Final Results
Online Travel Corporation PLC
16 December 2003
FOR IMMEDIATE RELEASE 16th December 2003
ONLINE TRAVEL CORPORATION PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST OCTOBER 2003
The board of Online Travel Corporation plc ('OTC' or the 'Company') is pleased
to present the Company's unaudited preliminary results for the year ended 31
October 2003.
Results
• 23% growth in gross sales to £104.9million
• 40% growth in leisure division sales to £71.4 million
• EBITDA of £1.0 million (before exceptional items and web development
costs)
• Adaption of OTC systems for third party travel sector
• Adaption of OTC systems for demographic targeting
• New contract wins in business travel division worth £6 million
Outlook
• Post year end sales growth of 300% + in flagship brand,
OnlineTravel.com
• New exclusive strategic travel partnership with Freeserve.com
• Launch of ThomasCook.com
• Integration of no frills carriers into Travelstore.com's self-book
system
• Benefits of the implementation of £3.0 million cost reduction programme
£8.3 million fundraising to strengthen balance sheet and invest in growth
Chairman of OTC, Tomasso Zanzotto, commented:
'In an extremely challenging year for the travel industry, the Company has
strengthened its foundations and managed to expand its business.
'Current trading indications are very encouraging. Our flagship brand,
OnlineTravel.com, has achieved gross sales growth of more than 300 per cent over
the last six weeks. Whilst the Company's sales growth to-date has primarily been
generated from 'white label' partnerships, this growth in our flagship brand and
the recent launch of ThomasCook.com are significant milestones in our
development. Growth across our three sales channels: strategic partnerships;
travel licensing; and own brands; highlights OTC's ability to derive revenue
streams from a number of sources using one core technical platform.
'The £8.3 million placing also announced today, provides the Group with the
financial strength required to fulfil its ambitious growth plans and meet its
regulatory capital requirements.
The Board views the year ahead with optimism.'
For further information, please contact:
Online Travel Corporation plc
Mark Jones, Chief Executive Tel: + 44 (0) 20 8607 9281
Mark Simpkins, Finance Director Tel: + 44 (0) 20 8408 6742
CardewChancery
Richard Fallowfield Tel: + 44 (0) 20 7930 0777
Jeanette Hamster Tel: + 44 (0) 20 7930 0777
Chairman's Statement
2003 was a challenging year for the entire travel sector. I am therefore pleased
to report that the Group has achieved continued sales growth, further progress
in the development of its corporate objectives and has enhanced its future
prospects.
In addition to increasing overall sales during the year, we continued to focus
on developing our sales channels, adding to the content of our sites, and
achieving operating efficiencies. The Group is already experiencing the benefits
of the system enhancements implemented during the year and I am encouraged that
the quality of our products is being recognised by an increasing number of blue
chip clients.
The Group's strategy is to create a major content driven travel business able to
leverage its technological expertise to derive revenues from three channels -
our own brands, those of our 'white-label' partners and licenced sites - and I
am encouraged by developments across all channels.
Results
The value of the Group's transactional revenue grew to £104.9 million, an
increase of 23 per cent over last year. The main driver of this growth was a 40
per cent increase in leisure travel sales to £71.4 million, in turn driven
primarily by increasing volumes of dynamically packaged deals via our pioneering
Build-Your-Own (BYO) technology. The corporate and concession travel markets
remained difficult throughout the period, however, recent contract wins are
evidence of the quality of our offering in this area and provide encouragement
for the future of these businesses.
Statutory Group turnover increased to £86.5 million (2002: £70.2 million) and
statutory gross profit (before exceptional costs) increased to £11.8 million
(2002: £9.8 million). Despite pressure from travel industry suppliers to lower
commissions and change charging mechanisms, the gross margin percentage on
statutory turnover held up well at 13.6 per cent (2002: 13.9 per cent), driven
predominantly by increased higher margin BYO sales and the successful
implementation of booking fees.
EBITDA (before web development and exceptional costs) was £1.0 million (2002:
£2.0 million).
Web development costs, which we continue to charge as they are incurred,
increased to £2.4 million (2002: £1.6 million) reflecting the increased range
and integration of travel products and content on our own and client sites. This
figure includes approximately £0.4 million in relation to the integration of
Travelstore.com and Allhotels.com, acquired in 2002 and approximately £0.3 million
in relation to the development of our booking systems to enable their use by
third party travel companies. Despite charging all the development costs associated
with the establishment of the ThomasCook.com site in the year under review, the
Board have taken the view that the licence revenues should be deferred to the current
year.
Exceptional costs of £2.0 million (2002: £1.0 million) consist of £1.2 million
from the non-recovery of amounts due, including those from acquisitions made
last year and £0.8 million in respect of termination payments, re-organisation
costs and a write off relating to discontinued business streams.
An operating cost reduction programme was implemented towards the end of the
year, the full benefit of which is expected to be felt in the current year and
beyond. Annualised savings of approximately £3.0 million were identified from
cost reductions at Travelstore and All Hotels and from increased automation.
The net loss for the year, after a taxation credit for research and development
of £0.7 million (2002: £0.5 million) is £5.2 million (2002: £2.6 million),
resulting in a loss per share of 4.4p (2002: loss per share of 2.7p).
Balance Sheet / Funding
Group cash balances at 31 October 2003 were £2.5 million (2002: £4.1 million),
however, the Group's balance sheet, showing net current liabilities of £2.8
million (including a bank loan of £0.5 million) (2002: net current assets of
£0.9 million), is not sufficiently robust for the Travel Regulatory Bodies to
renew the Group's operating licences. In order to renew its annual Air Travel
Operators License, the Company requires sufficient balance sheet strength to
meet the minimum net free asset requirements of the Civil Aviation Authority.
For this reason, the Board have today announced a placing of new shares to raise
£8.3 million for the Company. The Board believe that these funds are adequate
for the Company to obtain all necessary licences to continue to operate in its
principal markets and to finance its anticipated growth.
Current trading and prospects
Further to the announcement on 6 October 2003 of a contract to provide a new UK
e-commerce platform for Thomas Cook, one of the worlds leading travel groups,
ThomasCook.com was launched on 25 November 2003. Flights, hotels and BYO
holidays are currently available on the site with further booking services,
including car hire and insurance, following in the new year. We expect this site
to be a significant source of new revenue for the Group.
Following the launch of an enhanced flight booking system and the introduction
of new search engine optimisation technology onto OTC's flagship brand,
OnlineTravel.com in October 2003, the site's sales volumes have increased. In
the period since the year end, sales through OnlineTravel.com increased by over
300 per cent compared to the same period last year and were achieved with only a
modest increase in marketing spend. Overall, leisure division sales are up by in
excess of 40 per cent, year on year, since the year end. This is all organic
growth and excludes sales via ThomasCook.com.
Travelstore.com, the Group's business travel site, has recently completed the
first phase of the integration into its flight booking engine of a number of the
leading 'no-frills' carriers. Such integration will continue into the New Year.
This seeks to enable OTC to provide Travelstore.com clients with a more complete
range of flight options.
OTC has also recently agreed an enhanced, exclusive contract with the UK's
number one internet services provider, Freeserve. Our new strategic relationship
with Freeserve and other third parties further endorses the Company's strategy
of low cost customer acquisition in partnership with major portals and retailers
and demonstrates the quality of our services and products.
Current trading indications are very encouraging. Whilst the Company's sales
growth to-date has primarily been generated from 'white label' partnerships, the
growth in our flagship brand and the recent launch of ThomasCook.com are
significant milestones in our development. Growth across our three sales
channels: strategic partnerships; travel licensing; and own brands, highlight
OTC's ability to derive revenue streams from a number of sources using one core
technical platform.
We do not underestimate the challenges of a rapidly changing travel industry,
but our dedicated and enthusiastic management and employees continue to focus on
increasing sales and producing further cost efficiencies. This coupled with the
actions taken to strengthen the Group's balance sheet puts us in a strong
position to benefit from the continued predicted growth in online travel in
Europe. We look forward to building further on the sound platform we have
established in 2003 and growing revenues from all three of our income streams.
Tommaso Zanzotto
Chairman 16th December 2003
CHIEF EXECUTIVE'S REVIEW
Operational Review
OTC operates travel sites for a wide range of portals, media groups, retailers
and other travel businesses. Enhancements to our systems undertaken during the
year have already resulted in significant new sites such as ThomasCook.com being
added to our existing list which includes Freeserve, The Times, The Daily
Telegraph, The Guardian, Financial Times, Priceline, Cheapflights.com, Virgin,
and Tiscali in the UK and Zuji, AOL and Alta Vista in the Asia Pacific region.
Our technological ability to provide targeted services to different demographic
groups of consumers highlights the flexibility of our system and has allowed us
to launch our own Youthtravel.com site and several other sites for major youth
and student groups including student.uk.com and the Ministry of Sound. This
ability has been recognised by many other consumer groups and we are in
discussions with a number of them to provide similar services.
We continue to offer our customers the choice of booking online or via our call
centres, but our focus remains on driving more business online, where the cost
of processing is a fraction of the cost of a call centre booking.
Overall growth in gross sales during the year of over 23% to £104.9 million was
pleasing, in light of the increased threat of terrorism, the war in Iraq and the
impact of SARS.
Own Brand Strategy
The OTC business model enables large portals, media groups and retailers to
provide e-travel services tailored to the needs of their customers and the
recently launched OnlineTravel.com brand, provides the Group with visibility on
client sites. As the number of major media and retail clients grows, so does the
awareness and value of our OnlineTravel.com brand.
Other own brands include specialist sites such as 1ski.com, Ifyouski.com,
Ifyougolf.com, Ifyoudive.com and various activity, youth and explorer sites.
These brands have a growing database of direct customers and we are continually
adding to the quality of the content and products on offer.
Whilst we plan to use our multiple brand strategy to exploit the unique virtues
of online marketing to achieve growth, our marketing strategy in 2004 will be
focused on building on the initial success of OnlineTravel.com, our flagship
brand.
Technology Licensing
OTC has adapted its proprietary technology to enable it to derive additional
licensing revenues. Real opportunities exist in the travel market for licensing
selected technology and the quality of our products for both the business and
the leisure travel sectors places us in a strong position to capitalise on direct
and third-party licensing agreements.
In the corporate travel market 'Envoy', an Internet based business travel
management system, enables large corporate groups or travel agencies to manage
their business travel requirements. During the year, two new clients were secured
and we anticipate that the inclusion of no-frills carriers and hotels in the
first quarter of 2004 will allow us to convert more potential sales.
In the leisure travel market, 'Travel Junction', a product consisting of
selected components of our leisure booking systems, formed the basis of the most
significant contract of the year, ThomasCook.com. The announcement of our new
contract with Thomas Cook during the year and the subsequent launch of the site
on 25 November 2003 is a significant milestone in our development. We are
encouraged by the interest that this has generated and are in discussions with
several large travel companies that are attracted by the end-to-end e-commerce
systems we can provide. We believe few other European based travel businesses
can offer the same range of end-to-end e-commerce services.
Divisional Review
Leisure
The leisure travel division experienced the highest growth during the period,
with a 40 per cent increase in gross sales to £71.4 million (2002: £51.0
million).
This increase in sales highlights the increasing trend amongst consumers towards
planning and booking their travel online and the enhancements undertaken to our
product range, particularly to include BYO capability. 2003 was also a good year
for our own brands, particularly OnlineTravel.com and our winter sports site
Ifyouski.com which experienced increased levels of transactions. This trend has
continued since the year end, most notably with the spectacular growth in sales
at OnlineTravel.com.
OTC has also recently agreed an enhanced contract with the UK's number one
internet services provider, Freeserve. As part of this new contract, OTC will
offer users on the Freeserve travel channel exclusive access to key travel
components including flights and dynamic packaging sections. OTC will also
offer ferries, Eurostar, villa and short-break services.
Corporate
Corporate travel business sales were impacted not only by the war in Iraq and
SARS, but also by economic pressures on corporate travel budgets, a general
reduction in the average transactional values of scheduled air tickets, a
migration of business travellers to low cost carriers (which were not available
on the Travelstore.com booking engine during the year) and by direct booking.
Gross sales contribution from the division of £25.1 million represented a
marginal increase on the £24.3 million reported in 2002. On a like for like
basis, however, taking into account the Travelstore business which was acquired
in the third quarter of 2002, gross sales reduced by 26 per cent.
Whilst we expect conditions in the business travel sector to continue to be
challenging, we are encouraged by a number of new contracts won towards the end
of the year - Chivas Brothers, Ekonsol and InterPublic Group - which in
aggregate are expected to generate in excess of £6 million of gross sales in the
current year.
In addition, Travelstore.com has recently completed the first integration of a
'no-frills' carrier into its flight booking system. This allows Travelstore.com
to offer a no frills carrier solution and therefore a more complete range of
flight options to customers via its corporate self-book system. Further such
carriers are expected to be integrated into the Travelstore.com systems shortly.
Travelstore.com's internet travel management system is recognised as one of the
most advanced in the European market and ownership of this platform stands the
Group in good stead to benefit from expected increases in online corporate
self-booking.
Trade concessions
The difficult trading conditions in the travel industry led to redundancies in
the sector making this a challenging period for our trade concession business.
The gross sales of £8.4 million were 17 per cent below those achieved in 2002.
We have reduced costs within the division and continue to focus on building on
the 30 per cent of concession transactions that are transacted online.
Financial Review
The following pro-forma profit and loss account for the Group includes the sales
and associated costs of joint ventures and associates and the direct costs of
Travelstore.com Limited and Allhotel.com Limited acquired last year.
Year ended 31 October
--------- ---------
2003 2002
£m £m
Leisure travel and media 71.4 51.0
Business travel 25.1 24.3
Concession travel 8.4 10.2
--------- ---------
Gross Sales Value 104.9 85.5
--------- ---------
--------- ---------
Gross Profit 13.3 11.5
--------- ---------
12.7% 13.4%
Operating Costs
Sales and Marketing costs (2.2) (1.8)
Reservations & call centre costs (4.2) (3.7)
Central overheads (3.4) (2.8)
All Hotels (1.0) (0.3)
Travelstore (1.5) (1.0)
--------- ---------
(12.3) (9.5)
--------- ---------
EBITDA Pre-Web (pre-exceptionals) 1.0 2.0
Web Development (2.4) (1.6)
--------- ---------
EBITDA Post-Web (1.4) 0.4
Depreciation/Amortisation (1.8) (1.7)
Finance and bonding (0.8) (0.7)
Exceptionals (2.0) (1.0)
R&D tax credit 0.7 0.5
--------- ---------
(3.9) (3.0)
--------- ---------
========= =========
Loss (5.2) (2.6)
========= =========
The increase in overhead is heavily influenced by the £1.0 million attributable
to All Hotels, acquired in the fourth quarter of 2002 and the £1.5 million
attributable to Travelstore, acquired in the third quarter of 2002. Travelstore
has been fully integrated with Joint Venture Travel and All Hotels is now
operated from London, which has resulted in the closure of its Edinburgh office,
with the exception of a small team of developers. Costs for both businesses are
expected to be significantly reduced in the current year. In the case of
All Hotels, directly attributable costs in 2004 are projected to be less than
£0.5 million.
Excluding the acquisitions of All Hotels and Travelstore, operating costs
increased by 19% to £9.8 million (2002: £8.2 million), in line with management
expectations.
Interest and bonding costs increased to £0.8 million (2002: £0.7 million)
reflecting an increased volume of transactions and higher premiums in the
insurance bond market.
Call centre support and customer relationship management costs increased to £4.2
million (2002: £3.7 million) as part of the drive to improve service levels and
conversion rates. The introduction of enhanced technology, especially the new
mid-office processing system and continued benefits of scale, along with
increased use of the internet to book, will result in lower costs as a
percentage of sales.
Sales and marketing costs of £2.2 million (2002: £1.7 million) reflect an
absolute increase in marketing spend as a result of increased commission on
sales paid to white-label partners and an increase in promotion of the
OnlineTravel.com brand.
General administration and overhead costs increased to £3.4 million (2002: £2.8
million) reflecting the costs of expanding the senior management team and
supporting infrastructure to meet increased volumes. The increase includes the
head office cost of integrating acquisitions and the implementation of
back-office efficiencies. We expect further operational efficiencies from the
introduction of new technology solutions to our business processes.
Technology and Product Development
We are continually seeking to improve our technology to attract more clients and
customers and convert a higher percentage of 'visitors' into transacting
customers. Our investment in technology is geared to developing scaleable
systems that encourage online sales at the front end and automated booking,
fulfilment and settlement procedures. We remain focused on deploying our
technology resources to increase the range of our products, improving the
functionality of our core booking engines and providing our clients with the
advantages of unique products and personalisation.
Considerable enhancements have been made to our Order Processing System (OPS) to
encompass all aspects of travel transaction administration across all divisions,
including increased automation from ticketing robots and automated financial
reconciliation of receipts and payments. A version of OPS has also been rolled
out for the Asia Pacific market.
A large part of our technical resource in 2003 was focussed on bedding down the
acquisitions made in 2002. I am pleased to report that the systems integration
has been largely completed. During the year we have further finalised the
process of adapting our booking systems for third party use and we recently
announced our first major contract in this area with Thomas Cook. The
introduction of new search engine optimisation technology has had a significant
impact on the recent growth in sales at OnlineTravel.com.
Scheduled for launch early in the new year is an enhanced version of our BYO
system, which will include improvements to the flights engine and access to more
hotels and villas, and an improved integrated hotels solution.
Acquisitions
On 16th June 2003, the Company acquired the e-travel brands Deckchair.com and
Leisurehunt.com for an aggregate of £150,000 in cash as a cost effective way of
building market share and providing an extended user base for potential BYO
customers.
Deckchair.com, one of the first e-travel brands in the UK, had a database of
410,000 registered users with a profile similar to the Company's own brands
OnlineTravel.com and BargainHolidays.com. A redesigned Deckchair site was
launched on 19th June 2003 combining the best attributes of both sites,
including a BYO capability.
Leisurehunt.com had 192,000 registered users with a profile closely fitting that
of OTC's main hotel site, Allhotels.com.
Outlook
Industry research still predicts considerable growth in the European online
travel sector over the next few years, with the highest rates of growth in
dynamic packaging and the online hotel sector.
OTC was one of the early pioneers of dynamic packaging with its BYO technology
and the launch of the new version of this technology in January 2004 is expected
to maintain the Group at the forefront of this high margin, growth business.
Combined with the launch of its enhanced hotels solution, this is expected to
place the Company in a strong position to benefit from anticipated growth.
The recent strong growth at OnlineTravel.com is very encouraging and expected to
continue. The enhanced technology and search techniques which acted as a
catalyst for this growth will be employed on other own brand sites including
Deckchair.com, A2BTravel.com, BargainHolidays.com and Allhotels.com in 2004.
An ongoing review of the Company's portfolio has highlighted some brands with
lower growth potential. With systems integration complete, the Company is
examining the potential to profitably dispose of some of these brands.
The Company will continue to leverage its systems across multiple sales
channels. The majority of sales growth in the current year has been, and is
expected to continue to be, via our online booking systems, for which the
incremental processing and fulfilment costs have been minimised as a result of
increased automation. Flagship sites such as OnlineTravel.com and
ThomasCook.com, at which a high proportion of sales are transacted online, are
expected to account for a high proportion of anticipated growth.
The fundraising announced today puts the Company on a sound financial footing
and we are therefore confident that OTC will be able to benefit from the
continued growth in the online travel sector. We look forward to reporting on
our progress on the significant growth opportunities available to us from each
of our sales channels.
Mark Jones
Chief Executive 16th December 2003
Consolidated Profit and Loss account for the year ended 31 October 2003
Year ended Year ended
31 Oct 2003 31 Oct 2002
(Unaudited) (Audited)
____________________________________________________________
Pre-
Exceptional Exceptional
items Items Total Total
£000's £000's £000's £000's
Total
Transaction
Value(1) 104,859 - 104,859 85,503
_________ _________ _________ _________
- Continuing 86,499 - 86,499 64,455
- Acquisitions - - - 5,804
--------- -------- --------- ----------
Group Turnover 86,499 - 86,499 70,259
Cost of sales (74,692) (325) (75,017) (60,406)
_________ _________ _________ _______
Gross profit 11,807 (325) 11,482 9,853
_______ _________ _________ ________
Operating Costs
Selling and
distribution
costs (5,783) (70) (5,853) (6,371)
Administration
costs (7,478) (1,623) (9,101) (4,281)
Operating
Costs before
depreciation
and goodwill
amortisation (13,261) (1,693) (14,954) (10,652)
EBITDA (1,454) (2,018) (3,472) (1,069)
Depreciation (1,291) - (1,291) (1,418)
Goodwill
amortisation (500) - (500) (362)
--------- -------- --------- ----------
Total
Operating
Costs (15,052) (1,693) (16,745) (12,432)
Operating loss
--------- -------- --------- ----------
- Continuing (3,245) (2,018) (5,263) (2,398)
- Acquisitions (181)
--------- -------- --------- ----------
Group
Operating Loss (3,245) (2,018) (5,263) (2,579)
Share of
associate
company profit 100 187
_______ _________
Group Loss on
Ordinary
Activities
before
interest and
taxation (5,164) (2,392)
Interest
receivable 32 25
Interest
payable and
similar
charges (808) (666)
_______ _____
Group loss on
ordinary
activities
before
taxation (5,941) (3,033)
Taxation (note 6) 716 473
_______ _____
Retained loss
for the
financial year (5,225) (2,560)
_______ _______
Loss per share Pence Pence
- basic (4.4) (2.7)
_______ _______
- fully diluted (4.4) (2.7)
_______ _______
(1) Total transaction value does not represent the group's statutory turnover
and comprises amounts relating to the Group and its share of associates
Consolidated Balance Sheet at 31 October 2003
As at As at
31 Oct 2003 31 Oct 2002
(Unaudited) (Audited)
£000's £000's
Fixed assets 8,764 8,945
Intangible assets
Tangible assets 1,872 2,183
Investment in associated companies 184 238
_______ _______
Total Fixed Assets 10,820 11,366
_______ _______
Current assets
--------- ---------
Debtors 5,230 5,890
Cash at bank and in hand 2,508 4,173
--------- ---------
7,738 10,063
Creditors: amounts falling due within one year (10,568) (9,161)
--------- ---------
Net current assets/(Liabilities) (2,830) 902
_______ _______
Total Assets less current Liabilities 7,990 12,268
Creditors: amounts falling due after one year (615) (880)
_______ _______
Net Assets 7,375 11,388
_______ _______
Capital and reserves 1,219 1,142
Called up share capital
Share premium account 17,529 15,972
Capital reserve 1,499 1,499
Other Reserve - 391
Profit and loss account - deficit (12,872) (7,616)
_______ ________
Total equity shareholders' funds 7,375 11,388
_______ _______
Consolidated Cashflow Statement for the year ended 31 October 2003
Year ended Year ended
31 Oct 2003 31 Oct 2002
£000's £000's
Net cash outflow from operating activities (446) (75)
DIVIDENDS FROM JOINT VENTURES AND ASSOCIATES 95
Returns on investments and servicing of finance
Interest received 32 25
Interest paid (808) (666)
____
(1,222) (621)
Taxation 459 -
Corporation tax refunds
Capital expenditure (960) (1,719)
Payments to acquire tangible assets - continuing
- acquisitions
--- ---
_______
(1,724) (2,340)
Acquisitions and disposals (161) (437)
Purchase of subsidiary undertaking
Net cash acquired with subsidiary undertaking 655
Purchase of businesses (677) -
_________
Net cash outflow before financing (2,563) (2,122)
Financing 1,243 3,676
Issue of ordinary share capital - continuing
Loans to associated undertakings 154 (37)
New borrowings 500
Net cash inflow from financing 1,397 4,139
________
Increase/(decrease) in cash (1,165) 2,017
Notes
1. Basis of Preparation
The results incorporated in the preliminary announcement have been prepared on
the basis of accounting policies consistent with previous years.
The preliminary announcement was approved by the Board of directors on 15
December 2003. The figures for the year ended 31 October 2003 do not constitute
full accounts within the meaning of Section 240 of the companies Act 1985
The figures for the year ended 31 October 2002 have been extracted from the
accounts for 2002, which have been delivered to the registrar of companies. The
auditors have reported on those accounts and their report was unqualified and did
not contain statements under section 237 (2) of (3) of the Companies Act 1985.
The Annual Report and Accounts for the year ended 31 October 2003 will be sent
to shareholders in February 2004.
2. Loss per share 2003 2002
Attributable loss (£000's) (5,225) (2,560)
========== ==========
Average number of ordinary shares in issue (000's) 117,462 93,671
========== =========
Basic earnings (loss) per share (pence) (4.4)p (2.7)p
======== =========
Fully diluted earnings (loss) per share (pence) (4.4)p (2.7)p
======== =========
The fully diluted earnings (loss) per share takes account of outstanding share
options and warrants. The calculation shows that the fully diluted loss per
share is lower than the undiluted loss; in accordance with the requirements of
FRS 14, this is not considered to be dilutive.
3. Reconciliation of movements in shareholders' funds 2003 2002
£000's £'000
Opening shareholders' funds 11,388 7,002
New share capital subscribed 77 332
Share premium 1,557 6,223
Other reserve (391) 391
Currency movement on opening reserves (31)
Loss for the financial period (5,225) (2,560)
----------
Closing shareholders' funds 7,375 11,388
======= =========
4. Reconciliation of operating loss to net cash
outflow from operating activities 2003 2002
£'000 £'000
Operating loss (5,264) (2,579)
Depreciation of tangible fixed assets 1,291 1,418
Amortisation of goodwill 500 356
Currency movement on opening reserves (31)
Decrease in debtors 918 211
Increase in creditors 2,139 519
------- --------
Net cash outflow from operating activities (446) (75)
------- ========
5. Reconciliation of net cash flow to movement in net
cash 2003 2002
£'000 £'000
Increase/(decrease) in cash in the period (1,165) 2,017
Cash outflow from repayment of debt (500) -
--------- ---------
Change in net cash resulting from cash flows (1,665) 2,017
Net cash at 31 October 2002 4,173 2,156
_______ _______
Net cash at 31 October 2003 2,508 4,173
_______ _______
6. Taxation
No value is attributed to tax losses except where their recovery is reasonably
certain.
In the case of Research and Development tax credits, recovery is assessed as
being reasonably certain when each of the following conditions is met
- relevant expenditure has been incurred at the balance sheet date
- there is no reason to believe that the claim would be subject to
challenge by the Inland Revenue
This information is provided by RNS
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