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TIDMTMMG
RNS Number : 1072A
The Mission Marketing Group PLC
27 March 2012
The Mission Marketing Group plc
Final results for the year ended 31 December 2011
27 March 2012
The Mission Marketing Group plc ("TMMG" or "the mission(tm") ), the national marketing communications and advertising group, is pleased to announce its final results for the year ended 31 December 2011.
Trading
-- Great new business wins, including, Pitney Bowes, Cisco, Norwegian Seafood, Highland Spring, Ferodo and Peugeot Trade
-- Strong Client retention and growth from incumbent Clients, including BP, Bellway, Fairview, Domino's Pizza, M&S Money and Superdry
-- Net annualised new business of GBP4.1m operating income achieved in year
Income statement
-- Operating income ("revenue") up 15% to GBP41.5m (2010: GBP36.1m)
-- Operating margins improved to 14.1% (2010: 13.6%)
-- Headline operating profit up 19% to GBP5.8m (2010: GBP4.9m)
-- Net finance costs reduced by 24% to GBP1.6m (2010: GBP2.1m)
-- Pre-exceptional profit before tax up 50% to GBP4.2m (2010: GBP2.8m)
-- Reported profit before tax: GBP4.1m (2010: GBP1.6m)
-- Headline Diluted EPS: 4.2 pence (2010: 3.0 pence)
Balance sheet and cash flow
-- Cash inflow from operating activities of GBP5.1m (2010: GBP1.6m), following a further GBP0.5m reduction in working capital
-- Bank debt repayments of GBP4.5m, including GBP1.5m of voluntary prepayment
-- Investment of GBP1.7m in capex and new business ventures
-- Net bank debt reduced by GBP3.1m to GBP15.3m
-- Gearing reduced from 34% in 2010 to 26%
-- Debt leverage ratio reduced from x3.3 in 2010 to x2.3 in 2011 and expected to fall below x2 in first half of 2012
David Morgan, Chairman, commented:
"I think our teams should be warmly congratulated for delivering a stellar performance in 2011 against a very uncertain Market and financial back drop. Significant Client wins throughout the year have bolstered overall performance but greatest credit must go against their record of Client retention which, in a world of increased competition, shrinking margins and uncertain budgeting, is no mean feat.
We have had a sound start to the year and I feel confident that through controlled growth we will have a decent year ahead of us and will go into 2013 in even better shape as a business. It's safe to say, therefore, that we are predicting an exciting year for the mission(tm) , if not quite a lollapalooza"
Enquiries:
David Morgan, Chairman
Peter Fitzwilliam, Finance Director
The Mission Marketing Group plc 020 3463 2099
Mark Percy (Corporate Finance)
David Banks (Corporate Broking)
Seymour Pierce Limited 020 7107 8000
the mission(tm) is a national marketing communications and advertising group with 14 offices across the UK. The Group specialises in providing national and international clients with award winning marketing, advertising and business communications. Group members include April-Six, Big Communications, Bray Leino, RLA, Robson Brown, Story and ThinkBDW. the mission(tm) employs almost 700 staff nationally and is listed on AIM (TMMG).
www.themission.co.uk
Chairman's Statement
Dear reader
I think our teams should be warmly congratulated for delivering a stellar performance in 2011 against a very uncertain Market and financial back drop. By hitting their financial targets they have ensured that we continue to stabilise the business by reducing our inherited debt and providing a platform from which future growth can be encouraged.
Our three lead Agencies built on the gains they had made in 2010 whilst our smaller, yet perfectly formed, Agencies either maintained or grew from albeit a smaller base. For example, critical wins at RLA have established them as the leading player in the UK aftermarket automotive sector. Our focus on specialisation has been even more highlighted by ThinkBDW, who are now the UK's clear leader in the property marketing sector and April-Six, who are fast becoming recognised as the B2B technology Agency of choice.
Significant Client wins throughout the year have bolstered overall performance but greatest credit to the teams must go against their record of Client retention which, in a world of increased competition, shrinking margins and uncertain budgeting, is no mean feat.
2011 also saw us increase our portfolio through strategic and service complementing in-fill acquisitions. Either geographically, through Robson Brown in Newcastle, or by offering, through the social media experts Yucca or our new colleagues from Fire IMS who have joined our flourishing Belfast Agency, RLA. In November 2011 we established Bray Leino Vivactis, a business focussed on the serious end of the Healthcare sector. This new team was created via a firm co-operation with the mainland European Healthcare Group, Vivactis and by the hiring of top notch talent from leading Healthcare Agencies. We are very excited by this venture and we have every confidence that it will create a new and refreshing option within this sector. Early successes indicate that we will achieve our goal.
Looking into 2012 we are aiming for more of the same. Our focus will continue to be to pay down debt, consolidate our Agencies, act more as one business where it is appropriate for our Clients who require that depth of support and create new offerings wherever we see a strategic need or a business-enhancing opportunity.
I believe that we have the people, the structure and the passion in place to take further our commitment to being the most respected and regarded Agency group in the UK and that our forward momentum will continue through 2012.
We have had a sound start to the year and I feel confident that through controlled growth we will have a decent year ahead of us and will go into 2013 in even better shape as a business. It's safe to say, therefore, that we are predicting an exciting year for the mission(tm) , if not quite a lollapalooza.
David Morgan
Chairman
Financial Review
Summary
The Group's financial objectives articulated at the time of the refinancing in April 2010 were to focus on our core business, to improve profitability through growth and cost reductions, and to pay down debt.
The results for 2011 again demonstrate our continued progress:
-- Increased revenue, from winning new Clients, developing existing Clients, and expanding via new ventures, additional talent and strategic in-fill acquisitions;
-- Increased operating profits, from revenue growth and a reduction in central costs;
-- Reduced net debt, gearing ratio and debt leverage, from a focus on cash management.
Trading, Statement of Income and Dividend
Turnover (Billings) was significantly higher than the previous year, at GBP116.0m (2010: GBP90.4m), reflecting both the media launch of the 2011 Census (our largest ever project) and strong growth in media placement activity handled by ThinkBDW, our property-specialist Agency.
Operating income ("revenue") increased 15% to GBP41.5m (2010: GBP36.1m), mainly the result of strong growth in ThinkBDW and RLA (our automotive-specialist Agency), and also the first contribution from Robson Brown. As mentioned in the Chairman's Statement, it was a good year for new business wins and Client retention. Net new business revenue gained in the year totalled GBP4.1m, up from GBP2.8m last year. The lower gross margin achieved in 2011 (36% vs 40% in 2010) reflects the higher proportion of media in the business mix (44% of turnover vs 37% in 2010) as illustrated by the segmental analysis in Note 2.
Pre-exceptional operating profit increased by almost 20% to GBP5.8m (2010: GBP4.9m). Margins (operating profit as a percentage of gross profit) in each part of the business held up remarkably well considering the continuing downward pressure experienced by the industry as a whole and, after a further 12% year-on-year reduction in central costs, the Group's operating margin increased by 0.5% to 14.1%, ahead of the industry average.
The conversion of outstanding vendor debt to equity in June 2010 resulted in a reduction in both the level of debt on which interest was being paid and also the average interest rate. Strong cash management during the year further reduced levels of net debt, resulting in an overall 24% reduction in net interest payable to GBP1.6m (2010: GBP2.1m).
After financing costs, pre-exceptional profit before tax increased by 50% to GBP4.2m (2010: GBP2.8m).
After exceptional costs of GBP0.1m, representing the completion of restructuring commenced last year (2010: GBP1.2m relating to the bank refinancing, and redundancy and restructuring costs), profit before taxation was GBP4.1m (2010: GBP1.6m) and the profit after tax was GBP3.1m (2010: GBP0.9m).
The Group's effective tax rate was 25.0% (2010: 42.1%). The Group's effective tax rate is normally above the statutory rate due to non-deductible staff and client-related expenditure but, in 2011, the Group benefited from the release of over-provisions made in prior years.
The headline diluted EPS was 4.2 pence (2010: 3.0 pence).
In line with our continuing focus on debt reduction, the Board does not propose the payment of a dividend.
Balance Sheet and Cash Flow
The major restructuring of the balance sheet was completed last year and, accordingly, changes to our balance sheet have been less significant in 2011. However, predictions made in last year's Financial Review about improvements in operating cash flows and reductions in gearing, working capital and leverage ratios have all been realised, resulting in a further strengthening of the balance sheet.
Particularly pleasing was the strong cash management during the year, which resulted in a further GBP0.5m reduction in working capital despite the GBP26m increase in turnover. Cash flow from operating activities was GBP5.1m (2010; GBP1.6m), enabling the repayment of bank loans totalling GBP4.5m, including a voluntary prepayment of GBP1.5m to reduce interest costs, and a reduction in net debt to GBP15.3m (2010: GBP18.5m). As a result, our gearing ratio (net debt to equity) reduced from 34% to 26%. As predicted, our "leverage ratio" (ratio of net debt to pre-exceptional EBITDA) also reduced, from x3.3 at 31 December 2010 to x2.3 at 31 December 2011, and is expected to fall below x2 in the first half of 2012.
At 31 December 2011, the Board undertook its annual assessment of the value of goodwill and concluded that no impairment in the carrying value was required. Capital expenditure, at GBP1.5m, was roughly double 2010 levels as a result of the relocation of our Bristol and London offices and the refurbishment of our Leicester office.
In addition to the Group's principal focus on organic growth, GBP0.2m was invested in three small but significant deals during the year, which bring strengths and opportunities to complement and enhance our existing Agencies and the services we provide to our Clients:
-- Creation of a new and very talented Healthcare Agency, Bray Leino Vivactis;
-- Purchase of a thriving social media unit, Yucca; and
-- Regional expansion by our specialist Automotive Agency, RLA.
Each of these deals demonstrates that we are executing on our strategy, of seeking new ventures, additional talent and strategic acquisitions to accelerate growth, in a careful and selective way.
Peter Fitzwilliam
Finance Director
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2011
Year to Year to
31 December 31 December
2011 2010
Note GBP'000 GBP'000
TURNOVER 2 116,044 90,364
Cost of sales (74,577) (54,292)
OPERATING INCOME 2 41,467 36,072
Operating expenses before
exceptional items (35,619) (31,155)
OPERATING PROFIT BEFORE EXCEPTIONAL
ITEMS 5,848 4,917
Exceptional items 4 (100) (1,154)
------------- -------------
OPERATING PROFIT 5,748 3,763
Investment income 5 6
Finance costs 5 (1,641) (2,147)
IFRS interest charges 5 - (5)
PROFIT BEFORE TAXATION 6 4,112 1,617
Taxation 7 (1,026) (680)
PROFIT FOR THE YEAR 3,086 937
------------- -------------
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR 3,086 937
============= =============
Basic earnings per share
(pence) 8 4.35 1.67
Diluted earnings per share
(pence) 8 4.10 1.59
Headline basic earnings per
share (pence) 8 4.45 3.16
Headline diluted earnings
per share (pence) 8 4.20 3.00
The earnings per share figures derive from continuing and total operations.
Consolidated Balance Sheet
As at 31 December 2011
As at As at
31 December 31 December
2011 2010
Note GBP'000 GBP'000
FIXED ASSETS
Intangible assets 9 68,443 68,261
Property, plant and equipment 2,685 1,972
71,128 70,233
------------- -------------
CURRENT ASSETS
Stock and work in progress 626 489
Trade and other receivables 20,844 22,297
Cash and short term deposits 315 1,438
------------- -------------
21,785 24,224
CURRENT LIABILITIES
Trade and other payables (10,378) (8,687)
Accruals (8,117) (10,726)
Corporation tax payable (820) (342)
Bank loans 10 (4,000) (3,000)
(23,315) (22,755)
------------- -------------
NET CURRENT (LIABILITIES)/ASSETS (1,530) 1,469
TOTAL ASSETS LESS CURRENT LIABILITIES 69,598 71,702
------------- -------------
NON CURRENT LIABILITIES
Bank loans 10 (11,641) (16,903)
Obligations under finance leases (40) (96)
Deferred tax liabilities (1) (2)
------------- -------------
(11,682) (17,001)
------------- -------------
NET ASSETS 57,916 54,701
------------- -------------
CAPITAL AND RESERVES
Called up share capital 7,246 7,246
Share premium account 39,542 39,542
Own shares (1,234) (1,259)
Staff remuneration reserve 263 134
Retained earnings 12,099 9,038
------------- -------------
TOTAL EQUITY 57,916 54,701
============= =============
Consolidated Cash Flow Statement
for the year ended 31 December 2011
Year to Year to
31 December 31 December
2011 2010
Note GBP'000 GBP'000
OPERATING CASH FLOWS 11 7,193 5,438
Net finance costs (1,566) (2,583)
Tax paid (496) (1,229)
------------- -------------
Net cash inflow from operating activities 5,131 1,626
------------- -------------
INVESTING ACTIVITIES
Proceeds on disposal of property, plant
and equipment 69 16
Purchase of property, plant and equipment (1,552) (664)
Acquisition of subsidiaries - (52)
Acquisition of intangibles (190) -
Net cash outflow from investing activities (1,673) (700)
------------- -------------
FINANCING ACTIVITIES
Repayments of acquisition liabilities - (945)
Movement in finance leases (68) (69)
Repayment of long term bank loans (4,513) (12)
Proceeds on issue of ordinary share
capital - 1,279
Financing and share issue costs - (22)
Net cash (outflow)/inflow from financing
activities (4,581) 231
------------- -------------
(Decrease)/increase in cash and cash
equivalents (1,123) 1,157
Cash and cash equivalents at beginning
of year 1,438 281
------------- -------------
Cash and cash equivalents at end of
year 315 1,438
============= =============
Consolidated Statement of Changes in Equity
Year ended 31 December 2011
Staff remuneration
Share Share Own reserve Retained
capital premium shares GBP'000 earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- --------- --------- ------------------- ---------- ---------
Changes in equity
--------------------- --------- --------- --------- ------------------- ---------- ---------
At 1 January
2010 3,959 38,578 (1,398) 60 8,220 49,419
New shares issued 3,287 964 - - - 4,251
Credit for share
option scheme - - - 74 - 74
Shares awarded
to employees
from own shares - - 139 - (119) 20
Total Comprehensive
Income for the
year - - - - 937 937
--------------------- --------- --------- --------- ------------------- ---------- ---------
At 31 December
2010 7,246 39,542 (1,259) 134 9,038 54,701
Credit for share
option scheme - - - 129 - 129
Shares awarded
to employees
from own shares - - 25 - (25) -
Total Comprehensive
Income for the
year - - - - 3,086 3,086
At 31 December
2011 7,246 39,542 (1,234) 263 12,099 57,916
--------------------- --------- --------- --------- ------------------- ---------- ---------
Notes to the Final results
1. Basis of preparation and significant accounting policies
The results for the year to 31 December 2011 have been extracted from the audited consolidated financial statements.
The financial information set out above does not constitute the Company's statutory accounts for the years to 31 December 2011 or 2010 but is derived from those accounts. Statutory accounts for the year ended 31 December 2010 were delivered to the Registrar of Companies following the Annual General Meeting on 13 June 2011 and the statutory accounts for 2011 are expected to be published on the Group's website (www.themission.co.uk) shortly, posted to shareholders at least 21 days ahead of the Annual General Meeting ("AGM") on 18 June 2012 and, after approval at the AGM, delivered to the Registrar of Companies.
The auditors, Francis Clark LLP, have reported on the accounts for the year ended 31 December 2011 and Kingston Smith LLP have reported on the accounts for the year ended 31 December 2010; their reports in both years were (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 in respect of those accounts.
The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union and on the historical cost basis.
Going concern
The Group's available banking facilities provide comfortable levels of headroom against the Group's projected cash flows and the Directors accordingly consider that it is appropriate to continue to adopt the going concern basis in preparing these financial statements.
Accounting estimates and judgements
The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the financial statements and concluded that the main areas of judgement are:
-- Valuation of goodwill; and
-- Revenue recognition policies in respect of contracts which straddle the year end.
The valuation of goodwill is based on estimates of future cash flows derived from the financial projections of each cash-generating unit over an initial three year period and assumptions about growth thereafter.
Revenue is recognised based on an estimate of the stage of completion of contracts which straddle the year end, typically derived from the amount of time so far committed to those contracts in relation to the total estimated time to complete them.
2. Segmental Information
For management purposes the Group had seven operating subsidiaries during the period: April-Six Limited, Big Communications Limited, Bray Leino Limited, Fuse Digital Limited, RLA Group Limited, Story UK Limited and ThinkBDW Limited, each of which carries out a range of activities. These activities have been divided into four business and operating segments as defined by IFRS 8 which form the basis of the Group's primary reporting segments, namely: Branding, Advertising and Digital; Media; Events and Learning; and Public Relations.
Branding, Media Events Public Group
Advertising & Learning Relations
& Digital
Year to 31December 2011 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Turnover 50,150 51,335 11,890 2,669 116,044
------------- -------- ------------ ----------- --------
Operating income 30,767 4,559 4,045 2,096 41,467
------------- -------- ------------ ----------- --------
Segmental operating profit 5,027 1,593 302 12 6,934
Unallocated corporate expenses (1,086)
------------- -------- ------------ ----------- --------
Operating profit before
exceptional items 5,848
Other exceptional costs (100)
Operating profit 5,748
Investment income 5
Finance costs (1,641)
Profit on ordinary activities
before taxation 4,112
------------- -------- ------------ ----------- --------
Taxation (1,026)
------------- -------- ------------ ----------- --------
Profit for period 3,086
------------- -------- ------------ ----------- --------
Branding, Media Events Public Group
Advertising & Learning Relations
& Digital
Year to 31December 2010 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Turnover 44,163 33,565 10,025 2,611 90,364
------------- -------- ------------ ----------- --------
Operating income 26,916 3,434 3,799 1,923 36,072
------------- -------- ------------ ----------- --------
Segmental operating profit 4,820 1,035 199 91 6,145
Unallocated corporate expenses (1,228)
------------- -------- ------------ ----------- --------
Operating profit before
exceptional items 4,917
Other exceptional costs (1,154)
Operating profit 3,763
Investment income 6
Finance costs (2,147)
IFRS interest charges (5)
------------- -------- ------------ ----------- --------
Profit on ordinary activities
before taxation 1,617
------------- -------- ------------ ----------- --------
Taxation (680)
------------- -------- ------------ ----------- --------
Profit for period 937
------------- -------- ------------ ----------- --------
3. Reconciliation of Headline Profit to Reported Profit
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Headline profit before finance costs,
income from investments and taxation 5,848 4,917
Net finance costs (1,636) (2,141)
------------------------- -------------
Headline profit before taxation 4,212 2,776
------------------------- -------------
Adjustments
Exceptional items (100) (1,154)
IFRS interest charges - (5)
Reported profit before taxation 4,112 1,617
------------------------- -------------
Headline profit before taxation 4,212 2,776
Headline taxation (1,053) (1,003)
------------------------- -------------
Headline profit after taxation 3,159 1,773
------------------------- -------------
Adjustments
Other exceptional costs (100) (1,154)
IFRS interest charges - (5)
Taxation impact 27 323
------------------------- -------------
Reported profit after taxation 3,086 937
------------------------- -------------
The IFRS interest charges relate to both the deferred consideration and the bank arrangement fees. In previous years, headline profit was after adjusting for non-exceptional redundancy costs. In 2011, profits have only been adjusted for exceptional items and the prior year has been adjusted accordingly.
4. Exceptional items
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Bank refinancing costs - 470
Restructuring costs 100 684
------------- -------------
100 1,154
------------- -------------
Exceptional items represent revenue or costs that, either by their size or nature, require separate disclosure in order to give a fuller understanding of the Group's financial performance.
Exceptional items in 2011 consist of restructuring costs. Exceptional items in 2010 comprise professional fees relating to the re-structuring and re-scheduling of bank facilities and outstanding acquisition obligations, including the equity conversion and placing of new shares, and amounts payable as a result of the restructuring of the Board and the exit of vendor management following refinancing.
5. Finance Costs and IFRS Interest Charges
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Finance costs:
Interest on bank loans and overdrafts (1,182) (1,508)
Interest on loan notes - (306)
Amortisation of bank debt renegotiation
fees (459) (333)
-------------
(1,641) (2,147)
------------- -------------
IFRS interest charges:
Finance cost of deferred consideration - (5)
------------- -------------
6. Profit on Ordinary Activities before Tax
Profit on ordinary activities before taxation is stated after charging/(crediting):-
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Depreciation of fixed assets 754 721
Amortisation of intangible assets 8 4
Loss/(profit) on disposal of property,
plant and equipment 16 (14)
Operating lease rentals - Land and buildings 1,125 981
Operating lease rentals - Plant and equipment 299 338
Operating lease rentals - Other assets 166 89
Staff costs 26,278 24,051
Auditors' remuneration - audit fees 99 120
Auditors' remuneration - other services 65 43
(Profit)/loss on foreign exchange (7) 115
7. Taxation
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Current tax:-
UK corporation tax at 26.5% (2010: 28%) 1,265 711
Adjustment for prior periods (288) 50
------------- -------------
977 761
Deferred tax:-
Current year originating temporary differences (2) (82)
Adjustment for prior periods 51 1
-------------
Tax charge for the year 1,026 680
============= =============
Factors Affecting the Tax Charge for the Current Year:
The tax assessed for the year is lower (2010: higher) than the standard rate of corporation tax in the UK. The differences are:
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Profit before taxation 4,112 1,617
------------- -------------
Profit on ordinary activities before tax
at the standard rate of corporation tax
of 26.5% (2010: 28.0%) 1,090 453
Effect of:
Non-deductible expenses 188 224
Adjustments to prior periods (237) 50
Movement on provisions (6) 5
IFRS charges (4) 1
Other differences (5) (53)
-------------
Actual tax charge for the year 1,026 680
============= =============
8. Earnings Per Share
The calculation of the basic and diluted earnings per share is based on the following data, determined in accordance with the provisions of IAS 33: Earnings per Share.
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Earnings
Earnings for the purpose of reported earnings
per share being net profit attributable
to equity holders of the parent 3,086 937
------------ ------------
Earnings for the purpose of headline earnings
per share (see note 3) 3,159 1,773
------------ ------------
Number of shares
Weighted average number of ordinary shares
for the purpose of basic earnings per
share 70,944,643 56,024,579
Dilutive effect of securities:
Employee share options 2,007,832 1,355,879
Bank warrants 2,333,434 1,662,172
------------ ------------
Weighted average number of ordinary shares
for the purpose of diluted earnings per
share 75,285,909 59,042,630
Reported basis:
Basic earnings per share (pence) 4.35 1.67
Diluted earnings per share (pence) 4.10 1.59
Headline basis:
Basic earnings per share (pence) 4.45 3.16
Diluted earnings per share (pence) 4.20 3.00
------------ ------------
Basic earnings per share includes shares to be issued subject only to time as if they had been issued at the beginning of the period.
A reconciliation of the profit after tax on a reported basis and the headline basis is given in note 3.
9. Intangible Assets
Goodwill
Goodwill arose from the acquisition of the following subsidiary companies and is comprised of the following substantial components:
31 December 31 December
2011 2010
GBP'000 GBP'000
April-Six Ltd 9,411 9,411
Big Communications Ltd/Fuse Digital
Ltd 8,125 8,125
Bray Leino Ltd 30,831 30,831
RLA Group Ltd 6,572 6,572
Story UK Ltd 6,969 6,969
ThinkBDW Ltd 6,283 6,283
68,191 68,191
------------ ------------
Other Intangible Assets
31 December 31 December
2011 2010
GBP'000 GBP'000
Cost
At 1 January 81 81
Additions 190 -
------------ ------------
At 31 December 271 81
------------ ------------
Amortisation
At 1 January 11 7
Charge for the year 8 4
------------ ------------
At 31 December 19 11
------------ ------------
Net book value 252 70
------------ ------------
Other intangible assets consist of intellectual property rights. Additions of GBP190,000 in the year relate to client lists and other information acquired relating to FireIMC and Yucca.
10. Bank Overdrafts, Loans and Net Debt
31 December 31 December
2011 2010
GBP'000 GBP'000
Bank loan outstanding 16,207 20,314
Accumulated interest - 114
Adjustment to amortised cost (566) (525)
Carrying value of loan outstanding 15,641 19,903
Less: Cash and short term deposits (315) (1,438)
------------ ------------
Net bank debt 15,326 18,465
------------ ------------
The borrowings are repayable as follows:
Less than one year 4,000 3,000
In one to two years 12,207 4,000
In more than two years but less than
three years - 13,314
16,207 20,314
Accumulated interest - 114
Adjustment to amortised cost (566) (525)
15,641 19,903
Less: Amount due for settlement within
12 months (shown under current liabilities) (4,000) (3,000)
------------ ------------
Amount due for settlement after 12 months 11,641 16,903
------------ ------------
The adjustment to amortised cost relates to the amortisation of bank debt renegotiation fees over the life of the loan facility.
At 31 December 2011, the Company had a three year revolving credit facility of up to GBP12.8m, due for repayment by June 2013 on a quarterly basis, and a term loan facility of GBP3.0m with a bullet repayment on 31 December 2013. Interest on the revolving credit facility is based on 3 month LIBOR plus 4.125%, payable in cash on loan rollover dates. The interest margin of 7.5% on the term loan facility is added to the loan balance on a quarterly basis and payable in full with the bullet repayment on 31 December 2013. The gross amount of the term loan at 31 December 2011 was GBP3.4m. In addition to its committed facilities, the Group had available an overdraft facility of up to GBP2.0m with interest payable by reference to National Westminster Bank plc Base Rate plus 3.5%.
11. Reconciliation of Operating Profit to Operating Cash Flow
Year to Year to
31 December 31 December
2011 2010
GBP'000 GBP'000
Operating profit 5,748 3,763
Depreciation and amortisation charges 762 725
Loss/(gain) on disposal of property,
plant and equipment 16 (14)
Non cash charge for share options 129 94
Decrease/(Increase) in receivables 1,401 (5,277)
(Increase)/decrease in stock and work
in progress (137) 36
(Decrease)/Increase in payables (726) 6,111
------------ ------------
Operating cash flow 7,193 5,438
============ ============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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