4 Business Development and Group Situation
On the basis of the market position built up in Germany over the last few years and through the impact of the organisational structure newly introduced in April 2004, in the 2004/2005 financial year SinnerSchrader has been able to use the positive impetus from the general market development and increased its revenues by a good 16 % to € 14.3 million after years of negative figures.
The revenue increase of a good € 2 million in comparison to the previous year led to an improvement in the operating result, measured in the EBITA, by almost € 1.6 million, meaning that after four years of operative losses SinnerSchrader ended the 2004/2005 financial year back in positive territory with an EBITA of just under € 0.2 million. However, in 2004/2005 the EBITA was still encumbered with restructuring expenses of a good € 0.35 million as reserves had to be formed for the rent compensation payments that will be due next financial year for the depletion of the office space over-capacity in the Hamburg location.
Together with the income from creating the liquidity reserve of € 0.2 million and the moderate accommodation in the current operating results of future tax saving effects from accumulated losses brought forward resulting from building up an active latent tax position in the amount of € 0.15 million, in the 2004/2005 financial year SinnerSchrader earned annual profit of a good € 0.5 million or € 0.05 per share, in comparison to an annual loss of € –0.5 million or € –0.05 per share in the previous financial year.
This means that the overall business development was better than in the plans, in which SinnerSchrader had assumed revenue growth of between 5 % and 10 % and a balanced operating result for 2004/2005.
The development of the Group’s assets and financial situation also exceeded expectations. As of 31 August 2005 the equity amounted to € 10.3 million, a rise of just under € 2.2 million in comparison to the level at the end of the previous year. The growth from the annual profit was supplemented by the income from the sale of around 474,000 treasury stock in the amount of € 1.7 million.
The Group’s asset situation has primarily changed due to the repayment of treasury stock to shareholders in the amount of € 20.8 million already decided in the last financial year. While the effects were already considered in the equity as of 31 August 2004, the liquidity reserve fell by the amount repaid only as part of the settlement of the liability vis-à-vis the shareholders on 8 November 2004. Corrected of this effect, the liquidity reserve rose over the financial year from € 6.2 million on 31 August 2004 to € 10.6 million on 31 August 2005. At the end of the financial year the equity ratio reached a value of 75 %.
The development of the key indices for business development and the Group’s asset and financial situation in the period covered by the report will be described in detail in the following.
Fig. 4 | Development of revenue and EBITA since 1999/2000 in € millions