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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Infoserve | LSE:INFS | London | Ordinary Share | GB00B137SN31 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 5192V
Infoserve Group PLC
13 July 2009
Infoserve Group plc
("Infoserve" or "the Group")
Preliminary Results
Infoserve, a leading online local search marketing specialist, today announces
its final results for the year ended 31 March 2009.
Highlights
* Turnover increased by 20% to GBP5.6 million (2008: GBP4.7m)
* EBITDA profit achieved in three of the six months in the second half of the
financial year
* Operating loss substantially reduced to GBP0.8 million from GBP2.7 million
* Productivity per sales person increased by 18% to GBP54,800 per sales person per
annum
* Admin expenses down GBP527k (18%) as prior year cost reductions maintained
despite growing sales
* Gross margin increased to 32.4% from 11.4%
For further information, please contact:
+----------------------------------------------+---------------------------------+
| Infoserve Group plc | Steve Barnes, Chief Executive |
| Steve Barnes, Chief Executive | www.infoservegroup.com |
| steve.barnes@infoserve.com | Tel +44 (0)113 238 6200 |
| Jonathan Simpson, Interim Finance Director | www.infoservegroup.com |
| jonathan.simpson@infoserve.com | |
+----------------------------------------------+---------------------------------+
| Nominated Adviser | Tel +44 (0) 161 832 2174 |
| WH Ireland | |
| Robin Gwyn | |
| robin.gwyn@wh-ireland.co.uk | |
| | |
+----------------------------------------------+---------------------------------+
| Media Enquiries | Tel +44 (0) 113 380 1644 |
| Source Marketing Communications | |
| Peter Downey | |
| peter@sourcemc.co.uk | |
| | |
+----------------------------------------------+---------------------------------+
Chairman's Statement
Infoserve Group plc is an e-marketing company, specialising in local search. The
Company helps businesses, particularly SMEs, to maximise their performance
through online marketing.
I am pleased to report a year of good progress, both financially and
commercially, with the second half of the year building on the improved
performance in the first half.
Results
Turnover for the year increased by approximately 20% to GBP5.60 million (2008:
GBP4.65 million) and follows a 25% growth the previous year. This growth in
turnover was an excellent achievement in a difficult economic climate for much
of the Group's customer base but reflected the growing interest in online
marketing and local search.
Following on from last year's substantial improvement in productivity per
person, this again increased to GBP54,800 per active sales person from GBP46,600
last year. As a result, gross margins also improved from 11.4% to 32.4% helped
by the introduction of new products, better staff training and higher renewal
levels, thus continually increasing the Group's customer base, which should give
better transparency of future revenue.
Overheads were well down on the previous year, following the strategic cost
review in October 2007, when a substantial amount of overhead expenditure was
taken out of the business without affecting the day to day operations. During
the second half of the year, a number of actions have been taken by the Board,
which will further reduce the ongoing overheads of the business in this current
financial year.
As a consequence of the increased sales, better margins and reduced overheads,
the operating loss of GBP812,000 is substantially lower than GBP2.70 million
last year. After taking into account the net interest payable, there was a loss
before taxation of GBP992,000 (2008: GBP2.89 million).
The loss per share was 5.20p compared to 16.22p in 2008.
Cash and going concern
The improved trading performance has meant that the cash outflow from trading
and investment activities in the year has been only GBP419,000, of which only
GBP108,000 relates to the second half.
However, the Group remains undercapitalised as it has been since the IPO in
2006. Whilst a further GBP2 million was raised in 2007, the high cost associated
with growing the sales team and developing new products has left the Group able
to operate at current trading levels but unlikely to be able to continue to grow
at its current rate without additional funding.
On an underlying basis, the Group is now trading at almost a breakeven EBITDA,
with cash outflows on this basis at relatively low levels. All directors and
staff have taken pay cuts, very little capital expenditure has been authorised
by the Board and other overheads have been reduced to the bare minimum to assist
in preserving the short term cash position.
This situation is, however, not sustainable in the longer term if growth is to
be achieved. The Board is therefore considering a number of potential financing
options including the possibility of raising new capital from existing
shareholders and has also commenced discussions with its major shareholder,
David Hood about the raising of further funds. Additional funding details are
included in the Financial Review below.
Dividend
The Board is not recommending a dividend as all funds are required for the
development of the business (2008 : GBPnil).
External discussions
On 15 August 2008, the Group made an announcement that it was in early
discussions, which may or may not have led to an offer being made for the Group
(the "Discussions"). The Group announced on 10 June 2009 that these Discussions
had terminated.
Board changes
In July 2008, Mark Riley was appointed to the Board as Sales Director and has
been responsible for the significant improvement, not only in sales performance
but in the recruitment and training of our sales staff.
In March 2008, we announced that David Balbi, our Finance Director, was leaving
the Group to pursue other interests. On behalf of the Board, I would like to
thank David for his very valuable contribution to the development of the Group,
especially during some difficult trading periods, and wish him well for the
future.
The Board is currently searching for a successor and an announcement will be
made in due course. To assist the Group through the current situation, the Board
has appointed Jonathan Simpson as interim Finance Director. Jonathan is the
former Finance Director of Ultralase, a leading UK laser eye surgery provider.
Outlook
The market for online local search continues to grow and the Group now has
almost 3.5 million businesses listed on its own business directories and a
network of over 120 single industry vertical websites.
The contracts with Yahoo! and Google have given the business a unique position
to exploit the ever growing local search market through its close ties with both
companies, who represent over 96% of the UK's search and online advertising
market.
The Board is confident, that despite the current economic turmoil, it will
continue to grow its revenues and customer base and sustain the progress made in
the last financial year. The Board is actively considering possible financing
options to enable it to achieve these objectives.
James H Newman
Chairman
10 July 2009
Chief Executive's Review
* During the last financial year the background to the market has been coloured by
the much-publicised financial turmoil across the world. Despite this, online
marketing and advertising in general, and paid for search in particular have
seen continued growth in expenditure and focus.
* Paid-for search accounted for 59.3% of all online advertising in 2008.
* 60% of all online searches appear to be local in nature.
* Traditional media (outdoor, radio, press - black and white and colour, and TV)
spend in 2008 is estimated to be 8% down on 2007. Contrasting with this, online
advertising grew by 17% in 2008 (World Advertising Research Centre and PwC).
Furthermore IAB & PwC expect growth in internet advertising to continue in 2009
albeit at a reduced level.
* The Internet Advertising Bureau estimate online advertising spend in H2 2008 to
have overtaken press display's share of total UK advertising for the first time.
* 90% of household consumer spend on goods and services takes place within 20
miles of where individual consumers live or work.
* New figures from ComScore show that the use of online search to find local
businesses, products or services grew by 58% last year. By comparison, overall
internet searches increased by only 21% in 2008, highlighting that local search
continues to drive market growth.
* ComScore also highlighted that 75% of all local searches were non branded and
non-business specific, clearly indicating that most searchers do not have a
specific business in mind when they are actively seeking a supplier.
Business developments
We continue to reinforce our position as one of the UK's leading online local
search specialists. The Company continued to improve its service levels, product
propositions, value for money offering and breadth of product coverage
throughout the year.
We continued to closely monitor costs and reduce these wherever possible, and at
the same time managed our cash outflows tightly. Strong increased sales per head
were the cornerstone of continued revenue growth; these increases were the
result of improved disciplines, a greater emphasis and more detailed
implementation of training and development and overall product portfolio
enhancements. Whilst market share increases are difficult to measure, we believe
that the Company has grown in importance within our operating sector. The
revenue increases and cost controls together contributed to the achievement of
an EBITDA profit for three of the six months in the second half of the financial
year.
During the last year we have continued to focus on improving and integrating our
systems, and I am pleased that we have gone some way to delivering a complete
end-to-end system solution that utilises our business data throughout and
culminates in better customer service. Our GEMS bespoke in-house system is now
used to collect, collate and store our data, to use that data to deliver
intelligent campaigns to our sales executives, to re-populate our data with any
updates or orders taken, to populate an online sales tool which provides
customer information and access to search traffic statistics, as well as keyword
suggestions and an aide-memoire for the sales executive. The system now includes
an improved automated credit card transaction and approval process and
culminates in a streamlined production technique which makes the final product
process more efficient. We are also able to use this for control of Google
AdWords campaign management.
We have begun to undertake a series of ongoing email campaigns explaining to
SMEs how we can help them build an online presence that will give them a strong
return on investment. These campaigns will improve our business model by
providing easier commercial targets as people request a call back for further
information.
During this year we began offering website optimisation to our SME customers.
Our www.city-visitor.com site currently enjoys more than 11 million number 1
positions on the main search engines for searches involving specific keywords
and locations, and we have begun to use our search engine optimisation skills
for the direct benefit of our SME customers within their own websites. I
envisage this area of business growing substantially over the next 2 years.
We continue to work closely with Google and Yahoo! on their respective products
in our portfolio, and these two search engine partners, who today account for
more than 96% of all UK searches, will continue to be important contributors to
our market offering.
We have recently launched our first complete marketing package that covers our
complete product range as well as developing the customer's own website and I
envisage this 'bundle' package product will become considerably more important
over time as we establish ourselves increasingly as a one-stop online marketing
support agency for SMEs.
Summary
We cannot ignore the harsh reality of the overall market and our customer base
is of course affected by the difficult trading conditions. We will have to be
flexible and agile in switching focus away from those business categories most
affected by the downturn in order to concentrate resources on growth areas. All
indications are that online paid-for local search will continue to spearhead
overall growth in online advertising and marketing but we will have to work hard
to continue to drive productivity improvements from existing sales executives as
well as seeking out further growth.
Steve Barnes
Chief Executive
10 July 2009
Financial Review
+------------------------------------------------------+----+----------+----------+
| | | 2009 | 2008 |
+------------------------------------------------------+----+----------+----------+
| | | GBP000 | GBP000 |
+------------------------------------------------------+----+----------+----------+
| | | | |
+------------------------------------------------------+----+----------+----------+
| Revenue | | 5,595 | 4,651 |
+------------------------------------------------------+----+----------+----------+
| Cost of sales | | (3,785) | (4,122) |
+------------------------------------------------------+----+----------+----------+
| | | _______ | _______ |
+------------------------------------------------------+----+----------+----------+
| Gross profit | | 1,810 | 529 |
+------------------------------------------------------+----+----------+----------+
| Amortisation of intangible assets | | (174) | (251) |
+------------------------------------------------------+----+----------+----------+
| Administrative expenses | | (2,448) | (2,975) |
+------------------------------------------------------+----+----------+----------+
| | | ______ | _______ |
+------------------------------------------------------+----+----------+----------+
| Operating loss | | (812) | (2,697) |
+------------------------------------------------------+----+----------+----------+
| Financial income | | 3 | 34 |
+------------------------------------------------------+----+----------+----------+
| Financial expenses | | (183) | (227) |
+------------------------------------------------------+----+----------+----------+
| | | _______ | _______ |
+------------------------------------------------------+----+----------+----------+
| Net financing expense | | (180) | (193) |
+------------------------------------------------------+----+----------+----------+
| | | _______ | _______ |
+------------------------------------------------------+----+----------+----------+
| Loss before tax | | (992) | (2,890) |
+------------------------------------------------------+----+----------+----------+
| | | _______ | _______ |
+------------------------------------------------------+----+----------+----------+
Revenue
Revenue for the year has increased by approximately 20% year on year and the
performance per sales executive increased from GBP46,600 to GBP54,800 a rise of
18% on last year and 71% on the same period two years ago.
Margins
Gross margins have improved from 11% to 32% during the financial year reflecting
the increased sales productivity, streamlining of the sales force and cost
savings negotiated with key suppliers.
Results
Operating losses have reduced by GBP1.88 million as a result of the improved
sales margins and the continuation of cost control policies following the
strategic review of overhead costs in October 2007.
Significantly, the Group achieved an EBITDA profit in three of the last six
months prior to the end of the financial year.
Cash flow
As a result of the operating loss for the year and the Group's continuing
investment in systems and technology, the cash outflow of the Group during the
year was GBP419,000. This was offset by a loan from David Hood in October 2008
of GBP250,000.
Deferred tax asset
The Board has prepared forecasts and continues to believe that the Group will
become profitable in the future and therefore utilise the considerable tax
losses built up over the last few years. It has accordingly carried forward a
proportion of this recovery as a deferred tax asset in the balance sheet.
Going concern
The financial statements have been prepared on a going concern basis,
notwithstanding the net liabilities, net current liabilities and trading loss in
the year, which the directors believe to be appropriate for the following
reasons.
The Group meets its day to day working capital requirements through an
overdraft, currently guaranteed by its major shareholder, David Hood. The recent
overdraft facility, which expired in February 2009 has a limit of GBP250,000.
The Group continues to operate within this facility; June management accounts
place the overdraft at GBP159,000. Whilst the bank has neither renewed this
facility nor called in the overdraft, Mr Hood has indicated that he will make
available an equivalent facility should repayment be demanded.
The Group has also received loans from Mr Hood totalling GBP3.47 million
including accrued interest. In addition, one of the Group's landlords, Amerdale
LLP (of which Mr Hood is the majority partner) has currently agreed to defer
rent payments for the six month period to 31 March 2009, totalling GBP148,591,
which will be repaid in full at GBP24,765 per month from December 2009 until May
2010. Rent for the subsequent period has been paid when due. Additionally, in
January 2009 the Group agreed with HM Revenue and Customs to defer GBP253,000 of
pay as you earn and value added tax. Repayments commenced in February 2009 and
continue until September 2009 and the Group has, to date, complied fully with
all repayments in respect of this agreement.
The Group's business activities, together with the factors likely to affect its
future development, performance and position are set out in the Chief
Executive's Review. The financial position of the Group, its cash flows,
liquidity position and borrowing facilities are described in the Financial
Review.
The current economic environment is challenging. Whilst the Group has reported
an operating loss for the year the directors note that as at the year end the
Group has achieved EBITDA profitability for three of the last six months, and
that the Group has operated within its overdraft facility. The directors still
consider the Group to be within its growth phase and sales and gross margins are
expected to increase. The directors believe that the general economic conditions
will continue to present challenges in terms of sales revenues although the
local search market, in which the Group operates, continues to grow. Whilst the
directors have implemented a number of cost saving measures to preserve cash and
are investigating potential sources of additional finance, these general
economic conditions do create some uncertainties over future trading results and
cash flows. The directors have prepared cash flow forecasts for the period to
March 2011. The cash flow forecast assumes increased sales and gross margin and
no unnecessary capital expenditure. On the basis of these forecasts the Group
is expected to continue to operate within its current bank overdraft limit for
at least the next twelve months (assuming that interest on the loans from Mr
Hood continues to be deferred) though the amount of headroom is minimal.
Sensitised cash flow projections indicate that the Group may need to obtain
further short term funding until the Group becomes cash positive.
Mr Hood has not sought repayment of the capital and interest on his loans and
has indicated that he will, if necessary, consider providing further funding.
The directors understand that it is not Mr Hood's intention to finance the Group
on this basis for the long term. As a result the directors are currently
considering a number of potential financing options including the possibility of
raising new capital from the existing shareholders, to provide additional
capital for the Group. The Group has also commenced discussions with Mr Hood
about additional working capital facilities should they be needed or if other
potential financing options do not prove possible. Any additional funding would
potentially involve the conversion of existing debt to equity. Mr Hood has
indicated that he will not enforce loan repayments in the short term whilst
these discussions are in progress.
Whilst the directors remain confident of continuing to operate within the
current bank overdraft and of securing alternative funding, which may require
shareholder approval, there can be no certainty in these respects. Accordingly
the directors believe that the combination of these circumstances represents a
material uncertainty that may cast significant doubt upon the Group's and the
Company's ability to continue as a going concern and it may therefore be unable
to realise assets and discharge liabilities in the ordinary course of business.
Nevertheless after making full enquiries, and considering all the uncertainties
described above, the directors have no reason to believe that the Group and the
Company will be unable to continue in operational existence for the foreseeable
future. For these reasons, they continue to adopt the going concern basis in
preparing the Annual report and financial statements. The financial statements
do not include any adjustments that would result from the basis of preparation
being inappropriate.
Steve Barnes
Chief Executive
10 July 2009
Consolidated Income Statement
For the year ended 31 March 2009
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| | | 2009 | 2008 |
+----------------------------------------------+----+--------------+-------------+
| | | GBP000 | GBP000 |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| Revenue - continuing operations | | 5,595 | 4,651 |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| Cost of sales | | (3,785) | (4,122) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| Gross profit | | 1,810 | 529 |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| Amortisation of intangible assets | | (174) | (251) |
+----------------------------------------------+----+--------------+-------------+
| Administrative expenses | | (2,448) | (2,975) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| Total administrative expenses | | (2,622) | (3,226) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
| Operating loss - continuing operations | | (812) | (2,697) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| Financial income | | 3 | 34 |
+----------------------------------------------+----+--------------+-------------+
| Financial expenses | | (183) | (227) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| Net financing expense | | (180) | (193) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| Loss before tax | | (992) | (2,890) |
+----------------------------------------------+----+--------------+-------------+
| Taxation | | 0 | (55) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| Loss for the year | | (992) | (2,945) |
+----------------------------------------------+----+--------------+-------------+
| | | _______ | _______ |
+----------------------------------------------+----+--------------+-------------+
| | | | |
+----------------------------------------------+----+--------------+-------------+
+----------------------------------------------+----+--------------+-------------+
| Basic and diluted loss per share | | (5.20p) | (16.22p) |
+----------------------------------------------+----+--------------+-------------+
Consolidated Balance Sheet
At 31 March 2009
+------------------------------+----------+----------+----------+----------+----------+-------------------+
| | | | | 2009 | 2008 |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | GBP000 | GBP000 |
+------------------------------+----------+----------+----------+----------+----------+
| Non-current assets | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Property, plant and | | | | 251 | 397 |
| equipment | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Intangible assets | | | | 534 | 594 |
+------------------------------+----------+----------+----------+----------+----------+
| Investment in subsidiary | | | | - | - |
+------------------------------+----------+----------+----------+----------+----------+
| Deferred tax assets | | | | 838 | 838 |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | 1,623 | 1,829 |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| Current assets | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Trade and other receivables | | | | 345 | 282 |
+------------------------------+----------+----------+----------+----------+----------+
| Cash and cash equivalents | | | | 410 | 329 |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | 755 | 611 |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| Total assets | | | | 2,378 | 2,440 |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Current liabilities | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Bank overdraft | | | | (250) | - |
+------------------------------+----------+----------+----------+----------+----------+
| Interest-bearing loans and | | | | (3,278) | (2,123) |
| borrowings | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Trade and other payables | | | | (3,050) | (2,825) |
+------------------------------+----------+----------+----------+----------+----------+
| Provisions | | | | (80) | (80) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | (6,658) | (5,028) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| Non-current liabilities | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Interest-bearing loans and | | | | (287) | (1,023) |
| borrowings | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Trade and other payables | | | | (20) | (21) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | (307) | (1,044) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| Total liabilities | | | | (6,965) | (6,072) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| Net (liabilities)/assets | | | | (4,587) | (3,632) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | |
+------------------------------+----------+---------------------+---------------------+-------------------+
| Equity attributable to | | | | | |
| equity holders of the parent | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| Share capital | | | | 954 | 954 |
+------------------------------+----------+----------+----------+----------+----------+
| Share premium | | | | 3,871 | 3,871 |
+------------------------------+----------+----------+----------+----------+----------+
| Retained earnings | | | | (9,412) | (8,457) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| Total equity | | | | (4,587) | (3,632) |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | _______ | _______ |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+------------------------------+----------+----------+----------+----------+----------+-------------------+
Consolidated Statement of Cash Flows
For the year ended 31 March 2009
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | 2009 | 2008 |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | GBP000 | GBP000 |
+-----------------------------------+-----+----------+----------+----------+----------+
| Cash flows from operating | | | | | |
| activities | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Loss for the year | | | | (992) | (2,945) |
+-----------------------------------+-----+----------+----------+----------+----------+
| Adjustments for: | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Depreciation | | | | 151 | 166 |
+-----------------------------------+-----+----------+----------+----------+----------+
| Amortisation | | | | 174 | 251 |
+-----------------------------------+-----+----------+----------+----------+----------+
| Financial income | | | | (3) | (34) |
+-----------------------------------+-----+----------+----------+----------+----------+
| Financial expense | | | | 183 | 227 |
+-----------------------------------+-----+----------+----------+----------+----------+
| Loss on sale of property, plant | | | | 10 | 11 |
| and equipment | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Equity-settled share-based | | | | 37 | 89 |
| payment expenses | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Taxation | | | | - | 55 |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | (440) | (2,180) |
+-----------------------------------+-----+----------+----------+----------+----------+
| (Increase)/decrease in trade and | | | | (63) | 123 |
| other receivables | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Increase in trade and other | | | | 220 | 512 |
| payables | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Increase in provisions | | | | - | 80 |
+-----------------------------------+-----+----------+----------+----------+----------+
| Change in deferred government | | | | (1) | (2) |
| grant | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | (284) | (1,467) |
+-----------------------------------+-----+----------+----------+----------+----------+
| Interest paid | | | | (9) | (1) |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Net cash from operating | | | | (293) | (1,468) |
| activities | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Cash flows from investing | | | | | |
| activities | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Proceeds from sale of property, | | | | - | 5 |
| plant and equipment | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Interest received | | | | 3 | 34 |
+-----------------------------------+-----+----------+----------+----------+----------+
| Acquisition of property, plant | | | | (15) | (100) |
| and equipment | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Acquisition of other intangible | | | | (114) | (331) |
| assets | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Net cash from investing | | | | (126) | (392) |
| activities | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Cash flows from financing | | | | | |
| activities | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Proceeds from the issue of share | | | | - | 1,884 |
| capital (net of costs) | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Repayment of borrowings | | | | - | (50) |
+-----------------------------------+-----+----------+----------+----------+----------+
| Proceeds from the receipt of | | | | - | 25 |
| government grants | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Advance of loans | | | | 250 | - |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Net cash from financing | | | | 250 | 1,859 |
| activities | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Net decrease in cash and cash | | | | (169) | (1) |
| equivalents | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| Cash and cash equivalents at 1 | | | | 329 | 330 |
| April | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
| Cash and cash equivalents at 31 | | | | 160 | 329 |
| March | | | | | |
+-----------------------------------+-----+----------+----------+----------+----------+
| | | | | _______ | _______ |
+-----------------------------------+-----+----------+----------+----------+----------+
Notes to the Financial Statements
1.Accounting policies and basis of information
The financial information in this preliminary announcement has been prepared in
accordance with the accounting policies set out in the financial statements of
Infoserve Group plc for the financial year ended 31 March 2009. The financial
information in this document does not constitute the company's statutory
financial statements for the financial year but is derived from those financial
statements. Statutory financial statements for the period will be delivered
following the company's Annual General Meeting. The auditors opinion was
unqualified and does not include any statements under sections 237 (2) or (3) of
the Companies Act 1985 but does include an emphasis of matter paragraph cross
referring to the basis of preparation paragraph on going concern.
2.Earnings per share
The calculation of earnings per share is based upon the loss after taxation of
GBP992,178 (2008: GBP2,945,465) divided by 19,073,241 (2008: 18,162,494), being
the weighted average number of ordinary shares in issue during the year. Share
options in issue did not have a dilutive impact on the loss per share
calculation.
3. Consolidated reconciliation of movement in capital and reserves
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | Share | Share | Retained | Total |
| | | | capital | premium | earnings | equity |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | | | | |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Balance at 1 April 2007 | | | 731 | 2,210 | (5,601) | (2,660) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Total recognised income and expense | | | - | - | (2,945) | (2,945) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Equity-settled share-based payment | | | - | - | 89 | 89 |
| transactions | | | | | | |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Equity shares issued in the year | | | 223 | - | - | 223 |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Premium on shares issued in the year | | | - | 1,778 | - | 1,778 |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Costs on issue of shares | | | - | (117) | - | (117) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | _______ | _______ | _______ | _______ |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Balance at 31 March 2008 | | | 954 | 3,871 | (8,457) | (3,632) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | _______ | _______ | _______ | _______ |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | | | | |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Balance at 1 April 2008 | | | 954 | 3,871 | (8,457) | (3,632) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Total recognised income and expense | | | - | - | (992) | (992) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Equity-settled share-based payment | | | - | - | 37 | 37 |
| transactions | | | | | | |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | _______ | _______ | _______ | _______ |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| Balance at 31 March 2009 | | | 954 | 3,871 | (9,412) | (4,587) |
+-----------------------------------------+-+-+---------+---------+----------+---------+
| | | | _______ | _______ | _______ | _______ |
+-----------------------------------------+-+-+---------+---------+----------+---------+
4. Interest-bearing loans and borrowings
+------------------------------+------------+------------+------------+------------+
| | | | 2009 | 2008 |
+------------------------------+------------+------------+------------+------------+
| | | | GBP000 | GBP000 |
+------------------------------+------------+------------+------------+------------+
| Non-current liabilities | | | | |
+------------------------------+------------+------------+------------+------------+
| D R Hood loan account | | | 187 | 923 |
+------------------------------+------------+------------+------------+------------+
| Shares classified as a | | | 100 | 100 |
| liability | | | | |
+------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+------------------------------+------------+------------+------------+------------+
| | | | 287 | 1,023 |
+------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+------------------------------+------------+------------+------------+------------+
| Current liabilities | | | | |
+------------------------------+------------+------------+------------+------------+
| Current portion of D R Hood | | | 3,278 | 2,123 |
| loan account | | | | |
+------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+------------------------------+------------+------------+------------+------------+
| | | | 3,278 | 2,123 |
+------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+------------------------------+------------+------------+------------+------------+
Terms and debt repayment schedule
+------------+----------+----------+----------+---------+----------+----------+----------+
| | Currency | Nominal | Year | Face | Carrying | Face | Carrying |
| | | interest | of | value | amount | value | amount |
| | | rate | maturity | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | 2009 | 2009 | 2008 | 2008 |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | GBP000 | GBP000 | GBP000 | GBP000 |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| D R Hood | GBP | Linked | 2010 | 3,209 | 3,209 | 3,046 | 3,046 |
| loan | | to base | | | | | |
| | | rate | | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| D R Hood | GBP | Linked | 2011 | 256 | 256 | - | - |
| loan | | to base | | | | | |
| | | rate | | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| Shares | GBP | 5% per | N/A | 100 | 100 | 100 | 100 |
| classified | | annum | | | | | |
| as a | | | | | | | |
| liability | | | | | | | |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | _______ | _______ | _______ | _______ |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | 3,565 | 3,565 | 3,146 | 3,146 |
+------------+----------+----------+----------+---------+----------+----------+----------+
| | | | | _______ | _______ | _______ | _______ |
+------------+----------+----------+----------+---------+----------+----------+----------+
Mr Hood has not sought repayment of the capital and interest on his loans and Mr
Hood has indicated that he will not enforce loan repayments in the short term
whilst discussions over refinancing the group are in progress.
5. Trade and other payables
+-------------------------------+------------+------------+------------+------------+
| | | | 2009 | 2008 |
+-------------------------------+------------+------------+------------+------------+
| | | | GBP000 | GBP000 |
+-------------------------------+------------+------------+------------+------------+
| | | | | |
+-------------------------------+------------+------------+------------+------------+
| Trade payables | | | 690 | 513 |
+-------------------------------+------------+------------+------------+------------+
| Non-trade payables and | | | 1,287 | 1,113 |
| accrued expenses | | | | |
+-------------------------------+------------+------------+------------+------------+
| Deferred income | | | 1,071 | 1,197 |
+-------------------------------+------------+------------+------------+------------+
| Deferred government grants | | | 2 | 2 |
+-------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+-------------------------------+------------+------------+------------+------------+
| Current liabilities | | | 3,050 | 2,825 |
+-------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+-------------------------------+------------+------------+------------+------------+
| | | | | |
+-------------------------------+------------+------------+------------+------------+
| Deferred government grants | | | 20 | 21 |
+-------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+-------------------------------+------------+------------+------------+------------+
| Non-current liabilities | | | 20 | 21 |
+-------------------------------+------------+------------+------------+------------+
| | | | _______ | _______ |
+-------------------------------+------------+------------+------------+------------+
Included within trade and other payables is GBPnil (2008: GBP45,000) for the
Group and GBPnil (2008: GBPnil) for the Company expected to be settled in more
than 12 months.
Included within accrued expenses is GBP15,000 (2008: GBP10,000) in respect of
accrued interest on shares classified as a liability. This amount is payable
when the Company has distributable profits.
During 2008, the Group received a government grant of GBP25,000 for the fit out
of the leased property at Pioneer House in Darlington, GBP1,667 of the grant has
been recognised within administrative expenses in the Income Statement.
Deferred income relates to sales invoiced for which the revenue has not yet been
recognised.
6.Post balance sheet events
There are no significant post balance sheet events.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKKKKABKDFOD
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