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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cybit Hldgs | LSE:CYH | London | Ordinary Share | GB00B04QS651 | 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% | 73.00 | 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:9655I
CybIT Holdings PLC
03 December 2007
INTERIM RESULTS
For the six months to 30 September 2007
Cybit Holdings Plc ("Cybit"), the innovative Telematics Service Provider, today
announces its interim results for the six months ended 30 September 2007.
(Unaudited) (Unaudited) (Unaudited)
6 months to 6 months to Year to
30 September 30 September 31 March
2007 2006 2007
(as restated) (as restated)
#'000 #'000 #'000
---------- ---------- ----------
Sales revenue 9,007 5,793 13,289
Profit for the period before
taxation 616 19 637
Operating profit 1,231 519 1,741
Earnings before Interest, Tax,
Depreciation and Amortisation 1,709 767 2,345
Cash and cash equivalents 3,295 2,030 2,120
Basic earnings per share (pence) 1.94p 0.13p 2.85p
Diluted earnings per share(pence) 1.90p 0.13p 2.82p
Key Achievements
* #4 million Amatics acquisition completed in August
* Launch of new Fleetstar platform - increased capacity for over 100,000
vehicles
* Major new customer wins announced with Gilbarco Veeder Root, MacFarlane
Packaging, Cheshire Peaks and Plains Housing, Milbank Trucks and NHS Lothian
* Contract for Race Management System to track the position of the yachts
in the Volvo Ocean Race
Neil Johnson, Chairman commented:
" This is an excellent performance. Our strategy to create a broad market
leading platform in telematics and on which we can build additional scale is
proving to be very successful. Having integrated three recent acquisitions, we
now have a first class springboard to extend our capacity to win new business.
" In the current market any sensibly run business will focus on implementing
stronger business controls and driving efficiencies. Cybit is well placed to
offer low risk solutions to underpin these initiatives.
" Looking forward, we are well placed to continue our pattern of growth. The
market opportunity is significant. Whilst we have made good progress, the
penetration of telematics based tracking solutions in the wider commercial
vehicle market remains low. There is everything to play for and we are confident
that we will continue to build market share in this large and fast growing
market. The future for the group is very bright."
Date: 3 December 2007
For further information please contact:
Cybit Holdings Plc cityPROFILE
Richard Horsman, Chief Executive Simon Courtenay
Kevin Lawrence, Finance Director 020-7448-3244
01480-423980
CHAIRMAN'S STATEMENT
We are delighted with the progress that the company has made during the period.
Our strategy to create a profitable, broad based, international telematics group
is well advanced. The three acquisitions that we have made recently have all
bedded down well and are delivering very encouraging levels of new business in
new market sectors.
Our financial performance has been strong. We have improved revenue,
profitability and, despite the investment in acquisitions and technology, our
cash position is also very healthy. The Board is confident that the future for
the company is extremely bright.
Operational Review
Cybit now supports over 40,000 mobile assets for approximately 1,500 customers.
Major new customer wins during the first half have included Gilbarco Veeder
Root, MacFarlane Packaging, Cheshire Peaks and Plains Housing, Milbank Trucks
and NHS Lothian. Repeat business remains strong and our installed base sales
team are generating significant business from existing customers including
Alfred McAlpine, SIG, May Gurney, Sainsbury's and a contract renewal and
migration of over 800 units from SIG.
We have consolidated our software platforms which has resulted in the loss of
some smaller customers, but this has been more than offset by the strong
pipeline of new enquiries. As our installed base has grown we have benefited
from increased economies of scale and also a 37% increase in our operational
support and consulting revenues from #519,000 to #712,000. As an example of
increased activity levels, in September alone, we carried out over 3,000 vehicle
related telematics operations of one form or another.
We continue to focus on keeping a tight control on costs and since the
integration of the recent acquisitions, we have streamlined our central
operations. We have also benefited from significant improvements in our own
internal engineering resource.
Financial Performance
Revenue in the first half has grown by 17% over the second half of last year.
Compared to the equivalent period in 2006, revenues have jumped by 57% from
#5.8m to #9.0m. Pre-tax profit has increased significantly from #19,000 to
#616,000. This has been achieved against a backdrop of a reduction in funding
costs from 9.3% to 6.6% of total revenues. The cash balance at 30 September
increased to #3.3m (net cash of #2.0m - up from #1.2m at full year). Investment
in our own book increased from 19% to 21% on a like for like basis (i.e. as a
percentage of total vehicle telematics deals financed).
Operational Performance
The company is split into three distinct sectors, Vehicle Telematics, Maritime
Solutions and Private Mobile Radio based tracking and precise positioning. All
Vehicle Telematics operational activities have been centralised with a positive
impact on profitability. The newly formed Cybit Positioning Solutions, which is
focused on precise positioning solutions for companies in the Oil and Gas
sectors is performing very well. We are pleased that we have won a large
contract worth #1.2m for a significant oil and gas company. We have also enjoyed
strong revenue growth from our BlueFinger Maritime Solutions unit.
One of the highlights of the period under review was the signing of a small but
high profile project to provide a Race Management System for the yachts
competing in the next Volvo Ocean Race.
Amatics Acquisition
In August, we completed the #4m acquisition of Amatics, a vehicle telematics
business focused on customers in the utility sector and local authorities. We
integrated the business into the company within five weeks and have already
enjoyed some significant cost savings. The acquisition has enabled us to improve
our sales platform and move to vertical sales groups. This has helped us to
broaden our sales reach. We now have teams dedicated to winning business from
customers in the service and transport/logistics sectors.
Technology
As the company's strategy for growth evolves, we have continued to make further
progress to achieve our targets for new product development. We are on track to
hit our targets for new product innovation in the second half. The launch of new
Fleetstar Architecture will support growth well beyond 100,000 vehicles. We have
also taken steps to standardise the hardware platforms across the group, which
will facilitate ease of support and economies of scale.
Indirect channels
We have also expanded reseller sales of the channel focused Fleetstar-Reporter
and Fleetstar-AVL products. We are pleased that our indirect channel partners
have added 70 new customers during the first half. This represents 100% growth
over the same period last year and has resulted in us adding to further sales
and marketing resource to this area of our business.
International Operations
Our international businesses continue to make progress. We are pleased that the
Swedish business, although small, is now cash neutral. Opportunities for further
growth are emerging. The performance from our German business has been flat.
Despite the scale of this market, this business remains small and we are
exploring opportunities to grow the scale through acquisition.
Future Prospects
Looking to the future, we remain confident that we have the right strategy to
deliver significant future growth. The recent acquisitions have bedded down well
and after investing in strengthening the sales teams, they are making
encouraging progress. We have a first class opportunity to target new business
from a number of new sectors.
In terms of future growth opportunities, the UK is one of the more established
European markets for our products and services. This should be considered
against the background that penetration rates into the UK commercial vehicle
Telematics sector are estimated to be no more than 3%. With an estimated 20%
market share of currently installed units, Cybit is well placed to exploit the
growth opportunities available within the market as a whole.
Business levels across the business have been strong with October and November
representing our highest ever levels of order intake. Accordingly we are looking
forward to the second half with a high degree of confidence.
Neil Johnson
Chairman
3 December 2007
Consolidated interim income statement
For the six months ended 30 September 2007
Six months Six months Year ended
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited) (unaudited)
(as restated) (as restated)
Notes # # #
--------- ---------- ----------
Sales revenue 3 9,007,456 5,793,360 13,288,619
Cost of sales (3,466,899) (2,256,128) (4,855,508)
--------- ---------- ----------
Gross profit 5,540,557 3,537,232 8,433,111
----------------------------------------------------------------------------------------------
Administrative expenses
Other operating expenses (3,831,471) (2,769,852) (6,088,131)
Depreciation and amortisation (477,945) (247,811) (603,408)
----------------------------------------------------------------------------------------------
Total administrative expenses (4,309,416) (3,017,663) (6,691,537)
----------------------------------------------------------------------------------------------
Operating result 1,231,141 519,569 1,741,574
Finance income 8,038 63,456 80,639
Finance expense (623,295) (563,888) (1,185,258)
--------- ---------- ----------
Result for the period before taxation 615,884 19,137 636,955
Tax expense,net (184,756) 7,935 (22,355)
--------- ---------- ----------
Net result for the period 431,128 27,072 614,600
========= ========== ==========
Attributable to shareholders of Cybit
Holdings Plc 431,128 27,072 614,600
Earnings per share (pence) 6
Basic 1.94p 0.13p 2.85p
Diluted 1.90p 0.13p 2.82p
Consolidated interim balance sheet
30 September 2007
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited) (unaudited)
(as restated) (as restated)
# # #
--------- --------- ---------
ASSETS
Non-current assets
Goodwill 2,873,265 1,440,219 1,374,973
Other intangible assets 2,501,476 1,642,983 2,039,856
Property,plant and equipment 752,953 616,097 824,533
Deferred tax assets 528,416 548,605 733,215
Other non-current assets 3,372,547 506,221 3,561,051
--------- --------- ---------
10,028,657 4,754,125 8,533,628
Current assets
Inventories 1,813,808 551,736 1,638,204
Trade and other receivables 3,374,408 1,563,764 3,639,572
Other current assets 3,720,301 2,838,883 2,866,173
Cash and cash equivalents 3,295,512 2,029,868 2,119,985
--------- --------- ---------
Total 12,204,029 6,984,251 10,263,934
--------- --------- ---------
TOTAL ASSETS 22,232,686 11,738,376 18,797,562
========= ========= =========
LIABILITIES
Current liabilities
Trade and other payables 3,345,135 1,659,695 2,485,919
Short term borrowings 421,382 56,652 382,481
Current portion of long-term
borrowings 232,398 200,261 144,872
Current tax payable 509,316 10,299 27,793
Finance leases 46,502 109,547 90,893
Other creditors 866,486 520,143 600,501
Deferred consideration payable 250,000 - 750,000
Accruals and deferred income 1,298,320 661,252 1,838,773
--------- --------- ---------
6,969,539 3,217,849 6,321,232
Non- current liabilities
Long-term borrowings 729,561 280,924 403,814
Finance leases - 34,204 12,282
Deferred tax 459,146 342,069 327,475
Deferred income 1,789,958 119,038 464,259
Pension liability 2,905,624 - 2,905,624
--------- --------- ---------
TOTAL LIABILITIES 12,853,828 3,994,084 10,434,686
--------- --------- ---------
NET ASSETS 9,378,858 7,744,292 8,362,876
========= ========= =========
EQUITY
Share capital 7,213,618 7,150,882 7,150,882
Share premium account 7,195,778 7,098,214 7,098,214
Merger reserve (2,716,568) (3,168,708) (3,168,708)
Equity reserve 238,571 288,172 288,172
Foreign exchange reserve (32,732) (31,357) (301)
Retained earnings (2,519,809) (3,592,911) (3,005,383)
--------- --------- ---------
---------
TOTAL EQUITY 9,378,858 7,744,292 8,362,876
========= ========= =========
Consolidated interim statement of changes in equity 30 September 2007
Equity attributable to equity holders of Cybit Holdings Plc:
Share Share Foreign Merger Equity Retained Total equity
capital premium exchange reserve reserve earnings
account reserve
# # # # # # #
-------- -------- -------- -------- -------- -------- --------
Balance at 1
April 2006 (as
restated) 7,046,127 7,098,214 - (4,090,553) - (3,619,983) 6,433,805
Shares issued
on acquisition of
BlueFinger Limited 104,755 - - 921,845 - - 1,026,600
Increase in
equity reserve
on issue of warrants
issued on
acquisition of
BlueFinger Limited - - - - 288,172 - 288,172
Foreign exchange
adjustments - - (31,357) - - - (31,357)
Profit for the
six month period - - - - - 27,072 27,072
-------- -------- -------- -------- -------- -------- --------
Balance at 30
September 2006 7,150,882 7,098,214 (31,357) (3,168,708) 288,172 (3,592,911) 7,744,292
Foreign exchange
adjustments - - 31,056 - - - 31,056
Profit for the
six month period - - - - - 587,528 587,528
-------- -------- -------- -------- -------- -------- --------
Balance at 31
March 2007 7,150,882 7,098,214 (301) (3,168,708) 288,172 (3,005,383) 8,362,876
Shares issued
on acquisition
of Amatics Limited 48,100 - - 452,140 - - 500,240
Shares issued
on exercise of
warrants 14,636 97,564 - - - - 112,200
Transfer between
reserves on exercise
of warrants - - - - (54,446) 54,446 -
Increase in equity
reserve in relation
to options issued - - - - 4,845 - 4,845
Foreign exchange
adjustments - - (32,431) - - - (32,431)
Profit for the
six month period - - - - - 431,128 431,128
-------- -------- -------- -------- -------- -------- --------
Balance at 30
September 2007 7,213,618 7,195,778 (32,732) (2,716,568) 238,571 (2,519,809) 9,378,858
======== ======== ======== ======== ======== ======== ========
Consolidated interim cash flow statement
For the six months ended 30 September 2007
Six months Six months Year ended
30 September 30 September 31 March
2007 2006 2007
(unaudited) (unaudited) (unaudited)
(as restated) (as restated)
# # #
--------- ---------- ----------
Operating activities
Results for the period after tax 431,128 27,072 614,600
Adjustments for:
Depreciation and amortisation 477,945 247,811 603,408
Working capital changes 309,681 (492,174) (986,888)
Increase/(decrease) in deferred income 219,781 (9,077) (54,356)
Finance costs 615,257 500,432 1,104,619
Taxation expense recognised in the income statement 184,756 (7,935) 22,355
Employee equity settled share options 4,845 - -
--------- ---------- ----------
Cash generated from operations 2,243,393 266,129 1,303,738
Interest paid (23,042) (26,395) (25,806)
Financing costs of assigning debts to finance
companies (596,943) (537,493) (1,159,452)
--------- ---------- ----------
Net cash from operating activities 1,623,408 (297,759) 118,480
--------- ---------- ----------
Investing activities
Purchase of subsidiaries (4,017,330) (31,093) (308,093)
Net cash/(overdrafts) acquired
with subsidiaries 3,317,707 (103,486) (108,759)
Purchase of property, plant and equipment (79,690) (26,398) (111,525)
Purchase of other intangibles (176,516) (185,869) (496,537)
Proceeds from sale of property, plant and equipment 3,019 - 1,031
Interest received 4,728 63,456 80,639
--------- ---------- ----------
Net cash used in investing activities (948,082) (283,390) (943,244)
--------- ---------- ----------
Financing activities
Proceeds from share issues 112,200 - -
Receipts from borrowings 500,000 - 500,000
Receipts from short term borrowings 3,250,000 - -
Repayment of short term borrowings (3,250,000) - -
Finance lease repayments (56,673) (59,468) (154,254)
Repayment of loans (79,041) (64,698) (462,009)
--------- ---------- ----------
Net cash generated from/(used by)
financing activities 476,486 (124,166) (116,263)
--------- ---------- ----------
Net changes in cash and cash equivalents 1,151,812 (705,315) (941,027)
Net cash and cash equivalents, beginning of
period 1,737,504 2,678,531 2,678,531
--------- ---------- ----------
Net cash and cash equivalents, end of period 2,889,316 1,973,216 1,737,504
========= ========== ==========
Selected explanatory notes
1. Nature of operations and general information
The principal activity of Cybit Holdings Plc (the "Company") and its
subsidiaries (together, the "Group") is Telematics Service Provision. The Group
delivers a range of wireless solutions for the management and monitoring of
remote assets. The systems typically utilise GSM (Global System for Mobile
communications) and GPS (Global Positioning System) technology.
The Company, a public limited company, is the Group's ultimate parent company.
It is registered in England and Wales. The registered office of the Company,
which is also its principal place of business, is IT House, Chord Business Park,
London Road, Godmanchester, PE29 2NU. The Company's shares are listed on the
Alternative Investment Market of the London Stock Exchange (AIM).
Prior to 31 March 2007, the Group prepared its audited financial statements and
unaudited interim financial statements under UK Generally Accepted Accounting
Principles ("UK GAAP"). From 1 April 2007, the Group is required to prepare its
annual consolidated financial statements in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union and
implemented in the UK. The date of transition to IFRS for the Group was 1 April
2006 and the Group has prepared its opening IFRS balance sheet as at that date.
These condensed consolidated interim financial statements have been prepared
using the recognition and measurement principles of IFRS as adopted by the
European Union and as issued by the International Accounting Standards Board.
They do not include all of the information required for full annual financial
statements and should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 31 March 2007. These are
the first interim financial statements issued by the Company under IFRS.
These consolidated interim financial statements are presented in British pounds
(#), which is also the functional currency of the Company.
2. Accounting policies and changes thereto
Basis of preparation
The financial statements have been prepared under the historical cost convention
except for financial instruments and equity settled share based payments that
have been measured at fair value. The principal accounting policies for the
Group are set out below:
Basis of consolidation
The Group financial statements consolidate those of the Company and of its
subsidiary undertakings at the balance sheet date. Subsidiary undertakings are
entities over which the Group has the power to control the financial and
operating policies so as to obtain benefits from the activities. The Group
obtains and exercises control through voting rights.
Profits or losses on intra-Group transactions are eliminated in full.
Acquisitions of subsidiaries are dealt with by the purchase method. On
acquisition of a subsidiary, all of the subsidiary's assets and liabilities
which exist at the date of acquisition are recorded at their fair values
reflecting their condition at that date. Goodwill is stated after separating out
identifiable intangible assets. Goodwill represents the excess of acquisition
cost over the fair value of the Group's share of the identifiable net assets of
the acquired subsidiary at the date of acquisition.
The Company is entitled to the merger relief offered by Section 131 of the
Companies Act 1985 in respect of the difference between the consideration
received and the nominal value of the equity shares issued in connection with
the merger with Cybit Limited, and in respect of the difference between the fair
value and the nominal value of the equity shares issued in connection with
subsequent acquisitions where the criteria are met.
Business combinations completed prior to date of transition to IFRS
The Group has elected not to apply IFRS3 Business Combinations retrospectively
to business combinations prior to the date of transition, 1 April 2006.
Accordingly the classification of the combination remains unchanged from that
used under UK GAAP. Assets and liabilities are recognised at the date of
transition as they would be recognised under IFRS, and are measured using their
UK GAAP carrying amount immediately post-acquisition as deemed cost under IFRS,
unless IFRS requires fair value measurement.
Goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of
the identifiable net assets acquired and is capitalised.
Goodwill is subject to annual impairment testing. The recoverable amount is
tested annually or when events or changes in circumstances indicate that it may
be impaired. The recoverable amount is the higher of the fair value less costs
and the value in use in the Group. An impairment loss is recognised to the
extent that the carrying value exceeds the recoverable amount. In determining a
value in use, estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the goodwill that have not already
been included in the estimate of future cash flows.
Goodwill previously written-off under UK GAAP prior to the adoption of IFRS for
the restated balance sheet of 1 April 2006 has not been reinstated. Goodwill
previously written off to reserves is not written back to profit or loss on
subsequent disposal.
Revenue
Revenue is the amount receivable for goods and services, excluding VAT. Revenue
comprises the provision of
telematics-based fleet and vehicle management solutions, and is recognised in
line with the provision and installation of hardware, and the maintenance of
software over the period of the customer contract. Additional airtime revenue is
recognised as incurred by the customer. Connection bonuses are recognised when
receivable. Amounts received in advance of the provision of services are
included within deferred income.
In the case of long-term contracts, revenue reflects the contract activity
during the period and represents the proportion of total contract value which
costs incurred to date bear to total expected contract costs. Revenue and profit
is recognised in accordance with IAS18 Revenue Recognition.
Interest income is referred to below.
Deferred income
Deferred income represents non-refundable amounts received in advance of
services to be provided. It is taken to the income statement over the period of
the subscription or contract period as appropriate.
Interest
Interest is recognised using the effective interest method which calculates the
amortised cost of a financial asset and allocates the interest income over the
relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset
to the net carrying value of the financial asset.
Research and Development
Expenditure on research (or the research phase of an internal project) is
recognised as an expense in the period to which it is incurred.
Development costs incurred are capitalised only when all the following
conditions are satisfied:
* Completion of the intangible asset is technically feasible;
* The Group intends to complete the intangible asset and use or sell it;
* The intangible asset will generate probable future economic benefits.
Among other things, this requires that there is a market for the output from
the intangible asset or for the intangible asset itself, or, if it is to be
used internally, the asset will be used in generating such benefits;
* There are adequate technical, financial and other resources to complete
the development and to use or sell the intangible asset; and
* The expenditure attributable to the intangible asset during its
development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as
incurred.
Amortisation commences upon completion of the asset, and is shown within
administrative expenses. Careful judgement by the directors is applied when
deciding whether the recognition requirements for development costs have been
met. This is necessary as the economic success of any product development is
uncertain and may be subject to future technical problems at the time of
recognition. Judgements are based on the information available at each balance
sheet date. In addition, all internal activities related to the research and
development of new software products are continuously monitored by the
directors.
Assets acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in
a business combination is deemed to have a cost to the Group of its fair value
at the acquisition date. The fair value of the intangible asset reflects market
expectations about the probability that the future economic benefits embodied in
the asset will flow to the Group. Where an intangible asset might be separable,
but only together with a related tangible or intangible asset, the group of
assets is recognised as a single asset separately from goodwill where the
individual fair values of the assets in the group are not reliably measurable.
Where the individual fair value of the complimentary assets are reliably
measurable, the Group recognises them as a single asset provided the individual
assets have similar useful lives. Intangible assets recognised following
business combinations include customer contracts and intellectual property.
Property, Plant and Equipment
Property, plant and equipment are stated at cost, net of depreciation and any
provision for impairment, if applicable. Depreciation is calculated to write off
the cost of all property, plant and equipment over their expected useful
economic lives. The rates generally applicable are:
Furniture and fittings 25%-30% on cost
Motor vehicles 30% on cost
Computer and electrical equipment 30% on cost
Material residual value estimates are updated as required, but at least
annually, whether or not the asset is revalued.
Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the Group at which
management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include
goodwill, other intangible assets with an indefinite useful life, and those
intangible assets not yet available for use are tested for impairment at least
annually. All other individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor on the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries and joint ventures
is not provided if reversal of these temporary differences can be controlled by
the Group and it is probable that reversal will not occur in the foreseeable
future. In addition, tax losses available to be carried forward as well as other
income tax credits to the Group are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax
assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the balance
sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that are
charged or credited directly to equity (such as the revaluation of land) in
which case the related deferred tax is also charged or credited directly to
equity.
Financial Assets
All financial assets are recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial assets other than those
categorised as at fair value through profit or loss are recognised at fair value
plus transaction costs. Financial assets are categorised as at fair value
through profit or loss are recognised initially at fair value with transaction
costs expensed through the income statement.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Trade receivables
are classified as loans and receivables. Loans and receivables are measured
subsequent to initial recognition at amortised cost using the effective interest
method, less provision for impairment. Any change in their value through
impairment or reversal of impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence
that the Group will not be able to collect all amounts due to it in accordance
with the original terms of those receivables. The amount of the write-down is
determined as the difference between the asset's carrying amount and the present
value of estimated future cash flows.
An assessment for impairment is undertaken at least at each balance sheet date.
A financial asset is de-recognised only when the contractual rights to the cash
flows from the asset expire or the financial asset is transferred and that
transfer qualifies for de-recognition. A financial asset is transferred if the
contractual rights to receive the cash flows of the asset have been transferred
or the Group retains the contractual rights to receive the cash flows of the
asset but assumes a contractual obligation to pay the cash flows to one or more
recipients. A financial asset that is transferred qualifies for de-recognition
if the Group transfers substantially all the risks and rewards of ownership of
the asset, or if the Group neither retains nor transfers substantially all the
risks and rewards of ownership but does transfer control of that asset.
Financial Liabilities
Financial liabilities are obligations to pay cash or other financial assets and
are recognised when the Group becomes a party to the contractual provisions of
the instrument. Financial liabilities categorised as at fair value through
profit or loss are recorded initially at fair value, all transaction costs are
recognised immediately in the income statement. All other financial liabilities
are recorded initially at fair value, net of direct issue costs.
Financial liabilities categorised as at fair value through profit or loss are
measured at each reporting date at fair value, with changes in fair value being
recognised in the income statement. All other financial liabilities are recorded
at amortised cost using the effective interest method, with interest-related
charges recognised as an expense in finance cost in the income statement.
Finance charges, including premiums payable on settlement or redemption and
direct issue costs, are charged to the income statement on an accruals basis
using the effective interest method and are added to the carrying amount of the
instrument to the extent that they are not settled in the period in which they
arise.
A financial liability is de-recognised only when the obligation is extinguished,
that is, when the obligation is discharged or cancelled or expires.
Foreign Currencies
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet
date. Non-monetary items that are measured at historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction.
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined.
Any exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
initially recorded are recognised in the profit or loss in the period in which
they arise. Exchange differences on non-monetary items are recognised in the
statement of recognised income and expenses to the extent that they relate to a
gain or loss on that non-monetary item taken to the statement of recognised
income and expenses, otherwise such gains and losses are recognised in the
income statement.
The assets and liabilities in the financial statements of foreign subsidiaries
and related goodwill are translated at the rate of exchange ruling at the
balance sheet date. Income and expenses are translated at the actual rate. The
exchange differences arising from the retranslation of the opening net
investment in subsidiaries are taken directly to the "Foreign exchange reserve"
in equity. On disposal of a foreign operation the cumulative translation
differences (including, if applicable, gains and losses on related hedges) are
transferred to the income statement as part of the gain or loss on disposal.
Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event and it is probable
that an outflow of economic benefits will be required to settle the obligation.
Employee Benefits
Defined contribution pension scheme: The pension cost charged against operating
profits is the contributions payable to the scheme in respect of the accounting
period.
Defined benefit pension schemes: By virtue of the acquisition of Thales
Telematics plc in February 2007, the Group participates in a number of funded
group defined benefit schemes. The Group's share of assets and liabilities in
the schemes are derived on a proportionate basis related to the cash
contributions made. The management consider this the most appropriate basis of
allocation. However, under the terms of the sale and purchase agreement for the
acquisition of Thales Telematics plc, the vendor Thales UK Limited, has provided
a perpetual indemnity over any pension scheme deficit arising both before and
after acquisition in respect of the various defined benefit schemes that were
operated and participated in by the company prior to its acquisition.
Consequently, although the Group has a pension liability representing the
shortfall between the schemes' assets and the present value of defined
obligations, this is offset on a pound for pound basis by the indemnity provided
by Thales UK Limited and accordingly a corresponding pension asset has been
recognised in debtors falling due in more than one year. Under the terms of the
agreement there will be no net charge for the Group in either the current year
or future years in respect of these defined benefit schemes.
Short-term employee benefits, including holiday entitlement are included in
current pension and other employee obligations at the undiscounted amount that
the Group expects to pay as a result of the unused entitlement.
Leased assets
In accordance with IAS 17, the economic ownership of a leased asset is
transferred to the lessee if the lessee bears substantially all the risks and
rewards related to the ownership of the leased asset. The Group has no such
leases. All other leases are regarded as operating leases and the payments made
under them are charged to the income statement on a straight-line basis over the
lease term. Lease incentives are spread over the term of the lease.
Share options
The Group operates a number of employee share schemes under which it makes
equity-settled share-based payments to certain employees. The Group has also
issued warrants in respect of the acquisition of BlueFinger Limited in June
2006. For share-based payments to employees of the Group, and for warrants
issued to third parties, the fair value is determined at the grant date using
the Black Scholes method, and is expensed on a straight-line basis together with
a corresponding increase in equity over the vesting period, based on the Group's
estimate of the number of shares that will vest.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together
with other short-term, highly liquid investments that are readily convertible
into known amounts of cash and which are subject to an insignificant risk of
changes in value.
Equity
Equity comprises the following:
* "Share capital" represents the nominal value of equity shares;
* "Share premium account" represents the excess over nominal value of the
fair value of consideration received for equity shares, net of expenses of
the share issue;
* "Merger reserve" represents the merger reserve set up in relation to the
accounting for the acquisition of Cybit Limited in 2001 that was present
under UK GAAP and has remained unchanged on transition to IFRS. It also
includes the premium arising on the fair values ascribed to shares issued in
the course of business combinations;
* "Equity reserve" represents the reserve in relation to share options and
warrants issued but not yet exercised; and
* "Retained earnings" represents retained profits.
Explanation of transition to IFRS:
IFRS1 First-time Adoption of International Financial Reporting Standards sets
out the procedures that the Group must follow when it adopts IFRS for the first
time as the basis for preparing its financial statements. The Group is required
to establish its IFRS accounting policies as at 31 March 2007 and, in general,
apply these retrospectively to determine the IFRS opening balance sheet at its
date of transition, 1 April 2006. An explanation of how the transition from
UKGAAP to IFRS has altered the Group's financial position is set out below:
IFRS3 Business Combinations requires that goodwill is subject to annual
impairment reviews rather than amortisation.
IAS19 Employee benefits requires the recording of holiday pay accruals.
IAS12 Income taxes requires that deferred tax is provided on the difference
between the fair value and the tax base of identifiable assets and liabilities
acquired in a business combination.
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. These
interim financial statements have been prepared on the basis of taking the
exemption that business combinations prior to 1 April 2006, the Group's date of
transition to IFRS, have not been restated to comply with IFRS 3"Business
Combinations."
The net effect in the income statements for the periods under review may be
summarised as follows:
Six months Year ended
30 31 March
September 2006 2007
(unaudited) (unaudited)
# #
---------- ----------
Administrative expenses:
--------------------------
Under UK GAAP 3,024,789 6,715,428
Elimination of amortisation of goodwill (43,757) (106,416)
IFRS 3 amortisation of intangibles 34,055 82,706
IAS19 Employee benefits 2,576 (181)
---------- ----------
Restated under IFRS 3,017,663 6,691,537
========== ==========
Six months Year ended
30 31 March
September 2006 2007
(unaudited) (unaudited)
# #
---------- ----------
Net result for the period:
----------------------------
Under UK GAAP 9,729 565,898
Elimination of amortisation of goodwill 43,757 106,416
IFRS 3 amortisation of intangibles (34,055) (82,706)
IAS19 Employee benefits (2,576) 181
IAS12 Income taxes 10,217 24,811
---------- ----------
Restated under IFRS 27,072 614,600
========== ==========
The net effect on the opening balance sheet as at 1 April 2006 may be summarised
as follows:
Under UK GAAP IFRS 3 IAS19 Employee Restated under
(audited) benefits IFRS
(unaudited)
Business
Combinations
# # # #
-------- -------- -------- --------
ASSETS
Non-current assets
Goodwill 200,795 200,795
Other intangible assets 338,391 338,391
Property, plant and equipment 600,527 600,527
Deferred tax assets 550,887 550,887
Other non-current assets 553,647 553,647
-------- -------- -------- --------
2,244,247 2,244,247
-------- -------- -------- --------
Current assets
Inventories 454,322 454,322
Trade and other receivables 1,216,943 1,216,943
Other current assets 2,515,151 2,515,151
Cash and cash equivalents 2,693,308 2,693,308
-------- -------- -------- --------
6,879,724 6,879,724
-------- -------- -------- --------
-------- -------- -------- --------
TOTAL ASSETS 9,123,971 9,123,971
-------- -------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables 1,377,865 1,377,865
Short term borrowings 14,777 14,777
Current portion of long-term
borrowings 52,363 52,363
Current tax payable 10,299 10,299
Finance leases 114,475 114,475
Other creditors 437,953 437,953
Accruals and deferred income 384,822 27,607 412,429
-------- -------- -------- --------
2,392,554 27,607 2,420,161
-------- -------- -------- --------
Non-current liabilities
Long-term borrowings 61,055 61,055
Finance leases 80,835 80,835
Deferred income 128,115 128,115
-------- -------- -------- --------
TOTAL LIABILITIES 2,662,559 27,607 2,690,166
-------- -------- -------- --------
-------- -------- -------- --------
NET ASSETS 6,461,412 (27,607) 6,433,805
-------- -------- -------- --------
EQUITY
Share capital 7,046,127 7,046,127
Share premium account 7,098,214 7,098,214
Merger reserve (4,090,553) (4,090,553)
Equity reserve - -
Retained earnings (3,592,376) (27,607) (3,619,983)
-------- -------- -------- --------
TOTAL EQUITY 6,461,412 (27,607) 6,433,805
-------- -------- -------- --------
The net effect on the balance sheet as at 30 September 2006 may be summarised as
follows:
Under UK GAAP IFRS 3 IAS12 IAS19 Restated under
(unaudited) Business Income Employee IFRS
Combinations taxes benefits (unaudited)
# # # # #
-------- -------- -------- -------- --------
ASSETS
Non-current assets
Goodwill 2,218,462 (1,130,529) 352,286 1,440,219
Other intangible assets 502,752 1,140,231 1,642,983
Property, plant and equipment 616,097 616,097
Deferred tax assets 548,605 548,605
Other non-current assets 506,221 506,221
-------- -------- -------- -------- --------
4,392,137 9,702 352,286 4,754,125
-------- -------- -------- -------- --------
Current assets
Inventories 551,736 551,736
Trade and other receivables 1,563,764 1,563,764
Other current assets 2,838,883 2,838,883
Cash and cash equivalents 2,029,868 2,029,868
-------- -------- -------- -------- --------
6,984,251 6,984,251
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL ASSETS 11,376,388 9,702 352,286 11,738,376
-------- -------- -------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables 1,659,695 1,659,695
Short term borrowings 56,652 56,652
Current portion of long-term
borrowings 200,261 200,261
Current tax payable 10,299 10,299
Finance leases 109,547 109,547
Other creditors 520,143 520,143
Deferred tax - 342,069 342,069
Accruals and deferred income 631,069 30,183 661,252
-------- -------- -------- -------- --------
3,187,666 342,069 30,183 3,559,918
-------- -------- -------- -------- --------
Non- current liabilities
Long-term borrowings 280,924 280,924
Finance leases 34,204 34,204
Deferred income 119,038 119,038
-------- -------- -------- -------- --------
TOTAL LIABILITIES 3,621,832 342,069 30,183 3,994,084
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
NET ASSETS 7,754,556 9,702 10,217 (30,183) 7,744,292
-------- -------- -------- -------- --------
EQUITY
Share capital 7,150,882 7,150,882
Share premium account 7,098,214 7,098,214
Merger reserve (3,168,708) (3,168,708)
Equity reserve 288,172 288,172
Foreign exchange reserve - (31,357) (31,357)
Retained earnings (3,614,004) 41,059 10,217 (30,183) (3,592,911)
-------- -------- -------- -------- --------
TOTAL EQUITY 7,754,556 9,702 10,217 (30,183) 7,744,292
-------- -------- -------- -------- --------
The net effect on the balance sheet as at 31 March 2007 may be summarised as
follows:
Under UK GAAP IFRS 3 IAS12 IAS19 Restated under
(unaudited) Business Income Employee IFRS
Combinations taxes benefits (unaudited)
# # # # #
-------- -------- -------- -------- --------
ASSETS
Non-current assets
Goodwill 2,090,557 (1,067,870) 352,286 1,374,973
Other intangible assets 948,276 1,091,580 2,039,856
Property, plant and equipment 824,533 824,533
Deferred tax assets 733,215 733,215
Other non-current assets 3,561,051 3,561,051
-------- -------- -------- -------- --------
8,157,632 23,710 352,286 8,533,628
-------- -------- -------- -------- --------
Current assets
Inventories 1,638,204 1,638,204
Trade and other
receivables 3,639,572 3,639,572
Other current assets 2,866,173 2,866,173
Cash and cash equivalents 2,119,985 2,119,985
-------- -------- -------- -------- --------
10,263,934 10,263,934
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL ASSETS 18,421,566 23,710 352,286 18,797,562
-------- -------- -------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables 2,485,919 2,485,919
Short term borrowings 382,481 382,481
Current portion of long-term
borrowings 144,872 144,872
Current tax payable 27,793 27,793
Finance leases 90,893 90,893
Other creditors 600,501 600,501
Deferred tax 327,475 327,475
Deferred consideration 750,000 750,000
Accruals and deferred income 1,811,347 27,426 1,838,773
-------- -------- -------- -------- --------
6,293,806 327,475 27,426 6,648,707
-------- -------- -------- -------- --------
Non-current liabilities
Long-term borrowings 403,814 403,814
Finance leases 12,282 12,282
Deferred income 464,259 464,259
Pension liability 2,905,624 2,905,624
-------- -------- -------- -------- --------
TOTAL LIABILITIES 10,079,785 327,475 27,426 10,434,686
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
NET ASSETS 8,341,781 23,710 24,811 (27,426) 8,362,876
-------- -------- -------- -------- --------
EQUITY
Share capital 7,150,882 7,150,882
Share premium account 7,098,214 7,098,214
Merger reserve (3,168,708) (3,168,708)
Equity reserve 288,172 288,172
Foreign exchange reserve - (301) (301)
Profit and loss account (3,026,779) 24,011 24,811 (27,426) (3,005,383)
-------- -------- -------- -------- --------
TOTAL EQUITY 8,341,781 23,710 24,811 (27,426) 8,362,876
-------- -------- -------- -------- --------
3. Segment analysis
The Group has one principal activity and makes sales to a variety of global
destinations. An analysis of sales revenue by geographical market is given
below:
Six months Six months Year ended
30 30 31 March
September 2007 September 2006 2007
(unaudited) (unaudited) (unaudited)
# # #
---------- ---------- ----------
United Kingdom 8,312,596 5,390,690 11,908,502
Rest of Europe 298,880 - 172,473
Africa 193,470 386,660 1,164,484
Middle East 25,640 16,010 43,160
Rest of world 176,870 - -
---------- ---------- ----------
9,007,456 5,793,360 13,288,619
========== ========== ==========
4. Business combinations
On 24 August 2007, the Group acquired 100% of the issued share capital of
Amatics Limited, a company based in the UK. The total cost of acquisition
includes the components stated below:
#
Purchase price
Initial cash consideration 3,250,000
Deferred consideration payable in cash 250,000
Issue of 962,000 ordinary shares in Cybit Holdings Plc at 52p per
share 500,240
--------
4,000,240
Professional fees 17,330
--------
Total cost of acquisition 4,017,570
========
The allocation of the purchase price to the assets and liabilities of Amatics
Limited was only provisionally completed at 30 September 2007. The amounts
recognized for each class of the acquiree's assets, liabilities and contingent
liabilities recognised at the acquisition date are as follows:
Carrying amount Adjustments Provisional
under IFRS fair value
# # #
ASSETS
Intangible assets 95,441 505,714 601,155
Property, plant and equipment 13,376 - 13,376
Inventories 803,467 (634,136) 169,511
Trade receivables 413,708 - 413,708
Cash and cash equivalents 3,317,707 - 3,317,707
---------- --------- ---------
TOTAL ASSETS 4,643,878 (128,422) 4,515,457
LIABILITIES
Current liabilities
Trade payables 61,906 - 61,906
Current tax liability 481,523 - 481,523
Deferred tax - 151,714 151,714
Accruals and deferred income 195,116 - 195,116
---------- --------- ---------
738,545 151,714 890,229
Non-current liabilities
Deferred income 1,105,918 - 1,105,918
---------- --------- ---------
TOTAL
LIABILITIES 1,844,463 151,714 1,996,177
---------- --------- ---------
NET ASSETS 2,799,415 (280,136) 2,519,280
---------- ---------
Fair value of purchase consideration 4,017,570
---------
Goodwill 1,498,290
=========
The goodwill that arose on the combination can be attributed to the synergies
expected to be derived from the combination and the value of the workforce of
Amatics Limited which cannot be recognized as an intangible asset under IAS38
"Intangible Assets".
Since the acquisition, Amatics Limited has contributed #68,099 to the Group
profit for the period to 30 September 2007. Had the acquisition occurred on 1
April 2007, the revenue for the period to 30 September 2007 would have been
#1,360,361 and the profit would have been #488,893.
5. Share issues
During the period under review, shares were issued as part consideration for the
acquisition of Amatics Limited and also to satisfy the exercise of share
warrants previously issued on the acquisition of BlueFinger Limited in 2006.
These transactions resulted in the following changes to issued share capital and
the share premium account:
Share capital Share Premium Merger reserve Total
# # # #
At 1 April 2007 7,150,882 7,098,214 (3,168,708) 15,170,941
962,000 consideration
shares on acquisition
of Amatics Limited at
52p per share 48,100 - 452,140 500,240
Issue of 292,721
shares on exercise of
Warrants previously
issued on acquisition
of BlueFinger at
38.33p per share 14,636 97,564 112,200
-------- -------- -------- --------
At 30 September 2007 7,213,618 7,195,778 (2,716,568) 15,783,381
-------- -------- -------- --------
6. Earnings per share
The calculation of the basic earnings per share is based on the profits
attributable to the shareholders of the Group divided by the weighted average
number of shares in issue during the period. All earnings per share calculations
relate to continuing operations of the Group.
Profits Weighted Basic earnings
attributable to average number per share
shareholders of shares amount in pence
Six months
ended 30 September 2007 431,128 22,278,925 1.94p
Six months
ended 30 September 2006
(Restated) 27,072 21,101,007 0.13p
Year ended 31
March 2007
(Restated) 614,600 21,529,155 2.85p
The calculation of the diluted earnings per share is based on the profits
attributable to the shareholders of the Company divided by the weighted average
number of shares in issue during the period, as adjusted for dilutive share
options. All earnings per share calculations relate to continuing operations of
the Group.
Dilutive Diluted
options earnings per
share amount in
pence
Six months
ended 30
September 2007 409,597 1.90p
Six months
ended 30
September 2006
(Restated) 177,101 0.13p
Year ended 31
March 2007
(Restated) 299,099 2.82p
7. Financial Statements
The financial information included in this report does not constitute statutory
accounts for the purposes of section 240 of the Companies Act 1985. The full
accounts for the year ended 31 March 2007, which were prepared under UK GAAP and
which received an unqualified report from the auditors, and did not contain a
statement under s237(2) or (3) of the Companies Act 1985, have been filed with
the Registrar of Companies. The unaudited financial information contained in
this report has been prepared on the basis of accounting policies set out in
note 2. Comparative figures for the year ended 31 March 2007 contained within
this report were published in a press release on 2 July 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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