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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Team Internet Group Plc | LSE:TIG | London | Ordinary Share | GB00BCCW4X83 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.40 | 0.76% | 185.20 | 184.40 | 185.60 | 186.60 | 183.20 | 186.60 | 95,595 | 16:29:51 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Business Consulting Svcs,nec | 836.9M | 24.3M | 0.0894 | 20.72 | 499.46M |
RNS Number:4150O Innovation Group PLC 07 August 2003 7 August 2003 THE INNOVATION GROUP PLC REPORT FOR THE NINE MONTHS ENDED 30 JUNE 2003 The Innovation Group plc ("TiG" or "the Group"), the provider of innovative insurance solutions to the global financial services industry, today announces its unaudited results for the nine months to 30 June 2003. Highlights for the nine months ended 30 June 2003: > BPO revenue of #18.0m (2002: #15.8m) continues to grow quarter on quarter: Q1 2003: #5.7m, Q2 2003: #5.8m, Q3 2003: #6.4m. Technology Solutions revenue of #27.0m (ongoing (see note two) 2002: #58.9m). Total revenue of #45.0m (ongoing 2002: #74.7m) > EBITDA* of #4.5m (2002: #17.9m) > FRS 3 loss before tax of #8.8m inclusive of a goodwill amortisation charge of #12.3m and profit on disposal of #1.6m (2002:loss of #375.3m) > Adjusted profit before tax* of #1.9m (2002: #14.5m); third quarter in succession that the Group has delivered profits before goodwill amortisation (Q3 2003: #0.5m) > Adjusted EPS* of 0.52p (2002: 4.97p); basic EPS loss of 3.12p (30 June 2002: loss per share of 168.18p) > Cash is at #10.5m as at 30 June 2003; operating cash flow has continued to show encouraging improvements for the last three quarters > Major blue chip company signs off on delivery of claims system > Delivery of evaluation licence to top tier US insurance company > Board strengthened with the appointment of two fully independent non executive directors * Definitions are provided under financial highlights and note 2 Enquiries: The Innovation Group plc 01489 898300 Hassan Sadiq, Chief Executive Officer Paul Smolinski, Group Finance Director KBC Peel Hunt 020 7418 8900 Simon Hayes / Jonathan Marren Weber Shandwick Square Mile 020 7067 0700 Sara Musgrave / Katie Hunt Chairman's Statement The global business environment for insurance companies continues to be difficult. The shortfall in investment income resulting from the general economic environment has intensified the focus on generating profits from premium income. Technology will be a major contributor to this focus and, while a mood of caution still exists, insurers are prepared to invest in proven technology solutions that deliver improved profitability whilst also endeavouring to minimise project risk through contracting with major market players. The Innovation Group continues to be well placed to take advantage of this trend with our technology solutions for policy, claims and data conversion. Our global partnership with IBM, our satisfied top tier clients and our domain expertise are viewed as the important elements that will enable us to seize future opportunities. The insurance industry is also still wrestling with integration issues following a period of consolidation. The breadth of our technology solutions gives us a tremendous opportunity as these insurers turn their attention to the integration of their disparate legacy business processes and systems. During the quarter we have continued to progress in line with our plan and we have passed some major milestones. Our continued strategy of focusing on core revenue lines whilst maintaining costs at an appropriate level means that the Group has been able to deliver another profitable quarter before goodwill amortisation - our third in succession. First Half Highlights In January 2003, the Group sold its BPO business in France to Groupama for a total consideration of 4 million euros which represented a multiple of more than 80 times the historic earnings of the French BPO business or 25 times the net asset value. Also in January, Zurich Insurance paid a #1.8m license fee following the successful delivery of a claims system for UK general insurance. In March 2003, the Group concluded a rights issue which raised approximately #9m net of expenses, and this has given us the opportunity to extend several of our current customer relationships. Hassan Sadiq was appointed Chief Executive of the company replacing Robert Terry (who moved to a non- executive role). John Birkmire, Gordon Crawford and Clive Vlotman left the Board and we immediately commenced the process of appointing fully independent non-executive directors. The full first quarter and half year reports are available on our website. Financial and Operating Review Revenue for the nine months to 30 June 2003 was #45.0m (ongoing, as explained further in note 2, nine months to June 2002 (the "prior period"): #74.7m); Business Process Outsourcing ("BPO") revenue for nine months to 30 June 2003 was #18.0m (prior period: #15.8m); Technology Solutions revenue for nine months to 30 June 2003 was #27.0m (prior period: #58.9m). EBITDA for the same period was #4.5m (prior period: #17.9m). FRS 3 loss before tax was #8.8m inclusive of a goodwill amortisation charge of #12.3m and profit on French BPO disposal of #1.6m (prior period: loss of #375.3m); adjusted profit before tax, goodwill amortisation, and gains on disposal was #1.9m representing #0.3m, #1.1m and #0.5m for Q1, Q2 and Q3 respectively (prior period: #14.5m); adjusted EPS was 0.52p (prior period: 4.97p), basic EPS loss of 3.12p (prior period: loss per share of 168.18p). Cash is at #10.5m as at 30 June 2003. Operating cash before exceptional costs has continued to improve with an outflow in Q3 of only #0.8m (Q1 2003:#2.8m, Q2 2003:#1.5m) and the trend is expected to continue. BPO revenue for the quarter ended 30 June 2003 was #6.4m (Q1 2003: #5.7m, Q2 2003: #5.8m). Revenue from Technology Solutions for the quarter ended 30 June 2003 was #7.4m (Q1 2003: #10.1m, Q2 2003: #9.6m), comprising #2.0m initial licence fee and implementation and #5.4m recurring revenue. Technology Solutions Division In my last statement to shareholders, I indicated that one of the keys to new licence and implementation revenues would be success in the North American market. I am pleased to report that we have recorded a number of such successes in this region during the last three months. These include the successful final delivery of our claims product to a major blue chip company; the delivery of an evaluation licence and the commencement of billing work at one of America's top tier insurers; and confirmation of TiG as 'chosen vendor' for another leading US insurer. Our global relationship with IBM continues to strengthen with this addition of two major US clients. BPO Division Revenues and profitability from "TiG eQuals" (the brand name of our BPO division) have continued to increase overall. We continue to capitalise on the market positions we occupy in the UK, Germany, South Africa and Australia. We continue to explore other geographical opportunities for this model as well as leveraging our broader product offerings from our South African operation into existing and new territories. It is pleasing to report that the growth trends experienced in Australia, Germany and South Africa prevail and will outweigh the experience in the UK where a reduction in volumes is forecast, as a result of one customer taking its business in house in an effort to consolidate its different brands. Despite this one customer experience, our overall UK business pipeline is very active as insurers see the benefits of outsourcing their claims process. Board Changes During the quarter we made progress in our desire to appoint additional, fully independent non-executive directors to the Board. On 29 May 2003, we announced the appointment of Chris Banks as an independent non-executive director, and chairman of the audit committee. On 9 July 2003 we announced the appointment of David Thorpe as an independent non-executive director and chairman of the remuneration committee. Both Chris and David bring highly relevant skills and experience to The Innovation Group, gained at CMG and EDS respectively, and we look forward to the valuable contribution they both will make to the Group. On 9 July 2003, we also announced that Rob Terry was to step down as a director on 30 September 2003, the end of TiG's financial year. Rob is continuing to make his services available to the Company, although an agreement to conclude his existing two year consultancy agreement has been reached under which he will receive payment for his services during the interim period and a further payment following the end of the current financial year to a maximum amount of #437,500 (representing the balance of his contractual entitlement at that date). This will be treated as an exceptional charge in our final quarter of this financial year. Outlook The Directors believe they have taken the steps necessary to put the business on a sound financial footing for the future and, with the appointments of Chris Banks and David Thorpe, have strengthened the management experience and the governance of The Innovation Group. The Group remains committed to delivering profit and process improvement solutions for the insurance industry with proven products. Our BPO division has grown well over recent quarters and, despite the short term UK revenue consolidation, we expect to continue to see significant growth in Germany, South Africa and Australia. There has been a very encouraging increase in our Technology solutions activity level over the last quarter but it remains difficult to predict the precise timing of licence sales. Finally, I would like to commend our staff for their continued hard work and commitment, as well as thanking our shareholders for their invaluable support over the last nine months. Geoff Squire, OBE Chairman 7 August 2003 The Innovation Group plc Financial Highlights For the nine months ended 30 June 2003 Note 9 months ended 30 June Year to 30 September 2003 2002 2002 #'000 #'000 #'000 Turnover 45,008 83,931 100,071 Adjusted profit before tax 1 1,924 14,477 10,028 Loss before tax (8,761) (375,290) (391,114) Adjusted earnings per share (pence) 0.52 4.97 2.46 Basic loss per share (pence) (3.12) (168.18) (173.78) Dividend per share (pence) - 0.6 0.6 Note: 1. Adjusted profit before tax for the nine months ended 30 June 2003 is FRS 3 loss before tax of #8,761,000 (nine months ended 30 June 2002: loss of #375,290,000; year ended 30 September 2002: loss of #391,114,000) after excluding profit on disposal of operations of #1,645,000 (nine months ended 30 June 2002 and year ended 30 September 2002: #nil), exceptional costs of #nil (nine months ended 30 June 2002: #367,010,000; year ended 30 September 2002: #374,498,000) and the amortisation charge of #12,330,000 (nine months ended 30 June 2002: #22,757,000; year ended 30 September 2002: #26,644,000). References to adjusted profit and earnings per share reflect the Directors' view that this is an important measure for their own, and shareholders', assessment of the Group's underlying performance. The Innovation Group plc Unaudited Profit and Loss Account For the nine months ended 30 June 2003 Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 Note #'000 #'000 #'000 TURNOVER 2 45,008 83,931 100,071 Cost of sales (8,092) (11,870) (14,687) ----------------------------------------------------- Gross profit 36,916 72,061 85,384 Administrative expenses - exceptional items 3 - (367,010) (374,498) - other (47,097) (80,771) (102,411) ----------------------------------------------------- (47,097) (447,781) (476,909) ----------------------------------------------------- OPERATING LOSS (10,181) (375,720) (391,525) Profit on disposal of operations 4 1,645 - - Net interest (225) 430 411 ----------------------------------------------------- LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (8,761) (375,290) (391,114) Adjusted profit before tax 1,924 14,477 10,028 Amortisation (12,330) (22,757) (26,644) Exceptional items - (367,010) (374,498) Profit on disposal of operations 1,645 - - ----------------------------------------------------- Loss before tax (8,761) (375,290) (391,114) ===================================================== Tax on loss on ordinary activities 5 (385) (78) - ----------------------------------------------------- LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (9,146) (375,368) (391,114) Equity minority interests (12) - (85) ----------------------------------------------------- LOSS FOR THE PERIOD (9,158) (375,368) (391,199) Dividends paid/ proposed - (1,150) (1,255) ----------------------------------------------------- RETAINED LOSS FOR THE PERIOD (9,158) (376,518) (392,454) ===================================================== Adjusted earnings per ordinary share (pence) 6 0.52 4.97 2.46 Basic loss per ordinary share (pence) 6 (3.12) (168.18) (173.78) Diluted loss per ordinary share (pence) 6 (3.12) (168.18) (173.78) All amounts relate to continuing operations. The Innovation Group plc Unaudited Balance Sheet As at 30 June 2003 Unaudited Unaudited Audited 30 June 30 June 30 September 2003 2002 2002 Note #'000 #'000 #'000 FIXED ASSETS Intangible assets 41,423 57,748 53,987 Tangible assets 20,623 25,125 22,441 Investments 6,442 5,430 5,034 ----------------------------------------------------- 68,488 88,303 81,462 CURRENT ASSETS Stocks 183 122 131 Debtors 7 15,377 32,009 15,492 Investments 1,275 23,827 11,060 Cash at bank and in hand 10,469 12,177 9,149 ----------------------------------------------------- 27,304 68,135 35,832 CREDITORS: amounts falling due within one year (14,683) (45,059) (25,823) ----------------------------------------------------- NET CURRENT ASSETS 12,621 23,076 10,009 ----------------------------------------------------- TOTAL ASSETS LESS CURRENT LIABILITIES 81,109 111,379 91,471 CREDITORS: amounts falling due after more than one year Convertible loan notes (2,122) - (2,040) Other creditors (9,663) (15,974) (13,021) ----------------------------------------------------- (11,785) (15,974) (15,061) PROVISIONS FOR LIABILITIES AND CHARGES (1,922) (3,546) (3,673) ACCRUALS AND DEFERRED INCOME (11,366) (22,750) (15,132) EQUITY MINORITY INTERESTS (187) - (206) ----------------------------------------------------- NET ASSETS 55,849 69,109 57,399 ===================================================== CAPITAL AND RESERVES Called up share capital 8,281 3,861 3,952 Shares to be issued 566 12,000 14,000 Share premium account 476,048 456,096 458,973 Profit and loss account (429,046) (402,848) (419,526) ----------------------------------------------------- EQUITY SHAREHOLDERS' FUNDS 55,849 69,109 57,399 ===================================================== The interim results were approved by the Board of Directors on 7 August 2003. The Innovation Group plc Statement of total recognised gains and losses As at 30 June 2003 Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 Loss for the financial period (9,158) (375,368) (391,199) Currency translation differences (362) (1,838) (2,580) ----------------------------------------------------- Total recognised gains and losses relating to the period (9,520) (377,206) (393,779) ===================================================== Reconciliation of Movement in Shareholders' Funds Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 Loss for the financial period (9,158) (375,368) (391,199) Dividends - (1,150) (1,255) ----------------------------------------------------- (9,158) (376,518) (392,454) Currency translation differences (362) (1,838) (2,580) Issue of shares 21,404 41,413 44,381 Shares to be issued (13,434) - 2,000 ----------------------------------------------------- Net reduction to shareholders' funds (1,550) (336,943) (348,653) Opening shareholders' funds as previously reported 57,399 406,052 406,052 ----------------------------------------------------- Closing shareholders' funds 55,849 69,109 57,399 ===================================================== The Innovation Group plc Unaudited Cash Flow Statement For the nine months ended 30 June 2003 Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Operating (loss) before exceptional items (10,181) (8,710) (17,027) Depreciation and amortisation charges 14,668 26,601 32,121 Loss/(profit) on disposal of fixed assets 149 - (131) (Increase)/decrease in stocks (52) 64 55 (Increase)/decrease in debtors (75) 3,064 15,935 (Decrease) in creditors (9,605) (12,614) (23,138) ----------------------------------------------------- (5,096) 8,405 7,815 Cash outflow arising from exceptional costs (3,011) (7,485) (13,140) Acquisition related outflows* - (1,651) (2,761) ----------------------------------------------------- Net cash (outflow) from operating activities (8,107) (731) (8,086) ===================================================== Net cash (outflow) from operating activities (8,107) (731) (8,086) Returns on investments and servicing of finance (47) 207 697 Taxation (192) (4,478) (2,014) Capital expenditure (947) (5,061) (7,328) Acquisitions and disposals 528 (16,775) (14,958) Equity dividends paid - (4,370) (5,625) ----------------------------------------------------- Cash outflow before management of liquid resources and financing (8,765) (31,208) (37,314) Management of liquid resources 9,785 39,193 51,960 Financing 293 (10,027) (19,811) ----------------------------------------------------- Increase/(decrease) in cash less bank overdraft 1,313 (2,042) (5,165) ===================================================== * Acquisition related outflows during the nine months ended 30 June 2002 and year ended 30 September 2002 relate to payments made by the Company in respect of liabilities which crystallised as a consequence of the acquisitions of MTW and Huon and creditor payments associated with the pre-acquisition activities of the Cosy Group. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Increase/(decrease) in cash in the period 1,313 (2,042) (5,165) Cash outflow from decrease in debt and lease financing 8,865 10,027 19,811 Cash inflow from decrease in liquid resources (9,785) (39,193) (51,960) ----------------------------------------------------- Change in net funds resulting from cash flows 393 (31,208) (37,314) Loans, loan notes and finance leases acquired with subsidiaries - (1,754) (1,508) Foreign exchange 96 161 (484) Accrued interest on loan notes (178) - - ----------------------------------------------------- Movement in net funds in the period 311 (32,801) (39,306) Net (debt)/funds at start of period (1,255) 38,051 38,051 ----------------------------------------------------- Net (debt)/funds at end of period (944) 5,250 (1,255) ===================================================== The Innovation Group plc Notes to the Unaudited Results For the nine months ended 30 June 2003 1. BASIS OF PREPARATION The interim financial information of The Innovation Group Plc is for the nine month period to 30 June 2003, and has been prepared in accordance with the accounting policies set out in, and is consistent with, the audited financial statements for the year ended 30 September 2002. The results for the year ended 30 September 2002 have been extracted from the audited financial statements for that year. The audited financial statements have been filed with the Registrar of Companies and the auditors' report on those accounts was unqualified. The unaudited profit and loss account for the nine month period to, and the unaudited balance sheet as at 30 June 2003, do not amount to full accounts within the meaning of section 240 of the Companies Act 1985 and have not been delivered to the Registrar of Companies. 2. ANALYSIS OF TURNOVER, LOSS BEFORE TAX AND NET ASSETS Turnover can be analysed into the following categories: Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 Initial licence fees 3,332 16,968 17,520 Implementation 5,632 25,700 29,408 Recurring 36,044 41,263 53,143 ----------------------------------------------------- 45,008 83,931 100,071 ----------------------------------------------------- Following the restructuring of the group at the end of 2002, the Directors now consider that the Group has two principal activities. These are technology solutions and business process outsourcing. The results for the nine months ended 30 June 2003 can be analysed as follows. In practice it is not feasible to provide comparative data with sufficient accuracy and so, as permitted by SSAP 25, no comparative information is provided. In order to assist the reader when comparing results of the divisions, the comparatives provided in the Chairman's statement have been given with reference to ongoing revenues which exclude the revenues transferred to partners as described in the financial statements for the year ended 30 September 2002. Unaudited 9 months to 30 June 2003 Technology Solutions BPO Total #'000 #'000 #'000 Turnover 27,047 17,961 45,008 ---------------------------------------------------- EBITDA before R&D and central costs 9,142 2,027 11,169 *1 Amortisation and depreciation (8,344) (6,144) (14,488) ---------------------------------------------------- 798 (4,117) (3,319) ================================= R&D (4,880) *2 Central costs (1,982) Profit on disposal - BPO 1,645 Net interest (225) -------------- Loss before tax (8,761) ============== *1 EBITDA OF #4,487,000 comprises #11,169,000 as above less #4,700,000 R&D and #1,982,000 Central costs. *2 Research and development costs include approximately #180,000 of depreciation. BPO activities include certain territories and activities where operations are still in initial development or are operating in markets where they are yet to achieve critical mass. The result above consequently includes turnover of #799,000 and an adjusted operating loss of approximately #508,000 in relation to these businesses. Excluding these and businesses disposed of in the period, BPO operations are achieving an adjusted operating margin of 16% for the nine months ended 30 June 2003. The geographical analysis by location is as set out below: Turnover Loss before interest and tax Unaudited Unaudited Audited Unaudited Unaudited Audited 9 months to 9 months to Year to 9 months to 9 months to Year to 30 June 30 June 30 Sept 30 June 30 June 30 Sept 2003 2002 2002 2003 2002 2002 #'000 #'000 #'000 #'000 #'000 #'000 Europe, Middle East and Africa 29,140 49,867 59,227 6,327 16,177 (262,381) Americas 13,212 28,398 35,143 2,408 (2,047) (66,340) Asia Pacific 2,656 5,126 5,701 276 2,167 (1,412) Central and R&D - - - (6,862) (2,250) (10,250) Exceptional charge - - - - (367,010) (24,498) Profit on disposal - - - 1,645 - - Amortisation - - - (12,330) (22,757) (26,644) --------------------------------------------------------------------------------- 45,008 83,391 100,071 (8,536) (375,720) (391,525) ================================================================================= Due to the geographical spread of certain acquisitions and the centralisation of certain functions, it is not possible to allocate the related central costs over the geographical areas for the above periods. Net assets Unaudited Unaudited Audited 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 Europe, Middle East and Africa 31,001 3,870 18,156 Americas (17,839) (3,010) (21,191) Asia Pacific (8,839) (4,702) (7,792) Central 51,526 72,951 68,226 -------------------------------------------------- 55,849 69,109 57,399 ================================================== Central net assets include goodwill, other investments and net funds. 3. EXCEPTIONAL ADMINISTRATIVE EXPENSES Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 Fixed asset impairment - 4,538 4,616 Goodwill impairment - 350,000 350,000 Office closure costs - 2,703 3,050 Termination payments - 2,764 5,804 Redundancy period costs - 7,005 9,255 Contractual settlements - - 1,773 ---------------------------------------------- - 367,010 374,498 ============================================== 4. PROFIT ON DISPOSAL OF BUSINESS #'000 Net assets disposed of: Tangible fixed assets 647 Debtors 194 Cash at bank and in hand 88 Creditors (367) --------------- 562 Profit on disposal 1,645 --------------- 2,207 Satisfied by: =============== Cash 2,207 =============== The disposal of the Group's French BPO business was completed on 29 January 2003. The profit on disposal, which was determined including attributable goodwill of #nil was #1,645,000. 5. TAXATION The effective tax rate for the group based on projected results before amortisation and profit on disposal for the year ended 30 September 2003 is 20% (June 2002: 34%; September 2002: nil). The charge for the period is based on the pre amortisation and profit on disposal effective tax rate of 20%. 6. EARNINGS PER SHARE Unaudited Unaudited Audited 9 months to 9 months to Year to 30 June 30 June 30 September 2003 2002 2002 #'000 #'000 #'000 Diluted loss per share (3.12) (168.18) (173.78) Adjustments for share options and shares to be issued - - - ------------------------------------------------------- Basic loss per share (3.12) (168.18) (173.78) Adjustments for exceptional items, profit on disposal and amortisation 3.64 173.15 176.24 ------------------------------------------------------- Adjusted earnings per share 0.52 4.97 2.46 ======================================================= Earnings per share is calculated as follows: Basic earnings per share Average number of shares 293,318,730 223,190,865 225,104,606 Loss for the financial period (#'s) (9,158,000) (375,368,000) (391,199,000) ======================================================= Diluted earnings per share Average number of shares 293,318,730 223,190,865 225,104,606 Loss for the financial period (#'s) (9,158,000) (375,368,000) (391,199,000) ======================================================= Adjusted earnings per share Average number of shares 293,318,730 223,190,865 225,104,606 Loss for the financial period (#'s) (9,158,000) (375,368,000) (391,199,000) Add amortisation (#'s) 12,330,000 22,757,000 26,644,000 (Less)/add exceptional items (#'s) (1,645,000) 367,010,000 374,498,000 Less tax credit arising on exceptional items (#'s) - (3,301,000) (4,400,000) ------------------------------------------------------- Adjusted earnings (#'s) 1,527,000 11,098,000 5,543,000 ======================================================= FRS 14 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. For a loss making company with outstanding share options, net loss per share would only be increased by the exercise of out-of-the-money options. Since it seems inappropriate to assume that option holders would act irrationally, no adjustment has been made to diluted EPS for out- of-the-money share options. 7. WORKING CAPITAL Debtors as at 30 June 2003 comprise trade debtors of #11.7m (30 September 2002: #11.8m), accrued income of #nil (30 September 2002: #0.3m), prepayments, deposits and other debtors of #3.7m (30 September 2002: #3.4m). 8. ADDITIONAL COPIES OF THE STATEMENT Copies of this statement are available from The Innovation Group plc, Yarmouth House, 1300 Parkway, Solent Business Park, Whiteley PO15 7AE. INDEPENDENT REVIEW REPORT TO THE INNOVATION GROUP PLC Introduction We have been instructed by the company to review the financial information for the nine months ended 30 June 2003, which comprises the profit and loss account, the balance sheet, the cash flow statement and related notes 1 to 8 together with the reconciliation of operating loss to net cash outflow from operating activities and the reconciliation of net cash flow to movement in net funds. We have read the other information contained in the third quarter report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The third quarter report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the third quarter report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting polices and presentation applied to the third quarter report figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the nine months ended 30 June 2003. Deloitte and Touche LLP Chartered Accountants London 7 August 2003 This information is provided by RNS The company news service from the London Stock Exchange END QRTEAXPKEEEDEFE
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