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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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AT Commun. | LSE:ATCG | London | Ordinary Share | GB00B0C8K346 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.875 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMATCG RNS Number : 5667Q AT Communications Group Plc 15 April 2009 ATCG.L AT Communications Group plc ("ATC," the "Company" or the "Group") Preliminary results for the year ended 31 December 2008 ATC reports strong operating performance in continuing activities and a positive outlook AT Communications Group plc, the award-winning supplier of Information and Communications Technology ("ICT") solutions announces its preliminary results for the year ended 31 December 2008. Financial highlights: * Group revenue up 11% to GBP98.4m (2007: GBP88.4m). Continuing revenues (post disposal of Rocom) up by 22% to GBP52.9m (2007: GBP43.3m) * Underlying EBITDA up 5% to GBP8.7m (2007: GBP8.3m). Continuing underlying EBITDA up 40% to GBP5.3m (2007: GBP3.8m) * Operating profit before amortisation, impairment, non-recurring expenses and share based payments increased by 3% to GBP8.0m (2007: GBP7.7m). Continuing operating profit increased by 41% to GBP4.8m (2007: GBP3.4m) * Pre-tax profit, before amortisation, impairment, non-recurring expenses and share based payments decreased by 4% to GBP6.0m (2007: GBP6.2m) * Net debt increased to GBP18.1m at 31 December 2008 (2007: 15.0m) * Underlying profit after tax increased by 41% to GBP4.8m before charging GBP5.9m of impairment of intangible assets relating to the disposal of Rocom Ltd * Adjusted EPS decreased to 7.5p (2007: 7.9p) Operational highlights: * Investments in people and service development for our Servassure division during the period resulted in 58% increase in revenues for that division * Success of this strategy evidenced by period contract wins with OGC Buying Solutions and further new maintenance wins with Comet (via BT), IBM, as well as post period end contract wins with BT. * Contract wins during the period include distribution agreements with Amazon, AVAYA and Ericsson, a global IPT roll out with De La Rue and Voice and Data contracts with Carpetright. Post balance sheet events * ATC balance sheet improved though Rocom disposal * Rocom disposal for a consideration of GBP12.45m * Further post period end contract wins include an agreement with BT to expand third part maintenance revenues and a series of IPT Healthcare contracts with four NHS Primary Care Trusts. Commenting on results, Scott Kean, Interim Chief Executive, said: "2008 has been a year of transition in which we have again, despite the economic downturn, achieved organic revenue growth. The disposal of Rocom, post year end has strengthened our balance sheet. It also allows us to refocus on our core divisions and capabilities with a view to continuing to reduce our levels of debt while still growing profitably. Our Servassure division has performed well, achieving 58% growth during the period. Significant new contract secured after the year end reflects the market's confidence in our capabilities, which will further underpin our future success. Despite these challenging times, I am confident of the future prospects for the refocused Group and look forward to updating shareholders with further news in due course." Enquiries: +------------------------------------------+------------------------------------------+ | AT Communications Group plc | 08700 558 080 | +------------------------------------------+------------------------------------------+ | Scott Kean, Interim Chief Executive | | +------------------------------------------+------------------------------------------+ | www.atcommunications.co.uk | | +------------------------------------------+------------------------------------------+ | Cenkos Securities plc | 020 7397 8924 | +------------------------------------------+------------------------------------------+ | Stephen Keys | | +------------------------------------------+------------------------------------------+ | www.cenkos.com | | +------------------------------------------+------------------------------------------+ | Biddicks | 020 7448 1000 | +------------------------------------------+------------------------------------------+ | Shane Dolan | | +------------------------------------------+------------------------------------------+ | www.biddicks.co.uk | | +------------------------------------------+------------------------------------------+ Notes to Editors About AT Communications Group plc Following the disposal of Rocom Ltd, ATC now consists of three divisions: ATC Solutions: A leading business systems integrator, ATC Solutions is accredited at the highest level with leading ICT manufacturers and continues to craft best-of-breed solutions, supported by in-house service capabilities, to SME and corporate customers directly. ATC Solutions' customer base now totals over 10,000 and includes the majority of the Times 500 companies. www.atc.co.uk Servassure: A fully independent third party service provider to channel partners in the UK ICT market. Servassure targets and supplies large channel partners, including network operators such as BT and Colt and systems integrators such as Siemens who require a more customised level of service and support than a traditional, smaller channel. www.servassure.co.uk Your Network Services (Previously Rocom Network Services), or YNS A leading provider of voice and data connectivity for channel partners. Through our industry leading portal (yourbrilliantportal.co.uk) our channel partners are able to seamlessly connect, bill and manage their customers' networks. YNS's scale together with its supplier agreements enable it to deliver competitive and innovative products to channel partners of all sizes. AT Communications Group plc Chairman's statement I am pleased to report that despite a challenging trading environment, the Group has continued to make progress during the period under review, with increases in both revenue and underlying EBITDA. New contract wins and distribution agreements with Amazon, AVAYA, Ericsson, De La Rue and Carpet Right during the period have continued to support the organic growth of the business. This was underpinned by a reduction in net debt in the second half of 2008 to GBP18.1m This solid performance in a period of almost unprecedented economic volatility reflect the strength of ATC's position within the market and its track record of delivering quality solutions and services. In addition, and in alignment with management's plan to address the debt position, post period end it was announced that the Group's Rocom division has been disposed of for a consideration of GBP12.45m, strengthening the balance sheet. The Board will continue to focus its attention on cash, working capital and net debt, as part of its development plan for 2009. Following the disposal of Rocom, the Group has redefined its core operating divisions to maximise the current and future market demands and opportunities. ATC now consists of three divisions: Servassure, which continues to act as a comprehensive ICT service provision and support division through Tier 1 Telco's such as BT, Cable & Wireless and other strategic channel partnerships; Your Network Services (rebranded from Rocom Network Services), which will build on the inherent success of the Group's network services capability; and ATC Solutions, rebranded and redefined to be more structured and targeted in its approach to delivering ICT solutions to the retail market. I believe this new structure creates a more focused and robust business model, which combines best-of-breed industry partners and services to provide the next generation ICT solutions. During the period, management planned for the future and continued to invest in the Servassure division, a successful strategy that has delivered revenue growth of 58% during the period. For example, contract wins with OGC Buying Solutions, opened up substantial opportunities in an GBP85m public sector market and have been supported by further wins with Comet and post period end contract wins with BT. In addition, the group's YNS division also experienced strong growth of over 20% during the period. The new financial year has started well with further contracts wins with BT to expand third party maintenance revenues and a series of IPT Healthcare contracts with four NHS Primary Care Trusts, which will help us meet our 2009 expectations. During the period we made an additional Board appointment and a board change. In February 2008 Fred Hallsworth was appointed as non-executive director and in July 2008, Andrew Parsliffe replaced Ian Crawley as Finance Director. Post the period end, Alex Tupman, founder and Chief Executive of the Group announced plans to step down as Chief Executive, The disposal of Rocom was a catalyst for Alex to hand over to a new team. Whilst a permanent successor is sought, Scott Kean, the Group's former COO, and Managing Director of the Group's Servassure division replaces Alex as Interim CEO. The Board, as well as the entire Company would like to thank Alex, as ATC's founder and CEO for the past 10 years, for his exceptional contribution to the business to-date. Additionally, after nearly 4 years as chairman, I have decided to step down at the forthcoming AGM. I am delighted to announce today however, that John Standen joins the Board as Non Executive Director and will become Chairman following the forthcoming AGM. John brings to the Board a wealth of experience gained within the corporate finance sector including being CEO of Barclays Corporate Finance Division of BZW. John is currently Chairman of Xploite plc, an IT data storage business, Stanelco plc, a bioplastics business and a senior non executive director of Lavendon Group plc Europe's market-leading 'powered access' equipment rental group. Following the disposal of Rocom, ATC is in a stronger position to respond to economic conditions by focusing on high margin, strong recurring revenue, communications service business capable of steady growth. This is underpinned by both an improved balance sheet and cash flow profile. Finally, I would like to take this opportunity to thank all our staff for their exceptionally hard work during the period under review and look forward to continued development and growth in the year ahead. Gerry Spencer Non-Executive Chairman 15 April 2009 Interim Chief Executive's statement OVERVIEW During 2008, the Group invested in its continuing activities, Servassure and ATC Solutions, in order to underpin the Group's future growth. This strategy has been successful, particularly within Servassure, which has delivered an excellent performance with a 58% increase in revenues during the period. This has been underpinned by major contract wins and the creation of a forward sales pipeline into 2009 and beyond. Within ATC Solutions, contract wins include the roll out of IP telephony to Primary Care Trusts such as Gloucestershire, Bristol, Luton and Bedfordshire, as well as a resilient IP solution for East Midlands Ambulance Services 999 call centre. This division also secured contract wins with De La Rue, the world's largest commercial security printer, and Carpet Right, Europe's leading carpet and floor specialist retailer. I am delighted therefore, that post period end, Rocom's disposal has reduced the Group's debt, profile and outlook. The Group is now streamlined and focused on its core market with a healthy pipeline of new business and the wealth of associated opportunities. The Group is now well placed to capitalise on market opportunities as it focuses on its central capabilities to support industry leading Telco's such as BT, Cable & Wireless and Verizon and via its partnerships, to deliver best of breed next generation ICT solutions. RESULTS Revenue & profit In the twelve months to 31 December 2008, the Group's revenue increased by 11% to GBP98.4m (2007: GBP88.4m). This increase reflects a fourth year in a row of double digit organic growth. This was achieved despite the unprecedented economic downturn in markets and is testament to the investments made during the first half of the year; particularly in our Servassure division which itself has seen 58% growth. Gross profit increased by 13% to GBP40.3m (2007: GBP35.7m) again due to organic growth and investments as noted above. Gross margin from continuing operations has increased to 55% (2007: 54%) despite highly competitive market conditions and is testament to the quality of our service delivery and customer satisfaction. Operating profit, before impairment, amortisation of intangible assets, non-recurring costs and share based payments, increased by 3% from GBP7.7m to GBP8.0m. Underlying EBITDA increased by 4% to GBP8.7m (2007: GBP8.3m) The following table sets out the trading and operating performance of the Group's re-organised trading divisions including the Rocom discontinued activity. +----------------------+-----------+------------+---------+------------------+--------+-------+ | 2008 | Solutions | Servassure | YNS | Rocom - | Elims | Total | | | | | | Discontinued | | | +----------------------+-----------+------------+---------+------------------+--------+-------+ | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | +----------------------+-----------+------------+---------+------------------+--------+-------+ | Turnover | 22.7 | 27.5 | 12.2 | 47.3 | (11.3) | 98.4 | +----------------------+-----------+------------+---------+------------------+--------+-------+ | Underlying operating | 1.6 | 4.6 | 0.8 | 3.2 | (2.2) | 8.0 | | profit | | | | | | | +----------------------+-----------+------------+---------+------------------+--------+-------+ +----------------------+-----------+------------+---------+------------------+--------+-------+ | 2007 restated | Solutions | Servassure | YNS | Rocom - | Elims | Total | | | | | | Discontinued | | | +----------------------+-----------+------------+---------+------------------+--------+-------+ | | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | +----------------------+-----------+------------+---------+------------------+--------+-------+ | Turnover | 22.3 | 17.4 | 10.6 | 48.7 | (10.6) | 88.4 | +----------------------+-----------+------------+---------+------------------+--------+-------+ | Underlying operating | 1.5 | 3.1 | 0.6 | 4.3 | (1.8) | 7.7 | | profit | | | | | | | +----------------------+-----------+------------+---------+------------------+--------+-------+ 1 Turnover and underlying operating profit is shown inclusive of intra-group trading which is deducted in 'Elims' to present third party trading. 2 2007 restated figures are unaudited and have been calculated to provide a like for like comparison following the post period end disposal of Rocom Ltd on 24th March 2009. 3 Underlying EBITDA is profit before interest, tax, depreciation, amortisation, one-off items and share based payments and is reconciled to the financial statements as follows: +-------------------------------------------------------+----------+------+------------+ | | 2008 | | 2007 | +-------------------------------------------------------+----------+------+------------+ | | GBP000 | | GBP000 | +-------------------------------------------------------+----------+------+------------+ | Operating profit per financial statements | 845 | | 4,218 | +-------------------------------------------------------+----------+------+------------+ | Impairment and amortisation of goodwill and | 6,437 | | 1,296 | | intangible assets | | | | +-------------------------------------------------------+----------+------+------------+ | Non-recurring costs | 257 | | 1,892 | +-------------------------------------------------------+----------+------+------------+ | Share based payments | 445 | | 284 | +-------------------------------------------------------+----------+------+------------+ | Depreciation | 750 | | 628 | +-------------------------------------------------------+----------+------+------------+ | | | | | +-------------------------------------------------------+----------+------+------------+ | Underlying EBITDA | 8,734 | | 8,318 | +-------------------------------------------------------+----------+------+------------+ | | | | | +-------------------------------------------------------+----------+------+------------+ | Net financing costs | (1,979) | | (1,466) | +-------------------------------------------------------+----------+------+------------+ | Depreciation | (750) | | (628) | +-------------------------------------------------------+----------+------+------------+ | | | | | +-------------------------------------------------------+----------+------+------------+ | Underlying Profit Before Tax | 6,005 | | 6,224 | +-------------------------------------------------------+----------+------+------------+ | | | | | +-------------------------------------------------------+----------+------+------------+ | Adjusted Diluted EPS | 7.5p | | 7.9p | +-------------------------------------------------------+----------+------+------------+ Non-recurring costs are principally one off investments and restructuring costs incurred in the Servassure division during the period under review. Interest The net interest cost for the Group for the year increased to GBP2.0m (2007: GBP1.5m), due to higher debt levels in 2008. Loss before tax The consolidated loss before tax for the year was (GBP1.134m) (2007: profit of GBP2.8m), due to the impairment and amortisation charge of goodwill and intangible assets in Rocom of GBP5.898k (2007: GBP757k), being recognised in the year prior to its disposal in March 2009. Taxation The taxation charge was a credit of (GBP510k) for the year as a result of over provision from prior years. The taxation charge for 2007 was GBP362k which reflected the use of tax losses brought forward from prior year as well as credits from over payments made in prior years. Earnings per share Adjusted diluted EPS decreased to 7.5p (2007 7.9p) due to higher interest charges. Basic and diluted earnings / (loss) per share for the year were (0.8p) compared with 3.5p in 2007. Dividend and dividend policy In light of the Board's commitment to continue to reduce net debt, no dividend is proposed for the period. The Board hopes to return to a progressive dividend plan in the future. Cash flow and Debt The Group's net debt increased by GBP3.1m during the year to GBP18.1m (2007: (GBP15.0m). This was principally due to increased working capital in Rocom and investments made in the Servassure division during first half of the year. Since the year end the Group has completed on the sale of Rocom Ltd for a total consideration of GBP12.45m gross of fees, tax payments and expenses. GBP0.5m of the consideration is deferred to until March 2010. DIVISIONS ATC has seen success with its encompassing approach to market, direct through ATC Solutions and indirect through Servassure. The Group invested in Servassure, particularly in developing new service and product offerings and strengthening our data capability. The ATC Solutions division has also been redefined and rebranded to meet the changing market needs, creating a more focussed business. The Group has also further strengthened both in-house and channel support processes to streamline and enhance operational effectiveness. Moving forward, all the operating divisions are continuing to focus on and drive higher margin, longer-term contracts, utilising the strengthened and new service/product offerings now developed within the Group. ATC Solutions As part of ATC Solutions continued execution of its strategy, the division has been restructured to give more focus and clarity to specific markets, developing key vertical offerings, tailored to meet the more specific needs of these individual markets. Late in 2008, the team was split into 3 core areas; firstly, a business team focused on sub 300 employee organisations; secondly, a nationwide Enterprise team focused on plus 300 employees; and finally, a dedicated, specialist health team working with the NHS and other Blue Light organisations. The Group is delighted to see that this restructure has resulted in both increased order intake and pipeline. Wins include the roll out of IP telephony to Primary Care Trusts such as Gloucestershire, Bristol, Luton and Bedfordshire as well as a resilient IP solution for East Midlands Ambulance Services 999 call centre. We also announced during the period, landmark contracts with De La Rue, the world's largest commercial security printer, and Carpet Right, Europe's leading carpet and floor specialist retailer. Both contracts represent major client wins for ATC Solutions blue-chip and retails portfolio. ATC Solutions has now launched exciting, additional products into its portfolio, including new mobile and hosted VoIP solutions, both of which have already generated a high level of customer interest. In addition, ATC Solutions has launched a unique per-seat pricing model with options based on cost savings, enhanced efficiencies, growth and technology refresh, as part of a complete managed service proposition. In the current climate, this move will enable clients to achieve technology refresh without having to spend Capex as this model effectively utilises an organisation's existing Opex spend. The ATC Solutions division has also been rebranded and refocused on core manufacturer and supplier relationships, enabling additional support from those manufacturers and suppliers and a more strategic and targeted route to market. The rebranding has centred around our people and the added-value expertise they have. Servassure Servassure has seen growth of over 58% during the period driven by 32 new partner agreements signed within its UK Channels sector alone. The white labelled service offering has been well received with partners, enabling them to offer additional geographical reach as well as additional services to their end users. A new partner web portal has been launched providing partners with direct and immediate access to price all services on-line and obtain support collateral. There has been over GBP1m of new maintenance contracts signed in the period and a strong growth in pipeline. Alongside this, Servassure has strengthened its data offering including new partnerships with CISCO and Juniper and launched a number of already successful new services, including: Inventory & Audit Services - enabling partners to understand exactly what equipment, suppliers and billing make up a customers communications estate, providing opportunities to upsell services and develop the Servassure managed service proposition. White labelled call centre - partners can utilise the Group's call centre staff to handle calls within their own procedures enabling them to save on operational overheads. On Site Specialists - providing short and long term contractors for the Group's partners, ranging from engineering, project and service managers through to database analysts. Your Network Services (YNS) Formerly known as Rocom Network Services, Your Network Services forms part of the Group's new divisional structure and enables Resellers to connect seamlessly to ATC's voice and data network partners, thus benefiting from enhanced services and beneficial pricing. YNS experienced growth of over 20% during the period. To ensure ease of doing business, YNS recently launched an interactive web portal, www.yourbrilliantportal.co.uk. This portal, also known as 'business in a browser', gives partners one point of access into all of the Group's available services and support infrastructure with the ability to connect, bill and manage their customers accordingly. In addition, YNS has now successfully launched a wholesale mobile offering as well as a managed hosted VoIP solution, all of which will be shortly integrated in to the new portal. Rocom Rocom continued to expand and improve its brand portfolio with distribution wins from Avaya, Ericsson and Siemens during the year. However, this was set against a backdrop of declining sales and margins in Reseller and Corporate business. Whilst going some way to counter this decline, the expanded portfolio increased the working capital requirements of Rocom, resulting in a cash outflow for the period of GBP2m and overall reduced margins. Overall revenues declined by 3% during the period, whilst underlying operating profit declined by 26%. In the first quarter of 2009, distribution activity continued to decline as predicted, resulting in further decreases in revenues of 15% compared to the first quarter of 2008. This was set against a widely acknowledged market decline in distribution activity of 25%. PRODUCTS The Group divides its product and service offerings into four broad product areas, the income from which is shown in the following table together with the income arising from discontinued activities: +-------------------------------------------+--------------+--------------+-------------+ | | 2008 | Restated | | | | | 2007 | | +-------------------------------------------+--------------+--------------+-------------+ | | GBPm | GBPm | % Increase | +-------------------------------------------+--------------+--------------+-------------+ | Network Services | 18.8 | 16.1 | 17% | +-------------------------------------------+--------------+--------------+-------------+ | Maintenance | 9.9 | 8.1 | 22% | +-------------------------------------------+--------------+--------------+-------------+ | Systems Integration | 7.1 | 5.6 | 27% | +-------------------------------------------+--------------+--------------+-------------+ | Engineering | 17.2 | 13.4 | 28% | +-------------------------------------------+--------------+--------------+-------------+ | Discontinued | 45.4 | 45.2 | 0% | +-------------------------------------------+--------------+--------------+-------------+ * 2007 restated figures are unaudited and have been calculated to provide a like for like comparison following the post period end disposal of Rocom Ltd on 24th March 2009. Network services - the supply of fixed line and mobile voice and data services. Maintenance - ongoing-support contracts for installed ICT systems. Systems Integration - the design, project management and installation of ICT Solutions. Engineering - the provision of engineering services, including on site specialists. Discontinued - Rocom Ltd, the distribution of telephony hardware and peripherals. The table above demonstrates that our growth is being delivered through continuing activities, and those that have since been discontinued were entering decline. Substantial increases in Network services and maintenance continues the trend of increasing contracted and recurring revenues. This has been underpinned by growth in YNS (formerly Rocom Network Services) and the development of UK Channels activity in Servassure, by tapping into additional markets outside of BT, where we have also realised continued steady growth. OUTLOOK We have achieved a great deal during 2008, investing in the continuing areas of our business and working on the disposal of Rocom, which we believe has transformed the outlook for the Group. We have a refocused business, a strengthened balance sheet and a pipeline of new business, which will further enable the Group to grow in 2009 and beyond. This has already been demonstrated by the success we have had with contract wins so far this year. We are confident about our future prospects. Scott Kean Interim Chief Executive 15 April 2009 AT Communications Group plc Consolidated income statement Year ended 31 December 2008 +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | | Notes | Continuing | Discontinued | Total | Continuing | Discontinued | Total | | | Operations | Operations | Unaudited | Operations | Operations | Audited | | | GBP'000 | GBP'000 | GBP'000s | GBP'000 | GBP'000 | GBP'000 | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | | 2007 | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Revenue | 52,949 | 45,405 | 98,354 | 43,267 | 45,167 | 88,434 | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Cost of sales | (23,646) | (34,379) | (58,025) | (19,833) | (32,940) | (52,773) | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Gross profit | 29,303 | 11,026 | 40,329 | 23,434 | 12,227 | 35,661 | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Selling, | (25,644) | (13,840) | (39,484) | (22,702) | (8,741) | (31,443) | | general & | | | | | | | | administrative | | | | | | | | expenses | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Underlying | 5,286 | 3,448 | 8,734 | 3,785 | 4,533 | 8,318 | | EBITDA* | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Depreciation | (479) | (271) | (750) | (382) | (246) | (628) | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Underlying | 4,807 | 3,177 | 7,984 | 3,403 | 4,287 | 7,690 | | operating | | | | | | | | profit | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Share based | (379) | (66) | (445) | (240) | (44) | (284) | | payments | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Non -recurring | (230) | (27) | (257) | (1,892) | - | (1,892) | | and | | | | | | | | restructuring | | | | | | | | costs | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Amortisation | (539) | (5,898) | (6,437) | (539) | (757) | (1,296) | | and impairment | | | | | | | | of goodwill & | | | | | | | | intangible | | | | | | | | assets | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Operating | 3,659 | (2,814) | 845 | 732 | 3,486 | 4,218 | | profit / | | | | | | | | (loss) | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Investment | | | 24 | | | 20 | | revenue | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Finance costs | | | (2,003) | | | (1,486) | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | (Loss) / | | | (1,134) | | | 2,752 | | Profit before | | | | | | | | income tax | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Income tax credit / | | | 510 | | | (362) | | (expense) 2 | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | (Loss) / | | | (624) | | | 2,390 | | Profit for the | | | | | | | | year | | | | | | | | attributable | | | | | | | | to equity | | | | | | | | shareholders | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Earnings / | | | | | | | | (loss) per | | | | | | | | share | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Basic Note | | | (0.8)p | | | 3.5p | | 3 | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Diluted Note | | | (0.8)p | | | 3.5p | | 3 | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | Diluted | | | 7.5p | | | 7.9p | | adjusted** | | | | | | | | 3 | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ | | | | | | | | +-----------------------+------------+--------------+-----------+------------+--------------+----------+ *Earnings before interest, tax, depreciation, amortisation of intangible assets, non-recurring expenses and share based payment charges. **Diluted adjusted EPS is calculated after adding back amortisation and non-recurring expenses (adjusted for tax effects) but includes share based payment charges. AT Communications Group plc Consolidated statement of changes in equity Year ended 31 December 2008 +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | Share | Share | Capital | Hedging | Retained | Total | | | capital | premium | redemption | reserve | earnings | equity | | | | account | reserve | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Note | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Equity at 1 January 2007 | 609 | 15,123 | 6 | - | 2,723 | 18,461 | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Profit for the year | - | - | - | - | 2,390 | 2,390 | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Share-based payments | - | - | - | - | 284 | 284 | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Gain on interest rate | - | - | - | 27 | - | 27 | | hedges | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Total recognised income | 609 | 15,123 | 6 | 27 | 5,397 | 21,162 | | and expense | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Dividends | - | - | - | - | (662) | (662) | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Issue of share capital | 162 | 6,909 | - | - | - | 7,071 | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Cost of shares issued | - | (261) | - | - | - | (261) | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Balance at 31 December | 771 | 21,771 | 6 | 27 | 4,735 | 27,310 | | 2007 -Audited | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | (Loss) for the year | - | - | - | - | (624) | (624) | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Share-based payments | - | - | - | - | 445 | 445 | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Loss on interest rate | - | - | - | (1,007) | - | (1,007) | | hedges | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Total recognised income | 771 | 21,771 | 6 | (980) | 4,556 | 26,124 | | and expense | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Dividends | - | - | - | - | (771) | (771) | | 5 | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | Balance at 31 December | 771 | 21,771 | 6 | (980) | 3,785 | 25,353 | | 2008 - Unaudited | | | | | | | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ | | ======= | ========== | =========== | ========= | ========= | ======== | +---------------------------+---------+------------+-------------+-----------+-----------+----------+ AT Communications Group plc Consolidated balance sheet 31 December 2008 +----------------------------+----------+----------+-----------+----------+ | | | Note | 2008 | 2007 | | | | | GBP'000 | GBP'000 | +----------------------------+----------+----------+-----------+----------+ | Non-current assets | | | Unaudited | Audited | +----------------------------+----------+----------+-----------+----------+ | Goodwill | | 6 | 19,647 | 27,182 | +----------------------------+----------+----------+-----------+----------+ | Other intangible assets | | 6 | 1,841 | 7,030 | +----------------------------+----------+----------+-----------+----------+ | Property, plant and | | | 925 | 1,153 | | equipment | | | | | +----------------------------+----------+----------+-----------+----------+ | Deferred tax asset | | | 354 | 525 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | 22,767 | 35,890 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Current assets | | | | | +----------------------------+----------+----------+-----------+----------+ | Inventories | | | 6,476 | 9,401 | +----------------------------+----------+----------+-----------+----------+ | Trade and other | | | 23,884 | 23,390 | | receivables | | | | | +----------------------------+----------+----------+-----------+----------+ | Cash and cash equivalents | | | 1,672 | 2,922 | +----------------------------+----------+----------+-----------+----------+ | Derivative financial | | | - | 27 | | instruments | | | | | +----------------------------+----------+----------+-----------+----------+ | Assets classified as held | | | 22,408 | - | | for sale | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | 54,440 | 35,740 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Total assets | | | 77,207 | 71,630 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Current liabilities | | | | | +----------------------------+----------+----------+-----------+----------+ | Trade and other payables | | | 16,684 | 23,057 | +----------------------------+----------+----------+-----------+----------+ | Current income tax | | | 1,560 | 1,228 | | liabilities | | | | | +----------------------------+----------+----------+-----------+----------+ | Obligations under finance | | | - | 41 | | leases | | | | | +----------------------------+----------+----------+-----------+----------+ | Borrowings | | | 8,355 | 6,508 | +----------------------------+----------+----------+-----------+----------+ | Derivative financial | | | 980 | - | | instruments | | | | | +----------------------------+----------+----------+-----------+----------+ | Total liabilities | | | 11,595 | - | | associated with assets | | | | | | classified as held for | | | | | | sale | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | 39,174 | 30,834 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Net current assets | | | 15,266 | 4,906 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Non-current liabilities | | | | | +----------------------------+----------+----------+-----------+----------+ | Borrowings | | | 12,496 | 11,370 | +----------------------------+----------+----------+-----------+----------+ | Deferred income tax | | | 184 | 2,109 | | liabilities | | | | | +----------------------------+----------+----------+-----------+----------+ | Obligations under finance | | | - | 7 | | leases | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | | | | 12,680 | 13,486 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Total liabilities | | | 51,854 | 44,320 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Net assets | | | 25,353 | 27,310 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Equity | | | | | +----------------------------+----------+----------+-----------+----------+ | Share capital | | | 771 | 771 | +----------------------------+----------+----------+-----------+----------+ | Share premium account | | | 21,771 | 21,771 | +----------------------------+----------+----------+-----------+----------+ | Capital redemption reserve | | | 6 | 6 | +----------------------------+----------+----------+-----------+----------+ | Hedging reserves | | | (980) | 27 | +----------------------------+----------+----------+-----------+----------+ | Retained earnings | | | 3,785 | 4,735 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ | Total equity | | | 25,353 | 27,310 | +----------------------------+----------+----------+-----------+----------+ | | | | | | +----------------------------+----------+----------+-----------+----------+ AT Communications Group plc Consolidated cash flow statement Year ended 31 December 2008 +-------------------------------------------+----------+----------+----------+ | | Note | 2008 | 2007 | | | | GBP'000 | GBP'000 | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Net cash (absorbed by) continuing | 8 | (1,717) | (5,787) | | operating activities | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Investing activities | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Interest received | | 24 | 20 | +-------------------------------------------+----------+----------+----------+ | Proceeds of property held for | | - | 3,500 | | resale | | | | +-------------------------------------------+----------+----------+----------+ | Proceeds on disposal of property, | | - | 25 | | plant and equipment | | | | +-------------------------------------------+----------+----------+----------+ | Purchases of property, plant and | | (771) | (574) | | equipment | | | | +-------------------------------------------+----------+----------+----------+ | Acquisitions of subsidiaries | | - | (207) | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Net cash (used in) / generated | | (747) | 2,764 | | from investing activities | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Financing activities | | | | +-------------------------------------------+----------+----------+----------+ | Dividends paid | | (772) | (662) | +-------------------------------------------+----------+----------+----------+ | Repayments of borrowings | | (19,716) | (6,680) | +-------------------------------------------+----------+----------+----------+ | Repayments of obligations under | | (42) | (135) | | finance leases | | | | +-------------------------------------------+----------+----------+----------+ | Proceeds on issue of shares | | - | 6,809 | +-------------------------------------------+----------+----------+----------+ | New loans raised | | 20,851 | 458 | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Net cash from / (used in) | | 321 | (210) | | financing activities | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | Net (decrease) in cash and cash | | (2,143) | (3,233) | | equivalents from continuing | | | | | operations | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | (Overdrafts) / cash and cash | | (277) | 2,956 | | equivalents at beginning of | | | | | year from continuing operations | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ | (Overdrafts) and cash equivalents | | (2,420) | (277) | | at end of year | | | | +-------------------------------------------+----------+----------+----------+ | | | | | +-------------------------------------------+----------+----------+----------+ AT Communications Group plc Notes to the preliminary results 1. Financial information The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 31 December 2008 and 2007 as defined in Sections 240 of the Companies Act 1985. The accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use by the European Union. Whilst the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, it does not include sufficient information to comply with IFRS. The Group expects to publish full financial statements for the year ended 31 December 2008, which comply with IFRS in April 2009. The financial information has been prepared under the same accounting policies adopted in the Financial Statements for the year ended 31 December 2007 The comparative financial information for the year ended 31 December 2007 is derived from the statutory accounts for the year ended 31 December 2007 as adjusted for the conversion from UK GAAP to IFRS. The statutory accounts for the year ended 31 December 2007 have been delivered to the Registrar of Companies. The auditors have reported on the IFRS 2007 accounts; their report was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. The auditors have yet to sign their report on the 2008 accounts. The statutory accounts for the year ended 31 December 2008 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's Annual General Meeting. Whilst the auditors have not yet reported on the Financial Statements for the year ended 31 December 2008, they anticipate issuing an unqualified report which will not contain statements under Section 237 (2) or (3) of the Companies Act 1985. The financial information set out in this announcement was approved by the Board of Directors on 14 April 2009. 2. Income tax (credit) / expense +-------------------------------------------+----------+------+----------+ | | 2008 | | 2007 | +-------------------------------------------+----------+------+----------+ | | GBP000's | | GBP000's | +-------------------------------------------+----------+------+----------+ | Current tax | 1,684 | | 1,288 | +-------------------------------------------+----------+------+----------+ | Previous period over provisions | (309) | | (421) | +-------------------------------------------+----------+------+----------+ | Deferred tax | (1,885) | | (505) | +-------------------------------------------+----------+------+----------+ | | | | | +-------------------------------------------+----------+------+----------+ | | (510) | | 362 | +-------------------------------------------+----------+------+----------+ Corporation tax is calculated at 28% (2007: 30%) of the estimated assessable (loss) / profit for the year. The tax on the Group's profit before tax differs from the theoretical amount that would arise using the 28% tax rate as follows: +---------------------------------------------------+----------------+---------+---------+ | | | 2008 | 2007 | | | | GBP'000 | GBP'000 | +---------------------------------------------------+----------------+---------+---------+ | | | | | +---------------------------------------------------+----------------+---------+---------+ | (Loss) / | | (1,134) | 2,752 | | profit before | | | | | tax | | | | +---------------------------------------------------+----------------+---------+---------+ | | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax at the UK | | (318) | 826 | | corporation tax rate | | | | | of 28% (2007: 30%) | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax effect of | | 197 | 193 | | expenses that are not | | | | | deductible in | | | | | determining taxable | | | | | profit | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax effect of | | 14 | 60 | | depreciation that is | | | | | not deductible in | | | | | determining taxable | | | | | profit | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax effect of | | - | 23 | | depreciation in | | | | | excess of capital | | | | | allowances | | | | +---------------------------------------------------+----------------+---------+---------+ | Other timing | | - | 436 | | differences | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax effect of | | - | (250) | | utilisation of tax | | | | | losses not previously | | | | | recognised | | | | +---------------------------------------------------+----------------+---------+---------+ | Over provision in | | (309) | (421) | | previous years | | | | +---------------------------------------------------+----------------+---------+---------+ | Movement in deferred | | 2 | (505) | | tax | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax rate adjustment | | (98) | - | +---------------------------------------------------+----------------+---------+---------+ | Other | | 2 | - | +---------------------------------------------------+----------------+---------+---------+ | | | | | +---------------------------------------------------+----------------+---------+---------+ | Tax (credit) / | | (510) | 362 | | charge | | | | +---------------------------------------------------+----------------+---------+---------+ | | | | | +---------------------------------------------------+----------------+---------+---------+ 3.Earnings / (loss) per share The calculation of the basic, diluted and diluted adjusted earnings per share is based on the following data: +-----------------------------------------------------------+----------+------------+------------+ | | | 2008 | 2007 | | | | GBP'000 | GBP'000 | +-----------------------------------------------------------+----------+------------+------------+ | Earnings | | | | +-----------------------------------------------------------+----------+------------+------------+ | Earnings for the | | (624) | 2,390 | | purposes of basic | | | | | earnings per share | | | | | being net profit | | | | | attributable to | | | | | equity holders of the | | | | | parent | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Effect of dilutive | | - | - | | potential ordinary | | | | | shares: | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Earnings for the | | (624) | 2,390 | | purposes of diluted | | | | | earnings per share | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Operating | | 845 | 4,218 | | profit | | | | +-----------------------------------------------------------+----------+------------+------------+ | Amortisation | | 6,437 | 1,296 | | of goodwill & | | | | | intangible | | | | | assets | | | | +-----------------------------------------------------------+----------+------------+------------+ | Non -recurring | | 257 | 1,892 | | expenses | | | | +-----------------------------------------------------------+----------+------------+------------+ | Share based | | 445 | 284 | | payments | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Underlying profit | | 7,984 | 7,690 | | before tax | | | | +-----------------------------------------------------------+----------+------------+------------+ | Less underlying | | (2,235) | (2,222) | | income tax expense | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Earnings for the | | 5,749 | 5,468 | | purposes of diluted | | | | | adjusted earnings per | | | | | share | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Number of | | | | | shares | | | | +-----------------------------------------------------------+----------+------------+------------+ | Weighted average | | 77,141,356 | 69,231,218 | | number of ordinary | | | | | shares for the | | | | | purposes of basic | | | | | earnings per share | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Effect of | | | | | dilutive | | | | | potential | | | | | ordinary | | | | | shares: | | | | +-----------------------------------------------------------+----------+------------+------------+ | Share | | - | 27,898 | | options | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Weighted average | | 77,141,356 | 69,259,116 | | number of ordinary | | | | | shares for the | | | | | purposes of diluted | | | | | earnings per share | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Earnings / | | | | | (loss) per | | | | | share | | | | +-----------------------------------------------------------+----------+------------+------------+ | Basic | | (0.8)p | 3.5p | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Diluted | | (0.8)p | 3.5p | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ | Diluted | | 7.5p | 7.9p | | adjusted* | | | | +-----------------------------------------------------------+----------+------------+------------+ | | | | | +-----------------------------------------------------------+----------+------------+------------+ * Diluted adjusted EPS is calculated after adding back amortisation and non-recurring expenses (not adjusted for tax effects). 4.Segmental Analysis +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | 2008 | | | Wholesale | | Group & | Consolidated | | | ATC Solution | Servassure | Network | Discontinued | eliminations | | | | | | Services | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Revenue | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | External | 22,694 | 19,444 | 10,811 | 45,405 | - | 98,354 | | sales | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Inter-divisional | - | 7,969 | 1,396 | 1,892 | (11,257) | - | | sales | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Total | 22,694 | 27,413 | 12,207 | 47,297 | (11,257) | 98,354 | | revenue | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Operating | 1,555 | 4,585 | 775 | (2,814) | (3,256) | 845 | | profit/(loss) | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Share | 13 | 13 | - | 66 | 353 | 445 | | based | | | | | | | | payments | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Amortisation | - | - | - | 5,898 | 539 | 6,437 | | and | | | | | | | | impairment | | | | | | | | of | | | | | | | | intangibles | | | | | | | | & goodwill | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Non-recurring | 34 | 50 | - | 27 | 146 | 257 | | and | | | | | | | | restructuring | | | | | | | | costs | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Underlying | 1,602 | 4,648 | 775 | 3,177 | (2,218) | 7,984 | | operating | | | | | | | | profit | | | | | | | | / (loss) | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Depreciation | 146 | 219 | 114 | 271 | - | 750 | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Underlying | 1,748 | 4,867 | 889 | 3,448 | (2,218) | 8,734 | | EBITDA | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Finance | | | | | | (1,979) | | costs - | | | | | | | | net | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | (Loss) | | | | | | (1,134) | | before | | | | | | | | income | | | | | | | | tax | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | Income | | | | | | 510 | | tax | | | | | | | | credit | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | (Loss) | | | | | | (624) | | for | | | | | | | | the | | | | | | | | year | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------------------------------------+--------------+------------+-----------+--------------+--------------+--------------+ Inter-segment sales are charged at prevailing market prices. Segmental results are shown before Group management charge has been applied. +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | 2008 | ATC | | Wholesale | Discontinued | Group & | Consolidated | | | Solutions | Servassure | Network | | eliminations | | | | | | Services | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Balance sheet | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Assets | 27,620 | 30,508 | 8,522 | 22,276 | (11,720) | 77,207 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Liabilities | (22,794) | (16,273) | (4,894) | (11,595) | 3,702 | (51,854) | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Capital expenditure | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Property, plant and | 252 | 377 | 43 | 84 | - | 756 | | equipment | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Goodwill - business | - | - | - | - | - | - | | combinations | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | 2007 | ATC | Servassure | Wholesale | | Group & | Consolidated | | | Solutions | | Network | Discontinued | eliminations | | | | | | Services | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Revenue | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | External sales | 22,330 | 11,845 | 9,092 | 45,167 | - | 88,434 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Inter-divisional sales | - | 5,528 | 1,525 | 3,530 | (10,583) | - | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Total revenue | 22,330 | 17,373 | 10,617 | 48,697 | (10,583) | 88,434 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Operating profit | 1,415 | 2,933 | 560 | 3,486 | (4,176) | 4,218 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Share based payments | 22 | 22 | - | 44 | 196 | 284 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Amortisation of | - | - | - | 757 | 539 | 1,296 | | intangible assets & | | | | | | | | goodwill | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Non-recurring and | 86 | 128 | - | - | 1,678 | 1,892 | | restructuring costs | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Underlying operating | 1,523 | 3,083 | 560 | 4,287 | (1,763) | 7,690 | | profit | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Depreciation | 150 | 222 | 106 | 246 | (96) | 628 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Underlying EBITDA | 1,673 | 3,305 | 666 | 4,533 | (1,859) | 8,318 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Finance costs - net | | | | | | (1,466) | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Profit before income | | | | | | 2,752 | | tax | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Income tax expense | | | | | | (362) | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | Profit for the year | | | | | | 2,390 | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ | | | | | | | | +------------------------+-----------+-------------+-----------+--------------+--------------+--------------+ +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | 2007 | ATC | | Wholesale | Discontinued | Group & | Consolidated | | | Solutions | Servassure | Network | | eliminations | | | | | | Services | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | Balance sheet | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | Assets | 21,548 | 23,542 | 5,802 | 33,425 | (12,687) | 71,630 | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | Liabilities | (14,674) | (11,868) | (2,879) | (11,608) | (3,291) | (44,320) | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | Capital expenditure | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | Property, plant and | 254 | 257 | - | 63 | - | 574 | | equipment | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | Property, plant and | 69 | - | - | 138 | - | 207 | | equipment - business | | | | | | | | combinations | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ | | | | | | | | +-----------------------+-----------+------------+-----------+--------------+--------------+--------------+ 5. Dividends The dividends paid in 2008 of GBP771,000 (2007 - GBP662,000) amounted to 1 pence per share (2007 - 1 pence per share). No dividend is proposed for the year ended 31 December 2008. 6. Goodwill and other intangible assets +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | Tradenames | Customer | Total | Goodwill | | | and marks | lists / | intangible | | | | | contracts | assets | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | GBP'000 | GBP'000 | GBP'000 | GBP'000 | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Cost | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 1 | 2,251 | 6,643 | 8,894 | 27,430 | | January | | | | | | 2007 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Adjustment | - | - | - | 207 | | in respect | | | | | | of 2006 | | | | | | acquisitions | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 1 | 2,251 | 6,643 | 8,894 | 27,637 | | January | | | | | | 2008 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Transfer | (1,596) | (4,064) | (5,660) | (7,535) | | to | | | | | | assets | | | | | | held for | | | | | | sale | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 31 | 655 | 2,579 | 3,234 | 20,102 | | December | | | | | | 2008 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Accumulated | | | | | | amortisation | | | | | | and | | | | | | impairment | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 1 | (91) | (477) | (568) | (455) | | January | | | | | | 2007 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Amortisation | (189) | (1,107) | (1,296) | - | | for the year | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 1 | (280) | (1,584) | (1,864) | (455) | | January | | | | | | 2008 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Amortisation | (189) | (1,107) | (1,296) | | | for the year | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Impairment | | | | (5,141) | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Transfer | 187 | 1,580 | 1,767 | 5,141 | | to | | | | | | assets | | | | | | held for | | | | | | sale | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 31 | (282) | (1,111) | (1,393) | (455) | | December | | | | | | 2008 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | Carrying | | | | | | amount | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 31 | 373 | 1,468 | 1,841 | 19,647 | | December | | | | | | 2008 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | At 31 | 1,971 | 5,059 | 7,030 | 27,182 | | December | | | | | | 2007 | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ | | | | | | +-------------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+--------------------------------------------+ Goodwill and intangible assets acquired in a business combination are allocated at acquisition to the cash generating units (CGUs) that are expected to benefit from that business combination as follows: +---------------------------------------------------+----------+----------+----------+ | | | 2008 | 2007 | | | | GBP'000 | GBP'000 | +---------------------------------------------------+----------+----------+----------+ | | | | | +---------------------------------------------------+----------+----------+----------+ | ATC Solutions | | 8,613 | 9,152 | +---------------------------------------------------+----------+----------+----------+ | Servassure | | 10,681 | 10,681 | +---------------------------------------------------+----------+----------+----------+ | Wholesale | | 2,194 | 2,194 | | Network | | | | | Services | | | | +---------------------------------------------------+----------+----------+----------+ | Discontinued | | - | 12,185 | | operations | | | | +---------------------------------------------------+----------+----------+----------+ | | | | | +---------------------------------------------------+----------+----------+----------+ | | | 21,488 | 34,212 | +---------------------------------------------------+----------+----------+----------+ | | | | | +---------------------------------------------------+----------+----------+----------+ The Group tests goodwill and intangible assets annually for impairment, or more frequently if there are indications that they might be impaired. The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using post-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs and the rates used were between 16% and 19%. The amortisation periods used for Tradenames and marks are 6 years with respect to the Britannia acquisition and 20 years for the Rocom acquisition. The amortisation period used for customer lists and contracts is six years. Therefore the remaining amortisation periods are 4 years and 5 months for Britannia Tradenames and customer lists and contracts. The goodwill and intangible assets related to Rocom have been impaired to their recoverable amounts and are included within current assets held for sale. 7. Net Debt +------------------------------------------------+----------+----------+----------+----------+ | | | | 2008 | 2007 | | | | | GBP'000 | GBP'000 | +------------------------------------------------+----------+----------+----------+----------+ | | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Cash | | | 2,935 | 2,922 | | and | | | | | | cash | | | | | | equivalents | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Bank | | | (5,355) | (3,199) | | overdrafts | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Bank | | | (16,000) | (14,615) | | loans | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Other | | | (228) | (381) | | borrowings | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Loan | | | - | (65) | | notes | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Issue | | | 504 | 382 | | Costs | | | | | +------------------------------------------------+----------+----------+----------+----------+ | | | | | | +------------------------------------------------+----------+----------+----------+----------+ | Total | | | (18,144) | (14,956) | | net | | | | | | debt | | | | | +------------------------------------------------+----------+----------+----------+----------+ | | | | | | +------------------------------------------------+----------+----------+----------+----------+ 8. Notes to the cash flow statement +----------------------------------------------------------------+----------+----------+----------+ | | | 2008 | 2007 | | | | GBP'000 | GBP'000 | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | (Loss) / | | (1,134) | 2,752 | | profit before | | | | | tax | | | | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | Adjustments | | | | | for: | | | | +----------------------------------------------------------------+----------+----------+----------+ | Investment | | (24) | (20) | | revenues | | | | +----------------------------------------------------------------+----------+----------+----------+ | Finance | | 2,003 | 1,486 | | costs | | | | +----------------------------------------------------------------+----------+----------+----------+ | Depreciation | | 750 | 628 | | of property, | | | | | plant and | | | | | equipment | | | | +----------------------------------------------------------------+----------+----------+----------+ | Impairment | | 6,437 | 1,296 | | and | | | | | amortisation | | | | | of | | | | | intangible | | | | | assets | | | | +----------------------------------------------------------------+----------+----------+----------+ | Share-based | | 445 | 284 | | payment | | | | | expense | | | | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | Operating cash | | 8,477 | 6,426 | | flows before | | | | | movements in | | | | | working | | | | | capital | | | | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | (Increase) | | (2,680) | (2,119) | | in | | | | | inventories | | | | +----------------------------------------------------------------+----------+----------+----------+ | (Increase) | | (9,365) | (5,504) | | in | | | | | receivables | | | | +----------------------------------------------------------------+----------+----------+----------+ | Increase | | 4,428 | (2,633) | | / | | | | | (decrease) | | | | | in | | | | | payables | | | | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | Net cash | | (860) | (3,830) | | (absorbed | | | | | by)operations | | | | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | Income taxes | | (574) | (471) | | paid | | | | +----------------------------------------------------------------+----------+----------+----------+ | Interest paid | | (2,003) | (1,486) | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ | Net cash | | (1,717) | (5,787) | | (absorbed | | | | | by)operating | | | | | activities | | | | +----------------------------------------------------------------+----------+----------+----------+ | | | | | +----------------------------------------------------------------+----------+----------+----------+ The figures below show the amounts relating to the discontinued operation that are included within the Group cash flows for the year. +-----------------------------------------------+----------+----------+----------+----------+ | | | | | 2008 | | | | | | GBP'000 | +-----------------------------------------------+----------+----------+----------+----------+ | | | | | | +-----------------------------------------------+----------+----------+----------+----------+ | Net | | | | (547) | | cash | | | | | | flows | | | | | | from | | | | | | operating | | | | | | activities | | | | | +-----------------------------------------------+----------+----------+----------+----------+ | Net | | | | (78) | | cash | | | | | | flows | | | | | | from | | | | | | investing | | | | | | activities | | | | | +-----------------------------------------------+----------+----------+----------+----------+ | Net | | | | (20) | | cash | | | | | | flows | | | | | | from | | | | | | financing | | | | | | activities | | | | | +-----------------------------------------------+----------+----------+----------+----------+ | | | | | | +-----------------------------------------------+----------+----------+----------+----------+ | | | | | (645) | +-----------------------------------------------+----------+----------+----------+----------+ | | | | | | +-----------------------------------------------+----------+----------+----------+----------+ 9. Post Balance Sheet Events On 24 March 2009 the Group completed the sale of Rocom Limited to a third party for a consideration of GBP12.45m, of which GBP0.5m is deferred for one year. This information is provided by RNS The company news service from the London Stock Exchange END FR IIMMTMMABTTL
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