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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Allied Minds Plc | LSE:ALM | London | Ordinary Share | GB00BLRLH124 | 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% | 13.85 | 10.05 | 12.65 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:3114H
Alphameric PLC
11 February 2003
11 February 2003
Alphameric plc
("Alphameric" or the "Group")
Preliminary Results for the year ended 30 November 2002
Alphameric, the information technology solutions provider to
the retail sector, is pleased to announce Preliminary Results
for the year ended 30 November 2002.
Highlights
* A year of excellent progress with good revenue growth,
higher margins and substantial improvements in both profit and
cash flows
* Pre-tax profits, before goodwill amortisation, more than
doubled to #9.0 million (2001: #4.1 million) on turnover up 9%
at #61.9 million (2001: #56.8 million)
* Trading margins more than doubled to 14.1% (2001: 6.3%)
* EPS, before amortisation of goodwill, rose to 6.4p per
share (2001: 2.9p per share)
* Operating cash-inflow was very strong at #11.1 million
(2001: #3.1 million)
* The Board proposes a 60% increase in total dividend to
2.4p per share (2001: 1.5p). This follows the strong
performance and a review of dividend policy
* After goodwill amortisation and exceptional items the
Group returned a pre-tax profit of #2.5 million (2001: loss of
#1.7 million)
Commenting on outlook, Rodney Hornstein, Chairman, said:
"The Group has entered the new financial year with an excellent
product set, order book and prospect list. The Group carries
no debt, had year-end free cash balances in excess of #13
million and is strongly cash generative.
"The Retail Betting Division has historically relied to a great
extent on the receipt of a small number of high value
contracts. As we stated in our trading update in December
2002, we are taking advantage of the recent changes to the
retail betting marketplace to increase our focus on smaller
value, higher volume orders with greater repetitive revenue
streams, thereby reducing this imbalance and providing improved
visibility into the future. We believe that this change in the
division's revenue model is gathering pace and that the
benefits of the move to a more balanced model should be seen
towards the close of the current financial year.
"At a time when our competitors are weakening, the Retail
Division is able to embark upon a timely, targeted marketing
initiative to exploit Darwin's class-leading technological and
functional advantages. The division's growth this year is
supported by a strong order book and level of interest from
prospective customers and its strengthening position as one of
the leading suppliers of end-to-end systems to European
retailers.
"Having due regard to the current uncertainties prevailing in
the economy, the Board looks forward to the current financial
year with optimism."
- Ends -
For further information, please contact:
Alphameric plc
Alan Morcombe, Chief Executive Today: 020 7067 0700
Martin Randall, Finance Director Thereafter: 01483 293971
Weber Shandwick Square Mile
Nick Oborne / Susanne Walker 020 7067 0700
11 February 2003
Alphameric plc
("Alphameric" or the "Group")
Preliminary Results for the year ended 30 November 2002
CHAIRMAN'S STATEMENT
Introduction
In what continues to be a challenging time for most companies,
especially those in the technology sector, I am pleased to be
able to report on a year of excellent progress by the
Alphameric Group. The momentum achieved in the first six months
continued in the second half and we recorded good revenue
growth, higher margins and substantial improvements in both
profits and cash flows.
The Bookmaking Division's contribution to the year's results
was very strong with the installation of its Alphabet bet
capture and settling solution to Coral, Stanley, Tote
Bookmakers and Done Brothers and the securing of our largest
ever order for our betting shop display system (ALBOS) from
Ladbrokes.
The Retail Division performed satisfactorily during the period,
successfully launching its new Darwin software suite for high
street retailers. Early customer implementations have been very
well received.
We also established a presence in a new segment of the retail
sector through the acquisition of Crown Management Systems Ltd
("Crown"), a leading provider of information technology
solutions to the hospitality sector.
Group Results
For the year ending 30th November 2002 the Group achieved
revenues of #61.9 million (2001: #56.8 million), an increase of
9% on the previous period.
Pre-tax profits, before amortisation of goodwill, rose to #9.0
million (2001: #4.1 million) and the Group's net trading margin
progressed to 14.1% (2001: 6.3%) as the proportion of higher
margin software sales increased.
Adjusted earnings per share increased to 6.4 pence (before the
amortisation of goodwill) against 2.9 pence per share (before
exceptional items and the amortisation of goodwill) in the
previous year.
Year-end cash balances were #13.2 million (2001: #14.4 million)
following very strong positive operating cash flows of #11.1
million (2001: #3.1 million) and free cash flow (cash flow
before payments for acquisitions and dividends) of #7.2 million
(2001: #0.1 million). Cash expended on acquisitions during the
year totalled #6.7 million (2001: #2.3 million).
After goodwill amortisation and exceptional items the Group
returned a pre-tax profit of #2.5 million (2001: loss of #1.7
million).
Dividend
Your Board has reviewed the Company's dividend policy. Going
forward we will be looking for dividends to be covered between
2 and 3 times by adjusted earnings per share, which would
typically mean that the Group would be paying out under half of
the free cash flow generated in the year.
In light of the strong trading performance and the consequent
free cash flows, your Board is recommending a final dividend of
1.8 pence per share (2001: 1.0 pence per share). This amounts
to a total dividend for the year ended 30th November 2002 of
2.4 pence per share (2001: 1.5 pence per share), an increase of
60%.
Subject to shareholder approval at the forthcoming Annual
General Meeting, the final dividend will be payable to
shareholders on the register at 21 March 2003 and will be paid
on 17 April 2003.
Divisional Results
A detailed review of operations is covered in the attached
Group Chief Executive's report.
Retail Betting Division
Our Retail Betting Division had a very good year with revenues
increasing by 29% to #28.8 million (2001: #22.3 million) and
operating profit before the amortisation of goodwill increasing
to #5.0 million (2001: loss #0.5 million).
Of particular note during the period was the introduction of
our new range of fixed odds betting terminals (FOBs). FOBs are
electronic betting terminals that allow licensed betting office
customers to wager on a range of electronic bets where winners
can achieve a return of up to #50,000. Their introduction did
not materially impact the year's results but has opened up a
potentially significant new market segment for this division
which could prove to be a valuable new market for the Group.
Retail Division
Our Retail Division had a satisfactory year with revenues of
#30.9 million (2001: #30.6 million) generating a 16% increase
in trading profit to #4.6 million (2001: #4.0 million). Crown,
acquired in September, accounted for revenues of #2.6 million
and a trading profit of #187,000.
Project Darwin, our long-term development programme to deliver
a modern suite of retail software solutions, was completed
during the year and we are now in a strong position to market a
class leading set of software products for all non-food
retailers of any magnitude. I am pleased to report that early
sales success has been achieved. Projects were completed for
Dunelm, Shoe Zone, Clinkards and All:Sports during the year.
Acquisition of Crown
Crown is a leading UK supplier of head office, back office,
electronic point of sale and web based software solutions to a
range of customers including Costa Coffee, Pret a Manger,
Scottish and Newcastle Retailing, Yates Group plc and Noble
House Leisure. The acquisition has already yielded success and
I am pleased to report that its 2002 results fully met our
expectations.
We have integrated Crown with our existing hospitality business
to create a new unit, Alphameric Hospitality. This broadens our
market reach to provide end-to-end hospitality solutions for
pubs, clubs, coffee-houses and other similar operations.
Alphameric Hospitality has the benefit of high repeat revenues
with in excess of two thirds of its typical annual revenues
coming from long term contracts.
Third Party Logistics Software
A year ago I stated that we were looking to find an
international partner to assist us in taking the Logistics
business forward. To date the search has not been successful
as the wider third party logistics marketplace has tightened
and consolidated. It is clear that in the longer term the
third party logistics software market is not an appropriate
business area for us to pursue unaided and we continue to
investigate a suitable path forward for this activity.
Strategy
It is our stated aim to become the first choice provider of end-
to-end solutions in our target retail, hospitality and retail
betting markets. The Group has made significant steps towards
achieving this goal over the past two years.
The Retail Betting Division has established a leading position
in the UK retail betting marketplace. Whilst maintaining this
strong presence it is our intention to broaden our activities
to include the wider leisure sector where it is anticipated the
progressive reform of the gaming laws will offer increased
scope for success. Careful market positioning has placed us
well to make this transition as many of the key products we
have developed and supply to the retail betting marketplace are
built on a versatile platform offering significant scope and
potential within a wider leisure sector. We are confident that
we can generate significant growth from this additional market
sector.
A key driver in our entire marketplace is the ability to supply
innovative and effective systems that significantly enhance our
customers' business processes, whilst offering a clear business
case benefit to those customers. We will continue to invest in
research and development across all Divisions to ensure we are
able to grow our business by supplying cutting edge products
and services to existing and new customers.
Organic growth will continue to be supplemented with
acquisitions that satisfy our strict strategic and financial
criteria. As we have demonstrated this year with the
successful acquisition of Crown, a controlled acquisition
programme can be successful and add significant value to the
Group.
Board Change
I welcome Alan McWalter as a non executive director to the
Alphameric Plc Board. Most recently he was Group Marketing
Director at Marks and Spencer, having previously been with the
Kingfisher Group where he was Marketing Director of Woolworths
and Marketing and Business Development Director of Comet.
I am confident that Alan's extensive business experience and in
depth knowledge of the retail sector will make him a most
valuable addition to the Board.
Outlook
The Group has entered the new financial year with an excellent
product set, order book and prospect list. The Group carries
no debt, had year-end free cash balances in excess of #13
million and is strongly cash generative.
The Retail Betting Division has historically relied to a great
extent on the receipt of a small number of high value
contracts. As we stated in our trading update in December
2002, we are taking advantage of the recent changes to the
retail betting marketplace to increase our focus on smaller
value, higher volume orders with greater repetitive revenue
streams, thereby reducing this imbalance and providing improved
visibility into the future. We believe that this change in the
division's revenue model is gathering pace and that the
benefits of the move to a more balanced model should be seen
towards the close of the current financial year.
At a time when our competitors are weakening, the Retail
Division is able to embark upon a timely, targeted marketing
initiative to exploit Darwin's class-leading technological and
functional advantages. The division's growth this year is
supported by a strong order book and level of interest from
prospective customers and its strengthening position as one of
the leading suppliers of end-to-end systems to European
retailers.
Having due regard to the current uncertainties prevailing in
the economy, the Board looks forward to the current financial
year with optimism.
GROUP CHIEF EXECUTIVE'S REVIEW
Introduction
Last year saw the Group prosper in a market beset with
uncertainty and confusion. In a challenging year it was
particularly pleasing to achieve materially improved growth in
operating profits. Before acquisitions the operating profit at
#8.6 million more than doubled from the #3.6 million of the
year before.
This progress reflects our strategic focus on the generation of
organic growth, cash and profits, linked to a carefully
targeted acquisition programme where it is our policy to retain
the key management in acquired businesses whilst ensuring that
these businesses are integrated into the Group structure to
maximise synergies and cost savings.
Our Strengthened Position in Hospitality
I firmly believe that Alphameric can progressively become the
leading provider of end-to-end solutions in our chosen sectors
of the retail marketplace. With this in mind, in September
2002 we acquired the entire issued share capital of Crown
Management Systems Limited. Following the acquisition we merged
Crown with Alphameric's own hospitality offering and created a
new entity to be known as Alphameric Hospitality Limited. The
acquisition of Crown significantly widened our customer base in
the hospitality sector and its products and services are
substantially complementary to those provided by our existing
hospitality business. As a consequence I believe that this new
entity will materially strengthen our offering in this market.
Our growth in this sector has been planned to coincide with the
investment cycles of the larger hospitality organisations, the
recently lowered valuations of technology companies and the
conclusion of development expenditure within Crown that
culminated in market-leading products.
The culture of Crown fits well with that of Alphameric. While
it has a complementary product set to our existing operations,
all businesses will gain from pooling development expertise and
knowledge for the benefit of their adjacent market sectors. We
also expect to realise additional synergies from the businesses
going forward.
The newly enlarged Alphameric Hospitality business will focus
upon the supply of solutions to hospitality providers such as
pubs, clubs, coffee houses and restaurants. We offer a range
from electronic point of sale (EPoS) devices, through back
office and sophisticated head office systems to web based
solutions. The last of these allows our clients to service
their customers and collect real time information from their
estates, ready for analysis each morning on an outsourced,
managed basis.
I am confident that the acquisition of Crown is an important
step in establishing another sizeable revenue stream to
complement our existing activities.
Retail Betting Division
Our Retail Betting Division enjoyed an excellent year with
revenues up by 29% to #28.8 million, generating an operating
profit before the amortisation of goodwill of #5.0 million.
The highlight of the year for this division was the contract to
a value in excess of #8.0 million won from Ladbrokes, the UK's
largest high street retail betting chain. The contract for
ALBOS, our customer display system, was further confirmation of
our position as the first choice provider of information
technology solutions to retail betting chains and gave the
division an excellent start to the year.
In addition to our success at Ladbrokes we also generated a
good flow of orders for ALBOS, either as a stand-alone system
or as part of our turnkey bureau solution where we also provide
the requisite data feeds and other added value managed
services.
Our Alphabet bet capture and settling solution also
significantly increased its market penetration as we completed
the rollouts of this system to Stanley Racing, Tote Bookmakers
and Done Brothers.
In this marketplace we offer two differing bet capture and
settling solutions, Alphabet and our Slip Capture System (SCS).
Alphabet is a comprehensive solution that requires a high level
of sophistication and investment by the user. SCS is a less
sophisticated system that is ideally suited to the smaller
chains of bookmakers because it requires a lower level of
investment in both the system and the skills and training
required to operate it.
This year saw UK retail betting chains rapidly embrace and
commence roll out of fixed odds betting terminals (FOBs)
throughout their estates. FOBs are electronic gaming machines
that have high levels of return and high maximum winnings.
Typically they operate sophisticated software and create
betting opportunities through the delivery of high-quality
graphics offering bets on games of chance.
The sale of FOBs to bookmakers is a highly competitive activity
and we have worked hard to differentiate our offering from the
competition. Devices from Alphameric can be operated on a stand-
alone basis, like our competitors, or fully integrated within
the customer's existing EPoS or ALBOS systems. Whilst we are
currently not the largest supplier of FOBs, our product has
been well received and provides tangible benefits to operators.
I expect our installed base of over 220 terminals in several of
the key retail betting chains to grow quickly.
We have strengthened the supply of FOBs by our own sales force
by appointing a key leisure distributor offering the division a
quicker market entry and focus. Within this relationship we
intend to explore funding models more common in the traditional
Amusement With Prizes ("AWP") environment. Subject to the
market changes that are likely to be effected by the
recommendations made by Sir Alan Budd's report on gaming
legislation we will explore the potential of these terminals in
other market sectors such as pubs, clubs and casinos.
In the past the nature of our Retail Betting business has been
such that acceptable rates of growth have depended upon
delivering one or two major rollouts in each financial year.
This is a sensitivity that we have sought to reduce and in the
future an increasing proportion of this division's revenues
will come from longer-term contracts and arrangements that
allow for repetitive revenues. Specifically to address this
issue we continue to invest in new initiatives such as:
* Our managed bureau service for bookmakers that now offers
a proven and demonstrable alternative to the industry market
leader; and
* An enhanced bespoke software development resource that
enables us to offer a wider range of products that can be
leased or rented.
Whilst these changes will take time to come into full effect
and will not remove the division's focus on winning further
major orders that are available, they have already started to
reduce the level of dependency on such business.
It is our intention to take full advantage of the proposed
changes in legislation that are expected by providing
additional products to the market and increasing our market
penetration into complementary areas of operation. In
particular we are well positioned to take advantage of major
opportunities we see emerging in the wider Leisure sector. I
anticipate that the proportion of revenue we generate from this
sector will increase during the next financial year.
Retail Division
Our Retail Division, enhanced by the acquisition of Crown
Management Systems, produced an acceptable performance given
the uncertainties prevailing in its markets and the timing of
the release of its new product set during the year. Revenues
increased by 1% to #30.9 million and operating profit before
the amortisation of goodwill by 16% to #4.6 million
Alphameric Retail released its new retail software solution,
Darwin, which has met a very favourable reception. Darwin is a
flexible and modular range of software which a customer can
choose to implement in its entirety or to select elements to be
integrated with existing systems. To date we have installed
elements of the solution to Shoe Zone, Clinkards and All:Sports
and are implementing an order for the total package from
Dunelm, one of the UK's fastest growing retail operators.
The retail sector is subject to increasing uncertainty created
by domestic concerns over the effects of the level of consumer
spending and latterly world concerns over the possibility of
war in Iraq. However, Alphameric Retail remains one of the
largest and most capable providers of end-to-end solutions to
the UK marketplace and has a class-leading suite of products.
These advantages, the Group's financial strength and the weak
position of many of our competitors leaves us well positioned
to maximise the opportunities.
Logistics
Our Logistics operation had a poor year posting a loss before
the amortisation of goodwill of #0.8 million on reduced
revenues of #2.3 million.
As I stated last year, the Group does not have the resources to
fully realise the potential of our fledgling logistics
business. We have attempted to find a suitable partner to take
the business forward but the difficulties facing businesses in
the third party logistics market over the last 12 months and
the consequent consolidation activity has made this task more
difficult than was first envisaged. In order to maintain the
future integrity of the operation into the future we have
reduced headcount to a level where I believe that the business
will, at worse, break-even in the coming year whilst we
continue to seek a way of giving it the opportunity to achieve
its potential.
Summary
2002 was a successful year for the Group in an uncertain and
difficult market. 2003 has started encouragingly with
continued high levels of interest being shown in all of the
Group's products and solutions.
I believe that we will continue to see more consolidation in
the markets we serve and that this will throw up opportunities
for strong businesses such as our own. We are the UK's pre-
eminent provider of software to the UK Retail Betting market
and are increasingly moving towards this position for the
retail market. I am confident that this presence, coupled with
our strong trading performance and financial position, will
enable us to continue to meet the challenges of the current
year and beyond.
Staff
The much improved performance of Alphameric would not have been
possible without the enormous commitment and dedication
displayed by management and staff throughout the Company. I am
very appreciative of their efforts which will be crucial to our
success in the year ahead.
- Ends -
For further information, please contact:
Alphameric plc
Alan Morcombe, Chief Executive Today: 020 7067 0700
Martin Randall, Finance Director Thereafter: 01483 293971
Weber Shandwick Square Mile
Nick Oborne / Susanne Walker 020 7067 0700
ALPHAMERIC PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 NOVEMBER 2002
Restated
2002 2001
Note #'000 #'000
-----------------------------
Turnover
Continuing operations 59,299 56,848
Acquisitions 2,629 -
-----------------------------
2 61,928 56,848
-----------------------------
Operating costs
Operating costs excluding amortisation of
goodwill and exceptional administrative expenses (53,167) (53,288)
Exceptional administrative expenses 3 - (1,490)
Amortisation of goodwill (4,712) (4,265)
Exceptional amortisation of goodwill 4 (1,833) -
-----------------------------
(59,712) (59,043)
-----------------------------
Operating profit before amortisation of
goodwill and exceptional administrative expenses
Continuing operations 8,574 3,560
Acquisitions 187 -
8,761 3,560
-----------------------------
Amortisation of goodwill and exceptional
administrative expenses (4,712) (5,755)
Exceptional amortisation of goodwill 4 (1,833) -
-----------------------------
Operating profit/(loss) 2,5 2,216 (2,195)
Net interest receivable 270 518
-----------------------------
Profit/(loss) on ordinary activities
before taxation 2,486 (1,677)
Tax on profit/(loss) on ordinary
activities 6 (2,479) (591)
-----------------------------
Profit/(loss) for the financial year 7 (2,268)
Dividends 7 (2,497) (1,539)
-----------------------------
Retained loss for the financial year (2,490) (3,807)
-----------------------------
Earnings per share 8
Basic 0.0p (2.2p)
Before amortisation of goodwill
and exceptional administrative expenses 6.4p 2.9p
Diluted 0.0p (2.2p)
There is no difference between the profit/(loss) on ordinary activities before
taxation and the retained loss for the years stated above, and their historical
cost equivalents.
ALPHAMERIC PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 30 NOVEMBER 2002
Restated
2002 2001
#'000 #'000
Reported profit/(loss) for the financial year 7 (2,268)
Prior year adjustment 510 -
-----------------------------
Profit/(loss) recognised since last report 517 (2,268)
-----------------------------
ALPHAMERIC PLC
CONSOLIDATED BALANCE SHEET
AS AT 30 NOVEMBER 2002
Restated
2002 2001
Note #'000 #'000
Fixed assets
Intangible assets 79,684 78,288
Tangible assets 7,210 7,383
-----------------------------
86,894 85,671
Current assets
Stocks 6,105 6,300
Debtors 29,370 31,204
Cash held to secure loan notes 4,851 8,688
Cash at bank and in hand 13,208 14,404
-----------------------------
53,534 60,596
Creditors (amounts falling due within one year)
Loan notes (4,851) (8,688)
Other (27,796) (28,286)
-----------------------------
(32,647) (36,974)
Net current assets 20,887 23,622
-----------------------------
Total assets less current liabilities 107,781 109,293
Creditors (amounts falling due
after more than one year) (479) (651)
-----------------------------
Net assets 107,302 108,642
-----------------------------
Capital and reserves
Called up share capital 2,614 2,563
Contingent shares to be issued 858 1,085
Share premium account 99,776 98,450
Merger reserve 12,099 12,099
Profit and loss account deficit (8,045) (5,555)
-----------------------------
Total equity shareholders' funds 10 107,302 108,642
-----------------------------
ALPHAMERIC PLC
CONSOLIDATED CASHFLOW STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2002
2002 2001
Note #'000 #'000
Net cash inflow from operating
activities before exceptional
administrative expenses 11,146 3,132
Exceptional administrative expenses - (1,490)
-----------------------------
Net cash inflow from operating activities 11 11,146 1,642
-----------------------------
Returns on investments and servicing of finance
Interest paid (44) (46)
Interest received 323 553
-----------------------------
279 507
-----------------------------
Taxation
UK Corporation tax paid (2,357) (670)
-----------------------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,891) (1,919)
Disposal of tangible fixed assets 21 596
-----------------------------
(1,870) (1,323)
Acquisitions and disposals
Purchase of subsidiaries (7,062) (2,263)
Net cash acquired with subsidiary undertakings 350 (66)
-----------------------------
(6,712) (2,329)
-----------------------------
Equity dividends paid (1,640) (1,537)
-----------------------------
Management of liquid resources
(Increase)/decrease in short term deposits (3,000) 2,000
-----------------------------
Net cash outflow before financing (4,154) (1,710)
-----------------------------
Financing
Cash received from issue of share capital - 42
Repayments of capital element of finance leases (42) (93)
-----------------------------
Net cash outflow from financing (42) (51)
-----------------------------
Decrease in cash (excluding short term deposits)
in the year (4,196) (1,761)
-----------------------------
ALPHAMERIC PLC
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 30 NOVEMBER 2002
1. BASIS OF REPORTING
This preliminary statement of annual results which covers
the year to 30 November 2002 has been agreed by the Group's
auditors and is consistent with the full financial
statements.
The abridged preliminary Group accounts for the year ended
30 November 2002 are not statutory accounts and have been
extracted from the full statutory accounts for the year
ended 30 November 2002. The full statutory accounts for the
year on which the auditor's report is unqualified will be
delivered to the Registrar of Companies in due course.
The accounting policies used in the preparation of this
statement are consistent with those set out in the statutory
accounts for the year ended 30 November 2001, with the
exception of changes to the way deferred taxation is
accounted for, in accordance with Financial Reporting
Standard 19 which was released during the year. Adoption of
this FRS has led to a prior year adjustment as set out in
note 10 below.
The comparative figures for the year to 30 November 2001 are
abridged from the accounts for that year and do not
constitute full accounts within the meaning of Section 240
of the Companies Act 1985 (as amended). Statutory accounts
for that year on which the auditors gave an unqualified
opinion have been delivered to the Registrar of Companies
2. SEGMENTAL ANALYSIS
Class of Business
Turnover Turnover
2002 2001
#'000 #'000
Retail Betting 28,794 22,343
Retail
Continuing operations 28,233 30,604
Acquisitions 2,629 -
-----------------------------
30,862 30,604
Logistics 2,272 3,901
-----------------------------
Total 61,928 56,848
-----------------------------
Operating profit/(loss) by Class of Business
Before
amortisation Amortisation
of goodwill of goodwill 2002 2001
#'000 #'000 #'000 #'000
Retail Betting 4,958 (180) 4,778 (1,180)
---------------------------------------------------
Retail
Continuing operations 4,398 (4,346) 52 (1,007)
Acquisitions 187 (78) 109 -
---------------------------------------------------
4,585 (4,424) 161 (1,007)
Logistics (782) (1,941) (2,723) (8)
---------------------------------------------------
8,761 (6,545) 2,216 (2,195)
---------------------------------------------------
3. EXCEPTIONAL ADMINISTRATIVE EXPENSES
2002 2001
#'000 #'000
Exceptional administrative expenses (478) (1,490)
Exceptional administrative gains 528 -
Cost associated with exceptional gain (50) -
-----------------------------------
- (1,490)
-----------------------------------
Exceptional administrative expenses reflect reorganisation
costs of #478,000 (2001: #1,490,000) relating to the
continuing reorganisation of the Group following
acquisitions made in recent years. These primarily comprise
of redundancy and other related costs.
The exceptional gain relates to the part release of a
provision made at the previous year end for a claim received
for an alleged underpayment of past software licence fees
from one of the Group's suppliers. The directors continue
to challenge the basis for the claim, and consider that a
significant part of the provision created last year can now
be released. Costs associated with the claim include legal
and related costs.
4. EXCEPTIONAL AMORTISATION OF GOODWILL
Following a review of the carrying value of goodwill arising
from the Group's acquisitions, it was decided that it was
appropriate to write off the remaining goodwill associated
with the Logistics division of #1,833,000.
5. OPERATING PROFIT/(LOSS)
Continuing
operations Acquisitions Total
2002 2002 2002 2001
#'000 #'000 #'000 #'000
Turnover 59,299 2,629 61,928 56,848
Cost of sales (26,147) (1,253) (27,400) (28,315)
------------------------------------------------------
Gross profit 33,152 1,376 34,528 28,533
------------------------------------------------------
Administrative expenses (24,578) (1,189) (25,767) (24,973)
Exceptional administrative
expenses - - - (1,490)
Amortisation of goodwill (4,634) (78) (4,712) (4,265)
Exceptional amortisation
of goodwill (Note 4) (1,833) - (1,833) -
------------------------------------------------------
Total administrative expenses (31,045) (1,267) (32,312) (30,728)
------------------------------------------------------
Operating profit/(loss) 2,107 109 2,216 (2,195)
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
Restated
2002 2001
#'000 #'000
United Kingdom Corporation tax at 30% (2001: 30%) 2,651 776
Adjustments in respect of previous periods (374) -
-----------------------------
2,277 776
Deferred tax:
Origination and reversal of timing differences 202 (185)
-----------------------------
Tax on profit on ordinary activities 2,479 591
-----------------------------
7. DIVIDENDS
An interim dividend of 0.6p per share (2001: 0.5p),
amounting to #615,000 was paid during the year (2001:
#514,000). A final dividend of 1.8p per share is proposed
for the year (2001: 1.0p per share), amounting to #1,882,000
(2001 : #1,025,000).
8. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the
earnings attributable to Ordinary Shareholders by the
weighted average number of Ordinary Shares in issue during
the year as follows:
Restated
2002 2001
Earnings (#'000) 7 (2,268)
Weighted average shares in issue (m) 103.0 102.5
-----------------------------
Basic earnings per share (p) 0.0 (2.2)
-----------------------------
Earnings per share before goodwill amortisation and
exceptional administrative expenses have been presented in
addition to the earnings per share as defined in FRS14
since, in the opinion of the Directors, this provides
Shareholders with a more meaningful representation of the
earnings derived from the Group's businesses. It can be
reconciled from basic earnings per share as follows:
Restated
2002 2001
pence per share pence per share
Basic earnings per share 0.0 (2.2)
Amortisation of goodwill 6.4 4.1
Exceptional administrative expenses - 1.4
Taxation in respect of exceptional
administrative expenses - (0.4)
----------------------------
Earnings per share before amortisation of
goodwill and exceptional administrative expenses 6.4 2.9
----------------------------
Diluted earnings per share for 2002 and 2001 is the same as
the basic earnings.
9. INVESTMENTS
On 31 January 2002, the Group acquired the entire issued
share capital of Metabet Limited, a company that owned
certain software licences used within the retail bookmaking
business. On 4 September 2002, the Group acquired the
entire issued share capital of Crown Management Systems
Limited, a company that provides business solutions to the
hospitality market.
The aggregate assets and liabilities of Crown and Metabet
when acquired were as follows:
Provisional
Book value Fair value Fair value
of assets adjustments of assets
#'000 #'000 #'000
Tangible fixed assets 158 - 158
Stock 234 (30) 204
Debtors 2,371 - 2,371
Cash 350 - 350
Creditors and accruals (2,413) (118) (2,531)
-------------------------------------------
Total net assets 700 (148) 552
-------------------------------------------
Goodwill 7,513
-------------
Cost of acquisition 8,065
-------------
Satisfied by:
Shares allotted for investment 1,350
Cash 6,250
Acquisition costs 465
------------
8,065
------------
Provisional fair value adjustments have been made following
a reassessment of the assets and liabilities of the two
companies.
10. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
2002 2001
#'000 #'000
Profit/(loss) for the financial year as reported 7 (2,453)
Prior year adjustment to profit and loss - 185
----------------------------
Restated profit/(loss) for the financial year 7 (2,268)
Dividends (2,497) (1,539)
Share capital issued 51 6
Share premium arising on share issues 1,326 41
Merger relief arising on acquisition - 395
Contingent share capital to be issued (227) (2,334)
----------------------------
Net change in shareholders' funds (1,340) (5,699)
----------------------------
Opening shareholders' funds 108,642 114,341
----------------------------
Closing shareholders' funds 107,302 108,642
----------------------------
The prior year adjustment relates to the acquisition of FRS
19 "Deferred Tax" which was issued during the year.
11. NOTES TO THE CASHFLOW STATEMENT
2002 2001
#'000 #'000
Reconciliation of operating profit to net cash
inflow from operating activities:
Operating profit before amortisation of goodwill
and exceptional administrative expenses 8,761 3,560
Depreciation on tangible fixed assets 2,201 1,670
Decrease/(Increase) in stocks 399 (2,920)
Decrease/(Increase) in debtors 3,994 (3,468)
(Decrease)/Increase in creditors (4,209) 4,290
-------------------------------
Net cash inflow from operating activities
before exceptional items 11,146 3,132
Exceptional administrative expenses - (1,490)
-------------------------------
Net cash inflow from operating activities 11,146 1,642
-------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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