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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vebnet (Hldgs) | LSE:VBT | London | Ordinary Share | GB0032392986 | ORD �1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 253.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:5349P
Vebnet Holdings PLC
06 March 2008
VEBNET (HOLDINGS) PLC
INTERIM RESULTS
Vebnet, the AIM-listed, leading provider of technology based employee benefit
solutions, confirms further strong growth in its core FIX&FLEX(R) business
during the most recent six months ended 31 December 2007. This latest half-year
period saw continuing increases in customer and employee enrolment numbers and
in revenues and profitability.
Unaudited Unaudited Unaudited
Six months ended Six months ended Year
31 December 2007 31 December 2006 ended
£'000 £'000 30 June
2007
£'000
Revenue 2,585 2,102 5,245
Operating profit (loss) before
financing costs 171 (147) 416
Profit/(Loss) before tax 218 (100) 490
Earnings/(Loss) per share 2.3p (1p) 3.5p
Net assets 3,287 2,516 3,019
Net cash 1,870 1,076 1,894
Highlights
* Total revenues increased by 23% from £2,102k to £2,585k.
* Continued strong growth in core FIX&FLEX(R) business:
- Revenues from core business increased to £2,008k (£1,703k) - an
increase of 18%.
- Our direct distribution channel now represents 91% of new FIX&FLEX(R)
revenues.
- Customer numbers increased from 119 to 137 and the number of employees
using FIX&FLEX(R) as at 31 December 2007 was 282,071 an increase of 15%
from 30 June 2007.
* Costs increased by only 7% from £2,249 to £2,414k reflecting the
additional resources required to deliver the volume of new business won and
demonstrating the operating leverage implicit in our business model.
* For these interim results Vebnet has adopted International Accounting
Standards - IFRS - for the first time. Prior year results have been restated
onto the same basis.
* On 24 September 2007 Mercer entered into a ten-year licence agreement to
use Vebnet's FIX&FLEX(R) technology as the core application of its UK based
flexible benefits services. Mercer is one of the top four global employee
benefit consultants, operating in over 40 countries. This licence agreement
covers the migration of Mercer's existing UK client base to FIX&FLEX(R) as
well as giving Mercer and Vebnet options to extend the agreement into other
key European markets.
* More and more new and existing customers are procuring multiple services
from Vebnet, including reward consultancy, benefit scheme design,
communications, brokering, helpdesk and outsourced administration as well as
the core technology platform.
* Trading since the half-year-end has also been encouraging:
- The number of new implementations targeted for the second half of the
financial year is 15, adding at least a further 24,000 new employee
enrolments.
- New customers include Grant Thornton (4,300 employees) and First Great
Western (4,600 employees).
- Strong pipeline of new prospects.
- On 30 January 2008 Vebnet signed a five-year licence agreement with
Watson Wyatt Asia Pacific to promote FIX&FLEX(R) in the region. The
product will be made available from Watson Wyatt's 21 Asian offices and
will be a key delivery component of their flexible benefits proposition
for this important regional market.
Derek Scott, Chairman, stated: "All key performance metrics of our core business
continue to exhibit meaningful rates of growth and the Board is confident of
meeting market expectations for the full year to 30 June 2008."
The Chairman continued, "The strength of these interim results and our prospects
for the full year provide further evidence of the company's progression from
exhibiting potential to achievement of significant milestones. We have built an
outstanding quality of customer base with similar high quality prospects in the
pipeline for the future. We have also developed and broadened our service
offering to our customers and we are now providing a full range of complementary
services bringing real value to a number of those customers in all aspects of
flexible benefit provision with increasingly good earnings visibility. Our
services are now capable of delivery on a global scale and we expect to see
solid growth through a number of international partnerships in the foreseeable
future. The flexibility of our technology and service menu enables us
efficiently to create mutually valuable collaborations with other global players
who have complementary product or service offerings. The Board believes the
combination of these factors underpins the company's longer term prospects. "
Enquiries
Vebnet
Gerry O'Neill (CEO) 0131 270 5502; 07990 584096
gerryo@vebnet.com
Stephen Thurlow (CFO) 0131 270 5503; 07899 912522
stephent@vebnet.com
Seymour Pierce (NOMAD and broker)
Jonathan Wright 0207 107 8000
jonathanwright@seymourpierce.com
Note to Editors
Founded in 2000, Vebnet (www.vebnet.com) is a leading provider of technology and
managed services related to total reward and flexible benefit programmes. Vebnet
can provide individual solution components or a full end-to-end service covering
reward consultancy, benefit scheme design, communications, brokering,
technology, helpdesk and outsourced administration. These solutions drive
employee retention and empowerment and are key to managing the cost of employee
benefit provision for employers. Solutions are delivered through an employee
benefits portal which can be deployed both in the UK and overseas.
Interim announcement
The first half to 31 December 2007 was a further period of significant progress
in Vebnet's core business. All key performance metrics of our core business
continue to exhibit meaningful rates of growth.
Financial Review
In the half-year, total revenues increased by 23% from £2,102k to £2,585k.
Revenues from Vebnet's core FIX&FLEX(R) business increased in this period 18% to
£2,008k (£1,703k). As at 31 December 2007, the recurring revenue component of
this (for the six month period) was £1,310k, up from £906k for the equivalent
period in 2006, an increase of 45%.
Costs increased by only 7% from £2,249k to £2,414k, reflecting the additional
resources required to deliver the volume of new business won and demonstrating
the operating leverage implicit in our business model.
As a result, pre-tax profit for the six months moved from a loss of £100k to a
profit of £218k. Basic earnings per share increased to 2.3p.
Net cash at 31 December 2007 reduced marginally from £1,894 (30 June 2007) to
£1,870k largely reflecting accounting rules under IFRS. Trade debtors at 31
December 2007 were £1,639k. We believe there is minimal bad debt exposure in
this number.
Commercial and Market Review
The number of employees using FIX&FLEX(R) as at 31 December 2007 was 282,071, an
increase of 15% from 30 June 2007. Customer numbers increased from 119 to 137.
More and more new and existing customers are procuring multiple services from
Vebnet including reward consultancy, benefit scheme design, communications,
brokering, helpdesk and outsourced administration as well as the core technology
platform.
Our direct distribution channel now represents 91% of new, core revenues,
reflecting the investment made in sales and marketing since 2006. This channel
also produces higher margins for Vebnet in software licence fees.
Our licence channel delivered lower volume of new business but client quality
remained high.
Revenues from clients of 4th Contact (whom Vebnet acquired in October 2006) were
ahead of plan and we have minimal levels of customer attrition.
On 24 September 2007 Mercer entered into a ten-year licence agreement to use
Vebnet's FIX&FLEX(R) technology as the core application of its UK based flexible
benefits services. Mercer is one of the top four global employee benefit
consultants operating in over 40 countries. This agreement covers the migration
of Mercer's existing UK client base to FIX&FLEX(R) as well as giving Mercer and
Vebnet options to extend the agreement into other key European markets.
In terms of competition, we continue to be well positioned. We have visibility
of most tenders that come to market and win a large proportion of these either
directly or with/through one of our distribution partners. Our sales pipeline is
developed through a variety of marketing activities including PR, prospect
seminars, outbound calling and joint events with partners all of which are
proving effective.
Long Term Incentive Plan (LTIP)
At the Annual General Meeting of Vebnet (Holdings) plc on the 28 November 2007,
the company's shareholders approved the introduction of an LTIP to align the key
objectives of Directors and senior management with those of shareholders, namely
maximising shareholder value and complying with industry best practice. The
Remuneration Committee of Vebnet will supervise the operation of the LTIP. To
date no awards have been made under the LTIP.
Current Trading and Prospects
Trading since the half-year-end has also been encouraging. We continue to
maintain the quality of our client base through a number of new, large customer
wins and we have a strong and growing pipeline of future prospects. The number
of new implementations currently targeted for the second half of the financial
year is 15, adding at least a further 24,000 new employee enrolments. New
customers include Grant Thornton (4,300 employees) and First Great Western
(4,600 employees).
On 30 January 2008 Vebnet signed a five-year licence agreement with Watson Wyatt
Asia Pacific to promote FIX&FLEX(R) in the region. The product will be made
available from Watson Wyatt's 21 Asian offices and will be a key delivery
component of their flexible benefits proposition for this important growth
market.
The Board is very confident about the Company's ability to maintain its market
leadership position. We continue to look for opportunities to add shareholder
value through profitable sales growth in the UK and in selective overseas
markets and by synergistic acquisitions, while at the same time working closely
with large UK and overseas clients of our distribution partner network.
The Board is confident of meeting market expectations for the full year to 30
June 2008. The strength of these interim results and our prospects for the full
year provide further evidence of the company's progression from exhibiting
potential to achievement of significant milestones. We have built an outstanding
quality of customer base with similar high quality prospects in the pipeline for
the future. We have also developed and broadened our service offering to our
customers and we are now providing a full range of complementary services
bringing real value to a number of those customers in all aspects of flexible
benefit provision with increasingly good earnings visibility. Our services are
now capable of delivery on a global scale and we expect to see solid growth thr
ough a number of international partnerships in the foreseeable future. The
flexibility of our technology and service menu enables us efficiently to create
mutually valuable collaborations with other global players who have
complementary product or service offerings. The Board believes the combination
of these factors underpins the company's longer term prospects.
IFRS Transition Note
These condensed, interim consolidated financial statements form part of the
first reporting period that will be prepared under IFRS. An explanation on how
the transition from accounting under UK GAAP to IFRS has affected the Group is
set out on pages 15 to 21. The accounting policies impacted by the adoption of
IFRS are set out later in the interim report.
The Group's date of transition to IFRS was 1 July 2006. The main change in the
financial information compared with that reported previously under UK GAAP was
that, in accordance with IAS 38, certain development costs are capitalised
rather than expensed when all conditions set out under accounting policy note 1
(e) have been met. Previously under UK GAAP all development costs were expensed.
DEREK SCOTT
CHAIRMAN
21 MARCH 2008
Consolidated income statement
for the six month period ended 31 December 2007
------------------------------
Unaudited Unaudited Unaudited
6 months to 6 months to Year ended
31 Dec 07 31 Dec 06 30 June 07
£000 £000 £000
Revenue 2,585 2,102 5,245
Operating costs
Administrative expenses (1,642) (1,427) (3,210)
Research & development (569) (617) (1,268)
Sales & marketing (203) (205) (351)
--------- --------- ----------
Operating profit/(loss) before
financing costs 171 (147) 416
Financial income 47 47 75
Financial expenses - - (1)
--------- --------- ----------
Profit/(loss) before taxation 218 (100) 490
Taxation - - -
--------- --------- ----------
Profit/(loss) for the period 218 (100) 490
--------- --------- ----------
Profit/(loss) per ordinary share
Basic and diluted profit/(loss) per
share 2.3p (1p) 3.5p
--------- --------- ----------
Note:
All profit is attributable to the equity holders of the parent.
Revenue and profit/(loss) on ordinary activities before taxation for the current
and previous year relate wholly to continuing activities.
Consolidated balance sheet
as at 31 December 2007
--------------------------------
Unaudited Unaudited Unaudited
As at As at As at
31 Dec 07 31 Dec 06 30 June 07
Assets
Non-current assets
Property, plant and equipment 254 974 298
Intangible assets 1,079 25 846
--------- --------- ---------
Total non-current assets 1,333 999 1,144
--------- --------- ---------
Current assets
Trade and other receivables 1,960 2,087 2,262
Cash and cash equivalents 1,870 1,076 1,894
--------- --------- ---------
Total current assets 3,830 3,163 4,156
--------- --------- ---------
--------- --------- ---------
Total assets 5,163 4,162 5,300
--------- --------- ---------
Current liabilities
Trade and other payables 777 658 1,184
Obligations under finance leases - 4 -
Deferred income 1,099 984 1,097
--------- --------- ---------
Total current liabilities 1,876 1,646 2,281
--------- --------- ---------
--------- --------- ---------
Total liabilities 1,876 1,646 2,281
--------- --------- ---------
Net assets 3,287 2,516 3,019
--------- --------- ---------
Equity
Called up Share Capital 9,324 9,324 9,324
Share Premium Account 639 639 639
Capital Reserve (2,951) (2,951) (2,951)
Profit and Loss Account (3,725) (4,496) (3,993)
--------- --------- ---------
Total Equity 3,287 2,516 3,019
--------- --------- ---------
Consolidated cash flow statement
for the six month period ended 31 December 2007
--------------------------------
Unaudited Unaudited Unaudited
6 mths to 6 mths to Year ended
31 Dec 07 31 Dec 06 30 June 07
Cash flows from operating activities
Profit/(loss) for the period 218 (100) 490
Adjustments for:
Depreciation 115 107 235
Amortisation 85 - 50
--------- --------- ---------
Operating profit before changes in
working capital 418 7 775
Decrease/(increase) in trade and other
receivables 387 (1,240) (1,368)
(Decrease)/increase in trade and other
payables (405) 201 774
--------- --------- ---------
Cash generated/(used) by operations 400 (1,032) 181
Investing activities
Acquisition of property, plant and
equipment and intangible assets (474) (802) (861)
--------- --------- ---------
Cash flow from investing activities (474) (802) (861)
--------- --------- ---------
Cash flows from financing activities
Proceeds from the issue of share capital - 205 -
Purchase of own shares - - (90)
Sale of own shares 50 - 3
Repayment of finance lease liabilities - (8) (11)
--------- --------- ---------
Net cash inflow/(outflow) from financing
activities 50 197 (98)
--------- --------- ---------
Net decrease in cash and cash equivalents (24) (1,637) (778)
Outflow from capital element of finance
lease payments - 8 11
Cash and cash equivalents at start of
period 1,894 2,661 2,661
--------- --------- ---------
Cash and cash equivalents at the end of
period 1,870 1,032 1,894
--------- --------- ---------
Consolidated Interim Statement of Changes in Equity
Share Share Capital
Capital Premium Reserve
£000 £000 £000
Balance at 1 July 06 9,178 580 (2,951)
Loss for the period - - -
--------- -------- ---------
Total recognised expense for the - - -
period --------- -------- ---------
Issue of shares 146 59 -
--------- -------- ---------
Balance at 31 December 06 9,324 639 (2,951)
--------- -------- ---------
Purchase of own shares by employee - - -
trust
Sale of own shares by employee - - -
trust
--------- -------- ---------
Net expense recognised directly in - - -
equity
Profit for the period - - -
--------- -------- ---------
Total recognised income for the - - -
period --------- -------- ---------
--------- -------- ---------
Balance at 30 June 07 9,324 639 (2,951)
--------- -------- ---------
Sale of own shares by employee - - -
trust --------- -------- ---------
Net income recognised directly in - - -
equity
Profit for the period - - -
--------- -------- ---------
Total recognised income for the - - -
period --------- -------- ---------
--------- -------- ---------
Balance at 31 December 07 9,324 639 (2,951)
--------- -------- ---------
Consolidated Interim Statement of Changes in Equity (continued)
Profit and Loss Account Total Equity
£000 £000
Balance at 1 July 06 (4,396) 2,411
Loss for the period (100) (100)
---------- ---------
Total recognised expense for the
period (100) (100)
---------- ---------
Issue of shares - 205
---------- ---------
Balance at 31 December 06 (4,496) 2,516
---------- ---------
Purchase of own shares by employee
trust (90) (90)
Sale of own shares by employee trust 3 3
---------- ---------
Net expense recognised directly in
equity (87) (87)
Profit for the period 590 590
---------- ---------
Total recognised income for the
period 503 503
---------- ---------
---------- ---------
Balance at 30 June 07 (3,993) 3,019
---------- ---------
Sale of own shares by employee trust 50 50
---------- ---------
Net income recognised directly in
equity 50 50
Profit for the period 218 218
---------- ---------
Total recognised income for the
period 268 268
---------- ---------
---------- ---------
Balance at 31 December 07 (3,725) 3,287
---------- ---------
Notes to the consolidated interim financial statements
Accounting Policies
a) Basis of preparation
These condensed, interim consolidated 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 and effective at 30 June 2008 or as are expected to be adopted
and effective at 30 June 2008, our first annual reporting date at which we are
required to use IFRS accounting standards adopted by the EU.
Transitional arrangements
These condensed, interim consolidated financial statements are for the six
months ended 31 December 2007 and have been prepared with regard to 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 ending 30
June 2008. They do not include all of the information required for full
financial statements, and should be read in conjunction with the consolidated
financial statements (under UK GAAP) of the Group for the year ended 30 June
2007.
Vebnet's consolidated financial statements were prepared in accordance with UK
GAAP until 30 June 2006. The date of transition to IFRS was 1 July 2006. The
comparative figures for the period ended 30 June 2007 have been restated to
reflect changes in accounting policies as a result of the adoption of IFRS.
The Group has taken the exemption to apply IAS 38 from 1 July 2006. Prior to
this date all development costs were expensed. From 1 July 2006 the Group has
adopted IAS 38.
The IFRS accounting policies of the Group are detailed below.
In addition, the Group has taken the following optional exemptions from the full
retrospective application of IFRS accounting policies:
Business Combinations - the provisions of IFRS 3 'Business Combinations' have
been applied retrospectively from 1 July 2006. Vebnet has chosen not to restate
business combinations that took place before the date of transition.
Share Based payments - Vebnet has applied the option not to apply IFRS 2 to
equity instruments granted on or before 7 November 2002.
An explanation of how the transition from UK GAAP to IFRS has affected the Group
is set out on pages 15 to 21.
b) Statement of compliance
These condensed consolidated interim financial statements for the six months
ended 31 December 2007 have been prepared in accordance with International
Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting as
adopted by the EU. They do not include all the information and disclosures
required in the annual financial statements
and should be read in conjunction with the Group's audited financial statements
as at 30 June 2007 which are available upon request from the Company's head
office at 5-9 Thistle Street , Edinburgh, EH2 1DF or at www.vebnet.com.
The interim financial statements were authorised for issue by the Directors on 5
March 2008.
c) Basis of consolidation
On acquisition of a subsidiary its assets and liabilities are recorded at their
fair value as at the date of acquisition. The results of acquired subsidiaries
are included within the consolidated profit and loss account from the date of
acquisition.
The group financial statements consolidate the financial statements of the
company and its subsidiary undertakings using the acquisition method.
Intra-group transactions are eliminated on consolidation.
d) Revenue
Revenue derives from the principal activities of the Group and is stated net of
value added tax.
Revenue deriving from support contracts and fixed term licences is recognised
over the relevant contract periods. Revenue deriving from the delivery of
professional services is calculated by reference to the value of work performed
to date as a proportion of total contract value. Revenue deriving from the
supply of other goods and services is recognised following the provision of
goods and services.
e) Intangible Assets
Cost of acquiring customer base
The intangible assets arising from the acquisition of 4th Contact Limited have
been attributed to the cost of acquiring their customer base. The cost
represents the excess of the cost of acquisition over the Company's interest in
the fair value of the identifiable assets and liabilities of 4th Contact at the
date of acquisition and is stated at cost less accumulated amortisation and any
impairment in value. Amortisation is calculated to write off the cost of the
customer base on a straight-line basis over 6 years, which is estimated to be
its useful life.
Research and development costs
Research costs are expensed as incurred. An intangible asset arising from
development should be recognised if and only if the Group can demonstrate all of
the following:
a) an asset is created that can be identified;
b) it is probable that the asset created will be technical and commercially
feasible and the Group has sufficient resources to complete development ;
c) the asset is expected to generate future economic benefits;
d) the cost of developing the asset can be measured reliably
The expenditure capitalised includes the cost of materials, direct labour and an
appropriate proportion of overheads. Other development expenditure is recognised
in the income statement as an expense as incurred.
Amortisation of the asset begins when the development is complete and the asset
is available for use. It is amortised over period of expected future sales.
Assets are tested for impairment on annual basis.
Capitalised development costs are stated at cost less accumulated amortisation
and impairment losses.
Other intangible assets excluding goodwill
Purchased software are stated at the cost less accumulative amortisation.
Amounts capitalised under purchased software are amortised straight-line over 3
years.
f) Property, plant and equipment
The cost of property, plant and equipment is their purchase price, together with
incidental costs of acquisition. Depreciation is provided at the following
annual rates in order to write off each asset over its estimated useful life:
Improvements to property - 10% on cost
Fixtures, fittings & equipment - 20 to 33.3% on cost
For assets acquired on the purchase of a business and included at fair value,
the fair value is depreciated over the remaining estimated life.
g) Amounts recoverable on contracts
For contracts where the outcome can be assessed with reasonable certainty, an
appropriate proportion of the estimated profit earned to date is recognised and
the balance taken on completion. Full provision is made for anticipated losses.
Amounts recoverable on contracts are included in debtors net of payments
received from the customer.
h) Deferred Taxation
Deferred taxation is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date, where transactions or
events that result in an obligation to pay more or a right to pay less tax in
the future have occurred by the balance sheet date, with certain limited
exceptions.
Deferred tax is calculated on an undiscounted basis at the tax rates that are
expected to apply in the periods in which the timing differences are expected to
reverse, based on tax rates and laws enacted or substantively enacted at the
balance sheet date.
No deferred tax asset has been recognised, as its recoverability at this stage
is relatively uncertain.
i) Operating Leases
Operating lease rentals are charged to income in equal annual amounts over the
lease term.
j) Hire Purchase and Leasing Commitments
Assets obtained under hire purchase contracts or finance leases are capitalised
at their fair value in the balance sheet. Those held under hire purchase
contracts are depreciated over their estimated useful lives. Those held under
finance leases are depreciated over their estimated useful lives, or the lease
term, whichever is the shorter. The interest element of these obligations is
charged to the profit and loss account over the relevant period. The capital
element of the future payments is treated as a liability.
k) Pension Costs
The company makes a group personal pension available for employees and certain
directors. Contributions payable for the period are charged to the profit and
loss account.
l) Investments
Investments held as fixed assets are stated at cost, less provision for any
impairment.
m) Financial Instruments
Financial instruments are classified and accounted for, according to the
substance of the contractual arrangement, as either financial assets, financial
liabilities or equity instruments. An equity instrument is any contract that
evidences a residual interest in the assets of the company after deducting all
of its liabilities.
n) Share Based Payments
The Group has applied the requirements of IFRS 2 Share-based Payments. In
accordance with the transitional provisions, IFRS 2 has been applied to all
grants of equity instruments after 7 November 2002 that were unvested as of 1
July 2005. The fair value of share options issued by the company is charged to
the profit and loss account over the vesting period for these options. The fair
value of these options is determined using the Black Scholes Pricing model.
Charges to the profit and loss account are included within staff costs and
credits are included in the share based payments reserve.
o) Risks and uncertainties
The principal risks and uncertainties affecting the business activities of the
Group remain those detailed on page 10 of the 2007 Annual Report.
Explanation of transition to IFRSs
Reconciliation of Equity - 1 July 2006
UK GAAP in IFRS IFRS
IFRS format re-classification
£000 £000 £000
Non-current assets
Property, plant and
equipment 303 (33) 270
Intangibles - 33 33
-------- ------------ -------
Total non-current
assets 303 - 303
-------- ------------ -------
Current assets
Trade and other
receivables 888 - 888
Cash and cash
equivalents 2,672 - 2,672
-------- ------------ -------
Total current assets 3,560 - 3,560
-------- ------------ -------
Total assets 3,863 - 3,863
-------- ------------ -------
Current liabilities
Trade and other
payables 622 - 622
Obligations under
finance leases 12 - 12
Deferred income 818 - 818
-------- ------------ -------
Total current
liabilities 1,452 - 1,452
-------- ------------ -------
Non-current liabilities
Loans and overdrafts - - -
Obligations under finance - - -
leases
Deferred income - - -
-------- ------------ -------
Total non-current - - -
liabilities -------- ------------ -------
Total liabilities 1,452 - 1,452
-------- ------------ -------
Net assets 2,411 - 2,411
-------- ------------ -------
Equity
Called up share
capital 9,178 - 9,178
Share premium account 579 - 579
Capital reserve (2,950) - (2,950)
Profit and Loss
Account (4,396) - (4,396)
-------- ------------ -------
Total Equity 2,411 - 2,411
-------- ------------ -------
Computer software costs were capitalised as tangible fixed assets under UK GAAP.
In accordance with IFRS, computer software costs are capitalised as intangible
assets. This results in the reclassification from property, plant and equipment
to intangible assets.
Explanation of transition to IFRSs
Reconciliation of Equity - 31 December 2006
UK GAAP in IFRS IFRS
IFRS format re-classification
£000 £000 £000
Non-current assets
Property, plant and
equipment 999 (25) 974
Intangibles - 25 25
-------- ------------ -------
Total non-current
assets 999 - 999
-------- ------------ -------
Current assets
Trade and other
receivables 2,087 - 2,087
Cash and cash
equivalents 1,076 - 1,076
-------- ------------ -------
Total current assets 3,163 - 3,163
-------- ------------ -------
Total assets 4,162 - 4,162
-------- ------------ -------
Current liabilities
Trade and other
payables 658 - 658
Obligations under
finance leases 4 - 4
Deferred income 984 - 984
-------- ------------ -------
Total current
liabilities 1,646 - 1,646
-------- ------------ -------
Non-current liabilities
Loans and overdrafts - - -
Deferred income - - -
Obligations under finance - - -
leases
-------- ------------ -------
Total non-current - - -
liabilities -------- ------------ -------
Total liabilities 1,646 - 1,646
-------- ------------ -------
Net assets 2,516 - 2,516
-------- ------------ -------
Equity
Called up share
capital 9,324 - 9,324
Share premium account 639 - 639
Capital reserve (2,951) - (2,951)
Profit and Loss
Account (4,496) - (4,496)
-------- ------------ -------
Total Equity 2,516 - 2,516
-------- ------------ -------
Computer software costs were capitalised as tangible fixed assets under UK GAAP.
In accordance with IFRS, computer software costs are capitalised as intangible
assets. This results in the reclassification from property, plant and equipment
to intangible assets.
Explanation of transition to IFRS
Reconciliation of Equity - 30 June 2007
UK GAAP in IFRS IFRS
IFRS format re-classification
£000 £000 £000
Non-current assets
Property, plant and
equipment 334 (36) 298
Intangibles 649 197 846
-------- ------------ -------
Total non-current
assets 983 161 1,144
-------- ------------ -------
Current assets
Trade and other
receivables 2,262 - 2,262
Cash and cash
equivalents 1,894 - 1,894
-------- ------------ -------
Total current assets 4,156 - 4,156
-------- ------------ -------
Total assets 5,139 161 5,300
-------- ------------ -------
Current liabilities
Trade and other
payables 1,184 - 1,184
Obligations under finance - - -
leases
Deferred income 1,097 - 1,097
-------- ------------ -------
Total current
liabilities 2,281 - 2,281
-------- ------------ -------
Non-current liabilities
Loans and overdrafts - - -
Obligations under finance - - -
leases
Deferred income - - -
-------- ------------ -------
Total non-current - - -
liabilities -------- ------------ -------
Total liabilities 2,281 - 2,281
-------- ------------ -------
Net assets 2,858 161 3,019
-------- ------------ -------
Equity
Called up share
capital 9,324 - 9,324
Share premium account 639 - 639
Capital reserve (2,951) - (2,951)
Profit and Loss
Account (4,154) 161 (3,993)
-------- ------------ -------
Total Equity 2,858 161 3,019
-------- ------------ -------
Computer software costs were capitalised as tangible fixed assets under UK GAAP.
In accordance with IFRS, computer software costs are capitalised as intangible
assets. This results in the reclassification from property, plant and equipment
to intangible assets.
Development costs were included in research and development costs under UK GAAP.
In accordance with IFRS, development costs are capitalised as intangible assets.
This resulted in the reclassification from research and development costs to
intangible assets in the year to June 2007.
Explanation of transition to IFRS
Reconciliation of Profit - 6 month ended 31 December 2006
UK GAAP in Adj IFRS
IFRS format
£000 £000 £000
Revenue 2,102 - 2,102
Administration costs (1,427) - (1,427)
Research & development costs (617) - (617)
Sales & marketing (205) - (205)
Other operating income - - -
--------- --------- ---------
Operating loss before financing (147) - (147)
costs --------- --------- ---------
Financial income 47 - 47
Financial expenses - - -
--------- --------- ---------
Loss before taxation (100) - (100)
--------- --------- ---------
Taxation - - -
--------- --------- ---------
Loss for the period attributable to
equity holders of the parent (100) - (100)
--------- --------- ---------
Explanation of transition to IFRS
Reconciliation of Profit - Year ended 30 June 2007
UK GAAP in Adj IFRS
IFRS format
£000 £000 £000
Revenue 5,245 - 5,245
Administration costs (3,210) - (3,210)
Research & development costs (1,429) 161 (1,268)
Sales & marketing (351) - (351)
Other operating income - - -
--------- --------- ---------
Operating profit before financing 255 161 416
costs --------- --------- ---------
Financial income 75 - 75
Financial expenses (1) - (1)
--------- --------- ---------
Profit before taxation 329 161 490
--------- --------- ---------
Taxation - - -
--------- --------- ---------
Profit for the period attributable
to 329 161 490
equity holders of the parent --------- --------- ---------
Development costs were included in research and development costs under UK GAAP
in the year ended 30 June 2007. In accordance with IFRS, development costs are
capitalised as intangible assets. This resulted in the reclassification from
research and development costs to intangible assets in the year ended 30 June
2007.
Explanation of transition to IFRS
Reconciliation of Cash flows - 6 months ended 31 December 2006
UK GAAP in Adj IFRS
IFRS format
£000 £000 £000
Cash flows from operating
activities
Loss for the period (100) - (100)
Adjustments for:
Depreciation 107 - 107
Amortisation - - -
Share option expense - - -
--------- --------- ---------
Operating profit before changes in
working capital 7 - 7
(Increase) in trade and other
receivables (1,240) - (1,240)
Increase in trade and other payables 201 - 201
--------- --------- ---------
Cash used by operations (1,032) - (1,032)
--------- --------- ---------
Investing activities - - -
Acquisition of property, plant and
equipment and intangible assets (802) - (802)
--------- --------- ---------
Cash flow from investing activities (802) - (802)
--------- --------- ---------
Cash flows from financing
activities
Proceeds from the issue of share 205 - 205
capital
Purchase of own shares - - -
Sale of own shares - - -
Repayment of finance lease (8) - (8)
liabilities
--------- --------- ---------
Net cash inflow from financing
activities 197 - 197
--------- --------- ---------
Net decrease in cash and cash
equivalents (1,637) - (1,637)
Outflow from capital element of
finance 8 - 8
lease payments
Cash and cash equivalents at start of
period 2,661 - 2,661
--------- --------- ---------
Cash and cash equivalents at the end
of 1,032 - 1,032
period --------- --------- ---------
Explanation of transition to IFRS
Reconciliation of Cash flows - Year ended 30 June 2007
UK GAAP in Adj IFRS
IFRS format
£000 £000 £000
Cash flows from operating activities
Profit for the period 329 161 490
Adjustments for:
Depreciation 228 7 235
Amortisation 50 50
Share option expense - - -
--------- --------- ---------
Operating profit before changes in
working capital 607 168 775
(Increase) in trade and other
receivables (1,368) - (1,368)
Increase in trade and other payables 774 - 774
--------- --------- ---------
Cash used by operations 13 - 181
--------- --------- ---------
Investing activities - - -
Acquisition of property, plant and
equipment and intangible assets (693) (168) (861)
--------- --------- ---------
Cash flow from investing activities (693) (168) (861)
--------- --------- ---------
Cash flows from financing activities
Proceeds from the issue of share - - -
capital
Purchase of own shares (90) - (90)
Sale of own shares 3 - 3
Payment of finance lease liabilities (11) - (11)
--------- --------- ---------
Net cash outflow from financing
activities (98) - (98)
--------- --------- ---------
Net decrease in cash and cash
equivalents (778) - (778)
Outflow from capital element of
finance 11 - 11
lease payments
Cash and cash equivalents at start of
period 2,661 - 2,661
--------- --------- ---------
Cash and cash equivalents at the end
of 1,894 - 1,894
period --------- --------- ---------
Development costs were included in research and development costs under UK GAAP.
In accordance with IFRS, development costs are capitalised as intangible assets.
This resulted in the reclassification from research and development costs to
intangible assets in the year ended 30 June 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
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