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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Triplearc | LSE:TPA | London | Ordinary Share | GB0031067340 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.92 | 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:6528E
TripleArc PLC
28 September 2007
TripleArc Plc
Interim Results for the six months ended 30 June 2007
TripleArc Plc ("TripleArc", the "Company" or the "Group") provides technology
enhanced print management solutions to businesses seeking to reduce costs and
streamline business process. The Group is able to differentiate its offering by
providing its customers with industry leading technology solutions which
streamline the supply chain and facilitate sustainable cost savings.
CONTINUING BUSINESS SUMMARY
+------------------------------------+-------------+-------------+--------------+
|#'m | Six months | Six months| Year ended|
| | ended | ended| 31 December|
| |30 June 2007 | 30 June 2006| 2006 |
+------------------------------------+-------------+-------------+--------------+
|Turnover | #22.59m| #21.85m| #43.84m|
+------------------------------------+-------------+-------------+--------------+
|Gross profit | #6.70m| #6.68m| #13.91m|
+------------------------------------+-------------+-------------+--------------+
|EBITA* | #0.82m| #0.64m| #2.15m|
+------------------------------------+-------------+-------------+--------------+
|Adjusted earnings per share ** | 0.4p| 0.3p| 1.0p|
+------------------------------------+-------------+-------------+--------------+
|Cash inflow from operating | | | |
|activities | #1.8m| #1.2m| #1.5m|
+------------------------------------+-------------+-------------+--------------+
* EBITA - Earnings before interest, tax, amortisation, share option expense and
loss on disposal of subsidiary undertaking.
** Based on EBITA before deferred financing amortisation.
HIGHLIGHTS
* Turnover up 3% on prior year but delivery of anticipated revenue growth
affected by slower than anticipated demand from core customers
* EBITA up 28% on prior year with no exceptional costs incurred in the
period to June 2007
* Good progress made in delivery of the Group's strategy to become a full
business communication outsource provider
* Operational execution of the strategy enhanced with the appointment of
Group Operations Officer
* Net debt reduced from #14.9m at December 31 2006 to #13.2m at 30 June
2007
Richard Atkins, Chairman commented:
"The Group continued to work hard to deliver its core strategy of providing
technologically enhanced print management and business communication solutions
and has seen good progress made in the first half of 2007.
After a strong first quarter, revenue from many core print management customers
has been adversely affected by corporate activity within these customers and the
adverse market conditions. This has meant that top line growth has been slower
than previously anticipated in the first six months of the year.
The Board is confident however that the Group can recover some of this delayed
revenue during the second half and ultimately sustain prior year earnings for
the full year."
For further information please contact:
TripleArc Plc
Jason Cromack, Chief Executive Officer 0844 800 0567
Richard Hodgson, Chief Financial Officer
Weber Shandwick Financial ultimately
Terry Garrett/ Nick Dibden/ James White 020 7067 0700
CHAIRMAN'S STATEMENT
The Board announces the Group's results for the six months ended 30 June 2007.
Overview
The Group has continued to work hard on delivering its core strategy of
providing technology enhanced print management and business communication
solutions to businesses seeking to reduce costs and streamline business process.
The Group differentiates its offering by providing customers with consultative
account management, extended owned and outsourced services and industry leading
technology which streamline the supply chain and facilitate sustainable cost
savings.
The progress achieved with this strategy in 2006 continued into the first
quarter of 2007 as the Group continued to experience solid progress in its key
business objectives. This was demonstrated through strong growth in account
development, lower levels of attrition from non-contracted customers and the
inflow of new revenues from contracts signed in 2006. In the second quarter,
however, corporate activity and internal restructuring at many of the print
management division's core customers resulted in delays to their print
management spend. The Group was not, therefore, able to continue on the growth
path indicated by its performance earlier in the year.
The Board is confident that the Group's strategy is correct and validated by the
market but it recognises that the implementation of its strategy may take longer
in the prevailing climate.
Results
Turnover for the six months to 30 June 2007 increased by 3% to #22.6 million
(2006 - #21.8 million). Whilst gross profit remained flat at #6.70 million (2006
- #6.68 million), effective control of costs allowed the Group to report EBITA
up 28 % to #0.82 million (2006 - #0.64 million).
After finance costs of #1.02 million (2006 - #0.67 million) - which included a
one off charge of #0.25 million associated with the amendment of the Group's
banking facilities in February 2007 - the Group recorded a loss before tax of
#0.38 million (2006 - loss of #1.5 million).
Positive operating cash flow and additional improvements in working capital
management allowed a further #1.2m of loan repayments to be made. Net debt at 30
June 2007 was #13.2m down from #14.9m at 31 December 2006.
New Contract Wins
The Board is pleased that three new long term contracts were agreed in the
period with Citroen, the Royal Institution of Chartered Surveyors and The
Countess of Chester NHS Trust with values ranging between #250,000 per annum and
#1 million per annum. In addition the Group has successfully negotiated a three
year extension to its multi million pound contract with General Healthcare Group
which will see it providing an increased range of products and services. The
Group has also been awarded two framework agreements, including the Office of
Government Commerce to provide print services.
However, despite these notable successes, the Group has continued to experience
a decline in its non contracted revenue base where customers are provided with
ad hoc 'traditional' print services. This decline was expected and the Group
remains focussed on transferring these customers onto a contractual basis for
the provision of the Groups services and solutions.
Whilst this will provide a sustainable and more visible earnings stream in the
future, a lower margin on the basic print will be traded for longer term
contracts that will offer the Group the ability to sell additional margin
enhancing owned services and technology solutions which provide continual
improvement and streamline the communication supply chain delivering substantial
benefits to these customers.
Board Changes
On the 23rd May 2007 the Company announced that with effect from 22nd May 2007,
Peter Ryding had been appointed as an independent non-executive Director of the
TripleArc Board. Peter is also a member of the audit and remuneration committees
of the TripleArc board.
Shane Greenan resigned as a non-executive director of the TripleArc Board in
July 2007 due to his impending emigration to Australia.
On 3rd August 2007 the Company announced the appointment of Daniel Emerson to
the TripleArc Board in the role of Group Operations Officer. Daniel has been
with the Group for five years and has fourteen years experience of the graphic
communications industry. Daniel will concentrate on the operational execution of
the Group's strategy and will also oversee a new training and development
program which will focus on a more consultative account development approach.
Capital reduction
On 14th March 2007, the capital reduction proposal, approved at the
Extraordinary General Meeting on 31 January 2007, was confirmed by the courts.
The Capital Reduction has enabled TripleArc plc to regain a positive balance on
its distributable reserves which, ultimately, should enable the Company to pay
dividends to shareholders at an appropriate time in the future. In addition, the
Board feels that the restructured balance sheet truly reflects the underlying
commercial position of the Group and believes that this will have a positive
impact on its future contract tendering activity.
Impact of the adoption of International Financial Reporting Standards ("IFRS")
The Group intends to adopt IFRS for the year ending 31 December 2007 and has
prepared this interim report in accordance with the accounting policies that
will be adopted at that date. As a result, comparative data for previous periods
has been restated. A reconciliation between the comparative figures and those
previously reported is set out in the notes to this statement.
Current Trading & Outlook
The Board is pleased with the progress the Company has made in implementing its
key strategies. However the delayed spend of its core customers in the second
quarter will only partly be mitigated by the second half year trading and the
impact of new business won will not be materially recognised until next year.
The Board continues to look at ways of driving greater productivity from the
Group's cost base and remains mindful of available working capital resources
and the impact that this has on the pace of the delivery of its growth plans.
Despite these challenging conditions the Board believes that the Group will
achieve a result for the full year broadly in line with last year.
Richard Atkins
Chairman
TripleArc Plc
27 September 2007
CONSOLIDATED INCOME STATEMENT
+-------------------------------------+-------+----------+----------+------------+
| | |Six months|Six months| Year ended |
| | | ended | ended | |
+-------------------------------------+-------+----------+----------+------------+
| | | 30 June | 30 June |31 December |
| | | 2007 | 2006 | 2006 |
+-------------------------------------+-------+----------+----------+------------+
| |Notes | #'000 | #'000 | #'000 |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Continuing Operations | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Revenue | 1| 22,595| 21,847| 43,836|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Cost of sales | | (15,895)| (15,165)| (29,925)|
+-------------------------------------+-------+----------+----------+------------+
|Gross profit | | 6,700| 6,682| 13,911|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Other operating expenses | | (5,880)| (5,759)| (11,568)|
+-------------------------------------+-------+----------+----------+------------+
|Amortisation of intangibles | | (255)| (128)| (383)|
+-------------------------------------+-------+----------+----------+------------+
|Exceptional items | 2| -| (317)| (386)|
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Operating profit before amortisation | | | | |
|of intangibles | | 820| 606| 1,957|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Amortisation of intangibles | | (255)| (128)| (383)|
+-------------------------------------+-------+----------+----------+------------+
|Operating profit after amortisation | | | | |
|of intangibles | | 565| 478| 1,574|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Finance costs | 3| (1,021)| (667)| (1,313)|
+-------------------------------------+-------+----------+----------+------------+
|(Loss)/profit before tax | | (456)| (189)| 261|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Tax | | 78| (266)| (186)|
+-------------------------------------+-------+----------+----------+------------+
|Loss/ (profit) for the period from | | | | |
|continuing operations | | (378)| (455)| 75|
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Discontinued operations | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|(Loss) for the period from | | | | |
|discontinued operations | | -| (1,091)| (1,091)|
+-------------------------------------+-------+----------+----------+------------+
|Loss for the period | | (378)| (1,546)| (1,016)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|(Loss)/ Earnings per share | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|From continuing operations | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Basic | 4| (0.2p)| (0.2p)| 0.04p|
+-------------------------------------+-------+----------+----------+------------+
|Diluted | 4| (0.2p)| (0.2p)| 0.04p|
+-------------------------------------+-------+----------+----------+------------+
|Total EPS | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Basic | 4| (0.2p)| (0.75p)| (0.5p)|
+-------------------------------------+-------+----------+----------+------------+
|Diluted | 4| (0.2p)| (0.75p)| (0.5p)|
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
+-----------------------------------------------+----------+----------+----------+
|Tax on items taken directly to equity | -| -| -|
+-----------------------------------------------+----------+----------+----------+
|Net income recognised directly in equity | -| -| -|
+-----------------------------------------------+----------+----------+----------+
|Loss for the period | (378)| (1,546)| (1,016)|
+-----------------------------------------------+----------+----------+----------+
|Total recognised income and expense for the | | | |
|period | (378)| (1,546)| (1,016)|
+-----------------------------------------------+----------+----------+----------+
CONSOLIDATED BALANCE SHEET
+--------------------------------------+-------+-----------+----------+----------+
| | | | | At 31 |
| | |At 30 June |At 30 June| December |
| | | 2007 | 2006 | 2006 |
+--------------------------------------+-------+-----------+----------+----------+
| |Notes | #'000 | #'000 | #'000 |
+--------------------------------------+-------+-----------+----------+----------+
|Non-current assets | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Goodwill | | 33,359| 33,359| 33,359|
+--------------------------------------+-------+-----------+----------+----------+
|Other intangible assets | | 457| 940| 693|
+--------------------------------------+-------+-----------+----------+----------+
|Property, plant & equipment | | 1,723| 1,753| 1,863|
+--------------------------------------+-------+-----------+----------+----------+
| | | 35,539| 36,052| 35,915|
+--------------------------------------+-------+-----------+----------+----------+
|Current assets | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Inventories | | 842| 1,293| 922|
+--------------------------------------+-------+-----------+----------+----------+
|Trade and other receivables | | 7,352| 9,077| 10,094|
+--------------------------------------+-------+-----------+----------+----------+
|Cash and cash equivalents | | -| 231| -|
+--------------------------------------+-------+-----------+----------+----------+
| | | 8,194| 10,601| 11,016|
+--------------------------------------+-------+-----------+----------+----------+
| | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Total assets | | 43,733| 46,653| 46,931|
+--------------------------------------+-------+-----------+----------+----------+
| | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Current liabilities | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Trade and other payables | | (9,673)| (11,290)| (11,128)|
+--------------------------------------+-------+-----------+----------+----------+
|Current tax liabilities | | (396)| (156)| (378)|
+--------------------------------------+-------+-----------+----------+----------+
|Bank overdraft and loans | | (2,530)| (2,177)| (2,946)|
+--------------------------------------+-------+-----------+----------+----------+
|Hire purchase obligations | | (50)| -| (50)|
+--------------------------------------+-------+-----------+----------+----------+
| | | (12,649)| (13,623)| (14,502)|
+--------------------------------------+-------+-----------+----------+----------+
| | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Non-current liabilities | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Deferred tax liabilities | | (267)| (353)| (345)|
+--------------------------------------+-------+-----------+----------+----------+
|Bank loans | | (10,452)| (13,043)| (11,645)|
+--------------------------------------+-------+-----------+----------+----------+
|Hire purchase obligations | | (209)| -| (233)|
+--------------------------------------+-------+-----------+----------+----------+
|Other long term payables | | (508)| (133)| (155)|
+--------------------------------------+-------+-----------+----------+----------+
| | | (11,436)| (13,529)| (12,378)|
+--------------------------------------+-------+-----------+----------+----------+
| | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Total liabilities | | (24,085)| (27,152)| (26,880)|
+--------------------------------------+-------+-----------+----------+----------+
| | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Net assets | | 19,648| 19,501| 20,051|
+--------------------------------------+-------+-----------+----------+----------+
| | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Equity | | | | |
+--------------------------------------+-------+-----------+----------+----------+
|Called-up share capital | | 10,353| 10,353| 10,353|
+--------------------------------------+-------+-----------+----------+----------+
|Share premium | | -| 20,175| 20,175|
+--------------------------------------+-------+-----------+----------+----------+
|Share option reserve | | 869| 849| 869|
+--------------------------------------+-------+-----------+----------+----------+
|Merger reserve | | (621)| (621)| (621)|
+--------------------------------------+-------+-----------+----------+----------+
|Group interest in shares of TripleArc | | | | |
|plc | | (150)| (150)| (150)|
+--------------------------------------+-------+-----------+----------+----------+
|Retained earnings | | 9,197| (11,105)| (10,575)|
+--------------------------------------+-------+-----------+----------+----------+
|Total equity | 5| 19,648| 19,501| 20,051|
+--------------------------------------+-------+-----------+----------+----------+
CONSOLIDATED CASH FLOW STATEMENT
+-------------------------------------+-------+----------+----------+------------+
| | |Six months|Six months| Year ended |
| | | ended | ended | |
+-------------------------------------+-------+----------+----------+------------+
| | | 30 June | 30 June |31 December |
| | | 2007 | 2006 | 2006 |
+-------------------------------------+-------+----------+----------+------------+
| |Notes | #'000 | #'000 | #'000 |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Net cash from operating activities | 6| 1,834| 1,231| 1,477|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Investing activities | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Purchases of property, plant & | | | | |
|equipment | | (108)| (424)| (195)|
+-------------------------------------+-------+----------+----------+------------+
|Loss on disposal of subsidiary | | | | |
|undertaking | | -| 700| 700|
+-------------------------------------+-------+----------+----------+------------+
|Disposal proceeds of property, plant | | -| -| 12|
|& equipment | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Cash paid for disposal of subsidiary | | | | |
|undertaking | | -| (451)| (453)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Net disposal of bank borrowings upon | | | | |
|disposal of subsidiary undertaking | | -| 873| 808|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Deferred consideration paid | | -| (535)| (535)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Net cash used in investing activities| | (108)| 163| 337|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Financing activities | | | | |
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Repayment of borrowings | | (1,586)| (1,026)| (2,046)|
+-------------------------------------+-------+----------+----------+------------+
|Net cash used in financing activities| | (1,586)| (1,026)| (2,046)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Increase/(decrease) in cash and cash | | | | |
|equivalents | | 140| 368| (232)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Cash and cash equivalents at | | | | |
|beginning of the period | | (665)| (433)| (433)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
|Cash and cash equivalents at end of | | | | |
|the period | | (525)| (65)| (665)|
| | | | | |
+-------------------------------------+-------+----------+----------+------------+
SIGNIFICANT ACCOUNTING POLICES
a) Basis of preparation
These condensed consolidated interim financial statements are for the six months
ended 30 June 2007. They have been prepared in accordance with IAS 34 "Interim
Financial Reporting" and the requirements of IFRS 1 "First-time Adoption of
International Financial Reporting Standards" relevant to interim reports,
because they are part of the period covered by the Group's first IFRS financial
statements for the year ended 31 December 2007. They do not include all of the
information required for full annual financial statements, and should be read in
conjunction with the consolidated financial statements of the Group for the year
ended 31 December 2006.
These condensed consolidated interim financial statements (the interim financial
statements) have been prepared in accordance with the accounting policies set
out below which are based on the recognition and measurement principles of IFRS
in issue as adopted by the European Union (EU) and are effective at
31 December 2007 or are expected to be adopted and effective at
31 December 2007, our first annual reporting date at which we are required to
use IFRS accounting standards adopted by the EU. The date of transition to IFRS
was 1 January 2006 (transition date).
The comparative data for the year to 31 December 2006 and for the six months to
30 June 2006 has been restated and reconciliations are included in note 7 to
explain the changes.
The financial information set out above does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985.
The statutory accounts for the year ended 31 December 2006, which have been
delivered to the Registrar of Companies, carry an unqualified report by the
auditors and do not contain a statement under Section 237 (2) or section 237 (3)
of the Companies Act 1985.
Copies of this Statement are being sent to Shareholders. Further copies are
available from the Company Secretary, Dorcan 300, Murdock Road, Dorcan, Swindon,
SN3 5HY.
b) Basis of consolidation
The financial statements of the Group consolidate the financial statements of
TripleArc plc and all its subsidiaries. Subsidiaries are entities controlled by
the group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until
that control ceases.
The group has elected not to apply IFRS 3 Business Combinations retrospectively
to business combinations prior to the date of transition. Accordingly the
classification of the combination (acquisition, reverse acquisition or merger)
remains unchanged from that used under UK GAAP. Assets and liabilities are
recognised at date of transition as they would be recognised under IFRS, and are
measured using their UK GAAP carrying amount immediately post-acquisition as
deemed cost under IFRS, unless IFRS requires fair value measurement. Deferred
tax is adjusted for the impact of any consequential adjustments after taking
advantage of the transitional provisions.
c) Goodwill
Goodwill representing the excess of the cost of acquisition over the fair value
of the group's share of the identifiable net assets acquired, is capitalised and
reviewed annually for impairment. Goodwill is carried at cost less accumulated
impairment losses. Negative goodwill is recognised immediately after acquisition
in the income statement.
Goodwill written off to reserves prior to the date of transition to IFRS remains
in reserves. There is no re-instatement of goodwill that was amortised prior to
transition to IFRS. Goodwill previously written off to reserves is not written
back to profit or loss on subsequent disposal.
d) Intangible assets
(i) Intellectual property rights
Intellectual property rights are included at cost and amortised on a straight
line basis over their useful economic lives. The amortisation charge is shown
within other operating expenses in the income statement.
(ii) Assets acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in
a business combination is deemed to have a cost to the group equal to its fair
value at the acquisition date. The fair value of the intangible asset reflects
market expectations about the probability that the future economic benefits
embodied in the asset will flow to the group.
(iii) Customer list
Customer lists are valued based on the expected cash flows of the list acquired
discounted back to the acquisition date. Customer lists are amortised over the
length of the contracts in place with customers at the date of acquisition. The
amortisation charge is shown within other operating expenses in the income
statement.
e) Property, plant and equipment
Property, plant and equipment are shown at historical cost less accumulated
depreciation, less any provision for impairment in value.
Depreciation is provided at rates calculated to write off the cost less
estimated residual value of each asset on a straight-line basis over its
expected useful life, except freehold land which is not depreciated, as follows:
Freehold buildings - 2.5% per annum
Motor vehicles - 4 - 5 years
Plant and machinery - 4 - 10 years
Fixtures, fittings and equipment - 4 to 10 years
Leasehold improvements are depreciated using the straight line method over the
period of the lease to the date of the next option-to-break clause.
The assets' useful lives, residual values and depreciation methods are annually
reassessed.
f) Impairment of non-current assets
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of the related
business combination and represent the lowest level within the group at which
management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include
goodwill, other intangible assets with an indefinite useful life, and those
intangible assets not yet available for use are tested for impairment at least
annually. All other individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised as the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell, and value in use based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
g) Inventories
Inventories are valued at the lower of cost and net realisable value. Costs are
assigned using the first in, first out cost formula. Net realisable value is
based on estimated selling price less further costs expected to be incurred on
completion and disposal.
h) Taxation
The tax charge for the period includes the charge for tax currently payable and
deferred taxation. The current tax charge represents the estimated amount due
that arises from the operations of the Group in the financial period and after
making adjustments in respect of prior years. The tax charge in the interim
report is calculated by reference to the estimated effective tax rate for a full
year.
Deferred tax is recognised in respect of all differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit, except where
the temporary difference arises from goodwill or from the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
Current and deferred tax is measured at the tax rates that are expected to apply
in the periods in which the timing differences are expected to reverse, provided
they are enacted or substantively enacted at the balance sheet date.
i) Foreign currencies
Normal trading activities denominated in foreign currencies are recorded in
sterling at the exchange rates at the dates of the transactions. Monetary assets
and liabilities denominated in foreign currencies at the balance sheet date are
reported at the rates of exchange prevailing at the balance sheet date; exchange
differences arising are taken to the profit and loss account.
j) Revenue
Revenue is measured by reference to the fair value of consideration received or
receivable by the group for goods supplied and services provided, excluding VAT
and trade discounts. Revenue is recognised upon the performance of services or
transfer of risk to the customer.
Revenue is measured by reference to the fair value of consideration received or
receivable by the group for goods supplied and services provided, excluding VAT
and trade discounts. Revenue is recognised upon the performance of services or
transfer of risk to the customer.
(i) Sale of goods
Revenue from the sale of goods is recognised when all the following conditions
have been satisfied:
* the group has transferred to the buyer the significant risks and rewards
of ownership of the goods which is generally upon delivery of the goods to
the customer
* the group retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the
goods sold which is generally upon delivery of the goods to the customer
* the amount of revenue can be measured reliably
* it is probable that the economic benefits associated with the
transaction will flow to the group, and
* the costs incurred or to be incurred in respect of the transaction can
be measured reliably.
(ii) Rendering of services
When the outcome of a transaction involving the rendering of services can be
estimated reliably, revenue associated with the transaction is recognised by
reference to the stage of completion of the transaction at the balance sheet
date. The outcome of the transaction is deemed to be able to be estimated
reliably when all the following conditions are satisfied:
* the amount of revenue can be measured reliably
* it is probable that the economic benefits associated with the
transaction will flow to the entity
* the stage of completion of the transaction at the balance sheet date can
be measured reliably and is estimated by reference to percentage completion
of the requested service (or component parts thereof) to be provided. This
is measured by reference to pre-calculated estimates of the amount of time
required to complete the service less any remaining days required for
completion at the balance sheet date and
* the costs incurred for the transaction and the costs to complete the
transaction can be measured reliably.
Where a contract for goods or services involves delivery of several
different elements and is not fully delivered or performed by the year end,
revenue is recognised based on the proportion of the fair value of the
elements delivered to the fair value of the overall contract.
(iii) Interest
Interest is recognised using the effective interest method which calculates the
amortised cost of a financial asset and allocates the interest income over the
relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
(iv) Royalties
Royalties are recognised on an accruals basis in accordance with the substance
of the relevant agreement.
(v) Dividends
Dividends are recognised when the shareholders right to receive payment is
established.
k) Employee benefits
i) Defined contribution plans
The Group makes contributions to the personal pension plans of certain
employees. Group contributions payable in respect of the accounting period are
charged to the profit and loss account.
A stakeholder pension scheme has been set-up by certain of the Group's
subsidiaries. All employees may elect to contribute a portion of their pre-tax
earnings into the stakeholder pension plan which is managed by an independent
party.
ii) Share-based payment transactions
Share based incentive arrangements are provided to employees under the Group's
share option schemes. Share based arrangements put in place since 7 November
2002 are valued at the date of grant and charged to operating profit over the
vesting period of the scheme.
Equity-settled share-based payments are measured at fair value at the date of
grant.
All equity-settled share-based payments are ultimately recognised as an expense
in the income statement with a corresponding credit to "share option reserve".
If vesting periods or other non-market vesting conditions apply, the expense is
allocated over the vesting period, based on the best available estimate of the
number of share options expected to vest. Estimates are subsequently revised if
there is any indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any expense
recognised in prior periods if share options ultimately exercised are different
to that estimated on vesting.
Upon exercise of share options the proceeds received net of attributable
transaction costs are credited to share capital, and where appropriate share
premium.
l) Leased assets
In accordance with IAS 17, the economic ownership of a leased asset is
transferred to the lessee if the lessee bears substantially all the risks and
rewards related to the ownership of the leased asset. The related asset is
recognised at the time of inception of the lease at the fair value of the leased
asset or, if lower, the present value of the minimum lease payments plus
incidental payments, if any, to be borne by the lessee. A corresponding amount
is recognised as a finance leasing liability. Leases of land and buildings are
split into land and buildings elements according to the relative fair values of
the leasehold interests at the date of entering into the lease agreement.
The interest element of leasing payments represents a constant proportion of the
capital balance outstanding and is charged to the income statement over the
period of the lease.
All other leases are regarded as operating leases and the payments made under
them are charged to the income statement on a straight line basis over the lease
term. Lease incentives are spread over the term of the lease.
m) Exceptional items
Items are classed as exceptional in the income statement when they are
non-recurring in nature and are material individually or, if of a similar type,
in aggregate and so need to be disclosed by virtue of their size or because of
their relevance to understanding the entity's financial performance.
n) Financial instruments and hedging
The Group classifies financial instruments, or their component parts, on initial
recognition as a financial asset, a financial liability or an equity instrument
in accordance with the substance of the contractual arrangement.
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes party to the contractual provisions of the
instrument.
The particular recognition and measurement methods adopted for the Group's
financial instruments are disclosed below:
Trade and other receivables
Trade and other receivables do not carry interest and are measured subsequent to
initial recognition at amortised cost using the effective interest method, less
provision for impairment. A provision for impairment of trade receivables is
established when there is evidence that the Group will not be able to collect
all amounts due according to the original terms of these receivables. The amount
of the provision is the difference between the carrying value and the present
value of estimated future cash flows, discounted at the effective interest rate.
Impairment losses are recognised in the income statement.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits on call with banks and
bank overdrafts. Bank overdrafts are disclosed as current borrowings on the
balance sheet.
Trade and other payables
Trade and other payables are not interest bearing and are measured subsequent to
initial recognition at amortised cost using the effective interest method, less
provision for impairment.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs.
Subsequent measurement is at amortised cost. Finance charges, including any
premiums payable or discounts, and direct issue costs are recognised in the
income statement over the period of the borrowings using the effective interest
rate method.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
Share warrant
Under IAS 39, the modification to the Group's funding arrangements with HSBC in
the year is not an extinguishment and therefore the costs and fees incurred in
adjusting the liability's carrying amount have been capitalised against the
loans and amortised over the remaining term.
The warrant meets the definition of a compound financial instrument under IAS 32
and so the liability and equity components have been recognised separately.
Notes to the interim financial statements
1. Segment information
Business segments
+--------------------------------------+-----------+-----------+------------+
|Revenue |Six months |Six months | Year ended |
| | ended | ended | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June |31 December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Technology | 626| 268| 642|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Fulfilment | 1,783| 1,976| 3,774|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Print management | 20,186| 19,603| 39,420|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Continuing operations | 22,595| 21,847| 43,836|
| | | | |
+--------------------------------------+-----------+-----------+------------+
Business segments
+--------------------------------------+-----------+-----------+------------+
|Result |Six months |Six months | Year ended |
| | ended | ended | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June |31 December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Technology | 158| (160)| (293)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Fulfilment | 187| 87| 702|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Print management | 1,597| 2,111| 4,056|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Central and unallocated costs | (1,377)| (1,560)| (2,891)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Operating profit - continuing | | | |
|operations | 565| 478| 1,574|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Finance costs | (1,021)| (667)| (1,313)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Taxation | 78| (266)| (186)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Discontinued operation | -| (1,091)| (1,091)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Loss for the period | (378)| (1,546)| (1,016)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
All operations are based within the UK.
Segmental analysis has increased over that reported in previous statements to
reflect the three main different business units that are owned by the Group.
Seasonal fluctuations
The Print Management and Fulfilment divisions do experience seasonal
fluctuations with typically a greater proportion of operating profit being
generated in the second half of the year than the first due to work performed
for retail, membership and subscription customers.
2. Exceptional items
+--------------------------------------+-----------+-----------+------------+
| |Six months |Six months | Year ended |
| | ended | ended | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June |31 December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Recruitment, reorganisation and | | | |
|integration costs | -| (317)| (386)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Total exceptional items | -| (317)| (386)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
3. Finance costs
+--------------------------------------+-----------+-----------+------------+
| |Six months |Six months | Year ended |
| | ended | ended | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June |31 December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Interest payable on bank borrowings | 519| 508| 994|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Interest payable on finance leases | 16| -| 18|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Amortisation of deferred financing | | | |
|costs | 93| 59| 119|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Other finance charges | 393| 100| 182|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Total finance costs | 1,021| 667| 1,313|
| | | | |
+--------------------------------------+-----------+-----------+------------+
Included in Other finance charges is #250,000 of costs associated with the
amendment of the banking facility with HSBC that was signed in February 2007.
4. Earnings per share
+--------------------------------------+-----------+-----------+------------+
| |Six months |Six months | Year ended |
| | ended | ended | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June |31 December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|(Loss)/ earnings | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Continuing | (378)| (455)| 75|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Total | (378)| (1,546)| (1,016)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Average number of shares during year | '000 | '000 | '000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|For basic earnings per share | 207,062| 207,062| 207,062|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Sharesave Scheme options | -| -| -|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|For diluted earnings per share | 207,062| 207,062| 207,062|
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Earnings per share | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Continuing - basic | (0.2p)| (0.2p)| 0.04p|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|- diluted | (0.2p)| (0.2p)| 0.04p|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Total - basic | (0.2p)| (0.75p)| (0.5p)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|- diluted | (0.2p)| (0.75p)| (0.5p)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
5. Reserves
+--------------------------------------+-----------+-----------+------------+
| | | | At 31 |
| |At 30 June |At 30 June | December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Balance at beginning of the period | 20,051| 21,047| 21,047|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Total recognised income and expense | | | |
|for the period | (378)| (1,546)| (1,016)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Credit to equity for share-based | -| -| 20|
|payments | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Capital reduction expenses taken to | | | |
|share premium account | (25)| -| -|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Balance at end of the period | 19,648| 19,501| 20,051|
| | | | |
+--------------------------------------+-----------+-----------+------------+
During the year, in order to eliminate the deficit on the Company's profit and
loss account, the Board has undergone a Capital Reduction pursuant to which the
Company's share premium account was reduced to zero and this balance was
credited to the profit and loss account.
6. Net cash from operating activities
+--------------------------------------+-----------+-----------+------------+
| |Six months |Six months | Year ended |
| | ended | ended | |
+--------------------------------------+-----------+-----------+------------+
| | 30 June | 30 June |31 December |
| | 2007 | 2006 | 2006 |
+--------------------------------------+-----------+-----------+------------+
| | #'000 | #'000 | #'000 |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|(Loss)/ profit before tax from | | | |
|continuing operations | (456)| (189)| 261|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Loss before tax from discontinued | | | |
|operations | -| (1,091)| (1,091)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Adjustments for: | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Depreciation and amortisation | 484| 393| 965|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Capital reduction expenses | (25)| -| -|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Interest expense | 93| 59| 119|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Share based payments | -| -| 19|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Profit on disposal of property, plant | | | |
|and equipment | -| -| (6)|
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Operating cash flow before working | | | |
|capital movements | 96| (828)| 267|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Increase in working capital | 1,720| 2,059| 957|
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Cash generated by operations | 1,816| 1,231| 1,224|
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Income taxes received | 18| -| 253|
| | | | |
+--------------------------------------+-----------+-----------+------------+
| | | | |
| | | | |
+--------------------------------------+-----------+-----------+------------+
|Net cash from operating activities | 1,834| 1,231| 1,477|
| | | | |
+--------------------------------------+-----------+-----------+------------+
7. Explanation of transition to IFRS
The reconciliation of equity at 1 January 2006 (date of transition to IFRS), at
31 December 2006 (date of last UK GAAP financial statements) and at 30 June
2006, together with a reconciliation of the UK GAAP profit for the six months to
30 June 2006, and for the year ended 31 December 2006, are included below to
enable a comparison to be made between the June 2007 and June 2006 interim
figures.
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. These
interim financial statements have been prepared taking the business combination
exemptions. Business combinations prior to 1 January 2006, the Group's date of
transition to IFRS, have not been restated to comply with IFRS 3 "Business
Combinations". Goodwill arising from these business combinations has not been
restated other than as set out in note b below. The changes as a result of the
transition to IFRS are described below.
(a) Intangible assets
Certain software costs have been transferred from property, plant and equipment
to intangible assets.
(b) Goodwill
IFRS3 prohibits the amortisation of goodwill, which is instead subject to annual
impairment reviews. Goodwill is stated in the opening balance sheet at 1 January
2006 at its UK GAAP carrying value of #34.9m with subsequent amortisation
reversed. The impact on operating profit is a credit of #1.9m for the year ended
31 December 2006 and a credit of #0.9m for the six months ended 30 June 2006. An
impairment review was performed at the date of transition and no impairment was
identified. The goodwill created upon the acquisition of Access Plus Marketing
Logistics Limited has been split into its constituent parts in line with IFRS 3
Business Combinations.
(c) Deferred tax
The adjustment relates to the treatment of buildings partly qualifying for
industrial buildings allowances (IBAs). Under UK GAAP, the future allowances
available are compared to the book value of the qualifying element of the
building only. Under IFRS, the book value of the entire building is taken into
account, resulting in a one off deferred tax charge on the introduction of IFRS
of #167k.
In accordance with IAS12 provision has been made for deferred tax on intangible
assets. This was not required under UK GAAP. The increase in the deferred tax
liability was #306k at the date of acquisition of Access Plus Marketing
Logistics Limited.
(d) Holiday pay accrual
Per IAS the company must accrue for holiday not taken by employees at the end of
each period. The effect on the net assets of this accrual is #48k at 1 January
2006, #107k at 30 June 2006 and #62k at 31 December 2006 with the corresponding
movements being taken to the income statement.
(e) Discontinued operations
Under IAS the balances relating to discontinued operations have been aggregated
and included in one line at the end of the income statement.
Reconciliation of UK GAAP LOSS to IFRS LOSS
Six months to June 2006
+---------------------------------------+--------+----------+--------+
| | UK |Effect of | IFRS |
| | | | |
+---------------------------------------+--------+----------+--------+
| | GAAP |transition| |
| | | | |
+---------------------------------------+--------+----------+--------+
| | | to IFRS | |
| | | | |
+---------------------------------------+--------+----------+--------+
|Continuing operations | '#000 | '#000 | '#000 |
| | | | |
+---------------------------------------+--------+----------+--------+
|Sales | 21,847| -| 21,847|
| | | | |
+---------------------------------------+--------+----------+--------+
|Cost of sales |(15,165)| -|(15,165)|
+---------------------------------------+--------+----------+--------+
|Gross profit | 6,682| -| 6,682|
| | | | |
+---------------------------------------+--------+----------+--------+
|Other operating expenses | (6,879)| 675| (6,204)|
+---------------------------------------+--------+----------+--------+
|Operating (loss)/ profit | (197)| 675| 478|
| | | | |
+---------------------------------------+--------+----------+--------+
|Finance costs | (667)| -| (667)|
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit before tax | (864)| 675| (189)|
| | | | |
+---------------------------------------+--------+----------+--------+
|Tax | -| (266)| (266)|
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit for the period from | | | |
|continuing operations | (864)| 409| (455)|
+---------------------------------------+--------+----------+--------+
| | | | |
+---------------------------------------+--------+----------+--------+
|D Discontinued operations | | | |
| | | | |
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit for the period from | | | |
|discontinued operations | (1,108)| 17| (1,091)|
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit for the period | (1,972)| 426| (1,546)|
| | | | |
+---------------------------------------+--------+----------+--------+
Reconciliation of UK GAAP LOSS to IFRS LOSS
Year to December 2006
+---------------------------------------+--------+----------+--------+
| | UK |Effect of | IFRS |
+---------------------------------------+--------+----------+--------+
| | GAAP |transition| |
| | | | |
+---------------------------------------+--------+----------+--------+
| | | to IFRS | |
| | | | |
+---------------------------------------+--------+----------+--------+
| | '#000 | '#000 | '#000 |
| | | | |
+---------------------------------------+--------+----------+--------+
|Continuing operations | | | |
| | | | |
+---------------------------------------+--------+----------+--------+
|Sales | 43,836| -| 43,836|
| | | | |
+---------------------------------------+--------+----------+--------+
|Cost of sales |(29,925)| -|(29,925)|
+---------------------------------------+--------+----------+--------+
|Gross profit | 13,911| -| 13,911|
| | | | |
+---------------------------------------+--------+----------+--------+
|Other operating expenses |(13,440)| 1,489|(11,951)|
+---------------------------------------+--------+----------+--------+
|Exceptional items | (386)| -| (386)|
+---------------------------------------+--------+----------+--------+
|Operating profit | 85| 1,489| 1,574|
| | | | |
+---------------------------------------+--------+----------+--------+
|Finance costs | (1,313)| -| (1,313)|
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit before tax | (1,228)| 1,489| 261|
| | | | |
+---------------------------------------+--------+----------+--------+
|Tax | 3| (189)| (186)|
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit for the period from | | | |
|continuing operations | (1,225)| 1,300| 75|
+---------------------------------------+--------+----------+--------+
| | | | |
+---------------------------------------+--------+----------+--------+
|Di Discontinued operations | | | |
| | | | |
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit for the period from | | | |
|discontinued operations | (1,108)| 17| (1,091)|
+---------------------------------------+--------+----------+--------+
|(Loss)/ profit for the period | (2,333)| 1,317| (1,016)|
| | | | |
+---------------------------------------+--------+----------+--------+
Reconciliation of equity
At 1 January 2006
+-------------------------------+--------------+-------------+----------+
| | UK | Effect of | IFRS |
+-------------------------------+--------------+-------------+----------+
| | GAAP |transition to| |
+-------------------------------+--------------+-------------+----------+
| | | IFRS | |
+-------------------------------+--------------+-------------+----------+
| | '#000 | '#000 | '#000 |
+-------------------------------+--------------+-------------+----------+
|Non-current assets | | | |
+-------------------------------+--------------+-------------+----------+
|Goodwill | 34,974| -| 34,974|
+-------------------------------+--------------+-------------+----------+
|Intangible assets | -| -| -|
+-------------------------------+--------------+-------------+----------+
|Property, plant & equipment | 2,206| -| 2,206|
+-------------------------------+--------------+-------------+----------+
|Deferred tax asset | | | |
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Current assets | | | |
+-------------------------------+--------------+-------------+----------+
|Inventories | 1,281| -| 1,281|
+-------------------------------+--------------+-------------+----------+
|Trade and other receivables | 11,370| -| 11,370|
+-------------------------------+--------------+-------------+----------+
|Cash and cash equivalents | 994| -| 994|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Total assets | 50,825| -| 50,825|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Current liabilities | | | |
+-------------------------------+--------------+-------------+----------+
|Trade and other payables | (12,220)| (48)| (12,268)|
+-------------------------------+--------------+-------------+----------+
|Current tax liabilities | (105)| -| (105)|
+-------------------------------+--------------+-------------+----------+
|Bank overdraft and loans | (3,308)| -| (3,308)|
+-------------------------------+--------------+-------------+----------+
|Provisions | -| -| -|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Retirement benefit obligation | -| -| -|
| | | | |
+-------------------------------+--------------+-------------+----------+
|Deferred tax liabilities | 80| (167)| (87)|
+-------------------------------+--------------+-------------+----------+
|Bank loans | (13,976)| -| (13,976)|
+-------------------------------+--------------+-------------+----------+
|Hire purchase obligations | -| -| -|
+-------------------------------+--------------+-------------+----------+
|Other long term liabilities | (34)| -| (34)|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Total liabilities | (29,563)| (215)| (29,778)|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Net assets | 21,262| (215)| 21,047|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Equity | | | |
+-------------------------------+--------------+-------------+----------+
|Called-up share capital | 10,353| -| 10,353|
+-------------------------------+--------------+-------------+----------+
|Share premium | 20,175| -| 20,175|
+-------------------------------+--------------+-------------+----------+
|Share option reserve | 849| -| 849|
+-------------------------------+--------------+-------------+----------+
|Merger reserve | (621)| -| (621)|
+-------------------------------+--------------+-------------+----------+
|Group interest in shares of | (150)| -| (150)|
|TripleArc plc | | | |
+-------------------------------+--------------+-------------+----------+
|Retained earnings | (9,344)| (215)| (9,559)|
+-------------------------------+--------------+-------------+----------+
| | | | |
+-------------------------------+--------------+-------------+----------+
|Total equity | 21,262| (215)| 21,047|
+-------------------------------+--------------+-------------+----------+
Reconciliation of Equity
At 31 December 2006
+-------------------------------+--------------+-----------+----------+
| | UK GAAP | Effect of | IFRS |
+-------------------------------+--------------+-----------+----------+
| | |transition | |
| | | to | |
+-------------------------------+--------------+-----------+----------+
| | | IFRS | |
+-------------------------------+--------------+-----------+----------+
| | '#000 | '#000 | '#000 |
+-------------------------------+--------------+-----------+----------+
|Non-current assets | | | |
+-------------------------------+--------------+-----------+----------+
|Goodwill | 32,475| 884| 33,359|
+-------------------------------+--------------+-----------+----------+
|Intangible assets | -| 693| 693|
+-------------------------------+--------------+-----------+----------+
|Property, plant & equipment | 1,920| (57)| 1,863|
+-------------------------------+--------------+-----------+----------+
|Deferred tax asset | -| -| -|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Current assets | | | |
+-------------------------------+--------------+-----------+----------+
|Inventories | 922| -| 922|
+-------------------------------+--------------+-----------+----------+
|Trade and other receivables | 10,094| -| 10,094|
+-------------------------------+--------------+-----------+----------+
|Cash and cash equivalents | -| -| -|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Total assets | 45,411| 1,520| 46,931|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Current liabilities | | | |
+-------------------------------+--------------+-----------+----------+
|Trade and other payables | (11,066)| (62)| (11,128)|
+-------------------------------+--------------+-----------+----------+
|Current tax liabilities | (378)| -| (378)|
+-------------------------------+--------------+-----------+----------+
|Bank overdraft and loans | (2,946)| -| (2,946)|
+-------------------------------+--------------+-----------+----------+
|Hire purchase obligations | (50)| -| (50)|
+-------------------------------+--------------+-----------+----------+
|Provisions | -| -| -|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Retirement benefit obligation | -| -| -|
| | | | |
+-------------------------------+--------------+-----------+----------+
|Deferred tax liabilities | 10| (355)| (345)|
+-------------------------------+--------------+-----------+----------+
|Bank loans | (11,645)| -| (11,645)|
+-------------------------------+--------------+-----------+----------+
|Hire purchase obligations | (233)| -| (233)|
+-------------------------------+--------------+-----------+----------+
|Other long term liabilities | (155)| -| (155)|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Total liabilities | (26,463)| (417)| (26,880)|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Net assets | 18,948| 1,103| 20,051|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Equity | | | |
+-------------------------------+--------------+-----------+----------+
|Called-up share capital | 10,353| -| 10,353|
+-------------------------------+--------------+-----------+----------+
|Share premium | 20,175| -| 20,175|
+-------------------------------+--------------+-----------+----------+
|Share option reserve | 869| -| 869|
+-------------------------------+--------------+-----------+----------+
|Merger reserve | (621)| -| (621)|
+-------------------------------+--------------+-----------+----------+
|Group interest in shares of | (150)| -| (150)|
|TripleArc plc | | | |
+-------------------------------+--------------+-----------+----------+
|Retained earnings | (11,678)| 1,103| (10,575)|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Total equity | 18,948| 1,103| 20,051|
+-------------------------------+--------------+-----------+----------+
Reconciliation of Equity
At 30 June 2006
+-------------------------------+--------------+-----------+----------+
| | UK GAAP | Effect of | IFRS |
+-------------------------------+--------------+-----------+----------+
| | |transition | |
| | | to | |
+-------------------------------+--------------+-----------+----------+
| | | IFRS | |
+-------------------------------+--------------+-----------+----------+
| | '#000 | '#000 | '#000 |
+-------------------------------+--------------+-----------+----------+
|Non-current assets | | | |
+-------------------------------+--------------+-----------+----------+
|Goodwill | 33,498| (139)| 33,359|
+-------------------------------+--------------+-----------+----------+
|Intangible assets | -| 940| 940|
+-------------------------------+--------------+-----------+----------+
|Property, plant & equipment | 1,800| (47)| 1,753|
+-------------------------------+--------------+-----------+----------+
|Deferred tax asset | -| -| -|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Current assets | | | |
+-------------------------------+--------------+-----------+----------+
|Inventories | 1,293| -| 1,293|
+-------------------------------+--------------+-----------+----------+
|Trade and other receivables | 9,077| -| 9,077|
+-------------------------------+--------------+-----------+----------+
|Cash and cash equivalents | 231| -| 231|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Total assets | 45,899| 754| 46,653|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Current liabilities | | | |
+-------------------------------+--------------+-----------+----------+
|Trade and other payables | (11,180)| (110)| (11,290)|
+-------------------------------+--------------+-----------+----------+
|Current tax liabilities | (156)| -| (156)|
+-------------------------------+--------------+-----------+----------+
|Bank overdraft and loans | (2,177)| -| (2,177)|
+-------------------------------+--------------+-----------+----------+
|Hire purchase obligations | -| -| -|
+-------------------------------+--------------+-----------+----------+
|Provisions | -| -| -|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Retirement benefit obligation | -| -| -|
| | | | |
+-------------------------------+--------------+-----------+----------+
|Deferred tax liabilities | 79| (432)| (353)|
+-------------------------------+--------------+-----------+----------+
|Bank loans | (13,043)| -| (13,043)|
+-------------------------------+--------------+-----------+----------+
|Hire purchase obligations | -| -| -|
+-------------------------------+--------------+-----------+----------+
|Other long term liabilities | (133)| -| (133)|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Total liabilities | (26,610)| (542)| (27,152)|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Net assets | 19,289| 212| 19,501|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Equity | | | |
+-------------------------------+--------------+-----------+----------+
|Called-up share capital | 10,353| -| 10,353|
+-------------------------------+--------------+-----------+----------+
|Share premium | 20,175| -| 20,175|
+-------------------------------+--------------+-----------+----------+
|Share option reserve | 849| -| 849|
+-------------------------------+--------------+-----------+----------+
|Merger reserve | (621)| -| (621)|
+-------------------------------+--------------+-----------+----------+
|Group interest in shares of | | | |
|TripleArc plc | (150)| -| (150)|
+-------------------------------+--------------+-----------+----------+
|Retained earnings | (11,317)| 212| (11,105)|
+-------------------------------+--------------+-----------+----------+
| | | | |
+-------------------------------+--------------+-----------+----------+
|Total equity | 19,289| 212| 19,501|
+-------------------------------+--------------+-----------+----------+
INDEPENDENT REVIEW REPORT TO TRIPLEARC PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2007 set out on pages x to y. We have read the
other information contained in the interim report, which comprises the
highlights and the Chairman's statement 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 guidance contained
in APB Bulletin 1999/4 "Review of Interim Financial Information". Our review
work has been undertaken so that we might state to the company those matters we
are required to state to them in a 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 conclusion we have formed.
Directors' responsibilities
The interim 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 interim report.
As disclosed in note 7, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. This interim report has been prepared in
accordance with International Accounting Standard 34 "Interim Financial
Reporting" and the requirements of IFRS 1 "First-time Adoption of International
Financial Reporting Standards" relevant to interim reports.
The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
"Review of Interim Financial Information" issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of 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
International Standards on Auditing (UK and Ireland) 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 six months
ended 30 June 2007.
Grant Thornton UK LLP
Chartered Accountants
Birmingham, England
27 September 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFVEADIDFID
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