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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nexus Man | LSE:NXS | London | Ordinary Share | GB0030379423 | ORD 0.25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.085 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMNXS
21 February 2012
Nexus Management plc
("Nexus", the "Group" or the "Company")
Final results for the year ended 30 September 2011
The Board of Nexus Management Plc, the AIM quoted provider of specialist IT Managed Services,
is pleased to announce its final results for the year ended 30 September 2011.
Highlights:
- Turnover increased by GBP53,000 to GBP5.9 million (2010: GBP5.85 million)
- Turnaround to profitability before exceptional items of GBP396,000 (2010: GBP136,000 loss)
- Nexus UK continued to improve its performance, with additional sales to existing customers
and by securing new business
- Nexus in the US delivered a better than expected result for the financial year under review,
achieved through strong income performance and reductions to the cost base
Post-period Highlights
- Board restructured and strategic review process initiated. The Board anticipates that this
will enable the Group's business to grow and enhance shareholder value
M Barney Battles, Executive Chairman, commented:
"The start of the year has seen many high level changes with the
Board restructured and a strategic review over the operations and large
contracts. I am confident that the strategic changes will stabilise the group
and in time increase shareholder value. The operations have got off to a
reasonable start for the year 2011/12 and I look forward to the year ahead
with Nexus."
This announcement has been extracted from the accounts. The full Report and Accounts can be found
on the Nexus website at www.nexusmanagementplc.com
FURTHER ENQUIRIES
Nexus Management plc
M Barney Battles Tel: 0778 976 6242
Merchant Securities Limited (Nominated Adviser)
Simon Clements / David Worlidge Tel: 020 7628 2200
Rivington Street (Broker)
Jon Levinson Tel: 020 7562 3351
Bishopsgate Communications Ltd
Nick Rome / Deepali Schneider/Natalie Quinn Tel: 020 7562 3350
EXECUTIVE CHAIRMAN'S STATEMENT
I am pleased to report increased revenue for the Group and
significant improvements in the trading performance for the year ended 30
September 2011.
Although the general economic climate has continued to be in a
state of slow growth, 2010/11 has been a more stable year for the Nexus
Management Group. It has been a year with little corporate activity relating
to acquisitions or disposals and the Board of Directors and the management
teams of the subsidiary companies have been able to focus on the three core
businesses with a view to growing income and reducing the cost bases through
efficiencies and improved negotiations with suppliers.
The results for the 2010/11 financial year show an operating profit
of GBP396,000 before, and a loss of GBP114,000 after all exceptional items are
taken into account. This shows significant improvement from the 2009/10
financial year. However, there is still much work to be done in the
forthcoming year. The Board recognises the "need for change" to drive further
cost cutting measures and maximise the value of historic investment in people
and operations. In addition, the Group needs to reduce its reliance on one or
two key relationships and spread its risk across a broader range of market
sectors in the future.
During November and December 2011, the Group went through a number
of personnel changes at the Board level. Three new directors were appointed in
November 2011, and the Group welcomes the new Board which brings with it a
strong track record of achievements within the technology sector, namely with
Avisen plc.
The Group's largest client has an annual contract review early in
2012. We are actively engaged in the review process, particularly as there
have been some key organisational changes within this client during the last
12 months.
The technology sector is a challenging macro environment where long
term relationships can be impacted by global retrenching and restructuring.
The Board will be fully focused in 2011/12 on completing the recovery of the
Nexus Management Group, by growing turnover and improving operating profits
through a programme of cost reviews and reduction. In addition, the Board will
consider growth by acquisition as well as asset sales in 2011/12.
Finally, I would like to take this opportunity to thank the
management team and all of our employees for their hard work and dedication
which has enabled the Group to improve its performance during a challenging
year and put the Group in a position where it can return to profitability in
2011/12 and enhance the value to our shareholders.
M Barney Battles
Executive Chairman
CHIEF FINANCIAL OFFICER'S STATEMENT
Financials
During a year where the economy was in recession, I am pleased with
how the Group has performed. We set out to ensure all of the operating
subsidiaries were profitable at an operational level and with some great work
by our management and employees, we achieved our goal.
Turnover for the year ended 30 September 2011 increased by
approximately GBP53,000 to GBP5.9 million (2010: GBP5.8 million). During the period
under review the Group further reduced its cost base which resulted in a
turnaround to profitability before exceptional items. Strong performances by
all subsidiaries produced a profit before exceptional items of GBP396,000 for
the 12 months ended 30 September 2011 (2010: GBP136,000 loss). This is a
substantial improvement in the year which was due to significant contributions
from all three subsidiary companies.
Review of activities
Resilience won a major contract with a large telecommunications
company in the autumn of 2010, which had been in the pipeline for several
months. Although the overall income performance for the year was not as high
as expected, Resilience still managed to deliver a healthy contribution to the
Group's results.
Our Nexus UK company continued to improve its performance by making
additional sales to existing clients and by winning some small additional
business. The company delivered a healthy contribution to the Group in the
period under review.
After a steady start to the year, Nexus in the US experienced a
very good second half and delivered a better than expected result by the end
of the financial year. This was achieved through strong income performance
coupled with reductions to the cost base.
Outlook
During the first quarter of 2011-12, operations have traded in line
with management expectations and albeit early in the year, we are confident
that the Group will continue to grow. At the plc level, the Board has gone
through a restructure and the strategic approach is being reviewed which will
incur some exceptional cost. However, it is the Directors' aim to grow the
Group's business and enhance shareholder value.
Peter Weller
Chief Financial Officer
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2011
Year ended Year ended
30 September 2011 30 September 2010
GBP GBP
Continuing operations Notes
Revenue 3 5,903,138 5,849,728
Cost of sales (2,815,553) (2,747,253)
Gross profit 3,087,585 3,102,475
Operating expenses excluding exceptional expenses (2,691,374) (3,238,540)
Operating profit/(loss) before exceptional items 396,211 (136,065)
Exceptional items 4 (270,203) (442,167)
Operating profit/(loss) 126,008 (578,232)
Finance income 5 - 7
Finance costs 5 (240,494) (107,326)
Loss before tax (114,486) (685,551)
Tax 6 - -
Loss for the year from continuing operations (114,486) (685,551)
Discontinued operations
Loss for the year from discontinued operations - (314,190)
Loss for the year (114,486) (999,741)
Attributable to equity holders of the parent 7 (114,486) (999,741)
Loss per share
Basic and diluted 8 (0.0102)p (0.0946)p
Continuing operations basic and diluted 8 (0.0102)p (0.0649)p
The accompanying accounting policies and notes form an integral part of these financial
statements.
There is no difference between the loss on ordinary activities before taxation and the
accumulated loss for the two financial periods and their historic cost equivalent.
STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS OF THE PARENT
FOR THE YEAR ENDED 30 SEPTEMBER 2011
Share Foreign Share
Share premium Retained exchange Other options
Group capital account earnings reserve reserve reserve Total
GBP GBP GBP GBP GBP GBP GBP
As at 1 October
2009 2,450,263 4,802,471 (7,538,037) (87,223) - 890,146 517,620
Loss for the year - - (999,741) - - - (999,741)
Movement in the
year - - - (12,372) - - (12,372)
Shares issued 298,475 227,372 - - - - 525,847
Convertible loan
notes - - - - 38,876 - 38,876
Share based
payment charge - - - - - 54,252 54,252
As at 30
September 2010 2,748,738 5,029,843 (8,537,778) (99,595) 38,876 944,398 124,482
As at 1 October
2010 2,748,738 5,029,843 (8,537,778) (99,595) 38,876 944,398 124,482
Loss for the year - - (114,486) - - - (114,486)
Movement in the
year - - - (20,424) - - (20,424)
Shares issued 107,142 42,857 - - - - 149,999
Convertible loan
notes - - - - - - -
Share based
payment charge - - - - - 26,681 26,681
As at 30
September 2011 2,855,880 5,072,700 (8,652,264) (120,019) 38,876 971,079 166,252
GROUP BALANCE SHEET AS AT 30 SEPTEMBER 2011
30 September 30 September
2011 2010
GBP GBP
ASSETS Notes
Non-current assets
Property, plant and equipment 9 309,660 381,479
Intangible assets 10 633,910 902,482
Goodwill 11 668,810 661,025
1,612,380 1,944,986
Current assets
Inventories 12 412,941 376,282
Trade and other receivables 13 410,976 453,654
Cash and cash equivalents 409,391 380,833
1,233,308 1,210,769
Total assets 2,845,688 3,155,755
LIABILITIES
Current liabilities
Trade and other payables 14 (1,752,623) (1,796,723)
Loans and other borrowings 15 (206,362) (298,253)
Obligations under finance leases 16 (61,806) (63,904)
(2,020,791) (2,158,880)
Non-current liabilities
Trade and other payables 14 (68,688) (73,429)
Loans and other borrowings 15 (529,761) (636,980)
Obligations under finance leases 16 (60,196) (97,841)
Provisions for liabilities and charges 17 - (64,143)
(658,645) (872,393)
Total liabilities (2,679,436) (3,031,273)
Total assets less liabilities 166,252 124,482
EQUITY
Shareholders' equity
Called up share capital 18 2,855,880 2,748,738
Share premium 7 5,072,700 5,029,843
Other reserves 7 889,936 883,679
Retained earnings 7 (8,652,264) (8,537,778)
Total equity attributable to the equity holders of the parent 166,252 124,482
GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2011
30 September 30 September
2011 2010
GBP GBP
CONTINUING OPERATIONS
Cash flows from operating activities
Loss before tax (114,486) (994,386)
Adjustments for:
Interest paid 240,494 88,631
Interest received - (7)
Impairment of goodwill - 255,228
Amortisation of customer list 271,619 108,721
Loss on disposal of subsidiary - 308,835
Depreciation 111,170 134,841
Currency exchange adjustment (31,113) (24,129)
Operating cash flows before movements in working capital 477,684 (122,266)
Share option costs 26,681 54,252
(Increase)/Decrease in inventories (36,659) 114,805
Decrease in trade and other receivables 42,679 12,884
Decrease in provisions for liabilities and charges (64,143) (109,248)
(Decrease)/Increase in trade and other payables (48,841) 43,965
Cash generated from/(used in) operations 397,401 (5,608)
Interest paid (240,494) (88,631)
Net cash generated from/(used in) operating activities 156,907 (94,239)
Investing activities
Interest received - 7
Acquisition of goodwill - (96,510)
Proceeds from disposal of subsidiary - 126,155
Legal costs on disposal of subsidiary - (3,720)
Purchases of property, plant and equipment (36,974) (32,863)
Net cash used in investing activities (36,974) (6,931)
Financing activities
Proceeds from issue of share capital 107,142 -
Premium on issue 42,857 -
(Decrease)/Increase in borrowings (172,441) 410,779
Repayment of obligations under finance lease (68,933) (92,024)
Net cash (used in)/generated from financing activities (91,375) 318,755
Net cash generated from continuing operations 28,558 217,585
DISCONTINUED OPERATIONS
Net cash from investing activities - (746)
Net cash from discontinuing operations - (746)
Net increase in cash and cash equivalents 28,558 216,839
Cash and cash equivalents at beginning of year 380,833 163,994
Cash and cash equivalents at end of year 409,391 380,833
NOTES TO THE FINANCIAL STATEMENTS AT 30 SEPTEMBER 2011
1. GOING CONCERN
The Group recorded a loss of GBP114,486 including an operating profit
on existing businesses (before amortisation, foreign exchange and share based
payments) of GBP396,211. The directors have taken steps aimed at returning the
Group to profitability and are confident the Group is able to generate
positive cash flow from operations going forward.
Recognising the liquidity challenges facing the business the
following actions have taken place:
- The directors have carried out a strategic review of the Group's
businesses and reduced the overhead base where appropriate to assist the
Group with returning to profitability.
- Agreements have been reached with certain creditors to repay the
liabilities owed to them over agreed extended payment plans.
The directors of the Group have prepared detailed projections and
cash flow forecasts through to 30 September 2013. In considering these cash
flow forecasts, the directors have carefully considered the assumptions and
sensitivities and have concluded that the Group can remain within the level of
available finance. However, in arriving at this view, the directors are
cognisant of the fact that given the nature of the Group's business and in the
current economic climate there are inherent risks surrounding the
achievability of the Group's forecast sales and margins and the timing of cash
flows, including, inter alia, the continuation and extension of credit terms
in line with those assumed within the cash flow forecasts.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence in the foreseeable
future and as such have prepared the financial statements on the going concern
basis.
2. BASIS OF PREPARATION
The financial year represents the year ended 30 September 2011
(prior financial year ended 30 September 2010). The consolidated financial
statements for the year ended 30 September 2011 comprise the financial
statements of the Company and its subsidiaries (`Group').
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 30 September 2010 and 2011,
but is derived from those accounts. Statutory accounts for 2010 have been
delivered to the Registrar of Companies and those for 2011 will be delivered
following the Company's Annual General Meeting.
The financial statements have been prepared in accordance with EU
Endorsed International Financial Reporting Standards and IFRIC interpretations
(IFRS) and the Companies Act 2006 applicable to companies reporting under
IFRS. The financial statements have been prepared under the historical cost
convention.
3. BUSINESS AND GEOGRAPHICAL SEGMENTS
The segment reporting format is determined to be the geographical segments as the
Group's risk and rates of return are affected predominately by the location of its
customers. The Group has two main geographical segments, namely the USA and
Europe.
The segment results for the year ended 30 September 2011 are as follows:
Inter- Disconti-
Group Continuing nued Consoli-
Europe USA trading operations operations dated
Year ended 30 September 2011 GBP GBP GBP GBP GBP GBP
Revenue
Segmental revenue - external 1,444,386 4,458,752 - 5,903,138 - 5,903,138
Segmental revenue - internal 280,531 - (280,531) - - -
Total segmental revenue 1,724,917 4,458,752 (280,531) 5,903,138 - 5,903,138
Operating profit 128,375 267,836 - 396,211 - 396,211
Amortisation of intangible assets (271,619) - (271,619)
Share based payments (26,681) - (26,681)
Foreign currency translation 28,097 - 28,097
Finance income - - -
Finance costs (240,494) - (240,494)
Loss for the year (114,486) - (114,486)
Year ended 30 September 2010
Revenue
Segmental revenue - external 1,327,654 4,522,074 - 5,849,728 158,722 6,008,450
Segmental revenue - internal 270,586 - (270,586) - - -
Total segmental revenue 1,598,240 4,522,074 (270,586) 5,849,728 158,722 6,008,450
Operating loss (42,907) (93,158) - (136,065) (312,999) (449,064)
Impairment of goodwill (255,228) - (255,228)
Amortisation of intangible assets (108,721) - (108,721)
Share based payments (54,252) - (54,252)
Foreign currency translation (23,966) - (23,966)
Finance income 7 - 7
Finance costs (107,326) (1,191) (108,517)
Loss for the year (685,551) (314,190) (999,741)
Revenues from one customer of the Group amounted to more than 10% of the
Group's total revenue. The total revenues from this customer are detailed
below, by segment:
2011 2010
GBP GBP
Revenue
Europe 723,980 604,817
USA 1,421,490 1,421,705
2,145,470 2,026,522
Segmental Analysis of the Balance Sheet
Inter- Discontin-
Group Continuing ued Consoli-
Europe USA balances operations operations dated
Year ended 30 September 2011 GBP GBP GBP GBP GBP GBP
Additions to non-current assets 3,448 33,526 - 36,974 - 36,974
Depreciation (6,397) (104,773) - (111,170) - (111,170)
Impairment - - - - - -
Amortisation - (271,619) - (271,619) - (271,619)
Non-cash items other than depreciation - - - - - -
Segment assets 3,205,488 2,275,652 (2,635,452) 2,845,688 - 2,845,688
Segment liabilities (1,109,676) (4,205,212) 2,635,452 (2,679,436) - (2,679,436)
Year ended 30 September 2010
Additions to non-current assets 4,593 227,182 - 231,775 - 231,775
Depreciation (5,792) (237,634) - (243,426) (4,010) (247,436)
Impairment (255,228) - - (255,228) - (255,228)
Amortisation - (108,721) - (108,721) (108,721)
Non-cash items other than depreciation - - - - - -
Segment assets 3,183,102 2,674,664 (2,702,011) 3,155,755 - 3,155,755
Segment liabilities (1,341,755) (4,430,852) 2,702,011 (3,070,596) - (3,070,596)
4. EXPENSES AND AUDITOR'S REMUNERATION
The Group's results include charges/(credits) for the following:
2011 2010
Total Total
GBP GBP
Depreciation on tangible fixed assets owned 40,909 59,141
Depreciation on tangible fixed assets held under finance lease 70,261 79,710
Auditor's remuneration 44,750 45,500
Operating lease costs 201,044 205,129
Exceptional items:
Impairment of goodwill - 255,228
Amortisation of intangible assets other than goodwill 271,619 108,721
Share based payment 26,681 54,252
Net (profit)/loss on foreign currency translation (28,097) 23,966
Total Exceptional items 270,203 442,167
The profit attributable to the parent company profit and loss account for the year was GBP47,979
(2010:loss GBP940,203).
Auditor's remuneration
The fees charged by the auditors can be further analysed under the following headings for services
rendered:
2011 2010
GBP GBP
Audit services
Fees payable to Company auditor for the audit of parent Company and
consolidated accounts 15,500 15,500
Non-audit services
Fees payable to the Company's auditor and its associates for other services:
The audit of Company's subsidiaries pursuant to legislation 23,500 27,500
Tax compliance and advisory services 5,750 2,500
44,750 45,500
5. NET FINANCE COSTS
2011 2010
GBP GBP
Finance Expense
Interest on finance lease 14,702 43,767
Interest on factoring 108,188 18,695
Interest on other borrowings 117,604 46,055
240,494 108,517
Finance Income
Interest on cash and cash equivalents - 7
- 7
6. TAXATION
2011 2010
i) Current tax charge GBP GBP
The tax charge comprises:
UK taxation
Corporation tax at 27.00% (2010: 23.30%) - -
Non-UK taxation
Current - -
- -
Deferred taxation
Origination and reversal of temporary - -
differences
- -
ii) Tax reconciliation
The taxation expense/(credit) on the profit for the year differs from the amount
computed by applying the corporation tax rate to the profit before tax for the
following reasons:
2011 2010
GBP GBP
Loss on ordinary activities before tax (114,486) (999,741)
Theoretical tax charge at 27.00% (2010: 23.30%) (30,911) (232,940)
Effects of:
Expenses (including goodwill) not deductible for 8,566 69,946
tax purposes
Capital allowances in excess of depreciation 3,312 (3,928)
Other timing differences 38,913 (47,789)
Loss on disposal of subsidiary - 71,959
Adjustments in respect of prior periods - (45,111)
Utilisation of losses b/f (52,023) -
Unrelieved losses c/f 32,143 187,863
Total tax charge for the year - -
Factors that may affect future tax charges
At 30 September 2011 the Group has tax losses of approximately GBP2,112,463 (2010:
GBP2,168,538) to set against future profits of the same trade.
A deferred tax asset of GBP564,932 (2010: GBP505,269) arising from the tax losses in
place has not been recognised. Although the directors ultimately expect
sufficient taxable profits to arise, there is currently insufficient evidence to
support the recognition of a deferred tax asset in these financial statements.
7. RESERVES
Share Profit Foreign Share
premium and loss currency Other options
account account reserve reserve reserve
GBP GBP GBP GBP GBP
Group
Balance at 1 October 2010 5,029,843 (8,537,778) (99,595) 38,876 944,398
Currency exchange - - (20,424) - -
Premium in respect of shares issued in the year 42,857 - - - -
Share option movement in the year - - - - 26,681
Retained loss for the year - (114,486) - - -
At 30 September 2011 5,072,700 (8,652,264) (120,019) 38,876 971,079
Share Profit Share
premium and loss Other options
account account reserve reserve
GBP GBP GBP GBP
Company
Balance at 1 October 2010 5,029,843 (6,497,760) 38,876 944,398
Premium in respect of shares issued in the year 42,857 - - -
Share option movement in the year - - - 26,681
Retained loss for the year - 78,843 - -
At 30 September 2011 5,072,700 (6,418,917) 38,876 971,079
8. LOSS PER SHARE
Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Group by the
weighted average number of ordinary shares in issue
during the year.
Diluted
The weighted average number of the Group's ordinary
shares used in the calculation of diluted earnings per
share has been adjusted for the effect of potentially
dilutive share options granted under the Group's share
option schemes. (Potentially dilutive share options are
options with an exercise price less than the middle
market price at 30 September 2011).
2011 2010
Loss Loss
attributable Weighted attributable Weighted
to equity average Loss to equity average Earnings
holders of Number of holders of Number of
the parent shares per share the parent shares per share
GBP GBP GBP GBP
Basic EPS calculation (114,486) 1,115,518,105 (0.000102) (999,741) 1,056,288,534 (0.000946)
Effect of
dilutive
options 424,106,019 471,279,150
Diluted EPS calculation (114,486) 1,539,624,124 (0.000102) (999,741) 1,527,567,684 (0.000946)
Discontinued operations basic
and diluted EPS - - - (314,190) 1,056,288,534 (0.000297)
In the current year the Group has made a loss and the potential share options
are therefore anti-dilutive.
Potential dilutive items
2011 2010
Weighted Weighted
average average
Number of Number of
shares shares
Loan note 1 (see
note 15) 93,750,000 93,750,000
Loan note 2 (see
note 15) 43,750,000 43,750,000
Warrants - 42,857,413
Share options (seenote 18) 286,606,019 290,922,007
424,106,019 471,279,150
As the current year shows a loss, the other potential dilutive
items are anti-dilutive and therefore do not alter the EPS calculations.
9. PROPERTY, PLANT AND EQUIPMENT
Short Fixtures Office and
Motor leasehold and computer
Group vehicles improvements fittings equipment Total
GBP GBP GBP GBP GBP
Cost
At 1 October 2009 14,131 386,859 50,803 823,475 1,275,268
Additions - 26,309 2,606 106,350 135,265
Disposals (14,131) - (647) (6,425) (21,203)
Currency exchange adjustment - 2,407 230 4,286 6,923
At 1 October 2010 - 415,575 52,992 927,686 1,396,253
Additions - - 1,155 35,819 36,974
Disposals - - - - -
Currency exchange adjustment - 4,893 408 11,606 16,907
At 30 September 2011 - 420,468 54,555 975,111 1,450,134
Accumulated depreciation
At 1 October 2009 4,710 143,229 37,189 702,261 887,389
Provided in the year 4,010 28,630 6,280 99,931 138,851
Disposals (8,720) - (647) (6,425) (15,792)
Currency exchange adjustment - 631 159 3,536 4,326
At 1 October 2010 - 172,490 42,981 799,303 1,014,774
Provided in the year - 27,972 5,633 77,565 111,170
Disposals - - - - -
Currency exchange adjustment - 2,812 400 11,318 14,530
At 30 September 2011 - 203,274 49,014 888,186 1,140,474
Net Book Value
At 30 September 2011 - 217,194 5,541 86,925 309,660
At 30 September 2010 - 243,085 10,011 128,383 381,479
At 30 September 2009 4,710 143,229 37,189 702,261 887,389
Included in the total net book value of GBP309,660 is GBP128,522 (2010:
GBP169,243) in respect of assets held under hire purchase agreements. The
categories of these assets are short leasehold improvements of GBP54,656 and
computer and office equipment of GBP73,866.
The depreciation charged to the Income Statement in the year in
respect of such assets is GBP70,261 (short leasehold improvements of GBP4,259 and
computer and office equipment of GBP66,002 (2010: GBP79,710).
The Company had no property, plant and equipment.
10. INTANGIBLE ASSETS
Customer Brand and
List trade
Group names Total
GBP GBP GBP
Cost
At 1 October 2009 1,064,638 24,494 1,089,132
Currency exchange 7,617 435 8,022
adjustment
Additions
Disposals - (24,929) (24,929)
At 1 October 2010 1,072,555 - 1,072,555
Currency exchange 10,628 10,628
adjustment
At 30 September 2011 1,083,183 - 1,083,183
Amortisation
At 1 October 2009 62,104 - 62,104
Currency exchange (1,052)
adjustment (1,052) -
Provided in the year 108,721 - 108,721
At 1 October 2010 169,773 - 169,773
Currency exchange 7,881
adjustment 7,881 -
Provided in the year 271,619 - 271,619
At 30 September 2011 449,273 - 449,273
Net book value
At 30 September 2011 633,910 - 633,910
At 30 September 2010 902,482 - 902,482
At 30 September 2009 1,002,534 24,494 1,027,028
Group
2011 2010
GBP GBP
Resilience Technology Corporation 633,910 902,482
633,910 902,482
11. GOODWILL
Goodwill on Purchased
Group consolidation Goodwill Total
GBP GBP GBP
Cost
At 1 October 2009 641,137 831,361 1,472,498
Currency exchange adjustment - 8,735 8,735
Additions - 96,510 96,510
Disposals - (275,581) (275,581)
At 1 October 2010 641,137 661,025 1,302,162
Currency exchange adjustment - 7,785 7,785
At 30 September 2011 641,137 668,810 1,309,947
Impairment
At 1 October 2009 385,909 5,000 390,909
Impairment charge 255,228 - 255,228
Disposal - (5,000) (5,000)
At 1 October 2010 641,137 - 641,137
At 30 September 2011 641,137 - 641,137
Net book value
At 30 September 2011 - 668,810 668,810
At 30 September 2010 - 661,025 661,025
At 30 September 2009 255,228 826,361 1,081,589
Group
2011 2010
Resilience Technology Corporation 668,810 661,025
668,810 661,025
In accordance with the accounting policy, goodwill is tested annually by
comparing the book value to the recoverable amount. The recoverable amount has
been determined on the basis of value in use to the business, using a 5 year
discounted cash flow model, based on Directors' forecasts, that uses an
estimated growth rate of 2% and a cost of capital rate of 7%. Past experience
has shown growth to be in excess of 2%, and the Directors believe the cost of
capital rate to be conservative. No impairment has been identified.
12. INVENTORIES
Group
2011 2010
GBP GBP
Raw Materials 301,837 266,471
DX Units 111,104 109,811
Total Inventories 412,941 376,282
In the year ended 30 September 2011, raw materials recognised as
cost of sales amounted to GBP224,405 (2010: GBP312,119). There has been no write
down of inventories to net realisable value in 2011 (2010: GBPNil). The DX units
have been identified as very slow moving rechargeable stock that is held as
replacement units for existing clients. They have been included in inventories
at estimated net realisable value.
The company had no inventories at 30 September 2011.
13. TRADE AND OTHER RECEIVABLES
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Trade receivables 268,276 277,333 25,125 -
Amounts owed by Group undertakings - - 2,326,537 2,317,313
VAT recoverable - - 3,641 4,612
Other receivables 25,130 23,179 - -
Prepayments and accrued income 117,570 153,142 29,245 48,410
410,976 453,654 2,384,548 2,370,335
Within Group trade receivables, a balance of GBP126,752 (2010: GBP174,666) is subject
to a charge in respect of an invoice financing facility that the Group has with a
third party. At the balance sheet date GBP101,402 (2010: GBP136,958) included in
loans and other borrowings was due to the providers of this facility in respect
of debtors that they have not yet recovered.
Included in the Company total above is GBP2,326,537 (2010: GBP2,317,313) relating
to debtors due after more than one year.
There is no material variance between carrying and fair values.
14. TRADE AND OTHER PAYABLES
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Trade payables 830,325 836,880 12,503 20,916
Other payables 150,117 248,150 - -
Accruals and deferred income 840,869 785,122 42,916 76,749
1,821,311 1,870,152 55,419 97,665
Included within Other payables for the Group total above is GBP68,688 (2010:
GBP73,429) relating to amounts falling due after more than one year.
There is no material variance between carrying and fair values.
15. LOANS AND OTHER BORROWINGS
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Bank loans 59,200 160,092 - 100,000
Other loans 676,923 775,141 545,293 572,419
736,123 935,233 545,293 672,419
Disclosed within current liabilities (206,362) (298,253) (40,000) (161,295)
Disclosed as non-current liabilities 529,761 636,980 505,293 511,124
The borrowings are repayable as follows:
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
On demand or within one year 206,362 298,253 40,000 161,295
In the second to fifth years inclusive 529,761 636,980 505,293 511,124
736,123 935,233 545,293 672,419
Less: Amount due for settlement within 12
months (shown under current liabilities) (206,362) (298,253) (40,000) (161,295)
Amount due for settlement after 12 months 529,761 636,980 505,293 511,124
Included within other loans is an amount of GBP5,760 (2010: GBP12,651)
relating to the trade and asset acquisition of Resilience Technology
Corporation.
Bank overdrafts and loans are arranged at floating rates, exposing
the Group to cash flow interest rate risk.
The weighted average interest rates paid were as follows: 2011 2010
% %
Bank loans 9.63 8.80
Sensitivity analysis on the level of interest rates has not been undertaken as the
Directors believe that any increase/decrease in interest rates during the current
and previous year would have had no material impact on the level of interest
payable.
The other principal features of the Group's borrowings are as follows:
The Group has three loans taken out in previous years.
(i) Convertible loan notes of GBP375,000, convertible no later than 2015. The rate of
interest is 10% p.a.
(ii) Convertible loan notes of GBP175,000, convertible no later than 2015. The rate of
interest is 10% p.a.
(iii) Promissory note of GBP59,200 on a revolving line of credit at an interest rate
of 6.25% p.a.
16. NET OBLIGATIONS UNDER FINANCE LEASES
Minimum Present value
lease of lease
Group payments payments
2011 2010 2011 2010
GBP GBP GBP GBP
Amounts payable under finance lease
Within one year 70,383 77,576 70,383 77,576
In the second to fifth years inclusive 64,103 148,490 64,103 148,490
134,486 226,066 134,486 226,066
Less: Future finance charges (12,484) (64,321) (12,484) (64,321)
Present value of lease obligations 122,002 161,745 122,002 161,745
Less: Amount due to settlement within 12
months (shown under current liabilities) (61,806) (63,904) (61,806) (34,981)
Amount due to be settled after 12 months 60,196 97,841 60,196 126,764
Net obligations under finance leases contracts are secured on the assets
concerned.
The main finance leases within the Group are:
Addition to the "High availability virtual environment" (HAVEN) for
Nexus Management Inc. The lease commenced in 2011. A monthly rental of GBP1,601
is payable over 36 months, with an option to purchase at a nominal amount
after 36 months. The "High availability virtual environment" contains five
servers and storage units that house the virtual server. Nexus Management Inc.
offer HAVEN as a remote storage or virtual server product to its clients.
High availability virtual environment for Nexus Management Inc. The
lease commenced in 2010. A monthly rental of GBP2,371 is payable over 36 months,
with an option to purchase at a nominal amount after 36 months.
HVAC Air conditioning system for Nexus Management Inc. The lease
commenced in 2009. A monthly rental of GBP1,349 is payable over 60 months, with
an option to purchase at a nominal amount after 60 months.
Company
Amounts payable under finance leases in the company are GBPnil (2010 GBPnil).
17. PROVISIONS FOR LIABILITIES AND CHARGES
The Group has provided for additional liabilities of an uncertain
nature. These liabilities are deemed present obligations as a result of past
events and the likelihood of an economic outflow is deemed probable. However,
the timing of when these liabilities will crystallize is uncertain.
2011 2010
GBP GBP
Interest and penalties on
late payment of US payroll taxes - 31,627
Employee litigation - 30,618
Legal fees - 1,898
- 64,143
In 2009/10, a legal claim was made against Resilience Technology
Corporation from a former employee. This claim was awarded in favour of the
former employee, but has not yet been fully settled at 30 September 2011. A
payment plan was agreed with the former employee and Resilience continues to
make the payments in line with the agreement. The outstanding amounts are
included in the Resilience creditors.
18. SHARE CAPITAL
Group Company
2011 2010 2011 2010
GBP GBP GBP GBP
Authorised
4,000,000,000 (2010: 4,000,000,000)
Ordinary shares of GBP0.0025 each 10,000,000 10,000,000 10,000,000 10,000,000
Allotted, called up and fully paid
1,099,494,622 (2010: 980,105,031)
Ordinary shares of GBP0.0025 2,855,880 2,748,738 2,855,880 2,748,738
Shares to be issued
Nil (2010: Nil) Ordinary shares of GBP0.0025 - - - -
No. of GBP
shares
Reconciliation - Allotted, called up and fully paid
At 1 October 2010 1,099,494,622 2,748,737
Shares issued in the year:
Consideration for acquisition 0.35p per share 20,000,000 50,000
Consideration for fees 0.35p per share 22,857,143 57,143
At 30 September 2011 1,142,351,765 2,855,880
Share option schemes
On 6 April 2001 the Company adopted an Enterprise Management Incentive Scheme.
As set out below during the year the Company has granted 16,500,000 options
(2010: 6,750,000 options). Due to the value of these options or the tax status
of the recipients, none of these options will be treated as if they were issued
under an unapproved share option scheme. No provision is made for National
Insurance on the options, which are exercisable at the balance sheet date due
to a joint election in place between the Company and the individual under which
the individual has agreed to take on the Company's National Insurance
liability.
Details of the number of share options and the weighted average exercise price
(WAEP) outstanding during the year are as follows:
2011 2010
WAEP WAEP
Number Pence Number Pence
Outstanding at the beginning of the year 297,672,007 0.63p 290,922,007 0.63p
Granted during the year 16,500,000 0.40p 6,750,000 0.40p
Exercised during the year - - - -
Lapsed during the year (27,565,988) 0.86p - 0.66p
Outstanding at the end of the year 286,606,019 0.59p 297,672,007 0.62p
Exercisable at the end of the year 266,272,686 0.61p 290,922,007 0.65p
The weighted average share price at the date of exercise for share options
exercised during the year was nil (2010: nil).
At 30 September 2011 the following options were granted but not exercised.
Options granted to the directors of the Company are detailed separately:
i) 3,850,000 options at 0.25p per share exercisable between
31/12/03 and 29/7/13 granted to P J Weller.
ii) 65,048,110 options at 0.6p per share exercisable between 2/8/04 and 1/2/14
granted. The options to directors were as follows:
R A Richardson 16,666,667
P O R Paterson 16,666,667
G C Stoddart-Stones 2,500,000
P J Weller 1,666,667
iii) 13,114,756 options at 0.61p per share exercisable between 1/7/04 and
1/2/14 granted as follows:
R A Richardson 3,278,869
P O R Paterson 3,278,869
G C Stoddart-Stones 3,278,869
P J Weller 3,278,869
iv) 2,459,016 options at 0.61p per share exercisable between 1/8/04 and 1/2/14
granted.
v) 42,279,414 options at 0.68p per share exercisable between 9/12/04 and
8/6/14. The options to directors were as follows:
R A Richardson 12,254,903
P O R Paterson 12,254,903
G C Stoddart-Stones 1,838,235
P J Weller 1,225,490
vi) 1,376,148 options at 1.09p per share exercisable between 1/2/05 and 1/8/14
granted.
vii) 17,161,862 options at 0.75p per share exercisable between 1/10/05 and
17/5/15 granted.
viii) 2,380,953 options at 0.63p per share exercisable between 29/9/05 and
27/4/14 granted.
ix) 58,105,263 options at 0.59p per share exercisable between 18/11/05 and
17/5/15 The options to directors were as follows:
R A Richardson 16,842,105
P O R Paterson 16,842,105
G C Stoddart-Stones 2,526,316
P J Weller 1,684,211
x) 7,606,741 options at 0.49p per share exercisable between 31/5/06 and
31/5/15 granted. The options to directors were as follows:
P J Weller 2,400,000
xi) 1,200,000 options at 0.64p per share exercisable between 8/5/06 and
7/11/15 granted.
xii) 5,172,414 options at 0.58p per share exercisable between 13/10/06 and
12/4/16 granted.
xiii) 4,500,000 options at 0.63p per share exercisable between 16/4/07 and
15/10/16 granted.
xiv) 402,155 options at 0.75p per share exercisable between 16/4/07 and
15/10/16 granted to G C Stoddart-Stones.
xv) 365,854 options at 1.64p per share exercisable between 1/8/07 and 31/1/17
granted.
xvi) 6,000,000 options at 0.65p per share exercisable between 3/9/09 and
8/12/18 granted.
xvii) 10,000,000 options at 0.81p per share exercisable between 17/8/09 and
16/2/19 granted to P J Weller
xviii) 23,333,333 options at 0.81p per share exercisable between 17/2/10 and
16/2/19 granted.
The options to directors are as follows:
R A Richardson 10,000,000
P J Weller 10,000,000
xix) 5,750,000 options at 0.40p per share exercisable between 15/6/11 and
14/6/20 granted.
xx) 16,500,000 options at 0.40p per share exercisable between 8/3/12 and
7/3/21 granted.
The options to directors are as follows:
R A Richardson 3,300,000
P J Weller 3,300,000
G C Stoddart-Stones 3,300,000
P O R Paterson 3,300,000
J P Lister 3,300,000
The options outstanding at the end of the year have a range of
exercise prices from 0.25p to 1.09p. The estimate fair values of options
granted since 30 July 2003 were calculated using the Black-Scholes option
pricing model with the following inputs and subsequent assumptions:
Grant date 30 Jul 03 02 Feb 04 02 Feb 04 09 Jun 04 02 Aug 04 28 Apr 05
Share price at grant date 0.0025 0.0053 0.0053 0.0059 0.0095 0.0055
Exercise price 0.0025 0.0060 0.0061 0.0068 0.0109 0.0063
Number of employees 3 7 7 6 3 3
Shares under option 3,850,000 65,048,110 15,573,772 42,279,414 1,376,148 2,380,953
Vesting period (years) 0.5 0.5 0.5 0.5 0.5 0.5
Expected volatility 85% 85% 85% 85% 85% 78%
Option life (years) 10 10 10 10 10 10
Expected life (years) 10 10 10 10 10 10
Risk free rates 4.60% 4.60% 4.60% 4.60% 4.60% 4.60%
Expected dividends - - - - - -
Fair value per option 0.0016 0.0034 0.0034 0.0038 0.0061 0.0034
Grant date 18 May 05 18 May 05 31 May 05 08 Nov 05 13 Apr 06 16 Oct 06
Share price at grant date 0.0048 0.0048 0.0043 0.0056 0.0050 0.0063
Exercise price 0.0075 0.0059 0.0049 0.0064 0.0058 0.0063
Number of employees 40 6 9 5 3 3
Shares under option 17,161,862 58,105,263 7,606,741 1,200,000 5,172,414 2,400,000
Vesting period (years) 3 0.5 3 3 0.5 0.5
Expected volatility 78% 78% 78% 78% 78% 78%
Option life (years) 10 10 10 10 10 10
Expected life (years) 10 10 10 10 10 10
Risk free rates 4.60% 4.60% 4.60% 4.60% 4.60% 4.60%
Expected dividends - - - - - -
Fair value per option 0.0028 0.0029 0.0026 0.0034 0.0031 0.0039
Grant date 16 Oct 06 16 Oct 06 01 Feb 07 09 Dec 08 17 Feb 09 17 Feb 09
Share price at grant date 0.0063 0.0063 0.0164 0.0056 0.0081 0.0081
Exercise price 0.0063 0.0075 0.0164 0.0065 0.0081 0.0081
Number of employees 2 1 2 7 3 3
Shares under option 2,100,000 402,155 365,854 6,000,000 10,000,000 23,333,333
Vesting period (years) 3 3 3 3 0.5 3
Expected volatility 79% 77% 79% 66% 65% 65%
Option life (years) 10 10 10 10 10 10
Expected life (years) 10 10 10 10 10 10
Risk free rates 4.60% 4.60% 4.60% 4.50% 4.50% 4.50%
Expected dividends - - - - - -
Fair value per option 0.0039 0.0038 0.0103 0.0031 0.0046 0.0046
Grant date 15 Jun 10 8 Mar 11
Share price at grant date 0.0030 0.0033
Exercise price 0.0040 0.0040
Number of employees 7 5
Shares under option 5,750,000 16,500,000
Vesting period (years) 3 3
Expected volatility 65% 47%
Option life (years) 10 10
Expected life (years) 10 10
Risk free rates 2.50% 2.50%
Expected dividends - -
Fair value per option 0.0015 0.0013
No other conditions were included in the fair value calculations.
The expected volatility is based on historical volatility over the
expected life period. The expected life of the average expected period to
exercise based on historical experience. The risk free rate of return is the
yield on zero-coupon UK government bonds of a term consistent with the assumed
option life.
19. DIVIDEND
The Directors have not recommended a dividend.
20. COPIES OF THE REPORT & ACCOUNTS
Copies of the Report and Accounts will be posted to shareholders
shortly, will be available from the Company's registered office 120 Moorgate,
London EC2M 6UR and will be available from the Company's website
www.nexusmanagementplc.co.uk.
END
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