Interim Results
Anite Group PLC
11 December 2002
Wednesday, 11 December 2002
ANITE GROUP PLC ('ANITE')
Interim results for the six months ended 31 October 2002
Anite Group plc, the worldwide IT solutions and services company,
today announces its interim results for the six months ended 31
October 2002. The highlights are:
Highlights:
> Profit before tax* £8.9m (2001: £14.3m), after impact of
increased R&D and restructuring costs
> Adjusted basic earnings per share* 2.1p (2001: 3.9p), in
part reflecting 14.7% increase in shares in issue
> Impairment review resulted in £39.1m write off of goodwill,
leading to a net retained loss of £45.3m and basic and diluted
losses per share of 14.0p
> Turnover of continuing businesses up 20% to £111.5m
> Strong cash generation and interest cover of 8.9 times - the
Group is operating comfortably within its banking facilities
> Divisional performance before Group central costs
(divisional performance is now stated before central costs of
£1.8m) and interest (£1.1m) was as follows:
Public Sector turnover £36.4m, operating profits £1.2m, margin 3.3%
Travel turnover £16.2m, operating profits £3.3m, margin 20.3%
Telecoms turnover £21.3m, operating profits £4.1m, margin 19.2%
Consultancy turnover £37.6m, operating profits £3.2m, margin 8.5%
> All acquisitions have been successfully integrated, with
only one acquisition completed in the current financial year (CME
in June); none are currently expected in second half
> 78% of earnout obligations renegotiated; negotiations are
close to completion for the balance
> Strong Group order intake of £114m with Public Sector up
47%; order intake to revenue ratio of 1.2 in Public Sector, 0.8
in Travel, 0.9 in Telecoms and 1.0 in Consultancy, respectively
*Continuing businesses before goodwill amortisation and
exceptional items, but after finance charges
Commenting on the results John Hawkins, Chief Executive, said:
'Overall, we are confident that, for the year as a whole, Anite
will perform in line with expectations, continuing to benefit
from its strong order book and its business and geographical
diversification against a background of tough trading conditions.
'Our strategy to focus on building strong market positions in our
chosen sectors means that the Group, following the actions taken
to renegotiate the earnout obligations, reduce costs and drive
synergy benefits from the integration of its recent acquisitions,
will be well placed to recover strongly in 2003/4.'
For further information please contact:
Anite Group plc www.anite.com
John Hawkins, Chief Executive On the day: 020 7950 2800
Neil Bass, Group Financial Controller Thereafter: 0118 945 0129
Weber Shandwick Square Mile
Reg Hoare/Laurence Read 020 7950 2800
Interim results for the six months ended 31st October 2002
Chairman's Statement
Introduction
Anite is a worldwide IT solutions and services company. We focus
on providing mission critical, repeatable applications to the
public sector, travel, wireless telecoms and finance markets
worldwide. The Group employs around 2,400 staff primarily based
in the UK, France, Germany and the Netherlands, with
representation in nine other countries around the world.
For the six months ended 31 October 2002, I am pleased to report
a solid underlying first half performance against a background of
challenging market conditions and the impact of a number of one
off issues and items during the period. The Group's focus for the
period has been on managing its assets and good housekeeping, as
evidenced by strong cash generation, driving the synergies of the
businesses, successfully renegotiating the earnouts and reducing
costs.
Our strategy to grow Anite by organic investment and acquisitions
has positioned the Group with a business mix and geographical
diversification that should help to deliver above average margins
and growth when market conditions improve whilst ensuring that it
is capable of making good underlying progress even in difficult
times. Against the background of continued weak equity markets,
particularly for technology companies, we remain committed to our
strategy which we believe will deliver value to shareholders.
Results
Headline profits before tax on continuing businesses, before
goodwill amortisation and exceptional items but after finance
charges, held up well at £8.9m (2001: £14.3m). These profits
included the impact of a £2m increase in first half research and
development expenditure and £1.5m trading losses at Anite
Consulting Germany (formerly known as GMO - our SAP/ERP
business), as well as higher interest charges as a result of the
payment of earnouts. A reduced operating margin of 8.9% is based
on operating profits (before goodwill) of £10.0m (2001: £14.8m)
and also reflected the impact of the one off items referred to
above.
The reported post-tax loss after amortisation and exceptional
items of £45.3m (2001: £1.4m loss) reflects the review of
goodwill relating to past acquisitions that was undertaken in the
first half and which has resulted in an impairment charge of
£39.1m being included in these results. We also incurred the
severance payment of £0.75m and recruitment fees of £0.15m in
respect of the finance director. Adjusted basic earnings per
share (before goodwill amortisation and exceptional items) were
2.1p (2001: 3.9p), in part reflecting an increase of 14.7% in the
number of shares in issue.
Turnover growth of 20% has been achieved in the first half,
driven by strong order intake and by contributions from
acquisitions made last year. Public Sector, Telecoms and Travel
all grew their revenues, whilst Consultancy fell slightly. The
Group's order intake totalled £114m in the first half, which
should result in our projected annualised recurring revenues
increasing from 29% to 31% of total revenues, with an order
intake to revenue ratio of 1.2 in Public Sector, 0.8 in Travel,
0.9 in Telecoms and 1.0 in Consultancy, respectively. The
highlight in the first half was the recently announced £11m State
of Victoria contract won by Anite Public Sector which utilises
the skills of five of the Group's companies.
During the period, the Group completed just one small
acquisition, that of CME, which provides software solutions for
the police force, at a total cost including earnout of up to
£0.9m. All the acquisitions made in the last two years have been
successfully integrated, and no further acquisitions are
currently expected to be made in the second half.
The earnout obligations for Calculus, Carus, Didgicom, MSPS,
Parsec (partially), and Rox, representing 78% of the Group's
total potential earnout liabilities, have been successfully
renegotiated during the period; negotiations to crystallise the
remaining smaller earnouts are close to completion.
Strong first half cash generation has enabled the Group to keep
well within its banking facilities whilst paying out acquisition
and earnout commitments of £17.5m, with half year debt increasing
from £11.5m at 30 April 2002 to £17.1m at the half year,
representing gearing of 14.5% (30 April 2001: 6.4%). A similar
level of net debt is anticipated at the year-end after making
further estimated earnout payments of £11m. Interest cover was a
healthy 8.9 times.
During the first half there has been a headcount reduction of 30,
principally in Anite Consulting Germany (GMO) and the Travel
division, giving annualised savings of approximately £1m. In the
second half we have made a further headcount reduction of 70,
principally within Public Sector, which is expected to give
annualised savings of approximately £3m at a cost of £1.5m-£2.0m
The Board
The recruitment of a new finance director is progressing well
with a shortlist drawn up and interviewed and we expect to be in
a position to announce an appointment early in the New Year. In
the period under review, the finance director's role has been
ably handled by other members of our finance team, both at head
office and in the divisions. On behalf of the board, shareholders
and staff, I would like to thank Simon Hunt, who resigned in the
period under review, for his significant contribution and
dedication to the Group's transformation and success since his
appointment in 1996.
Shareholders may be aware that it is the Group's policy that one
third of the board should be re-appointed every year and in any
event each director must retire at the third AGM following their
appointment or re-appointment.
Dividend policy
The Board has consistently stated that rather than pay dividends,
its free cash flow should be reinvested in the business to
deliver the Group's core strategy, and in the short term this is
ensuring the Group is not exposed to higher gearing whilst it
makes significant earnout payments. In the longer term, and
given the likelihood of strong free cash flows in coming years,
it may be appropriate to review this policy.
Chief Executive's operating review
Strategy
Our strategic objective is to establish a worldwide IT solutions
and services group which is centred on the telecoms, finance,
public sector and travel markets and to establish global
repeatable software solutions in three of these areas: public
sector, telecoms and travel. We will achieve this by a
combination of organic investment in our people and products and
selective acquisitions of businesses that broaden our product
portfolio, client and geographical reach. The estimated
investment in our core applications amounts to between £150m-
£200m.
This strategy helps to create a balance between long-term
recurring revenues from managed services' and maintenance of
solutions' contracts and shorter-term revenues from an order book
generated by our consultancy activities. Unlike a pure
consultancy business, this strategy should enable us to increase
our revenues and profits without necessarily increasing the
number of people we engage.
Our management philosophy is to encourage strong decentralised
management that focuses on achieving enterprise value growth and
profit growth in their respective businesses whilst creating
businesses that are dedicated to their target markets.
Anite Public Sector
Anite Public Sector (APS) continued to grow strongly with revenue
up 54% at £36.4m, and order intake at £43.5m, up 47% on the first
half of last year. Operating profits at £1.2m (2001: £2.8m)
were, as expected, impacted by increased spending on R&D and pre-
sales costs incurred on the State of Victoria contract. Order
intake to revenue ratio improved to 1.2 compared to 1.1 last
year.
Public Sector is now our largest business, currently with around
800 staff in the UK, built up through organic investment and
acquisition. All the acquisitions have now been integrated into
one organisational structure with three divisions focused on
local and regional government; central government; and Scotland.
The integration has given us the opportunity to remove duplicated
activities without impacting the division's capacity to exploit
growth, and we have therefore instigated a further headcount
reduction of 70 employees in the second half, equating to
approximately 9% of APS's workforce, providing annualised savings
of approximately £3m.
As part of this reorganisation, we have strengthened the
division's management. John Gibson, who joined us from Bull
Information Systems Limited where he was chief executive, has
been appointed managing director of APS. Management's focus is on
driving the benefits from our recent acquisitions - and
particularly to sell more of those acquisitions' capabilities
into our existing customers - and to work with other Anite
divisions to develop new offers - notably in managed services.
In the first half APS has had many notable successes in its main
areas of operations:
Revenues and Benefits - first half contracts include Sefton
M.B.C. and West Lindsey D.C. with over 25 authorities having now
selected Pericles, which has been the main focus of much of our
recent R&D. We are well placed for several other procurements in
the second half, having already been awarded preferred supplier
status.
Social Care - our offerings continued to perform strongly, with
Tameside Borough Council, London Borough of Barking and Dagenham
and Knowsley M.B.C. amongst those committing to our SWIFT system
and services.
Document Management - at the corporate level our system is
proving an increasingly attractive proposition for public
authorities. APS with its Anite@Work product and DOCS@on-line
offer has secured contract wins including Gloucester City
Council, South Cambridgeshire and Manchester City.
Housing - the successful signing of the State of Victoria
contract concluded an encouraging half-year for APS in the
housing arena, endorsing our R&D investments in these software
products. Windsor and Maidenhead Royal Borough Council joined
our expanding list of housing system customers and we were
appointed preferred housing system supplier in a number of other
procurements during the half. An excellent order for the future
was that received from South Somerset - our first significant
Housing Association win.
Central government, police and defence - driven in many cases by
the e.government targets - these markets present good
opportunities for APS domain knowledge, products and skills. APS
secured recommendations, preferred supplier status and contracts
for a number of projects including choice-based lettings;
developing a multi-agency intranet for emergency and disaster
response; extending e.services to older people; and the
development of an extranet for a consortium of 4 London boroughs.
This latter project, which will contract shortly, represents a
£2.7m 3-year contract and will produce a single point of access
for public services and community information.
Travel
Anite Travel's strategic focus is to provide managed services and
solutions to the European tour operating, ferry and cruise
marketplace. The division has continued to make good progress
following the acquisition and integration of FSS (previously a
competitor, which was acquired in December 2001), despite tough
market conditions. Half year operating profits were 50% up
at £3.3m (2001: £2.2m) on sales 37.3% higher at £16.2m (2001:
£11.8m).
In order to capitalise on Travel's strong market position and the
Group's strong Consultancy capabilities within Germany, Anite
Travel Systems Germany has been created thus directly
increasing the range and reach of the Travel division by offering
its products and services to the German tour operating market.
Our long-term managed services contract with MyTravel continues
to be implemented successfully and without interruption and the
customer in return continues to meet all its obligations to us.
The annualised value of this contract represents around 5% of the
revenues of the Travel division and the contract period is for 10
years from August 2001 with a 3 year break clause.
The high percentage of revenues derived from managed services,
applications management and support contracts provides good
forward visibility and a predictable revenue stream from Travel's
key customers. Its strong market position, and the cost savings
made in the first half, indicates that the division's prospects
remain good. However, discretionary spend from travel market
customers is proving less predictable because of the current
economic climate.
Telecoms
The Telecoms business has continued to grow its revenues in a
tough market. Sales were 18.3% up at £21.3m (2001: £18.0m) with
operating profits of £4.1m (2001: £5.8m). Although the core
wireless testing business grew its sales and profits, overall
divisional profitability was impacted by Anite Calculus which
made no contribution during the period compared to £1.9m (before
Group central costs) in the first half last year.
The core wireless testing business, which represents
approximately 93% of the Telecoms division's turnover, continues
to perform well in a difficult market. Its revenue and profits
increased by 32% and 6%, respectively, compared to the first half
of last year, reflecting higher 3G hardware costs, competition
and the weakening of the US dollar. Its order intake has
increased by 16% driven by a healthy prospect list for both
2/2.5G and 3G solutions, with a 55/45 split between the two
technologies. Performance in Europe, USA, Taiwan and Korea was
strong driven by continuing demand for its 2G solutions,
particularly for the new 850Mhz and EDGE variants, although Japan
is weak.
The overall divisional outlook is reasonable with a good prospect
list and the majority of profits expected to be derived from our
strong core wireless testing business.
Consultancy
The market for consultancy services remains challenging across
Europe with an over-supply of services and shortening contract
cycles, with particular pricing pressure in markets such as the
Netherlands and Germany, and as a result, we have rationalised
our German businesses by means of the closure of offices and a
reduction in staff. The Group's consultancy activities remained
profitable but operating profits fell to £3.2m (2001: £6.7m) and
we do not expect market conditions to change for the remainder of
this financial year. This result includes losses of £1.5m from
Anite Consulting Germany (GMO), which specialises in SAP/ERP
consultancy and which is no longer a core business, as a result
of which the board is considering its options for this activity.
The core of Anite's Consultancy division in the region, including
Anite Systems, Anite Deutschland, GMO-MC and Anite Austria,
together represent some 80% of the total reported turnover in
Austria and Germany and continue to perform satisfactorily.
Ian Tait has been appointed to the new role of head of European
and International Operations and is accelerating our plans to
focus our international consultancy based businesses in line with
our chosen business sectors, public sector, travel, telecoms and
finance, and to leverage opportunities provided by our strong
offering of applications developed by our core UK businesses. The
division continues to focus on utilisation levels, keeping
overheads low and diversifying the business as far as possible in
applications management and support contracts, whilst continuing
to benefit from:
> Applications and management support contracts in Germany
> An increase in public sector contracts won through the
German armed forces
> Over 100 of our consultants being linked to long-term
contracts with customers - resulting in a variable cost structure
> Strong margins and utilisation in our French and UK
consultancy base.
Examples of international consultancy work in our chosen industry
sectors include, in public sector, the successful signing of the
£11m State of Victoria contract, and our business with the
European Space Agency in Germany, which has performed well with
sales up 10% compared with the first half of 2001, and orders up
by 60%. Both finance and telecoms have also won new work in
Austria, whilst Parsec Systems has been particularly successful
growing its international and finance sector work.
Research and development and offshore development
Total research and development expenditure in the first half was
£5m (2001: £3m), largely focused on Public Sector and Telecoms.
A similar level of R&D is expected in the second half. Dati, a
Latvian based software development group which develops software
and provides services and for which we have an option to acquire,
has as expected been used on a number of projects in Public
Sector and other divisions. The benefits of this low cost
offshore development resource are that it enables us to continue
to invest in product development at a considerable saving and to
take advantage of new business opportunities.
Outlook
The divisional outlook for the remainder of the current financial
year can be summarised as follows:
> Public Sector - the outlook is excellent with orders up 47%
in the first half, an order intake to revenue ratio of 1.2 and
beneficial seasonal bias
> Telecoms - the outlook is reasonable with an order intake to
revenue ratio of 0.9, with performance expected to be driven by
its strong core wireless testing business
> Travel - the outlook is reasonable with an order intake to
revenue ratio of 0.8, continuing benefits from the FSS acquisition,
and a good proportion of managed services
> Consultancy - the outlook is uncertain with an order intake
to revenue ratio of 1.0, but following cost reductions, the
business is expected to maintain its current performance in the
absence of further market deterioration.
Overall, we are confident that, for the year as a whole, Anite
will perform in line with expectations, continuing to benefit
from its strong order book and its business and geographical
diversification against a background of tough trading conditions.
Our strategy to focus on building strong market positions in our
chosen sectors means that the Group, following the actions taken
to renegotiate the earnout obligations, reduce costs and drive
synergy benefits from the integration of its recent acquisitions,
will be well placed to recover strongly in 2003/4.
Finance Review
Cash flow and balance sheet
There has been strong cash generation and control of working
capital in the first half and the Group is operating comfortably
within its banking facilities. Net debt (including outstanding
loan notes) at the half-year end stood at £17.1m (30 April 2002:
£11.5m), after making £17.5m of acquisition and earnout payments.
A similar level of net debt is anticipated at the year-end after
paying a further estimated £11m in earnout payments. Gearing at
the half year end was 14.5% (30 April 2002: 6.4%).
Net debt included net bank borrowings of £2.8m, finance leases of
£1.7m and loan note obligations of £12.6m relating to earnouts.
During the first half, our average net borrowings were £10.4m
after deducting overseas cash balances and we expect strong
second half cash generation to reduce borrowings by the financial
year-end.
Group central costs
In order to provide a better analysis of divisional performance,
we are now stating divisional operating profits before Group
central costs. These costs include head office staff costs,
directors' remuneration, professional and office costs, but
exclude costs directly attributable to operations.
Earnouts
The earnout obligations for Calculus, Carus, Didgicom, MSPS,
Parsec (partially) and Rox together representing 78% of the
Group's total potential earnout liabilities, have been
successfully renegotiated; negotiations to crystallise the
remaining smaller earnouts are close to completion and the
forecast outstanding earnouts are as follows:
£m 2002/3 2003/4 2004/5 2005/6 Total
Shares Cash Shares Cash Shares Cash Shares Cash Shares Cash
--------------------------------------------------------------------------------------------------
Already paid/shares issued
- existing agreements 21.2 17.5 - - - - - - 21.2 17.5
Future earnout payments
- existing agreements 6.7 5.4 0.9 1.2 2.6 3.3 - - 10.2 9.9
- agreements being
renegotiated*
(Parsec, Anite.Net,ITS
& CME) 0.6 5.6 - 7.5 - 2.8 - 4.4 0.6 20.3
--------------------------------------------------------------------------------------------------
Total forecast earnouts 28.5 28.5 0.9 8.7 2.6 6.1 - 4.4 32.0 47.7
--------------------------------------------------------------------------------------------------
Forecast weighted average
number of shares in issue 334.6m 347.5m 351.7m
*current estimate of likely variation
Interest
Interest cost comprises:
£m 2002/3 2001/2
Net bank interest 0.8 0.2
Loan notes 0.2 -
Property interest 0.1 0.3
------------------------
1.1 0.5
------------------------
A broadly similar level of interest payable is expected in the
second half. Interest cover in the first half was 8.9 times.
Taxation
The Group tax rate in the first half was 24% (2001: 24.6%) and we
expect to be able to maintain this rate for the foreseeable
future.
Earnings per share
The number of shares in issue increased from 306,810,769 at the
year-end 30 April 2002 to 338,012,514 in this period. The
average number of shares in issue used to calculate earnings per
share was 324,569,718 (2001: 282,904,502), an increase of 14.7%.
Goodwill
Goodwill is capitalised based on the maximum potential cost of an
acquisition including earnout and is written off over a maximum
of 10 years. If earnouts below the maximum provided in the
relevant acquisition agreement are paid, the difference is
credited against goodwill.
In line with our practice of reviewing goodwill acquired with all
our past acquisitions every 6 months, we have included an
impairment charge of £39.1m in these interim results, principally
in respect of Anite Calculus (100% of investment impaired -
£29.6m), a supplier of billing solutions to the telecoms' market,
which we acquired in December 2000. Since acquisition, the
billing market has not performed as expected, and we have
decided, therefore, to impair the carrying value of the goodwill
acquired with this business.
As a result, the total goodwill carried on the balance sheet is
now £158.0m and we expect that the annualised goodwill
amortisation going forward will be approximately £21m.
Exceptional items
As previously indicated, these results include an exceptional
£0.75m cost relating to the departure of the outgoing finance
director together with £0.15m in respect of recruitment fees for
the new finance director.
11 December 2002
ANITE GROUP PLC
Consolidated profit and loss account
for the six months ended 31 October 2002
Before
goodwill Goodwill Unaudited Unaudited Audited
amortisation amortisation 6 months to 6 months to 12 months to
and exceptional and exceptional 31 October 31 October 30 April
items items 2002 2001 2002
£'000 £'000 £'000 £'000 £'000
Turnover
Existing operations 111,292 - 111,292 92,638 199,782
Acquisitions 249 - 249 - -
--------------------------------------------------------------------------------------------------
Continuing operations 111,541 - 111,541 92,638 199,782
Discontinued - - - 2,582 2,728
Total Turnover 111,541 - 111,541 95,220 202,510
--------------------------------------------------------------------------------------------------
Net operating costs
- Operating costs (101,487) - (101,487) (81,491) (174,290)
- Goodwill amortisation - (13,541) (13,541) (11,080) (24,265)
- Goodwill impairment - (39,159) (39,159) - -
- Severance costs - (900) (900) - -
(101,487) (53,600) (155,087) (92,571) (198,555)
Operating profit/(loss)
- Existing operations 10,049 (53,559) (43,510) 3,784 5,198
- Acquisitions 5 (41) (36) - -
--------------------------------------------------------------------------------------------------
Continuing operations 10,054 (53,600) (43,546) 3,784 5,198
Discontinued operations - - - (1,135) (1,243)
10,054 (53,600) (43,546) 2,649 3,955
Share of associate's
operating loss - - - (77) (31)
Profit/(loss) on sale/closure
of discontinued operations
(note 2) - 1,266 1,266 (83) 2,955
Loss on sale of tangible
fixed assets - - - - (4)
==================================================================================================
Profit/(loss) on ordinary
activities before finance
charges 10,054 (52,334) (42,280) 2,489 6,875
Finance charges - net (1,125) - (1,125) (525) (1,111)
==================================================================================================
Profit/(loss) on ordinary
activities before tax 8,929 (52,334) (43,405) 1,964 5,764
Tax on profit/(loss) on
ordinary activities (note 3) (2,139) 216 (1,923) (3,224) (7,344)
==================================================================================================
Profit/(loss) on ordinary
activities after tax 6,790 (52,118) (45,328) (1,260) (1,580)
Minority interests (15) - (15) (113) (82)
==================================================================================================
Profit/(loss) for the
financial period 6,775 (52,118) (45,343) (1,373) (1,662)
Dividends proposed (note 4) - - - - -
==================================================================================================
Retained profit/(loss) for
the period 6,775 (52,118) (45,343) (1,373) (1,662)
==================================================================================================
Loss per share (note 8) Basic (14.0p) (0.5p) (0.6p)
Diluted (14.0p) (0.5p) (0.6p)
Adjusted earnings per share
before goodwill amortisation
and exceptional items -continuing
operations (note 8) Basic 2.1p 3.9p 7.2p
Diluted 2.0p 3.7p 6.8p
Consolidated statement of total recognised gains and losses
for the six months ended 31 October 2002
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 October 31 October 30 April
2002 2001 2002
£'000 £'000 £'000
Loss for the financial period - Group (45,343) (1,296) (1,631)
- Associate - (77) (31)
------------------------------------------------------------------------------------------------
(45,343) (1,373) (1,662)
(Loss)/gain on foreign currency translation (489) 2,017 1,615
------------------------------------------------------------------------------------------------
Total recognised (losses)/gains since last
annual report and accounts (45,832) 644 (47)
================================================================================================
ANITE GROUP PLC
Consolidated balance sheet
as at 31 October 2002
Unaudited Unaudited Audited
31 October 31 October 30 April
2002 2001 2002
£'000 £'000 £'000
Fixed assets
Intangible 160,891 207,512 228,460
Tangible 12,749 9,139 12,232
Associates - 1,667 -
Investments 1,091 850 1,145
--------------------------------------------------------------------------------------------------
174,731 219,168 241,837
Current assets
Stock and WIP 7,561 6,966 9,819
Debtors 62,389 54,416 69,464
Investments - 49 -
Short term deposits 2,450 7,930 16,026
Cash at bank 18,809 11,352 12,690
--------------------------------------------------------------------------------------------------
91,209 80,713 107,999
--------------------------------------------------------------------------------------------------
Current liabilities
Bank borrowings (21,018) (7,057) (18,618)
Hire purchase (757) (240) (652)
Amounts falling due within one year (85,771) (79,757) (100,004)
--------------------------------------------------------------------------------------------------
(107,546) (87,054) (119,274)
--------------------------------------------------------------------------------------------------
Net current liabilities (16,337) (6,341) (11,275)
Creditors: amounts falling due after one year
Hire purchase (910) (169) (726)
Bank loan (3,099) (3,334) (4,858)
Other creditors (974) (242) (757)
Provisions for liabilities and charges (35,843) (43,086) (43,203)
--------------------------------------------------------------------------------------------------
(40,826) (46,831) (49,544)
--------------------------------------------------------------------------------------------------
Net assets 117,568 165,996 181,018
==================================================================================================
Called-up share capital 33,850 28,816 30,731
Share premium account 92,814 54,814 74,595
Shares to be issued 20,821 67,177 59,350
Reserves (29,962) 14,729 16,140
Minority interest 45 460 202
--------------------------------------------------------------------------------------------------
Capital employed 117,568 165,996 181,018
==================================================================================================
ANITE GROUP PLC
Consolidated cash flow statement
for the six months ended 31 October 2002
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 October 31 October 30 April
2002 2001 2002
£'000 £'000 £'000
Net cash inflow from
operating activities (note 5) 15,074 7,235 26,634
Returns on investments and servicing of finance (959) (331) (786)
Taxation (2,260) (3,770) (7,969)
Capital expenditure and financial investments (2,370) (2,854) (6,221)
Acquisitions and disposals (9,116) (5,823) (21,013)
=====================================================================================================
Cash inflow/(outflow) before management of liquid
resources and financing 369 (5,543) (9,355)
Management of liquid funds 13,576 1,791 (5,991)
Financing (7,226) (5,039) 11,121
-----------------------------------------------------------------------------------------------------
Increase/(decrease) in cash in the period 6,719 (8,791) (4,225)
=====================================================================================================
Notes to the interim accounts for the six months to 31 October 2002
1. The financial information contained in this document
does not constitute statutory accounts within the meaning of
section 240 of the Companies Act 1985. The accounts have
been prepared using accounting policies consistent with those
set out in the most recent audited financial statements.
Statutory accounts for the year to 30 April 2002 have been
filed with the registrar of companies. The auditors have
reported on those accounts; their report is unqualified and
did not contain a statement under section 237(2) or (3) of
the Companies Act 1985.
2. Profit/(loss) on sale/closure of discontinued operations
Unaudited
6 months to
31 October
2002
£'000
Deferred consideration received in respect of Anite IT Personnel disposal 266
Release of pension underfunding provision in previously disposed of businesses 1,000
--------------
1,266
==============
3. Taxation
Unaudited
6 months to
31 October
2002
£'000
On the profit on ordinary activities for the period
UK corporation tax 494
Overseas taxation 682
Originating and reversal of timing differences - UK 1,985
Originating and reversal of timing differences - Overseas (1,238)
-----------------
1,923
=================
4. Dividends
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 October 31 October 30 April
2002 2001 2002
£'000 £'000 £'000
Proposed - - -
==================================================
5. Reconciliation of operating (loss)/profit to net cash inflow
from operating activities
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 October 31 October 30 April
2002 2001 2002
£'000 £'000 £'000
Operating (loss)/profit (43,546) 2,649 3,955
Depreciation 2,386 1,886 3,898
Intangible software licence 487 299 725
Goodwill amortisation 13,541 11,080 24,265
Goodwill impairment 39,159 - -
Decrease/(increase) in stock 2,258 (1,638) (3,351)
Decrease/(increase) in debtors 7,713 (1,164) (17,168)
(Decrease)/increase in creditors (6,924) (5,877) 14,344
Profit on disposal of fixed assets - - (34)
----------------------------------------------------------------------------
Net cash inflow from operating
activities 15,074 7,235 26,634
============================================================================
6. Reconciliation of net cash flow to movement in net debt
£'000
Increase in cash in period 6,719
Cash outflow from decrease in bank loan and financing
(including redemption of loan notes £7,957) 7,245
Cash inflow from increase in liquid resources (13,576)
----------------------------------------------------------------------------
Change in net debt resulting from cash flows 388
Increase in finance leases (818)
Increase in loan notes (5,217)
Net debt at 1 May 2002 (11,497)
----------------------------------------------------------------------------
Net debt at 31 October 2002 (17,144)
============================================================================
7. Analysis of net debt
1 May 2002 Non Cash Cash Flow 31 Oct 2002
£'000 £'000 £'000 £'000
Cash at bank and in hand 12,690 - 6,119 18,809
Bank overdrafts (766) - 600 (166)
-----------
6,719
Bank loans due within one year (17,852) - (3,000) (20,852)
Bank loans due after one year (4,858) - 1,759 (3,099)
Finance leases (1,378) (818) 529 (1,667)
-----------
(712)
Short - term deposits 16,026 - (13,576) 2,450
-------------------------------------------------------------------------------
Net (debt)/funds excluding
loan notes 3,862 (818) (7,569) (4,525)
Loan notes due within one year (15,359) (5,217) 7,957 (12,619)
-------------------------------------------------------------------------------
Net debt (11,497) (6,035) 388 (17,144)
===============================================================================
8. (Loss)/earnings per share
The loss per share has been calculated on the net loss of £45,343,000
(2001: loss £1,373,000) and the average number of shares in issue
of 324,569,718 (2001: 282,904,502) and the weighted average number
of shares (adjusted for dilution) of 339,998,484 (2001:
292,648,520)
FRS 14 requires presentation of diluted EPS when a company could be
called upon to issue shares that would decrease net profit or
increase net loss per share. For a loss making company with
outstanding share options, net loss per share would only be
increased by the exercise of out-of-the-money options. Since it
seems inappropriate to assume that option holders would act
irrationally, no adjustment has been made to diluted EPS for out-
of-the-money share options.
The adjusted earnings per share has been based on the adjusted profit
for the financial period on continuing operations (excluding
goodwill amortisation, exceptional items and profit/(loss) on
sale/closure of discontinued operations of £6,775,000 (2001:
£10,925,000).
9. Reserves at 31 October 2002
Share Premium Profit & loss
Shares to be issued account Other Reserves account
At 1 May 2002 59,350 74,595 270 15,870
Retained loss for the period - - - (45,343)
Premium on shares issued - 18,219 - -
Shares to be issued 420 - - -
Shares issued against
earnouts in the year (21,194) - - -
Provisions no longer required-
written back against goodwill (17,623) - - -
Reclass of provisions (132) - - -
Loss of foreign currency
translation - - - (489)
Utilised during the year - - (270) -
--------------------------------------------------------------------------------------------
At 31 October 2002 20,821 92,814 - (29,962)
============================================================================================
10.Divisional results (before goodwill amortisation and exceptional items)
Unaudited 6 months to Unaudited 6 months to
31 October 2002 31 October 2001
£m Sales Profit Margin % Sales Profit Margin %
---------------------------------------------------------------------------------------------
Public Sector 36.4 1.2 3.3 23.7 2.8 11.8
Travel 16.2 3.3 20.3 11.8 2.2 18.6
Telecoms 21.3 4.1 19.2 18.0 5.8 32.2
Consultancy 37.6 3.2 8.5 39.1 6.7 17.1
---------------------------------------------------------------------------------------------
111.5 11.8 10.6 92.6 17.5 18.9
Head Office costs - (1.8) - - (2.7) -
---------------------------------------------------------------------------------------------
111.5 10.0 8.9 92.6 14.8 16.0
Finance charges - (1.1) - - (0.5) -
---------------------------------------------------------------------------------------------
Continuing operations 111.5 8.9 8.0 92.6 14.3 15.4
Discontinued operations - - - 2.6 (1.1) -
---------------------------------------------------------------------------------------------
Profit before tax, goodwill
amortisation and exceptional
items 111.5 8.9 8.0 95.2 13.2 13.9
=============================================================================================
INDEPENDENT REVIEW REPORT TO ANITE GROUP PLC
Introduction
We have been instructed by the company to review the financial
information for the six months ended 31 October 2002 which
comprises the Consolidated profit and loss account, the
Consolidated balance sheet, the Consolidated statement of total
recognised gains and losses, the Consolidated cash flow
statement, and related notes 1 to 10. We have read the other
information contained in the interim report and considered
whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the
interim report in accordance with the Listing Rules of the
Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should
be consistent with those applied in preparing the preceding
annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained
in Bulletin 1999/4 issued by the Auditing Practices Board for use
in the United Kingdom. A review consists principally of making
enquiries of group management and applying analytical procedures
to the financial information and underlying financial data and,
based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise
disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards
and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended 31 October 2002.
Deloitte & Touche
Chartered Accountants
London
11 December 2002
Notes: A review does not provide assurance on the maintenance and
integrity of the website, including controls used to achieve
this, and in particular on whether any changes may have occurred
to the financial information since first published. These
matters are the responsibility of the directors but no control
procedures can provide absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and
dissemination of financial information differs from legislation
in other jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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