TIDMAVV
RNS Number : 5690N
AVEVA Group PLC
19 May 2015
19 May 2015
AVEVA GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2015
AVEVA Group plc ('AVEVA'; stock code : AVV), one of the world's
leading providers of engineering data and design IT systems, today
announces its preliminary results for the year ended 31 March
2015.
Financial Highlights
2015 2014 % Change
--------------------------- ---------- ---------- ---------
Revenue GBP208.7m GBP237.3m -12%
--------------------------- ---------- ---------- ---------
Organic constant currency
revenue** GBP220.4m GBP237.3m -7%
--------------------------- ---------- ---------- ---------
Adjusted* profit before
tax GBP62.1m GBP78.3m -21%
--------------------------- ---------- ---------- ---------
Profit before tax GBP54.9m GBP69.0m -20%
--------------------------- ---------- ---------- ---------
Adjusted* profit before
tax margin 29.8% 33.0%
--------------------------- ---------- ---------- ---------
Basic earnings per share 65.07p 78.12p -17%
--------------------------- ---------- ---------- ---------
Adjusted* basic earnings
per share 74.51p 89.05p -16%
--------------------------- ---------- ---------- ---------
Net cash GBP103.8m GBP117.5m -12%
--------------------------- ---------- ---------- ---------
Final dividend per share 25.0p 22.0p +14%
--------------------------- ---------- ---------- ---------
* Adjusted profit before tax, adjusted profit margin and
adjusted basic earnings per share are calculated before
amortisation of intangible assets (excluding other software),
share-based payments, gain/loss on fair value of forward foreign
exchange contracts and exceptional items. In addition, adjusted
basic earnings per share also include the tax effects of these
adjustments.
** Organic constant currency revenue is defined as the period's
reported revenue restated to reflect the previous year's average
exchange rates and excludes the contribution from 8over8.
Highlights
-- Resilient performance in difficult markets with revenue and profit in line with expectations
-- Focus on sales execution with 'One AVEVA' beginning to deliver benefits
-- Strong performance from AVEVA Everything 3D(TM) (AVEVA E3D(TM)), now a meaningful revenue
contributor
-- Second half organic, constant currency revenue was GBP128.1 million, broadly flat on prior
year (2014 H2 - GBP128.8 million) reflecting our focus on sales execution
-- Rental licence revenue grew by 8% in the second half to GBP67.8 million (2014 H2 - GBP62.7
million) on a constant currency basis, reflecting good renewals and new agreements with Global
Accounts
-- Delivered against planned cost efficiencies
-- Proposed final dividend of 25.0 pence per share, an increase of 14% over prior year (2014
- 22 pence)
-- Net cash balance of GBP117.6 million on 30 April 2015, reflecting strong cash collection since
the year end
Commenting, Chief Executive Richard Longdon said:
"Overall I am very pleased with the strategic and operational
progress we have made during the period. Despite the difficult
trading environment, we have demonstrated our ability to capitalise
on our strengths: a broad international reach and strong
competitive positioning in all of our markets."
Enquiries:
AVEVA Group plc
Richard Longdon, Chief Executive
James Kidd, Chief Financial Officer
Derek Brown, Head of Investor Relations
On 19 May 2015 Tel: 020 7796 4133
Thereafter Tel: 01223 556655
Hudson Sandler
Andrew Hayes / Wendy Baker / Alex Brennan
Tel: 020 7796 4133
Conference call and webcast
AVEVA management will host a conference call and audio-webcast,
for registered participants, at 09:30 (BST) today. The
audio-webcast will be also accessible via the AVEVA website
following the presentation.
To register for the webcast and access the presentation
materials please visit:
http://www.aveva.com/en/Investors.aspx.
Conference calls dial in details:
Telephone: +44(0)20 3427 1904
Conference call code: 5208663
Participants are advised to visit the website at least 15
minutes prior to the commencement of the call in order to register
and, for those accessing the webcast, in order to download and
install any audio software that may be required.
NB: Conference call participants will be able to ask questions
during the Q&A session, but those on the webcast will be in a
listen only mode.
A full replay facility will be made available later in the
day.
Additional information can be accessed at
www.aveva.com/investors or by contacting the AVEVA Investor
Relations team or Hudson Sandler directly.
Chairman's statement
Introduction
Overview
I am pleased to report that AVEVA has made good progress in
difficult market conditions, and that the resilience of the Group's
business model has been a key feature of the past twelve
months.
The full year results reflect our particular focus on execution
in the second half of the financial year. Total recurring revenue
for the second half of the year was up 5%, demonstrating the
resilience of our business. We were also able to deliver the
GBP10.0 million of cost efficiencies we had targeted.
Group revenue of GBP208.7 million (2014 - GBP237.3 million), was
in line with our revised expectations and adjusted* profit before
tax was GBP62.1 million (2014 - GBP78.3 million), resulting in an
adjusted profit margin of 29.8% (2014 - 33.0%). The reported profit
before tax was GBP54.9 million (2014 - GBP69.0 million). Adjusted
basic earnings per share declined 16% to 74.51 pence (2014 - 89.05
pence). Basic earnings per share declined 17% to 65.07 pence (2014
- 78.12 pence). We closed the year with net cash of GBP103.8
million (2014 - GBP117.5 million).
This result reflects a reduced market demand throughout the year
due to the significantly lower oil price and subsequent reduction
in customer activity, as well as the previously reported weakness
in South America and North East Asia during the first half. The
strength of sterling also had a pronounced negative effect on our
reported results, trimming Group revenue by 6%, as our overseas
revenue was translated at less favourable rates compared to the
last financial year.
Strategic progress
Notwithstanding the tougher market backdrop, I am pleased to
report that AVEVA has continued to make excellent strategic
progress on a number of fronts. This is particularly evident in the
newly realigned organisation reflected within our sales, Research
& Development and solution delivery activities. A year ago we
introduced 'One AVEVA' to better support our Engineering,
Procurement and Construction (EPC) and Owner Operator (OO)
customers through a single sales approach. This has proved to be
very effective at helping us to grow the number of solution sales
we make. In addition, we have recently unified our development
teams across all of our solutions and technologies and streamlined
our solution delivery capabilities.
We have continued to make very good progress with our Global
Accounts. Many customers are responding to more uncertain markets
by investing in new technologies from AVEVA to maximise
competitiveness and efficiency. AVEVA E3D has been an outstanding
example of this and has proved to be a powerful catalyst for us to
deepen our relationships with these key customers. As a result we
are pleased to be able to report significant new contracts with
Aker Solutions,WS Atkins and KBR, among others.
AVEVA E3D is a clear example of AVEVA's position as the leading
innovator within its industry. We have also delivered a range of
new products and functional enhancements to many of our other
products over the last twelve months. Of particular note is the
Activity Visualisation Platform and the new Cloud-enabled version
of AVEVA E3D, both of which have generated much excitement from
customers in recent months.
During the year we were pleased to acquire 8over8 Limited. Based
in Northern Ireland, 8over8's core product, ProCon(TM), is a
software solution designed to minimise risk and increase control
and capital discipline for some of the world's most complex
projects. This demonstrates AVEVA is well placed to use its balance
sheet to deliver well-timed, strategically important acquisitions
with a strong logical fit. We are confident that the addition of
8over8 will enable us to further broaden our relationships with the
OO community, and serve to further differentiate AVEVA in its
markets.
Market environment
The lower oil price has led to a reduction in global upstream
E&P capital expenditure, and it is well documented that a
number of projects have been postponed or moth-balled, although the
overall effect for AVEVA is mixed. This has had an impact on our
EPC customers, their backlogs and general levels of activity.
We have market-leading, well-invested technology solutions that
underpin our competitive advantage across our target sectors and
geographies. Our mission to enable our customers to work globally
with less risk, shorter lead-times and greater business efficiency
throughout the asset lifecycle ensures we are aligned to robust
long-term growth drivers, particularly given demand for energy, the
increasing complexity of their assets, the focus on health and
safety and environmental considerations. However, despite some
stabilisation in the oil price, it is difficult to predict when the
delayed capital projects will be restarted.
Operationally, we demonstrated our ability to react with agility
to changing market conditions, and our early actions enabled us to
deliver cost efficiencies ahead of our original plans. This
protected profitability in the second half of the financial
year.
The Board
I am pleased to report further progress in developing the
Board's role in supporting and reviewing the Group's strategy for
long-term growth. I believe that the scope and effectiveness of
this process is now delivering results which can be clearly seen in
the various strategic and organisational achievements noted above.
As a Board, we continue to monitor closely the achievement of
business objectives alongside the oversight of risks and the
maintenance of strong governance processes.
Dividend
AVEVA has a progressive dividend policy, reflecting the Board's
confidence in the underlying strength of the business and its
ability to deliver profitable long-term growth and strong cash
generation. Consequently, the Board is recommending a final
dividend of 25.0 pence (2014 - 22 pence), an increase of 14% over
the prior year, payable on 3 August 2015 to shareholders on the
register on 3 July 2015. This gives a full year dividend of 30.5
pence (2014 - 27 pence), an increase of 13% over last year.
Outlook
I believe that the quality and commitment of the AVEVA team
worldwide has been central to our ability to show the resilience of
our business in the face of more challenging and uncertain market
conditions, and on behalf of the Board I would like to thank
everyone in the organisation for the effort and dedication that has
enabled us to achieve this.
The Board is convinced that there continues to be exciting
growth opportunities for AVEVA in the coming years, and that the
strength of the long-term fundamentals across our various end
markets remains undiminished. We will continue to focus on managing
our cost base to further improve efficiency. As a result, we are
confident in our ability to make further progress in capitalising
on these opportunities in the future.
Philip Aiken
Chairman
19 May 2015
Chief Executive's strategic review
Summary of Performance
Resilience in difficult markets
The financial year 2014/15 proved the resilience of AVEVA's
business model, given the mixed trading environment we experienced.
Our revenue mix, broad international reach and strong competitive
positioning proved to be key strengths. Our emphasis was on
execution in the second half of the year and I am pleased to say
that we were able to deliver the GBP10.0 million of cost
efficiencies we had targeted. Full year constant currency revenue
of GBP220.4 million (2014 -GBP237.3 million) reflected a second
half performance in line with the previous year, with an increase
in annual fees and rental licences broadly flat despite the
difficult market backdrop. Rental deals that had shifted into the
second half closed successfully in line with expectations. We were
also able to demonstrate that the significant investment we have
made in Research & Development in recent years has been
well-timed, enabling us to expand our penetration within Global
Accounts despite the difficult economic backdrop facing many of our
customers.
Overall, I am pleased with the strategic and operational
progress we have made during the period. We have continued to
expand our sales to OOs through a more coordinated approach,
founded upon the 'One AVEVA' sales strategy, implemented at the
start of the year. This has had the effect of increasing solution
sales to customers and positions us well for the future. We also
continued our strategy of reinvesting cash in strategically
important acquisitions, with the addition of 8over8 Limited in
January 2015, an industry-leading provider of contract risk
management solutions.
Over the course of the year, we have seen substantially more
challenging conditions in our Oil & Gas end market, which
represents around 45% of Group revenue, with the material weakening
in the oil price leading to sharp reductions in exploration and
production capital expenditure. In addition to this, our business
in Latin America was further impacted by Brazil's ongoing political
difficulties. In the Marine market, global shipbuilding activity
remained subdued, driven by ongoing over-capacity, reduction in new
orders for specialist off-shore vessels and relatively low global
GDP growth. In the Power market, we continued to see steady single
digit growth.
We have an international business with over 50 offices operating
in more than 30 countries worldwide. Sterling has strengthened
materially during the course of our financial year, in particular
against the Euro but also against many other currencies in which we
do business, and we saw a 6% negative translation impact on our
reported revenue. This is covered in more detail in the Finance
Review.
Why customers in our end markets buy our software
Our software is used by our customers as they design, build and
operate large capital-intensive assets, in the Process, Power and
Marine industries. We sell our solutions principally to the EPC
companies, shipyards and OO customers worldwide. Our vision of the
Digital Asset is enabling our customers to manage continual change
as they deliver and operate some of the world's most complex
assets.
Increasingly, our customers are demanding a combination of our
products and this, backed by our 'One AVEVA' sales strategy, is
driving wider adoption of the entire AVEVA product portfolio
delivering strong upsell opportunities. This has been particularly
evident in the success we have achieved in expanding our footprint
within our Global Accounts. Other notable customers opting for a
broader portfolio of our products include Southern California Gas
Company, a good example of an OO combining a range of AVEVA
applications in order to improve capital efficiency, reliability
and compliance.
Engineering & Design Systems (EDS) review and drivers
As a result of the difficult end markets our EDS business was
subdued. Revenue for this line of business declined by 14% to
GBP182.7 million, reflecting in particular the downturn in Brazil
and South Korea where rental licence renewals were depressed in the
first half of the year. Our initial licence business was influenced
principally by the reduced levels of activity among our Asian
shipyard customers compared to the previous year. Nevertheless,
sales of AVEVA E3D continued to gain momentum throughout the year
and we have achieved significant strategic progress with our Global
Accounts. In general, rental renewals remained robust among our key
accounts, and we concluded significant deals with Aker Solutions,
Jacobs Engineering, Technip, WorleyParsons and AMEC Foster Wheeler,
among others.
Enterprise Solutions (ES) review and drivers
The market backdrop for our information management products has
been challenging, with lengthy sales cycles and pressures on
discretionary spend amongst our customers. This was reflected in
the financial performance for this line of business which did not
deliver the level of growth that we expected, with revenue of
GBP24.9 million (2014 -GBP25.9 million), excluding the impact of
the acquired 8over8 business. However, the innovations delivered to
our customers this year are driving increased demand for our
solutions to create and manage our customers' Digital Assets.
Despite the tough market backdrop, there were a number of notable
projects during the period including Husky, Davie, BASF and BAE. We
also successfully completed important milestones at Chevron's
Wheatstone project and at ConocoPhillips.
Innovation leadership driving new opportunities
Our commitment to being the leading innovator in our industry
remains undiminished and customer feedback on the products
showcased at our AVEVA World Summit in October 2014 was hugely
positive. With AVEVA E3D gaining momentum in the market, the next
step will be the Cloud-enabled version. We demonstrated a full
function version of AVEVA E3D on a Cloud platform proving no
difference in performance to a locally installed solution. The
addition of a Cloud-based solution will offer customers rapid
deployment as well as the flexibility to mix both cloud and on
premise users in the same project. The Cloud technology is already
being tested by several customers as part of our early adopter
programme. Building on our position as the industry leader in
visualisation technology, we demonstrated our new ability to 'walk
through' laser scans in an environment indistinguishable from the
actual facility. We also demonstrated combined AVEVA E3D and AVEVA
NET(TM) technology on a large touchscreen that is now with early
adopter clients, including Lundin and Shell, to demonstrate the
next generation in navigating project and asset information in
context.
We also announced major enhancements to AVEVA NET with improved
3D interaction and faster, more powerful search, visualisation and
navigation capabilities.
Elsewhere, the launch of our new Information Standards Manager
has been well received by customers. AVEVA ISM(TM) bridges the gap
between OOs and EPCs, enabling greater control over critical
engineering information standards across their projects and
enterprises.
We have an exciting product pipeline over the medium term,
particularly as our design tools and information management
solutions continue to converge.
Regional performance
Across our three main regions, we saw a mixed performance. Asia
Pacific was down 20% in the year on a constant currency basis,
which reflected a reduction in initial licence fees compared to a
very strong performance a year ago, as well as a particular
weakness in South Korea where our shipyard customers have
experienced lower activity levels due to a reduction in offshore
Oil & Gas projects.
Revenue in EMEA and the Americas on a constant currency basis
was broadly flat compared to the prior year, reflecting weakness in
Brazil and parts of EMEA offset by growth from our Global
Accounts.
Further details on our regional performance are contained in the
Finance Review.
Our Focus
Long-term opportunity in global growth markets
Our business remains strongly positioned in its target markets,
where the fundamentals support long-term growth. Despite the
near-term effects of a weaker oil price, over the long term, with
increased energy usage and a growing global population, significant
infrastructure investment will be required in order to meet demand;
the International Energy Authority (IEA) estimates that global
energy demand will increase by 37% by 2040, with the majority of
this increase occurring in China and India. Oil & Gas is
increasingly difficult to extract, necessitating more hours to be
spent in detailed design. This is set against a backdrop where the
IEA forecast that liquids demand alone is set to rise from 87
million to 98 million barrels per day within just five years. Our
software is critical to solving the biggest engineering challenges
in the harshest environments. With similar fundamental drivers,
Power offers attractive growth opportunities over the long term as
the world's emerging economies invest in their power generation
requirements and the ageing infrastructure of the developed world
is maintained and replaced. Our global presence and international
reach positions us well to capitalise on these opportunities.
Meanwhile, in times of uncertainty we are focused on supporting our
customers as they seek to become more efficient and adapt to the
fast changing environment.
Our strong position in engineering design also offers us a
unique opportunity to support the lifecycle of the assets our
software tools are used to create. Our information management
solutions, with the support of our growing partner network, are
increasingly relevant to a wide range of asset-intensive industries
beyond the core markets we have traditionally served.
Solution sales, our organisation and the convergence of
technologies
We have been pursuing a strategy of increasing the number of
solution sales we make, whereby customers opt for a number of our
products and we increase our footprint within our customer base.
With this in mind, we reported at the interim stage that we had
realigned our sales organisation behind a 'One AVEVA' approach in
order to better promote the entire AVEVA product range to all
customers, supporting both design and operations. As previously
indicated, we have also unified our technology organisation,
following the convergence of our two key product areas, detailed
engineering design and information management. Finally, the Digital
Asset is now firmly reinforced as the vision that lies at the heart
of our service organisation, to better focus on service delivery
and grow our specialist service capabilities over time.
We expect that this streamlined solutions and product strategy
will deliver major benefits to our business in coming years as our
technologies are used increasingly in combination. Our future
financial reporting will, from 2015/16, also be re-aligned behind
this convergence and this year is the last in which we will
disclose EDS and ES as our primary segments. From 2015/16, we are
monitoring the business on a regional basis and, therefore, this
will become our primary method of segmental financial
reporting.
Management of our cost base
Recognising the more difficult trading conditions in the first
half of the financial year, we took early action to achieve
cost-efficiencies. This, combined with lower sales commissions and
bonuses during the period, has enabled us to limit the impact on
profitability caused by lower than planned revenue. In addition, we
have taken further action to address the cost base by rationalising
some of our regional offices and reducing headcount in some areas
of the business. This will deliver annualised savings of
approximately GBP3.0 million which will help offset the cost
increases we face in 2015/16 as a result of inflation, increased
bonus and commission costs and the annualised effect of new hires
made in 2014/15.
Our Achievements
Strategic progress with Global Accounts
Our Global Accounts EPC program continued to bear fruit over the
past year. The challenges seen in our end user markets are
prompting our Global Accounts to take the opportunity to invest in
the latest AVEVA technologies in order to maximise their
competitiveness and business advantage. The integrated
Bubbleview(TM) laser capability within AVEVA E3D is now making this
solution the de facto standard for all future brownfield projects,
eliminating or reducing re-modelling activities by over 90%. Beyond
AVEVA E3D, there is also increased uptake and deployment of AVEVA
NET across our Global Accounts, as they continue their journey
towards true data-centric working built around a trusted digital
asset.
I am especially pleased to be able to report a new significant
contract with Aker Solutions of Norway which builds on the
fantastic relationship we have enjoyed with them over the last 20
years. Aker has invested in PDMS(TM) throughout this period and is
now using this platform to develop and deploy AVEVA E3D across
their business. This is a good example of how we are deepening the
relationships with our customers whilst increasing the revenue
opportunity.
Development of the partner channel
We continue to strengthen our partnerships with leading
consulting, technology and outsourcing companies as we build our
presence in the operational lifecycle of the asset. During the
period we announced a global alliance with Capgemini to cover
asset-intensive industries. Capgemini's Digital Asset Lifecycle
Management (DiALM) solution is based on AVEVA's information
management technology and enables OOs to control and manage project
and operational performance of their assets. We are already
supporting Capgemini on the Nuclear New Build programme in the UK
and we expect this agreement to help extend our presence within our
existing markets and into the other asset-intensive industries
served by Capgemini, for example transport. We also announced a new
collaboration with EMC to deliver an integrated software solution
for capital projects and asset operations. Under the terms of this
agreement, AVEVA and EMC have combined the two best-in-class
product suites, AVEVA NET and EMC(R) Documentum(R) Engineering,
Plant and Facilities Management (EPFM), into a single solution.
Elsewhere, we formalised our partnership agreement with ETAP for
seamless data exchange on the most complex electrical installations
in all types of process and power plants, ships and offshore
facilities.
Strong growth from AVEVA E3D
As mentioned above, AVEVA E3D has proven to be a catalyst for
more solution sales particularly within our Global Accounts
business, but we are also making progress across the rest of our
customer base. Notable deals in the period included WS Atkins, who
have chosen AVEVA E3D and Laser Modeller(TM) to support lean
construction processes. KBR selected AVEVA E3D for global projects
as part of a complete integrated engineering and design
environment. Tianchen, one of China's largest engineering
contractors in the chemical processing industry, standardised on
AVEVA E3D. D3SCOM Engineering Sdn. Bhd., a specialist in
intelligent modelling engineering services, also adopted AVEVA E3D
and Laser Modeller for brownfield projects with Owner Operators in
Malaysia.
We now have more than 230 customers who have licensed AVEVA E3D,
and the cumulative revenue to date since launch has exceeded
GBP11.0 million. Thus, as we look at the current financial year
AVEVA E3D is expected to be a material contributor to revenue for
the first time and the long-term outlook is exciting.
Strategic development through M&A
The acquisition of 8over8 Limited in January 2015 was
strategically important and is being integrated according to plan.
8over8's core software platform, ProCon, is sold principally to
organisations that design, build and operate high value assets,
where it is used as a risk management tool for increased project
control and capital discipline. Acquiring this business is an
example of how we can use M&A as a strategic tool for growing
our business into related technologies and market areas and shows
our disciplined approach to acquisitions. There is a strong logical
fit and we have several AVEVA NET customers who have ProCon
implemented alongside our solution. AVEVA has always had the
capabilities for managing changes in design and other data via our
existing tools and solutions and now ProCon brings us the
capability to manage the impact of those changes on a project's
cost and outcome. We are, therefore, optimistic that this
acquisition opens up a range of new opportunities for growth both
in our existing markets and other related industries.
The Future
Adapting to shifting customer priorities
Efficiency is even more important than ever for our customers
and it is AVEVA's goal to provide the tools to deal with ever
shorter time-frames and greater cost constraints. Via the creation
of the Digital Asset we help our customers to focus on
profitability and a lean organisation. This is a journey for our
customers, many of whom are now placing the Digital Asset at the
heart of their technology vision. Our solutions in the design world
are increasingly being called upon to integrate information about
the 'as-built' asset, via integrated laser modelling capabilities,
as well as operational asset information, via AVEVA NET. As a
result OOs can extend the life of their assets whilst our EPC
customers can use our solutions to design more efficient assets,
handling the data in the project phase far more efficiently and
incorporating operational lessons learned ready to handover to the
operator.
Summary and outlook
For much of the year under review AVEVA has faced more
challenging market conditions. We have been particularly affected
by the reduction in activity in the upstream Oil & Gas sector.
Over time we expect capital investment in Oil & Gas
infrastructure to return to growth, but the timing of this is
uncertain. Despite the mixed trading environment, we have
demonstrated our ability to capitalise on our strengths: a broad
international reach and strong competitive positioning in all of
our markets. We aim to continue to lead through innovation and, as
has been demonstrated by the milestones achieved with AVEVA E3D, to
drive growth through exciting new offerings.
It is a testament to the dedication of all of our people around
the world that we were able to deliver significant cost
efficiencies in the second half of the year and looking ahead we
shall have an even greater focus on costs during the current
financial year. Whilst we recognise the challenges in our markets,
we are focused on the opportunities that lie before us both
strategically and operationally. As a result, the Board is
confident that we can achieve our growth targets over the medium
term.
Richard Longdon
Chief Executive
19 May 2015
Finance Review
Summary
The strength of AVEVA's business model, good sales execution and
tight cost management supported a resilient financial performance
in the second half of the financial year, following a disappointing
first half. The business is well positioned for future growth with
a sound financial footing and solid business model capable of
dealing with short term volatility in our end markets.
The results for the year are summarised as follows:
2014/15 2014/15 2014/15 2014/15 2013/14 Organic
Organic constant
constant currency
GBPm Organic 8over8 Total currency** Total change
Revenue
Annual fees 60.2 0.5 60.7 64.4 57.1 13%
Rental licence
fees 97.2 0.3 97.5 102.2 109.9 (7%)
--------- -------- -------- ------------ -------- ----------
Recurring revenue 157.4 0.8 158.2 166.6 167.0 -
Initial licence
fees 31.1 - 31.1 33.5 48.4 (31%)
Training and
Services 19.1 0.3 19.4 20.3 21.9 (7%)
--------- -------- -------- ------------ -------- ----------
Total revenue 207.6 1.1 208.7 220.4 237.3 (7%)
--------- -------- -------- ------------ -------- ----------
Cost of sales (15.2) (0.3) (15.5) (16.1) (17.4) (7%)
--------- -------- -------- ------------ -------- ----------
Gross profit 192.4 0.8 193.2 204.3 219.9 (7%)
Operating expenses* (130.0) (1.4) (131.4) (138.9) (142.1) (2%)
Net finance
interest 0.3 - 0.3 0.3 0.5 (40%)
Adjusted profit/(loss)
before tax 62.7 (0.6) 62.1 65.7 78.3 (16%)
--------- -------- -------- ------------ -------- ----------
* Operating expenses adjusted to exclude amortisation of
intangible assets (excluding other software), share-based payments,
gain/loss on forward foreign exchange contracts and exceptional
items.
** Organic constant currency is defined as the period's reported
results restated to reflect the previous year's average exchange
rates and excludes the contribution from 8over8.
Total revenue for the year was GBP208.7 million which was down
12% compared to 2013/14 (2014 - GBP237.3 million). Included in the
results is GBP1.1 million from 8over8 Limited, the business we
acquired in January 2015. Our organic revenue on a constant
currency basis was GBP220.4 million, which was down 7% compared to
2013/14.
Following H1 revenue of GBP92.3 million (2014 - GBP108.5
million) on an organic, constant currency basis, the second half of
the year delivered organic, constant currency revenue of GBP128.1
million. This was broadly flat compared to 2013/14 (2014 - GBP128.8
million) and was a good, resilient performance considering the
market conditions we faced, particularly in Oil & Gas.
Adjusted profit before tax was GBP62.1 million (2014 - GBP78.3
million) and on a reported basis, profit before tax was GBP54.9
million (2014 - GBP69.0 million). Within this, the acquired 8over8
business contributed a loss of GBP0.6m in the short period since
the acquisition on 5 January 2015.
Revenue
An analysis of organic revenue by geography is set out
below:
2014/15 2014/15 2013/14
Organic constant Organic constant
GBPm Reported currency Reported currency change
EMEA 103.5 112.9 112.0 1%
Americas 36.8 38.2 38.4 (1%)
Asia Pacific 67.3 69.3 86.9 (20%)
Total revenue 207.6 220.4 237.3 (7%)
---------- ------------------ ---------- -----------------
As highlighted within the interim results, revenue was impacted
by foreign exchange on the retranslation of our overseas
subsidiaries by GBP12.8 million or 6%. EMEA was impacted most
significantly as a result of the weakness of the Euro and Russian
rouble.
EMEA
In EMEA, reported revenue was down 8%. On a constant currency
basis, revenue was broadly flat at GBP112.9 million (2014 -
GBP112.0 million) and reflected a mixed performance across the
countries we operate in. Annual fees grew by 8% which was
principally from the larger Owner Operators. Rental fees increased
by 3% mainly driven by growth from the Global EPC accounts, many of
whom have signed multi-year contracts, and an acceleration in sales
of AVEVA E3D. This was offset by reduced usage by some EPCs in the
UK and Norway with offshore Oil & Gas exposure. Initial licence
fees were down 7% due to tougher market conditions generally in
Central Europe which was offset by a robust performance in Russia
despite the political situation and the threat of sanctions for
some of our customers. Services were down 16% due to lower levels
of activity for Enterprise Solutions within some of the Owner
Operators.
Americas
In the Americas, reported revenue was down 4%. On a constant
currency basis, the performance was broadly flat with revenue of
GBP38.2 million (2014 - GBP38.4 million). Within this we saw a good
level of renewals within our Global EPC accounts based in the US
which was offset by the performance in Latin America which was down
28% compared to last year. Our Brazilian customers continued to be
impacted by the lower levels of activity in Oil & Gas and this
resulted in Americas' rental fee revenue declining by 6%. Initial
licence fees grew by 34% and services by 8% illustrating our
success in selling into Owner Operators in North America
demonstrating that the increased focus is beginning to show
benefits. Annual fees increased by 2% following the increase in
initial licence fees.
Asia Pacific
Revenue in Asia Pacific was down 23% on a reported basis and
down 20% on a constant currency basis which reflected a mixed
picture across the geographies that we operate in. As indicated at
the half year, we have seen lower levels of activity in the
offshore Oil & Gas projects in South Korea and parts of South
East Asia. In 2013/14, we benefited from some large initial licence
fees in South Korea which have not repeated in 2014/15 resulting in
a decline of 46%. On a positive note we saw double digit growth in
China driven by customers in the Power and Process industries.
Annual fees increased by 22% due to the strong initial licence
fees in 2013/14, and we also benefitted by approximately GBP3.0
million from Chinese customers who had stopped paying annual fees
and wanted to reactivate, for which we charge a catch-up fee.
As highlighted in the interim results, customers in Asia Pacific
often use rental licences to flex their usage over and above their
core entitlement under the initial/annual licences. Because of the
lower levels of activity, some customers have not renewed their
rental licences. We also had one large customer who, towards the
end of 2013/14, changed the structure of their arrangement from a
rental to an initial licence model. As a result, rental licence
fees were down 26% compared to last year.
Revenue by category
The Group's recurring revenue, which consists of annual fees,
and rental licence fees was flat year on year on a constant
currency basis at GBP166.6 million (2014 - GBP167.0 million) and
represented 76% of revenue (2014 - 70%).
Annual fees grew by 13% to GBP64.4 million on a constant
currency basis which reflects the strong initial licence
performance a year ago, particularly in South Korea and the
catch-up fees in China. Annual fees have continued to grow
reflecting the continued resilience of our business model.
Rental licence fee revenue fell by 7% to GBP102.2 million on a
constant currency basis. Following a disappointing first half, we
saw a good second half performance with growth of 8% delivering
revenue of GBP67.8 million compared to GBP62.7 million in second
half of 2013/14. This was mostly generated from Global Account
customers through the benefits of the new multi-year contracts and
overall a good level of renewals, although we did see some reduced
activity levels within those EPCs with a higher level of exposure
to offshore Oil & Gas projects. Also included within rental
licences are the two customers that renewed as planned in second
half which we referenced in the interim results. Despite the robust
performance in rental licences in the second half, we remain
cautious as we enter 2015/16 because of the mixed outlook within
our EPC customers who are exposed to Oil & Gas.
Initial licence fee revenue felt the largest impact of the Oil
& Gas market, down 31% to GBP33.5 million. This was mostly felt
in Asia Pacific, which is a market that prefers the initial licence
fee model and we had a tough comparable following the very strong
growth in South Korea in 2013/14. We did see good growth in initial
licences in North America.
Training and services revenue was broadly flat at GBP20.3
million (2014 - GBP21.9 million).
Segment performance
The organic performance of our primary segments is set out
below:
2014/15
2014/15 Organic 2013/14 Constant
constant currency
GBPm Reported currency Reported change
EDS
Revenue 182.7 193.9 211.5 (8%)
Segment costs (45.7) (47.9) (48.5) (1%)
--------------- ---------- ---------- ---------- ----------
Contribution 137.0 146.0 163.0 (10%)
--------------- ---------- ---------- ---------- ----------
ES
Revenue 24.9 26.5 25.9 3%
Segment costs (25.5) (26.9) (29.3) (8%)
--------------- ---------- ---------- ---------- ----------
Contribution (0.6) (0.4) (3.4) (91%)
--------------- ---------- ---------- ---------- ----------
Engineering & Design Systems (EDS)
Revenue from EDS on a constant currency basis was GBP193.9
million (2014 - GBP211.5 million), a decrease of 8%.
On a constant currency basis, segment costs for EDS were GBP47.9
million, a reduction of 1% compared to the previous year and
delivered a segment contribution of GBP146.0 million (2014 -
GBP163.0 million).
Enterprise Solutions (ES)
ES revenue for the year was GBP26.5 million on an organic
constant currency basis compared to GBP25.9 million in 2013/14. The
backlog at 31 March 2015 was GBP10.8 million (31 March 2014 -
GBP10.7 million).
ES costs fell by 8% to GBP26.9 million on an organic constant
currency basis compared to GBP29.3 million last year. We maintained
tight discipline over the ES cost base during the year which has
delivered these savings.
ES incurred a segment loss of GBP0.4 million (2014 - GBP3.4
million), which reflects the tight control of costs during the year
in light of the difficult market conditions we faced.
The consolidated results include the results from 8over8 with
revenue of GBP1.1 million and segment costs of GBP1.1 million.
New segment reporting
As described in the Chief Executive's review, from 1 April 2015,
the ES and EDS lines of business will merge. As a result we will no
longer be disclosing these as our primary segments in our financial
statements. From 1 April 2015, the Executive management team will
monitor and appraise the business based on geographic performance
and therefore this will become the basis for our primary segments
in our financial statements.
Cost analysis
An analysis of organic operating expenses on a normalised basis
is set out below:
2014/15
2014/15 Organic constant 2013/14 Organic constant
GBPm Reported currency Reported currency change
Research & Development 28.1 29.3 32.9 (11%)
Selling and distribution 85.3 90.3 90.4 -
Administrative expenses 16.6 19.3 18.8 3%
-------------------------- ---------- ------------------ ---------- -----------------
Total costs 130.0 138.9 142.1 (2%)
-------------------------- ---------- ------------------ ---------- -----------------
Following the disappointing first half results driven by weaker
revenue, we completed a review of our planned investment in staff
and discretionary spend in the second half of the year with a view
to reducing operating expenses by GBP10.0 million compared to the
original plan. We successfully delivered against this target and as
a result our overall cost base reduced by 2% or GBP3.3 million from
GBP142.1 million to GBP138.9 million on a constant currency basis.
Compared to 2013/14, the savings were made in the following
areas:
-- Reduction in discretionary spend in areas of travel, contractors and consulting/professional
fees
-- Lower Research & Development costs from moving to in-house facility in Hyderabad from outsourcing.
We also saw a one-off effect from reduced levels of sales
commissions and bonuses which reflected the business performance
during the year.
Our Research & Development activities are carried out in the
UK, Sweden, Norway, Denmark, USA and India and therefore costs are
exposed to movements in exchange rates. Research & Development
costs fell by 11% on a constant currency basis due to savings made
by moving projects from third-party outsource providers in India to
our in-house facility in Hyderabad as indicated above, as well as
savings from lower discretionary costs such as travel within
Research & Development.
Selling and distribution expenses were flat on a constant
currency basis. This was principally due to lower sales commissions
and bonuses because of the reduced level of revenue offset by the
cost of additional sales and marketing staff to ensure that we take
advantage of growth opportunities in key markets such as North
America.
Administrative expenses increased by 3% on a constant currency
basis because of some one-off costs and continued investment in our
information systems offset by lower bonus costs.
The business faces a mixed outlook in its end markets together
with an increased cost base from inflation and the annualised
impact of the cost of hires made in H1 of 2014/15. Further, we do
not expect all of the savings from reduced bonuses and commissions
in 2014/15 to recur. As a result in March 2015, we initiated
further action by executing on a number of cost saving initiatives
including rationalisation of some of our regional offices and
reduction in the number of employees in specific areas of the
business. These initiatives took place in March, April and May and
will result in annual savings of approximately GBP3.0 million. We
have incurred an exceptional charge for redundancy and related
costs and property lease costs of GBP0.8 million in the year to 31
March 2015 and we expect to incur further exceptional costs of
approximately GBP2.5 million in 2015/16 in respect of these
initiatives.
Acquisition of 8over8 Limited
The Group acquired 8over8 Limited on 5 January 2015 for
consideration of GBP26.9 million. The acquired business held GBP1.3
million of cash at that date. Prior to being acquired, the business
had a calendar financial year and therefore the quarter to 31 March
has historically been seasonally the lowest quarter. Since becoming
part of the AVEVA Group, 8over8 contributed GBP1.1 million of
revenue and incurred an adjusted loss before tax of GBP0.6 million.
8over8 has, so far, mainly sold to Owner Operators within Oil &
Gas, but we believe that there are good opportunities to cross-sell
the solution into Mining and other capital intensive
industries.
Costs for 8over8 Limited include GBP0.3 million in cost of
sales, GBP0.8 million in Research & Development, GBP0.5 million
in selling and distribution costs and GBP0.1 million in
administrative expenses.
Exceptional items
During the year the Group incurred exceptional costs of
GBP1,990,000 (2014 - GBP3,395,000), relating to acquisition costs
for 8over8 of GBP371,000 (2014 - GBP102,000), exceptional
restructuring costs of GBP851,000 (2014 - GBP1,762,000) and a
provision for underpaid sales taxes in an overseas location of
GBP768,000 (2014 - GBP1,531,000).
The acquisition and integration fees relate to fees paid to
professional advisers for legal and due diligence advice related to
the acquisition of 8over8 Limited.
The exceptional restructuring costs incurred during 2014/15
relate to the redundancy and related costs in connection to the
rationalisation of offices and reduction in employees in specific
areas of the business.
The Group has provided for a potential underpaid sales tax
liability, in respect of prior periods, related to the local sales
of one of the Group's subsidiary companies. The provision includes
an estimate of the underpaid tax as well as related interest for
late payment.
Profit before tax
Adjusted profit before tax for the year ended 31 March 2015 was
GBP62.1 million (2014 - GBP78.3 million), a decrease of 21%. This
resulted in an adjusted profit margin of 29.8% on a reported basis
compared to 33.0% for 2013/14.
Reported profit before tax was GBP54.9 million (2014 - GBP69.0
million).
Taxation
The effective tax rate for the year was 24.2% (31 March 2014 -
26.1%) as the Group benefited from the reduction of 2% in the
underlying UK corporate tax rate to 21%. Our effective rate was
higher than the underlying UK rate because of profits earned in
higher tax jurisdictions and non-deductible expenses.
Dividends
The Board is declaring a final dividend of 25.0 pence per share
(2014 - 22 pence per share), an increase of 14%. The dividend will
be payable on 3 August 2015, to shareholders on the register on 3
July 2015.
Earnings per share
Basic earnings per share were 65.07 pence (2014 - 78.12 pence)
and diluted earnings per share were 64.92 pence (2014 - 77.99
pence). Adjusted basic earnings per share were 74.51 pence (2014 -
89.05 pence).
Balance sheet and cash flows
AVEVA continues to maintain a strong balance sheet and has no
debt. Net assets at 31 March 2015 were GBP189.9 million compared to
GBP185.0 million at 31 March 2014.
Non-current assets
Non-current assets increased from GBP74.0 million to GBP90.9
million mainly due to the goodwill and intangible assets acquired
as part of the acquisition of 8over8 Limited in January 2015.
Working capital
Gross trade receivables at 31 March were GBP94.2 million (2014 -
GBP82.9 million). The increase was due to the strong finish to the
year resulting in our billings in the final quarter being more
weighted towards the end of the period. In addition the balance
includes trade receivables of GBP1.3 million related to 8over8
Limited. The bad debt provision at 31 March 2015 was GBP5.6 million
compared to GBP5.2 million at 31 March 2014.
Deferred income at 31 March 2015 was GBP48.2 million compared to
GBP36.5 million at 31 March 2014. This includes GBP4.5 million
related to 8over8 Limited, the impact of rental contracts moving to
the second half and GBP0.9 million related to the change of rate
for deferring post contractual support used when accounting for
rental licences.
Trade payables and other liabilities were lower than last year
due to lower accruals for bonuses and commissions.
Cash generation
Net cash (including treasury deposits) at 31 March 2015 was
GBP103.8 million compared to GBP117.5 million at 31 March 2014.
Cash generated from operating activities after tax was GBP30.9
million (2014 - GBP52.0 million). The Group showed strong cash
generation in the first half of the year but the phasing of
billings as noted above meant that overall our cash generation for
the year was lower than previous years. There has been no change in
the credit terms offered to customers and cash collection has
generally been in line with previous periods. In addition, during
the year the Group paid additional contributions to the UK defined
benefit pension scheme of GBP5.9 million (31 March 2014 - GBP2.5
million). The cash conversion for the year was 83% (2014 - 102%).
The cash balance at 30 April 2015 was GBP117.6 million reflecting
strong cash collections since the year end.
Pensions
On an accounting basis, the Group's pension liabilities
increased from GBP8.8 million last year to GBP14.2 million at the
year-end. This was principally caused by the UK defined benefit
scheme deficit increasing from GBP5.9 million to GBP11.3 million
driven by a reduction in government gilt and corporate bond yields,
leading to a corresponding reduction in the discount rate used to
discount our long-term liabilities, and is despite a strong asset
performance.
On 31 March 2015, the Group closed the UK defined benefit
pension scheme to future accrual. This decision was taken to manage
the current and future risk on the Group's balance sheet, with a
view to ultimately effecting an insurance buy-out. Previously
accrued pension benefits will continue to be revalued in line with
RPI. The Group agreed a deficit recovery plan with the trustees
following the triennial valuation in 2013 with the plan to
contribute GBP12 million over the 5 year period to March 2019. As
part of this plan the Group paid lump sum contributions of GBP3.9
million during the year (2013/14 - GBP2.5 million) as well as a
further voluntary contribution of GBP2.0 million to further improve
the funding level of the scheme.
Capital structure
At 31 March 2015, the Group had 63,948,241 shares of 3 5/9p each
in issue (31 March 2014 - 63,873,360 shares). During the year the
AVEVA Group Employee Benefit Trust 2008 ("the Trust") purchased
13,991 ordinary shares in the Company in the open market at an
average price of GBP21.72 per share for total consideration of
GBP305,000 in order to satisfy awards made under the AVEVA Group
Management Bonus Deferred Share Scheme 2008. At 31 March 2015, the
Trust owned 44,722 ordinary shares in the Company.
In the prior year the Company paid a special dividend of GBP100
million, which was also accompanied by a share consolidation of 15
new ordinary shares for every 16 ordinary shares held. This reduced
the number of shares in issue by approximately 4.3 million.
Treasury policy
The Group treasury policy aims to ensure that the capital held
is not put at risk and the treasury function is managed under
policies and procedures approved by the Board. These policies are
designed to reduce the financial risk arising from the Group's
normal trading activities, which primarily relate to credit,
interest, liquidity and currency risk. The Group is, and expects to
be, cash positive and at 31 March 2015 held net cash of GBP103.8
million. The treasury policy includes strict counter party
limits.
James Kidd
Chief Financial Officer
19 May 2015
Review of principal risks and uncertainties
Dependency on key markets
AVEVA generates a substantial amount of its income from
customers whose main business is derived from capital projects in
the Oil & Gas, Power and Marine markets. World economic
conditions or funding constraints for new capital projects may
adversely affect our financial performance, as we have experienced
during 2014/15.
AVEVA is expanding into new market segments such as mining,
petrochemicals and AEC, albeit from a relatively small base. It is
central to our strategy to diversify our customer offerings into
Owner Operators and Plant operations. This will help secure a
longer-term income stream that extends beyond the design/build
phase of these capital projects. In addition, our ever-expanding
global presence provides some mitigation from over-reliance on key
geographic markets.
Competition
AVEVA operates in highly competitive markets that serve the Oil
& Gas, Power and Marine markets. We believe that there are a
relatively small number of significant competitors serving our
markets. However, some of these competitors could, in the future,
pose a greater competitive threat, particularly if they consolidate
or form strategic or commercial relationships among themselves or
with larger, well capitalised companies. Further threats are posed
by the entrance, into AVEVA's markets, of a much larger technology
competitor or transformational technology, such as Cloud-based
solutions.
We carefully monitor customers and other suppliers operating
within our chosen markets. We stay close to our customers and
ensure we have a strong understanding of their needs and their
expectations from the AVEVA product development roadmap.
Recently we have launched AVEVA E3D. This, together with a
number of other new products, will help cement our relationships
with our customers and reinforce barriers to competition.
Professional Services
The development of the Group's Enterprise Solutions represents a
significant opportunity for the Group but this is a market with
different characteristics compared to our traditional Engineering
& Design software products. It therefore brings different
challenges and opportunities for the Group which we must manage
effectively.
Most significantly, the deployment for our customers of an
enterprise solution will involve some degree of consulting and/or
implementation work. This requires specialist knowledge to be
available and well managed potentially in many geographic
locations. In some instances we may opt to partner with a third
party for this work and this relationship also requires careful
management and maintenance.
We employ experienced industry professionals within our
professional services team and continue to build commercial
partnerships with third party systems integrators.
We have rigorous processes and controls for the appraisal of
potential commercial opportunities prior to any bid being
submitted. Bids are appraised on grounds of technical complexity as
well as financial and commercial risk.
Identification and successful integration of acquisitions
In recent years, the Group has completed a number of
acquisitions and expects to continue to review acquisition targets
as part of its strategy. The integration of acquisitions involves a
number of unique risks, including diversion of management's
attention, failure to retain key personnel of the acquired
business, failure to realise the benefits anticipated to result
from the acquisition, and successful integration of the acquired
intellectual property.
While each acquisition and integration is unique, AVEVA now has
an experienced team to appraise and complete acquisitions. The
Group's experience of previous 'bolt-on' acquisitions provides a
good understanding of potential integration risks and as a result
we feel well placed to successfully manage these risks. Were the
Group to undertake a much larger acquisition, we would ensure that
appropriate resources and experience were applied to manage the
risks and that we had access to the best possible professional
advice.
Protection of intellectual property
The Group's success has been built upon the development of its
substantial intellectual property rights and the future growth of
the business requires the continual protection of these tools.
The protection of the Group's proprietary software products is
achieved by licensing rights to use the application, rather than
selling or licensing the computer source code. The Group uses third
party technology to encrypt, protect and restrict access to its
products. Access limitations and rights are also defined within the
terms of the software licence agreement. The Group seeks to ensure
that its intellectual property rights are appropriately protected
by law and seeks to vigorously assert its proprietary rights
wherever possible.
Research & Development
The Group makes substantial investments in Research &
Development in enhancing existing products and introducing new
products and must effectively appraise its investment decisions and
ensure that we continue to provide class-leading solutions that
meet the needs of our markets.
Our software products are complex and new products or
enhancements may contain undetected errors, failures, performance
problems or defects which may impact our strong reputation with our
customers.
AVEVA continually reviews the alignment of the activities of our
Research & Development teams to ensure that they remain focused
on areas that will meet the demands of our customers and deliver
appropriate financial returns. This process is managed by
developing a product roadmap that identifies the schedule for new
products and the enhancements that will be made to successive
versions of existing products. Products are extensively tested
prior to commercial launch.
International operations
The Group has offices in 30 countries and must determine how
best to utilise its resources across these diverse markets. Where
necessary, the business must adapt its market approach to best
capitalise on local market opportunities, particularly in the
strategically key growth economies.
In addition, the Group is required to comply with the local
laws, regulations and tax legislation in each of these
jurisdictions. Significant changes in these laws and regulations or
failure to comply with them could lead to additional liabilities
and penalties.
The Group manages its overseas operations by employing locally
qualified personnel who are able to provide expertise in the
appropriate language and an understanding of local culture, custom
and practice. Local management is supported by local professional
advisers and further oversight is maintained from the Group's
corporate legal and finance functions.
Recruitment and retention of employees
AVEVA's success has been built on the quality and reputation of
its products and services, which rely almost entirely on the
quality of the people developing and delivering them. Managing this
pool of highly skilled and motivated individuals across all
disciplines and geographies remains key to our ongoing success.
The Group endeavours to ensure that employees are motivated in
their work and there are regular appraisals, with staff encouraged
to develop their skills. Annually there is a Group-wide salary
review that rewards strong performance and ensures salaries remain
competitive. Commission and bonus schemes help to ensure the
success of the Group and individual achievement is appropriately
rewarded.
Foreign exchange risk
Exposure to foreign currency gains and losses can be material to
the Group, with more than 80% of the Group's revenue denominated in
a currency other than sterling, of which our two largest are US
dollar and Euro.
The overseas subsidiaries predominantly trade in their own local
currencies, which acts as a partial natural hedge against currency
movements. In addition, the Group enters into forward foreign
currency contracts to manage the risk where material and practical.
The Group limits its hedging of revenue to US dollar, Euro,
Japanese yen and its hedging of costs to Swedish krona and Indian
rupee.
Consolidated income statement
for the year ended 31 March 2015
2015 2014
Notes GBP000 GBP000
------------------------------------------------------- ----- --------- ---------
Revenue 3, 4 208,686 237,336
Cost of sales (15,538) (17,378)
------------------------------------------------------- ----- --------- ---------
Gross profit 193,148 219,958
Operating expenses
Research & development costs (32,696) (38,278)
Selling and distribution expenses (87,863) (92,967)
Administrative expenses (18,036) (20,186)
------------------------------------------------------- ----- --------- ---------
Total operating expenses (138,595) (151,431)
------------------------------------------------------- ----- --------- ---------
Profit from operations 54,553 68,527
Finance revenue 765 1,208
Finance expense (456) (746)
------------------------------------------------------- ----- --------- ---------
Analysed as:
Adjusted profit before tax 62,098 78,257
Amortisation of intangibles (excluding other software) (4,707) (4,677)
Share-based payments 441 (2,317)
(Loss)/gain on fair value of forward foreign exchange
contracts (980) 1,121
Exceptional items 5 (1,990) (3,395)
------------------------------------------------------- ----- --------- ---------
Profit before tax 54,862 68,989
Income tax expense 6 (13,303) (17,978)
------------------------------------------------------- ----- --------- ---------
Profit for the year attributable to equity holders
of the parent 41,559 51,011
------------------------------------------------------- ----- --------- ---------
Earnings per share (pence)
- basic 8 65.07 78.12
- diluted 8 64.92 77.99
Adjusted earnings per share (pence)
- basic 8 74.51 89.05
- diluted 8 74.34 88.90
------------------------------------------------------- ----- --------- ---------
All activities relate to continuing activities.
The accompanying notes are an integral part of this Consolidated
income statement.
Consolidated statement of comprehensive income
for the year ended 31 March 2015
2015 2014
Notes GBP000 GBP000
----------------------------------------------------------- ----- -------- -------
Profit for the year 41,559 51,011
Items that may be reclassified to profit or loss in
subsequent periods:
Exchange differences arising on translation of foreign
operations (9,393) (6,933)
Items that will not be reclassified to profit or loss
in subsequent periods:
Actuarial (loss)/gain on retirement benefit obligations 12 (11,496) 5,672
Tax on items relating to components of other comprehensive
income 6(a) 2,657 (1,275)
----------------------------------------------------------- ----- -------- -------
Total of items that will not be reclassified to profit
or loss in subsequent periods (8,839) 4,397
----------------------------------------------------------- ----- -------- -------
Total comprehensive income for the year, net of tax 23,327 48,475
----------------------------------------------------------- ----- -------- -------
The accompanying notes are an integral part of this Consolidated
statement of comprehensive income.
Consolidated balance sheet
31 March 2015
2015 2014
Notes GBP000 GBP000
------------------------------- ----- ------- -------
Non-current assets
Goodwill 50,589 38,474
Other intangible assets 27,506 21,540
Property, plant and equipment 7,595 8,395
Deferred tax assets 3,800 4,131
Other receivables 9 1,440 1,498
------------------------------- ----- ------- -------
90,930 74,038
------------------------------- ----- ------- -------
Current assets
Trade and other receivables 9 96,468 83,596
Financial assets - 547
Treasury deposits 10 45,248 40,238
Cash and cash equivalents 10 58,519 77,309
Current tax assets 2,195 2,162
------------------------------- ----- ------- -------
202,430 203,852
------------------------------- ----- ------- -------
Total assets 293,360 277,890
------------------------------- ----- ------- -------
Equity
Issued share capital 2,274 2,271
Share premium 27,288 27,288
Other reserves 1,655 10,589
Retained earnings 158,713 144,829
------------------------------- ----- ------- -------
Total equity 189,930 184,977
------------------------------- ----- ------- -------
Current liabilities
Trade and other payables 11 81,613 72,954
Financial liabilities 432 -
Current tax liabilities 5,718 9,108
------------------------------- ----- ------- -------
87,763 82,062
------------------------------- ----- ------- -------
Non-current liabilities
Deferred tax liabilities 1,480 2,003
Retirement benefit obligations 12 14,187 8,848
------------------------------- ----- ------- -------
15,667 10,851
------------------------------- ----- ------- -------
Total equity and liabilities 293,360 277,890
------------------------------- ----- ------- -------
The accompanying notes are an integral part of this Consolidated
balance sheet.
The financial statements were approved by the Board of Directors
and authorised for issue on 19 May 2015. They were signed on its
behalf by:
Philip Aiken Richard Longdon Company number
Chairman Chief Executive 2937296
Consolidated statement of changes in shareholders' equity
31 March 2015
Other
reserves
-------- ------------ --------
Cumulative Total
Notes Share Share Merger translation Treasury other Retained Total
capital premium reserve adjustments shares reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------------- ------ -------- -------- -------- ------------ -------- --------- --------- ---------
At 1 April 2013 2,269 27,288 3,921 15,042 (1,251) 17,712 204,337 251,606
Profit for the year - - - - - - 51,011 51,011
Other comprehensive
income - - - (6,933) - (6,933) 4,397 (2,536)
----------------------- ------ -------- -------- -------- ------------ -------- --------- --------- ---------
Total comprehensive
income - - - (6,933) - (6,933) 55,408 48,475
Issue of share capital 2 - - - - - - 2
Share-based payments - - - - - - 2,317 2,317
Tax arising on share
options - - - - - - (255) (255)
Investment in own
shares - - - - (717) (717) - (717)
Cost of employee
benefit
trust shares issued
to employees - - - - 527 527 (527) -
Equity dividends 7 - - - - - - (116,451) (116,451)
----------------------- ------ -------- -------- -------- ------------ -------- --------- --------- ---------
At 31 March 2014 2,271 27,288 3,921 8,109 (1,441) 10,589 144,829 184,977
Profit for the period - - - - - - 41,559 41,559
Other comprehensive
income - - - (9,393) - (9,393) (8,839) (18,232)
----------------------- ------ -------- -------- -------- ------------ -------- --------- --------- ---------
Total comprehensive
income - - - (9,393) - (9,393) 32,720 23,327
Issue of share capital 3 - - - - - - 3
Share-based payments - - - - - - (441) (441)
Tax arising on share
options - - - - - - (73) (73)
Investment in own
shares - - - - (305) (305) - (305)
Cost of employee
benefit
trust shares issued
to employees - - - - 764 764 (764) -
Equity dividends 7 - - - - - - (17,558) (17,558)
----------------------- ------ -------- -------- -------- ------------ -------- --------- --------- ---------
At 31 March 2015 2,274 27,288 3,921 (1,284) (982) 1,655 158,713 189,930
----------------------- ------ -------- -------- -------- ------------ -------- --------- --------- ---------
The accompanying notes are an integral part of this Consolidated
statement of changes in shareholders' equity.
Consolidated cash flow statement
for the year ended 31March 2015
2015 2014
Notes GBP000 GBP000
------------------------------------------------------------ ----- -------- ---------
Cash flows from operating activities
Profit for the year 41,559 51,011
Income tax 6(a) 13,303 17,978
Net finance revenue (309) (462)
Amortisation of intangible assets 5,335 4,879
Depreciation of property, plant and equipment 2,914 2,932
(Gain)/loss on disposal of property, plant and equipment 191 (83)
Share-based payments (441) 2,317
Difference between pension contributions paid and amounts
charged to operating profit (6,565) (2,993)
Research & development expenditure tax credit (930) (875)
Changes in working capital:
Trade and other receivables (11,752) (3,221)
Trade and other payables 852 (159)
Changes to fair value of forward foreign exchange contracts 980 (1,121)
------------------------------------------------------------ ----- -------- ---------
Cash generated from operating activities before tax 45,137 70,203
Income taxes paid (14,231) (18,217)
------------------------------------------------------------ ----- -------- ---------
Net cash generated from operating activities 30,906 51,986
------------------------------------------------------------ ----- -------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (2,571) (3,118)
Purchase of intangible assets (522) (2,119)
Acquisition of subsidiaries and business undertakings,
net of cash acquired (25,651) -
Proceeds from disposal of property, plant and equipment 345 427
Interest received 765 1,208
Maturity/(purchase) of treasury deposits (net) 10 (5,010) 95,847
------------------------------------------------------------ ----- -------- ---------
Net cash flows from/used in investing activities (32,644) 92,245
------------------------------------------------------------ ----- -------- ---------
Cash flows from financing activities
Interest paid (73) (98)
Purchase of own shares (305) (717)
Proceeds from the issue of shares 3 2
Dividends paid to equity holders of the parent 7 (17,558) (116,451)
------------------------------------------------------------ ----- -------- ---------
Net cash flows used in financing activities (17,933) (117,264)
------------------------------------------------------------ ----- -------- ---------
Net (decrease)/increase in cash and cash equivalents (19,671) 26,967
Net foreign exchange difference 881 (3,930)
Opening cash and cash equivalents 10 77,309 54,272
------------------------------------------------------------ ----- -------- ---------
Closing cash and cash equivalents 10 58,519 77,309
------------------------------------------------------------ ----- -------- ---------
The accompanying notes are an integral part of this Consolidated
cash flow statement.
1. Basis of preparation
The Group is required to prepare its Consolidated financial
statements in accordance with IFRS as adopted by the European
Union. For the purposes of this document the term IFRS includes
International Accounting Standards.
The preliminary announcement covers the period 1 April 2014 to
31 March 2015 and was approved by the Board on 19 May 2015.
The financial information contained in this preliminary
announcement of audited results does not constitute the Group's
statutory accounts for the years ended 31 March 2015 or 31 March
2014. The accounts for the year ended 31 March 2014 have been
delivered to the Registrar of Companies. The statutory accounts for
the years ended 31 March 2015 and 2014 have been reported on by the
Company's auditors; the reports on these accounts were unqualified,
did not draw attention to any matters by way of emphasis and did
not contain any statement under section 498(2) or (3) of the
Companies Act 2006 or equivalent preceding legislation.
The statutory accounts for the year ended 31 March 2015 are
expected to be posted to shareholders in due course and will be
delivered to the Registrar of Companies after they have been laid
before the shareholders in a general meeting on 9 July 2015. Copies
will be available from the registered office of the Company, High
Cross, Madingley Road, Cambridge CB3 0HB and can be accessed on the
AVEVA website, www.aveva.com. The registered number of AVEVA Group
plc is 2937296.
The Group presents a non-GAAP performance measure on the face of
the Consolidated income statement. The Directors believe that this
alternative measure of profit provides a reliable and consistent
measure of the Group's underlying performance. The face of the
Consolidated income statement presents adjusted profit before tax
and reconciles this to profit before tax as required to be
presented under the applicable accounting standards. Adjusted
earnings per share is calculated having adjusted profit after tax
for the same items and their tax effect. The term adjusted profit
is not defined under IFRS and may not be comparable with similarly
titled profit measures reported by other companies. It is not
intended to be a substitute for, or superior to, GAAP measures of
profit.
2. Accounting policies
The preliminary statement has been prepared on a consistent
basis with the accounting policies set out in the last published
financial statements for the year ended 31 March 2014. New
standards and interpretations which came into force during the year
did not have a significant impact on the Group's financial
statements.
3 REVENUE
An analysis of the Group's revenue is as follows:
2015 2014
GBP000 GBP000
------------------------ ------- -------
Annual fees 60,724 57,084
Rental licence fees 97,489 109,936
------------------------ ------- -------
Total recurring revenue 158,213 167,020
Initial licence fees 31,122 48,394
Training and services 19,351 21,922
------------------------ ------- -------
Total revenue 208,686 237,336
Finance revenue 765 1,208
------------------------ ------- -------
209,451 238,544
------------------------ ------- -------
Services consist of consultancy, implementation services and
training fees.
Included within revenue for the year ended 31 March 2015 are
annual fees of GBP534,000, rental fees of GBP296,000 and services
of GBP321,000 related to the acquired business of 8over8
Limited.
4 Segment information
During the year, the Group was organised into two lines of
business, being Engineering & Design Systems and Enterprise
Solutions, which are considered to be the two reportable segments
for the Group. The products of each of the lines of business are
taken to market by a shared sales force that is itself organised
into three geographical sales divisions: Asia Pacific; Americas;
and Europe, Middle East and Africa (EMEA).
The Executive Board monitors the operating results of the lines
of business for the purposes of making decisions about performance
assessment and resource allocation. Performance is evaluated based
on adjusted profit contribution using the same accounting policies
as adopted for the Group's financial statements. There is no
inter-segment revenue. Balance sheet information is not included in
the information provided to the Executive Board. Support functions
such as head office departments are controlled and monitored
centrally.
Engineering
& Design Enterprise
Systems Solutions Total
Year ended 31 March 2015 GBP000 GBP000 GBP000
-------------------------------------------------------- ----------- ---------- --------
Income statement
Revenue
Annual fees 54,662 6,062 60,724
Rental licence fees 92,730 4,759 97,489
Initial licence fees 27,376 3,746 31,122
Training and services 7,925 11,426 19,351
-------------------------------------------------------- ----------- ---------- --------
Segment revenue 182,693 25,993 208,686
Operating costs (45,660) (26,637) (72,297)
-------------------------------------------------------- ----------- ---------- --------
Segment profit/(loss) contribution 137,033 (644) 136,389
-------------------------------------------------------- ----------- ---------- --------
Reconciliation of segment profit contribution to profit
before tax
Shared selling and distribution expenses (58,236)
Other shared operating expenses (16,364)
Net finance revenue 309
-------------------------------------------------------- ----------- ---------- --------
Adjusted profit before tax 62,098
Exceptional items and other normalised adjustments(#) (7,236)
-------------------------------------------------------- ----------- ---------- --------
Profit before tax 54,862
-------------------------------------------------------- ----------- ---------- --------
# Normalised adjustments include amortisation of intangible
assets (excluding other software), share-based payments and
(losses)/gains on fair value of forward foreign exchange
contracts.
Enterprise Solutions includes revenue of GBP1,151,000 and
contribution of GBP21,000 relating to the acquired business of
8over8 Limited.
4 Segment information continued
Engineering
& Design Enterprise
Systems Solutions Total
Year ended 31 March 2014 GBP000 GBP000 GBP000
-------------------------------------------------------- ----------- ---------- --------
Income statement
Revenue
Annual fees 51,382 5,702 57,084
Rental licence fees 105,489 4,447 109,936
Initial licence fees 45,525 2,869 48,394
Training and services 9,090 12,832 21,922
-------------------------------------------------------- ----------- ---------- --------
Segment revenue 211,486 25,850 237,336
Operating costs (48,457) (29,233) (77,690)
-------------------------------------------------------- ----------- ---------- --------
Segment profit contribution 163,029 (3,383) 159,646
-------------------------------------------------------- ----------- ---------- --------
Reconciliation of segment profit contribution to profit
before tax
Shared selling and distribution expenses (58,016)
Other shared operating expenses (23,835)
Net finance revenue 462
-------------------------------------------------------- ----------- ---------- --------
Adjusted profit before tax 78,257
Exceptional items and other normalised adjustments(#) (9,268)
-------------------------------------------------------- ----------- ---------- --------
Profit before tax 68,989
-------------------------------------------------------- ----------- ---------- --------
Analysis of revenue by geographical location
Year ended 31 March 2015
------------------------------------
Asia
Pacific EMEA Americas Total
GBP000 GBP000 GBP000 GBP000
---------------------- -------- ------- -------- -------
Revenue
Annual fees 25,137 29,838 5,749 60,724
Rental licence fees 21,625 51,365 24,499 97,489
Initial licence fees 16,855 10,537 3,730 31,122
Training and services 3,992 12,034 3,325 19,351
---------------------- -------- ------- -------- -------
Total revenue 67,609 103,774 37,303 208,686
---------------------- -------- ------- -------- -------
Year ended 31 March 2014
------------------------------------
Asia
Pacific EMEA Americas Total
GBP000 GBP000 GBP000 GBP000
---------------------- -------- ------- -------- -------
Revenue
Annual fees 21,013 30,400 5,671 57,084
Rental licence fees 30,036 53,047 26,853 109,936
Initial licence fees 32,364 13,135 2,895 48,394
Training and services 3,443 15,454 3,025 21,922
---------------------- -------- ------- -------- -------
Total revenue 86,856 112,036 38,444 237,336
---------------------- -------- ------- -------- -------
Other segmental disclosures
The Company's country of domicile is the UK. Revenue attributed
to the UK and all foreign countries amounted to GBP16,038,000 and
GBP192,648,000 (2014 - GBP20,667,000 and GBP216,669,000)
respectively. In 2013/14 South Korea accounted
4 Segment information continued
for 16% of the Group's total revenue. No individual country
accounted for more than 10% of the Group's total revenue. Revenue
is allocated to countries on the basis of the location of the
customer.
Non-current assets (excluding deferred tax assets) held in the
UK and all foreign countries amounted to GBP46,594,000 and
GBP40,536,000 (2014 - GBP22,723,000 and GBP47,184,000)
respectively. There are no material non-current assets located in
an individual country outside of the UK.
No single external customer accounted for 10% or more of the
Group's total revenue (2014 - none).
Further information concerning revenue by type of product and
service is disclosed in note 3.
5 Exceptional items
During the year the Group incurred exceptional costs of
GBP1,990,000 (2014 - GBP3,395,000), relating to acquisition and
integration activities of GBP371,000 (2014 - GBP102,000),
exceptional restructuring costs of GBP851,000 (2014 - GBP1,762,000)
and a provision for underpaid sales taxes in an overseas location
of GBP768,000 (2014 - GBP1,531,000).
The acquisition and integration fees paid during the year,
relate to fees paid to professional advisers for legal and due
diligence advice related to the acquisition of 8over8 Limited with
prior year costs related to Bocad.
The exceptional restructuring costs incurred during 2014/15
relate to the accrued redundancy and related costs in connection to
the rationalisation of offices and reduction in headcount in
specific areas of the business.
The Group has provided for a potential underpaid sales tax
liability in respect of prior periods, related to the local sales
of one of the Group's subsidiary companies. The provision includes
an estimate of the underpaid tax as well as related interest for
late payment.
6 Income tax expense
a) Tax on profit
The major components of income tax expense for the years ended
31 March 2015 and 2014 are as follows:
2015 2014
GBP000 GBP000
--------------------------------------------------------- ------- -------
Tax charged in Consolidated income statement
Current tax
UK corporation tax 5,362 8,440
Adjustments in respect of prior periods 3 (503)
--------------------------------------------------------- ------- -------
5,365 7,937
--------------------------------------------------------- ------- -------
Foreign tax 6,667 9,962
Adjustments in respect of prior periods 553 267
--------------------------------------------------------- ------- -------
7,220 10,229
--------------------------------------------------------- ------- -------
Total current tax 12,585 18,166
Deferred tax
Origination and reversal of temporary differences 785 (246)
Adjustment in respect of prior periods (67) 58
--------------------------------------------------------- ------- -------
Total deferred tax 718 (188)
--------------------------------------------------------- ------- -------
Total income tax expense reported in Consolidated income
statement 13,303 17,978
--------------------------------------------------------- ------- -------
2015 2014
GBP000 GBP000
------------------------------------------------------------------ ------- -------
Tax relating to items (charged)/credited directly to Consolidated
statement of comprehensive income
Deferred tax on retranslation of intangible assets 380 236
Deferred tax on actuarial remeasurements on retirement benefit
obligation 1,085 (1,511)
Current tax on pension contributions 1,192 -
------------------------------------------------------------------ ------- -------
Tax credit reported in Consolidated statement of comprehensive
income 2,657 (1,275)
------------------------------------------------------------------ ------- -------
b) Reconciliation of the total tax charge
The differences between the total tax charge shown above and the
amount calculated by applying the standard rate of UK corporation
tax to the profit before tax are as follows:
2015 2014
GBP000 GBP000
------------------------------------------------------------- ------- -------
Tax on Group profit before tax at standard UK corporation
tax rate of 21% (2014 - 23%) 11,521 15,866
Effects of:
- expenses not deductible for tax purposes 646 823
- irrecoverable withholding tax 132 256
- movement on unprovided deferred tax balances 387 933
- change in UK tax rate for deferred tax balances - (147)
- differing tax rates on overseas earnings 128 425
- adjustments in respect of prior years 489 (178)
------------------------------------------------------------- ------- -------
Income tax expense reported in Consolidated income statement 13,303 17,978
------------------------------------------------------------- ------- -------
7 Dividends paid and proposed on equity shares
2015 2014
GBP000 GBP000
------------------------------------------------------------ ------- -------
Declared and paid during the year
Interim 2014/15 dividend paid of 5.5 pence (2013/14 - 5.0
pence) per ordinary share 3,515 3,178
Final 2013/14 dividend paid of 22.0 pence (2012/13 - 19.5
pence) per ordinary share 14,043 13,261
Special dividend paid of 147.0 pence per share - 100,012
------------------------------------------------------------ ------- -------
17,558 116,451
------------------------------------------------------------ ------- -------
Proposed for approval by shareholders at the Annual General
Meeting
------------------------------------------------------------ ------- -------
Final proposed dividend 2014/15 of 25.0 pence (2013/14 -
22.0 pence) per ordinary share 15,976 14,052
------------------------------------------------------------ ------- -------
The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting on 9 July 2015 and has
not been included as a liability in these financial statements. If
approved at the Annual General Meeting, the final dividend will be
paid on 3 August 2015 to shareholders on the register at the close
of business on 3 July 2015.
8 Earnings per share
2015 2014
Pence Pence
------------------------------------------ ------ ------
Earnings per share for the year:
- basic 65.07 78.12
- diluted 64.92 77.99
Adjusted earnings per share for the year:
- basic 74.51 89.05
- diluted 74.34 88.90
------------------------------------------ ------ ------
2015 2014
Number Number
-------------------------------------------------------------- ---------- ----------
Weighted average number of ordinary shares for basic earnings
per share 63,872,070 65,297,504
Effect of dilution: employee share options 146,272 112,020
-------------------------------------------------------------- ---------- ----------
Weighted average number of ordinary shares adjusted for
the effect of dilution 64,018,342 65,409,524
-------------------------------------------------------------- ---------- ----------
The calculations of basic and diluted earnings per share are
based on the net profit attributable to equity holders of the
parent for the year of GBP41,559,000 (2014 - GBP51,011,000). Basic
earnings per share amounts are calculated by dividing the net
profit attributable to equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the
net profit attributable to equity holders of the parent by the
weighted average number of ordinary shares outstanding during the
year plus the weighted average number of ordinary shares that would
be issued on the conversion of all the potentially dilutive share
options into ordinary shares.
Details of the calculation of adjusted earnings per share are
set out below:
2015 2014
GBP000 GBP000
---------------------------------------------------------------- ------- -------
Profit after tax for the year 41,559 51,011
Intangible amortisation (excluding software) 4,707 4,677
Share-based payments (441) 2,317
Loss/(gain) on fair value of forward foreign exchange contracts 980 (1,121)
Exceptional items 1,990 3,395
Tax effect on exceptional items (134) (781)
Tax effect on other normalised items (1,067) (1,351)
Adjusted profit after tax 47,594 58,147
---------------------------------------------------------------- ------- -------
The denominators used are the same as those detailed above for
both basic and diluted earnings per share.
The adjustment made to profit after tax in calculating adjusted
basic and diluted earnings per share has been adjusted for the tax
effects of the items adjusted.
The Directors believe that adjusted earnings per share is a more
representative presentation of the underlying performance of the
business.
9 Trade and other receivables
2015 2014
GBP000 GBP000
------------------------------------- ------- -------
Current
Amounts falling due within one year:
Trade receivables 88,618 77,762
Prepayments and other receivables 6,590 5,402
Accrued income 1,260 432
------------------------------------- ------- -------
96,468 83,596
------------------------------------- ------- -------
Trade receivables are non-interest bearing and generally on
terms of between 30 and 90 days. The Directors consider that the
carrying amount of trade and other receivables approximates their
fair value.
2015 2014
GBP000 GBP000
---------------------------------- ------- -------
Non-current
Prepayments and other receivables 1,440 1,498
---------------------------------- ------- -------
Non-current prepayments and other receivables include rental
deposits for operating leases.
As at 31 March 2015 the provision for impairment of receivables
was GBP5,636,000 (2014 - GBP5,161,000) and an analysis of the
movements during the year was as follows:
GBP000
--------------------------------------------- -------
At 1 April 2013 4,771
Charge for the year, net of amounts reversed 1,302
Utilised (399)
Exchange adjustment (513)
--------------------------------------------- -------
At 31 March 2014 5,161
Arising from business combination 1,011
Charge for the year, net of amounts reversed 3,327
Utilised (3,612)
Exchange adjustment (251)
--------------------------------------------- -------
As at 31 March 2015 5,636
--------------------------------------------- -------
As at 31 March, the ageing analysis of trade receivables (net of
provision for impairment) was as follows:
Past due not impaired
---------------------------------------
Neither Less More
past than Four Eight than
due nor four to eight to twelve twelve
Total impaired months months months months
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----- ------- --------- ------- --------- ---------- -------
2015 88,618 65,058 20,712 1,650 1,176 22
----- ------- --------- ------- --------- ---------- -------
2014 77,762 53,304 20,264 3,322 780 92
----- ------- --------- ------- --------- ---------- -------
10 Cash and cash equivalents and treasury deposits
2015 2014
GBP000 GBP000
-------------------------------------------- ------- -------
Cash at bank and in hand 50,635 64,293
Short-term deposits 7,884 13,016
-------------------------------------------- ------- -------
Net cash and cash equivalents per cash flow 58,519 77,309
Treasury deposits 45,248 40,238
-------------------------------------------- ------- -------
103,767 117,547
-------------------------------------------- ------- -------
Treasury deposits represent bank deposits with an original
maturity of over three months.
Short-term deposits are made for varying periods of between one
day and three months, depending on the immediate cash requirements
of the Group, and earn interest at the respective short-term
deposit rates.
The fair value of cash and cash equivalents and treasury
deposits is GBP103,767,000 (2014 - GBP117,547,000).
11 Trade and other payables
2015 2014
GBP000 GBP000
------------------------------------------------ ------- -------
Current
Trade payables 3,251 4,116
Social security, employee taxes and sales taxes 14,500 11,347
Accruals and other payables 15,232 20,521
Deferred revenue 48,213 36,490
Deferred consideration 417 480
------------------------------------------------ ------- -------
81,613 72,954
------------------------------------------------ ------- -------
Trade payables are non-interest bearing and are normally settled
on terms of between 30 and 60 days. Social security, employee taxes
and sales taxes are non-interest bearing and are normally settled
on terms of between 19 and 30 days. The Directors consider that the
carrying amount of trade and other payables approximates their fair
value.
12 Retirement benefit obligations
The movement on the provision for retirement benefit obligations
was as follows:
UK German South
defined defined Korean
benefit benefit severance
scheme schemes pay Total
GBP000 GBP000 GBP000 GBP000
------------------------------------------- -------- -------- ---------- -------
At 31 March 2013 13,214 1,945 1,800 16,959
Current service cost 1,628 55 312 1,995
Net interest on pension scheme liabilities 562 36 63 661
Actuarial remeasurements (5,573) 10 (109) (5,672)
Employer contributions (3,978) (951) (60) (4,989)
Exchange adjustment - (21) (85) (106)
------------------------------------------- -------- -------- ---------- -------
At 31 March 2014 5,853 1,074 1,921 8,848
Current service cost 1,487 - 246 1,733
Net interest on pension scheme liabilities 276 42 65 383
Actuarial remeasurements 11,389 122 (15) 11,496
Employer contributions (7,724) (47) (526) (8,297)
Exchange adjustment - (132) 156 24
------------------------------------------- -------- -------- ---------- -------
At 31 March 2015 11,281 1,059 1,847 14,187
------------------------------------------- -------- -------- ---------- -------
The Group operated a UK defined benefit pension plan providing
benefits based on final pensionable pay which is funded. This
scheme was closed to new employees on 30 September 2002, was
converted to a Career Average Revalued Earnings basis on 30
September 2004 and then closed to future accrual from 31 March
2015. No service cost or curtailment gain arose upon closure of the
scheme, due to all previously accrued past service benefits
retaining the same link to future inflation or future earnings.
The latest triennial valuation of the scheme's liabilities was
completed as at 31 March 2013, and showed a funding deficit of
GBP13,231,000. To eliminate this funding shortfall the Trustees and
the Company agreed that additional cash contributions will be paid
to the scheme. GBP2.5 million was contributed in February 2014,
GBP2.5 million was contributed in April 2014 and 60 additional
monthly payments of GBP116,667 are to be made starting April 2014.
The Company made an additional unscheduled contribution of GBP2
million in March 2015.
13. Directors
Philip Aiken
Chairman
Philip Dayer
Non-Executive Director and Senior Independent Director
Jonathan Brooks
Non-Executive Director
Jennifer Allerton
Non-Executive Director
Richard Longdon
Chief Executive
James Kidd
Chief Financial Officer
14. Responsibility statement pursuant to FSA's Disclosure and
Transparency Rule 4 (DTR 4)
Each Director of the Company (whose names and functions appear
in note 13) confirms that (solely for the purpose of DTR 4) to the
best of his knowledge:
-- the financial information in this document, prepared in
accordance with the applicable UK law and applicable accounting
standards, give a true and fair view of the assets, liabilities,
financial position and result of the Company and of the Group taken
as a whole; and
-- the Chairman's statement, Chief Executive's review and
Finance review include a fair review of the development and
performance of the business and the position of the Company and
Group taken as a whole, together with a description of the
principal risks and uncertainties that they face.
On behalf of the Board
James Kidd Richard Longdon
Chief Financial Officer Chief Executive
19 May 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LLFSDEDITLIE
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