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Iomart Group PLC (IOM)

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Monday 29 November, 2010

Iomart Group PLC

Half Yearly Report

RNS Number : 9255W
Iomart Group PLC
29 November 2010
 



 

29 November 2010

iomart Group plc

("iomart" or the "Group")

Half Yearly Results

 

iomart Group plc (AIM:IOM), the cloud computing and managed hosting services company, is pleased to report its half yearly results for the period ended 30 September 2010.

 

FINANCIAL HIGHLIGHTS

 

·      Revenue up 36% to £11.4m (H1 2010: £8.4m)

 

·      EBITDA1 up 222% to £2.7m (H1 2010: £0.8m)

 

·      PAT up 105% to £1.0m (H1 2010: £0.5m2)

 

·      Net cash at end of period of £5.3m (H1 2010: £4.5m)

 

 

OPERATIONAL HIGHLIGHTS

 

·      Acquisition of Titan Internet Limited for £4.2m in October 2010

 

·      iomart Hosting customer base increased by over 50% with substantial increase in cloud solutions

 

·      Rapidswitch adds virtualised dedicated server to product range

 

·      Easyspace experiences improvement in customer retention and increase in average revenue per user

 

·      Netintelligence receives prestigious award for successful delivery of Universal Home Access project

 

1 EBITDA means earnings before interest, tax, depreciation, amortisation, acquisition costs and share based payments

2 before exceptional gain of £1m and related costs of £135k on reduction of deferred consideration on business combination

 

Angus MacSween, CEO commented,

 

"In the first half of the financial year we continued to successfully grow both the size and quality of our customer base. iomart is one of the very few, trusted UK providers of complex hosting services and this has led to exceptionally low churn and high recurring revenues from existing and new customers. Our range of high quality services combined with investment in technological innovation means we are very well positioned to continue to deliver strong growth."

 

For further information:

 

iomart Group plc      

Tel: 0141 931 6400

Angus MacSween       

                

Ian Ritchie




Peel Hunt

(Nominated Adviser and Broker)

Tel: 020 7418 8900

 

Richard Kauffer

Daniel Harris




Threadneedle Communications Limited

Tel: 020 7653 9850

Caroline Evans-Jones


Tom Moriarty              


Hilary Millar


 

 

 

About iomart Group plc

 

iomart Group is one of the UK's leading providers of managed hosting and cloud computing services. From a single server through to private cloud networks, iomart specialises in the delivery and management of mission-critical hosting services, enabling customers to reduce the costs, complexity and risks associated with maintaining their own web and online applications.

 

By physically owning and managing its own network infrastructure, including five state-of-the-art data centres in the UK, iomart offers world-beating levels of service to its customers. The Group offers a unique 100% uptime guarantee with all hosting services being engineered to ensure no single point of failure.

 

Services offered include: Managed Hosting, Colocation, Complex Hosting solutions, Content Delivery Networks, IP Transit, Data Centre Services and Cloud Computing.

 

For further information about the Group, please visit www.iomart.com



 

Chief Executive's Statement

 

Introduction

 

I am very pleased to report on another excellent period of trading for the Group. We are now becoming firmly established as one of the UK's leading managed hosting providers, with companies continuing to choose iomart for the provision of the business critical cloud and managed hosting services that they require.

 

The acquisition of high quality managed hosting companies is an important element of our strategy and we were delighted to have completed the purchase of Titan Internet Limited ("Titan") post the period end on 29 October 2010. Titan brings to the Group a very good customer base and an extremely competent workforce that provide a high level of managed hosting services to these customers.

 

The movement into profitability which we initially achieved in the first half of the last financial year and which we built on in the second half has continued during this period. Indeed EBITDA for this period of £2.7m (H1 2010 £0.8m) is almost at the level we achieved for the whole of the March 2010 financial year.

 

Both of our operating segments have contributed to this high level of profit growth. Our Hosting segment has continued to win substantial amounts of new business across all of our brands and the Easyspace segment has also contributed strongly.

 

Financial Performance

 

Revenues from our operations grew 36% to £11.4m (H1 2010 £8.4m), with strong contributions from both of our operating segments.

 

Easyspace grew revenues by 12% to £3.9m (H1 2010 £3.4m) over the period largely through an increase in the average revenue per customer and also through improved rates of customer retention.

 

Our Hosting segment grew revenues by 53% to £7.5m (H1 2010 £4.9m) through the sustained acquisition of managed hosting contracts by our main trading brands iomart Hosting, which services the needs of the corporate market, and Rapidswitch, which provides dedicated server solutions to the SME market.

 

The gross profit in the period, which is calculated by deducting variable cost of sales such as domain costs, power and sales commission and the relatively fixed costs of operating our datacentres, from revenue, was £6.8m (H1 2010 £4.4m). This substantial increase in gross profit was a direct result of the contribution from the revenue growth delivered by both segments. In percentage terms the gross margin improved to 60% (H1 2010 53%) with again both segments recording improved gross margin percentages in the period. In Easyspace this was due to the impact of increased revenue per customer and improved customer retention and in Hosting where, due to the fixed nature of some of the operating costs, the contribution from increased revenues improved the percentage margin.

 

The Group's EBITDA of £2.7m (H1 2010 £0.8m) reflects a vastly improved performance confirming the sustained move into recurring profitability which was achieved for the first time in H1 2010. Once again both segments contributed to this greatly improved performance. 

 

Easyspace improved its EBITDA to £1.4m (H1 2010 £1.1m) and also its margin to 36% from 31%. This improvement is mainly due to the effect of the increased revenue per customer during the period and improved retention of customers.

 

Hosting improved its EBITDA to £2.4m (H1 2010 £0.8m) and also its margin to 32% from 17%. This significant improvement is largely due to the contribution made by the increased sales from both iomart Hosting and Rapidswitch together with the cost savings achieved in moving Rapidswitch customers to our own datacentre from rented datacentre space post acquisition. Over the period we have continued to incur additional expenditure on resources for the Hosting segment to provide the high level of service our growing customer base has come to expect, and to increase our sales force to further exploit the opportunities afforded by a growing market for these services.

 

Group overheads, which are not allocated to segments, include the cost of the Board, all the running costs of the headquarters in Glasgow, and Group led functions such as human resource, marketing, finance and design. Group overheads in the period remained unchanged at £1.1m (H1 2010 £1.1m).

 

Depreciation charges of £1.2m (H1 2010 £0.8m) have increased as we depreciate the equipment purchased to provide services to our new customers and also due to additional datacentre capacity being brought into play.  The charge for the amortisation of intangible assets has increased to £0.3m (H1 2010 £0.2m) as we amortise the intangible assets acquired when Rapidswitch was purchased. The share based payment charge has decreased to £0.1m (H1 2010 £0.2m) as a result of both the lapsing of share options and share options issued in previous periods having been fully charged in the Income Statement. Under revised accounting standards it is no longer permissible to include the costs incurred during an acquisition as part of the overall cost of our balance sheet investment. Consequently, during the period the costs we incurred of £0.1m (H1 2010 £nil) in respect of legal and financial services on acquisition related activities have been charged to the income statement.

 

Finance income in the period of £0.2m (H1 2010 £0.1m) includes interest earned on the deferred consideration due to the Group from a disposal in a previous year which was received in the period and also interest due on a lease rental deposit. Finance costs of £0.1m (H1 2010 £nil) have increased as we make use of leases to fund the purchase of some of the capital equipment needed to provide services to new customers.

 

As a result the profit for the period before tax was £1.2m (H1 2010 £0.5m, including an exceptional net gain of £0.9m arising from the renegotiation of deferred consideration payable).

 

There is a small tax charge in the period of £0.1m (H1 2010 tax credit of £0.9m) resulting in a profit for the period from total operations of £1.0m (H1 2010 £1.4m, including an exceptional net gain of £0.9m arising from the renegotiation of deferred consideration payable and a tax credit of £0.9m).

 

The Group generated cash from operating activities in the period of £3.1m (H1 2010 £0.6m) which after net expenditure on investing activities of £1.3m (H1 2010 £8.6m) and net cash used in financing activities of £0.5m (H1 2010 £0.4m) resulted in a cash and cash equivalent balance at the end of the period of £7.1m (H1 2010 £5.5m).

 

The net cash position of the Group at the end of September was £5.3m (H1 2010 £4.5m).

 

After the end of the period the Group acquired the entire issued share capital of Titan for a total consideration of £4.2m of which £3.6m was paid on completion and a further amount of up to £0.6m is payable no earlier than 1 April 2011. At the request of the Group, £3m of the Group's £10m borrowing facility provided by Lloyds, has been made available to finance the acquisition and £2m has been drawn down. At the time of the acquisition, Titan had £0.5m of net cash.

 

Operational Review

 

Whilst all our activities involve the provision of managed hosting services we are organised into two segments.

 

Hosting

 

Our activities within the Hosting segment have all performed well over the period. We are seeing a continual shift towards the provision of cloud hosting solutions and we are responding to this market opportunity through the provision of a mix of virtual and physical solutions, with many customers selecting an element of both. We have won over 200 new orders in the period through our iomart Hosting division, which provides complex hosting solutions to the corporate market, many of which involve the provision of virtual solutions. As has been our experience in previous periods, a significant number of these orders were placed by existing customers and as ever we are grateful to these customers for the loyalty they continue to place in us as a provider of essential services.

 

Netintelligence, our provider of cloud security services, has enjoyed a very good period providing the internet security solution for the government sponsored Universal Home Access program through which school children in England and Wales have been provided with a fully enabled laptop. As well as being a commercial success the project has also been a technical success and it was very gratifying to be awarded the Security Project of the Year at the recent UK Computing Security Awards for the work undertaken on this project.

 

Rapidswitch, which provides dedicated server hosting services to the SME market, has continued to enjoy success over the period. The recent launch of a range of virtual dedicated servers within our product range has been met with an encouraging level of enthusiasm by the marketplace.

 

We continued our programme of datacentre fit out with the commencement of a further phase of fit out in our Maidenhead datacentre. This will provide an additional 7,000 square feet of datacentre space by the end of this financial year.

 

All of this activity contributed to an increase in the Hosting segment revenue of 53% to £7.5m (H1 2010 £4.9m) over the prior period.

 

Easyspace

 

The Easyspace segment, which provides a range of products and services to the micro and SME market, has enjoyed growth over the period with revenues increasing by 12% to £3.9m (H1 2010 £3.4m). We have seen an increase in the overall number of customers, the average revenue per customer and customer renewal rates over the period all of which have helped to drive the increase in revenues.

 

Current trading and outlook

 

Trading in the second half is progressing well with our pipeline of new business continuing to strengthen.

 

The fundamental shift from companies buying technology and managing it in-house to outsourcing it as a flexible service from strong, trusted suppliers is in its infancy. We are in a market set to grow significantly over the next few years and with a strong asset base and the expertise to deliver a complex set of cloud services, we expect to continue the growth we have enjoyed recently.

 

We look forward with confidence.

  

  

 

 



 

Consolidated Interim Statement of Comprehensive Income        

Six months ended 30 September 2010

 



 Unaudited

 Unaudited

Audited



 6 months to 30/09/2010

6 months to 30/09/2009 

 Year to 31/03/2010



£'000

£'000

£'000






 Revenue


11,378

8,361

 18,327






 Cost of sales


 (4,571)

 (3,915)

 (7,830)






 Gross profit


 6,807

 4,446

 10,497






 Administrative expenses


 (5,743)

 (4,830)

 (10,119)






 Operating profit/(loss)


 1,064

 (384)

 378






 Analysed as:





 Earnings before interest, tax, depreciation, amortisation, acquisition  costs and share based payments


2,707

840

 3,112

 Share based payments


(117)

(186)

(379)

 Acquisition costs


(60)

-

-

 Depreciation


 (1,174)

 (819)

 (1,846)

 Amortisation


 (292)

 (219)

 (509)






 Gain on reduction of deferred consideration on business combination


-

1,000

1,000

 Associated costs on gain on reduction of deferred consideration


-

(135)

(135)

 Finance income

4

 185

 60

 77

 Finance costs

4

 (94)

 (24)

 (66)






 Profit before taxation


 1,155

 517

 1,254






 Taxation

5

 (120)

 852

816

 Profit for the period from total operations


1,035

1,369

 2,070
















 Total comprehensive income for the period


1,035

1,369

 2,070
















 Attributable to equity holders of the parent


1,035

1,369

 2,070











 

Basic and diluted earnings per share










 Total operations





 Basic earnings per share 

3

1.03 p

1.37 p

2.12 p

 Diluted earnings per share

3

 1.02 p

 1.37 p

 2.12 p



 

Consolidated Interim Statement of Financial Position

As at 30 September 2010

 



 Unaudited

 Unaudited

 Audited



30/09/2010

30/09/2009

31/03/2010



£'000

£'000

£'000






 ASSETS





 Non-current assets





 Intangible assets - goodwill


20,723

20,713

 20,723

 Intangible assets - other


1,072

1,124

1,008

 Deferred tax asset


612

648

 604

 Lease deposit


 1,616

 884

 1,216

 Property, plant and equipment

6

 12,890

 11,736

 12,276



36,913

 35,105

 35,827

 Current assets





 Cash and cash equivalents


 7,073

 5,458

 5,715

 Deferred consideration receivable on disposal

7

 -

 914

 914 

 Trade and other receivables


 3,235

 2,659

 2,937



 10,308

 9,031

 9,566






 Total assets


 47,221

 44,136

 45,393






 LIABILITIES





 Non-current liabilities





 Non-current borrowings


 (1,096)

 (177)

 (834)



 (1,096)

 (177)

 (834)






 Current liabilities





 Deferred consideration due on acquisitions

8

-

(2,350)

(1,000)

 Trade and other payables


 (8,712)

 (6,137)

 (7,489)

 Current borrowings


 (722)

 (776)

 (480)



 (9,434)

 (9,263)

 (8,969)






 Total liabilities


 (10,530)

 (9,440)

 (9,803)






 Net assets


36,691

 34,696

 35,590






 EQUITY





 Share capital


 1,035

 1,002

 1,028

 Own shares


(2,464)

(637)

(2,464)

 Capital redemption reserve


 1,200

 1,200

 1,200

 Share premium


 19,847

 17,583

 19,514

 Retained earnings


 17,073

 15,548

 16,312

 Total equity


 36,691

 34,696

 35,590



Consolidated Interim Statement of Cash Flows

Six months ended 30 September 2010



 Unaudited

 Unaudited

Audited



 6 months to 30/09/2010

 6 months to 30/09/2009

 Year to 31/03/2010



£'000

£'000

£'000






Profit before tax


1,155

517

 1,254

Gain on reduction of deferred consideration - net


-

(865)

(865)

Finance income - net

4

(91)

(36)

(11)

Depreciation


 1,174

 819

 1,846

Amortisation


 292

 219

 509

Share based payments


 117

 186

 379

Movement in deposits


(400)

-

(332)

Movement in trade receivables


 (338)

 215

 (63)

Movement in trade payables


1,173

 (363)

 1,169

Cash flow from operations


 3,082

 692

 3,886

Taxation paid


-

(60)

(164)

Net cash flow from operating activities


 3,082

 632

3,722






Cash flow from investing activities





Purchase of property, plant and equipment


 (924)

 (1,580)

 (2,341)

Capitalisation of development costs


 (163)

 (118)

 (281)

Purchase of  intangible assets - software


 (193)

 (58)

 (69)

Payment for acquisition of subsidiary undertaking


(4,440) 

(5,458) 

Repayment of borrowings on acquisition of subsidiary undertaking


-

(226)

(226)

Deferred consideration paid on prior period acquisition

8

(1,000)

(2,525)

(2,935)

Receipt from disposal of discontinued operation

7

 795

 -

 - 

Net cash acquired with subsidiary undertaking


-

155

155

Interest received


225

155

172

Net cash used in investing activities


 (1,260)

 (8,637)

 (10,983)






Cash flow from financing activities





Issue of shares


 340

 41

41 

Repayment of finance leases


 (360)

 (138)

 (396)

Repayment of borrowings


 -

 (35)

 (222)

Interest paid


 (53)

 (24)

 (66)

Dividends paid


(391)

(291)

(291)

Net cash used in financing activities


 (464)

 (447)

 (934)






Net increase/(decrease) in cash and cash equivalents


 1,358

 (8,452)

(8,195)






Cash and cash equivalents at the beginning of the period


5,715

13,910

13,910






Cash and cash equivalents at the end of the period


7,073

5,458

 5,715

 

 



Consolidated Interim Statement of Changes in Equity

Six months ended 30 September 2010

 

 


 

 Share capital

Own

shares JSOP

Own

shares treasury

Capital redemption reserve

 Share premium account

 

Retained earnings

 

 

 Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

Changes in equity








Balance at 1 April 2009

1,002

-

(678)

1,200

17,583

14,284

33,391









Share based payments

-

-

-

-

-

186

186

Dividends paid

-

-

-

-

-

(291)

(291)

Issue of own shares for option redemption

-

-

41

-

-

-

41

Profit in the period

-

-

-

-

-

1,369

1,369









Balance at 30 September 2009

1,002

-

(637)

1,200

17,583

15,548

34,696









Share based payments

-

-

-

-

-

193

193

Issue of own shares for option redemption

-

-

130

-

-

(130)

-

Issue of own shares to Joint Share Ownership Plan

-

-

507

-

712

-

1,219

Issue of new shares to Joint Share Ownership Plan

26

(2,464)

-

-

1,219

-

(1,219)

Profit in the period

-

-

-

-

-

701

701









Balance at 31 March 2010

1,028

(2,464)

-

1,200

19,514

16,312

35,590









Share based payments

-

-

-

-

-

117

117

Dividends paid

-

-

-

-

-

(391)

(391)

Issue of own shares for option redemption

7

-

-

-

333

-

340

Profit in the period

-

-

-

-

-

1,035

1,035









Balance at 30 September 2010

1,035

(2,464)

-

1,200

19,847

17,073

36,691









 

 

 

 



Notes to the Half Yearly Financial Information            

Six months ended 30 September 2010

 

1.              Accounting policies

 

The financial information for the year ended 31 March 2010 set out in this half yearly report does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The figures for the year ended 31 March 2010 have been extracted from the Group financial statements for that year. Those financial statements have been delivered to the Registrar of Companies and included an independent auditors' report, which was unqualified and did not contain a statement under section 493 of the Companies Act 2006.

 

The half yearly financial information has been prepared using the same accounting policies and estimation techniques as will be adopted in the Group financial statements for the year ending 31 March 2011. The Group financial statements for the year ended 31 March 2010 were prepared under International Financial Reporting Standards as adopted by the European Union. These half yearly financial statements have been prepared on a consistent basis and format with the Group financial statements for the year ended 31 March 2010. The provisions of IAS 34 'Interim Financial Reporting' have not been applied in full.

 

The Group has adopted IFRS 3(R) 'Business Combinations' in the current year. All expenses incurred in connection with acquisitions have been expensed through the income statement.

 

 

 

2.              Operating segments

 

Revenue by Operating Segment

 


6 months to 30/09/2010

6 months to 30/09/2009

Year to 31/03/2010


External

Internal

Total

External

Internal

Total

External

Internal

Total


£'000

£'000

£'000

£'000

£'000

£'000

 £'000

 £'000

£'000

Easyspace

3,850

-

3,850

3,441

-

3,441

7,363

-

7,363

Hosting

7,528

459

7,987

4,920

274

5,194

10,964

717

11,681


11,378

459

11,837

8,361

274

8,635

18,327

717

19,044

 

Geographical Information

In presenting the consolidated information on a geographical basis, revenue is based on the geographical location of customers. The United Kingdom is the place of domicile of the parent company, iomart Group plc. All of the Group's revenue originates from the United Kingdom. No individual country other than the United Kingdom contributes a material amount of revenue therefore revenue from outside the United Kingdom has been shown as from Rest of the World.

Analysis of Revenue by Destination





6 months to 30/09/2010

6 months to 30/09/2009

Year to 31/03/2010





£'000

£'000

£'000

United Kingdom




10,430

7,842

17,142

Rest of the World




948

519

1,185

Revenue from operations



11,378

8,361

18,327


Profit by Operating Segment

 


6 months to 30/09/2010

6 months to 30/09/2009

Year to 31/03/2010


 

EBITDA before share based payments and acquisition costs

Share based payments, acquisition costs, depreciation & amortisation

 

 

 

 

Operating profit/(loss)

 

EBITDA before share based payments and acquisition costs

Share based payments, acquisition costs, depreciation & amortisation

 

 

 

 

Operating profit/(loss)

 

EBITDA before share based payments and acquisition costs

Share based payments, acquisition costs, depreciation & amortisation

 

 

 

 

Operating profit/(loss)

Easyspace

1,376

(18)

1,358

1,071

(17)

1,054

2,579

(35)

2,544

Hosting

2,443

(1,448)

995

845

(1,021)

(176)

2,763

(2,320)

443

Group overheads

(1,112)

-

(1,112)

(1,076)

-

(1,076)

(2,230)

-

(2,230)

Share based payments

-

(117)

(117)

-

(186)

(186)

-

(379)

(379)

Acquisition costs

(60)

(60)

-

-

-

-

-

-


2,707

(1,643)

1,064

840

(1,224)

(384)

3,112

(2,734)

378

Net gain on business combination



-



865

 

 

865

Group interest and tax



(29)



888

 

 

827

Profit for the period

2,707

(1,643)

1,035

840

(1,224)

1,369

3,112

(2,734)

2,070

 

Group overheads, share based payments, acquisition costs, interest and tax are not allocated to segments.


3.              Earnings per share

 

The calculations of earnings per share are based on the following results and numbers:

 



 6 months to 30/09/2010

 6 months to 30/09/2009

 Year to 31/03/2010






Total Operations












 £'000

 £'000

 £'000

Profit for the financial period and basic earnings attributed to ordinary shareholders


1,035

1,369

2,070



 No

 No

 No

Weighted average number of ordinary shares:


 000

 000

 000

For basic earnings per share


 100,709

 99,831

 97,577

Exercise of share options


           480

           176

          230

For diluted earnings per share


 101,189

 100,007

 97,807

Basic earnings per share


 1.03 p

 1.37 p

 2.12 p

Diluted earnings per share


 1.02 p

 1.37 p

 2.12 p

 

 

4.              Net finance cost

 




 6 months to 30/09/2010

 6 months to 30/09/2009

 Year to 31/03/2010






Finance income:





Bank interest receivable


33

60

77

Other interest income


152

-

-

Finance income for the period


185

60

77






Finance expense:





Finance lease interest


(53)

(24)

(66)

Other interest payable


(41)

-

-

Finance expense for the period


(94)

(24)

(66)











Net finance cost for the period


91

36

11

Other interest income of £112,000 was received in the period relating to interest earned on sums held in escrow which have now been released. In addition, £80,000 was received in the period relating to interest earned on sums held on a rental deposit by a landlord since the inception of the agreement and of this, £40,000 had previously been accrued in interest receivable.

 

 

 

5.              Taxation

 




 6 months to 30/09/2010

 6 months to 30/09/2009

 Year to 31/03/2010






Tax charge for the period


(128)

-

(12)

Adjustment relating to prior period


-

-

20

Deferred tax credit


8

852

808

Taxation (charge)/credit for the year


(120)

852

816

 

The Group has a deferred tax asset which has been recognised in respect of tax losses within one of the subsidiary companies, which has generated taxable profits and is expected to continue to do so.

 

  

6.              Property, plant and equipment

 


Freehold property

Leasehold improve-ments

Datacentre equipment

Computer equipment

Office equipment

Motor vehicles

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000









Cost:








At 1 April 2009

837

360

7,584

1,869

677

-

11,327

Additions in the period

-

392

462

794

8

-

1,656

Acquisition of subsidiary

-

1,299

166

727

21

14

2,227

At 30 September 2009

837

2,051

8,212

3,390

706

14

15,210

Additions in the period

-

88

183

1,294

4

-

1,569

Disposals in the period

-

-

-

-

-

(7)

(7)

At 31 March 2010

837

2,139

8,395

4,684

710

7

16,772

Additions in the period

-

404

205

1,178

1

-

1,788

At 30 September 2010

837

2,543

8,600

5,862

711

7

18,560









Accumulated depreciation:








At 1 April 2009

(12)

(346)

(677)

(1,246)

(374)

-

(2,655)

Charge for the period

(4)

(49)

(317)

(422)

(25)

(2)

(819)

At 30 September 2009

(16)

(395)

(994)

(1,668)

(399)

(2)

(3,474)

Charge for the period

(4)

(63)

(335)

(607)

(15)

(3)

(1,027)

Disposals in the period

-

-

-

-

-

5

5

At 31 March 2010

(20)

(458)

(1,329)

(2,275)

(414)

-

(4,496)

Charge for the period

(10)

(69)

(346)

(730)

(18)

(1)

(1,174)

At 30 September 2010

(30)

(527)

(1,675)

(3,005)

(432)

(1)

(5,670)









Carrying amount:








At 30 September 2010

807

2,016

6,925

2,857

279

6

12,890









At 31 March 2010

817

1,681

7,066

2,409

296

7

12,276









At 30 September 2009

821

1,656

7,218

1,722

307

12

11,736

 

 

7.              Deferred consideration receivable on disposal

 

The deferred consideration receivable on disposal of Ufindus Limited in July 2008 of £914,000 was received in July 2010 net of costs associated with the disposal of £119,000.

 

 

 

8.              Deferred consideration due on acquisitions




30/09/2010

30/09/2009

31/03/2010




 £'000

 £'000

 £'000






Deferred consideration due on acquisitions





-       Ezee DSL Limited


-

(1,400)

(1,000)

-       Rapidswitch Limited


-

(950)

-






Total deferred consideration due on acquisitions


-

(2,350)

(1,000)

 

On 27 August 2010, the final instalment of deferred consideration of £1,000,000 was paid in relation to the acquisition of Ezee DSL Ltd. The single share in Ezee DSL Limited that had been placed in escrow was transferred to iomart Group plc on payment of this final instalment and consequently iomart Group plc now owns 100% of the share capital of this company.

 

9.              Analysis of change in net cash/(debt)

 


 

Cash and cash equivalents

£'000

 

 

Bank

loans

£'000

 

 

Other

loans

£'000

Finance leases and hire purchase

£'000

Total

£'000







At 1 April 2009

13,910

-

-

(202)

13,708

Inception of finance leases

-

-

-

(277)

(277)

Acquired on acquisition of subsidiary

155

(222)

(226)

(425)

(718)

Cash flow

(8,607)

35

226

138

(8,208)

At 30 September 2009

5,458

(187)

-

(766)

4,505







Inception of finance leases

-

-

-

(806)

(806)

Cash flow

257

187

-

258

702

At 31 March 2010

5,715

-

-

(1,314)

4,401







Inception of finance leases

-

-

-

(864)

(864)

Cash flow

1,358

-

-

360

1,718

At 30 September 2010

7,073

-

-

(1,818)

5,255

 

 

10.            Post balance sheet event

 

On 29 October 2010, the Group acquired the entire issued share capital of Titan Internet Limited for a total cash consideration of up to £4.2m. Of the total consideration of £4.2m, £3.6m was paid on completion and a further amount of up to £0.6m is payable no earlier than 1 April 2011, subject to the certain performance criteria being met. In addition, at the date of acquisition, Titan Internet Limited had approximately £0.5m of net cash.

 

 

 

11.            Availability of half yearly reports

 

Half yearly reports will be sent to all shareholders on 15 December 2010.  Copies of the half yearly report will be available for collection from the offices of Peel Hunt Ltd, 111 Old Broad Street, London, EC2N 1PH, for a period of one month from the date of despatch and in accordance with Rules 20 and 26 of the AIM Rules, available from the company's website at www.iomart.com.

 

 



 

INDEPENDENT REVIEW REPORT TO IOMART GROUP PLC

 

Introduction

 

We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 September 2010 which comprises the consolidated interim statement of comprehensive income, the consolidated interim statement of financial position, the consolidated interim statement of cash flows, the consolidated interim statement of changes in equity and the related notes 1 to 11 set out on pages 6 to 14. We have read the other information contained in the half yearly financial report which comprises only the interim results announcement and the chief executive's statement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial information.

 

This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity".  Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim figures are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.

 

As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.



INDEPENDENT REVIEW REPORT TO IOMART GROUP PLC

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2010 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.

 

 

 

 

GRANT THORNTON UK LLP

REGISTERED AUDITOR

CHARTERED ACCOUNTANTS
Glasgow

 

26 November 2010

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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