Half-yearly Report
23 March 2010
Eurovestech plc
("Eurovestech", the "Group" or the "Company")
Interim report for the six months ended 31 December 2009 ("the period" or "the
six months")
Highlights
* Realisation of investment in KSS Retail Ltd for £11 million
* Sale of part of ToLuna holding realises £7.1 million
* Reported pretax profit of £39.0 million from continuing operations
* Net assets of £68.6 million (20p per share)
* Proposed return of up to £10 million to shareholders
* Cash return of 2.18p per share subject to shareholder approval and buyback
authorisation
* Eurovestech celebrates tenth birthday with strong balance sheet and
excellent prospects
Richard Grogan, Chairman, comments
"The share price of Eurovestech today has more than trebled since the float in
March 2000 at 5p. We continue to focus on developing and delivering on the
existing potential of our portfolio."
Further Enquiries
Eurovestech plc
Richard Bernstein (Chief Executive Officer) 020 7491 0770
Merchant John East Securities Limited
David Worlidge / Simon Clements 020 7628 2200
Cenkos Securities
Ivonne Cantu 020 7397 8900
Chairman's Statement
I am pleased to report our results for the six months ended 31 December 2009; a
period of significant progress for Eurovestech and its investee companies. The
period began with a remarkable and transformational acquisition for ToLuna, our
biggest investee company, and ended with the realisation at an excellent profit
on our investment in KSS Retail Ltd. These successes and the progress of the
rest of the portfolio laid the ground for the return of cash to shareholders,
details of which were announced earlier this month.
These achievements came at a time of continued challenging global economic
conditions. A tepid recovery appears to have started from the nadir reached
during the credit crisis, but your Board recognises that we are still a long
way from returning to the stability or rates of economic growth previously
experienced. Banking and credit markets remain fragile; concern has shifted
from problem companies to problem economies. These conditions have been a test
of the strength of our management teams and the robustness of our businesses.
Both are emerging in excellent shape.
The way was led by ToLuna. Having established a track record of rapid and
profitable organic growth, on 15 July 2009 it completed the acquisition of the
internet surveys division of Greenfield Online ("Greenfield Online") from
Microsoft for $40 million. This brought Greenfield Online, a pioneer of online
market research services in the USA, into the ToLuna stable and transformed
ToLuna into the leading independent global provider of market research
services, with strong market positions in Europe and North America and
platforms for growth in Eastern Europe and Asia.
This was a transformational deal for ToLuna and one which sets the seal on its
remarkable success since its foundation in 2000. It now has a resource base of
more than four million panellists in 33 countries and a base in "social voting"
which is full of potential. Following the Greenfield Online acquisition,
ToLuna's stock market value rose above £100 million and is currently more than
£125 million. To meet demand for ToLuna shares, Eurovestech sold part of its
investment at 210p per share, realising a net £7.1 million. Eurovestech
co-founded ToLuna in 2000 and its total cost of investment was £2 million. To
date it has realised a net £14.6 million from its investment, and continues to
hold a 29.8 per cent holding in ToLuna, which is currently valued at £38
million.
Just as ToLuna got the six month period off to an excellent start, the sale of
KSS Retail Ltd, announced on 31 December 2009, brought it to a successful
conclusion. KSS Retail was sold to dunnhumby Limited, a subsidiary of Tesco
Plc, for a total of £12.9 million cash. The net proceeds to Eurovestech, after
employee option entitlements, were £11 million. Eurovestech acquired Knowledge
Support Systems Limited in June 2003 for £1 million at a time when it was
lossmaking. It was rationalised, streamlined and in September 2007, KSS Retail
was demerged from the fuels division KSS Ltd. By the time of its sale, KSS
Retail had been transformed into a leading provider of price optimisation
solutions. Eurovestech continues to own 100 per cent of KSS Ltd.
Results for the Eurovestech for the six months ended 31 December 2009 show a
profit before tax from continuing operations of £39.0 million. The comparative
figure for the six months to 31 December 2008 is £3.3 million. The large
increase in profits is a consequence of two successful disposals in the period
and of changes in the way the Company's investment in ToLuna is required to be
valued under accounting rules. The realised gains on the part-sale of ToLuna
and the disposal of KSS Retail, together account for a reported profit on
disposal of £13.2 million.
Until July 2009 when the Company sold some of its holding in ToLuna, ToLuna was
treated for accounting purposes as a subsidiary of Eurovestech. Accounting
rules require that investments in subsidiaries are shown at asset value. Now
that ToLuna is no longer treated as a subsidiary, accounting rules require that
Eurovestech's holding is valued at its stock market valuation and requires the
Company to recognise a gain on the re-recognition of ToLuna. At operating
profit level, Eurovestech reported net gains on financial assets at fair value
of £28.2 million reflecting the re-recognition of ToLuna.
Basic earnings per share were 11.41p against 1.91p in the corresponding period.
Our focus, as always, is on building the value of our companies for investors.
We regard the net asset value of our investments as an important benchmark. Net
asset value reflects the costs of the group's trading activities over the
period and of management incentive payments under contractual agreements on
realisations. Our report includes the company balance sheet of Eurovestech
which shows shareholders' funds of £68.6 million (equivalent to 20p per share),
compared to £64.8 million a year earlier and £72.9m at 30 June 2009. Since the
end of the period, net assets have increased by approximately £4 million. We
are greatly encouraged by the progress of our investee companies, which is set
out in more detail in the portfolio review which follows.
PORTFOLIO REVIEW
TOLUNA
In addition to concluding the acquisition of Greenfield Online, ToLuna made
further excellent progress in its trading during the six months. In a trading
update issued on 1 February 2010, ToLuna reported that for calendar year 2009,
revenues were expected to exceed £49 million and underlying pre-tax profit
(before exceptional costs and amortisation) was expected to be at least £7
million. These were ahead of market expectations, with pre-tax profit more than
10 per cent. above market expectations. Revenue growth was strong in all
territories, with significant progress in North America and Europe. ToLuna now
operates panels in 33 countries and has a resource base of more than four
million panellists. The technological strength of its offering was reinforced
by the acquisition of Greenfield Online.
The acquisition, completed on 15 July 2009, was accompanied by a £28 million
share placing at 210p per share. To meet demand, Eurovestech sold 3.55 million
shares, realising £7.1 million net of all costs. Following this sale,
Eurovestech retains a 29.8 per cent. holding in ToLuna, which at 22 March 2010
was valued at £38 million. Eurovestech remains fully supportive of ToLuna's
strategy and believes that the successful integration of Greenfield Online has
greatly strengthened its global position and prospects.
KSS LTD ("KSS Fuels")
KSS Fuels now comprises three distinct offerings to support businesses pricing
fuels; Software, Analytics and Consulting.
KSS Fuels delivered a record performance for the six months ended 31 December
2009. Revenues were 11 per cent. ahead of the same period a year earlier, with
a 20 per cent. profit margin at EBIT (earnings before interest and tax) level,
compared to a loss a year ago. Having reported delays in the finalisation of
some customer orders in the first half of 2009, KSS secured several outstanding
orders. It also benefited from the reduction in costs implemented early in
2009.
Subsequent to the period end, KSS Fuels reported a substantial order from The
Pantry Inc, one of the largest independently operated convenience store chains
in the United States. The Pantry selected a suite of KSS Fuels products at more
than 1,600 US retail locations. KSS Fuels entered 2010 with a strong pipeline
of software deals expected to close in both the US and Europe and of business
intelligence analytics and pricing consultancy services from its existing
customer base. It has finalised a contract with a large multi-country fuels
retailer in Europe and started work on five consulting projects. It has
partnered with Valroart, a Brazilian pricing consultancy, to act as sales agent
for KSS Fuels. As an endorsed business solution partner of SAP, KSS Fuels is
working closely with SAP globally on new prospects in North America, Latin
America and Europe. KSS Fuels is a 100 per cent. owned subsidiary of
Eurovestech.
KSS RETAIL LTD ("KSS RETAIL")
Prior to its sale, KSS Retail announced more than doubled unaudited revenues
for the year ended 30 June 2009, with an unaudited profit before and after tax
of £1.2 million.
MAGENTA CORPORATION ("MAGENTA")
Magenta's Maxifier online advertising optimisation product continues to build
on its recent successes. Having already won contracts from Channel 4, Bauer
Media and BSkyB, Maxifier recently signed a worldwide strategic partnership and
licensing agreement with a major global advertising group. This has the
potential to accelerate Maxifier's growth greatly. Magenta's logistics
operation continues to seek Software-as-a-Service licensing deals which will
produce recurring revenues, rather than one-off payments. Conditions in
logistics markets have inevitably been affected by the economic downturn.
Despite this, Magenta has continued to expand business with its existing
clients and now has a growing pipeline of business in the UK and the USA,
particularly in the field of patient transport services, where its Maxoptra
solution is beginning to be adopted by UK hospitals and clinics. In the USA,
Maxoptra is being trialled by suppliers to the Veterans Administration.
Magenta recently won a contract with Corporate Solutions Limited, a 4PL
logistics provider which is acting as a showcase for Magenta's advanced
scheduling solutions. Magenta has begun collaborating with Cambridge University
and a number of major transport groups on "last mile" initiatives which have
the potential to open up new markets. This progress notwithstanding, conditions
remain extremely challenging and it is important that the logistics operation
builds its revenue base further. The sales staff in the USA and UK has been
reinforced. Eurovestech owns 46.9 per cent. of Magenta.
LOGNET SYSTEMS ("LOGNET")
LogNet won five new customers and significant upgrade business from several of
its existing customers during 2009, while the value of its pipeline more than
doubled, as major telecoms companies recognised the value of its customer
management and billing solutions. E- billing and customer care solutions can
help telecoms companies to cut their operational costs and achieve greater
profitability.
In September 2009, LogNet was selected by Caiway in the Netherlands to
implement its multiple play customer management and billing solution. Caiway
provides digital TV, internet and telephone services over IP networks. In
November 2009, LogNet deployed its MaxBill product suite for MYtv, which
recently launched a digital satellite TV service in the Ukraine.
For the calendar year 2009, LogNet's revenues rose by 216 per cent. compared to
2008 and it earned a margin of 16 per cent. before interest and tax, with a
particularly strong performance in the six months ended 31 December 2009.
LogNet's management is confident that its progress during 2009 lays the base
for continued growth in the current year. Following a funding round in February
2010 and the conversion of preference shares, Eurovestech owns 23.9 per cent.
of LogNet.
MIST/AUDIONAMIX
Mist Technologies, which now markets its products under the Audionamix brand,
achieved further recognition for its sound separation technology.
In the run up to last Christmas, Audionamix was commissioned by Universal Music
to create a new version of Dame Vera Lynn's wartime classic song "We'll Meet
Again" with the current Fron Male Voice Choir. This UK Christmas hit attracted
widespread interest from the public and the music industry.
More recently, Audionamix signed two confidential contracts with major
Hollywood groups. Audionamix has appointed Robert Hewitt, previously Global
Vice President of Sales at THX, to accelerate its commercial development. This
follows the appointment of Pierre Lescure, one of the leading figures in the
French media and entertainment industries, as a non-executive director. He is a
former managing director of media group Canal+ and former co-managing director
of Vivendi Universal.
During 2009, Audionamix filed six patents in the field of source separation,
alone or co-signed with established sound research laboratories. Audionamix and
a Norwegian partner were winners of EUREKA's Eurostars programme with their
RAABSPM project. A total of EU1.5 million (£1.3 million) of funding was granted
to the project. More than 500 "beta testers" worldwide are now using
Audionamix's UnMixingStation software, which allows complete automatic source
separation. Eurovestech owns 37.8 per cent. of Mist/Audionamix.
ARKEX LTD ("ARKeX")
ARKeX's gravity gradiometry surveys, which allow energy and mineral explorers
to make airborne surveys which give an accurate picture of sub-surface geology,
continue to make progress. It began work on the first BlueQube marine survey
off the western coast of Greenland. More recently it completed a survey of the
Zone Sud area of offshore Gabon for CGGVeritas, a leading international
geophysical company. This work was completed ahead of a major licensing round
in Gabon. In December ARKeX appointed Dr Steve Curl, an experienced director of
private equity companies in the oil and gas sector, as non-executive chairman.
Eurovestech owns 2.4 per cent. of ARKeX.
CHARITABLE DONATIONS
The Company announces that it has today issued 500,000 new ordinary shares in
the issued share capital of Eurovestech divided equally between the following
five charitable organizations: Fredericks Foundation, Great Ormond Street
Hospital Children's Charity, Mango, Marie Curie Cancer Care and ABF (Army
Benevolent Fund) The Soldiers' Charity.
Richard Bernstein, Chief Executive of the Company, has paid the £5,000 to
facilitate their issue, representing the nominal value of these shares of 1
penny per share. Application has been made for these shares to be admitted to
AIM and it is expected that dealings will commence on 31 March 2010.
Including these shares, since its flotation in 2000, Eurovestech has created
and gifted 9.6 million shares to 85 charitable organizations. These shares have
a market value of more than £1.5 million. We hope this will encourage other
companies to support charities in a similar way.
PROSPECTS
This month marks the tenth anniversary of Eurovestech's flotation in March
2000. The intervening decade has been a very testing one for technology
investors. Many investment ventures were launched, very few survive.
Eurovestech has not only survived but has built a portfolio of businesses which
have performed with great resilience in the most challenging economic
conditions.
Following recent realisations, we are happy to celebrate our tenth birthday by
delivering a return of cash. Following consultations with our major
shareholders, proposals have been posted for a cash return of approximately £
7.5 million or 2.18p per share, with up to a further £2.5 million being
allocated to a share buyback scheme. These proposals will be put to a
shareholder meeting on 29 March 2010. Having shown its ability to grow
successful businesses, Eurovestech is now demonstrating its ability to realise
value from these and to share the gains with its investors.
The potential to build further value remains very promising, both from our
existing portfolio and from exciting new investment opportunities. Net of the
planned cash return, the Company will retain a strong balance sheet with
adequate cash reserves to fund the development of the portfolio. It is evident
that current economic conditions may give rise to investment opportunities on
attractive terms. Some promising opportunities are currently under review.
The share price of Eurovestech today has more than trebled since the float in
March 2000 at 5p. The techMark index over the same period has declined by
approximately 67 per cent. Nonetheless, the directors are keenly conscious of
the disparity between the share price and the underlying value of the assets -
a frequent dilemma for companies with a market value below £100 million. Though
the Company has demonstrated its ability to realise investments at or above
their book value, the market discount persists. Consequently, a proactive
approach is being taken, which includes the proposal to return £7.5 million
cash to shareholders and a share buyback scheme of up to £2.5 million. We
continue to focus on developing and delivering on the exciting potential of our
portfolio.
Richard Grogan
Chairman
22 March 2010
Consolidated Income Statement
Six month Six month 15 month
period to period to period to
31 December 31 December 30 June
2009 2008 2009
(audited)
(unaudited) (unaudited) (restated)
Continuing operations Notes £'000 £'000 £'000
Revenue 3 3,328 2,694 7,466
Investment income 14 24 35
Net gains on financial assets at 4 28,173 4,502 2,458
fair value
Profit on disposal of non-current 4 13,180 - -
investments
Operating expenses (5,725) (3,987) (9,664)
Operating profit 3 38,970 3,233 295
Finance income 34 80 82
Finance costs (1) (9) (38)
Profit before tax 39,003 3,304 339
Income tax credit - - 96
Profit for the period from 39,003 3,304 435
continuing operations
Discontinued operations
Profit for the period from 296 3,258 5,754
discontinued operations
Profit for the period 39,299 6,562 6,189
Attributable to:
Equity holders of the Company 39,299 5,313 4,112
Minority interest - 1,249 2,077
39,299 6,562 6,189
Earnings per share
Basic earnings per share (pence) 5 11.41 1.91 1.80
Diluted earnings per share (pence) 5 11.29 1.88 1.78
Prior period figures are restated for reclassification of KSS Retail as
discontinued operations.
Consolidated Statement of Comprehensive Income
Six month Six month 15 month
period to period to period to
31 December 31 December 30 June
2009 2008 2009
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Profit for the period 39,299 6,562 6,189
Foreign exchange movements (45) 400 (277)
Total income and expense recognised in the 39,254 6,962 5,912
period
Attributable to:
Equity holders of the Company 39,254 4,752 3,821
Minority interest - 2,210 2,091
39,254 6,962 5,912
Consolidated Statement of Financial Position
31 December 31 December 30 June
2009 2008 2009
Notes (unaudited) (unaudited) (audited)
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 100 1,131 240
Goodwill - 6,266 -
Other intangible assets 32 7,357 54
Financial assets at fair value 6 45,048 8,487 9,913
through profit or loss
Deferred tax asset 1,372 1,372 1,372
46,552 24,613 11,579
Current assets
Trade and other receivables 15,713 14,338 3,921
Financial assets at fair value 3,755 931 1,200
through profit or loss
Cash and cash equivalents 2,082 4,761 4,299
Held-for-sale assets - - 22,992
21,550 20,030 32,412
Liabilities
Current liabilities
Trade and other payables 2,148 9,611 4,087
Income tax liabilities - 469 -
Borrowings 20 1,517 17
Held-for-sale liabilities - - 8,018
2,168 11,597 12,122
Net current assets 19,382 8,433 20,290
Non-current liabilities
Trade and other payables - 474 -
Borrowings 26 16 30
Deferred tax liability - 862 -
Provisions 5,418 2,517 3,375
5,444 3,869 3,405
Net assets 60,490 29,177 28,464
Equity
Capital and reserves attributable to
the equity holders of the Company
Issued capital 3,445 3,439 3,443
Share premium 18,798 18,727 18,771
Other reserves 132 (300) 34
Retained earnings 38,115 (715) (1,184)
60,490 21,151 21,064
Minority interest - 8,026 7,400
Total equity 60,490 29,177 28,464
Consolidated Statement of Cashflows
Six month Six month 15 month
period to 31 period to 31 period to
December December 30 June
2009 2008 2009
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Cash flows from operating activities
Profit for the period before taxation 39,299 7,379 7,474
Adjustments for:
Net finance income (33) (10) (46)
Depreciation of property, plant and 86 479 1,005
equipment
Amortisation of intangible assets 11 878 2,979
Gains on financial assets (28,173) (4,502) (2,598)
Impairment of financial assets - - 140
Profit on disposal of non-current (13,180) - -
investments
Movement on provision 2,043 572 1,430
Investment income (14) (24) (35)
Share based payments 11 234 585
Increase in trade and other receivables (3,245) (1,703) (2,405)
(Decrease)/increase in trade and other (987) 1,907 (1,296)
payables
Net cash (used in)/generated from (4,182) 5,210 7,233
operations
Finance costs (1) (131) (195)
Income tax paid - (799) (581)
Net cash (used in)/generated by (4,183) 4,280 6,457
operating activities
Cash flows from investing activities
Finance income 34 141 157
Purchase of subsidiary undertakings (net - - (5,097)
of cash acquired)
Purchase of property, plant and (67) (580) (1,066)
equipment
Purchase of intangible assets (21) (1,933) (4,082)
Dividends received 75 60 475
Disposal of financial assets 13,086 14,081 52,619
Purchase of financial assets (12,271) (15,513) (50,685)
Net cash generated by/(used in) 836 (3,744) (7,679)
investing activities
Cash flows from financing activities
Finance lease capital repayments (1) (112) (279)
Finance lease loan drawn down - 98 243
Dividends paid to minority interest - (55) (432)
Proceeds from issue of equity shares 2 3 7
Net cash generated by/(used in) 1 (66) (461)
financing activities
Net (decrease)/increase in cash and cash (3,346) 470 (1,683)
equivalents
Exchange movements 65 74 186
Cash and cash equivalents at the start 5,363 2,709 6,860
of the period
Cash and cash equivalents at the end of 2,082 3,253 5,363
the period
Consolidated Statement of Changes in Equity
Share Share Other Foreign Retained Minority Total
capital premium reserve exchange earnings interest equity
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2008 3,436 18,680 116 175 (5,296) 5,309 22,420
Foreign exchange - - - (50) - 266 216
movements
Profit for the - - - - (732) 241 (491)
period
Share based payment - - 6 - - - 6
charge
At 30 June 2008 3,436 18,680 122 125 (6,028) 5,816 22,151
Foreign exchange (561) 961 400
movements
Profit for the - - - - 5,313 1,249 6,562
period
Charity shares 3 47 - - - - 50
Share based payment - - 14 - - - 14
charge
At 31 December 2008 3,439 18,727 136 (436) (715) 8,026 29,177
Foreign exchange - - - 320 - (1,213) (893)
movements
Profit for the - - - - (469) 587 118
period
Charity shares 4 44 - - - - 48
Share based payment - - 14 - - - 14
charge
At 30 June 2009 3,443 18,771 150 (116) (1,184) 7,400 28,464
Foreign exchange - - - (45) - - (45)
movements
Profit for the - - - - 39,299 - 39,299
period
Charity shares 2 27 - - - - 29
Share based payment - - 11 - - - 11
charge
Disposal of - - - 132 - (7,400) (7,268)
subsidiary
At 31 December 2009 3,445 18,798 161 (29) 38,115 - 60,490
Notes to the interim report
1. Legal status and activities
Eurovestech Plc ("the Company") and its subsidiaries (together "the Group")
make investments in technology businesses.
The principal trading subsidiaries during the period were Knowledge Support
Systems Limited ("KSS Ltd") and KSS Retail Limited ("KSS Retail'). Their
activities were as follows:
KSS Ltd is a provider of price optimisation technology and services to the oil
and gas sectors.
KSS Retail a provider of price optimisation technology and services to the
retail sector.
The Company is a public limited company which is quoted on the Alternative
Investment Market of the London Stock Exchange and is incorporated and
domiciled in the UK. The address of the registered office is 29 Curzon Street,
London, W1J 7TL.
2. Basis of preparation
This interim report for the six month period ended 31 December 2009 has been
prepared in compliance with IAS 34 `Interim financial reporting'. It does not
include all the information required for full annual financial statements and
should be read in conjunction with the consolidated financial statements of the
Group for the 15 month period ended 30 June 2009, which were prepared under
International Financial Reporting Standards ("IFRS") as adopted by the European
Union.
The interim financial information has been prepared on a basis which is
consistent with the accounting policies adopted by the Group for the last
financial statements and in compliance with IAS 34. The Company has also
adopted the amendments to IAS 1 `Presentation of Financial Statements' and IFRS
8 `Operating Segments' which has resulted in some minor changes to both the
Income Statement and Segmental information presentation respectively.
The financial information presented does not constitute statutory accounts as
defined by section 240 of the Companies Act 1985. The Group's statutory
accounts for the 15 month period to 30 June 2009 have been filed with the
Registrar of Companies. The auditors, PricewaterhouseCoopers LLP, reported on
these accounts and their report was unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985.
Comparative figures are given for the six months to 31 December 2008 and the 15
month period to 30 June 2009.
The income statement for the 15 month period to 30 June 2009 has been restated
to include the results of KSS Retail, which was disposed on 31 December 2009
(see note 4), within discontinued operations. Discontinued operations for the
two comparative periods include both the results of KSS Retail and ToLuna plc.
Current period discontinued operations include only the results of KSS Retail.
3. Segmental analysis
a. Primary reporting format - business segments
The segment results for the six month period ended 31 December 2009 are as
follows:
Venture Software Total
capital development
£'000 £'000 £'000
Total segment revenue 133 3,195 3,328
Inter segment revenue - - -
Revenue 133 3,195 3,328
Investment income 14 14
Net gains on financial assets 28,173 - 28,173
at fair value
Profit on disposal of non-current 13,180 - 13,180
investments
Other operating expenses (3,192) (2,533) (5,725)
Operating profit 38,308 662 38,970
Net finance income 33
Profit before tax 39,003
Income tax credit -
Profit for the period 39,003
The segment results for the six month period ended 31 December 2008 are as
follows:
Venture Software Total
capital development
£'000 £'000 £'000
Total segment revenue 68 2,766 2,834
Inter segment revenue (13) (127) (140)
Revenue 55 2,639 2,694
Investment income 24 24
Net gains on financial assets 4,502 - 4,502
at fair value
Other operating expenses (1,251) (2,736) (3,987)
Operating profit 3,330 (97) 3,233
Net finance income 71
Profit before tax 3,304
Income tax credit -
Profit for the period 3,304
The segment results for the 15 month period ended 30 June 2009 are as follows:
Venture Software Total
capital development (restated)
(restated)
£'000 £'000 £'000
Total segment 145 7,617 7,762
revenue
Inter segment (86) (210) (296)
revenue
Revenue 59 7,407 7,466
Investment income 35 - 35
Net gains on financial assets at fair value 2,458 - 2,458
Other operating expenses (3,170) (6,494) (9,664)
Operating (loss) / profit (618) 913 295
Net finance income 44
Profit before tax 339
Income tax credit 96
Profit for the 435
period
4. Group investment disposals
Partial disposal of Toluna plc
On 26 June 2009, ToLuna Plc ("ToLuna"), a Eurovestech subsidiary, announced the
conditional acquisition of the business and assets of the ISS Division of
Greenfield Online, which was subsequently completed on 15 July 2009. The total
consideration, paid in full on 15 July 2009, was £24.4 million. The acquisition
was financed through an equity placing of £28 million to which the Company did
not contribute.
Additionally, in conjunction with the above transaction, the Company agreed to
sell 3,552,383 ToLuna shares at 210p per share, the Placing price, which
realised £7.1 million after disposal costs. As a result of this share sale and
ToLuna's share placing, the Company's shareholding in ToLuna reduced from 50.6
per cent to 29.9 per cent and ToLuna is now recorded as an investment in the
Group accounts. This resulted in a profit on partial disposal of £4.3m in the
consolidated accounts. Additionally, as a consequence of reinstating ToLuna as
an investment in the Group Balance Sheet a profit of £29 million is shown as
the difference between the share of net assets and the market value of the
investment at the balance sheet date.
Disposal of KSS Retail
On 31 December 2009, the whole of the issued share capital of KSS Retail was
sold to dunnhumby Limited, a subsidiary of Tesco plc, for a cash consideration
of £12.9 million. After taking account of management and employee option
entitlements, Eurovestech was due £11.0 million of this consideration. £10.7
million was received at the start of January 2010 and £0.3 million is payable
by 31 March 2010. Hence, £11.0 million is recognised within Trade and Other
Receivables at the balance sheet date. A profit on disposal of £8.9 million has
been recorded in the consolidated results.
5. Earnings per share
Six months Six months 15 month
to 31 to 31 period to
December December 30 June
2009 2008 2009
(unaudited) (unaudited) (restated)
£'000 £'000 £'000
Profit for the period attributable to 39,003 3,304 435
continuing operations
Profit for the period attributable to 296 3,258 5,754
discontinued operations
Profit for the period attributable to equity 39,299 6,562 6,189
shareholders
Basic earnings per share (pence)
from continuing operations 11.32 0.96 0.13
from discontinued operations 0.09 0.95 1.67
11.41 1.91 1.80
Diluted earnings per share (pence)
from continuing operations 11.20 0.95 0.13
from discontinued operations 0.09 0.93 1.65
11.29 1.88 1.78
Shares Shares Shares
Issued ordinary shares at start of the 344,322,801 343,622,801 343,622,801
period
Ordinary shares issued in the period 200,000 300,000 700,000
Issued ordinary shares at end of the period 344,522,801 343,922,801 344,322,801
Weighted average number of shares in issue 343,422,801 343,772,801 343,825,912
Dilutive effect of options 3,657,024 4,463,119 3,864,801
Diluted weighted average shares 348,079,825 348,235,920 347,690,713
6. Non-current financial assets at fair value through profit or loss
Equity investments
£'000
At 1 March 2008 6,991
Additions 470
Net gain on investments at fair 2,622
value
Impairment of investments (140)
Disposals (30)
At 1 July 2009 9,913
Additions 5,665
Net gain on investments at fair 29,480
value
At 31 December 2009 45,058
The additions and fair value gains primarily relate to re-recognition of Toluna
as an investment at fair value.
7. Company Balance Sheet
At 31 At 31 At 30
December December June
2009 2008 2009
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Fixed assets
Tangible assets 4 3 2
Investments 54,548 62,022 71,842
54,552 62,025 71,844
Current assets
Debtors 13,068 1,789 1,681
Investments 3,755 931 1,200
Cash at bank and in hand 784 1,253 1,196
17,607 3,973 4,077
Creditors: amounts falling due within one (3,542) (1,205) (2,983)
year
Net current assets 14,065 2,768 1,094
Net assets 68,617 64,793 72,938
Capital and reserves
Called up share capital 3,445 3,439 3,443
Share premium account 18,798 18,679 18,771
Other reserve 100 100 100
Profit and loss account 46,274 42,575 50,624
Shareholders' funds 68,617 64,793 72,938
8. Return of Cash
As disclosed in the Return of Cash Circular sent out to shareholders on 10
March 2010, the Directors have proposed a Return of Cash of 2.18p per share
payable to shareholders on the register at 5pm on 29 March 2010, subject to
shareholder approval at the General Meeting and court approval of cancellation
of the share premium account.
9. Interim results
Copies of the interim results for the six months ended 31 December 2009 will
shortly available from the Company's website www.eurovestech.com.
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