RNS Number : 9406I
ITIS Holdings PLC
26 November 2008
ITIS Holdings plc ("ITIS" or the "Company") a leading road traffic and information data specialist is pleased to announce its interim
results for the six months ended 30 September 2008.
Highlights
* Revenue from continuing operations up 3.0% to �8.33m (2007: �8.09m), of which �2.24m is from Trafficlink (2007: �nil)
* Loss before taxation on continuing operations was �0.43m (2007: profit of �2.18m), prior to the impact of exceptional items (see
note 1) of �0.56m (2007: �nil), whilst loss before taxation on continuing operations after exceptional items was �0.99m (2007: profit of
�2.18m)
* Basic and diluted loss per share from continuing operations were 0.9p (2007: earnings per share 1.6p)
* New PND and vehicle manufacturer contracts renewed
* Significant opportunities for international business growth
* Trafficlink business fully integrated and new contract with Global Radio bringing 71 new stations
Stuart Marks, Chief Executive of ITIS commented: "Given the strength of our business model and our consistent earnings growth in recent
years, trading levels in the first half of this year are, of course, disappointing. We have successfully renewed all contracts that ended
in the period and have won new business in both the PND and OEM markets. However, new car sales are at their lowest level since 1991 and the
suddenness with which those sales deteriorated together with the fixed cost structure of our UK traffic business has contributed
significantly to the fall in our results. This was combined with an unprecedented rise in fuel prices which led to a reduction in callers
to our IVR service due to below average levels of congestion. We recognise that market conditions have changed radically and given that
this new low level of activity may well continue, we have taken immediate steps to reduce our cost base. I am pleased, however, that due to
recent technological advancements with our software we are able to make these cuts without compromising our service offering and indeed we will continue to invest to maintain our leading position.
The Trafficlink business is now fully integrated with over 90% of all radio stations using our service. Combined with our market
leadership in the RDS-TMC market, more drivers have access to our traffic information than from any other source.
We are fortunate to have a first class management team who are ready to meet this more challenging market and I will be working with
them to ensure we support our employees and customers and position the business appropriately. All of these, combined with the continuing
demand for our product in our home and international markets, allows us to be confident that we will deliver improved performance in the
second half of the year as compared to the first half."
FINANCIAL OVERVIEW
For the six months ended 30 September 2008, Group revenue from continuing operations increased 3% to �8.33m (2007: �8.09m), which
included �2.24m from Trafficlink (2007: �nil). Excluding Trafficlink revenue fell by 24.7% to �6.09m. Revenue arose predominantly from the
Group's UK business, being traffic data sales to RDS-TMC customers, data sales to local and central Government and other third party
organisations, broadcast traffic sales to 230 commercial radio stations and the BBC, as well as from customers using the Group's mobile
telephone information services.
The fall in revenue was driven by the following factors: The Group's RDS-TMC business is heavily dependent upon new car sales especially
in the premium brand segment and has been directly impacted by five consecutive months of falling car sales, culminating in the lowest
August sales since 1966 and a 21.2% fall in September, the lowest September levels since the twice-yearly plate change system started in
1999 (source: The Society of Motor Manufacturers and Traders Limited (SMMT)). This trend has continued into October with a further reported
fall of 23% (source: SMMT), and we expect year on year falls to continue for the rest of the current financial year. Secondly, the dramatic
increase in fuel prices in the first half of this year had the effect of reducing congestion on the roads, and this in turn led to a sharp
reduction in the usage of the Group's mobile telephone information services, which have a direct correlation to congestion. Furthermore
there was no contribution from the DfT contract which ended in February.
As the majority of the UK's traffic business costs are fixed, the fall in revenues has greatly impacted upon UK profits. The six months
to 30 September 2008 has had the full effect of the step change of costs incurred due to establishing a data centre, the additional FM
bandwidth taken on during 2007 and heavy investment in the International business. This data centre requires additional annual
communications, licensing and running costs but allows all live systems to be run from one site of the highest quality with extensive
capacity for expansion, whilst the additional FM bandwidth was acquired to improve the quality and coverage of our TMC service.
Actions have already been taken in the last two months to reduce the cost base of the Group to appropriate levels to service the current
market, the benefits of which will have an effect in the second half of this financial year. We continue to monitor our costs and review
them in relation to sales performance and we will take whatever further action is necessary to keep them aligned without compromising the
quality of our service. The Group's operational infrastructure is capable of supporting incremental business without increasing its costs.
The Group continued to invest in its research and development centre in Israel during the period, spending �0.76m (2007: �0.55m). This
investment in the Group's technology both in Israel and the UK has led to a very exciting breakthrough in our traffic data collection
technologies, which we believe when implemented over the next six months will enable us to further improve our data quality and to reduce
costs substantially.
As a result of delays with our contract in Missouri during the six months ended 30 September 2008, the directors have reassessed their
estimate of the recoverability of revenues recognised in previous periods and have written off costs in relation to the same project (see
note 1). This has had the effect of reducing revenues in the period by �141k and is accounted for as an exceptional loss of �434k.
Loss before taxation on continuing operations was �0.43m (2007: profit of �2.18m), prior to the impact of exceptional items (see note 1)
of �0.56m (2007: �nil). After exceptional items (see note 1) loss before taxation on continuing operations was �0.99m (2007: profit of
�2.18m), of which �0.12m (2007: �nil) arises from Trafficlink.
Despite the challenging environment, the business remained cash generative on an operating basis during the period although cash
balances fell �1.37m to �0.59m at 30 September 2008, due to the payment of a final dividend of �1.42m. The dividend of 1.5p per share for
the year ended 31 March 2008 was paid on 29 September 2008, following its approval at the Company's AGM. At 30 September 2008, the Group
had available �8m (2007: �nil) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.
Basic and diluted loss per share from continuing operations were 0.9p (2007: earnings per share 1.6p).
UK BUSINESS
The UK market has historically provided ITIS with the majority of its revenue largely because we are the leading provider of traffic
information to the automotive and personal navigation device (PND) and OEM markets. The business model benefits from a high degree of
operational leverage and whilst in the past ITIS' earnings growth has been driven largely by new contracts with car manufacturers and strong
new car sales, the business has suffered since May 2008 when new car sales began to fall rapidly. Our customers still demand high quality
traffic information in their vehicles and on their own devices as we do not see any change to this basic requirement.
We also earn significant revenue from our Interactive Voice Response (IVR) service where drivers are able to access real time traffic
information from short dial numbers across all mobile networks. This service is sensitive to congestion levels and the dramatic increase in
fuel prices which affected motoring costs in the first quarter of this financial year led to significantly reduced congestion on the roads
and fewer accidents. This in turn reduced disruption on the road network. IVR call volumes reduced significantly as a result and the
associated fall in revenues impacted directly on our profitability. With fuel prices returning to more normal levels and the onset of
winter we are seeing our IVR revenues return to traditional levels although we note that in this more challenging economic climate there is
likely to be some negative impact on this source of sales.
Despite these more challenging conditions, ITIS retains a position of clear market leadership in supplying RDS-TMC services to the
automotive and PND sector and has successfully renewed all contracts that ended in the period. Additionally we have recently won new
business from the PND markets and continue to consolidate our leading position. Our customers include BMW, Ford, Jaguar, Land Rover, Lexus,
MINI, Mercedes-Benz, Mitsubishi, Nissan, Porsche, Renault, Rolls Royce, Toyota and Volvo. Aftermarket and PND customers include Active
Pilot, Clarion, Co Pilot, Harman Becker, Mio, Navman, Nokia, Pioneer, Road Angel, Route 66, Snooper, Sony Europe, Telmap, Teleatlas,
Telenav, TomTom and Webraska. The strength and depth of these contractual relationships will enable ITIS to benefit from an increase in
revenues and profits when market conditions do become more favourable and market penetration of our services to car navigation devices and
PNDs increase.
We continue to invest in our UK service through greater volumes of Floating Vehicle Data (FVD) probes in order to further enhance our
highly valuable traffic database and to maintain our unique national coverage to ensure all customers benefit from the best possible
service.
Since April this year we have been transmitting the first component of our Transport Protocol Export Group (TPEG) service called Traffic
Event Compact (TEC). This provides incident data, similar in content to our well known TMC service, but since it is delivered through
Digital Audio Broadcasting (DAB), it is transferred much faster with more messages and shorter update times, thus providing a more
responsive service.
TPEG is the protocol to be used to transfer the next generation traffic and travel information ("TTI") services to drivers and other
travellers. It provides a flexible mechanism to deliver a whole new range of applications enabling new possibilities for broadcast travel
information. The greater bandwidth provided by DAB and the relatively mature infrastructure in the UK gives ITIS a great opportunity to
launch enhanced traffic data to our customers. Several different applications can be delivered through the same channel as part of a single
service, or multiple services can be provided specific to individual customers.
The next component application of the test service is TFP (TrafficFlow and Prediction). This provides full network flow speeds for the full
TMC network, and will enable Navigation systems to make better routing decisions and give accurate route times. This application will be
launched on air in December to accompany TEC on our test multiplex in the London area.
We are pleased to have secured national bandwidth on the DAB multiplex operated by DigitalOne, and plan to enter a live testing environment
next month.
ITIS is recognised as the clear leader in both the development and deployment of this technology and is committed to developing TPEG
into a class leading service.
TRAFFICLINK
In December 2007 ITIS acquired Trafficlink. Trafficlink is the "voice of traffic" in the UK and is the leading distributor of traffic
incident and travel information to broadcasters and the media. Key customers include the BBC, Global Traffic Network (for whom we work with
to deliver the Highways Agency's "Traffic Radio" service) and through an exclusive agreement with UBC Media, 230 commercial radio stations.
In October 2008 Trafficlink signed an agreement with Global Radio and UBC Media plc, under which, stations forming the Hit Music
Network including Capital Radio in London, the Galaxy and Heart networks, Gold, and Xfm will receive information, bulletins and scripts
directly from Trafficlink's seven regional offices. Classic FM and LBC will also receive voiced bulletins and live information. The new
service will include a feed of up to the minute traffic and travel information to each of Global Radio's different station websites, giving
users 24/7 access to local travel news. It also opens up further potential opportunities for Global Radio and its listeners to take
advantage of other traffic related products and services developed in association with ITIS.
The new two year deal underlines our position as the UK's leading supplier of traffic and travel information, as we now provide
information to 90% of the UK's Independent Local Radio market as well as the BBC, ITV and Sky. Our contract with the BBC was renewed for a
further three years in December 2007 and we provide broadcasts and data to all BBC local radio stations in England as well as the national
networks, Radio 2 and Five Live, together with BBC online and Ceefax. Trafficlink information reaches over 40 million people in the UK each
week and is compiled from over 4,000 CCTV images, traffic sensors, contacts with the Police, HA and other local sources and ITIS' leading
Floating Vehicle Data network.
Trafficlink has now been fully integrated into ITIS' operations and the synergies achieved along with the operational efficiencies of
combining the operations, will lead to substantially reduced running costs in the second half of this year. Customer feedback on the
acquisition has been encouraging and the studio environment in which Trafficlink operates has given many customers an insight into our
business which they can relate to day to day through their own experience of the radio.
INTERNATIONAL
Our international business continues to enjoy strong growth despite global economic conditions. Some countries have been more affected
than others and we are prioritising our resources with those partners who can finance a national roll out and where there is a continued
requirement from both Government and industry for this information. Since we first started deploying our Cellular Floating Vehicle Data
(CFVD�) platform awareness of this technology has become more widespread leading to greater recognition of it by mobile operators and in
turn, more willingness from them to work with ITIS.
In Israel, our technology centre is responsible for the development and installation of CFVD�. Since acquiring this technology in 2003
we have continued to invest in the team there and believe that access to highly skilled people in the areas of Geographical Information
Systems, wireless networks and GPS enables us to produce global market leading technology. The strength of the NIS, the local currency,
against the pound has contributed to the majority of the rise in Israeli costs during the period.
ITIS' reputation, expertise and leadership position in the commercialisation of traffic information means that the Company is frequently
targeted as the partner of choice. We currently have ten live projects across the world including two in Australia, and others in Belgium,
China, Germany, Ireland, Israel, the State of Missouri, Singapore and South Africa all of which are progressing well. Despite the delays
with the Missouri Department for Transport, we continue to work closely with our customer to satisfy their requirements. Other new
contracts awarded to ITIS will be announced once the customers themselves go public with them. In addition we have ongoing enquiries and
work in progress with more than twenty others and remain confident that our strategy on focussing resources on stable economies will enable
us to roll out new countries at a cost effective and efficient rate whilst satisfying our desire to become a world leader in real time
traffic data. However in these challenging times the company will make suitable investments in new countries only where an acceptable return within a defined timescale can be guaranteed. We will
manage the related overhead on that basis and expect to deliver greater profitability as we go into the new financial year.
We have acquired digital bandwidth from Bayern Digital Radio and will be using this to test our next generation traffic services in
Germany. Despite the challenging economic environment we continue to invest in delivering the most advanced services for all our customers
and in particular the premium segment.
CURRENT TRADING AND PROSPECTS
The Board remain confident of the Company's ability to maintain market leadership in the UK and establish ITIS as the leading global
provider of traffic information services whilst maintaining rigorous cost control and where necessary, cost reduction. Whilst the first
half results were disappointing, the Board believes that the fundamental drivers of our business remain unchanged and we are in a very good
position to capitalise on any improvement in trading conditions around the world.
Consolidated income statement
Note Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
Revenue 5 8,326,505 8,086,716 18,322,831
Cost of sales (3,956,623) (2,832,824) (6,342,440)
__________ __________ __________
Gross profit 4,369,882 5,253,892 11,980,391
Operating costs before (4,968,520) (3,413,997) (7,591,028)
exceptional items
Amortisation of acquired 6 (121,969) - (81,314)
intangible assets
Non-recurring contract costs 5 (293,334) - -
Total operating costs (5,383,823) (3,413,997) (7,672,342)
Operating (loss) profit before (457,715) 1,839,895 4,389,363
exceptional items
Amortisation of acquired 6 (121,969) - (81,314)
intangible assets
Non-recurring contract loss 5 (434,257) - -
Operating (loss) profit (1,013,941) 1,839,895 4,308,049
Interest receivable and 25,903 336,060 493,620
similar income
Group interest payable and - - (8,986)
similar charges
__________ __________ __________
(Loss) profit before tax (988,038) 2,175,955 4,792,683
Current tax on ordinary - (609,267) (106,680)
activities
Deferred tax credit (charge) 51,634 - (1,486,544)
__________ __________ __________
Tax on (loss) profit on 51,634 (609,267) (1,593,224)
ordinary activities
__________ __________ __________
(Loss) profit for the period 5 (936,404) 1,566,688 3,199,459
__________ __________ __________
__________ __________ __________
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
Earnings per share
Basic and diluted (loss) 2 (0.9) 1.6 3.2
earnings per ordinary share
(pence)
__________ __________ __________
All activity arose from continuing operations
Consolidated statement of recognised income and expense
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
(Loss) profit for the financial (936,404) 1,566,688 3,199,459
period
Currency translation difference - - 527
__________ __________ __________
Total recognised income and (936,404) 1,566,688 3,199,986
expense for the period
__________ __________ __________
Attributable to:
Equity holders of the parent (936,404) 1,566,688 3,199,986
__________ __________ __________
Consolidated balance sheet
Note 30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
Non-current assets
Goodwill 9,315,548 - 9,315,548
Other intangible assets 2,013,931 541,541 2,288,700
Property, plant and equipment 2,006,542 1,226,323 1,885,005
Deferred tax asset - 882,563 5,286
Other receivables 421,668 - 552,854
__________ __________ __________
13,757,689 2,650,427 14,047,393
__________ __________ __________
Current assets
Trade and other receivables 5,924,584 6,450,163 6,322,318
Cash and cash equivalents 591,621 12,962,933 1,964,522
__________ __________ __________
6,516,205 19,413,096 8,286,840
__________ __________ __________
Total assets 20,273,894 22,063,523 22,334,233
__________ __________ __________
Current liabilities
Trade and other payables (4,430,071) (4,267,139) (4,193,130)
__________ __________ __________
Net current assets 2,086,134 15,145,957 4,093,710
__________ __________ __________
Non-current liabilities
Other payables (30,888) (37,083) (69,039)
__________ __________ __________
Total liabilities (4,460,959) (4,304,222) (4,262,169)
__________ __________ __________
Net assets 15,812,935 17,759,301 18,072,064
__________ __________ __________
Capital and reserves
Called-up share capital 5,230,270 5,230,270 5,230,270
Share premium account - 38,070,740 -
Retained earnings 10,058,236 (25,873,499) 12,413,527
Other reserve 524,429 331,790 428,267
__________ __________ __________
Equity attributable to equity holders of the 4 15,812,935 17,759,301 18,072,064
parent
__________ __________ __________
Total equity 15,812,935 17,759,301 18,072,064
__________ __________ __________
Consolidated cash flow statement
Note Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
Net cash from operating 3 540,079 1,565,408 3,874,611
activities
__________ __________ __________
Investing activities
Interest received 25,903 336,060 493,620
Proceeds on disposal of property, plant and - - 136,627
equipment
Purchases of property, plant and equipment (519,996) (509,637) (1,347,812)
Purchases of intangible assets - - (16,795)
Acquisition of subsidiary - - (3,010,346)
__________ __________ __________
Net cash used in investing activities (494,093) (173,577) (3,744,706)
__________ __________ __________
Financing activities
Dividends paid (1,418,887) - (1,417,012)
Repayment of borrowings - - (8,320,000)
__________ __________ __________
Net cash used in financing activities (1,418,887) - (9,737,012)
__________ __________ __________
Net (decrease) increase in cash and cash equivalents (1,372,901) 1,391,831 (9,607,107)
Cash and cash equivalents at the beginning of the 1,964,522 11,571,102 11,571,102
period
Effect of foreign exchange rate changes - - 527
__________ __________ __________
Cash and cash equivalents at the end of the period 591,621 12,962,933 1,964,522
__________ __________ __________
Notes to the interim financial information (unaudited)
1. Preparation of the interim financial information
The interim financial report has been prepared using accounting policies
consistent with International Financial Reporting standards (IFRS) and in
accordance with those disclosed in the annual report for the year ended
31 March 2008, with the exception of the presentation of exceptional
items, which is set out further below. The requirements of IAS 34
'Interim Financial Reporting' do not apply to this interim financial
report.
Exceptional items
Exceptional items are those items that are unusual because of their size,
nature or incidence or that the directors consider should be disclosed
separately to enable a full understanding of the group's results. This
includes the amortisation of intangible assets acquired in business
combinations (note 6) and non-recurring contract costs (note 5).
Exceptional items have been presented separately on the face of the
income statement and accordingly the comparative amounts for the year
ended 31 March 2008 have been restated. The directors consider that this
change in presentation gives a fairer presentation of the results of the
group.
The summarised results for the six months to 30 September 2008 and the
comparative results for the six months to 30 September 2007 are
non-statutory accounts within the meaning of Section 240 of the Companies
Act 1985 and have not been reported upon by the auditors under Section
235 of the Companies Act 1985.
The comparative figures for the year ended 31 March 2008 are an abridged
version of the Company's full accounts and, together with other financial
information contained in these interim results, do not constitute
statutory accounts of IT IS Holdings plc within the meaning of section
240 of the Companies Act 1985. The statutory accounts for the year ended
31 March 2008 have been delivered to the Registrar of Companies. The
report of the auditors was not qualified and did not contain a statement
under Section 237 (2) and (3) of the Companies Act 1985.
2. Basic and diluted earnings per ordinary share
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
(Loss) profit for the (936,404) 1,566,688 3,199,459
financial period
__________ __________ __________
Weighted average number of 98,442,884 98,442,884 98,442,884
ordinary shares for the
purposes of basic (loss)
earnings per share
Effect of dilutive potential 1,672,916 1,672,916
ordinary shares - Share
options*
__________ __________ _________
100,115,800 98,442,884 100,115,800
__________ __________ __________
__________ __________ __________
Basic and diluted (loss) (0.9) 1.6 3.2
earnings per share (p)
__________ __________ __________
* The number of share options used is the excess of options in issue at 31 March 2008 and 30 September 2008, over the number of
shares held in the IT IS Holdings EBT.
Notes to the interim financial information (unaudited)
3. Reconciliation of operating (loss) profit to net cash inflow from
operating activities
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
(Loss) profit for the period (936,404) 1,566,688 3,199,459
Adjustments for:
Depreciation of property, 398,459 359,608 533,955
plant and equipment
Amortisation of intangible 274,769 - 393,138
assets
Interest income (25,903) (336,060) (493,620)
Share-based payment expense 96,162 - 171,860
Finance costs - - 8,986
Income tax expense - 609,267 106,680
Deferred tax (credit) charge (51,634) - 1,486,544
Gain on disposal of property, - - (22,370)
plant and equipment
__________ __________ __________
Operating cash flows before (244,551) 2,199,503 5,384,632
movements in working capital
Decrease (increase) in 528,920 (1,661,021) (833,643)
receivables
Increase (decrease) in 255,710 1,026,926 (672,267)
payables
__________ __________ __________
Cash generated by operations 540,079 1,565,408 3,878,722
Interest paid - - (8,986)
Research and development tax - - 4,875
credit
__________ __________ __________
Net cash from operating 540,079 1,565,408 3,874,611
activities
__________ __________ __________
4. Statement of changes in equity
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
(Loss) profit for the financial (936,404) 1,566,688 3,199,459
period
Other recognised gains and - - 527
losses relating to the period
IFRS 2 share option charge 96,162 75,383 171,860
Dividends paid (1,418,887) - (1,417,012)
__________ __________ __________
Net (reduction in) addition to (2,259,129) 1,642,071 1,954,834
Group shareholders' funds
Opening Group shareholders' 18,072,064 16,117,230 16,117,230
funds
__________ __________ __________
Closing Group shareholders' 15,812,935 17,759,301 18,072,064
funds
__________ __________ __________
Notes to the interim financial information (unaudited)
5. Segmental analysis
The directors are of the opinion that the Group operates in a single
segment, that of the provision of road traffic and data services. Hence
all revenue and results relate to this class of business. The
geographical analysis of revenue and result is set out below:
Revenue
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
United Kingdom 8,002,677 7,676,345 17,254,785
Mainland Europe 227,002 322,490 817,199
U.S.A. (140,923) - 140,923
Israel 31,004 47,879 81,221
Rest of World 206,745 40,002 28,703
Intersegmental sales 1,091,781 971,000 2,529,873
Eliminations (1,091,781) (971,000) (2,529,873)
_________ _________ _________
Consolidated 8,326,505 8,086,716 18,322,831
_________ _________ _________
Result
Six months to Six months to Year ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Unaudited
� � �
United Kingdom (211,190) 2,387,815 5,362,641
Mainland Europe 233,377 85,283 463,592
U.S.A. (434,257) (91,184) (13,752)
Israel (757,094) (546,000) (1,510,694)
Rest of World 155,223 3,981 6,262
_________ _________ _________
Operating profit (1,013,941) 1,839,895 4,308,049
_________ _________ _________
Other gains and losses
Interest received 25,903 336,060 493,620
Finance costs - - (8,986)
_________ _________ _________
Profit before tax (988,038) 2,175,955 4,792,683
_________ _________ _________
Tax 51,634 (609,267) (1,593,224)
_________ _________ _________
Consolidated (936,404) 1,566,688 3,199,459
_________ _________ _________
During the six months ended 30 September 2008, as a result of ongoing delays
with the State of Missouri Department for Transport, the directors have
reassessed their estimate of the recoverability of revenues recognised in
previous periods. Revenues in the period have therefore been reduced by
�140,923, being the amount previously recognised in the year ended 31 March
2008. In addition, costs of �293,334 incurred in relation to the same project
have been written off to the income statement, creating a one-off loss for
the period of �434,257 in the USA segment.
Notes to the interim financial information (unaudited)
6. Amortisation of acquired intangible assets
On 6 December 2007 the group acquired 100% of the issued share capital of
Trafficlink Limited. Intangible assets of �1,969,510 were recognised in
the group balance sheet following the acquisition.
7. Contingent liability
As disclosed in the annual report for the year ended 31 March 2008 a
claim was filed in the Tel Aviv District Court against IT IS Traffic
Service Ltd. ("ITSL"), a wholly owned subsidiary of the Group. Based on
advice from legal counsel, the Directors believe ITSL has strong defences
to the claims and thus it is unlikely that a liability will arise from
this litigation. As a result no contingency in respect of the claim has
been provided for in the company accounts. During the six months ended 30
September 2008, the group spent �95,211 (2007: �148,643) defending the
claim.
8. Interim statement
A copy of this announcement will be circulated to all registered
shareholders of the Company and copies will be available for members of
the public upon application to the Registered Office at Station House,
Stamford New Road, Altrincham, Cheshire, WA14 1EP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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