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TRAINERS’ HOUSE GROUP INTERIM REPORT 1 JANUARY – 30 SEPTEMBER 2022

Trainers' House Oyj
Trainers' House Oyj

TRAINERS' HOUSE GROUP, STOCK EXCHANGE RELEASE, 27 OCTOBER 2022 at 8:30

January-September 2022 in brief

  • net sales EUR 7.3 million (EUR 7.5 million), change of -3.3 % compared to the corresponding period of the previous year

  • operating result EUR 0.5 million (EUR 1.1 million), 6.8 % of net sales (14.2 %)

  • cash flow from operations EUR 0.5 million (EUR 1.1 million)

  • earnings per share* EUR 0.23 (EUR 0.49)

July-September 2022 in brief

  • net sales EUR 1.8 million (EUR 1.8 million), change of -2.8 % compared to the corresponding period of the previous year

  • operating result EUR -0.2 million (EUR 0.1 million), -14.0 % of net sales (3.1 %)

  • cash flow from operations EUR -0.2 million (EUR -0.1 million)

  • earnings per share* EUR -0.12 (EUR 0.03)

*In the second quarter, the number of the company's shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 30 September 2022 also for the comparison period.

Key figures at the end of the third quarter of 2022

  • cash and cash equivalents EUR 2.2 million (EUR 3.0 million)

  • interest-bearing liabilities of EUR 0.5 million (EUR 0.7 million) and interest-bearing net debt of EUR -1.7 million (EUR (-2.3 million).

  • equity ratio 67.8 % (70.9 %)


OUTLOOK FOR 2022

The company estimates the operating profit for 2022 to be EUR 0.45–0.70 million.


CEO ARTO HEIMONEN

Considering the upcoming difficult market conditions, the company's performance was adequate. The quality of customer work was high, and the sales work was active. However, the result development was not satisfactory. The effort of the staff was of a high standard. Many thanks to customers, employees, and partners.

In August, representatives of the company's personnel and management - Elli, Emilia, Juho, Jari and Saku - conquered the summit of Kilimanjaro, the highest single free-standing mountain in the world. Although only a few people took physical steps, was the entire Trainers' House community making the journey. The purpose of the trip was to gain visibility for Trainers' House's next business phase and increase interest towards the company. The journey to the next peak always goes through the valley, and the peak is climbed one step at a time.

With the same sisu that it takes to get to the top of a mountain, the company's personnel acquired almost a fifth more new assignments in the third quarter than the previous year.

Due to the holiday season, the third quarter of Trainers' House is actually two months long.

Despite the good work, the outlook for the rest of the year has weakened. The main reason for the change is the decrease in sales and turnover forecast.

Healthy cash flow and profitability are the most important goals of the company's business in 2022 as well. The company continues to strengthen the Ignis business and increase the flow efficiency of the training business. The company is looking for breakthroughs in the media business.

The purpose of Trainers’ House is to help people forward. The company's strategy is to touch people, electrify management and produce verifiable results.

More information:
Arto Heimonen, CEO, +358 404 123 456
Saku Keskitalo, CFO, +358 404 111 111


OPERATIONAL REVIEW

During the review period, the company focused on sales work and implementing customer projects.

At the request of investors, Trainers' House became more active in its investor communication in 2021. During the review period, the company continued on its chosen path. The company organized a virtual capital markets day in September. On the capital markets day, the company confirmed that its dividend payment policy will remain in effect. According to the policy, if the boundary conditions are met, the company's target is to distribute a dividend of EUR 1.0–1.5 million per year.

As previously announced, the company opened an office in Tallinn after the review period on 3rd October. The purpose of opening the office is to increase the company's number of personnel, generate more customer value and expand Trainers' House's profitable business.

As previously announced, the company specified the outlook for 2022 after the end of the review period. The outlook for operating profit was previously EUR 0.7–1.0 million, and the new outlook is EUR 0.45–0.70 million.


FINANCIAL PERFORMANCE

Net sales for the reporting period were EUR 7.3 million (EUR 7.5 million). Operating result was EUR 0.5 million, 6.8 % of net sales (EUR 1.1 million, 14.2 %). The result for the period was EUR 0.5 million, 6.8 % of net sales (EUR 1.1 million, 14.1 %).

The breakdown of the Group's figures (unit thousand euros) is presented in the following table:

Group’s main figures (kEUR)

1-9/2022

1-9/2021

Net sales

7 284

7 534

Other operating income

6

0

Expenses arising from employee benefits

-4 546

-4 215

Other expenses

-1 902

-1 862

EBITDA

842

1 456

Depreciation and impairment losses

-344

-389

EBIT

498

1 067

EBIT, % of net sales

6.8 %

14.2 %

Financial income and expenses

-10

-17

Result before taxes

488

1 050

Income taxes

5

9

Result of the period

493

1 059

Result, % of net sales

6.8 %

14.1 %


LONG-TERM OBJECTIVES

The company's long-term goal is profitable growth.


FINANCING, INVESTMENTS AND SOLVENCY

Cash flow and key financing figures (unit million euros)

1-9/2022

1-9/2021

Cash flow from operations before financial items

0.5

1.1

Cash flow from operations

0.5

1.1

Cash flow from investments

-0.1

-0.1

Cash flow from financing

-1.5

-1.2

Total cash flow

-1.2

-0.2

 

 

 

 

9/2022

9/2021

Cash

2.2

3.0

Interest-bearing debt

0.5

0.7

Equity ratio %

67.8 %

70.9 %


MAJOR RISKS AND UNCERTAINTIES

Trainers’ House’s business is sensitive to economic fluctuations.

The general economic situation internationally and in Finland contains significant risks. The war in Europe, the tense world political situation and the possible expansion of the crisis can cause rapid changes in the operating environment.

Changes in the openness of Europe, the freedom of world trade and the world political situation affect the exports of Finnish companies, which is reflected in the demand of the domestic market.

High inflation and the resulting increase in interest rates have a negative effect on economic activity.

The evolution of the Covid 19-pandemic and its impact on economic activity still contains uncertainties.

The overheating of the labor market makes it difficult to recruit and engage key personnel.

The above-mentioned risks, when realized alone or together, have a significant impact on the company's operations.

The company divides the risk factors affecting business, earnings, and market capitalization into five main categories: market and business risks, personnel-related risks, technology and information security risks, financial risks, and legal risks.

Trainers’ House has sought to hedge against the adverse effects of other risks with comprehensive insurance policies. These include statutory insurance, liability and property insurance and legal expenses insurance. Insurance coverage, insurance values and deductibles are reviewed annually together with the insurance company.

The Management Team reports to the Board on a monthly basis on key business-related risks and, where necessary, risk management measures.

The Group has the reporting systems required for effective business monitoring. Internal control is linked to the company’s vision, strategic goals and the business goals set on the basis of them.

The realization of business objectives and the Group’s financial development are monitored on a monthly basis through the Group’s corporate governance system. As an essential part of the control system, actual data and up-to-date forecasts are reviewed monthly by the Group Management Team. The control system includes, among other things, sales reporting, an income statement, a rolling revenue and profit forecast, and key figures that are important to operations.

Trainers’ House is an expert organization. The magnitude of market and business risks is difficult to determine. Typical risks in this area are related to, for example, general economic development, customer distribution, technology choices, the development of competition and the management of personnel costs.

Risks are managed through the planning and regular monitoring of sales, human resources, and operating expenses, which enables rapid action when circumstances change. The risks of trade receivables have been taken into account by the recognition of expenses based on the age of the receivables and individual risk analyzes.

The goal of Trainers’ House’s financial risk management is to secure the availability of equity and debt financing on competitive terms and to reduce the impact of adverse market movements on the company’s operations.

Financial risks are divided into four categories, which are liquidity, interest rate risks, currency risks and credit risks. Each risk is monitored separately. Liquidity and interest rate risks are reduced with sufficient cash resources and efficient collection of receivables. Currency risks are low as Trainers’ House operates primarily in the euro market. In financial risk management, the focus is on liquidity.

The success of Trainers’ House as an expert organization depends on its ability to attract and retain skilled staff. In addition to a competitive salary, personnel risks are managed through incentive schemes and investments in personnel training, career opportunities and general well-being.

Technology is a key part of Trainers’ House’s business. Technology risks include, but are not limited to, supplier risk, risks related to internal systems, challenges posed by technological change, and security risks. Risks are protected against long-term cooperation with technology suppliers, appropriate security systems, staff training and regular security audits.

Trainers’ House’s legal risks are mainly focused on the contractual relationship between the company and customers or service providers. At their most typical, they relate to delivery responsibility and the management of intellectual property rights. In order to manage the risks related to contracts and intellectual property rights, the company has internal guidelines for contractual procedures. In the company’s view, the contractual risks are not unusual.

At the end of the review period, goodwill and other intangible assets recognized in the balance sheet have been tested in the normal way. The test did not reveal any need for impairment.

The consolidated balance sheet of Trainers’ House has goodwill of EUR 2.1 million. The balance sheet value of other intangible assets is EUR 1.1 million. If the Group's profitability does not develop as forecasted or other external factors independent of the Group's operations, such as interest rates, change significantly, it is possible that goodwill and other intangible assets will have to be written off. Recognition of an impairment loss would have no effect on the Group's cash flow.

Due to the project nature of the operations, the order backlog is short, and predictability is therefore challenging.

The description of potential risks is not comprehensive. Trainers' House conducts continuous risk assessment in connection with its operations and strives to hedge against identified risks.

Investors have also been informed about the risks in the company’s annual review and on the website at www.trainershouse.fi.


PERSONNEL

At the end of the review period, the Group had 146 (132) employees. As before, the company reports the number of employees converted to full-time employees.

DECISIONS REACHED AT THE ANNUAL GENERAL MEETING

The Annual General Meeting of Trainers' House Plc was held on 30 March 2022, in Helsinki with exceptional arrangements due to the Covid 19-pandemic. Shareholders and their proxies had the opportunity to attend the Annual General Meeting and exercise their rights only by voting in advance and submitting counterproposals and questions in advance. Attending the meeting on the spot was not possible.

The meeting approved the financial statements and consolidated financial statement for the financial year 2021 and discharged the CEO and the members of the Board of Directors from liability. The Annual General Meeting also approved the presented remuneration report for the institutions.

In accordance with the proposal of the Board of Directors, the Annual General Meeting decided that the number of the company's shares will be reduced without reducing the share capital in accordance with Chapter 15, Section 9 of the Companies Act by merging each ten shares into one share. The purpose of the share consolidation is to improve the conditions for trading and to increase flexibility in the distribution of dividends. The combination of shares will not affect the company's equity.

In order to avoid the creation of fractions of shares, the Board of Directors was authorized to decide on a directed share issue in which the company's new shares will be transferred free of charge by dividing the number of shares according to each shareholder's book-entry account by ten. The maximum number of new shares issued by the company is a maximum of 10,000 new shares. The company's Board of Directors has the right to decide on the exact number of new shares to be issued and on all other matters related to the issue of shares. The authorization is valid until 30 June 2022.

The merger will be carried out in such a way that, at the same time as the above-mentioned new shares are issued, the company will redeem free of charge from all shareholders the number of shares in each shareholder's book-entry account multiplied by 9/10, nine shares will be redeemed. The number of shares held by a shareholder is estimated on a book-entry basis. Shares redeemed free of charge will be cancelled immediately upon redemption. The date of the share combination is 1 April 2022. The combination of shares will take place on the day of the combination in the book-entry system after the end of stock exchange trading. If necessary, trading in the company's share on Nasdaq Helsinki Ltd will be suspended in order to make technical arrangements in the trading system after the date of the merger. The cancellation of the shares and the new total number will be registered in the Trade Register by approximately 4 April 2022, and trading in the new total number of the company's shares will begin under the new ISIN code on 4 April 2022. The company's Board of Directors has the right to decide on all other matters related to the redemption of shares. The arrangement does not require any action from shareholders.

In accordance with the proposal of the Board of Directors, the Annual General Meeting decided that the company will pay a dividend of EUR 0.70 for each share after the merger of shares described above. The dividend will be paid in two installments, with EUR 0.60 to be paid on 14 April 2022 (record date for dividend payment on 7 April 2022) and EUR 0.10 to be paid on 22 December 2022 (record date for dividend payment on 15 December 2022). The dividend will be paid to a shareholder who is entered in the company's shareholder register on the record date of the dividend payment.

The number of Board members was confirmed to be four (4). Aarne Aktan, Jarmo Hyökyvaara, Jari Sarasvuo and Elma Palsila were elected as members. At the inaugural meeting held after the Annual General Meeting, the Board elected Jari Sarasvuo as its Chairperson.

The Annual General Meeting decided on a remuneration of EUR 1,500 per month for the Board member and EUR 3,500 per month for the Chairperson.

Ernst & Young Oy was re-elected as the company's auditor. The auditor is remunerated according to the auditor's reasonable invoice.

SHARES AND SHARE CAPITAL

The company’s share is listed on Nasdaq Helsinki Ltd under the name Trainers’ House Plc (TRH1V).

In the second quarter, the number of the company's shares changed as a result of the reverse split and the directed free share issue. The change in the number of shares took place on 1 April 2022 after the end of trading, and trading in the new number of shares and the ISIN code began on 4 April 2022. The new number of shares of Trainers’ House is 2,147,826. The share-specific data for the comparison period and the beginning of the year have been adjusted due to the reverse split.

At the end of the reporting period, Trainers’ House Plc had 2,147,826 shares and a registered share capital of EUR 880,743.59. The company does not hold any of its own shares. There have been no changes in the share capital during the period.

Share performance and trading

During the period under review, a total of 540 thousand shares, or 25.2 % of the average number of all company shares (826 thousand shares, 38.5 %), were traded on Nasdaq Helsinki for a value of EUR 3.9 million (EUR 5.6 million). The period’s highest share quotation was EUR 9.80 (EUR 10.85), the lowest EUR 5.00 (EUR 3.60) and the closing price EUR 5.82 (EUR 7.28). The weighted average price was EUR 7.25 (EUR 6.78). At the closing price on 30 September 2022, the company’s market capitalization was EUR 12.5 million (EUR 15.6 million).

SUMMARY OF FINANCIAL STATEMENTS AND NOTES

The report has been prepared in accordance with IAS 34 standard. The report has been prepared in accordance with IFRS standards and interpretations that have been approved for application in the EU and are in force on 1 January 2022.

In this interim report Trainers’ House has followed the same accounting policies and calculation methods as in the 2021 annual financial statements.

The figures given in the interim report are unaudited.

INCOME STATEMENT IFRS (kEUR)

1-9/2022

7-9/2022

1-9/2021

7-9/2021

1-12/2021

NET SALES

7 284

1 783

7 534

1 834

10 340

Other operating income

6

0

0

0

0

Expenses:

 

 

 

 

 

Materials and services

-362

-101

-532

-111

-717

Personnel-related expenses

-4 546

-1 321

-4 215

-1 126

-5 916

Depreciation and impairment losses

-344

-115

-389

-130

-535

Other operating expenses

-1 540

-494

-1 330

-410

-1 856

Total expenses

-6 792

-2 032

-6 467

-1 777

-9 024

Operating result

498

-249

1 067

57

1 316

Financial income and expenses

-10

-2

-17

-6

-26

Result before taxes

488

-251

1 050

52

1 291

Income taxes

5

2

9

3

0

RESULT OF THE PERIOD

493

-249

1 059

55

1 291

Result attributable to owners of the parent company

493

-249

1 059

55

1 291

Earnings per share, EUR*

0.23

-0.12

0.49

0.03

0.60

Earnings per share attributable to owners of the parent company, EUR*

0.23

-0.12

0.49

0.03

0.60

*In the second quarter, the number of the company's shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 30 September 2022 also for the comparison period.

BALANCE SHEET IFRS (kEUR)

9/2022

9/2021

12/2021

ASSETS

 

 

 

Non-current assets

 

 

 

Tangible assets

683

881

907

Goodwill

2 129

2 129

2 129

Other intangible assets

1 110

1 137

1 123

Long-term receivables

 

 

 

Other receivables, long-term

172

0

104

Deferred tax receivables

200

203

200

Total long-term receivables

372

203

304

Total non-current assets

4 294

4 351

4 463

 

 

 

 

Current assets

 

 

 

Account receivables and other receivables

1 151

1 236

1 045

Cash and cash equivalents

2 197

3 044

3 378

Total current assets

3 347

4 280

4 424

TOTAL ASSETS

7 641

8 630

8 887

 

 

 

 

SHAREHOLDERS’ EQUITY AND LIABILITIES

 

 

 

Equity attributable to the owners of the parent company

 

 

 

Share capital

881

881

881

Distributable non-restricted equity fund

37

37

37

Retained earnings

3 540

3 967

3 752

Result of the period

493

1 059

1 291

Total shareholders’ equity

4 950

5 944

5 961

Long-term liabilities

 

 

 

Deferred tax liabilities

223

227

229

Long-term financial liabilities

228

436

408

Total long-term liabilities

451

663

637

Short-term liabilities

 

 

 

Short-term financial liabilities

259

299

317

Accounts payable and other liabilities

1 982

1 725

1 971

Total short-term liabilities

2 240

2 023

2 288

Total liabilities

2 691

2 687

2 925

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES

7 641

8 630

8 887


CASH FLOW STATEMENT IFRS (kEUR)

1-9/2022

1-9/2021

1-12/2021

CASH FLOW FROM OPERATIONS

 

 

 

Result of the period

493

1 059

1 291

Adjustments

356

406

543

Changes in working capital

-384

-370

-11

Cash flow from operations before financial items and taxes

464

1 095

1 823

Financial items and taxes paid

-10

-17

-30

CASH FLOW FROM OPERATIONS

453

1 077

1 793

CASH FLOW FROM INVESTMENTS

 

 

 

Investments in tangible and intangible assets

-108

-117

-175

CASH FLOW FROM INVESTMENTS

-108

-117

-175

CASH FLOW FROM FINANCING

 

 

 

Repayment of lease liabilities

-239

-325

-433

Dividends paid

-1 289

-859

-1 074

CASH FLOW FROM FINANCING

-1 527

-1 183

-1 507

TOTAL CASH FLOW

-1 182

-223

111

CHANGE IN CASH AND CASH EQUIVALENTS

 

 

 

Opening balance of cash and cash equivalents

3 378

3 267

3 267

Closing balance of cash and cash equivalents

2 197

3 044

3 378

CHANGE IN CASH AND CASH EQUIVALENTS

-1 182

-223

111


CHANGE IN SHAREHOLDERS’ EQUITY (kEUR)
Equity attributable to owners of the parent company

CHANGE IN SHAREHOLDERS’ EQUITY (kEUR)

Share capital

Distributable non-restricted equity fund

Retained earnings

Total

Equity 1 January 2021

881

37

4 826

5 744

Other comprehensive income

 

 

1 059

1 059

Dividends

 

 

-859

-859

Equity 30 September 2021

881

37

5 026

5 944

 

 

 

 

 

Equity 1 January 2022

881

37

5 043

5 961

Other comprehensive income

 

 

493

493

Dividends

 

 

-1 503

-1 503

Equity 30 September 2022

881

37

4 032

4 950

RELATED PARTY TRANSACTIONS

During the period under review, Trainers’ House had transactions with Causa Prima Ltd, a company controlled by Jari Sarasvuo, the Chairperson of the Board of Directors, and Pro Vividus Ltd and Anorin Liekki Ltd, which are related to the company.

The following transactions took place with related parties:

RELATED PARTY TRANSACTIONS (kEUR)

1-9/2022

1-9/2021

1-12/2021

Purchases during the period

190

118

164

Liabilities at the end of the period

3

30

45


PERSONNEL

1-9/2022

1-9/2021

1-12/2021

Average number of personnel

125

114

118

Personnel at the end of the period

146

132

126


COMMITMENTS AND CONTINGENT LIABILITIES

9/2022

9/2021

12/2021

Collaterals and contingent liabilities given for own commitments

141

134

136


OTHER KEY FIGURES

9/2022

9/2021

12/2021

Equity ratio (%)

67.8 %

70.9 %

69.8 %

Shareholders' equity/share (EUR)*

2.30

2.77

2.78

*In the second quarter, the number of the company's shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 30 September 2022 also for the comparison period.

Calculation formulas for key figures

Earnings per share        = Result of the period attributable to owners of the parent company
                                      Average number of shares adjusted for share issue in financial period

Interest-bearing net debt = Interest-bearing liabilities – cash and cash equivalents

Equity ratio (%)          = Equity x 100
                                     Balance sheet total – advances received

Equity / share            = Equity                                                                                                               
                                    Number of shares adjusted for share issue at the
                                    end of financial period

Items affecting the calculation of key figures

9/2022

9/2021

12/2021

Advances received (kEUR)

335

247

344

Interest-bearing liabilities (kEUR)

487

735

725

Average number of shares adjusted for share issue in financial period (unit thousand shares)*

2 148

2 148

2 148

Number of shares adjusted for share issue at the end of the financial period (unit thousand shares)*

2 148

2 148

2 148

*In the second quarter, the number of the company's shares changed as a result of the reverse split and the related directed free share issue. The share-specific key figures in the release have been reported according to the number of shares on 30 September 2022 also for the comparison period.


In Helsinki 27 October 2022

TRAINERS’ HOUSE PLC

BOARD OF DIRECTORS

Information:
Arto Heimonen, CEO, +358 404 123 456
Saku Keskitalo, CFO, +358 404 111 111

DISTRIBUTION
Nasdaq Helsinki
Main media
www.trainershouse.fi – For investors

Attachment