Latest Results

Interim Results

WFCA plc (AIM: WFCA.L), a leading regional advertising and marketing agency, today announces its interim results for the 6 months ended 31 December 2009.

Highlights

• Profit before tax and exceptional items £417k (2008 H1: £509k)
• Gross margin for period 18% (2008 H1: 17.9%)
• Operating margin for period 15.2% (2008 H1: 14.8%)
• Working capital improvement of £420k

Chairman's and Chief Executive's Half Yearly Statement

The net profit before taxation and exceptional items for the six months ended 31st December 2009 of £416,189 (2008, £509,310) is in line with our expectations and represents a 73% increase over the result for the six months to June 2009. Turnover for the period values £15,198,936 (2008, £19,301,659).  The shortfall to last year reflects the fact that much of the autumn and early winter activity of 2008 was committed prior to the onset of the economic slowdown. The 2009 result has therefore been achieved in a considerably more demanding trading environment.

Gross margin has marginally increased to 18% and the operating margin has improved to 15.2% reflecting the Group's strict cost control during the year. Since the year end, the net assets of the company have increased by £293,430 and the net current assets have improved by £419,666. The increases in net worth and liquidity should be maintained in the second half of the financial year. Basic earnings per share are 0.11p (2008, 0.23p) and utilisation of bank working capital facilities has reduced to £1,731,659 (2008, £3,248,665).

Looking ahead to the second half of the financial year, the company expects to remain profitable and cash generative. The client departure announced in the 3rd December 2009 trading update will impact results for the second half, although overhead restructuring and staff redundancies are expected to substantially mitigate the loss of gross profit. A one off charge for severance costs, amounting to approximately £130,000, will be included in the second half year results. The annualised benefit of the overhead restructuring will be to reduce overheads by £1 million.

New business activity continues apace and we remain confident of growing our client base. We retain a high quality workforce and look forward to generating profit growth as the business climate improves.

The long term strategic goal of enhancing the Group's development by acquisition as well as organic growth remains as strong as ever. The company has been in dialogue with a number of third parties, but will only conclude transactions on terms that are earnings enhancing and which do not adversely affect the strengthening liquidity of the Group.

The board remains confident of the Group's future prospects.

Consolidated Income Statement

For the 6 months ended 31st December 2009

Consolidated Balance Sheet

As at 31st December 2009

Consolidated Cash Flow Statement

For the 6 months ended 31st December 2009

Consolidated Statement of Changes in Equity

For the 6 months ended 31st December 2009

Basis of Preparation

This half-yearly financial report is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The financial statements for the year to 30th June 2009, which were prepared in accordance with International Reporting Standards ('IFRS') as adopted by the European Union and upon which the auditors have issued an unqualified report, have been delivered to the Registrar of Companies.

The half-yearly financial report for the six months ended 31st December 2009 have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. The accounting policies applied in the half-yearly financial report are consistent with those set out and applied in the Group's Annual Report for the year to 30th June 2009.

The half-yearly financial report for the six months ended 31st December 2009 which comprise the Consolidated Income Statement, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity and the related notes, has been reviewed by the Group's auditor. In addition, the Group's auditor has read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.