Final Results

RNS Number : 8393W

Tracsis PLC

26 November 2010

 



Tracsis plc

Final Results for the year ended 31 July 2010

26 November 2010

Tracsis plc ("Tracsis" or the "Company") (AIM: TRCS), a leading provider of operational planning software and consultancy services to passenger transport industries , is pleased to announce its audited final results for the year ended 31 July 2010.

Highlights:

·      Revenue increased to £2.65 million (2009: £2.31 million) - increase due to acquisition and organic growth

·      Successful acquisition of Safety Information Systems Limited - product has extensive growth potential, demonstrated by a large contract win for the product for use within the Stockholm Metro

·      Launch of brand new product line: TRACSRoster - several new customer accounts secured, and continued success post year end into the current financial year

·      Adjusted EBITDA* of £701k (2009: £711k) - small reduction in underlying profit due to investment in overhead base in anticipation of future growth. Adjusted EBITDA* basic earnings per share of 3.6p (2009: 3.7p).

·      Strong balance sheet maintained, with cash balances at 31 July 2010 of £2.55m (2009: £2.99m). Reduction in cash is largely due to the acquisition in the year, and settlement of deferred consideration from previous acquisitions. The business remains debt free

* Earnings before finance income, tax, depreciation, amortisation, exceptional costs and share-based payment charges

John McArthur, CEO, commented:

"Tracsis has performed well in the past year and achieved further growth during a period of unprecedented economic and industry turmoil.  We have continued to invest in building our delivery and R&D capabilities, expanded our sales team, and grown our organic revenue streams.  At the same time we have made a further acquisition - our third to date - which adds further breadth and depth to our market offering.  Our efforts have resulted in record sales and a strengthened industry position which puts us in a great position for the future"

Enquiries:

Tracsis plc	Tel: [phone]
John McArthur, Chief Executive Officer	www.tracsis.com
Rod Jones, Chairman
Broker and NOMAD: Zeus Capital Ltd	Tel: [phone]
Alex Clarkson/Nick Cowles

The Company's Final Results are available on its website www.tracsis.com

Chairman's and Chief Executive Officer's Report

Introduction

For the third successive year since IPO in 2007, the Group is pleased to report on a period of further growth which has included the acquisition of Safety Information Systems Limited ("SIS") and the successful marketing of a brand new product line - TRACSRoster.  The Group has continued to invest in building our delivery and R&D capabilities, expanding our sales team, growing our organic revenue streams along with integrating the business offerings of RWA Rail Limited and Peeping Limited which were acquired in 2008 and 2009 respectively.  Our efforts have resulted in record sales and a strengthened industry position.

Set against a background of continuing economic and industry turmoil, which has included a change of government, the Group has retained a tight control of costs and cash management which has resulted in a strong balance sheet with good cash reserves and no debt.  Looking ahead, Tracsis is well placed for further growth and looks forward to reporting on the benefits of recent investments in the short term.

Business overview

Tracsis plc is a provider of resource optimisation software and operational planning consultancy to companies in the passenger transport industries (primarily passenger rail) within the UK and overseas markets. 

Tracsis's products and services can be broadly categorised into three revenue streams: resource optimisation software; passenger demand analysis and surveys; and operational and performance planning consultancy. The majority of these services and the revenue generated therein remain within the passenger bus and rail sector.  The Group's core product suite is used to automate and optimise the process by which labour schedules and rosters are created, allowing for this activity to be done with greater speed and with a higher degree of accuracy and efficiency than existing methods.

Financial summary

The Group achieved revenue of £2.65 million for the year, up 14.5% on our 2009 revenue of £2.31million and delivered an adjusted EBITDA* of £701,000 (2009: £711,000). Administrative costs excluding intangible asset amortisation and exceptional acquisition costs increased from £1.65m to £1.97m, due to the integration of the SIS acquisition and the investment in the Group's overhead base in anticipation of future growth. After taking into account intangible asset amortisation and exceptional acquisition costs, total administrative costs amounted to £2.07m (2009: £1.65m). 

At 31 July 2010, the Group had cash balances of £2.55m (2009: £2.99m) and remains debt free. The reduction in cash against 2009 was largely due to the SIS acquisition and settlement of deferred consideration from previous acquisitions. The Group's operating cash generation remained strong.

Trading for our core software products was stronger than anticipated and this partly reflects the growing reputation of Tracsis within transport circles but also demonstrates the continued and significant pressure on transport operators to increase operational efficiency and remove extraneous costs. 

Whilst software revenue was buoyant, our consultancy activity during the period was somewhat depressed and this was entirely in line with expectation given the on-going recession at large combined with the uncertainty in public spending (i.e. Network Rail) which was brought about by the change of government.  An unforeseen knock-on effect of this uncertainly was a delay to the retendering process for UK rail franchises.  As mentioned in our interim statement, this delay has resulted in no revenue being generated from franchise bidding during the period but it is testament to the Group that the overall impact on revenues was small given that we have outperformed elsewhere.  The Group anticipates franchise bidding activity will resume during 2011 once the Conservative government has carried out several pieces of strategic review work within the rail sector.

Trading progress

Software Licences and Maintenance

Tracsis continues to operate a software lease licence business model with contracts usually lasting for the duration of a customer's franchise operations (typically 7 - 10 years).  The Group continues to rely on close working relationships with all of the major train operating groups and employ a direct sales model which ensures our people and services and are closely aligned with the needs of the industry.

At present there are 3 core software products that span the scheduling, rostering and performance management reporting functions of transport operations.  The Group also provides implementation, support and maintenance services for each product as customers undertake the software adoption process. 

During the period the Group is pleased to report it has retained all previous software clients and has made progress in growing the customer base of all 3 key products.  Our customer list now includes East Midlands Trains (Stagecoach), South West Trains (Go-Ahead) and Transpennine Express (First Group).  We have also been successful in winning a major contract for our COMPASS product for use within Stockholm Metro and this is a major milestone given that Tracsis acquired this software as part of the purchase of Safety Information Systems in December 2009.  Along with the new software clients, the Group also carried out extensive revenue generating pilot work in New Zealand and the Republic of Ireland which the Directors believe should pave the way for additional software sales in the fullness of time.

Consultancy and training

Tracsis continues to provide a wide range of operational consultancy services to clients in the rail industry via its wholly owned subsidiary RWA Rail Ltd. These consultancy services include one-off engagements utilising our core software products but also encompass larger, more diverse projects which include the following elements: timetable planning and formulation; performance modelling; arbitration services; feasibility studies into new rail infrastructure and a variety of other ad-hoc management consultancy engagements. A significant part of the Groups' consultancy revenue is derived from rail franchise bidding where the RWA team provides a range of strategic operational advice on all aspects of a prospective bid.

In line with expectation, demand for consultancy services was depressed during the past 12 months which reflects a tightening on government spending following the recession at large combined with the general uncertainty brought about by a change of government.  This situation led to several rail re-franchising processes which has been scheduled to take place in 2010 to be delayed until 2011 or later - most notably East Coast, Greater Anglia and Essex Thameside.  However, looking ahead the Directors believe that 2011 will bring much needed clarity to the situation and continue to believe the transport industry will remain a key target market for both software and consultancy services. Any further unforeseen delays will only provide a timing issue in relation to work which Tracsis expects to undertake as part of the re-franchising processes.

Acquisition of Safety Information Systems Limited

On 4 December 2009, the Group announced the acquisition of Safety Information Systems Limited (SIS) for cash consideration of £791,000 and the issue of 97,087 ordinary shares in Tracsis. Safety Information Systems is a specialist provider of performance management software and develops and markets the COMPASS product suite (Combined Operational Management Performance and Safety System).  The COMPASS software is marketed to a wide variety of clients that operate within safety/performance critical environments which include passenger rail and can be used for a variety of critical reporting such as delay attribution and root cause analysis of safety incidents.

The Directors believes SIS and the COMPASS suite have extensive growth potential within the transport industries and the acquisition meets the overall growth strategy of the Group in acquiring complementary 'best-in-breed' solutions that can be developed and marketed to a homogenous client base under the Tracsis brand.  During the past 12 months the Group has begun the process of integrating the business operation of SIS with those of Tracsis and has hired key personnel to run SIS going forwards. 

Along with the acquisition of Safety Information Systems, the Group continues to evaluate other relevant businesses and technologies that have obvious synergies with Tracsis and remains focussed on strategic acquisitions as a means of growing the business in future.

Outlook

Tracsis has performed well in the past year and achieved organic growth and record sales during a period of unprecedented economic turmoil and industry instability. The acquisition of Safety Information Systems - our third to date - not only broadens the Group's product offering and customer base, but provides us access to entirely new markets outside passenger transport.

Furthermore, the Group has expanded our sales, implementation, and technical development capability which has allowed us not only to retain all of our previous customers but to secure several new key accounts with operators such as South West Trains, East Midlands Trains and Transpennine Express.  Looking ahead, the Group remains well placed to continue its goal of becoming a leading provider of operational planning software and consultancy services to the transport markets.  As always, our thanks go out to customers, shareholders and staff who continue to support us.

Rod Jones, Chairman

John McArthur, Chief Executive Officer

26 November 2010

Consolidated income statement for the year ended 31 July 2010

		2010	2009
	Notes	£000	£000
Revenue	4
- continuing		2,395	2,311
- acquisitions		252	-
Total revenue		2,647	2,311
Administrative costs		(2,074)	(1,645)
Adjusted EBITDA*		701	711
Amortisation of intangibles		(78)	-
Depreciation		(6)	(4)
Acquisition costs		(24)	-
Share-based payment charges		(20)	(41)
Operating profit
- continuing		380	666
- acquisitions		193	-
Total operating profit		573	666
Finance income		11	63
Profit before tax		584	729
Taxation		(98)	(218)
Profit for the year		486	511
Earnings per ordinary share
Basic	5	2.50p	2.69p
Diluted	5	2.29p	2.45p

* Earnings before finance income, tax, depreciation, amortisation, exceptional items and share-based payment charges. 

Consolidated statement of financial position as at 31 July 2010                                                                 

		Restated
	2010	2009
	£000	£000
Non-current assets
Property, plant and equipment	11	8
Intangible assets	2,351	1,892
	2,362	1,900
Current assets
Trade and other receivables	1,054	729
Cash and cash equivalents	2,546	2,986
	3,600	3,715
Total assets	5,962	5,615
Non-current liabilities
Deferred tax liabilities	362	271
	362	271
Current liabilities
Trade and other payables	707	1,003
Current tax liabilities	201	346
	908	1,349
Total liabilities	1,270	1,620
Net assets	4,692	3,995
Equity attributable to equity holders of the company
Called up share capital	78	77
Share premium reserve	1,839	1,839
Merger reserve	836	646
Share based payments reserve	122	102
Retained earnings	1,817	1,331
Total equity	4,692	3,995

Consolidated statement of changes in equity as at 31 July 2010

		Share		Share-based
	Share	Premium	Merger	Payments	Retained
	Capital	Reserve	Reserve	Reserve	Earnings	Total
	£000	£000	£000	£000	£000	£000
At 1 August 2008	70	1,641	-	61	820	2,592
Profit for the year	-	-	-	-	511	511
Total comprehensive income	-	-	-	-	511	511
Transactions with owners:
Share based payment charges	-	-	-	41	-	41
Cash share issue	2	198	-	-	-	200
Shares issued as consideration for business combinations	5	-	646	-	-	651
At 31 July 2009 (restated)	77	1,839	646	102	1,331	3,995
At 1 August 2009	77	1,839	646	102	1,331	3,995
Profit for the year	-	-	-	-	486	486
Total comprehensive income	-	-	-	-	486	486
Transactions with owners:
Share based payment charges	-	-	-	20	-	20
Shares issued as consideration for business combinations	1	-	194	-	-	195
Expenses of share issues	-	-	(4)	-	-	(4)
At 31 July 2010	78	1,839	836	122	1,817	4,692

Consolidated statement of cash flows for the year ended 31 July 2010

		2010	2009
		£000	£000
Operating activities
Profit for the year		486	511
Finance income		(11)	(63)
Depreciation		6	4
Amortisation of intangible assets		78	-
Income tax charge		98	218
Share based payment charges		20	41
Operating cash inflow before changes in working capital		677	711
Movement in trade and other receivables		(155)	960
Movement in trade and other payables		(15)	21
Cash generated from operations		507	1,692
Finance income		11	63
Income tax paid		(304)	(176)
Net cash flow from operating activities		214	1,579
Investing activities
Purchase of plant and equipment		(9)	(6)
Payment of deferred consideration		(152)	-
Acquisition of subsidiaries	3	(489)	(666)
Net cash flow used in investing activities		(650)	(672)
Financing activities
Expenses of share issues		(4)	-
Proceeds from the Placing (net of costs)		-	181
Net cash flow (used in)/from financing activities		(4)	181
Net (decrease)/increase in cash and cash equivalents		(440)	1,088
Cash and cash equivalents at the beginning of the year		2,986	1,898
Cash and cash equivalents at the end of the year		2,546	2,986

Notes

1          Financial information

            The financial information set out above does not constitute the company's statutory accounts for the years ended 31 July 2010 or 2009 but is derived from those accounts. Statutory accounts for 2009 have been delivered to the registrar of companies, and those for 2010 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.  

2.         Basis of preparation

(a)        Statement of compliance

The Group consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the EU and applicable law.

(b)        Basis of measurement

The financial statements have been prepared under the historical cost convention except for derivative financial instruments that are stated at their fair value.

(c)        Functional and presentation currency

These consolidated financial statements are presented in sterling, which is the Company's functional currency.  All financial information presented in sterling has been rounded to the nearest thousand.

(d)        Use of estimates and judgements

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.  The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods, if the revision affects both current and future periods.During the year, the Group revised its estimate of the useful economic lives of customer relationship intangibles due to a revised assessment of the rail franchise industry. The impact in the current year was £31,000.

 (e)       Changes in accounting policies

IFRS and IFRIC are issued by the International Accounting Standards Board (the IASB) and must be adopted into European Union law, referred to as endorsement, before they become mandatory under the IAS Regulation.

The following IFRSs, IFRIC interpretations and amendments have been adopted in the financial statements for the first time in this financial period:

(i)     IFRS 2 - Share-based payment: Vesting conditions and cancellation

       This is an amendment to IFRS 2 which clarifies the term "vesting conditions" and provides the accounting treatment for non-vesting conditions and cancellations.  This has been implemented by the Group but has had no impact on the results or assets of the Group.

(ii)    IFRS 3 - Business Combinations (2008)

From 1 August 2009 the Group has applied IFRS 3 Business Combinations (2008) in accounting for business combinations.  The change in accounting policy has been applied prospectively and has had no material impact on earnings per share.

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group.  Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.  In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.

       Acquisitions on or after 1 August 2009

       For acquisitions on or after 1 August 2009, the Group measures goodwill at the acquisition date as:

·    the fair value of the consideration transferred; plus

·    the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less

·    the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

       When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

       The consideration transferred does not include amounts related to the settlement of pre-existing relationships.  Such amounts are generally recognised in profit or loss.

       Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

       Any contingent consideration payable is recognised at fair value at the acquisition date.  If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.  Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

       Acquisitions prior to 1 August 2009

       For acquisitions prior to 1 August 2009, goodwill represents the excess of the cost of the acquisition over the Group's interest in the recognised amounts (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquiree.

       Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of acquisition.

       There have been no further alterations made to the accounting policies as a result of considering all amendments to IFRS and IFRIC interpretations that became effective during the accounting period as these were considered to be immaterial to the Group's operations or were not relevant.

 (iii)  IFRS 8 - Operating Segments

       IFRS 8 replaces IAS 14 - 'Segmental Reporting' and requires operating segments to be disclosed on the same basis as that used for internal reporting.  It has been implemented by the Group from 1 August 2009 and has had no impact on the results or net assets of the Group but has resulted in revised disclosures.  As of 1 August 2009 the Group determines and presents operating segments based on the information that internally is provided to the Board of Directors, which is the Group's chief operating decision maker ("CODM").  This change in accounting policy is due to the adoption of IFRS 8 Operating Segments.  Previously operating segments were determined and presented in accordance with IAS 14 Segment Reporting.  The new accounting policy in respect of operating segment disclosures is presented as follows.

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components.  An operating segment's operating results are reviewed regularly by the CODM to make decisions about resources to be allocated to the segment and assess its performance, for which discrete financial information is available.

Since the change in accounting policy only impacts presentation and disclosure aspects, there is no impact on earnings per share.

Under both IFRS 8 Operating Segments and IAS 14 Segment Reporting, the Group has determined that it has only one reportable segment.  This position will be monitored as the Group develops.

(iv)   IAS 1 (Revised) - Presentation of Financial Statements

       This is effective for the year ended 31 July 2010.  The standard requires a change in the format and presentation of the Group's primary statements but has had no impact on reported results or equity.

(v)    IFRS 7 - Finance Instruments - Disclosures (amendment)

       This is effective for the year ended 31 July 2010.  The amendment requires enhanced disclosures about fair value measurement and liquidity risk.

(vi)   Amendments to IAS 23 -Borrowing Costs

       This removes the option of immediately expensing borrowing costs that are directly attributable to a qualifying asset and requires such costs to be capitalised.  It has been adopted by the Group from 1 August 2009 and has had no impact on the results or net assets of the Group.

(vii)   IFRIC 17 - Distributions of Non-Cash Assets to Owners

       This was issued in November 2008 and is effective for annual periods beginning on or after 1 July 2009.  This is not currently applicable to the Group as it has not made any non-cash distributions.

(viii)  IFRIC 18 - Transfers of Assets from Customers

       This was issued in January 2009 and is effective for transfer of assets received on or after 1 July 2009.  This is not relevant for the Group as it has not received any assets from customers.

 (f)        Going concern

The Group is debt free and has substantial cash resources.  The Board has prepared cash flow forecasts for the forthcoming year based upon assumptions for trading and the requirements for cash resources.

Based upon this analysis, the Board has concluded that the Group has adequate working capital resources and that it is appropriate to use the going concern basis for the preparation of the consolidated financial statements.

(g)        Change of accounting presentation

During the year the Company reclassified certain reserve balances from share premium to merger reserve in order to correctly account for the issue of shares which took place for the acquisition of subsidiaries.  Comparatives have been restated accordingly. 

As the reclassification has no impact on profit, net assets, or on significant categories of assets, a third balance sheet has not been presented.

3.         Acquisition of subsidiary

On 4 December 2009, the Group acquired 100% of the issued share capital of Safety Information Systems Limited, for a combination of cash and share based consideration.  The company provides software products and services to companies principally in the transport industry which the Directors consider complements the existing services and will provide economies of scale. 

In the eight month period to 31 July 2010 the company contributed revenue of £252,000 and operating profit of £193,000 to the Group's results.  If the acquisition had occurred on 1 August 2009, management estimates that consolidated revenue would have been £320,000 and consolidated profit for the year would have been £175,000.  In determining these amounts, management has assumed that the fair value adjustments, determined provisionally that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 August 2009.

The acquisition had the following effect on the Group's assets and liabilities on the acquisition date:

			Recognised
	Pre-acquisition	Fair value	value on
	carrying amount	adjustments	acquisition
	£000	£000	£000
Intangible assets: Customer relationships	-	272	272
Intangible assets: Technology assets	-	230	230
Trade and other receivables	170	-	170
Trade and other payables	(25)	(42)	(67)
Income tax payable	(23)	-	(23)
Deferred tax liability	-	(129)	(129)
Net identified assets and liabilities	122	331	453
Goodwill on acquisition			136
			589
Consideration paid in cash			791
Net cash acquired			(302)
Net cash flow			489
Consideration paid: fair value of shares issued			50
Deferred contingent consideration:
- cash			45
- fair value of shares to be issued			5
Total consideration			589

Pre-acquisition carrying amounts were determined based on applicable IFRSs, immediately prior to the acquisition.  The values of assets and liabilities recognised on acquisition are the estimated fair values.

The fair value adjustments are provisional and arise in accordance with the requirements of IFRSs to recognise intangible assets acquired.  In determining the fair values of intangible assets the Group has used discounted cash flow forecasts.  The fair value of shares issued was based on market value at the date of issue.

The deferred contingent consideration is based on the maximum amount which could be payable under an earn out arrangement contained within the acquisition agreement.  This contingent consideration is dependent upon certain earnings targets being met and will be dependent upon the absolute level of earnings achieved in a designated period post acquisition.  The amount payable could vary between a minimum of £nil and a maximum of £50,000.

The Group incurred acquisition related costs of £24,000 which have been included within administrative expenses.

4.         Segment information

The Group's revenue and profit was derived from its principal activity which is the sale of resource optimisation software and closely associated consultancy services that assists with automating and optimising the process of labour scheduling within the transport industry. 

Consideration of IFRS 8 Operating Segments

Following the introduction of the above accounting standard, effective for accounting periods beginning on or after 1 August 2009, the Group has made the following considerations to arrive at the disclosure made in these financial statements.

IFRS 8 requires consideration of the Chief Operating Decision Maker ("CODM") within the Group.  In line with the Group's internal reporting framework and management structure, the key strategic and operating decisions are made by the Board of Directors, who review internal monthly management reports, budgets and forecast information as part of this.  Accordingly, the Board of Directors are deemed to be the CODM.

Operating segments have then been identified based on the internal reporting information and management structures within the Group.  From such information it has been noted that the CODM reviews the business as a single operating segment, receiving internal information on that basis.  The management structure and allocation of key resources, such as operational and administrative resources, are arranged on a centralised basis.  Due to the small size and low complexity of the business, profitability is not analysed in further detail beyond the operating segment level and is not divided by revenue stream.

The CODM reviews a split of revenue streams on a monthly basis and, as such, this additional information has been provided below.

	2010	2009
Revenue	£000	£000
Software licences	876	576
Post contract customer support	197	142
Consultancy services, training and other revenue	1,574	1,593
Total revenue	2,647	2,311

The principal activity of the Group is based mainly in the United Kingdom hence no geographical analysis is presented.  This position will be monitored as the Group develops.

Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items

Information regarding the results of the reportable segment is included below.  Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Board of Directors.  Segment profit is used to measure performance.  There are no material inter-segment transactions, however, when they do occur, pricing between segments is determined on an arm's length basis.  Revenues disclosed below materially represent revenues to external customers.

	2010	2009
	£000	£000
Revenues
Total revenue for reportable segments	2,647	2,311
Consolidated revenue	2,647	2,311
Profit or loss
Total profit or loss for reportable segments	701	711
Unallocated amounts:
Share based payment charge	(20)	(41)
Other exceptional items	(24)	-
Depreciation	(6)	(4)
Amortisation of intangible assets	(78)	-
Interest receivable	11	63
Consolidated profit before tax	584	729

	2010	2009
	£000	£000
Assets
Total assets for reportable segments	3,611	3,723
Unallocated assets - intangible assets	2,351	1,892
Consolidated total assets	5,962	5,615
Liabilities
Total liabilities for reportable segments	908	1,349
Unallocated liabilities - deferred tax	362	271
Consolidated total liabilities	1,270	1,620

Major customers

Transactions with the Group's largest customer represent 12.5% of the Group's total revenues.

5.         Earnings per share

Basic earnings per share

The calculation of basic earnings per share at 31 July 2010 was based on the profit attributable to ordinary shareholders of £486,000 (2009: £511,000) and a weighted average number of ordinary shares in issue of 19,459,000 (2009: 18,949,000), calculated as follows:

Weighted average number of ordinary shares

In thousands of shares

	2010	2009
Issued ordinary shares at 1 August	19,134	17,503
Effect of shares issued related to business combinations	325	1,076
Effect of shares issued for cash	-	370
Weighted average number of shares at 31 July	19,459	18,949

Diluted earnings per share

The calculation of diluted earnings per share at 31 July 2010 was based on profit attributable to ordinary shareholders of £486,000 (2009: £511,000) and a weighted average number of ordinary shares in issue after adjustment for the effects of all dilutive potential ordinary shares of 21,178,000 (2009: 20,780,000), calculated as follows:

Weighted average number of ordinary shares (diluted)

In thousands of shares

	2010	2009
Weighted average number of shares (basic)	19,459	18,949
Effect of shares options in issue	1,719	1,831
Weighted average number of shares (diluted) at 31 July	21,178	20,780

In addition, adjusted EBITDA* is shown below on the grounds that it is a common metric used by the market in monitoring similar businesses.

	2010	2009
	£000	£000
Adjusted EBITDA*	701	711
Basic adjusted EBITDA* per share	3.6p	3.7p
Diluted adjusted EBITDA* per share	3.3p	3.4p

* Earnings before finance income, tax, depreciation, amortisation, exceptional costs and share-based payment charges.

 

END

 

 

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