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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Satcom Grp | LSE:SGH | London | Ordinary Share | GB00B0D66620 | ORD USD0.10 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:7711P
SatCom Group Holdings plc
11 March 2008
Press Release 11 March 2008
SatCom Group Holdings Plc
("SatCom" or "the Group")
Interim results for the six months ended 31 December 2007
SatCom Group Holdings Plc (AIM: SGH), a leading reseller of mobile satellite
communications equipment and airtime, announces its interim results for the six
months ended 31 December 2007.
Highlights
* Turnover increased 14.3% to US$31.9 million (H1 2007: US$27.9 million)
* EBITDA up 15.8% to US$2.2 million (H1 2007: US$1.9 million)
* Operating profit increased 25% to US$2.0 million (H1 2007: US$1.6 million)
* Adjusted basic earnings per share up to 2.20 cents per share (H1 2007:
2.09 cents)
* Recommended interim dividend increased to 0.2 cents per share (H1 2007:
0.17 cents per share)
* Regional distribution centres now operational in North America, Europe,
Middle East, Africa and Asia
* Appointed as a Global Master Distributor for Thrane & Thrane in September
2007
Commenting on the results, Richard Vos, Chairman of SatCom Group Holdings Plc,
said: "These results demonstrate SatCom's continued growth. The Group is in
excellent shape to further progress having completed the investment in systems
and people and rationalising the Group's operations. SatCom is now a truly
global provider of Mobile Satellite Services with operations in North America,
Europe, Africa, the Middle East and Asia.
"The Group is well positioned to benefit from the continued forecast growth of
Inmarsat's BGAN and voice services. As in previous years, we expect our
turnover and resulting profits to be weighted towards the second half of the
financial year and look forward to maintaining the growth that the Group has
historically achieved."
- Ends -
For further information:
SatCom Group Holdings plc
Mark White, Chief Executive Officer Tel: +44 (0) 1722 439 206
mark.white@satcomgroup.com www.SatComgroup.com
Martin Ward, Chief Financial Officer Tel: +44 (0) 1722 439 201
martin.ward@satcomgroup.com www.SatComgroup.com
Landsbanki Securities (UK) Limited
Gareth Price / Fred Walsh Tel: +44 (0) 207 426 9000
fred.walsh@landsbanki.com www.landsbanki.com
Abchurch
Chris Lane / George Parker Tel: +44 (0) 20 7398 7719
george.parker@abchurch-group.com
Chairman's Statement
The Group has continued to make solid progress and is reaping the rewards of
last year's investment in front and back office systems, new Service Providers
and staff training. This, together with increasing customer acceptance of the
Inmarsat BGAN service, has contributed to a further improvement in year-on-year
organic growth. The six-month period to 31 December 2007 saw the Group
accredited as an Inmarsat Voice Services Distribution Partner, opening up
another opportunity for revenue generation in this market.
The Mobile Satellite Services sector is experiencing ongoing consolidation. The
Group intends to continue to participate in this consolidation and will look at
strategic, accretive acquisition opportunities as they arise. The Group will
seek to remain focussed on delivering sophisticated "Best in Class" support
packages to our customers.
The Group's activities are now spread across the world, with major activity
centres in Dubai, North America, Singapore, Thailand and the UK, allowing us to
provide 24/7 service throughout the year and to supply equipment from
warehousing facilities closer to our major markets and customers. Additionally,
our network of sales offices and our community of wholesalers put the Group in
an excellent position to take advantage of opportunities in the growing Mobile
Satellite Services market.
Our ongoing success would not be possible without the enthusiasm of our people
and I would like to take this opportunity to thank all of the Group's employees
who have contributed to this success.
Richard Vos
Chairman
10 March 2008
Chief Executive's Statement
Highlights
The Group's results for the six months to 31 December 2007 show continued strong
organic growth, with good results from sales of Inmarsat's BGAN Broadband and
from US Government contracts. As in previous years, the first half of the year
represents a lower level of business, particularly in Land Mobile, as August and
December have lower business levels in both hardware and airtime. We therefore
expect further revenue growth in the second half of this year and beyond.
Our investment in systems and people, together with the rationalisation of the
Group's operations during 2007, are now bearing fruit. Sales of BGAN equipment
and airtime, after a slower than anticipated start last year, are now living up
to our expectations. We are also taking orders for Inmarsat's new Fleet
Broadband range and we anticipate that the market for this product will increase
once the third Inmarsat 4 satellite provides full global coverage. The Group is
well-positioned to take advantage of this opportunity. As with BGAN, the
Inmarsat Voice Services products need time to develop, but we are confident that
the Group will take full advantage of this market also once initial problems are
resolved.
Rationalisation of the Group's North American operations has now been completed.
With a view to improving our logistics capability, reducing costs and providing
better and quicker response to customer requirements, we have developed regional
distribution centres for North America, Europe, Middle East/Africa and Asia. Our
Dubai centre also provides 24/7 service support all year round, with assistance
as required from other members of the Group in appropriate time-zones. In August
the Group was appointed a Global Master Distributor for Thrane and Thrane, a
major manufacturer of equipment in the MSS market.
Financial review
Turnover for the six months ended 31 December 2007 was $31.9 million (2006:
$27.9 million) reflecting an increase of 14.2% over the same period last year.
The Group's EBITDA has also grown by a similar percentage to $2.2 million (2006:
$1.9 million).
IFRS adoption
SatCom has adopted International Financial Reporting Standards (IFRS) with
effect from 1 July 2006 and the effect is shown in the "Consolidated statement
of changes in equity", together with information in note 12.
HMC
Following discussion with the vendors, the final deferred payment on the
acquisition of HMC, amounting to $1.0m, was made in November 2007 in cash, in
preference to the contractual position of an equal split of shares and cash,
thus avoiding unnecessary dilution for existing shareholders and potential
market disruption.
Dividends
In line with the Group's progressive dividend policy, SatCom intends to pay an
interim dividend of 0.2 cents per ordinary share (2006 interim 0.17 cents).
This will be paid on 18 April 2008 to all shareholders on the register at 25
March 2008.
The proposed final dividend for the year ended 30 June 2007 of 0.33 cents per
share was paid in December 2007 (2006 final: 0.25 cents).
Outlook
SatCom continues to see significant organic growth opportunities in broadband
equipment and airtime sales from Inmarsat's BGAN services, as the MSS market is
increasingly looking for higher bandwidth communications. The Group will
continue to focus on the promotion of BGAN and Fleet Broadband sales during 2008
and we are confident that this market will show good growth. MSS handheld
products remain a significant market and we will continue to sell a wide range
of these products and services.
The Group will continue its acquisition strategy, targeting profit-enhancing
companies with strong revenues in global locations that assist the sales profile
of new and existing Group products. Our ability to react quickly to industry
developments places the Group in an ideal position to service existing global
customers with new and proven technology as well as to attract new business.
Mark White
Chief Executive Officer
10 March 2008
Consolidated accounts for the six months ended 31 December 2007
Consolidated income statement
Notes Unaudited Unaudited Audited
half year half year year ended
31 Dec 07 31 Dec 06 30 Jun 07
$'000's $'000's $'000's
(restated) (restated)
Revenue 3
Continuing operations
- Ongoing 31,907 21,795 46,517
- Acquisitions - 6,133 11,496
31,907 27,928 58,013
Cost of sales (24,930) (21,486) (44,212)
Gross profit 6,977 6,442 13,801
Administrative expenses (4,744) (4,497) (8,411)
EBITDA 2,233 1,945 5,390
Depreciation and amortization (223) (176) (419)
Operating profit (EBIT) 4
Continuing operations
- Ongoing 2,010 1,565 4,565
- Acquisitions - 204 406
2,010 1,769 4,971
Net interest and similar charges (376) (364) (760)
Amortisation of issue costs on convertible (59) (59) (122)
loan stock
Profit on ordinary activities before
taxation 1,575 1,346 4,089
Taxation 6 (330) (286) (794)
Profit on ordinary activities after
taxation 1,245 1,060 3,295
Basic earnings per share 5 2.09 cents 1.92 cents 5.86 cents
Diluted earnings per share 5 2.13 cents 1.92 cents 5.56 cents
Adjusted basic earnings per share 5 2.19 cents 2.03 cents 6.08 cents
Consolidated accounts as at 31 December 2007
Consolidated balance sheet
Unaudited Unaudited Audited
half year half year year ended
31 Dec 07 31 Dec 06 30 Jun 07
Notes $'000's $'000's $'000's
(restated) (restated)
Non-current assets
Goodwill 12,673 11,598 12,641
Intangible fixed assets 995 32 777
Property, plant and equipment 878 931 975
14,546 12,561 14,393
Current assets
Inventories 4,999 3,966 5,588
Trade and other receivables 18,241 12,118 17,582
Bank balances and cash 1,160 1,550 959
24,400 17,634 24,129
Current liabilities
Financial liabilities 805 1,115 925
Trade and other payables 19,916 14,534 18,349
Current tax 333 1,476 1,121
Obligations under finance leases 118 77 118
21,172 17,202 20,513
Net current assets 3,228 432 3,616
Total assets less current liabilities 17,774 12,993 18,009
Non-current liabilities
Financial liabilities 7,264 7,566 7,987
Obligations under finance leases 127 - 187
7,391 7,566 8,174
Net assets 10,383 5,427 9,835
Shareholders' equity
Called-up share capital 6,053 5,687 6,053
Share premium account 4,845 2,942 4,845
Contingent share capital 10 - 500 500
Merger reserve 11 (10,884) (10,884) (10,884)
Other reserves 55 55 55
Retained profits 10,314 7,127 9,266
Total shareholders' funds 10,383 5,427 9,835
Consolidated accounts as at 31 December 2007
Consolidated statement of changes in equity
Contingent
Share Share share Merger Other Retained
capital premium capital reserve reserves profits Total
$'000s $'000s $'000s $'000s $'000s $'000s $'000s
Balance at 30 June 2006
- as originally stated 5,250 723 714 (10,884) - 6,256 2,059
- changes in relation to first time
adoption of IFRS - - - - 55 (73) (18)
Restated balance at 30 June 2006 5,250 723 714 (10,884) 55 6,183 2,041
Profit for the financial period - - - - - 1,060 1,060
Adjustment to minority interests
for company now a subsidiary - - - - - 24 24
Dividends paid - - - - - (140) (140)
New shares issued (net of costs) 437 2,219 (214) - - 2,442
Balance at 31 December 2006 5,687 2,942 500 (10,884) 55 7,127 5,427
Profit for the financial period - - - - - 2,235 2,235
Adjustment to minority interests
for company now a subsidiary - - - - - (1) (1)
Dividends paid - - - - - (95) (95)
New shares issued (net of costs) 366 1,903 - - - - 2,269
Balance at 30 June 2007 6,053 4,845 500 (10,884) 55 9,266 9,835
Consolidated accounts as at 31 December 2007
Consolidated statement of changes in equity
Contingent
Share Share share Merger Other Retained
capital premium capital reserve reserves profits Total
$'000s $'000s $'000s $'000s $'000s $'000s $'000s
Balance at 30 June 2007 6,053 4,845 500 (10,884) 55 9,266 9,835
Profit for the financial period - - - - - 1,251 1,251
Dividends paid - - - - - (197) (197)
Adjustment to contingent share - - (500) - - - (500)
capital for consideration actually
paid by cash
Balance at 31 December 2007 6,053 4,845 - (10,884) 55 10,314 10,383
Consolidated accounts for the six months ended 31 December 2007
Consolidated cash flow statement
Unaudited Unaudited Audited
half year half year year ended
31 Dec 07 31 Dec 06 30 Jun 07
Notes $'000's $'000's $'000's
(restated) (restated)
Cash flows from operating activities
Net cash generated (used) from operating
activities 7 1,937 1,097 (377)
Cash flows from investing activities
Interest received 17 175 346
Purchase of intangible fixed assets (218) (235) (1,144)
Purchase of tangible fixed assets (126) (45) (58)
Cash paid to acquire subsidiary
undertakings 10 (1,032) (5,589) (2,223)
Net cash acquired with subsidiary undertakings - (244) (244)
Net cash used in investing activities (1,359) (5,938) (3,323)
Cash flows from financing activities
Issue of ordinary share capital (net of costs) - 2,442 2,529
Issue of Convertible Unsecured Loan Stock ("CULS") - 2,366 874
Decrease in short term borrowing (120) (166) (356)
Payment of finance lease liabilities (60) (12) (54)
Dividends paid (197) (140) (235)
Net cash (used) generated in financing activities (377) 4,490 2,758
Net increase (decrease) in cash and cash 201 (351) (942)
equivalents
Cash and cash equivalents at the 959 1,901 1,901
beginning of the period
Cash and cash equivalents at the end of 1,160 1,550 959
the period
Consolidated accounts for the six months ended 31 December 2007
Group notes
1. Basis of preparation
The Group's interim consolidated financial statements for the six months ended
31 December 2007 are the Group's first interim consolidated financial statements
prepared in accordance with International Financial Reporting and Accounting
Standards ("IFRS").
The financial statements are presented in US dollars since this is the currency
in which the majority of the Company's transactions are denominated.
The interim statement does not constitute statutory accounts as defined by
Section 240 of the Companies Act 1985. The information for the year to 30 June
2007 has been extracted from the full financial statements for that year (as
restated for the adoption of IFRS), which received an unqualified audit report,
and which, have been filed with the Registrar of Companies. The information for
the half year to 31 December 2006 and year to 30 June 2007 has been restated for
the first time adoption of International Financial Reporting and Accounting
Standards and includes the disclosures required by IFRS 1 "First time adoption
of International Financial Reporting Standards", concerning the transition from
UK GAAP to IFRS. This is given in note 12.
2. Accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the company and enterprises controlled by the company ("its subsidiaries") made
up to 30 June each year. Control is achieved where the company has the power to
govern the financial and operating policies of a subsidiary.
Minority interests in the net assets of consolidated subsidiaries are identified
separately from the group's equity therein. Minority interests consist of the
amount of those interests at the date of the original business combination and
the minority's share of changes in equity since the date of the combination.
Losses applicable to the minority in excess of the minority's interest in the
subsidiary's equity are allocated against the interests of the group except to
the extent that the minority has a binding obligation and is able to make
additional investment to cover the losses.
The results of subsidiaries acquired or disposed of during the period are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
All transactions and balances between group enterprises are eliminated on
consolidation.
Revenue recognition
Revenue represents amounts receivable for goods and services provided in the
normal course of business, net of discounts, VAT and other sales related taxes.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of the acquisition is measured at the aggregate of the fair values, at the
acquisition date, of assets given, liabilities incurred or assumed, and equity
instruments issued by the group, plus any costs directly attributable to the
acquisition. The acquiree's identifiable assets, liabilities and contingent
liabilities are recognised at their fair value at the acquisition date, except
for non-current assets that are held for resale, which are recognised and
measured at fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of cost over the group's interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities
recognised of a subsidiary, associate or jointly controlled entity at the date
of acquisition. Goodwill is recognised as an asset and is tested for impairment
annually, or on such occasions that events or changes in circumstances indicate
that its value might be impaired.
On disposal of a subsidiary, the attributable amount of unamortised goodwill,
which has not been subject to impairment, is included in the determination of
the profit or loss on disposal.
Positive goodwill arising on acquisitions before the date of the transition to
International Financial Reporting Standards has been retained at the previous UK
GAAP amount subject to being tested for impairment at that date. Negative
goodwill arising on acquisitions before the date of the transition has been
credited to retained earnings at the date of transition.
The interest of minority shareholders in the acquiree is initially measured at
the minority's proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
Taxation
The tax charge represents the sum of current and deferred tax.
Current tax currently payable is based on taxable profits for the year. Taxable
profits differ from net profits as reported in the income statement because it
excludes items that are taxable or deductible in other years and items that are
not taxable or deductible. The group's liability for current tax is calculated
using tax rates that have been enacted or substantively enacted at the balance
sheets date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the liability method. Deferred tax
liabilities are recognised for all temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be
available against which temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability or the asset is realised.
Other intangible assets
Other intangible assets acquired are capitalised at cost. Other intangible
assets are amortised on a straight line basis over their estimated useful lives
up to a maximum of 20 years. The carrying value of intangible assets is reviewed
for impairment when any events or changes in circumstances indicate the carrying
value may not be recoverable.
Amortisation is calculated so as to write off the cost of an asset, less its
estimated residual value, over the useful economic life of that asset as
follows:
Other intangible assets: 5% per annum
Fixed assets
All fixed assets are initially recorded at cost.
Depreciation
Depreciation is calculated so as to write off the cost of an asset, less its
estimated residual value, over the useful economic life of that asset as
follows:
Leasehold improvements over remaining lease term straight line
Equipment 20-33% per annum straight line
Stocks
Stocks are valued at the lower of cost and net realisable value, after making
due allowance for obsolete and slow moving items.
Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under
tangible fixed assets at their fair value. The capital element of future
payments is treated as a liability and the interest is charged to the group
profit and loss account on a straight line basis.
Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits
and risks of ownership remain with the lessor are charged against profits on a
straight line basis over the period of the lease.
Foreign currencies
Assets and liabilities in other currencies are translated into U.S. Dollars at
the rates of exchange ruling at the balance sheet date. Transactions in other
currencies are translated into U.S. Dollars at the rate of exchange ruling at
the date of the transaction. Exchange differences are taken into account in
arriving at the operating profit.
Financial instruments
Financial instruments are classified and accounted for, according to the
substance of the contractual arrangement, as either financial assets, financial
liabilities or equity instruments. An equity instrument is any contract that
evidences a residual interest in the assets of the Company after deducting all
of its liabilities.
3. Revenue by geographical location of customer
Unaudited Unaudited Audited
half year half year year ended
31 Dec 07 31 Dec 06 30 Jun 07
$'000's $'000's $'000's
(restated) (restated)
European Union 5,944 3,238 6,605
United States 13,711 14,703 31,495
Asia and Australasia 10,508 8,317 14,387
Rest of the World 1,744 1,670 5,526
31,907 27,928 58,013
4. Operating profit
Operating profit is stated after charging (crediting):
Unaudited Unaudited Audited
half year half year year ended
31 Dec 07 31 Dec 06 30 Jun 07
$'000's $'000's $'000's
(restated) (restated)
Depreciation 223 176 418
Amortisation - - 1
Auditor's remuneration - as auditors 70 50 131
Auditor's remuneration - other work - 40 54
Operating lease costs: land and buildings 173 205 228
Net loss (profit) on foreign currency 88 87 (24)
translation
5. Earnings per share
Basic earnings per share are based on the Group profit attributable to members
of the parent company of $1,245,000 (2006: $1,060,000) and on 59,628,644 (2006:
55,115,154) being the weighted average number of shares in issue during the
period.
Diluted earnings per share are based on the profit attributable to members of
the parent company plus the interest payable to the convertible bondholders,
less the relevant tax relief thereon, being $,1,480,000 (2006: $1,262,000) and
on 69,564,941 (2006: 65,749,123) being the diluted weighted average number of
shares in issue during the period.
Adjusted basic earnings per share are based on the profit attributable to
members of the parent company plus the amortisation of issue costs on
convertible loan stock and amortisation of goodwill being $1,304,000 (2006:
$1,119,000).
6. Taxation
The tax charge of $330,000 (2006: $286,000) is calculated by applying the
effective tax rate for each of the Group's material tax jurisdictions to the
profit before tax in each jurisdiction.
7. Cash flow statement
Unaudited Unaudited Audited
half year half year year ended
31 Dec 07 31 Dec 06 30 Jun 07
$'000's $'000's $'000's
(restated) (restated)
Reconciliation of operating activities to operating cash flows
Operating profit 2,010 1,769 4,971
Adjustments for:
Depreciation 223 176 418
Amortisation - - 1
Operating cash flow before movement in 2,233 1,945 5,390
working capital
(Increase) decrease in inventories 589 (451) (2,073)
(Increase) decrease in receivables (1,018) 412 (4,693)
Increase (decrease) in payables 1,255 133 3,036
Cash generated by operations 3,059 2,039 1,660
Interest paid (393) (539) (1,106)
Income taxes paid (729) (403) (931)
Net cash generated (used) from operating 1,937 1,097 (377)
activities
8. Investments
Details of the trading investments at 31 December 2007, in which the Group holds
20% or more of the issued share capital of any class of share capital, are as
set out below. All companies are in the business of distribution of satellite
communication equipment and airtime and unless stated, all holdings are in
ordinary shares:
Name of subsidiary % of shares held Country
SatCom Distribution Limited 100% UK
SatCom Distribution, Inc. 100% USA
O'Gara Satellite Systems, Inc. 100% USA
SatCom Distribution (Asia) Limited 100% Hong Kong
SatCom Distribution Middle East FZ LLC 55% UAE
Horizon Mobile Communications Company Limited 100% Thailand
Horizon Mobile Communications Pte Limited 100% Singapore
Horizon Mobile Communications (HK) Company Limited 100% BVI
Horizon Mobile Communications (Australia) Pty. 100% Australia
Horizon Mobile Communications (HK) Company Limited * 100% Japan
Horizon Mobile Communications (UK) Limited 100% UK
HMC America LTD ** 100% USA
SatCom Global FZE 100% UAE
World Communication Center, Inc. 100% USA
* Registered branch ** Limited Partnership
9. Share options
As at 31 December 2007, 53,980 options were outstanding under the Enterprise
Management Incentive Scheme (UK Staff) and 255,218 options were outstanding
under the Unapproved Scheme (Overseas Staff). Options that lapsed during the
period amounted to 1,460 under the Enterprise Management Incentive Scheme (UK
Staff) and 10,256 under the Unapproved Scheme (Overseas Staff).
10. Contingent share capital
In November 2007, SatCom paid the final balance of deferred consideration in
respect of the acquisition of HMC totalling $1.0 million. The acquisition
agreement allowed for the payment to be paid as to 50% in new ordinary shares of
SatCom. However, to avoid unfavourable dilution, the Board decided to negotiate
a 100% cash payment which was accepted by the vendors.
11. Merger reserve
The acquisition by the Company of SatCom Distribution Limited and its
subsidiaries in May 2004 was accounted for as a group reconstruction.
Accordingly, a debit merger reserve was recognised in the consolidated balance
sheet representing the difference between the consideration paid to acquire the
Group and its net assets at the date of the transaction.
12. First time adoption of IFRS
This is the first year that the group and company have presented their financial
statements in accordance with IFRS and with those parts of the Companies Act
1985 applicable to companies reporting under IFRS. Reference to IFRS throughout
these financial statements refers to the application of International Accounting
Standards, International Financial Reporting Standards and IFRIC
interpretations.
The group and company have applied IFRS 1 for its initial implementation of
IFRS. The last financial statements under UK GAAP were for the year ended 30
June 2007, therefore the group's and company's date of transition to IFRS is 1
July 2006 and comparative information in the financial statements has been
restated to reflect the group's and company's adoption of IFRS except where
otherwise required or permitted by IFRS 1.
IFRS 1 requires an entity to comply with each IFRS effective at the reporting
date for its first financial statements prepared under IFRS. As a general rule,
IFRS 1 requires such standards to be applied retrospectively. However, the
standard permits several optional exemptions from full retrospective
application. The company has elected to take advantage of the following
exemption:
* The company has adopted IFRS 3 "Business Combinations" to the extent
that it applies to acquisitions after 1 July 20006. Acquisitions before that
date will be recorded under previous accounting rules as the company has taken
advantage of the exemption permitted in IFRS 1.
The following details the disclosure that is required in the first year of
adoption of IFRS:
* Group reconciliation of equity at 1 July 2006, 31 December 2006 and 30
June 2007.
* Group reconciliation of the income statement for the interim period
ended 31 December 2006 and year ended 30 June 2007.
On the grounds of materiality, no adjustment has been made in respect of the
fair value of foreign currency hedging instruments or in respect of the equity
element of the convertible bonds under IFRS.
12. First time adoption of IFRS
Group
Reconciliation of equity at 1 July 2006 (date of transition to IFRS)
UK GAAP Transition IFRS
Notes $'000's $'000's $'000's
Non-current assets
Goodwill 5,844 - 5,844
Intangible fixed assets 25 - 25
Property, plant and equipment 746 - 746
6,615 - 6,615
Current assets
Inventories 3,216 - 3,216
Trade and other receivables 11,357 - 11,357
Bank balances and cash 1,901 - 1,901
16,474 - 16,474
Current liabilities
Financial liabilities 1,281 - 1,281
Trade and other payable 13,702 - 13,702
Current tax 906 - 906
Obligations under finance leases 18 - 18
15,907 - 15,907
Net current assets 567 - 567
Total assets less current liabilities 7,182 - 7,182
Non-current liabilities
Financial liabilities 5,141 - 5,141
5,141 - 5,141
Net assets 2,041 - 2,041
Shareholders' equity
Called-up share capital 5,250 - 5,250
Share premium account 723 - 723
Contingent share capital 714 - 714
Merger reserve (10,884) - (10,884)
Other reserves - 55 55
Retained profits 6,256 (73) 6,183
Total shareholders' funds 2,059 (18) 2,041
Minority interests (18) 18 -
2,041 - 2,041
12. First time adoption of IFRS
Group
Reconciliation of equity at 31 December 2006
UK GAAP Transition IFRS
Notes $'000's $'000's $'000's
Non-current assets
Goodwill 11,418 180 11,598
Intangible fixed assets 32 - 32
Property, plant and equipment 931 - 931
12,381 180 12,561
Current assets
Inventories 3,966 - 3,966
Trade and other receivables 12,118 - 12,118
Bank balances and cash 1,550 - 1,550
17,634 - 17,634
Current liabilities
Financial liabilities 1,115 - 1,115
Trade and other payable 14,534 - 14,534
Current tax 1,476 - 1,476
Obligations under finance leases 77 - 77
17,202 - 17,202
Net current assets 432 - 432
Total assets less current liabilities 12,813 180 12,993
Non-current liabilities
Financial liabilities 7,566 - 7,566
7,566 - 7,566
Net assets 5,247 180 5,427
Shareholders' equity
Called-up share capital 5,687 - 5,687
Share premium account 2,942 - 2,942
Contingent share capital 500 - 500
Merger reserve (10,884) - (10,884)
Other reserves - 55 55
Retained profits 7,028 99 7,127
Total shareholders' funds 5,273 154 5,427
Minority interests (26) 26 -
5,247 180 5,427
12. First time adoption of IFRS
Group
Reconciliation of equity at 30 June 2007
UK GAAP Transition IFRS
Notes $'000's $'000's $'000's
Non-current assets
Goodwill 12,231 410 12,641
Intangible fixed assets 777 - 777
Property, plant and equipment 975 - 975
13,983 410 14,393
Current assets
Inventories 5,588 - 5,588
Trade and other receivables 17,582 - 17,582
Bank balances and cash 959 - 959
24,129 - 24,129
Current liabilities
Financial liabilities 925 - 925
Trade and other payable 18,349 - 18,349
Current tax 1,121 - 1,121
Obligations under finance leases 118 - 118
20,513 - 20,513
Net current assets 3,616 - 3,616
Total assets less current liabilities 17,599 410 18,009
Non-current liabilities
Financial liabilities 7,987 - 7,987
Obligations under finance leases 187 - 187
Deferred tax liabilities - - -
8,174 - 8,174
Net assets 9,425 410 9,835
Shareholders' equity
Called-up share capital 6,053 - 6,053
Share premium account 4,845 - 4,845
Contingent share capital 500 - 500
Merger reserve (10,884) - (10,884)
Other reserves - 55 55
Retained profits 8,980 286 9,266
Total shareholders' funds 9,494 341 9,835
Minority interests (69) 69 -
9,425 410 9,835
12. First time adoption of IFRS
Group
Reconciliation of profit for the 6 months ended 31 December 2006
UK GAAP Transition IFRS
Notes $'000's $'000's $'000's
Turnover 27,928 - 27,928
Cost of sales (21,486) - (21,486)
Gross profit 6,442 - 6,442
Administrative expenses (4,853) 180 (4,673)
Operating profit 1,589 180 1,769
Interest receivable 175 - 175
Finance costs (598) - (598)
Profit on ordinary activities before taxation 1,166 180 1,346
Taxation (286) - (286)
Profit for the year 880 180 1,060
The impact of the transition to IFRS is an increase in the profit for the period
of $180,000.
IFRS 3 'Business Combinations' prohibits the amortisation of goodwill. Removal
of the amortisation for the period has increased the profit by $180,000.
12. First time adoption of IFRS
Group
Reconciliation of profit for the year ended 30 June 2007
UK GAAP Transition IFRS
Notes $'000's $'000\'s $'000's
Turnover 58,013 - 58,013
Cost of sales (44,212) - (44,212)
Gross profit 13,801 - 13,801
Administrative expenses (9,240) 410 (8,830)
Operating profit 4,561 410 4,971
Interest receivable 346 - 346
Finance costs (1,228) - (1,228)
Profit on ordinary activities before taxation 3,679 410 4,089
Taxation (794) - (794)
Profit for the year 2,885 410 3,295
The impact of the transition to IFRS is an increase in the profit for the year
of $410,000.
IFRS 3 'Business Combinations' prohibits the amortisation of goodwill. Removal
of the amortisation for the year has increased the profit by $410,000.
-Ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
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