2012-02-16 07:30:00 CET
2012-02-16 07:30:22 CET
REGULATED INFORMATION
Trainer's House Oyj - Financial Statement Release
TRAINERS' HOUSE'S FINANCIAL STATEMENTS BULLETIN FOR 1 JANUARY - 31 DECEMBER 2011
Espoo, 2012-02-16 07:30 CET (GLOBE NEWSWIRE) -- TRAINERS' HOUSE PLC, FINANCIAL
STATEMENTS BULLETIN, 16 FEBRUARY 2012 AT 8:30
Trainers' House operating profit showed a year-on-year improvement.
January - December 2011 in brief (the figures are figures for the company's
continuing operations)
-- net sales came to EUR 15.7 million (EUR 15.6 million)
-- operating profit (EBIT) before non-recurring items and depreciation
resulting from the allocation of acquisition cost was EUR 1.6 million (EUR
1.1 million), or 10.1% of net sales (7.1%)
-- the operating result after these items was EUR -16.7 million (EUR -15.8
million), or -106.8% of net sales (-101.5%)
-- cash flow from operating activities was EUR 0.9 million (EUR -1.5 million)
-- earnings per share were EUR -0.28 (EUR -0.24)
October - December 2011 in brief (the figures are figures for the company's
continuing operations)
-- net sales EUR 3.8 million (EUR 4.4 million)
-- operating profit (EBIT) before non-recurring items and depreciation
resulting from the allocation of acquisition cost was EUR 0.2 million (EUR
0.1 million), or 4.4% of net sales (2.7%)
-- a non-recurring write-down totalling EUR 17.6 million was entered for the
last quarter of 2011 in the Group's goodwill and in deferred tax assets
recognised in the balance sheet
-- operating result after these items was EUR -16.9 million (EUR -14.7 million), or -446.3% of net sales (-334.8%)
-- cash flow from operating activities was EUR 0.3 million (EUR 0.9 million)
-- earnings per share were EUR -0.27 (EUR -0.22)
Key figures at the end of 2011
-- liquid assets totalled EUR 3.3 million (EUR 3.7 million)
-- interest-bearing liabilities amounted to EUR 8.7 million (EUR 9.9 million),
and interest-bearing net debt totalled EUR 5.4 million (EUR 6.2 million)
-- net gearing was 32.4% (17.7%)
-- the equity ratio was 53.6% (66.8%)
OUTLOOK FOR 2012
The company expects net sales to remain at the current level and operating
profit after depreciation resulting from the allocation of acquisition cost to
improve year-on-year.
REPORT OF VESA HONKANEN, CEO
The general economic uncertainty has been reflected in the buying behaviour of
Trainers' House's customers since summer 2011. This contributed to the last
quarter's net sales falling below the previous year's level. The operating
profit after depreciation resulting from the allocation of acquisition cost
improved slightly in the last quarter in comparison to the corresponding period
in 2010. The strengthening of sales management during the autumn increased the
accumulation of new orders toward the end of the year.
The net sales for 2011 were the same as in 2010. Due to the efficiency
enhancing measures implemented in the company, operating profit after
depreciation resulting from the allocation of acquisition costs improved
compared to 2010.The company recognised a write-down of EUR 16.7 million in the
Group's goodwill in the financial statements.The write-down does not have an
effect on cash flow.
Work capacity management services raised extensive interest among our
customers, and several significant customer relationships were gained. In an
increasing number of customer relationships, there is a strong link between
auditing the current situation and management systems, which are used to ensure
that changes in the customer's practices take root and thus, the desired
results are achieved. Trainers' House's intensive presence in the customer's
everyday work brings better customer results faster.
Continuous improvement of operations and strengthening competence through
recruitment give the company a good basis for success in 2012 despite the
uncertainty possibly prevailing in the general operating environment.
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
Trainer's House helps its customers grow by supporting their everyday
leadership.
This task is executed by offering customers business-critical training and
consultancy 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.
FINANCIAL PERFORMANCE
Net sales development in the last quarter of the financial year was weaker than
expected.Operating profit before non-recurring items and depreciation resulting
from the allocation of acquisition costs improved year-on-year.The
profitability of operations improved significantly from the previous year.
Net sales from continuing operations in the period under review came to EUR
15.7 million (EUR 15.6 million).Operating profit from continuing operations
before depreciation resulting from the allocation of the acquisition cost of
Trainers' House Oy was EUR 1.6 million, or 10.1% of net sales (EUR 1.1 million,
or 7.1% of net sales).Profit for the period was EUR -18.4 million, or -117.3%
of net sales (EUR -16.2 million, or -104.1%).
Non-recurring items
On 17 January 2012, the Board of Directors of Trainers' House decided to lower
the estimates on the profitability and growth of net sales in the training
business used in impairment testing.As a result, the Board of Directors
resolved that a total of EUR 16.7 million of the Group's goodwill will be
written down.After this write-down, the Group balance sheet has approximately
EUR 9.1 million of goodwill.
Trainers' House Plc's balance sheet included deferred tax assets of EUR 1.5
million.In its meeting held on 17 January 2012, the company's Board of
Directors has reviewed the principles used in recognising deferred tax assets
and decided to make a non-recurring write-down of EUR 0.9 million on the
deferred tax assets recognised in the consolidated financial statements.The
write-down is based on a revised estimate of the company's taxable income in
2012-2014.The write-down has no effect on operating profit or cash flow.
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).
The following table itemises the Group's key figures (in thousands of euros
unless otherwise noted):
2011 2010
Net sales 15,658 15,578
Expenses:
Personnel-related expenses -7,399 -8,093
Other expenses -6,174 -5,796
EBITDA 2,086 1,689
Depreciation of non-current assets -507 -582
Operating profit before depreciation 1,578 1,107
of acquisition cost
% of net sales 10.1 7.1
Depreciation of allocation of -1,638 -1,968
acquisition cost *)
Operating profit before non-recurring -60 -861
items
Non-recurring items **) -16,671 -14,953
EBIT -16,731 -15,814
% of net sales -106.8 -101.5
Financial income and expenses -833 -1,094
Profit/loss before tax -17,564 -16,907
Tax ***) -798 689
Profit/loss for the period continuing -18,362 -16,218
operations
% of net sales -117.3 -104.1
Discontinued operations ****) -4,781
Profit/loss for the period -18,362 -20,999
*) Of the purchase price for Trainers' House Oy in 2007, EUR 10.2 million has
been allocated to intangible assets with a limited useful life. This item is
depreciated over five years.The remaining portion of this item will be
depreciated as follows: EUR 1.6 million in 2011 and EUR 1.4 million in 2012.
**) Non-recurring items in 2011 include a write-down in the Group's goodwill in
the amount of EUR 16.7 million.Non-recurring items in 2010 include a
restructuring provision in the amount of EUR 0.5 million, and a write-down in
the Group's goodwill in the amount of EUR 14.4 million.
***) The tax included in the income statement is deferred.Taxes recognised in
the income statement have no effect on cash flow.On 31 December 2011, the
company's balance sheet included deferred tax assets from losses carried
forward in the amount of EUR 0.6 million.Of the deferred tax assets, EUR 0.1
million will expire in 2012 and the remaining EUR 0.4 million in 2019.
Write-down in deferred tax assets of EUR 0.9 million has been recognised in the
result for 2011.
****) Discontinued operations are specified in the notes.
The following table itemises distribution of net sales from continuing
operations and shows the quarterly profit/loss from the start of 2010, in
thousands of euros.
Q110 Q210 Q310 Q410 2010 Q111 Q211 Q311 Q411 2011
--------------------------------------------------------------------------------
Net sales 4180 4168 2831 4398 15578 4420 4636 2812 3790 15658
--------------------------------------------------------------------------------
Operating 588 483 -81 118 1107 653 884 -124 165 1578
profit
before
depreciation
of
acquisition
cost *)
--------------------------------------------------------------------------------
Operating 79 -575 -590 -14728 -15814 244 475 -533 -16915 -16731
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 third quarter of the financial year, the company had loans related
to this loan agreement in an amount of EUR 9.2 million. The company negotiated
a new agreement concerning this amount with the bank.At the end of the
reporting period, the company had loans related to this new loan agreement in
an amount of EUR 8.3 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.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.
Cash flow and financing
Cash from operating activities before financial items for the period under
review totalled EUR 2.0 million (EUR -0.3 million), and after financial items
EUR 0.9 million (EUR -1.5 million).
There were no investments in the reporting period (EUR 6.1 million).Cash flow
from financing came to EUR -1.3 million (EUR -2.8 million).
Total cash flow amounted to EUR -0.4 million (EUR 1.8 million).
On 31 December 2011, the Group's liquid assets totalled EUR 3.3 million (EUR
3.7 million).The equity ratio was 53.6% (66.8%).Net gearing was 32.4%
(17.7%).At the end of the reporting period, the Group had interest-bearing
liabilities in the amount of EUR 8.7 million (EUR 9.9 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.
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 fourth quarter.Based on the
results of this impairment testing, the goodwill values were EUR 16.7 million
lower than the book value, resulting in a goodwill write-off in the financial
statements.After having reviewed the principles used in recognising deferred
tax assets on the basis of the tests, the company's Board of Directors decided
to make a non-recurring write-down totalling EUR 0.9 million in deferred tax
assets in the financial statements for 2011.
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 EUR
0.6 million.Of the deferred tax assets, EUR 0.1 million will expire in 2012 and
the remaining EUR 0.4 million in 2019.
If the Group's taxable income for 2012 does not reach approximately EUR 0.4
million, there is a risk that some of the deferred tax assets recognised in the
consolidated balance sheet cannot be utilised and therefore will have to be
written down.
The company's new loan agreement, under which there were loans in an amount of
EUR 8.3 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 described in more detail in the annual report and on the company's
website at: www.trainershouse.fi > Investors.
PERSONNEL
At the end of 2011, the Group employed 125 (133) 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 reporting period, 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, 9.5 million shares in total, or 14.0% of the
average number of all company shares (16.0 million shares, or 23.6%), were
traded on the Helsinki stock exchange, for a value of EUR 2.6 million (EUR 6.8
million).The period's highest share quotation was EUR 0.36 (EUR 0.53), the
lowest EUR 0.17 (EUR 0.33) and the closing price EUR 0.18 (EUR 0.36).The
weighted average price was EUR 0.27 (EUR 0.42). With the closing price for 31
December 2011, the company's market capitalisation was EUR 12.2 million (EUR
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 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 EUR 0.46 and for the 2010B warrant, EUR 0.29.The subscription period for
shares converted under the warrant 2010A is from 1 September 2011 to 31
December 2012, and for shares converted under the warrant 2010B from 1
September 2012 to 31 December 2013.No shares have been subscribed under the
warrants.
The total number of warrants granted to the personnel is 1.8 million. A total
cost of EUR 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.This financial
statements bulletin has been prepared in accordance with the IFRS standards and
interpretations adopted in the EU, valid on 31 December 2011.
In producing this financial statements bulletin, 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 full-year figures given in the financial statements bulletin are audited.
INCOME STATEMENT, IFRS (kEUR)
Group Group Group Group
01/10- 01/10- 01/01- 01/01-
31/12/11 31/12/10 31/12/11 31/12/10
CONTINUING OPERATIONS
NET SALES 3,790 4,398 15,658 15,578
Other income from operations 168 119 648 263
Costs:
Materials and services 580 843 2,278 2,231
Personnel-related 1,894 2,356 7,399 8,522
expenses
Depreciation 523 594 2,145 2,549
Impairment 16,671 14,445 16,671 14,445
Other operating expenses 1,206 1,008 4,544 3,908
Operating profit/loss -16,915 -14,728 -16,731 -15,814
Financial income and expenses -480 -345 -833 -1,094
Profit/loss before tax -17,395 -15,073 -17,564 -16,907
Tax *) -803 207 -798 689
Profit/loss for the period -18,199 -14,866 -18,362 -16,218
continuing operations
Discontinued operations -38 -4,781
PROFIT/LOSS FOR THE PERIOD -18,199 -14,904 -18,362 -20,999
Other comprehensive income:
Cash flow hedges 50 50 174 178
Income tax relating to -13 -13 -45 -46
components of other
comprehensive income
Other comprehensive income 37 37 129 132
for the year, net of tax
TOTAL COMPREHENSIVE -18,162 -14,867 -18,233 -20,867
INCOME FOR THE YEAR
Profit/loss attributable to:
Owners of the parent company -18,199 -14,904 -18,362 -20,999
Total comprehensive income
attributable to:
Owners of the parent company -18,162 -14,867 -18,233 -20,867
Earnings per share, undiluted:
EPS result for the period from -0.27 -0.22 -0.27 -0.24
continuing operations
EPS attributable to hybrid -0.01 -0.01 -0.01 -0.01
bond investors
EPS continuing operations -0.27 -0.22 -0.28 -0.24
EPS result for the period from -0.00 -0.07
discontinued operations
EPS attributable to equity -0.27 -0.22 -0.28 -0.31
holders of the parent company
EPS result for the period -0.27 -0.22 -0.27 -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
31/12/11 31/12/10
ASSETS
Non-current assets
Property, plant and equipment 594 1,032
Goodwill 9,135 25,806
Other intangible assets 11,107 12,871
Other financial assets 202 202
Other receivables 1,607 3,127
Deferred tax receivables 579 1,717
Total non-current assets 23,224 44,754
Current assets
Inventories 11 11
Accounts receivables and 4,510 4,121
other receivables
Cash and cash equivalents 3,280 3,686
Total current assets 7,800 7,817
TOTAL ASSETS 31,025 52,571
SHAREHOLDERS' EQUITY AND
LIABILITIES
Equity attributable to equity
holders of the parent company
Share capital 881 881
Premium fund 13,943 13,943
Hedging reserve -129
Distributable non-restricted 31,872 31,872
equity fund
Other equity fund 4,962 4,962
Retained earnings -35,031 -16,410
Total shareholders' equity 16,627 35,119
Long-term liabilities
Deferred tax liabilities 2,862 3,288
Other long-term liabilities 6,468 4,649
Accounts payable and other 5,068 9,515
liabilities
Total liabilities 14,398 17,452
TOTAL SHAREHOLDERS' EQUITY AND 31,025 52,571
LIABILITIES
CASH FLOW STATEMENT, IFRS (kEUR)
Group Group
01/01- 01/01-
31/12/11 31/12/10
Profit/loss for the period -18,362 -20,999
Adjustments to profit/loss 20,552 22,447
for the period
Change in working capital -142 -1,740
Financial items -1,192 -1,176
Cash flow from operations 856 -1,468
Divestment of business 6,183
Investments in tangible and -118
intangible assets
Cash flow from investments 6,065
Withdrawal of long-term loans 9,300
Repayment of long-term loans -10,296 -7,450
Withdrawal of hybrid bond 4,962
Repayment of finance lease -265 -281
liabilities
Cash flow from financing -1,261 -2,769
Change in cash and cash -405 1,828
equivalents
Opening balance of cash and 3,686 1,858
cash equivalents
Closing balance of cash and 3,280 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 132 -20,999 -20,867
comprehensive
income
--------------------------------------------------------------------
Hybrid bond 4,962 -348 4,614
--------------------------------------------------------------------
Sharebased 15 15
payments
--------------------------------------------------------------------
Equity 881 13,943 -129 31,872 4,962 -16,410 35,119
31/12/2010
--------------------------------------------------------------------
--------------------------------------------------------------------
Equity 881 13,943 -129 31,872 4,962 -16,410 35,119
01/01/2011
--------------------------------------------------------------------
Other 129 -18,362 -18,233
comprehensive
income
--------------------------------------------------------------------
Hybrid bond -370 -370
--------------------------------------------------------------------
Sharebased 111 111
payments
--------------------------------------------------------------------
Equity 881 13,943 31,872 4,962 -35,031 16,627
31/12/2011
--------------------------------------------------------------------
RESTRUCTURING PROVISION (kEUR) Group Group
01/01- 01/01-
31/12/11 31/12/10
Provisions 1 January 389 346
Provisions increase 675
Provisions used -130 -633
Provisions 31 December 258 389
PERSONNEL Group Group 01/01- 01/01-
31/12/11 31/12/10
Average number of personnel 128 150
Personnel at the end of 125 133
the period
COMMITMENTS AND CONTINGENT Group Group
LIABILITIES (kEUR) 31/12/11 31/12/10
Collaterals and contingent 11,906 12,894
liabilities given for
own commitments
Interest rate swaps:
Fair value -174
Nominal value 5,214 8,427
DISCONTINUED OPERATIONS (kEUR)
The results of a discontinued operations are as follows:
Group
01/01-
13/08/10
Revenue 4,877
Expenses -4,715
Profit/loss before tax 162
Tax -42
Profit/loss after tax 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 -4,781
discontinued operations
Earnings per share discontinued operations:
Undiluted earnings/share (EUR) -0.07
Diluted earnings/share (EUR) -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
31/12/11 31/12/10
Equity-to-assets ratio (%) 53.6 66.8
Net gearing (%) 32.4 17.7
Shareholders' equity/share (EUR) 0.24 0.52
Return on equity (%) -71.0 -37.5
Return on investment (%) -46.8 -27.8
Helsinki, 16 February 2012
TRAINERS' HOUSE PLC
BOARD OF DIRECTORS
For more information, please contact
Vesa Honkanen, CEO, at tel. +358 500 432 993
Mirkka Vikström, CFO, at tel. +358 50 376 1115
DISTRIBUTION
OMX Nordic Exchange, Helsinki
Main media
www.trainershouse.fi > Investors
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