Half-yearly Report

Half-yearly Report

Next Fifteen Communications Plc

Next Fifteen Communications Group plc:

Interim results for the six months ended 31 January 2009

Strong progress in a challenging environment

Next Fifteen Communications Group plc ("Next Fifteen" or "the Group"), the global public relations consultancy group, today announces strong results for the six months to 31 January 2009.

Financial Highlights:

• Revenues increased by 10% to £33.5 million (2008: £30.4 million)
• Adjusted* profit before tax increased by 15% to £3.55 million (2008: £3.08 million) (see note 3)
• Adjusted* pre-tax profit margins improved to 10.6% (2008: 10.1%) (see note 2)
• Adjusted* earnings per share increased by 11% to 4.47p (2008: 4.01p) (see note 7)
• Interim dividend maintained at 0.45p per share
• Net debt of £0.8m with no material earn-out obligations remaining

* before one-off costs – see note 3

Corporate Progress:

• Acquired remaining stake in Panther Communications Group Limited, parent of Lexis, making the agency a wholly-owned subsidiary of the Group
• Expanded relationship with a number of clients including IBM, AMD and Cisco and won new retained clients including Skype, SanDisk and Intuit Inc.

Commenting on the results, Chairman of Next Fifteen, Will Whitehorn, said:

“We are operating well in a challenging environment as can be seen by these results. Over 80% of our revenues are derived from retainer relationships with clients that include many of the world’s leading technology companies including IBM, Cisco, Microsoft and Xerox as well as non-technology businesses such as Coca Cola and Unilever. As anticipated, we did see a reduction in revenue levels in January and the Group has taken resolute steps in response to these changes in its markets as demonstrated by reducing headcount and operating expenses. We remain optimistic about the medium- and long-term prospects for growth. The Group’s strategy remains focused on improving margins and generating organic growth but looking to supplement this with targeted acquisitions that add to the capability of our existing PR businesses. During the period the Group has been looking to make use of its strong balance sheet and has been pursuing several small acquisitions and hopes to be able to announce at least one of these in the coming months.”

For further information contact:

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Next Fifteen Communications Group

Tim Dyson, Chief Executive

001 415 350 2801

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David Dewhurst, Finance Director

07974 161183

Â

Inferno PR

Liam Jacklin

020 8735 9727

[e-mail]

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Elijah Lawal

020 8735 9718

[e-mail]

Â

Attached:

Chairman and Chief Executive’s Statement

Consolidated Income Statement

Consolidated Statement of Recognised Income and Expense

Consolidated Balance Sheet

Consolidated Statement of Cash Flow

Notes to the Interim Accounts

Chairman and Chief Executive's Statement

Next Fifteen Communications Group plc (“the Group”), the global public relations consultancy, is again pleased to report strong results for the six months to 31 January 2009. During the period, revenue increased by 10% to £33.5m (2008: £30.4m). After one-off costs, profit before tax was £1.44m (2008: £2.01m); without these one-off costs adjusted profit was up 15% at £3.55m (2008: £3.08m) (see note 3). Basic earnings per share fell to 1.71p (2008: 2.52p) but adjusted earnings per share rose by 11% to 4.47p (2008: 4.01p) (see note 7). During the period, the Group made acquisition-related payments of £4.4m, which leaves it with almost no further earn-out obligations. As a result, the Group had a small net-debt of £0.8m at 31 January 2009. The Board has decided to maintain the interim dividend at 0.45p, although it hopes to be able to increase the final dividend when full-year results are announced in October. The Group's strategy remains focused on improving margins by generating organic growth from its existing PR brands and supplementing this with targeted acquisitions that offer growth-potential and complement the existing businesses.

The Group’s adjusted profit before income tax margin has improved to 10.6%, up from 10.1% during the same period in 2008 (see note 2). Dependence on key clients has continued to reduce, with the top ten clients now accounting for 33% of revenue, down from just under 35% in the same period during 2008. We have worked with eight of the top ten clients for more than four years, with four of them for more than eight years and with two of them for over 16 years, so they provide a stable platform from which we can continue to grow revenue. We are still seeing a healthy new-business climate in all the Group’s main markets. We have expanded our relationships with a number of clients, including IBM, AMD and Cisco. We have also added clients such as Skype, SanDisk and Intuit Inc.

The Group produced these results in a worsening economy. As anticipated, revenue in January, when many clients reset budgets for the year, was down from the levels of previous months and this affected these interim results. The lower client budgets will also clearly have an impact on revenue in the second half of the year, and the Group expects to see a decline in revenue of approximately 10% from the first to second halves of the year. In anticipation of this, as mentioned in January’s trading update, the Group reduced its headcount and closed its Seattle office. These reductions, which represented about 9% of staff, resulted in a one-off cost of £700,000 in the first half. The Group has made further staff reductions so far in the second half of the year, and will continue to look at all ways in which we can reduce expenditure in line with expected revenue to maintain operating profit margins.

Following a strategic review the Group has taken the decision to merge its London-based Inferno operation into Bite. Inferno was established in 2003 by staff from Bite, and bringing the two agencies back together creates a very strong European management team for Bite and an enlarged agency better able to extend existing client relationships. The integration will result in a one-off restructuring charge of approximately £0.5m in the second half, mainly related to surplus office space.

During the period the Group acquired the remaining stake in Panther Communications Group Limited, the parent of Lexis, making the agency a wholly-owned subsidiary of the Group. The Group also made what is, in effect, the last major earn-out payment to the OutCast shareholders. A final payment of £200,000 is due this October.

Chairman and Chief Executive's Statement (Continued)

Prospects

Given the current global recession, the Group has taken resolute steps to respond to the changes in its markets, as was demonstrated by the headcount reductions noted above and the Group’s tight control of operating expenses.

We remain optimistic about the medium- and long-term prospects for growth. The Group is highly diversified geographically, with strong businesses in all the major developed PR markets and in emerging PR markets, including India and China, where we have operated for thirteen and six years, respectively. The Group also continues to benefit from its strong positioning in social media, an area of marketing services that is expanding as other areas, such as traditional advertising, decline. We therefore remain optimistic about our long-term growth potential and about that of the PR market overall. The Group is currently in discussions with a handful of companies outside the UK which we consider as potential acquisitions. This is in-line with our strategy of adding to the capability of our existing PR businesses and capturing the more accessible and fairly valued opportunities that several markets currently offer.

Will Whitehorn

Chairman

Â

Tim Dyson

Chief Executive Officer

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

	Â		Â	Six months ended 31 January 2009 (Unaudited)January 2009 (Unaudited)			Â	Six months ended 31 January 2008 (Unaudited)January 2008 (Unaudited)			Â	Year ended 31 July 2008
		Note		£’000	Â	£’000		£’000	Â	£’000		£’000	Â	£’000
														Â
Billings						39,388				35,669				73,916
Â	Â	Â	Â	Â	Â	Â	Â	Â	Â	Â	Â	Â	Â	Â
														Â
Revenue		2				33,462				30,417				63,107
														Â
Staff costs				22,344				20,409				42,455
Depreciation				612				589				1,203
Amortisation				99				39				113
Reorganisation costs				700				-				-
Other operating charges				6,855				6,264				12,630
														Â
Total operating charges						(30,610)				(27,301)				(56,401)
						Â				Â				Â
														Â
Operating profit						2,852				3,116				6,706
														Â
Finance expense						(1,657)				(1,282)				(1,481)
Finance income						98				92				174
Net finance expense		6				(1,559)				(1,190)				(1,307)
														Â
														Â
Share of profit of equity-accounted investees						151				85				117
Profit before income tax		2,3				1,444				2,011				5,516
														Â
Income tax expense		4				(512)				(603)				(1,655)
														Â
Profit for the period						932				1,408				3,861
														Â
Attributable to:
Equity holders of the parent						914				1,298				3,663
Minority interest						18				110				198
														Â
						932				1,408				3,861
														Â
Earnings per share		7
Basic (pence)						1.71				2.52				7.08
Diluted (pence)						1.70				2.48				6.99

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

	Â	Six months ended 31 January 200931 January 2009 (Unaudited)			Â	Six months ended 31 January 200831 January 2008 (Unaudited)			Â	Year ended 31 July 200831 July 2008 Â
		£’000	Â	£’000		£’000	Â	£’000		£’000	Â	£’000
												Â
Foreign currency translation differences for foreign operations		3,295				510				15
Translation differences on long-term foreign currency inter-company loans		-				23				28
		Â				Â				Â
Income and expense recognised directly in equity		3,295				533				43
												Â
Profit for the period				932				1,408				3,861
				Â				Â				Â
Total recognised income and expense for the period				4,227				1,941				3,904
												Â
												Â
Attributable to:
Equity holders of the Company				4,209				1,831				3,706
												Â
Minority interest				18				110				198
												Â
Total recognised income and expense for the period				4,227				1,941				3,904

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED BALANCE SHEET

AS AT 31 JANUARY 2009

		Â		Â	31 January 2009 (Unaudited)(Unaudited)			Â	31 January 2008 (Unaudited)(Unaudited) (restated)¹			Â	31 July 2008
						Â				Â				Â
			Note		£’000		£’000		£’000		£’000		£’000		£’000
Assets
															Â
Property, plant and equipment					2,556				2,278				2,435
Intangible assets					19,167				14,102				15,462
Investments in equity-accounted investees					365				171				190
Deferred tax asset					1,637				2,630				1,468
Other receivables					997				384				651
Total non-current assets							24,722				19,565				20,206
															Â
Trade and other receivables					17,358				15,779				15,720
Cash and cash equivalents					6,219				6,226				9,525
Current tax assets					1,173				-				701
Total current assets							24,750				22,005				25,946
Â
Total assets			2				49,472				41,570				46,152
															Â
Liabilities
															Â
Loans and borrowings					6,377				5,288				5,315
Deferred tax liabilities					9				227				32
Other payables					256				-				385
Deferred consideration					-				704				139
Total non-current liabilities							(6,642)				(6,219)				(5,871)
															Â
Loans and borrowings					-				513				-
Trade and other payables					13,952				12,608				14,914
Corporation tax liability					649				191				677
Deferred consideration					288				815				2,630
Derivative financial liabilities					2,005				856				685
Share-purchase obligation					-				3,084				1,737
Total current liabilities							(16,894)				(18,067)				(20,643)
															Â
Total liabilities							(23,536)				(24,286)				(26,514)
															Â
TOTAL NET ASSETS							25,936				17,284				19,638
															Â
Equity
Share capital							1,381				1,340				1,354
Share-premium reserve							5,157				5,157				5,157
Merger reserve							3,075				2,357				2,659
Share-purchase reserve							-				(2,840)				(1,380)
Foreign currency translation reserve							3,104				510				(191)
Investment in own shares							(647)				(668)				(663)
Treasury shares							(594)				-				(504)
Retained earnings							14,460				11,180				12,960
							Â				Â				Â
Total equity attributable to equity holders of the Company							25,936				17,036				19,392
Minority interests							-				248				246
															Â
TOTAL EQUITY							25,936				17,284				19,638

¹ See note 1 for details.

NEXT FIFTEEN COMMUNICATIONS GROUP PLC

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

	Â	Â	Â	Six months ended 31 January 2009 (Unaudited)31 January 2009 (Unaudited)			Â	Six months ended 31 January 2008 (Unaudited)31 January 2008 (Unaudited)			Â	Year ended 31 July 2008
				£’000	Â	£’000		£’000	Â	£’000		£’000	Â	£’000
														Â
Cash flows from operating activities
														Â
Profit for the period				932				1,408				3,861
Adjustments for:
Depreciation				612				589				1,203
Amortisation				99				39				113
Finance income				(98)				(92)				(174)
Finance expense				1,657				1,282				1,481
Share of profit from equity-accounted investees				(151)				(85)				(117)
Loss on sale of property, plant and equipment				(12)				117				2
Income tax expense				512				603				1,655
Share based payments				190				114				237
														Â
Net cash inflow from operating activities before changes in working capital						3,741				3,975				8,261
														Â
Change in trade and other receivables				1,223				(513)				(1,417)
Change in trade and other payables				(2,604)				(662)				2,755
						(1,381)				(1,175)				1,338
														Â
Net cash generated from operations						2,360				2,800				9,599
														Â
Income taxes paid						(760)				(612)				(1,090)
														Â
Net cash from operating activities						1,600				2,188				8,509
														Â
Cash flows from investing activities
														Â
Acquisition of subsidiary, net of cash acquired				(4,399)				(813)				(829)
Acquisition expenses				(4)				-				-
Proceeds on disposal of property, plant and equipment				35				-				-
Acquisition of property plant and equipment				(229)				(878)				(1,591)
Acquisition of intangible assets				(123)				-				(329)
Payments for long-term cash deposits				(176)				-				(233)
Receipts from long-term cash deposits				-				33				-
Interest received				98				92				174
														Â
Net cash outflow from investing activities						(4,798)				(1,566)				(2,808)
														Â
Cash flows from financing activities
														Â
Proceeds from sale of own shares				21				36				64
Acquisition of own shares				(90)				-				(504)
Repayment of bank borrowings				(500)				(33)				(337)
Capital element of finance lease rental repayment				(242)				(113)				(217)
Interest paid				(256)				(285)				(414)
Dividends paid to holders of the parent				-				-				(807)
														Â
Net cash outflow from financing activities						(1,067)				(395)				(2,215)
Net increase/ (decrease) in cash and cash equivalents						(4,265)				227				3,486
Cash and cash equivalents at beginning of the period						9,525				5,834				5,834
Exchange gains on cash held						959				165				205
						Â				Â				Â
Cash and cash equivalents at end of period						6,219				6,226				9,525

NOTES TO THE INTERIM ACCOUNTS

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

1) BASIS OF PREPARATION

The financial information in these interim results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The principal accounting policies used in preparing the interim results are those the Group expects to apply in its financial statements for the year ended 31 July 2009 and are unchanged from those disclosed in the Group’s Annual Report for the year ended 31 July 2008. The financial information for the six months ended 31 January 2009 and the six months ended 31 January 2008 has not been reviewed, is unaudited and does not constitute the Group's statutory financial statements for those periods, as defined under section 434 of the Companies Act 2006. The comparative financial information for the full year ended 31 July 2008 has, however, been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors’ report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 237(2)-(3) of the Companies Act 1985.

Liabilities in respect of put-option agreements that require the Group to purchase minority interests are treated as derivatives over equity instruments and are recorded in the balance sheet at fair value. The fair value of such put options is remeasured at each period end. The movement in fair value is recognised in the income statement. The Group recognises its best estimate of the amount it is likely to pay, should these options be exercised by the minority interests, as a liability in the balance sheet. When the initial fair value of the liability in respect of the put-option is created the corresponding debit is included in the share-purchase reserve.

The obligation to acquire the remaining shares in Panther Communications Group Limited, the parent company of Lexis Public Relations Limited, was incorrectly estimated on transition to adopted IFRS in August 2006. During the 31 July 2008 year-end reporting process, management noted this issue. As a result, an adjustment has been made to the 31 January 2008 financial information provided within this report to increase the share-purchase obligation liability and share-purchase reserve by £597,000. There is no impact on the consolidated cash flow or income statement.

NOTES TO THE INTERIM ACCOUNTS

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

2) SEGMENT INFORMATION

Primary reporting format – business segments

The Group operates in one business segment, being the provision of public relations services. A second business segment, being research, is not large enough to require segmental disclosure.

Secondary reporting format – geographical segments

The Group’s operations are based in four main geographical areas. The UK is the home country of the Parent Company.

	Â	Revenue	Â	Profit beforebefore incomeincome taxtax	Â	Adjusted profitprofit beforebefore incomeincome tax¹tax¹	Â	Total assetsassets	Â	Capital expenditureexpenditure
		£’000		£’000		£’000		£’000		£’000
										Â
Six months ended 31 January 2009 (Unaudited)
										Â
UK		8,929		1,146		1,463		9,451		80
Europe and Africa		5,094		579		701		4,025		16
US and Canada		15,477		2,999		3,314		20,332		73
Asia Pacific		3,962		468		468		5,644		72
Head Office		-		(3,748)		(2,401)		10,020		124
		Â		Â		Â		Â		Â
		33,462		1,444		3,545		49,472		365
										Â
Six months ended 31 January 2008 (Unaudited)
										Â
UK		9,488		1,259		1,311		9,283		535
Europe and Africa		4,749		433		433		3,693		25
US and Canada		12,966		2,486		2,556		14,709		140
Asia Pacific		3,214		297		297		4,011		128
Head Office		-		(2,464)		(1,521)		9,874		112
		Â		Â		Â		Â		Â
		30,417		2,011		3,076		41,570		940
  Year ended 31 July 2008
Â
UK		18,787		2,336		2,520		13,096		785
Europe and Africa		10,074		1,164		1,164		4,085		52
US and Canada		27,522		5,576		5,704		16,186		559
Asia Pacific		6,724		667		667		4,262		366
Head Office		-		(4,227)		(3,473)		8,523		349
		Â		Â		Â		Â		Â
		63,107		5,516		6,582		46,152		2,111

¹ Adjusted profit before income tax has been reached by adjusting profit before income tax for movements in the fair value of financial instruments, reorganisation costs and unwinding of the discount on deferred consideration and share-purchase obligation. See note 3 Reconciliation of pro-forma financial measures.

NOTES TO THE INTERIM ACCOUNTS

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

3) RECONCILIATION OF PRO-FORMA FINANCIAL MEASURES

Â	Six months ended 31 January 200931 January 2009 (Unaudited)	Â	Six months ended 31 January 200831 January 2008 (Unaudited)		Â	Year ended 31 July 200831 July 2008 Â
	£’000		Â	£’000		Â	£’000
							Â
Profit before income tax	1,444			2,011			5,516
Movement in fair value of financial instruments¹	1,320			925			754
Unwinding of discount on deferred consideration²	48			70			128
Unwinding of discount on share-purchase obligation³	33			70			184
Reorganisation costs4	700			-			-
							Â
Adjusted profit before income tax	3,545			3,076			6,582

Adjusted profit before income tax has been presented to provide additional information which may be useful to the reader.

¹ See note 6

^² As required by IAS39 Financial Instruments: Recognition and Measurement, an interest charge of £48,000 has been recognised during the period in relation to the unwinding of the discount on the deferred consideration payable for OutCast Communications Corporation.

³ As required by IAS39 Financial Instruments, an interest charge of £33,000 has been recognised during the period in relation to the unwinding of the discount on the share-purchase obligation for Lexis Public Relations Limited.

⁴ The reorganisation costs of £700,000 relate to redundancies across the Group and the closure of the Text 100 Seattle office. £100,000 of these costs can be attributed to the closure of the Seattle office (£82,000 due to headcount reductions and £18,000 due to other office closure costs). The remaining £600,000 of reorganisation costs have been incurred as a result of headcount reductions required to reflect revenue expectations in the worsening economy.

4) INCOME TAX EXPENSE

The tax charge is based on the forecast effective tax rate of 35.5% for the year. The Group’s corporation tax rate for the year ending 31 July 2009 is forecast to increase to a rate within the range of 34% – 37% as a result of currency contracts expiring in the current financial year. The costs of the currency contracts are deemed to be UK costs for tax purposes; however there is not anticipated to be sufficient UK operating profit in the year to fully offset the costs for tax purposes and it is not considered prudent to recognise a deferred tax asset in respect of the costs. The negative impact of the currency contracts expiring on the Group tax rate is expected to be partially offset by profits in countries such as Australia, Spain, South Africa and Japan, which were formerly loss-making but which became profitable for tax purposes in 2009. The Group also continues to benefit in 2009 from the reduction in corporation tax rates in overseas territories in which it operates, such as China, Hong Kong, Malaysia, Italy, Spain and Sweden. The increase in the Group’s corporation tax rate is anticipated to be temporary and is expected to return close to the 2008 rate of 30% during 2010.

5) DIVIDENDS

An interim dividend of 0.45p (2008: 0.45p) per ordinary share will be paid on 22 May 2009 to shareholders listed on the register of members on 1 May 2009. Shares will go ex-dividend on 29 April 2009. The Employee Share Ownership Trust has waived its rights to dividends of £5,000 in the six months ended 31 January 2009 (Interim 2008: £8,000; Full-year 2008: £27,000).

6) FINANCE EXPENSE

The net finance expense of £1,559,000 (2008: £1,190,000) includes a charge of £1,320,000 (2008: charge of £925,000) on financial instruments reflecting the movement in the fair value since 31 July 2008. These financial instruments comprise financial products used for hedging interest-rate risk on long-term debt and currency exposure on USD and EUR.

Also included within finance expense is a charge of £81,000 for the period (2008: £140,000) relating to the notional interest on the deferred consideration for the purchase of OutCast Communications Corporation and the share-purchase obligation relating to the purchase of Lexis Public Relations Limited.

NOTES TO THE INTERIM ACCOUNTS

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

7) EARNINGS PER SHARE

	Six months ended 31 January 2009 (Unaudited)31 January 2009 (Unaudited)	Â	Six months ended 31 January 200831 January 2008 (Unaudited)	Â	Year ended 31 July 200831 July 2008
	£’000		£’000		£’000
					Â
Basic and diluted earnings attributable to ordinary shareholders	914		1,298		3,663
Reorganisation costs after taxation	465		-		-
Unwinding of discount on deferred consideration	29		46		80
Unwinding of discount on share- purchase obligation	24		70		184
Movement in fair value of financial instruments after tax	950		654		532
	Â		Â		Â
Adjusted and diluted adjusted earnings attributable to ordinary shareholders	2,382		2,068		4,459
					Â
	Number		Number		Number
					Â
Weighted average number of ordinary shares	53,315,691		51,581,138		51,737,491
Dilutive shares	138,998		719,602		652,320
	Â		Â		Â
Diluted weighted average number of ordinary shares	53,454,689		52,300,740		52,389,811
					Â
					Â
Basic earnings per share	1.71p		2.52p		7.08p
Diluted earnings per share	1.70p		2.48p		6.99p
Adjusted earnings per share	4.47p		4.01p		8.62p
Diluted adjusted earnings per share	4.46p		3.95p		8.51p

Adjusted and diluted adjusted earnings per share have been presented to provide additional useful information. The adjusted earnings per share is the performance measure used for the vesting of employee share options and performance shares. The only difference between the adjusting items in this note and the figures in note 3 is the tax effect of those adjusting items.

NOTES TO THE INTERIM ACCOUNTS

FOR THE SIX MONTHS ENDED 31 JANUARY 2009

8) ACQUISITIONS

1. On 1 September 2008 Bite Communications Limited (a wholly owned subsidiary of the Company) acquired the business and certain assets of AimPR Public Relations AB, a company based in Stockholm, Sweden. This business was integrated into Bite’s existing Swedish operation. The Company acquired 100% of the voting equity instruments for a consideration of SEK990,000 (£83,000), with further consideration of SEK574,000 (£48,000) payable based on revenue of retained clients in the first six months, and an estimated SEK632,000 (£53,000) payable based on revenue of retained clients over the 12 months following completion.

The Company acquired SEK22,000 (£2,000) of office equipment, with the remaining consideration used to fund the purchase of the benefit of contracts valued at SEK2,174,000 (£182,000).

Intangibles of SEK2,222,000 (£186,000) have been capitalised including SEK48,000 (£4,000) of legal and professional fees, and will be amortised over its useful economic life of 5 years.

2. On 27 October 2008, the Group paid £1,145,000 relating to the deferred consideration for the purchase on 4 April 2008 of a 10.55% stake in Panther Communications Group Limited (‘Panther’), the parent company of Lexis Public Relations Limited (‘Lexis’).

Also, on 27 October 2008, the Group acquired the remaining 12.85% stake in Panther, the parent company of Lexis. The stake was acquired for a total consideration of £1,771,000, of which £1,328,000 was satisfied in cash and £443,000 in shares (1,098,591 shares), taking the Group’s total stake to 100%.

3. On 3 November 2008, the Group paid US$3,023,000 (£1,843,000) relating to the deferred consideration for the purchase of OutCast Communications Corporation (‘OutCast’). OutCast is a wholly owned subsidiary acquired in June 2005.