Interim Results

RNS Number : 2052I
Microgen PLC
23 July 2012
 



23 July 2012

 

MICROGEN plc ('Microgen' or 'Group')

INTERIM RESULTS FOR THE SIX MONTHS ENDED

30 JUNE 2012

 

Microgen, the software and services provider to the global financial services, digital media and commercial sectors, reports unaudited results for the six months ended 30 June 2012.

 

Highlights

 

·     The Board is pleased to report a very satisfactory performance in difficult market conditions with results in line with first half market expectations.  Current economic climate is impacting consultancy deployment and extending new business sales cycles

 

·     Revenue of £17.0 million (H1, 2011: £19.0 million) with underlying growth in higher margin recurring revenue

 

·     Operating profit of £4.4 million (H1, 2011: £4.5 million) demonstrates resilience of the Group's business model

 

·     Microgen Aptitude Version 4 launched including 3D Navigator

 

·     Basic EPS 4.2 pence (H1, 2011: 4.2 pence)

 

·     Strong balance sheet with net funds at 30 June 2012 of £27.1 million (H1, 2011: £25.2 million) after returning £6.8 million of cash to shareholders in the last twelve months

 

·     Interim dividend of 1.1 pence per share (2011: 1.1 pence per share)

 

 

 

Contacts

Martyn Ratcliffe, Chairman                                                       020-7496-8100

David Sherriff, Chief Executive Officer

Philip Wood, Group Finance Director

 

James Melville-Ross / Clare Thomas, FTI Consulting    020-7831-3113

 

 



 

MICROGEN plc ('Microgen' or 'Group')

Interim Results for the six months ended

30 June 2012

 

 

Microgen reports revenue and profits in line with market expectations for the six months ended 30 June 2012.  The macro-economic environment continues to be challenging, particularly in the banking sector, resulting in the deferment of purchasing decisions.  Microgen's high performance technology, particularly Microgen Aptitude and Microgen Accounting Hub, continue to be recognised for their market leading capability but converting preferred supplier status into contracted business is protracted. Despite the current climate, Microgen has delivered a very satisfactory performance.

 

Group Financial Performance

 

In the six months ended 30 June 2012, Group revenue was £17.0 million (H1, 2011: £19.0 million) with operating profit of £4.4 million (H1, 2011:  £4.5 million).  Basic earnings per share for the six months ended 30 June 2012 was 4.2 pence (H1, 2011: 4.2 pence).  The Board has continued to determine that all internal research and development costs incurred in the period are expensed.

 

Cash generated from operations in the six months ended 30 June 2012 was £2.9 million (H1, 2011: £4.4 million) following strong cash collections at the year end and seasonal payments in the first half of 2012.   The Group continues to have a strong balance sheet with net funds of £27.1 million at 30 June 2012 (30 June 2011: £25.2 million) after returning £6.8 million to shareholders in the last twelve months via ordinary and special dividends. 

 

The interim dividend is maintained at 1.1 pence per share (2011: 1.1 pence per share).  The dividend will be paid on 24 August 2012 to shareholders on the register as at 3 August 2012.

 

Microgen Aptitude Solutions Division ("MASD")

 

MASD provides enterprise level application products and solutions to some of the world's largest financial institutions and digital media organisations, where the customers require very high speed processing of large volumes of complex, business-event driven transactions.

 

MASD revenue was £9.0 million (H1, 2011: £10.8 million) of which approximately 40% is now recurring (H1, 2011: 25%).  MASD operating profit was £1.8 million (H1, 2011 : £2.0 million), representing an operating margin of 19.5% (H1, 2011: 19.0%).

 

During the first six months of the year a number of client licences have been extended as their use of Microgen's software has increased, in either functional, geographic or transaction volume terms.  This has contributed to the 33% increase in the division's recurring revenue to £3.6 million (H1, 2011: £2.7 million).  Nevertheless, as noted at the time of the final results for 2011, budgetary pressures pursuant to the current economic climate have led to reductions in the number of consultants deployed on projects.  In addition, whilst Microgen Aptitude and Microgen Accounting Hub have been selected as the preferred vendor solution in a number of new business sales opportunities, it is apparent that the final sales stages are extending and as such the Board's expectations for 2012 are dependent upon a number of sales opportunities closing in the second half of the year.

 

MASD has continued to invest in Microgen Aptitude and recently announced the results of performance tests at a third party test facility which demonstrated that Microgen Aptitude, the Enterprise Application Platform, has achieved 7 billion transactions per hour performing in-memory processing.  Further tests, involving database to database processing, resulted in Microgen Aptitude achieving over 800 million transactions per hour.  This performance confirms Microgen Aptitude's leadership in delivering the high transaction-processing performance required in addressing the challenges of "Big Data".  Furthermore, at the end of June, Version 4 of Microgen Aptitude was launched together with a new 3D Navigator module.  This new module, together with the additional functionality provided within Version 4 of Microgen Aptitude, further strengthen the product's market leading combination of functionality and transaction-processing performance. 

 

Financial Systems Division ("FSD")

 

The Microgen Financial Systems Division operates in more mature sectors of the financial services software market.  FSD combines proven, established applications with domain knowledge and expertise to deliver back office processing software and solutions in the Wealth Management, Banking and Asset Management sectors.

 

Reflecting the market maturity, revenue in FSD for the period ended 30 June 2012 was £8.0 million (H1, 2011: £8.3 million) of which 80% is recurring revenue.  As a result of the Division's significant levels of high margin recurring revenue, FSD has maintained high operating margins at 50% (H1, 2011: 46%).

 

Whilst the Division continues to review the viability of a number of its smaller product categories, the Group's strong balance sheet affords the Division the capability to evaluate add-on acquisitions in financial back office processing to complement its current market offerings, should appropriate opportunities arise.

 

Statement on Principal Risks and Uncertainties

 

Pursuant to the requirements of the Disclosure and Transparency Rules the Group provides the following information on its principal risks and uncertainties.  The Group considers strategic, operational and financial risks and identifies actions to mitigate those risks.  These risk profiles are updated at least annually.  The principal risks and uncertainties detailed within the Group's 2011 Annual Report remain applicable for the final six months of the financial year.  The Group's 2011 Annual Report is available from the Microgen website : www.microgen.com.

 

Related party transactions during the period are disclosed in Note 14.

  

Prospects

 

The selection of Microgen Aptitude and Microgen Accounting Hub as the preferred vendor solution in a number of sales opportunities demonstrates the market leading capability of Microgen's technology.  New business sales cycles have, however, been extended due to the effects of the macro-economic environment, particularly within the financial services sector to which Microgen has a material exposure.  Whilst the Board's expectations for 2012 are dependent upon a number of sales opportunities closing in the second half of the year the Group's strong balance sheet, high level of recurring revenue and conservative operational approach provides resilience against the full effects of the market conditions. 

 

 


 

 

INTERIM CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2012



Unaudited six months ended 30 Jun 2012


Unaudited six months ended 30 Jun 2011

 


Audited year ended 31 Dec 2011


Note

Before

intangible

amortisation


Intangible

amortisation


Total


Before

intangible

amortisation


Intangible

amortisation


Total


Before

intangible

amortisation


Intangible

amortisation


Total



£000


£000


£000


£000


£000


£000


£000


£000


£000

Revenue

5

17,049


-


17,049


19,014


-


19,014


38,776


-


38,776

Operating costs


(12,614)


(59)


(12,673)


(14,438)


(58)


(14,496)


(29,177)


(117)


(29,294)

Operating profit

5

4,435


(59)


4,376


4,576


(58)


4,518


9,599


(117)


9,482

Finance income


97


-


97


97


-


97


258


-


258

Finance costs


-


-


-


(40)


-


(40)


(142)


-


(142)

Profit before income tax


4,532


(59)


4,473


4,633


(58)


4,575


9,715


(117)


9,598

Income tax expense

6





(1,074)






(1,144)






(2,348)

Profit for the period






3,399






3,431






7,250




















Earnings per share



















Basic

7





4.2p






4.2p






8.9p

Diluted

7





4.1p






4.0p






8.7p
























pence per share


£000




pence per share


£000




pence per share


£000

Dividends



















Paid dividend per share

9



2.2p


1,794




2.1p


1,701




3.2p


2,575

Proposed dividend per share

9



1.1p


898




1.1p


892




2.2p


1,794

 

Special Dividend



















Paid dividend per share




-


-




-


-




5.0p


4,070

 

All results derive from continuing operations.

 


INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2012

 

 

 

Unaudited

six months

ended

 

Unaudited

six months

ended

 

Audited

year

ended

 

 

30 Jun

 2012

 

30 Jun 2011

31 Dec 2011

 

 

£000

 

£000

£000

 

 

 

 

 

 

Profit for the period

 

3,399

 

3,431

7,250

Other comprehensive income

 

 

 

 

 

Cash flow hedges, net of tax

 

198

 

70

(367)

Currency translation difference

 

(21)

 

41

(142)

Other comprehensive income for the period, net of tax

 

177

 

111

(509)

Total comprehensive income for the period

 

3,576

 

3,542

 

6,741

 

 

 



INTERIM CONSOLIDATED BALANCE SHEET

As at 30 June 2012

 

Note

Unaudited

as at

30 Jun 2012

 

Unaudited

as at

30 Jun 2011

 

Audited

as at

31 Dec 2011

ASSETS

 

£000

 

£000

 

£000

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

10

5,451

 

5,512

 

5,521

Goodwill

 

41,774

 

41,774

 

41,774

Intangible assets

10

59

 

177

 

118

Deferred income tax asset

 

1,311

 

1,384

 

1,324

 

 

48,595

 

48,847

 

48,737

Current assets

 

 

 

 

 

 

Trade and other receivables

 

4,975

 

6,461

 

5,611

Financial assets - derivative financial instruments

 

-

 

56

 

-

Cash and cash equivalents

 

27,125

 

26,866

 

26,971

 

 

32,100

 

33,383

 

32,582

Total assets

 

80,695

 

82,230

 

81,319

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 - borrowings associated with property

11

-

 

(370)

 

-

 - derivative financial instruments

 

(156)

 

(40)

 

(353)

Trade and other payables

 

(17,441)

 

(18,330)

 

(19,981)

Current income tax liabilities

 

(1,015)

 

(842)

 

(768)

Provisions for other liabilities and charges

12

(107)

 

-

 

(107)

 

 

(18,719)

 

(19,582)

 

(21,209)

Net current assets

 

13,381

 

13,801

 

11,373

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 - borrowings associated with property

11

-

 

(1,297)

 

-

Provisions for other liabilities and charges

12

(134)

 

(151)

 

(135)

 

 

(134)

 

(1,448)

 

(135)

NET ASSETS

 

61,842

 

61,200

 

59,975

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Share capital

13

4,083

 

4,055

 

4,069

Share premium account

13

11,876

 

11,693

 

11,842

Capital redemption reserve

 

1,146

 

1,146

 

1,146

Other reserves

 

36,817

 

37,136

 

36,619

Retained earnings

 

7,920

 

7,170

 

6,299

TOTAL EQUITY

 

61,842

 

61,200

 

59,975

 

 

 

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2012

 

 

 

 


Share Capital

Share

premium

Retained

earnings

Capital

Redemption

Reserve

Other

reserves

Total



£000

£000

£000

£000

£000

£000









At 1 January 2012


4,069

11,842

6,299

1,146

36,619

59,975

Comprehensive income








Profit for the period


-

-

3,399

-

-

3,399

Cash flow hedges

- net fair value gains net of tax


-

-

-

-

198

198

Exchange rate adjustments


-

-

(21)

-

-

(21)

Total comprehensive income


-

-

3,378

-

198

3,576

Proceeds from shares issued


14

34

-

-

-

48

Value of employee service


-

-

37

-

-

37

Dividends paid


-

-

(1,794)

-

-

(1,794)

Total Contributions by and distributions to owners of the company recognised directly into equity


14

34

(1,757)

-

-

(1,709)

At 30 June 2012 (unaudited)


4,083

11,876

7,920

1,146

36,817

61,842









 

 



Share Capital

Share

premium

Retained

earnings

Capital

Redemption

Reserve

Other

reserves

Total



£000

£000

£000

£000

£000

£000









At 1 January 2011


4,041

11,531

5,354

1,146

37,066

59,138

Comprehensive income








Profit for the period


-

-

3,431

-

-

3,431

Cash flow hedges

- net fair value gains net of tax


-

-

-

-

70

70

Exchange rate adjustments


-

-

41

-

-

41

Total comprehensive income


-

-

3,472

-

70

3,542

Proceeds from shares issued


14

162

-

-

-

176

Value of employee service


-

-

45

-

-

45

Dividends paid


-

-

(1,701)

-

-

(1,701)

Total Contributions by and distributions to owners of the company recognised directly into equity


14

162

(1,656)

-

-

(1,480)

At 30 June 2011 (unaudited)


4,055

11,693

7,170

1,146

37,136

61,200

 



INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2012

 

 

 

Unaudited

as at

30 Jun 2012

 

Unaudited

as at

30 Jun 2011

 

Audited

as at

31 Dec 2011

 

Note

£000

 

£000

 

£000

Cash flows from operating activities

 

 

 

 

 

 

Cash generated from operations

8

2,901

 

4,448

 

12,542

Interest paid

 

-

 

(40)

 

(156)

Income tax paid

 

(827)

 

(691)

 

(1,758)

Net cash generated from operating activities

 

2,074

 

3,717

 

10,628

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

10

(267)

 

(685)

 

(1,171)

Interest received

 

97

 

97

 

186

Net cash used in  investing activities

 

(170)

 

(588)

 

(985)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Net proceeds from issue of ordinary share capital

13

48

 

176

 

395

Dividends paid

9

(1,794)

 

(1,701)

 

(6,645)

Repayment of mortgage

11

-

 

(185)

 

(1,852)

Net cash used in financing activities

 

(1,746)

 

(1,710)

 

(8,102)

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

158

 

1,419

 

1,541

 

 

 

 

 

 

 

Opening cash and cash equivalents

 

26,971

 

25,412

 

25,412

Effects of exchange rate changes

 

(4)

 

35

 

18

Closing cash and cash equivalents

 

27,125

 

26,866

 

26,971

 

 



 NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

 

 

1.         General information

 

Microgen plc (the 'Company') and its subsidiaries (together, the 'Group') provide software and services to the global financial services, digital media and commercial sectors.

 

The Company is a public limited company incorporated and domiciled in England and Wales with a primary listing on the London Stock Exchange. The address of its registered office is Old Change House, 128 Queen Victoria Street, London, England, EC4V 4BJ.

 

These condensed consolidated interim financial statements were approved for issue on 20 July 2012.

 

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2011 were approved by the Board of directors on 24 February 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

 

These condensed consolidated interim financial statements have been reviewed, not audited.

 

2.         Basis of preparation

 

These condensed consolidated interim financial statements for the six months ended 30 June 2012 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34, 'Interim financial reporting' as adopted by the European Union. These condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2011, which have been prepared in accordance with IFRSs as adopted by the European Union.

 

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its condensed consolidated interim financial statements.

 

3.         Accounting policies

 

The accounting policies adopted are consistent with those of the previous financial statements, except as described below.

 

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profits.

 

New and amended standards and interpretations need to be adopted in the first interim financial statements issued after their effective date. There are no new IFRSs or IFRICs that are effective for the first time for this interim period that would be expected to have a material impact on the group.


4.         Estimates

 

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

 

In preparing these condensed interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2011, with the exception of changes in estimates that are required in determining the provision for income taxes.

 

5.         Segmental information

 

The Board of Microgen plc has been identified as the chief operating decision-maker of Microgen. Management has determined the operating segments of the group based on the reports provided to the Board of Microgen plc.

 

 

Unaudited six months ended 30 Jun 2012

 

 

 

Microgen

Aptitude

Solutions

 

Financial

Systems

 

Total

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Revenue

 

9,038

 

8,011

 

17,049

Operating costs before group overheads

 

(7,277)

 

(3,980)

 

(11,257)

 

 

 

 

 

 

 

Operating profit before group overheads

 

1,761

 

4,031

 

5,792

 

 

 

 

 

 

 

Group overheads

 

 

 

 

 

(1,357)

 

 

 

 

 

 

 

Operating profit before intangible amortisation

 

 

 

 

 

4,435

 

 

 

 

 

 

 

Divisional intangible amortisation

 

-

 

(59)

 

(59)

 

 

 

 

 

 

 

Divisional operating profit

 

1,761

 

3,972

 

 

 

 

 

 

 

 

 

Operating profit

 

 

 

 

 

4,376

 

 

 

 

 

 

 

Finance income

 

 

 

 

 

97

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

 

4,473

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

(1,074)

 

 

 

 

 

 

 

Profit for the period

 

 

 

 

 

3,399








 

 

 

Unaudited six months ended 30 Jun 2011

 

 

 

 

Microgen

Aptitude

Solutions

 

Financial

Systems

 

Total

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Revenue

 

10,763

 

8,251

 

19,014

Operating costs before group

overheads

 

(8,719)

 

(4,410)

 

(13,129)

 

 

 

 

 

 

 

Operating profit before group overheads

 

2,044

 

3,841

 

5,885

 

 

 

 

 

 

 

Group overheads

 

 

 

 

 

(1,309)

 

 

 

 

 

 

 

Operating profit before

intangible amortisation

 

 

 

 

 

4,576

 

 

 

 

 

 

 

Divisional intangible amortisation

 

-

 

(58)

 

(58)

 

 

 

 

 

 

 

Divisional operating profit

 

2,044

 

3,783

 

 

 

 

 

 

 

 

 

Operating profit

 

 

 

 

 

4,518

 

 

 

 

 

 

 

Net finance income

 

 

 

 

 

57

 

 

 

 

 

 

 

Profit before tax

 

 

 

 

 

4,575

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

(1,144)

 

 

 

 

 

 

 

Profit for the period

 

 

 

 

 

3,431

 

 

 

Audited year ended 31 Dec 2011

 

 

 

Microgen

Aptitude

Solutions

 

Financial

Systems

 

Total

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Revenue

 

21,799

 

16,977

 

38,776

Operating costs before group overhead

 

(17,590)

 

(8,983)

 

(26,573)

 

 

 

 

 

 

 

Operating profit before group overheads

 

4,209

 

7,994

 

12,203

 

 

 

 

 

 

 

Group overheads

 

 

 

 

 

(2,604)

 

 

 

 

 

 

 

Operating profit before intangible amortisation

 

 

 

 

 

9,599

 

 

 

 

 

 

 

Divisional  intangible amortisation

 

-

 

(117)

 

(117)

 

 

 

 

 

 

 

Divisional operating profit

 

4,209

 

7,877

 

 

 

 

 

 

 

 

 

Operating profit

 

 

 

 

 

9,482

 

 

 

 

 

 

 

Net finance income

 

 

 

 

 

116

 

 

 

 

 

 

 

Profit before income tax

 

 

 

 

 

9,598

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 (2,348)

 

 

 

 

 

 

 

Profit for the year

 

 

 

 

 

7,250

 

 

 

6.         Income taxes

 

Income tax expense is recognised based on management's estimate of the weighted average income tax rate expected for the full financial year of 24% (the estimated tax rate for the six months ended 30 June 2011 was 25%).

 

7.         Earnings per share

 

 

 

Unaudited

six months

ended

30 Jun 2012

 

Unaudited

six months

ended

30 Jun 2011

 

Audited

year ended

31 Dec

2011

 

 

pence

 

pence

 

Pence

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Basic

 

4.2

 

4.2

 

8.9

 

 

 

 

 

 

 

Diluted

 

4.1

 

4.0

 

8.7

 

 

 

 

 

 

 

Adjusted earnings per share

 

 

 

 

 

 

Basic

 

4.2

 

4.2

 

8.6

 

 

 

 

 

 

 

Diluted

 

4.1

 

4.0

 

8.4

 

To provide an indication of the underlying operating performance the adjusted earnings per share calculation above excludes intangible amortisation, exceptional items and has a tax charge based on the effective rate.

 

 

 

 

Unaudited

six months

ended

30 Jun 2012

 

Unaudited

six months

ended

30 Jun 2011

 

Audited

year ended

31 Dec

 2011

 

 

pence

 

pence

 

pence

 

 

 

 

 

 

 

Basic earnings per share

 

4.2

 

4.2

 

8.9

Prior years' tax charge

 

-

 

-

 

(0.1)

Intangible amortisation net of tax

 

0.1

 

0.1

 

0.1

Tax losses recognised

 

(0.1)

 

(0.1)

 

(0.3)

 

 

 

 

 

 

 

Adjusted earnings per share

 

4.2

 

4.2

 

8.6

 

 

8.         Cash generated from operations

 

 

 

Unaudited

six months

ended

30 Jun 2012

 

Unaudited

six months

ended

30 Jun 2011

 

Audited

year ended

31 Dec

2011

 

 

£000

 

£000

 

£000

 

 

 

 

 

 

 

Profit before tax

 

4,473

 

4,575

 

9,598

Adjusted for:

 

 

 

 

 

 

Depreciation

 

337

 

330

 

739

Amortisation of intangible assets

 

59

 

58

 

117

Share-based payment expense

 

34

 

45

 

115

Finance income

 

(97)

 

(97)

 

(258)

Finance costs

 

-

 

40

 

142

 

 

 

 

 

 

 

Changes in working capital:

 

 

 

 

 

 

Decrease/ (increase) in receivables

 

636

 

(490)

 

360

(Decrease)/ increase in payables

 

(2,540)

 

125

 

1,776

(Decrease) in provisions

 

(1)

 

(138)

 

(47)

 

 

 

 

 

 

 

Cash generated from operations

 

2,901

 

4,448

 

12,542

 

 

9.         Dividends

 

The interim dividend of 1.1 pence per share (2011: 1.1 pence per share) was approved by the Board on 20 July 2012. It is payable on 24 August 2012 to shareholders on the register at 3 August 2012. 

 

This interim dividend, amounting to £898,000 (2011: £892,000), has not been included as a liability in this interim financial information.  It will be recognised in shareholders' equity in the year to 31 December 2012.

 

The final dividend that relates to the period to 31 December 2011 amounting to £1,794,000 was paid in May 2012 (2011: £1,701,000).

  

10.       Property, plant and equipment and intangible assets

 

Six months ended 30 June 2012

Tangible

assets

 

Intangible

assets

 

£000

 

£000

Opening net book amount 1 January 2012

5,521

 

118

Additions

267

 

-

Depreciation and amortisation

(337)

 

(59)

Closing net book amount 30 June 2012 (unaudited)

5,451

 

59

 

Six months ended 30 June 2011

Tangible

assets

 

Intangible

Assets

 

£000

 

£000

Opening net book amount 1 January 2011

5,157

 

235

Additions

685

 

-

Depreciation and amortisation

(330)

 

(58)

Closing net book amount 30 June 2011 (unaudited)

5,512

 

177

 

The group have placed contracts for £10,000 of future capital expenditure which has not been provided for in the financial statements.

 

11.       Borrowings and loans

 

 

Unaudited

six months

ended

30 Jun 2012

 

Unaudited

six months

ended

30 Jun 2011

 

Audited

year ended

31 Dec 2011

 

£000

 

£000

 

£000

 

 

 

 

 

 

Non-current

-

 

1,297

 

-

Current

-

 

370

 

-

 

-

 

1,667

 

-

 

 

 

 

 

 

The bank loan was repaid in full on 29 September 2011.

 

 

 

 

 

 

Six months ended 30 June 2011

 

 

 

 

£000

Opening amount as at 1 January 2011

 

 

 

 

1,852

Repayments of borrowings

 

 

 

 

(185)

Closing amount as at 30 June 2011

 

 

 

 

1,667

 

12.       Provisions for other liabilities and charges

 

 

 

Unaudited

six months

ended

30 Jun 2012

 

Unaudited

six months

ended

30 Jun 2011

 

 

£000

 

£000

 

 

 

 

 

Property provision

 

 

 

 

 

 

 

 

 

At 1 January

 

242

 

289

Utilised

 

-

 

(71)

(Credited) to income statement

 

-

 

(67)

Foreign exchange

 

(1)

 

-

 

 

 

 

 

At 30 June

 

241

 

151

 

13.       Share capital

 

Six months ended 30 June 2012

Number of shares  (thousands)

Ordinary shares

£000

Share premium

£000

Total

£000

Opening balance as at 1 January 2012

81,396

4,069

11,842

15,911

Proceeds from shares issued - employee share option scheme

283

14

34

48

Closing balance as at 30 June 2012

81,679

4,083

11,876

15,959

 

 

 

 

 

Six months ended 30 June 2011

Number of shares  (thousands)

Ordinary shares

£000

Share premium

£000

Total

£000

Opening balance as at 1 January 2011

80,839

4,041

11,531

15,572

Proceeds from shares issued - employee share option scheme

281

14

162

176

Closing balance as at 30 June 2011

81,120

4,055

11,693

15,748

 

 

Employee share option scheme: options exercised during the six month period ended 30 June 2012 resulted in 282,701 shares being issued (30 June 2011: 281,336), with exercise proceeds of £48,000 (30 June 2011: £176,000). The related weighted average share price at the time of exercise was £1.43 (30 June 2011: £1.39) per share.

 

14.       Related party transactions

 

Microgen's Chairman, Mr Ratcliffe is also the chairman of RM plc. RM Education plc, a subsidiary of RM plc, engaged a subsidiary of Microgen plc to provide software and services. During the six month period ended 30 June 2012, the amounts invoiced were £258,000 (2011: £nil). Furthermore, RM Education plc has entered into a contract with the Group to utilise Microgen's software and services for RM Books, with some of the fees based on future transaction volumes.

 

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. There were no other related party transactions during the six month period ended 30 June 2012 (30 June 2011: nil), as defined by International Accounting Standard No 24 'Related Party Disclosures' except for key management compensation.

 

The related party transactions for the year ended  31 December 2011 as defined by International Accounting Standard No 24 'Related Party Disclosures' are disclosed in note 28 of the Microgen plc Annual Report for the year ended 31 December 2011.

 

15.       Statement of directors' responsibilities

 

The directors' confirm that this consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union, and that the half yearly management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 

-     an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and 

 

-     material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

 

The directors of Microgen plc are listed in the Microgen plc Annual Report for 31 December 2011, with the exception of Mr P Davies and Mr R Kanter, who both retired on 24 April 2012.  A list of current directors is maintained on the Microgen plc website: www.microgen.com

 

Copies of this statement are being posted to shareholders and will also be available on the investor relations page of our website (www.microgen.com).  Further copies are available from the Company Secretary at Old Change House, 128 Queen Victoria Street, London, EC4V 4BJ.

 

 

By order of the Board

 

 

           

 

 

P Wood

 

20 July 2012

 

Group Finance Director

 

 

 

 

 

Independent review report to Microgen plc

 

Introduction

 

We have been engaged by the company to review the condensed consolidated interim financial statements in the interim financial report for the six months ended 30 June 2012, which comprises the Interim consolidated income statement, Interim consolidated statement of comprehensive income, Interim consolidated balance sheet, Interim consolidated statement of changes in equity, Interim consolidated statement of cash flows, comparative figures and related notes. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial information.

Directors' responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our responsibility

 

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

 

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.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 

 

 

PricewaterhouseCoopers LLP
Chartered Accountants

London
20 July 2012

 

Notes

1)      The maintenance and integrity of the Microgen plc's website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

2)      Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 


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