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NET Netcall Plc

90.00
0.00 (0.00%)
30 Apr 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Netcall Plc LSE:NET London Ordinary Share GB0000060532 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% 90.00 88.00 92.00 90.00 90.00 90.00 93,345 08:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Information Retrieval Svcs 36.04M 4.21M 0.0257 35.02 147.53M

Netcall PLC Half Yearly Report (6563F)

24/02/2015 7:00am

UK Regulatory


Netcall (LSE:NET)
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RNS Number : 6563F

Netcall PLC

24 February 2015

24 February 2015

NETCALL PLC

("Netcall", the "Company", or the "Group")

Interim results for the six months ended 31 December 2014

Netcall plc (AIM: NET), a leading customer engagement software provider, today announces its unaudited interim results for the six months ended 31 December 2014.

Financial Highlights

   --      Adjusted EBITDA(1) increased by 8% to GBP2.66m (H1 FY14: GBP2.48m) 
   --      Adjusted diluted earnings per share(2) increased 4% to 1.38p (H1 FY14: 1.33p) 
   --      Revenue increased to GBP8.60m (H1 FY14: GBP8.43m) 

-- Revenue of a recurring nature(3) increased 4% to GBP5.49m corresponding to 64% of total revenue

-- Cash generated from operations was GBP2.07m (H1 FY14: GBP1.30m) before national insurance on share option payments

   --      Profit before tax increased 3% to GBP1.41m (H1 FY14: GBP1.37m) 
   --      Debt-free balance sheet with net cash funds of GBP13.0m 

1) profit before interest, taxation, depreciation, amortisation, acquisition expenses and share-based charges

2) earnings per share before amortisation of acquired intangible assets, acquisition expenses, share-based charges, adjusted to a standard rate of corporation tax

   3)     revenue from support and maintenance and hosted service contracts 

Operational Highlights

   --      Expanded product suite with new multi-media capabilities and deeper platform integration 
   --      High levels of cross and upgrade Liberty sales from our clients 
   --      Delivered improved organisational efficiency and processes in key areas 
   --      Increased pipeline of Liberty sales opportunities 

Henrik Bang, CEO of Netcall, commented,

"I am pleased to report another period of revenue and profit growth with high levels of recurring revenue and cash generation. We have had record cross and upgrade orders from our clients including purchases of our new multi-media solutions. We continue to invest in the capabilities of our Liberty product suite, which together with our strong balance sheet, customer base and growing pipeline of opportunities gives the Board confidence in achieving a successful outcome for the full year."

For further enquiries, please contact:

 
 Netcall plc                            Tel. +44 (0) 
                                         330 333 6100 
 Henrik Bang, CEO 
  Michael Jackson, Chairman 
  James Ormondroyd, Group Finance 
  Director 
 
 finnCap Limited (Nominated Adviser      Tel. +44 (0) 
  and Broker)                            20 7220 0500 
 Stuart Andrews / James Thompson, 
  Corporate Finance 
 Victoria Bates / Simon Johnson, 
  Corporate Broking 
 
 Newgate                                 Tel. +44 (0) 
                                         20 7653 9850 
 Tim Thompson /Jasper Randall / Robyn 
  McConnachie 
 

About Netcall plc

Netcall is a UK company quoted on the AIM market of the London Stock Exchange. Netcall's software product suite provides compelling business process solutions for end-to-end customer engagement, incorporating multi-channel contact centre, workforce optimisation, business process management and enterprise content management. The Netcall software platform helps organisations meet the growing demands of their customers and prospects whilst improving internal efficiencies, thereby increasing profitability and customer satisfaction.

Netcall's customer base contains over 700 organisations in both the private and public sectors. These include two thirds of NHS Acute Health Trusts, major telecoms operators such as BT and leading organisations including Interflora, Lloyds Banking Group, Cineworld, Interserve, Prudential, British Sugar and Thames Water.

For further information, please consult the Netcall website: www.netcall.com

Introduction

Netcall continued to see significant interest in its Liberty platform and its customer engagement solutions. The Group recorded 8% higher adjusted EBITDA than the same period last year supported by increased revenues and improved margins. This represents a record revenue and profit result for an interim period in the Company's history.

The strength of the revenue of a recurring nature, accounting for 64% of total revenue, continues to underpin the Group's profitability and ongoing cash generation and provides a good level of visibility for the second half. The Group maintains a debt free balance sheet with an increased net cash balance of GBP13.0m at the period end.

Customers continue to purchase a broad range of solutions across the Liberty platform. In particular there was good cross and up-sales demand from the existing client base in the period, which also represents a significant opportunity going forward. The Group also continues to win new customers with both public and private organisations as they look to improve their customer engagement capabilities in a cost effective manner. New customer wins in the period include the London Borough of Hackney and Cofunds.

The Group remains committed to expanding its range of products and services by continuing to invest in the Liberty platform and go-to-market execution. Businesses are continuously seeking more sophisticated and comprehensive approaches to managing customer engagement enabling improved customer acquisition and retention while driving operational efficiencies. Netcall's end-to-end platform means it is well positioned to capitalise on this trend and the Board remains confident in the Company's prospects.

Financial Review

Group revenue for the period increased 2% to GBP8.60m (H1 FY14: GBP8.43m), comprising continuing growth in the core business primarily driven by existing clients supplemented with revenue from the non-core MovieLine service, which continues to generate positive cash flow for the Group.

Revenue which is considered to be recurring in nature, derived from support, maintenance, hosting and managed service contracts, was 64% (H1 FY14: 63%) of total Group revenue and continues to exceed the Group's fixed operating costs.

Gross profit margin increased by 0.5% to 91.3% as a result of the continuing focus on higher margin business.

Administrative expenses, before depreciation, amortisation, acquisition costs and share-based charges, increased to GBP5.18m (H1 FY14: GBP5.17m) an improvement in expense to revenue to 60% (H1 FY14: 61%) as a result of delivering further efficiency and process improvements.

Consequently, the Group recorded an 8% increase in adjusted EBITDA to GBP2.66m (H1 FY14: GBP2.48m), a margin of 31% of revenue (H1 FY14: 29%) and a profit before tax of GBP1.41m for the period (H1 FY14: GBP1.37m).

The Group tax charge was GBP0.23m (H1 FY14: GBP0.10m) an effective rate of tax of 17% (H1 FY14: 8%). The effective rate of tax benefited from the utilisation of previously unrecognised tax losses from prior years. It was higher than the same period last year due to tax deductions for shares acquired by employees under share option schemes in that prior period.

Adjusted diluted earnings per share increased 4% to 1.38p (H1 FY14: 1.33p). Reported diluted earnings per share was 0.84p (H1 FY14: 0.94) which was lower due to the issue of shares under share option schemes in the last financial year.

Cash generated from operations before national insurance on share option payments increased 59% to GBP2.07m (H1 FY14: GBP1.30m), representing 78% of adjusted EBITDA (H1 FY14: 53%). The change in conversion ratio is largely a result of temporary timing differences in the comparative period.

Spending on research and development, including capitalised software development was GBP0.90m (H1 FY14: GBP0.90m) of which capitalised software expenditure was GBP0.35m (H1 FY14: GBP0.36m).

Total capital expenditure was GBP0.42m (H1 FY14: GBP0.48m); the balance after capitalised development, being GBP0.06m (H1 FY14: GBP0.12m) relating to corporate facilities.

As a result of these factors, cash increased to GBP13.0m at 31 December 2014 (30 June 2014: GBP11.4m). The Group continues to maintain a debt-free balance sheet.

On 12 January 2015, post period end, the Company paid a dividend to shareholders in respect of the financial year ended 30 June 2014 of 0.9 pence per share totalling GBP1.23m, an increase of 29% over the previous financial year.

Business Review

Netcall's objective is to provide a comprehensive suite of customer engagement solutions which, on a single platform, enables organisations to have higher quality customer interactions and experience a lower operating cost.

Organisations across all sectors are looking to deliver best-in-class customer service and experience, in an architecture which manages multiple interaction channels (web, mobile, social media, web-chat, telephone and SMS) seamlessly. In order to simplify operations, organisations are moving towards full suite solutions that offer applications (for example customer records management, business process rules and integration to back office systems) which are fully integrated with communication and context routing technology.

The Liberty platform, which is available in the cloud or on premise, delivers this comprehensive functionality and can be acquired as a suite or on a modular basis. This provides a flexible entry point and upgrade path for organisations and as result it continues to gain foothold amongst new customers and its adoption is also broadening within our existing client base.

Examples of solution implementations include:

-- An existing callback customer selected the Liberty platform to replace their cloud contact centre to obtain integration with voice and non-voice channels such as social and web chat together with CRM integration.

-- An international transport organisation has deployed our workforce management solution to improve customer service and support revenue generation in a multi-skilled and multi-language environment thereby achieving significant improvements in both abandoned call rates and speed of answer.

-- A government agency selected the Liberty platform to provide PCI compliant automated payments which allows users to register their vehicle details using speech automation and make pay as you go and top-up payments to their accounts.

During the period the Group continued to develop and launch new solutions improving Liberty's capabilities including strengthening our multi-channel applications and creating new joined up solutions which enhance the differentiation of the platform. Examples include:

-- The introduction of a web-chat solution and improved integration for social media engagement which can be managed together with other media streams, each with different characteristics and service level requirements. These solutions have been well received by our customers and the first orders have been received.

-- A unique integration of our patented call-back application and workforce management solution enable users to forecast financial and service level impact of using call-back technology at specific times to maximise the utilisation of contact centre resources. Initial results from this innovation has shown a significant improvement in interactions answered within service level and average time to answer compared to using standalone solutions.

-- An integration of our contact centre and case management applications. This enables multi-channel workflow and routing of cases between departments combined with the ability to send proactive automated alerts and notifications as required.

The aim with our continuous development of the Liberty platform is to maintain a frequent release programme which allows both new and existing customers to map their current and future customer engagement requirements using Liberty's modular design, thereby creating incremental revenue opportunities for the Group.

Moving forward, Netcall's product roadmap priorities include ongoing replication of Liberty functionality to its current Cloud solution, thereby offering customers more flexibility while providing the opportunity to grow the Group's recurring revenue base. The Group will continue its focus on bringing additional enhancements to Liberty's multi-channel solutions to ensure the Group continues to offer best-of-breed solutions as part of its unified offering to our customers.

In addition, the Board continues to examine potential acquisitions of complementary businesses that fit the Group's acquisition criteria to enhance the Group's growth.

Outlook

We continue to invest in the capabilities of our SaaS and premise-based Liberty product suite. Together with our strong balance sheet, customer base and growing pipeline of opportunities it gives the Board confidenc e in achieving a successful outcome for the full year. Acquisition remains a part of the Group's strategy and the Board continues to assess the market for complementary acquisitions to enhance organic growth.

Unaudited consolidated income statement for the six months to 31 December 2014

 
                                                                                        12 months to 
                                                    Six months to       Six months to        30 June 
 GBP'000                                         31 December 2014    31 December 2013           2014 
--------------------------------------------   ------------------  ------------------  ------------- 
 Revenue                                                    8,598               8,430         16,866 
 Cost of sales                                              (751)               (782)        (1,513) 
---------------------------------------------  ------------------  ------------------  ------------- 
 Gross profit                                               7,847               7,648         15,353 
 
 Administrative expenses                                  (6,492)             (6,303)       (13,541) 
 Other gains/(losses) - net                                     -                 (1)              - 
--------------------------------------------   ------------------  ------------------  ------------- 
 
 Adjusted EBITDA                                            2,663               2,477          4,928 
 Acquisition credit                                             -                  50             50 
 Share-based payments                                       (558)               (462)        (1,689) 
 Depreciation                                                (72)                (60)          (127) 
 Amortisation of acquired intangible assets                 (466)               (520)        (1,054) 
 Amortisation of other intangible assets                    (212)               (141)          (296) 
 
 Operating profit                                           1,355               1,344          1,812 
 
 Finance income                                                55                  37             85 
 Finance costs                                                (2)                 (7)           (11) 
---------------------------------------------  ------------------  ------------------  ------------- 
 Finance income - net                                          53                  30             74 
---------------------------------------------  ------------------  ------------------  ------------- 
 
 Profit before tax                                          1,408               1,374          1,886 
 
 Tax                                                        (234)               (104)            327 
---------------------------------------------  ------------------  ------------------  ------------- 
 Profit for the period                                      1,174               1,270          2,213 
=============================================  ==================  ==================  ============= 
 
 Earnings per share - pence 
 Basic                                                       0.86                1.04           1.76 
 Diluted                                                     0.84                0.94           1.72 
=============================================  ==================  ==================  ============= 
 

All activities of the Group in the current and prior periods are classed as continuing. All of the profit for the period is attributable to the shareholders of Netcall plc.

Statement of comprehensive income for the six months to 31 December 2014

 
                                                                                       12 months to 
                                                   Six months to       Six months to        30 June 
 GBP'000                                        31 December 2014    31 December 2013           2014 
 
 Profit for the period                                     1,174               1,270          2,213 
--------------------------------------------  ------------------  ------------------  ------------- 
 Total comprehensive income for the period                 1,174               1,270          2,213 
============================================  ==================  ==================  ============= 
 

Unaudited consolidated balance sheet at 31 December 2014

 
 GBP'000                                             31 December 2014   31 December 2013   30 June 2014 
-------------------------------------------------   -----------------  -----------------  ------------- 
 Assets 
 Non-current assets 
 Property, plant and equipment                                    286                296            307 
 Intangible assets                                             11,490             12,157         11,804 
 Investments                                                      288                  -            188 
 Deferred income tax asset                                        846                480            867 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total non-current assets                                      12,910             12,933         13,166 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Current assets 
 Inventories                                                      171                220            168 
 Trade and other receivables                                    4,499              4,821          5,237 
 Current income tax asset                                           -                  -             66 
 Cash and cash equivalents                                     12,999              9,959         11,377 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total current assets                                          17,669             15,000         16,848 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total assets                                                  30,579             27,933         30,014 
==================================================  =================  =================  ============= 
 
 Equity and liabilities 
 Equity attributable to the owners of the parent 
 Share capital                                                  6,945              6,267          6,940 
 Share premium                                                  3,015              3,015          3,015 
 Merger reserve                                                 2,509              2,509          2,509 
 Capital reserve                                                  188                188            188 
 Treasury shares                                                (419)              (419)          (419) 
 Employee share schemes reserve                                   917                714            394 
 Profit and loss account                                        7,543              5,300          7,560 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total equity                                                  20,698             17,574         20,187 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Liabilities 
 Non-current liabilities 
 Deferred income tax liabilities                                  569                682            594 
 Other payables                                                     -                 41             24 
 Provisions                                                       122                 75             84 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total non-current liabilities                                    691                798            702 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Current liabilities 
 Trade and other payables                                       4,199              4,219          3,353 
 Current income tax liabilities                                   145                 97              - 
 Deferred income                                                4,846              5,245          5,772 
 Total current liabilities                                      9,190              9,561          9,125 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total liabilities                                              9,881             10,359          9,827 
--------------------------------------------------  -----------------  -----------------  ------------- 
 Total equity and liabilities                                  30,579             27,933         30,014 
==================================================  =================  =================  ============= 
 

Unaudited consolidated statement of changes in equity at 31 December 2014

 
                                                                                                Profit 
                                                              Capital              Employee        and 
                            Share      Share     Merger    redemption   Treasury      share       loss     Total 
 GBP'000                  capital    premium    reserve       reserve     shares    schemes    account    equity 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 
 Balance 
  at 1 July 
  2013                      6,117      3,015      2,509           188      (419)        872      4,603    16,885 
 Proceeds 
  from share 
  issue                       150          -          -             -          -          -          -       150 
 Increase 
  in equity 
  in relation 
  to options 
  issued                        -          -          -             -          -        133          -       133 
 Reclassification 
  following 
  exercise 
  or lapse 
  of share 
  options                       -          -          -             -          -      (291)        291         - 
 Dividends 
  to equity 
  holders 
  of the company                -          -          -             -          -          -      (864)     (864) 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Transactions 
  with owners                 150          -          -             -          -      (158)      (573)     (581) 
 Profit and 
  total comprehensive 
  income for 
  the period                    -          -          -             -          -          -      1,270     1,270 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Balance 
  at 31 December 
  2013                      6,267      3,015      2,509           188      (419)        714      5,300    17,574 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Balance 
  at 1 January 
  2014                      6,267      3,015      2,509           188      (419)        714      5,300    17,574 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Proceeds 
  from share 
  issue                       673          -          -             -          -          -          -       673 
 Increase 
  in equity 
  reserve 
  in relation 
  to options 
  issued                        -          -          -             -          -        856          -       856 
 Tax credit 
  relating 
  to share 
  options                       -          -          -             -          -        141          -       141 
 Reclassification 
  following 
  exercise 
  or lapse 
  of share 
  options                       -          -          -             -          -    (1,317)      1,317         - 
 Transactions 
  with owners                 673          -          -             -          -      (320)      1,317     1,670 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Profit and 
  total comprehensive 
  income for 
  the period                    -          -          -             -          -          -        943       943 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Balance 
  at 30 June 
  2014                      6,940      3,015      2,509           188      (419)        394      7,560    20,187 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Balance 
  at 1 July 
  2014                      6,940      3,015      2,509           188      (419)        394      7,560    20,187 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Proceeds 
  from share 
  issue                         5          -          -             -          -          -          -         5 
 Increase 
  in equity 
  reserve 
  in relation 
  to options 
  issued                        -          -          -             -          -        529          -       529 
 Tax credit 
  relating 
  to share 
  options                       -          -          -             -          -         36          -        36 
 Reclassification 
  following 
  exercise 
  or lapse 
  of share 
  options                       -          -          -             -          -       (42)         42         - 
 Dividends 
  to equity 
  holders 
  of the company                -          -          -             -          -          -    (1,233)   (1,233) 
 Transactions 
  with owners                   5          -          -             -          -        523    (1,191)     (663) 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Profit and 
  total comprehensive 
  income for 
  the period                    -          -          -             -          -          -      1,174     1,174 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 Balance 
  at 31 December 
  2014                      6,945      3,015      2,509           188      (419)        917      7,543    20,698 
----------------------  ---------  ---------  ---------  ------------  ---------  ---------  ---------  -------- 
 

Unaudited consolidated cash flow statement for the six months to 31 December 2014

 
                                                                                                          12 months to 
                                                                      Six months to       Six months to        30 June 
 GBP'000                                                           31 December 2014    31 December 2013           2014 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Cash flows from operating activities 
 Profit before income tax                                                     1,408               1,374          1,886 
 Adjustments for: 
   Depreciation                                                                  72                  60            127 
   Amortisation                                                                 678                 661          1,350 
   Share-based payments                                                         529                 462            989 
   Net finance income                                                          (53)                (30)           (74) 
 Changes in working capital (excluding the effects of 
 acquisitions) 
   Inventories                                                                  (3)                  58            110 
   Trade and other receivables                                                  738               (316)          (724) 
   Trade and other payables                                                 (1,299)             (1,111)          (264) 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Cash generated from operations                                               2,070               1,158          3,400 
 
 Analysed as: 
 Cash generated from operations before national insurance on 
  share option payments                                                       2,070               1,303          4,341 
 National insurance on share options                                              -               (145)          (941) 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 
 Interest paid                                                                  (2)                 (7)           (11) 
 Income tax refund/ (paid)                                                       10                (94)          (160) 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Net cash generated from operating activities                                 2,078               1,057          3,229 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Cash flows from investing activities 
 Investment in Macranet Ltd                                                   (100)                   -          (188) 
 Purchases of property, plant and equipment                                    (51)                (88)          (168) 
 Proceeds on disposal of property, plant and equipment                            -                   6              7 
 Development expenditure                                                      (354)               (357)          (657) 
 Purchases of other intangible assets                                          (11)                (33)           (69) 
 Interest received                                                               55                  37             77 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Net cash used in investing activities                                        (461)               (435)          (998) 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Cash flows from financing activities 
 Proceeds from issue of ordinary shares                                           5                 150            823 
 Dividends paid to Company shareholders                                           -                   -          (864) 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Net cash used in financing activities                                            5                 150           (41) 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Net increase in cash and cash equivalents                                    1,622                 772          2,190 
 Cash and cash equivalents at beginning of period                            11,377               9,187          9,187 
---------------------------------------------------------------  ------------------  ------------------  ------------- 
 Cash and cash equivalents at end of period                                  12,999               9,959         11,377 
===============================================================  ==================  ==================  ============= 
 

Notes to the financial information for the six months ended 31 December 2014

1. General information

Netcall plc (AIM: "NET", "Netcall", or the "Company") is a leading provider of customer engagement software. It is a public limited company which is quoted on AIM (a market of the London Stock Exchange). The Company's registered address is 3(rd) Floor, Hamilton House, 111 Marlowes, Hemel Hempstead, HP1 1BB and the Company's registered number is 1812912.

2. Basis of preparation

The Group interim results consolidate those of the Company and its subsidiaries (together referred to as the 'Group'). The principal trading subsidiaries of Netcall are Netcall Telecom Ltd and Serengeti Systems Ltd.

These consolidated interim financial statements (the 'results') have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (February 2015). This results announcement does not constitute statutory accounts of the Group within the meaning of sections 434(3) and 435(3) of the Companies Act 2006. The balance sheet at 30 June 2014 has been derived from the full Group accounts published in the Annual Report and Accounts 2014, which has been delivered to the Registrar of Companies and on which the report of the independent auditors was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

The results have been prepared in accordance with the accounting policies set out in the Group's 30 June 2014 statutory accounts, which are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union ("EU"). No changes to accounting policies are expected for the year ending 30 June 2015.

The results for the six months ended 31 December 2014 were approved by the Board on 20 February 2015. A copy of these interim results will be available on the Company's web site www.netcall.com from 27 February 2015.

The principal risks and uncertainties faced by the Group have not changed from those set out on page 7 of the annual report for the year ended 30 June 2014.

3. Segmental analysis

Management considers that there is one operating business segment being the design, development, sale and support of software products and services, which is consistent with the information reviewed by the Board of Directors when making strategic decisions. Resources are reviewed on the basis of the whole of the business performance.

The key segmental measure is adjusted EBITDA which is profit before interest, tax, depreciation, amortisation, acquisition and reorganisation expenses and share-based payments, which is set out on the consolidated income statement.

4. Earnings per share

The basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding those held in treasury:

 
                                                                     Six months to       Six months to    12 months to 
                                                                  31 December 2014    31 December 2013    30 June 2014 
--------------------------------------------------------------  ------------------  ------------------  -------------- 
 Net earnings attributable to ordinary shareholders (GBP'000s)               1,174               1,270           2,213 
 Weighted average number of ordinary shares in issue (000s)                136,980             121,538         126,076 
 Basic earnings per share (pence)                                             0.86                1.04            1.76 
==============================================================  ==================  ==================  ============== 
 

The diluted earnings per share has been calculated by dividing the net profit attributable to ordinary shareholders by the weighted average number of shares in issue during the year, adjusted for potentially dilutive shares that are not anti-dilutive.

 
                                                                     Six months to       Six months to    12 months to 
                                                                  31 December 2014    31 December 2013    30 June 2014 
--------------------------------------------------------------  ------------------  ------------------  -------------- 
 Weighted average number of ordinary shares in issue (000s)                136,980             121,538         126,076 
 Adjustments for share options (000s)                                        2,459              13,001           2,835 
 Weighted average number of potential ordinary shares in issue 
  (000s)                                                                   139,439             134,539         128,911 
--------------------------------------------------------------  ------------------  ------------------  -------------- 
 Diluted earnings per share (pence)                                           0.84                0.94            1.72 
==============================================================  ==================  ==================  ============== 
 

Adjusted basic and diluted earnings per share has been calculated to exclude the effect of acquisition and reorganisation costs, share-based payment charges, amortisation of acquired intangible assets and utilisation of historic tax losses. The Board believes this gives a better view of ongoing maintainable earnings. The table below sets out a reconciliation of the earnings used for the calculation of earnings per share to that used in the calculation of adjusted earnings per share:

 
                                                                     Six months to       Six months to    12 months to 
 GBP'000s                                                         31 December 2014    31 December 2013    30 June 2014 
--------------------------------------------------------------  ------------------  ------------------  -------------- 
 Profit used for calculation of basic and diluted EPS                        1,174               1,270           2,213 
 Acquisition credit                                                              -                (50)            (50) 
 Share-based payments                                                          558                 462           1,689 
 Amortisation of acquired intangible assets                                    466                 520           1,054 
 Tax adjustment                                                              (271)               (415)         (1,357) 
 Profit used for calculation of adjusted basic and diluted EPS               1,927               1,787           3,549 
==============================================================  ==================  ==================  ============== 
 
 
                                            Six months to       Six months to    12 months to 
 Pence                                   31 December 2014    31 December 2013    30 June 2014 
-------------------------------------  ------------------  ------------------  -------------- 
 Adjusted basic earnings per share                   1.41                1.47            2.81 
 Adjusted diluted earnings per share                 1.38                1.33            2.75 
=====================================  ==================  ==================  ============== 
 

5. Dividends

A dividend in respect of the year ended 30 June 2014 of 0.9 pence per share amounting to a total dividend of GBP1.23m was approved at the Annual General Meeting held on 27 November 2014. This dividend was paid on 12January 2015.

A dividend in respect of the year ended 30 June 2013 of 0.7 pence per share amounting to a total dividend of GBP0.86m was paid on 10 January 2014.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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