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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Secure Income Reit Plc | LSE:SIR | London | Ordinary Share | GB00BLMQ9L68 | 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% | 461.00 | 461.00 | 461.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:7149B
Sirius Financial Solutions PLC
20 April 2006
Sirius Financial Solutions PLC
Operating profit* ahead of expectations and up 54% - final dividend up 25% -
strong take up of flagship product, Sirius 21
Sirius Financial Solutions, the specialist supplier of software and services to
the insurance and financial services industry worldwide, today announced its
preliminary results for the year ended 31 December 2005.
*Operating profit before deduction of goodwill amortisation and operating
exceptional
FINANCIAL HIGHLIGHTS
* Group turnover of #21.8m (2004: #21.7m)
* Recurring revenues remained strong and at #8.7m (2004: #7.6m)
represent 39.8% (2004: 35.0%) of Group turnover
* Operating profit pre goodwill amortisation and operating exceptional
up 54% to #2.1m (2004: #1.4m). After charging goodwill and the operating
exceptional, operating profit was #0.4m (2004: #0.5m)
* Improvement in both gross profit and net profit margin (pre goodwill
amortisation and exceptional item) at 45.6% and 9.7% (2004: 42.6% and 6.3%)
respectively, this is the third successive year of improvement in this net
profit measure
* Adjusted earnings per share** of 10.3p (2004: 6.5p) and basic earnings
per share of 0.5p (2004: 1.4p)
* Proposed final dividend up 25% to 1.25p per share (2004: 1.0p)
* One-off operating exceptional charge of #0.7m (2004: #nil) in respect
of the Group's previous leasehold head office
OPERATIONAL HIGHLIGHTS
* Strong take up of Sirius 21 following launch in January 2005; 65
customers and 800 users live at December 2005
* Record year in 2005 for Sirius for Insurance with 11 new wins
* Continued expansion of India development centre, currently at 46
employees
** Adjusted earnings per share is based on the profit for the financial year
before deduction of goodwill amortisation and operating exceptional
Stephen Verrall, Chairman and Group Chief Executive of Sirius Financial
Solutions, said:
"I am very pleased to announce a further year of significant improvement in
operating profit*, up 54%, ahead of expectations, as a result of a combination
of cost control and strong growth in our Insurance Systems business unit. We
have a strong order book and with increased forward visibility we are confident
about the Group's prospects."
20 April 2006
Enquiries
Sirius Financial Solutions 0121 779 8400
Stephen Verrall/ Richard Bowser
College Hill
Adrian Duffield/Ben Way 020 7457 2020
CHAIRMAN'S STATEMENT
Results REVIEW
On a turnover of #21.8m (2004: #21.7m), operating profit before deduction of
goodwill and operating exceptional was ahead of the Board's expectations at
#2.1m (2004: #1.4m) with adjusted earnings per share (based on the profit for
the financial year before deduction of goodwill amortisation and operating
exceptional) at 10.3p (2004: 6.5p). After charging goodwill amortisation, the
one-off operating exceptional, interest and tax the profit for the year was
#0.1m (2004: #0.2m).
The Group ended the year in a net cash position and the business continued to
generate operating cash inflows, which for the year amounted to #0.9m (2004:
#2.6m).
The Board propose a final dividend of 1.25p per share (2004: 1.0p) which
combined with the interim dividend represents a full year dividend of 1.75p
(2004: 1.5p).
The Group's turnover for the year was supported by recurring revenues of #8.7 m
(2004: #7.6m). Recurring revenues continue to increase as a proportion of
turnover, accounting for 39.8% of total Group turnover in 2005 (2004: 35.0%).
As previously forecast, the move to term licencing has resulted in a suppression
of turnover levels. In addition, the move to Sirius 21 has reduced low margin
third-party hardware and software sales during the year by #0.4m. This low
margin revenue has been more than compensated for by higher margin service
revenues.
The improvement to operating profit has been achieved by the successful
execution of our declared strategy, which commenced at the end of 2003.
At the beginning of 2005, we set ourselves a number of specific goals and are
pleased to be able to report, as we did in 2004, positive progress against all
of them. All of the main initiatives planned and introduced for 2005 have been
successful in both implementation and impact. They include:
* A shift in emphasis from one-off licence sales to services, recurring
revenues and renewable term licences. Nearly all of the new wins contracted
in 2005 have been sold as term licences - typically over a four year term
thus providing the opportunity for renewal at the end of the term
* Improved productivity in the professional services and support areas
of the business through further growth in the Sirius owned and managed
development centre in India. We now have 46 staff employed in India
* Achievement of a record year for the Sirius for Insurance product
with 11 new win sales in the year
* The launch of Sirius for Broking as an Managed Service Provision (MSP)
- newly branded as Sirius 21- currently more than 100 Sirius 21 sales have
been achieved
Our wholly owned Sirius development centre in Delhi has now been operating for
nearly two years and currently has 46 staff. We have been very impressed with
both the quality and productivity of our Indian operation. In line with our
original plans we expect to have 55 staff by the end of 2006. The success of
this off shoring strategy represents a key component in our drive to improve
margins across all of our sales lines.
BUSINESS REVIEW
From the outset of 2005 the Group has operated under the simplified structure of
two business units: Intermediary Systems and Insurance Systems which now
incorporates Sirius Web Services.
Intermediary Systems
Intermediary Systems is the oldest of the Group's business units, and is
accountable for all revenue derived from the sale and support of the Sirius for
Broking application to insurance intermediaries of all sizes. It is also
responsible for the insurance distribution operation, which develops and
supports product distribution between insurers and broking customers.
Turnover for this unit was 48.2% of total revenue at #10.5m (2004: #11.8m). The
move to the four year term Sirius 21 MSP model has meant a lower sales value,
largely from the reduced requirement for hardware. Hardware and third party
sales fell by #0.4m during the year - this lower margin revenue has in part been
replaced by higher margin managed service fees. Sirius 21 sales were also
supported by the renewal of #0.5m of Sirius for Broking contracts completing
their four year term. This is a trend we can confidently expect to continue in
2006 and beyond.
The broking product is predominantly sold into the UK.
Sirius for Broking
Sirius for Broking continues to win customers from all of its competitors and
the Sirius for Broking application has now been deployed to over 6,000 users.
At the beginning of 2005 we undertook a re-launch of our Sirius for Broking
product under the Sirius 21 brand. Sirius 21 adopts the MSP hosted deployment
method. It was our aim to sell Sirius 21 to both new customers and convert
existing users to this model. This launch has been highly successful in both of
these objectives and we have to date secured orders from 115 customers with 71
sites live. Our early hopes of reduced costs of maintenance and improved service
levels have also proved correct along with the anticipated growth in service
revenues and reduction in low margin third party software and hardware.
The launch of Sirius 21 allows us to build on our success to date and maintain a
competitive advantage in the marketplace; we are now achieving run rate sales
from both our existing base and our competitors. In 2005 we sold Sirius 21 to
23 new customers displacing competitor systems. All Sirius 21 customers support
our financial model of term licencing.
The UK broker market continues to experience significant consolidation and
Sirius 21 is well placed to ease the IT burden and make savings for all in the
broker market regardless of size. These benefits resulted in the decision of
major consolidator, The Oval Group, to implement Sirius 21 into 60% of its
current business, representing some 250 users. A significant new business win
for the second half of 2005 was the Bollington Group; one of the largest and
growing provincial brokers in the North West, which, is transitioning it's
entire operation consisting of 125 users across 8 offices onto Sirius 21 after
22 years of running Misys.
Much focus has been placed on account managing all of our customers. This has
helped to increase levels of satisfaction and accelerate the migration to Sirius
21. Sirius continues to win customers from all its competitors and with recent
disruption and change of ownership within two of our top four UK competitors, we
confidently expect further opportunities and wins through 2006.
Sirius WebServices is becoming a critical tool in supporting the way brokers
trade with their market and customers. As well as offering creative web design,
development and deployment in the "business-to-business" and consumer
environments, we are now leading the way with integration into the insurance
industry owned portal (iMarket) enabling brokers to trade SME products with
single key entry to iMarket owners; Norwich Union, Royal & Sun Alliance, Zurich,
Allianz Cornhill, AXA and Groupama.
In 2006, the growing Sirius 21 customer base will allow the emergence of a
trading community. In particular, this will enable a significant number of
specialist schemes which are traded by many Sirius customers to be easily
distributed to other Sirius 21 customers via the trading platform. This will
also permit insurers to make scheme products directly available to the Sirius 21
community and significantly cut the cost of distribution for all in the cycle.
Sirius will earn a percentage of Gross Written Premium for business placed
through this new service.
Sirius Datasure, the New Zealand acquisition, contributed #0.9m of revenues in
its first full year of ownership, increasing both its profits and turnover on
the previous year.
Insurance Systems
Insurance Systems is responsible for the sale, deployment and support of:
* The Sirius for Insurance application for insurers, underwriters and
underwriting agencies
* The Swift application for financial services organisations.
* Sirius WebServices with its increasing focus on full web integration of
our core products to provide on line servicing
Product deployments from this business unit include the UK, North America,
Australasia, the Caribbean, Africa, and the Far East. In 2005, this was
successfully extended into South Africa and India. During the year the business
unit generated #11.3m of revenues, a 13% increase on 2004 and represents 51.8%
of revenues.
Sirius for Insurance
Sirius for Insurance (S4I) had another record year in 2005 with successes in all
of its strategic markets. Most notable wins were QBE in their Asia/Pacific
region, Lion of Africa in South Africa, PlusOne in the UK and Reliance in India.
Insurers that were taken live during 2005 include the UK specialist insurer,
GJW, the Jamaican insurer, General Accident Jamaica and Australian insurer
Calliden. With 11 new customer wins in 2005 alone and 36 in the last 5 years,
S4I is the most successful software in its class. 2005 also proved the
benefit of the Sirius targeted partner programme with both Reliance and Lion of
Africa won in partnership with Hewlett Packard. Sirius also sold its first
jointly developed business intelligence tool with Moore Stephens 'bintelligent
for Sirius' to Lion of Africa.
Swift
The Financial Adviser business around Swift has cemented its leadership in the
upper echelons of this marketplace with the start of a roll-out to the entire
SJP adviser community and success with the project at Openwork, the new venture
arising from Zurich. The Openwork solution will service over 2,300 advisers and
is by far the most significant implementation of its type in the UK for many
years. With Swift 21, the Managed Service Platform now deployed at Buckles and
a new release of Swift under construction containing substantial functionality
supporting "Straight Through Processing" to insurers, this business is well
placed for the coming year. Although no major new deals were signed in 2005, the
prospect pipeline for Swift remains very encouraging.
Sirius WebServices
Sirius WebServices is an interactive communications service provider, offering
creative web design, development and deployment in the business-to-business and
consumer environments. This business unit also provides internet and intranet
design and build services, including the provision of full cycle e-commerce, for
many of the Group's insurance customers, as well as for a range of significant
companies in other industries.
Sirius WebServices (internet and digital media specialists) returned to form in
2005 by contributing a healthy profit to the division capitalising on increasing
demand for internet solutions and, in particular, the opportunity for the
integration of web services with the core Sirius insurance applications.
After a period of relatively low activity, increasing consumer demand for
internet facilities has seen many companies revitalise their web strategies and
growth in the B2C market for web solutions which began at the end of 2004 and
was sustained during 2005. New customers have been added in all sectors,
including sites for French industrial conglomerate Saint Gobain (UK), IFA SIPP
administrator Hornbuckle Mitchell and leading Media Insurance brokers Alan
Chapman and James.
Integration of the core Sirius and Swift applications will continue to create
many new opportunities for the WebServices offering in the wider Sirius customer
base.
We continue to provide a full range of services to Ace, Boots and Coors and are
pleased to have been able to add Rolls Royce to our client list at the start of
2006.
FINANCE REVIEW
Summary of Group performance
A sizeable increase in the Groups recurring revenues of 14% has improved both
the predictability of future revenues and margins.
On very similar levels of turnover the Group has considerably improved its
margins at both gross profit and net operating profit levels. In summary this
has been achieved by:
* Reducing the cost base in 2005
* A fall of #0.4m in low margin hardware and third party software sales
following the adoption of the Sirius 21 MSP model
* The introduction of new MSP revenues which have and will continue to
enhance both margins and recurring revenues
* Extension to our Indian off-shore development facility with a reduction in
costs and improved productivity
Operating profit margins (before goodwill amortisation, and operating
exceptional ) have now improved for 3 successive years to 9.7% (2004 6.3%).
Operating Exceptional
As previously announced the Board, following advice from its agents, are of the
view that it is appropriate to recognise a provision against a proportion of
future rental payments and associated costs from its previous leasehold head
office in Sutton Coldfield. As a result a charge of #742,604 has been treated as
an operating exceptional in 2005.
Taxation
The Group continues to benefit from a low effective tax rate. During 2005 the
Group took advantage of the benefit from R & D tax credits and utilisation of
non trading income losses in the Holding Company.
Deferred Income
Deferred income on the balance sheet represents amounts invoiced but not yet
recognised as revenue. Of the total deferred income balance of #2,272,669
(2004: #2,031,563), #955,097 (2004: #918,931) relates to deferred maintenance
fees that are generally invoiced annually in advance and recognised over the
contract period. A significant proportion of the Group's maintenance contracts
run from 1 January to 31 December and therefore the effect of invoicing annually
in advance is to increase trade debtors at the balance sheet date.
The remaining #1,317,572 (2004: #1,112,632) relates to amounts invoiced for
products or services in line with contract terms that have not yet been
recognised as revenues.
International Financial Reporting Standards
As a Group listed on the Alternative Investment Market (AIM), we are required to
report under International Financial Reporting Standards ('IFRSs') in preparing
consolidated accounts for accounting periods beginning on or after 1 January
2007 with prior year comparatives on the same basis. The results for the year
ending 31 December 2006 will therefore form the comparatives with the first
required set of IFRS published accounts being those for the year ended 31
December 2007.
The Group has initiated a project to review the requirements of IFRSs and assess
the likely financial impact on the Group's consolidated results from adopting
these standards. The project remains ongoing and at this stage it is too early
to comment on the potential financial adjustments required to the consolidated
accounts.
The impact of share-based payments has been reviewed as this will be required to
be adopted under the UK GAAP Financial Reporting Standard; FRS 20 "Share-based
Payment' effective from 1 January 2006. Accounting for share-based payments is
considered by the Group to be one of the key IFRS adjustments.
EPS
Adjusted earnings per share ('EPS') for the year at 10.3p (2004: 6.5p)
represents an increase of 58% on the prior year. Adjusted EPS is calculated
from the profit for the financial year before goodwill amortisation and
operating exceptional item of #1,800,168 (2004: #1,113,065) and on 17,410,126
(2004: 17,027,606) ordinary shares of 1p each being the weighted average number
in issue during the year.
The calculation of basic earnings per ordinary share is based on profits of
#90,326 (2004: #236,755) and on 17,410,126 (2004: 17,027,606) ordinary shares,
being the weighted average number of ordinary shares in issue during the year.
Dividends
In addition to the interim dividend of 0.5p (2004: 0.5p) per ordinary share
paid on 28 October 2005, the Directors recommend a final dividend of 1.25p
(2004: 1.0p) per ordinary share to shareholders on the register on 28 April
2006, payable on 31 May 2006, a 25% improvement on 2004.
Outlook for 2006
We intend to continue the successful strategies deployed in 2004 and 2005 thus
building on two years of considerable improvement to profitability. Based on
these strategies together with the market opportunities for all our products I
am confident of delivering further growth in profitability for 2006.
The outlook for Sirius is very encouraging in 2006 and we continue to receive
considerable interest in both our Sirius 21 and Sirius for Insurance products.
Sales opportunities in these areas will be further enhanced from the ongoing
introduction of web servicing capability. In the area of professional services I
am particularly confident that our sales objectives will be achieved as they are
already strongly underpinned by the existing order book. These factors combined
with the increases in recurring revenues provide good visibility of 2006
revenues.
Stephen J Verrall
Chairman and Group Chief Executive
19 April 2006
GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2005
2005 2004
Notes # #
Turnover 2 21,780,968 21,704,052
Cost of sales (11,843,307) (12,453,146)
Gross profit 9,937,661 9,250,906
Distribution costs (2,408,798) (2,479,118)
Administrative expenses:
- goodwill amortisation (967,238) (876,310)
- depreciation (492,798) (431,938)
- operating exceptional 3 (742,604) -
- other (4,924,033) (4,971,359)
- total administrative expenses (7,126,673) (6,279,607)
Operating profit pre goodwill amortisation and operating 2,112,032 1,368,491
exceptional
Goodwill amortisation (967,238) (876,310)
Operating exceptional 3 (742,604) -
Operating profit 402,190 492,181
Interest receivable 26,148 70,260
Interest payable and similar charges (88,109) (176,997)
Profit on ordinary activities before taxation 340,229 385,444
Tax on profit on ordinary activities (237,380) (145,331)
Profit on ordinary activities after taxation 102,849 240,113
Minority interests (12,523) (3,358)
Profit for the financial year 90,326 236,755
Earnings per share: 4
- basic 0.5p 1.4p
- diluted 0.5p 1.4p
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2005
2005 2004
# #
Profit for the financial year 90,326 236,755
Exchange difference on retranslation of net assets of subsidiary
undertaking 79,926 (28,272)
Total recognised gains and losses relating to the year 170,252 208,483
GROUP RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 December 2005
As restated
2005 2004
# #
Total recognised gains and losses 170,252 208,483
Dividends (260,832) (170,076)
Shares issued net of expenses and amounts accrued 94,610 229,704
Total movements during the year 4,030 268,111
Shareholders' funds at 1 January as previously stated 11,250,491 11,070,578
Prior year adjustment 173,219 85,021
Shareholders' funds at 1 January as restated 11,423,710 11,155,599
Shareholders' funds at 31 December 11,427,740 11,423,710
GROUP BALANCE SHEET
at 31 December 2005
As restated
2005 2004
Notes # #
Fixed assets
Intangible assets 4,816,125 5,686,700
Tangible assets 1,839,747 1,599,121
6,655,872 7,285,821
Current assets
Stocks 3,695 4,351
Debtors 10,451,144 8,643,198
Cash at bank and in hand 651,105 1,063,918
11,105,944 9,711,467
Creditors: amounts falling due within one year (3,615,609) (3,242,594)
Net current assets 7,490,335 6,468,873
Total assets less current liabilities 14,146,207 13,754,694
Creditors: amounts falling due after more than one year (92,710) (329,128)
Provisions for liabilities and charges (370,272) -
Deferred income (2,272,669) (2,031,563)
Net assets 11,410,556 11,394,003
Capital and reserves
Called up share capital 176,767 175,334
Share premium account 4,485,937 4,392,760
Merger reserve 5,891,572 5,891,572
Profit and loss account 873,464 964,044
Shareholders' funds 11,427,740 11,423,710
Minority interests (17,184) (29,707)
Total capital employed 11,410,556 11,394,003
Shareholders' funds may be analysed as:
Ordinary shareholders' funds 11,408,441 11,391,888
Deferred shares 2,115 2,115
11,410,556 11,394,003
Richard J Bowser
Director
19 April 2006
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 December 2005
2005 2004
Notes # #
Net cash inflow from operating activities 6 903,386 2,613,448
Returns on investments and servicing of finance
Interest received 26,148 70,260
Interest paid (69,287) (151,333)
Interest element of finance lease rental payments (18,174) (18,869)
(61,313) (99,942)
Taxation
Corporation tax paid (99,646) (247,997)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (731,809) (780,206)
Receipts from sales of tangible fixed assets 4,818 713,314
(726,991) (66,892)
Acquisitions
Purchase of subsidiary undertaking (64,917) (766,922)
Cash acquired with subsidiary undertaking - 219,731
(64,917) (547,191)
Equity dividends paid (260,832) (170,076)
Net cash (outflow)/ inflow before financing (310,313) 1,481,350
Financing
Issue of ordinary share capital 94,610 134,084
Repayment of long-term loans (112,500) (452,500)
Repayment of capital element of finance leases and hire
purchase contracts (122,645) (153,306)
(140,535) (471,722)
(Decrease)/ increase in cash 6 (450,848) 1,009,628
NOTES TO THE ACCOUNTS
at 31 December 2005
1. BASIS OF PREPARATION
The financial information set out above does not constitute the full statutory
accounts of Sirius Financial Solutions Plc for the years ended 31 December 2005
and 31 December 2004 respectively, but is derived from those accounts.
Statutory accounts for 2004 have been delivered to the Registrar of Companies,
and those for 2005 will be delivered following Sirius Financial Solutions'
Annual General Meeting on 31 May 2006. The auditors have reported on those
accounts; their reports were unqualified and did not contain statements under
section 237(2) or (3) of the Companies Act 1985.
The accounts are prepared under the historical cost convention, in accordance
with applicable United Kingdom accounting standards, the Companies Act and the
accounting policies set out in the 2004 statutory accounts.
During 2004, the Accounting Standards Board issued two Financial Reporting
Standards; FRS 21 "Events after the Balance Sheet Date" and FRS 22 "Earnings Per
Share" effective from 1 January 2005. The Group has adopted these Financial
Reporting Standards in these financial statements. Adoption of FRS 21 has
resulted in removing dividends approved after the balance sheet date from
liabilities at the balance sheet date. FRS 22 has no prior year impact.
2. TURNOVER AND SEGMENTAL ANALYSIS
The Group operates in one principal area of activity, that of the development
and supply of insurance specific application software both as a package and as a
solution.
In 2004 turnover originated principally from two geographical markets: Europe
and the United Kingdom; North America and the Caribbean. On 13 December 2004
a 75.8% shareholding was acquired in Sirius Datasure Limited, a company
domiciled in New Zealand. The turnover originating from Sirius Datasure Limited
in the post acquisition period is considered significant enough to require
separate disclosure of the New Zealand territory in the analysis below.
Australia and New Zealand have therefore been included as an additional segment.
Europe and North America and Australia and Rest of World Total
2005 United Kingdom Caribbean New Zealand
# # # # #
Group turnover
Turnover by
destination:
Sales to third parties 17,797,000 1,326,674 1,472,463 1,184,831 21,780,968
Turnover by origin:
Sales to third parties 19,567,959 1,326,674 886,335 - 21,780,968
Profit
Segment operating
profit pre goodwill
amortisation and operating
exceptional 1,915,984 210,226 70,298 60,529 2,257,037
Goodwill amortisation (732,417) (135,950) (98,871) - (967,238)
Operating exceptional (742,604) - - - (742,604)
Interest receivable 15,941 1,404 8,775 28 26,148
Interest payable and similar
charges (86,963) (274) (547) (325) (88,109)
Segment profit before
central group costs and
taxation 369,941 75,406 (20,345) 60,232 485,234
Central group costs (145,005)
Profit on ordinary
activities before taxation 340,229
Net assets/ liabilities
Net assets/ (liabilities) by
segment 11,812,434 (444,226) (76,911) 119,259 11,410,556
Europe and North America and Australia and Rest of World Total
2004 United Kingdom Caribbean New Zealand
# # # # #
Group turnover
Turnover by
destination:
Sales to third parties 18,629,743 1,804,841 8,687 1,260,781 21,704,052
Turnover by origin:
Sales to third parties 19,823,710 1,804,841 75,501 - 21,704,052
Profit
Segment operating
profit before
goodwill amortisation 1,057,967 382,530 13,320 33,071 1,486,888
Goodwill amortisation (732,416) (135,843) (8,051) - (876,310)
Interest receivable 68,945 761 554 - 70,260
Interest payable and similar
charges (176,434) (532) - (31) (176,997)
Segment profit before
central group costs and
taxation 218,062 246,916 5,823 33,040 503,841
Central group costs (118,397)
Profit on ordinary
activities before taxation 385,444
Net assets/ liabilities (as
restated)
Net assets/ (liabilities) by
segment (as restated) 12,193,669 (703,997) (123,083) 57,121 11,423,710
3. OPERATING EXCEPTIONAL
At the start of 2004, the Group relocated its head office from Sutton Coldfield
to Solihull. The previous leasehold premises were not sublet during the year as
expected and as a result a one-off charge of #742,604 has been made to the
profit and loss account during the year.
This operating exceptional item of #742,604 represents the costs incurred during
the year in making leasehold improvements to the property together with the
current provision for estimated future rental and associated costs of the
property.
The cash outflow in respect of this item was #372,332 during the year.
4. EARNINGS PER SHARE
The calculation of basic earnings per ordinary share is based on profits of
#90,326 (2004: #236,755) and on 17,410,126 (2004: 17,027,606) ordinary shares,
being the weighted average number of ordinary shares in issue during the year.
The 2005 diluted earnings per share is based on the profit for the year of
#90,326 (2004: #236,755) and on 17,632,540 ordinary shares (2004: 17,096,084),
calculated as follows:
2005 2004
No. No.
Basic weighted average number of shares 17,410,126 17,027,606
Dilutive potential ordinary shares:
Executive share options and employee SAYE scheme 222,414 68,478
17,632,540 17,096,084
Adjusted earnings per share
2005 2004
Adjusted earnings per share 10.3p 6.5p
Diluted adjusted earnings per share 10.2p 6.5p
The adjusted earnings per share is calculated from the profit for the financial
year before goodwill amortisation and operating exceptional item of #1,800,168
(2004: #1,113,065) and on 17,410,126 (2004: 17,027,606) ordinary shares of 1p
each being the weighted average number in issue during the year.
The directors have chosen to present this adjusted earnings per share as they
believe that it provides a more meaningful indicator of the performance of the
Group.
5. DIVIDENDS AND OTHER APPROPRIATIONS
2005 2004
# #
Equity dividends on ordinary shares:
2003 final paid 0.5p per share - 85,021
2004 final paid 1.0p per share 173,219 -
Interim paid 0.5p per share (2004: 0.5p) 87,613 85,055
260,832 170,076
A 2005 final dividend of #218,314 is proposed (2004: #173,219) being 1.25p per
share (2004: 1.0p per share).
6. NOTES TO THE STATEMENT OF CASH FLOWS
(i) Reconciliation of operating profit to net cash inflow from operating
activities
As restated
2005 2004
# #
Operating profit 402,190 492,181
Depreciation of tangible fixed assets 492,798 431,938
Amortisation of goodwill 967,238 876,310
Loss/ (profit) on sale of fixed assets 3,742 (6,501)
Decrease in stocks 656 5,820
(Increase)/ decrease in deferred payment debtor (57,877) 36,685
(Increase) in other debtors (1,568,928) (247,517)
Increase in creditors 293,325 1,024,532
Increase in provisions 370,242 -
Net cash inflow from operating activities 903,386 2,613,448
(ii) Analysis of net funds
At 1 January Cash flow Other non-cash Exchange At 31 December
2005 changes movement 2005
# # # # #
Cash at bank and in hand 1,063,918 (412,813) - 38,035 651,105
1,063,918 (412,813) - 38,035 651,105
Bank loans (261,695) 112,500 (648) - (149,843)
Finance leases (337,274) 122,645 - - (214,629)
(598,969) 235,145 (648) - (364,472)
464,949 (177,668) (648) 38,035 286,633
(iii) Reconciliation of net cash flow to movement in net funds/ (debt)
2005 2004
# #
(Decrease) /increase in cash in the year (450,848) 1,009,628
Cash outflow from movement in debt and lease financing 235,145 605,806
Change in net debt arising from cash flows (215,703) 1,615,434
Amortisation of loan issue costs (648) (6,795)
Translation differences 38,035 -
Movement in net debt in the year (178,316) 1,608,639
Net funds/(debt) at 1 January 464,949 (1,143,690)
Net funds at 31 December 286,633 464,949
This information is provided by RNS
The company news service from the London Stock Exchange
END
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