RNS Number:3093D
Financial Objects PLC
05 September 2007
5 September 2007
Financial Objects plc
Interim results for the six months to 30 June 2007
Financial Objects plc, an international supplier of software solutions for the
banking, wealth management and energy sectors, reports strong growth in revenue
and profit.
2007 2006
#000 #000 Growth
Revenue 10,645 9,378 14%
Operating profit* 1,418 964 47%
Profit before taxation 1,273 872 46%
Basic earnings per share 2.8p 2.1p 33%
Adjusted earnings per share** 3.3p 2.4p 38%
* excluding amortisation of acquired intangible assets
** excluding income tax and amortisation of acquired intangible assets
Within these results, the Group has adopted IFRS reporting for the first time.
The restatement of the 2006 comparatives is shown in note 9.
Highlights for the six months ended June 2007:
* Continued sales growth, up 14%
* Operating profit margin up to 13% (2006: 10%)
* Strong operating cash flow of #1.0 million (2006: negative #0.4 million)100
* Encouraging number of new client wins
Commenting on the results, Paul Fullagar, Chairman said:
'In our March statement we highlighted a number of new contracts signed within
Wealth Management and Energy. This success has been maintained, resulting in a
high level of organic sales growth within these two divisions. Operating
margins across the Group have now risen to 13%, and operating cash generation
remains strong. We are now focused on maintaining this momentum, with the
strengthened management team looking for growth both organically and by
acquisition.'
For further information, please contact:
Financial Objects plc Tel: 020 7836 3010
Karim Peermohamed, Chief Executive Officer
Peter Youngs, Finance Director
Financial Dynamics Tel: 020 7831 3113
James Melville-Ross / Hannah Sloane
Evolution Securities
Stuart Andrews Tel: 020 7071 4300
CHAIRMAN'S STATEMENT
The first half of 2007 has seen another six months of strong trading in the
Group. This is reflected in sales growth of 14% and earnings per share growth
of 33%. Operating cash generation was likewise strong, and the half year ended
with net funds of #3.7 million.
We remain focused on three sectors: banking, wealth management and energy.
Within each of these sectors we have software solutions that are capable of
considerable organic growth at attractive margins. The success of the wealth
management and energy software has provided a wider product and customer base
for the Group. Having successfully integrated two acquisitions in the past two
years, we will continue to consider further suitable opportunities.
Financial results
The Group has adopted IFRS reporting for the first time. The restatement of the
2006 comparatives is shown in note 9.
Group revenues for the six months to 30 June 2007 increased by 14% to #10.6
million (2006: #9.4 million). Underlying organic sales growth was 9% and of the
#10.6 million, 39% (#4.2 million) was recurring support revenue.
Encouraging growth in operating profit continues to be achieved. Operating
profit (before amortisation of acquired intangible assets) increased by 47% to
#1.4 million (2006: #1.0 million). Operating margins increased to 13% (2006:
10%).
Profit before tax was up 46% at #1.3 million (2006: #0.9 million).
There is no material tax charge. The Group has tax losses of around #8 million
available for offset against future profits.
Basic earnings per share have increased by 33% to 2.8 pence (2006: 2.1 pence).
Adjusted to exclude tax and amortisation of acquired intangible assets, the
earnings per share have increased by 38% to 3.3 pence (2006: 2.4 pence).
Operating cash flow was #1.0 million. After payment of the 2006 final dividend
(#0.4 million), capital expenditure (#0.2 million), development expenditure
(#0.1 million) and proceeds from the sale of own shares (#0.6 million), the
Group generated net cash of #0.9 million. The Group's net funds at the end of
June were #3.7 million.
Order backlog stood at #13.0 million at the end of the period (December 2006:
#13.1 million).
Banking
Banking systems sales of #4.7 million accounted for 44% of the Group's turnover
in the six months to June 2007 (2006: #5.9 million, 63%). Revenues declined by
21%. As anticipated, this decline is principally the result of particularly
high licence sales in the first half of 2006. It also reflects a lower than
planned conversion of prospects. Operating margins declined to 19% (2006: 24%).
Recurring sales within the banking division continue to be strong at #2.5
million, 53% (2006: #2.5 million, 42%).
We now expect to record a full year decline in revenues in this division.
Despite the decline in sales, we believe there continues to be a good market for
our banking products. Within the division, both ibis s2 and activebank have an
encouraging number of prospects, from new clients as well as from our existing
client base. We have appointed a new head of banking and are undertaking
increased investment in sales resource to build for 2008 and beyond. Costs
remain under tight control, with virtually all development work being undertaken
in our development centre in Bangalore.
Wealth Management
Sales of our wealth management software at #1.8 million accounted for 17% of the
Group's turnover in the six months to June 2007 (2006: #1.0 million, 11%).
Revenues increased by 80%. Operating margins improved to 6% (2006: negative
12%).
A number of new clients have been signed and we are close to signing others.
Further investment in product development, including integration with the ibis
s2 private banking software, is being undertaken. This, along with the increased
investment in sales resource, will provide the platform for continued growth.
Energy
Sales of the credit risk system to the energy trading sector at #2.1 million
accounted for 20% of the Group's turnover in the six months to June 2007 (2006:
#0.4 million, 4%). Revenues increased by 421%. Underlying organic growth was
256% (the business was acquired in March 2006). Operating margins improved to
22% (2006: negative 46%).
The market for credit risk systems in the energy trading sector is buoyant. The
substantial contract signed with Shell in the latter part of 2006 has progressed
exceptionally well, and provides a strong reference basis for the quality of our
software and our project management skills. We continue to invest in product
development, extending the functionality and creating a new thin client version
of the software to allow access via the internet and through web portals. This
will help ensure that our product remains the market leader.
Other software products
Sales of our other software products at #2.1 million accounted for 19% of the
Group's turnover in the six months to June 2007 (2006: #2.1 million, 22%).
Revenues were in line with the same period last year. Operating margins held
steady at 18% (2006: 18%).
Within this division, we have a number of software solutions serving specialist
markets. These include fairs, a product for Independent Financial Advisers;
genisys, a document management system; and gvas, property asset management
software. We have seen a number of new contracts signed across the division
during the first half of the year, and anticipate that the division will
continue to make a significant contribution to the Group.
Wholly-owned development centre in Bangalore
Over 50% of our employees are based in our wholly-owned development centre in
Bangalore, where the majority of development is carried out. Most of the
product groups now have a team in place. This facility allows us to maintain
continual investment in product development.
Dividend
The Board does not intend to pay an interim dividend, but expects to deliver a
progressive dividend policy and pay a final dividend, subject to the full year
result being in line with current expectations.
Board
As previously announced, Karim Peermohamed took over as Chief Executive at the
beginning of the year. In addition Roger Foster decided to retire and stepped
down from the Board in May this year after 12 years as Chairman. The Board would
like to thank him for his substantial contribution to the company, setting the
strong foundations for future success. Stewart Foster also decided to leave and
stepped down at the same time. We would like to wish them both well in the
future.
Outlook
The outlook for the Group for the second half of 2007 and beyond continues to be
in line with previous expectations. A number of new client contracts were
signed in the first half of 2007, giving us a good order backlog going into the
second half. Since the period-end we have completed the deployment of our
energycredit solution at E.ON Sales & Trading GmbH. Our solution is now being
used within its credit management team to support power, coal and carbon dioxide
certificate trading operations throughout continental Europe. We are also
pleased to announce that we concluded contracts in August with a major US power
utility.
This, along with a solid pipeline of other potential sales in all divisions, and
the increased investment being made in both sales and product development, gives
us confidence that overall organic growth for the Group can be continued. In
addition, following the successful integration of both the Wealth Management and
Raft acquisitions, we are looking to acquire additional complementary businesses
that are potentially synergistic and earnings enhancing.
Paul Fullagar
Chairman
5 September 2007
CONSOLIDATED INTERIM INCOME STATEMENT
For the six months ended 30 June 2007
Six months Six months Year
Note Ended Ended ended
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
Revenue 2 10,645 9,378 19,858
Operating costs 3 (9,395) (8,526) (17,801)
_____________________________________________
Operating profit 1,250 852 2,057
Finance income / (expense) 23 20 (12)
_____________________________________________
Profit before taxation 1,273 872 2,045
Income tax (expense) / credit 4 (54) 21 607
_____________________________________________
Profit for the period 1,219 893 2,652
Earnings per share 5
- basic 2.8p 2.1p 6.2p
- diluted 2.7p 2.1p 6.2p
Dividend per share - - 1.0p
All revenue and operating profit is derived from continuing operations.
CONSOLIDATED INTERIM BALANCE SHEET AS AT 30 JUNE 2007
30 June 2007 30 June 2006 31 Dec 2006
Note #000 #000 #000
Assets
Non-current assets
Property, plant and equipment 424 428 407
Intangible assets
- goodwill 6,526 6,574 6,526
- intangible assets 2,906 3,240 3,073
- capitalised development costs 479 408 438
Deferred tax assets 1,340 863 1,423
___________________________________________
Total non-current assets 11,675 11,513 11,867
Current assets
Trade and other receivables 5,643 7,002 5,564
Income tax receivable 35 141 20
Cash and cash equivalents 4,070 1,153 4,121
Assets classified as held for sale - 805 -
___________________________________________
Total current assets 9,748 9,101 9,705
Total assets 21,423 20,614 21,572
Equity
Issued share capital 7 889 888 888
Share premium 8 470 11 11
Acquisition reserve 8 5,377 6,356 5,377
Capital redemption reserve 8 240 240 240
Special reserve 8 2,127 5,240 6,871
Retained earnings 8 3,227 (3,167) (2,370)
___________________________________________
Total equity 12,330 9,568 11,017
Liabilities
Non-current liabilities
Loans and overdrafts 138 412 275
Deferred tax liabilities 1,040 1,102 1,070
___________________________________________
Total non-current liabilities 1,178 1,514 1,345
Current liabilities
Borrowings 275 1,143 1,074
Trade and other payables 3,353 3,401 3,860
Income tax payable 328 419 374
Deferred income 3,959 4,455 3,875
Provisions - 114 27
___________________________________________
Total current liabilities 7,915 9,532 9,210
Total liabilities 9,093 11,046 10,555
Total equity and liabilities 21,423 20,614 21,572
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
For the six months ended 30 June 2007
Six Six
Note Months Months Year
ended ended ended
30 June 30 June 31 Dec
2007 2006 2006
#000 #000 #000
Profit for the period 1,219 893 2,652
Depreciation 140 160 317
Net rental expense charged against provisions - (283) (353)
Amortisation of development spend capitalised 89 75 150
Amortisation of acquired intangible assets 168 112 279
Financing (income) / expense (23) (20) 12
Income tax expense / (credit) 54 (21) (607)
___________________________________________
Cash generated from operations before
changes in working capital 1,647 916 2,450
Movement in trade and other receivables (79) (1,317) (47)
Movement in trade and other payables (520) 89 (46)
Movement in provisions (27) (124) (141)
Cash generated from / (used by) operations 1,021 (436) 2,216
___________________________________________
Interest paid (40) (26) (82)
Income tax paid (2) - (8)
___________________________________________
Net cash generated from / (used in) operating
activities 979 (462) 2,126
Cash flows from investing activities
Purchase of property, plant and equipment (158) (68) (162)
Product development (130) - (105)
Interest received 63 46 70
Disposal of business, net of cash disposed of - - 805
Acquisition of subsidiary, net of cash acquired - (1,767) (1,811)
___________________________________________
Net cash flows used in investing activities (225) (1,789) (1,203)
Cash flows from financing activities
Proceeds from the issue of share capital 12 12 12
Repayment of borrowings (137) - (206)
Repayment of loan notes (799) - -
Proceeds from sale of own shares 550 - -
Dividends paid 6 (431) - -
___________________________________________
Net cash flows (used in) / generated from
financing activities (805) 12 (194)
Net (decrease) / increase in cash and
cash equivalents (51) (2,239) 729
Cash and cash equivalents at beginning of period 4,121 3,392 3,392
___________________________________________
Cash and cash equivalents at end of period 4,070 1,153 4,121
Notes
1. Significant accounting policies
Basis of preparation
The AIM Rules require that the next annual consolidated financial statements of
the company, for the year ending 31 December 2007, be prepared in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the EU ("
adopted IFRSs").
This interim financial information has been prepared on the basis of the
recognition and measurement requirements of adopted IFRSs as at 30 June 2007
that are effective (or available for early adoption) at 31 December 2007, the
Group's first annual reporting date at which it is required to use adopted
IFRSs. Based on these adopted IFRSs, the directors have applied the accounting
policies, as set out below, which they expect to apply when the first annual
IFRS financial statements are prepared for the year ending 31 December 2007.
However, the adopted IFRSs that will be effective (or available for early
adoption) in the annual financial statements for the year ending 31 December
2007 are still subject to change and to additional interpretations and therefore
cannot be determined with certainty. Accordingly, the accounting policies for
that annual period will be determined finally only when the annual financial
statements are prepared for the year ending 31 December 2007.
The comparative figures for the financial year ended 31 December 2006 are not
from the Group's statutory accounts for that financial year. Those accounts,
which were prepared under UK Generally Accepted Accounting Practices, have been
reported on by the Group's auditors and delivered to the registrar of companies.
The report of the auditors was unqualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis without
qualifying their report and did not contain statements under section 237 (2) or
(3) of the Companies Act 1985.
These consolidated interim financial statements were approved by the Board of
Directors on 4th September 2007.
The accounting policies applied by the Group resulting from changes for IFRS are
set out below. In all other respects, they are the same as those applied by the
Group in its consolidated financial statements as at and for the year ended 31
December 2006.
Intangible assets
Goodwill
Goodwill arises on the acquisitions of subsidiaries, associates and joint
ventures. As part of its transition to IFRS, the Group elected not to restate
those business combinations that occurred prior to 1 January 2006. In respect of
these acquisitions, goodwill represents the amount recognised under the Group's
previous accounting framework (UK GAAP). For acquisitions on or after 1 January
2006, goodwill represents the excess of the cost of the acquisition over the
Group's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities of the acquiree. When the excess is negative, it is
recognised immediately in profit or loss.
Goodwill is measured at cost less accumulated impairment losses. The carrying
amounts are reviewed at each reporting date to determine whether there is any
indication of impairment. Where there is, the recoverable amount is estimated
and an impairment loss is recognised if the carrying amount exceeds its
recoverable amount.
Other intangible assets
Intangible assets other than goodwill that are acquired by the Group are stated
at cost less accumulated amortisation and impairment losses.
Amortisation is charged to the profit and loss account on a straight-line basis
over the estimated useful lives of the intangible assets acquired.
Intangible assets (continued)
Research and development
Development expenditure is capitalised only if development costs can be measured
reliably, the product or process is technically and commercially feasible,
future economic benefits are probable and the Group intends to and has
sufficient resources to complete development and to use and sell the asset. The
expenditure capitalised includes the cost of materials, direct labour and
overhead costs that are directly attributable to preparing the asset for its
intended use. Other development expenditure, as well as expenditure on research
activities, is recognised in profit or loss when incurred.
Capitalised development expenditure is measured at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised in profit or loss on a straight-line basis over the
estimated useful lives the related products.
2. Segmental analysis
The Group operates from the United Kingdom, the USA, India, Singapore, Hong
Kong, Luxembourg and the Czech Republic. The Group's revenue and operating
result analysed by segment of business is shown in the table below.
Revenue and profit by segment (#000)
Revenue Profit / (loss)
Six Six Six Six
Months Months Year Months Months Year
Ended ended ended ended ended ended
30 June 30 June 31 Dec 30 June 30 June 31 Dec
2007 2006 2006 2007 2006 2006
Banking 4,706 5,920 11,369 916 1,406 2,500
Wealth Management 1,790 996 2,378 111 (124) 38
Energy 2,079 399 1,942 448 (182) 71
Other Software Products 2,070 2,063 4,169 367 367 767
____________________________________________________________________
Total 10,645 9,378 19,858 1,842 1,467 3,376
Unallocated costs (424) (503) (1,040)
Profit before interest and amortisation __________________________________
of acquired intangible assets 1,418 964 2,336
Amortisation of acquired intangible
assets (168) (112) (279)
Net interest receivable 23 20 (12)
__________________________________
Profit before tax 1,273 872 2,045
3. Operating costs
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 Dec 2006
#000 #000 #000
Staff costs 5,408 5,038 10,146
Other operating charges 3,525 3,130 6,847
Depreciation of fixed assets 140 159 317
Amortisation of capitalised software development 89 75 150
Amortisation of acquired intangible assets 168 112 279
Issue of share options - IFRS 2 cost 65 12 62
_________________________________________________
Operating costs 9,395 8,526 17,801
4. Income tax
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 Dec 2006
#000 #000 #000
Current tax - - (7)
Deferred tax (54) 21 614
_________________________________________________
Income tax (expense) / credit (54) 21 607
The low charge for the period ended 30 June 2007 reflects the benefit of
#337,000 of tax losses recognised as a deferred tax asset. A further #4,870,000
of tax losses remain unrecognised as at 30 June 2007.
5. Earnings per share
The adjusted earnings per share figure excludes income tax and amortisation of
acquired intangible assets to provide a more accurate assessment of the ongoing
earnings of the Group. Adjusted earnings per share can be reconciled to the
basic earnings per share as follows:
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 Dec 2006
#000 #000 #000
Basic profit 1,219 893 2,652
Amortisation of acquired intangible assets 168 112 279
Income tax 54 (21) (607)
_______________________________________________
Adjusted earnings 1,441 984 2,324
Adjusted basic earnings per ordinary share 3.3p 2.4p 5.5p
Diluted adjusted earnings per ordinary share 3.2p 2.3p 5.4p
Weighted average number of shares:
Six months Six months Year
ended ended ended
Number of shares 30 June 2007 30 June 2006 31 Dec 2006
For basic earnings per share 43,623,501 41,862,747 42,568,938
Effect of share options 1,140,729 306,347 343,848
_______________________________________________
For diluted earnings per share 44,764,230 42,169,094 42,912,786
6. Dividends
The following dividends were declared and paid by the Group:
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 Dec 2006
#000 #000
Final dividend for the year ended 31 December 2006 of
1.0p per share 431 - -
7. Share capital
30 June 31 Dec
2007 2006
Number #000 Number #000
Authorised:
Ordinary shares of 2p each 53,500,005 1,070 53,500,005 1,070
Allotted, called up and fully paid:
Ordinary shares of 2p each 44,445,856 889 44,416,856 888
The movement of shares relates to share options exercised for a total
consideration of #17,110 with a nominal value of #580.
8. Reserves
Share Capital Profit &
premium acquisition redemption Special loss
account reserve reserve reserve account
#000 #000 #000 #000 #000
At 1 January 2007 11 5,377 240 6,871 (3,076)
Adjustment on adoption of IFRS on 1 January - - - - 706
At 1 January 2007 (restated) 11 5,377 240 6,871 (2,370)
Retained profit for the period - - - - 1,219
Issue of share options - IFRS 2 cost - - - - 65
Issue of ordinary share capital - share options 459 - - - -
Transfer to profit and loss account reserve - - - (4,744) 4,744
Dividend - - - - (431)
At 30 June 2007 470 5,377 240 2,127 3,227
In 2002, following Court approval for the reduction of the Company's share
premium account, the Company set up a Special Reserve to facilitate the purchase
of its own shares. During 2007, having established that all creditors at that
time had been cleared, the Company transferred the distributable portion of the
Special Reserve (#4,744,000) to the profit and loss account.
9. Transition to IFRS on first time adoption
Explanation of columns:
A Presentation differences required by IFRS
B Measurement and recognition differences
C Prior year adjustments
Reconciliation of the UK GAAP consolidated balance sheet to the IFRS
consolidated balance sheet
Explanation of adjustments in the balance sheet reconciliations:
1 Recognition of acquired intangible assets as required by IFRS
2 Capitalisation of product development costs previously expensed under UK GAAP
3 Deferred tax liability from capitalised development costs and acquired
intangible assets
4 Reclassification of assets and liabilities for operation held for sale
5 Recognition of deferred tax asset for acquired tax losses accounted for as an
adjustment to goodwill
1 January 2006
UK GAAP A B IFRS
UK GAAP format #000 #000 #000 #000 IFRS Format
Fixed assets Assets
Non-current assets
Fixed assets 343 - - 343 Property, plant and equipment
Intangible assets
Intangible assets - goodwill 5,838 - - 5,838 - goodwill
483(2) 483 - capitalised development costs
6,181 - 483 6,664 Total non-current assets
Current assets Current assets
Debtors 4,822 (141) - 4,681 Trade and other receivables
141 - 141 Income tax receivable
Cash at bank and in hand 3,392 - - 3,392 Cash and cash equivalents
8,214 - - 8,214 Total current assets
14,395 - 483 14,878 Total assets
Capital and reserves Equity
Called up share capital 808 - - 808 Issued share capital
Share premium account 6,066 - - 6,066 Share premium
Acquisition reserve 4,738 - - 4,738 Acquisition reserve
Capital redemption reserve 240 - - 240 Capital redemption reserve
Special reserve 5,240 - - 5,240 Special reserve
Profit and loss account (10,465) - 338 (10,127) Retained earnings
Equity shareholders' funds 6,627 - 338 6,965 Total equity
Liabilities
Creditors: Amounts falling
due after more than one year 481 (481) Non-current liabilities
481 - 481 Loans and overdrafts
145(3) 145 Deferred tax liabilities
481 - 145 626 Total non-current liabilities
Creditors: Amounts falling
due within one year 6,766 (6,766) Current liabilities
275 - 275 Borrowings
2,792 - 2,792 Trade and other payables
222 - 222 Income tax payable
3,477 - 3,477 Deferred income
Provisions for liabilities and 521 - - 521 Provisions
charges
7,287 - - 7,287 Total current liabilities
7,768 - 145 7,913 Total liabilities
14,395 - 483 14,878 Total equity and liabilities
9. Transition to IFRS on first time adoption (continued)
30 June 2006
UK GAAP A B C IFRS
UK GAAP format #000 #000 #000 #000 #000 IFRS Format
Fixed assets Assets
Non-current assets
Fixed assets 450 - - (22)(4) 428 Property, plant and equipment
Intangible assets
Intangible assets - goodwill 10,058 - (1,881)(1) (1,603)(4) 6,574 - goodwill
3,240(1) - 3,240 - intangible assets
408(2) - 408 - capitalised development costs
863(5) 863 Deferred tax assets
10,508 - 1,767 (762) 11,513 Total non-current assets
Current assets Current assets
Debtors 7,630 (141) - (487) (4) 7,002 Trade and other receivables
141 - - 141 Income tax receivable
Cash at bank and in hand 1,332 - - (179) (4) 1,153 Cash and cash equivalents
- 805(4) 805 Assets classified as held for sale
8,962 - - 139 9,101 Total current assets
19,470 - 1,767 (623) 20,614 Total assets
Capital and reserves Equity
Called up share capital 888 - - - 888 Issued share capital
Share premium account 11 - - - 11 Share premium
Acquisition reserve 6,356 - - - 6,356 Acquisition reserve
Capital redemption reserve 240 - - - 240 Capital redemption reserve
Special reserve 5,240 - - - 5,240 Special reserve
Profit and loss account (3,750) - 665 (82) (3,167) Retained earnings
Equity shareholders'
funds 8,985 - 665 (82) 9,568 Total equity
Liabilities
Creditors: Amounts 412 (412) Non-current liabilities
falling due after more
than one year 412 - - 412 Loans and overdrafts
1,102(3) - 1,102 Deferred tax liabilities
412 - 1,102 - 1,514 Total non-current liabilities
Creditors: Amounts 9,959 (9,959) Current liabilities
falling due within one
year
1,143 - - 1,143 Borrowings
3,942 - (541) (4) 3,401 Trade and other payables
419 - - 419 Income tax payable
4,455 - - 4,455 Deferred income
Provisions for 114 - - - 114 Provisions
liabilities and charges
10,073 - - (541) 9,532 Total current liabilities
10,485 - 1,102 (541) 11,046 Total liabilities
19,470 - 1,767 (623) 20,614 Total equity and liabilities
9. Transition to IFRS on first time adoption (continued)
31 December 2006
UK GAAP A B C IFRS
UK GAAP format #000 #000 #000 #000 #000 IFRS Format
Fixed assets Assets
Non-current assets
Fixed assets 407 - - - 407 Property, plant and equipment
Intangible assets
Intangible assets - 8,784 - (1,368)(1) (890)(5) 6,526 - goodwill
goodwill
3,073(1) - 3,073 - intangible assets
438(2) - 438 - capitalised development costs
Deferred tax asset 900 - - 523(5) 1,423 Deferred tax assets
10,091 - 2,143 (367) 11,867 Total non-current assets
Current assets Current assets
Debtors 5,584 (20) - - 5,564 Trade and other receivables
20 - - 20 Income tax receivable
Cash at bank and in hand 4,121 - - - 4,121 Cash and cash equivalents
9,705 - - - 9,705 Total current assets
19,796 - 2,143 (367) 21,572 Total assets
Capital and reserves Equity
Called up share capital 888 - - - 888 Issued share capital
Share premium account 11 - - - 11 Share premium
Acquisition reserve 5,377 - - - 5,377 Acquisition reserve
Capital redemption reserve 240 - - - 240 Capital redemption reserve
Special reserve 6,871 - - - 6,871 Special reserve
Profit and loss account (3,076) - 1,073 (367) (2,370) Retained earnings
Equity shareholders' funds 10,311 - 1,073 (367) 11,017 Total equity
Liabilities
Creditors: Amounts falling 275 (275) Non-current liabilities
due after more than one
year 275 - - 275 Loans and overdrafts
1,070(3) - 1,070 Deferred tax liabilities
275 - 1,070 - 1,345 Total non-current liabilities
Creditors: Amounts falling 9,183 (9,183) Current liabilities
due within one year 1,074 - - 1,074 Borrowings
3,860 - - 3,860 Trade and other payables
374 - - 374 Income tax payable
3,875 - - 3,875 Deferred income
Provisions for liabilities 27 - - - 27 Provisions
and charges 9,210 - - - 9,210 Total current liabilities
9,485 - 1,070 - 10,555 Total liabilities
19,796 - 2,143 (367) 21,572 Total equity and liabilities
9. Transition to IFRS on first time adoption (continued)
Reconciliation of the UK GAAP consolidated profit and loss account to the IFRS
consolidated income statement
Explanation of adjustments in the income statement reconciliations:
1 Removal of UK GAAP goodwill amortisation, recognition of amortisation of
capitalised development costs and acquired intangible assets
2 Release / creation of deferred tax liability in respect of intangible assets
3 Removal of turnover and operating costs of operation held for sale
4 Release of deferred tax asset
5 Release and adjustment of deferred tax asset resulting from adjustment to
goodwill
Period ended 30 June 2006
UK GAAP B C IFRS
UK GAAP format #000 #000 #000 #000 IFRS Format
Turnover 10,452 - (1,074)(3) 9,378 Revenue
Operating costs (9,823) 278(1) 1,019(3) (8,526) Operating costs
Operating profit 629 278 (55) 852 Operating profit
Net interest receivable 20 - - 20 Finance income
Profit on ordinary activities
before taxation 649 278 (55) 872 Profit before taxation
Tax on profit on ordinary activities - 48(2) (27)(4) 21 Income tax (expense) / credit
Profit on ordinary activities
after taxation and for the period 649 326 (82) 893 Profit for the period
Year ended 31 December 2006
UK GAAP B C IFRS
UK GAAP format #000 #000 #000 #000 IFRS Format
Turnover 19,858 - - 19,858 Revenue
Operating costs (18,455) 654(1) - (17,801) Operating costs
Operating profit 1,403 654 - 2,057 Operating profit
Net interest payable (12) - - (12) Finance expense
Profit on ordinary activities
before taxation 1,391 654 - 2,045 Profit before taxation
Tax on profit on ordinary activities 893 81(2) (367)(5) 607 Income tax (expense) / credit
Profit on ordinary activities after
taxation and for the period 2,284 735 (367) 2,652 Profit for the period
There are no material reclassifications or adjustments to the cash flow
statement as a result of the transition to IFRS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKQKDCBKDACK
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