Interim Results
Intec Telecom Systems PLC
05 June 2007
Intec Telecom Systems PLC - Unaudited results for the six months ended 31 March
2007
Improved results delivered through increased revenue and effective cost
management
London, 5 June 2007 - Intec Telecom Systems PLC ("Intec" or "the Company"), a
leading supplier of billing and operations support systems to the global
telecoms industry, announces its unaudited results for the six months ended 31
March 2007 ("H1 2007"). Solid trading has allowed Intec to deliver increases to
both revenue and earnings. Intec also continues to win competitive contracts in
all regions, with notable wins in the USA, Australia, Brazil, Russia, Poland,
the Caribbean, China and Vietnam announced in the period. We brought new
products to market, including a new billing solution for the fast-growing mobile
sector and a solution to new EU data retention requirements.
Financial highlights
• Revenue increased by 6.5% to £61.3m (six months ended 31 March 2006
("H1 2006"): £57.6m)
• Adjusted operating profit* up 43% to £3.0m (H1 2006: £2.1m)
• Operating loss of £8.0m (H1 2006: profit of £2.1m) after impairment
charge and exceptional items of £10.9m
• Cash generated by operations of £5.0m (H1 2006: £10.7m)
• Adjusted basic earnings* per ordinary share of 0.73p (H1 2006:
0.43p)
• Basic (loss)/earnings per share of (2.86p) (H1 2006: 0.43p)
• Net cash of £19.6m (30 September 2006: £18.7m)
*Pre-exceptionals and goodwill impairment charges
Operational highlights
• Key new customer wins in the USA, Australia, Brazil, Russia, Poland,
the Caribbean, China and Vietnam
• New solutions launched for high growth mobile markets and new EU
legislative requirements
• Implemented more effective global delivery organisational structure
• Over 320 trained staff now deployed in offshore service centre
Commenting on today's results, John Hughes, Intec's Chairman and interim Chief
Executive Officer, said: "Intec's first half results show improved margins and
profitability, giving us a solid foundation for the second half. Our pipeline of
future new business is healthy and we have a stable recurring revenue stream and
a good contracted order book. Our challenge is to ensure that we convert both
new opportunities and current contracts into profitable revenue. The Board,
management team and staff are fully focused on this objective. I have confidence
that we have the ability to deliver results that will demonstrate continued
progress."
A meeting for analysts will be held today at 9.15 for 9.30 a.m. at the offices
of College Hill, 78 Cannon Street Street, London.
For further information, please contact:
Intec Telecom Systems PLC www.intecbilling.com
John Hughes, Chairman and interim Chief Executive Officer +44 (0)1483 745 800
Andrew Rodaway, Director of Marketing +44 7768 808082
College Hill
Sara Musgrave/Carl Franklin/Ben Way +44 (0)20 7457 2020
Pictures are available for the media to view and download from www.vismedia.co.uk
NOTES TO EDITORS
About Intec Telecom Systems PLC
Intec supplies billing software solutions to over 60 of the world's top 100
telecoms carriers and is one of the world's leading BSS/OSS (business and
operations support systems) vendors. Intec's customers include AT&T, BellSouth,
Cable & Wireless, The Carphone Warehouse (UK), China Unicom, Deutsche Telekom,
Eircom (Ireland), France Telecom, Hutchison 3G, O2, Orange, T-Mobile,
Telefonica, Vodafone, Virgin Mobile, Vivo and Verizon.
Intec has a comprehensive and expanding range of solutions and services ranging
from market leading mediation and convergent billing products through to
innovative IMS Charging solutions. Intec works closely with its customers, many
of whom have been with Intec since its inception, to provide the highest
standards of performance, flexibility and robustness to help carriers service
their customers effectively and profitably.
Founded in 1997, Intec is listed on the London Stock Exchange (ITL.L) and has
over 1,600 staff and 31 offices in 25 countries. For more information visit
www.intecbilling.com
CHAIRMAN AND INTERIM CEO'S STATEMENT
After a disappointing 2006, our focus this year is to make good on our promise
of improved financial performance. During the first half we made changes to our
management and operational structure, worked hard to win new business in a
highly competitive market, improved our global delivery capability and kept a
tight rein on costs. The improvement process is by no means finished, but it is
gratifying to report that first half results show improved margins and
profitability. We will continue to focus on business process improvements,
efficiency and cost optimisation.
During the first half Intec has continued to demonstrate success as a vendor in
a market that is consolidating around a handful of key participants. We have
seen revenue growth and new business in all regions, including especially strong
results from Asia-Pacific, with new contracts announced in the first half in
Australia, Brazil, the Caribbean, China, Poland, Russia, the US, and Vietnam.
In February we announced a contract with HT Mobile in Vietnam for a full suite
of Intec products, as well as a high-profile win at a tier 1 carrier in
Australia which is consolidating multiple mediation systems onto our convergent
platform. Key wins announced in EMEA in the first half included a major billing
contract with Poland's Polkomtel, and additional business with Russia-based
VimpelCom - one of the country's largest operators. In North America, which has
seen the greatest impact from carrier consolidation, we intend to bring growth
back to this region by rebuilding our business with consolidated entities,
especially by strengthening our partner engagements, expanding into new
verticals (including non-telecoms markets) and aggressively pursuing new tier
two customers in what is still the world's largest single communications market.
Successes in the US include the renewal of a multi-year, multi-million dollar
Carrier Access Billing (CABS) agreement with a Tier 1 service provider. In CALA
(Caribbean and Latin America) we announced a major win with Brazilian mobile
operator Claro for mediation technology to support over 20 million subscribers,
and a key win with UTS in the Caribbean for our new Intec Routing and Trading
Solution. We have a good pipeline of larger opportunities in this region.
This breadth of success underlines the strength of our technology, as well as
our capability to deliver on a global scale. We have continued to invest in
products, service delivery, and distribution, and our current pipeline of future
business demonstrates the results of our investment.
In September 2006 we announced the acquisition of EUR Systems, a provider of
outsourced billing services to the domestic US market, which has contributed to
our performance in the first half. We have successfully combined EUR with our
own similar business, consolidating certain shared facilities and functions to
reduce cost. No acquisitions have been made in the first half.
Intec has retained its position as one of the market's most innovative vendors
in the business and operations support systems space, launching several new or
upgraded products and solutions, including our new Intec Mobile Business
Solution, which targets the high-growth mobile market. We have continued to
invest in our delivery capability, as well as reorganising our whole approach to
professional services for greater efficiency and improved productivity through
the creation of a global delivery team that maximises utilisation and
responsiveness. Our Bangalore operation is progressing well and, in line with
our 2007 target, now has in excess of 320 trained staff. We expect these changes
to deliver increasing operational and financial benefits as we move forward.
Intec is delighted to have welcomed Robin Taylor to the Board in March as our
new Group Finance Director. Having served as Finance Director at ITNET prior to
its sale to Serco, as well as other substantial roles in public companies in the
software and services arena, Robin brings with him a wealth of experience and
strong capabilities in developing and refining both the finance function and its
contribution to the overall business. During the period our long-standing CEO
Kevin Adams and CFO John Arbuthnott left the business. We also announced the
departure of our senior non-executive Director, Roger McDowell, after a
five-year tenure. Kevin, John and Roger served Intec through periods of
substantial growth and development and I record my thanks to them all for their
contributions. Our search for a new CEO is well advanced, and we are looking to
strengthen the Board with new non-executive directors.
Outlook
First half results show improved margins and profitability, giving us a solid
foundation for the second half. Our pipeline of future new business is healthy
and we have a stable recurring revenue stream and a good contracted order book.
Our challenge is to ensure that we convert both new opportunities and current
contracts into profitable revenue. The Board, management team and staff are
fully focused on this objective. I have confidence that we have the ability to
deliver results that will demonstrate continued progress.
John Hughes
Chairman
4 June 2007
Group Finance Director's Review
In the six months to 31 March 2007 ("H1 2007") our Earnings Before Interest,
Tax, Depreciation and Amortisation ("EBITDA"), before exceptionals and goodwill
impairment, has improved to £6.5 million, a margin of 11%, compared to £4.7
million (8%) for the prior period. Intec generated operating profits before tax,
goodwill impairment and exceptionals of £3.0 million (H1 2006: £2.1 million) on
revenues of £61.3 million (H1 2006: £57.6 million). The results reflect a
recovery in revenues despite being adversely impacted by £4.6 million of
exchange losses due to a US dollar that has weakened by 14% since H1 2006 but
assisted by the acquisition of EUR. Positive cash flow of £5.0 million (H1 2006:
£10.7 million) was generated from operations. Adjusted earnings per share
(before goodwill and exceptionals) was 0.73p (H1 2006: 0.43p).
The operating profit figure of £3.0 million excludes an exceptional charge of
£2.4 million resulting from a detailed business model and operations review and
the associated Board and staff restructuring, as well as an impairment charge of
£8.5 million relating to goodwill on a previous acquisition. Loss per ordinary
share after these charges was 2.86p compared with a profit of 0.43p for the
comparative period.
Intec has four primary revenue sources - new licences, professional services,
managed services, and support & maintenance. Licence revenue grew 3% to £13.6m
(H1 2006: £13.2 m) representing 22% of total revenue. This category now includes
volume licence upgrades, reclassified from recurring revenue (all comparatives
are stated on the same basis). Professional Services, at around 37% of revenues,
contributed £22.9 million (H1 2006 £24.2 million).
Managed Services is a new category which we have established covering the
provision of various outsourced services, primarily billing, to our customers.
This includes our former billing bureau business, the acquired EUR business, and
revenue from new customers for this offering won outside the domestic US in the
first half. This area contributed 14% of revenues at £8.7 million (H1 2006: £3.5
million). Support and maintenance revenues represented 26% of the overall
revenue in the period, at £16.1 million (H1 2006: £16.7 million). This reduction
is primarily a consequence of exchange losses.
Improvement of margins is a key management priority. We have continued working
towards our objective of improvement in gross margin through ongoing cost
management, replacing expensive contractors with full-time staff, and the
delivery of a greater proportion of services from lower-cost locations. Gross
margin has improved around 1% in the first half to 53.5%, due to cost savings of
approximately £3.8 million and volume/mix related benefits of £1.4 million,
offset by foreign exchange losses of £2.7 million. The cost savings are
principally from the investment in our professional services centre in Bangalore
and from reduced headcount globally.
Total overhead costs, as detailed below, rose to £26.3 million compared with
£25.6 million. However, the 2007 figure includes £0.5m of additional
administrative costs for the acquired EUR business. These increases have been
partially offset by both cost savings made in the core business as a result of
actions taken at the end of 2006 and by foreign currency weakness which
contributed £1.6 million of benefit.
Distribution costs decreased 7% to £9.1 million (H1 2006: £9.8 million),
compared to the 6% increase in revenues, as a result of restructuring for
greater effectiveness in our sales and marketing operations. Development costs
fell 14% to £7.0 million (H1 2006: £8.2 million) as certain major projects
concluded successfully and we completed transition of some R&D resources to
lower cost locations.
Administrative expenses rose to £10.2 million (H1 2006: £7.6 million) due to the
additional expenses associated with EUR, a provision for the Company's variable
compensation scheme (no such provision was made in H1 2006), a continuing
investment in business systems and an increased provision for bad debts. Note
that to improve the quality of investor information we have re-allocated
facilities and IT costs, from Administrative costs, to Cost of Sales,
Distribution and Development for all reported numbers.
Reported loss before tax rose to £7.7 million (H1 2006: profit of £2.5 million)
primarily as a result of the exceptional charges of £2.4 million, and from the
impairment of goodwill. We have taken this impairment charge after a full review
of the goodwill associated with the 2003 acquisition of the Digiquant business.
This non-cash charge of £8.5 million represents 100% of the outstanding goodwill
on Digiquant. This decision rests on our judgement that the forecast revenues
from this business unit may not deliver sufficiently positive cash flows to
cover the disproportionately high property lease commitments and related
facilities costs acquired with the business.
Cash generated by operations was £5.0 million (H1 2006: £10.7 million), with net
cash at the period end of £19.6 million (30 September 2006: £18.7 million),
including £6.9 million of bank debt raised to fund the EUR acquisition. The
lower operational cash flows in 2007 are almost entirely due to an extra £10
million of cash collected in 2006, generated from higher levels of debtors and
accrued income in 2005.
Overall we have seen good financial progress in the business in the first half,
with solid revenue performance, improved margins, increased profitability and
positive control of costs. In the remainder of the year we shall continue our
focus on increasing revenues, productivity and cash generation, and reducing
cost.
Robin Taylor
Group Finance Director
4 June 2007
FINANCIAL HIGHLIGHTS
Six months ended 31 March 2007
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Revenue 61,299 57,578 112,320
(Loss)/profit before tax (7,692) 2,456 (5,301)
Operating (loss)/profit (7,954) 2,061 (6,018)
EBITDA before exceptional items (i) 6,455 4,741 3,626
Cash generated from operations 5,033 10,723 14,072
(Loss)/earnings per ordinary share (2.86)p 0.43p (2.06)p
Diluted (loss)/earnings per ordinary share (2.86)p 0.42p (2.06)p
Basic (loss)/earnings per ordinary share
before exceptional items (ii) 0.73p 0.43p (0.86)p
Notes to the financial highlights
£000 £000 £000
(i) (Loss)/profit before tax (7,692) 2,456 (5,301)
Net finance income (262) (395) (717)
Operating (loss)/profit (7,954) 2,061 (6,018)
Exceptional items 2,393 - 3,738
Goodwill impairment 8,521 - -
Depreciation and amortisation 3,495 2,680 5,906
EBITDA before exceptional items 6,455 4,741 3,626
(ii) Basic (loss)/earnings per share
before exceptional items:
(Loss)/profit after tax (8,716) 1,290 (6,252)
After tax impact of exceptional items 2,393 - 3,645
Impairment of goodwill 8,521 - -
Profit after tax before exceptional items 2,198 1,290 (2,607)
CONSOLIDATED INCOME STATEMENT
Six months ended 31 March 2007
Unaudited Unaudited Restated*
Six months ended Six months ended Year ended
Continuing operations 31 March 31 March 30 September
Note 2007 2006 2006
£000 £000 £000
REVENUE 2 61,299 57,578 112,320
Cost of sales (28,517) (27,276) (55,319)
GROSS PROFIT 32,782 30,302 57,001
Distribution costs (9,089) (9,803) (20,832)
Administrative expenses:
Development expenditure (7,020) (8,196) (16,549)
Depreciation and amortisation (3,495) (2,680) (5,906)
Goodwill impairment (8,521) - -
Exceptional items (2,393) - (3,738)
Other administrative expenses (10,218) (7,562) (15,994)
Total administrative expense (31,647) (18,438) (42,187)
OPERATING (LOSS)/PROFIT (7,954) 2,061 (6,018)
Investment income 480 501 894
Finance costs (218) (106) (177)
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE
TAX (7,692) 2,456 (5,301)
Income tax expense 3 (1,024) (1,166) (951)
(LOSS)/PROFIT FOR THE PERIOD (8,716) 1,290 (6,252)
(Loss)/earnings per share - basic 4 (2.86)p 0.43p (2.06)p
(Loss)/earnings per share - diluted 4 (2.86)p 0.42p (2.06)p
* - See Note 1
CONSOLIDATED BALANCE SHEET
31 March 2007
Unaudited Unaudited Audited
31 March 31 March 30 September
Note 2007 2006 2006
£000 £000 £000
NON-CURRENT ASSETS
Goodwill 93,385 101,541 101,924
Other intangible assets 12,869 7,224 14,006
Property, plant and equipment 7,497 8,012 7,946
Investments - 5 -
Trade and other receivables 5 592 588 586
Deferred tax asset 1,317 619 1,011
115,660 117,989 125,473
CURRENT ASSETS
Trade and other receivables 5 45,627 48,149 47,177
Cash and cash equivalents 26,513 29,747 25,960
72,140 77,896 73,137
TOTAL ASSETS 187,800 195,885 198,610
CURRENT LIABILITIES
Trade and other payables 6 35,163 29,936 37,130
Current tax liabilities 1,027 1,708 1,139
Bank loan and other borrowings 6,878 2,223 7,316
Provisions 8 301 869 326
43,369 34,736 45,911
NON-CURRENT LIABILITIES
Deferred tax liabilities 706 921 821
Other payables 7 1,066 824 890
Provisions 8 4,321 2,484 4,202
6,093 4,229 5,913
TOTAL LIABILITIES 49,462 38,965 51,824
EQUITY
Share capital 3,049 3,037 3,043
Share premium account 161,813 161,406 161,500
Merger reserve 249 6,768 6,768
Own shares (95) (95) (95)
Translation and other reserves (2,668) 1,525 (1,967)
Retained earnings (24,010) (15,721) (22,463)
TOTAL EQUITY 138,338 156,920 146,786
TOTAL EQUITY AND LIABILITIES 187,800 195,885 198,610
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended 31 March 2007
Share
Share premium Merger Own Translation Retained
Capital account reserve shares reserves earnings Total
£000 £000 £000 £000 £000 £000 £000
Balance at 1 October 2006 3,043 161,500 6,768 (95) (1,967) (22,463) 146,786
Exchange differences arising on
translation of foreign operations - - - - (701) - (701)
Net expense recognised directly in - - - - (701) - (701)
equity
Loss for the period - - - - - (8,716) (8,716)
Total recognised income and expense for
the period - - - - (701) (8,716) (9,417)
Issue of share capital net of share 6 313 - - - - 319
issue expenses
Recognition of share-based payments - - - - - 650 650
Transfer to merger reserve - - (6,519) - - 6,519 -
Balance at 31 March 2007 3,049 161,813 249 (95) (2,668) (24,010) 138,338
CONSOLIDATED CASH FLOW STATEMENT
Six months ended 31 March 2007
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Operating (loss)/profit (7,954) 2,061 (6,018)
Adjustments for:
Depreciation of property, plant and equipment 1,718 1,879 3,259
Amortisation of intangible assets 1,618 801 2,488
Amortisation of capitalised development 159 - 159
expenditure
Goodwill impairment 8,521 - -
(Gain)/loss on disposal of property, plant and
equipment (64) (8) 30
Share-based payment expense 650 701 1,501
Increase/(decrease) in provisions 170 (58) 1,268
Operating cash flows before movements in working
capital 4,818 5,376 2,687
Decrease in receivables 974 8,834 10,205
(Decrease)/increase in payables (759) (3,487) 1,180
Cash generated by operations 5,033 10,723 14,072
Income taxes paid (net) (1,608) (1,305) (1,994)
Net cash generated by operating activities 3,425 9,418 12,078
Investing activities
Interest received 479 492 933
Purchase of property, plant and equipment (1,531) (2,061) (3,480)
Purchase of intangible assets (1,467) (2,201) (4,356)
Proceeds on disposal of property, plant and
equipment 67 3 28
Expenditure on capitalised product development (123) (387) (490)
Acquisition of subsidiaries - - (7,380)
Net cash used in investing activities (2,575) (4,154) (14,745)
Financing activities
Interest paid (190) (35) (83)
Interest element of finance lease rental (10) (7) (16)
payments
VAT recovered on acquisition costs 207 261 261
Proceeds on issue of shares 115 421 521
Proceeds from new bank loan - - 7,101
Repayment of other borrowings - - (2,173)
Repayments of obligations under finance leases (126) (29) (62)
Net cash (used in)/ generated by financing
activities (4) 611 5,549
Net increase in cash and cash equivalents 846 5,875 2,882
Cash and cash equivalents at beginning of period 25,960 23,770 23,770
Effect of foreign exchange rates (293) 102 (692)
Cash and cash equivalents at end of period 26,513 29,747 25,960
NOTES TO THE UNAUDITED INTERIM FINANCIAL INFORMATION
Six months ended 31 March 2007
1. BASIS OF PREPARATION
The condensed consolidated financial statements for the six months ended 31
March 2007 have been prepared in accordance with the requirements of the Listing
Rules.
The financial information in this report is neither reviewed nor audited and
does not comprise statutory accounts for the purposes of Section 240 of the
Companies Act 1985. No statutory accounts for the period have been delivered
to the Registrar of Companies.
With the exception of those items noted below as reclassifications, the abridged
information for the year ended 30 September 2006 is based upon the Group's
audited accounts. The statutory accounts for the year ended 30 September 2006
have been delivered to the Registrar of Companies. The auditor's report on
those was unqualified and did not contain a Statement under either Section 237
(2) or Section 237(3) of the Companies Act 1985.
The accounting policies adopted in the preparation of the interim consolidated
financial statements are consistent with those followed in preparation of the
Group's annual financial statements for the year ended 30 September 2006 except
for the following:
For the year ended 30 September 2006, facilities and IT costs were shown as a
component of other administrative expenses. All facilities and infrastructure
costs are now allocated to the functions of cost of sales, distribution costs
and development expenditure. This allocation has been based on the average
headcount per key function. The balances for 30 September 2006 and 31 March 2006
have been restated to reflect this allocation. The effect of this classification
on the period ended 31 March 2006 is to reduce the other administrative expenses
by £3,145,000 (September 2006 - £6,762,000) and to increase cost of sales,
distribution costs and development expenditure by £2,135,000 (September 2006 -
£4,597,000), £369,000 (September 2006 - £790,000) and £641,000 (September 2006 -
£1,375,000) respectively. This decreases previously reported gross margin at 31
March 2006 from 56% to 53% (30 September 2006 - from 55% to 51%). Depreciation
charges for plant, property and equipment are now disclosed together with the
amortisation charge for intangible assets.
The Directors are of the opinion that the revised income statement provides a
clearer presentation of the group's activities.
This interim financial report was approved for issue by the Board of Directors
on 4 June 2007.
2. SEGMENTAL INFORMATION
Geographical segments
At 31 March 2007, the Group is organised into four key geographical segments:
Europe, Middle East and Africa (EMEA), North America, Caribbean and Latin
America (CALA) and Asia-Pacific. These four geographical segments are the
Group's primary reporting format for segment information by customer location.
Segment results include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise
development costs, corporate assets and liabilities and expenses.
Segment information under the primary reporting format is as disclosed in the
table below:
EMEA North Asia-Pacific CALA Unaudited
America Total
Continuing operations 2007 2007 2007 2007 2007
£000 £000 £000 £000 £000
Revenue 23,936 23,014 9,802 4,547 61,299
Segment profit 10,250 6,318 4,503 2,262 23,333
Unallocated costs:
- product operations (14,049)
- corporate costs (6,354)
- exceptional items (2,393)
- impairment of goodwill (8,521)
Operating loss (7,954)
Investment income/(finance charges) 262
Loss on ordinary activities before tax (7,692)
Taxation (1,024)
Loss for the period (8,716)
EMEA North Asia-Pacific CALA Unaudited
America Total
Continuing operations 2006 2006 2006 2006 2006
£000 £000 £000 £000 £000
Revenue 23,460 21,594 8,125 4,399 57,578
Segment profit 7,215 6,241 3,436 1,540 18,432
Unallocated costs:
- product operations (12,248)
- corporate costs (4,123)
Operating profit 2,061
Investment income/(finance charges) 395
Profit on ordinary activities before tax 2,456
Taxation (1,166)
Profit for the period 1,290
2. SEGMENTAL INFORMATION (continued)
Revenue by activity Unaudited Unaudited Restated*
Six months ended Six months ended Year ended
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Licence 13,614 13,222 23,811
Professional services income 22,859 24,175 48,838
Managed services 8,719 3,504 7,675
Support and maintenance fees 16,107 16,677 31,996
Total revenue by activity 61,299 57,578 112,320
* - Licence revenue now includes volume licence upgrades, which has been
reclassified from recurring revenue. Previously £2,679,000 at 31 March 2006
(£7,309,000 at 30 September 2006) was disclosed as volume licence upgrades.
Managed services revenue is a new category which we have established covering
the provision of various outsourced services, primarily billing, to our
customers.
3. INCOME TAX EXPENSE
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Current taxation:
UK corporation tax at 30% (2006: 30%) - - -
Foreign tax 1,074 918 1,935
1,074 918 1,935
Adjustments in respect of prior years
UK corporation tax 280 - (859)
Foreign tax 62 199 385
342 199 (474)
Total current tax expense 1,416 1,117 1,461
Deferred taxation:
UK - 49 -
Foreign (392) - (510)
Total deferred taxation (392) 49 (510)
Total income tax 1,024 1,166 951
4. (LOSS)/EARNINGS PER ORDINARY SHARE
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Continuing operations
Profit/(loss) for the period - basic and diluted (8,716) 1,290 (6,252)
Profit/(loss) for the period - basic and diluted (8,716) 1,290 (6,252)
Impairment of goodwill 8,521 - -
After tax effect of exceptional items 2,393 - 3,645
Adjusted profit for the period - basic and diluted 2,198 1,290 (2,607)
Number Number Number
'000 '000 '000
Weighted average number of ordinary shares - basic 304,502 302,437 302,952
Effect of dilutive potential ordinary shares options 270 2,812 -
Weighted average number of ordinary shares - diluted 304,772 305,249 302,952
Pence Pence Pence
Basic (loss)/earnings per ordinary share (2.86) 0.43 (2.06)
Effect of dilutive potential ordinary shares options - (0.01) -
Diluted (loss)/earnings per ordinary share (2.86) 0.42 (2.06)
Basic (loss)/earnings per ordinary share (2.86) 0.43 (2.06)
After tax effect of exceptional items 3.59 - 1.20
Adjusted earnings per ordinary share 0.73 0.43 (0.86)
Effect of dilutive potential ordinary shares options - (0.01) -
Adjusted diluted earnings per ordinary share 0.73 0.42 (0.86)
5. TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Non-current:
Prepayments 592 588 586
Current:
Trade debtors 26,705 24,710 30,211
Corporation tax - 329 329
Overseas tax 563 127 104
Other receivables 1,760 342 1,560
Prepayments 3,987 4,360 4,440
Accrued income 12,612 18,281 10,533
45,627 48,149 47,177
6. TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Obligations under finance leases 169 100 339
Trade payables 2,401 3,210 3,767
Other payables 4,954 2,716 6,227
Accruals 11,624 6,649 9,982
Deferred revenue 16,015 17,261 16,815
35,163 29,936 37,130
7. NON-CURRENT LIABILITIES - OTHER PAYABLES
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
£000 £000 £000
Obligations under finance leases 266 264 235
Other payables 800 560 655
1,066 824 890
8. PROVISIONS FOR LIABILITIES AND CHARGES
Onerous lease Unaudited
commitments Lease incentives Other provisions Total
£000 £000 £000 £000
At 1 October 2006 2,010 1,722 796 4,528
Reclassifications 98 (134) 36 -
Charged to the income statement - 536 136 672
Utilised/paid during the period (78) (318) (105) (501)
Translation differences 2 (29) (50) (77)
2,032 1,777 813 4,622
Analysed as:
Current liabilities 182 119 - 301
Non-current liabilities 1,850 1,658 813 4,321
2,032 1,777 813 4,622
Onerous lease commitments disclosed above relate to sub-let or vacant lease
commitments acquired with the Digiquant and Singl.eView businesses where the
lease commitment is expected to be greater than any sublease income. Amounts
provided relate to the period up to the first option to break on a property in
Denmark and properties acquired with the Singl.eView acquisition. The first
option to break for the Denmark property is in 2011 and accordingly the
provision above includes the discounted fair value of the future lease rental
shortfalls up to this point.
Lease incentives are in respect of rent free periods on certain properties
leased within the group. The provision is expected to be utilised over the life
of the lease, the longest of which expires in 2014.
Other provisions disclosed above mainly relate to future estimated costs to
complete certain ongoing legal matters in respect of Singl.eView, and lease
dilapidations relating to office leases in Canada. The lease dilapidations are
only expected to be utilised on the termination of the leases, which are all
greater than one year. The utilisation of the ongoing legal matters is uncertain
and shown as greater than one year.
.
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