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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Landround | LSE:LDR | London | Ordinary Share | GB0001339844 | 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% | 2.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:0237F Landround Plc 03 October 2007 Landround plc ("Landround" or "the Company") INTERIM RESULTS FOR PERIOD ENDED 31 JULY 2007 Landround plc, the AIM-listed rewards programme and promotions group, announces its unaudited interim results for the six months to 31 July 2007. Highlights: *Losses substantially cut to #248,000 before exceptional charges (2006: #699,000) *Cash balance of #734,000 (2006: Borrowings of #589,000) *Improvement in margins to 59 per cent *Overheads down 13 per cent *Citigroup signs as rewards programme client in 2 countries *Acquisition linked to business launch in fixed fee market Landround Chief Executive, Colin Gibson, said: ""The operating loss is still clearly not a figure we are happy with but is in line with our plans and reflects a business in recovery. Achieving a neutral cash flow despite the loss recorded is perhaps the most significant achievement in the six month period. "Landround, via its subsidiary White Label Rewards, has been selected as Citigroup's partner in two European countries with the programme now successfully launched in Portugal. The selection of Landround as their partner for this project represents an endorsement of the Company's growing reputation for delivering excellent service and value in reward programmes. "This and other developments reflect progress with the strategy of building a level of recurring income from blue chip reward programmes which will ultimately cover all of our monthly costs to leave the more volatile promotions income to provide incremental profitability. "In the second half of the year management expects to continue the present good progress in developing the reward scheme business internationally. An increasing number of market opportunities are opening up for the business and even merely regaining a proper share of the UK promotions market will deliver a significant improvement in results". -ends- For further information please contact: David Owen, Chairman Landround plc Telephone: 01594 516096 Mobile: 07976 723276 Peter Shea, Daniel Stewart & Co plc Telephone: 020 7776 6550 Paul Quade, City Road Telephone: 020 7248 8010 Communications Mobile: 07947 186694 Chairman's Statement One year on from my previous interim statement and the major changes in Board personnel and product portfolio I referred to at that time have all been achieved and bedded in. Your Chief Executive, Colin Gibson, has taken a firm grip on the business and his team of Tony Pope, Finance Director, and Franco Sessini, Travel Director, has brought professional management skills to bear. Substantially improved management information is now available to Landround and our ability to analyse individual reward programmes and tactical promotions has improved dramatically. The figures, showing a loss of #248,000 for the half year before an exceptional item, while still unsatisfactory, demonstrate the steady improvement anticipated at the time of our fund-raising in December 2006 and we have a number of active discussions in train with major commercial organisations. The acquisition of Fixed Fee Plus adds another potential revenue stream and the recruitments undertaken during the last year are showing promise. Our contract wins with Citigroup underline our status as one of the leading international reward programme providers. All our reward clients have continued in place and a number are anticipating an expansion of their activity in the coming months. Reward programmes by their very nature take time to sell and grow but the opportunities currently under discussion augur well for our medium term future. Our promotions division still faces a challenging environment but we expect personnel changes undertaken over the last months to bear fruit and that we will soon see the first signs of a return to our previous profitable performance. I must take this opportunity to thank not only all staff for their sterling efforts but also your non-executives, Bill Brown and Alan Williamson, who have provided wise counsel and valuable commercial acumen. David G Owen Chairman, 2 October 2007 Chief Executive's Report General The first six months of 2007/8 have seen the business trading close to the expectations set at the time of the December 2006 fundraising. Compared with 2006/7, revenue has been similar in total albeit with some differences in the underlying mix of business. In view of a number of presentational changes already resulting from the introduction of International Financial Reporting Standards for the first time, the Board has elected also to change the basis on which revenue is recognised to exclude revenue from Landround Travel Limited, the Group's travel agency. This subsidiary exists to service the delivery of travel rewards and promotions resulting from the sales of other Group companies and does not initiate new external sales. The Board believes that this presentation will allow a clearer focus on the true revenue performance of the business. In addition the Board has reviewed in detail the carrying amount of goodwill relating to the purchase of Travel Offers and has concluded that a write-down is appropriate. Margins have improved to 59% compared with 51% in the equivalent 2006/7 period. The first six months of 2006/7 included some elements of reward programme revenue taken on at lower prices than the new management team would now accept. In addition, the results in the first six months of 2006/7 included additional costs related to certain flight promotions sold in the prior period which exceeded the level of provisions at 31 January 2006. In order to launch new overseas reward programmes, the business has had to invest in additional call centre resources but despite these additional costs, overheads were over 13% reduced, mainly due to the headcount reductions which took place in June 2006 and continuing tight control. The #250,000 exceptional cost of making these reductions was reflected as a cost in last year's accounts. The current period results also reflect the #147,000 additional exceptional cost of settling a long-running legal dispute over fees, commissions and costs with a former sales consultant who left the business in 2004. The overall result was an operating loss substantially reduced from #950,000 to #395,000 - still clearly not a result we are happy with but one which is in line with our plans and reflects a business in recovery. The business continued to demonstrate good working capital control and achieved a neutral cash flow despite the loss recorded in the six month period. Capital expenditure has been held to an essential minimum. The closing balance sheet shows #732,000 of net cash balances compared with net borrowings of #589,000 at 31 July 2006 and with a net cash balance of #725,000 at 31 January 2007. Net cash balances have declined in August and September linked to the timing of customer billings, the dispute settlement referred to above and the timing of other commitments but the business continues to trade within agreed bank facilities. Reward Programmes Landround, via its subsidiary, White Label Rewards Limited, has been selected as Citigroup's partner in two European countries, with the programme now launched successfully in Portugal and a contract signed for another country, which is expected to launch in the near future. Landround will manage the rewards systems, the call centres and the sourcing of rewards on Citigroup's behalf for these programmes. The Board is delighted to be able to announce this partnership with Citigroup. The selection of Landround as their partner for this project represents an endorsement of Landround's growing reputation for delivering excellent service and value in reward programmes. The UK credit card programme with Goldfish (formerly Morgan Stanley) has performed very strongly in the period with an increase in cardholders of over 50% in the last six months and therefore a significant acceleration of points issued to customers. This growth has been driven by a range of attractive introductory offers on the card. The UK programme was recently enhanced through the launch of e-Buys on the buy and fly! website. This offers a set of links to around 60 major retailers where buy and fly! members can earn extra points when shopping on-line. The Compra y Vuela programme in Spain linked to cards operated by Banesto (a top ten Spanish bank and part of Grupo Santander, the owner of Abbey in the United Kingdom) continues to perform well albeit that it is no longer showing the significant growth achieved in the launch period. Ways of enhancing the offering to develop further cardholder growth are being pursued. The launch of the buy and fly! programme in Sweden through our partner Resurs bank has been a significant success in the period with growth in cardholder numbers and spend exceeding annual plans already after 8 months. Further development of the programme is in hand to maintain and build on this strong early momentum. In Ireland, business with our leading partner, Tesco, has maintained a reasonable level but we have seen significant growth coming from business through our department store partner, Heatons, following the launch of a temporary reward card which allows us to capture new customers' initial spending and bring them into the programme from day one. The buy and fly! credit card launched with MBNA is building steadily. The developments above reflect progress with the strategy of building a level of recurring income from blue chip reward programme customers which will ultimately at least cover all of our monthly costs to leave the more volatile promotions income to provide incremental profitability. Promotions The promotions side of the business performed poorly in general with the overall result improved by two larger non-routine deals which accounted for around a third of total promotions revenue. One of these deals was a larger consumer prize deal on relatively low margins while the other represented Landround's first real foray into non-travel based fixed fee promotions with a large drinks manufacturer. The mainstream promotions business, in the UK, Spain and Ireland suffered from inconsistency in day to day sales and from an absence of any larger deals. This represented a disappointment following the re-building of the UK promotions sales team at the end of the previous financial year. Management concluded that a number of changes were necessary and in late August the sales and marketing function for UK and Ireland was restructured to ensure that the marketing and promotion sales functions were each headed by specialists in those disciplines. We believe that these changes can make our marketing function more pro-active and improve our sales performance. Linked to these changes and following the acquisition of Fixed Fee Plus Limited, a small company in the fixed fee market, Landround has created a new (non-travel) fixed fee promotions division from September. To head this division, we have recruited an external manager with excellent experience in the fixed fee market, Bob Kotecha, who is a former colleague of Alan Williamson, one of our non-executive directors. Alan led the team that built up and sold Fotorama, a leading business in this market, and Bob was a key member of his management team. Travel Offers The Travel Offers business has continued to underperform in revenue terms, although some cost reduction was achieved by bringing fulfillment in house and the overall result was a profit (after attributable overheads) of #15,000. A number of changes in the approach to pricing and how the free hotel accommodation product is marketed have been piloted with a variety of results and the team expects to build on these to improve results in the second half. Looking forward In the second half of the year, management expects to continue the present good progress in developing the reward scheme business internationally with a number of further contract signings and launches. Following the restructuring of the UK and Ireland sales and marketing functions in late August / early September, it is also expected that there will be a gradual improvement in promotion sales in addition to the development of a new stream of business in fixed fee promotions. An increasing number of market opportunities are opening up for the business in the international rewards market and even merely regaining a proper share of the UK promotions market will deliver a significant improvement in results. Tight management of costs and cash will remain a key feature of the business as it moves steadily to a level and mix of revenue which will deliver consistent monthly profitability. Colin Gibson Chief Executive, 2 October 2007 Consolidated Income Statement for the six months ended 31 July 2007 (unaudited) 6 months 6 months ended 31 12 months ended 31 ended July 2006 #'000 January 2007 #'000 31 July *restated *restated Note 2007 #'000 Revenue 4 3,198 3,251 5,273 Cost of sales (1,322) (1,585) (2,382) Gross profit 1,876 1,666 2,891 Administrative expenses (2,271) (2,616) (4,785) Loss from operations (395) (950) (1,894) Analysed as: Loss from operations before (248) (699) (1,644) exceptional items Exceptional items 5 (147) (251) (250) Loss from operations (395) (950) (1,894) Finance expense (19) (24) (69) Finance income 2 - - Loss before taxation 4 (412) (974) (1,963) Income tax expense - - (60) Loss for the period (412) (974) (2,023) Loss per share (basic and 6 (2.9p) (17.0p) (29.3p) diluted) * as restated for the first time adoption of International Financial Reporting Standards - see Note 1 Consolidated Balance Sheet as at 31 July 2007 (unaudited) Note 31 July 2007 31 July 2006 31 January 2007 #'000 #'000 #'000 *restated *restated Non current assets Goodwill 7 362 350 350 Property, plant and 356 560 449 equipment Deferred tax asset 613 675 613 1,331 1,585 1,412 Current assets Inventories 69 99 68 Trade and other 1,252 1,889 1,017 receivables Cash and cash equivalents 732 463 725 Current tax asset - 41 45 2,053 2,492 1,855 Current liabilities Borrowings - (1,052) - Trade and other payables (1,658) (1,809) (1,525) Provisions (1,185) (952) (950) Current tax - (3) - (2,843) (3,816) (2,475) Non current liabilities Provisions (723) (580) (580) (723) (580) (580) Net (liabilities) / (182) (319) 212 assets Equity Called up equity share 701 286 701 capital Share based payment 41 25 23 reserve Share premium 4,055 2,888 4,055 Capital redemption 10 10 10 reserve Retained earnings (4,989) (3,528) (4,577) Total equity (182) (319) 212 * as restated for the first time adoption of International Financial Reporting Standards - see Note 1 Consolidated Cashflow Statement for the six months ended 31 July 2007 (unaudited) +---------------------------+-------+---------------+---------------+---------------+ | | | 6 months ended| 6 months ended|12 months ended| | | | 31 July 2007| 31 July 2006| | | | | #'000| #'000|31 January 2007| | | | | | #'000| | | Note| | *restated| | | | | | | *restated| | | | | | | | | | | | | | | | | | | | | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Cash generated from | 8 | (7) | (348) | (591) | |operations | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Income taxes received | | 45 | 290 | 285 | +---------------------------+-------+---------------+---------------+---------------+ |Interest paid | | (21) | (24) | (65) | +---------------------------+-------+---------------+---------------+---------------+ |Net cash from operating | | 17 | (82) | (371) | |activities | | | | | +---------------------------+-------+---------------+---------------+---------------+ | | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Investing activities | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Interest received | | 2 | - | - | +---------------------------+-------+---------------+---------------+---------------+ |Purchases of property,plant| | - | (63) | (30) | |and equipment | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Acquisition of subsidiaries| | (93) | - | - | |anbusinesses | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Cash acquired with | | 81 | - | - | |subsidiaries | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Net cash from investing | | (10) | (63) | (30) | |activities | | | | | +---------------------------+-------+---------------+---------------+---------------+ | | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Financing activities | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Hire purchase payments | | - | - | (12) | +---------------------------+-------+---------------+---------------+---------------+ |Proceeds from issue of | | - | - | 1,582 | |shares (net of expenses) | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Net cash from financing | | - | - | 1,570 | |activities | | | | | +---------------------------+-------+---------------+---------------+---------------+ | | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Net increase / (decrease) | | 7 | (145) | 1,169 | |in cash and cash | | | | | |equivalents | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Cash and cash equivalents | | 725 | (444) | (444) | |at the beginning of the | | | | | |period | | | | | +---------------------------+-------+---------------+---------------+---------------+ |Cash and cash equivalents | | 732 | (589) | 725 | |at the end of the period | | | | | +---------------------------+-------+---------------+---------------+---------------+ * as restated for the first time adoption of International Financial Reporting Standards - see Note 1 Note that the impact of IFRS on the cashflow statement is restricted to changes in presentation and classification; the overall net cashflows in all periods are unchanged. Consolidated Statement of Changes in Shareholders' Equity for the six months ended 31 July 2007 (unaudited) +---------------------------+---------------+---------------+---------------+ | | 6 months ended| 6 months ended|12 months ended| | | 31 July 2007| 31 July 2006| | | | #'000| #'000|31 January 2007| | | | | #'000| | | | *restated| | | | | | *restated| | | | | | | | | | | | | | | | | | | | | +---------------------------+---------------+---------------+---------------+ |Balance at start of period | 212 | 1,663 | 1,663 | +---------------------------+---------------+---------------+---------------+ | | | | | +---------------------------+---------------+---------------+---------------+ |Adjustments for IFRS / UK | - | (1,033) | (1,033) | |GAAP | | | | +---------------------------+---------------+---------------+---------------+ | | | | | +---------------------------+---------------+---------------+---------------+ |Revised balance at start of| 212 | 630 | 630 | |period | | | | +---------------------------+---------------+---------------+---------------+ | | | | | +---------------------------+---------------+---------------+---------------+ |Loss for the period | (412) | (974) | (2,023) | +---------------------------+---------------+---------------+---------------+ |Share capital issued (net | - | - | 1,582 | |of costs) | | | | +---------------------------+---------------+---------------+---------------+ |Share based payment charge | 18 | 25 | 23 | +---------------------------+---------------+---------------+---------------+ |Balance at end of period | (182) | (319) | 212 | +---------------------------+---------------+---------------+---------------+ * as restated for the first time adoption of International Financial Reporting Standards - see Note 1 Notes 1. Approval of interim report The interim report was approved by the directors on 2 October 2007. 2. Basis of Preparation The group has adopted International Financial Reporting Standards ('IFRS') as adopted by the EU for the year ending 31 January 2008, and therefore the results for the six months ended 31 July 2007 represent the group's first interim report prepared in accordance with its accounting policies under IFRS. Previously the group has reported using UK Generally Accepted Accounting Principles ('UK GAAP'). Reconciliations between UK GAAP and IFRS are presented as note 9. Following a review of accounting policies under IFRS, the directors consider it appropriate to amend the basis on which turnover from one of the group's subsidiary companies is recognised - see note 3 below for further detail. This interim report has been prepared in accordance with IFRS and International Reporting Committee ('IFRIC') interpretations that are expected to be applicable to the consolidated financial statements for the year ended 31 January 2008. These standards are subject to ongoing amendment and/or interpretation and are therefore still subject to change. Accordingly information contained in this interim report may need to be updated for subsequent amendments to IFRS required for first time adoption or for new standards issued post the balance sheet date. The financial information herein does not constitute full statutory accounts within the meaning of Section 240 of the Companies Act 1985 (as amended). Comparative figures are based on the IFRS restatements as detailed in note 9. The UK GAAP figures used as the basis for the IFRS restatements are extracted from the group's interim report for the six months ended 31 July 2006 and the full year Annual Report and Accounts for the year ended 31 January 2007. The latter have been filed with the Registrar of Companies and contain an unqualified audit report. Although the group has net liabilities and has recorded further losses in the period, this report has been prepared on the basis that the group will continue to be a going concern. The balance sheet was significantly strengthened by the equity fundraising in December 2006, the level of losses is much reduced, the group maintains a positive cash balance, and the business has the continued support of its major shareholders and its bank. 3. Revenue recognition policy Revenues derived from Landround Travel (the group's UK and Irish travel agency) are no longer recognised as revenue on consolidation. Landround Travel is now very much viewed as an "after-sale" service segment for Landround Marketing, the subsidiary company which is primarily responsible for generating the group's core reward programme and promotions income. The revenues disclosed in Landround Travel's own statutory accounts are wholly dependent on revenues generated from the group's marketing division (Landround Marketing); Landround Travel in isolation does not have the capacity to generate external revenues. The revised presentation provides a more meaningful insight into overall group performance, both in terms of revenues and gross profitability. The impact has been to reduce turnover and cost of sales by #1,441,000 in the six months to 31 July 2007 (six months to 31 July 2006: #2,560,000; year to 31 January 2007: #4,457,000). There is no impact whatsoever on profit / loss or equity. This change has been included within the IFRS reconciliations in note 9, and has been analysed as an amendment to previously reported UK GAAP figures. 4. Segmental Reporting . +------------------+--------------------+--------------------+---------------------+ | | 6 months ended| 6 months ended| 12 months ended| | | | | | | | 31 July 2007| 31 July 2006| 31 January 2007| | | | | | | | #'000| #'000| #'000| | | | | | | | | | | +------------------+---------+----------+---------+----------+---------+-----------+ | | Revenue |Profits / | Revenue |Profits / | Revenue | Profits / | | | | (losses) | | (losses) | | (losses) | | | | | | | | | | | | | | | | | +------------------+---------+----------+---------+----------+---------+-----------+ |Rewards | 2,025 | 1,247 | 1,995 | 819 | 3,281 | 1,507 | +------------------+---------+----------+---------+----------+---------+-----------+ |Promotions | 960 | 439 | 976 | 587 | 1,513 | 938 | +------------------+---------+----------+---------+----------+---------+-----------+ |Hotel Catalogues | 213 | 190 | 280 | 260 | 479 | 446 | +------------------+---------+----------+---------+----------+---------+-----------+ |Central | - | (2,271) | - | (2,616) | - | (4,785) | +------------------+---------+----------+---------+----------+---------+-----------+ |Total | 3,198 | (395) | 3,251 | (950) | 5,273 | (1,894) | +------------------+---------+----------+---------+----------+---------+-----------+ | | | | | | | | +------------------+---------+----------+---------+----------+---------+-----------+ |Net financial | | (17) | | (24) | | (69) | |expense | | | | | | | +------------------+---------+----------+---------+----------+---------+-----------+ | | | | | | | | +------------------+---------+----------+---------+----------+---------+-----------+ |Loss before | | (412) | | (974) | | (1,963) | |taxation | | | | | | | +------------------+---------+----------+---------+----------+---------+-----------+ 5. Exceptional items Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to facilitate a better understanding of the group's financial performance. The exceptional item disclosed in the six months ended 31 July 2007 relates to a litigation settlement in excess of previous provisions in respect of a former sales consultant. There is no further ongoing litigation within the group. The exceptional item in the prior year related to restructuring costs, primarily redundancy expenses. 6. Loss per share The calculation of loss per share is based on the weighted average number of shares in issue during the period of 14,024,136 (31 July 2006: 5,726,636; 31 January 2007: 6,911,993) and on the loss for the period of #412,000 (31 July 2006 restated: #974,000; 31 January 2007 restated: #2,023,000). 7. Goodwill The goodwill movement in the period relates to the acquisition of Fixed Fee Plus Limited for #12,000. This business offers "fixed fee" promotions which are non travel-based. 8. Cash generated from operations +---------------------------+---------------+---------------+---------------+ | | 6 months ended| 6 months ended|12 months ended| | | 31 July 2007| 31 July 2006|31 January 2007| | | #'000| #'000| #'000| | | | | | | | | *restated| *restated| +---------------------------+---------------+---------------+---------------+ |Loss from operations | (395) | (950) | (1,894) | +---------------------------+---------------+---------------+---------------+ |Adjusted for: | | | | +---------------------------+---------------+---------------+---------------+ |Depreciation | 93 | 123 | 201 | +---------------------------+---------------+---------------+---------------+ |(Increase) / decrease in | (1) | (9) | 22 | |inventories | | | | +---------------------------+---------------+---------------+---------------+ |(Increase) / decrease in | (235) | 101 | 973 | |receivables | | | | +---------------------------+---------------+---------------+---------------+ |Increase in payables | 513 | 362 | 84 | +---------------------------+---------------+---------------+---------------+ |Share based payments | 18 | 25 | 23 | +---------------------------+---------------+---------------+---------------+ |Cash generated from | (7) | (348) | (591) | |operations | | | | +---------------------------+---------------+---------------+---------------+ 9. IFRS transition / UK GAAP Amendments Reconciliations of the impact of the adoption of IFRS and amendments made to UK GAAP are set out below, together with explanatory comments. Income statement reconciliation for the six months ended 31 July 2006 +-------------------+---------+-----------+---------+----------+----------+ | | UK GAAP| Revenue| UK GAAP| Goodwill| IFRS| | | |Recognition| | | | | | as| | restated| | | | | reported| #'000| | | | | | | | #'000| #'000| #'000| | | #'000| | | | | | | | | | | | +-------------------+---------+-----------+---------+----------+----------+ |Revenue | 5,811 | (2,560) | 3,251 | - | 3,251 | +-------------------+---------+-----------+---------+----------+----------+ |Cost of sales | (4,145) | 2,560 | (1,585) | - | (1,585) | +-------------------+---------+-----------+---------+----------+----------+ |Gross Profit | 1,666 | -| 1,666| -| 1,666 | +-------------------+---------+-----------+---------+----------+----------+ |Administration | (2,670) | - | (2,670) | 54 | (2,616) | |expenses | | | | | | +-------------------+---------+-----------+---------+----------+----------+ |Loss from | (1,004) | - | (1,004) | 54 | (950) | |operations | | | | | | +-------------------+---------+-----------+---------+----------+----------+ |Finance expense | (24) | - | (24) | - | (24) | +-------------------+---------+-----------+---------+----------+----------+ |Loss before | (1,028)| - | (1,028) | 54 | (974) | |taxation | | | | | | +-------------------+---------+-----------+---------+----------+----------+ |Income tax expense | - | - | - | - | - | +-------------------+---------+-----------+---------+----------+----------+ |Loss for the period| (1,028) | - | (1,028) | 54 | (974) | +-------------------+---------+-----------+---------+----------+----------+ Income statement reconciliation for the year ended 31 January 2007 +-------------------+----------+------------+---------+--------+----------+----------+ | | UK GAAP| Revenue| UK GAAP|Goodwill| Deferred| IFRS| | | | Recognition| | | Tax| | | | as| | restated| | | | | | reported| #'000| | | #'000| | | | | | #'000| #'000| | #'000| | | #'000| | | | | | | | | | | | | | +-------------------+----------+------------+---------+--------+----------+----------+ |Revenue | 9,730 | (4,457) | 5,273 | - | - | 5,273 | +-------------------+----------+------------+---------+--------+----------+----------+ |Cost of sales | (6,839) | 4,457 | (2,382) | - | - | (2,382) | +-------------------+----------+------------+---------+--------+----------+----------+ |Gross Profit | 2,891 | -| 2,891| -| - | 2,891 | +-------------------+----------+------------+---------+--------+----------+----------+ |Administration | (4,893) | - | (4,893) | 108 | - | (4,785) | |expenses | | | | | | | +-------------------+----------+------------+---------+--------+----------+----------+ |Loss from | (2,002) | - | (2,002) | 108 | - | (1,894) | |operations | | | | | | | +-------------------+----------+------------+---------+--------+----------+----------+ |Finance expense | (69) | - | (69) | - | - | (69) | | | | | | | | | | | | | | | | | +-------------------+----------+------------+---------+--------+----------+----------+ |Loss before | (2,071) | - | (2,071) | 108 | - | (1,963) | |taxation | | | | | | | +-------------------+----------+------------+---------+--------+----------+----------+ |Income tax expense | (75) | - | (75) | - | 15 | (60) | +-------------------+----------+------------+---------+--------+----------+----------+ |Loss for the period| (2,146) | - | (2,146) | 108 | 15 | (2,023) | +-------------------+----------+------------+---------+--------+----------+----------+ Balance sheet reconciliation as at 1 February 2006 (IFRS transition date) UK GAAP Goodwill UK GAAP Deferred Reclassifications IFRS Tax as Restated reported #'000 #'000 #'000 #'000 #'000 #'000 Non current assets Goodwill 1,480 (1,130) 350 - - 350 Property, plant 620 - 620 - - 620 and equipment Deferred tax 437 - 437 97 141 675 asset 2,537 (1,130) 1,407 97 141 1,645 Current assets Inventories 90 - 90 - - 90 Trade and other 1,990 - 1,990 - - 1,990 receivables Cash and cash 617 - 617 - - 617 equivalents Current tax 472 - 472 - (141) 331 asset 3,169 - 3,169 - (141) 3,028 Current liabilities Borrowings (1,073) - (1,073) - - (1,073) Trade and other (1,799) - (1,799) - - (1,799) payables Current tax (3) - (3) - - (3) Provisions - - - - (726) (726) (2,875) - (2,875) - (726) (3,601) Non current liabilities Provisions (1,168) - (1,168) - 726 (442) (1,168) - (1,168) - 726 (442) Net assets / 1,663 (1,130) 533 97 - 630 (liabilities) Equity Called up equity 286 - 286 - - 286 share capital Share premium 2,888 - 2,888 - - 2,888 Capital 10 - 10 - - 10 redemption reserve Retained (1,521) (1,130) (2,651) 97 - (2,554) earnings Total equity 1,663 (1,130) 533 97 - 630 Balance sheet reconciliation as at 31 July 2006 UK GAAP Goodwill UK GAAP Deferred Reclassifications IFRS Tax Restated #'000 #'000 #'000 #'000 #'000 #'000 Non current assets Goodwill 1,426 (1,076) 350 - - 350 Property, plant and 560 - 560 - - 560 equipment Deferred tax asset 437 - 437 97 141 675 2,423 (1,076) 1,347 97 141 1,585 Current assets Inventories 99 - 99 - - 99 Trade and other 1,889 - 1,889 - - 1,889 receivables Cash and cash 463 - 463 - - 463 equivalents Current tax asset 182 - 182 - (141) 41 2,633 - 2,633 - (141) 2,492 Current liabilities Borrowings (1,052) - (1,052) - - (1,052) Trade and other (1,809) - (1,809) - - (1,809) payables Current tax (3) - (3) - - (3) Provisions - - - - (952) (952) (2,864) - (2,864) - (952) (3,816) Non current liabilities Provisions (1,532) - (1,532) - 952 (580) (1,532) - (1,532) - 952 (580) Net assets / 660 (1,076) (416) 97 - (319) (liabilities) Equity Called up equity 286 - 286 - - 286 share capital Share based payment 25 - 25 - - 25 reserve Share premium 2,888 - 2,888 - - 2,888 Capital redemption 10 - 10 - - 10 reserve Retained earnings (2,549) (1,076) (3,625) 97 - (3,528) Total equity 660 (1,076) (416) 97 - (319) Balance sheet reconciliation as at 31 January 2007 UK GAAP Goodwill UK GAAP Deferred Reclassifications IFRS Tax restated #'000 #'000 #'000 #'000 #'000 #'000 Non current assets Goodwill 1,372 (1,022) 350 - - 350 Property, plant and 449 - 449 - - 449 equipment Deferred tax asset 496 - 496 112 5 613 2,317 (1,022) 1,295 112 5 1,412 Current assets Inventories 68 - 68 - - 68 Trade and other 1,017 - 1,017 - - 1,017 receivables Cash and cash 725 - 725 - - 725 equivalents Current tax asset 50 - 50 - (5) 45 1,860 - 1,860 - (5) 1,855 Current liabilities Trade and other (1,525) - (1,525) - - (1,525) payables Provisions - - - - (950) (950) (1,525) - (1,525) - (950) (2,475) Non current liabilities Provisions (1,530) - (1,530) - 950 (580) (1,530) - (1,530) - 950 (580) Net assets / 1,122 (1,022) 100 112 - 212 (liabilities) Equity Called up equity 701 - 701 - - 701 share capital Share based payment 23 - 23 - - 23 reserve Share premium 4,055 - 4,055 - - 4,055 Capital redemption 10 - 10 - - 10 reserve Retained earnings (3,667) (1,022) (4,689) 112 - (4,577) Total equity 1,122 (1,022) 100 112 - 212 Explanatory Comments In preparing this interim report, the group has elected to apply the following transitional arrangements permitted by IFRS1 'First time adoption of International Financial Reporting Standards': * Business combinations effected before 1 February 2006 have not been restated. * The carrying amount of capitalised goodwill at 31 January 2006 that arose on business combinations accounted for using the acquisition method under UK GAAP was frozen at this amount and tested for impairment at 1 February 2006. The reconciling items - both those arising as a result of implementing IFRS as well as those arising as a result of adjustments made under UK GAAP - are explained below: Goodwill * Amortisation charged from 1 February 2006 has been removed, reducing the level of administration expenses in both restated periods. * The detailed impairment review undertaken at 1 February 2006, in accordance with the guidelines within IAS 36 'Impairment of assets', indicated that a significant write-down of goodwill associated with the acquisition of Travel Offers Limited was appropriate. The carrying value of goodwill was as a result reduced to #350,000. This has been disclosed as an amendment to the previously reported UK GAAP goodwill valuations in the reconciliations above. Deferred taxation * Deferred taxation is now recognised in accordance with IAS 12 'Income taxes'. The only material difference to UK GAAP is that deferred tax assets are no longer discounted, hence the discount element of the asset under UK GAAP has been reversed. Revenue Recognition * In order to facilitate better understanding of the restatements, the impact of the revenue recognition policy referred to in note 3 has been included within the reconciliations, disclosed as an amendment to revenues reported under UK GAAP. Reclassifications * Under UK GAAP the provision for estimated future redemption costs was classified within provisions for liabilities and charges. Under IFRS provisions are required to be split between current and non current liabilities. This change has been presented within the IFRS balance sheet reconciliations, again for the sake of clarity. * Under UK GAAP deferred tax assets were split between debtors falling due within one year and debtors falling due after more than one year. Under IFRS deferred tax assets are presented in non current assets in their entirety. This information is provided by RNS The company news service from the London Stock Exchange END IR UUGGCUUPMGMP
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