TIDMGTX
RNS Number : 2604O
Genetix Group PLC
04 March 2009
Genetix Group plc Preliminary Financial Results
for the year ended 31 December 2008
--Strong revenue growth and cash generation demonstrating fundamental strengths
=-
New Milton, UK, 4 March 2009 - Genetix Group plc (AIM: GTX), the cell imaging
and analysis group, today announces its preliminary financial results for the
year ended 31 December 2008.
Highlights
* Revenue up 14% to GBP26.2 million (2007: GBP22.9 million)
* Good growth in clinical instruments, cell biology and consumables and services
* Underlying gross margins* increased to 62% (2007: 60%)
* Further investment in sales and marketing of GBP1.1 million to drive future
growth
* Underlying profit before tax* up 18% to GBP4.3 million (2007: GBP3.6 million)
* Underlying earnings per share* up 27% to 5.25 pence (2007: 4.12 pence)
* Cash from operations up 34% to GBP2.8 million (2007: GBP2.1 million); cash at 31
December 2008 of GBP15.2 million (2007: GBP12.6 million)
* Final dividend of 0.4 pence per share; full year dividend of 0.6 pence per share
up 20% (2007: 0.5 pence per share)
* New Chief Executive Officer, Charles De Rohan, to spearhead growth strategy
* Underlying performance excludes unrealised amounts arising from fair value
changes on forward foreign exchange contracts and adjustments to acquired
intangibles and goodwill. Statutory profit before tax is GBP2.1 million (2007:
GBP2.8 million) and earnings per share is 2.73 pence (2007: 3.39 pence). Unless
specified otherwise, all references to underlying gross margins, underlying
operating profit, underlying profit before tax and underlying earnings per share
throughout this document excludes unrealised amounts arising from fair value
changes on forward foreign exchange contracts and adjustments to acquired
intangibles and goodwill. See note 2.
Charles de Rohan, Chief Executive, commented:
"We have delivered a healthy set of results, driving increased revenue, higher
underlying gross margins, improved underlying profitability and earnings while
continuing to invest in the business to sustain momentum into the future.
Genetix' ability to develop and market leading-edge products was further
demonstrated by the successful launch of the GSL-120 Slide Loader to a wide
range of customers including a multi site implementation with the National
Health Service in Scotland.
Our business is well placed with a robust cash position, world class products
and strong customer relationships. We continue to manage our cost base tightly
in line with the current economic trading environment."
Genetix Group plc
Charles de Rohan, Chief Executive
Andrew Kellett, Finance Director
Tel:
01425 624600
Financial Dynamics
Jonathan Birt; Tel: 020 7831 3113
Piper Jaffray Ltd.
James Steel; Tel 020 3142 8700
The release will be available on the Company's website: www.genetix.com
Notes to Editors
About Genetix Group plc
Headquartered in New Milton, UK, with offices in the UK, US, Germany and Japan,
and quoted on the AIM (GTX: AIM), Genetix provides scientists and clinicians
with unrivalled solutions for imaging and intelligent image analysis in the life
science and diagnostic markets.
In research, pharmaceutical and biotherapeutic development, the company's
systems set industry standards for accurate selection of microbial colonies, and
for screening and selection of mammalian secretory cell lines. Other systems
evaluate the response of cells to potential therapeutic agents and quantify
tissue biomarkers.
In diagnostics, Genetix holds a leading position in genetic testing with
thousands of the company's platforms used in laboratories worldwide.
Through its expertise in robotics, cell and molecular biology, image analysis
and interpretation, supported by a strong IP portfolio, Genetix is committed to
the continual development of innovative solutions.
For more information please visit www.genetix.com
Chairman's statement
2008 was a year of considerable success for Genetix as we achieved sales growth
for our products, grew underlying profits and continued to make significant
investment in the business to sustain momentum.
Total revenue for the year increased 14% to GBP26.2 million; underlying
operating profit was up 20% to GBP3.6 million, and underlying profit before tax
was GBP4.3 million, 18% higher than 2007. Underlying earnings per share improved
27% to 5.25 pence.
On a statutory basis, after accounting for the unrealised amounts on forward
foreign exchange contracts and adjustments to acquired intangibles and goodwill,
operating profit was GBP1.4 million (2007: GBP2.2 million) and profit before tax
was GBP2.1 million (2007: GBP2.8 million). Basic earnings per share were 2.73
pence (2007: 3.39 pence). Further details are contained in note 2.
In assessing the performance of the Group I am pleased with the progress made
against the objectives we set at the start of 2008. We have driven top line
growth by continuing to invest in our global infrastructure; we launched new
products including the GSL-120 Slide Loader, which has been an outstanding
success with sales to a number of high profile customers worldwide. During these
increasingly challenging times, we have maintained our focus on improving
operational efficiencies and cash collection, with underlying gross margins up
to 62% (2007: 60%) and cash generated from operations increasing by 34% to
GBP2.8 million (2007: GBP2.1 million).
In respect of the current year we have the following three objectives:
* To further drive revenue growth. We expect to achieve this by improving our
customer focus and expanding our geographical footprint so we can serve more of
our global customers directly;
* Launch additional industry leading products targeted both at the drug discovery
and genetic testing markets; and
* Expand our presence into new areas within the large diagnostics market such as
digital pathology. This allows us to play to our core strengths in imaging and
image analysis.
Board changes
As previously reported, there were a number of Board changes during the year. I
assumed the role of Chairman from John Morgan in August. I would like to express
our sincere thanks to John for his significant contribution to the Group over
eight years.
Charles de Rohan joined the Board in September as Chief Executive Officer.
Charles joined from Abbott Laboratories' Diagnostics Division and has broad
international business and marketing experience and will help drive our
increasing presence in the diagnostics market.
Mark Reid, founder and former Chief Executive Officer, has become a Non
Executive Director and strategic advisor. Mark led Genetix from its inception in
1991 helping it to grow into a dynamic, international business, respected
worldwide. Mark remains firmly committed to the Group and the Board continues to
benefit from his considerable experience and wise counsel.
Dividend
The Board is recommending a final dividend of 0.4 pence per share, making a
total of 0.6 pence per share for the year as a whole, an increase of 20% over
2007. The Board remains committed to a progressive dividend policy. Subject to
approval at the annual general meeting the final dividend will be paid on 19
June 2009 to shareholders on the register on 22 May 2009.
Employees
Genetix is fortunate to have a highly skilled, creative and enthusiastic
workforce. Their continuing energy and commitment has made the year a success
and gives me confidence as we look forward into the future and continue to
invest in employee development.
Outlook
The core markets that Genetix serves - biopharmaceutical drug discovery and
diagnostics - are fundamentally strong with good long term growth prospects.
Although the current economic environment may have an impact on our customers'
spending plans in the near term, we are well placed to weather this with a
robust balance sheet, strong cash position and no debt, combined with strict
attention to cost management.
We continue to invest in new products and develop new markets. We have
significant geographic presence in the world's major healthcare and
pharmaceutical markets in the US, Europe and Japan and we continue to invest in
developing our sales presence.
We have a clear strategic vision for the business, a growing global
infrastructure in major markets worldwide and a market leading portfolio of
innovative products. We remain committed to executing our plans and delivering
sustainable shareholder value and look forward to the future with confidence.
Chief Executive's review
Strategy
We remain focussed on exploiting the significant opportunities within the
biopharmaceutical drug discovery and diagnostics markets:
* Both markets are fundamentally strong and have good growth prospects;
* These markets provide opportunities where Genetix' core competencies of imaging
and imaging analysis help to drive change and deliver sustainable, competitive
advantage to our customers;
* Over recent years there has been a strategic shift of emphasis undertaken by
pharmaceutical companies on developing biopharmaceutical drugs and on becoming
more 'agile and lean'. Pharmaceutical companies want to speed up the drug
development process and get an indication early in the discovery process of any
factors that might impede progression of the drug at a later stage thus
minimising costs. Our product range for drug discovery enable these critical
needs - by focussing on productivity and early detection, they provide an
attractive and compelling investment decision; and
* The healthcare market is moving from a focus on therapies that cure disease and
relieve pain to one based on early diagnosis and prevention, assisted by the
expanded use of targeted drugs. In addition, pharmaceutical companies are
searching for new therapies that target more effectively those individuals'
responsiveness to treatment. Our systems can analyse both tissue and cellular
samples and assess disease progression, thereby giving physicians increasing
accuracy and time to take preventative action.
We will execute our strategy by investing organically and through high quality
acquisitions that deliver complimentary technology and skills or enhanced access
to our key markets.
Sales and marketing
Our guiding principle is to put the customer first and to concentrate on
improving the overall experience they receive from us. This involves
understanding and addressing their needs from products and applications that
help solve their problems, to ongoing service, support and training.
Our sales and marketing spend increased by GBP1.1 million (35%) in the year as
we enlarged our sales infrastructure to deliver the full potential of our
products in our chosen markets. This was achieved by:
* The opening of an office in Japan, Genetix KK in April 2008 to support our
growth in the world's second largest pharmaceutical market. We are satisfied
with the market reaction for the first nine months of operation, and we expect
this investment to realise its full potential in the medium term;
* Establishing dedicated product managers improving our life cycle management; and
* Strengthening application and customer support, allowing us to enhance our
scientific credibility and quickly respond to our customers' needs.
We have increased investment in our direct sales organisation for key markets,
enabling us to be more proactive with customers, better understanding of their
objectives and offering more competitive solutions. In particular, in Germany
and Benelux we increased our sales infrastructure to enable us to sell direct in
those territories, with early signs positive.
We have also intensified our marketing efforts to drive improved effectiveness
by:
* Refining messaging for our products with an enhanced focus on how they provide
solutions for our customers;
* Increasing the interactivity of our web site allowing easier navigation and
enhanced data capture and analysis to allow us to target customers based on
their interest in each particular product; and
* Developing new presentations and brochures for key strategic products.
Research and development
We made good progress with the Group's research and development projects during
the year. Approximately 20 percent of our employees are dedicated to developing
and enhancing new and existing products with the aim of enabling our customers
to improve patient health by speeding up the discovery of new drugs and more
quickly and accurately diagnosing a medical condition.
The GSL-120 Slide Loader is an excellent example - an automated solution for
scanning and imaging cytogenetic slides, providing significant productivity
gains. As it is also the first slide loader to incorporate an oiling and high
quality image capture system, it gives clinicians more accurate and consistent
images and, with digital data capture, examination need not be constrained by
geographical boundaries. The GSL-120 Slide Loader therefore helps clinicians by
improving the speed and accuracy of genetic test results. This system has been
well received by customers worldwide.
Our continuing aim is to evolve and refine the way we operate, striving for on
time, on specification delivery of new products that meet market requirements.
Central to this is formalised project management, combined with cross functional
team review of project progress from concept through to product delivery.
To underpin our efforts in this regard we have recruited a senior R&D executive
adding considerably to the depth of management in this important area. Dr
Stephen Game joined us in November from GE Healthcare Life Sciences where he
held various senior positions including head of molecular cell biology,
responsible for 35 staff.
The Group also continues to invest in establishing a strong Intellectual
Property position which, we believe, helps to protect future income flows.
People
Our success is fundamentally linked to the initiative, energy and commitment of
our staff worldwide. We recognise that staff development is fundamental and
continue to invest in our people in all functions and at all levels so they can
become more talented and even better at their jobs.
We have also introduced a new leadership development programme for our managers.
This programme is designed to equip all managers with essential leadership
skills, improving teamwork, an ability to embrace change, lead from the front
and drive business performance. I have been impressed with the results so far
and look forward to the continuation of this initiative.
Financial performance review
Despite increasing economic headwinds particularly towards the end of 2008, we
delivered a strong set of numbers for 2008; a direct result of the strategic
decisions made over recent years that has made the business more diversified in
the markets and customer it serves:
* Revenues of GBP26.2 million (2007: GBP22.9 million) increased by 14%. The
stronger US Dollar had a beneficial impact on revenues of approximately GBP0.8
million. At constant exchange rates, our sales growth for the year would have
been 11%;
* Underlying profit before tax of GBP4.3 million (2007: GBP3.6 million), increased
by 18%;
* Underlying earnings per share of 5.25 pence (2007: 4.12 pence) increased by 27%;
and
* Cash from operations was GBP2.8 million (2007: GBP2.1 million), an improvement
of 34%.
The increase in revenues was driven by growth in clinical instruments, cell
biology and the recurring revenue streams of consumables and services. The
company's genomics based instruments revenues were, as expected, broadly stable
at 2007 levels. Despite increased investment, the performance of our US drug
discovery business was below expectations; as a result we have taken steps to
reconfigure and refocus this sales organisation with higher calibre sales
professionals and better targeting of customers and opportunities. We are
confident that these actions will lead to an improvement in performance.
The increase in underlying profit before tax was driven by improved product mix,
better operating leverage and higher interest income.
In conclusion, our strategy is clear; optimising our competitive strengths in
cell imaging and analysis in order to deliver technologies that will ultimately
improve patient care to our customers in the drug discovery and diagnostics
markets.
Financial review
Results
Group revenue increased by 14% to GBP26.2 million (2007: GBP22.9 million).
Revenue was positively impacted by the strengthening US dollar, estimated to be
GBP0.8 million at constant exchange rates. Our clinical instrument business
performed well in the year, with revenues increasing by 21% to GBP8.7 million
(2007: GBP7.2 million). This performance was supported by the successful launch
of the GSL-120 Slide Loader. Our cell biology business grew revenues by 19% to
GBP7.7 million (2007: GBP6.5 million). In addition, we saw a healthy growth in
our recurring revenue stream of consumables and services, up 12% to GBP6.2
million (2007: GBP5.5 million). Revenues from genomics-based instruments of
GBP3.6 million were broadly comparable to last year (2007: GBP3.7 million).
Sales of instrumentation accounted for 73% (2007: 74%) and consumables and
services 27% (2007: 26%). Total instrument sales increased by 14% over last
year. Sales from consumables and services increased by 17%.
Geographic regions
The business' primary reporting format is geographical. Approximately 47% of our
sales (GBP12.2 million) were attributable to the United States. A further
GBP10.6 million (40%) came from Europe (including UK) with the remaining GBP3.4
million (13%) from the rest of the world.
Sales in all regions showed good growth compared to 2007. Sales in the United
States were up 12%; in Europe (including UK) sales were 18% higher and sales in
the rest of the world were 12% higher. However as reported in the Chief
Executive's review, sales in the US drug discovery business were below
expectations and actions have been taken to address this.
Gross margin
The Group's underlying gross margin improved to 62% (2007: 60%), mainly driven
by improved product mix and operational efficiencies.
On a statutory basis, the Group's gross margin was 59% (2007: 60%), a slight
fall due to unrealised amounts on forward foreign currency contracts being
recorded in the income statement in accordance with IAS 39.
Operating expenses
Gross R&D expenditure (before capitalised development costs) was GBP2.0 million
(2007: GBP2.3 million); after capitalising GBP0.6 million (2007: GBP0.9 million)
and amortising GBP0.5 million (2007: GBP0.4 million), net R&D spend was GBP1.9
million (2007: GBP1.8 million).
Sales and administrative costs increased by GBP1.8 million to GBP10.8 million,
driven by additional investment in sales infrastructure and marketing of GBP1.1
million.
Adjustments to intangibles and goodwill were GBP1.3 million (2007: GBP0.7
million) due to increased utilisation of losses in Applied Imaging in the US.
Correspondingly, this reduced the Group's effective tax rate on underlying
profits from 18% in 2007 to 11% in 2008.
Profitability
The Group's underlying operating profit grew by 20% to GBP3.6 million (2007:
GBP3.0 million).
Net interest income was GBP0.6 million (2007: GBP0.6 million), 10% higher due to
higher average cash balances and better returns.
Underlying profit before tax grew by 18% to GBP4.3 million (2007: GBP3.6
million).
Underlying performance
In assessing underlying performance the Group excludes unrealised amounts
arising from revaluing forward foreign exchange contracts required by IAS 39 and
adjustments to acquired intangibles and goodwill, assisting investors in their
understanding of the underlying trends and profitability of the Group.
The Group continues to manage its foreign exchange risk by utilising forward
currency contracts. At 31 December 2008, the Group was committed to US$7 million
of forward contracts at average rates of US$1.783 all maturing in 2009. Where
hedge accounting is not adopted, IAS 39 requires that these contracts be valued
at fair value at the Balance Sheet date with the gains or losses arising
recognised immediately in the income statement. As at 31 December 2008, the
unrealised loss arising from these fair value changes was GBP876,000 (31
December 2007: GBP34,000 loss), and accordingly a charge of GBP842,000 for the
movement in the year is recorded in the Income Statement.
Adjustments to acquired intangibles and goodwill of GBP1.3 million (2007: GBP0.7
million) comprise amortisation of acquired intangibles of GBP0.4 million (2007:
GBP0.4 million) and an adjustment to goodwill of GBP0.9 million (2007: GBP0.3
million), arising due to the increased post acquisition utilisation of taxation
losses in Applied Imaging in the United States. These charges have no cash
effect.
Taxation
The Group's effective tax rate is 6.1% (2007: 13.7%); lower than the standard
rate of 28% due to the continuing benefit of the UK government's R&D tax credit
scheme and the utilisation of taxation losses in Applied Imaging in the United
States.
The Group's effective tax rate on underlying profits is 11.4% (2007: 18%); lower
than last year as the Group has been able to utilise more of the taxation losses
available to offset against profits earned in the United States.
Earnings
Underlying basic earnings per share were 5.25 pence (2007: 4.12 pence) based on
a weighted average of 71,778,989 shares in issue during 2008. Underlying diluted
earnings per share were 5.25 pence (2007: 4.10 pence) based on a weighted
average of 71,781,643 shares.
Cash flow
Cash generated from operations was GBP2.8 million during the year (2007: GBP2.1
million). The Group paid tax during the year of GBP0.8 million (2007: GBP0.5
million).
Capital expenditure was GBP0.8 million (2007: GBP0.6 million) of which GBP0.2
million was on patent applications. Product development expenditure was GBP0.6
million (2007: GBP0.9 million).
Dividend payments in the year were GBP0.5 million (2007: GBPnil).
The business ended the year with cash of GBP15.2 million an increase of 21%,
enabling it to make continued investments and take advantage of external
opportunities.
Employees
We employed 181 people worldwide as at 31 December 2008 (31 December 2007: 180).
The average number of employees in the year was 181 (2007: 176).
Exchange rates
The results of the Group's US, Japanese and German subsidiaries were translated
into sterling at average exchange rates of GBP/$1.84 (2007: 2.00), GBP/Yen 190
(2007: N/A), and GBP/EUR1.25 (2007: 1.46) respectively. The balance sheets were
translated at the year end exchange rates of GBP/$1.44 (2007: 1.99), GBP/Yen 130
(2007: N/A) and GBP/EUR1.03 (2007: 1.36).
Going concern
The Group has considerable financial resources and as a consequence the
directors believe that the Group is well placed to manage its business risks
successfully despite the current uncertain economic outlook. Accordingly, the
directors have a reasonable expectation that the Group and Company has adequate
resources to pursue its business plans and they continue to adopt the going
concern basis for preparing the annual report and accounts.
Risks and uncertainties
There are a number of risks and uncertainties which could impact the Group's
long term performance. If the Group does not continue to compete in its markets
effectively by developing innovative new products, providing superior customer
service and responding effectively to its competitors, it could lose customers
and its results could be adversely affected.
We are subject to the same general risks and uncertainties as any other
business, for example, the impact of changes in general economic conditions
including currency and interest rate fluctuations and the impact of competition,
the impact of natural disasters and sourcing of materials. Senior management
conducts regular risk reviews at which time the likelihood and impact of risks
are assessed. Outlined below is a description of the principal risks and
uncertainties that are specific to our business. Not all these factors are
within the Group's control. There may be other risks and uncertainties which are
unknown to the Group or which may not be material now but could turn out to be
material in the future.
Global economic environment
The Group sells high value capital equipment; in a deteriorating economic
environment, customers' may defer or cancel planned purchases. Any significant
deferral of purchases will impact the profitability of the Group. The Board
reviews the situation regularly and will take cost actions to minimise the
impact of any sustained deferral of customer's investment purchases.
Competitors
The Group operates in a competitive market place, where product innovation is
essential to retain a competitive edge. There are threats that our competitors
can launch new products into our markets before we can effectively respond, thus
resulting in lost sales. To reduce this risk we continually invest in R&D and
undertake market and customer research. In addition, some of Genetix'
competitors in certain markets are larger and have greater financial resources.
This may enable them to deliver products on more attractive terms or to invest
larger amounts in R&D.
Key suppliers
The Group could be disrupted by the loss of a key supplier which could disrupt
our ability to carry on manufacturing. The Group is in active discussions with
our key suppliers, we also hold an appropriate level of strategic stock to
mitigate against short term supplier failure.
Employees
The Group continually seeks to recruit and retain talented employees who
ultimately contribute to our success. In addition the Group has certain
individuals who have extensive knowledge of markets, customers and R&D. The
Group undertakes employee attitude survey's and seeks, with employee
involvement, to address specific areas.
Intellectual property
The Group may not be able to secure and/or maintain the intellectual property
associated with its products. It may also face challenges to its patents which
it does not have the resources to challenge and enforce potential infringements.
The Group regularly reviews its intellectual property position with its patent
attorneys.
Regulatory
Some of the Group's products are regulated and the relevant country regulatory
bodies may change existing or impose new regulatory requirements which may
impact products already sold by the Group or under development. Such changes may
have a significant impact both on sales and operating costs.
The Group continually reviews the regulatory environment with the assistance of
external consultants and takes corrective action whenever necessary.
Taxation
The Group utilises taxation losses in the United States. If these were not
available for use, the Group's effective tax rate would be materially higher
than it is currently.
Foreign exchange
As a consequence of the international nature of the Group's business it is
exposed to risks associated with changes in foreign currency exchange rates.
Currency risks primarily arise as a result of the fact that a significant
proportion of the Group's costs are incurred in pounds sterling whilst its
revenues are recorded in a range of currencies including Euros, U.S. dollars and
Japanese Yen. The Group seeks to reduce its exposure to exchange rate volatility
through a number of tools including various hedging instruments yet such methods
cannot remove all currency risk to the Group's trading performance.
Consolidated income statement
+---------------------------+--------------+----------+-----------+
| for the year ended 31 | Underlying | Other | Total |
| December 2008 | performance* | items* | 2008 |
| | 2008 | 2008 | GBP'000 |
| | GBP'000 | GBP'000 | |
| | | | |
| | | | |
+---------------------------+--------------+----------+-----------+
| Continuing operations | | | |
+---------------------------+--------------+----------+-----------+
| Revenue | 26,222 | - | 26,222 |
+---------------------------+--------------+----------+-----------+
| Cost of sales | (9,911) | (842) | (10,753) |
+---------------------------+--------------+----------+-----------+
| Gross profit | 16,311 | (842) | 15,469 |
+---------------------------+--------------+----------+-----------+
| Research & development | (1,898) | - | (1,898) |
+---------------------------+--------------+----------+-----------+
| Sales & administrative | (10,803) | (1,320) | (12,123) |
| expenses | | | |
+---------------------------+--------------+----------+-----------+
| Total administrative | (12,701) | (1,320) | (14,021) |
| expenses | | | |
+---------------------------+--------------+----------+-----------+
| Operating profit | 3,610 | (2,162) | 1,448 |
+---------------------------+--------------+----------+-----------+
| Interest income | 642 | - | 642 |
+---------------------------+--------------+----------+-----------+
| Profit before taxation | 4,252 | (2,162) | 2,090 |
+---------------------------+--------------+----------+-----------+
| Tax | (483) | 356 | (127) |
+---------------------------+--------------+----------+-----------+
| Profit for the period | 3,769 | (1,806) | 1,963 |
+---------------------------+--------------+----------+-----------+
| Attributed to: | | | |
+---------------------------+--------------+----------+-----------+
| Equity holders of the | 3,769 | (1,806) | 1,963 |
| parent | | | |
+---------------------------+--------------+----------+-----------+
| | | | |
+---------------------------+--------------+----------+-----------+
| Earnings per share | | | |
+---------------------------+--------------+----------+-----------+
| Basic | 5.25p | (2.52)p | 2.73p |
+---------------------------+--------------+----------+-----------+
| Diluted | 5.25p | (2.52)p | 2.73p |
+---------------------------+--------------+----------+-----------+
Table continued...
+---------------------------+--------------+----------+-----------+
| for the year ended 31 | Underlying | Other | Total |
| December 2008 | performance* | items* | 2007 |
| | 2007 | 2007 | GBP'000 |
| | GBP'000 | GBP'000 | |
+---------------------------+--------------+----------+-----------+
| | | | |
+---------------------------+--------------+----------+-----------+
| Continuing operations | | | |
+---------------------------+--------------+----------+-----------+
| Revenue | 22,909 | - | 22,909 |
+---------------------------+--------------+----------+-----------+
| Cost of sales | (9,109) | (34) | (9,143) |
+---------------------------+--------------+----------+-----------+
| Gross profit | 13,800 | (34) | 13,766 |
+---------------------------+--------------+----------+-----------+
| Research & development | (1,750) | - | (1,750) |
+---------------------------+--------------+----------+-----------+
| Sales & administrative | (9,036) | (746) | (9,782) |
| expenses | | | |
+---------------------------+--------------+----------+-----------+
| Total administrative | (10,786) | (746) | (11,532) |
| expenses | | | |
+---------------------------+--------------+----------+-----------+
| Operating profit | 3,014 | (780) | 2,234 |
+---------------------------+--------------+----------+-----------+
| Interest income | 584 | - | 584 |
+---------------------------+--------------+----------+-----------+
| Profit before taxation | 3,598 | (780) | 2,818 |
+---------------------------+--------------+----------+-----------+
| Tax | (645) | 260 | (385) |
+---------------------------+--------------+----------+-----------+
| Profit for the period | 2,953 | (520) | 2,433 |
+---------------------------+--------------+----------+-----------+
| Attributed to: | | | |
+---------------------------+--------------+----------+-----------+
| Equity holders of the | 2,953 | (520) | 2,433 |
| parent | | | |
+---------------------------+--------------+----------+-----------+
| | | | |
+---------------------------+--------------+----------+-----------+
| Earnings per share | | | |
+---------------------------+--------------+----------+-----------+
| Basic | 4.12p | (0.73)p | 3.39p |
+---------------------------+--------------+----------+-----------+
| Diluted | 4.10p | (0.73)p | 3.37p |
+---------------------------+--------------+----------+-----------+
*'Other items' relate to unrealised amounts arising from fair value changes on
forward foreign exchange contracts and adjustments to acquired intangibles and
goodwill. 'Other items' have been disclosed separately in order to give an
indication of the underlying performance of the Group. Further information is
provided in note 2.
Consolidated and Company balance sheets at
31 December 2008
+----------------------------------------+----------------------------------------+----------+---------+---------+
| | Group | Company |
+ +---------------------------------------------------+-------------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Non-current assets | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Goodwill | 15,868 | 16,756 | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Other intangible assets | 7,512 | 7,793 | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Property, plant and equipment | 2,833 | 2,723 | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Available-for-sale investments | - | 1 | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Investments in subsidiaries | - | - | 52,732 | 52,683 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| | 26,213 | 27,273 | 52,732 | 52,683 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Current assets | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Inventories | 3,261 | 1,991 | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Trade and other receivables | 7,330 | 5,963 | 201 | 88 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Cash and cash equivalents | 15,243 | 12,647 | 11,642 | 10,612 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| | 25,834 | 20,601 | 11,843 | 10,700 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Total assets | 52,047 | 47,874 | 64,575 | 63,383 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Current liabilities | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Trade and other payables | (7,211) | (5,571) | (5,007) | (5,600) |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Current tax liabilities | (169) | (639) | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Provisions | (245) | (224) | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| | (7,625) | (6,434) | (5,007) | (5,600) |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Net current assets | 18,209 | 14,167 | 6,836 | 5,100 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Non-current liabilities | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Deferred service income | (769) | (170) | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Deferred tax liabilities | (1,961) | (2,174) | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Total liabilities | (10,355) | (8,778) | (5,007) | (5,600) |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Net assets | 41,692 | 39,096 | 59,568 | 57,783 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Equity | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Share capital | 35,889 | 35,889 | 35,889 | 35,889 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Share premium account | 16,376 | 16,376 | 16,376 | 16,376 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Capital redemption reserve | 2,925 | 2,925 | 2,925 | 2,925 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Merger reserve | (29,686) | (29,686) | - | - |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Other reserves | 1,252 | 117 | 126 | 212 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Retained earnings | 14,936 | 13,475 | 4,252 | 2,381 |
+----------------------------------------+----------------------------------------+----------+---------+---------+
| Total equity attributable to | 41,692 | 39,096 | 59,568 | 57,783 |
| equity shareholders | | | | |
+----------------------------------------+----------------------------------------+----------+---------+---------+
Consolidated and Company cash flow statement for the year ended
31 December
2008
+----------------------------------------+--------+-----------+---------+--------+
| | Group | Company |
+----------------------------------------+--------------------+------------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------------------+--------+-----------+---------+--------+
| | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Operating activities | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Cash generated by operations | 3,600 | 2,664 | - | - |
+----------------------------------------+--------+-----------+---------+--------+
| Tax paid | (755) | (540) | - | 14 |
+----------------------------------------+--------+-----------+---------+--------+
| Net cash inflow from operating | 2,845 | 2,124 | - | 14 |
| activities | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Investing activities | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Purchases of property, plant | (570) | (427) | - | - |
| and equipment | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Expenditure on patents | (213) | (216) | - | - |
+----------------------------------------+--------+-----------+---------+--------+
| Expenditure on product | (584) | (894) | - | - |
| development | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| (Decrease)/increase in | - | - | (2,097) | 2,539 |
| intercompany borrowings | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Interest received | 636 | 584 | 629 | 521 |
+----------------------------------------+--------+-----------+---------+--------+
| Intercompany dividends received | - | - | 3,000 | - |
+----------------------------------------+--------+-----------+---------+--------+
| Acquisition of subsidiary (net | - | (53) | - | (53) |
| of cash acquired) | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Net cash (outflow)/inflow from | (731) | (1,006) | 1,532 | 3,007 |
| investing activities | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Financing activities | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Proceeds on issue of shares | - | 40 | - | 40 |
+----------------------------------------+--------+-----------+---------+--------+
| Dividends paid | (502) | - | (502) | - |
+----------------------------------------+--------+-----------+---------+--------+
| Net cash (outflow)/inflow from | (502) | 40 | (502) | 40 |
| financing activities | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Net increase in cash and cash | 1,612 | 1,158 | 1,030 | 3,061 |
| equivalents | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Cash and cash equivalents at | 12,647 | 11,485 | 10,612 | 7,551 |
| beginning of year | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Effect of foreign exchange rate | 984 | 4 | - | - |
| changes | | | | |
+----------------------------------------+--------+-----------+---------+--------+
| Cash and cash equivalents at | 15,243 | 12,647 | 11,642 | 10,612 |
| end of year | | | | |
+----------------------------------------+--------+-----------+---------+--------+
Consolidated statement of recognised income and expense
for the year ended 31
December 2008
+------------------------------------------------+----+-----+--------+--------+
| | | | 2008 | 2007 |
| | | | GBP000 | GBP000 |
+------------------------------------------------+----+-----+--------+--------+
| | | | | |
+------------------------------------------------+----+-----+--------+--------+
| Exchange differences on translation of foreign | | | 1,071 | 4 |
| operations | | | | |
+------------------------------------------------+----+-----+--------+--------+
| Net income recognised directly in equity | | | 1,071 | 4 |
+------------------------------------------------+----+-----+--------+--------+
| Profit for the year | | | 1,963 | 2,433 |
+------------------------------------------------+----+-----+--------+--------+
| Total recognised income and expense for the | | | 3,034 | 2,437 |
| year | | | | |
+------------------------------------------------+----+-----+--------+--------+
Consolidated and Company reconciliations of movement in equity
for the year
ended 31 December 2008
+----------------------------------------+---------------+---------------+---------------+---------------+
| | Group | Company |
+----------------------------------------+-------------------------------+-------------------------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------------------------+---------------+---------------+---------------+---------------+
| | | | | |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Total recognised income and expense | 3,034 | 2,437 | (627) | (467) |
| for the year | | | | |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Effect of share-based payment charge | 64 | 59 | (86) | 59 |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Increase in share capital | - | 40 | - | 40 |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Dividends received | - | - | 3,000 | - |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Dividends paid | (502) | - | (502) | - |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Equity shareholders' funds brought | 39,096 | 36,560 | 57,783 | 58,151 |
| forward | | | | |
+----------------------------------------+---------------+---------------+---------------+---------------+
| Equity shareholders' funds carried | 41,692 | 39,096 | 59,568 | 57,783 |
| forward | | | | |
+----------------------------------------+---------------+---------------+---------------+---------------+
Preliminary Announcement 2008
Notes to the preliminary announcement
1. Preparation of financial statements
While the financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting Standards
('IFRS'), this announcement does not itself contain sufficient information to
comply with IFRS. The Group intends to publish full financial statements that
comply with IFRS.
The preliminary announcement has been prepared on the basis of the accounting
policies as stated in the financial statements for the year ended 31 December
2008.
The financial information contained in the preliminary announcement does not
constitute the Group's statutory results for the year ended 31 December 2008 or
2007. The above figures for the year ended 31 December 2008 and 2007 are an
abridged version of the Group's audited accounts which have been reported on by
the Group's auditors and for which an unqualified audit report has been issued.
The auditors' report did not contain statements under s237(2) or (3) Companies
Act 1985 or draw attention to any matters by way of emphasis without qualifying
their report. The full annual report and accounts will be posted to shareholders
shortly and the Annual General Meeting will be held on 21 May 2009. The
statutory accounts for 2008 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
The preliminary announcement was approved by the Board on 4 March 2009.
2. Underlying performance
Underlying performance is presented to assist investors in their understanding
of the underlying performance and trends of the Group. Underlying performance
measures are not defined terms under IFRS and may not be comparable with
similarly titled measures reported by other companies.
Underlying performance excludes unrealised amounts arising from revaluing
forward foreign exchange contracts required by IAS 39 and adjustments to
acquired intangibles and goodwill.
A reconciliation of underlying gross profit, operating profit, profit before tax
and earnings per share measures to IFRS measures is set out below.
+--------------------------------------+----------------+----------------+
| | 2008 | 2007 |
| | GBP'000 | GBP'000 |
| | | |
+--------------------------------------+----------------+----------------+
| | | |
+--------------------------------------+----------------+----------------+
| Underlying gross profit | 16,311 | 13,800 |
+--------------------------------------+----------------+----------------+
| Unrealised amounts arising from | (842) | (34) |
| revaluing forward exchange contracts | | |
+--------------------------------------+----------------+----------------+
| Statutory IFRS gross profit | 15,469 | 13,766 |
+--------------------------------------+----------------+----------------+
| | | |
+--------------------------------------+----------------+----------------+
| Underlying operating profit | 3,610 | 3,014 |
+--------------------------------------+----------------+----------------+
| Unrealised amounts arising from | (842) | (34) |
| revaluing forward exchange contracts | | |
+--------------------------------------+----------------+----------------+
| Adjustments to acquired intangibles | (1,320) | (746) |
| and goodwill | | |
+--------------------------------------+----------------+----------------+
| Statutory IFRS operating profit | 1,448 | 2,234 |
+--------------------------------------+----------------+----------------+
| | | |
+--------------------------------------+----------------+----------------+
| Underlying profit before tax | 4,252 | 3,598 |
+--------------------------------------+----------------+----------------+
| Unrealised amounts arising from | (842) | (34) |
| revaluing forward exchange contracts | | |
+--------------------------------------+----------------+----------------+
| Adjustments to acquired intangibles | (1,320) | (746) |
| and goodwill | | |
+--------------------------------------+----------------+----------------+
| Statutory IFRS profit before tax | 2,090 | 2,818 |
+--------------------------------------+----------------+----------------+
| | | |
+--------------------------------------+----------------+----------------+
| Underlying earnings per share | 5.25p | 4.12p |
+--------------------------------------+----------------+----------------+
| Unrealised amounts arising from | (0.85p) | (0.05p) |
| revaluing forward exchange contracts | | |
+--------------------------------------+----------------+----------------+
| Adjustments to acquired intangibles | (1.67p) | (0.68p) |
| and goodwill | | |
+--------------------------------------+----------------+----------------+
| Statutory IFRS earnings per share | 2.73p | 3.39p |
+--------------------------------------+----------------+----------------+
3. Primary reporting format - geographical regions
The Group determines its reportable segments based on the structure of the
internal financial reports that are used by senior management for decision
making purposes. As at 31 December 2008 and 2007, the Group's operations were
organized into two geographic regions, the USA, and the UK & Rest of World.
Geography is our primary segment reporting format. The manufacture and marketing
of our products is a single integrated business and as a consequence the Group
has only one business segment and no secondary reporting segment format
disclosure has been made.
+------------------------------------------+----------------+----------------+-----------------+
| | | 2008 | |
+------------------------------------------+----------------+----------------+-----------------+
| | UK | USA | Group |
| | & | GBP'000 | GBP'000 |
| | Rest | | |
| | of | | |
| | World | | |
| | GBP'000 | | |
+------------------------------------------+----------------+----------------+-----------------+
| Income statement | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Revenue | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Total sales | 18,890 | 11,739 | |
+------------------------------------------+----------------+----------------+-----------------+
| Inter-segment sales | - | (4,407) | |
+------------------------------------------+----------------+----------------+-----------------+
| Total revenue from third parties | 18,890 | 7,332 | 26,222 |
+------------------------------------------+----------------+----------------+-----------------+
| | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Underlying operating profit | 1,485 | 2,125 | 3,610 |
+------------------------------------------+----------------+----------------+-----------------+
| Adjustments to acquired intangibles | (1,320) | - | (1,320) |
| and goodwill | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Unrealised amounts arising from | (842) | - | (842) |
| revaluing forward foreign currency | | | |
| contracts | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Interest income | 642 | - | 642 |
+------------------------------------------+----------------+----------------+-----------------+
| (Loss)/profit before taxation | (35) | 2,125 | 2,090 |
+------------------------------------------+----------------+----------------+-----------------+
| Tax | 62 | (189) | (127) |
+------------------------------------------+----------------+----------------+-----------------+
| Profit for the year attributable to | 27 | 1,936 | 1,963 |
| equity holders | | | |
+------------------------------------------+----------------+----------------+-----------------+
| | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Balance sheet | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Assets | 48,228 | 3,819 | 52,047 |
+------------------------------------------+----------------+----------------+-----------------+
| | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Liabilities | (5,056) | (3,338) | (8,394) |
+------------------------------------------+----------------+----------------+-----------------+
| Unallocated liabilities | | | (1,961) |
+------------------------------------------+----------------+----------------+-----------------+
| Consolidated total liabilities | | | (10,355) |
+------------------------------------------+----------------+----------------+-----------------+
| | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Other segment information | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Capital expenditure | 1,183 | 184 | 1,367 |
+------------------------------------------+----------------+----------------+-----------------+
| Depreciation | 372 | 129 | 501 |
+------------------------------------------+----------------+----------------+-----------------+
| Amortisation of intangible assets | | 9 | 1,076 |
| | 1,067 | | |
+------------------------------------------+----------------+----------------+-----------------+
| Adjustment to carrying value of | 888 | - | 888 |
| goodwill | | | |
+------------------------------------------+----------------+----------------+-----------------+
| Non cash expenses: Share based payment | 64 | - | 64 |
| expense | | | |
+------------------------------------------+----------------+----------------+-----------------+
+------------------------------------------+----------------+----------------+----------------+
| | | 2007 | |
+------------------------------------------+----------------+----------------+----------------+
| | UK | USA | Group |
| | & | GBP'000 | GBP'000 |
| | Rest | | |
| | of | | |
| | World | | |
| | GBP'000 | | |
+------------------------------------------+----------------+----------------+----------------+
| Income statement | | | |
+------------------------------------------+----------------+----------------+----------------+
| Revenue | | | |
+------------------------------------------+----------------+----------------+----------------+
| Total sales | 16,785 | 8,979 | |
+------------------------------------------+----------------+----------------+----------------+
| Inter-segment sales | - | (2,855) | |
+------------------------------------------+----------------+----------------+----------------+
| Total revenue from third parties | 16,785 | 6,124 | 22,909 |
+------------------------------------------+----------------+----------------+----------------+
| | | | |
+------------------------------------------+----------------+----------------+----------------+
| Underlying operating profit | 2,016 | 998 | 3,014 |
+------------------------------------------+----------------+----------------+----------------+
| Adjustments to acquired intangibles | (746) | - | (746) |
| and goodwill | | | |
+------------------------------------------+----------------+----------------+----------------+
| Unrealised amounts arising from | (34) | - | (34) |
| revaluing forward foreign currency | | | |
| contracts | | | |
+------------------------------------------+----------------+----------------+----------------+
| Interest income | 582 | 2 | 584 |
+------------------------------------------+----------------+----------------+----------------+
| Profit before taxation | 1,818 | 1,000 | 2,818 |
+------------------------------------------+----------------+----------------+----------------+
| Tax | (276) | (109) | (385) |
+------------------------------------------+----------------+----------------+----------------+
| Profit for the year attributable to | 1,542 | 891 | 2,433 |
| equity holders | | | |
+------------------------------------------+----------------+----------------+----------------+
| | | | |
+------------------------------------------+----------------+----------------+----------------+
| Balance sheet | | | |
+------------------------------------------+----------------+----------------+----------------+
| Assets | 43,897 | 3,977 | 47,874 |
+------------------------------------------+----------------+----------------+----------------+
| | | | |
+------------------------------------------+----------------+----------------+----------------+
| Liabilities | (4,035) | (2,569) | (6,604) |
+------------------------------------------+----------------+----------------+----------------+
| Unallocated liabilities | | | (2,174) |
+------------------------------------------+----------------+----------------+----------------+
| Consolidated total liabilities | | | (8,778) |
+------------------------------------------+----------------+----------------+----------------+
| | | | |
+------------------------------------------+----------------+----------------+----------------+
| Other segment information | | | |
+------------------------------------------+----------------+----------------+----------------+
| Capital expenditure | 1,491 | 46 | 1,537 |
+------------------------------------------+----------------+----------------+----------------+
| Depreciation | 434 | 161 | 595 |
+------------------------------------------+----------------+----------------+----------------+
| Amortisation of intangible assets | 935 | - | 935 |
+------------------------------------------+----------------+----------------+----------------+
| Adjustment to carrying value of | 314 | - | 314 |
| goodwill | | | |
+------------------------------------------+----------------+----------------+----------------+
| Non cash expenses: Share based payment | 59 | - | 59 |
| expense | | | |
+------------------------------------------+----------------+----------------+----------------+
4. Operating profit
+-----------------------------------------------+----+----------+----------+---------+
| | | 2008 | 2007 |
| | | GBP000 | GBP000 |
+-----------------------------------------------+----+----------+----------+
| Operating profit is stated after | | | |
| charging/(crediting): | | | |
+-----------------------------------------------+----+----------+----------+
| Depreciation of property, plant and equipment | | 501 | 595 |
+-----------------------------------------------+----+----------+----------+
| Amortisation of intangible assets | | 1,076 | 935 |
+-----------------------------------------------+----+----------+----------+
| Adjustment to goodwill in respect of the | | 888 | 314 |
| benefit received from utilisation of taxation | | | |
| losses | | | |
+-----------------------------------------------+----+----------+----------+
| Cost of inventories recognised as expense | | 6,085 | 5,647 |
+-----------------------------------------------+----+----------+----------+
| Auditors remuneration for audit services (see | | 90 | 87 |
| below) | | | |
+-----------------------------------------------+----+----------+--------------------+
| Auditors remuneration for non audit services | | 88 | 44 |
| (see below) | | | |
+-----------------------------------------------+----+----------+--------------------+
| Research and development (including salaries) | | 1,990 | 2,255 |
| before capitalisation of development costs | | | |
+-----------------------------------------------+----+----------+--------------------+
| Grant recoveries | | (14) | (25) |
+-----------------------------------------------+----+----------+--------------------+
| Change in fair value of financial liabilities | | 842 | 152 |
| designated as at fair value through profit | | | |
| and loss | | | |
+-----------------------------------------------+----+----------+--------------------+
| Exchange gain on foreign currency | | (284) | (328) |
| transactions | | | |
+-----------------------------------------------+----+----------+----------+---------+
The analysis of auditors' remuneration is as follows:
+---------------------------------------------------+---------------+---------------+
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+---------------------------------------------------+---------------+---------------+
| Fees payable to the company's auditors for the | 71 | 68 |
| audit of the company's annual accounts | | |
+---------------------------------------------------+---------------+---------------+
| Fees payable to the company's auditors for | | |
| other services to the group: the audit of the | | |
| company's subsidiaries pursuant to legislation | | |
+---------------------------------------------------+---------------+---------------+
| | 19 | 19 |
+---------------------------------------------------+---------------+---------------+
| Total audit fees | 90 | 87 |
+---------------------------------------------------+---------------+---------------+
| | | |
+---------------------------------------------------+---------------+---------------+
| Tax services related to: | | |
+---------------------------------------------------+---------------+---------------+
| Compliance | 60 | 41 |
+---------------------------------------------------+---------------+---------------+
| General advisory | 28 | 3 |
+---------------------------------------------------+---------------+---------------+
| Total non audit fees | 88 | 44 |
+---------------------------------------------------+---------------+---------------+
5. Earnings per share from continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
+---------------------------------------------------+------+----------+----------+
| | | 2008 | 2007 |
| | | GBP000 | GBP000 |
+---------------------------------------------------+------+----------+----------+
| Earnings | | | |
+---------------------------------------------------+------+----------+----------+
| Earnings for the purpose of basic and diluted | | 1,963 | 2,433 |
| earnings per share being net profit attributable | | | |
| to equity shareholders of the parent. | | | |
+---------------------------------------------------+------+----------+----------+
| | | | |
+---------------------------------------------------+------+----------+----------+
| Earnings for the purpose of underlying basic and | | 3,769 | 2,953 |
| diluted earnings per share being net profit | | | |
| attributable to equity shareholders of the | | | |
| parent, before unrealised fair value changes on | | | |
| forward currency contracts and adjustments to | | | |
| acquired intangibles and goodwill | | | |
+---------------------------------------------------+------+----------+----------+
| | | | |
+---------------------------------------------------+------+----------+----------+
| Number of shares | | No. 000 | No. 000 |
+---------------------------------------------------+------+----------+----------+
| Weighted average number of ordinary shares for | | 71,779 | 71,728 |
| the purpose of basic earnings per share | | | |
+---------------------------------------------------+------+----------+----------+
| Effect of dilutive potential ordinary shares: | | 3 | 73 |
| Share options | | | |
+---------------------------------------------------+------+----------+----------+
| Weighted average number of ordinary shares for | | 71,782 | 72,101 |
| the purpose of diluted earnings per share | | | |
+---------------------------------------------------+------+----------+----------+
| | | | |
+---------------------------------------------------+------+----------+----------+
| Earnings per share | | Pence | Pence |
+---------------------------------------------------+------+----------+----------+
| Basic earnings per share | | 2.73 | 3.39 |
+---------------------------------------------------+------+----------+----------+
| Diluted earnings per share | | 2.73 | 3.37 |
+---------------------------------------------------+------+----------+----------+
| | | | |
+---------------------------------------------------+------+----------+----------+
| Underlying earnings per share | | | |
+---------------------------------------------------+------+----------+----------+
| Basic earnings per share | | 5.25 | 4.12 |
+---------------------------------------------------+------+----------+----------+
| Diluted earnings per share | | 5.25 | 4.10 |
+---------------------------------------------------+------+----------+----------+
6. Note to the consolidated and company cash flow statements
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| | Group | Company |
+--------------------------------------------------------+---------------------------------+---------------------------------+
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Operating | 1,448 | 2,234 | (1,520) | (1,099) |
| profit/(loss) | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Adjustments | | | | |
| for: | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Depreciation | 501 | 595 | - | - |
| of property, | | | | |
| plant and | | | | |
| equipment | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Amortisation | 1,076 | 935 | - | - |
| of | | | | |
| intangible | | | | |
| assets | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Adjustment | 888 | 314 | - | - |
| to | | | | |
| carrying | | | | |
| value of | | | | |
| goodwill | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Other | 64 | 59 | (86) | 59 |
| non-cash | | | | |
| items | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Operating cash flows before | 3,977 | 4,137 | (1,606) | (1,040) |
| | | | | |
| movements in working | | | | |
| capital | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Increase | (1,270) | (566) | - | - |
| in | | | | |
| inventories | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| (Increase)/decrease in | (1,367) | 300 | (113) | (4) |
| receivables | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Increase/(decrease) | 2,260 | (1,207) | 1,719 | 1,044 |
| in payables | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
| Cash | 3,600 | 2,664 | - | - |
| generated | | | | |
| by | | | | |
| operations | | | | |
+--------------------------------------------------------+----------------+----------------+----------------+----------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JJMRTMMMMBAL
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