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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Intelligent Env | LSE:IEN | London | Ordinary Share | GB0004630454 | 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% | 7.125 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMIEN RNS Number : 3022Z Intelligent Environments Group PLC 21 September 2009 IEN.L Intelligent Environments Group PLC ("IE" or "the Group") Major client wins drive growth Intelligent Environments Group plc (AIM Ticker: IEN), the online software provider for financial services, today announces its interim year results for the six months ended 30th June 2009. Financial highlights * Recurring revenues up 21%, as high profile brands adopt IE platform. * * 30% of total revenues are now recurring * Total revenues up 8% at GBP3.2 million (2008: GBP2.9 million) * Gross margin percentage up to 86% (2008: 82%) * Operating profit up 36% at GBP0.5 million * Operating cash inflow of GBP0.6 million * Net cash balance GBP1.1 million Operational Highlights * 22 royalty earning brand contracts operational by end of June 2009 * Three new customer wins in the half year * Contract wins with Home Retail Group and Stroud and Swindon Building Society * Three NetFinance V4 projects completed in the half year, including National Savings & Investments * Research and Development expenditure increases to a sustainable GBP0.5 million Outlook Clive Richards, IE's Chairman commented:- "We have delivered a solid performance in the first half with further strong growth in the savings markets expected. This is underpinned by further opportunities to upgrade our existing customers to the NetFinance V4 platform during the second half of the year. Our increasing profitability has enabled the Group to propose a maiden dividend for the full year and with financial service institutions increasingly using the internet to cut costs, IE is well positioned to continue with its growth curve. I look forward to reporting further progress in due course" For further information: +-------------------------------------+---------------------------------------------------------------+ | Intelligent Environments Group plc | Tel: | | Phillip Blundell, Chief Executive | 020 | | www.ie.com | 8614 | | | 9800 | +-------------------------------------+---------------------------------------------------------------+ | FinnCap | Tel: | | Charles Cunningham, NOMAD and | 020 | | Broker | 7600 | | | 1658 | +-------------------------------------+---------------------------------------------------------------+ | Biddicks | Tel: | | Shane Dolan | 020 | | | 7448 | | | 1000 | +-------------------------------------+---------------------------------------------------------------+ Chairman's Statement Introduction I am pleased to report solid progress during the first six months of 2009 underpinned by a series of new customer wins. This has resulted in an 8% increase in total revenues and a 36% increase in operating profit for the six months ended 30 June 2009. As mentioned in our 2008 annual report, the difficulties in the UK banking sector combined with a global recession have had an impact on our business, particularly our plans to expand internationally. Testimony to this was the cancellation of our contract with the Royal Bank of Scotland who pulled out of the European consumer finance market. Other prospects do exist and through our partnership programme we continue to assess viable opportunities. We have enjoyed steady success in the consumer finance market with two new customers being acquired who both wish to offer their cardholders secure online account management and e-statements. This is a proven way to enhance customer service and reduce operational costs. Revenue from the consumer finance market has reduced as Banks limit their current phase of investment in acquisition platforms. However, this reduction has been more than offset by the buoyant market for online retail saving systems for both the acquisition of new customers and for providing a secure online account management platform. Continuing work from our existing savings customers coupled with the addition of Stroud and Swindon Building Society as a new customer has seen our revenues from the UK savings market double in the six month period. One of our key strategic aims is to increase the proportion of our total recurring revenues. I am pleased to report therefore that in the half year, recurring revenues were up 21% and now represent 30% of total revenues with a doubling of income from transactional revenues. Our investment in Research and Development has continued to increase. Our teams in Kingston and Pune, India, are working effectively together to enhance the functionality of the NetFinance V4 platform. We have extended the capabilities to support mobile banking and the product factory over the last six months with further exciting developments in the coming months. Our R&D expenditure doubled in the period to GBP0.5 million, a level that we are comfortable with going forward. The delivery function has had a very busy six months with three major V4 projects reaching a successful conclusion and significant enhancements to the Barclaycard platform. I am particularly proud of the first V4 project completions that now give us live reference sites to strengthen our marketing message as well as increasing the knowledge and expertise of our staff. Currently we employ 65 people up from 50 at the same point in 2008. Financial summary The addition of three new customers contributed to the 8% overall increase in revenues to GBP3.2 million and to the 30% increase in licence income during the six month period, compared with the same period last year. Consulting revenues fell 7% in the period, compared with the prior six month period, due to the termination of the RBS contract and the reduced spend at HBOS. On the positive side the completion of three V4 projects and the higher number of brands on the transactional revenue model meant that recurring revenues were up 21% compared with the same period last year. A reduction in the use of third party contractors combined with the favourable revenue mix has resulted in a reduction in the cost of sales that has also improved the gross profit by 13% compared with the same period last year. The gross margin percentage now stands at 86% up from 82% in the first half of 2008. Operating expenses are up 9% in the period, compared with the same period last year, driven by the increase in headcount. We have also increased our marketing expenditure as we look to commercially exploit the new NetFinance V4 software platform. The increase in operating profit has been achieved by a reduction in the cost of sales coupled with the net capitalisation of research and development costs totalling GBP356k, in accordance with International Financial Reporting Standards. The operating margin for this first half of the year is up from 11% in the corresponding period last year to 14% this year. Given the continued profitable growth, the Board feel there is sufficient certainty to increase the deferred tax asset to reflect the recoverability of trading losses in the foreseeable future. The result of this action is a non-cash credit to the income statement of GBP28k. The cash position improved to GBP1.1 million compared to GBP1.0 million at the end of 2008 and also at 30 June 2008. On the basis of the continuing trend of profitability, it is your board's intention to have a progressive dividend policy and to pay its first dividend which will be declared at the time of the issuance of the preliminary figures for the year ending 31 December expected in April 2010. Outlook The continued disruption to the credit markets is expected to deliver strong revenue growth in the savings market that will be partly offset by continued weakness in the consumer finance market. There are further opportunities to upgrade our existing customers to the NetFinance V4 platform during the second half of the year, which should bring further progress to our strategic aims. I expect that the focus of our customers will continue to be on cost cutting, which will bring to the fore the greater use of the internet and mobile banking. These are your company's core strengths and should generate profitable sales opportunities. We have a market leading solution, delivered by an unrivalled team of experts in a prominent channel and this drives my enthusiasm for the future. Clive Richards OBE.DL Chairman +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Condensed Consolidated Interim Income Statement | | | +----------------------------------------------------------+--------------+-------------+ | for the six months ended | | | | | | 30 June 2009 | | | | | +-----------------------------------+--------+-------------+--------------+-------------+ | | | | | Notes | Unaudited | Unaudited | Audited | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | Six | Six | Year to | | | | | | | months | months | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | to 30 | to 30 | December | | | | | | | June | June | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | 2009 | 2008 | 2008 | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | GBP | GBP | GBP | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Revenue | | | | 4 | 3,160,051 | 2,933,982 | 6,405,054 | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Cost of Sales | | | | (436,904) | (521,693) | (1,120,612) | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Gross Profit | | | | 2,723,147 | 2,412,289 | 5,284,442 | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Operating expenses | | | | (2,297,854) | (2,110,972) | (4,195,235) | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Other operating income | | | | 30,800 | 33,184 | 63,184 | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Operating profit | | | | 456,093 | 334,501 | 1,152,391 | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Investment income | | | | 1,442 | 4,944 | 27,108 | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | +--------------------------------+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Profit before taxation | | 457,535 | 339,445 | 1,179,499 | +-----------------------------------+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Tax | | 6 | 28,000 | 74,000 | 36,000 | +--------------------------------+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Profit for the period | | | | 485,535 | 413,445 | 1,215,499 | | attributable to equity | | | | | | | | holders of the parent | | | | | | | | company | | | | | | | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Earnings per share | | | | | | | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | | | | | | | | | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ | Basic earnings per share | | | 3 | 0.29p | 0.25p | 0.74p | +-----------------------------+--+--+--------+-------------+--------------+-------------+ | Diluted earnings per share | | 3 | 0.29p | 0.24p | 0.72p | +--------------------------+--+--+--+--------+-------------+--------------+-------------+ The operating profit for the period arises from the Group's continuing operations. +---------------------------------------------+-----------------------------------+ | Condensed Consolidated Statement of Other Comprehensive Income (Unaudited) | +---------------------------------------------------------------------------------+ | for the six months ended 30 June 2009 | +---------------------------------------------+-----------------------------------+ +---------------+---------------+---------------+---------------+---------------+ | | | Unaudited | Unaudited | Audited | | | | Six months to | Six months to | Year to | | | | 30 June 2009 | 30 June 2008 | December 2008 | +---------------+---------------+---------------+---------------+---------------+ | | | | | | +---------------+---------------+---------------+---------------+---------------+ | | | GBP | GBP | GBP | +---------------+---------------+---------------+---------------+---------------+ | Profit for | | 485,535 | 413,445 | 1,215,499 | | the period | | | | | +---------------+---------------+---------------+---------------+---------------+ | Currency | | (12,128) | 806 | 17,486 | | translation | | | | | | differences | | | | | +---------------+---------------+---------------+---------------+---------------+ | Other comprehensive income | (12,128) | 806 | 17,486 | | (net of tax) | | | | +-------------------------------+---------------+---------------+---------------+ | Total comprehensive income | 473,407 | 414,251 | 1,232,985 | | for the year attributable to | | | | | equity holders of the parent | | | | | company | | | | +---------------+---------------+---------------+---------------+---------------+ +-------------+--+--------+--------+----------------+---------------+-----------------+ | Condensed Consolidated Statement of Financial Position | +-------------------------------------------------------------------------------------+ | As at 30 June | | | | | | | 2009 | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | | | | Notes | Unaudited | Unaudited | Audited | +-------------+--+--------+--------+----------------+---------------+-----------------+ | | | | | at 30 | at 30 | at 31 December | | | | | | June | June | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | | | | | 2009 | 2008 | 2008 | +-------------+--+--------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | | | | | GBP | GBP | GBP | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Assets | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Non-current | | | | | | | assets | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Property, plant and | | 128,795 | 110,505 | 131,992 | | equipment | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | Intangible assets | 7 | 1,303,809 | 530,433 | 947,395 | +-------------------------+--------+----------------+---------------+-----------------+ | Trade and other | | 535,333 | 320,417 | 671,333 | | receivables | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | Deferred tax | | 6 | 364,000 | 374,000 | 336,000 | | assets | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Total non-current | | 2,331,937 | 1,335,355 | 2,086,720 | | assets | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Current assets | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Trade and other | | 2,394,313 | 1,887,158 | 2,093,275 | | receivables | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | Cash and cash | | 1,051,737 | 1,034,164 | 985,317 | | equivalents | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | Total current | | | 3,446,050 | 2,921,322 | 3,078,592 | | assets | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Total assets | | | 5,777,987 | 4,256,677 | 5,165,312 | +----------------+--------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Current | | | | | | | liabilities | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Trade and other | | (1,420,487) | (1,366,646) | (1,408,145) | | payables | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | Total current | | | (1,420,487) | (1,366,646) | (1,408,145) | | liabilities | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Total | | | (1,420,487) | (1,366,646) | (1,408,145) | | liabilities | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Net assets | | | | 4,357,500 | 2,890,031 | 3,757,167 | +-------------+--+--------+--------+----------------+---------------+-----------------+ | | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Equity | | | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ | Called up | | 8 | 1,668,174 | 1,643,524 | 1,645,824 | | share capital | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Share premium | | 8 | 61,538 | 21,815,635 | 21,823,185 | | account | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Share option | | 5 | 195,163 | 113,573 | 152,125 | | reserve | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Cumulative translation | 5 | 2,648 | (1,904) | 14,776 | | reserve | | | | | +-------------------------+--------+----------------+---------------+-----------------+ | Retained | | | 2,429,977 | (20,680,797) | (19,878,743) | | earnings | | | | | | +----------------+--------+--------+----------------+---------------+-----------------+ | Total equity | | 4,357,500 | 2,890,031 | 3,757,167 | | attributable to equity | | | | | | holders of the parent | | | | | | company | | | | | +-------------+--+--------+--------+----------------+---------------+-----------------+ +--------+--------+------+--------+-------+--+--+-----------+--+----------+--+---------+--+--+--------+--+--+-------------+ | | | | | | | | | | +--------+--------+-----------------------+-----+-----------+----------------+------------+-----------+-------------------+ | Condensed Consolidated Statement of Changes in Equity | | | | | (Unaudited) | | | | +----------------------------------------------------------------------------+------------+-----------+-------------------+ | for the six months ended | | | | | | | 30 June 2009 | | | | | | +--------------------------------------------+--------------+----------------+------------+-----------+-------------------+ | | | | | Attributable to equity holders of the parent company | +--------+--------+------+-------------------+----------------------------------------------------------------------------+ | | | | Issued | Share | Share | Cumulative | Retained | Total | | | | | share | | | translation | | | +--------+--------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | | | | capital | premium | option | reserve | earnings | equity | | | | | | | reserve | | | | +--------+--------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | | | | | | | | | | +--------+--------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | | | | | | | | | | | | | | GBP | GBP | GBP | GBP | GBP | GBP | +--------+--------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Balance at 1 January | 1,645,824 | 21,823,185 | 152,125 | 14,776 | (19,878,743) | 3,757,167 | | 2009 | | | | | | | +------------------------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Profit for the | | - | - | - | - | 485,535 | 485,535 | | period | | | | | | | | +-----------------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Exchange translation | - | - | - | (12,128) | - | (12,128) | | differences on | | | | | | | +------------------------+-------------------+-----------------+----------+------------------+--------------+-------------+ | foreign | | | | | | | | | operations (net | | | | | | | | | of tax) | | | | | | | | +-----------------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Total comprehensive | - | - | - | (12,128) | 485,535 | 473,407 | | income for the period | | | | | | | +------------------------+-------------------+-----------------+----------+------------------+--------------+-------------+ | | | | | | | | +------------------------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Share option | | - | - | 43,038 | - | - | 43,038 | | charge | | | | | | | | +-----------------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Issued share | | 22,350 | 61,538 | - | - | - | 83,888 | | capital | | | | | | | | +-----------------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Cancellation of the | - | (21,823,185) | - | - | 21,823,185 | - | | share premium account | | | | | | | +------------------------+-------------------+-----------------+----------+------------------+--------------+-------------+ | Balance at | 1,668,174 | 61,538 | 195,163 | 2,648 | 2,429,977 | 4,357,500 | | 30 June 2009 | | | | | | | +------------------------+-------------------+-----------------+----------+------------------+--------------+-------------+ | | | | | | | | | | +--------+--------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | | | | | | | | | | +--------+--------+------+-------------------+-----------------+----------+------------------+--------------+-------------+ | For the six months ended 30 June 2008 (Unaudited) | +-------------------------------------------------------------------------------------------------------------------------+ | Balance at | 1,636,816 | 21,796,918 | 81,136 | (2,710) | (21,094,242) | 2,417,918 | | 1 January 2008 | | | | | | | +---------------------------------+-------------+--------------+-------------+---------+-----------------+----------------+ | Profit for the | | - | - | - | - | 413,445 | 413,445 | | period | | | | | | | | +-----------------+---------------+-------------+--------------+-------------+---------+-----------------+----------------+ | Exchange translation | | | | | | | | differences on | | | | | | | +---------------------------------+-------------+--------------+-------------+---------+-----------------+----------------+ | foreign | | - | - | - | 806 | - | 806 | | operations (net | | | | | | | | | of tax) | | | | | | | | +-----------------+---------------+-------------+--------------+-------------+---------+-----------------+----------------+ | Total comprehensive | - | - | - | 806 | 413,445 | 414,251 | | income for the period | | | | | | | +---------------------------------+-------------+--------------+-------------+---------+-----------------+----------------+ | | | | | | | | +---------------------------------+-------------+--------------+-------------+---------+-----------------+----------------+ | Share option | | - | - | 32,437 | - | - | 32,437 | | charge | | | | | | | | +-----------------+---------------+-------------+--------------+-------------+---------+-----------------+----------------+ | Issue of share | | 6,708 | 18,717 | - | - | - | 25,425 | | capital | | | | | | | | +-----------------+---------------+-------------+--------------+-------------+---------+-----------------+----------------+ | Balance at | 1,643,524 | 21,815,635 | 113,573 | (1,904) | (20,680,797) | 2,890,031 | | 30 June 2008 | | | | | | | +--------+--------+------+--------+-------+--+--+-----------+--+----------+--+---------+--+--+--------+--+--+-------------+ +--------+--------+--------+------------+-+-------------+-+-----------+-------------+-------------+-+--------------+ | Condensed Consolidated Statement of Changes in Equity (Audited) | +------------------------------------------------------------------------------------------------------------------+ | for the year ended | | | | | | | 31 December 2008 | | | | | | +-----------------------------------------+-------------+-------------+-------------+-------------+----------------+ | | | | | Attributable to equity holders of the parent company | +--------+--------+--------+--------------+------------------------------------------------------------------------+ | | | | Issued | Share | Share | Cumulative | Retained | Total | | | | | share | | | translation | | | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | capital | premium | option | reserve | earnings | equity | | | | | | | reserve | | | | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | | | | | | | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | GBP | GBP | GBP | GBP | GBP | GBP | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | | | | | | | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | | | | | | | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | Balance at | 1,636,816 | 21,796,918 | 81,136 | (2,710) | (21,094,242) | 2,417,918 | | 1 January 2008 | | | | | | | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | Profit for the | | - | - | - | - | 1,215,499 | 1,215,499 | | year | | | | | | | | +-----------------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | Exchange translation | - | - | - | 17,486 | - | 17,486 | | differences on | | | | | | | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | foreign operations (net | | | | | | | | of tax) | | | | | | | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | Total comprehensive | - | - | - | 17,486 | 1,215,499 | 1,232,985 | | income for the period | | | | | | | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | | | | | | | +--------+--------+--------+--------------+---------------+-----------+-------------+---------------+--------------+ | Share option | | - | | - | 70,989 | - | - | 70,989 | | charge | | | | | | | | | +-----------------+--------+------------+-+---------------+-----------+-------------+---------------+--------------+ | Issue of share capital | 9,008 | 26,267 | - | - | - | 35,275 | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | Balance at | 1,645,824 | 21,823,185 | 152,125 | 14,776 | (19,878,743) | 3,757,167 | | 31 December 2008 | | | | | | | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | | | | | +--------------------------+--------------+---------------+-----------+-------------+---------------+--------------+ | | | | | | | | +--------+--------+--------+------------+-+-------------+-+-----------+-------------+-------------+-+--------------+ +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Condensed Consolidated Statement of Cash | | | | | Flows | | | | +-----------------------------------------------+--------------+-------------+------------+ | for the six months ended 30 June | | | | | | 2009 | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | Unaudited | Unaudited | Audited | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | Six | Six | Year to | | | | | | | months | months | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | to 30 | to 30 | 31 | | | | | | | June | June | December | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | 2009 | 2008 | 2008 | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | GBP | GBP | GBP | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Cash flow from operating activities | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Profit before tax | | | | 457,535 | 339,445 | 1,179,499 | +-------------------------------+--+--+---------+--------------+-------------+------------+ | Investment income | | | | (1,442) | (4,944) | (27,108) | +-------------------------------+--+--+---------+--------------+-------------+------------+ | Depreciation of property, plant and | | 43,846 | 36,264 | 71,469 | | equipment | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | Amortisation of intangible | | | | 177,059 | - | 114,956 | | assets | | | | (12,128) | 806 | 17,486 | | Exchange differences | | | | | | | +-------------------------------+--+--+---------+--------------+-------------+------------+ | Increase in trade and other | | (165,038) | (276,495) | (833,528) | | receivables | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | Increase in trade and other | | 12,342 | 118,779 | 160,278 | | payables | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | Share option charge | | | | 43,038 | 32,437 | 70,989 | +-------------------------------+--+--+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Net cash inflow from operating activities | 555,212 | 246,292 | 754,041 | +-----------------------------------------------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Cash flow from investing activities | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Investment income | | | | 1,442 | 4,944 | 27,108 | +-------------------------------+--+--+---------+--------------+-------------+------------+ | Purchase of property, plant and | | (40,649) | (28,777) | (85,469) | | equipment | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | Purchase of intangible assets | | (533,473) | (185,566) | (717,484) | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Net cash outflow from investing activities | (572,680) | (209,399) | (775,845) | +-----------------------------------------------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Cash flow from financing activities | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Proceeds from the issue of share | | 83,888 | 25,425 | 35,275 | | capital | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Net cash generated from financing | | 83,888 | 25,425 | 35,275 | | activities | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Net increase in cash and cash equivalents | 66,420 | 62,318 | 13,471 | +-----------------------------------------------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Cash and cash equivalents at start | | 985,317 | 971,846 | 971,846 | | of period | | | | | +-------------------------------------+---------+--------------+-------------+------------+ | | | | | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ | Cash and cash equivalents at end of | | 1,051,737 | 1,034,164 | 985,317 | | period | | | | | +----------------------------+--+--+--+---------+--------------+-------------+------------+ NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Accounting policies Basis of preparation This Report was approved by the directors on 18 September 2009. The company is domiciled in the United Kingdom. The company is listed on the Alternative Investment Market stock exchange. The current and comparative periods to June have been prepared using the accounting policies and practices consistent with those adopted in the annual financial statements for the year ended 31 December 2008 except the adoption of IAS 1 Revised and IFRS 8 as noted below and are also consistent with those which will be adopted in the 31 December 2009 financial statements. Comparative figures for the year ended 31 December 2008 have been extracted from the statutory financial statements for that period which carried an unqualified audit report, did not include reference to any matters to which the auditor drew attention by way of emphasis, and did not contain a statement under section 237(2) or (3) of the Companies Act 1985 and have been delivered to the Registrar of Companies. The Group has applied IAS 1 Revised "Presentation of Financial Statements" and IFRS 8 "Operating Segments" as of 1 January 2009. In accordance with IAS 1 the financial statements have been re-titled and a consolidated statement of other comprehensive income produced. IFRS 8 states that segment information should be based on management's internal reporting structure and accounting principles. As disclosed in the financial statements for the year ended 31 December 2008, the Group's segment information has already been based on the management reporting structure and therefore the operating segments are the same as previously reported. The financial statements for the year ended 31 December 2008 were prepared in accordance with International Accounting and Financial Reporting Standards ("IFRS") as adopted in the EU. The Financial Information contained in this report does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. This report has not been audited or reviewed by the Group's auditors. During the first six months of the current financial year there have been no related party transactions that materially affect the financial position or performance of the group and there have been no changes in the related party transactions described in the last annual financial report. The principal risks and uncertainties of the group have not changed since the publication of the last annual financial report where a detailed explanation of such risks and uncertainties can be found. 2. Dividends The Board has not declared a dividend for the period ended 30 June 2009 (30 June 2008: Nil; 31 December 2008: Nil). 3. Basic and diluted earnings per share Basic and diluted earnings per share is based on the figures in the table below: +---------------+--+--------+--------+---------------+---------------+---------------+ | Earnings per | | | | | | | share | | | | | | +------------------+--------+--------+---------------+---------------+---------------+ | | | | | Unaudited | Unaudited | Audited | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | Six | Six | Year to | | | | | | months | months | | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | to 30 | to 30 | 31 | | | | | | June | June | December | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | 2009 | 2008 | 2008 | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | | | | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | GBP | GBP | GBP | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | | | | +---------------+--+--------+--------+---------------+---------------+---------------+ | Basic and diluted | | 485,535 | 413,445 | 1,215,499 | | earnings | | | | | +---------------------------+--------+---------------+---------------+---------------+ | | | | | | | | +---------------+--+--------+--------+---------------+---------------+---------------+ | | | | | | | | +---------------+--+--------+--------+---------------+---------------+---------------+ | Number of shares | | | | | | +------------------+--------+--------+---------------+---------------+---------------+ | | | | | | | | +---------------+--+--------+--------+---------------+---------------+---------------+ | Basic weighted average number of | 164,594,713 | 163,766,042 | 164,146,543 | | shares | | | | +------------------------------------+---------------+---------------+---------------+ | Effect of dilutive share | | 4,298,614 | 6,937,604 | 4,063,855 | | options | | | | | +---------------------------+--------+---------------+---------------+---------------+ | Diluted weighted average number of | 168,893,327 | 170,703,646 | 168,210,398 | | shares | | | | +------------------------------------+---------------+---------------+---------------+ | | | | | | | | +---------------+--+--------+--------+---------------+---------------+---------------+ | Basic EPS | | | | 0.29p | 0.25p | 0.74p | +---------------+--+--------+--------+---------------+---------------+---------------+ | Diluted EPS | | | | 0.29p | 0.24p | 0.72p | +---------------+--+--------+--------+---------------+---------------+---------------+ 4. Revenue The Group's revenue and profit before taxation is derived entirely from its principal business activity. The Group's management and internal reporting structures split the turnover between licences, customer consultancy services and recurring revenues, but not costs and its operating results. Consequently there is only one class of business activity undertaken by the Group, being the provision of online software and services that allow organisations to disseminate information, integrate systems and deliver e-business applications. The Group provides the following supplementary analysis: +-----------------------+--------------------------+--------------------------+-----------------------+ | | Unaudited | Audited | +-----------------------+-----------------------------------------------------+-----------------------+ | | Half-year ended | Year ended 31 | | | 30 June | December | +-----------------------+-----------------------------------------------------+-----------------------+ | | 2009 | 2008 | 2008 | +-----------------------+--------------------------+--------------------------+-----------------------+ | | GBP | GBP | GBP | +-----------------------+--------------------------+--------------------------+-----------------------+ | Licence | 752,395 | 577,565 | 1,589,321 | +-----------------------+--------------------------+--------------------------+-----------------------+ | Consultancy services | 1,469,825 | 1,580,825 | 2,957,255 | +-----------------------+--------------------------+--------------------------+-----------------------+ | Recurring revenues | 937,831 | 775,592 | 1,858,478 | +-----------------------+--------------------------+--------------------------+-----------------------+ | | 3,160,051 | 2,933,982 | 6,405,054 | +-----------------------+--------------------------+--------------------------+-----------------------+ Geographical analysis The analysis by geographical area of the Group's revenue is set out below: Unaudited Unaudited +---------------------------------+---------------------+-----------------+--------------+--------------+ | Revenue | Half-year ended | Half-year ended | | | 30 June 2009 | 30 June 2008 | +---------------------------------+---------------------------------------+-----------------------------+ | | | | +---------------------------------+---------------------------------------+-----------------------------+ | | Sales by | Sales by | Sales by | Sales by | | | destination | origin | destination | origin | +---------------------------------+---------------------+-----------------+--------------+--------------+ | | GBP | GBP | GBP | GBP | +---------------------------------+---------------------+-----------------+--------------+--------------+ | United Kingdom | 1,746,706 | 3,160,051 | 1,425,184 | 2,933,982 | +---------------------------------+---------------------+-----------------+--------------+--------------+ | Rest of Europe | 137,374 | - | 403,738 | - | +---------------------------------+---------------------+-----------------+--------------+--------------+ | USA | 1,275,971 | - | 1,105,060 | - | +---------------------------------+---------------------+-----------------+--------------+--------------+ | | 3,160,051 | 3,160,051 | 2,933,982 | 2,933,982 | +---------------------------------+---------------------+-----------------+--------------+--------------+ Audited +------------------------------+--------------------+--------------------+ | Revenue | Year ended | | | 31 December 2008 | +------------------------------+-----------------------------------------+ | | Sales by | Sales by | | | destination | origin | +------------------------------+--------------------+--------------------+ | | GBP | GBP | +------------------------------+--------------------+--------------------+ | United Kingdom | 3,606,533 | 6,405,054 | +------------------------------+--------------------+--------------------+ | Rest of Europe | 557,214 | - | +------------------------------+--------------------+--------------------+ | USA | 2,241,307 | - | +------------------------------+--------------------+--------------------+ | | 6,405,054 | 6,405,054 | +------------------------------+--------------------+--------------------+ 5. Capital and reserves Share option reserve The share option reserve includes an expense based on the fair value of share options issued since 7 November 2002 in accordance with IFRS 2 for a number of share-based payment awards which have been granted and which have not vested by the effective date of the accounting standard 1 January 2006. During the six months ended 30 June 2009, the group granted 2.75m share options to employees where the aggregate fair value at date of grant was GBP109,835. The share options were conditional on the achievement of minimum profit before tax targets of GBP1.5 million on an annual basis. Cumulative translation reserve The translation reserve comprises all foreign exchange differences arising since 1 January 2006 from the retranslation of opening net investment in subsidiary companies that do not have sterling as a functional currency. Exchange differences are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised in the income statement in the period in which the subsidiary is disposed of. 6. Tax on profit on ordinary activities The Directors are confident that the group will achieve future profitability in line with the current business plan, therefore, a deferred tax asset of GBP364,000 (June 2008: GBP374,000; December 2008: GBP336,000) has been recognised at the balance sheet date. There is sufficient certainty to increase the deferred tax asset to reflect the recoverability of trading losses in the foreseeable future. The result of this action is a non-cash credit to the income statement of GBP28,000 (June 2008: GBP74,000; December 2008: GBP36,000). 7. Intangible assets +---------+--------+--------+--------+--------+----------+------+---------------+ | | | | | | | | Development | | | | | | | | | costs | +---------+--------+--------+--------+--------+----------+------+---------------+ | | | | | | | | GBP | +---------+--------+--------+--------+--------+----------+------+---------------+ | At 1 January | | | | | | | | 2009 | | | | | | | +------------------+--------+--------+--------+----------+------+---------------+ | Cost | | | | 1,062,351 | +------------------------------------+--------+----------+------+---------------+ | Accumulated amortisation | | | | | (114,956) | +---------------------------+--------+--------+----------+------+---------------+ | Net book amount | | | | | 947,395 | +---------------------------+--------+--------+----------+------+---------------+ | | | | | | +------------------------------------+--------+----------+------+---------------+ | Opening net book amount | | | | 947,395 | +------------------------------------+--------+----------+------+---------------+ | Additions - internally developed | | | | 533,473 | +------------------------------------+--------+----------+------+---------------+ | Amortisation | | | | | | (177,059) | +------------------+--------+--------+--------+----------+------+---------------+ | Closing net book amount at 30 June | | | | 1,303,809 | | 2009 | | | | | +------------------------------------+--------+----------+------+---------------+ | | | | | | | +---------------------------+--------+--------+----------+------+---------------+ | At 1 January | | | | | | | | 2008 | | | | | | | +------------------+--------+--------+--------+----------+------+---------------+ | Opening net book amount | | | | | 344,867 | +---------------------------+--------+--------+----------+------+---------------+ | Additions - internally developed | | | | 185,566 | +------------------------------------+--------+----------+------+---------------+ | Closing net book amount at 30 June | | | | 530,433 | | 2008 | | | | | +------------------------------------+--------+----------+------+---------------+ | Additions -internally developed | | | | 531,918 | +------------------------------------+--------+----------+------+---------------+ | Amortisation | | | | (114,956) | +------------------------------------+--------+----------+------+---------------+ | Closing net book amount at | | | | 947,395 | | 31 December 2008 | | | | | +---------+--------+--------+--------+--------+----------+------+---------------+ The internally generated intangible asset arises from the Group's computer software development initiative. These development costs are capitalised and amortised on a straight-line basis over their useful lives of three years once the related software product is available for use. If the product becomes unviable the deferred development costs are written off. The amortisation included in operating expenses is GBP177,059 (June 2008: GBPnil and December 2008: GBP114,956). The development costs capitalised for the six months ended June 2009 amount to GBP533,473 (June 2008: GBP185,566 and December 2008: GBP717,484) and will be amortised on a straight-line basis over their useful life of three years once the software product is available for use. Development costs which are not related to product maintenance and version upgrades are capitalised. 8. Share capital +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ | | | | | Number of | Ordinary | Share | Total | +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ | | | | | shares | shares | premium | | +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ | | | | | | GBP | GBP | GBP | +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ | | | | | | | | | +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ | Opening balance as at 1 January 2008 | 163,681,600 | 1,636,816 | 21,796,918 | 23,433,734 | +---------------------------------------------------+-------------+------------+--------------+--------------+ | Proceeds from shares issued - | | | | | | employee share option scheme | | | | | + +-------------+------------+--------------+--------------+ | | 670,769 | 6,708 | 18,717 | 25,425 | +---------------------------------------------------+-------------+------------+--------------+--------------+ | | | | | | | | | +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ | At 30 June 2008 | | | 164,352,369 | 1,643,524 | 21,815,635 | 23,459,159 | +-------------------------+--------------+----------+-------------+------------+--------------+--------------+ | Proceeds from shares issued - | | | | | | employee share option scheme | | | | | + +-------------+------------+--------------+--------------+ | | 230,000 | 2,300 | 7,550 | 9,850 | +---------------------------------------------------+-------------+------------+--------------+--------------+ | | | | | | +---------------------------------------------------+-------------+------------+--------------+--------------+ | At 31 December 2008 | 164,582,369 | 1,645,824 | 21,823,185 | 23,469,009 | +---------------------------------------------------+-------------+------------+--------------+--------------+ | Cancellation of the share premium account | - | - | (21,823,185) | (21,823,185) | +---------------------------------------------------+-------------+------------+--------------+--------------+ | Proceeds from shares issued - | 2,235,000 | 22,350 | 61,538 | 83,888 | | employee share option scheme | | | | | +---------------------------------------------------+-------------+------------+--------------+--------------+ | At 30 June 2009 | | | 166,817,369 | 1,668,174 | 61,538 | 1,729,712 | +-------------------------+--------------+----------+-------------+------------+--------------+--------------+ | | | | | | | | | +------------+------------+--------------+----------+-------------+------------+--------------+--------------+ Share premium account On 29 April 2009 the Company received a high court approval for the cancellation of its share premium account as the Company had an accumulated deficit on its retained earnings. The absence of distributable profits meant that the Company was unable to pay dividends. The Resolution, which was proposed as a special resolution, approved the cancellation of the Company's share premium account, which as at 29 April 2009 amounted to GBP21,823,185. Accordingly the cancellation of the share premium account is now effective. This now enables the Company to consider the payment of dividends in the future. This information is provided by RNS The company news service from the London Stock Exchange END IR GGGMLGRDGLZM
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