TIDMILX
RNS Number : 2293U
ILX Group PLC
22 June 2009
?
ILX Group plc
2008/9 Preliminary Results
ILX Group plc ('ILX' or the "Company"), the AIM quoted business education and
training company, announces its unaudited preliminary results for the year ended
31 March 2009.
Highlights:
* Revenue up 17.1% to GBP15.6m (2008: GBP13.3m)
* Profit before tax and non-recurring costs* down 8.5% to GBP1.70m (2008:
GBP1.86m)
* Adjusted fully diluted earnings per share before non-recurring costs* down 8.6%
to 6.04p (2008: 6.61p)
* Strong cash generation during the year
* Net debt reduced by GBP800,000
* All earn-out amounts now paid
* Recommended final dividend maintained at 1.5p
* Full details are included in the Chief Executive's Business Review.
Ken Scott, Chief Executive of ILX Group plc, commented:
"The last financial year was difficult and our trading divisions showed mixed
results with 40% revenue growth in Best Practice offset by Corporate Training
Group which was badly hit by the economic downturn, in particular the collapse
of Lehman Brothers and its aftermath. In this context I believe that our
results, which demonstrate considerable revenue growth, and a significant
underlying profit, are highly creditable.
We have increased our market share and although the current year promises to be
very challenging we have built a strong business and expect to further increase
our market share, improve our positioning, and reduce our debt."
Enquiries:
+------------------------------------------+------------------------------------------+
| ILX Group plc | |
+------------------------------------------+------------------------------------------+
| Ken Scott / Jon Pickles | 020 7751 7100 |
+------------------------------------------+------------------------------------------+
| Lothbury Financial | |
+------------------------------------------+------------------------------------------+
| Michael Padley / Libby Moss | 020 7011 9411 |
+------------------------------------------+------------------------------------------+
| Arbuthnot Securities Limited | |
+------------------------------------------+------------------------------------------+
| Tom Griffiths | 020 7012 2000 |
+------------------------------------------+------------------------------------------+
Editor's Notes
ILX Group plc (www.ilxgroup.com) is a leading provider of vocational training to
the private and public sectors, delivered through e-learning, and instructor-led
courses/workshops, and trades through two divisions:
1.Best Practice provides e-learning, instructor-led training and implementation
consultancy principally to the programme and project management, IT service
management and business finance markets.
2.Banking & Finance (through Corporate Training Group) provides instructor-led
training, workshops and related services, principally to the investment banking
community.
Chairman's Statement
For the year ended 31 March 2009
I am pleased to present the results for the year ended 31 March 2009.
This year has been one of unprecedented financial and economic turmoil. The
financial services sector, from which the Company gains approximately one-third
of its revenues, has experienced tectonic shifts in the trading landscape. In
addition, the global economy is in the midst of the worst recession in living
memory.
In this context I believe that our results for the year ended 31 March 2009,
which demonstrate considerable revenue growth, and a significant underlying
profit, are highly creditable. Our strategy for some years has been to focus on
the provision of hard skills training to our customers through a combination of
innovative e-learning products and traditional classroom training. This has
continued in the year just ended and the focus on hard skills training has
contributed to the robustness of the business.
The Best Practice Group has enjoyed an exceptional year, building on the
structural changes made last year and the launch of a major new product, taking
significant market share from the competition and delivering increased revenue
in excess of 40%.
The Corporate Training Group by contrast had a mixed, but overall difficult
year. Revenues grew by 9% in the first half, but fell by 37% in the second half
of the year, following the collapse of Lehman Brothers and the resulting global
banking crisis. Despite maintaining excellent relationships with core clients
and generating a number of new business streams, in particular from overseas
collaborations, full year revenues were 11% down over the preceding year.
Financial Results
Total revenue for the year was GBP15.6 million (2008: GBP13.3 million), an
increase of 17.1%. However, margin pressures meant that operating profit before
non-recurring items was GBP2.09 million (2008: GBP2.29 million) and underlying
profit before taxation and non-recurring items was GBP1.70 million (2008:
GBP1.86 million), a fall of 8%. Accordingly, adjusted diluted earnings per
share, before non-recurring items reduced to 6.04p (2008: 6.61p).
In the light of significant (mainly non-cash) non-recurring costs, it is
appropriate to present an adjusted underlying profit and diluted earnings per
share figure, stated before non-recurring costs which are explained in the Chief
Executive's Business Review and detailed in the notes to the financial
statements.
Net debt, defined as all bank debt less cash at bank, was GBP4.69 million at the
end of the year (2008: GBP5.51 million which included deferred consideration).
Personnel Changes
Peter Evans, previously managing director and co-founder of the Corporate
Training Group, joined the Board in January 2009. Peter has specific
responsibility to identify and evaluate strategic opportunities for the Company.
Earn-outs
The second and final earn-out payment of GBP2.5 million for the Corporate
Training Group was made in cash. Whilst the Company had the option to pay up to
GBP1.5 million of the total in shares, this would have resulted in considerable
dilution for shareholders given the current share price.
ILX has now paid all its liabilities under earn-out arrangements in full and is
now concentrating primarily on repaying debt.
Dividend
The Board remains committed to the payment of an annual dividend, but it is also
mindful of the requirement to conserve cash and repay debt, particularly in the
current uncertain climate.
A dividend of 1.5 pence per share was paid in August 2008, in respect of the
year ended 31 March 2008. Subject to shareholders' approval being obtained at
the Company's forthcoming AGM, the Directors recommend the payment of a
maintained annual dividend of 1.5 pence per share in respect of the year ended
31 March 2009. It is intended that this dividend will be paid on 30 October 2009
to shareholders on the register at 4 September 2009 and that the ordinary shares
will become ex-dividend on 2 September 2009.
The Directors are considering the option of making available a scrip dividend
alternative to shareholders, which if offered would be taken up by each of the
Directors.
Share Buyback Authority
The Company will be seeking to renew its share buyback authority at the
Company's forthcoming AGM. If approved, this will allow the Company, if it so
chooses, to re-purchase up to 14.99% of its issued share capital, which it would
hold in treasury. The terms of the tax relief granted to our Enterprise
Investment Scheme and Venture Capital Trust investors effectively prevent the
Company from carrying out any buy-backs until 27 July 2009.
The Board has no intention to carry out such a buyback exercise in the immediate
future as any surplus cash generated is likely to be utilised to reduce debt. It
would however like to retain this option.
Investor Relations
Our AGM has been moved back to September in order that it does not coincide with
the holiday period and in the hope that more shareholders will be able to
attend. I would strongly encourage shareholders to attend the AGM on 25
September, at One London Wall, where you will be able to hear from and question
the Directors and other key members of staff as well as see a demonstration of
the Company's products.
Finally, I am pleased to remind shareholders that we continue to offer a 10%
discount on all training courses, and a 20% discount on software products, to
all shareholders holding at least 1,000 shares at the time of purchase. The
discount is applicable to private individuals only for open course enrolments
and single user licences.
Outlook
The forthcoming year promises to be a difficult one and we are under no
illusions as to the tough trading conditions which persist in the market and are
likely to for the foreseeable future. Nevertheless we have built a strong
business and expect to increase our market share, improve our positioning, and
reduce our debt. Trading into the new financial year remains challenging but
robust.
Once again I would like to thank management and all staff for their hard work
over the year and I look forward to the future with confidence.
Paul Lever
Chairman
22 June 2009
Business Review
For the year ended 31 March 2009
Introduction
Our strategy is to build a strong company providing technical business training,
delivered through innovative and exciting e-learning software together with top
quality traditional instructor-led training.
The Company continues to trade through two divisions; the Best Practice Group,
providing training in project and service management qualifications such as
PRINCE2(TM) and ITIL(TM), and the Corporate Training Group, providing financial
training programmes principally for finance professionals.
In the year to 31 March 2009, we have experienced mixed trading conditions in
what has been by far the toughest economic environment in living memory.
Nevertheless, the strengths of the business have ensured that we once again
delivered revenue growth and a significant, albeit slightly reduced, underlying
profit.
Financial Results
Profit for the Year
Revenues for the year were GBP15.6 million (2008: GBP13.3 million), an increase
of 17.1%. This is entirely due to organic growth (2008: organic growth of
14.0%). Best Practice Group revenues were up 40.4% to GBP10.5 million (2008:
GBP7.50 million). Corporate Training Group revenues were GBP4.83 million (2008:
GBP5.40 million), a fall of 10.6%.
Revenues from other services fell from GBP0.41 million to GBP0.22 million.
Whilst the Company saw strong growth in sales of e-learning products over the
year, the fastest growth area was once again classroom training. Accordingly,
gross margins have again decreased slightly to 49.0% (2008: 51.1%), due to the
changed revenue mix.
Operating margins decreased to 13.4% (2008: 17.2%), principally due to reduced
profits from the Corporate Training Group. Operating profit, before
non-recurring items was GBP2.09 million (2008: GBP2.29 million), a fall of 8.5%.
Consequently, profit before tax and non-recurring items also fell by 8.5% to
GBP1.70 million (2008: GBP1.86 million).
Cash Flow and Net Debt
The Company delivered a further year of strong operating cash flow. Cash
generated from operating activities for the year was GBP1.82 million (2008:
GBP3.17 million), representing 87% of underlying operating profit (2008: 139%).
Free cash flow, being cash generated from operating activities less interest,
tax, and all capital expenditure, was GBP1.49 million (2008: GBP2.57 million).
During the year, the Company made the second and final earn-out payment in
respect of the acquisition of Corporate Training Group. This was made entirely
in cash with GBP1.5 million generated from operating cash flow, and the
remaining GBP1 million from bank facilities. This was done so as not to dilute
existing shareholders. All earn-out payments were completed in February 2009.
Net debt, defined as all bank debt less cash at bank, was GBP4.69 million at 31
March 2009 (2008: GBP5.51 million). This is a multiple of just over three times
free cash flow, and just over two times underlying operating profit.
This remaining net debt comprises GBP4.13 million in term debt, which is
repayable over three years, and GBP0.56 million in working capital facilities,
comprising an overdraft and confidential invoice finance facility.
Non-Recurring Items
This year the Company has incurred substantial non-recurring charges,
principally non-cash items that warrant particular explanation.
Cash items totalled GBP0.18 million in respect of bad debts, principally
relating to Lehman Brothers and Kaupthing. The exceptional circumstances that
surrounded the collapse of these two banks and the fact that historically the
Company has experienced a negligible level of bad debt are the principal reasons
behind highlighting these losses separately as non-recurring costs.
The remaining charges are non-cash entries.
The principal charge relates to the write-off of GBP2.36 million in goodwill
relating to the Mount Lane acquisition. This charge is shown as an impairment on
the Income Statement. Whilst this acquisition has not ultimately been
successful, it is worth noting that five other acquisitions were made between
2004 and 2006, each of which have proven successful.
As last year, the Company used an interest rate swap arrangement, details of
which are contained in the notes to the financial statements, to reduce exposure
to future movements in interest rates. Nothing was paid for this arrangement,
but accounting standards require us to value the instrument and to take any
change in value to the Income Statement. This resulted in an additional notional
charge of GBP170,000 which is included in interest payable for the year (2008:
GBP39,000). Provided the Company does not look to exit this arrangement early,
these charges will ultimately be reversed and returned to distributable
reserves.
Taxation
The taxation charge for the year was GBP420,000 (2008: GBP460,000). The Company
has now fully utilised all its tax losses and carries forward a tax liability of
GBP329,000 payable in January 2010.
Net Profit and Dividend
After the non-recurring charges highlighted above, net loss attributable to
equity holders after tax and non-recurring items for the year was GBP1.43
million (2008: profit GBP1.03 million).
A dividend of 1.5 pence per share was paid during the year in respect of the
year ended 31 March 2008, and this is shown in the statement of changes in
equity. As stated in the Chairman's Statement, a recommended final dividend of
1.5p in respect of the year ended 31 March 2009 will be payable in October 2009,
subject to obtaining shareholders' approval at the forthcoming AGM, with the
prospect of a scrip dividend alternative being offered.
Earnings Per Share
The Company uses an adjusted diluted earnings per share measure to evaluate
performance. This measure takes fully diluted earnings per share and adjusts to
remove the effect of non-recurring items, both costs and benefits. It also
ensures a consistent normalised tax rate is used, thus removing the beneficial
effect of recognition of tax assets and accelerated research and development tax
credits.
Adjusted diluted earnings per share for the year were 6.04p (2008: 6.61p), a
fall of 8.6%.
Markets - Revenue Streams
Revenue Mix
The proportion of classroom training has increased again during the year, with
instructor-led training, which grew by 21% in the year, now accounting for 61%
of revenues (2008: 59%). E-Learning, which grew by 26%, now accounts for 32%
(2008: 30%). The remaining 7% of revenues (2008: 11%) relates to consultancy,
software development and sales of books and manuals.
We remain committed to the appropriate use of e-learning and instructor-led
training across all our subject areas.
Revenue by Subject
The Company continues to train in a range of hard business skill subjects.
During 2008/9, PRINCE2(TM) and other project management training significantly
outperformed all other subjects to grow by almost 60%. During this period, ILX
Group has won significant market share and is now the global market leader for
PRINCE2(TM) training.
The key markets at present are as follows.
PRINCE2(TM) and other Project Management
This area provided 53% of group revenues (2008: 40%) in the year.
We train to both PRINCE2(TM) Foundation and PRINCE2(TM) Practitioner level, as
well as in qualifications such as the APM Introductory Certificate in Project
Management, Managing Successful Programmes, and general project management.
Training is provided to a wide range of corporate customers spread across the
public and private sector. In addition, sales of distance learning and open
programme places direct to individuals have soared during the year and now
account for around 30% of revenues.
Our ability to offer a full range of e-learning and distance learning products,
as well as public and custom classroom training sessions, and consultancy,
remains unique in the marketplace and has been key in cementing our position as
the lead PRINCE2(TM) supplier. The company launched a fully interactive
accredited PRINCE2(TM) Practitioner e-learning product in February, which
contributed significantly to year end sales. PRINCE2(TM) revenues grew nearly
60% in a year in which saw many of our competitors struggle.
ITIL(TM) and Service Management
9% of group revenues (2008: 10%) in the year came from ITIL(TM), the IT service
management qualification, and related service management training.
As with PRINCE2(TM) and project management, training is provided to a wide range
of customers across public and private sectors, and is delivered through both
classroom training and e-learning products.
The major change in the ITIL(TM) qualification from version 2 to version 3,
which took place in 2007/8, provided us with a major opportunity to demonstrate
market leadership. Our ITIL v3(TM) products, both classroom and e-Learning, were
first to market, and additional courses have been developed to highlight the
transition from version 2 to version 3.
ITIL(TM) remains a core part of our offering but with the market still adjusting
to the new version, sales remained relatively flat during the year, growing by
just 4%.
Finance for Professionals and Non-Financial Managers
This market, serviced primarily by the Corporate Training Group, accounted for
33% (2008: 44%) of revenues.
A wide range of subjects is covered including Accounting and Analysis, Corporate
Finance, Company Valuation, Financial Modelling, Investment Management,
Financial Products and Markets, and Regulation.
We train at various levels from major graduate training programmes right up to
managing director level. Customers include a number of major investment banks as
well as other financial institutions and some corporates and professional firms.
It has been a difficult year for this revenue stream, which has seen revenues
fall by 11% overall.
We continue with the provision of customised e-learning solutions for
multi-national and global organisations, and have developed additional
e-learning products to service this market. This is expected to ensure our
offerings to key clients remain cost-effective in what is currently a difficult
period for all of them.
We remain one of the leaders in this marketplace but it is a market which is
likely to shrink further before it recovers.
Other Revenue Streams
Bespoke software development accounted for a small revenue stream and continues
to be undertaken in certain circumstances for key customers.
IT and Migration training also contributed but suffered from the economic
climate, with customers putting off software transition plans with a resulting
knock-on effect on the training requirement. Accordingly, we ceased operations
in this area on a stand alone basis.
There are still opportunities to generate revenues from existing clients
utilising our bespoke development capability, as well as to repurpose the
existing product suite to support business elsewhere in the group.
Markets - Prospects
Market Outlook
Even in times of recession demand for hard skills training tends to remain
robust. Nevertheless the landscape for the next twelve months will be
particularly challenging given the depth and global nature of this recession.
All the major investment banks which have historically provided considerable
training revenue, particularly in the summer graduate training months, have
continued to book significant sums for 2009/10, but these numbers are in many
cases materially reduced. The market is very fragmented and its size is
difficult to determine, but we believe that we continue to gain market share.
In the short to medium term, we expect the financial services training market to
contract significantly. This will clearly impact revenues from Corporate
Training Group, which as previously noted fell 37% in the second half of 2008/9.
Commensurate action will include driving revenue-generating initiatives both
abroad and in the corporate sector.
The IT and project management training market is less dramatically affected, but
our revenue growth of 40% in this area last year in difficult economic
conditions is a clear indication of how we have grown in stature, and obtained
significant market share, when many competitors are struggling. The annual IT
Skills Research survey recently placed ILX as number 8 (up from number 14 last
year) in the Top 50 providers of IT and related training, which is a very
pleasing result.
The PRINCE2(TM) methodology is undergoing a significant update to PRINCE2
2009(TM), which will provide particular challenges to the whole industry. We
expect to be in a strong position to deal with and benefit from this update.
We expect our market-leading e-learning products, and flexible classroom
training business model, to hold us in good stead for the coming year. Trading
conditions will however remain difficult.
Operations
During the year, the Company continued to operate as two divisions, Best
Practice Group, run by Managing Director Eddie Kilkelly, and Corporate Training
Group. As previously announced, Peter Evans, formerly the Managing Director of
Corporate Training Group, joined the Board as Strategic Business Development
Director in January 2009.
Given the change in landscape for 2009/10, we have made a number of changes to
integrate the businesses further and to address our cost base. Since the year
end, Eddie Kilkelly has been promoted to the post of Chief Operating Officer, a
role which carries the responsibility for both divisions and a remit to
integrate the sales and operations of the two businesses.
Summary and Prospects
As mentioned above, 2009/10 will be a very different year for the training
industry. However, I believe the Company is well positioned to respond to, and
operate in, the new environment, building on the work we have achieved to date
even though there are still challenges to be overcome.
We believe our strategy of continuing to build a sizeable training and software
company in the hard skills business training market is the right one. In
2009/10 we look forward to consolidating our position further.
Ken Scott
Chief Executive
22 June 2009
Consolidated Income Statement
For the Year ended 31 March 2009
+------------------------------------------+--------+--------------+-------------+
| | | Year ended | Year ended |
| | | 31.3.2009 | 31.3.2008 |
| | | Unaudited | Audited |
+------------------------------------------+--------+--------------+-------------+
| | Notes | GBP'000 | GBP'000 |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Revenue | 3 | 15,582 | 13,312 |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Cost of sales | | (7,954) | (6,513) |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Gross profit | | 7,628 | 6,799 |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Administrative and | | (5,584) | (4,640) |
| distribution expenses | | | |
| excluding depreciation | | | |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Earnings before interest, tax | | 2,044 | 2,159 |
| and | | | |
| depreciation | | | |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Depreciation | | (127) | (127) |
+------------------------------------------+--------+--------------+-------------+
| Impairment | | (2,360) | - |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Operating (loss) / profit | 3 & 4 | (443) | 2,032 |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| Interest receivable and similar income | | 16 | 16 |
+------------------------------------------+--------+--------------+-------------+
| Interest payable and similar charges | | (579) | (554) |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| (Loss) / Profit before tax | | (1,006) | 1,494 |
+------------------------------------------+--------+--------------+-------------+
| Tax | | (420) | (460) |
+------------------------------------------+--------+--------------+-------------+
| (Loss) / Profit for the | | (1,426) | 1,034 |
| year attributable | | | |
| to equity shareholders | | | |
+------------------------------------------+--------+--------------+-------------+
| | | | |
+------------------------------------------+--------+--------------+-------------+
| (Loss) / Earnings per share: | | | |
+------------------------------------------+--------+--------------+-------------+
| Basic | 5 | (7.35p) | 5.33p |
+------------------------------------------+--------+--------------+-------------+
| Diluted | 5 | (6.97p) | 5.27p |
+------------------------------------------+--------+--------------+-------------+
Consolidated Balance Sheet
As at 31 March 2009
+--------------------------------------------+--------------+-------------+
| | As at | As at |
| | 31.3.2009 | 31.3.2008 |
| | Unaudited | Audited |
+--------------------------------------------+--------------+-------------+
| Assets | GBP'000 | GBP'000 |
+--------------------------------------------+--------------+-------------+
| Non-current assets | | |
+--------------------------------------------+--------------+-------------+
| Property, plant and equipment | 184 | 206 |
+--------------------------------------------+--------------+-------------+
| Intangible assets | 21,006 | 23,129 |
+--------------------------------------------+--------------+-------------+
| Deferred tax asset | - | 77 |
+--------------------------------------------+--------------+-------------+
| Total non-current assets | 21,190 | 23,412 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Current assets | | |
+--------------------------------------------+--------------+-------------+
| Trade and other receivables | 3,191 | 3,464 |
+--------------------------------------------+--------------+-------------+
| Cash and cash equivalents | 96 | 994 |
+--------------------------------------------+--------------+-------------+
| Total current assets | 3,287 | 4,458 |
+--------------------------------------------+--------------+-------------+
| Total assets | 24,477 | 27,870 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Current liabilities | | |
+--------------------------------------------+--------------+-------------+
| Trade and other payables | (2,778) | (3,249) |
+--------------------------------------------+--------------+-------------+
| Deferred consideration | - | (1,000) |
+--------------------------------------------+--------------+-------------+
| Tax liabilities | (946) | (694) |
+--------------------------------------------+--------------+-------------+
| Bank loans and facilities | (1,287) | (1,250) |
+--------------------------------------------+--------------+-------------+
| Total current liabilities | (5,011) | (6,193) |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Non-current liabilities | | |
+--------------------------------------------+--------------+-------------+
| Derivative financial instruments | (210) | (39) |
+--------------------------------------------+--------------+-------------+
| Bank loans | (3,500) | (2,750) |
+--------------------------------------------+--------------+-------------+
| Total non-current liabilities | (3,710) | (2,789) |
+--------------------------------------------+--------------+-------------+
| Total liabilities | (8,721) | (8,982) |
+--------------------------------------------+--------------+-------------+
| Net assets | 15,756 | 18,888 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Equity | | |
+--------------------------------------------+--------------+-------------+
| Issued share capital | 1,939 | 1,939 |
+--------------------------------------------+--------------+-------------+
| Share premium | 11,802 | 11,804 |
+--------------------------------------------+--------------+-------------+
| Shares to be issued - deferred | - | 1,500 |
| consideration | | |
+--------------------------------------------+--------------+-------------+
| Own shares in trust | (1,825) | (1,825) |
+--------------------------------------------+--------------+-------------+
| Share option reserve | 115 | 303 |
+--------------------------------------------+--------------+-------------+
| Buyback reserve | 1,178 | 1,178 |
+--------------------------------------------+--------------+-------------+
| Retained earnings | 2,547 | 3,989 |
+--------------------------------------------+--------------+-------------+
| Total equity | 15,756 | 18,888 |
+--------------------------------------------+--------------+-------------+
The financial statements were approved by the board of directors and authorised
for issue on 22 June 2009.
Consolidated Cash Flow Statement
For the Year ended 31 March 2009
+--------------------------------------------+--------------+-------------+
| | Year ended | Year ended |
| | 31.3.2009 | 31.3.2008 |
| | Unaudited | Audited |
+--------------------------------------------+--------------+-------------+
| | GBP'000 | GBP'000 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| (Loss) / Profit from operations | (443) | 2,032 |
+--------------------------------------------+--------------+-------------+
| Adjustments for: | | |
+--------------------------------------------+--------------+-------------+
| Depreciation | 127 | 127 |
+--------------------------------------------+--------------+-------------+
| Goodwill impairment | 2,360 | - |
+--------------------------------------------+--------------+-------------+
| Share option charge | 59 | 45 |
+--------------------------------------------+--------------+-------------+
| Movement in trade and other receivables | 238 | (796) |
+--------------------------------------------+--------------+-------------+
| Movement in trade and other payables | (522) | 1,759 |
+--------------------------------------------+--------------+-------------+
| Cash generated from operating activities | 1,819 | 3,167 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Interest paid | - | (21) |
+--------------------------------------------+--------------+-------------+
| Tax paid | (14) | (137) |
+--------------------------------------------+--------------+-------------+
| Net cash generated from operating | 1,805 | 3,009 |
| activities | | |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Investing activities | | |
+--------------------------------------------+--------------+-------------+
| Interest received | 16 | 16 |
+--------------------------------------------+--------------+-------------+
| Proceeds on disposal of property and | - | 7 |
| equipment | | |
+--------------------------------------------+--------------+-------------+
| Purchases of property and equipment | (105) | (108) |
+--------------------------------------------+--------------+-------------+
| Expenditure on product development | (230) | (350) |
+--------------------------------------------+--------------+-------------+
| Acquisition of subsidiaries (net of cash | (2,518) | (2,532) |
| acquired) | | |
+--------------------------------------------+--------------+-------------+
| Net cash used by investing activities | (2,837) | (2,967) |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Financing activities | | |
+--------------------------------------------+--------------+-------------+
| Increase in borrowings | 192 | 780 |
+--------------------------------------------+--------------+-------------+
| Net cost of share issue | (2) | (8) |
+--------------------------------------------+--------------+-------------+
| Interest and refinancing costs paid | (388) | (540) |
+--------------------------------------------+--------------+-------------+
| Dividend paid | (263) | (123) |
+--------------------------------------------+--------------+-------------+
| Net cash from financing activities | (461) | 109 |
+--------------------------------------------+--------------+-------------+
| Net change in cash and cash equivalents | (1,493) | 151 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Cash and cash equivalents at start of year | 994 | 843 |
+--------------------------------------------+--------------+-------------+
| Cash and cash equivalents at end of year | (499) | 994 |
+--------------------------------------------+--------------+-------------+
| | | |
+--------------------------------------------+--------------+-------------+
| Cash and cash equivalents represented by: | | |
+--------------------------------------------+--------------+-------------+
| Overdraft and invoice finance facilities | (595) | - |
+--------------------------------------------+--------------+-------------+
| Cash at bank | 96 | 994 |
+--------------------------------------------+--------------+-------------+
| | (499) | 994 |
+--------------------------------------------+--------------+-------------+
Consolidated Statement of Changes in Equity
For the Year ended 31 March 2009
+---------------------------------------------+---------------+--------------+
| | Year ended | Year ended |
| | 31.3.2009 | 31.3.2008 |
| | Unaudited | Audited |
+---------------------------------------------+---------------+--------------+
| | GBP'000 | GBP'000 |
+---------------------------------------------+---------------+--------------+
| | | |
+---------------------------------------------+---------------+--------------+
| Balance at start of year | 18,888 | 19,440 |
+---------------------------------------------+---------------+--------------+
| (Loss) / Profit for the year | (1,426) | 1,034 |
+---------------------------------------------+---------------+--------------+
| Dividends paid | (263) | (123) |
+---------------------------------------------+---------------+--------------+
| Options exercised | - | 1 |
+---------------------------------------------+---------------+--------------+
| Options granted | 59 | 45 |
+---------------------------------------------+---------------+--------------+
| Deferred consideration | (1,500) | (1,500) |
+---------------------------------------------+---------------+--------------+
| Costs relating to share issue | (2) | (9) |
+---------------------------------------------+---------------+--------------+
| Balance at end of year | 15,756 | 18,888 |
+---------------------------------------------+---------------+--------------+
Notes to the Financial Statements
For the year ended 31 March 2009
1Results
The financial information set out in this unaudited preliminary announcement
does not constitute statutory accounts as defined in Section 240 of the
Companies Act 1985.
The summarised balance sheet at 31 March 2009 and the
summarised income statement, summarised cash flow statement and associated notes
for the year then ended have been extracted from the Group's financial
statements.
The comparative financial information for the year ended 31 March 2008 is
based on an abridged version of the Group's published financial statements for
that period, which contained an unqualified audit report and which have been
filed with the Registrar of Companies.
The statutory accounts for 2009 will be finalised on the basis of the
financial information presented in this unaudited preliminary announcement and
will be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
2Accounting policies
The prinicipal accounting policies of the Group are set out in the Group's 2008
Annual Report and Financial Statements. The policies have remained unchanged for
the year ended 31 March 2009.
3Segment reporting
The Group operates in one business segment; that of supply of training and
consultancy solutions. The operations are monitored by the geographic regions of
UK, Mainland Europe, North America, and Other (Asia, Middle and Far East,
Africa, and South America).
+------------------------+-------------+----------+----------+----------+----------+
| For the year ended | UK, | Mainland | North | Other | Total |
| 31 March 2009 | Republic of | Europe | America | | |
| | Ireland and | | and | | |
| | Channel | | Canada | | |
| | Islands | | | | |
+------------------------+-------------+----------+----------+----------+----------+
| | GBP | GBP | GBP | GBP | GBP |
+------------------------+-------------+----------+----------+----------+----------+
| | | | | | |
+------------------------+-------------+----------+----------+----------+----------+
| Segment revenue | 12,952 | 1,282 | 464 | 884 | 15,582 |
+------------------------+-------------+----------+----------+----------+----------+
| Segment result | 6,340 | 628 | 227 | 433 | 7,628 |
+------------------------+-------------+----------+----------+----------+----------+
| Central costs | | | | | (8,071) |
+------------------------+-------------+----------+----------+----------+----------+
| Operating loss | | | | | (443) |
+------------------------+-------------+----------+----------+----------+----------+
| | | | | | |
+------------------------+-------------+----------+----------+----------+----------+
| For the year ended | UK, | Mainland | North | Other | Total |
| 31 March 2008 | Republic of | Europe | America | | |
| | Ireland and | | and | | |
| | Channel | | Canada | | |
| | Islands | | | | |
+------------------------+-------------+----------+----------+----------+----------+
| | GBP | GBP | GBP | GBP | GBP |
+------------------------+-------------+----------+----------+----------+----------+
| | | | | | |
+------------------------+-------------+----------+----------+----------+----------+
| Segment revenue | 11,798 | 968 | 228 | 318 | 13,312 |
+------------------------+-------------+----------+----------+----------+----------+
| Segment result | 6,027 | 494 | 116 | 162 | 6,799 |
+------------------------+-------------+----------+----------+----------+----------+
| Central costs | | | | | (4,767) |
+------------------------+-------------+----------+----------+----------+----------+
| Operating profit | | | | | 2,032 |
+------------------------+-------------+----------+----------+----------+----------+
All assets and liabilities are maintained and managed centrally.
4Non-recurring costs
During the year, the Company incurred non-recurring costs as follows:
+------------------------------------------+--------------+--------------+
| | Year ended | Year ended |
| | 31.3.2009 | 31.3.2008 |
+------------------------------------------+--------------+--------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+--------------+--------------+
| Included within administrative expenses | | |
+------------------------------------------+--------------+--------------+
| Restructuring costs | - | 179 |
+------------------------------------------+--------------+--------------+
| Other non-trading costs | - | 74 |
+------------------------------------------+--------------+--------------+
| Exceptional bad debt provisions | 176 | - |
+------------------------------------------+--------------+--------------+
| | 176 | 253 |
+------------------------------------------+--------------+--------------+
| | | |
+------------------------------------------+--------------+--------------+
| Included within operating profit | | |
+------------------------------------------+--------------+--------------+
| Goodwill impairment | 2,360 | - |
+------------------------------------------+--------------+--------------+
| | | |
+------------------------------------------+--------------+--------------+
| Included within interest payable | | |
+------------------------------------------+--------------+--------------+
| Financing costs | 170 | 111 |
+------------------------------------------+--------------+--------------+
The exceptional bad debt provisions relate principally to full provisions which
have been made in respect of amounts owed by Lehman Brothers and Kaupthing for
services provided. The Company has seen negligible levels of bad debt in
previous years.
The goodwill impairment relates to the write-off of the goodwill which arose on
the acquisition of Mount Lane Implementation and Training Solutions Ltd in
November 2005.
The financing costs relate to the revaluation of the Company's interest rate
swap agreement (2008: GBP111,000 related to the early settlement of the
Company's debt finance with HSBC).
5(Loss) / Earnings per share
(Loss) / Earnings per share is calculated by dividing loss attributable to
shareholders of GBP1,426,000 (2008: profit of GBP1,034,000) by the weighted
average number of shares in issue during the year.
Diluted earnings per share is adjusted for outstanding share options and the
average option price, using an average interest saving of 8.0% (2008: 8.0%).
To allow shareholders to gain a better understanding of the underlying trading
performance of the Company, an adjusted earnings per share and adjusted diluted
earnings per share has been calculated using an adjusted profit after taxation
before post-taxation non-recurring costs.
+------------------------------------------+---------------+--------------+
| | Year ended | Year ended |
| | 31.3.2009 | 31.3.2008 |
+------------------------------------------+---------------+--------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| Post tax (loss) / profit for the year | (1,426) | 1,034 |
+------------------------------------------+---------------+--------------+
| After tax interest on | 6 | 17 |
| outstanding options | | |
| multiplied by exercise price | | |
+------------------------------------------+---------------+--------------+
| (Loss) / Profit for diluted earnings per | (1,420) | 1,051 |
| share | | |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| Post tax (loss) / profit for the year | (1,426) | 1,034 |
+------------------------------------------+---------------+--------------+
| Add back actual tax charge | 420 | 460 |
+------------------------------------------+---------------+--------------+
| Strip out non-recurring items | 2,706 | 364 |
+------------------------------------------+---------------+--------------+
| Normalised tax charge | (476) | (557) |
+------------------------------------------+---------------+--------------+
| Profit for adjusted earnings per share | 1,224 | 1,301 |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| | GBP'000 | GBP'000 |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| Profit for adjusted earnings per share | 1,224 | 1,301 |
+------------------------------------------+---------------+--------------+
| After tax interest on outstanding | 6 | 17 |
| options multiplied by exercise price | | |
+------------------------------------------+---------------+--------------+
| Profit for adjusted diluted earnings per | 1,230 | 1,318 |
| share | | |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| | Number | Number |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| Weighted average shares | 19,390,762 | 19,390,598 |
+------------------------------------------+---------------+--------------+
| Outstanding share options | 972,750 | 557,125 |
+------------------------------------------+---------------+--------------+
| Weighted average shares for diluted | 20,363,512 | 19,947,723 |
| earnings per share | | |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| | | |
+------------------------------------------+---------------+--------------+
| Basic earnings per share | (7.35p) | 5.33p |
+------------------------------------------+---------------+--------------+
| Diluted earnings per share | (6.97p) | 5.27p |
+------------------------------------------+---------------+--------------+
| Adjusted earnings per share | 6.31p | 6.71p |
+------------------------------------------+---------------+--------------+
| Adjusted diluted earnings per share | 6.04p | 6.61p |
+------------------------------------------+---------------+--------------+
6Dividend
A final dividend of 1.5 pence per share in respect of the year ended 31 March
2008 was paid on 22 August 2008. This dividend is reflected in these financial
statements.
The directors recommend the payment of a final dividend of 1.5 pence per share
in respect of the year ended 31 March 2009, subject to shareholders' approval
being obtained at the Company's Annual General Meeting on 25
September 2009. This dividend will be paid on 30 October 2009 to shareholders on
the register at 4 September 2009. The ordinary shares will become ex-dividend on
2 September 2009. These financial statements do not reflect this dividend
payable, which will be accounted for in the statement of changes in equity as an
appropriation of retained earnings, in the year ending 31 March 2010.
7Annual Report
The annual report will be sent to shareholders shortly and will also be
available from the Company's website www.ilxgroup.com and from the Company's
registered office at 1 London Wall, London EC2Y 5AB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKCKKABKDQAD
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