TIDMPDC
RNS Number : 6205G
Printing.com plc
10 June 2013
7.00 AM
10 JUNE 2013
Printing.com plc
("Printing.com" or "the Company")
Preliminary Results for the period ended 31 March 2013
Printing.com, operating in the UK, Holland, Belgium, France,
Ireland and under licence in New Zealand and the US today announces
its preliminary results for the year ended 31 March 2013.
Financial Highlights
2013 2012 Change
Turnover GBP20.66m GBP21.77m -5.1%
EBITDA before exceptional
costs* GBP2.81m GBP3.43m -18.1%
EBITDA GBP2.63m GBP3.43m -23.3%
Profit before tax and exceptional
costs* GBP1.11m GBP1.30m -14.6%
Exceptional costs* GBP0.18m -
Profit before tax GBP0.89m GBP1.25m -28.8%
EPS - Basic 1.69p 2.33p -27.4%
EPS - Fully Diluted 1.69p 2.32p -27.2%
Dividend 2.55p 2.55p -
Capital Expenditure GBP1.56m GBP1.38m
Net Cash GBP1.42m GBP1.87m
Net Funds** GBP1.39m GBP1.77m
*Exceptional costs of which GBP0.16m represented a severance
payment.
**Net funds is the net of cash and cash equivalents less other
interest bearing loans and borrowings
Operational highlights
-- Encouraging growth in online channels - Drukland.be and Flyerzone UK.
-- Further growth in key accounts via BrandDemand
-- Group Intellectual Property leveraged to launch 'Software-as-a-Service' (SaaS) offerings
-- SaaS based W3P and TemplateCloud initiatives successfully launched
-- Proposed Company name change reflects the Group's broader activity
-- 2013 final dividend maintained
For further information:
Printing.com plc
Tony Rafferty (Chief Executive) 07966 517 336
Alan Roberts (Finance Director) 0161 848 5713
N+1 Singer (Nominated Adviser)
Richard Lindley 0113 388 4789
Sandy Fraser 0207 496 3176
Chairman's Statement
The key development within the year under review was the
successful launch of the Company's new 'Software as a Service'
(SaaS), W3P.com and Templatecloud.com offerings. This type of
service is also referred to as 'Cloud Computing'.
These SaaS offerings leverage the Group's software and other
intellectual property and thereby significantly have reduced
development costs to date. Notwithstanding this, establishing these
SaaS offerings has incurred material operational costs during the
year under review impacting on Company earnings.
However, moving forward we believe that these new SaaS offerings
will open up material new opportunities for the Group.
Results
During the year, printing volumes contracted, resulting in a
decrease in turnover of 5.1% to GBP20.66m (2012: GBP21.77m). This
decrease, together with the subsidy of the new SaaS initiatives,
resulted in EBITDA before exceptional costs contracting by 18.1% to
GBP2.81m from GBP3.43m last year. Operating profit, before
exceptional costs, decreased by 14.6% to GBP1.11m (2012:
GBP1.30m).
The exceptional costs of GBP0.18m, incurred in the period, were
principally the severance payment made to the outgoing Director of
the Group's Dutch subsidiary. Profit before tax reflected this and
contracted by 28.8% to GBP0.89m (2012: GBP1.25m)
Cash
The Company had cash of GBP1.42m (2012: GBP1.87m) at the year
end.
During the year, the Group repaid GBP0.08m of debt and finished
the year with negligible legacy debt of GBP0.02m. Capital
investment totalled GBP1.56m (2012: GBP1.38m), funded through
operational cash flows. This principally reflected the ongoing
investment in the Group's new SaaS offerings.
Capital Reduction
Having gained Shareholder support at the last AGM the Company
received Court approval to the capital reorganisation on 8 August
2012 increasing distributable reserves in the Company by GBP4.08m
through the cancellation of the share premium account.
Dividend
When updating the market on 20 February 2013, the Board reported
its intention to recommend the payment of a final dividend at the
same level as the previous year, having taking into account not
just the Company's earnings but the near absence of debt together
with the underlying cash generation. This remains the Board's
position and it recommends a final dividend of 1.50p to be paid on
2 August 2013 to Shareholders on the register at the close of
business on 5 July 2013. This would make a total dividend for the
year of 2.55p (2012: 2.55p).
Moving forward, the Board believes that until the scalability
and cash requirements of the new initiatives are established, a
dividend policy requiring that proposed dividends are covered by
earnings should be adopted.
People at Printing.com
With the advent of the new SaaS offerings, the endeavours of our
employees and partners are becoming more diverse and demanding, and
I accordingly thank them one and all for their respective
efforts.
Proposed Change of Name
The Company's name previously represented the single focus of
our business activities, today the Group and its offering are more
diverse. In particular, the Printing.com plc name causes confusion
and misunderstanding when marketing the TemplateCloud and W3P SaaS
offerings.
It is therefore our intention to table a resolution at the AGM
to change the Company's name from Printing.com plc to Grafenia plc
to reflect the broad 'graphic nature' of the Group's activity.
Outlook
The Company embarks on its new SaaS initiatives with significant
net cash and strong underlying cash generation.
In the short term, we believe that the majority of the Group's
earnings will continue to be generated from the sale of printing.
The print market remains competitive, but we believe the Group's
channels Flyerzone, BrandDemand and Drukland together with the
augmented Printing.com formula, position the Group well to
compete.
We are now at the juncture where we believe the new SaaS
formulas, W3P and Templatecloud.com, will gain momentum and by the
end of the current year make a positive contribution to earnings on
a monthly basis.
Various elements of the new SaaS offerings have already been
'internationalised' and readied for use in multiple languages. This
reflects our belief that we can commercially exploit the SaaS
technology in other territories via agents, master license owners
and the like.
Given the early stage of exploiting the SaaS offerings it is
appropriate that we remain cautious about the scope for earnings
growth during the current financial year. However, moving forward
we believe that the Group has a clearly defined strategy and
significant opportunities for growth.
Les Wheatley
Chairman
10 June 2013
Chief Executive's Statement
Overview of Strategy
The sale of printing through the Printing.com franchise network
and online via Flyerzone, Drukland, BrandDemand remains important
to the Group. Indeed, in the short term, this activity is likely to
continue to generate the majority of the Group's earnings and is
strongly cash generative.
Worldwide, there are more printing companies wanting to sell
online and needing the necessary systems to do so. This provides an
opportunity to leverage the Group's software and make it available
to companies wishing to sell online via a new SaaS formula. The
SaaS revenue model is based on 'pay-per-month', 'pay-per-click' and
'pay per design'.
We are now at the point where our new SaaS initiatives, W3P and
Templatecloud.com have moved from development to deployment.
Moving forward, the Group will have three distinct revenue
streams;- printing services via its franchised and online channels,
secondly W3P.com a SaaS based platform for the graphic arts sector
and finally TemplateCloud.com, a SaaS based offering selling
'templated' graphic design.
Review of trading - UK&EI
Sales across the Printing.com network were GBP12.55m (2012:
GBP13.78m) with the reduction reflecting a competitive marketplace
and increased online competition.
To arrest this decline, we have configured W3P so that partners
can order printing via the system. Indeed, to date a number of
Printing.com Franchisees have converted to the W3P format yet
continued to utilise the Group's printing facilities. Collectively
this enables the Group to broaden its 'reseller' base and increase
the lifetime value of its partners.
Review of trading - France
Sales from France across all channels progressed marginally to
GBP0.57m (2012: GBP0.54m).
Review of trading - Belgium
Trading across the Group's Drukland.be channel exhibited
encouraging progress to GBP1.21m (2012: GBP0.80m). In the period
Drukland.be added the Group's TemplateCloud platform which
contributed to sales.
Review of trading - Netherlands
Sales from the Group's Dutch channels, Flyerzone.nl and
Drukland.nl contracted by 5.3% to GBP6.12m (2012: GBP6.46m)
reflecting increased competition.
However, taking out the effect of exchange rate variations; the
underlying contraction, measured in Euro sales, was just 2.3%.
TemplateCloud content was added during the second half to
Drukland.nl and will follow shortly onto Flyerzone.nl when its
website is upgraded.
BrandDemand
BrandDemand is an alternative brand used by the Company's
Printing.com franchisees when offering a print management service.
Its revenue for the year increased to GBP0.58m (2012: GBP0.29m).
This reflected the addition of many new clients and the maturing of
other accounts.
Moving forward we expect additional growth for BrandDemand UK.
The formula has also been recently launched in the Netherlands.
Flyerzone UK
Flyerzone.co.uk is a low-cost, online only service targeting
SOHO clients. Clients progress their orders by uploading a PDF file
or by choosing a design Template from the Company's TemplateCloud
system, which is featured on the site.
During the year revenues grew to GBP0.68m (2012: GBP0.09m). The
run rate for March 2013 was circa GBP0.11m reflecting the ongoing
growth.
Establishing Flyerzone has to date required significant
marketing investment, thereby requiring subsidy from the Group's
other activities. Our objective for Flyerzone UK is that it makes a
positive contribution, on a monthly basis, by the close of the
current financial year.
TemplateCloud.com
In the Interim Report we highlighted that the TemplateCloud
formula was being positioned as a stand alone SaaS offering and a
revenue stream in its own right, rather than as an element of the
Group's own channels.
The concept of TemplateCloud is to 'crowdsource' graphic design
from freelance contributors. The TemplateCloud software converts
the 'graphic designer's work' from an industry standard file format
into a proprietary format capable of being edited via a web
browser.
Templates cover the promotional needs of a vast array of SOHO
types. The English library now contains in excess of 11,000
templates. The content has been translated into French, Dutch,
Spanish, Italian, Portuguese, Swedish and German along with US
Imperial sizes.
The first such agreement is now in place via a partnership with
Needaprint.co.uk and Needaprint.ie.
Terms have been agreed with a number of other online printers,
in various territories, to add this functionality.
Moving forward we believe that TemplateCloud will be added to a
material number of online printers thereby leveraging the Group's
intellectual property.
W3P
W3P is the Company's new SaaS based formula for graphic
designers, printers and the like. The system provides online
ordering, proofing, studio management, in-house and third party
production. It also includes the Company's template technology
providing web-to-print functionality.
The foundation of W3P is the Company's established Flyerlink
software, developed originally for use by Printing.com Franchisees.
This has enabled the powerful and sophisticated W3P platform to be
developed at a significantly lower cost and more expeditiously than
would otherwise have been the case.
W3P partners pay a license fee of GBP99 - GBP199 per month
depending on the chosen functionality. Above a certain threshold
partners also pay micro fees, typically GBP2 or GBP3 per order.
During the final quarter of the year 11 of these agreements were
completed - post the year end the user base has continued to
grow.
The W3P platform is now being readied for use across many EU
countries, the US and Australia. During the current year we looked
to put in place agents to promote W3P in these other territories
and anticipate that this will gain momentum.
Board Changes
Following taking up a new position in Canada, Christian Deckart
has announced his intention to step down from his role as
Non-executive Director at the Group's AGM on 19 July 2013. On
behalf of the Board I would like to express our thanks to Christian
for his hard work and contribution to the development of the
Group.
Current Trading
Across our core markets the sale of printing remains broadly in
line with the Company's internal budget and the prior year. The
pipeline for new W3P partners remains encouraging and we believe
this bodes well for the grant of additional licenses moving
forward.
We are also engaged in meaningful discussions with a number of
international partners who could, promote the W3P and TemplateCloud
offerings in their respective countries.
Tony Rafferty
Chief Executive
10 June 2013
Financial Review
Revenue
Group revenues decreased by 5.1% to GBP20.66m (2012: GBP21.77m).
Revenue from the Eurozone was 38.1% of the total (2012: 35.8%).
EBITDA for the Group, before exceptional costs, decreased by
18.1% to GBP2.81m (2012: GBP3.43m).
Pre Tax Profit, before exceptional costs, decreased to GBP1.11m
(2012: GBP1.30m). Exceptional costs of GBP0.18m were incurred in
the period, principally being the severance payment made to Hans
Scheffer, the MD of the Group's Dutch subsidiary, reducing Pre Tax
Profit to GBP0.89m (2012: GBP1.26m)
Gross Profit
The Group's simple definition of Gross Profit has been revenue
less direct materials (including the cost of distribution when made
direct to customers). MFG cost of sales included the manufacturing
conversion cost, as they are supplied by third party commercial
printers. Increased integration in the supply chain has meant that
in the second half of the year more MFG production was supplied by
the UK Hub resulting in Gross Profit increasing as a percentage
from 53.4% to 54.3% although it reduced overall to GBP11.21m (2012:
GBP11.63m) inline with the decrease in revenue.
EBITDA
The Group define EBITDA as operating profit, before exceptional
costs, plus depreciation and amortisation. The year showed a
decrease to GBP2.81m being 13.6% (2012: GBP3.43m 19.9%) of
turnover.
Pre-Tax Profit
The Group recorded a pre-tax profit of GBP0.89m (2012:
GBP1.26m), being 4.3% (2012: 5.8%) of Group revenue.
Staff costs increased in the year to GBP4.83m (2012: GBP4.47m),
and rose as a percentage of revenue to 23.4% from 20.5%. The
increase in staff costs reflected the investment in the
establishment and development of the new sales Channels. The
depreciation and amortisation charge for the year was GBP1.70m
(2012: GBP2.13m), last year these charges had peaked as the
investment in the Hub Infrastructure, Territory Rights and Customer
Lists approach the end of their useful economic lives fall away.
The most significant element remains the charge for the
amortisation of Software Development.
Interest Received and Charged
Interest received and charged in the period were negligible.
Taxation
In the year the standard rate for tax was 24% (2012: 24%). The
charge for the current year is GBP0.09m or 9.7% of PBT (2012:
GBP0.16m or 12.7%). The effective tax rate was reduced through the
inclusion of enhanced tax relief on research and development
expenditure.
Earnings Per Share (EPS)
Basic EPS achieved was 1.69p (2012: 2.33p), the weighted average
number of shares used was 47,557,835. Diluted EPS achieved was
1.69p (2012:2.32p), the weighted average number of shares used was
47,610,446. The year closed with 47,557,835 ordinary shares in
issue.
Cash Flow
At the year end the Group had cash balances of GBP1.42m (2012:
GBP1.87m). After debt of GBP0.02m in MFG legacy bank loans Net
Funds were GBP1.39m (2012: GBP1.77m). Operational cash inflow
remained strong at GBP2.72m (2012: GBP3.54m). The most significant
cash outflow being dividends paid of GBP1.21m (2012: GBP1.49m).
Capital Expenditure
The total expenditure for the year was GBP1.56m (2012:
GBP1.38m). The major item being Software Development charges for
the online initiatives and computing infrastructure GBP1.17m (2012:
GBP0.86m). There were no Franchises reverting to Company ownership
in the period and no Customer Lists were acquired (2012:
GBP0.33m).
Manufacturing capacity at the Manchester Hub provides scope for
growth without additional capital expenditure.
Capital expenditure will therefore continue to be mainly
incurred on software development and enhancement at levels similar
to that seen in 2013
Share Capital and Share Options
No employee options were exercised or granted during the
year.
During the year the Company did not purchase any of its own
shares.
Treasury Policies and Financial Risk
Surplus funds are intended to support the Group's short term
working capital requirements. These funds are invested through the
use of short term deposits and the policy is to maximise returns as
well as provide the flexibility required to fund on-going
operations. It is not the Group's policy to enter into financial
derivatives for speculative or trading purposes.
Interest rate risk, liquidity risk and currency risk
Interest rate risks are minimal, having cleared all finance
lease agreements. The Group uses leasing or hire purchase at
periods of up to 5 years to finance purchases of major items of
plant where it is considered to be a more effective use of
funds.
The Group operates in Holland, Belgium, France, Ireland and
Switzerland and therefore has overseas assets and liabilities which
are income generating and thus any currency movements are
considered to be a low risk.
Alan Q. Roberts
Finance Director
10 June 2013
Group Share Price
The Group's share price performance for the period under review
ranged between 21.00 pence to 32.50 pence. The market price of
shares as at 31 March 2013 was 21.75 pence (31 March 2012: 28.00
pence).
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2013
Note 2013 2012
GBP000 GBP000
Revenue 3 20,664 21,768
Raw materials and consumables used (9,453) (10,134)
Gross profit 11,211 11,634
Staff costs (4,825) (4,473)
Other operating charges (3,577) (3,727)
Depreciation and amortisation (1,698) (2,134)
Total expenses (10,100) (10,334)
Operating profit before exceptional
costs 1,111 1,300
Exceptional costs (183) -
Operating profit 928 1,300
Financial income 13 14
Financial expenses (50) (56)
Net financing expense (37) (42)
Profit before tax 891 1,258
Taxation 4 (86) (158)
Profit for the year 805 1,100
Other comprehensive income for the - -
year
Total comprehensive income for the
year 805 1,100
Basic earnings per share 5 1.69p 2.33p
Diluted earnings per share 5 1.69p 2.32p
Consolidated Statement of Changes in Equity
Group - year ended 31 March Share Share Merger Retained
2012 Capital premium reserve Earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 March 2011 469 3,881 838 1,311 6,499
Profit and total comprehensive
income for the year - - - 1,100 1,100
Dividends paid - - - (1,492) (1,492)
Shares issued 6 198 - - 204
Total movement in equity 6 198 - (392) (188)
Balance at 31 March 2012 475 4,079 838 919 6,311
Group - year ended 31 March
2013
Profit and total comprehensive
income for the year - - - 805 805
Capital Reorganisation - (4,079) - 4,079 -
Dividends paid - - - (1,213) (1,213)
Shares issued - - - - -
Total movement in equity - (4,079) - 3,671 (408)
Balance at 31 March 2013 475 - 838 4,590 5,903
Consolidated Statement of Financial Position
At 31 March 2013
2013 2012
GBP000 GBP000
Non-current assets
Property, plant and equipment 1,976 2,173
Intangible assets 4,681 4,615
Deferred tax assets 2 2
Total non-current assets 6,659 6,790
Current assets
Inventories 183 147
Trade and other receivables 2,543 2,898
Cash and cash equivalents 1,417 1,874
Total current assets 4,143 4,919
Total assets 10,802 11,709
Current liabilities
Other interest-bearing loans and borrowings (23) (80)
Trade and other payables (2,826) (2,889)
Current tax payable (157) (372)
Accruals and deferred income (1,075) (1,315)
Other liabilities (365) (243)
Total current liabilities (4,446) (4,899)
Non-current liabilities
Other interest-bearing loans and borrowings - (23)
Deferred tax liabilities (453) (476)
Total non-current liabilities (453) (499)
Total liabilities (4,899) (5,398)
Net assets 5,903 6,311
Equity attributable to equity holders of the
parent
Share capital 475 475
Share premium - 4,079
Merger reserve 838 838
Retained earnings 4,590 919
Total equity 5,903 6,311
Consolidated Statement of Cash Flows
for year ended 31 March 2013
Group Group
2013 2012
GBP000 GBP000
Cash flows from operating activities
Profit for the year 805 1,100
Adjustments for:
Depreciation, amortisation and impairment 1,698 2,134
Net finance expense 37 10
Foreign exchange (loss)/gains (45) 32
Tax expense 86 158
Operating cash flow before changes in working
capital and provisions 2,581 3,434
Change in trade and other receivables 355 609
Change in inventories (36) 43
Change in trade and other payables (181) (544)
Cash generated from Operations 2,719 3,542
Interest paid (5) (24)
Income tax paid (324) (337)
Net cash inflow from operating activities 2,390 3,181
Cash flows from investing activities
Proceeds from sale of plant and equipment - 4
Interest received 13 14
Acquisition of plant and equipment (303) (183)
Capitalised development expenditure (574) (322)
Acquisition of other intangible assets (687) (872)
Dividends received - -
Net cash used in investing activities (1,551) (1,359)
Cash flows from financing activities
Proceeds from the issue of share capital - 204
Payment of finance lease liabilities - (200)
Repayment of bank loans (80) (127)
Repayment of loan notes - (355)
Dividends paid (1,213) (1,492)
Net cash used in financing activities (1,293) (1,970)
Net decrease in cash and cash equivalents (454) (148)
Exchange (loss)/gain on cash and cash equivalents (3) 20
Cash and cash equivalents at start of year 1,874 2,002
Cash and cash equivalents at 31 March 1,417 1,874
Notes
(forming part of the interim financial statements)
1 Basis of preparation
Printing.com plc (the "Company") is a company incorporated and
domiciled in the UK.
These financial statements do not include all information
required for full annual financial statements, and should be read
in conjunction with the financial statements of the Group as at and
for the year ended 31 March 2013.
The comparative figures for the year ended 31 March 2012 are not
the Company's statutory accounts for that financial year. Those
accounts have been reported on by the Company's auditors and
delivererd to the Registrar of Companies. The report of the
auditors was (i) unqualified, (ii) did not include a reference to
any matters to which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
These condensed consolidated preliminary financial statements
were approved by the Board of Directors on 10 June 2013.
2 Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at
and for the year ended 31 March 2012.
3 Segmental information
As in the prior year the Group's primary operating segments are
geographic being UK & Ireland, Europe and others. The segmental
analysis by nature of service is also consistent with the prior
year being conventional printing services, online printing services
and licence income.
This disclosure correlates with the information which is
presented to the Chief Operating Decision Maker, the Chief
Executive (CEO), who reviews revenue (which is considered to be the
primary growth indicator) by segment. The Group's costs, finance
income, tax charges, non-current liabilities, net assets and
capital expenditure are only reviewed by the CEO at a consolidated
level and therefore have not been allocated between segments in the
analysis below.
Of the Group revenue of GBP20,664,000, GBP12,216,000 was
generated in the UK (2012: GBP13,389,000). Revenue generated
outside the UK is primarily attributable to Holland & Belgium
GBP7,327,000 (2012: GBP7,258,000), France GBP566,000 (2012:
GBP536,000) and Republic of Ireland GBP333,000 (2012: GBP392,000).
No single customer provided the Group with over 10% of its
revenue.
Of the Group's non-current assets (excluding deferred tax) of
GBP6,657,000, GBP6,356,000 are located in the UK. Non-current
assets located outside the UK are in Holland GBP207,000, (2012:
GBP663,000), France GBP93,000, (2012: GBP91,000) and the Republic
of Ireland GBP1,000, (2012: GBP1,000).
Analysis by location of sales
UK & Ireland Europe Other Total
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2013
Segment revenues 12,549 7,893 222 20,664
Operating Expenses (19,553)
Results from operating activities 1,111
Exceptional expense (183)
Net finance expense (37)
Profit before tax 891
Tax (86)
Profit for the period 805
Assets
Unallocated net assets 5,903
UK & Ireland Europe Other Total
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2012
Segment revenues 13,781 7,794 193 21,768
Operating Expenses 20,468
Results from operating activities 1,300
Net finance income (42)
Profit before tax 1,258
Tax (158)
Profit for the period 1,100
Assets - Unallocated net assets 6,311
Analysis by type
Printing Printing Licence Total
services services Income
- online
sales
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2013
Segment revenues 8,755 11,031 878 20,664
Operating Expenses (19,553)
Results from operating activities 1,111
Exceptional expense (183)
Net finance income (37)
Profit before tax 891
Tax (86)
Profit for the period 805
Assets
Unallocated net assets 5,903
Analysis by type
Printing Printing Licence Total
services services Income
- online
sales
GBP000 GBP000 GBP000 GBP000
Period ended 31 March 2012
Segment revenues 7,399 13,324 1,045 21,768
Operating Expenses 20,468
Results from operating activities 1,300
Net finance income (42)
Profit before tax 1,258
Tax (158)
Profit for the period 1,100
Assets
Unallocated assets 6,311
4 Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in profit and loss except to the
extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in profit and loss except to the
extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Recognised in profit and loss
2013 2012
GBP000 GBP000
Current tax expense
Current year 292 459
Foreign tax 158 152
Adjustments for prior years (341) (325)
109 286
Deferred tax expense
Origination and reversal of temporary differences (181) (252)
Movement due to change in rate of tax (27) (62)
Adjustment in respect of prior year 185 186
Total tax in profit and loss 86 158
The adjustment in the tax expense for prior years is primarily
due to R&D tax reclaims. These amounts are only recognised by
the Group when the claims have been completed and cash received.
The amounts reclaimed differ from the development costs capitalised
under IAS and therefore the difference is not recognised as part of
the tax base of these assets.
Reconciliation of effective tax rate
2013 2012
GBP000 GBP000
Profit for the period 891 1,258
Total tax expense (86) (158)
Profit after taxation 805 1,100
Tax using the UK corporation tax rate of 24%
(2012: 26%) 193 327
Permanent differences 19 28
Overseas tax losses not recognised 2 12
Difference in overseas tax rate 27 (22)
Adjustments in respect of prior periods -
current tax (341) (325)
Adjustments in respect of prior periods -
deferred tax 185 186
Movement due to change in tax rate (20) (48)
Total tax expense 86 158
The Group Tax Creditor amounts to GBP157,000 (2012: GBP372,000).
The deferred tax assets and liabilities as at 31 March 2013 have
been calculated using the tax rate of 24% which was substantively
enacted at the balance sheet date.
A reduction in the UK corporation tax rate from 26% to 25%
(effective from 1 April 2012) was substantively enacted on 5 July
2011, and further reductions to 24% (effective from 1 April 2012)
and 23% (effective from 1 April 2013) were substantively enacted on
26 March 2012 and 3 July 2012 respectively. This will reduce the
company's future current tax charge accordingly. The deferred tax
liability at 31 March 2013 has been calculated based on the rate of
23% substantively enacted at the balance sheet date.
The March 2013 Budget announced that the rate will further
reduce to 20% by 2015 in addition to the planned reduction to 21%
by 2014 previously announced in the December 2012 Autumn Statement.
It has not yet been possible to quantify the full anticipated
effect of the announced further 3% rate reduction, although this
will further reduce the company's future current tax charge and
reduce the company's deferred tax liability accordingly.
5 Earnings per share
The calculations of earnings per share are based on the
following profits and numbers of shares.
2013 2012
GBP000 GBP000
Profit after taxation for the financial year 805 1,100
Weighted average number of shares
Number of Number of
Shares Shares
For basic earnings per ordinary share 47,557,835 47,302,191
Exercise of share options 52,611 203,901
For diluted earnings per ordinary share 47,610,446 47,506,092
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
The holders of deferred shares shall not be entitled to any
participation in the profits or the assets of the Company and the
deferred shares do not carry any voting rights.
6 Dividends
2013 2012
GBP000 GBP000
Final dividends paid in respect of prior year
but not recognised as liabilities in that year 713 993
Interim dividends paid in respect of the current
year 500 499
Total dividend paid in the year 1,213 1,492
After the balance sheet date dividends of GBP713,000/1.50p per
qualifying ordinary share (2012: GBP713,000/1.50p per qualifying
ordinary share) were proposed by the Directors. The dividends have
not been provided for.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAPKNEAKDEFF
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