Shield Service Group Plc
LSE : SSGP

October 21, 2010 09:29 ET

Final Results for the year ended 31 May 2010

                               SHIELD SERVICE GROUP PLC ("Shield" or the "Company")
                                                         
                                   Final results for the year ended 31 May 2010




CHAIRMAN'S STATEMENT


Final Results

Shield Service Group Plc, the Plus-quoted provider of support services, is pleased to announce its audited results
for the year ended 31 May 2010.

Highlights

    *       Gross Turnover GBP6,418,326
    *       Gross Profit   GBP1,875,265
    *       Gross Margin   29%
    *       Profit before tax GBP2,010
    *       EBITDA GBP330,181
    *       Earnings per share (0.5p)


Chairman's Statement

The Group achieved a small profit before taxation for the year to 31 May 2010.

Turnover was down due to the effects of losses suffered in the previous financial year at the onset of the
economic crisis.

Our quote bank for new business is high; however the market remains sluggish with conversion into new business
taking longer than expected.

Our cash position remains healthy and the board therefore recommends the payment of a dividend for the year of 0.5
pence per share.

I remain confident that the Company will ride out the present challenging economic cycle and return to profitable
growth when conditions improve.


T R Pritchard - Chairman

19/10/2010

Enquiries:
Shield Service Group Plc                                            07513 296747
Kenneth Macpherson, Non-Executive Director

PLUS Advisor:                                                       020 7251 3762
Alfred Henry Corporate Finance Ltd
www.alfredhenry.com
Jon Isaacs/Nick Michaels

The Directors accept responsibility for this announcement.




GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MAY 2010
                                                         
                                                         
                                                          Year Ended             Period
                                                           31.5.10          19.5.08 to 31.5.09
                                        Notes                       GBP                         GBP
TURNOVER                                                      6,418,326                   7,716,441
Continuing operations                           6,231,088                   5,380,954
Acquisitions                                      187,238                   2,335,487
                                                ---------                   ---------
                                                6,418,326                   7,716,441
                                                =========                   =========

Cost of sales                                                (4,543,061)                 (5,526,680)
                                                              ---------                   ---------
GROSS PROFIT                                                  1,875,265                   2,189,761

Net operating expenses                                       (1,785,171)                 (1,997,868)
                                                              ---------                   ---------
OPERATING PROFIT                                                 90,094                     191,893

     Continuing operations                         58,545                    (23,549)
      Acquisitions                                 31,549                     215,442
                                                 --------                    --------
                                                   90,094                     191,893
                                                 ========                    ========
Exceptional item - Goodwill impairment                                -                    (164,635)
Interest receivable and similar income                               24                       2,644
                                                              ---------                   ---------
                                                                 90,118                      29,902
Interest payable and similar charges                            (88,108)                   (102,097)
                                                              ---------                   ---------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
BEFORE TAXATION                                                   2,010                     (72,195)

Tax on profit on ordinary activities                            (35,842)                    (61,108)
                                                              ---------                   ---------
RETAINED (LOSS) FOR THE
FINANCIAL YEAR AFTER TAXATION                                   (33,832)                   (133,303)
                                                              =========                   =========


EPS - Basic (pence)                      2                       (0.465)                     (2.255)
                                                                  =====                       =====


STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
The Group has no recognised gains or losses other than the results for the year as set out above.


GROUP BALANCE SHEET
YEAR ENDED 31 MAY 2010

                                                                         31.5.10                 31.5.09

                                                                   GBP           GBP         GBP          GBP
                                                         
FIXED ASSETS
Intangibles - goodwill                                                     1,682,124                1,690,807
Tangibles                                                                    161,057                  197,677
                                                                           ---------                ---------
                                                                           1,843,181                1,888,484
CURRENT ASSETS
Stocks                                                          19,033                     27,098
Debtors                                                      1,040,189                  1,398,321
Cash at bank and in hand                                        43,421                     26,688
                                                             ---------                  ---------
                                                             1,102,643                  1,452,107


CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR                                            841,354                  1,134,923
                                                             ---------                  ---------
Net current assets                                                           261,289                  317,184
                                                                            --------                ---------

Total assets less current liabilities                                      2,104,470                2,205,668
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR                                                  (1,016,052)              (1,523,418)

                                                                           ---------                ---------
                                                                           1,088,418                  682,250
                                                                           =========                =========


CAPITAL AND RESERVES

Called up share capital                                                      771,002                  595,002
Share premium                                                                279,000                   15,000
Profit and loss account                                                       38,416                   72,248
                                                                           ---------                 --------
Shareholders Funds                                                         1,088,418                  682,250
                                                                           =========                 ========

                                                         
                                                         
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY 2010
                                                         
                                                         
                                                                  Year Ended                     Period
                                                                     31.5.10              19.5.08 to 31.5.09
                                                                 GBP          GBP          GBP           GBP
                                                            

Net cash inflow from operating
activities                                                                722,922                    185,664
Returns on investments and servicing of finance

        Interest received                                        24                      2,644
        Interest paid                                       (85,219)                   (99,418)
        Hire purchase interest paid                          (2,889)                    (2,679)
                                                           --------                   --------
                                                                          (88,084)                   (99,453)

Taxation                                                                  (71,060)                  (105,362)

Capital expenditure

        Purchase of intangible assets                      (166,662)                         -
        Purchase of tangible fixed assets                   (33,898)                   (65,735)
        Sale of tangible fixed assets                         5,800                      7,765
                                                          ---------                   --------
                                                                         (194,760)                   (57,970)
Acquisitions and disposals

        Cash paid to acquire subsidiaries                         -                 (1,504,543)
        Net cash acquired with subsidiaries                       -                      6,652
        Net assets acquired with subsidiaries                     -                    206,324
                                                          ---------                  ---------
Net cash outflow from acquisitions and disposals                                -                 (1,291,567)

Equity dividends paid                                                           -                   (114,000)
                                                                        ---------                  ---------
Cash inflow/(outflow) before financing                                    369,018                 (1,482,688)

Financing
        Share capital issued at a premium                   440,000                     30,000
        Borrowings                                           14,775                  1,027,847
        Capital element of hire purchase payments           (21,525)                   (23,531)
        Loan repayment                                     (500,000)                         -
                                                          ---------                  ---------
Net cash (outflow)/inflow from financing                                  (66,750)                 1,034,316
                                                                        ---------                  ---------
Increase/(Decrease) in cash                                               302,268                  (448,372)
                                                                        =========                  =========
                                                         
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2010
                                                         
                                                         
1.      ACCOUNTING POLICIES

Statutory Information

The   financial   information   set   out  in this announcement  does  not   constitute   the   Group's  statutory
accounts  for the year ended 31 May 2010 but  is  derived  from those accounts.

The  Group's  auditors,  Jeffreys Henry LLP did report upon the annual statements for the  year  ended  under  the
Companies Act 2006. The report from the Auditors was not qualified.


Accounting Convention

The  financial  statements have been prepared under the historical cost convention, and  in  accordance  with  the
Companies  Act  2006 and applicable accounting standards. The Group financial statements have been prepared  under
the  provision  of  the  Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations  2008  (SI
2008/410)  and applicable standards. A summary of the more important Group accounting policies is set  out  below,
together  with  an  explanation  of  where changes have been made to previous policies  on  the  adoption  of  new
accounting standards in the year. The Company has taken advantage of the exemption from presenting its own  profit
and loss account under s408 of the Companies Act 2006. The Company made a loss in the year of GBP27,921.

Basis of Consolidation

The  consolidated  accounts  incorporate the financial statements of Shield Service  Group  Plc  and  all  of  its
subsidiary  undertakings, made up for the year 1 June 2009 to 31 May 2010.  The Group uses the acquisition  method
of accounting to consolidate the results of subsidiary undertakings and the results of the subsidiary undertakings
are  included  from  the  date  of  acquisition.  The holding Company's  accounting  policies  have  been  applied
consistently in dealing with items.

Turnover

Turnover derives primarily from the provision of cleaning services and is recognised by reference to the stage  of
completion of the transaction at the balance sheet date.  On some contracts revenue is apportioned over the period
and in these cases is accrued at the year end. All turnover is recognised exclusive of VAT.

Goodwill

Goodwill  arising on the acquisition of subsidiaries and other assets is the difference between the fair value  of
the  consideration paid and the fair value of the assets and liabilities acquired.  Goodwill is being written  off
evenly  over its estimated useful life of twelve years. Goodwill relating to the acquisition of customer lists  is
being written off evenly over its estimated useful life of 12 years

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated  useful
life or, if held under a finance lease, over the lease term, whichever is the shorter.

Plant and machinery:             15% on cost and 50% on cost
Fixtures and fittings:           15% on cost, 16.67% on cost, 20% on cost and 25% on cost
Motor vehicles:                  25% on reducing balance
Leasehold improvements:          Over 7 years which is the length of the original lease.

The  carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there  is
any  indication  of  impairment. An asset's carrying value is written down to its recoverable  amount,  being  the
higher of the net selling price and value in use, if that is less than the asset's carrying value.

Stocks

Stock  is  valued at the lower of cost and net realisable value, after making due allowance for obsolete and  slow
moving items.

Deferred taxation

Deferred  tax  is recognised on all timing differences where the transactions or events that give the  Company  an
obligation  to pay more tax in the future, or a right to pay less tax in the future, have occurred by the  balance
sheet  date.  Deferred  tax assets are recognised when it is more likely than not that  they  will  be  recovered.
Deferred  tax is measured using rates of tax that have been enacted or substantively enacted by the balance  sheet
date.

Investments

Fixed asset investments are stated at cost less provision for permanent diminution in value.

Hire purchase and leasing commitments

Assets  obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those  held
under  hire purchase contracts are depreciated over their estimated useful lives. Those held under finance  leases
are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to the profit and loss account over the relevant period.  The
capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to the profit and loss account as incurred.

Pensions

The  Group operates a defined contribution pension scheme. Contributions payable for the year are charged  in  the
profit and loss account.

Financial instruments

Financial  liabilities  and  equity  instruments are classified according to  the  substance  of  the  contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in  the  assets
of the entity after deducting all of its financial liabilities.

Where  the contractual obligations of financial instruments (including share capital) are equivalent to a  similar
debt  instrument,  those  financial instruments are classed as financial liabilities.  Financial  liabilities  are
presented  as  such in the balance sheet. Finance costs and gains or losses relating to financial liabilities  are
included  in the profit and loss account. Finance costs are calculated so as to produce a constant rate of  return
on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability
then  this  is  classed  as an equity instrument. Dividends and distributions relating to equity  instruments  are
debited direct to equity.


2.      EARNINGS PER SHARE

The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of
ordinary shares in issue during the year.

Details of the adjusted earnings per share are set out below:

                                                            2010            2009

Basic EPS (pence)                                         (0.465)         (2.255)
Earnings attributable to ordinary shareholders (GBP)     (33,832)       (133,303)
Weighted average number of shares                      7,270,020       5,910,157
 

Contact Information

  • Shield Service Group Plc