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
of acquisition cost
1,537 1,071
% of net sales 17.0 12.8
Depreciation of allocation of
acquisition cost *)
-819 -1,017
Operating profit before non-recurring
items
718 54
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
operations
310 -914
% 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
profit before
depreciation
of acquisition
cost *)
588 483 -81 118 1107 653 884
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 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 €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
01/04-
30/06/11
Group
01/04-
30/06/10
Group
01/01-
30/06/11
Group
01/01-
30/06/10
Group
01/01-
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
expenses
2,081 2,578 4,045 4,841 8,522
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
continuing operations
234 -759 310 -914 -16,218
           
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
components of other
comprehensive income
-8 -24 -28 -22 -46
           
Other comprehensive income
for the year, net of tax
23 68 79 62 132
           
TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
257 -578 388 -657 -20,867
           
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
continuing operations
0.00 -0.01 0.00 -0.01 -0.24
EPS attributable to hybrid
bond investors
    -0.00   -0.01
EPS continuing operations 0.00 -0.01 0.00 -0.01 -0.24
EPS result for the period from
discontinued operations
  0.00   0.00 -0.07
EPS attributable to equity
holders of the parent company
0.00 -0.01 0.00 -0.01 -0.31
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
30/06/11
Group
30/06/10
Group
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
other receivables
4,122 6,450 4,121
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
equity fund
31,872 31,872 31,872
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
liabilities
8,273 6,996 9,515
       
Total liabilities 15,888 26,370 17,452
       
TOTAL SHAREHOLDERS’ EQUITY AND
LIABILITIES
51,445 82,032 52,571



CASH FLOW STATEMENT, IFRS (in thousands of euros)

 

  Group
01/01-
30/06/11
Group
01/01-
30/06/10
Group
01/01-
31/12/10
       
Profit/loss for the period 310 -719 -20,999
Adjustments to profit/loss
for the period
1,581 2,494 22,447
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
intangible assets
  -61 -118
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
liabilities
-158 -149 -281
Cash flow from financing -158 4,814 -2,769
       
Change in cash and cash
equivalents
414 3,797 1,828
Opening balance of cash and
cash equivalents
3,686 1,858 1,858
Closing balance of cash and
cash equivalents
4,099 5,655 3,686



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
01/01/2010
881 13,943 -260 31,872   4,921 51,357
Other
comprehensive
income
    62     -719 -657
Hybrid bond         4,962   4,962
Equity
31/06/2010
881 13,943 -198 31,872 4,962 4,202 55,662
               
Equity
01/01/2011
881 13,943 -129 31,872 4,614 -16,062 35,119
Other
comprehensive
income
    79     310 388
Hybrid bond         -22   -22
Sharebased
payments
          72 72
Equity
30/06/2011
881 13,943 -50 31,872 4,592 -15,681 35,557


 

 

RELATED PARTY TRANSACTIONS (in thousands of euros)

 
Group
01/01-
30/06/11
Group
01/01-
30/06/10
Group
01/01-
31/12/10
       
Management’s emoluments
Salaries and other short-term
employment benefits
147 244 400
       
RESTRUCTURING PROVISION (in thousands of euros)

 
Group
01/01-
30/06/11
Group
01/01-
30/06/10
Group
01/01-
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
01/01-
30/06/11
Group
01/01-
30/06/10
Group
01/01-
31/12/10
       
Average number of personnel 132 171 150
Personnel at the end of
the period
139 166 133
       
COMMITMENTS AND CONTINGENT
LIABILITIES
(in thousands of euros)
Group
30/06/11
Group
30/06/10
Group
31/12/10
Collaterals and contingent
liabilities given for
own commitments
12,460 14,741 12,894
       
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
01/01-
30/06/11
Group
01/01-
30/06/10
Group
01/01-
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
before tax
    7,860
Share of the divested operation
in the goodwill
    -10,717
Loss from a divested operation
before tax
    -2,857
Tax     -2,044
Profit/loss for the period from a
discontinued operations
  195 -4,781
       
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
liabilities
    -301
Receivables and liabilities total     1,140
       
Cash received     6,183
Cash and cash equivalents
of a divested business
    0
Impact on cashflow     6,183


 

 

OTHER KEY FIGURES

 
Group
30/06/11
Group
30/06/10
Group
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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