.4 million of
interest-bearing debt (EUR 7.1 million).
Financial risks
The fulfilment of the company’s obligations under its financing agreements
requires profitability in the company's business operations and the ability to
make timely payments in accordance with the corporate restructuring programme.
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.
Liquidity remains the key focus of financial risk management.
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. The
company's financial situation is critical and taking care of the company's
liabilities under the corporate restructuring programme requires the company to
improve the profitability of its business operations. The company's operations
are also tied to personnel.
Short-term risks
The goodwill, other intangible assets and deferred tax assets recognised in the
balance sheet were re-tested for impairment at the end of the quarter.
Trainers’ House Plc’s consolidated balance sheet now contains EUR 1.7 million
of goodwill. The balance sheet value of trademarks is EUR 6.1 million. 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 and other
intangible assets 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, the consolidated balance sheet contained
deferred tax assets from losses carried forward in the amount of EUR 0.3
million. The deferred tax assets will expire between 2019 and 2024.
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 2016, the Group employed 87 (66) people.
DECISIONS REACHED AT THE ANNUAL GENERAL MEETING
The annual general meeting of Trainers’ House Plc was held in Espoo on 23 March
2016.
In accordance with the proposal of the Board of Directors, the Annual General
Meeting decided that no dividend would be paid for the 2015 financial period
and that the profit for the financial year as reported in the parent company’s
financial statements would be recognised in profit or loss. The Annual General
Meeting also decided that the premium fund would be decreased by EUR 494,539.16
to cover the company's cumulative losses and the invested non-restricted equity
fund would be decreased by EUR 36,461,365.15 to simplify the structure of the
parent company's balance sheet. Following these deductions, both funds have
been used in full. Following all of the proposed measures, the company's
retained earnings are EUR -1,512,503.58 plus the profit of EUR 604,019.85 for
the 2015 financial period, making EUR -908,483.73.
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 from 1 January to 31 December 2015.
It was confirmed that the Board of Directors shall consist of three (3)
members. Aarne Aktan, Jarmo Hyökyvaara and Jari Sarasvuo were re-elected as
members of the Board of Directors. 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 each Board member
of EUR 1,500 and of EUR 3,500 for the Chairman of the Board.
Ernst & Young Oy were elected as the company’s auditors. Auditor’s fees are
paid on the basis of a reasonable invoice.
It was decided to authorise the Board of Directors to decide on a share issue
and on the granting of special rights entitling holders to shares on one or
more occasions. The number of shares to be issued on the basis of the
authorisation may not exceed 13,000,000. The authorisation also includes the
entitlement to decide upon a share issue to the company itself on the condition
that the number of treasury shares held by the company following the issue is
no more than one tenth (1/10) of all of the shares in the company. The Board of
Directors decides upon the terms and conditions of share issues and on the
granting of special rights entitling holders to shares as referred to in
Chapter 10, Section 1 of the Limited Liability Companies Act. Share issues and
the granting of other special rights entitling holders to shares as referred to
in Chapter 10, Section 1 of the Limited Liability Companies Act may take place
in deviation of the shareholders' pre-emptive subscription rights (a private
placement). This authorisation overrides previous authorisations concerning
share issues and grants of other special rights entitling holders to shares.
The authorisation shall remain in force until 30 June 2019.
SHARES AND SHARE CAPITAL
The shares of Trainers’ House Plc are listed on Nasdaq Helsinki Ltd under the
symbol TRH1V.
At the end of the period under review, Trainers’ House Plc had issued
106,737,062 shares and the company’s registered share capital amounted to EUR
880,743.59. The company does not possess any treasury shares. No changes took
place in the number of shares or share capital during the period under review.
Share performance and trading
During the period under review, a total of 16.2 million shares, or 15.2% of the
average number of all company shares (5.0 million shares or 7.4%), were traded
on the Helsinki Exchanges for a value of EUR 1.6 million (EUR 0.2 million). The
period’s highest share quotation was EUR 0.14 (EUR 0.04), the lowest EUR 0.07
(EUR 0.02) and the closing price EUR 0.14 (EUR 0.04). The weighted average
price was EUR 0.10 (EUR 0.04). At the closing price on 31 March 2016, the
company’s market capitalisation was EUR 14.9 million (EUR 2.7 million).
PERSONNEL OPTION PROGRAMMES
Trainers’ House Plc has two option programmes for its personnel, included in
the personnel’s commitment and incentive scheme.
The company’s Board of Directors decided on 5 August 2013 to adopt a new option
programme under the authorisation of the Annual General Meeting on 21 March
2012. The number of option rights granted shall not exceed 7,500,000, and the
option rights shall entitle their holders to subscribe for no more than
7,500,000 new shares or treasury shares in total. 2,500,000 of the converted
shares will be under the warrant 2013A and the subscription period for the
converted shares is from 1 January 2015 to 1 January 2018. 2,500,000 of the
converted shares will be under the warrant 2013B and the subscription period
for the converted shares is from 1 January 2016 to 1 January 2018. 2,500,000 of
the converted shares will be under the warrant 2013C and the subscription
period for the converted shares is from 1 January 2017 to 1 January 2018. The
subscription price for each warrant is EUR 0.09. A total of 5.0 million options
were granted to the personnel. A total cost of EUR 0.0 million has been
expensed for the 2016 financial year for the options.
The company’s Board of Directors decided on 18 December 2013 to adopt a new
option programme under the authorisation of the Annual General Meeting on 21
March 2012. The number of option rights granted shall not exceed 5,250,000, and
the option rights shall entitle their holders to subscribe for no more than
5,250,000 new shares or treasury shares in total. The converted shares will be
under the warrant 2013D. The subscription period for shares converted under the
warrant is from 1 January 2018 to 31 December 2018, and the subscription price
for each warrant is EUR 0.06. All of the options were granted to the personnel.
A total cost of EUR 0.0 million has been expensed for the 2016 financial year
for the options.
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 as of 31 December 2015.
In producing this interim report, Trainers’ House has applied the same
accounting principles for key figures as in its Financial Statements for 2015.
The calculation of key figures is described on page 92 of the financial
statements included in the annual report for 2015.
The figures given in the interim report are unaudited.
INCOME STATEMENT, IFRS (kEUR)
Group Group Group
01/01- 01/01- 01/01-
31/03/16 31/03/15 31/12/15
CONTINUING OPERATIONS
NET SALES 2,250 1,814 6,898
Other income from operations 0 160 332
Costs:
Materials and services -207 -124 -546
Personnel-related -1,217 -1,206 -4,436
expenses
Depreciation -2 -37 -69
Impairment -1,428
Other operating expenses -230 -802 -2,389
Operating profit/loss 593 -194 -1,638
Financial income and expenses -8 -61 3,108
Profit/loss before tax 585 -256 1,470
Tax *) -121 1 289
TOTAL COMPREHENSIVE 464 -255 1,759
INCOME FOR THE YEAR
Profit/loss attributable to:
Owners of the parent company 464 -255 1,759
Total comprehensive income
attributable to:
Owners of the parent company 464 -255 1,759
Earnings per share, undiluted:
EPS result for the period from 0.00 -0.00 0.02
continuing operations
EPS attributable to equity 0.00 -0.00 0.02
holders of the parent company
EPS result for the period 0.00 -0.00 0.02
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
31/03/16 31/03/15 31/12/15
ASSET
Non-current assets
Property, plant and equipment 51 104 42
Goodwill 1,653 1,653 1,653
Other intangible assets 6,125 7,557 6,125
Other financial assets 6 4 6
Deferred tax receivables 265 383 386
Total non-current assets 8,099 9,701 8,212
Current assets
Inventories 10 10 10
Accounts receivables and 1,218 1,165 1,464
other receivables
Cash and cash equivalents 1,757 1,568 1,546
Total current assets 2,985 2,743 3,020
TOTAL ASSETS 11,084 12,445 11,232
SHAREHOLDERS’ EQUITY AND
LIABILITIES
Equity attributable to equity
holders of the parent company
Share capital 881 881 881
Premium fund 216 216
Distributable non-restricted 31,872 34,970
equity fund
Other equity fund 900
Retained earnings 5,709 -32,021 -29,963
Total shareholders’ equity 6,589 1,847 6,103
Long-term liabilities
Deferred tax liabilities 1,225 1,511 1,225
Other long-term liabilities 1,116 6,050 1,364
Accounts payable and other 2,154 3,037 2,540
liabilities
Total liabilities 4,495 10,597 5,129
TOTAL SHAREHOLDERS’ EQUITY AND 11,084 12,445 11,232
LIABILITIES
CASH FLOW STATEMENT, IFRS (kEUR)
Group Group Group
01/01- 01/01- 01/01-
31/03/16 31/03/15 31/12/15
Profit/loss for the period 464 -255 1,759
Adjustments to profit/loss 158 187 -1,669
for the period
Change in working capital -177 67 30
Financial items -23 1 -39
Cash flow from operations 422 -0 81
Investments in tangible and -11 -9
intangible assets
Proceeds from sale of tangible 43
and intangible assets
Repayment of loan receivables 15 15
Cash flow from investments -11 15 49
Withdrawal of long-term loans 23 2 88
Repayment of long-term loans -222 -222
Repayment of finance lease -26 -28
liabilities
Cash flow from financing -200 -24 -162
Change in cash and cash 211 -10 -32
equivalents
Opening balance of cash and 1,546 1,578 1,578
cash equivalents
Closing balance of cash and 1,757 1,568 1,546
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 881 216 31,872 900 -31,780 2,088
01/01/2015
------------------------------------------------------------------------
Other -255 -255
comprehensive
income
------------------------------------------------------------------------
Sharebased 14 14
payments
------------------------------------------------------------------------
Equity 881 216 31,872 900 -32,021 1,847
31/03/2015
------------------------------------------------------------------------
------------------------------------------------------------------------
Equity 881 216 34,970 -29,963 6,103
01/01/2016
------------------------------------------------------------------------
Other 464 464
comprehensive
income
------------------------------------------------------------------------
Sharebased 23 23
payments
------------------------------------------------------------------------
Decrease of -216 -34,970 35,186 0
funds to
cover losses
------------------------------------------------------------------------
Equity 881 0 0 5,709 6,589
31/03/2016
------------------------------------------------------------------------
RESTRUCTURING PROVISION (kEUR) Group Group Group
01/01- 01/01- 01/01- 31/12/15
31/03/16 31/03/15
Provisions 1 January 221 200 200
Provisions increased 78 175
Provisions used -16 -154
Provisions 31 March / 31 December 205 278 221
PERSONNEL Group Group Group
01/01- 01/01- 01/01-
31/03/16 31/03/15 31/12/15
Average number of personnel 80 70 79
Personnel at the end of 87 66 84
the period
COMMITMENTS AND CONTINGENT Group Group Group
LIABILITIES (kEUR) 31/03/16 31/03/15 31/12/15
Collaterals and contingent 821 7,407 866
liabilities given for
own commitments
OTHER KEY FIGURES Group Group Group
31/03/16 31/03/15 31/12/15
Equity-to-assets ratio (%) 60.0 14.9 55.5
Net gearing (%) -5.1 296.8 1.6
Shareholders’ equity/share (EUR) 0.06 0.03 0.06
Return on equity (%) 58.7 -113.1 43.0
Return on investment (%) 28.8 -40.6 19.5
Return on equity and return on investment have been calculated for the previous
12 months.
Espoo 21 April 2016
TRAINERS’ HOUSE PLC
BOARD OF DIRECTORS
For more information, please contact:
Arto Heimonen, CEO, tel. +358 404 123 456
Saku Keskitalo, CFO, tel. +358 404 111 111
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