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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vega Grp. | LSE:VEG | London | Ordinary Share | GB0009291500 | 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% | 273.20 | 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:9443Z
Vega Group PLC
10 July 2007
Embargoed until 0700 10 July 2007
VEGA Group PLC
Preliminary results for the year ended 30 April 2007
VEGA Group PLC ("VEGA"), the specialist Professional Services Company, today
announces its preliminary results for the year ended 30 April 2007.
Key Points - Underlying Results
* Revenue up 3% to #64.1m (2006: #62.1m)
* Adjusted operating profit* up 7% to #5.1m (2006: #4.8m)
* Adjusted operating margin* improved to 8.0% from 7.7%
* Adjusted pre-tax profit* up 9% to #4.8m (2006: #4.5m)
* Adjusted diluted EPS* up 7% to 17.8p (2006: 16.7p)
* Proposed final dividend of 2.25p, giving a total for the year of 3.0p
(2006: 2.5p), up 20%
* Net debt reduced to #0.3m (2006: #1.6m)
* before amortisation of acquired intangibles and exceptional items.
Key Points - Statutory Results
* Operating profit #4.1m (2006: #4.2m)
* Pre-tax profit #3.8m (2006: #3.9m)
* Diluted EPS 14.5p (2006: 14.8p)
* Exceptional items of #0.8m relating to reorganisation costs
Key Points - Operational
* Strong revenue growth achieved in both the Aerospace market (up 7%) and
Government market (up 22%)
* Strong own staff growth in the UK Defence market, as low margin
sub-contractor revenues were reduced in line with Group strategy. Overall
Defence revenues down 4%
* #19m contract signed with Thales UK to provide the total training
solution for the MoD's #800m Watchkeeper Unmanned Air Vehicle system over
five years
* Significant contracts signed introducing new services, such as
architectural modelling, and opening up potential new markets, such as
Commercial Space
* Reorganisation of the Group into separate business streams for
Consulting, Technology and Managed Solutions now complete
* New business development teams established
* Continuing investment in new business processes to meet business growth
needs
* Acquisition of Anite Deutschland, as announced on 9 July 2007
Chief Executive, Phil Cartmell said:
"This has been a year of great achievement and change for VEGA, both internally
and externally. We have continued to deliver year-on-year growth and profit, and
have undergone major reorganisation towards a more balanced business model.
The significant effort made in transforming the Group over the past twelve
months, turning VEGA into a sales focussed, professional services organisation,
has been reflected in the strength and quality of new business in the pipeline.
I believe that we are now very well positioned to embark upon our next stage of
organic growth and also to move forward with our strategy for acquisitions."
For further information please contact:
VEGA Group PLC: Phil Cartmell 01707 391999
Sue Bygrave
Smithfield: Reg Hoare 0207 360 4900
Tania Wild
Print resolution images are available for the media to view and download from
www.vismedia.co.uk
Notes to Editors:
About VEGA
VEGA is a specialist professional services company. It provides independent
consulting, technology and managed solutions, based on 30 years experience of
specialist market and technological domains. This enables VEGA to offer
independent expert advice and pragmatic support services in the effective
implementation of business strategy. In doing so, VEGA helps its clients to
identify business value, manage risk and realise higher levels of success from
their programmes and projects.
VEGA's principal markets are Aerospace, Defence and Government. Its key
geographies are defined as the UK, Germany and Rest of Europe (France, Holland,
Spain).
CONSULTING - Offers advisory services to clients on the practical implementation
of business strategy, often in the early stages of programme and project
lifecycles. Services include: Business Consulting, Enterprise & Systems
Architecture, Procurement and Capability Acquisition and Information Security.
TECHNOLOGY - Develops innovative systems and tools, to support the successful
execution of client programmes and projects; builds complex bespoke solutions.
Services include Bespoke Systems, Secure Systems, Simulation Systems, Client and
VEGA R&D.
MANAGED SOLUTIONS - Provides teams of experienced, specialist practitioners to
manage and implement client programmes. Services include Managed Services,
Programme and Project Support, Science and Technology Research, Operations and
Systems Engineering.
AEROSPACE - Within the Aerospace market, VEGA supports scientific, commercial
and military programmes worldwide and has been involved in almost every European
Space Agency mission over the last 30 years. Clients include: European Space
Agency, European Commission, Inmarsat, EUMETSAT, EADS Astrium, Thales Alenia
Space and SES Astra. On the military side, clients include BAE Systems, Thales,
CAE and EADS, working on programmes like the Eurofighter and the UK Army's new
UAV capability, Watchkeeper.
DEFENCE - VEGA has a long track record of working alongside our defence clients
to deliver strategically important defence information and communication systems
as a trusted partner. We work with UK and European defence agencies and armed
forces in the specification, acquisition, security, integration and deployment
of network enabled capability to ensure that it delivers the operational
benefits for which it is intended. Clients include the UK Ministry of Defence,
mainly through Defence Equipment and Support (DE&S). Current projects include
client side support for the Defence Information Infrastructure (DII(F)) and
Command Support Information Systems (CSIS) Integrated Project Team (IPT).
GOVERNMENT - VEGA is Catalist accredited and works with Government departments
and agencies to ensure that transformation initiatives are conceived,
implemented and integrated effectively and efficiently. We help our clients
deliver citizen-centric services that operate with the necessary levels of
accessibility and security. VEGA also works alongside the stakeholders of the UK
Resilience and Critical National Infrastructure communities to ensure UK
security at home and abroad. Clients include the Cabinet Office, Department of
Communities and Local Government, Home Office, Foreign & Commonwealth Office, UK
Emergency Services, Department of Trade and Industry and the Welsh Assembly
Government.
VEGA floated on the London Stock Exchange in 1992 at an issue price of 122p.
VEGA is listed in the Software & Computer Services sector, and has a RIC code of
VEG.L.
CHAIRMAN'S STATEMENT
Introduction and highlights
This year marks a year of major change for VEGA with the Group now well
established as a specialist professional services provider with a strong
management team and a clear service offering. Whilst the business has been
transformed over the last twelve months the strong trading performance has
continued with increases again in both revenues and adjusted operating profit*.
Group revenues for the year ended 30 April 2007 increased by 3% to #64.1m.
Adjusted operating profit* increased by 7% to #5.1m. Adjusted diluted earnings
per share* also increased by 7% to 17.8p. Reported operating profit was #4.1m
(2006: #4.2m). Reported diluted earnings per share were 14.5p (2006: 14.8p).
During the year we completed the reorganisation of the Group into three separate
business streams for Consulting, Technology and Managed Solutions. It is the
Board's view that this will position the Group better for future growth by
making clear to all our stakeholders the full scope of the Group's service
offerings, ensuring focussed leadership and development of the businesses and
giving more visibility of the underlying performance of the Group.
Significant effort has also been spent in continuing the transition of the Group
into a sales focussed organisation and this was borne out in both the strength
and quality of new business in the Group's pipeline as we entered the new
financial year.
People
VEGA depends on the commitment of its people and I would again like to thank all
our staff for their part in delivering another good set of results.
We now have a very strong management team supporting the executive directors and
this should enable the business to flourish whilst at the same time allow the
executive directors to channel more of their efforts into the continuing
development of the Group.
Dividends
The Board is recommending a final dividend of 2.25p per share which, together
with the interim dividend of 0.75p per share, will bring the total dividends for
the year to 3.0p per share, a 20% increase on the previous year. This increase
reflects the Board's confidence in the Group's future prospects and the high
level of its dividend cover.
Strategy
Our strategy is to grow the Group significantly by exploiting its position as a
specialist professional services provider with a strong reputation for
delivering independent advice and pragmatic solutions to its clients. The
markets in which we operate are currently undergoing significant change and this
will open up further opportunities for us to deliver high value services,
supporting our clients in the successful delivery of their programmes and
systems. The Board will continue to consider acquisition opportunities to
broaden the Group's service offerings, extend its geographic reach and take the
Group into new markets where there is proven demand for its services.
Acquisition
We were pleased to announce on 9 July 2007 that we had acquired Anite
Deutschland Management GmbH and its subsidiaries (together "Anite Deutschland")
for a total consideration of #8.0m in cash from Anite Group plc. Anite
Deutschland is a key part of our strategy for international growth and will add
significantly to our existing presence in Germany. The company will give us a
major German defence client which is vital in helping our penetration into that
market and will also open a new market sector for us in Financial Services which
we believe will provide us with opportunities to cross-sell other VEGA services.
Anite Deutschland has a strong and dynamic senior management team who are
committed to further build the business under the VEGA banner.
Outlook
We are already seeing the benefits of the new management team and structure that
has been put in place and are confident that the prospects for the Group remain
very encouraging.
Andy Roberts
Chairman
* before amortisation of acquired intangibles and exceptional items
CHIEF EXECUTIVE'S REVIEW
Performance
I am pleased to report on another year of good performance and real progress
against the new strategy. We have continued to deliver year-on-year growth in
both Group revenue and adjusted operating profit*, whilst making significant
changes to the Group organisation and its management structure in order to
improve future Group performance.
Strategy
During the year, we have continued to deliver against and build upon our stated
strategy, namely to achieve a balanced business model with greater parity
between services, geographies and markets. I am pleased to report that the
changes made during the year under review to implement this strategy have
produced encouraging results.
Services
Last year we set out to make a stronger distinction between the Consulting and
the Technology elements of our businesses, in order to capitalise on their
different operating characteristics and channel investment towards staff
development and competitive differentiation of our service offerings. This year
we have progressed this further, by separating out the Managed Solutions element
of our business.
We now go forward with what I believe is a much simpler and more compelling set
of propositions for how VEGA can help our clients as businesses. These can be
summarised as:
* A Consulting business that advises clients on the practical
implementation of their business strategies.
* A Technology business that develops innovative systems and tools to
support the successful execution of client programmes and projects.
* A Managed Solutions business that provides teams of experienced
specialist practitioners to manage and implement client programmes and
projects.
Each of these three business streams now has its own P&L, management team and
business plan. As a result, we have already seen Technology and Managed
Solutions capabilities, originally developed around Aerospace clients, transfer
successfully into the UK Government and Defence markets, with further
opportunities in the pipeline.
Geographies
We have continued in our efforts to organise more cohesively within our key
geographies of the UK, Germany and France. Individual managers have been
appointed for each country and they have been tasked with building the VEGA
presence and future growth prospects in their respective territories.
This has yielded continued growth in the UK and a widening of our customer base
in both Germany and France. We have also set up a Spanish subsidiary, primarily
as a contracting vehicle for existing framework agreements.
Going forward, I intend for the geographies to receive increasing emphasis, as
we move to a more devolved business model. This will result in a smaller
corporate team, providing strategy and direction from the centre, with larger
geographic teams executing and delivering locally.
Markets
The senior Business Development appointments that we made last year, coupled
with on-going investment in account management, sales process, back office
customer relationship management and better use of strategic advisers, has
continued to enhance our client engagement and sales prospects in our core
markets of Aerospace, Defence and Government.
Our Business Development Directors are now engaged at the highest levels of
their respective industries, participating in both networking and lobbying
activities and delivering more insight and influence at the development stage of
programmes. These include meetings at the levels of UK Government ministers,
Defence Chiefs of Staff, CEO's of Aerospace primes and EU Vice Presidents.
Investment in market research and analysis continues, as we pursue our journey
from capability led, through sales led, ultimately towards a market led business
strategy.
VEGA has always excelled in technologically and operationally complex
environments, which has made Aerospace, Defence and Government natural and
fertile markets for the Group. As the pressure in these markets to modernise,
enhance value and secure their operations has grown, they have increasingly come
to recognise the value of specialist expertise and independent advice such as
VEGA's, in parallel with generic methodologies and off-the-shelf solutions
offered by others.
This encourages me to believe that there is significant room for growth in each
of our traditional markets, and also in the relevance of VEGA's capabilities to
other markets, where the need for transformation, value for money and security
is driving investment.
Positioning
Last year I introduced my intention to evolve VEGA's positioning towards that of
a specialist professional services company; namely a company that, by virtue of
its 30 year experience of specialist market and technological domains, is able
to offer independent expert advice and support services to help businesses with
the practical implementation of their strategies.
This builds on our current positioning as a provider of independent programme
and system assurance - helping clients to ensure their programmes and systems
deliver the value for which they were intended - but also recognises the
important contribution VEGA is making to client business transformation, beyond
the purely technological.
By putting the emphasis on how VEGA helps its clients as businesses, we will
extend the scope of our client engagements and increase the applicability of
what we do to a wider range of clients and markets.
In doing so, we intend to exploit what I see as an expanding market opportunity
between the high-end strategic consultancies, the major integrator-manufacturer
companies and the niche software and equipment vendors.
In the course of the year I have seen increasing evidence of the attractiveness
of this position, and we will therefore accelerate moves in this direction
through our branding and positioning.
Staff
VEGA currently employs 630 staff, with a comparatively lean overhead and high
proportion of professional fee-earning staff. We have continued to build teams
around the high level appointments of previous years, through leadership
development from within, strategic external recruitment and careful use of
associates and advisers.
Our business development success in winning new clients and projects from some
of the major competitors in our markets, is now being mirrored in recruitment,
where we are receiving an increasing number of unsolicited employment enquiries
from leading individuals. We believe that clients and employees remain attracted
to VEGA's core cultural attributes of technical excellence, pragmatism,
dedication and delivery.
I recognise the outstanding contribution made by VEGA staff, who have continued
to deliver the excellent services for which we are renowned. We have also
created the structural and cultural freedom for VEGA, as an invigorated team, to
exploit our 30 year heritage and to embrace the exciting new opportunities ahead
of us.
Innovation
One of VEGA's strengths has always been in creative problem solving for its
clients. This has continued to underpin our business growth and in recent years
has led to landmark contracts such as CSIS and Watchkeeper. More recently, we
have started to increase our investment in intellectual property and research &
development.
In the course of the year, we have supported some innovative new developments,
where we now enjoy a position of thought leadership and market shaping. These
include: the application of gaming technology to infection control and medical
emergencies; the application of advanced architectural framework modelling to
assist strategic decision making; and the application of mobile technology to
support rapid reaction teams in the field.
Corporate Development
Corporate development activity around potential mergers and acquisitions
continues to be and will remain an important part of our growth strategy. We
will look to make in-fill acquisitions to enhance our existing business and will
also consider transformational opportunities.
Summary
This has been a year of great achievement and change for VEGA, both internally
and externally. We have continued to deliver year-on-year growth and profit and
have undergone major reorganisation towards a more balanced business model.
The significant effort made in transforming the Group over the past twelve
months, turning VEGA into a sales focussed professional services organisation,
has been reflected in the strength and quality of new business in the pipeline.
I believe that we are now very well positioned to embark upon our next stage of
organic growth and also to move forward with our strategy for acquisitions.
Phil Cartmell
Chief Executive
* before amortisation of acquired intangibles and exceptional items
FINANCIAL REVIEW
Overview
VEGA has delivered growth in revenues and adjusted operating profits* this year
whilst making significant changes to the business to better position it for the
future. These changes included reducing the level of low margin sub-contractor
revenues in the UK defence market to improve the UK operating margins. In total,
Group revenue for the year was up 3% to #64.1m (2006: #62.1m) and adjusted
operating profit* was up 7% to #5.1m (2006: #4.8m). Group adjusted operating
margins* improved from 7.7% to 8.0%. Adjusted profit before tax* was up 9% to
#4.8m (2006: #4.5m). Reported operating profit was #4.1m (2006: #4.2m). Reported
profit before tax was #3.8m (2006: #3.9m).
During the period the Group has established three distinct business streams for
Consulting, Technology and Managed Solutions and appointed senior executives to
lead them. The business is now being run on this basis and for the year ending
30 April 2008 these will comprise the Group's primary reporting segments. An
analysis of the results for the year ended 30 April 2007 by business stream has
been included in this announcement for illustrative purposes, however, the
commentaries below are provided on a geographical basis as this is how the
business was managed during the period under review.
Significant changes were made during the year ended 30 April 2007 to the senior
management team and also to consolidate the Group's offices in Germany and the
UK and this is reflected in exceptional items totalling #0.8m relating to both
staff termination costs and final payments in respect of property leases.
Cash generated from operations increased compared with the previous year but
there was some absorption into working capital owing to the timing of milestone
payments on a number of contracts and some short term delays, because of the
timing of the Easter holidays, in customers authorising payments to us before
the year end.
Review of Operations
Year ended Year ended
30 April 30 April
2007 2006 Growth Share
Revenue by geography #'m #'m
UK 42.0 40.0 5% 65%
Germany 15.8 17.0 -7% 25%
Rest of Europe 6.3 5.1 22% 10%
---------- ----------- ----------- ------------
Total 64.1 62.1 3% 100%
---------- ----------- ----------- ------------
UK
At #42.0m (2006: #40.0m), total revenue in the UK was up 5% compared with last
year.
There was strong growth in Aerospace and Government where UK revenues increased
by 15% and 22% respectively. In Aerospace this growth reflected, inter alia,
work on a verification and validation toolset for the European GPS programme
Galileo and support provided to EADS Astrium on the UK military Skynet 5
programme. Work also commenced on the #19m contract announced in July 2006 with
Thales UK which is to provide the total training solution for the MoD's #800m
Watchkeeper Unmanned Air Vehicle system. In the Government market the growth
came predominately in the areas of central government and emergency services
notably GCHQ, the Foreign & Commonwealth Office, the Department for Communities
and Local Government and the London Ambulance Service.
In the UK Defence market revenues declined by 1% compared with last year, as the
Company worked to reduce low margin sub-contractor revenues to improve the
overall operating profit margin. Own staff revenues, however, increased,
particularly around the provision of architectural modelling support to the UK
MoD and building a secure information gateway for the UK intelligence community.
Adjusted operating margins* in the UK increased to 9.6% (2006: 7.5%).
Germany
Revenues in Germany fell by 7% in the period to #15.8m, from #17.0m in the
corresponding period last year but order intake for the year was ahead and there
were some important wins with new clients such as the German National Space
Agency, DLR, and the commercial satellite operator, SES Astra in Luxembourg.
As a result of the reduced revenues, the adjusted operating margin* in Germany
reduced to 7.9% (2006: 10.1%).
Rest of Europe
Rest of Europe comprises the Group's operations in France, Holland and Spain. In
total, these operations increased their revenues in the period by 22% to #6.3m,
from #5.1m last year. The total adjusted operating margin declined from 12.8% to
7.0%, largely reflecting investment in France where the business continues to
shift from a predominantly sales based operation to a full trading entity. This
included the recruitment of a French managing director during the year to help
exploit VEGA's position in the heart of the French aerospace industry in
Toulouse. The work in Holland and Spain is primarily with the European Space
Research and Technology Centre and the European Astronomy Centre where revenues
have grown again, despite some pressure on margins.
Exceptional Items
During the year exceptional costs totalling #0.8m (2006: #0.3m) were incurred,
of which #0.6m were staff termination costs which related to restructuring the
senior management team, closing an office and withdrawing from a specific
business sector and #0.2m related to exiting from property leases.
Taxation
The adjusted group tax charge* of #1.1m (2006: #1.0m) resulted in an effective
tax rate for the year of 22.5% (2006: 21.4%) and benefited from claims for
research & development tax credits which reduced the tax charge by #0.6m (2006:
#0.6m).
Earnings Per Share
Adjusted diluted earnings per share* increased 7% to 17.8p per share (2006:
16.7p). Reported diluted earnings per share were 14.5p (2006: 14.8p).
Cashflow and Debt
Cash generated from operations in the year was #3.5m (2006: #3.4m), representing
86% of operating profit (2006: 80%). The absorption of cash into working capital
this year reflects the timing of certain milestone payments on fixed price
contracts and the impact of Easter holidays on the authorisation of payments to
us by customers close to the year end. Net debt at 30 April 2007 was #0.3m
(2006: #1.6m).
Dividends
The Board is recommending a final dividend of 2.25p per share, making a total
dividend for the year of 3.0p per share, an increase of 20% over the previous
year. The dividend is covered 6 times by adjusted earnings*. The final dividend,
if approved at the Annual General Meeting, will be paid on 14 September 2007 to
shareholders on the register on 17 August 2007.
Sue Bygrave
Group Finance Director
* before amortisation of acquired intangibles and exceptional items
Consolidated Income Statement
Notes Year Year
ended ended
30 April 30 April
2007 2006
#000 #000
------------------------------------------ ---------- ---------- ----------
Revenue 2 64,120 62,126
Net operating costs (60,018) (57,921)
------------------------------------------ ---------- ---------- ----------
Operating profit
before amortisation of acquired intangibles
and exceptional items 5,133 4,803
Amortisation of acquired intangibles (183) (328)
Exceptional items 3 (848) (270)
------------------------------------------ ---------- ---------- ----------
Operating profit 2 4,102 4,205
Finance costs (354) (376)
Finance revenue 61 25
------------------------------------------ ---------- ---------- ----------
Profit before tax 3,809 3,854
Income tax expense 4 (745) (745)
------------------------------------------ ---------- ---------- ----------
Profit for the year 3,064 3,109
------------------------------------------ ---------- ---------- ----------
Earnings per share 5
Basic 15.05p 15.27p
Diluted 14.50p 14.80p
Adjusted earnings per share 5
Basic 18.42p 17.18p
Diluted 17.75p 16.65p
Dividends per share paid and proposed in
respect of the period 6
Interim paid 0.750p 0.625p
Final proposed 2.250p 1.875p
All profit for the year and earnings per share are attributable to equity
holders of the parent and derived from continuing operations
Consolidated Balance Sheet
Notes As at As at
30 April 30 April
2007 2006
#000 #000
--------------------------------------- ---------- ---------- ----------
Non-current assets
Property, plant and equipment 1,041 1,053
Intangible assets - goodwill 14,906 14,874
Intangible assets - other 457 460
Trade and other receivables 7 1,366 1,496
Deferred tax assets 316 177
--------------------------------------- ---------- ---------- ----------
18,086 18,060
Current assets
Trade and other receivables 7 20,028 16,250
Income tax receivable 180 42
Financial assets (interest rate swap) 10 -
Cash 2,978 2,873
--------------------------------------- ---------- ---------- ----------
23,196 19,165
--------------------------------------- ---------- ---------- ----------
Total assets 41,282 37,225
--------------------------------------- ---------- ---------- ----------
Current liabilities
Trade and other payables 8 (15,917) (13,812)
Financial liabilities 9 (1,291) (1,337)
Income tax payable (1,904) (1,608)
Provisions (191) -
--------------------------------------- ---------- ---------- ----------
(19,303) (16,757)
Non-current liabilities
Financial liabilities 9 (1,960) (3,143)
Provisions (200) (288)
Deferred tax liabilities (62) (135)
--------------------------------------- ---------- ---------- ----------
(2,222) (3,566)
--------------------------------------- ---------- ---------- ----------
Total liabilities (21,525) (20,323)
--------------------------------------- ---------- ---------- ----------
Net assets 19,757 16,902
--------------------------------------- ---------- ---------- ----------
Equity attributable to
equity holders of the parent
Equity share capital 1,018 1,018
Share premium 6,226 6,226
Retained earnings 10,232 7,377
Merger reserve 2,281 2,281
--------------------------------------- ---------- ---------- ----------
Total equity 10 19,757 16,902
--------------------------------------- ---------- ---------- ----------
Consolidated Cash Flow Statement
Notes Year ended Year ended
30 April 30 April
2007 2006
#000 #000
------------------------------------------ ---------- ---------- ----------
Operating activities
Profit after tax 3,064 3,109
Taxation 745 745
Net finance expense 293 351
------------------------------------------ ---------- ---------- ----------
Operating profit 4,102 4,205
Increase in trade and other receivables (3,673) (4,404)
Increase in trade and other payables 2,095 2,593
Increase/(decrease) in provisions 103 (34)
Depreciation and amortisation 721 852
Loss on disposal of property, plant and
equipment 7 8
Share based payments 161 144
------------------------------------------ ---------- ---------- ----------
Cash generated from operations 3,516 3,364
Tax paid (759) (984)
------------------------------------------ ---------- ---------- ----------
Net cash flow from operating activities 2,757 2,380
Investing activities
Capital expenditure - plant and equipment (417) (459)
Capital expenditure - intangible assets (301) (200)
Sale of plant and equipment 4 7
Interest received 61 25
------------------------------------------ ---------- ---------- ----------
Net cash flow from investing activities (653) (627)
Financing activities
Debt repayments (1,203) (1,544)
Interest paid (310) (367)
Dividends paid to equity shareholders (534) (432)
------------------------------------------ ---------- ---------- ----------
Net cash flow from financing activities (2,047) (2,343)
------------------------------------------ ---------- ---------- ----------
Increase in cash and cash equivalents 11 57 (590)
Effect of exchange rates on cash and cash
equivalents 86 (56)
Cash and cash equivalents at beginning of
year 2,794 3,440
------------------------------------------ ---------- ---------- ----------
Cash and cash equivalents at end of year 2,937 2,794
------------------------------------------ ---------- ---------- ----------
Consolidated Statement of Recognised Income and Expense
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
-------------------------------------------------- ---------- ----------
Exchange difference on retranslation of foreign
operation 21 54
Gain/(loss) on hedge of net overseas investment 85 (93)
Gain on interest rate hedge 18 49
Tax on items taken directly to or transferred from
equity 40 -
-------------------------------------------------- ---------- ----------
Net income recognised directly in equity 164 10
Profit for the year 3,064 3,109
-------------------------------------------------- ---------- ----------
Total recognised income and expense for the year 3,228 3,119
-------------------------------------------------- ---------- ----------
Notes
1. Basis of preparation
The financial information set out in this announcement does not constitute the
Group's financial statements as defined by s240 of the Companies Act 1985 for
the years ended 30 April 2007 or 2006. The results for the years ended 30 April
2007 and 2006 are extracted from the audited accounts of VEGA Group PLC, on
which the auditors have issued an unqualified opinion which did not contain a
statement under s237(2) or (3) Companies Act 1985.
The accounting policies have been consistently applied to all periods presented.
The audited financial statements for the year ended 30 April 2006 have been
delivered to the Registrar of Companies. The Annual Report for the year ended 30
April 2007 will be mailed to shareholders in August 2007 and will be delivered
to the Registrar of Companies following the Annual General Meeting which will be
held on 6 September 2007 at Lacon House, Theobald's Road, London, WC1X 8RW.
Copies will be available to the public from the Company's registered office.
This preliminary announcement covers the year ended 30 April 2007 and was
approved by the Board of Directors on 9 July 2007.
2. Segmental analysis - analysis by geography
Up until 30 April 2007 the Group was organised and reported in the business of
Programme and System Assurance. Segment information is reported geographically.
The Group's geographical segments are based on the location of the Group's
assets. Sales to customers disclosed in geographical segments are based on the
geographical location of its customers.
Year ended 30 April 2007 Year ended 30 April 2006
United Rest of United Rest of
Kingdom Germany Europe Total Kingdom Germany Europe Total
#000 #000 #000 #000 #000 #000 #000 #000
------------ ------- ------- ------- ------- ------- ------ ------ -------
Revenue
Segment
revenue 43,367 16,469 6,332 66,168 41,563 17,393 5,193 64,149
Inter-segment
sales (1,389) (626) (33) (2,048) (1,576) (399) (48) (2,023)
------------ ------- ------- ------- ------- ------- ------ ------ -------
Sales to
external
customers 41,978 15,843 6,299 64,120 39,987 16,994 5,145 62,126
Adjusted
operating
profit*
Before
central
costs 4,026 1,249 444 5,719 3,005 1,708 657 5,370
Central
costs (586) (567)
------------ ------- ------- ------- ------- ------- ------ ------ -------
Adjusted
operating
profit* 5,133 4,803
------------ ------- ------- ------- ------- ------- ------ ------ -------
Operating
profit
Before
central 3,397 847 444 4,688 2,735 1,380 657 4,772
costs
Central
costs (586) (567)
------------ ------- ------- ------- ------- ------- ------ ------ -------
Operating
profit 4,102 4,205
------------ ------- ------- ------- ------- ------- ------ ------ -------
* before amortisation of acquired intangibles and exceptional items
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Revenue by market sector
Aerospace 33,644 31,511
Defence 25,770 26,750
Government 4,706 3,865
--------------------------------- ---------- -------------
Total revenue 64,120 62,126
--------------------------------- ---------- -------------
From 1 May 2007 the Group has changed its organisation, focussing on three
business streams (Consulting, Technology and Managed Solutions) that operate
across geographies. For the year ending 30 April 2008 these business streams
will comprise the Group's primary reporting segments. The following additional
information for 2006/07 is provided to allow shareholders gain a clearer
understanding of the trading performance of the Group during the transition to
the new reporting structure. Comparative information for the previous financial
year is not available.
Year ended 30 April 2007
Managed
Consulting Technology Solutions Total
#000 #000 #000 #000
Revenue
Segment revenue 4,568 20,393 40,506 65,467
Inter-segment sales (71) (1,061) (215) (1,347)
------------------- ---------- ---------- ---------- ----------
Sales to external customers 4,497 19,332 40,291 64,120
------------------- ---------- ---------- ---------- ----------
Adjusted operating profit*
Before central costs 483 1,049 4,187 5,719
Central costs (586)
------------------- ---------- ---------- ---------- ----------
Adjusted operating profit* 5,133
------------------- ---------- ---------- ---------- ----------
Operating profit
Before central costs 425 469 3,794 4,688
Central costs (586)
------------------- ---------- ---------- ---------- ----------
Operating profit 4,102
------------------- ---------- ---------- ---------- ----------
* before amortisation of acquired intangibles and exceptional items
3. Exceptional items
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
---------------------------------- ---------- ----------
Property costs 195 -
Staff termination costs 653 270
---------------------------------- ---------- ----------
Total non-recurring items 848 270
---------------------------------- ---------- ----------
Property costs comprise final lease payments and dilapidations arising on
rationalisation of the Group's office portfolio. Staff termination costs
comprise payments arising on the reorganisation of Group management, closure of
an office and withdrawal from a specific business sector. Exceptional items are
stated before UK corporation tax credits of #189,000 (2006: #81,000) and foreign
tax credit of #85,000 (2006: #nil).
4. Income tax
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
--------------------------------------------------- ---------- ----------
Current income tax
Current income tax charge 1,428 1,334
Adjustments in respect of current income tax
of previous years (511) (571)
--------------------------------------------------- ---------- ----------
Total current income tax 917 763
Deferred income tax
Origination and reversal of temporary differences (172) (18)
--------------------------------------------------- ---------- ----------
Total tax charge in the income statement 745 745
--------------------------------------------------- ---------- ----------
UK corporation tax 567 401
Foreign corporation tax 350 363
--------------------------------------------------- ---------- ----------
Current tax charge 917 764
UK deferred tax credit (100) (13)
Foreign deferred tax credit (72) (6)
--------------------------------------------------- ---------- ----------
Total 745 745
--------------------------------------------------- ---------- ----------
A reconciliation of income tax expense applicable to accounting profit before
income tax at the statutory income tax rate to income tax expense at the Group's
effective income tax rates is as follows:
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
--------------------------------------------------- ---------- ----------
Accounting profit before income tax 3,809 3,854
--------------------------------------------------- ---------- ----------
At UK statutory income tax rate of 30% (2006: 30%) 1,143 1,156
Adjustments in respect of current income tax of
previous years (511) (571)
Adjustments in respect of deferred income tax of
previous years (131) (55)
Expenditure not allowable for income tax purposes 70 14
Excess foreign tax on overseas income 61 73
Other 113 128
--------------------------------------------------- ---------- ----------
At effective income tax rate of 19.6% (2006: 19.3%) 745 745
--------------------------------------------------- ---------- ----------
5. Earnings per share
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
----------------------------------------------------- ---------- ----------
Earnings attributable to shareholders 3,064 3,109
Adjusted for:
Amortisation of acquired intangibles (net of
taxation) 112 200
Exceptional items (net of taxation) 574 189
----------------------------------------------------- ---------- ----------
Adjusted earnings 3,750 3,498
----------------------------------------------------- ---------- ----------
Year ended Year ended
30 April 30 April
2007 2006
Ordinary Ordinary
shares shares
-------------------------------------------------- ------------ ----------
Basic weighted average number of shares 20,356,821 20,356,821
Dilutive potential ordinary shares (employee share
options) 770,532 648,055
-------------------------------------------------- ------------ ----------
Diluted weighted average number of shares 21,127,353 21,004,876
-------------------------------------------------- ------------ ----------
6. Dividends
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
-------------------------------------------------- ---------- ----------
Declared and paid during the year
Final dividend for 2006: 1.875p per 5p ordinary
share (2005: 1.5p) 382 305
Interim dividend for 2007: 0.75p per 5p ordinary
share (2006: 0.625p) 152 127
-------------------------------------------------- ---------- ----------
Total dividend paid 534 432
-------------------------------------------------- ---------- ----------
Proposed for approval at AGM
Final dividend for 2007: 2.25p per ordinary share
(2006: 1.875p) 458 382
-------------------------------------------------- ---------- ----------
7. Trade and other receivables
As at As at
30 April 30 April
2007 2006
#000 #000
---------------------------------------- ----------- ----------
Due within one year:
Amounts recoverable on contracts 10,592 7,367
Trade receivables 8,899 8,346
Prepayments 367 455
Other debtors 170 82
---------------------------------------- ----------- ----------
20,028 16,250
Due after more than one year:
Amounts recoverable on contracts 1,366 1,496
---------------------------------------- ----------- ----------
Total 21,394 17,746
---------------------------------------- ----------- ----------
8. Trade and other payables
As at As at
30 April 30 April
2007 2006
#000 #000
---------------------------------------- ----------- ----------
Due within one year:
Payments received on account 5,444 4,720
Trade creditors 4,722 3,248
Other creditors 1,586 1,380
Accruals 4,165 4,464
---------------------------------------- ----------- ----------
Total 15,917 13,812
---------------------------------------- ----------- ----------
9. Financial liabilities
As at As at
30 April 30 April
2007 2006
#000 #000
---------------------------------------- ----------- ----------
Due within one year:
Bank overdraft 41 79
Bank loans 1,250 1,250
Interest rate swap - 8
---------------------------------------- ----------- ----------
1,291 1,337
---------------------------------------- ----------- ----------
Due after more than one year:
Bank loans 1,960 3,143
---------------------------------------- ----------- ----------
Total 3,251 4,480
---------------------------------------- ----------- ----------
10. Reconciliation of movements in equity
Group Equity share Share Retained Merger Total
capital premium earnings reserve equity
#000 #000 #000 #000 #000
-------------------- -------- ------- ------- ------- --------
At 1 May 2006 1,018 6,226 4,546 2,281 14,071
Profit for the year 3,109 3,109
Share based payments 144 144
Equity dividends paid (432) (432)
Exchange movements 54 54
Loss on hedge of net
overseas investments (93) (93)
Gain on interest rate
hedge 49 49
-------------------- -------- ------- ------- ------- --------
At 30 April
2006 and 1 May 2006 1,018 6,226 7,377 2,281 16,902
Profit for the year 3,064 3,064
Share based payments 161 161
Deferred tax credit on
share based payments 40 40
Equity dividends paid (534) (534)
Exchange movements 21 21
Gain on hedge of net
overseas investments 85 85
Gain on interest rate
hedge 18 18
-------------------- -------- ------- ------- ------- --------
At 30 April 2007 1,018 6,226 10,232 2,281 19,757
-------------------- -------- ------- ------- ------- --------
11. Movement in net debt
As at As at
30 April 30 April
2007 2006
#000 #000
--------------------------------- ------------ ---------
Opening net debt (1,607) (2,449)
Repayment of bank loans 1,203 1,544
Exchange and other movements 84 (112)
Net cash flow from activities 57 (590)
--------------------------------- ------------ ---------
Movement in the year 1,344 842
--------------------------------- ------------ ---------
Closing net debt (263) (1,607)
--------------------------------- ------------ ---------
12. Post balance sheet event
On 9 July 2007 the Company acquired the entire issued share capital of Anite
Deutschland Management GmbH and its subsidiaries, from Anite Group plc, for a
consideration of #8,000,000. The was funded by a new five year term loan from
Bank of Scotland.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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