TIDMNBT
RNS Number : 7912O
Group NBT PLC
23 September 2011
Group NBT plc
("Group NBT", "the Group" or "the Company")
Group NBT is a leading global supplier of domain name management
and associated services
Preliminary results for the year ended 30 June 2011
Highlights
-- Revenue
-- Revenue up 13% to GBP49.5 million
-- Organic* revenue up 4% at GBP45.7 million and up 5% excluding
revenues from our domain name acquisitions business (6% in constant
currency)
-- NetNames Platinum Service revenue up 13% in constant currency
to GBP15.5 million
-- Managed hosting revenue up 10% in constant currency to GBP7.0
million
-- Brand protection revenue up by 28% in constant currency to
GBP2.1 million
-- Underlying** profit before tax
-- Underlying** profit before tax at GBP9.6 million up 18%
-- Organic* underlying** profit before tax was up 9% to GBP8.9
million, and excluding domain acquisitions profit was up 15% (16%
in constant currency)
-- Indom, acquired 14 December 2010, has traded well with
revenue of GBP3.8 million and underlying** pre-tax profit of GBP0.7
million
-- Underlying** diluted EPS was up 11% to 26.22 pence and on an
organic* basis, excluding domain acquisitions, up 9%
-- Net cash at year end GBP6.2 million
-- Recommended Cash Offer from Newton Bidco Limited, an
investment vehicle owned indirectly by certain funds managed by
HgCapital LLP
-- An interim dividend of 1.68 pence, up 20% was paid in April
2011. As a result of the Cash Offer, no final dividend is
proposed
* excluding the results of Indom SAS, acquired on 14 December
2010
** excluding amortisation, restructuring costs, acquisition
related expenses and an unexpected financial loss (see cash flow
section)
Geoff Wicks, Chief Executive Officer, commented: "We have
experienced another good year and although growth is not back to
levels seen before economic conditions deteriorated we have seen
some improvement. The acquisition of Indom during the year supports
our position as a market leader for domain name management services
in Europe and we will continue to look for similar acquisition
possibilities."
For further information, please contact:
Geoff Wicks, CEO + 44 (0)20 7015
geoff.wicks@groupnbt.com Group NBT plc 9326
Nominated Advisers: Michael
Meade, Richard Thomas
Corporate Broking - James Numis Securities + 44 (0)20 7260
Black Limited 1000
Zoe Biddick/Sophie McNulty
zoe.biddick@biddicks.co.uk
sophie.mcnulty@biddicks.co.uk Biddicks + 44 (0)20 31786378
Business Review
Group NBT is pleased to announce another year of good growth.
The Group continued to grow revenue both organically and through
acquisition and at the same time maintained its margins, despite
markets remaining difficult throughout the year. Our domain name
management business was a key focus for development and we are
particularly pleased with the excellent revenue growth achieved in
our brand protection business. There are signs of improving market
conditions especially for domain name management where the
potential for new domain name extensions is being pursued
vigorously.
In another announcement issued today, the Board is pleased to
report that it has agreed terms with Newton Bidco Limited, an
investment vehicle owned indirectly by certain funds managed by
HgCapital LLP, in respect of a recommended Cash Offer for the
Company at a price of 550 pence per share, valuing the entire
issued and to be issued share capital at approximately GBP153
million. The Cash Offer values the Company's shares at an
attractive premium to both the current and recent closing prices at
which the shares have been traded and exceeds the highest price at
which the shares have traded at any time in the last ten years. The
Cash Offer is to be implemented by means of a scheme of arrangement
("the Scheme"). Investors will be invited to approve the Scheme at
a Court Meeting and General Meeting, details of which will be
posted to shareholders in due course.
Since commencing the strategy of developing a corporate domain
name management and hosting business nearly a decade ago, the
Company has made good progress in establishing itself as a market
leader in Europe. In HgCapital the Board believes it has found a
partner which will support Group NBT in achieving its commercial
and strategic objectives and will help it grow both organically by
investment and through securing acquisition opportunities that
would otherwise be beyond its current financial resources as a
quoted company.
Strategy
Our strategy is to build recurring revenue by delivering
excellent products with a high service content. This strategy has
served us well and will remain in place while the markets continue
to grow and companies need to outsource the management of the
services we provide. This model has been a key part of sustaining
the steady progress we have made over a number of years. In the
year under review we achieved good growth in Continental Europe and
in the US, while maintaining steady growth in our home market.
Market conditions
Higher levels of new business, combined with lower levels of
cancellations, indicate some improvement in certain areas of our
business although economic conditions remain uncertain. As a
result, customer activity has not yet reached the levels we have
seen in previous years. In the domain name management market there
has been a great deal of interest in the new domain name extensions
which were finally agreed by ICANN in June. Whilst this did not
have any impact on revenue during the year it did serve to raise
awareness of the need to manage what are increasingly valuable
domain name assets.
Financial overview
Revenue for the Group was GBP49.5 million for the year to 30
June 2011, up 13% on the previous year including the impact of the
acquisition of Indom, a French competitor, in December 2010.
Excluding the impact of this acquisition, Group revenue was GBP45.7
million, up 4% year-on-year and up 5% on a constant currency
basis.
Underlying profit before tax was GBP9.6 million, up 18% on the
previous year and, excluding the impact of Indom, up 9%
year-on-year and up 10% on a constant currency basis.
Cash generation was particularly good during the year and at the
end of the financial year the Group had GBP6.2 million net cash
before unamortised facility fees. This compares with GBP11.4
million at the end of the previous year and includes the subsequent
acquisition of Indom for GBP12.0 million in net cash.
Corporate Brand Services
Group NBT, through its subsidiary NetNames, provides a range of
services to manage and protect companies' online activities.
Companies are able to register domain names in over 250
jurisdictions around the world and frequently build significant
sized portfolios of domain names which, like trademarks, often form
part of their valuable intellectual property assets. NetNames
manages these portfolios for many companies to ensure that they are
registered properly, renewed in a timely manner and used
appropriately.
Additionally, Group NBT helps its customers to protect their
brands against online fraud, digital piracy, counterfeiting and
other online infringements. This range of products is provided by
the NetNames and Envisional brands.
Revenue for Corporate Brand Services for the year under review
was GBP23.6 million, up 7% on last year, or 9% at constant currency
rates and excluding domain acquisitions, revenue was up 10% on last
year, or 11% at constant currency rates. Within these numbers,
revenue for domain name management was GBP21.5 million and revenue
for brand protection services was GBP2.1 million. Revenue for
NetNames Platinum Service, the Group's flagship domain name
management product, grew 12% during the year, 13% at constant
currency rates.
Growth for domain name management has improved on the previous
year as we have seen better levels of new sales and lower levels of
cancellations. Overall growth was held back by lower revenue from
domain acquisitions, where we act for our customers to buy names
for them in the secondary market. Domain acquisitions experienced
exceptional sales in the year ending 30 June 2010 which, as we
noted in previous communications, was unlikely to be repeated in
the year under review.
Envisional's brand protection services did particularly well
with revenue for the year to 30 June 2011 up 28% on the previous
year. Not only have we acquired some excellent new customers but we
have also improved customer retention. Growth is also, in part, due
to an enhanced product offering, allowing customers the ability to
remove infringing websites and auctions.
Managed Hosting
Managed hosting services are provided to companies in the UK and
France. Revenue for the year under review was GBP7.0 million, up
10% on the previous year. Technology has played an important role
in the improvement of our performance as much of our new revenue
comes from our new cloud based services. We have also experienced
an improvement in market conditions which is reflected in higher
levels of new business.
Partner and reseller services
Ascio is our partner and reseller brand which offers other ISPs
the ability to register a wide range of domain names using our
technology and systems. Revenue for the year was GBP9.0 million, up
6% on last year, or 9% at constant currency rates. Some of our
larger partners have experienced lower growth as a result of the
prevailing market conditions which, in turn, affects our revenue.
We have, however, continued to add new partners at a similar rate
to last year and this will help to maintain growth rates in the
future.
We continue to be focused on Continental Europe where we have a
resilient customer base and we have extended this focus into
Eastern Europe in order to drive new business.
Online Services
Group NBT's online services register and renew domain names and
provide hosting and email services through the websites of several
of our brands, primarily the Easily brand in the UK and Speednames
in Europe. Revenue for these services for the year under review was
GBP6.1 million, 14% down on last year, or 13% at constant currency
rates. The previous year's result benefited from the transfer of
some revenue within the Group which did not recur this year.
However, we expect to experience decline in this segment of the
market as we continue to concentrate on our managed services.
Indom
Indom, a market leader for the provision of domain name
management services in France, was acquired by the Group on 14
December 2010. Since the acquisition Indom has continued to perform
ahead of initial expectations. We have embarked on restructuring
and integration which will take up to two years to complete. Over
time Group NBT France and Indom will be merged and the Indom
business will be transferred to the Group's systems. This project
is progressing well and we are already experiencing some of the
benefits of the acquisition. This acquisition also brings
significant expertise into the Group, Stephane Van Gelder who will
manage the Group's business in France is an expert in the domain
name market and is the Chairman of a key ICANN committee.
Profit
The overall gross margin of 73.3% decreased from 73.6% last
year. Excluding Indom, gross margin was 72.6%, below last year's
rate as the result of relatively small changes to the revenue
mix.
Underlying operating profit at GBP9.6 million, increased 19%
year-on-year and the margin at 19.5% was up from 18.5% last year.
Excluding Indom, underlying operating profit was up 10% at GBP8.9
million at a margin of 19.6%. Excluding both Indom and domain
acquisitions, the underlying operating profit grew strongly at 16%
year-on-year with a margin of 18.0%, up from 16.3% as overheads
remained largely flat and revenues grew.
On a statutory basis: operating profit was GBP7.3 million, up 2%
from GBP7.1 million last year and profit before tax was GBP7.2
million, up 1% from last year. The amounts by which these statutory
profit measures were adjusted to arrive at the underlying profit
measures used, comprise: amortisation of intangible assets acquired
through acquisitions of GBP1.3 million (2010: GBP1.0 million) which
increased as a result of the acquisition of Indom; advisory and
professional fees in respect of the acquisition of Indom of GBP0.4
million (2010: nil) which were expensed instead of being
capitalised in accordance with the revised accounting standard on
accounting for acquisitions; technical and other one-off costs
relating to the integration of Indom of GBP0.3 million (2010: nil);
and the unexpected financial loss arising from our Danish bank as
described below of GBP0.3 million (2010: nil).
Basic EPS was 20.04 pence, down 7% from 21.48 pence last year
and diluted EPS was 19.46 pence, down 7% from 20.99 pence last
year. Both these measures were impacted by the adjusting items
mentioned above, namely, amortisation, restructuring costs,
acquisition related expenses and the financial loss, which in total
amounted to GBP2.3 million compared to GBP1.0 million last
year.
Taxation
A tax charge of GBP2.0 million (2010: GBP1.7 million) arose in
the year representing an effective tax rate of 28.3% (2010:
23.2%).
The effective tax rate on underlying profit before tax
(excluding amortisation, restructuring costs, acquisition related
expenses, and the financial loss together with associated tax
credits) was 27.0% (2010: 23.5%). There were numerous factors that
drove up the effective rate of tax from last year including the
addition of Indom. The main factors were; non-UK regions where the
effective tax rates moved towards higher statutory rates as
anticipated; and the proportion of UK profits, taxed at a
relatively higher rate, increasing within the mix.
Cash flow
At 30 June 2011, the Group had net cash balances of GBP6.2
million (2010: GBP11.4 million) before unamortised facility fees.
This comprised cash balances of GBP12.4 million (2010: GBP13.4
million) and debt, before unamortised facility fees, of GBP6.2
million (2010: GBP2.0 million).
Cash conversion remained strong over the year with cash
generated from operations increasing to GBP10.7 million including
Indom, up from GBP9.4 million last year. Free cash flow, comprising
cash flows from operations, interest, tax and capital expenditure,
was up 9% to GBP7.8 million from GBP7.1 million last year with tax
payments increasing by 68% to GBP1.9 million.
Net cash outflow in connection with the acquisition of Indom was
GBP12.0 million. While this was funded mostly through existing cash
resources, a GBP4.5 million three-year term loan together with a
three-year revolving credit facility of GBP1.5 million, currently
undrawn, was secured in December 2010. This is in addition to the
existing debt of GBP1.0 million which is repayable by July
2012.
In February 2011, an unexpected financial loss was arose from
our primary Danish clearing bank filing for bankruptcy following
which, after a distribution of 66%, GBP0.3 million of our cash
balances were lost. The bank, which is now under state ownership,
has announced that the eventual distribution may increase to 84% in
total but this is subject to a legal process and therefore no
further recovery has been provided for in the financial statements.
The Group's policy in respect of surplus funds is to distribute
them amongst various banks and this policy was in place at the time
of the bankruptcy.
Dividend
An interim dividend of 1.68 pence was paid on 15 April 2011. As
a result of the Cash Offer, no final dividend is proposed.
Directors' Responsibilities
The Directors confirm to the best of their knowledge that:
a) these unaudited preliminary results have been prepared in
accordance with DRT 4.2.4R of the Disclosure and Transparency Rules
of the Financial Services Authority;
b) the Business Review includes a fair review of the information
required by DRT 4.2.7R and DRT 4.2.8R of the Disclosure and
Transparency Rules of the Financial Services Authority.
By order of the Board
Geoff Wicks
Chief Executive
Consolidated Income Statement
for the year ended 30 June
2011
Unaudited Audited
2011 2010
GBP'000 GBP'000
Revenue 49,459 43,921
Cost of sales 13,227 11,590
Gross profit 36,232 32,331
Operating expenses 28,955 25,184
Operating profit 7,277 7,147
Finance income 108 81
Finance expense (147) (41)
Profit before taxation 7,238 7,187
Taxation (2,049) (1,666)
Profit for the year 5,189 5,521
------------------------ ---------- --------
Earnings per share
- Basic 20.04p 21.48p
- Diluted 19.46p 20.99p
------------------------ ---------- --------
All amounts relate to continuing
activities.
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2011
Unaudited Audited
2011 2010
GBP'000 GBP'000
----------------------------------------- ---------- --------
Profit for the year 5,189 5,521
Other comprehensive income
Exchange translation differences 3,268 (1,503)
Total comprehensive income for the year 8,457 4,018
----------------------------------------- ---------- --------
The deferred tax credits in relation to share-based payments,
previously shown in this statement, have now been removed and is
part of the Consolidated Statement of Changes in Equity.
Consolidated Statement of Financial Position
as at 30 June 2011
Unaudited Audited
2011 2010
GBP'000 GBP'000
Assets
Non-current assets
Goodwill 39,805 27,523
Other intangible assets 6,116 1,619
Property, plant and equipment 1,883 2,213
Deferred tax asset 1,412 1,084
49,216 32,439
-------------------------------- ---------- ---------
Current assets
Trade and other receivables 7,956 5,960
Cash and cash equivalents 12,407 13,443
20,363 19,403
-------------------------------- ---------- ---------
Total assets 69,579 51,842
-------------------------------- ---------- ---------
Liabilities
Current liabilities
Bank loan (2,874) (983)
Trade and other payables (16,223) (12,348)
Taxation (1,614) (1,530)
(20,711) (14,861)
-------------------------------- ---------- ---------
Non-current liabilities
Bank loan (3,236) (991)
Deferred tax liability (1,786) -
(5,022) (991)
-------------------------------- ---------- ---------
Total liabilities (25,733) (15,852)
-------------------------------- ---------- ---------
Net assets 43,846 35,990
-------------------------------- ---------- ---------
Capital and reserves
Called up share capital 260 259
Share premium account 4,055 3,824
Merger reserve 12,008 12,008
Other reserve 2,121 1,794
Cumulative translation reserve 5,851 2,583
Profit and loss account 19,551 15,522
Total equity 43,846 35,990
-------------------------------- ---------- ---------
Consolidated Statement of Changes in Equity
for the year ended 30 June 2011
Cumulative
Share Share Merger Other translation Retained
capital premium reserve reserve reserve profit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 30
June 2011
(Unaudited)
Balance at 1
July 2010 259 3,824 12,008 1,794 2,583 15,522 35,990
Comprehensive
income for
the year - - - - 3,268 5,189 8,457
Dividends - - - - - (1,160) (1,160)
Share-based
payment
credit - - - 142 - - 142
Deferred tax
recognised on
share-based
payment - - - 185 - - 185
Issue of share
capital 1 231 - - - - 232
Balance at 30
June 2011 260 4,055 12,008 2,121 5,851 19,551 43,846
--------------- -------- -------- -------- -------- ------------ --------- --------
Year ended 30
June 2010
(Audited)
Balance at 1
July 2009 254 3,536 12,008 1,467 4,086 10,880 32,231
Comprehensive
income for
the year - - - - (1,503) 5,521 4,018
Dividends - - - - - (879) (879)
Share-based
payment
credit - - - 98 - - 98
Deferred tax
recognised on
share-based
payment - - - 229 - - 229
Issue of share
capital 5 288 - - - - 293
Balance at 30
June 2010 259 3,824 12,008 1,794 2,583 15,522 35,990
--------------- -------- -------- -------- -------- ------------ --------- --------
Consolidated Statement of Cash Flows
for the year ended 30 June 2011
Unaudited Audited
2011 2010
GBP'000 GBP'000
Cash flow from operating activities
Profit before taxation 7,238 7,187
Finance expense / (income)(net) 39 (40)
Depreciation and amortisation 2,777 2,487
Profit on disposal of assets (44) -
Share-based payments 142 98
Exchange differences (147) (324)
(Increase) / decrease in trade and
other receivables (286) 919
Increase / (decrease) in trade and
other payables 939 (907)
-------------------------------------------- ---------- --------
Cash generated from operations 10,658 9,420
Taxation paid (1,894) (1,125)
Net cash inflow from operating activities 8,764 8,295
-------------------------------------------- ---------- --------
Cash flow from investing activities
Interest received 108 81
Purchase of property, plant and equipment (1,025) (1,211)
Proceeds from disposal of fixed assets 62 -
Purchase of subsidiary undertakings (14,170) (147)
Net cash acquired with subsidiary
undertaking 2,183 -
Net cash outflow from investing activities (12,842) (1,277)
-------------------------------------------- ---------- --------
Cash flow from financing activities
Interest paid (147) (41)
Dividends paid (1,160) (879)
Long term loan receipt / (repayments) 3,882 (983)
Proceeds from issue of share capital 232 293
Net cash inflow / (outflow) from financing
activities 2,807 (1,610)
-------------------------------------------- ---------- --------
Net (decrease) / increase in cash
and cash equivalents (1,271) 5,408
Cash and cash equivalents at start
of year 13,443 8,157
Effect of exchange rate changes 235 (122)
Cash and cash equivalents at end of
year 12,407 13,443
-------------------------------------------- ---------- --------
Notes
1. Basis of preparation
The financial information set out in these unaudited preliminary
results do not constitute the company's statutory accounts for 2010
or 2011. Statutory accounts for the year ended 30 June 2010 have
been reported on by the Independent Auditors. The Independent
Auditors' Report on the Annual Report and Financial Statements for
2010 was unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
The results for the year ended 30 June 2011 are unaudited.
Statutory accounts for the year ended 30 June 2010 have been filed
with the Registrar of Companies. The statutory accounts for the
year ended 30 June 2011 will be finalised based on the information
presented in this announcement and delivered to the Registrar in
due course.
2. Accounting policies
The financial information set out in these preliminary results
has been prepared using the recognition and measurement principles
of International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively Adopted IFRSs). The accounting
policies adopted in this financial information have been
consistently applied to all the years presented and are consistent
with the policies used in the preparation of the statutory accounts
for the period ended 30 June 2010 and which will form the basis of
the 2011 Financial Statements, except as described as below.
A number of new and amended standards became effective for
periods beginning on or after 1 July 2010. The principal change
that is relevant to the Group is IFRS 3 Business Combinations
(revised). Apart from no longer capitalising acquisition expenses,
there has been no effect on the reported results or previous
financial position of the Group.
None of the other new standards and amendments affect the
Group.
3. Segmental analysis
The Group reports operating performance of the business by
revenue from each of its following services: corporate domain name
services - management of corporate domain name portfolios; managed
hosting services - dedicated hosting solutions for SMEs; reseller
services - white-labelled domain name registration services for
ISPs and other intermediaries; online services - domain names,
email and shared hosting; and brand protection services -
monitoring the Internet for brand abuse, fraud, piracy and
counterfeiting.
The chief operating decision maker is the Chief Executive
Officer, who reviews these Group results together with gross profit
margin and other measures for decision making purposes. On this
basis it is considered that as the Group's activities are operated
largely through a common infrastructure and support functions its
activities constitute one operating segment. The format set out
below is used to report results internally.
Unaudited Audited
2011 2010
GBP'000 GBP'000
Revenue by service
Corporate domain names 25,231 20,300
Managed hosting 7,031 6,397
Reseller 8,963 8,468
Online 6,099 7,084
Brand protection 2,135 1,672
----------
49,459 43,921
---------- --------
Gross profit 36,232 32,331
---------- --------
Underlying operating
profit* 9,625 8,109
---------- --------
Net finance (expense) / income (39) 40
---------- --------
Underlying profit before
tax** 9,586 8,149
Amortisation (1,324) (962)
Restructuring costs (312) -
Acquisition related
expenses (398) -
Financial loss (314) -
Profit before taxation 7,238 7,187
---------- --------
* Underlying operating profit is defined as operating profit
excluding amortisation, restructuring costs, acquisition related
expenses and an unexpected financial loss (see Cash flow section of
the Business Review for details).
** Underlying profit before tax is defined as profit before tax
excluding amortisation, restructuring costs, acquisition related
expenses and an unexpected financial loss (see Cash flow section of
the Business Review for details).
Other geographical information The Group operates in three main
geographic areas: UK, other European countries and the USA.
Revenue, profit before tax and non-current assets by origin of
geographical segment are as follows:
Revenue Profit before tax Non-current assets
Audited As
Unaudited Audited Unaudited Audited Unaudited restated
2011 2010 2011 2010 2011 2010
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
UK 23,045 22,438 5,263 4,664 10,688 11,280
Other
European
countries 23,838 19,211 1,290 2,013 37,100 20,060
USA 2,576 2,272 685 510 16 15
49,459 43,921 7,238 7,187 47,804 31,355
----------- ---------- -------- ---------- -------- ---------- ------------
Under the requirements of IFRS 8 deferred tax has been removed
from the non-current assets analysis and comparative amounts have
been restated accordingly.
4. Earnings per share
The basic and diluted earnings per share for the year ended 30
June 2011 are based on the profit for the year attributable to
ordinary shareholders, of GBP5.19 million (2010: GBP5.52 million)
and on the weighted average number of shares of 25,896,000 (2010:
25,705,000).
An adjusted earnings per share has also been presented in
addition to the earnings per share and is based on earnings
adjusted to eliminate the effects of amortisation, restructuring
costs, acquisition related expenses and financial loss. It has been
calculated to allow shareholders to gain a clearer understanding of
the trading performance of the Group.
The basis of the calculation of the basic and diluted profit per
share is set out below:
Unaudited Audited
2011 2010
GBP'000 GBP'000
Profit attributable to ordinary shareholders 5,189 5,521
Amortisation of intangible assets (net of tax) 958 716
Restructuring costs (net of tax) 213 -
Acquisition related expenses (net of tax) 398 -
Financial loss (net of tax) 236 -
Profit attributable to ordinary shareholders before
amortisation, restructuring, acquisition related
expenses and financial loss 6,994 6,237
-------------------------------------------------------- ---------- --------
Weighted average and adjusted weighted average number of
ordinary shares (000s):
Number Number
Shares used for basic earnings
per share 25,896 25,705
Dilutive share options 766 599
Shares used for diluted earnings
per share 26,662 26,304
---------------------------------- ------- -------
Earnings per share:
Basic Diluted
Unaudited Audited Unaudited Audited
2011 2010 2011 2010
pence pence pence pence
Earnings per share 20.04 21.48 19.46 20.99
Amortisation of intangible assets
(net of tax) 3.70 2.79 3.59 2.72
Restructuring costs (net of tax) 0.82 0.00 0.80 0.00
Acquisition related expenses (net
of tax) 1.54 0.00 1.49 0.00
Financial loss (net of tax) 0.91 0.00 0.88 0.00
Adjusted earnings per share 27.01 24.27 26.22 23.71
---------------------------------- ---------- -------- ---------- --------
5. Dividend
Unaudited Audited
2011 2010
GBP'000 GBP'000
Final paid of 2.8p (2010: 2.0p) per share
- relating to previous year's results 725 517
Interim paid of 1.68p (2010:
1.4p) per share 435 362
Dividends paid in the
year 1,160 879
------------------------------------------- ---------- --------
Equity dividends are recognised when they become legally
payable. Interim dividends are recognised when paid. Final
dividends are recognised when approved by the shareholders at an
Annual General Meeting.
An interim dividend of 1.68 pence (2010: 1.4 pence) was paid in
April 2011. No final dividend is proposed (2010: 2.8 pence).
6. Property, plant and equipment
Fixtures
Computer fittings and Leasehold
equipment equipment improvements Total
Unaudited GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- ---------- ------------- ------------- --------
Cost
At 1 July 2010 9,983 792 418 11,193
Acquisition of
subsidiaries - 299 - 299
Additions 947 13 65 1,025
Disposals (485) (104) - (589)
Exchange differences 48 (12) 7 43
-------------------------- ---------- ------------- ------------- --------
At 30 June 2011 10,493 988 490 11,971
-------------------------- ---------- ------------- ------------- --------
Depreciation
At 1 July 2010 8,009 707 264 8,980
Acquisition of
subsidiaries - 200 - 200
Disposals (468) (103) - (571)
Provided in year 1,294 74 85 1,453
Exchange differences 31 (13) 8 26
-------------------------- ---------- ------------- ------------- --------
At 30 June 2011 8,866 865 357 10,088
-------------------------- ---------- ------------- ------------- --------
Net book value
At 30 June 2011 1,627 123 133 1,883
-------------------------- ---------- ------------- ------------- --------
Audited
Cost
At 1 July 2009 7,599 2,031 410 10,040
Additions 1,181 20 10 1,211
Re-allocation 1,255 (1,255) - -
Exchange differences (52) (4) (2) (58)
-------------------------- ---------- ------------- ------------- --------
At 30 June 2010 9,983 792 418 11,193
-------------------------- ---------- ------------- ------------- --------
Depreciation
At 1 July 2009 6,322 970 216 7,508
Provided in year 1,383 92 50 1,525
Re-allocation 351 (351) - -
Exchange differences (47) (4) (2) (53)
-------------------------- ---------- ------------- ------------- --------
At 30 June 2010 8,009 707 264 8,980
-------------------------- ---------- ------------- ------------- --------
Net book value
At 30 June 2010 1,974 85 154 2,213
-------------------------- ---------- ------------- ------------- --------
The re-allocation of fixed assets in 2010 was to re-align the
type of fixed asset to the appropriate category.
7. Loans and borrowings
Unaudited Audited
2011 2010
GBP'000 GBP'000
-------------------------------- ---------- --------
Current: Secured bank loan 2,874 983
Non-current: Secured bank loan 3,236 991
-------------------------------- ---------- --------
6,110 1,974
-------------------------------- ---------- --------
Bank loan
On 16 January 2007, a five-year term loan of GBP5.00 million was
arranged and drawn down in connection with the acquisition of Group
NBT A/S. On 14 December 2010, a three-year term loan of GBP4.50
million was arranged and drawn down in connection with the
acquisition of Indom SAS. These loans bear interest based on LIBOR
which for the year was at an average rate of 3.27% (2010: 1.60%);
and are secured by a fixed and floating charge over the Group's
assets and will be repaid by equal amounts over the loan term.
In the above table, loans are stated net of unamortised issue
costs of GBP0.07 million (2010: GBP0.03 million). The Group has
charged to the Consolidated Income Statement issue costs of GBP0.03
million (2010: GBP0.02 million) in respect of these facilities.
These costs are allocated to the Consolidated Income Statement over
the term of the facility at a constant rate on the carrying
amount.
8. Acquisition
On 14 December 2010 the Group acquired 100% of the voting share
capital Indom SAS (formerly Indom SA) for a cash consideration of
GBP14.17 million (EUR16.88 million). Indom SAS had GBP2.18 million
(EUR2.60 million) of net cash balances at acquisition. The
consideration paid is subject to agreement on the working capital
position prior to the acquisition and could result in a reduction
of the cash consideration paid of up to GBP0.63 million (EUR0.70
million). As these discussions are ongoing no adjustment has been
made to the fair value of the consideration paid.
The details of the fair value of the assets and liabilities
acquired, purchase consideration and the goodwill arising at the
date of acquisition, all of which were translated to GBP from Euro
at an exchange rate of GBP1/ EUR1.1914, are set out below:
Book value of Fair value
Unaudited assets acquired adjustments Fair value
GBP'000 GBP'000 GBP'000
Intangible fixed
assets 972 4,406 5,378
Tangible fixed
assets 99 - 99
Current assets 1,710 - 1,710
Cash at bank 2,183 - 2,183
Current liabilities (2,857) - (2,857)
Long-term
liabilities (113) - (113)
Deferred tax - (1,793) (1,793)
--------------------- -------------------- -------------------- -----------
1,994 2,613 4,607
Goodwill 9,563
Consideration 14,170
--------------------- -------------------- -------------------- -----------
Satisfied by: Cash
consideration 14,170
--------------------- -------------------- -------------------- -----------
Effects on Group
cash flow:
Cash consideration 14,170
Cash balances on
acquisition (2,183)
---------------------
Net cash outflow 11,987
--------------------- -------------------- -------------------- -----------
The fair value adjustment is in respect of intangible assets
acquired and resulted in the following assets being recognised -
customer lists valued at GBP3.98 million, technology valued at
GBP1.37 million and non-compete agreements valued at GBP0.03
million.
Goodwill represents Indom SAS' position in the French corporate
domain name market and the expected revenue and costs synergies
arising from combining its business within the enlarged Group. The
goodwill recognised is not deductible for tax purposes.
Current assets at acquisition included trade receivables with a
book and fair value of GBP1.57 million representing contractual
receivables of GBP1.91 million. Whilst every effort will be made to
collect all contractual receivables, it is estimated that based on
current information GBP0.34 million is unlikely to be
recovered.
Transaction costs of GBP0.40 million were incurred, comprising
mainly of professional fees, which have been charged to the
Consolidated Income Statement within operating expenses.
The results of Indom SAS for the post acquisition period to 30
June 2011 together with the last full year's results are set out
below:
15 Dec 2010 to 30 June
Unaudited 2011 Year ended 31 Dec 2010
GBP'000 GBP'000
Revenue 3,764 6,589
-------------------------- ------------------------- -----------------------
Gross profit 3,059 5,289
-------------------------- ------------------------- -----------------------
Underlying *** operating
profit 688 1,023
-------------------------- ------------------------- -----------------------
Net finance income 23 38
Underlying*** profit
before tax 711 1,061
Restructuring costs (186) -
Employment termination
settlement - (302)
Doubtful debt provision - (344)
Deferred income
adjustment relating to
prior years (net of
tax) - (684)
Profit / (loss) before
tax and amortisation per
local GAAP statutory
accounts 525 (269)
-------------------------- ------------------------- -----------------------
***The underlying profit measures exclude:
- Amortisation of capitalised software in the local entity's
financial statements;
- Restructuring costs relating to IT expenditure in connection
with systems integration and the cost of abandoning existing
projects;
- Employment termination costs;
- One-off increase in provisions for doubtful debts; and
- One-off change from correction in revenue recognition
accounting policy.
Had Indom SAS' results been included in the Group results from
July 2010, Group revenue would have increased by approximately
GBP2.87 million and Group underlying *** profit before tax by
GBP0.48 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DKBDQKBKBACB
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