Information  X 
Enter a valid email address

Tikit Group PLC (TIK)

  Print      Mail a friend       Annual reports

Tuesday 06 March, 2012

Tikit Group PLC

Final Results

RNS Number : 7341Y
Tikit Group PLC
06 March 2012
 



 

Tikit Group plc

("Tikit" or "the Group")

Preliminary Results for the year ended 31 December 2011

 

Tikit, a leading independent provider of IT software, solutions, consultancy and services to legal and accounting firms in Europe and North America, today reports its preliminary results for the year ended 31 December 2011.

 

Key Financial Results (presented under IFRS)

 


2011

2010

Change %





Revenues

£26.4m

£26.9m

(2)

Profit before tax, amortisation of acquired intangibles, share-based charges and acquisition expenses

£4.8m

£3.8m

27

Profit before tax

£3.5m

£3.0m

20

Earnings per share before amortisation of acquired intangibles, share-based charges, acquisition expenses and related tax

25.2p

19.6p

29

Basic earnings per share

19.0p

15.5p

23

Dividend per share

8.0p

6.3p

27

Cash generation from operations

£5.2m

£5.3m

(2)

Net cash at period end

£5.5m

£2.9m

89

 

Highlights

Managed Services revenues, consisting of recurring support and outsourcing services increased by 7% to £15.6 million (2010: £14.6 million); this revenue now contributes 59% of the total Group revenue

Revenues derived from Tikit-owned software increased by 33% to £8.2 million and were 31% of total Group revenues

Profit before tax, amortisation of acquired intangibles, share-based charges and acquisition expenses increased by 27% to £4.8 million (2010: £3.8 million)

Operating margins increased to 18.4% (2010: 14.2%)

Earnings per share before amortisation of acquired intangibles, share-based charges, acquisition expenses and related tax increased by 29% to 25.2p (2010: 19.6p)

Final dividend increased by 28% to 5.5p per share (2010: 4.3p) giving a total for the year up 27% to 8.0p (2010: 6.3p)

Cash generated from operations was £5.2 million (2010: £5.3 million)

Net cash at period end increased 89% to £5.5 million (2010: £2.9 million)



 

Commenting on the results, Mike McGoun, Chairman, said:

 

"2011 has been a very important year in the development of Tikit.  Significant progress has been made in the transformation of the group from a reseller of third party software to an international software business focused on application software for the legal market.  The high levels of recurring managed services revenues mean that the Group is well placed to benefit from the trend towards outsourcing.  The fundamentals of our business are excellent, and we look towards the future with optimism."

 

- ends -

 

Presentation to Analysts

 

An analysts briefing will be held today at 10.00 a.m. at the offices of Tavistock Communications, 131 Finsbury Pavement, EC2A 1NT.

 

For further information:

 


Tikit Group plc

Mike McGoun (Non Exec Chairman)

David Lumsden (Chief Executive)

Mike Kent (Finance Director)

 

020 7400 3737

Investec

(Nominated Adviser and Broker)

Andrew Pinder

 

020 7597 4000

Tavistock Communications

John West / Simon Compton

 

020 7920 3150

 

 

About Tikit

Established in 1994 and subsequently listed on AIM in 2001, Tikit is a leading supplier of IT solutions and services to European and North American legal and accounting firms.  It has more than 1,400 clients, including 92 of the UK's top 100 law firms, 61 of the top 100 US law firms and 18 of the top 50 UK accountancy firms.  The Company employs around 200 people from four offices in the UK and offices in each of Spain, France and North America.

 

Tikit combines an unrivalled understanding of the technology needs of legal and accounting firms with a broad portfolio of solutions and services to match those needs.  Tikit's solutions and services span the IT spectrum and include financial and practice management, content management, document production, customer relationship management and infrastructure services.

 

Tikit is listed on the Alternative Investment Market (AIM) of the London Stock Exchange (AIM:TIK).

 

 

 

CHAIRMAN'S STATEMENT

 

Introduction

I am pleased to report that the Group's performance for 2011 was ahead of expectations, with profits and earnings per share well ahead of the prior year. Although total revenues have not increased year on year, lower-margin revenues, largely derived from the resale and support of third party software has been replaced with higher margin sales and support revenues from Tikit-owned software.

 

2011 has been an important year in the development of Tikit. We successfully launched three new key software products demonstrating that the Group's focus is now on selling its own software.  Indeed, it is particularly pleasing to report that revenues derived from the sale and support of Tikit-owned software grew by 33% to over £8.2 million (2010: £6.2 million). This was achieved without any meaningful contribution from the three new products launched during the year, which we expect will help drive growth in 2012 and beyond. In addition, during the period, we also continued to add to our existing client base as well as focusing on winning and retaining recurring, managed service and support revenues. 

 

Despite tough economic conditions, our overseas subsidiaries in France and Spain were both profitable in 2011.  Activity in North America showed strong and profitable growth during the year and this is increasingly becoming an important market for Tikit, particularly as we grow our portfolio of Tikit-owned software.

 

Results

Overall total Group revenues for the year decreased marginally to £26.4 million (2010: £26.9 million), 2% lower than in the prior year. However, as highlighted above, the past twelve months has seen a shift in the product mix, with the increase in revenues from Tikit-owned software significantly improving margin and resulting in a 27% increase in operating profits (before amortisation of acquired intangibles, share-based charges and acquisition expenses).

 

Recurring revenues from our managed services (support and outsourcing) businesses increased by 7% to £15.6 million (2010: £14.6 million) and represented 59% (2010: 54%) of total Group revenues.  Within this figure, it is pleasing to note that support revenues from Tikit-owned software increased by 41% to £6.5 million (2010: £4.6 million).

 

Total software sales, including both third-party and Tikit-owned sales, fell by 12% to £5.5 million (2010: £6.3 million).  This was largely attributable to the end of the partnership agreement with LexisNexis for the sale and support of 'InterAction', their CRM product. Strong sales of Tikit-owned software, including our 'Partner for Windows' practice management software and Tikit eMarketing products, contributed to an increase in sales of Tikit-owned software of 10% to £1.7 million (2010: £1.6 million).

 

Consultancy and implementation revenues declined to £4.3 million (2010: £4.8 million), due to the lower level of implementation of large projects by our clients and also in part to the direction taken by the Group to move away from non-core consulting activities.

 

Operating profit, before amortisation of acquired intangibles, share-based charges and acquisition expenses, increased 27% year-on-year to £4.8 million (2010: £3.8 million) with an improvement in operating margin to 18.4% (2010: 14.2%).  Share-based charges during the period were £0.39 million (2010: £0.28 million) increasing mainly due to the performance-based Long Term Incentive Plan, implemented in 2010.  Amortisation of acquired intangibles increased to £0.89 million (2010: £0.45 million) reflecting a full year of amortisation of intangibles arising from the Carpe Diem and Pensera acquisitions in October 2010.

 

Profit before taxation increased by 20% to £3.5 million (2010: £3.0 million) and the effective tax rate on profits was 24.1% in 2011 (2010: 25.3%).  Basic earnings per share were up 23% to 19.0 pence (2010: 15.5 pence) and earnings per share, before amortisation of acquired intangibles, share-based charges, acquisition expenses and related tax, increased by 29% to 25.2 pence (2010: 19.6 pence).

 

Our balance sheet remains strong.  Net assets at 31 December 2011 were £18.2 million (2010: £16.2 million), with net cash balances up by £2.6 million to £5.5 million (2010: £2.9 million).  The business continues to be cash generative. The net inflow of cash from operating activities in the period was £5.2 million (2010: £5.3 million), representing a conversion into cash of 101% (2010: 128%) of operating profit before depreciation, amortisation, share-based charges and acquisition expenses.

 

During the year, £0.30 million of cash was used on acquisitions, £0.04 million of net interest was paid (2010: £0.04 million) which related to the annual fee on unused loan facilities, and £0.95million was paid in respect of dividends (2010: £0.87 million).  Share options exercised during the year contributed £0.16 million (2010: £0.02 million).   The Group purchased a number of its own shares at a cost of £0.42 million (2010: £0.75 million) and these are held in the Tikit Employee Benefit Trust to help satisfy future share option exercises.

 

Dividend

The Board is recommending a final dividend of 5.5p per share, subject to shareholder approval at the AGM to be held on 2 May 2012.  It is to be paid on 4 May 2012 to shareholders who are on the register on 30 March 2012.  This, when taken with the interim dividend of 2.5p (2010: 2.0p), will bring the total dividend for the year to 8.0p (2010: 6.3p), an increase of 27%.

 

Employees

2011 was a demanding year as we successfully re-positioned the Group in a challenging trading environment. These excellent results have been achieved by the skill, commitment and enthusiasm of all our staff and I would like to thank them all for their contribution during the year.

 

Summary and Outlook

The focus for 2012 will be to invest further in sales, marketing and development capabilities rather than to drive margins higher. This should not only result in higher sales of Tikit-owned software but will position the business for higher growth in the future.  Our balance sheet remains strong and the Group has a good record of cash generation, providing a sound basis for us to continue to seek out opportunities to expand the range of services to our clients.  Trading and sales opportunities in the early months of 2012 have been encouraging.  The Board continues to be optimistic about the future trading prospects of the Group.

 

 

Mike McGoun

Chairman

Tikit Group plc

5 March 2012

 

 

OPERATING REVIEW

 

The past twelve months have been an important transitional period for Tikit. The loss of the revenue derived from the LexisNexis partnership early in the year was largely offset by the excellent contribution from Carpe Diem, the software business acquired from Sage late in 2010. The key highlight for the year is therefore the significant increase in the changing revenue mix towards our own software and away from a dependence on third party based revenues. Tikit's proposition as we enter 2012 is stronger than that portrayed by the 2011 results with the development and release of new products in 2011 such as Tikit Legal Office (TLO), Tikit ClientConnect and Carpe Diem Mobile. These provide the group with a market leading platform for progression in 2012 and beyond.

 

Tikit continues to make good progress with the Group's strategy of building revenues from our own software and support operations.  Our leading position in the UK legal market sector enables us to design and develop software that meets our clients' requirements and provides a depth and breadth of support that is unmatched by our competitors.

 

Our managed services business, which covers all aspects of support including help desks, support of Tikit software and third party software and full outsourcing, performed particularly well and now represents 59% of total revenue.

 

Revenues and gross profits are reported for the purposes of year-on-year comparison across three core business categories: Managed Services, Software Sales and Consultancy.  Clients are delivered an integrated solution based upon a managed blend of each of these areas of expertise.

 

Managed Services

Revenues from support and outsourcing continue to grow and increased by 7% to £15.6 million.  This growth was achieved despite losing the support revenues from LexisNexis which showed a year on year reduction of £1.4 million. The growth of non-LexisNexis support was therefore over 15% in the year. Tikit has over 1,150 clients taking contracted support services.

 

In late 2010, we launched the 'Tikit Total Care Programme for CRM'.  This service provides clients with a managed service that not only removes the responsibility from clients' staff to manage their CRM system but also drives its development and use, in comparison to our competitors who merely seek to outsource the day-to-day running of the system. This type of outsourcing capability continues to differentiate Tikit from other vendors.  A number of clients, including Davenport Lyons, have taken up this service and are enthusiastic about the benefits they have derived.

 

The acquisition of Carpe Diem from Sage, undertaken in October 2010, has performed particularly well and 2011 saw a number of clients return to Carpe Diem support contracts following the acquisition and the subsequent new release of Carpe Diem Classic. The functional improvements inherent in Carpe Diem Classic and the launch of Carpe Diem Mobile and Carpe Diem Enterprise have given clients the confidence that there is a comprehensive long term strategy for Carpe Diem.

 

Network Infrastructure Services

This division installs and supports the critical IT infrastructure of hundreds of accountancy practices as well as many of our legal clients. During the period, there were many refresh projects for leading accountants such as Carter Backer Winter, HW Fisher and Simmons Gainsford LLP. In addition, we are now taking on a number of outsourcing contracts where Tikit's Network and Integration Services division (NIS) takes full responsibility for the 24 hour management of IT systems infrastructure.

 

New Citrix thin client technology was delivered to top law firms including Goodman Derrick LLP, Speechly Bircham LLP & SJ Berwin LLP.

 

In January 2011, leading regional law firm, Geldards LLP, selected NIS to provide support services for its complete critical IT support function. NIS monitor, manage and support the firm's IT hardware and provide a comprehensive 24/7 support function for its IT team.

 

A number of server virtualisation projects were undertaken in this period including top 20 accountancy practice Kingston Smith who reduced 22 servers down to 2 over a fortnight, reducing the server footprint and the associated IT operational costs with numerous benefits including improving resilience and disaster recovery capabilities.

 

During the year, Buzzacotts LLP, a 200+ user accountancy firm, asked NIS to re-design and implement an advanced hosted virtual environment to improve performance, stability and security when they relocated to their new flagship city office.  Our solution provides continuity for all their business critical applications in the event of a disaster scenario.

 

Software Sales

Sales of our own software increased by 10% over the corresponding period in 2010.  Total software sales account for 21% of our total revenues (2010: 23%). Total software sales, including third party software, fell by 12% to £5.5 million (2010: £6.3 million).

 

Tikit ClientConnect

Sales of LexisNexis InterAction licences, the Client Relationship Management (CRM) software, were negligible in 2011 compared with approximately £0.6 million in 2010, this resulting in the majority of the reduction of third party software sales year on year.  LexisNexis UK gave notice that they would provide a direct sales channel to the legal market in the UK from mid-May 2011, and as a consequence, Tikit is no longer entitled to resell the InterAction product. As a result, we utilised our considerable expertise and experience of CRM to develop an innovative new marketing and CRM system for law firms and Tikit ClientConnect was launched in July 2011. Comprising contact management, business development, sales and marketing support, reporting and e-marketing, Tikit ClientConnect has the potential to be a real game-changer for law firms.  It combines professional standard, firm-wide marketing and CRM functionality with a low cost of ownership and ease of implementation.

 

This product has been extremely well received by clients with New Quadrant Partners LLP, Breeze & Wyles Solicitors LLP, Blacks Solicitors LLP and Barnes Marsland Solicitors all committing to the product.

 

Our CRM delivery teams will continue to provide support to clients that retain InterAction with the high level of knowledge and service that they have come to expect from Tikit.  We are able to provide independent product advice in the CRM market space and are uniquely placed to provide support for the interconnection of CRM products to other key applications within law firms.

 

Tikit eMarketing

Whilst there was some disruption to sales of this product in the first half as a result of the LexisNexis announcement, sales recovered well in the second half resulting in 28 new sales in the year and taking our installed base worldwide to 250 clients. 2012 has started well with encouraging prospects for this product, especially in North America.

 

Carpe Diem

Time recording continues to play a very important role within law firms as lawyers seek to measure their cost of providing legal services.

 

The new release of Carpe Diem Classic was well received and resulted in a number of new orders and strengthened the loyalty of the installed base. In the first half of 2011, Akin Gump Strauss Hauer & Feld LLP, one of the world's largest law firms with more than 800 lawyers in 14 offices, selected Carpe Diem Enterprise as its global time tracking solution.

 

In January 2011, Tikit announced Tikit Carpe Diem Mobile for Blackberry followed in August by versions for iPhone and iPad devices, allowing real-time integration of the new mobile platform for both Carpe Diem Classic and Carpe Diem Enterprise. This was implemented at Kennedys Law LLP during the second half of 2011.  We are looking to further extend the range of time recording offerings for Carpe Diem during 2012 and Tikit is well placed to take advantage of the growing demand for this mobility within the legal sector.

 

Tikit Legal Office

One of the most exciting and potentially important developments of the year was the launch of Tikit Legal Office (TLO).

 

TLO is an innovative cloud-based outsourced solution, aimed at providing small and medium sized law firms with a comprehensive package for their practices, including accounting, document management, CRM and time recording.  By using TLO, law firms will benefit not only from a reduced capital cost, but also enhanced mobile access and reliability.

 

TLO is an important development for Tikit as we predict many law firms, under pressure to increase efficiencies and profit margins, will look to outsource much of their IT function.  Tikit is uniquely placed to benefit from this development given its place at the heart of the professional services IT industry.

 

TLO is effectively an integrated best-of-breed solution that brings together a portfolio of established market leading, tried and tested legal software applications in a pre-bundled and ready to rollout format that is both easy to implement and allows law firms to manage and control their IT costs. The solution also overcomes the issues faced with implementing upgrades and new releases as Tikit takes care of this through its controlled desktop environment.

 

The core of TLO is the Tikit Partner for Windows practice management system software which is already being used as an accounts, practice, case and matter management system extensively throughout mid-tier law firms.

 

TLO is offered on a subscription basis and following the first two sales of this fully managed, hosted solution we expect this to be an important source of profit for the group in the future.

 

Tikit Template Management System

Tikit's Template Management System (TMS) is one of Tikit's flagship products. TMS allows firms to reduce the amount of in-template code and the number of templates that have to be managed. This administrator tool enables support teams to make simple changes to templates quickly ensuring increased productivity and reduced risk.

 

The successful implementation of this product at Linklaters LLP was completed at the end of 2011.   With 27 offices in 19 countries, and more than 5,000 employees, the upgrade to the Microsoft Office 2010 Suite and successful installation of TMS was critical for the firm.  Tikit was selected to provide the TMS solution in order to deliver all Linklaters' branded templates and related functionality in their new Office 2010 environment.

 

Partner for Windows

Partner for Windows, the leading practice management system (PMS) for law firms, is now installed in over 600 clients in the small and medium size UK law firm market. Since being acquired in 2008 Tikit has achieved 131 new business wins for its PMS solution which is an outstanding figure for the sector.

 

There have been some notable wins during the year, thus adding to the strong on-going support revenues. Eric Robinson Solicitors, a 130 user practice and one of the South Coast's leading law firms has chosen Tikit's PMS as their new solution after deciding to move away from their LexisNexis Axxia system. TV Edwards LLP, a London law firm, selected Tikit's Partner for Windows to replace their current IRIS AIM Evolution system. The new system will cater for all practice and case management aspects of the business at a time of rapid expansion for the firm following their recent announcement of mergers with two other London firms taking their headcount close to 200 staff. Revenues reduced slightly to £4.9 million (2010: £5.0 million) in line with the general fall in revenues for law firms in this sector, however, the profit contribution from this division increased by more than 5% over the prior year.  This is an excellent performance given the tough trading conditions experienced by a number of small and mid-sized law firms.

 

Autonomy

Tikit continues to be a leading partner to Autonomy and has provided document management and enterprise search solutions to leading firms such as DWF LLP and Foot Anstey LLP in the UK, as well as some leading overseas firms. A number of important and large Autonomy Worksite upgrades were undertaken during the year, and significant maintenance contracts won from competitors.

 

Tikit won the Autonomy iManage "EMEA Partner of the Year" award at Autonomy's annual Partner Summit in Chicago in May 2011. The acquisition of Autonomy by Hewlett Packard has had no impact on Tikit's partnership with Autonomy and is not expected to impact Tikit's business in the future.

 

Consultancy

Consultancy revenues for the year were £4.3 million (2010: £4.8 million), a reduction of 10% on the corresponding period but broadly in line with the run rate achieved in the second half of 2010.  The reduction was due to the planned cutbacks made in non-core consulting activities.

 

The Content Management consultancy team had a busy 2011 with significant new implementation and upgrade projects of Autonomy iManage WorkSite. This showed that while trading conditions for law firms remained challenging, their requirement for appropriate and modern tools to complete their work efficiently remained.

 

New implementations at law firms included Birketts LLP and Ashfords LLP and also outside of legal, significant implementations included the accountancy firm HW Fisher and the property management firm The Portman Estates. We also won our first project for a Russian law firm based in Moscow which commenced in September and will complete early in 2012.

 

A very pleasing aspect of 2011 was the number of consultancy, support and maintenance contracts for Autonomy iManage WorkSite won by Tikit from our competitors. These were clients for whom Tikit did not undertake the initial install but who have come to Tikit for future upgrade work as well as support and maintenance.

 

The CRM Consultancy team undertook a number of key projects in the period. Foot Anstey LLP finalised their InterAction project including integration with eMarketing and PMS. InterAction was implemented at William Fry and Blake Lapthorn. eMarketing projects were undertaken for a significant number of firms including Russell Jones Walker, Wiggin LLP, Herbert Smith LLP, Sackers LLP, Troutman Sanders LLP and Salans. It was also pleasing to get InterAction review and rework projects from Ropes & Gray (US) and TLT LLP. These projects involved a re-launch of InterAction which encompassed a total review of InterAction and business consultancy on best practice, improved configuration to support business development activities and end user usage.

 

Overseas Operations

Focusing on law firms and corporate legal departments, Tikit France provides content management, client relationship management and finance and business process solutions.  Tikit France performed well during 2011 in challenging conditions, achieving a profit for the year and now has over 70 clients. 

 

Trading continues to be tough in Spain given the economic difficulties that still exist.  Nevertheless, Tikit Spain has become the legal technology provider of choice for Spanish law firms, with over 60 clients. The content and client relationship management solutions that Tikit Spain has implemented are some of the most complex in Europe. 

 

Overall, combined revenues for France and Spain were similar year on year at £2.3 million (2010: £2.4million).

 

Business in North America continues to be strong with 28 new client wins for our eMarketing solution.  Our key focus is selling Tikit's own software, such as ClientConnect and Carpe Diem, alongside our strong eMarketing product into a market where we already have over 350 law firm clients.  We are optimistic about the future prospects in North America as there remains a significant growth opportunity there from the further penetration of our eMarketing solution and the introduction of our new suite of products.

 

Current Trading and Outlook

Since the year end, the Group has continued to win new software sales contracts with new and existing clients, in both Europe and North America.

 

The convergence of Tikit Legal Office with our outsourced service-desk offering enables us to provide law firms with a very cost effective, scalable, all-encompassing IT solution.

 

Interest expressed from our customers in the improvements to Carpe Diem Classic and the launch of Carpe Diem Mobile and Carpe Diem Enterprise supports our view that this product suite will be an important contributor to the Group's success in 2012 and beyond.

 

The Group continues to explore potential acquisition opportunities and has funds available.  Our acquisition criteria are rigorous and are in place to ensure that any acquisitions undertaken are in line with our strategy and add to the range of services that we are able to provide to our expanding client base.

 

Overall, the Board is pleased with the progress that has been made in the past year and, whilst the UK professional services markets remain cautious, business activity levels are improving. The high level of contracted support revenues, combined with anticipated sales of Tikit-developed software, lead us to expect that 2012 will deliver further growth.  We believe that the fundamentals of our business are strong and we look towards the future with optimism.

 

David Lumsden

Chief Executive

Tikit Group plc

5 March 2012



Audited Consolidated Income Statement

for the year ended 31 December 2011

 

 

 

2011

2010

 

Note

£'000

£'000

Revenue

 

2

26,352

26,875

Operating Costs

 

(17,629)

(19,263)

Gross Profit

 

8,723

7,612

Administrative expenses

 

(5,161)

(4,628)

Operating profit before amortisation of acquired intangibles, share-based charges and acquisition expenses

 

4,841

3,821

Amortisation of acquired intangibles

 

(887)

(450)

Share-based charges

 

(392)

(279)

Acquisition expenses

 

-

(108)

Operating profit

2

3,562

2,984

Finance income

 

17

4

Finance costs

 

(53)

(43)

Profit before tax, amortisation of acquired intangibles, share-based charges and acquisition expenses

 

4,805

3,782

Amortisation of acquired intangibles

 

(887)

(450)

Share-based charges

 

(392)

(279)

Acquisition expenses

 

-

(108)

Profit before tax

2

3,526

2,945

Tax Expense

3

(849)

(746)

Profit for the year attributable to equity holders of the parent

 

2,677

2,199

Earnings per share

 

 

 

Basic earnings per share

4

19.0p

15.5p

Diluted earnings per share

4

17.8p

14.9p

All amounts relate to continuing activities.

 

 

 

Audited Consolidated Statement of Comprehensive Income

for the year ended 31 December 2011

 

 

 

2011

2010

 

 

£'000

£'000

Profit for the year

 

2,677

2,199

Other comprehensive income

 

 

 

Currency translation (losses)/gains on foreign operations

 

(5)

5

Total comprehensive income for the year

 

2,672

2,204

 

 

 

Audited Consolidated Balance Sheet

at 31 December 2011

 

 

 

2011

2011

2010

2010

 

 

£'000

£'000

£'000

£'000

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Goodwill


13,709

 

13,716

 

Other intangible assets


5,626

 

6,501

 

Deferred tax asset


539

 

 -

 

Property, plant and equipment


386

 

439

 

Total non-current assets

 

 

20,260

 

20,656

Current assets

 

 

 

 

 

Inventories


29

 

4,102

 

Trade and other receivables


6,114

 

6,413

 

Cash and cash equivalents


6,088

 

3,784

 

Total current assets

 

 

12,231

 

14,299

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade payables


(2,020)

 

(6,866)

 

Other tax liabilities


(1,202)

 

(1,013)

 

Corporation tax liability


(562)

 

(481)

 

Deferred income


(5,712)

 

(5,597)

 

Accruals


(1,890)

 

(1,505)

 

Deferred consideration


-

 

(321)

 

Bank overdraft


(635)

 

(901)

 

Total current liabilities

 

 

(12,021)

 

(16,684)

 

Non-current liabilities

 

 

 

 

 

Deferred tax liability

 

 

(1,294)

 

(1,088)

Deferred consideration

 

 

(1,011)

 

(1,028)

Total non-current liabilities

 

 

 (2,305)

 

(2,116)

 

 

 


 

 

TOTAL NET ASSETS

 

 

18,165

 

16,155

 

Capital and reserves attributable to equity holders of the parent

 

 

 

 

 

Called up share capital

 

 

1,473


1,473

Share premium account

 

 

1,890


1,890

Merger reserve

 

 

4,074


4,074

EBT share reserve

 

 

(1,428)


(1,206)

Capital redemption reserve

 

 

125


125

Translation reserve

 

 

109


114

Profit and loss account

 

 

11,922


9,685

TOTAL EQUITY

 

 

18,165

 

16,155

 

 

 

Audited Consolidated Cash Flow Statement

for the year ended 31 December 2011

 

 

 

2011

2011

2010

2010

 

Note

£'000

£'000

£'000

£'000

Profit for the financial year

 

2,677

 

2,199

 

Tax expense

 

849

 

746

 

Interest receivable

 

(17)

 

(4)

 

Interest payable

 

53

 

43

 

Share-based charges

 

392

 

261

 

Depreciation charges

 

144

 

173

 

Loss on fixed asset disposal

 

-

 

1

 

Amortisation of intangibles

 

1,059

 

624

 

Acquisition expenses

 

-

 

108

 

Operating profit before changes in working capital and provisions

 

 

5,157

 

4,151

Decrease/(increase) in inventories

 

 

4,073

 

(4,013)

Decrease/(increase) in trade and other receivables

 

 

103

 

(267)

(Decrease)/increase in trade payables and other current liabilities

 

 

(4,112)

 

 

5,433

Cash generated from operations

 

 

5,221

 

5,304

Taxation

 

 

(756)


(850)

Net cash generated from operating activities

 

 

4,465


4,454

Cash flows from investing activities

 

 

 

 

 

Purchase of property, plant and equipment

 

(145)

 

(107)

 

Purchase of other intangible assets

 

(200)

 

(173)

 

Acquisition of customer related intangible asset

 

-


(890)

 

Acquisition of subsidiary

 

-

 

(287)

 

Acquisition expenses

 

-

 

(108)

 

Deferred consideration in respect of acquisition of subsidiary

  

(303)

 

-

 

Net cash used in investing activities

 

 

(648)

 

(1,565)

Cash flows from financing activities

 

 

 

 

 

Interest received

 

17

 

4

 

Interest paid

 

(53)

 

(43)

 

Dividends paid to equity shareholders

 

(954)

 

(870)

 

Proceeds from the exercise of share options

 

162

 

21

 

Purchase of Ordinary Shares for EBT

 

(419)

 

(746)

 

Net cash used in financing activities

 

 

(1,247)

 

(1,634)

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

2,570

 

1,255

Cash and cash equivalents at start of year

 

 

2,883

 

1,628

Cash and cash equivalents at end of year

 

 

5,453

 

2,883

 

Attributable to

 

 

 

 

 

Cash and cash equivalents

 

 

6,088

 

3,784

Bank overdraft

 

 

(635)

 

(901)

Cash and cash equivalents at end of year

 

 

5,453

 

2,883

 

 

 

Audited Consolidated Statement of Changes in Equity

at 31 December 2011

 


Ordinary

Share


Capital


EBT

Profit



share

premium

Merger

redemption

Translation

share

and loss



capital

account

reserve

reserve

reserve

reserve

account

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2010

1,473

1,890

4,074

124

109

(617)

8,130

15,183

Profit for the year

-

-

-

-

-

-

2,199

2,199

Currency translation differences on foreign operations

-

-

-

-

5

-

-

5

Total comprehensive income for the year

-

-

-

-

5

-

2,199

2,204

Shares purchased into EBT

-

-

-

-

-

(746)

-

(746)

Exercise of options

-

-

-

-

-

157

(136)

21

Redemption of preference shares

-

-

-

1

-

-

(1)

-

Deferred tax on share-based charges

-

-

-

-

-

-

102

102

Dividends paid

-

-

-

-

-

-

(870)

(870)

Credit in respect of share-based charges

-

-

-

-

-

-

261

261

Other changes in equity

-

-

-

1

-

(589)

(644)

(1,232)

At 1 January 2011

1,473

1,890

4,074

125

114

(1,206)

9,685

16,155

Profit for the year

-

-

-

-

-

-

2,677

2,677

Currency translation differences on foreign operations

-

-

-

-

(5)

-

-

(5)

Total comprehensive income for the year

-

-

-

-

(5)

-

2,677

2,672

Shares purchased into EBT

-

-

-

-

-

(419)

-

(419)

Exercise of options

-

-

-

-

-

197

(35)

162

Deferred tax on share-based charges

-

-

-

-

-

-

196

196

Dividends paid

-

-

-

-

-

-

(954)

(954)

Credit in respect of share-based charges

-

-

-

-

-

-

353

353

Other changes in equity

-

-

-

-

-

(222)

(440)

(662)

Balance at 31 December 2011

1,473

1,890

4,074

125

109

(1,428)

11,922

18,165

 

 

Notes to the Audited Consolidated Financial Statements

for the year ended 31 December 2011

 

1 Basis of preparation

This preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), the Companies Act 2006 applicable to companies reporting under IFRS and under the historical cost convention.

 

2 Segment Information

The segment reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by the differences in the products and services provided. All the segments are focused on providing software and services to law firms and accountancy practices. The consultancy segment provides business and technical services in relation to the implementation of IT solutions. The managed services segment provides application and infrastructure support services. The software segment provides application and infrastructure software. The hardware segment provides hardware and peripherals. Hardware is not a focus for the Group but is sometimes sold as part of an IT infrastructure solution.

 

2011


Consultancy

Managed Services

Software

Hardware

Total


£'000

£'000

£'000

£'000

£'000

Segment revenue

4,322

15,601

5,502

927

26,352

Segment gross profit

1,240

8,035

2,693

162

12,130

Unallocated costs*





(3,407)

Gross profit





8,723

Administrative expenses





 (5,161)

Operating profit





3,562

Finance income





17

Finance costs





 (53)

Profit before taxation





3,526

 *Unallocated costs include development and sales cost

 

2010



Managed





Consultancy

Services

Software

Hardware

Total


£'000

£'000

£'000

£'000

£'000

Segment revenue

4,805

14,556

6,280

1,234

26,875

Segment gross profit

1,244

6,409

2,624

158

10,435

Unallocated costs*





(2,823)

Gross profit





7,612

Administrative expenses





(4,628)

Operating profit





2,984

Finance income





4

Finance costs





(43)

Profit before taxation





2,945

* Unallocated costs include development and sales costs

 

The assets and liabilities of the Group cannot be allocated to the above segments. For internal reporting purposes balance sheets are not split into segments.

 

 

 

3 Taxation on profit

(a) Analysis of charge in year


2011

2010


£'000

£'000

Current tax



UK corporation tax on profits for the year

1,018

985

Overseas tax on profits for the year

22

8

Adjustments in respect of prior periods

(61)

(76)

Total current tax

979

917

Deferred tax



Origination and reversal of temporary differences

(108)

(137)

Changes in rates of deferred tax

(64)

(34)

Adjustments in respect of prior periods

42

-

Total tax expense

849

746

 

(b) Factors affecting tax charge for the year

The tax assessed for the year differs from that obtained by applying the standard rate of corporation tax in the UK of 26.5% (2010: 28%).

 

The differences are explained below:


2011

2010


£'000

£'000

Profit on ordinary activities before tax

3,526

2,945

Profit on ordinary activities multiplied by the standard rate of UK corporation tax of 26.5% (2010:28%)

935

825

Expenses that are not deductible in determining taxable profits

10

53

Tax adjustments relating to share options

(21)

(30)

Changes in rates of deferred tax

(64)

(34)

Adjustments in respect of prior periods - current tax

(61)

(76)

Adjustments in respect of prior periods - deferred tax

42

-

Other

8

8

Total tax expense

849

746

 

 

4 Earnings per share

The calculation of earnings per Ordinary Share is based on profit after tax and the weighted average number of Ordinary Shares in issue during the year after deducting shares held by the EBT.

 

The weighted average number of Ordinary Shares used in the calculation of earnings per share is as follows:


2011

2010


Number

Number

Weighted average Ordinary Shares in issue during the year

14,056,000

14,153,000

Potentially dilutive share options under the Group's share option schemes

973,000

589,000

Weighted average Ordinary Shares for diluted earnings per share

15,029,000

14,742,000

 

An adjusted earnings per share has also been calculated in addition to the basic earnings per share and is based on earnings adjusted to eliminate the effects of amortisation of acquired intangibles, share-based charges and acquisition expenses, together with related tax. It has been calculated to allow shareholders to gain a clearer understanding of the trading performance of the Group.

 


2011

2011

2011

2010

2010

2010



Basic

Diluted


Basic

Diluted



pence

per

pence per


pence per

pence per


£'000

share

share

£'000

share

share

Basic earnings:







Profit after tax

2,677

19.0

17.8

2,199

15.5

14.9

Adjustments:







Amortisation of acquired intangibles

887

6.3

5.9

450

3.2

3.1

Tax on amortisation of acquired intangibles

(307)

(2.2)

(2.0)

(164)

(1.2)

(1.1)

Share-based charges

392

2.8

2.6

279

2.0

1.9

Tax on share-based charges

(102)

(0.7)

(0.7)

(105)

(0.7)

(0.7)

Acquisition expenses

-

-

-

108

0.8

0.7

Adjusted earnings

3,547

25.2

23.6

2,767

19.6

18.8

 

 

5 Publication of non-statutory accounts

The financial information in the preliminary statement of results does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010. Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2010 and 2011.

 

The financial statements, and this preliminary statement, of the Group for the year ended 31 December 2011 were authorised for issue by the Board of Directors on 5 March 2012.

 

6 A copy of the Annual Report and Accounts for the year ended 31 December 2011 will be sent to the shareholders and copies will be available from the company's Registered Office at Tikit Group plc, 12 Gough Square, London, EC4A 3DW or by visiting our web site at www.tikit.com.

 

7 The annual general meeting of the company will be held at the offices of Tikit Group plc, 12 Gough Square, London, EC4A 3DW on 2 May 2012.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR UGUUAWUPPGRA

a d v e r t i s e m e n t