TIDMWSPR
RNS Number : 5417J
Worldspreads Group PLC
01 July 2011
WorldSpreads Group plc
Preliminary Results for the Year ended 31 March 2011
WorldSpreads Group plc ("WorldSpreads", the "Company" or the
"Group") today announces its full year results for the twelve
months ended 31 March 2011.
Highlights
-- Trading revenue from continuing operations, excluding IT
revenue of EUR0.40m (GBP0.35m): up 25% to EUR16.07m (GBP14.12m)
(2010: EUR12.89m, GBP11.33m)
-- Marketing spend up 455% to EUR3.22m (GBP2.83m) (2010:
EUR0.58m, GBP0.51m)
-- Operating loss from continuing operations before stock option
compensation: EUR0.64m (GBP0.56m) (2010: Operating profit before
stock compensation of EUR3.00m, GBP2.64m)
-- Basic (loss)/earnings per share from continuing operations of
(1.7c) (2010: 5.7c)
-- Strong balance sheet with net assets of EUR21.61m (GBP18.99m)
(2010: EUR22.43m, GBP19.71m) and Cash (excluding monies held on
behalf of clients) of EUR12m (GBP10.54m) (2010: EUR13.0m,
GBP11.42m)
-- Average trades per day from continuing operations: up 56% to
9,616 (2010: 6,148)
-- 4,508 (2010: 4,124) new clients registered in year to 31
March 2011
Commenting on the results, CEO Conor Foley stated:
The results we are presenting today demonstrate the continuing
strong performance in our core business areas, as demonstrated by
the strong growth in all of our key performance indicators.
As we highlighted throughout the year, the period under review
has been characterised by significant investment in systems, new
key management and international expansion. This, combined with an
aggressive advertising and brand building campaign in the UK
market, is, in the Board's view, achieving the Group's target
objectives. We are reinforcing our position in the competitive UK
retail market for financial spread betting; our international
operations have been expanded and the growth in the volume of
business that this strategy was targeting is now emerging. The
development of advanced risk management controls in relation to
trading, exposure management and, at a macro level, in respect of
the performance required of our business units, has played a major
role in improving the quality of our income streams and in the
firm's ability to react rapidly to changing environments in both
the domestic and international markets. Our partnership model
continues to grow strongly and is greatly aided in its business
development and delivery by our IT team in Kuala Lumpur. New
partners have been added to the platform; under-performing partners
have been terminated and there is a very strong pipeline of new
cooperation opportunities in the UK, Europe and the Far East.
Enhancements are continually being made to our proprietary IT
platform, XEQT, and new products are in the planning stages for
delivery to our clients during this calendar year. As consistently
stated over the last 12 months, we have operated over this period
at an almost break-even level, reflecting the investment in
resources, marketing and overseas start-ups. However, the
underlying activity levels and 'run rates' were very encouraging:
Trading profits, excluding IT revenues, were up 25% on the prior
year; over 4,500 new clients opened accounts in the year; average
daily trade numbers were up 56% on the previous year; and expansion
in our existing and carefully selected, new overseas markets
continued.
In summary, our rebuilding and repositioning work is close to
completion. It is our firm view that we have created the ideal
foundation for sustainable, controlled and high quality growth in
the coming years.
For further information, please contact:
WorldSpreads Group plc
Niall O'Kelly, Chief Financial Officer
+353 (0)1 775 5210 / +44 (0)20 7398 5100
Collins Stewart Europe Limited (Nominated advisor & Joint
Broker)
Matt Goode
+44 (0)20 7523 8350
Matrix Corporate Capital LLP (Joint Broker)
Malcolm Strang/Robert Beenstock
+44 (0)20 3206 7000
Bloxham (ESM advisor &Joint Broker)
Peter O'Carroll
+353 (0) 1 611 9200
Chief Executive's Statement
The year ended 31 March 2011 has been a significant year in the
development of the Company. We undertook an extensive programme of
investment in our infrastructure and marketing. We believe this
investment was necessary to position the Company for strong future
growth and we are satisfied that the investment is delivering the
expected returns to the business. In market terms, the year was
testing, with the sovereign debt crisis in Europe, the faltering US
economy, as well as the sharp impact of the natural disasters in
Japan leading to sporadic volatile markets conditions. The Company
delivered a 25% increase in trading profits during the year, a
satisfactory result although slightly behind our own expectations
due to longer lead times in a number of our new overseas offices.
Notwithstanding this we saw excellent growth in our existing
international business with the international division (disclosed
in Note 3 as "Europe" and "Other") growing by 30% to deliver
revenues of EUR6.3m (GBP5.5m).
As indicated in January, the Company made a small loss from
continuing operations, before stock option compensation of EUR0.14m
(GBP0.12m) and taxation, of EUR0.66m (GBP0.58m) down from a profit
of EUR3.0m (GBP2.63m) in 2010. This loss comes about as a result of
the increased infrastructure and marketing investment made during
the year. In the past 12 months the Company has had a number of
significant positive developments: the establishment and opening of
5 new offices in Germany, France, Sweden, Denmark and Portugal; an
investment in a significant sales and marketing programme in the UK
and overseas; and an innovative price offering (Zero spreads) which
has delivered a significant number of new clients. We believe that
we have built the foundations that will allow the Company to access
more new business and to grow strongly in the current year and
years ahead.
IT development has played a key part in the growth of the
Company. The Company's development team in Malaysia has been
continuing to improve our XEQT platform and is currently in the
process of developing a new CFD and FX platform, which we plan to
launch later in 2011. In addition, the Company will be launching a
new mobile trading platform before the end of the calendar
year.
The Company continues to seek out new partnership opportunities
as a successful channel for expanding the business. We have
enhanced our partnership offering over the course of the last year
and we have a number of exciting potential partnerships in the
pipeline which should, when launched, contribute meaningfully to
the business. Trading and client statistics continued to improve
during the past financial year to 31 March 2011. The number of new
accounts opened was 4,508 (2010: 4,124) and the average daily trade
numbers during the year increased by 56% to 9,616 from 6,148 in the
prior year. These two Key Performance Indicators are critical for
the revenue performance of the Company and drove a 25% uplift in
revenue from continuing operations, excluding IT revenue of
EUR0.40m (GBP0.35m), for the year ended 31 March 2011 to EUR16.07m
(GBP14.12m), up from EUR12.89m (GBP11.33m) in the comparable period
last year.
The Company invested strongly in infrastructure and marketing
areas of the business during the past year which led to operating
expenses rising from EUR6.64m (GBP5.83m) in the year to 31 March
2011 to EUR12.41m (GBP10.90m) in the current year. Of this
increase, EUR3.22m (GBP2.83m) was additional investment in
marketing. The Company intends to continue its investment in
marketing in the current year.
Gross margins from continuing operations have decreased to 71%
for the year to 31 March 2011 from 75% for the year ended 31 March
2010. The margin erosion is in part attributable to the impact of a
sustained marketing programme based on offering zero spreads to
customers with larger deposit levels on a limited number of markets
for a limited period of time. The Board expects the Group's gross
margins to improve going forward due to the expected increase in
contribution from the Company's higher margin international
offices.
Summary Trading Performance
The growth in the Company's Financial Spread Betting Division
continued over the course of the year. Financial Spread Betting
revenues grew to EUR16.07m (GBP14.12m) for the year to 31 March
2011 from EUR12.89m (GBP11.33m) for the year to 31 March 2010, an
increase of 25%. This growth was experienced across all geographic
regions with growth in the Company's more profitable international
regions slightly ahead of the mean at 30%. The international
division's revenues (disclosed in Note 3 as "Europe" and "Other")
for the year increased to EUR6.3m (GBP5.54 million) in the year to
31 March 2011 from EUR4.82m (GBP4.24m) for the year to 31 March
2010. The growth levels experienced in Spain, Greece and Hungary
were particularly pleasing.
Balance Sheet
The Group is in a strong financial position with net assets of
EUR21.61m (GBP18.99m) (2010: EUR22.43m, GBP19.71m), of which
EUR12.00m (GBP10.54m) (2010: EUR13m, GBP11.42m) is cash (excluding
monies held on behalf of clients). Additionally, the Group is due
to receive EUR1.65m (GBP1.45m) in cash in December 2011 as the
final deferred proceeds of the disposal of the Irish Financial
Spread Betting Division. The Company has continued to maintain
tight control over its margining and credit policies with the
result that bad debts for the year are less than 2.5% of
turnover.
Dividend Policy and Share Buy Back
In line with the policy set out in the Company's AIM Admission
Document, it is the Directors' intention to focus on delivering
capital growth for shareholders and to apply earnings to continue
generating that growth. Accordingly, the Directors do not propose
paying a dividend in respect of the financial year ended 31 March
2011 but will review the Company's dividend policy from time to
time as appropriate.
As highlighted in the trading update in March, the Board has
decided that, in common with many companies, it should have the
necessary authorities to provide the Company with the flexibility
to repurchase a proportion of the Company's own shares by way of
on-market share buy backs under certain circumstances. The Company
intends that share buy backs will only be executed when appropriate
financial and stock market conditions prevail and when the Board
determines that share purchases are in the best interests of the
Company and its shareholders as a whole. The Company does not
currently have any authority to repurchase its own shares.
In order to achieve this flexibility the Company intends to seek
the approval of its shareholders for a buyback authority at an
Extraordinary General Meeting of the Company (the "EGM") and will
issue formal notice of the EGM in the first half of July.
Summary and Outlook
The year in question was one of 'investment for long-term
growth'. We have initiated an aggressive sales and marketing
strategy both in the UK and in carefully selected European markets
under the Group's own brand name, as well as committing meaningful
investment to the systems, people and other resources required to
both manage risk and develop the infrastructure to support this
next stage of the Group's expansion. The strategy has put the
Company in a strong position for future growth and we are confident
that we have the necessary individuals and structures to deliver
this growth for shareholders.
The Board is satisfied with the Company's performance in the
first quarter of the new financial year. The continued market
volatility has been positive for both trading activity and new
client acquisition, and with the strong pipeline of new
opportunities, both in the UK and overseas, the Board is confident
that the Company will achieve its targets in the current year.
Conor Foley
Chief Executive Officer
Note: The exchange rate used throughout this statement is
EUR1.138:GBP1.
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
PRELIMINARY CONDENSED CONSOLIDATED INCOME STATEMENT
For the year ended 31 March 2011
Restated
2011 2010
Notes EUR000 EUR000
Continuing Operations
Revenue 3 16,467 12,888
Cost of sales (4,836) (3,210)
________ ________
Gross profit 11,631 9,678
Administrative expenses (12,409) (6,643)
________ ________
Operating (loss)/profit (778) 3,035
Finance income 39 33
Finance expense (58) (66)
________ ________
(Loss)/profit before tax (797) 3,002
Income taxation credit/(expense) 4 119 (756)
________ ________
(Loss)/profit for the year
from continuing operations (678) 2,246
________ ________
Discontinued Operations
(Loss)/profit for the year
from discontinued operations
after tax as restated 6 (581) 2,498
________ ________
(Loss)/profit for the Year
Attributable to Equity Holders
of the Parent Company (1,259) 4,744
========== ==========
Earnings per Share from continuing
operations (in euro-cents)
Basic 5 (1.7) 5.7
Diluted 5 (1.7) 5.6
Earnings per Share from discontinuing
operations (in euro-cents)
Basic 5 (1.5) 6.3
Diluted 5 (1.4) 6.3
Earnings per Share (in euro-cents)
Basic 5 (3.2) 12.0
Diluted 5 (3.1) 11.9
No dividends are proposed by the Company.
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
PRELIMINARY CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 31 March 2011
Restated
2011 2010
EUR000 EUR000
(Loss)/profit for the
year (1,259) 4,744
======= =======
Exchange
differences on
translation of
foreign
operations 157 278
______ ______
Other comprehensive
income (loss) for
the year, net of
tax 157 278
______ ______
Total comprehensive
income for the year,
net of tax (1,102) 5,022
======= =======
Attributable to:
Equity holders of the
Parent Company (1,102) 5,022
======= =======
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
PRELIMINARY CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
As at 31 March 2011
Restated
2011 2010 2009
Notes EUR000 EUR000 EUR000
Non-Current Assets
Property, plant and
equipment 1,508 873 898
Intangible assets 2,445 2,179 764
Interest in joint
ventures - - 17
Deferred tax asset - 31 393
Deferred
consideration on
sale of Irish
Financial Spread
Betting Division 6 - 1,650 -
_________ _________ _________
3,953 4,733 2,072
Current Assets
Prepayments and accrued
income 2,659 1,740 1,073
Derivative financial
instruments 10,097 8,140 9,667
Trade and other
receivables 5,798 7,927 7,566
Cash and cash
equivalents 9 31,803 26,840 22,368
_________ _________ _________
50,357 44,647 40,674
Assets of disposal
group classified as
held for sale - - 1,201
_________ _________ _________
Total Assets 54,310 49,380 43,947
============ ============ ============
Equity
Issued share capital 8 594 591 591
Share premium 17,830 17,682 17,682
Retained earnings 4,073 5,328 471
Other reserves (1,245) (1,402) (1,680)
Share option scheme 359 227 340
_________ _________ _________
Total equity 21,611 22,426 17,404
=========== =========== ===========
Non-Current Liabilities
Deferred tax liability 42 - -
Current Liabilities
Trade and other payables 24,744 17,329 20,021
Derivative financial
instruments 5,699 6,925 3,283
Interest-bearing loans
and borrowings 2,214 2,323 2,013
Current tax liabilities - 377 136
_________ _________ _________
32,657 26,954 25,453
Liabilities directly
associated with the
assets classified as
held for sale - - 1,090
_________ _________ _________
Total liabilities 32,699 26,954 26,543
_________ _________ _________
Total Equity and
Liabilities 54,310 49,380 43,947
============ ============ ============
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
PRELIMINARY CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
For the year ended 31 March 2011
Issued Other Reserves Share
--------- ---------
Share Share Retained Merger Other Option
capital Premium earnings Reserve reserve scheme Total
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Balance at 31 March
2008 590 17,643 (1,445) (97) (905) 355 16,141
-------- -------- -------- -------- -------- -------- --------
Other
comprehensive
loss - - - - (678) - (678)
Profit for the year - - 1,901 - - - 1,901
-------- -------- -------- -------- -------- -------- --------
Total
comprehensive
income for the
year - - 1,901 - (678) - 1,223
Exercise of options 1 39 15 - - (15) 40
-------- -------- -------- -------- -------- -------- --------
Balance at 31 March
2009 591 17,682 471 (97) (1,583) 340 17,404
Other comprehensive
income - - - - 278 - 278
Profit for the year
as restated - - 4,744 - - - 4,744
-------- -------- -------- -------- -------- -------- --------
Total
comprehensive
income for the
year as
restated - - 4,744 - 278 5,022
Expiry of options - - 113 - - (113) -
-------- -------- -------- -------- -------- -------- --------
Balance at 31 March
2010 591 17,682 5,328 (97) (1,305) 227 22,426
====== ====== ====== ====== ====== ====== ======
Other comprehensive
loss - - - - 157 - 157
Loss for the year - - (1,259) - - - (1,259)
-------- -------- -------- -------- -------- -------- --------
Total comprehensive
loss for the year - - (1,259) - 157 (1,102)
Exercise of options 3 148 - - - - 151
Expiry of options - - 4 - - (4) -
Share option
compensation - - - - - 136 136
-------- -------- -------- -------- -------- -------- --------
Balance at 31 March
2011 - Unaudited 594 17,830 4,073 (97) (1,148) 359 21,611
====== ====== ====== ====== ====== ====== ======
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
PRELIMINARY CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2011
Restated
Notes 2011 2010
Operating activities EUR000 EUR000
(Loss)/profit before tax from continuing
activities (797) 3,002
(Loss)/profit before tax from
discontinued operations (581) 2,498
_________ _________
(Loss)/profit before tax (1,378) 5,500
Adjustment to reconcile profit before
tax to net cash flows:
Finance income (39) (81)
Finance expense 58 66
Non-cash:
Depreciation and amortisation 587 560
Impairment loss on Sale Shares 581 -
Write off of investment in joint venture - 17
Profit on disposal of Irish
Financial Spreads Betting
Division - (4,895)
Provision for impairment of trade
receivables 349 608
Share option compensation 136
Working capital adjustments:
Decrease/(increase) in trade, prepayments
and other receivables 506 (2,336)
Increase/(decrease) in trade and other
payables 7,414 (4,392)
(Increase)/decrease in derivative
financial assets (1,957) 1,527
(Decrease)/increase in derivative
financial liabilities (1,226) 3,642
Income tax paid (337) (136)
Other exchange movements (3) (331)
_________ _________
Net cash flows from/(used in) operating
activities 4,691 (251)
_________ _________
Investing activities
Purchases of property, plant & equipment (947) (774)
Purchases of intangible assets (517) (1,863)
Interest received 39 81
Net cash inflow from disposal of
Irish Financial Spread Betting
Division and Sports Betting
Division 1,575 6,303
_________ _________
Net cash flows from investing activities 150 3,747
Financing activities
Proceeds from borrowings - 169
Interest paid (58) (66)
Issue of shares for cash 151 -
_________ _________
Net cash flows from financing activities 93 103
Net (decrease)/increase in cash and
cash equivalents 4,934 3,599
Effect of exchange rate changes on
cash and cash equivalents 158 790
Cash and cash equivalents at 1 April 26,204 21,815
_________ _________
Cash and cash equivalents at 31 March 9 31,296 26,204
=========== ===========
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements
1. CORPORATE INFORMATION
The condensed consolidated unaudited financial statements of the
Group for the year ended 31 March 2011 were authorised for issue in
accordance with as resolution of the directors on 30 June 2011.
WorldSpreads Group plc is a limited company incorporated and
domiciled in Ireland whose shares are publicly traded.
The principal activities of the company and its subsidiaries
("the Group") are described in Note 3.
2. BASIS OF PREPARATION
The preliminary condensed unaudited consolidated financial
statements have been prepared under the historical cost basis
except for derivative financial instruments that have been measured
at fair value. The condensed consolidated unaudited financial
statements are presented in Euro, which is denoted by the symbol
EUR. All amounts are rounded to the nearest EUR'000 unless
otherwise stated.
The Group disposed of its Irish Financial Spread Betting
Division in December 2009 and as such has adopted the provisions of
IFRS 5 - Non-current Assets Held for Sale and Discontinued
Operations. As a result the Irish Financial Spread Betting Division
was treated as a discontinued operation and its post-tax results,
for the current and prior years, shown separately on the face of
the income statement.
The preliminary condensed consolidated financial statements for
the year ended 31 March 2011, as presented herein, are unaudited
and non-statutory. The condensed consolidated financial statements
for the year ended 31 March 2010 as presented in this preliminary
announcement represent an abbreviated version of the Group's full
accounts for that year, on which the independent auditors issued an
unqualified audit report without reference to any matters of
emphasis and which have been filed in the Companies Registration
Office in Ireland. The financial statements are published on
group's website, www.worldspreads.com.
The accounting policies set out in that document have been
consistently applied to all periods presented in these preliminary
financial statements.
3. SEGMENT INFORMATION
For management purposes, the Group is organised into business
units based on the geographical location and has three reportable
segments all continuing:
-- The United Kingdom financial spread trading segment
-- The Europe financial spread trading segment
-- The Other financial spread trading segment
The Other segment refers to the Company's business generated
outside of the UK and European markets such as South Africa.
Management monitors the results of its business units separately
for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on
operating revenue and segment profit before tax. Group financing
(including finance costs and finance revenue) is managed on a group
basis and are not allocated to operating segments.
WORLDSPREADS GROUP PLC
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Notes to the interim condensed consolidated financial
statements, continued
3. SEGMENT INFORMATION (Continued)
Year Ended 31 March 2011, Unaudited
Discontinued Total
Continuing operations operations operations
----------------------------------------------------- -----------------
Europe UK Other Irish
Financial Financial Financial Financial
spread spread spread spread
trading trading trading Unallocated Total trading Total
Revenue EUR000's EUR000's EUR000's EUR000's EUR000's EUR000's EUR000's
Sales to external customers 5,948 9,758 363 398 16,467 - 16,467
______ ______ ______ ______ ______ ______ ______
Total Revenue 5,948 9,758 363 398 16,467 - 16,467
========= ========= ========= ========= ========= ========= =========
Operating loss (330) (493) 87 - (736) - (736)
Unallocated operating loss - - - (42) (42) - (42)
Finance income - 39 - - 39 - 39
Finance expense - (58) - - (58) (58)
Write down in carrying value
of Sale Shares - - - - - (581) (581)
Income tax credit 76 116 - - 192 - 192
Deferred taxation (29) (44) - - (73) - (73)
______ ______ ______ ______ ______ ______ ______
Loss after tax (283) (440) 87 (42) (678) (581) (1,259)
======== ======== ======== ======== ======== ======== ========
Other segment information
Non-current assets
Capital expenditure: - 1,868 - 2,085 3,953 - 3,953
Property, plant & equipment - 889 - 58 947 - 947
Intangible assets - 228 - 289 517 - 517
Depreciation - 289 - 33 322 - 322
Amortisation - 48 - 217 265 - 265
Impairment of trade receivables 185 164 - - 349 - 349
No revenue from transactions with a single external customer or
counterparty amounted to 10% or more of the Group's total revenue
in 2011. All revenues from continued operations are derived from
foreign countries.
WORLDSPREADS GROUP PLC
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Notes to the interim condensed consolidated financial
statements, continued
3. SEGMENT INFORMATION (Continued)
Year Ended 31 March 2010, Unaudited as restated
Discontinued Total
Continuing operations operations operations
----------------------------------------------------- -----------------
Europe UK Irish
Financial Financial Financial
spread spread spread
trading trading Unallocated Total trading Total
Revenue EUR000's EUR000's EUR000's EUR000's EUR000's EUR000's
Sales to external
customers 4,820 8,068 - 12,888 2,145 15,033
______ ______ ______ ______ ______ ______
Total Revenue 4,820 8,068 - 12,888 2,145 15,033
========= ========= ========= ========= ========= =========
Operating profit 1,095 1,643 - 2,738 (2,429) 309
Unallocated operating
profit - - 297 297 - 297
Write off of investment
in Joint Venture - - - - (17) (17)
Finance Income/expense,
net - (33) - (33) 49 16
Profit on disposal of
Irish Division - - - - 4,895 4,895
Income tax expense (150) (226) - (376) - (376)
Deferred taxation (152) (228) - (380) - (380)
______ ______ ______ ______ ______ ______
Profit after tax 793 1,156 297 2,246 2,498 4,744
========= ========= ========= ========= ========= =========
Other segment information
Non-current assets
Capital expenditure: - 1,171 3,562 4,733 - 4,733
Property, plant &
equipment - 730 28 758 16 774
Intangible assets - 124 1,642 1,766 97 1,863
Depreciation - 171 - 171 84 245
Amortisation - 147 - 147 158 305
Impairment of trade
receivables - 608 - 608 306 914
No revenue from transactions with a single external customer or
counterparty amounted to 10% or more of the Group's total revenue
in 2010. All revenues from continued operations are derived from
foreign countries.
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements, cont'd
4. INCOME TAXATION
2011 2010
EUR000 EUR000
Current Income Tax
Current income tax (credit)/charge (136) 376
Prior year adjustments (56) -
________ ________
Current tax charge in the income
statement (192) 376
________ ________
Deferred taxation
Relating to origination and reversal
of temporary differences 20 393
Under/(over) provision in prior
years 53 (13)
________ ________
Deferred tax charge in the income
statement 73 380
________ ________
Tax (credit)/charge in the income
statement (119) 756
========== ==========
Analysed as follows:
Irish income taxation - -
Foreign Income taxation (119) 756
________ ________
Tax (credit)/charge in the income
statement (119) 756
========== ==========
A reconciliation between taxation on profits at the Irish
Corporation Tax Rate and the Group's actual tax charge is as
follows:
2011 2010
EUR000 EUR000
Accounting (loss)/profit before
tax (797) 3,002
Tax on (loss)/profit at 12.5%
(2009: 12.5%) (100) 375
Effects of:
Expenses not deductible 47 14
Income tax at 25% and 28% (89) 418
Over provision in prior years (3) (13)
Temporary timing differences 26 -
Group relief - (38)
________ ________
Taxation (credit)/charge for
year (119) 756
========== ==========
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements, cont'd
4. INCOME TAXATION (Continued)
Deferred income tax
Deferred income tax at 31 March relates to the following:
Consolidated
Statement of
Consolidated Statement Consolidated Changes in
of Financial Position Income Statement Equity
Liability Asset
2011 2010 2011 2010 2011 2010
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Deferred income tax
assets
Accelerated capital
allowances 42 15 20 3 - -
Losses available for
offset
against future taxable
income - - - (396) - -
Short-term timing
differences 16 - - - -
Adjustments in respect
of
prior periods - - 53 13 - -
Foreign exchange
movement on
translation of UK
subsidiary - - - - - 18
______ ______ ______ ______ ______ ______
42 31 73 (380) - 18
======== ======== ======== ======== ======== ========
5. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net
profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
Restated
2011 2010
EUR000 EUR000
Basic
(Loss)/profit attributable to ordinary
shareholders
From continuing operations (678) 2,246
From discontinued operations (581) 2,498
_________ _________
(1,259) 4,744
=========== ===========
Weighted average number of shares
in issue during the year for basic
earnings per share 39,523,322 39,363,322
Basic earnings per share (in Euro-cents)
From continuing operations (1.7) 5.7
From discontinued operations (1.5) 6.3
_________ _________
Basic earnings per share (in Euro-cents) (3.2) 12.0
=========== ===========
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements, cont'd
5. EARNINGS PER SHARE (Continued)
Restated
2011 2010
EUR000 EUR000
Diluted
Profit attributable to ordinary
shareholders
From continuing operations (678) 2,246
From discontinued operations (581) 2,498
_________ _________
(1,259) 4,744
=========== ===========
Weighted average number of shares
in issue during the year for basic
earnings per share 39,523,322 39,363,322
Effect of dilution:
Number of shares under option 3,482,500 3,065,075
Number of shares that would have
been
issued at average market price (2,932,593) (2,637,333)
_________ _________
Weighted average number of ordinary
shares adjusted for the effect of
dilution 40,073,229 39,791,064
_________ _________
Diluted earnings per share (in Euro-cents)
From continuing operations (1.7) 5.6
From discontinued operations (1.4) 6.3
_________ _________
Diluted earnings per share (in Euro-cents) (3.1) 11.9
=========== ===========
6. DISCONTINUED OPERATIONS
At 22 December 2009 the Group entered into a contract, by way of
a management buyout, to sell its Irish financial spread betting
division consisting of one wholly owned subsidiary, WorldSpreads
(Ireland) Limited. Consideration for the deal was cash on
completion of EUR6,680,095 plus deferred consideration, also in
cash, totaling EUR3,225,000 which is due to be paid in two
tranches; the first payment for EUR1,575,000 was received and the
second payment is due on the 22 December 2011 and is for
EUR1,650,000. In addition to the above, further consideration was
paid by way of the transfer of 1,885,579 shares in WorldSpreads
Group plc (the "Sale Shares") which had been held by the management
team. At 31 March 2011 the value of these shares was EUR1,115,810
(2010: EUR1,696,569).
Included in the profit on the sale of the Irish Financial Spread
Betting Division in the prior year was an unrealised gain on the
revaluation of the Sale Shares at the share price for the Company
at the year-end in the amount of EUR535,303. Due to an adverse
movement in the Group's share price between the prior year end and
the year ended 31 March 2011 the Group has posted an unrealised
loss on the year end revaluation of these Sale Shares of
EUR580,758. This amount has been disclosed in the income statement
under discontinued operations. The total amount of cash received,
net of the expenses associated with the transaction was
EUR6,138,644. The results attributable to the discontinued
financial spread betting division are as follows:
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements, cont'd
6. DISCONTINUED OPERATIONS (Continued)
Restated
Financial
Spread
Betting
Division
2010
EUR000
Revenue 2,145
Cost of sales (621)
_______
Gross profit 1,524
Administrative expenses (3,952)
Profit on disposal of financial
spread betting division 4,895
_______
Operating profit 2,467
Write off of joint venture (18)
Finance income 49
_______
Profit before tax from a
discontinued operation 2,498
Income tax expense -
_______
Profit for the year from a
discontinued operation 2,498
=========
Disposal of Irish Financial Spread Betting Division
As a result of this transaction the Group reclassified its Irish
financial spread betting division as discontinued operations in
accordance with IFRS 5 in the year ended 31 March 2010.
Correction of an error relating to the valuation of the assets
disposed of in the sale of the Irish Financial Spread Betting
Division
Due to inaccurate calculation of certain of the assets and
liabilities disposed of in the sale of the Irish Financial Spread
Betting Division in December 2009, other trade and other payables
were understated by EUR610,000. This error also had the effect of
overstating the gain on the disposal of the Irish Financial Spread
Betting Division under discontinued operations in the income
statement by the same amount. The net impact on the statement of
comprehensive income is EUR610,000.
The error has been corrected by restating each of the affected
financial statement line items for the year in which the error
occurred, as described above.
The basic and diluted earnings per share from discontinuing
operations was as follows:
Restated
2011 2010
Earnings per share
Basic from discontinued operation (in Euro
Cents) (1.5) 6.3
Diluted from discontinued operation (in
Euro Cents) (1.4) 6.3
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements, cont'd
7. RELATED PARTY TRANSACTIONS
Key management personnel comprise those persons having authority
and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any
directors (whether executive or otherwise) of the entity.
Remuneration of key management personnel
2011 2010
EUR000 EUR000
Directors' compensation
Directors' fees 202 197
Salaries and other emoluments 528 496
_________ _________
730 693
=========== ===========
2011 2010
EUR000 EUR000
Other key management compensation
Salaries and other emoluments - 109
_________ _________
- 109
=========== ===========
Directors' interests in an employee share option scheme
Share options held by members of the Board of Directors' to
purchase ordinary shares have the following expiry dates and
exercise prices:
Expiry Exercise
date price Number
31 March 2011 31/12/2015 EUR0.6284 1,850,000
31/12/2015 GBP0.7050 1,200,000
31 March 2010 14/12/2010 EUR0.6284 1,000,000
30/03/2012 EUR0.6284 550,000
Lindsay McNeile, a Non-Executive Director of the Group, had a
trading account with the Group which he operated during the year.
At the end of the year the amount of EUR17,777 (2010: EUR26,591)
was due by Mr. McNeile to the Group and the movement during the
year arises as a result of trading losses incurred and payments
made by Mr. McNeile.
8. ISSUED SHARE CAPITAL
During the year ended 31 March 2011, the allotted, called up and
fully paid share capital of the Group was increased from EUR590,450
to EUR594,050 due to the issue of 240,000 Ordinary shares following
the exercise of options for cash at a price of EUR0.6284. The
proceeds of this issue, amounting to EUR150,816, were split between
share capital of EUR3,600 and share premium of EUR147,216.
WORLDSPREADS GROUP PLC
PRELIMINARY CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL
STATEMENTS
Notes to the preliminary condensed consolidated (unaudited)
financial statements, cont'd
9. CASH AND CASH EQUIVALENTS
For the purposes of the consolidated cash flow statement, cash
and cash equivalents comprise the following at 31 March:
2011 2010
EUR000 EUR000
Cash at bank and in hand 31,803 26,840
Bank overdrafts (507) (636)
_________ _________
31,296 26,204
=========== ===========
10. EVENTS AFTER BALANCE SHEET DATE
There were no adjusting events or non-adjusting events after the
balance sheet date.
11. COMMITMENTS AND CONTINGENCIES
The Company had no material commitments or contingencies at the
balance sheet date.
12. APPROVAL OF THE PRELIMINARY CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
The preliminary condensed consolidated financial statements were
approved by the Board of Directors on 30 June 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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