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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Straight | LSE:STT | London | Ordinary Share | GB0033695486 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 77.00 | 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:3946E
Straight PLC
25 September 2007
25 September 2007
STRAIGHT PLC
Interim results for the six months
ended 30 June 2007
Straight plc (AIM:STT.L), Europe's leading supplier of recycling containers is
pleased to announce its interim results for the six months ended 30 June 2007.
Highlights:
* Robust organic sales growth - revenue up 11%
* Recycling container sales at record levels
* Operating profit before reorganisation costs down 18% to #1.0m
* Profit before tax, after reorganisation costs, #0.8m (2006: #1.3m)
* Interim dividend declared and increased by 4% to 1.25p per share (2006: 1.2p)
* Positive outlook for second half
Commenting on the results, James Newman, Chairman of Straight said: "Our trade
order book is at a very healthy level with a higher margin products mix than in
recent years. Consequently, the second half of the year is looking positive."
Chief Executive, Jonathan Straight added: "We now have a broad range of products
helping individuals, businesses and other organisations to improve their
environmental performance and to reduce their carbon footprint. Our ability to
sell these products though different channels puts us in a unique position."
For further information contact:
Straight plc
James Newman, Chairman / Jonathan 0113 245 2244 / 07850 672727
Straight, CEO
Panmure Gordon
Andrew Godber / Katherine Roe 0207 459 3600
Redleaf Communications
Paul Dulieu / Sam Robbins / Tom Newman 0207 822 0200
Notes to Editors
* Straight plc was established in 1993, by Jonathan Straight, to supply
container solutions for source separated waste. Initially one man and a desk,
the company grew to become the UK's leading supplier of kerbside recycling
boxes as well as a key supplier of other types of waste and recycling
container solutions.
* Following sustained growth, Straight joined AIM in 2003 with a view to
fuelling further growth.
* In 2005, Straight acquired Blackwall Limited, the UK's largest supplier of
home composters and water butts. Since integrating the two businesses,
Straight now provides a wide range of waste and recycling solutions to local
authorities, the waste industry and general businesses. Through the Blackwall
brand Straight delivers environmental garden products directly to end users in
partnership with local authorities and utilities.
* Further information about the company and its products can be found at:
www.straight.co.uk
Chairman's Statement
The first half of 2007 has been a period of growth for the Group as well as a
period of change. The variations to the business model by the outsourcing of
distribution and some of our call centre activities have been the major
challenges in the period, which has also seen good growth in a number of our
markets.
Results
Turnover for the period grew by 11% to #13.9m. Despite the reduction in water
butt sales due to an exceptionally wet summer, this was a good performance with
a number of the new product ranges gaining immediate acceptance from customers.
Margins, however, fell due in part to the product mix being less centred on
retail sales but also as a result of higher carriage charges incurred during the
period of change. We also incurred costs attributable to the reorganisation and
training of staff and the development of new systems to cope with the new
business model. These additional costs of approximately #265,000 were expected
and will not occur again.
As a result of these strategic initiatives undertaken and the extra costs
incurred during the first half, this period's headline profit of #1.0m is below
last year, which was boosted by the substantial demand for high margin
water-butts. Profit before tax is #0.8m compared to #1.3m in 2006. Headline
earnings per share is 6.5p (2006: 8.1p).
International Financial Reporting Standards (IFRS)
This year, the accounts have been prepared under International Financial
Reporting Standards (IFRS) and the effects of these accounting reporting rules
are explained in note 8 to these accounts. The results to 30 June 2006 and 31
December 2006 have been restated under IFRS
Balance sheet
The Group remains cash generative despite a high level of capital expenditure in
the period. Whilst stocks of goods have risen, this is in line with seasonal
variations in trade and the growth of the product range.
Strategic developments
The strategic initiatives taken at the end of last year to create an improved
business model by outsourcing a number of activities previously undertaken by
the Group will, over time, prove to be the best course of action as the Group
continues to grow its markets and product base.
The first half of 2007 has been spent putting the infrastructure and systems in
place, with additional costs being incurred, so very little benefit has accrued
to the Group as yet. The evolution of this process may include the recruitment
of additional partners to improve areas where service and cost have not matched
our expectations. The systems and controls are now in place so that any further
changes are not expected to cause disruption to either our operations or our
customer service.
We recently acquired the business and assets of Gummy Bins Limited for a nominal
sum. This has given us control over an exciting product range, which we were
already selling to our customers. This acquisition is in line with our policy of
developing our product range and adding good quality brands to our customer
offering.
Dividend
The Board has declared an increase of 4% in the interim dividend to 1.25p per
share (2006: 1.2p). This will be payable on 14 December 2007 to shareholders on
the register at 16 November 2007.
Outlook
Sales of recycling containers are at record levels as the Government's vision of
more household waste being separated at source continues to drive demand
upwards. Our retail activity is growing in strength with sales from the
evengreener catalogue and website showing increases each month in the first
half.
We have recently announced several new key products for our container range for
bulk waste and recycling collections and our garden products division has
increased its penetration into this growing market. Our trade order book is at a
very healthy level with a higher margin products mix than in recent years.
Consequently, the second half of the year is looking positive.
James H Newman
Chairman
25 September 2007
Operating Review
The first half of 2007 has been a period of continued expansion against a
backdrop of investment in scalable systems to allow sustained organic and
acquisitive growth going forward.
Core Markets
The Government Waste Strategy published last May broadly supports our vision of
increased source separation of recyclables by householders. This vision will now
extend to businesses, educational establishments and public spaces giving
greater penetration for our products and opportunities for the development of
new designs.
Kerbside container sales were again at high levels with multiple moulds running
24/7 to keep up with demand. Major contracts included supplies to Swindon
Borough Council of wheeled bins and home delivery and to Birmingham City Council
of kerbside boxes.
Substantial initial orders for a new 40 litre version of our Wheeled Bin Inner
Caddy boosted our confidence in this innovative product, which is designed to
keep materials separate within a standard wheeled bin. Interest in this system
remains strong as it offers local authorities a cost-effective method of
adding further collection streams without adding a further wheeled bin.
With many local authorities now switching to alternate weekly waste and
recyclable collections the issue of food waste is high on the agenda. Our
market-leading combination of a 5 litre Kitchen Caddy with a 25 litre Kerbside
Caddy has set the standard for source separated food waste collections in the
UK. Further new products will follow in 2008 allowing us to increase sales and
margins further.
Supplies of home composting bins to WRAP, the Government Agency, were at an all
time high. Our flexible business model with multiple moulds and production sites
allowed us to increase our share of this market.
Home and garden products
A new water butt designed for Wickes, saw turnover for that customer in the
period double that of the whole of 2006. The long awaited Butt Butt, designed by
Wayne Hemingway, went into production with a launch in B&Q in August.
We have also created a new retail brand BeGreenTM , which unifies all of our
products for home recycling, composting, water saving and energy conservation.
This now gives a platform for expanding our business through retail multiples
and garden centres.
Overseas markets were also developed, in part to make up for slow sales of water
butts in the UK. Several thousand units have now been sent to Australia and we
have strong interest from other parts of the world.
Retail sales activity
Our work with water companies this year has been at a more manageable level and
our service levels have further improved. Whilst demand has been lower than last
year, water conservation remains necessary and the prospects for this business
remain positive.
Our evengreener catalogue brand has received good exposure and increased web
sales month on month throughout the period. The catalogue will be expanded
considerably going forward. We have established an in-house web team to further
develop the e-commerce side of our business and look forward to maintaining
our position as a leading eco-retailer.
Business to business activity
Part of our business is to supply modest quantities of recycling containers to
business of various sizes. Our web team is now focused on launching
binsdirect.com, our new business to business site. This is scheduled to go live
before the end of this year.
Acquisitions
The growth that we wish to achieve will not only be organic. It will be
necessary to make a number of key acquisitions to gain entry into new markets
and to accelerate the growth of our product range. We are actively pursuing a
number of opportunities which we hope will come to fruition over the next
six months.
Outlook
We now have a broad range of products helping individuals, businesses and other
organisations to improve their environmental performance and to reduce their
carbon footprint.
Our ability to sell these products through different channels: in bulk; to local
authorities; through retail multiples; or directly to the public via our own
retail brands puts us in a unique position. Many of the barriers to growth have
now been addressed and a secure platform has been established which will allow
us to begin to accelerate our growth plans and acquisitions.
Jonathan M Straight
Chief Executive
25 September 2007
Unaudited Condensed Consolidated Income Statement
For the 6 months ended 30 June 2007
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
Note #'000 #'000 #'000
Revenue 4 13,905 12,564 27,836
Cost of sales (10,928) (9,525) (22,465)
-------- ------- --------
Gross profit 4 2,977 3,039 5,371
Operating costs excluding
reorganisation costs and
amortisation of intangibles (1,971) (1,806) (3,504)
-------- ------- --------
Operating profit excluding
reorganisation costs and
amortisation of intangibles 1,006 1,233 1,867
Reorganisation costs (265) - -
Amortisation of intangibles (9) (8) (17)
Investment income 31 58 107
-------- ------- --------
Profit before taxation 763 1,283 1,957
Income tax expense 5 (235) (395) (610)
-------- ------- --------
Profit for the period
attributable to the equity
holders of the Company 528 888 1,347
-------- ------- --------
Earnings per share for profit attributable to the
equity holders of the Company during the period
Headline 7 6.5p 8.1p 12.4p
Basic 7 4.6p 7.8p 11.9p
Diluted 7 4.5p 7.6p 11.5p
Unaudited Condensed Consolidated Statement of Changes in Equity
For the 6 months ended 30 June 2007
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
#'000 #'000 #'000
Balance at start of period 10,020 8,911 8,911
Arising on grant of share options 37 26 56
Profit for the period attributable
to the equity holders
of the Company 528 888 1,347
-------- ------- --------
Total recognised income and
expense for the period 10,585 9,825 10,314
Arising on exercise of share options 15 - 128
Dividends paid (310) (283) (422)
-------- ------- --------
10,290 9,542 10,020
-------- ------- --------
Unaudited Condensed Consolidated Balance Sheet
At 30 June 2007
30 June 30 June 31 December
2007 2006 2006
Restated Restated
#'000 #'000 #'000
Assets
Non current assets
Property, plant and equipment 1,319 1,086 1,180
Intangible assets 5,727 5,652 5,719
Investments 35 - -
------ ------ ------
7,081 6,738 6,899
Current assets
Inventories 1,504 542 1,181
Trade and other receivables 6,293 6,182 5,057
Cash and cash equivalents 3,751 5,139 2,126
------ ------ ------
11,548 11,863 8,364
------ ------ ------
Total assets 18,629 18,601 15,263
------ ------ ------
Liabilities
Non current liabilities
Deferred taxation (35) (37) (35)
Current liabilities
Trade and other payables (7,456) (8,075) (4,599)
Income tax payable (848) (947) (609)
------- ------- -------
(8,304) (9,022) (5,208)
------- ------- -------
Total liabilities (8,339) (9,059) (5,243)
------- ------- -------
-------- ------- -------
Net assets 10,290 9,542 10,020
-------- ------- -------
Equity attributable to equity holders of parent
Issued share capital 115 113 115
Share premium 5,966 5,827 5,953
Merger reserve 744 744 744
Retained earnings 3,465 2,858 3,208
------ ------ ------
Total equity 10,290 9,542 10,020
------ ------ ------
Unaudited Condensed Consolidated Cash Flow Statement
For the 6 months ended 30 June 2007
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
#'000 #'000 #'000
Cash flows from operating activities
Cash generated from operations 2,238 3,879 1,711
Income tax paid 4 - (540)
-------- ------- --------
Net cash generated from
operating activities 2,242 3,879 1,171
Cash flows from investing activities
Purchases of property,
plant and equipment (603) (464) (701)
Proceeds from sale of property,
plant and equipment 345 - -
Purchases of intangible assets (55) (87) (193)
Purchases of investments (35) - -
Interest received 28 58 107
-------- ------- --------
Net cash used in
investing activities (320) (493) (787)
Cash flows from financing activities
Dividends paid (310) (283) (422)
Proceeds from issue of shares 13 - 128
-------- ------- --------
Net cash used in financing
activities (297) (283) (294)
-------- ------- --------
Net increase in cash
and cash equivalents 1,625 3,103 90
Cash and cash equivalents
at beginning of period 2,126 2,036 2,036
-------- ------- --------
Cash and cash equivalents
at end of period 3,751 5,139 2,126
-------- ------- --------
Reconciliation of profit before tax to cash generated from operating activities
Profit before tax 763 1,283 1,957
Adjustments for
depreciation 238 178 386
amortisation 9 8 17
equity settled share
based payments 37 26 56
profit on sale of
tangible fixed assets (4) - (111)
investment income (31) (58) (107)
Changes in working capital
inventories (323) (127) (766)
trade and other receivables (1,308) (693) 508
trade and other payables 2,857 3,262 (229)
-------- ------- --------
Cash generated from operations 2,238 3,879 1,711
-------- ------- --------
Notes to the Interim Results Announcement
For the 6 months ended 30 June 2007
1. General information
Straight plc "the Group" supplies container solutions for source separated
waste, mostly within the UK. The Company is registered in England under company
registration number 2923140 and its registered office is 31 Eastgate, Leeds,
LS2 7LY. As a consequence of its AIM listing, the Group is required to prepare
statutory financial statements which comply with accounting standards as adopted
for use in the European Union "EU" in respect of its financial year ended 31
December 2007.
When the 2007 financial statements are prepared, they will be the first
financial statements prepared by the Company in accordance with accounting
standards as adopted for use in the EU and as such will take account of the
requirements and options in IFRS1 (First-time Adoption of International
Financial Reporting Standards) as they relate to the 2006 comparatives included
therein.
These consolidated interim financial statements have been approved for issue by
the Board of Directors on 25 September 2007.
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
Group's statutory financial statements for the year ended 31 December 2006,
prepared under UK GAAP, have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified and did not
contain a statement under Section 237(2) of the Companies Act 1985.
2. IFRS 1 - Transition to IFRS
The Group's financial statements for the year ended 31 December 2007 will be its
first annual financial statements that comply with IFRS. The Group has applied
IFRS 1 in preparing these consolidated interim financial statements.
3. Summary of Significant Accounting Policies
The Group's accounting policies have been revised to comply with IFRS as adopted
by the EU, and are shown below.
Basis of Preparation
These interim consolidated financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting and the requirements of IFRS 1 relevant
to interim reports. These interim financial statements have been prepared in
accordance with the recognition and measurement principles of IFRS effective or
expected to be effective at the time of preparation of these statements.
The policies set out below have been consistently applied to all the periods
presented.
The Group's consolidated financial statements were prepared in accordance with
UK Generally Accepted Accounting Principles (UK GAAP) until 31 December 2006.
UK GAAP differs in some areas from IFRS. In preparing the Group's 2007
consolidated interim financial statements, management has amended certain
accounting and valuation methods applied in the UK GAAP financial statements to
comply with IFRS. The comparative figures in respect of 2006 have been restated
to reflect these adjustments.
Reconciliations and descriptions of the effect of the transition from UK GAAP to
IFRS on the Group's equity and its net income and cash flows are provided in
note 8.
The consolidated interim financial statements have been prepared under the
historical cost convention.
Business Combinations
These interim financial statements consolidate the accounts of the Company and
its subsidiaries for the period to 30 June 2007.
The Group has elected not to apply IFRS3 Business Combinations retrospectively
to business combinations prior to 1 January 2006 under the exemption granted by
IFRS1.
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
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Company in exchange for control of the acquiree,
plus any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date.
Goodwill arising on acquisition is recognised as an asset and originally
measured at cost, being the excess of the cost of the business combination over
the Group's interest in the fair net value of the identifiable assets,
liabilities and contingent liabilities recognised.
Provided fair value can be measured reliably, intangible assets acquired in a
business combination are recognised separately from goodwill at fair value at
the date of acquisition. Intangible assets are amortised on a straight line
basis over their estimated useful lives.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary at the date of acquisition. Goodwill is
initially recognised as an asset at cost and is subsequently measured at cost
less any accumulated impairment losses. Goodwill which is recognised as an
asset is reviewed for impairment at least annually.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently where there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit.
An impairment loss recognised for goodwill is not reversed in a subsequent
period.
On disposal of a subsidiary, the attributable goodwill is included in the
determination of the profit or loss on disposal.
Revenue Recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales related
taxes.
Sales of services are recognised and invoiced as the services are performed.
Sales of goods are recognised when goods are delivered and title has passed.
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Foreign Currencies
In preparing the financial statements of the individual companies, transactions
in currencies other than the entity's functional currency, foreign currencies,
are recorded at rates of exchange prevailing at the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing on the balance
sheet date. Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
in equity.
Retirement Benefit Costs
Payments to the Group's defined contribution benefit scheme are charged as an
expense as they fall due.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on taxable profit for the year. The
taxable profit differs from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet 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 generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Property, Plant and Equipment
Fixtures and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is provided on all property, plant and equipment at rates
calculated to write off the cost of each asset over its useful economic life on
a straight line basis as follows:
* Motor vehicles - 3 years
* Plant and machinery - 5 years
* Fixtures, fittings and office equipment - 3 years
Impairment of tangible and intangible fixed assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss. Where the asset does not generate cash flows that
are independent from other assets, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs. An intangible asset with an
indefinite useful life is tested for impairment annually and whenever there is
an indication that the asset may be impaired.
Trade receivables
Trade receivables are non-derivative financial assets which arise when the Group
provides goods or services directly to a debtor with no intention of trading the
receivable. Any change in their value through impairment or reversal of
impairment is recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other
short term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Share based payments
The Group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting
period, based on the Group's estimate of shares that will eventually vest and
adjusted for the effect of non market-based vesting conditions. Fair value is
measured by use of the Black-Scholes model.
4. Segmental information
At 30 June 2007, the Group's activities were organised into two segments, its
environmental container solutions business and its direct to consumer
environmental products business. These divisions are the basis on which the
Group reports its primary segment information. All turnover arises in the UK.
It is not possible to split the two segments' performance below gross profit.
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
#'000 #'000 #'000
Revenue
Environmental container solutions 10,882 8,562 20,227
Direct to consumer
environmental products 3,023 4,002 7,609
-------- -------- --------
13,905 12,564 27,836
-------- -------- --------
Gross profit
Environmental container solutions 2,008 1,879 4,058
Direct to consumer
environmental products 969 1,160 1,313
-------- -------- --------
2,977 3,039 5,371
Unallocated operating costs
excluding reorganisation costs,
depreciation, amortisation
of intangibles and share scheme
charges (1,696) (1,602) (3,062)
-------- -------- --------
Headline operating profit
before reorganisation costs,
depreciation, amortisation
of intangibles and share scheme
charges 1,281 1,437 2,309
-------- -------- --------
5. Income tax expenses
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
#'000 #'000 #'000
Current tax 235 395 612
Deferred tax - - (2)
-------- -------- --------
235 395 610
-------- -------- --------
6. Dividends
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
#'000 #'000 #'000
Amounts recognised as
equity distributions in
the period 310 283 422
-------- -------- --------
Date dividend paid 25.5.07 26.5.06 15.12.06
Amount paid per share 2.7p 2.5p 1.2p
The interim dividend proposed of 1.25p per share has not been included as a
liability in these financial statements.
7. Earnings per share
Half year to Half year to Year ended
30 June 2007 30 June 2006 31 Dec 2006
Restated Restated
#'000 #'000 #'000
Earnings
Earnings for the purposes
of basic earnings per share
being profit for the period
attributable to the equity
holders of the Company 528 888 1,347
Reorganisation costs 265 - -
Taxation on reorganisation costs (80) - -
Share scheme charges 37 26 56
-------- -------- --------
Earnings for the purposes
of headline earnings per share
being the adjusted profit for
the period attributable to
the equity holders of the company 750 914 1,403
-------- -------- --------
Number of shares
Weighted average number of
ordinary shares for the
purposes of basic earnings
per share 11,487,537 11,326,827 11,349,878
Dilutive effect of
share options 138,448 390,763 323,826
----------- ----------- -----------
11,625,985 11,717,590 11,673,704
----------- ----------- -----------
Earnings per ordinary share
Headline 6.5p 8.1p 12.4p
Basic 4.6p 7.8p 11.9p
Diluted 4.5p 7.6p 11.5p
8. Reconciliation between IFRS and UK GAAP
These interim financial statements are the Group's first to be prepared under
IFRS. In preparing its opening IFRS balance sheet and comparative information
for the 6 months ended 30 June 2006, certain amounts previously reported in
financial statements prepared in accordance with UK GAAP have been adjusted.
An explanation of how the transition from UK GAAP to IFRS has affected the
Group's reported financial position and financial performance is set out below.
There have been no changes to the Group's cash flows as a result of the
transition.
Share Holders Equity
IFRS Adjustment UK GAAP
at to goodwill at
30 June 2006 amortisation 30 June 2006
#'000 #'000 #'000
Issued share capital 113 - 113
Share premium 5,827 - 5,827
Merger reserve 744 - 744
Retained earnings 2,858 (136) 2,722
-------- --------- --------
9,542 (136) 9,406
-------- --------- --------
IFRS Adjustment UK GAAP
at to goodwill at
31 Dec 2006 amortisation 31 Dec 2006
#'000 #'000 #'000
Issued share capital 115 - 115
Share premium 5,953 - 5,953
Merger reserve 744 - 744
Retained earnings 3,208 (272) 2,936
-------- --------- --------
10,020 (272) 9,748
-------- --------- --------
Consolidated Income Statements
IFRS Adjustment UK GAAP
at to goodwill at
30 June 2006 amortisation 30 June 2006
#'000 #'000 #'000
Revenue 12,564 - 12,564
Cost of sales (9,525) - (9,525)
-------- --------- --------
Gross profit 3,039 - 3,039
Operating costs (1,814) (136) (1,950)
-------- --------- --------
Operating Profit 1,225 (136) 1,089
Investment income 58 - 58
-------- --------- --------
Profit before taxation 1,283 (136) 1,147
Income tax expense (395) - (395)
-------- --------- --------
Profit for the period
attributable to the equity
holders of the Company 888 (136) 752
-------- --------- --------
IFRS Adjustment UK GAAP
at to goodwill at
30 June 2006 amortisation 30 June 2006
#'000 #'000 #'000
Revenue 27,836 - 27,836
Cost of sales (22,465) - (22,465)
-------- --------- --------
Gross profit 5,371 - 5,371
Operating costs (3,521) (272) (3,793)
-------- --------- --------
Operating Profit 1,850 (272) 1,578
Investment income 107 - 107
-------- --------- --------
Profit before taxation 1,957 (272) 1,685
Income tax expense (610) - (610)
-------- --------- --------
Profit for the period
attributable to the equity
holders of the Company 1,347 (272) 1,075
-------- --------- --------
Consolidated Net Assets
IFRS Asset Adjustment UK GAAP
at reclassification to goodwill at
30 June 2006 amortisation 30 June 2006
#'000 #'000 #'000 #'000
Non current assets
Property plant
and equipment 1,086 85 - 1,171
Intangible assets 5,652 (85) (136) 5,431
Investments - - - -
------- ------ ------ -------
6,738 - (136) 6,602
Current assets
Inventories 542 - - 542
Trade and other receivables 6,182 - - 6,182
Cash 5,139 - - 5,139
------- ------ ------ -------
11,863 - - 11,863
------- ------ ------ -------
Total assets 18,601 - (136) 18,465
------- ------ ------ -------
Non current liabilities
Deferred taxation (37) - - (37)
Current liabilities
Trade and other payables (8,075) - - (8,075)
Income tax payable (947) - - (947)
------- ------ ------ -------
(9,022) - - (9,022)
------- ------ ------ -------
Total liabilities (9,059) - - (9,059)
------- ------ ------ -------
------- ------ ------ -------
Net assets 9,542 - (136) 9,406
------- ------ ------ -------
IFRS Asset Adjustment UK GAAP
at reclassification to goodwill at
30 June 2006 amortisation 30 June 2006
#'000 #'000 #'000 #'000
Non current assets
Property plant
and equipment 1,180 153 - 1,333
Intangible assets 5,719 (153) (272) 5,294
Investments - - - -
------- ------ ------ -------
6,899 - (272) 6,627
Current assets
Inventories 1,181 - - 1,181
Trade and other receivables 5,057 - - 5,057
Cash 2,126 - - 2,126
------- ------ ------ -------
8,364 - - 8,364
------- ------ ------ -------
Total assets 15,263 - (272) 14,991
------- ------ ------ -------
Non current liabilities
Deferred taxation (35) - - (35)
Current liabilities
Trade and other payables (4,599) - - (4,599)
Income tax payable (609) - - (609)
------- ------ ------ -------
(5,208) - - (5,208)
------- ------ ------ -------
Total liabilities (5,243) - - (5,243)
------- ------ ------ -------
Net assets 10,020 - (272) 9,748
------- ------ ------ -------
Under UK GAAP consolidation goodwill was amortised over 20 years. Under IFRS all
goodwill is now subject to annual impairment review. Consolidation goodwill
balances have been written back to their net book value under UK GAAP at 31
December 2005.
9. This statement is being sent to the shareholders of the Company and will be
available at the Company's registered office at 31 Eastgate, Leeds, LS2 7LY.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KGGZLVDVGNZM
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