TIDMAVS
RNS Number : 5246L
Avesco Group PLC
12 January 2016
AVESCO GROUP plc
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2015
Avesco Group plc ("Avesco" or the "Group") (AIM: AVS), the
international provider of services to the corporate presentation,
entertainment and broadcast markets, announces its preliminary
results for the year ended 30 September 2015.
KEY HIGHLIGHTS
-- Revenue up 6% to GBP133.7m (2014: GBP126.4m)
-- Operating profit up GBP4.0m to GBP4.9m (2014: GBP0.9m)
-- Trading profit up 18% to GBP7.4m (2014: GBP6.3m)*
-- Trading EBITDA up 8% to GBP27.0m (2014: GBP25.0m)*
-- Continuing operations earnings per share of 12.4p (2014: loss per share of 12.8p)
-- Annual dividend increased by 17% to 7.0p per share (2014: 6.0p)
-- Profit from discontinued operations of GBP1.1m (2014: GBP1.2m)
-- Net debt reduced GBP3.9m to GBP17.5m (2014: GBP21.4m)
* As described in note 8, the Group uses certain non-GAAP
alternative measures to assess underlying operating
performance.
Richard Murray, Chairman, commented:
"2015 has been another record breaking year for the Group with
operating profit even higher than in 2012 when we had the benefit
of the London Olympics in our home territory. The fact that this
has been achieved in an odd year is particularly pleasing.
The sale of the land and buildings at Fountain announced earlier
today will realise substantial value for shareholders, the full
value of which will be reported in the coming year, and will
significantly reduce our net Group debt down to very modest
levels.
The current financial year has started well, with Creative
Technology performing strongly in both Europe and the US. With the
Group now carrying a much lower debt burden, streamlined and
refocused, we expect to be able to continue our drive to increase
profitability, to generate cash and to grow dividends."
For further information please contact:
Avesco Group plc
Richard Murray, Chairman 01293 583400
John Christmas, Group Finance
Director
finnCap Ltd
Julian Blunt/Scott Mathieson,
Corporate Finance
Malar Velaigam, Corporate
Broking 020 7220 0500
Results
2015 has been another record breaking year for the Group with
operating profit even higher than in 2012 when we had the benefit
of the London Olympics in our home territory. The fact that this
has been achieved in an odd year is particularly pleasing.
The main drivers behind this strong performance were CT Europe,
which had the benefit of both the first European Games in Baku in
June and the near elimination of losses in CT Germany (as a result
of last year's restructuring there) and CTUS, which continues to be
the Group's biggest profit contributor.
During the 12 months ended 30 September 2015, our revenue grew
by 6% to GBP133.7m (2014: GBP126.4m), whilst trading profits grew
18% to GBP7.4m (2014: GBP6.3m), trading EBITDA was up 8% to
GBP27.0m (2014: GBP25.0m), and net debt was further reduced to
GBP17.5m (2014: GBP21.4m).
The increase in trading profits includes a margin increase of
1%. Overheads increased at a much lower rate than the rate of
profit increase, aided by an overhead reduction of GBP1.1m
resulting from our prior year restructuring in CT Germany. These
savings were again mainly derived from the full year effect of the
2014 reductions in staff numbers. Our average staff numbers during
the year were reduced by another 3% to 685 (2014: 705) from a 2013
high of 765.
Our operating profit was GBP4.9m (2014: GBP0.9m) and, after
taking account of net interest costs of GBP1.7m (2014: GBP1.3m),
the result before income tax was a profit of GBP3.2m (2014: GBP0.4m
loss). The tax charge for the year was GBP0.9m (2014: GBP2.3m) and
the profit from discontinued operations was GBP1.1m (2014: GBP1.2m
profit). The basic earnings per share was 18.0p and the diluted
earnings per share was 17.9p (2014: basic and diluted loss per
share of 7.2p).
Non trading items, which have been removed from the operating
results in order to calculate the trading profit, gave a net cost
of GBP2.5m in the 12 months ended September 2015 (2014: GBP5.4m).
Significant restructuring costs within this balance in 2015 include
GBP1.3m for the impairment of fixtures and fittings at Fountain
(due to the sale of the Wembley site), an onerous lease provision
of GBP0.7m necessitated by the streamlining of the London branch of
mclcreate and a GBP0.4m increase to the amount provided in the
prior year in relation to the onerous lease in CT Germany. Other
non-recurring items in 2015 include a cost of GBP0.2m caused by a
change in estimate of dilapidation provisions in the UK, a cost of
GBP0.2m relating to potential claims relating to prior year
activities in the US and credits of GBP0.3m relating to prior
period transactions in the South East Asian region and the UK.
Exceptional items in 2014 were mainly in respect of the substantial
restructuring costs in CT Germany.
Discontinued operations relate to the successful outcome of our
litigation with the Walt Disney Company and others in 2013. In
2015, we recorded a GBP1.1m gain from the release of an accrual for
a related indemnity that is no longer required (2014: a GBP1.2m
reduction in our estimate of the tax payable on the gain). No
further gains or losses are expected to be recognised in
discontinued operations as a result of the Disney litigation.
In 2016, we expect the net gain from the Fountain transaction to
amount to approximately GBP7m after tax and related costs.
Creative Technology (CT)
The Creative Technology division saw revenues climb GBP11.0m to
GBP107.1m (2014: GBP96.1m) and trading profit more than doubled to
GBP9.1m (2014: GBP4.4m). Our main profit driver, CTUS, saw revenue
grow by a further 21%, on top of last year's 18% increase, and
profits there rose commensurately. Revenue in CT Europe was down
slightly but profits were significantly increased as we reaped the
benefit of our much lower cost base in Germany. The European Games
in Baku were also very beneficial, generating over GBP5m in
revenue.
Creative Technology Asia Pacific ("CTAP") again failed to reach
its break even target but results there were on a par with last
year's much improved set of numbers. CTAP remains a significant
asset to our other larger CT operations seeking to service their
clients in the region and we continue to work towards creating a
profitable business there.
Full Service
mclcreate, our full service business, had a solid year. Revenue
fell to GBP14.0m (2014: GBP14.4m) but trading profit rose to
GBP0.3m (2014: GBP0.2m), reflecting a 2% margin improvement. The
business lost a significant exhibition based client and has
reshaped its business around fewer, larger warehouses across the
UK, the benefits of which are expected to begin to flow in
2015/16.
Broadcast Services
Our Broadcast Services division performed poorly this year, with
revenue dropping to GBP12.5m (2014: GBP15.8m) resulting in a
trading loss of GBP1.9m (2014: GBP1.7m profit). Presteigne was
unable to build on the strong progress made last year as it
struggled in a very competitive, commodity driven market. The
results were also impacted by a GBP0.9m write off as a result of a
customer suffering cashflow issues and being unable to fully repay
a debt brought forward from the prior year. Steps have been taken
to bolster the sales team in Presteigne and we expect to see an
improved performance in 2016, an even year.
Fountain Studios suffered a small trading loss of GBP0.1m (2014:
breakeven) as pricing pressures pushed margins down by 3%. This is
clearly an inadequate return on the investment we have in this
asset and on 12 January 2016 we announced that we had sold the land
and buildings for GBP16m with a lease back agreement until at least
31 December 2016. It is likely that this will lead to the closure
of the business in Wembley and we are therefore commencing a
consultation process with the affected staff. At the end of our
lease the equipment there will be moved or sold and we have
therefore recorded an impairment of GBP1.3m in exceptional items in
anticipation of these eventual disposals. The further anticipated
GBP7m net profit of the Fountain transaction will be reported in
the 2016 accounts.
Taxation
The total income tax expense for the year was GBP0.9m (2014:
GBP2.3m). The Group tax charge has benefited significantly from our
success in discussions with HMRC to allow prior period losses and
other allowances from our partnership in Germany to be set against
tax payable in the UK.
The income tax expense for the year consists of a GBP1.7m
current tax charge (2014: GBP0.0m) and a deferred tax credit of
GBP0.9m (2014: charge of GBP2.3m). The current tax charge primarily
relates to charges in the US (high taxable profits earned in the US
cannot be offset against taxable losses elsewhere in the world) and
is mitigated somewhat by a GBP1.5m credit arising from the
availability of the German losses. The deferred tax credit has
arisen due to the availability of German capital allowances in the
UK tax group.
Our deferred tax asset at the year end stood at GBP4.6m (2014:
GBP3.9m). Tax losses represent GBP0.6m (2014: GBP1.0m) of this
asset, with the balance of GBP4.0m (2014: GBP2.9m) mostly resulting
from the temporary difference between the tax base and the book
value of property, plant and equipment.
Further deferred tax assets amounting to GBP7.2m at the year end
(2014: GBP4.5m) remain unrecognised on the balance sheet.
The majority of the deferred tax liability of GBP5.3m (2014:
GBP5.3m) relates to temporary differences between the tax base and
the book value of property, plant and equipment and has primarily
arisen due to the availability of high levels of first year
allowances on equipment purchases in CTUS.
Cash Generation and Capital Expenditure
During the year the Group reduced net debt by GBP3.9m to
GBP17.5m (2014: 21.4m).
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This was derived from a trading EBITDA of GBP27.0m (2014:
GBP25.0m), net investments in new equipment of GBP16.0m (2014:
GBP19.0m), 70% of which went to CTUS, net outflows of working
capital and other balance sheet items of GBP0.7m (2014: GBP2.3m
outflow), cash held on the acquisition of Sports Technology of
GBP0.6m, dividends of GBP1.5m (including those paid to minority
interests), interest and tax payments of GBP4.6m (2014: GBP1.9m)
and adverse foreign exchange movements of GBP0.9m.
The Group's cash flow (and interest expense) during 2014 was
impacted by the GBP30.5m return of cash to shareholders and LTIP
holders, the GBP9.8m buy-back of shares from Taya Communications
Ltd (both in January 2014, following receipt of our GBP44.5m net
share of the proceeds from the Disney litigation in 2013) and the
Group restructuring programme.
The net assets of the Group increased over the year to GBP34.4m
at 30 September 2015 (2014: GBP32.1m). This equates to a net asset
value of GBP1.80 per share (2014: GBP1.70 per share or GBP1.67 on a
fully diluted basis when the then remaining 0.4m shares subject to
LTIP awards were taken into account).
In addition to the Group's cash balances of GBP12.7m, the Group
had unutilised banking and HP facilities of GBP19.9m at the year
end and was comfortably within its finance and banking facilities
of some GBP50.1m. The main component of the Group's facilities was
a GBP20m multi currency revolving loan from HSBC, which will be
reduced to GBP10m, in light of the approximate GBP13m net receipt
from the Fountain asset disposal. The remaining GBP10m line with
HSBC is now in place until June 2018, with other facilities
comprising a combination of overdraft and leasing lines.
Dividend
At the half year, we increased the interim dividend to 2.0p per
share (2014: 1.5p), which was paid in October 2015. The Board is
now pleased to announce that it proposes to increase the final
dividend this year to 5.0p (2014: 4.5p) per share, thus making a
total dividend for the year of 7.0p per share (2014: 6.0p),
reflecting our continued confidence in the longer term prospects
for the Group.
Subject to shareholder approval, the proposed dividend is
expected to be paid on 6 April 2016 to shareholders on the register
at the close of business on 11 March 2016.
People
This has been another tremendously busy year and our staff have
yet again risen to the occasion, maintaining the high levels of
quality and technical expertise our customers have come to expect,
often under pressure and in difficult conditions. I thank them most
sincerely for their loyalty, efforts and exceptional skill in
performing their duties.
Current Trading and Outlook
We have now realised the cost savings anticipated by the Group's
previous restructuring programmes and believe that the Group's
profitability has been effectively rebased. The sale of the land
and buildings at Fountain will realise substantial value for
shareholders, the full value of which will be reported in the
coming year, and significantly reduce our net Group debt down to
very modest levels.
As for trading, the current financial year has started well,
with CT performing strongly in both Europe and the US. With the
Group now carrying a much lower debt burden, streamlined and
refocused, we expect to be able to continue our drive to increase
profitability, to generate cash and to grow dividends.
Richard Murray
12 January 2016
Avesco Group plc
Consolidated Income Statement
For the year ended 30 September 2015
Year ended 30
September
2015 2014
Note GBP000s GBP000s
--------------------------------- ----- ----------- -----------
Revenue 1 133,674 126,391
Cost of sales (83,035) (80,186)
--------------------------------- ----- ----------- -----------
Gross profit 50,639 46,205
Operating expenses and
income (45,754) (45,721)
Share of associate's
profit/(loss) (27) 384
--------------------------------- ----- ----------- -----------
Trading profit 7,357 6,253
Exceptional items (2,499) (5,385)
--------------------------------- ----- ----------- -----------
Operating profit 1 4,858 868
Finance income 6 23
Finance costs (1,656) (1,321)
--------------------------------- ----- ----------- -----------
Profit/(loss) before
income tax 3,208 (430)
Income tax expense 3 (854) (2,310)
--------------------------------- -----
Profit/(loss) from continuing
operations 2,354 (2,740)
Profit on discontinued
operation, net of tax 1,072 1,192
Profit/(loss) for the
financial year 3,426 (1,548)
--------------------------------- ----- ----------- -----------
Attributable to:
Owners of the Company 3,032 (1,548)
Non-controlling interests 394 -
--------------------------------- ----- ----------- -----------
3,426 (1,548)
--------------------------------- ----- ----------- -----------
Pence Pence
per share per share
Earnings/(losses) per
share attributable to
the equity holders of
the company (note 4)
- basic 18.0p (7.2)p
- diluted 17.9p (7.2)p
Earnings/(losses) per
share for profit attributable
to the equity holders
of the company from continuing
operations (note 4)
- basic 12.4p (12.8)p
- diluted 12.3p (12.8)p
Avesco Group plc
Alternative Performance Measures (non-GAAP)
For the year ended 30 September 2015
Year ended 30
September
2015 2014
GBP000s GBP000s
------------------------------------- -------- --------
Operating profit 4,858 868
Adjusted to exclude:
------------------------------------- -------- --------
Restructuring costs and
compensation for loss of
office 2,387 5,738
Payments to LTIP holders
and bonuses in connection
with the Disney settlement - (246)
Other non-recurring costs/(credits) 112 (107)
-------------------------------------- -------- --------
Exceptional items 2,499 5,385
Trading profit 7,357 6,253
Net finance costs (1,650) (1,298)
Trading profit after net
finance costs 5,707 4,955
-------------------------------------- -------- --------
Trading EBITDA (note 2) 26,955 24,968
-------------------------------------- -------- --------
Refer to note 8 for a full description of the alternative
performance measures adopted by the Group.
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2015
Year ended 30
September
2015 2014
GBP000s GBP000s
-------------------------------------- -------- --------
Profit/(loss) for the
financial year 3,426 (1,548)
Other comprehensive income:
Currency translation
differences 511 187
--------------------------------------- -------- --------
Total comprehensive income/(expense)
for the year 3,937 (1,361)
--------------------------------------- -------- --------
Attributable to:
Owners of the Company 3,543 (1,361)
Non-controlling interests 394 -
-------------------------------------- -------- --------
3,937 (1,361)
-------------------------------------- -------- --------
Avesco Group plc
Consolidated balance sheet
As at 30 September 2015
30 September 30 September
2015 2014
GBP000s GBP000s
----------------------------- ------------------- ---------------------
Assets
Non-current assets
Property, plant and
equipment 54,266 57,787
Intangible assets 209 130
Investment in associate - 327
Deferred income tax
assets 4,585 3,919
Trade and other receivables 141 148
------------------------------ ------------------- ---------------------
59,201 62,311
Current assets
Inventories 649 596
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Trade and other receivables 25,860 23,801
Current income tax
assets 1,483 -
Cash at bank and on
hand 12,749 9,065
40,741 33,462
----------------------------- ------------------- ---------------------
Total assets 99,942 95,773
------------------------------ ------------------- ---------------------
Liabilities
Non-current liabilities
Borrowings and loans 21,866 22,602
Deferred income tax
liabilities 5,330 5,292
Provisions 2,735 2,477
------------------------------ ------------------- ---------------------
29,931 30,371
Current liabilities
Trade and other payables 25,138 24,543
Current income tax
liabilities 876 384
Borrowings and loans 8,345 7,902
Provisions 1,233 430
------------------------------ ------------------- ---------------------
35,592 33,259
----------------------------- ------------------- ---------------------
Total liabilities 65,523 63,630
------------------------------ ------------------- ---------------------
Total assets less total
liabilities 34,419 32,143
------------------------------ ------------------- ---------------------
Equity
Capital and reserves
attributable to equity
holders of the company
Ordinary shares 2,095 2,095
Share premium 11,194 11,194
Capital redemption 12,646 12,646
Translation reserve 743 232
Retained earnings 7,633 5,976
------------------------------ ------------------- ---------------------
Equity attributable
to owners of the Company 34,311 32,143
Non-controlling interests 108 -
----------------------------- ------------------- ---------------------
Total equity 34,419 32,143
------------------------------ ------------------- ---------------------
Avesco Group plc
Consolidated Statement of Changes in Equity
For the year ended 30 September 2015
Share Share Capital
capital premium redemption Translation Retained Non-controlling Total
account account reserve reserve earnings Total interest equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Balance at
1 October 2014 2,095 11,194 12,646 232 5,976 32,143 - 32,143
Profit for
the period - - - - 3,032 3,032 394 3,426
Other
comprehensive
income, net
of tax - - - 511 - 511 - 511
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Total
comprehensive
income for
the period - - - 511 3,032 3,543 394 3,937
Transactions
with owners
in their capacity
as owners:
Non-controlling
interest
acquired - - - - - - 47 47
External
dividends
paid - - - - (1,141) (1,141) (333) (1,474)
LTIP and share
options - - - - (234) (234) - (234)
----------------
Balance at
30 September
2015 2,095 11,194 12,646 743 7,633 34,311 108 34,419
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Share Share Capital
capital premium redemption Translation Retained Non-controlling Total
account account reserve reserve earnings Total interest equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Balance at
1 October 2013 2,649 23,286 - 45 47,219 73,199 - 73,199
Loss for the
period - - - - (1,548) (1,548) - (1,548)
Other
comprehensive
income, net
of tax - - - 187 - 187 - 187
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Total
comprehensive
income/(expense)
for the period - - - 187 (1,548) (1,361) - (1,361)
Transactions
with owners
in their capacity
as owners:
Issue of B
and C shares 12,092 (12,092) - - - - - -
Redemption
of B shares (12,092) - 12,092 - (12,092) (12,092) - (12,092)
Dividend on
C shares - - - - (16,455) (16,455) - (16,455)
Purchase of
ordinary shares (554) - 554 - (9,769) (9,769) - (9,769)
External
dividends
paid - - - - (1,013) (1,013) - (1,013)
LTIP and share
options - - - - (366) (366) - (366)
---------
Balance at
30 September
2014 2,095 11,194 12,646 232 5,976 32,143 - 32,143
------------------ ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------
Avesco Group plc
Consolidated cash flow statement
For the year ended 30 September 2015
Year ended 30 September
2015 2014
GBP000s GBP000s
----------------------------------- ---------------------------- ---------------------------
Cash flows from operating
activities
Cash generated from operations 26,292 16,415
Income tax paid (2,942) (1,268)
Net cash generated from
operating activities 23,350 15,147
------------------------------------ ---------------------------- ---------------------------
Cash flows from investing
activities
Purchases of property,
plant and equipment and
software (19,237) (23,492)
Proceeds from sale of
property, plant and equipment 3,262 4,450
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Dividends from associate - 200
Interest received 6 23
Acquisition of subsidiary 634 -
Net cash (used in)/generated
from investing activities (15,335) (18,819)
------------------------------------ ---------------------------- ---------------------------
Cash flows from financing
activities
Interest paid (1,640) (1,247)
Proceeds from external
borrowings 23,672 23,361
Repayments of external
borrowings (25,031) (13,544)
Purchase of ordinary
shares - (9,769)
Redemption of B shares - (12,092)
Dividends paid to Company's
shareholders (1,141) (17,468)
Dividends paid to non-controlling (333) -
interest
Net cash used in financing
activities (4,473) (30,759)
------------------------------------ ---------------------------- ---------------------------
Net increase/(decrease)
in cash and cash equivalents 3,542 (34,431)
Cash, cash equivalents
and bank overdrafts at
beginning of year 8,968 43,107
Exchange gains on cash
and bank overdrafts 227 292
Cash and cash equivalents
at end of year 12,737 8,968
------------------------------------ ---------------------------- ---------------------------
Avesco Group plc
Notes to the preliminary announcement
For the year ended 30 September 2015
1. Segmental information
Management has determined the operating segments based on the
reports reviewed by the Board of Directors that are used to make
strategic decisions.
The Board of Directors categorises Group companies based on the
services they provide and as a result the business is split into
four segments. These correspond to three operating segments
(Creative Technology, Full Service and Broadcast Services) which
together provide the Group's principal activity of services to the
corporate presentation, entertainment and broadcast markets. In
addition, the Group recognises a further segment, Head Office,
which provides administrative support to the rest of the Group.
Creative Technology provides specialist AV services and
equipment to the live events, broadcast and entertainment markets.
The Full Service segment provides full technical support for
conferences, sports, music, corporate and television programmes.
Finally, the Broadcast Services segment provides broadcast
equipment, systems and services to the broadcast industry.
The Board of Directors assesses performance of the operating
segments based on trading profit (see note 8). As segmental
performance does not therefore include finance costs and tax, such
items are not allocated to segments.
The segmental results for the year ended 30 September 2015 are
as follows:
Creative Full Broadcast Head
Technology Service Services Office Group
GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------- ------------ --------------- ---------- ------------------- --------
Total segment
revenue 107,374 14,060 12,989 - 134,423
Inter segment
revenue (263) (33) (453) - (749)
-------------------
Revenue 107,111 14,027 12,536 - 133,674
------------------------- ------------ --------------- ---------- ------------------- --------
Trading profit/(loss) 9,132 265 (1,923) (117) 7,357
Restructuring
costs and compensation
for loss of office (384) (712) (1,291) - (2,387)
Other non-recurring
(costs)/credits (49) - (65) 2 (112)
------------------------- ------------ --------------- ---------- ------------------- --------
Operating profit/(loss) 8,699 (447) (3,279) (115) 4,858
Net finance costs (1,650)
Profit before
income tax 3,208
Income tax expense (854)
------------------------- ------------ --------------- ---------- -------------------
Profit for the
financial year
from continuing
operations 2,354
------------------------- ------------ --------------- ---------- ------------------- --------
The segmental results for the year ended 30 September 2014 are
as follows:
Creative Full Broadcast Head
Technology Service Services Office Group
GBP000s GBP000s GBP000s GBP000s GBP000s
------------------------------- ------------ --------- ---------- ------------------- --------
Total segment revenue 96,258 14,446 16,266 - 126,970
Inter segment revenue (133) (17) (429) - (579)
-------------------
Revenue 96,125 14,429 15,837 - 126,391
------------------------------- ------------ --------- ---------- ------------------- --------
Trading profit/(loss) 4,420 229 1,680 (76) 6,253
Restructuring (costs)/credits
and compensation
for loss of office (5,247) (474) (38) 21 (5,738)
Payments to LTIP
holders and bonuses
in connection with
the Disney settlement 59 16 9 162 246
Other non-recurring
credits/(costs) 426 (8) (249) (62) 107
------------------------------- ------------ --------- ---------- ------------------- --------
Operating (loss)/profit (342) (237) 1,402 45 868
Net finance costs (1,298)
Loss before income
tax (430)
Income tax expense (2,310)
------------------------------- ------------ --------- ---------- -------------------
Loss for the financial
year from continuing
operations (2,740)
------------------------------- ------------ --------- ---------- ------------------- --------
Inter-segment transactions are entered into under the normal
commercial terms and conditions that would be available to
unrelated third parties.
No single customer contributed revenues of greater than 10% of
the Group's total revenue for 2015 or 2014.
The Group's main business segments operate in four main
geographical areas. Details of the segmental allocation of revenue
can be found below.
2015 2014
Revenue GBP000s GBP000s
-------------------------- -------- --------
United Kingdom 45,060 48,801
Mainland Europe 10,777 14,577
United States of America 62,618 51,545
Rest of the World 15,219 11,468
133,674 126,391
-------------------------- -------- --------
Revenue is allocated based on the country in which the customer
is located.
2. Trading earnings before interest, taxation, depreciation and amortisation ('Trading EBITDA')
2015 2014
GBP000s GBP000s
-------------------------- -------- --------
Trading profit 7,357 6,253
Depreciation 18,357 17,880
Impairment 1,158 726
Amortisation of software 83 109
Trading EBITDA 26,955 24,968
--------------------------- -------- --------
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Trading EBITDA is defined in note 8.
3. Income tax expense
2015 2014
GBP000s GBP000s
--------------------------- -------- --------
Current tax
Current tax on profits
for the year 3,461 393
Adjustments in respect
of prior years (1,749) (428)
---------------------------- -------- --------
Total current tax 1,712 (35)
Deferred tax
Origination and reversal
of temporary differences (858) 2,345
---------------------------- -------- --------
Total deferred tax (858) 2,345
Income tax charge 854 2,310
---------------------------- -------- --------
4. Earnings/(losses) per share
2015 2014
GBP000s GBP000s
----------------------------------- -------- --------
Profit/(loss) for the financial
year 3,426 (1,548)
Profit on discontinued operation,
net of tax (1,072) (1,192)
----------------------------------- -------- --------
Profit/(loss) from continuing
operations 2,354 (2,740)
----------------------------------- -------- --------
Weighted average number of
shares (net of treasury shares)
For basic earnings per share
(000's) 19,004 21,361
Effect of dilutive share
options (000's) 148 848
--------
For diluted earnings per
share (000's) 19,152 22,209
----------------------------------- -------- --------
Earnings/(losses) per share
Basic 18.0p (7.2)p
Diluted 17.9p (7.2)p
----------------------------------- -------- --------
Continuing operations basic 12.4p (12.8)p
Continuing operations diluted 12.3p (12.8)p
----------------------------------- -------- --------
Discontinued operations basic 5.6p 5.6p
Discontinued operations diluted 5.6p 5.6p
----------------------------------- -------- --------
Basic earnings per share have been calculated by dividing
profit/loss for the period by the weighted average number of
ordinary shares in issue during the period.
Diluted earnings per share have been calculated by dividing
profit/loss for the period by the weighted average number of
ordinary shares in issue during the period, adjusted for any awards
under the Company's Long Term Incentive Plan ("LTIP") where
pre-specified performance conditions have been satisfied and any
required conversion of dilutive potential options.
Adjusted earnings per share have been calculated as per note
8.
5. Dividends
An interim dividend for the year ended 30 September 2015 of 2.0p
per ordinary share amounting to a total of GBP382,000 was approved
and was paid on 1 October 2015 to shareholders on the Register at
6.00pm on 4 September 2015.
A final dividend for the year ended 30 September 2015 of 5.0p
per share has been proposed and, subject to shareholders' approval,
will be paid on 6 April 2016 to shareholders on the register at the
close of business on 11 March 2016.
An interim dividend for the year ended 30 September 2014 of 1.5p
per ordinary share amounting to a total of GBP283,000 was approved
and was paid on 1 October 2014 to shareholders on the Register at
6.00pm on 5 September 2014.
A final dividend for the year ended 30 September 2014 of 4.5p
per ordinary share amounting to a total of GBP858,000 was approved
and was paid on 8 April 2015 to shareholders on the register on 12
March 2015.
A special dividend of GBP1.10 per C share was approved and was
paid on 24 January 2014 under the Return of Cash.
6. Analysis of net debt
Other At
At Net non Currency 30
1 October cash cash translation September
2014 flow changes differences 2015
Group GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ----------- -------- ---------------- ------------- -----------
Cash at bank
and in hand 9,065 3,447 - 237 12,749
Bank overdrafts (97) 95 - (10) (12)
------------------ ----------- -------- ---------------- ------------- -----------
Net cash 8,968 3,542 - 227 12,737
Bank loans due
in more than
one year (16,848) 2,500 - (506) (14,854)
HP obligations
due in less
than one year (7,805) 6,649 (6,827) (350) (8,333)
HP obligations
due in more
than one year (5,754) (7,790) 6,827 (295) (7,012)
Net debt (21,439) 4,901 - (924) (17,462)
------------------ ----------- -------- ---------------- ------------- -----------
Other
At Net non Currency At 30
1 October cash cash translation September
2013 flow changes differences 2014
Group GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ----------- --------- ---------------- ------------- -----------
Cash at bank
and in hand 43,699 (34,859) - 225 9,065
Bank overdrafts (592) 428 - 67 (97)
------------------ ----------- --------- ---------------- ------------- -----------
Net cash 43,107 (34,431) - 292 8,968
Bank loans due
in more than
one year (7,419) (9,492) - 63 (16,848)
HP obligations
due in less
than one year (7,303) 5,613 (6,182) 67 (7,805)
HP obligations
due in more
than one year (6,048) (5,938) 6,182 50 (5,754)
Net cash/(debt) 22,337 (44,248) - 472 (21,439)
------------------ ----------- --------- ---------------- ------------- -----------
Other non cash changes
relate to the passage of
time.
7. Status of preliminary announcement
The financial information set out in this announcement for the
year ended 30 September 2015 does not constitute the Group's
statutory accounts as defined by s435 of the Companies Act but has
been extracted from the 2015 statutory accounts on which an
unqualified audit report has been made by the auditors, and which
did not contain an emphasis of matter paragraph nor a statement
under section 498(2) or (3) of the Companies Act 2006.
Statutory Accounts for the year ended 30 September 2014 have
been delivered to the Registrar of Companies and the auditors'
report on these accounts was unqualified and did not contain a
statement under either Section 498(2) or (3) of the Companies Act
2006.
8. Basis of preparation
The preliminary results for the year ended 30 September 2015
have been prepared in accordance with the accounting policies set
out in the annual report and accounts for the year ended 30
September 2014.
Non-GAAP financial measures
For the purposes of this preliminary announcement and the annual
report and accounts, the Group uses alternative non-Generally
Accepted Accounting Practice ("non-GAAP") financial measures which
are not defined within IFRS. The Directors use these measures in
order to assess the underlying operational performance of the Group
and as such, these measures are important and should be considered
alongside the IFRS measures. The following non-GAAP measures are
referred to in the preliminary announcement:
a) Trading profit/loss
'Trading profit/loss' is separately disclosed, being defined as
operating profit adjusted to exclude restructuring costs and
compensation for loss of office, payments to LTIP holders and
bonuses in connection with the Disney settlement, and other
non-recurring costs. Other non-recurring costs relate to items
which management believe do not accurately reflect the underlying
trading performance of the business in the period. Examples of
other non-recurring costs are one off costs and charges incurred
which management believe do not accurately reflect the trading
performance of the business. The Directors believe that trading
profit/loss is an important measure of the underlying performance
of the Group.
b) Trading EBITDA
Trading earnings before interest, taxation, depreciation and
amortisation ('Trading EBITDA') is separately disclosed in note 2,
being defined as trading profit/loss adjusted to exclude
depreciation and amortisation of software, as well as any
impairment which has been included in trading profit/loss. Trading
EBITDA includes profits on disposal of property, plant and
equipment. The Directors believe that trading EBITDA is an
important measure of the underlying performance of the Group.
9. Post balance sheet event
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