TIDMDL.
RNS Number : 9298C
Dealogic (Holdings) PLC
15 March 2011
Dealogic (Holdings) plc
Preliminary results for the year ended 31 December 2010
Dealogic (Holdings) plc, the provider of a management platform
comprising technology, content and support for the investment
banking industry, today announces its preliminary results for the
year ended 31 December 2010.
Highlights
-- Revenue growth of 11.6% to US$103.6 million (2009: US$92.8
million) supported by stronger global market activity
-- Significant further investment in the technology platform,
people and global footprint
-- Operating margin of 36.0% (2009: 37.8%); with profit before
tax of US$38.6 million; and diluted earnings per share of 38.1
cents per share
-- Tender offer on 21 June 2010 reduced shares in issue by 26.4%
at a cost of US$68.8 million, funded by existing resources and new
bank debt of US$34.1 million
-- Free cash flow (1) of US$26.6 million for the period, with a
net cash surplus of US$0.1 million at the end of the year
-- Final dividend of 10.7 pence (equivalent to 17.3 cents at
$1.61) will be payable on 11 May 2011, bringing total dividends in
respect of 2010 to 12.7 pence (2009: 9.4 pence)
% Change
- constant
2010 2009 % Change currency
------------
Revenue US$000 103,552 92,775 +11.6 +11.8
------------------ -------- -------- ---- ------- --------- ------------
Operating profit US$000 37,230 35,097 +6.1 +6.0
------------------ -------- -------- ---- ------- --------- ------------
Profit before tax US$000 38,586 36,270 +6.4 +6.4
------------------ -------- -------- ---- ------- --------- ------------
Profit for the
year US$000 25,257 24,588 +2.7 +2.6
------------------ -------- -------- ---- ------- --------- ------------
Basic earnings
per share cents 38.9 32.3 +20.4 +20.3
------------------ -------- -------- ---- ------- --------- ------------
Diluted earnings
per share cents 38.1 32.1 +18.7 +18.5
------------------ -------- -------- ---- ------- --------- ------------
Final dividend
per share pence 10.7 (2) 7.5 +42.7
-------- -------- ---- ------- ---------
cents 17.3 11.3 +53.1
--------------------------- -------- ---- ------- ---------
Notes
(1) Operating cashflow before interest less capital expenditure
and capitalised development costs
(2) Translated at an exchange rate of $1.61
Commenting on the final results, Peter Ogden (Chairman)
said,
"Dealogic produced record revenues and operating profits in
2010. Diluted earnings per share increased 19% year on year,
reflecting the increased profits and the lower number of shares in
issue following the tender offer in June. We achieved revenue
growth in each of the Americas, Europe and Asia regions.
Our business successfully weathered the downturn in market
activity during the financial crisis and we have seen a steady
improvement in the business environment since the second quarter of
2009. We have a proven track record of effectively managing through
short term market disruptions and the long term prospects for our
business remain strong."
ENQUIRIES
Dealogic (Holdings) plc
Helen Vincent
+44 20 7379 5650
Company Secretary
J.P. Morgan Securities Ltd (Nominated Adviser)
Andrew Hodgkin
+44 20 7588 2828
Chairman's Statement
Dealogic produced record revenues and operating profits in 2010.
Diluted earnings per share increased 19% year on year, reflecting
the increased profits and the lower number of shares in issue
following the tender offer in June. Revenue growth resulted from
increased utilisation by our clients of the Dealogic platform
combined with continuing positive sentiment in global capital
markets. We achieved revenue growth in each of the Americas, Europe
and Asia regions.
Revenue for 2010 of US$103.6m was up 12% on the US$92.8m in 2009
while our operating costs, as a result of continuing to invest
constructively in our people, technology platform and global
footprint, rose by 15% to US$66.3m (2009: US$57.7m). Profit before
tax increased by 6% to US$38.6m (2009: US$36.3m) and diluted
earnings per share by 19% to 38.1 cents (2009: 32.1 cents). As a
result, we are proposing paying a final dividend of 17.3 cents
which will bring the total dividends for the year to 20.4 cents, an
increase of 42% on the 14.4 cents paid in respect of 2009.
Our clients, the leading players in the global capital markets,
continue to demand our sophisticated solutions comprising software,
content and professional support as they seek to optimize their
investment banking performance. We are a people business. Key to
our success is the ability to attract, recruit and retain staff of
the highest calibre and to equip them with the qualifications and
experience to match our client's needs. The Board would, once
again, wish to record its appreciation and extend its thanks to
every staff member for contributing to another successful year for
Dealogic.
Our business successfully weathered the downturn in market
activity during the financial crisis and we have seen a steady
improvement in the business environment since the second quarter of
2009. The markets today are fast paced and volatile and there may
be further shocks to the capital markets as a result of global
unrest and rising oil prices. We have a proven track record of
effectively managing through short term market disruptions and the
long term prospects for our business remain strong.
Peter J Ogden
Chairman
14 March 2011
Operating & Financial Review
In 2010 Dealogic generated operating profit of US$37.2m (2009:
US$35.1m) and free cash flow (operating cash flow before interest
less capital expenditure and capitalised development costs) of
US$26.6m (2009: US$20.6m). The group increased revenues across all
three main operating regions, US, EMEA and Asia Pacific. Activity
in the global capital markets continued to improve, with a marked
increase in volumes in quarter four, contributing to higher levels
of transaction revenue. This supplemented the steady growth in
subscriptions revenue and together increased total revenue by 11.6%
to US$103.6m (2009: US$92.8m).
Operating cash flow before movements in working capital amounted
to US$41.2m (2009: US$39.1m), with the net reduction in trade and
other receivables and payables providing a further US$0.7m (2009:
absorption of US$5.7m), generating cash from operations of US$41.9m
(2009: US$33.4m). Prior to the purchase and sale of financial
assets and the tender offer for ordinary shares and related bank
loans, a net increase in cash and cash equivalents of US$18.1m
(2009: US$13.3m) was achieved.
In June 2010 the Company repurchased for immediate cancellation,
by way of a tender offer, 26.4% of the ordinary shares in issue and
shares to be issued in terms of the Exchange Rights Agreement
("ERA") at a cost of US$68.8m. To fund the share repurchase a bank
loan facility of GBP23m was entered into, of which GBP9m had been
repaid by the end of the year.
2010 2009
------------------------------ -------------------------------
Operating Net Operating Net
US$ million Revenue profit assets Revenue profit assets
EMEA 33.0 17.0 13.4 31.0 16.8 57.5
Americas 54.9 16.3 25.7 51.3 15.3 36.7
Asia 15.7 3.9 3.6 10.5 3.0 2.0
103.6 37.2 42.7 92.8 35.1 96.2
-------- ---------- -------- -------- ---------- ---------
The geographic spread of customers and operations means that
results are affected by movements in exchange rates between the USD
and the other currencies in which we operate. The average exchange
rates between 2009 and 2010 are very similar and so there is little
difference between the results as reported and when calculated on a
constant currency basis.
Revenue from the three regions, EMEA, Americas and Asia grew by
6.6%, 7.0% and 48.4% respectively during 2010. The Americas
accounted for 53.0% of revenues followed by EMEA with 31.9% and
Asia with 15.1%.
The trend in improving global capital market activity levels
that started in Q2 of 2009 continued in 2010 with a noticeable
strengthening in the final quarter of the year. As in 2009,
revenues from market volume related transactions in the second half
of the year were greater than in the first half, while recurring
revenues increased progressively over both years.
In 2010 the group continued its investment in development,
product management and IT infrastructure. As a result staff costs
increased by 12.7% from US$41.9m in 2009 to US$47.2m in 2010, and
capital expenditure increased from US$0.8m to US$2.5m. In addition
to full time employees, contractor development staff were hired at
a cost of US$3.0m for the year. Staff costs represent 71.2% of
total operating expenses (2009: 72.7%).
Other operating expenses increased by 25.2% compared to 2009 for
the following reasons: the costs associated with the tender offer
and related bank facility, additional investment in infrastructure,
with two new property leases being signed during the year in Hong
Kong and Hungary; expensed IT hardware and software to support
additional clients and staff; travel related costs as we have
expanded our customer base and the global reach of our
platform.
Depreciation remained constant during the year whereas
amortisation increased by 28.2% as a result of the full year charge
for the amortisation of the information databases acquired during
2009.
Total operating costs increased by US$8.6m to US$66.3m (2009:
US$57.7m), an increase of 15.0% which, combined with the 11.6%
increase in revenue led to a decrease in the operating margin from
37.8% to 36.0%.
Finance income increased during 2010 as gains on the disposal of
available-for-sale financial assets of US$0.4m and foreign exchange
gains of US$0.7m more than offset the decline in interest due to
the reduction in bank balances and the reduced holdings of
available-for-sale financial assets. Finance expenses increased due
to the interest charged on the new loan facilities (at LIBOR plus
1.5%) and the unrealised loss recognised on the interest rate hedge
taken out to fix the future interest rates payable for a portion of
the bank loans.
Taxation
The group's tax charge, including ERA tax appropriations,
amounted to US$13.3m (2009: US$11.7m), representing 34.9% (2009:
32.6%) of profit before tax (excluding the post-tax share of profit
from associates). In accordance with IFRS requirements, the
contribution from associates is reported on an after-tax basis and
reflected a tax charge of US$0.3m. The underlying rate for 2010 was
36.0% (2009: 35.9%) before the benefit of reducing provisions in
respect of prior years by US$0.4m (2009: US$1.2m). Income tax
payments of US$12.0m (2009: US$10.1m) were made during the
year.
Earnings and Dividends
Profit for the year increased by 2.7% to US$25.3m (2009:
US$24.6m). The net effect of the tender offer, plus additional
share buy-backs and issues to satisfy the exercise of share options
again reduced the weighted average number of shares in issue - from
76.1m in 2009 to 64.9m in 2010. As a result, basic earnings per
share of 38.9 cents (2009: 32.3 cents) and diluted earnings per
share of 38.1 cents (2009: 32.1 cents) have increased on 2009 by
20.4% and 18.7% respectively.
The Board has recommended a final dividend of 10.7 pence (17.3
cents) to be paid on 11 May 2011 to shareholders on the register on
15 April 2011. This is an increase of 42.7% on the second interim
dividend of 7.5 pence (11.3 cents) paid in respect of 2009. This
dividend, together with the first interim dividend of 2.0 pence
(3.1 cents), brings the total dividends in respect of 2010 to 12.7
pence; 20.4 cents (2009: 9.4 pence; 14.4 cents) per share. Total
dividends for 2010 are covered 2.2 times (2009: 2.3 times) by
profit after tax.
Tender offer
On 2 June 2010 the Company announced the launch of a tender
offer to repurchase up to 26.4% of the Ordinary Shares and the
shares to be issued in terms of the ERA, at a price of 220 pence
per share. The tender offer price represented a premium of 15.8% on
the closing price on 1 June 2010.
A circular was sent to shareholders on 2 June 2010 setting out
the detailed terms of the tender offer. The tender offer was
accepted in full and became effective on 21 June 2010, with 17.6
million shares being repurchased for immediate cancellation and a
reduction of 3.3 million in the number of shares to be issued in
terms of the ERA, at a total cost of US$68.8 million. This reduced
the number of allotted shares from 71,391,140 to 53,745,145; with a
corresponding reduction in the number of shares to be issued under
the terms of the ERA from 12,346,842 to 9,083,748.
The tender offer was funded in part by existing resources and in
part by a new bank loan facility for GBP23.0m, consisting of a
medium term loan of GBP16.0m and a revolving credit facility of
GBP7.0m. During the course of the year the company has repaid the
entire revolving credit loan and the scheduled GBP2.0m of the
medium term loan, leaving GBP14.0m (US$21.6m) outstanding at the
end of the year.
With the introduction of the loan facilities the group has for
the first time incurred bank debt. The group has agreed financial
covenants with the lender relating to interest cover, leverage and
cash flow and has comfortably met all conditions.
Statement of Financial Position
Shareholders' funds decreased by US$53.5m to US$42.7m at the end
of 2010, primarily as a result of the tender offer referred to
above and profit retained after the payment of dividends. In
addition there were further purchases of 0.1m shares into treasury
at a cost of US$0.3m and the issue of 0.6m (US$1.4m) shares from
treasury to satisfy the exercise of share options. Total
comprehensive income for the year of US$22.6m comfortably exceeded
the reserves utilised to pay dividends and appropriations of
US$10.3m.
Non-current assets decreased by US$17.4 million due to the sale
of the government securities valued at US$18.7m at the end of 2009.
Deferred tax assets have increased by US$1.8m as a result of the
potential tax credits on employee gains on the exercise of share
options following an increase in the share price from 165.0 pence
at the end of 2009 to 252.5 pence at the end of 2010.
At the end of the year the group owed US$21.6m (2009: US$nil) of
the bank loan referred to in the tender offer section above, and
held cash at bank of US$21.7m. Over the coming 12 months the group
is scheduled to repay a further US$6.2m of the bank loan and this
amount is therefore classified as a current liability. The
remaining balance of US$15.4m is repayable in equal quarterly
instalments of US$1.5m, with a final payment of US$7.7m in June
2013, and is therefore classified as a non-current liability.
Net current assets decreased by US$20.9m to US$9.2m due to the
change in cash and bank loans; an increase in deferred subscription
income of US$2.1m; an increase in corporation tax liabilities of
US$1.6m; partially offset by an increase of US$3.8m in trade
receivables due to the strong revenues in the final quarter.
Sources and usage of funds
The group continues to generate strong cash-flows from operating
activities: US$29.6m (2009: US$23.3m), with increased profitability
and a slight reduction in working capital levels despite the
enhanced activity levels. After paying taxes of US$12.0m, investing
in infrastructure (US$2.2m), software development (US$0.7m) and
externally acquired software (US$0.3m), the group generated cash
flow before financing and sales of government securities
(available-for-sale financial assets) of US$27.3m compared to
US$21.6m in 2009.
The group sold all remaining UK government securities for
US$17.6m and after the payment of dividends and related
appropriations of US$10.3m (2009: US$5.6m), and the purchase and
issue of treasury shares, the group generated US$35.7m (2009:
US$13.3m) prior to the tender offer and bank loans.
The cost of the tender offer absorbed US$68.8m which was
partially offset by net new bank loan inflows of US$20.2m during
the period, leaving the group with cash at the end of the year of
US$21.7m (2009: US$34.3m) and debt of US$21.6m (2009: US$nil).
Treasury and exchange rates
The group maintains adequate liquidity in the currencies in
which it operates and aims to optimise returns on invested funds.
In addition to USD, the main currency in which the group trades is
GBP, where, to a significant degree, revenues and operating costs
are in balance, with a modest excess of costs in GBP at the
operating profit level.
The group monitors risk closely especially in times of economic
uncertainty. As a result of entering into the bank facilities the
group is exposed to the risk of future rises in LIBOR interest
rates as the loans attract a rate of LIBOR plus 1.5%. As a result,
the group has taken out an interest rate swap to mitigate this
risk.
The group only enters into hedging agreements when it has a
quantified underlying exposure requiring the hedge. Other than the
interest rate hedge referred to there were no such agreements
outstanding at the end of the year. The group does not hedge the
translation risk that exists when non-USD balance sheets are
consolidated and takes these changes directly to equity.
The results of subsidiaries are translated at the average
exchange rates applicable to the period being reported upon, while
their net assets are translated at year end rates. The monthly
average exchange rate used in 2010 to translate GBP transactions
into USD was $1.5470 (2009: $1.5547); with the year end exchange
rate at $1.5655 (2009: $1.6148).
Forward-looking statements
Certain statements in this annual report are forward-looking.
Although the group believes that the expectations reflected in
these statements are reasonable, it can give no assurance that
these expectations will prove to have been correct. As these
statements involve risks and uncertainties, actual results may
differ materially from those expressed or implied by these
forward-looking statements.
The group undertakes no obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2010
Notes 2010 2009
US$000 US$000
------------------------------------------------ ------
Revenue 3 103,552 92,775
Staff costs 5 (47,218) (41,915)
Depreciation of property, plant &
equipment (2,446) (2,479)
Amortisation of intangible assets (1,229) (959)
Other operating expenses (15,429) (12,325)
------------------------------------------------ ------ --------- ---------
Operating profit 4 37,230 35,097
Finance income 6 1,368 708
Finance expenses 7 (438) (3)
Share of post-tax profit of associate 426 468
Profit before income tax 38,586 36,270
Income tax expense 8 (13,329) (11,682)
------------------------------------------------ ------ --------- ---------
Profit for the year 25,257 24,588
------------------------------------------------ ------ --------- ---------
Other comprehensive income
Currency translation differences recognised
directly in equity (2,500) 503
Net change in fair value of available-for-sale
financial assets (287) (158)
Income tax on other comprehensive
income 8 87 39
------------------------------------------------ ------
Other comprehensive income for the
year, net of income tax (2,700) 384
------------------------------------------------ ------ --------- ---------
Total comprehensive income for the
year 22,557 24,972
------------------------------------------------ ------ --------- ---------
Earnings per share: Cents Cents
------------------------------------------------ ------ --------- ---------
Basic 12 38.9 32.3
Diluted 12 38.1 32.1
------------------------------------------------ ------ --------- ---------
Dividend per share:
------------------------------------------------ ------
Interim 9 3.1 3.1
Final 9 17.3 11.3
------------------------------------------------ ------ --------- ---------
20.4 14.4
------------------------------------------------ ------ --------- ---------
The above results are derived from continuing activities.
Consolidated Statement of Financial Position
at 31 December 2010
Notes 2010 2009
US$000 US$000
------------------------------------- ------
ASSETS
Non-current assets
Property, plant and equipment 5,627 5,923
Intangible assets
Goodwill 42,196 42,196
Capitalised development costs 1,238 1,105
Other intangible assets 590 878
Investment in associate 263 339
Deferred tax assets 2,789 1,015
Available-for-sale financial assets - 18,683
52,703 70,139
------------------------------------- ------ ---------- ---------
Current assets
Trade receivables 22,637 18,887
Other receivables 2,457 2,843
Current deferred tax assets 1,090 905
Cash and bank balances 21,684 34,261
47,868 56,896
------------------------------------- ------ ---------- ---------
Total assets 100,571 127,035
------------------------------------- ------ ---------- ---------
Current liabilities
Trade and other payables (12,207) (10,189)
Deferred subscription income (15,173) (13,120)
Loans and borrowings 10 (6,164) -
Current tax liabilities (4,378) (2,776)
Provisions (790) (767)
(38,712) (26,852)
------------------------------------- ------ ---------- ---------
Net current assets 9,156 30,044
------------------------------------- ------ ---------- ---------
Non-current liabilities
Loans and borrowings 10 (15,410) -
Provisions (3,283) (3,471)
Deferred tax liabilities (436) (490)
------
(19,129) (3,961)
------------------------------------- ------ ---------- ---------
Total liabilities (57,841) (30,813)
------------------------------------- ------ ---------- ---------
Net assets 42,730 96,222
------------------------------------- ------ ---------- ---------
EQUITY AND LIABILITIES
Capital and reserves
Share capital 11 4,321 5,740
Share premium 1,369 1,369
Shares to be issued 48,597 48,597
Capital redemption reserve 51,928 50,509
Other reserves (124,465) (55,658)
Cumulative translation reserve (5,395) (2,895)
Retained earnings 66,375 48,560
Total equity 42,730 96,222
------------------------------------- ------ ---------- ---------
Consolidated Statement of Cash Flow
for the year ended 31 December 2010
Notes 2010 2009
US$000 US$000
----------------------------------------------- ------ --------- ---------
Profit for the year 25,257 24,588
Adjustments for:
Income tax expense 8 13,329 11,682
Finance income 6 (919) (708)
Finance expenses 7 438 3
Depreciation of property, plant & equipment 2,446 2,479
Amortisation of intangible assets 1,229 959
Loss on disposals of fixed assets - 42
Gain on disposals of available-for-sale
financial assets (449) -
Other operating income (161) -
Share based payment charges 5 433 478
Share of post-tax profit of associate (426) (468)
Operating cash flows before movements
in working capital and provisions 41,177 39,055
Increase in trade and other receivables (3,935) (6,442)
Increase in trade and other payables 4,860 1,185
Decrease in provisions (216) (393)
Cash generated by operations 41,886 33,405
Interest paid (298) (3)
Income tax paid (12,004) (10,091)
----------------------------------------------- ------ --------- ---------
Net cash generated by operating activities 29,584 23,311
----------------------------------------------- ------ --------- ---------
Cash flows from investing activities
Interest received 558 562
Purchases of property, plant & equipment
and other assets (2,549) (792)
Acquisition - (1,000)
Development expenditure (736) (874)
Dividends received from associate 485 387
Purchases of available-for-sale financial
assets - (15,940)
Redemption of available-for-sale financial
assets 17,612 15,951
Net cash generated/(used) in investing
activities 15,370 (1,706)
----------------------------------------------- ------ --------- ---------
Cash flows from financing activities
Dividends paid 9 (8,623) (4,721)
Appropriations under the Exchange Rights
Agreement 9 (1,682) (919)
Purchase of own shares into treasury (321) (3,273)
Issue of own shares from treasury 1,352 604
Shares repurchase - tender offer (68,807) -
New bank loans raised 20,219 -
Net cash used in financing activities (57,862) (8,309)
----------------------------------------------- ------ --------- ---------
Net (decrease)/increase in cash and
cash equivalents (12,908) 13,296
Cash and cash equivalents at the beginning
of the year 34,261 20,179
Effect of exchange rate fluctuations
on cash held in foreign currencies 331 786
Cash and cash equivalents at the end
of the year 21,684 34,261
----------------------------------------------- ------ --------- ---------
Consolidated Statement of Changes in Equity
for the year ended 31 December 2010
Shares Capital Cumulative
Share Share to be redemption Other translation Retained
capital premium issued reserve reserves reserve earnings Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
---------------- -------- -------- ------- ----------- ---------- ------------ --------- ---------
At 1 January
2010 5,740 1,369 48,597 50,509 (55,658) (2,895) 48,560 96,222
Total
comprehensive
income for the
year - - - - - (2,500) 25,057 22,557
Transactions
with owners
---------------- -------- -------- ------- ----------- ---------- ------------ --------- ---------
- Dividends and
appropriations - - - - - - (10,305) (10,305)
---------------- -------- -------- ------- ----------- ---------- ------------ --------- ---------
- Employee
share options
charge for the
period - - - - - - 433 433
income tax - - - - - - 125 125
deferred tax - - - - - - 1,474 1,474
---------------- -------- -------- ------- ----------- ---------- ------------ --------- ---------
- Treasury
shares
purchase of
shares - - - - - - (321) (321)
issue of
shares - - - - - - 1,352 1,352
---------------- -------- -------- ------- ----------- ---------- ------------ --------- ---------
- Tender offer
purchase and
cancellation
of ordinary
shares (1,419) - - 1,419 (58,125) - - (58,125)
cancellation
of shares in
terms of the
ERA - - - - (10,682) - - (10,682)
At 31 December
2010 4,321 1,369 48,597 51,928 (124,465) (5,395) 66,375 42,730
---------------- -------- -------- ------- ----------- ---------- ------------ --------- ---------
Shares Capital Cumulative
Share Share to be redemption Other translation Retained
capital premium issued reserve reserves reserve earnings Total
US$000 US$000 US$000 US$000 US$000 US$000 US$000 US$000
---------------- -------- -------- ------- ----------- --------- ------------ --------- --------
At 1 January
2009 5,740 1,369 48,597 50,509 (55,658) (3,398) 31,430 78,589
Total
comprehensive
income for the
year - - - - - 503 24,469 24,972
Transactions
with owners
---------------- -------- -------- ------- ----------- --------- ------------ --------- --------
- Dividends and
appropriations - - - - - - (5,640) (5,640)
---------------- -------- -------- ------- ----------- --------- ------------ --------- --------
- Employee
share options
charge for the
period - - - - - - 478 478
income tax - - - - - - 684 684
deferred tax - - - - - - (192) (192)
---------------- -------- -------- ------- ----------- --------- ------------ --------- --------
- Treasury
shares
purchase of
shares - - - - - - (3,273) (3,273)
issue of
shares - - - - - - 604 604
At 31 December
2009 5,740 1,369 48,597 50,509 (55,658) (2,895) 48,560 96,222
---------------- -------- -------- ------- ----------- --------- ------------ --------- --------
Other Reserves comprise the Merger Reserve which arose from the
group restructuring in 2004 and the Other Reserves which arose from
the tender offer in June 2010.
Notes to the Financial Statements
for the year ended 31 December 2010
1. Basis of information in the preliminary announcement
The financial information in this preliminary announcement does
not constitute the group's statutory accounts for the years ended
31 December 2010 or 2009. The financial information for the year
ended 31 December 2009 is derived from statutory accounts for that
year, which have been delivered to the Registrar of Companies, and
the financial information for the year ended 31 December 2010 is
derived from statutory accounts for that year, which will be
delivered in due course. The auditors have reported on those
accounts; their reports were (i) unqualified, (ii) did not include
a reference to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006 in respect of the accounts for 2010.
This preliminary announcement was approved by the board of
directors on 14 March 2011.
2. Accounting policies
Summary of significant accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out in the 2009
Annual Report. These policies have been consistently applied to all
the years presented, there are no significant new accounting
policies that are applicable to the financial statements for
2010.
2.1 Basis of preparation
Dealogic (Holdings) plc's consolidated financial statements were
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU ('adopted IFRS'), IFRIC
Interpretations and those sections of the Companies Act 2006
applicable to companies reporting under IFRS.
3. Operating segments
The group has adopted the "management approach" in identifying
the operating segments as outlined in IFRS 8. Management has
analysed the information that the Chief Operating Decision Maker
reviews and has concluded that the operating segments should
reflect the geographic split of the business.
The group has three reportable segments: Europe, Middle East and
Africa (EMEA); Americas; and Asia. The income tax expense for the
full year 2009 has been reallocated to reflect the tax expenses
associated with the Hong Kong branch.
For the year ended 31 December
2010
EMEA Americas Asia Total
US$000 US$000 US$000 US$000
------------------------------- --------- --------- -------- ---------
Revenue 33,025 54,876 15,651 103,552
Depreciation and amortisation (1,245) (2,292) (138) (3,675)
Operating costs (27,850) (25,161) (9,636) (62,647)
Contribution 3,930 27,423 5,877 37,230
Inter-segment revenue/(costs) 13,116 (11,142) (1,974) -
Operating profit 17,046 16,281 3,903 37,230
Finance income 1,353 6 9 1,368
Finance expenses (403) (31) (4) (438)
Share of post-tax profit
of associate 426 - - 426
Profit before income tax 18,422 16,256 3,908 38,586
Income tax expense (4,707) (7,444) (1,178) (13,329)
------------------------------- --------- --------- -------- ---------
Profit for the year 13,715 8,812 2,730 25,257
------------------------------- --------- --------- -------- ---------
Reportable segment total
assets 51,505 43,587 5,479 100,571
------------------------------- --------- --------- -------- ---------
Reportable segment total
liabilities (38,109) (17,829) (1,903) (57,841)
------------------------------- --------- --------- -------- ---------
For the year ended 31 December
2009
EMEA Americas Asia Total
US$000 US$000 US$000 US$000
------------------------------- --------- --------- -------- ---------
Revenue 30,968 51,263 10,544 92,775
Depreciation and amortisation (1,135) (2,188) (115) (3,438)
Operating costs (22,972) (23,247) (8,021) (54,240)
Contribution 6,861 25,828 2,408 35,097
Inter-segment revenue/(costs) 9,914 (10,471) 557 -
Operating profit 16,775 15,357 2,965 35,097
Finance income 700 16 (8) 708
Finance expenses - - (3) (3)
Share of post-tax profit
of associate 468 - - 468
Profit before income
tax 17,943 15,373 2,954 36,270
Income tax expense (4,250) (6,553) (879) (11,682)
-------------------------------
Profit for the year 13,693 8,820 2,075 24,588
------------------------------- --------- --------- -------- ---------
Reportable segment total
assets 80,530 44,077 2,428 127,035
------------------------------- --------- --------- -------- ---------
Reportable segment total
liabilities (23,064) (7,363) (386) (30,813)
------------------------------- --------- --------- -------- ---------
Group revenue includes all of the top 10 global investment
banks, none of which represent more than 10% of total revenue
(2009: 1). There are no reconciling items between figures presented
above and the primary financial statements.
4. Operating profit
2010 2009
US$000 US$000
-------------------------------------------- ------- -------
Operating profit is stated after charging:
Amortisation of developed software 603 359
Amortisation of software and databases 626 600
Depreciation of property, plant and
equipment 2,446 2,479
Losses on disposal of fixed assets - 42
Tender offer and bank fees 1,135 -
Acquisition costs - 1,000
Operating lease costs - land & buildings 3,997 3,813
Share based payments 433 478
-------------------------------------------- ------- -------
5 Staff numbers and costs
The average number of employees (including directors) during the
year was:
2010 2009
No. No.
------------------------------- ----- -----
Programmers & Researchers 223 249
Sales & Support 154 139
Central Services & Management 80 72
457 460
------------------------------- ----- -----
Their aggregate remuneration costs comprised:
2010 2009
US$000 US$000
--------------------------------- ------- -------
Salaries, wages and incentives 42,720 37,591
Social security costs 2,964 2,786
Pension contributions 1,171 1,152
Share-based payments 433 478
Short-term compensated absences (70) (92)
47,218 41,915
--------------------------------- ------- -------
An amount of US$3,020,000 relating to temporary staff
contractors is included within salaries, wages and incentives.
Directors' emoluments were US$3,238,000 (2009: US$2,421,000), of
which the highest paid director received US$1,005,000 (2009:
US$971,000). Contributions of US$73,000 (2009: US$52,000) were paid
on behalf of the directors to money purchase pension schemes,
including US$10,000 (2009: US$10,000) in respect of the highest
paid director. No options (2009: no options) were exercised by the
directors, therefore no gains (2009: no gains) on exercise were
made.
Key management remuneration (including directors) was:
2010 2009
US$000 US$000
--------------------------------- ------- -------
Salaries, wages and incentives 5,937 5,025
Pension contributions 149 137
Share-based payments 248 294
Short-term compensated absences 5 6
6,339 5,462
--------------------------------- ------- -------
There are 16 employees (including directors) defined as being
key management for 2010 (2009: 13). Key management are defined as
being members of the executive committee and other staff with a
significant cross-group role.
6. Finance income
2010 2009
US$000 US$000
------------------------------------------ ------- -------
Interest on short-term bank deposits 168 285
Interest on available-for-sale financial
assets 55 344
Gains on disposal of available-for-sale
financial assets 449 -
Exchange gains 696 79
1,368 708
------------------------------------------ ------- -------
7. Finance expenses
2010 2009
US$000 US$000
--------------------------------------- ------- -------
Bank interest payable (35) (3)
Bank loan interest payable (343) -
Unrealised loss on interest rate swap (60) -
(438) (3)
--------------------------------------- ------- -------
8. Income tax expenses
The tax charge comprises:
2010 2009
US$000 US$000
------------------------------------------------ ------- --------
Current tax
UK Corporation tax 6,588 8,436
Double tax relief (664) (2,817)
------------------------------------------------ ------- --------
5,924 5,619
Foreign tax 8,769 7,904
------------------------------------------------ ------- --------
14,693 13,523
------------------------------------------------ ------- --------
Adjustments in respect of prior years
UK tax (577) (846)
Foreign tax (320) (198)
(897) (1,044)
------------------------------------------------ ------- --------
Total current tax 13,796 12,479
------------------------------------------------ ------- --------
Deferred tax
Origination and reversal of timing differences
Current year
UK tax (233) (118)
Foreign tax (723) (569)
(956) (687)
------------------------------------------------ ------- --------
Adjustments in respect of prior years
UK tax 13 (13)
Foreign tax 476 (97)
489 (110)
------------------------------------------------ ------- --------
Total deferred tax (467) (797)
------------------------------------------------ ------- --------
Total tax on profit on ordinary activities 13,329 11,682
------------------------------------------------ ------- --------
Foreign tax includes US$2,901,000 (2009: US$2,654,000) of ERA
tax.
9. Dividends and appropriations
The payments during the year are detailed below:
Dividend Dividend Dividend Appropriation
per share per share value value
pence cents US$000 US$000
------------------------- ----------- ----------- --------- --------------
2008 Final dividend paid
on 13 May 2009 3.1 4.3 2,766 536
2009 Interim dividend
paid on 2 November
2009 1.9 3.1 1,955 383
Recognised in 2009 5.0 7.4 4,721 919
------------------------- ----------- ----------- --------- --------------
2009 Second interim
dividend paid on 1
April 2010 7.5 11.3 7,187 1,401
2010 Interim dividend
paid on 1 November
2010 2.0 3.1 1,436 281
Recognised in 2010 9.5 14.4 8,623 1,682
------------------------- ----------- ----------- --------- --------------
The directors propose a final dividend of 10.7 pence, 17.3 cents
(2009 second interim dividend: 7.5 pence, 11.3 cents) in respect of
the 2010 financial year be paid on 11 May 2011 to shareholders on
the register on 15 April 2011. This dividend has not been included
as a liability in these financial statements. At the same date a
proportionate payment will be made in respect of the dividend
element of the appropriation under the terms of the Exchange Rights
Agreement. These payments, amounting to US$8,008,000 and
US$1,571,000 respectively, will be accounted for when paid.
10. Loans and borrowings
2010 2009
US$000 US$000
------------------------- ------- -------
Current liabilities
Bank loan 6,164 -
------------------------- ------- -------
Non-current liabilities
Bank loan 15,410 -
------------------------- ------- -------
Total 21,574 -
------------------------- ------- -------
During the year the group entered into new bank loan facilities
with a value of GBP23,000,000, comprising a mixture of medium term
and revolving credit loans, which will expire on 10 June 2013. The
facilities were initially denominated in GBP but later
redenominated in USD.
The repayment terms of the facility require quarterly repayments
of US$1,541,000 plus a final payment of US$7,705,000 at the end of
the term.
The following loans are held and outstanding at the end of the
year:
Dealogic (Holdings) plc - US$13,074,000
Dealogic LLC - US$8,500,000
Over the course of the next 12 months the Company is scheduled
to repay US$6,164,000 of the medium term loan facility.
The rates of interest charged on each facility are at LIBOR plus
a margin of 1.5%.
11. Called Up Share Capital
2010 2009
------------------------------------ -------------- --------------
Authorised
Ordinary shares of GBP0.05 each as
at 1 January and 31 December GBP 7,000,000 GBP 7,000,000
------------------------------------ -------------- --------------
Allotted, called up and fully paid
Ordinary shares of GBP0.05 each as
at 1 January and 31 December GBP 2,687,257 GBP 3,569,557
Ordinary shares of GBP0.05 each as
at 1 January and 31 December US$ 4,321,544 US$ 5,740,424
------------------------------------ -------------- --------------
Number allotted
Ordinary shares of GBP0.05 each 53,745,145 71,391,140
------------------------------------ -------------- --------------
Shares in issue Treasury shares Allotted shares
'000 '000 '000
------------------------ ---------------- ---------------- ----------------
At 1 January 2009 64,219 7,172 71,391
Re-purchase of own
shares (1,575) 1,575 -
Re-issue of own shares 786 (786) -
At 31 December 2009 63,430 7,961 71,391
Re-purchase of own
shares (92) 92 -
Re-issue of own shares 591 (591) -
Re-purchased and
cancelled - tender
offer (17,646) - (17,646)
At 31 December 2010 46,283 7,462 53,745
------------------------ ---------------- ---------------- ----------------
Effect on
Treasury shares - Company and EST No. of shares retained earnings
'000 US$000
----------------------------------- -------------- -------------------
At 1 January 2009 7,172 26,373
Re-purchase of own shares 1,575 3,273
Re-issue of own shares (786) (604)
At 31 December 2009 7,961 29,042
Re-purchase of own shares 92 321
Re-issue of own shares (591) (1,352)
At 31 December 2010 7,462 28,011
----------------------------------- -------------- -------------------
Tender offer
During the year the Company repurchased 17,645,995 ordinary
shares for immediate cancellation, by way of a tender offer at a
cost of US$58,125,000; and also reduced the number of shares to be
issued in terms of the Exchange Rights Agreement by 3,263,094 at a
cost of US$10,682,000. The par value of the cancelled shares of
US$1,419,000 was transferred from share capital to the capital
redemption reserve, and the total of the tender payments of
US$58,125,000 was debited against other reserves. The effective
date of the transaction was 21 June 2010.
In addition, the following transactions were made:
The Company issued nil GBP0.05 ordinary shares during the year
(2009: nil).
The Company purchased 92,377 (2009: 1,575,469) of its own
ordinary shares at a total cost of US$321,000 (2009: US$3,273,000).
The Company issued 241,161(2009: 786,791) shares to satisfy the
exercise of share options by employees. Since 1 January 2011, the
Company has not purchased any further shares.
The EST purchased nil (2009: nil) shares at a total cost of
US$nil (2009: US$nil). The EST issued 350,000(2009: nil) shares to
satisfy the exercise of share options by employees. Since 1 January
2011, the EST has not purchased any further shares.
Both the shares purchased by the Company and those held by the
EST are held as Treasury Shares and excluded from the calculation
of earnings per share.
Shares purchased up to 31 December 2010 are excluded from the
calculation of earnings per share from the date they were purchased
by the Company.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. The EST has waived its rights to
receive a dividend on the 2,931,609 (2009: 3,281,609) shares it
holds.
12. Earnings per share
The earnings and weighted average numbers of ordinary shares
used in the calculation of earnings per share are as follows:
2010 2009
US$000 US$000
----------------------------------------- ------- -------
Profit for the year 25,257 24,588
----------------------------------------- ------- -------
Number Number
000's 000's
----------------------------------------- ------- -------
Weighted average number of shares
in issue (excluding Treasury Shares,
which include shares held by employee
share trusts) 54,304 63,703
Shares to be issued under the Exchange
Rights Agreement 10,622 12,347
Basic weighted average number of shares 64,926 76,050
Dilutive effect of share options 1,404 446
Diluted weighted average number of
shares 66,330 76,496
----------------------------------------- ------- -------
Number of potentially dilutive share
options (weighted average) 394 2,454
----------------------------------------- ------- -------
Cents Cents
----------------------------------------- ------- -------
Basic earnings per ordinary share 38.9 32.3
Diluted earnings per ordinary share 38.1 32.1
----------------------------------------- ------- -------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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