We have also realigned support functions to eliminate duplicated costs and most importantly, to ensure that we take best advantage of the management skills within the organisation.
These changes have been made to help us achieve our longer term strategic goals but they have had the added advantage, in the present uncertain market conditions, of focusing attention on our key revenue and cost drivers.
Over the next half year we will concentrate the location of our support activities in Swindon and central London while retaining our current network of training centres. This will result in the closure of a number of satellite offices inherited through past acquisitions. We are also realigning skills in the organisation with the requirements of our market, releasing a small number of individuals whose skills no longer match those requirements. These changes will have a neutral effect on costs in the next half year and positively impact future annual operating costs. We are, however, continuing to hire those who can strengthen our management and operations.
The year started strongly, particularly in training, but demand then weakened in April and May. The revenue growth of 9.4% and the operating profit increase of 8.7% to £2.5 million in the first half year represent a satisfactory result.
There was a small interest credit of £0.1 million arising from a broadly neutral average cash position in the period.
Operating cash flow of £1.9 million was generated by the continuing operations but this was offset by a net cash outflow related to the discontinued Acuma operations and by the payment of the 2000 final dividend of £3.4 million, to leave a net borrowings position of £3.1 million at 31 May 2001.
The interim dividend is maintained at 1.8p (2000: 1.8p), reflecting our continuing belief in the growth potential of the business. The dividend will be payable on 4 October 2001 to shareholders on the register on 24 August 2001.
The outcome of the year is dependent on our last quarter which has historically delivered about one third of our revenue. At this stage, autumn market conditions are very difficult to predict; while there was some pick up in June compared to the difficult months of April and May, the market gives us little confidence that this will be maintained through the remainder of the year.
The fundamentals of the business are strong and I can assure you that the management team is focused on maximising every revenue opportunity and tightly controlling costs to make the best of these uncertain times. Furthermore we are continuing to make the changes that will help realise the considerable potential of your company.
SOURCE: COMPANY PRESS RELEASE
