TIDMFFA
RNS Number : 9166S
FFastFill PLC
28 May 2009
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28 May 2009
FFastFill plc
("FFastFill" or the "Company")
Final Results for the period ending 31 March 2009
FFastFill (LSE: FFA), the leading provider of Software as a Service ("SaaS")
solutions to the global derivatives community is pleased to announce robust
final results for the financial year ended 31 March 2009.
Financial Highlights
* Revenue increased by 27% to stand at GBP14.4m (FY 07/08: GBP11.4m)
* SaaS revenues increased 42% to GBP9.1m (FY 07/08: GBP6.4m)
* '12 month Order Book' stands at GBP14.2m (FY 07/08: GBP11.5m), with SaaS Order
Book increasing 41% to GBP10.3m (FY 07/08: GBP7.2m)
* EBITDA of GBP1.7m (FY 07/08: GBP1.5m)
* Operating Profit of GBP0.3m (FY 07/08: GBP0.2m)
* Cash balance at GBP2.2m (FY 07/08: GBP2.4m)
Operational Highlights
* Further contract wins and renewals secured despite difficult market conditions
* Progress made with Asia Pacific expansion strategy
* Acquisition of Exchange Technology Pty Ltd completed in July provides an initial
base in Asia Pacific and an experienced middle office development team
* Proceeds from November's GBP1.0m Placing are being directed towards our
expansion efforts in this key region
* Roll-out of new SaaS-enabled Middle Office suite marking further progress in our
integrated Straight-through-Processing ("STP") strategy
* Operational launch of Risk-Pro product further enhances Front through Middle to
Back product offering
* Board and management structure changes announced in April to reflect new
business phase: Hamish Purdey appointed as Chief Executive Officer and Keith
Todd assumes role of Executive Chairman
Commenting on the results Keith Todd, Executive Chairman of FFastFill said:
"I am pleased to announce these results which show a robust performance from
FFastFill in spite of what has been a very difficult set of market conditions.
We continue to navigate these challenges, moving now from a phase of
'development' into a period more focused on exploiting our extensive product
suite and resources to further strengthen our sales pipeline and profitability."
"Our business has never been as strong competitively as it is today. As I said
at the time of our interim results in November, the pace of growth in our sector
and our markets remains difficult to predict in the short term as the
consequences of the financial crisis unwind. However, in spite of this recent
market turbulence, the Board remains confident that the medium and long term
fundamentals of our target markets are strong and that our company is well
placed to continue to grow its market share."
For further information please contact:
FFastFill plc +44 (0)20 7665 8900
Keith Todd, Executive Chairman
Hamish Purdey, Chief Executive Officer
Financial Dynamics +44 (0)20 7831 3113
James Melville-Ross / Matt Dixon / Emma Appleton
KBC Peel Hunt +44 (0)20 7418 8900
Jonathan Marren / Richard Kauffer
Chairman's Statement
Introduction
I am pleased to be able to report a robust performance for the year ended 31
March 2009, achieved in spite of a very difficult market environment. We have
recently reached the end of what I have termed our 'development phase', where we
established our SaaS and STP credentials and laid the foundation for our
multi-asset trading technologies. We are now prioritising attention on
exploiting these assets and to deploying our resources in a way that will
further strengthen our sales pipeline and profitability.
Market
The last twelve months has seen stability and confidence in very short supply
within the financial services industry, which has led in some cases to some of
our large customers deferring or delaying their business strategies and
associated purchasing decisions.
However, this turbulence has also led to opportunities for our company and we
are seeing early signs of the emergence of more boutique trading operations
moving out from the big banks. US regulators are also leading a push for the
industry to switch from "Over-The-Counter" ("OTC") to centrally cleared trading.
If the regulators are successful in achieving this change, this will create a
fundamental shift in the shape of the financial services industry and lead to an
increase in the volume of exchange cleared and exchange traded securities. We
are also seeing an emergence in demand for multi-asset trading solutions as
traders and brokers look to differentiate their offerings and improve
profitability: all of which fits well with our strategy.
Financial Overview
We achieved record full year revenue of GBP14.4m (FY 07/08: GBP11.4m), a growth
of 27% during the year. Organic growth at 18.8%, while strong compared to our
competitors, was lower than the previous year's organic growth of 30% due to the
turbulent market conditions that resulted in some delay in contract signings.
However, several of these delayed contracts have now been signed and will
contribute to income in the current financial year. SaaS revenue was up by 42%
during the period to GBP9.1m (FY 07/08: GBP6.4m) and now accounts for 63.6% of
our total revenue.
EBITDA for the period was up 13% at GBP1.7m (FY 07/08: GBP1.5m) and we delivered
an operating profit of GBP0.3m (FY 07/08: GBP0.2m).
The full benefits of the GBP1.5m per annum cost reduction programme that we
announced in March will be realised in the second half of this financial year.
The savings will offset some cost increases necessary to support our
Asia Pacific expansion as well as improve underlying profitability.
The order book for the next twelve months now stands at GBP14.2m (FY 07/08:
GBP11.5m), representing a growth of 23% over the prior year. This order book
figure includes a purely SaaS order book of GBP10.3m (FY07/08: GBP7.3m), itself
an improvement of 41% over the previous financial year. Cash at the year end
stood at GBP2.2m (FY 07/08: GBP2.4m).
Asia Pacific Expansion
During the year we embarked on our Asia Pacific expansion strategy. As part of
this strategy, in July 2008 we acquired Exchange Technology Pty Limited in
Australia, bringing us an experienced middle office development team, regional
exchange connectivity and 12 customers in the region.In November, we announced a
Placing to raise approximately GBP1.0m to fund the next stage of our plans in
the region.
We have also invested in our technology infrastructure in the region and plan to
establish a Singapore business development base in August. Securing the
global middle office business in February of a Tier 1 financial institution in
this region was also a significant milestone in our efforts to expand into Asia
Pacific and an endorsement of our middle office strategy.
Management Team Changes
I was delighted to announce the appointment of Hamish Purdey as Chief Executive
Officer in April 2009 and to welcome him to the Board of Directors. Hamish has
worked at FFastFill for the past eight years in various roles in the UK, US and
Asia and has now assumed full responsibility for the day-to-day running of the
Group. At the same time, we announced that Nigel Hartnell would become
a Non-Executive Director and that Dr John Elmore would retire from his role as
Chief Technology Officer. I would like to express my sincere thanks to them both
for the enormous contribution they have made to the Group over the years in
their executive roles.
Our People
I would like to take this opportunity to thank our staff for their commitment
and dedication during the year. Without them, FFastFill could not have achieved
the financial performance it has during the year. We have a highly committed
and motivated team around the globe, all of whom share a single-minded
determination to achieve success for the Company.
Distributable Reserves
It is the Board's intention, at the Annual General Meeting to be held in July,
to seek Shareholder approval for the cancellation of the Company's Share Premium
Account. The effect of this cancellation, were it to be approved, would be to
create distributable reserves in the Company which would give it the flexibility
to pay dividends or to purchase its own shares in the market to be held in
treasury or cancelled, should this be considered to be in the best interests of
the Company and its shareholders.
Strategy and Outlook
We have spent the last six years building a business which is capable of
delivering long term shareholder value. These characteristics are very much in
evidence today in our business model, especially in relation to our SaaS
strategy, which provides a solid stream of recurring revenue, a highly scalable
business and a model which can generate higher margins over the longer term. The
model is now further strengthened by the breadth of our offering, both in terms
of the multiple asset class functionality that we are able to offer and our
ability to provide solutions from the back to the front office. Having a modern
flexible technology platform in the current climate is critical in terms of
maintaining and winning customers.
In the coming year we will begin to gradually shift our attention and our
resources away from technology development to further strengthening and
developing our sales pipeline. We will also continue our investment, building
our infrastructure in Asia and continuing to develop business for ourselves in
that region. The resilience of our platform and our technology offering will
remain important, and we will focus on further developing our global middle
office software offering through a convergence of ET Seals and FFastFill's
existing SaaS offering and also on developing a global multi-asset SaaS platform
for the back office.
The Board believes the business has never been as strong competitively as it is
today. As we said at the time of our interim results in November, the pace of
growth in our sector and our markets remains difficult to predict in the short
term as the consequences of the financial crisis unwind. However, in spite of
this recent market turbulence, the Board remains confident that the medium and
long term fundamentals of our target markets are strong and that our company is
well placed to continue to grow its market share.
Keith Todd
Executive Chairman
Chief Executive Officer's Review
Introduction
I am delighted to present this, my first statement as FFastFill Chief Executive
Officer. 2008/09 has been a milestone year in the development of our company and
I am energised by the task ahead as we drive forward from what we have
termed our 'development phase' into a phase that will see us exploit our assets
in order to maximise our growth and profitability.
Contract Wins during the Year
During the financial year, FFastFill continued to win a series of new client
mandates and renew existing business. This was largely due to the success and
leverage of the SaaS model and was in spite of the tough economic circumstances.
We have also invested heavily in the development of the platform and now offer a
true front through middle to back office trading platform, which facilitates
improved risk management and lower technology costs.
Wins in the year in the front office business included converting MF Global FX
technology to our 21st century New Generation (NG) platform, also signing Mint
Equities, Mizuho, ICAP and re-signing Futures Betting after their acquisition by
London Capital Group. The middle office saw Skandinaviska Enskilda Banken AB
("SEB") implement our SaaS solution as well as conversions from the previous
software platform, Viewpoint. The Eclipse suite of products in the back office
continues to thrive. Renewal licences during the period include Banca IMI and
AMT Futures.We were also successful during the year in winning and implementing
NYSE Euronext Liffe's eFills system within our data centres.
Offerings - Developing our End-to-End offer
The product offerings from front through middle and back continue to progress in
terms of functionality and scalability. The combination of the NG platform and
the Eclipse back office platform lays a solid groundwork for future growth using
best of breed technology in both areas to deliver customer requirements.
Front Office
In the front office, we continue to lead as a SaaS-delivered, readily deployable
multi asset class trading and order management system. The addition of FX and
cash bonds to the platform, as well as the continued development of futures
trading functionality and scalability have further strengthened the SaaS
platform. We continue to lead in London Metals Exchange ("LME") exchange
connectivity with one third of Category 1 & 2 members using our services. The
significant functional requirements of the users of the LME raise the barrier to
entry for new vendors. In addition, we have enhanced NG to run as a truly global
SaaS system raising the prospect of local execution with centralised order book
and risk management for global firms.
Middle Office
The development of the SEALS NG platform through FY 08/9 and into FY 09/10 is an
important development of the period. The Company is very well placed to compete
for and win business in the global middle office market; a position further
enhanced by the 'go live' during summer 2008 of the NG-based platform derived
from the previous Viewpoint software and the integration of the Exchange
Technology acquisition. The SEALS workflow interface will be released during
July 2009 and the Asian gateways will follow.
Back Office
The back office has continued to grow in terms of market coverage and
functionality. The year has seen significant development in additional asset
classes including spread betting, Credit Default Swaps ("CDS") and in the
emerging power/freight exchanges IDEX, IMAREX and Nordpool. Enhanced regulatory
reporting requirements were also key deliverables during the period. The
migration of Eclipse to Linux also represents a key milestone for the year.
Risk
The integration of our RiskPro offerings with front, middle and back office
platforms offering real time P&L and intraday SPAN margin calculations has been
a significant development during the year. Being able to take trade information
in real or near real time from either the front, middle or back office and then
perform risk management calculations on this data is a unique selling point for
our RiskPro system. Eclipse Risk was released as a component piece of this and
is providing the final piece of the front through back integration.
Partnerships
FFastFill has worked hard during 2008/09 on strengthening the partnerships we
have with our key suppliers. We have achieved and maintained Microsoft Gold
Partnership during the year. Our front and middle office technology is based on
the Microsoft suite of operating system and database technologies and we are
very pleased with the scaling and the capacity we are achieving especially after
the implementation of Windows 64 bit technology. We also continue to work with
Citrix on our SaaS deployment technologies and are expanding our relationship
with Object Trading Pty Ltd in the provision of data and trade execution
connectivity in the Asia Pacific region.
We have also reconfirmed our Oracle Partner status and are working with Oracle
to continue to leverage that relationship. During the year we have moved the
back office platform to Oracle on Intel based Linux and this has provided
increased levels of scalability and cost efficiency for FFastFill and improved
service delivery for our customers.
During the period we have also worked closely with Progress Apama to ensure best
of breed algorithmic functionality. This year we have extended our relationship
with Progress Apama to host their technology and to offer it to customers on a
SaaS-delivered basis.
Service and Quality
We have continued to innovate in our service management methodologies and
technologies. One of the core benefits of the SaaS model is that we have been
able to build a management and monitoring infrastructure which allows us to
monitor the service delivery from the network all the way into the application.
This allows us to be significantly more responsive and to proactively diagnose
issues as and when they arise. We leverage the Microsoft suite of monitoring
tools and are migrating to the SCOM platform during 2009.
We continue to succeed in providing cost efficient solutions to customers,
maximising return from our data centre investments. We have also refined our
analysis of the use of power within our data centres, and the use of blades and
64 bit Windows has ensured we can achieve more with the power we have today. In
addition, we now understand down to the level of specific processes which
services are consuming the most power and this will be crucial to the continued
cost-effectiveness of FFastFill's services in the future.
The infrastructure platform is delivering millisecond sensitive trading and risk
management as well as heavy duty computing power to the overnight processes in
the back office. We are continually optimising the way in which services are
delivered and testing and re-testing the resilience and failover capabilities
within the solution. The addition of the Asian infrastructure, due to go live in
Q2 2009, will further extend the global service platform.
Internal Process
Alongside customer infrastructure we have invested in internal processes during
the year. We have implemented an integrated financial and customer management
system as well as moved to a VOIP enabled phone network. Both will contribute to
the enhanced productivity of staff and increased efficiency.
Operational Priorities
Priorities for FY 09/10 include the continued integration of the SEALS middle
office functionality within the NG architecture as well as final deployment of
the remainder of the Asian solution alongside continued efficiency and
optimisation of the service delivery platform. We will also be focused on
developing a back office global multi-asset SaaS platform.
I look forward with energy to the year ahead and to continuing to drive this
business forward as we enter a new phase in our market place.
Hamish Purdey
Chief Executive Officer
Financial Review
Full year revenue grew 27% to GBP14.4m (FY 07/08: GBP11.4m) including SaaS
revenues of GBP9.1m (FY 07/08: GBP6.4m), a rise of 42%.
The pro-forma organic growth of the FFastFill business, excluding the effect of
acquisitions, was 18.8%. Whilst strong compared to our competitors, this figure
was lower than the previous year's organic growth of 30% due to the turbulent
market conditions that resulted in some delay in contract signings. Several of
these contracts have now been signed and will contribute to revenue in the
current financial year. This year's double-digit revenue growth has been
achieved by increasing the average income generated from our top 20 customers to
GBP0.561m (FY 07/08: GBP0.438m), a growth of 28%, reflecting our efforts to
increase the numbers of services we are providing to our clients and winning new
business.
The order book for the next twelve months now stands at GBP14.2m (FY 07/08:
GBP11.5m). Within this, our SaaS order book has grown by 41% to GBP10.3m. (FY
07/08: GBP7.3m).
The increase in revenue and improvement in total gross margin, offset by
operating cost increases related to our investment in expansion, led to an
EBITDA of GBP1.7m compared to GBP1.5m in FY 07/08. Operating profit of GBP0.3m
(FY 07/08: GBP0.2m) was achieved during the year.
In April we announced some cost reduction measures that resulted from the end of
what we termed our 'development phase' and the advances that have been made in
software and operational processes over the past few years have delivered
productivity gains. These savings have been achieved chiefly through some staff
reductions and through the consolidation of office buildings and data centre
operations. The savings are expected to total approximately GBP1.5m per annum
when fully delivered and it is expected that the full benefits will be realised
in the second half of this current financial year. The savings will offset some
cost increases necessary to support our Asia Pacific expansion as well as
improve underlying profitability. As mentioned in our Trading Update of 2 March
2009, included in the FY 08/09 accounts is an exceptional item of GBP0.6m to
facilitate these cost reductions.
In the period, the group's total operating expenses grew by GBP3.0m from
GBP11.1m in 2008 to GBP14.1m.This increase was due to:
* Cost of Sales (GBP0.3m) Primarily through the increase in revenue, third party
license fees have increased by GBP0.3m.
* Operating Expenses increased GBP2.5m to GBP9.5m (FY 07/08: GBP7.0m):
* The effect of acquisitions (GBP1.2m) Exchange Systems Technologies Limited (now known as FFastFill Post-trade
Processing, or "PTP") was only included in the accounts for FY 08/09 for nine
months starting from 1 July 2007). Exchange Technology Pty Limited was included
in the accounts for FY 08/09from 1 July 2008.
* Investment in growth (GBP0.4m) This includes the implementation of improved communication links to some
exchanges and linking our US and UK data centres with two transatlantic links.
This will improve customers' trading experience and as a result help accelerate
future growth. We have also increased our Asia Pacific sales coverage and
software test facilities.
* Czech exchange rate (GBP0.2m) A significant part of our development team is based in Prague and the exchange
rate GBP: CZ Koruna has moved on average between the periods by 18% (FY 07/08:
38 Koruna per GBP / FY 08/09: 31 Koruna per GBP). This has increased the
operating expense charge to the income statement by GBP0.16m.
* Other overhead expenses (GBP0.4m) Third party costs increased by GBP0.4m in the period. This includes London
infrastructure cost increases of GBP0.3m owing to London data centre cost
increases. Our previous contracts had protected us through the last financial
year from the substantial rise in London costs.
* Plc cost increase (GBP0.3m) Executive directors' salaries had been waived in the first half year. These are
now being paid in line with executive directors' contracts. In addition there
was an increased group accrual during the period for share-based payments and
additional investment in investor relations activity.
Amortization and depreciation at GBP1.4m for the period (FY 07/08: GBP1.3m)
represents an increase of GBP0.1m on the prior year.
Overall the Company reported a Loss before Tax of GBP0.4m for the period (FY
07/08: Loss before Tax GBP0.1m) includes exceptional costs related to the cost
reduction programme of GBP0.64m.
The Company reported a Loss after Tax for the period of GBP0.4m (FY 07/08:
Profit after Tax GBP0.92m). In FY 07/08 we had the benefit of including GBP1.0m
of deferred tax asset which has been included in the income statement. In
addition the Company has a further GBP18.0m of tax losses that are still
regarded as a contingent asset.
Cash inflow from operations was GBP0.9m (FY 07/08: cash inflow GBP2.2m). A
customer payment of GBP0.7m was received on the 1 April 2009 and was not
included within the cash inflow for the year ended 31 March 2009. This, and some
changes to customer payment cycles, accounted substantially for the decrease in
cash inflow from operations when compared to last year.
Capital expenditure on tangible fixed assets was GBP0.5m (FY 07/08: GBP0.6m),
namely for equipment required for customer signings during the financial year
and the replacement of some core infrastructure equipment. In addition, the
Company invested GBP1.7m (FY 07/08: GBP1.0m) in product development in the Trade
Execution Services, PTP and middle office areas.
During the year we embarked on our Asia Pacific expansion strategy and as part
of our strategy in July we acquired Exchange Technology Pty Limited in
Australia, bringing us an experienced middle office development team, regional
exchange connectivity and 12 customers in the region for GBP1.2m. This was
followed in November, with the announcement of a Placing to raise approximately
GBP1.0m to fund our plans in this region in particular to support our
infrastructure role out. Cash at 31 March 2009 was GBP2.2m (FY 07/08: GBP2.4m).
The Board does not intend to pay a dividend. However it is the Board's
intention, at the Annual General Meeting to be held in July, to seek Shareholder
approval for the cancellation of the Company's Share Premium Account. The effect
of this cancellation, were it to be approved, would be to create distributable
reserves in the Company which would give it the flexibility to pay dividends or
to purchase its own shares in the market to be held in treasury or cancelled,
should this be considered to be in the best interests of the Company and its
shareholders.
CONSOLIDATED INCOME STATEMENT for the year ended 31 March 2009
+------------------------------------------+-----------+------------+---+--+---+--------------+
| | Notes | | | |
+------------------------------------------+-----------+-------------------+---+--------------+
| | | 2009 | | | 2008 |
+------------------------------------------+-----------+----------------+--+---+--------------+
| Continuing operations: | | GBP'000 | | | GBP'000 |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Revenue | | 14,384 | | | 11,359 |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Operating expenses | | (14,125) | | | (11,145) |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Operating profit | | 259 | | | 214 |
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Exceptional items | | (643) | | | (368) |
+------------------------------------------+-----------+------------+------+---+--------------+
| Finance income | | 33 | | | 51 |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Finance costs | | (90) | | | (34) |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Loss before taxation | | (441) | | | (137) |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Tax | | 34 | | | 1,061 |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| (Loss)/profit after taxation | | (407) | | | 924 |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| (Loss)/profit attributable to equity holders of the | (407) | | | 924 |
| company | | | | |
+------------------------------------------------------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Basic (loss)/earnings per share | 5 | (0.11p) | | | 0.26p |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | | | |
+------------------------------------------+-----------+------------+------+---+--------------+
| Fully diluted (loss)/earnings per share | 5 | (0.11p) | | | 0.26p |
+------------------------------------------+-----------+------------+------+---+--------------+
| | | | |
+------------------------------------------+-----------+------------+---+--+---+--------------+
CONSOLIDATED BALANCE SHEET as at 31 March 2009
+-----------------------------------------+---------+---------------+--+--------------+
| | | 2009 | | 2008 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | GBP'000 | | GBP'000 |
+-----------------------------------------+---------+---------------+--+--------------+
| ASSETS | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Non-current assets | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Goodwill | | 7,633 | | 6,480 |
| Intangible assets | | 3,567 | | 2,595 |
| Property, plant and equipment | | 750 | | 785 |
| Trade and other receivables | | 145 | | 145 |
| Deferred taxation | | 1,494 | | 1,505 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | 13,589 | | 11,510 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Current assets | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Trade and other receivables | | 4,182 | | 2,665 |
+-----------------------------------------+---------+---------------+--+--------------+
| Cash and cash equivalents | | 2,159 | | 2,424 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | 6,341 | | 5,089 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| TOTAL ASSETS | | 19,930 | | 16,599 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| LIABILITIES | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Current liabilities | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Trade and other payables | | (7,476) | | (6,122) |
+-----------------------------------------+---------+---------------+--+--------------+
| Borrowings | | (500) | | - |
+-----------------------------------------+---------+---------------+--+--------------+
| Obligations under finance leases | | - | | (103) |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | (7,976) | | (6,225) |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Current assets less current liabilities | | (1,635) | | (1,136) |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Total assets less current liabilities | | 11,954 | | 10,374 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Non-current liabilities | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Trade and other payables | | (367) | | - |
+-----------------------------------------+---------+---------------+--+--------------+
| Borrowings | | (125) | | - |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| NET ASSETS | | 11,462 | | 10,374 |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| EQUITY | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| Share capital | | 3,965 | | 3,705 |
+-----------------------------------------+---------+---------------+--+--------------+
| Share premium account | | 32,544 | | 31,093 |
+-----------------------------------------+---------+---------------+--+--------------+
| Other reserve | | 235 | | 715 |
+-----------------------------------------+---------+---------------+--+--------------+
| Share-based payment reserve | | 226 | | 114 |
+-----------------------------------------+---------+---------------+--+--------------+
| Merger reserve | | 890 | | 890 |
+-----------------------------------------+---------+---------------+--+--------------+
| Currency translation reserve | | 40 | | (112) |
+-----------------------------------------+---------+---------------+--+--------------+
| Retained earnings | | (26,438) | | (26,031) |
+-----------------------------------------+---------+---------------+--+--------------+
| Capital and reserves attributable to | | 11,462 | | 10,374 |
| the equity shareholders of the company | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
| | | | | |
+-----------------------------------------+---------+---------------+--+--------------+
COMPANY BALANCE SHEET as at 31 March 2009
+--------------------------------------------+--------+-------------+--+-------------+
| | | 2009 | | 2008 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | GBP'000 | | GBP'000 |
+--------------------------------------------+--------+-------------+--+-------------+
| ASSETS | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Non-current assets | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Investments | | 7,657 | | 7,657 |
+--------------------------------------------+--------+-------------+--+-------------+
| Trade and other receivables | | 2,177 | | 100 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | 9,834 | | 7,757 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Current assets | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Trade and other receivables | | 77 | | 313 |
+--------------------------------------------+--------+-------------+--+-------------+
| Cash and cash equivalents | | 1,639 | | 1,712 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | 1,716 | | 2,025 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| TOTAL ASSETS | | 11,550 | | 9,782 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| LIABILITIES | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Current liabilities | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Trade and other payables | | (4,875) | | (4,964) |
+--------------------------------------------+--------+-------------+--+-------------+
| Borrowings | | (500) | | - |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | (5,375) | | (4,964) |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Current assets less current liabilities | | (3,659) | | (2,939) |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Total assets less current liabilities | | 6,175 | | 4,818 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Non-current liabilities | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Borrowings | | (125) | | - |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | 6,050 | | 4,818 |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| EQUITY | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Share capital | | 3,965 | | 3,705 |
+--------------------------------------------+--------+-------------+--+-------------+
| Share premium account | | 32,544 | | 31,093 |
+--------------------------------------------+--------+-------------+--+-------------+
| Other reserves | | 235 | | 715 |
+--------------------------------------------+--------+-------------+--+-------------+
| Share-based payment reserve | | 226 | | 114 |
+--------------------------------------------+--------+-------------+--+-------------+
| Retained earnings | | (30,920) | | (30,809) |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| Capital and reserves attributable to the | | 6,050 | | 4,818 |
| equity shareholders of the company | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
| | | | | |
+--------------------------------------------+--------+-------------+--+-------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - attributable to the shareholders
of the company
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
| | | | | | | | | Share- | | | | | | | | |
| | | | | Share | | | | based | | | | | | | | |
| | | Share | | premium | | Other | | payment | | Merger | | Translation reserve | | Retained | | |
| | | capital | | account | | reserves | | reserve | | reserve | | | | earnings | | Total |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Balances at 1 April | | | | | | | | | | | | | | | | |
| 2007 | | 2,897 | | 26,561 | | 235 | | 35 | | 890 | | (9) | | (26,955) | | 3,654 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Exchange differences on | | | | | | | | | | | | | | | | |
| translating foreign | | | | | | | | | | | | | | | | |
| operations | | - | | - | | - | | - | | - | | (103) | | - | | (103) |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Profit for the year | | - | | - | | - | | - | | - | | - | | 924 | | 924 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Total recognised income | | | | | | | | | | | | | | | | |
| and expense | | - | | - | | - | | - | | - | | (103) | | 924 | | 821 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Deferred shares issued | | - | | - | | 480 | | | | | | | | | | 480 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Share-based payment | | - | | - | | - | | 79 | | - | | - | | - | | 79 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Share issues | | 808 | | 4,532 | | - | | - | | - | | - | | - | | 5,340 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Balance at 31 March | | | | | | | | | | | | | | | | |
| 2008 | | 3,705 | | 31,093 | | 715 | | 114 | | 890 | | (112) | | (26,031) | | 10,374 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Exchange differences on | | | | | | | | | | | | | | | | |
| translating foreign | | | | | | | | | | | | | | | | |
| operations | | - | | - | | - | | - | | - | | 152 | | - | | 152 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Loss for the year | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | - | | - | | - | | - | | - | | - | | (407) | | (407) |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Total recognised income | | | | | | | | | | | | | | | | |
| and expense | | - | | - | | - | | - | | - | | 152 | | (407) | | (255) |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| | | | | | | | | | | | | | | | | |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Share-based payment | | - | | - | | - | | 112 | | - | | - | | - | | 112 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Deferred shares issued | | - | | - | | (480) | | - | | - | | - | | - | | (480) |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Share issues | | 260 | | 1,451 | | - | | - | | - | | - | | - | | 1,711 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
| Balance at 31 March | | | | | | | | | | | | | | | | |
| 2009 | | 3,965 | | 32,544 | | 235 | | 226 | | 890 | | 40 | | (26,438) | | 11,462 |
+-------------------------+---+----------+---+-----------+---+----------+---+-----------+---+----------+---+---------------------+---+-----------+---+-----------+
COMPANY STATEMENT OF CHANGES IN EQUITY - attributable to the shareholders of the
company
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | Share | | Share | | Other | | Share- | | | Retained | | Total |
| | | capital | | premium | | reserves | | based | | | earnings | | |
| | | | | account | | | | payment | | | | | |
| | | | | | | | | reserve | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | | GBP'000 | | GBP'000 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Balance at 1 April 2007 | | 2,897 | | 26,561 | | 235 | | 35 | | | (27,941) | | 1,787 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Loss for the year | | - | | - | | - | | - | | | (2,868) | | (2,868) |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Total recognised income and | | | | | | | | | | | | | |
| expense | | - | | - | | - | | - | | | (2,868) | | (2,868) |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Shares to be issued | | - | | - | | 480 | | - | | | - | | 480 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Share-based payment | | - | | - | | - | | 79 | | | - | | 79 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Share issues | | 808 | | 4,532 | | - | | - | | | - | | 5,340 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Balance at 31 March 2008 | | 3,705 | | 31,093 | | 715 | | 114 | | | (30,809) | | 4,818 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Loss for the year | | - | | - | | - | | - | | | (111) | | (111) |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Total recognised income and | | | | | | | | | | | | | |
| expense | | - | | - | | - | | - | | | (111) | | (111) |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Shares to be issued | | - | | - | | (480) | | - | | | - | | (480) |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Share-based payment | | - | | - | | - | | 112 | | | - | | 112 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Share issues | | 260 | | 1,451 | | - | | - | | | - | | 1,711 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| Balance at 31 March 2009 | | 3,965 | | 32,544 | | 235 | | 226 | | | (30,920) | | 6,050 |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
| | | | | | | | | | | | | | |
+---------------------------------+---+----------+---+-----------+---+-----------+---+-----------+---+---+------------+---+------------+
The company has taken advantage of s230 Companies Act 1985 in
not publishing its own income statement.
The loss for the year was GBP111,000 (2008: Loss GBP2,868,000).
CASH FLOW STATEMENTS for the year ended 31 March 2009
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| |Notes | Group | | Company | | Group | | Company |
| | | 2009 | | 2009 | | 2008 | | 2008 |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash flows from operating | | | | | | | | |
| activities | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash flows from operations | A | 926 | | (1,929) | | 2,132 | | 3,096 |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Interest received | | 33 | | 26 | | 51 | | 42 |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Interest paid | | (90) | | (37) | | (34) | | - |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Tax received | | 45 | | - | | 61 | | - |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Net cash flows from/(used | | 914 | | (1,940) | | 2,210 | | 3,138 |
| in) operating activities | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash from investing | | | | | | | | |
| activities | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Purchase of investments | | - | | - | | - | | (3,228) |
| Purchase of intangible assets | | (1,752) | | - | | (983) | | - |
| Purchase of property, plant and | | (502) | | - | | (602) | | - |
| equipment | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Acquisition of subsidiaries (net | | (826) | | - | | (4,210) | | (4,210) |
| of cash acquired) | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Net cash flows used in investing | | (3,080) | | - | | (5,795) | | (7,438) |
| activities | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash flows from financing | | | | | | | | |
| activities | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Net proceeds from issue of | | 1,231 | | 1,231 | | 5,220 | | 5,220 |
| ordinary share capital | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Advance of borrowings | | 750 | | 750 | | - | | - |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Repayment of borrowings | | (125) | | (125) | | - | | - |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Finance lease principal payments | | (103) | | - | | (252) | | - |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Net cash flows from financing | | 1,753 | | 1,856 | | 4,968 | | 5,220 |
| activities | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Net change in cash and cash | | (413) | | (84) | | 1,383 | | 920 |
| equivalents | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Exchange rate movement | | 148 | | 11 | | 25 | | 1 |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash and cash equivalents at | | 2,424 | | 1,712 | | 1,016 | | 791 |
| beginning of year | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash and cash equivalents at end | | 2,159 | | 1,639 | | 2,424 | | 1,712 |
| of year | | | | | | | | |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
| Cash and cash equivalents comprise cash on hand and deposits and other short term highly |
| liquid investments that are readily convertible to a known amount of cash and are subject |
| to an insignificant risk of changes in value. |
| |
+------------------------------------+-------+---------+--+----------+--+---------+--+-----------+
NOTES TO THE CASH FLOW STATEMENTS for the year ended 31 March 2009
A. Reconciliation of profit/(loss) after taxation to net cash flows from
operating activities
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| | | Group | | Company | | Group | | Company |
| | | 2009 | | 2009 | | 2008 | | 2008 |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| (Loss)/profit after | | (407) | | (111) | | 924 | | (2,868) |
| taxation | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Finance income | | (33) | | (26) | | (51) | | (42) |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Finance costs | | 90 | | 37 | | 34 | | - |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Taxation | | (34) | | - | | (1,061) | | - |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Depreciation | | 607 | | - | | 777 | | - |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Amortisation of intangible | | 834 | | - | | 493 | | - |
| assets | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Share based payment | | 112 | | 29 | | 79 | | 79 |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Foreign exchange | | (63) | | - | | 71 | | (1) |
| translation differences | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| (Increase)/decrease in | | (1,393) | | (1,841) | | (480) | | 67 |
| receivables | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Increase/(decrease) in | | 1,213 | | (17) | | 1,346 | | 2,633 |
| payables | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Provision against | | - | | - | | - | | 3,228 |
| investment in subsidiaries | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| Cash flows from operating | | 926 | | (1,929) | | 2,132 | | 3,096 |
| activities | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
| | | | | | | | | |
+----------------------------+--+-----------+--+-----------+--+-----------+--+----------+
NOTES TO THE ACCOUNTS for the year ended 31 March 2009
1. General information
FFastFill Plc is incorporated and domiciled in the United Kingdom under the
Companies Act 1985 and is listed on the AIM market.
These accounts are presented in pounds sterling because that is the currency of
the primary economic environment in which the group operates. Foreign operations
are included in accordance with the policies set out in note 2.
At the date of issue of these accounts the following Standards and
interpretations which have not been applied in these accounts were in issue but
not yet effective:-
IFRS 1 Revised IFRS 1 First-time adoption of IFRS
IFRS 2 Share based payments - Amendment, vesting conditions and
cancellations
IFRS 3 Business Combinations - Comprehensive revision on applying the
acquisition method
IFRS 7 Financial Instruments: Disclosures - Amendment; Reclassification
of Financial Assets
IFRS 8 Operating segments
IAS 1 Presentation of Financial Statements - comprehensive revision
including requiring a statement of comprehensive income
IAS 23 Borrowing costs - Comprehensive revision to prohibit immediate
expensing
IAS 27 Consolidated and Separate Financial Statements - Amendments
arising from IFRS 3
IAS 27 Consolidated and Separate Financial Statements - Amendment, cost
of an investment in a subsidiary, jointly controlled entity or associate
IAS 28 Investment in Associates - Consequential amendments arising from
IFRS 3
IAS 39 Financial Instruments: Recognition and Measurement - Amendment;
Reclassification of Financial Assets
IAS 39 Financial Instruments: Recognition and Measurement - Amendment;
Eligible hedged items
The directors anticipate that the adoption of these Standards and
Interpretations in future years will have no material impact on the accounts of
the Group.
2Accounting policies
Basis of preparation
The accounts have been prepared in accordance with
International Financial Reporting Standards, adopted by the European Union
("IFRS").
The accounts have been prepared under the historical cost convention. The
principal accounting policies adopted are set out below.
Going concern
During the year the group made a loss of GBP0.407 million (2008:
profit of GBP0.924 million) and had net assets at 31 March 2009 of GBP11.5
million (2008: GBP10.4 million).
As a result of winning a number of significant new customers during the year,
the group's order book of recurring and run-rate revenue at the end of March
2009 was over GBP14.2 million. This has already increased further in the period
since the end of the year and the group has a strong pipeline of further
business from both current and new customers.
On this basis, the directors have prepared the accounts on the going concern
basis. The accounts do not include any adjustments that would arise if this
basis were inappropriate.
NOTES TO THE ACCOUNTS for the year ended 31 March 2009
Accounting policies (continued)
Basis of consolidation
The consolidated accounts incorporate the accounts of
the company and entities controlled by the company (its subsidiaries) made up to
31 March each year. Control is achieved where the company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities. Where necessary, adjustments are made to
the accounts of subsidiaries to bring the accounting policies used into line
with those by the group. All intra-group transactions, balances, income and
expenses are eliminated on consolidation.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method,
with the exception of the original business combination involving FFastFill Plc
and FFastFill Europe Limited which was, accounted for using the pooling of
interests method. The cost of the acquisition is measured as the aggregate of
the fair values, at the date of exchange, of assets given, liabilities incurred
or assumed, and equity instruments issued by the group in exchange for control
of the acquiree, plus any costs directly attributable to the business
combination. The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 Business
combinations are recognised at their fair value at the acquisition date. The
group has taken advantage of the transitional exemption in IFRS 3 from restating
goodwill on acquisitions prior to 1 April 2005.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. Goodwill is initially recognised as an asset at cost
and is subsequently measured at cost less any accumulated impairment losses. Any
impairment is recognised immediately in profit or loss and is not subsequently
reversed. The group tests goodwill annually for impairment or more frequently if
there are indicators that goodwill might be impaired.
Goodwill is allocated to cash generating units that are expected to benefit from
the business combination in which the goodwill arose, for the purpose of
impairment testing.
The recoverable amount of the cash generating unit is determined from value in
use calculations. The key assumptions for the value in use calculations are
those regarding the discount rates, growth rates and expected changes to selling
prices and direct costs during the forecast period. Management estimates
discount rates using pre-tax rates that reflect current market assessments of
the time value of money and the risks specific to the cash generating unit. The
growth rates are based on industry growth forecasts. Changes in selling prices
and direct costs are based on past practices and expectations of future changes
in the market.
The group prepares cash flow forecasts derived from the most recent financial
budgets approved by management for the next five years and extrapolates cash
flows for the following five years based on an estimated growth rate which does
not exceed the average long-term growth rate for the relevant markets.
The rate used to discount the forecast cash flows from the cash generating unit
is 2.5%.
Property, plant and equipment
Property, plant and equipment are recognised initially at cost. Depreciation is
provided on cost in equal annual instalments over the estimated useful lives of
the assets concerned. The following annual rates are used.
+--------------------------+--------------------------+
| Computer hardware | 33% |
+--------------------------+--------------------------+
| Office equipment | 25% |
+--------------------------+--------------------------+
| Short leasehold | 33% |
| improvements | |
+--------------------------+--------------------------+
| Computer software | 33% |
+--------------------------+--------------------------+
NOTES TO THE ACCOUNTS for the year ended 31 March 2009 (continued)
Accounting policies (continued)
Investments
Investments in subsidiaries are stated at cost less provision for impairment.
Internally generated intangible assets - software development expenditure
Costs associated with maintaining computer software are recognised as an expense
as incurred. Development costs that are directly attributable to the design and
testing of identifiable and unique software products controlled by the group are
recognised as intangible assets when the following criteria are met:
* It is technically feasible to complete the software product so that it will be
available for use
* Management intends to complete the software product and use or sell it
* There is an ability to use or sell the software product
* It can be demonstrated how the software product will generate probable future
economic benefits
* Adequate technical, financial and other resources to complete the development
and to use or sell the software product are available
* The expenditure attributable to the software product during its development can
be reliably measured
Where no internally generated intangible asset can be recognised, development
expenditure is recognised as an expense in the period in which it is incurred.
Research expenditure is expensed as incurred.
Developed software development expenditure is stated at cost less accumulated
amortisation and impairment losses. The expenditure capitalised includes the
cost of materials and direct labour. Amortisation is charged to the income
statement on a straight-line basis over the estimated useful lives of the
products concerned.
The amortisation period for development costs incurred on the group's
development is five years.
Impairment of assets (excluding goodwill)
At each balance sheet date, the group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for impairment
annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognised as income immediately, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
NOTES TO THE ACCOUNTS for the year ended 31 March 2009 (continued)
Accounting policies (continued)
Deferred taxation
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Temporary
differences are differences between the group's taxable profits and its results
as stated in the financial statements.
Deferred tax assets are recognised to the extent that it is regarded as more
likely than not that they will be recoverable against suitable taxable profits
in the future. Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which timing differences are expected to
reverse, based on tax rates and laws that have been enacted or substantively
enacted by the balance sheet date.
The company recognises deferred tax in respect of the profits of overseas
subsidiaries except where the timing of the receipt of these profits is
controlled by group and it is not probable that the profits will be distributed
in the foreseeable future.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. Assets held
under finance leases are recognised as assets of the group at their fair value
or, if lower, at the present value of the minimum lease payments, each
determined at the inception of the lease. The corresponding liability to the
lessor is included in the balance sheet as a finance lease obligation. Lease
payments are apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining balance
of the liability.
Rentals payable under operating leases are charged to the income statement on a
straight-line basis over the term of the relevant lease.
Foreign currency translation
The individual financial statements of each group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each group company are expressed in pound
sterling, which is the functional currency of the company, and the presentation
currency for the consolidated financial statements.
In preparing the accounts of each company, transactions in currencies other than
the entity's functional currency (foreign currencies) are recorded at the rate
of exchange prevailing on the date of transactions. At each balance sheet date,
monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Non-monetary
items carried at fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
in equity.
For the purpose of presenting consolidated accounts, the assets and liabilities
of the group's foreign operations are translated at exchange rates prevailing on
the balance sheet date. Income and expense items are translated at the average
exchange rates for the period unless exchange rates fluctuate significantly
during that period, in which case the exchange rates at the date of transactions
are used. Exchange differences arising, if any, are classified as equity and
transferred to the group's translation reserve. Such translation differences are
recognised as income or as expenses in the period in which the operation is
disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate, except goodwill and fair value adjustments
arising on acquisitions before the date of transition to IFRSs as sterling
denominated assets and liabilities.
Revenue
Revenue, which excludes value added tax, represents the value of goods
and services supplied. Where income relates to future services or there are
associated ongoing costs the income is spread over the life of the provision of
the service. All other revenue is recognised on delivery.
Share-based payments
The group operates two share options schemes; the Enterprise Management
Incentive Scheme and the 2003 Share Option Scheme (HM Revenue & Customs
unapproved). The fair value of options is recognised as an employee benefit
expense with a corresponding increase in reserves over the vesting period. The
proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options are
exercised.
Share option and warrants granted prior to 7 November 2002 and unvested at the
date of transition to IFRS have been excluded from the share-based payment
calculation, as permitted by IFRS 2 Share-based payment.
Research and development tax credits
Research and development tax credits are recognised when receipt is virtually
certain.
Exceptional items
Items that are material in size, unusual and non-recurring in nature are
presented as exceptional items in the income statement. The directors are of
opinion that the separate recording of non-recurring costs provides helpful
information about the group's underlying performance.
3 Critical accounting judgements and key sources of estimation uncertainty
The preparation of accounts in conformity with IFRS requires the use of
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Although these estimates are
based on management's best knowledge of the amount, event or actions, actual
results may ultimately differ from those estimates. The key sources of
estimation uncertainty at the balance sheet date derives from management
assumptions in relation to the capitalisation and amortisation of internally
generated software assets, revenue recognition, goodwill impairment reviews and
share-based payments. The accounting policies in relation to these items are
disclosed in note 2 above.
4 Financial information
The financial information set out in this statement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
statutory accounts for the year ended 31 March 2008, prepared under IFRS as
adopted by the European Union have been delivered to the Registrar of Companies
and carry an audit report that is unqualified and did not contain any statement
under s237(2) of (3) of the Companies Act 1985. Statutory accounts for the year
ended 31 March 2009 have been audited and will be delivered to the Registrar of
Companies following their publication.
5Basic earnings per share and fully diluted earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to
ordinary shareholders for each year amounting to GBP407,000 (2008: profit
GBP924,000) for the year ended 31 March 2009 by 383,998,302 (2008: 350,698,541),
being the weighted average number of ordinary shares in issue during each year.
Diluted earnings per share
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| The weighted average number of ordinary shares for calculating fully diluted |
| loss per share is determined as follows: |
+------------------------------------------------------------------------------------+
| | | | | | | | |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| | | | | | 2009 | | 2008 |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| | | | | | No: | | No: |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| | | | | | | | |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| Weighted average number of ordinary shares | | 383,998,302 | | 350,698,541 |
+--------------------------------------------------+--+-------------+--+-------------+
| | | | | | | | |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| Share options | | | | | - | | 445,233 |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| | | | | | | | |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| | | | | | | | |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
| Fully diluted weighted average number of | | 383,998,302 | | 351,143,774 |
| ordinary shares | | | | |
+--------------------------------------------------+--+-------------+--+-------------+
| | | | | | | | |
+-----------------------+-----------+--+-----------+--+-------------+--+-------------+
Share options were non-dilutive for the year ended 31 March 2009 as the group
incurred a loss.
6 Dividend
The directors are not declaring a dividend.
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