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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Promethean | LSE:PRW | London | Ordinary Share | GB00B60B6S45 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 39.875 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMPRW
RNS Number : 8039N
Promethean World Plc
31 July 2014
Promethean World Plc
Interim results for the six months ended 30 June 2014
Full year outlook maintained
Financial results
-- Revenue GBP57.7m, down 17.6% or 11.6% on a constant currency basis (H1 2013: GBP70.0m) -- Gross margin 31.2% (H1 2013: 35.6%) -- Operating costs(1) well controlled, 12.0% below H1 2013 -- Adjusted EBITDA(1) loss of GBP1.7m (H1 2013: profit of GBP2.5m) -- Operating loss GBP6.4m (H1 2013: loss GBP3.4m) -- Cash balance GBP9.2m as at 30 June 2014 (30 June 2013: GBP9.1m; 31 Dec 2013 GBP17.6m)
Operational review
-- Strong performance in North America: -- Constant currency revenues 4.4% ahead of H1 2013 -- Miami-Dade contract won and delivered -- International revenues down 33.7% in H1, but stronger H2 revenues expected
-- ClassFlow(TM) 2.0 software release at ISTE on 1 July 2014 (following a Beta release at the BETT International trade show in January 2014)
(1) Excluding exceptional items, share-based payments, amortisation and depreciation.
Jim Marshall, CEO, said:
"Promethean has competed well during the period and we expect to meet market expectations for 2014. In North America, trading conditions are continuing to recover and our US dollar revenues were ahead of the first half of last year. In the International region a number of factors have moved the balance of revenues towards the second half of the year, and this has depressed H1 results compared to the equivalent period last year.
"The response to the launch of our ClassFlow(TM) software has been encouraging. We have now released ClassFlow(TM) 2.0 and, together with our professional services team, we anticipate that it will be a key differentiator, helping us win new contracts. Its development path goes beyond aggregating data in classrooms, to aggregating and enabling analysis of data at School, District and National levels, creating the prospect for further significant improvements in learning and administration efficiency.
"All of this is helping us evolve from being a hardware to being a software and solutions driven company, strengthening our positioning in the changing educational technology marketplace. The impact of our software strategy will only begin to be felt towards the end of this year, but we expect it to grow steadily from next year onwards. In the meantime, we will continue to manage our business prudently and conserve our cash."
Analyst presentation
A briefing to analysts will take place at 08:30am on Thursday 31 July 2014 at Citigate Dewe Rogerson, 3 London Wall Buildings, London Wall, London, EC2M 5SY. A copy of the presentation slides will be available on the investor relations section of www.prometheanworld.com.
Enquiries
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Promethean World Plc
Jim Marshall, Chief Executive Officer
Ian Baxter, Chief Financial Officer + 44 (0) 1254 290749
Citigate Dewe Rogerson Consultancy + 44 (0) 20 7638 9571
Anthony Carlisle + 44 (0) 7973 611 888
Business performance
------------------------------------------ ------- ------- --------
H1 2014 H1 2013 Change
------------------------------------------ ------- ------- --------
GBPm unless stated
Revenue: as reported 57.7 70.0 -17.6%
Revenue: constant currency 57.7 65.3 -11.6%
Adjusted EBITDA (loss)/profit(1) (1.7) 2.5 n/a
Adjusted operating loss(2) (5.7) (2.6) 120.5%
Adjusted operating margin(2) -9.9% -3.7% -6.2%pts
Pro forma net loss(2,3) (3.7) (3.4) 8.7%
Pro forma basic loss per share(2,3,4) (p) (1.85) (1.71) 8.6%
------------------------------------------ ------- ------- --------
Results under a statutory basis
H1 2014 H1 2013 Change
------------------------------------------ ------- ------- --------
GBPm unless stated
Revenue 57.7 70.0 -17.6%
Operating loss (6.4) (3.4) 92.2%
Net loss (4.3) (4.0) 7.6%
Basic loss per share (p) (2.15) (2.00) 7.5%
------------------------------------------ ------- ------- --------
Cash flow
H1 2014 H1 2013 Change
------------------------------------------ ------- ------- --------
GBPm unless stated
Free cash flow(5) (7.5) 3.5 n/a
Net cash as at 30 June 9.2 9.1 +1.2%
------------------------------------------ ------- ------- --------
(1) excluding exceptional items, share-based payments, amortisation and depreciation;
(2) excluding exceptional items, share-based payments and amortisation of acquired
intangible assets;
(3) stated on a pro forma basis using a tax rate of 24.0% (H1 2013: 24.0%);
(4) the weighted average number of ordinary shares is as per the basic EPS calculation;
and
(5) defined as Adjusted EBITDA less capex less change in trading working capital.
Key metrics
H1 2014 H1 2013 Change
---------------------------------------- --------- --------- ------
Volumes
Interactive Display Systems 57,370 60,521 -5.2%
Learner Response Systems and Assessment 140,544 215,840 -34.9%
---------------------------------------- --------- --------- ------
Average Selling Prices (GBP)
Interactive Display Systems 951.3 1,067.9 -10.9%
Learner Response Systems and Assessment 22.2 24.9 -11.2%
---------------------------------------- --------- --------- ------
Promethean Planet (as at 30 June)
Members 1,953,401 1,655,890 +18.0%
Resources 94,435 81,355 +16.1%
---------------------------------------- --------- --------- ------
Operating review
Trading environment
In the period, there has been a contrast between performance in North America, where constant currency revenue was 4.4% ahead of the first half last year, and lower revenues from the International region, where contract sizes tend to be larger and the timing of tenders more uncertain. We expect International revenues to recover in the second half.
As a result, first half Group revenues were GBP57.7m, 17.6% lower than the first half of 2013 (H1 2013: GBP70.0m). Reported revenues have been impacted by the weakness of the US dollar. On a constant currency basis, Group revenues were 11.6% lower than in H1 2013.
We are maintaining our full year outlook due to the improved trading conditions in North America, combined with a developing pipeline of opportunities in the International region for both run rate business and tenders. In addition, we have made significant progress on our software strategy, which is aiding our hardware sales.
North America
In North America, the business has performed ahead of anticipated levels, with first half revenues of GBP36.5m (H1 2013: GBP38.0m), 4.4% ahead of the comparative period on a constant currency basis. The North American region represented 63.2% of Group revenues in the period (H1 2013: 54.3%). This reflects increased stability in education budgets in many districts and greater confidence to invest in interactive classroom technology.
Promethean has competed strongly in interactive display tender opportunities and our performance has benefitted from our broader product range and our software strategy. The Miami-Dade contract, first announced in February 2014, represents a large and strategic win for Promethean, although it was gross margin dilutive in the period. All 10,000 ActivBoard Touch interactive displays under the initial phase of that contract have now been delivered and, importantly, the related professional development support is ongoing to help teachers adopt and fully benefit from this new technology. Promethean has also captured smaller, yet strategically important, interactive display contracts in other US districts.
The market for dedicated LRS devices in North America reflects the continued introduction of disparate devices into classrooms, in particular tablets. Dedicated LRS devices now represent a smaller but important part of our business and we increased our market share of this segment. North American LRS revenues were GBP2.6m, down 34.4% (H1 2013: GBP4.0m).
The growth in disparate devices in classrooms, however, is a key driver behind our software strategy, both at classroom and at enterprise levels. In North America, in 2013, 3.1m tablet devices were purchased for use in the education sector (Source: Futuresource Consulting). We firmly believe that a significant opportunity exists in connecting such devices to enable the teacher to obtain instant feedback on student comprehension and intervene during the moment of learning and so improve learning outcomes.
International
In the International region, which includes everywhere outside of North America, we have maintained our market share in the K-12 segment excluding China and Turkey. However, the timing of tender opportunities has a significant impact on sales volumes in any period. First half, revenue was GBP21.2m (H1 2013: GBP32.0m), which was below our expectations, reflecting some instability in certain countries and continued softness in southern European markets. However, there remains a pipeline of tender opportunities, a number of which are expected to ship later in the year.
During the first half of 2014, Promethean increased sales in Central Asia and in the UK. In the UK, a replacement cycle is emerging with a significant proportion of schools now embracing interactive flat panels and our ActivPanel Touch range is well positioned in this market. As we establish Promethean in this segment of the market, interactive flat panels will be margin dilutive relative to the equivalent interactive whiteboard.
Market share
Promethean has increased its IWB market share in the most recently available market research report provided by Futuresource. Promethean's global share, excluding China and Turkey, in the K-12 interactive whiteboard market on a last twelve months (LTM) basis for the period ended 31 March 2014, was 23.5% (LTM to 31 March 2013: 21.8%). Although Promethean has grown market share over the 12 months to 31 March 2014, overall interactive display market volumes in that period have reduced by 12.0%. The same point is true of dedicated learner response devices for the global K-12 market, where our market share has grown from 27.6% as at end March 2013 to 33.6% as at 31 March 2014, again excluding China and Turkey, but overall market volumes were down by 45.3% over the year.
Product and service strategy
Promethean's product and service strategy is focused on the vision of a technology enabled classroom with all interactive devices working seamlessly together, whether for whole class, small group or individual learning. Promethean's solutions include interactive displays, classroom software and one-to-one mobile devices.
Interactive display systems
The market for interactive displays is evolving from being almost exclusively interactive whiteboard dominated to one in which, while interactive whiteboards currently remain the dominant technology, interactive flat panels are gaining in market share in certain countries. In addition, there is an increasing recognition of the importance of the ability of small groups to use the interactive surfaces for collaborative learning. The more touches an interactive display can accommodate, therefore, the greater the flexibility the teacher has to utilise this technology during lessons.
Having introduced its first interactive flat panel in Q4 2013, Promethean has continued to rollout the product with encouraging sales in the UK in the first half of the year. The market for interactive flat panels is highly competitive and with further technology advances there has been a reduction in ASPs. Whilst Promethean's interactive flat panels have a higher absolute selling price they deliver a lower relative gross margin than the equivalent size of interactive whiteboard.
Developments continue on Promethean's range of interactive whiteboards, with the capability of the ActivBoard Touch range being enhanced to accommodate six independent touches. Promethean is continuing the development of its ActivWall concept and has previewed a prototype in January at BETT (London) and in June at ISTE (Atlanta) trade exhibitions this year.
Mobile device solutions
Promethean's mobile device offering includes the Promethean KUNO tablet (for the US market only), for which a pipeline of pilot trials are ongoing, and our dedicated learner response devices ActivExpression and ActiVote. We believe that education specific LRS devices will continue to remain relevant due to their relatively low cost, extended battery life and robustness compared to many tablet devices, particularly for the younger learner. In addition, the ActivExpression and ActiVote are not reliant on WiFi connections for classroom interactivity.
Classroom software & services
In H1 2014, Promethean has made significant progress on its software rollout with the launch of ClassFlow(TM) . In January, a Beta version was released (primarily to the US market) and was favourably received. ClassFlow(TM) simplifies the creation of interactive lessons and provides an intuitive lesson presentation experience that can connect disparate devices in a classroom. Linking interactive white boards or interactive flat panels (from Promethean or other providers) with tablets and other student response devices provides a dynamic learning environment to engage students fully. The resulting data flow between teacher and students enables the teacher to easily switch between learning activities, and teaching modalities, sharing and receiving information as required during a lesson.
On 1 July 2014, Promethean released ClassFlow(TM) 2.0, which adds several new features to the Beta version including an expansion to content authoring and import capabilities (including Promethean Inspire flipcharts, SMART(TM) Notebook and Microsoft PowerPoint files) and a new assessment builder. ClassFlow(TM) 2.0 also has the facility to segment groups of students within ClassFlow(TM) so a teacher can deliver specific content to selected students, furthering the ability to deliver differentiated learning. In addition, a new ClassFlow(TM) Teacher 'paid' app is now available for tablets which allows the teacher to control, deliver and amend a ClassFlow(TM) lesson from anywhere in the classroom. Promethean is also offering a ClassFlow(TM) Pro teacher licence that will provide private lesson storage and extraction of assessment data. ClassFlow(TM) Pro and the Teacher app represent the first steps in monetising ClassFlow(TM) software.
Further enhancements to ClassFlow(TM) are being developed to extend the capabilities in a classroom as well as integrate and facilitate the flow of classroom data to existing school/district data management systems.
Promethean's professional services team is working with education professionals providing training in the use of interactive displays and one-to-one devices recently deployed in their classrooms. Customised development plans have also been prepared to align to the district's initiatives, curriculum assets and long-term goals. The professional development team will also provide support and implementation services to drive adoption of ClassFlow(TM) in the US.
Dividend
The Board has decided not to pay an interim dividend (2013: nil).
Outlook
The Board expects a stronger second half performance from the International region, with continued good performance in North America, and for Promethean to meet the market's revenue expectations for the full year. Whilst a stronger gross margin performance is expected in the second half of the year, full year gross margin will be slightly below current expectations. Promethean will continue to maintain a tight control of operating costs and Adjusted EBITDA for the year is likely to be in line with expectations.
Having released ClassFlow(TM) 2.0 on 1 July 2014, the monetisation of the software is underway and expected to commence in the second half of this year. However, as previously announced, we do not expect ClassFlow(TM) to generate material revenue this year.
Financial review
Revenue, product volumes & average selling prices
First-half revenues were GBP57.7m, down 17.6%, versus 2013 (H1 2013: GBP70.0m) or 11.6% on a constant currency basis. At a regional level, North America revenues of GBP36.5m represented 63.2% of Group revenues (H1 2013: GBP38.0m, 54.3% of Group revenues). In constant currency terms, North American revenues were up 4.4%. International revenues in H1 2014 were GBP21.2m, 33.7% below last year (H1 2013: GBP32.0m).
By product segment, interactive display systems revenues for the group were GBP54.6m, 15.6% lower than sales of GBP64.6m in H1 last year. Learner response system (LRS) revenues for the first-half were GBP3.1m, a 42.2% reduction compared with GBP5.4m last year. Promethean sold 57,370 interactive display systems (H1 2013: 60,521 systems) and 140,544 learner response system handsets (H1 2013: 215,840), decreases of 5.2% and 34.9% respectively compared to the same period last year.
In North America, interactive display system revenues were GBP33.9m (H1 2013: GBP34.0m) and sales of learner response systems of GBP2.6m (H1 2013: GBP4.0m), reductions of 0.5% and 34.4% respectively. Sales volumes of interactive display systems increased by 41.9% to 25,952 from 18,293 in H1 2013. Dedicated LRS handset sales of 97,888 units represent a 21.7% reduction from 124,960 units in H1 2013.
Sales of interactive display systems in the International region of GBP20.7m (H1 2013: GBP30.6m), were 32.3% lower due to a reduction in sales volumes from 42,228 in H1 2013 to 31,418 in H1 2014. LRS revenues fell by 64.2% to GBP0.5m (H1 2013: GBP1.4m). Handset sales at 42,656 were 53.1% lowerin the first-half of the year versus the comparator period (H1 2013: 90,880).
The average selling price (ASP) for interactive display systems in the first-half of 2014 decreased to GBP951 from GBP1,068 in H1 2013, a fall of 10.9%, primarily due to the adverse currency translation impact on revenues (on a constant currency basis the reduction in ASP was 4.5%) and lower lesson content revenues.
The North America ASP of GBP1,305 (H1 2013: GBP1,861) was lower due to large tender pricing, lower lesson content revenues and product mix, as well as the adverse currency translation impact. The International ASP declined to GBP659 (H1 2013: GBP724) due to a combination of changes in country and product mix in comparison to the prior period.
Gross profit
During the first half of the year Promethean's gross profit was GBP18.0m versus GBP24.9m in H1 2013, reflecting the overall drop in both revenues and gross margin.
Gross margin in the first-half was 31.2% (H1 2013: 35.6%), due to the impact of large tender pricing, lower lesson content revenues in the period (in Q1 2013, lesson content revenues benefitted from royalties arising from the initial adoption of Houghton Mifflin Harcourt (HMH) interactive curriculum content resources) and product mix (including lower LRS revenues) all of which was only partially offset by the geographical mix of sales being more weighted towards North America.
Gross profit for North America was GBP11.4m in H1 2014 (H1 2013: GBP15.1m), primarily reflecting a reduction in gross margin during the period. The gross margin in North America was 31.3% (H1 2013: 39.8%), the reduction primarily reflecting the margin impact from the concentration of Miami-Dade contract revenues in H1 2014 and H1 2013 having benefitted from HMH content adoption revenues.
Gross profit for International was GBP6.6m in H1 2014, down from GBP9.7m in H1 2013 due to lower revenues. The gross margin in International was 31.2% (H1 2013: 30.5%).
Operating expenses
Operating expenses, excluding exceptional items, share-based payments, depreciation and amortisation, were down by 12.0% to GBP19.7m (H1 2013: GBP22.4m). The Group's sales and marketing expenses reduced by GBP1.6m to GBP13.7m. Administrative expenses were flat at GBP4.1m.
Total gross research and development expenditure (before amounts capitalised) was GBP6.3m in the first half of 2014 versus GBP6.6m in the first half of 2013, a 4.3% decrease. Net of capitalised expenditure, research and development costs were GBP1.9m (H1 2013: GBP3.0m).
Exceptional items
In H1 2014 exceptional costs of GBP1.1m were incurred primarily in further streamlining the management structure. An exceptional credit of GBP0.6m was recognised from the partial release of a prior year trade receivable impairment provision. There were no exceptional items during the comparative period.
EBITDA and EBIT
Adjusted EBITDA excludes exceptional costs and share-based payments. Promethean's Adjusted EBITDA was a loss of GBP1.7m in H1 2014 compared to a profit of GBP2.5m in H1 2013. Depreciation and amortisation (excluding the amortisation of acquired intangible assets) reduced from GBP5.1m in H1 2013 to GBP4.0m in H1 2014.
Promethean's Adjusted EBIT was a loss of GBP5.7m in H1 2014 compared to a loss of GBP2.6m in H1 2013. The Adjusted EBIT margin for the period was -9.9% (H1 2013: -3.7%).
Interest and tax
The Group had net finance income of GBP0.8m compared to net finance costs of GBP1.9m in H1 2013, principally driven by foreign exchange gains of GBP1.0m.
The Group's consolidated effective tax rate for H1 2014 was 23.5% compared to 24.0% in H1 2013.
Pro forma net income and earnings per share
On a pro forma basis, excluding amortisation of acquired intangible assets, exceptional items and share-based payments and assuming a tax rate of 24.0% (H1 2013: 24.0%), in H1 2014 there was an adjusted net loss of GBP3.7m compared to net loss of GBP3.4m in H1 2013. Pro forma earnings per share, calculated by reference to the weighted average number of ordinary shares per the basic EPS calculation, was a loss of 1.85p in H1 2014 (H1 2013: loss per share of 1.71p) and is set out as follows:
GBPm unless stated H1 2014 H1 2013
--------
Loss before tax as reported (5.6) (5.3)
Adjusted for:
Exceptional items and share-based payments 0.7 0.4
Amortisation of acquired intangible assets - 0.4
Pro forma loss before tax (4.9) (4.5)
Tax thereon (2014: 24.0% & 2013: 24.0%) 1.2 1.1
-------- --------
Pro forma net loss (3.7) (3.4)
-------- --------
Number of ordinary shares (m)(1) 200.9 200.6
Pro forma basic loss per share (p) (1.85) (1.71)
-------- --------
(1) The number of ordinary shares is the weighted average number of ordinary shares as per the basic EPS calculation.
Cash flow
As at 30 June 2014, the Group had a net cash balance of GBP9.2m (30 June 2013: GBP9.1m), GBP8.4m lower than at 31 December 2013 (GBP17.6m), due to a GBP2.9m operating cash outflow in the period and the continued investment in new product development.
In the first half of 2014, the Group's free cash flow (defined as Adjusted EBITDA less capital expenditure and changes in trading working capital) was an outflow of GBP7.5m, compared to a GBP3.5m inflow for H1 2013.
Risks and uncertainties
The Group faces a number of risks and uncertainties which could have a material impact upon its long-term performance. These risks are both internal and external. The Board has an established set of processes which assists in the identification, evaluation and management of these risks.
The principal risks and uncertainties facing the Group at 30 June 2014 are consistent with those set out on pages 12 to 17 of the Annual Report and Accounts 2013 (a copy of which is available from the investor section of the Group's website www.prometheanworld.com). These risks remain valid as regards their potential to impact the Group. No new significant risks have been identified during the current period.
Going concern
The Group meets its day-to-day working capital requirements through operating cash flows, supplemented if required by borrowings. The Directors have prepared cash flow projections for the period to December 2015 which shows that the Group is capable of continuing to operate within its banking facilities.
On the basis of the above, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the forseeable future. Accordingly the going concern basis of accounting continues to be adopted in preparing the interim financial statements.
Forward looking statements
The information in this release is based on management information.
This report may include statements that are forward looking in nature. The words "believe", "anticipate", "expect", "intend", "may" and "should" and other similar expressions that are predictions of, or indicate, future events or trends are forward looking statements. By their nature, forward looking statements involve known and unknown risks, assumptions, uncertainties and other factors which may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Accordingly, forward looking statements are not, and should not be construed as being, guarantees of the Company's future performance, financial condition or liquidity, or of the development of, or trends affecting, the industry in which the Company operates. Except as required by the Listing Rules and applicable law, the Company undertakes no obligation to update, revise or change any forward looking statements to reflect events or developments occurring after the date of this report.
Responsibility statement of the Directors in respect of the half-yearly financial report
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
-- the interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
Approved by the Board and signed on its behalf by
Jim Marshall
Chief Executive Officer
30 July 2014
The Directors who served during the period were:
Philip Rowley Chairman
Jim Marshall Chief Executive Officer
Ian Baxter Chief Financial Officer (from 27
Lord Puttnam February 2014)
Graham Howe Senior Independent Director
Judy Verses Non-Executive Director
Jackie Yeaney Non-Executive Director (from 1
March 2014)
Non-Executive Director (from 1
March 2014)
Neil Johnson ceased to be a Director on 27 February 2014.
Tony Cann and Dante Roscini ceased to be Non-Executive Directors on 8 May 2014.
Philip Rowley succeeded Graham Howe as Chairman on 8 May 2014.
Condensed consolidated statement of profit or loss
For the period ended
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
Note GBP000 GBP000 GBP000
----------------------------------------- ---- -------- -------- -----------
Revenue 5 57,690 70,016 141,158
Cost of sales (39,669) (45,124) (90,572)
----------------------------------------- ---- -------- -------- -----------
Gross profit 5 18,021 24,892 50,586
Operating expenses (24,467) (28,246) (56,491)
----------------------------------------- ---- -------- -------- -----------
Analysis of results from operating
activities:
(Loss)/earnings before interest, tax,
depreciation, amortisation, exceptional
costs and share-based payments (1,691) 2,503 9,407
Depreciation and amortisation (excluding
amortisation of acquired intangible
assets) (4,013) (5,089) (10,129)
Amortisation of acquired intangible
assets - (407) (782)
Exceptional costs 6 (1,138) - (4,267)
Exceptional income 6 587 - 742
Share-based payments 13 (191) (361) (876)
----------------------------------------- ---- -------- -------- -----------
Results from operating activities (6,446) (3,354) (5,905)
----------------------------------------- ---- -------- -------- -----------
Finance income 7 1,044 38 192
Finance expense 7 (236) (1,954) (993)
----------------------------------------- ---- -------- -------- -----------
Net finance income/(expense) 808 (1,916) (801)
----------------------------------------- ---- -------- -------- -----------
Loss before income tax (5,638) (5,270) (6,706)
Income tax credit 8 1,327 1,265 909
----------------------------------------- ---- -------- -------- -----------
Loss for the period (1) (4,311) (4,005) (5,797)
----------------------------------------- ---- -------- -------- -----------
Loss per share
Basic loss per share (pence) 12 (2.15) (2.00) (2.89)
Diluted loss per share (pence) 12 (2.15) (2.00) (2.89)
----------------------------------------- ---- -------- -------- -----------
(1) All attributable to Equity shareholders and is entirely from continuing operations.
Condensed consolidated statement of profit or loss and other comprehensive income
For the period ended
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
---------------------------------------------- -------- -------- -----------
Loss for the period from the income statement (4,311) (4,005) (5,797)
Foreign currency translation differences -
foreign operations (600) 1,599 291
Net (loss)/gain on net investments in foreign
operations (774) 1,347 (209)
Total comprehensive loss for the period (1) (5,685) (1,059) (5,715)
---------------------------------------------- -------- -------- -----------
(1) All attributable to Equity shareholders and is entirely from continuing operations.
Condensed consolidated statement of financial position
Registered number 7118000
As at
30 June 30 June 31 December
2014 2013 2013
Note GBP000 GBP000 GBP000
-------------------------------------------- ----- --------- --------- -----------
Assets
Property, plant and equipment 7,564 9,003 7,741
Intangible assets 10 15,728 17,775 14,219
Deferred tax assets 10,030 8,786 8,326
-------------------------------------------- ----- --------- --------- -----------
Total non-current assets 33,322 35,564 30,286
-------------------------------------------- ----- --------- --------- -----------
Inventories 10,707 11,847 8,670
Derivative financial instruments 216 25 163
Trade and other receivables 27,597 34,185 24,601
Current tax assets 832 - 838
Cash and cash equivalents 9,162 9,056 17,591
-------------------------------------------- ----- --------- --------- -----------
Total current assets 48,514 55,113 51,863
-------------------------------------------- ----- --------- --------- -----------
Total assets 81,836 90,677 82,149
-------------------------------------------- ----- --------- --------- -----------
Liabilities
Trade and other payables (31,523) (29,858) (25,937)
Derivative financial instruments - (244) -
Provisions (3,667) (4,027) (3,735)
Current tax liabilities (861) (567) (779)
-------------------------------------------- ----- --------- --------- -----------
Total current liabilities (36,051) (34,696) (30,451)
-------------------------------------------- ----- --------- --------- -----------
Trade and other payables - - -
Provisions (321) (810) (685)
Deferred tax liabilities - - -
-------------------------------------------- ----- --------- --------- -----------
Total non-current liabilities (321) (810) (685)
-------------------------------------------- ----- --------- --------- -----------
Total liabilities (36,372) (35,506) (31,136)
-------------------------------------------- ----- --------- --------- -----------
Net assets 45,464 55,171 51,013
-------------------------------------------- ----- --------- --------- -----------
Equity
Share capital 11 20,320 20,000 20,000
Share premium 99,796 99,796 99,796
Capital reserve 93,990 93,990 93,990
Translation reserve (FCTR) 2,760 6,998 4,134
Retained earnings (171,402) (165,613) (166,907)
-------------------------------------------- ----- --------- --------- -----------
Total equity (all attributable to equity holders
of the Company) 45,464 55,171 51,013
--------------------------------------------------- --------- --------- -----------
Condensed consolidated statement of changes in equity
For the six months to 30 June 2013
Share Share Capital Translation Retained Total
capital premium reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------------- ------- ------- ------- ----------- --------- -------
Balance at 1 January 2013 20,000 99,796 93,990 4,052 (161,897) 55,941
----------------------------------- ------- ------- ------- ----------- --------- -------
Total comprehensive income
for the period
Loss for the period - - - - (4,005) (4,005)
----------------------------------- ------- ------- ------- ----------- --------- -------
Foreign currency translation
differences - - - 1,599 - 1,599
Net gain on net investment
in foreign operations - - - 1,347 - 1,347
Total other comprehensive
income - - - 2,946 - 2,946
----------------------------------- ------- ------- ------- ----------- --------- -------
Total comprehensive income/(loss)
for the period - - - 2,946 (4,005) (1,059)
----------------------------------- ------- ------- ------- ----------- --------- -------
Transactions with owners,
recorded directly in equity
Contributions by and distributions
to owners
Share-based payments (net
of tax) - - - - 289 289
----------------------------------- ------- ------- ------- ----------- --------- -------
Total contributions by and
distributions to owners - - - - 289 289
----------------------------------- ------- ------- ------- ----------- --------- -------
Balance at 30 June 2013 20,000 99,796 93,990 6,998 (165,613) 55,171
----------------------------------- ------- ------- ------- ----------- --------- -------
Condensed consolidated statement of changes in equity
For the year to 31 December 2013
Share Share Capital Translation Retained Total
capital premium reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------------ --------- --------- --------- ------------ ---------- --------
Balance at 1 January 2013 20,000 99,796 93,990 4,052 (161,897) 55,941
Total comprehensive income
for the year
Loss for the year -- - - - (5,797) (5,797)
--------- --------- --------- ------------ ---------- --------
Foreign currency translation
differences - - - 291 - 291
Net loss on net investment
in foreign operations - - - (209) - (209)
Total other comprehensive
income - - - 82 - 82
------------------------------------ --------- --------- --------- ------------ ---------- --------
Total comprehensive income/(loss)
for the year - - - 82 (5,797) (5,715)
------------------------------------ --------- --------- --------- ------------ ---------- --------
Transactions with owners,
recorded directly in equity
Contributions by and distributions
to owners
Share-based payments (net
of tax) - - - - 787 787
------------------------------------ --------- --------- --------- ------------ ---------- --------
Total contributions by and
distributions to owners - - - - 787 787
Balance at 31 December 2013 20,000 99,796 93,990 4,134 (166,907) 51,013
------------------------------------ --------- --------- --------- ------------ ---------- --------
Condensed consolidated statement of changes in equity
For the six months to 30 June 2014
Share Share Capital Translation Retained Total
capital premium reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------------------- ------- ------- ------- ----------- --------- -------
Balance at 1 January 2014 20,000 99,796 93,990 4,134 (166,907) 51,013
----------------------------------- ------- ------- ------- ----------- --------- -------
Total comprehensive income
for the period
Loss for the period - - - - (4,311) (4,311)
----------------------------------- ------- ------- ------- ----------- --------- -------
Foreign currency translation
differences - - - (600) - (600)
Net loss on net investment
in foreign operations - - - (774) - (774)
Total other comprehensive
income - - - (1,374) - (1,374)
----------------------------------- ------- ------- ------- ----------- --------- -------
Total comprehensive loss for
the period - - - (1,374) (4,311) (5,685)
----------------------------------- ------- ------- ------- ----------- --------- -------
Transactions with owners,
recorded directly in equity
Contributions by and distributions
to owners
Issue of share capital to
Employee Benefit Trust 320 - - - (320) -
Share-based payments (net
of tax) - - - - 136 136
----------------------------------- ------- ------- ------- ----------- --------- -------
Total contributions by and
distributions to owners 320 - - - (184) 136
----------------------------------- ------- ------- ------- ----------- --------- -------
Balance at 30 June 2014 20,320 99,796 93,990 2,760 (171,402) 45,464
----------------------------------- ------- ------- ------- ----------- --------- -------
Condensed consolidated statement of cash flows
For the period ended
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
Note GBP000 GBP000 GBP000
----------------------------------------- ---- -------- -------- -----------
Cash flows from operating activities
Loss for the period (4,311) (4,005) (5,797)
Adjustments for:
Depreciation 1,165 1,656 3,250
Amortisation of intangible assets 2,848 3,840 7,661
Impairment losses on property, plant
and equipment - - 125
Impairment losses on intangible assets - - 4,142
Impairment losses on trade receivables (587) - (674)
Loss/(gain) on sale of property, plant
and equipment 57 (69) (9)
Net finance (income)/expense (808) 1,916 801
Income tax credit (1,327) (1,265) (909)
Share-based payments 191 361 876
----------------------------------------- ---- -------- -------- -----------
(2,772) 2,434 9,466
Change in inventories (2,234) 4,360 6,891
Change in trade and other receivables (3,025) (5,858) 4,054
Change in trade and other payables 4,925 6,314 2,537
Change in provisions (431) (1,596) (2,013)
----------------------------------------- ---- -------- -------- -----------
Cash (used in)/generated from operations (3,537) 5,654 20,935
Finance cost paid 961 (854) (1,058)
Income tax (paid)/received (356) 120 210
----------------------------------------- ---- -------- -------- -----------
Net cash (outflow)/inflow from operating
activities (2,932) 4,920 20,087
----------------------------------------- ---- -------- -------- -----------
Cash flows from investing activities
Finance income received 15 38 48
Proceeds from sale of property, plant
and equipment 82 69 126
Acquisition of property, plant and
equipment (1,248) (385) (1,252)
Development expenditure 10 (4,357) (3,572) (8,072)
Net cash used in investing activities (5,508) (3,850) (9,150)
----------------------------------------- ---- -------- -------- -----------
Cash flows from financing activities
Transaction costs of new bank facility - - (938)
Cash inflow/(outflow) from settlement
of derivatives 207 (165) (226)
Net cash used in financing activities 207 (165) (1,164)
----------------------------------------- ---- -------- -------- -----------
Net (decrease)/increase in cash and
cash equivalents (8,233) 905 9,773
Cash and cash equivalents at 1 January 17,591 8,011 8,011
Exchange rate effects (196) 140 (193)
----------------------------------------- ---- -------- -------- -----------
Cash and cash equivalents at period
end 9,162 9,056 17,591
----------------------------------------- ---- -------- -------- -----------
Notes
To the condensed interim financial statements
1 Reporting entity
Promethean World Plc (the "Company") is a company registered in England and Wales. The address of the Company's registered office is Promethean House, Lower Philips Road, Blackburn, Lancashire BB1 5TH.
The condensed interim consolidated financial statements of the Company as at and for the six months ended 30 June 2014 comprises of the Company and its subsidiaries (together referred to as the "Group" and individually as "Group Entities").
The Group's Promethean brand is a world leader in the global market for interactive learning technology. The Group creates, develops, supplies and supports leading-edge, interactive learning technology primarily for the education market. Promethean's solutions include its interactive display systems (ActivBoard, ActivTable and ActivPanel), its Learner Response Systems (ActiVote, ActivExpression and Promethean KUNO tablet) and its specialised teaching software (ActivInspire, ActivEngage and ClassFlow(TM) ).
Promethean also provides comprehensive training and support and, now with over 1.9 million members, Promethean Planet (www.prometheanplanet.com) is the world's largest online community for users of interactive learning technology, providing user-generated and premium content and is a forum for teachers to exchange ideas and experience.
2 Statement of compliance
These condensed consolidated interim financial statements of Promethean World Plc have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the EU. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of Promethean World Plc as at 31 December 2013 which have been prepared in accordance with IFRSs as adopted by the EU.
The comparative figures for the year ended 31 December 2013 are not the Group's statutory accounts for that financial year. Those accounts have been reported upon by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
These condensed consolidated interim financial statements were approved by the Board of Directors on 30 July 2014.
3 Accounting policies
These condensed consolidated interim financial statements of Promethean World Plc have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the EU.
As required by the Disclosure and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of Promethean World Plc's published consolidated financial statements for the year ended 31 December 2013.
Changes in accounting policy
There has been no impact during the period to 30 June 2014 resulting from new accounting standards or amendments to existing accounting standards that became effective for the Group from 1 January 2014.
Going concern
The Group meets its day-to-day working capital requirements through operating cash flows, supplemented if required by borrowings. The Directors have prepared cash flow projections for the period to December 2015 which shows that the Group is capable of continuing to operate within its existing facilities and can meet the covenant test set out within the facility.
On the basis of the above, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the forseeable future. Accordingly the going concern basis of accounting continues to be adopted in preparing the interim financial statements.
4 Estimates
The preparation of the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those applied to the consolidated financial statements of Promethean World Plc as at and for the year ended 31 December 2013.
5 Operating segments
There are two reportable segments identified by the Group, based on the destination of sales, North America and International, and they do not arise as a result of an aggregation process. The North America business segment consists of the United States, Canada and the Caribbean. The International business segment consists of the UK & Ireland, Continental Europe and the Rest of the World. Performance by segment is managed and reviewed to gross profit. For internal reporting purposes, aside from trade receivables, no allocation is made between these segments for balances in the statement of financial position, as regardless of an asset's geographical location it could serve each business segment. Disclosures of segment performance are provided in the tables below:
Reportable segment revenue
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
----------------------------------------- -------- -------- -----------
North America 36,476 38,025 69,094
International 21,214 31,991 72,064
----------------------------------------- -------- -------- -----------
57,690 70,016 141,158
----------------------------------------- -------- -------- -----------
Reportable segment profit (gross profit)
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
----------------------------------------- -------- -------- -----------
North America 11,406 15,145 27,659
International 6,615 9,747 22,927
----------------------------------------- -------- -------- -----------
18,021 24,892 50,586
----------------------------------------- -------- -------- -----------
Reconciliation to loss before income tax
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
------------------------------------------- -------- -------- -----------
Reportable segmental profit (gross profit) 18,021 24,892 50,586
Sales and marketing expenses (13,660) (15,263) (28,326)
Administrative expenses (4,108) (4,111) (7,836)
Research and development (net) (1,944) (3,015) (5,017)
------------------------------------------- -------- -------- -----------
Adjusted EBITDA (1,691) 2,503 9,407
Depreciation and amortisation costs (4,013) (5,089) (10,129)
------------------------------------------- -------- -------- -----------
Adjusted operating loss (5,704) (2,586) (722)
Amortisation of acquired intangible assets - (407) (782)
Exceptional costs(1) (1,138) - (4,267)
Exceptional income 587 - 742
Share-based payments (191) (361) (876)
Net finance (expense)/income 808 (1,916) (801)
------------------------------------------- -------- -------- -----------
Loss before income tax (5,638) (5,270) (6,706)
------------------------------------------- -------- -------- -----------
(1) Further details of the exceptional costs are disclosed in note 6.
Further analysis of the Group's revenues by type of product is provided below:
Revenue by product
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
---------------------------------------------------- -------- -------- -----------
Interactive display systems and accessories 54,576 64,631 132,072
Learner Response Systems & Assessment (LRSA) 3,114 5,385 9,086
---------------------------------------------------- -------- -------- -----------
57,690 70,016 141,158
---------------------------------------------------- -------- -------- -----------
Interactive display systems and accessories revenue
by region
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
---------------------------------------------------- -------- -------- -----------
North America 33,865 34,044 63,067
International 20,711 30,587 69,005
---------------------------------------------------- -------- -------- -----------
54,576 64,631 132,072
---------------------------------------------------- -------- -------- -----------
Learner Response Systems & Assessment revenue by
region
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
---------------------------------------------------- -------- -------- -----------
North America 2,611 3,981 6,027
International 503 1,404 3,059
---------------------------------------------------- -------- -------- -----------
3,114 5,385 9,086
---------------------------------------------------- -------- -------- -----------
Seasonality
In addition to economic factors, the Group's revenues are subject to seasonal fluctuation during the key buying seasons in the United States, which runs from June to September, and in International markets. As a result, the Directors consider that there is an impact on performance of the Group when comparing first half results to those achieved in the second half.
6 Exceptional costs
In H1 2014 exceptional costs of GBP1,138,000 were incurred primarily in further streamlining the management structure. An exceptional credit of GBP587,000 was recognised from the partial release of a prior year trade receivable impairment provision. There were no exceptional items during the comparative period.
7 Finance income and expense
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
------------------------------------------------- -------- -------- -----------
Interest on bank deposits 15 38 48
Net change in the fair value of financial assets
at fair value through
profit or loss 53 - 144
Foreign exchange gains 976 - -
------------------------------------------------- -------- -------- -----------
Finance income 1,044 38 192
------------------------------------------------- -------- -------- -----------
Interest expense on bank and other loans (126) (97) (208)
Debt issue costs amortised (110) (32) (252)
Foreign exchange losses - (1,587) (533)
Net change in the fair value of financial assets
at fair value through
profit or loss - (238) -
------------------------------------------------- -------- -------- -----------
Finance expense (236) (1,954) (993)
------------------------------------------------- -------- -------- -----------
Net finance income/(expense) 808 (1,916) (801)
------------------------------------------------- -------- -------- -----------
The changes in fair value of financial assets at fair value through profit or loss result from the movements during the period in the mark to market valuation of the Group's outstanding foreign currency instruments, which are valued in accordance with level 2 methodology.
8 Income tax credit
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
------------------------ -------- -------- -----------
Current tax expense (446) (455) (395)
Deferred tax credit 1,773 1,720 1,304
------------------------ -------- -------- -----------
Total income tax credit 1,327 1,265 909
------------------------ -------- -------- -----------
Income tax is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax result of the interim period. The Group's consolidated reported tax rate for the six months ended 30 June 2014 was 23.5% (six months ended 30 June 2013: 24%).
9 Dividends
The Directors are not proposing an interim dividend for the six months to 30 June 2014 (2013: GBPnil).
10 Intangible assets
The movements in the net book value of the Group's intangible assets in the six months to 30 June 2014 were as follows:
Development Customer
costs contracts Total
GBP000 GBP000 GBP000
-------------------------------------- ----------- --------- -------
Net book value as at 1 January 2014 14,219 - 14,219
Additions 4,357 - 4,357
Effect of movements in exchange rates - - -
Amortisation for the period (2,848) - (2,848)
-------------------------------------- ----------- --------- -------
Net book value as at 30 June 2014 15,728 - 15,728
-------------------------------------- ----------- --------- -------
Net book value as at 30 June 2013 17,770 5 17,775
-------------------------------------- ----------- --------- -------
11 Capital and reserves
On 25 March 2014, the Company allotted and issued 3,200,000 ordinary shares of 10 pence each to the Company's Employee Benefit Trust, to satisfy the Company's obligation to transfer ordinary shares to employees following the anticipated exercise of future share options and vesting of conditional share awards. The total share capital allotted and in issue as at 30 June 2014 was 203,200,000 ordinary 10 pence shares (30 June 2013: 200,000,000).
12 Loss per share
Basic loss per share
The calculation of basic loss per share is based on the loss attributable to ordinary shareholders as disclosed below and a weighted average number of ordinary shares outstanding, calculated as follows:
Loss attributable to ordinary shareholders
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
---------------------------------------------------------- -------- -------- -----------
Loss for the period attributable to ordinary shareholders (4,311) (4,005) (5,797)
---------------------------------------------------------- -------- -------- -----------
Weighted average number of ordinary shares
In thousands of shares
Issued ordinary shares at 1 January 200,000 200,000 200,000
Effect of ordinary shares issued in the period 1,715 - -
Less: Weighted average Promethean World Plc shares
held by
the Employee Benefit Trust (1,830) (857) (496)
Effect of dilutive vested share options not yet exercised 1,012 1,482 1,103
---------------------------------------------------------- -------- -------- -----------
Weighted average number of ordinary shares at period
end 200,897 200,625 200,607
---------------------------------------------------------- -------- -------- -----------
Basic loss per share (pence) (2.15) (2.00) (2.89)
---------------------------------------------------------- -------- -------- -----------
Diluted loss per share
The calculation of diluted loss per share at 30 June 2014 was based on loss attributable to ordinary shareholders as disclosed below, and a weighted average number of ordinary shares outstanding calculated as follows:
6 months 6 months
to to Year ended
30 June 30 June 31 December
2014 2013 2013
GBP000 GBP000 GBP000
--------------------------------------------- -------- -------- -----------
Loss for the period attributable to ordinary
shareholders (4,311) (4,005) (5,797)
--------------------------------------------- -------- -------- -----------
Weighted average number of shares (basic) 200,897 200,625 200,607
Effect of conversion of Promethean World
Plc share options - - -
--------------------------------------------- -------- -------- -----------
Weighted average number of shares (diluted) 200,897 200,625 200,607
--------------------------------------------- -------- -------- -----------
Diluted loss per share (pence) (2.15) (2.00) (2.89)
--------------------------------------------- -------- -------- -----------
No adjustment has been made to the weighted average number of shares for the purpose of the diluted earnings per share calculation as the effect would be anti-dilutive.
13 Share-based payments
The terms and conditions of the share option schemes in place at 31 December 2013 are provided in the consolidated financial statements for Promethean World Plc as at 31 December 2013.
On 8 May 2014 90,000 nil cost options were granted under the CSOP with an exercise price of 32.125p per share.
The terms and conditions of the CSOP are consistent with those provided in the consolidated financial statements for Promethean World Plc as at 31 December 2013 for the grants on 28 June 2013.
14 Related parties
Tony Cann ceased to be a Director of the Company on 8 May 2014. With effect from 8 May 2014, Tony Cann has been employed by Promethean Limited to advise in relation to product development matters. He receives a salary of GBP38,000 per annum for his work in this capacity.
There have been no other related party transactions or changes to the nature of related party transactions previously described in the 2013 consolidated financial statements of Promethean World Plc that could have a material effect on the financial position or performance of the Group in the period.
Independent Review Report by KPMG LLP to Promethean World Plc
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FCA.
Stuart Burdass
For and on behalf of KPMG LLP
Chartered Accountants
St James' Square
Manchester
M2 6DS
30 July 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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