Final Results

RNS Number : 1644T

GB Group PLC

02 June 2009

 



Embargoed until 07.00

2 June 2009

GB GROUP PLC 

('GB' or the 'Group')

Annual Results Announcement for the Year Ended 31 March 2009

GB Group Plc, the identity management specialists, is pleased today to announce its annual results for year ended 31st March 2009.

Highlights

• Pre-tax profits increased by £1.8 million to £1.4 million (2008: £0.4 million loss). Profit before tax and share-based payments increased to £1.7 million (2008: £0.2 million loss), in line with expectations.

• Group revenue in the year increased by 23% to £23.8 million (2008: £19.4 million) driven by growth across all areas of the business. 

• Revenue in DataAuthentication, GB's identity verification business, increased by 56% to £11.7 million (2008: £7.5 million). 

• DataIntegrity and DataSolutions, providers of identity based marketing services, generated increased revenues of £12.1 million (2008: £11.9 million). 

• Cash balances at the year-end of £4.5 million (2008: £4.3 million) after payment of a dividend of £845,000 during the year.

• 15% increase in the level of dividend to 1.15p per share (2008: 1.00p) to be recommended to shareholders at the forthcoming AGM.

• Revenue in the current year to date of £3.4 million was approximately £0.4 million below that of last year, however, the same period last year included a one-off settlement of licence arrears of £0.35 million.

Commenting, Richard Law, CEO, said: 

'GB made excellent progress in the year ending 31 March 2009 and, despite more subdued market conditions, we continue to demonstrate leadership in the emerging market for identity management. We believe that identity management is a fundamental enabler of online business and, accordingly, represents an exceptional opportunity for the Group.'  

For further information, please contact:

GB Group plc	01244 657333
Richard Law, Chief Executive Dave Wilson, Finance Director
Weber Shandwick Financial  Nick Oborne Clare Perks  Katie Matthews	020 7067 0700
Website	www.gb.co.uk

Notes to Editors

About GB Group plc

The most successful organisations recognise the value of understanding your individual identity - who you are, what you need and what you like. GB combines this concept of identity with technology to create an environment of trust so that organisations can connect, communicate and transact with consumers safely, responsibly and profitably. We call this identity management.

GB Group has three complementary identity management offerings:

• Identity Verification - combating ID fraud, money laundering and under-age gambling 

• Identity Capture and Maintenance - providing accurate and up-to-date customer information for your contact strategy 

• Identity Analysis - understanding, targeting and retaining profitable customers 

This enables our clients to make informed business decisions based on a thorough knowledge of consumer identity and behaviour, leading to more effective communication and interaction with the customer.

GB is listed on the London Stock Exchange (GBG). For more information, please visit GB's website: www.gb.co.uk. 

GB Group - because identity matters™  

CHAIRMAN'S STATEMENT

This was a year of strong performance for the Group and, against a backdrop of increasingly difficult economic conditions, revenue grew by 23% and the business completed the transition into full year profitability.

Since 2003, GB has developed from a traditional marketing services business into one that is now focused on being a leading identity management business. GB addresses how businesses verify and manage the identity of their customers online, not only to minimise fraud and regulatory risk, but also to enable them to develop relationships with those customers and maximise their revenue opportunities.

Our established UK leadership in the electronic age and identity verification market with URU™, our joint business with BT plc, along with our international ID verification service, ID3 Check™, can now be linked with our other complementary identity management services, developed from our traditional marketing services businesses, to provide integrated solutions. This allows our clients accurately to capture, verify and maintain identity details of their customers as well as to analyse aspects of an individual's identity in order to understand, target and retain their most profitable customers.

The Group is well placed to respond to the continuing shift in purchasing behaviour as consumers spend increasing amounts of time and money purchasing online as their confidence and familiarity in doing business over the internet increases. Within this environment, the traditional use of documents to verify age and identity is not practical or time or cost efficient. Accordingly, our growth prospects are linked to an increasing need for businesses to verify and manage their customers online and we believe that a new industry sector of 'Identity Management' is emerging to address this need.  

Given the underlying momentum of the business and the strength of GB's balance sheet - no debt and £4.5 million in cash - the Board is recommending a 15% increase in the level of the ordinary dividend to 1.15p per share (2008: 1.0p per share). This dividend will be proposed at the AGM in July.  

Our people remain a key ingredient to our success in managing our opportunities and challenges and, on behalf of the Board, I would like to thank the GB team, led by Richard Law, for their achievements this past year, their continuing commitment and their drive to succeed.

J L Walker-Haworth

Chairman

CHIEF EXECUTIVE'S REVIEW

Overview

The Group performed well and made good progress during the year. Significant revenue growth was achieved which enabled GB to generate a creditable full year profit. Through the execution of our strategy to align all of our products and services with Identity Management and to develop them simultaneously to operate in the online environment, we have successfully positioned the Group to benefit from the continuing move to doing business online.

Group revenue increased year-on-year by 23% to £23.8 million (2008: £19.4 million) and the full year pre-tax profits increased by £1.8 million to £1.4 million (2008: £0.4 million loss). Group profit before tax and share-based payments increased to £1.7 million (2008: £0.2 million loss). The Group has now been profitable for the last six consecutive quarters. These reported results are in line with those indicated in the trading update issued on 21 April 2009.

Throughout the second half of the year being reported on, and in the current year to date, levels of consumer activity, on which our transactional services are based, have moderated somewhat. During April and May 2009, the Group's underlying level of business was slightly lower than that of the previous year. Revenue in the current year to date of £3.4 million was approximately £0.4 million below that of last year, however, the same period last year included a one-off settlement of licence arrears of £0.35 million.

Cash balances at the end of the year remained strong at £4.5 million (2008: £4.3 million).

DataAuthentication

GB continues to lead the market for electronic age and identity verification with its URU and ID3 Check services.

In the year to 31 March 2009, our DataAuthentication business recorded a 56% increase in its revenues to £11.7 million (2008: £7.5 million) with growth coming from new clients and increased volume usage by existing clients. Lower levels of consumer activity in the economy experienced from October 2008 onwards moderated our growth in the second half of the year and in the current year to date, overall activity remains slightly behind that of last year.

Our strategy for the DataAuthentication business continues to be to grow the client and usage base for both its URU and ID3 Check services across our core sectors of Financial Services, Mobile Telecoms and Online Gaming where our presence is well established. We continue to target the Online Retail sector where, as an example of an area where our services can assist our clients, the underage purchase of age restricted or regulated products (such as alcohol) over the internet remains a problem for businesses. There has recently been a second reading in the House of Lords of a private members bill which, if enacted, would make it a requirement for online retailers to verify whether a person buying goods or services meets the legal minimum age, in a similar way that online gaming companies are required to verify the age of their subscribers. Developments in this and other evolving markets look promising as regulation increases.  

Our international verification service, ID3 Check, has seen growth over the course of the year which we expect to continue in the future with increases in the breadth and depth of identity-based data accessible through the service. Our recent announcement of a strategic partnership with SCHUFA, enabling GB to offer the highest possible level of identity verification for clients wishing to engage in business in Germany, is an example of this development.

Identity Based Marketing Services

During the year, GB's DataSolutions and DataIntegrity activities were combined to enable them to achieve both operational and strategic synergies. Strategically, the combined business is now firmly aligned with the Identity Management market and customer identity is now at the core of all GB's products and services. The combined business, which took the name of DataSolutions, generated revenues of £12.1 million in the year (2008: £11.9 million) and increased its profitability through cost and operational synergies.

During the year, an increasing proportion of revenue came from services newly developed to operate in the online environment. Our strategy is to continue this trend by increasingly integrating the identity based marketing services of this business with the identity verification services provided by DataAuthentication, thereby enabling our clients to effectively manage the identity of their customers throughout their lifecycle.  

In the current year-to-date, revenues are slightly lower than the same period last year although last year's revenue did include a non-recurring amount of £0.35 million in relation to a one-off licence settlement. After adjusting for this, revenue has increased marginally.

Outlook

GB made excellent progress in the year ending 31 March 2009 and, despite more subdued market conditions, we continue to demonstrate leadership in the emerging market for identity management. We believe that identity management is a fundamental enabler of online business and, accordingly, represents an exceptional opportunity for the Group.

R A Law

Chief Executive

BUSINESS AND FINANCIAL REVIEW

The Group's Business

The most successful organisations recognise the value of understanding your individual identity - who you are, what you need and what you like.  GB combines this concept of identity with technology to create an environment of trust so that organisations can connect, communicate and transact with consumers safely, responsibly and profitably. We call this Identity Management.

The Group's principal business activities utilise the same assets and resources and correspond to three complementary identity management offerings:

• Identity Verification - combating ID fraud, money laundering and under-age gambling 

• Identity Capture and Maintenance - providing accurate and up-to-date customer information for your contact strategy 

• Identity Analysis - understanding, targeting and retaining profitable customers 

This enables our clients to make informed business decisions based on a thorough knowledge of consumer identity and behaviour, leading to more effective communication and interaction with the customer.

Group Vision, Objectives and Strategy

The Group's vision is to be the recognised leader in the field of identity management, a fundamental enabler of online business.

The Group's strategy continues to be to create and maintain unique online products and products and services which provide additional value for clients and that are of sufficient strength to enable the Group to create new markets and to consistently win new business against our competition. The Group achieves this through its investment in people and business development opportunities and the application of innovation, quality and excellence in everything it does.

Group Overview

The year ended 31 March 2009 was significant in terms of the return to profitability for the Group following a period of investment in developing the opportunities for DataAuthentication in the rapidly growing market for electronic ID verification.

The following table sets out the results of the Group for the year ended 31 March 2009.

		Years ended 31 March
		2009		2008
		£'000		£'000
Revenue		23,799		19,365
Operating profit/(loss) before share based payments		1,479		(455)
Operating profit/(loss)		1,205		(680)
Finance revenue		184		242
Profit/(loss) before tax		1,389		(438)
Income tax credit		111		40
Profit/(loss) for the financial year		1,500		(398)

2009 Financial Year Compared to 2008 Financial Year

In the year to 31 March 2009, revenue for the Group increased 23% to £23.4 million (2008: £19.4 million) resulting from strong growth in DataAuthentication.  Profitability increased significantly with profits before taxation of £1.4 million compared to a loss of £0.4 million in the previous year.

Explanations of the significant items in the Income Statement during the year are as follows:

Revenue

Revenue for the Group showed strong growth as a result of increased DataAuthentication revenues. Revenues from DataAuthentication grew by 56% to £11.7 million (2008: £7.5 million) and combined revenues from DataIntegrity and DataSolutions were £12.1 million (2008: £11.9 million) including the settlement of licence arrears in the year of £350,000.

Gross Profit and Cost of Sales

Group gross profit margins were 51% compared to 49% for the year to 31 March 2008.

Other Operating Expenses

Other operating expenses were £10.7 million (2008: £10.2 million) with the increase principally as a result of further levels of investment in areas of sales, marketing and development for the DataAuthentication business area.

Exceptional Items

Exceptional items totalled £94,000 (2008: £nil). This related to final salary payments following a staff reorganisation.

Group Profit/(Loss)

The Group generated an operating profit of £1.2 million (2008: £0.6 million loss) and finance revenue earned during the year was £0.2 million (2008: £0.2 million) resulting in a profit before tax of £1.4 million (2008: £0.4 million loss).

Taxation

The current tax credit of £111,000 (2008: £40,000 credit) reflects the recognition of an increased deferred tax asset relating to decelerated capital allowances and tax losses, partially offset by current tax.

Dividend

The Board of Directors will propose a final ordinary dividend of 1.15 pence per share, amounting to £981,000 (2008: £845,000). The final ordinary dividend with respect to the year ended 31 March 2009, if approved, will be paid on 13 August 2009 to ordinary shareholders whose names were on the register on 17 July 2009.

Amounts Transferred To/(From) Reserves

The amount transferred to reserves is £929,000 (2008: £805,000 transfer from reserves) after accounting for the previous year's dividend of £845,000 (2008: £632,000) which was paid during the year ended 31 March 2009.

Balance Sheet and Liquidity

Explanations of the most significant items in the Balance Sheet during the year are as follows:

Property, Plant and Equipment

The amount invested in property, plant and equipment during the year was £353,000 (2008: £220,000).

Intangible Assets

The carrying value of goodwill at 31 March 2009 was £6.5 million (2008: £6.5 million). The carrying value of product development costs capitalised in accordance with IAS 38 'Intangible Assets' was £85,000 (2008: £136,000). Intangible assets are tested annually for impairment and no impairment was required.

Trade and Other Receivables

The value of trade and other receivables increased by £0.8 million to £6.1 million at 31 March 2009, compared to the same date last year. This was principally due to an increase in the level of trade receivables as a result of higher revenues.

Cash Flows

Cash and cash equivalents increased by £0.2 million (2008: £0.9 million decrease) after taking into account the investment in fixed assets and dividend paid. Further analysis of this movement is included in the Consolidated Cashflow Statement.

Cash and Cash Equivalents

At 31 March 2009, the Group held cash and short-term deposit balances of £4.5 million (2008: £4.3 million) and in accordance with the Group's treasury policy, all funds are placed with major UK clearing banks and building societies.

Trade and Other Payables

The value of trade and other payables has decreased by £0.1 million to £6.4 million (2008: £6.5 million) at 31 March 2009, compared to the same date last year.

The value of deferred income at 31 March 2009 was £0.8 million (2008: £1.0 million).

Key Performance Indicators

The Board monitor the Group's progress against its strategic objectives and the financial performance of the Group's operations on a regular basis. Performance is assessed against the strategy and budgets using financial and non-financial measures.

The following details some of the principal Key Performance Indicators (KPIs) used by the Group, their purpose, the basis of calculation and the source of the underlying data. A summary of performance against these KPIs is given below.

• Financial

The Group uses the following primary measures to assess the performance of the Group and its propositions.

• Revenue (Group and DataAuthentication)

Revenue and revenue growth are used for internal performance analysis and by investors to assess progress against outlook statements in the market.

• Operating result

Operating result and profit growth is used by the Group for internal performance analysis and by investors to assess progress against outlook statements in the market.

• Earnings per share

               Earnings per share is calculated as basic earnings per share from continuing operations.

• Cash

Cash and cash equivalent balances are used by the Group for internal performance analysis and by investors to assess progress against outlook statements.

• Customers

  • DataAuthentication Live Client Numbers

Client based KPIs for the rapidly growing DataAuthentication market are important measures for internal performance analysis and management also believes that it provides useful information for investors regarding the success of the Group's customer acquisition activities. The data used to calculate the KPI is derived from the Group's billing and financial systems for those contracted clients who have begun utilising the services.

• Transaction Based

  • Underlying Identity Verifications

Management believe that DataAuthentication transaction-based measures provide useful information for investors regarding trends in client revenue derived from electronic identity verification services and the extent to which clients have adopted the service. The data used to calculate this KPI is extracted from the Group's billing and financial systems. Underlying identity verifications is the total number of verifications on the Group's URU™ and ID3-Check™ systems and excludes one-off batch verifications.

Performance Against KPIs

A summary of the Group's progress in achieving its objectives, as measured against KPIs, is set out below.

	Years ended 31 March
	2009		2008
Revenue Growth	23%		30%
Operating Profit/(Loss) Growth	277%		55%
Earnings/(Loss) Per Share	1.8p		(0.5)p
Cash (£'000)	4,504		4,309
DataAuthentication Revenue Growth	56%		57%
DataAuthentication Live Customer Numbers	258		223
Underlying Identity Verifications	9,334,531		5,564,920

Principal Risks and Uncertainties

Management use a model to identify and assess the impact of risks to the business under four key headings - financial, strategic, operational and knowledge. For each risk, the likelihood and consequence are identified, management controls are confirmed and results reported. The corporate governance report on page in the Annual Report describes more about the Group's risk management process. The more significant risks and uncertainties faced by the Group are set out below:

• Regulatory risk: legislation in all the markets we serve changes on a regular basis, and interpretation of existing laws can also change to create ever tightening standards, often requiring additional human and financial resources and the provision of new assets and systems. Whilst the Group is committed to respond positively to new regulation and legislation, changes could affect the pricing for, or adversely affect the revenue from, the services the Group offers.

• Competitive position: the Group operates in competitive markets and intensified competition could lead to a reduction in the rate at which the Group adds new customers and to a decrease in the size of the Group's market share if clients chose to receive services from other providers.

• Non-supply by major supplier: the Group sources some of its data and infrastructure from third party suppliers and partners. The removal from the market of one or more of these third party suppliers or interruption in supply could quickly affect the Group's operations adversely and could result in loss of revenue or additional expenditure for the Group.

• Disaster recovery and business continuity: the Group has an understandable reliance on its place of business, IT systems and people and currently operates from a single site. The loss of key components could affect the Group's operations and result in additional expenditure whilst the established business continuity plan is effected following an incident.

Relationships

Other than our shareholders, the Group's performance and value are influenced by other stakeholders, principally our customers, suppliers, employees and our strategic partners. Relationships are managed both on an individual basis and via representative groups. The Group participates in industry groups which give a genuine access to client and supplier groups and decision makers in government and other regulatory bodies.

Treasury Policy and Financial Risk

The Group's treasury operation is managed within formally defined policies which are reviewed by the Board. The Group finances its activities with cash and short-term deposits. Other financial assets and liabilities, such as trade receivables and trade payables, arise directly from the Group's operating activities. Surplus funds of the Group are invested through the use of short-term deposits with the objective of maximising fixed interest rate returns whilst still providing the flexibility to fund on-going operations when required. It is not the Group's policy to engage in speculative activity or to use complex financial instruments.

CONSOLIDATED INCOME STATEMENT

Year ended 31 March 2009

		2009		2008
		£'000		£'000
	Note
Revenue
- excluding exceptional item	3	23,449		19,365
- exceptional item	3	350		-
	3	23,799		19,365
Cost of sales		(11,768)		(9,893)
Gross profit		12,031		9,472
Other operating expenses excluding exceptional items		(10,732)		(10,152)
Exceptional items	5	(94)		-
Operating profit/(loss)		1,205		(680)
Finance revenue		184		242
Profit/(loss) before tax		1,389		(438)
Income tax credit		111		40
Profit/(loss) for the year attributable to equity holders of the parent		1,500		(398)
Earnings/(loss) per share	7
- basic earnings/(loss) per share for the year		1.8p		(0.5)p
- diluted earnings/(loss) per share for the year		1.8p		(0.5)p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year ended 31 March 2009

			Equity share  capital		Merger reserve		Capital redemption reserve		Retained earnings		Total equity
			£'000		£'000		£'000		£'000		£'000
Balance at 1 April 2007			5,617		6,575		3		(223)		11,972
Loss for the period			-		-		-		(398)		(398)
Total recognised income and expense for the period			-		-		-		(398)		(398)
Exercise of options			66		-		-		-		66
Cost of share-based payments			-		-		-		225		225
Equity dividend			-		-		-		(632)		(632)
Balance at 31 March 2008			5,683		6,575		3		(1,028)		11,233
Profit for the period			-		-		-		1,500		1,500
Total recognised income and expense for the period			-		-		-		1,500		1,500
Exercise of options			184		-		-		-		184
Cost of share-based payments			-		-		-		274		274
Equity dividend			-		-		-		(845)		(845)
Balance at 31 March 2009			5,867		6,575		3		(99)		12,346

COMPANY STATEMENT OF CHANGES IN EQUITY Year ended 31 March 2009

			Equity share  capital		Merger reserve		Capital redemption reserve		Retained earnings		Total Equity
			£'000		£'000		£'000		£'000		£'000
Balance at 1 April 2007			5,617		6,575		3		2,093		14,288
Loss for the period			-		-		-		(398)		(398)
Total recognised income and expense for the period			-		-		-		(398)		(398)
Exercise of options			66		-		-		-		66
Cost of share-based payments			-		-		-		225		225
Equity dividend			-		-		-		(632)		(632)
Balance at 31 March 2008			5,683		6,575		3		1,288		13,549
Profit for the period			-		-		-		1,483		1,483
Total recognised income and expense for the period			-		-		-		1,483		1,483
Exercise of options			184		-		-		-		184
Cost of share-based payments			-		-		-		274		274
Equity dividend			-		-		-		(845)		(845)
Balance at 31 March 2009			5,867		6,575		3		2,200		14,645

CONSOLIDATED BALANCE SHEET

As at 31 March 2009

	Note		2009		2008
			£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	8		983		987
Intangible assets			6,600		6,642
Deferred tax asset			563		400
			8,146		8,029
Current assets
Trade and other receivables			6,145		5,351
Cash and short-term deposits			4,504		4,309
			10,649		9,660
TOTAL ASSETS			18,795		17,689
EQUITY AND LIABILITIES
Capital and reserves
Equity share capital	10		5,867		5,683
Merger reserve			6,575		6,575
Capital redemption reserve			3		3
Retained earnings			(99)		(1,028)
Total equity attributable to equity holders of the parent			12,346		11,233
Current liabilities
Trade and other payables			6,345		6,456
Current tax			52		-
Provisions			52		-
			6,449		6,456
TOTAL LIABILITIES			6,449		6,456
TOTAL EQUITY AND LIABILITIES			18,795		17,689

COMPANY BALANCE SHEET

As at 31 March 2009

	Note		2009		2008
			£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	8		983		987
Intangible assets	9		94		136
Investments			9,317		9,317
Deferred tax asset			563		400
			10,957		10,840
Current assets
Trade and other receivables			6,145		5,367
Cash and short-term deposits			4,504		4,309
			10,649		9,676
TOTAL ASSETS			21,606		20,516
EQUITY AND LIABILITIES
Capital and reserves
Equity share capital	10		5,867		5,683
Merger reserve			6,575		6,575
Capital redemption reserve			3		3
Retained earnings			2,200		1,288
Total equity			14,645		13,549
Current liabilities
Trade and other payables			6,857		6,967
Current tax			52		-
Provisions			52		-
			6,961		6,967
TOTAL LIABILITIES			6,961		6,967
TOTAL EQUITY AND LIABILITIES			21,606		20,516

CONSOLIDATED CASH FLOW STATEMENT  Year ended 31 March 2009

	Note		2009		2008
			£'000		£'000
Group profit/(loss) before tax			1,389		(438)
Adjustments to reconcile Group profit/(loss) before tax to net cash flows
Interest income			(184)		(242)
Depreciation of property, plant and equipment	8		357		341
Amortisation of intangible fixed assets	9		69		69
Share-based payments	11		274		225
Increase in trade and other receivables			(794)		(1,599)
(Decrease)/increase in trade and other payables			(111)		1,327
Increase in provisions			52		-
Net cash generated from/(used in) operating activities			1,052		(317)
Cash flows from investing activities
Purchase of property, plant and equipment			(353)		(220)
Expenditure on product development			(27)		(43)
Interest received			184		242
Net cash flows used in investing activities			(196)		(21)
Cash flows from financing activities
Proceeds from issue of shares			184		66
Dividends paid to equity shareholders			(845)		(632)
Net cash flows used in financing activities			(661)		(566)
Net increase/(decrease) in cash and cash equivalents			195		(904)
Cash and cash equivalents at the beginning of the period			4,309		5,213
Cash and cash equivalents at the end of the period			4,504		4,309

COMPANY CASH FLOW STATEMENT  Year ended 31 March 2009

	Note		2009		2008
			£'000		£'000
Company profit/(loss) before tax			1,372		(438)
Adjustments to reconcile Group loss before tax to net cash flows
Interest income			(184)		(242)
Depreciation of property, plant and equipment	8		357		341
Amortisation of intangible fixed assets	9		69		69
Share-based payments	11		274		225
Increase in trade and other receivables			(778)		(1,599)
(Decrease)/increase in trade and other payables			(110)		1,327
Increase in provisions			52		-
Net cash generated from/(used in) operating activities			1,052		(317)
Cash flows from investing activities
Purchase of property, plant and equipment			(353)		(220)
Expenditure on product development			(27)		(43)
Interest received			184		242
Net cash flows used in investing activities			(196)		(21)
Cash flows from financing activities
Proceeds from issue of shares			184		66
Dividends paid to equity shareholders			(845)		(632)
Net cash flows used in financing activities			(661)		(566)
Net increase/(decrease) in cash and cash equivalents			195		(904)
Cash and cash equivalents at the beginning of the period			4,309		5,213
Cash and cash equivalents at the end of the period			4,504		4,309

NOTES TO THE ACCOUNTS

1.  CORPOARATE INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRSs

GB Group plc is a public limited company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the London Stock Exchange.

The Group and Company's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union as they apply to the financial statements of the Group and Company for the year ended 31 March 2009.

2. ACCOUNTING POLICIES

Basis of Preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and IFRIC interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.  A summary of the significant accounting policies is set out below.

The Group and Company financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

Basis of Consolidation

The Group financial statements consolidate the financial statements of GB Group plc and its subsidiary undertakings drawn up to 31 March each year.

3. REVENUE

Revenue disclosed in the Income Statement is analysed as follows:

	2009		2008
	£'000		£'000
Sale of goods	6,277		6,121
Rendering of services	17,172		13,244
Exceptional item	350		-
Revenue	23,799		19,365
Finance revenue	184		242
Total revenue	23,983		19,607

The £350,000 exceptional item is related to back-dated revenues which resulted from a licence dispute that was settled on 28 May 2008.

4. SEGMENTAL INFORMATION

All of the revenue, profits/(losses), operating assets and liabilities relate to the Group's principal business activities, all of which are continuing, being the development, sale and support of business application software, the provision of marketing database and anti-fraud services and the licensing of technology.  This represents a single segment.  Revenue is stated net of value added tax. Revenue and operating profit/(loss) arise principally in the United Kingdom.

5. EXCEPTIONAL ITEMS

	2009		2008
	£'000		£'000
Recognised in arriving at the operating profit:
Reorganisation costs	94		-
	94		-

Reorganisation costs relate to final salary payments following a staff reorganisation.

6. DIVIDENDS PAID AND PROPOSED

						2009 £'000		2008 £'000
Declared and paid during the year
Final dividend for 2008: 1.00p (2007: 0.75p)						845		632
Proposed for approval at AGM (not recognised as a liability at 31 March)
Final dividend for 2009: 1.15p (2008: 1.00p)						981		845

7. EARNINGS/LOSS) PER ORDINARY SHARE

Basic

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the basic weighted average number of ordinary shares in issue during the year.

		2009 pence per share		2009 £'000		2008 pence per share		2008 £'000
Profit/(loss) attributable to equity holders of the parent		1.8		1,500		(0.5)		(398)

Diluted

Diluted earnings/(loss) per share amounts are calculated by dividing the profit/(loss) for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 

		2009		2008
		No.		No.
Basic weighted average number of shares in issue		84,979,900		84,264,385
Dilutive effect of share options		780,546		-
Diluted weighted average number of shares in issue		85,760,446		84,264,385

		2009 pence per share		2009 £'000		2008 pence per share		2008 £'000
Profit/(loss) attributable to equity holders of the Company		1.8		1,500		(0.5)		(398)

8. PROPERTY, PLANT AND EQUIPMENT

Group and Company
							Plant and equipment
							£’000
Cost
At 1 April 2007							1,976
Additions							220
At 31 March 2008							2,196
Additions							353
Disposals							(7)
At 31 March 2009							2,542
Depreciation and impairment
At 1 April 2007							868
Provided during the year							341
At 31 March 2008							1,209
Provided during the year							357
Disposals							(7)
At 31 March 2009							1,559
Net book value
At 31 March 2009							983
At 31 March 2008							987
At 1 April 2007							1,108

The net book value in respect of assets held under finance leases and hire purchase agreements is £nil (2008: £nil).

9. INTANGIBLE ASSETS

Group	Development costs £'000		Goodwill £'000		Total £'000
Cost
At 1 April 2007	172		6,506		6,678
Additions - product development	43		-		43
At 31 March 2008	215		6,506		6,721
Additions - product development	27		-		27
At 31 March 2009	242		6,506		6,748
Amortisation and impairment
At 1 April 2007	10		-		10
Amortisation during the year	69		-		69
At 31 March 2008	79		-		79
Amortisation during the year	69		-		69
At 31 March 2009	148		-		148
Net book value
At 31 March 2009	94		6,506		6,600
At 31 March 2008	136		6,506		6,642
At 1 April 2007	162		6,506		6,668

Goodwill arose on the acquisition of GB Mailing Systems Limited and e-Ware Interactive Limited.  From 1 April 2004, goodwill is no longer amortised and is annually tested for impairment (see note 15).

Company	Development costs £'000		Total £'000
Cost
At 1 April 2007	172		172
Additions - product development	43		43
At 31 March 2008	215		215
Additions - product development	27		-
At 31 March 2009	242		242
Amortisation and impairment
At 1 April 2007	10		10
Amortisation during the year	69		69
At 31 March 2008	79		79
Amortisation during the year	69		69
At 31 March 2009	148		148
Net book value
At 31 March 2009	94		94
At 31 March 2008	136		136
At 1 April 2007	162		162

10.    EQUITY SHARE CAPITAL

					2009		2008
					£'000		£'000
	Authorised
	93,609,520 (2008: 93,609,520) ordinary shares of 2.5p each				2,340		2,340
	Issued and fully paid
	Allotted, called up and fully paid				2,133		2,112
	Share premium				3,734		3,571
					5,867		5,683
					2009		2008
					No.		No.
	Number of shares in issue at 1 April				84,451,382		83,742,748
	Issued on exercise of share options				862,860		708,634
	Number of shares in issue at 31 March				85,314,242		84,451,382

11. SHARE-BASED PAYMENTS

Group and Company

The Group operates Executive Share Option Schemes under which executive directors, managers and staff of the Company are granted options over shares.

Executive Share Option Scheme

Options are granted to executive directors and employees on the basis of their performance. Options are granted at the full market value of the Company's shares at the time of grant and are exercisable between three and ten years from the date of grant. The options vest when the Company's earnings per share growth is greater than the growth of the Retail Prices Index (RPI) over a 3 year period prior to the exercise date. There are no cash settlement alternatives.

Executive Share Option Scheme (Section C Scheme)

Options are granted to executive directors and employees on the basis of their performance. Options are granted at the full market value of the Company's shares at the time of grant and are exercisable between three and ten years from the date of grant. The percentage of an option that will vest and be capable of exercise will depend on the performance of the Company.  A minimum of 50 per cent. of the options will vest when the Total Shareholder Return (TSR) performance of the Company, as compared to the TSR of the FTSE Computer and CPU Services Sub-Sector over a three-year period, matches or exceeds the median company. The percentage of shares subject to an option in respect of which that option becomes capable of exercise will then increase on a sliding scale so that the option will become exercisable in full if top quartile performance is achieved.

GB Sharesave Scheme

The Group has a savings-related share option plan, under which employees save on a monthly basis, over a three or five year period, towards the purchase of shares at a fixed price determined when the option is granted. This price is usually set at a 20% discount to the market price at the time of grant. The option must be exercised within six months of maturity of the savings contract, otherwise it lapses.

The expense recognised from equity-settled share-based payments in respect of employee services received during the year is £274,000 (2008: £225,000).

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year.

	2009 No.		2009 WAEP		2008 No.		2008 WAEP
Outstanding as at 1 April	8,744,601		28.62p		8,676,487		27.45p
Granted during the year	1,999,931		31.13p		1,878,439		28.24p
Forfeited during the year	(438,647)		33.55p		(738,950)		31.58p
Cancelled during the year	(117,640)		26.54p		(252,741)		27.62p
Exercised during the year	(863,310)		21.28p2		(708,634)		9.08p3
Expired during the year	(85,000)		31.50p		(110,000)		36.84p
Outstanding at 31 March	9,239,935		29.61p		8,744,601		28.62p
Exercisable at 31 March	4,313,166		28.50p		3,070,832		26.12p

1 Included within this balance are options over 551,176 (2008: 676,176) shares that have not been recognised in accordance with IFRS 2 as the options were granted on or before 7 November 2002. These options have not been subsequently modified and therefore do not need to be accounted for in accordance with IFRS 2.

2 The weighted average share price at the date of exercise for the options exercised is 32.36p

3 The weighted average share price at the date of exercise for the options exercised is 31.62p

For the shares outstanding as at 31 March 2009, the weighted average remaining contractual life is 5.3 years (2008: 5.2 years).

The weighted average fair value of options granted during the year was 10.23p (2008: 10.60p). The range of exercise prices for options outstanding at the end of the year was 11.75p - 100.50p (2008: 11.60p - 100.50p).

12. RELATED PARTY TRANSACTIONS

Compensation of key management personnel (including directors)

Group & Company

 

			2009		2008
			£’000		£’000
Short-term employee benefits			416		579
Post-employment benefits			38		44
Share-based payments			11		5
			465		628

 

 

RESPONSIBILITY STATEMENT BY MANAGEMENT

We confirm that to the best of our knowledge:

a.   the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities,  financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and

b.   the Annual Results Announcement includes a fair review of the development, performance and position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that it faces.

By order of the Board

R A Law

Director

OTHER INFORMATION

(i)	The above financial information, which is unaudited, does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the year ended 31 March 2009 has been extracted from the draft statutory accounts on which an unqualified audit opinion has been issued. Statutory accounts for the year ended 31 March 2009 will be delivered to the Registrar in due course. The annual results announcement is prepared on the same basis as set out in the previous year's statutory accounts. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.
(ii)	The annual results announcement was approved by the Board of Directors of GB Group plc on 1 June 2009.
(iii)	The ex-dividend date is 15 July 2009; the record date is 17 July 2009; the payment date is 13 August 2009.
(iv)	The AGM will take place on 30 July 2009.
(v)	The 2009 interim results announcement is expected to be on 24 November 2009.
(vi)	This report will also be available on the GB Group web site: www.gb.co.uk from 2 June 2009.
(vii)	The Company intends to dispatch to shareholders printed copies of the full annual report and accounts for the year to 31 March 2009 by 30 June 2009.

 

END

 

 

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