Interim Results - Part 2
Interim Results - Part 2
August 28, 2008 at 12:00 AM EDT
Part 2 : For preceding part double click [nRn1b1627C]
Investing activities
Interest received 1,872 1,988 3,885
Acquisition of subsidiaries, net of cash acquired - (32,596) (32,600)
Sale of property, plant and equipment 11 306 336
Purchases of property, plant and equipment (2,471) (6,173) (8,620)
Purchases of intangible assets (2,922) (2,934) (5,619)
Acquisition of minority interests - - (30)
Net cash flow from investing activities (3,510) (39,409) (42,648)
Financing activities
Interest paid (3,536) (2,069) (5,333)
Dividends paid to equity shareholders of the parent (8,063) (7,871) (11,806)
Proceeds from issue of shares - 543 661
Purchase of own shares (9,501) - (11,332)
Repayment of capital element of finance leases (10,281) (2,061) (12,195)
Repayment of loans (7,265) (6,742) (11,103)
New borrowings 7,509 6,203 19,832
Increase/(decrease) in factor financing 18,818 (8,381) (8,743)
Net cash flows from financing activities (12,319) (20,378) (40,019)
Increase/(decrease) in cash and cash equivalents 8,816 (54,346) (50,195)
Effect of exchange rates on cash and cash equivalents (1,477) 1 (1,521)
Cash and cash equivalents at beginning of period 7,266 58,982 58,982
Cash and cash equivalents at end of period 14,605 4,637 7,266
Analysis of net funds
Cash and cash equivalents 14,605 4,637 7,266
Factor financing (44,324) (21,148) (23,453)
Net debt prior to customer-specific financing (29,719) (16,511) (16,187)
Finance leases (50,004) (30,218) (47,642)
Other loans (16,218) (6,707) (15,975)
Net debt (95,941) (53,436) (79,804)
Notes to the accounts
1 Accounting policies
Basis of preparation
The unaudited interim financial statements have been prepared on the basis of
the accounting policies set out in the Group's statutory accounts for the year
ended 31 December 2007, and in accordance with International Accounting Standard
34 'Interim Financial Reporting', as adopted by the European Union. The taxation
charge is calculated by applying the Directors' best estimate of the annual tax
rate to the profit for the period. Other expenses are accrued in accordance with
the same principles used in the preparation of the annual accounts.
2 Segment information
The Group's primary reporting format is geographical segments and its secondary
format is business segments.
The Group's geographical segments are determined by the location of the Group's
assets and operations. The Group's business in each geography is managed
separately and held in separate statutory entities.
Revenues are usually expected to be higher in the second half of the year than
in the first six months. This is principally driven by customer buying behaviour
in the markets in which we operate. Typically this leads to a more pronounced
effect on operating profit. In addition the effect is compounded further by the
tendency for the holiday entitlements of our employees to accrue during the
first half of the year and to be utilised in the second half.
Segmental performance for the period to 30 June 2008 was as follows:
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
Revenue by geographic market
UK 708,099 671,154 1,357,305
Germany 379,777 340,680 708,581
France 147,211 135,309 285,698
Benelux 15,173 13,190 27,557
Total 1,250,260 1,160,333 2,379,141
Gross profit by geographic market
UK 98,924 95,324 197,185
Germany 51,959 43,339 94,202
France 16,961 14,178 31,501
Benelux 1,694 1,309 2,920
Total 169,538 154,150 325,808
Operating profit/(loss) by geographic market
UK 10,112 11,267 33,957
Germany 4,320 3,779 10,942
France (1,930) (2,111) (1,754)
Benelux (68) (111) (44)
Total 12,434 12,824 43,101
Revenue by business segment
Product 923,193 873,628 1,774,164
Professional services 83,993 71,088 158,488
Support and managed services 243,074 215,617 446,489
Total 1,250,260 1,160,333 2,379,141
3 Finance costs
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
Bank loan and overdrafts 1,220 1,537 2,624
Finance charges payable on customer-specific financing 1,726 629 2,025
Other interest - - 303
2,946 2,166 4,952
4 Income tax
The charge based on the profit for the period comprises:
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
UK corporation tax 4,087 5,388 13,420
Foreign tax 101 38 113
Adjustments in respect of prior periods (651) - (385)
Deferred tax (469) (107) 13
3,068 5,319 13,161
5 Earnings per ordinary share
Earnings per share (EPS) amounts are calculated by dividing profit attributable
to ordinary equity holders by the weighted average number of ordinary shares
outstanding during the year (excluding own shares held).
Diluted earnings per share amounts are calculated by dividing profit
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the year (excluding own shares held) adjusted
for the effect of dilutive options.
Adjusted basic and adjusted diluted EPS are presented to provide more comparable
and representative information. Accordingly the adjusted basic and adjusted
diluted EPS figures exclude amortisation of acquired intangibles.
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
Profit attributable to equity holders of the parent 7,922 7,496 28,888
Amortisation of acquired intangibles attributable to equity 268 240 613
holders of the parent
Tax on amortisation of acquired intangibles (67) - (184)
Profit before amortisation of acquired intangibles attributable 8,123 7,736 29,317
to equity holders of the parent
No '000 No '000 No '000
Basic weighted average number of shares (excluding own shares 150,850 157,272 156,117
held)
Effect of dilution:
Share options 2,769 2,616 2,202
Diluted weighted average number of shares 153,619 159,888 158,319
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
pence pence pence
Basic earnings per share 5.3 4.8 18.5
Diluted earnings per share 5.2 4.7 18.2
Adjusted basic earnings per share 5.4 4.9 18.8
Adjusted diluted earnings per share 5.3 4.8 18.5
6 Dividends paid and proposed
The proposed final dividend for 2007 of 5.5p per ordinary share was approved at
the AGM in May 2008 and was paid on 12 June 2008. An interim dividend in respect
of 2008 of 2.7p per ordinary share, amounting to a total dividend of £3,960,000,
was declared by the Directors at their meeting on 27 August 2008. This interim
report does not reflect this dividend payable.
7 Financial liabilities
Factor financing
On 13 May 2008, the Group entered into a £60m Sterling and Euro Receivables
Financing Agreement with a bank. Under the terms of the arrangement certain
trade debts are sold to the bank who in turn advances cash payments in relation
to these debts. Interest is charged on a daily basis at a rate of ECB base rate
+65 basis points. The facility is committed for a minimum period of three years.
At the end of the period 25% of the facility was drawn down.
8 Adjusted operating profit
Reconciliation of adjusted operating profit
Management measure the Group's operating performance using adjusted operating
profit which is stated prior to amortisation of acquired intangibles and after
charging finance costs on customer-specific financing for which the Group
receives regular rental income.
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
Operating profit 12,434 12,824 43,101
Add back
Amortisation of acquired intangibles 268 240 613
After charging
Finance costs on customer-specific financing (1,726) (629) (2,025)
Adjusted operating profit 10,976 12,435 41,689
Adjusted operating profit/(loss) by geographic market
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
UK 8,874 11,263 33,099
Germany 4,100 3,394 10,388
France (1,930) (2,111) (1,754)
Benelux (68) (111) (44)
Total 10,976 12,435 41,689
9 Adjusted cash flow statement
The adjusted cash flow has been provided to explain how management view the cash
performance of the business. There are two primary differences to this
presentation compared to the statutory cash flow statement, as follows:
1) Factor financing is not included within the statutory definition of cash and cash
equivalents, but operationally is managed within the total net funds/borrowings of the
businesses; and
2) Items relating to customer specific financing are adjusted for as follows:
a. Interest paid on customer-specific financing is reclassified
from interest paid to adjusted operating profit;
b. Assets held under finance leases, which are matched by
amounts receivable under customer operating lease rentals,
are netted off against each other. This impacts the
depreciation of leased assets, the repayment of capital
element of finance leases and net working capital; and
c. Assets financed by loans, which are matched by amounts
receivable under customer operating lease rentals, are netted
off against each other. This impacts the movement on loans
within financing activities and also net working capital.
Adjusted cash flow statement
For the six months ended 30 June 2008
Unaudited six months ended 30 June 2008 Unaudited six months ended 30 June 2007 Year ended 31 Dec 2007
£'000 £'000 £'000
Adjusted operating profit 10,976 12,435 41,689
Adjustments to reconcile Group adjusted operating profit
to adjusted operating cashflow
Depreciation and amortisation 8,976 8,589 16,603
Share-based payment 1,573 1,269 2,659
Working capital movements (5,456) (13,759) (20,089)
Currency and other adjustments (1,190) 43 (4,196)
Adjusted operating cashflow 14,879 8,577 36,666
Income taxes paid (5,527) (6,345) (13,853)
Net interest received 62 549 577
Capital expenditure and investments (5,382) (8,801) (13,933)
Acquisitions and disposals - (32,596) (32,600)
Equity dividends paid (8,063) (7,871) (11,806)
Cashoutflow before financing (4,031) (46,487) (34,949)
Financing
Proceeds from issue of shares - 543 661
Purchase of own shares (9,501) - (11,332)
Decrease in net debt pre CSF in the period (13,532) (45,944) (45,620)
Decrease in net debt pre CSF (13,532) (45,944) (45,620)
Net debt pre CSF at beginning of period (16,187) 29,433 29,433
Net debt pre CSF at end of period (29,719) (16,511) (16,187)
10 Publication of non-statutory accounts
The financial information contained in the interim statement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
auditors have issued an unqualified opinion on the Group's statutory financial
statements under International Accounting Standards for the year ended 31
December 2007. Those accounts have been delivered to the Registrar of
Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
END