Final Results
For immediate release 1 July 2009
ANITE PLC
Results for the year ended 30 April 2009
Anite plc ('Anite' or 'the Company'), the international software and solutions company, today announces its results for the year ended 30 April 2009.
Financial highlights (adjusted)1
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Revenue of £90.1m (2008: £91.6m), at constant currency revenue was £82.6m
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EBITDA £25.8m (2008: £24.7m)
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Operating profit of £20.0m (2008: £18.7m):
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benefited from £2.3m early settlement from MyTravel
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benefited by £3.9m from currency movements
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Non-operational property costs increased by £0.8m
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Operating margin of 22.2% (2008: 20.4%)
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Profit before tax of £18.1m (2008: £16.7m)
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Basic earnings per share 4.4p (2008: 3.3p)
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Final dividend of 0.65p per share (2008: 0.60p) making a total of 0.95p (2008: 0.875p)
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Net cash of £27.3m (2008: net debt £15.4m); this includes the impact of:
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gross cash receipt £56.8m from Anite Public Sector disposal
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£25m reduction in term loan
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£9.9m returned to shareholders through 3.0p special dividend
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part settlement of currency swap £8.9m
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Statutory results2
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Revenue from continuing operations £90.1m (2008: £92.8m)
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Profit from continuing operations before tax £6.4m (2008: £9.5m)
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Profit for the year £36.3m (2008: £13.2m)
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Basic earnings per share 11.3p (2008:3.8p)
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Diluted earnings per share 10.8p (2008: 3.7p)
Operating highlights
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Disposal of Public Sector completed on 31 October 2008
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Improved operating performance from Wireless benefited from cost cutting and favourable currency
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Stable underlying performance from Travel excluding one-off customer impacts
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72% of revenues now derived from international markets: Wireless 95%, Travel 30%
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Orders:
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intake down to £77.6m (2008: £101.8m) reflecting XL Leisure administration and significant multi-year orders in prior year
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closing order book £59.3m (2008: £69.0m)
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1 Adjusted results are for continuing operations for the year before disposed businesses, share-based payments, amortisation of acquired intangible assets and restructuring costs.
2 For a reconciliation of adjusted results highlights to reported statutory results see Financial Review.
Commenting, Christopher Humphrey, Chief Executive said:
'I expect the current trading year to be challenging, particularly in the first half, given the impact of our additional investment in LTE and the effect of customer changes in Travel. The longer-term outlook for our new travel system and its international market, and for the growing adoption of LTE technology is, however, very positive.
'We continue to execute our strategy and I am confident that the work we will undertake during the current financial year will help us to build foundations for future growth, to ride out the prevailing economic storm and to deliver shareholder value.'
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For further information, please contact: |
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Anite plc |
www.anite.com |
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Christopher Humphrey, Chief Executive |
01753 804000 |
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Smithfield |
020 7360 4900 |
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Reg Hoare/Tania Wild/Will Henderson |
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An analysts' meeting will be held today at 9.15am for 9.30am at the offices of JP Morgan Cazenove, 20 Moorgate, London, EC2R 6DA.
Print resolution images are available for the media to view and download from www.vismedia.co.uk
Notes to editors
Anite is an international software and solutions company focused on the provision of test and operational systems in the wireless market and reservation and e-commerce solutions to the leisure travel industry.
Our comprehensive solutions have developed from Anite's deep sector knowledge and are focused around the supply of Anite-owned software products. Anite provides a full range of services to its customers, including implementation, systems integration, maintenance and managed services, enabling it to maximise customer satisfaction. With its headquarters in the UK, Anite employs around 500 staff in 13 countries across Europe, America, Asia and the Middle East.
Preliminary results for the year ended 30 April 2009
All references to adjusted revenues and profits relate to continuing operations for the year before disposed businesses, share-based payments, amortisation of acquired intangible assets and restructuring costs. See the attached income statement and notes for details. A reconciliation of adjusted results to reported statutory results is given below.
Chairman's statement
Introduction
I am pleased to report a good set of results for the year. These were achieved against the background of a global recession and the changes we made to the business during 2008/09. The sale of our Public Sector Division in October 2008 was the latest, and most significant, step in our strategy of transforming the Company into a more tightly-focused software business.
We now operate in two divisions. Our Wireless business is a global leader in both handset and air interface testing and is firmly positioned at the heart of our Company. Our Travel business is the market leader for travel technology solutions in the UK and northern Europe. Both operations have a strong international presence and the Company now derives 72% (2008: 67%) of revenues from international markets (Wireless 95% (2008: 92%), Travel 30% (2008: 19%)).
Further details of the Company's performance are in the Chief Executive's review and the Financial review below.
Acquisitions and disposals
The sale of Public Sector for a gross consideration of £56.8m (net proceeds £44.8m) resulted in a net profit on the disposal of £27.6m.
Since 2004, the Company has raised £90.6m by disposing of 11 businesses and has invested £65.4m in acquiring two businesses. The disposal programme has enabled us to sharpen the focus of the Company further, and to return value to shareholders, while making selective acquisitions to strengthen our position in our chosen markets.
Strategy
Our strategy is to position Anite as a global leader in Wireless test software. The disposal of Public Sector was a major step in transforming Anite into a more focused company and of improving its long-term prospects for growth, higher margins and greater international exposure.
The Board believes that Wireless is a long-term growth market, which has high barriers to entry and limited competition in those areas in which Anite operates. This makes it possible to achieve good margins and to add value by making selective acquisitions. In Travel, following the various one-off customer changes over the past year and the strengthening of the management team, the Board believes the best strategy is to optimise the business's long-term value by continuing to strengthen and improve its market position.
In the Board's view these factors together with operational success, tempered by a reduction in the predictability and visibility of earnings, should ultimately improve the rating of Anite's shares.
Results
Adjusted revenue from continuing operations was £90.1m (2008: £91.6m). Adjusted operating profit was £20.0m (2008: £18.7m) and the adjusted operating margin was 22.2% (2008: 20.4%). The adjusted operating profit is stated before disposed businesses, share-based payments charge, amortisation of acquired intangible assets, and restructuring costs.
Revenue and profit benefited from a £2.3m early settlement of part of our contract with MyTravel. Profitability was, however, affected by a one-off £0.8m increase in legacy, non-operating property costs. The effect of currency movements during the year was to improve revenue by £7.5m and operating profit by £3.9m (based on this year's result at last year's average exchange rates). Net amortisation of research and development costs (R&D) in the year reduced profits by £1.0m (2008: £nil).
Adjusted profit before tax from continuing operations was £18.1m (2008: £16.7m) after net finance charges of £1.9m (2008: £2.0m), giving basic earnings per share (after tax) of 4.4p (2008: 3.3p). Profit for the year, including profit from discontinued operations of £31.4m (2008: £6.5m), was £36.3m (2008: £13.2m). This gives basic earnings per share of 11.3p (2008: 3.8p).
Dividend and share buyback
The Board has declared a final dividend of 0.65p per share (2008: 0.6p), making a total dividend for the year of 0.95p per share (2008: 0.875p). This dividend will be payable on 20 October 2009 to shareholders on the register at 18 September 2009.
Following the disposal of Public Sector, the Board returned £9.9m in cash to shareholders in February 2009 by means of the payment of a special dividend of 3.0p per ordinary share. This was combined with an eight for nine share consolidation that reduced the number of shares in issue to 298.6 million (2008: 338.0 million). The Board has also committed to continuing a share buyback programme worth up to £10.0m, subject to market conditions.
Balance sheet and cash
Anite has a strong balance sheet, financial flexibility and good cash resources.
Net cash of £27.3m (2008: net debt £15.4m) at the year end included the net cash proceeds of £45.5m from the disposal of Anite Public Sector, enabling us to reduce our term loan by £25.0m, the £9.9m cost of the special dividend, and an £8.9m part settlement of a currency swap.
Given the current macroeconomic conditions, the Board believes it prudent to retain a strong cash balance. In addition, in order to provide the financial flexibility to enable us to consider acquisitions, we retain total bank facilities of £45.0m, of which £25.0m remains undrawn.
The Board, management and people
During the year, a number of Board and senior management changes reflected the continuing development of the Company. Christopher Humphrey, the Group's Finance Director since 2003, was appointed Chief Executive on 1 January 2009. He replaced Steve Rowley, who had been Chief Executive since 2003.
Steve led Anite's transformation from a troubled and fragmented IT services' company to a focused international software company, culminating in the sale of Public Sector and the return of significant shareholder value. We thank him for his major contribution to the Company and wish him well in his new role at Torex.
The Board is making progress with the recruitment of a new Group Finance Director, and will announce an appointment as soon as possible.
Nigel Clifford, Chief Executive at Symbian Limited (a subsidiary of Nokia), was appointed as a Non-Executive Director on 1 April 2009. Nigel's global experience and knowledge in the mobile handset and wireless operator industries will be invaluable as we continue to progress our wireless strategy. Peter Bertram, a non-executive Director since 2004, has decided to step down from the Board during the current year once a new Finance Director has been appointed. He is Chairman or a Non-Executive Director of a number of listed companies and has made a valuable contribution as Chairman of the Audit Committee. The Board intends to appoint another Non-Executive Director in the near future.
During the year we also made a number of important senior management changes in our Wireless and Travel businesses to strengthen the teams in place and to take Anite through the next phases of its development.
On behalf of the Directors, I thank all our staff for their hard work and support during such an important year.
Summary
We expect profits for 2009/10 as a whole to be lower than in 2008/09. This will be more marked in the first half as a result of the re-basing of our Travel business and an increased customer-led one-off investment in LTE (4G).
We now have the strategy and the team in place to take us into the next phase of our transformation. We also have the financial platform and market positions from which to consolidate, invest and develop our two strong businesses in these challenging economic times.
Clay Brendish
Chairman
Chief Executive's review
Overview of the year
In my first review as Chief Executive, I am delighted to be able to report that Anite is in a robust condition. In what was an extremely challenging economic environment, our Wireless and Travel divisions both performed well in the year, while the sale of our Public Sector division was a further demonstration of our commitment to refocusing our business.
The divisional results were achieved despite the ongoing consolidation among our customers in the travel industry and the long development phase of 4G - the next-generation mobile phone technology - having an impact on our revenue. In addition, the sale of our Public Sector division enabled us to reduce our bank borrowings, to focus our resources on our core businesses and to pay a special dividend to our shareholders. As a result of the sale the group now employs fewer people and has lower sales, but margins and profits are higher than they were five years ago and our balance sheet is much stronger.
Our revenue and operating profit benefited from significant currency movements during the year, volatility which directly resulted from the global economic crisis. Currency and interest rate changes also, however, had an impact on the value of the Company's investments and hedging liabilities. In short, the sterling value of our underlying euro-denominated assets - represented by our Network Testing business - increased, but were matched by a rise in the total value of our derivative financial liabilities taken out at the time of its purchase. Delivering shareholder value continues to be imperative: during the year we returned cash to shareholders through a special dividend, increased the ordinary dividend, cancelled shares through a share consolidation and began buying back shares.
Our markets
Anite is structured into two market-facing divisions: Wireless and Travel. Wireless is further structured into two operations: Handset Testing and Network Testing. Handset Testing provides specialist systems and software to enable mobile phone manufacturers to bring new handsets and data cards to market quickly. Network Testing provides a range of systems which enable mobile phone operators to test the efficiency and effectiveness of their networks, as well as of different makes of handset, in live situations. Travel provides industry-leading reservation systems to tour operators, airline consolidators and cruise, ferry and rail companies.
Wireless
Handset Testing
Our Handset Testing business, based in Fleet, Hampshire, provides customers with a single expandable platform to test new handsets' viability, conformance with industry standards and ability to interoperate with multiple networks and other devices.
The main drivers of growth in Handset Testing are the constant changes and improvements in mobile phone technology and the number of new handset models which are launched each year. These, combined with the different configurations used by network operators, mean that before mobile phones are ready to be sold they must go through development testing to ensure functionality; conformance testing to ensure they meet industry standards; and interoperability testing (IOT) to ensure they are able to communicate with multiple networks and other devices. Older technologies do not become redundant when new generations are introduced and any new testing regime must also incorporate the means to test them.
Our strongest market has historically been in conformance testing, but we have recently strengthened our position in IOT and are working with our hardware partner, Agilent, on the development of our new system for 4G (LTE) testing. Our initial system, which has secured early market position with key LTE customers, will be replaced by an Agilent hardware-based system in due course. Full functionality will be progressively introduced during 2009 and enhanced during 2010. In common with all our competitors, the very nature of this leading - edge development programme means that risks remain around the timing and delivery of the completed products.
LTE (4G)
The introduction of next-generation devices (such as smart phones and data dongles) has created a rapidly increasing demand for data services: it is predicted that over the next five years mobile data traffic will increase 100-fold. Network operators face a limit on how much traffic their existing networks can support, yet competition from WiFi hotspots and wired broadband limits their ability to charge for data transmission at rates comparable to those for voice calls. This clearly represents a long term threat to their profitability. As a result, the network operators are constantly seeking faster, more efficient, and cheaper, ways to deliver data.
By the end of 2007, it was clear that 4G LTE (Long Term Evolution) had gained wide acceptance as the most effective and universal technology to deliver the high data capacity that is needed. LTE enables network operators to support more subscribers on their spectrum allocations at a reduced cost per bit. To date 31 major operators around the globe, including industry giants AT&T, Verizon and Vodafone, have committed to LTE for their 4G networks from 2010.
Anite has backed LTE since its inception and continues to invest strongly in products to support its introduction. Working with key mobile equipment manufacturers our initial LTE testing solution is already being used to test around ten devices. We expect to be able to supply our customers with our proprietary testing system during the current financial year and for LTE to begin to make a significant impact on our revenue from 2010/11.
Performance
We achieved a growth in profits this year, despite a minor decline in revenue from legacy products and an increase in development costs for our 4G testing solutions. Since a large proportion of Handset Testing's revenue is in US dollars and euros - while the majority of its cost base is in sterling - the business benefited from the appreciation of the US dollar and the euro against sterling.
During the year, we made good progress in the development of our software for testing 4G devices and are already supplying key customers with our own initial systems. We also restructured the business: new management and sales executives have resulted in the business becoming more market facing and we now have established regional directors in each major geographic area: Europe and the Middle East, Asia and the Americas.
We also strengthened the Handset Testing management team with a number of senior appointments, including Mike Bonin, formerly Managing Director of TEMS, the network testing division of Ericsson, as Managing Director.
Strategy
Our objective is to complete our basic products for testing 4G devices and to supply customers with a common platform which has been customised to their particular needs for development testing, conformance testing and interoperability testing.
Outlook
The current year will be affected by the continuing cyclical lull between testing different generations of handsets and by a one-off additional customer-led £4m investment that we are making in our LTE solutions. Following the strong take-up of smart phones and the consequent growth of data revenues there is undoubtedly a very strong case for LTE rather than any other technology and, by the end of the current financial year, we expect to have made further significant progress in the development of our offer and to have generated additional revenues from LTE in the final quarter.
It is currently not possible to predict the rate of growth and customers' take-up of next-generation devices, but we are confident that our proprietary testing equipment will be in demand. While we do not expect to see a significant return on our investment in the technology until 2010/11, it will ultimately broaden our market and will confirm our position as one of the leaders in testing 4G devices.
Network Testing
Our Network Testing business (Nemo), based in Oulu, Finland, provides the measurement tools to enable mobile network operators to verify, test and improve coverage and quality; to test the effect of new services on existing networks; and to compare the performance of different manufacturers' mobile phones in the same environments to enable mobile network operators to choose the best handsets to endorse.
Performance
In a challenging market, we defied the general trend and improved our market position and profitability by winning new customers. The introduction of 3G in China brought new business, and we also increased our market share elsewhere in Asia and in other emerging markets. Nevertheless, following the general decline in economic conditions, the second half of the year was characterised by customers reducing their operating budgets and making short-term deferrals of expenditure.
We finished the year with an increase in profits, which, as elsewhere in Anite's business, was helped by the translation of euro-denominated profits into sterling.
Strategy
We focus on winning and retaining customers by being first with new technology, by providing excellent after-sales service and technical support, and by maintaining strong relationships direct with customers or through local distributors on three continents.
Outlook
In the short term, we predict that the visibility of sales and customers' budgets will become more uncertain and this, combined with the recent trend of a weakening euro, is likely to result in the current financial year being more challenging than that of 2008/09. In the longer term, we expect growth to continue in developing countries, particularly in the emerging markets of Africa, India and Latin America.
In common with Handset Testing, each evolution of technology creates a demand for new testing and, as mobile phone use expands around the world and technology continues to develop, the longer-term prospects for our Network Testing business are positive.
Travel
Our travel division, based in Slough, Berkshire, is a leading supplier of reservation, content management and Customer Relationship Management (CRM) software for holiday companies, airline consolidators and packaged holiday operators.
Performance
We continued to make good progress in our relationship with TUI Germany, now Europe's leading travel group, during the year. We are putting into live operation the second phase of our contract with the company - implementing @comRes reservations software across its operations in central Europe - and have recently been contracted by TUI to build the third phase. In addition, since the year end we have signed an initial contract for @comRes with REWE, Germany's third-largest tour operator.
Significant projects in this business tend to come in uneven blocks and our results for the year should be viewed against the exceptionally high value multi-year orders taken in the previous year. Revenue and profit in 2008/09 were better than expected, but were influenced by a number of one-off events.
The economic climate put pressure on end consumers' disposable incomes with the result that travel operators were also under pressure. In September 2008 our customer XL, which had been the UK's third-largest tour operator, went into administration.
In 2007, major consolidation took place in the UK when Thomson (TUI) and First Choice merged, and Thomas Cook acquired MyTravel. TUI achieved synergies by bringing Thomson and First Choice together and moving them onto the reservations system which was already in use at Thomson, and Thomas Cook moved the MyTravel business to the Thomas Cook system. Since First Choice and MyTravel were both our customers these changes had an impact on our results. The termination of the MyTravel contract added £2.3m to profit, but the loss of the two companies as clients will affect future revenues.
Since 2004 the Travel business unit had supplied managed IT services to Norwich Union (NU) for one of its financial services products; this was non-core business for us which had grown from a small initial contract. At the end of the financial year, NU moved this product platform to another financial services provider. This, too, will reduce revenue and profit in 2009/10.
We re-energised our Travel business when we strengthened its management team during the year and appointed Mike Kingswood, formerly Managing Director of our Public Sector business, as Managing Director. This has not only improved leadership, but has also revitalised the division's strategic direction.
Strategy
Over the past three years we have invested heavily in @comRes, our comprehensive and versatile browser-based reservations system. Our objective is to capitalise on its ability to handle fixed and flexible packaging, component-based travel, dynamic packaging and all specialist operations from a single system, to enable us to continue our overseas expansion. In the short term, we foresee our growth as being in Germany, and central and eastern Europe. We already operate a sales office in Cologne, Germany, and are strengthening our resources in that country.
In addition, we plan to migrate customers who use our legacy ATOP system to @comRes, and also to change our revenue model to one in which we licence the system to customers on an annual basis. This will have benefits on both sides: it will reduce the initial capital cost for customers and will augment our recurring revenue in the future.
Outlook
Business failures and consolidation are undoubtedly putting the travel industry under pressure. On a pro-forma basis, we estimate that the effect of the one-off customer events detailed above has reduced Travel's revenues by £11m, and operating profits by £6m on an annualised basis. We aim partly to mitigate this reduction through new business and the migration of existing customers from ATOP to @comRes.
In the medium term we are confident that we will be able to accelerate the installation rate of our increasingly configurable and feature-rich @comRes product at customers in the UK and overseas. It is scalable and robust, and we have a proven reputation for developing and installing software that works. We believe that customers' increasing confidence in our @comRes software will enable us to maximise the shareholder value that is inherent in this product.
Group strategy
Our longer-term strategy is unchanged - to put Wireless at the heart of our business - but we are currently committed to operating two successful divisions: Wireless and Travel. We will continue to look at world markets for the organic growth of both businesses, to improve margins and to maintain strong operational cash flow.
Equally, we will continue to invest in the development of our market-leading software, and will take advantage of our strong balance sheet and financial position to invest in carefully-considered complementary acquisitions, particularly in the network testing market.
Group outlook
I expect the current trading year to be challenging, particularly in the first half, given the impact of our additional investment in LTE and the effect of customer changes in Travel. The longer-term outlook for our new travel system and its international market and for the growing adoption of LTE technology is, however, very positive.
We continue to execute our strategy and I am confident that the work we will undertake during the current financial year will help us to build foundations for future growth, to ride out the prevailing economic storm and to deliver shareholder value.
Christopher Humphrey
Chief Executive
Financial review
The Group continued to progress its strategy during the year to improve the quality of its earnings.
The disposal of its Public Sector business provided the funds to reduce its borrowing, to pay a special dividend to shareholders and to focus on its core Wireless and Travel businesses.
Overview
We reported good underlying margins in our businesses, strong cash generation and a reduction in debt.
The Group disposed of its Public Sector business in October 2008 for a total consideration of £56.8m in cash, including additional consideration from a final working capital adjustment of £2.5m, generating a profit on disposal of £27.6m after costs. As a result the Group reduced its bank borrowings (term loan) by £25.0m, returned £9.9m to shareholders by way of a special dividend and share consolidation and part-settled a cross-currency swap for £8.9m, further details of which are shown below. The adjusted results for the continuing operations (excluding disposed businesses, amortisation of acquired intangible assets, share-based payments and restructuring costs) were as follows:
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Revenue fell by 1.6% to £90.1m (2008: £91.6m)
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Operating profit increased by 6.9% to £20.0m (2008: £18.7m) benefiting from the one-off MyTravel contract settlement in Travel, strong cost control and the general weakness of sterling in the period
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Profit before taxation improved by 8.4% to £18.1m (2008: £16.7m)
Currency effect
During the year there were significant movements in foreign currency exchange rates. The average rate for the US dollar strengthened 16.4% against sterling from £1= $2.01 to £1 = $1.68 and the average rate of the euro strengthened by 15.0% from £1= €1.40 to €1.19, both of which had a favourable transactional effect on our trading results. The effect of these changes was to improve revenue by £7.5m and operating profit by £3.9m on a constant currency basis. Also on a constant currency basis, revenues were £82.6m and operating profits were £16.1m. The impact on divisional results is shown in the divisional overviews below. In the current financial year, we have budgeted using the following average exchange rates: £1= $1.50 and £1= €1.15.
Group KPIs
The Group uses a variety of key performance indicators (KPIs) across its various businesses as well as at Group level. The most important of these for the adjusted results1 at Group level for continuing operations are:
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Group KPIs |
2009 |
2008 |
2007 |
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Order intake, £m |
77.6 |
101.8 |
112.5 |
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Revenue, £m |
90.1 |
91.6 |
92.2 |
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Adjusted operating profit1, £m (note 2.3) |
20.0 |
18.7 |
22.5 |
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Operating margin, % |
22.2 |
20.4 |
24.4 |
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EBITDA, £m |
25.8 |
24.7 |
27.7 |
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Free cash2 , £m |
19.0 |
16.0 |
6.8 |
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R&D P&L expense, £m (note 2.4) |
10.8 |
12.7 |
10.1 |
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R&D total spend3, £m |
9.8 |
12.7 |
11.6 |
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Headcount (closing) |
492 |
520 |
546 |
1 Continuing operations before disposed businesses, share-based payments, amortisation of acquired intangible assets and restructuring costs.
2 Free cash represents net cash generated from operating activities less capital expenditure and capitalised development costs.
3 R&D total spend is the total development cost before the effect of capitalisation/amortisation. Net amortisation of research and development costs (R&D) in the year reduced profits by £1.0m (2008: £nil).
Divisional overview
The two remaining operating divisions both improved their profitability during the year, with Travel benefiting from a one-off settlement of the MyTravel contract and Wireless from the weakness in sterling.
Wireless
Anite provides specialist test systems and software which enable manufacturers of mobile phones to bring their new products to market quickly and mobile operators to optimise their networks.
| Wireless KPIs - based on adjusted results1 |
2009 |
2008 |
2007 |
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Orders, £m |
53.7 |
61.0 |
68.4 |
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Revenue, £m |
59.0 |
60.4 |
64.7 |
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Adjusted operating profit1, £m |
14.0 |
11.7 |
18.5 |
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Operating margin2 % |
23.7 |
19.4 |
28.6 |
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EBITDA, £m |
18.4 |
17.9 |
24.1 |
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R&D P&L expense, £m |
10.8 |
12.2 |
9.6 |
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R&D total spend3, £m |
9.8 |
12.2 |
11.1 |
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Headcount (closing) |
269 |
265 |
283 |
1 Continuing operations before disposed businesses, share-based payments, amortisation of acquired intangible assets and restructuring costs.
2 Operating margin represents adjusted operating profit divided by revenue
3 R&D total spend is the total development cost before the effect of capitalisation/amortisation.
Overall Wireless orders were down 12.0% in the year, reflecting an anticipated reduction resulting from weaker market conditions in the Wireless market. In addition a number of three-year maintenance contracts, totalling £6.4m, which were won in 2007/08 were not repeated this year. Revenues were marginally down by 2.3% although operating profits, helped by the weaker pound, were up 19.7%.
The effect of capitalisation of R&D under IAS 38 had the effect of reducing profits by £1.0m (net amortisation), compared with the previous year, in which net capitalised R&D had no net effect.
The currency effect of exchange rate fluctuations in the US dollar had the effect of improving overall Wireless revenues by £6.7m and operating profits by £3.3m.
Handset testing
In Handset Testing, as anticipated, fewer new system sales were achieved, as customers generally now have sufficient 2G and 3G testing capability, but maintenance revenues with existing customers remained robust. Consolidation among chip set manufacturers reduced the scale of that customer base, which is being replaced in part by manufacturers of new smart devices. There was a recovery in sales in North America, but European and Asian performance was weaker.
To mitigate the impact of these trends on profitability, while at the same time taking our partnership with Agilent Technologies into consideration, we made a number of changes to the business to increase focus and reduce costs.
Network Testing (Nemo)
In Network Testing, technology upgrades and a growing amount of business coming from emerging markets contributed to revenue growth, as did the effect of US$/€ exchange rates. In mature markets, the launch and take-up by consumers of new smart devices that use more data is resulting in operators needing to upgrade their infrastructure.
The network testing market continues to be extremely competitive and order book visibility is generally very short, but the business has excellent products - on which investment continues - and improved routes to market. Overall, Nemo's market position has improved during the year and we believe that we can increase our network test presence further, both organically and through acquisition.
Travel
Anite is the leading provider of travel technology solutions for tour operators, low-cost airlines, ferry and holiday park operators in the UK and Europe. Customers can choose to license our products with applications support, then either host the system themselves, or - as many do - take advantage of our fee based service which provides hosting and 24/7 system availability from our secure data centre. Customer relationships are long term and contracts typically operate over 3-7 years.
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Travel KPIs - based on adjusted results1 |
2009 |
2008 |
2007 |
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Orders, £m |
23.9 |
40.8 |
44.1 |
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Revenue, £m |
31.1 |
31.2 |
27.5 |
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Adjusted operating profit1, £m |
9.5 |
8.5 |
6.4 |
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Operating margin2, % |
30.5 |
27.2 |
23.3 |
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EBITDA, £m |
10.4 |
8.8 |
6.6 |
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R&D P&L expense and total spend, £m |
- |
0.5 |
0.5 |
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Headcount (closing) |
194 |
218 |
222 |
1 Continuing operations before disposed businesses and share-based payments.
2 Operating margin represents adjusted operating profit divided by revenue.
The Travel division performed reasonably well in the year, benefiting from some one-off revenue and profit and a good underlying performance.
During the year, part of the MyTravel (Thomas Cook) contract was settled early, resulting in a one-off £2.3m benefit to revenue and profit, but against this there were some management restructuring costs in the second half-year. Excluding these, but including a very small bad debt as a result of XL Leisure going into administration, divisional operating profit was approximately 14% down, compared with the same period last year, with revenue 7.7% down. The reduction in ongoing work from MyTravel and the loss of work from XL Leisure had an impact on our profitability; this was, however, improved by the strength of the euro, which increased overall revenue by £0.8m and profits by £0.6m. The divisional order intake was reduced by some £1.7m as a result of the XL Leisure administration and is down compared with the previous year's record order intake. The total order book at the year end stood at £43.2m (2008: £50.4m).
As anticipated, the managed services contract with Norwich Union has not been renewed, as a result of a change in its business strategy. Five new contracts, including three international customers, were signed during the period for @comRes, our market-leading solution for tour operators. Continued good progress was achieved on our large contract with TUI Germany: delivery of Phase Two of the contract has been completed and a series of Brands went 'live' as planned in June 2009. An additional order for Phase Three was also taken in May 2009. We still have a long- term relationship with MyTravel, despite the early settlement of part of the original contract, including a commitment to provide a modified service for a minimum of five years.
During the period under review, @comRes revenues exceeded ATOP revenues for the first time.
There continues to be good interest in, and a strong international order pipeline for, @comRes set against a difficult trading background for the sector and tough comparatives. Customers' investment in their reservation systems is being driven by the need to reduce costs and to take advantage of opportunities provided by the internet, while the number of holiday transactions has a minor direct impact on our revenues.
Good progress with TUI Central Europe and other customers has resulted in 30% (2008: 19%) of our revenue now being derived from international customers. This is expected to rise in the future. We see further opportunities within the TUI Group and the German market as a whole.
Although overall Travel profitability will be reduced next year by the one-off customer issues referred to above, its underlying performance is stable and its prospects are good.
Group results: continuing operations
The reconciliation of adjusted operating profit to profit before tax from continuing operations is as follows:
|
|
2009 £m |
2008 £m |
| Adjusted operating profit1 |
20.0 |
18.7 |
|
Disposed businesses |
- |
0.2 |
|
Share-based payments charge |
(1.8) |
(2.0) |
|
Restructuring costs (see note 2.6) |
(4.8) |
(3.3) |
|
Amortisation of acquired intangible assets |
(4.0) |
(3.4) |
|
Operating profit from continuing operations |
9.4 |
10.2 |
|
Other gains and losses 2 |
(1.1) |
(0.1) |
|
Finance income |
1.2 |
2.9 |
|
Finance charges |
(3.1) |
(3.6) |
|
Profit before tax from continuing operations |
6.4 |
9.4 |
1 Before share-based payments, amortisation of acquired intangible assets and restructuring costs.
2 Ineffectiveness of the net investment hedge of £1.1m (2008: £43k) and loss on disposal of disposed business £nil (2008 £65k).
Group results: adjusted EBITDA (excluding disposed businesses)
The reconciliation of adjusted operating profit to adjusted EBITDA from continuing businesses is as follows:
|
|
2009 |
2008 |
|
|
£m |
£m |
|
|
|
|
|
Adjusted operating profit |
20.0 |
18.7 |
|
Depreciation |
3.2 |
3.9 |
|
Amortisation |
2.6 |
2.1 |
|
|
|
|
|
EBITDA |
25.8 |
24.7 |
Divisional results
|
|
2009 |
2008 |
||||||
|
|
Revenue1 |
Adjusted profit1 |
Adjustments2 |
Profit3 |
Revenue1 |
Adjusted profit1 |
Adjustments2 |
Profit3 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Wireless - Handset |
37.7 |
7.1 |
(0.6) |
6.5 |
41.6 |
6.2 |
(4.0) |
2.2 |
|
Wireless - Networks |
21.3 |
6.9 |
(3.5) |
3.4 |
18.8 |
5.5 |
(3.2) |
2.3 |
|
Total Wireless |
59.0 |
14.0 |
(4.1) |
9.9 |
60.4 |
11.7 |
(7.2) |
4.5 |
|
Travel |
31.1 |
9.5 |
(0.3) |
9.2 |
31.2 |
8.5 |
(0.3) |
8.2 |
|
Total operations |
90.1 |
23.5 |
(4.4) |
19.1 |
91.6 |
20.2 |
(7.5) |
12.7 |
|
Unallocated corporate costs |
|
(2.7) |
(1.3) |
(4.0) |
|
(1.6) |
(1.2) |
(2.8) |
|
Surplus properties |
|
(0.8) |
(4.9) |
(5.7) |
|
0.1 |
- |
0.1 |
|
Operating profit |
|
20.0 |
(10.6) |
9.4 |
|
18.7 |
(8.7) |
10.0 |
|
Net finance charges |
|
(1.9) |
- |
(1.9) |
|
(2.0) |
1.3 |
(0.7) |
|
Other gains and losses |
|
- |
(1.1) |
(1.1) |
|
- |
- |
- |
|
Profit before tax |
|
18.1 |
(11.7) |
6.4 |
|
16.7 |
(7.4) |
9.3 |
|
Basic EPS |
|
4.4p |
(2.9)p |
1.5p |
|
3.3p |
(1.4)p |
1.9p |
1 Continuing operations (excluding disposed businesses) before adjustments.
2 Adjustments-Share-based payments (SBP), amortisation of acquired intangible assets (AAIA), restructuring costs, other gains and losses and exchange gain on translation of Nemo escrow account.
3 Continuing operations excluding disposed businesses
Orders
Orders for continuing businesses (excluding disposed businesses) decreased by 23.8% and are analysed by division below:
|
|
2009 |
2008 |
||||
|
|
|
|
Order intake as a % of revenue |
|
|
Order intake as a % of revenue |
|
|
|
|
|
|
||
|
|
Order intake |
Revenue |
Order intake |
Revenue |
||
|
|
£m |
£m |
% |
£m |
£m |
% |
|
Wireless |
53.7 |
59.0 |
91 |
61.0 |
60.4 |
101 |
|
Travel |
23.9 |
31.1 |
77 |
40.8 |
31.2 |
131 |
|
Total |
77.6 |
90.1 |
86 |
101.8 |
91.6 |
111 |
Revenue
Revenue for continuing businesses, excluding disposed businesses, decreased by 1.6% to £90.1.m and is analysed by type in the table below:
One of the Group's financial objectives is to improve the quality of its earnings by increasing the proportion of revenue that comes from recurring business, such as managed services and software maintenance, both of which are longer-term in nature, together with the revenue from sales of its own software licences.
Revenue analysis
|
|
Wireless |
Travel |
Total |
|||
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
|
|
|
|
|
|
|
|
|
Managed services |
- |
- |
10.1 |
10.2 |
10.1 |
10.2 |
|
Software maintenance |
16.9 |
16.1 |
4.5 |
4.5 |
21.4 |
20.6 |
|
|
16.9 |
16.1 |
14.6 |
14.7 |
31.5 |
30.8 |
|
Software licences |
29.5 |
31.4 |
1.5 |
0.7 |
31.0 |
32.1 |
|
Sub-total |
46.4 |
47.5 |
16.1 |
15.4 |
62.5 |
62.9 |
|
|
|
|
|
|
|
|
|
% of total |
78.6% |
78.6% |
51.8% |
49.4% |
69.4% |
68.7% |
|
|
|
|
|
|
|
|
|
Bespoke and SI |
- |
- |
9.0 |
10.0 |
9.0 |
10.0 |
|
Third-party |
12.6 |
12.9 |
3.7 |
5.8 |
16.3 |
18.7 |
|
Other- contract settlement* |
- |
- |
2.3 |
- |
2.3 |
- |
|
Total |
59.0 |
60.4 |
31.1 |
31.2 |
90.1 |
91.6 |
* settlement of the MyTravel contract.
Overhead costs
Group overhead costs (excluding research and development, amortisation, share-based payments and restructuring costs) reduced from £34.7m to £33.4m (see note 2.4) in the year. Restructuring costs included a £4.9m provision required for our Slough property which is now more than 50% empty, following the disposal of Public Sector. We are actively marketing the empty floor to try to mitigate our costs, although this is likely to be challenging in the current economic climate.
Divisional performances are stated before unallocated corporate costs, which include head office staff costs, Directors' remuneration, professional and office costs, and non-operational costs. During the period, unallocated corporate costs totalled £2.7m (2008: £1.6m) and included higher professional fees and increased bonus provisions (nil in 2008). Unallocated share-based payments totalled £1.3m (2008: £1.2m). Following the disposal of Public Sector central staff numbers, including shared services such as IT and HR, reduced from 37 to 29.
During the year we paid £2.6m to exit an onerous property lease within our legacy portfolio and our overall non-operational property costs increased to £0.8m (2008: net surplus £0.1m). We continue to manage an orderly and low-risk run-down of this portfolio which comprises properties previously occupied by Group businesses. We take the opportunity to exit non-operational property leases, where economically advantageous to do so, although it creates fluctuations in our costs and cash flows from time to time.
Development costs
Development spending by division during the year was as follows:
|
|
2009 |
2008 |
||||||||
|
|
Capitalised development costs |
Capitalised development costs |
||||||||
|
|
P&L |
Gross |
Amortisation |
Net |
Total spend |
P&L |
Gross |
Amortisation |
Net |
Total spend |
|
|
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
£m |
|
Wireless |
10.8 |
0.9 |
(1.9) |
(1.0) |
9.8 |
12.2 |
2.3 |
(2.3) |
- |
12.2 |
|
Travel |
- |
- |
- |
- |
- |
0.5 |
- |
- |
- |
0.5 |
|
Total |
10.8 |
0.9 |
(1.9) |
(1.0) |
9.8 |
12.7 |
2.3 |
(2.3) |
- |
12.7 |
Total development spending (excluding the effect of capitalisation/amortisation) reduced in the year to £9.8m (2008: £12.7m). £10.8m (2008: £12.7m) was expensed in the year, including net amortisation of £1.0m (2008: nil). The amount of capitalised development costs, which are principally in respect of test cases, declined in the year to £0.9m (2008: £2.3m) Development spending is wholly focused on the Wireless division in which there will be increased investment in LTE (4G) in the coming year.
Group finance costs
Net finance costs (note 5) were £1.9m (2008: £0.7m - included a one-off exchange gain of £1.3m on the translation of the escrow account (euro denominated) held for the Nemo earnout). The Group used interest rate Swaps to manage its exposure to interest rate movements on bank borrowings incurred at the time of the acquisition of Nemo. As a result of this, and of the cross-currency Swap taken out at the same time, the Group has an effective fixed rate of borrowing on its term loan and Swap against which floating rate Libor (sterling) and Euribor (euro) interest rates are received.
Taxation
The tax rate for the continuing operations for the year was 22.7% (2008 28.9%).The charge for the year amounted to £1.4m (2008 £2.7m). The cash payment for the year amounted to £3.4m (2008: £3.9m). The tax rate decreased in the year, as a result of adjustments to the provisions made for deferred tax in prior years. As Wireless continues to widen its geographic spread of profits, the Group tax rate is expected to show some volatility as the profit mix between high-tax and low-tax locations changes from year to year.
Shareholder returns and dividends
-
Adjusted basic earnings per share was 4.4p (2008: 3.3p).
-
The Company returned £9.9m to its shareholders through a special dividend and share consolidation of 3.0p per share following the disposal of Public Sector.
-
The Board has proposed a final dividend of 0.65p per share (2008: 0.6p) making a total for the year of 0.95p (2008: 0.875p) - covered 4.6 times by adjusted earnings.
-
Retained earnings attributable to equity holders were £36.3m (2008: £13.2m) for the year.
At 30 April 2009, the number of shares in issue had decreased by 39.43m to 298.61m, (from 338.04m at 30 April 2008). In total 37.33m shares were cancelled as part of the share consolidation in February 2009, 2.56m shares were bought back and cancelled at an average price of 25.8p per share and for a total cost of £0.7m; 0.46m new shares were issued to settle SAYE and grant/award maturities. The weighted average number of shares in issue used to calculate basic earnings per share was 321.7m (2008: 344.53m). This does not include the dilutive effect of share option and grant/award schemes.
Disposals
On 31 October the Group disposed of its Public Sector business for a gross consideration of £56.8m (including final working capital adjustment of £2.5m) and £44.8m net of costs (£3.7m) and cash disposed (£8.3m). This generated a profit on disposal of £27.6m.
Derivative financial liabilities
When Anite purchased Nemo in December 2006, it entered into a number of Swaps designed to hedge against movements in interest and foreign exchange rates, and to protect the value of both the investment and the reserves of the Group. As a result of significant movements in interest rates and £/€ exchange rates since that date, the sterling value of the underlying euro-denominated assets has increased, but has been matched by a rise in the value of the derivative financial liabilities. The latter had risen to a total liability of £24.5m at 30 April 2009, after having paid £8.9m in April 2009 to settle one of the cross-currency Swaps.
The Group continues to have a fully effective hedge against the net investment in Nemo with all effective foreign exchange movements being taken directly to reserves. The maturity date of all derivative instruments is 31 October 2011 and the value of any final settlement will depend on the interest rates and exchange rates at that time.
Cash management
The Group achieved strong cash conversion from operating profits during the year with the benefit of the cash proceeds from the Public Sector disposal. The key movements in the year were as follows:
-
Net proceeds from disposals - £45.5m (2008: £7.9m)
-
Tax paid - £3.4m (2008: £3.9m)
-
Capital expenditure - £3.7m (2008: £3.9m)
-
Shares bought back for cancellation - £0.7m (2008: £7.5m)
-
Shares bought for employee trust - £0.2m (2008: £4.3m)
-
Dividends paid - £3.0m (2008: £3.7m)
-
Special dividend paid of 3.0p per share - £9.9m (2008: £nil)
-
Part repayment of cross-currency Swap - £8.9m (2008: £0.4m)
-
Term loan repayment - voluntary repayment £25m (2008: scheduled repayment £5m)
Balance sheet and cash
The Group had a net cash position on 30 April 2009 of £27.3m (2008: net debt £15.4m). This included the cash consideration of £56.8m from the sale of Anite Public Sector in October 2008. The Company used some of the proceeds to repay £25.0m of its term loan, reducing it to £20.0m. Gearing was nil% (2008: 24.7%).
Analysis of net cash/(debt)
|
|
2009 |
2008 |
|
|
£m |
£m |
|
Cash and cash equivalents |
47.2 |
29.4 |
|
Bank borrowings |
(20.0) |
(45.0) |
|
Unamortised issue costs |
0.1 |
0.2 |
|
Net cash/(debt) |
27.3 |
(15.4) |
Following the disposal of Public Sector and because of its strong cash position the Group reviewed its other facilities and, as a result, the syndicated revolving facility was reduced to £20.0m (2008: £40.0m) and the net overdraft facility reduced to £5.0m (2008: £10.0m). Both of these facilities, which we believe are appropriate for our expected future requirements, remained undrawn at 30 April 2009.
Going concern
The Directors acknowledge the latest guidance on going concern. Despite the current volatility in the financial markets and uncertain economic outlook, the Directors believe that the Group has a robust business model - as evidenced by the trading of the business over the past six months - strong free cash flow generation, and complies with all its banking covenants. In making their assessment of going concern, the Directors consider the budgets, including the Wireless research and development commitments, cash forecasts for the following 18 months together with forecast covenant positions. In addition, they take into account the current strong net cash position, the availability of banking facilities and the maturity profile of debt obligations. After considering the above, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly Anite continues to adopt the going concern basis in preparing the consolidated financial statements.
Christopher Humphrey
Chief Executive
Consolidated income statement
|
|
|
2009 |
2008 |
|
|
Note |
£000 |
£000 |
|
Continuing operations |
|
|
|
|
Revenue |
2.2 |
90,098 |
92,807 |
|
Cost of sales |
|
(34,835) |
(36,900) |
|
Gross profit |
|
55,263 |
55,907 |
|
Distribution costs |
|
(10,755) |
(10,133) |
|
Research and development |
|
(12,474) |
(16,687) |
|
Administrative expenses |
|
(22,673) |
(18,871) |
|
Operating expenses |
2.4 |
(45,902) |
(45,691) |
|
Operating profit before disposed businesses, share-based payments, amortisation ofacquired intangible assets and restructuring costs |
2.3 |
20,045 |
18,709 |
|
Disposed businesses |
2.3 |
- |
202 |
|
Share-based payments |
|
(1,874) |
(1,951) |
|
Amortisation of acquired intangible assets |
|
(4,040) |
(3,416) |
|
Restructuring costs |
2.1 |
(4,770) |
(3,328) |
|
Operating profit |
2.2 |
9,361 |
10,216 |
|
Other gains and losses |
3 |
(1,057) |
(108) |
|
Finance income |
5 |
1,199 |
2,932 |
|
Finance charges |
5 |
(3,090) |
(3,573) |
|
Profit from continuing operations before tax |
|
6,413 |
9,467 |
|
Tax expense |
6 |
(1,454) |
(2,739) |
|
Profit from continuing operations |
|
4,959 |
6,728 |
|
Profit from discontinued operations |
4(a) |
31,384 |
6,506 |
|
Profit for the year |
|
36,343 |
13,234 |
|
Profit attributable to equity holders of the parent |
|
36,343 |
13,234 |
|
Continuing and discontinued operations |
|
|
|
|
Earnings per share - basic |
7 |
11.3p |
3.8p |
|
- diluted |
|
10.8p |
3.7p |
|
Continuing operations |
|
|
|
|
Earnings per share - basic |
7 |
1.5p |
1.9p |
|
- diluted |
|
1.5p |
1.9p |
Consolidated balance sheet
|
|
|
2009 |
2008 |
|
|
Note |
£000 |
£000 |
|
Non-current assets |
|
|
|
|
Goodwill |
|
64,415 |
78,658 |
|
Other intangible assets |
|
26,553 |
30,755 |
|
Property, plant and equipment |
|
10,893 |
11,653 |
|
Deferred tax assets |
|
1,731 |
104 |
|
|
|
103,592 |
121,170 |
|
Current assets |
|
|
|
|
Inventories |
|
2,289 |
3,885 |
|
Trade and other receivables |
|
24,297 |
53,123 |
|
Derivative financial assets |
|
75 |
13 |
|
Current tax assets |
|
381 |
160 |
|
Cash and cash equivalents |
|
47,177 |
29,374 |
|
|
|
74,219 |
86,555 |
|
Total assets |
|
177,811 |
207,725 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
(24,699) |
(57,617) |
|
Bank borrowings |
8 |
(4,979) |
(4,981) |
|
Current tax payable |
|
(7,236) |
(10,283) |
|
Derivative financial liabilities |
|
- |
(4,328) |
|
Provisions |
10 |
(5,389) |
(4,887) |
|
|
|
(42,303) |
(82,096) |
|
Non-current liabilities |
|
|
|
|
Bank borrowings |
8 |
(14,936) |
(39,843) |
|
Deferred tax liabilities |
|
(6,181) |
(6,356) |
|
Derivative financial liabilities |
|
(24,487) |
(11,949) |
|
Provisions |
10 |
(5,994) |
(4,937) |
|
|
|
(51,598) |
(63,085) |
|
Total liabilities |
|
(93,901) |
(145,181) |
|
Net assets |
|
83,910 |
62,544 |
|
Equity |
|
|
|
|
Issued share capital |
|
33,644 |
33,854 |
|
Share premium account |
|
25,485 |
25,406 |
|
Own shares |
|
(3,657) |
(5,132) |
|
Merger reserve |
|
722 |
6,538 |
|
Capital redemption reserve |
|
2,741 |
2,485 |
|
Other reserves |
|
(5,087) |
(940) |
|
Retained earnings |
|
30,062 |
333 |
|
Total equity |
|
83,910 |
62,544 |
Consolidated statement of changes in equity
|
|
Issued share capital £000 |
Share premium account £000 |
Own shares £000 |
Merger reserve £000 |
Capital redemption reserve £000 |
Other reserves £000 |
Retained earnings £000 |
Total £000 |
|
|
||||||||
|
|
||||||||
|
|
||||||||
|
Balance at 1 May 2007 Changes in equity for the year to 30 April 2008 |
35,325 |
25,010 |
(1,019) |
6,538 |
859 |
(7) |
(1,764) |
64,942 |
|
|
|
|
|
|
|
|
|
|
|
Exchange differences arising on translation of foreign operations |
- |
- |
- |
- |
- |
(25) |
- |
(25) |
|
Cash flow hedges taken to equity |
- |
- |
- |
- |
- |
(263) |
- |
(263) |
|
Fair value losses on net investment hedges (net of foreign exchange and tax)1 |
- |
- |
- |
- |
- |
(645) |
- |
(645) |
|
Net loss recognised directly in equity |
- |
- |
- |
- |
- |
(933) |
- |
(933) |
|
Profit for the year |
- |
- |
- |
- |
- |
- |
13,234 |
13,234 |
|
Total recognised income and expense for the year |
- |
- |
- |
- |
- |
(933) |
13,234 |
12,301 |
|
Issue of share capital |
155 |
396 |
- |
- |
- |
- |
- |
551 |
|
Purchase of own shares into treasury |
- |
- |
(4,333) |
- |
- |
- |
- |
(4,333) |
|
Sale of own shares from treasury |
- |
- |
220 |
- |
- |
- |
(220) |
- |
|
Dividend paid |
- |
- |
- |
- |
- |
- |
(3,709) |
(3,709) |
|
Share buy back and cancellation |
(1,626) |
- |
- |
- |
1,626 |
- |
(7,497) |
(7,497) |
|
Recognition of share-based payments |
|
|
|
|
|
|
|
|
|
before tax |
- |
- |
- |
- |
- |
- |
2,294 |
2,294 |
|
Deferred tax related to share-based |
|
|
|
|
|
|
|
|
|
payments |
- |
- |
- |
- |
- |
- |
(2,005) |
(2,005) |
|
Balance at 30 April 2008 Changes in equity for the year to 30 April 2009 |
33,854 |
25,406 |
(5,132) |
6,538 |
2,485 |
(940) |
333 |
62,544 |
|
Exchange differences arising on translation of foreign operations2 |
- |
- |
- |
- |
- |
449 |
- |
449 |
|
Cash flow hedges taken to equity |
- |
- |
- |
- |
- |
(1,514) |
- |
(1,514) |
|
Fair value losses on net investment hedges (net of foreign exchange and tax)1 |
- |
- |
- |
- |
- |
(3,082) |
- |
(3,082) |
|
Net loss recognised directly in equity |
- |
- |
- |
- |
- |
(4,147) |
- |
(4,147) |
|
Profit for the year |
|
|
|
|
|
|
36,343 |
36,343 |
|
Total recognised income and expense for the year |
- |
- |
- |
- |
- |
(4,147) |
36,343 |
32,196 |
|
Issue of share capital |
46 |
79 |
- |
- |
- |
- |
- |
125 |
|
Purchase of own shares in treasury |
- |
- |
(195) |
- |
- |
- |
- |
(195) |
|
Sale of own shares from treasury |
- |
- |
1,670 |
- |
- |
- |
(1,670) |
- |
|
Dividends paid |
- |
- |
- |
- |
- |
- |
(12,903) |
(12,903) |
|
Utilisation of merger reserve |
- |
- |
- |
(5,816) |
- |
- |
5,816 |
- |
|
Share buy back and cancellation |
(256) |
- |
- |
- |
256 |
- |
(660) |
(660) |
|
Recognition of share-based payments before tax |
- |
- |
- |
- |
- |
- |
2,783 |
2,783 |
|
Deferred tax related to share-based |
- |
- |
- |
- |
- |
- |
20 |
20 |
|
payments |
|
|
|
|
|
|
|
|
|
Balance at 30 April 2009 |
33,644 |
25,485 |
(3,657) |
722 |
2,741 |
(5,087) |
30,062 |
83,910 |
1 The net loss of £3,082,000 (2008: £645,000) comprises the fair value loss on the net investment hedge of £14,124,000 (2008: £14,807,000) relating to the effective portion of the cross currency swaps, partly offset by the foreign exchange gains £10,393,000 (2008: £10,745,000) and tax credit of £649,000 (2008: £3,417,000), totalling £11,042,000 (2008: £14,162,000).
2 Includes amounts recycled through the income statement on disposal of businesses (note 4(b)).
Consolidated cash flow statement
|
|
|
2009 |
2008 |
|
|
Note |
£000 |
£000 |
|
|
|
|
|
|
Profit for the year |
|
|
|
|
Continuing operations |
|
4,959 |
6,728 |
|
Discontinued operations |
|
31,384 |
6,506 |
|
|
|
36,343 |
13,234 |
|
Adjustments for: |
|
|
|
|
Tax (credit)/expense - continuing and discontinued |
6 |
(1,194) |
5,049 |
|
Profit before tax on disposal of discontinued operations |
4(a) |
(28,182) |
(3,200) |
|
Loss before tax on disposal of disposed businesses |
3 |
- |
65 |
|
Hedge ineffectiveness on the net investment hedge |
3 |
1,057 |
43 |
|
Finance charges - continuing and discontinued |
5 |
1,791 |
719 |
|
Depreciation and impairment of property, plant and equipment |
|
3,535 |
4,583 |
|
Amortisation and impairment of intangible assets |
|
3,605 |
5,320 |
|
Amortisation of acquired intangible assets |
|
4,040 |
3,416 |
|
Loss on disposal of property, plant and equipment |
|
- |
94 |
|
Share-based payments |
|
2,783 |
2,294 |
|
Decrease in provisions |
|
(1,946) |
(1,260) |
|
Increase in provisions - restructuring costs |
|
4,770 |
- |
|
Operating cash flows before movements in working capital |
|
26,602 |
30,357 |
|
Decrease in inventories |
|
1,248 |
624 |
|
Decrease in receivables |
|
15,360 |
2,979 |
|
Decrease in payables |
|
(14,548) |
(5,613) |
|
Movements in working capital |
|
2,060 |
(2,010) |
|
Cash generated from operations before exceptional cash payments |
|
31,312 |
28,347 |
|
Cash payments for onerous property lease |
|
(2,650) |
- |
|
Cash generated from operations |
|
28,662 |
28,347 |
|
Interest received |
|
1,297 |
2,104 |
|
Interest paid |
|
(2,664) |
(3,699) |
|
Income taxes paid |
|
(3,410) |
(3,928) |
|
Net cash generated from operating activities |
|
23,885 |
22,824 |
|
Cash flow from investing activities |
|
|
|
|
Proceeds from disposal of subsidiary undertakings |
4(b) |
53,835 |
8,535 |
|
Net bank balance disposed with subsidiary undertakings |
|
(8,315) |
(677) |
|
Increase in cash held in escrow related to acquisitions |
|
- |
9,471 |
|
Net payments to previously closed businesses |
|
(201) |
(492) |
|
Deferred consideration paid |
|
- |
(2,309) |
|
Part settlement of cross currency swap |
|
(8,884) |
(440) |
|
Purchase of property, plant and equipment |
|
(3,184) |
(2,781) |
|
Proceeds from disposal of property, plant and equipment |
|
34 |
43 |
|
Purchase of software licences |
|
(544) |
(1,080) |
|
Expenditure on capitalised product development |
|
(1,142) |
(2,982) |
|
Net cash generated from investing activities |
|
31,599 |
7,288 |
|
Cash flow from financing activities |
|
|
|
|
Issue of ordinary share capital |
|
125 |
551 |
|
Share buy back for cancellation |
|
(660) |
(7,497) |
|
Purchase of own shares into treasury |
|
(195) |
(4,333) |
|
Dividend paid to Company's shareholders |
|
(12,903) |
(3,709) |
|
Decrease in bank loans |
|
(25,000) |
(5,000) |
|
Net cash used in financing activities |
|
(38,633) |
(19,988) |
|
Net increase in cash and cash equivalents |
|
16,851 |
10,124 |
|
Effect of exchange rate changes |
|
952 |
585 |
|
Cash and cash equivalents at 1 May |
|
29,374 |
18,665 |
|
Cash and cash equivalents at 30 April |
|
47,177 |
29,374 |
Discontinued operations include Anite Public Sector (2008: Anite Deutschland) which generated net operating cash inflows of £3,406,000 (2008: outflow £4,789,000), paid £nil (2008: £16,000) in respect of net returns on investment and servicing of financing, and paid £526,000 (2008: £714,000) for capital expenditure.
1 Statement of accounting policies
a) Basis of preparation
The preliminary results have been prepared under the historical cost convention and in accordance with current International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations. However, this announcement does not contain sufficient information to comply with all the disclosure requirements of IFRS.
The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions in certain areas that affect the reported amounts in the financial statements. Although these estimates and assumptions are based on management's best knowledge, the actual results ultimately may differ from those estimates.
The statutory accounts for 2009 have been prepared following accounting policies consistent with those for the year ended 30 April 2008. These can be found on our website www.anite.com. The financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the Group operates.
The financial information set out in this announcement does not constitute statutory accounts within the meaning of Sections 434 to 436 of the Companies Act 2006 and is an abridged version of the Group's financial statements for the year ended 30 April 2009 which were approved by the directors on 30 June 2009. Statutory accounts for the year ended 2008 have been delivered to the Registrar of Companies, the auditors have reported on those accounts, their report was unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985. Statutory accounts for the period ended 30 April 2009 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts, their reports were unqualified and did not contain statements under Section 498 of the Companies Act 2006.
The preliminary announcement for the year ended 30 April 2009 was approved by the Board of Directors on 30 June 2009.
2 Revenue and segmental information
2.1 Restructuring costs
As a result of the disposal of Anite Public Sector, the head office property at 353 Buckingham Avenue, Slough will be underutilised due to the relocation of Anite Public Sector staff. In light of the current market conditions for office space, there is uncertainty over whether the Group will be able to utilise or sublet the empty space in the near future although management are actively seeking to mitigate this. A provision has been established in the current period.
The provision in the prior period relates to the restructuring of the Wireless division. This provision includes the impact of both asset write-downs of the own-platform development costs and other costs of restructuring and redundancy.
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Net property provision established |
4,909 |
- |
|
Cost of exiting own-platform development |
(139) |
2,474 |
|
Other restructuring / redundancy costs |
- |
854 |
|
|
4,770 |
3,328 |
2.2 Business segments - primary basis
The Group is organised into two business segments: Wireless and Travel.
These two business segments are the Group's primary reporting format for segment information. During the period, Anite Public Sector Holdings Ltd and its subsidiaries ('Anite Public Sector') were sold. Its results are included as a discontinued operation and details are disclosed in note 4.
Segmental information under the primary reporting format is as disclosed in the table below:
|
|
|
Wireless |
|
Travel |
|
Unallocated items |
Total |
|
|
|
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
Note |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
- continuing businesses1 |
|
58,988 |
60,410 |
31,207 |
31,598 |
- |
- |
90,195 |
92,008 |
|
- inter-segment revenue2 |
|
- |
- |
(97) |
(360) |
- |
- |
(97) |
(360) |
|
|
|
58,988 |
60,410 |
31,110 |
31,238 |
- |
- |
90,098 |
91,648 |
|
- disposed businesses3 |
|
- |
- |
- |
1,159 |
- |
- |
- |
1,159 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
- continuing operations |
|
58,988 |
60,410 |
31,110 |
32,397 |
- |
- |
90,098 |
92,807 |
|
- discontinued operations3 |
|
- |
- |
- |
- |
- |
- |
28,810 |
64,428 |
|
Total revenue |
|
58,988 |
60,410 |
31,110 |
32,397 |
- |
- |
118,908 |
157,235 |
|
Continuing operations Segment profit |
|
|
|
|
|
|
|
|
|
|
- continuing businesses1 |
|
13,758 |
11,277 |
9,213 |
8,217 |
(4,800) |
(2,736) |
18,171 |
16,758 |
|
- disposed businesses3 |
|
- |
- |
- |
202 |
- |
- |
- |
202 |
|
Operating profit for continuing operations before amortisation and restructuring costs |
|
13,758 |
11,277 |
9,213 |
8,419 |
(4,800) |
(2,736) |
18,171 |
16,960 |
|
Amortisation of acquired intangible assets |
|
(4,040) |
(3,416) |
- |
- |
- |
- |
(4,040) |
(3,416) |
|
Restructuring costs |
|
139 |
(3,328) |
- |
- |
(4,909) |
- |
(4,770) |
(3,328) |
|
Segment operating profit |
|
9,857 |
4,533 |
9,213 |
8,419 |
(9,709) |
(2,736) |
9,361 |
10,216 |
|
Other gains and losses |
3 |
- |
- |
- |
(65) |
(1,057) |
(43) |
(1,057) |
(108) |
|
Finance charges |
5 |
- |
- |
- |
- |
(1,891) |
(641) |
(1,891) |
(641) |
|
Profit from continuing operations before tax |
|
9,857 |
4,533 |
9,213 |
8,354 |
(12,657) |
(3,420) |
6,413 |
9,467 |
|
Tax expense |
|
- |
- |
- |
- |
(1,454) |
(2,739) |
(1,454) |
(2,739) |
|
Profit from continuing operations |
|
9,857 |
4,533 |
9,213 |
8,354 |
(14,111) |
(6,159) |
4,959 |
6,728 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
Operating profit from discontinued operations |
4 (a) |
|
|
|
|
|
|
454 |
5,694 |
|
Profit on sale of discontinued operations |
4 (a) |
|
|
|
|
|
|
28,182 |
3,200 |
|
Finance income |
5 |
|
|
|
|
|
|
100 |
(78) |
|
Profit from discontinued operations |
|
|
|
|
|
|
|
28,736 |
8,816 |
|
Tax charge |
|
|
|
|
|
|
|
2,648 |
(2,310) |
|
Profit from discontinued operations |
|
|
|
|
|
|
|
31,384 |
6,506 |
|
Profit for the year |
|
|
|
|
|
|
|
36,343 |
13,234 |
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period is stated after: |
|
|
|
|
|
|
|
|
|
|
Capitalisation of development costs ('DC') |
|
869 |
2,309 |
- |
- |
- |
- |
869 |
2,309 |
|
Amortisation of DC |
|
(1,855) |
(2,309) |
- |
- |
- |
- |
(1,855) |
(2,309) |
|
Net amortisation of DC |
|
(986) |
- |
- |
- |
- |
- |
(986) |
- |
1 Continuing businesses comprise operating results of continuing operations before the operating results of disposed businesses.
2 Inter-segment revenues are charged at prevailing market rates.
3 Disposed businesses comprise the operating results of continuing operations which have ceased during the year and which do not meet the definition of discontinued operations under IFRS 5
2.3 Business segments - continuing operations
|
|
|
Wireless |
|
Travel |
|
Unallocated items |
Total |
|
|
|
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
Note |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
- continuing before disposed businesses |
|
58,988 |
60,410 |
31,110 |
31,238 |
- |
- |
90,098 |
91,648 |
|
Adjusted operating profit1 |
|
13,992 |
11,768 |
9,542 |
8,461 |
(3,489) |
(1,520) |
20,045 |
18,709 |
|
Net finance charges before exchange gain |
5 |
- |
- |
- |
- |
(1,891) |
(1,923) |
(1,891) |
(1,923) |
|
Adjusted profit1 before tax |
|
13,992 |
11,768 |
9,542 |
8,461 |
(5,380) |
(3,443) |
18,154 |
16,786 |
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs |
2.1 |
139 |
(3,328) |
- |
- |
(4,909) |
- |
(4,770) |
(3,328) |
|
Share-based payments |
|
(234) |
(491) |
(329) |
(244) |
(1,311) |
(1,216) |
(1,874) |
(1,951) |
|
Amortisation of acquired intangible assets |
|
(4,040) |
(3,416) |
- |
- |
- |
- |
(4,040) |
(3,416) |
|
Net finance charge - exchange gain |
5 |
- |
- |
- |
- |
- |
1,282 |
- |
1,282 |
|
Other gains and losses |
3 |
- |
- |
- |
- |
(1,057) |
(43) |
(1,057) |
(43) |
|
Segment operating profit before disposed businesses & tax |
|
9,857 |
4,533 |
9,213 |
8,217 |
(12,657) |
(3,420) |
6,413 |
9,330 |
|
Disposed businesses: |
|
|
|
|
|
|
|
|
|
|
- Operating profit |
|
- |
- |
- |
202 |
- |
- |
- |
202 |
|
- Other gains and losses |
3 |
- |
- |
- |
(65) |
- |
- |
- |
(65) |
|
Profit from continuing operations before tax |
2.2 |
9,857 |
4,533 |
9,213 |
8,354 |
(12,657) |
(3,420) |
6,413 |
9,467 |
1 Continuing operations before disposed businesses, share-based payments, amortisation of acquired intangible assets, other gains and losses and restructuring costs.
This additional information has been disclosed to give a clearer understanding of the results of the business segments before and after non-trading and one-off items
2.4 Operating expenses
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Distribution costs |
|
|
|
- amortisation of acquired intangible assets |
2,234 |
1,900 |
|
- other |
8,521 |
8,233 |
|
|
10,755 |
10,133 |
|
Research and development |
|
|
|
- amortisation of internally generated assets |
1,855 |
2,309 |
|
- other |
8,952 |
10,388 |
|
|
10,807 |
12,697 |
|
- amortisation of acquired intangible assets |
1,806 |
1,516 |
|
- restructuring costs |
(139) |
2,474 |
|
|
12,474 |
16,687 |
|
Administrative expenses |
|
|
|
- restructuring costs |
4,909 |
854 |
|
- share-based payments |
1,874 |
1,951 |
|
- other |
15,890 |
16,066 |
|
|
22,673 |
18,871 |
|
Total operating expenses |
45,902 |
45,691 |
|
Analysed as: |
|
|
|
- amortisation of acquired intangible assets |
4,040 |
3,416 |
|
- amortisation of internally generated assets |
1,855 |
2,309 |
|
- restructuring costs |
4,770 |
3,328 |
|
- share-based payments |
1,874 |
1,951 |
|
- other |
33,363 |
34,687 |
|
|
45,902 |
45,691 |
3 OTHER GAINS AND LOSSES
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Hedge ineffectiveness on the net investment hedge |
(1,057) |
(43) |
|
Loss on sale of disposed business |
- |
(65) |
|
|
(1,057) |
(108) |
The losses arising due to ineffectiveness on the net investment hedge are derived from the differences in the movement in the fair value of the cross currency swap taken out to hedge the net investment in Anite Finland Ltd and the hypothetical derivative that represented the market value of the swap on the date of designation.
The other gains and losses for the year ended 30 April 2008 relate to the loss on the disposal of Anite Travel Systems Ab Ltd within the Travel business segment.
4 Discontinued operations
a) Discontinued operations
The Group completed its disposal of the Anite Public Sector division with the sale of its 100% interest in the ordinary share capital of Anite Public Sector Holdings Ltd and its subsidiaries on 31 October 2008.
The profits in respect of the disposal of Anite Public Sector are set out below. The operating profit before interest of Anite Public Sector up to the date of the disposal was £467,000 (2008: £5,598,000). These results, including other discontinued businesses, are shown in the results below:
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Profit after tax for the year from discontinued operations |
|
|
|
Revenue |
28,810 |
64,428 |
|
Cost of sales |
(16,323) |
(35,731) |
|
Gross profit |
12,487 |
28,697 |
|
Operating expenses |
(12,033) |
(23,003) |
|
Operating profit before interest |
454 |
5,694 |
|
Finance income |
100 |
(78) |
|
Profit before tax |
554 |
5,616 |
|
Tax credit |
(488) |
(1,110) |
|
Profit after tax |
66 |
4,506 |
|
Profit on sale of discontinued operations |
|
|
|
Net movement in provision in relation to previously discontinued operations |
574 |
1,935 |
|
Profit on disposal of Anite Public Sector (note 4(b)) |
27,608 |
- |
|
Profit on disposal of Anite Deutschland (note 4(b)) |
- |
1,265 |
|
Net profit before tax on sale of discontinued operations |
28,182 |
3,200 |
|
Tax charge on the profit on sale of discontinued operations |
- |
(1,200) |
|
Tax credit relating to activities discontinued in prior years |
3,136 |
- |
|
Profit after tax on sale of discontinued operations |
31,318 |
2,000 |
|
Total |
31,384 |
6,506 |
b) Sale of discontinued operations
The net assets and consideration in respect of the disposal of Anite Public Sector (2008: Anite Deutschland) are set out below:
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
|
Anite Public Sector |
Anite Deutschland |
|
Goodwill |
22,210 |
4,000 |
|
Intangible assets |
1,675 |
91 |
|
Property, plant and equipment |
1,132 |
87 |
|
Current assets |
14,024 |
2,716 |
|
Cash and cash equivalents |
8,315 |
397 |
|
Current liabilities |
(20,541) |
(1,220) |
|
Provisions |
(925) |
(170) |
|
Net assets |
25,890 |
5,901 |
|
Recycled foreign exchange |
(363) |
38 |
|
Profit on disposal |
27,608 |
1,265 |
|
Net consideration |
53,135 |
7,204 |
|
Relating to: |
|
|
|
Cash consideration |
56,783 |
8,000 |
|
Disposal costs |
(3,648) |
(796) |
|
|
53,135 |
7,204 |
|
Net cash flows in respect of the disposal of operations are as follows: |
|
|
|
Cash received (net of disposal costs paid) |
53,835 |
7,204 |
|
Cash and cash equivalents sold |
(8,315) |
(397) |
|
|
45,520 |
6,807 |
5 Net finance (charge)/income
|
|
Continuing operations |
|
Discontinued operations |
|
Total |
|
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Finance income |
|
|
|
|
|
|
|
Interest receivable and similar income |
92 |
106 |
- |
- |
92 |
106 |
|
Interest on short-term deposits |
1,107 |
614 |
100 |
98 |
1,207 |
712 |
|
Exchange gain on translation of the cash deposit held in escrow |
- |
1,282 |
- |
- |
- |
1,282 |
|
Gains on financial instruments in a hedging relationship: |
|
|
|
|
|
|
|
- Interest rate swaps and caps - cash flow hedges |
- |
76 |
- |
- |
- |
76 |
|
- Cross currency swaps - net investment hedge |
- |
694 |
- |
- |
- |
694 |
|
Others |
- |
160 |
- |
- |
- |
160 |
|
|
1,199 |
2,932 |
100 |
98 |
1,299 |
3,030 |
|
Finance charges |
|
|
|
|
|
|
|
Bank loans and overdrafts1 |
(2,023) |
(3,305) |
- |
(157) |
(2,023) |
(3,462) |
|
Other loans/commitment fees |
(101) |
(118) |
- |
(19) |
(101) |
(137) |
|
Losses on financial instruments in a hedging relationship: |
|
|
|
|
|
|
|
- Interest rate swaps and caps - cash flow hedges |
(121) |
- |
- |
- |
(121) |
- |
|
- Cross currency swaps - net investment hedge |
(638) |
- |
- |
- |
(638) |
- |
|
Unwinding of discount on provisions 2 |
(207) |
(150) |
- |
- |
(207) |
(150) |
|
|
(3,090) |
(3,573) |
- |
(176) |
(3,090) |
(3,749) |
|
Net finance (charge)/income |
(1,891) |
(641) |
100 |
(78) |
(1,791) |
(719) |
1 Finance charges on bank loans and overdrafts include amortisation of issue costs of £91,000 (2008: £385,000).
2 The unwinding of discount on provisions (note 10) relates to property and deferred consideration provisions.
6 Income tax expense
|
|
Continuing operations |
Discontinued operations |
Total |
|||
|
|
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Current tax |
|
|
|
|
|
|
|
UK corporation tax |
1,110 |
2,590 |
488 |
1,110 |
1,598 |
3,700 |
|
Foreign tax |
3,151 |
2,587 |
- |
- |
3,151 |
2,587 |
|
|
4,261 |
5,177 |
488 |
1,110 |
4,749 |
6,287 |
|
Adjustments in respect of prior years |
|
|
|
|
|
|
|
UK corporation tax |
- |
9 |
(3,136) |
- |
(3,136) |
9 |
|
Foreign tax |
70 |
- |
- |
- |
70 |
- |
|
|
70 |
9 |
(3,136) |
- |
(3,066) |
9 |
|
Total current tax expense/(credit) |
4,331 |
5,186 |
(2,648) |
1,110 |
1,683 |
6,296 |
|
Deferred tax |
|
|
|
|
|
|
|
UK |
(1,754) |
(1,414) |
- |
- |
(1,754) |
(1,414) |
|
Foreign |
(1,123) |
(1,033) |
- |
1,200 |
(1,123) |
167 |
|
Total deferred tax (credit)/expense (note 24) |
(2,877) |
(2,447) |
- |
1,200 |
(2,877) |
(1,247) |
|
Total income tax expense/(credit) |
1,454 |
2,739 |
(2,648) |
2,310 |
(1,194) |
5,049 |
The tax charge on the profit on sale of discontinued operations was £nil (2008: £1.2m).
Corporation tax is calculated at 28% (2008: 29.84%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Charged/(credited) to equity |
|
|
|
Deferred tax relating to share-based payments |
(20) |
2,005 |
|
Deferred tax relating to amortisation of acquired intangibles |
948 |
908 |
|
UK corporation tax relating to foreign exchange |
(1,597) |
(4,325) |
|
|
(669) |
(1,412) |
Factors affecting tax charge for the year
The tax assessed on the profit on ordinary activities for the year is different to the standard rate of corporation tax in the UK. The differences are explained below:
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Profit before tax |
|
|
|
Continuing operations |
6,413 |
9,467 |
|
Tax on Group profit at standard UK corporation tax rate of 28% (2008: 29.84%) |
1,796 |
2,840 |
|
Effects of: |
|
|
|
Impairments and sale/closure of discontinued operations |
(32) |
(398) |
|
Disallowed expenses and non-taxable income (net) |
107 |
352 |
|
Ineligible depreciation |
3 |
137 |
|
Prior year adjustment in relation to deferred tax |
(968) |
- |
|
Short-term timing differences |
616 |
310 |
|
Tax losses carried forward |
162 |
509 |
|
Utilisation of tax losses |
(195) |
(1,153) |
|
(Lower)/higher tax rates on overseas earnings |
(120) |
158 |
|
Changes to tax rate |
- |
19 |
|
Adjustments to current tax charge in respect of previous periods |
70 |
9 |
|
Other |
15 |
(44) |
|
Income tax expense for year |
1,454 |
2,739 |
|
Tax rate for continuing operations |
22.7% |
28.9% |
The Group earns its profits in the UK and overseas. The tax rate used for tax on profit on ordinary activities is 28%, reduced from 30% in periods to 31 March 2008, being the standard rate for UK corporation tax, as the Group's head office is in UK.
Some components of the Group's overseas profits are likely to be taxed at an effective rate that is higher than the UK rate. Other components, due to the availability of losses brought forward in certain countries, are likely to be taxed at a lower rate.
7 Earnings per share
The calculations of earnings per share are based on the Group profit for the year, adjusted profit1 and weighted average number of shares in issue:
|
|
Basic |
|
Diluted |
|
|
|
2009 |
2008 |
2009 |
2008 |
|
EPS summary |
|
|
|
|
|
Basic EPS |
11.3p |
3.8p |
10.8p |
3.7p |
|
Basic EPS for continuing operations |
1.5p |
1.9p |
1.5p |
1.9p |
|
Adjusted EPS2 |
4.4p |
3.3p |
4.2p |
3.2p |
|
|
2009 |
2008 |
2009 |
2008 |
|
|
Pence per share |
Pence per share |
£000 |
£000 |
|
Profit for the year |
11.3 |
3.8 |
36,343 |
13,234 |
|
Profit from discontinued operations |
(9.8) |
(1.9) |
(31,384) |
(6,506) |
|
Profit for the year on continuing operations |
1.5 |
1.9 |
4,959 |
6,728 |
|
Reconciliation to adjusted profit: |
|
|
|
|
|
Operating (profit) from disposed businesses |
- |
(0.1) |
- |
(202) |
|
Loss on sale of disposed businesses |
- |
- |
- |
65 |
|
Profit for the year on continuing operations (before impact of disposed businesses) |
1.5 |
1.8 |
4,959 |
6,591 |
|
Other gains and losses (net of tax) |
0.2 |
- |
761 |
30 |
|
Exchange gain on retranslation of the cash deposit held in escrow (net of tax) |
- |
(0.2) |
- |
(899) |
|
Restructuring costs (net of tax) |
1.1 |
0.7 |
3,434 |
2,354 |
|
Amortisation of acquired intangible assets (net of tax) |
0.9 |
0.7 |
2,917 |
2,383 |
|
Share-based payments (net of tax) |
0.7 |
0.3 |
2,097 |
853 |
|
Adjusted profit1 |
4.4 |
3.3 |
14,168 |
11,312 |
1 Profit from continuing businesses before disposed businesses, other gains and losses, share-based payments, amortisation of acquired intangible assets and restructuring costs.
2 Earnings per share on adjusted profit1 have been included to give an additional understanding of the results of the continuing businesses.
Both basic and diluted EPS for discontinued operations is 9.8p (2008: 1.9p).
|
Number of shares ('000) |
2009 |
2008 |
|
Weighted average number of shares in issue - used to calculate basic earnings per share |
321,714 |
344,533 |
|
Effect of dilutive ordinary shares |
|
|
|
- SAYE and share option schemes |
13,507 |
12,296 |
|
Number of shares used to calculate diluted earnings per share |
335,221 |
356,829 |
8 Bank borrowings
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Current |
|
|
|
Bank loans |
4,979 |
4,981 |
|
Non-current |
|
|
|
Bank loans |
14,936 |
39,843 |
|
|
19,915 |
44,824 |
|
The borrowings are repayable as follows: |
|
|
|
On demand or within one year |
4,979 |
4,981 |
|
In the second year |
4,979 |
4,980 |
|
In the third to fifth years inclusive |
9,957 |
34,863 |
|
|
19,915 |
44,824 |
|
Less: amounts due for settlement within 12 months (shown under current liabilities) |
(4,979) |
(4,981) |
|
Amount due for settlement after 12 months |
14,936 |
39,843 |
The current and non-current bank loans comprise a £20m (2008: £45m) fixed term loan less £0.085m (2008: £0.176m) of unamortised issue costs being amortised over the period of the loan.
The loan was taken out on 30 November 2006 under a borrowing facility maturing on 30 November 2011. This loan is secured by a fixed and floating charge on the Group's assets.
9 Net CASH / (debt)
|
|
|
2009 |
2008 |
|
|
|
£000 |
£000 |
|
Cash and cash equivalents |
|
47,177 |
29,374 |
|
Bank borrowings - current |
|
(4,979) |
(4,981) |
|
Bank borrowings - non-current |
|
(14,936) |
(39,843) |
|
Net cash / (debt) |
|
27,262 |
(15,450) |
|
A reconciliation of the movement in net cash/(debt) for the year is as detailed below: |
|
|
|
|
|
|
2009 |
2008 |
|
|
|
£000 |
£000 |
|
Net debt at 1 May |
|
(15,450) |
(22,577) |
|
Decrease in cash deposit held in escrow |
|
- |
(9,471) |
|
Net increase in cash and cash equivalents |
|
16,851 |
10,124 |
|
Unamortised issue costs of bank borrowings |
|
(91) |
(385) |
|
Decrease in bank borrowings |
|
25,000 |
5,000 |
|
Exchange movement |
|
952 |
1,859 |
|
Net cash / (debt) at 30 April |
|
27,262 |
(15,450) |
10 Provisions
|
|
|
|
|
|
|
|
|
Deferred |
|
Property |
Other |
Group |
|
|
consideration |
Warranties |
provision |
provisions |
total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
At 1 May 2008 |
202 |
3,234 |
5,368 |
1,020 |
9,824 |
|
Establish deferred consideration provision debited to goodwill |
140 |
- |
- |
- |
140 |
|
Release of provision credited to income statement |
- |
(4) |
(396) |
(202) |
(602) |
|
Established during the year |
- |
500 |
6,289 |
614 |
7,403 |
|
Disposal of subsidiaries in current period (note 4(b)) |
- |
- |
(751) |
(174) |
(925) |
|
Disposal of subsidiaries in prior period (note 4(a)) |
- |
(329) |
- |
(245) |
(574) |
|
Utilised during the year (continuing) |
(32) |
(8) |
(3,424) |
(512) |
(3,976) |
|
Utilised during the year (discontinued) |
- |
(201) |
- |
- |
(201) |
|
Unwinding of discount |
- |
- |
207 |
- |
207 |
|
Exchange movement |
70 |
18 |
- |
(1) |
87 |
|
At 30 April 2009 |
380 |
3,210 |
7,293 |
500 |
11,383 |
|
|
2009 |
2008 |
|
|
£000 |
£000 |
|
Analysed as: |
|
|
|
Current liabilities |
5,389 |
4,887 |
|
Non-current liabilities |
5,994 |
4,937 |
|
|
11,383 |
9,824 |
The deferred consideration balance of £0.4m (US$0.6m) represents the final element of the cash earnout consideration payable following the acquisition of Invenova Corporation in January 2007. This was settled in full in May 2009.
The warranty provision has been made to cover any potential claims made by disposed businesses during the contractual warranty period. It is expected to be utilised in one to six years.
The property provision is in respect of all properties surplus to business requirements and dilapidation provisions for properties currently in use. It is expected to be utilised in one to 13 years. The established provision in the year includes an amount of £4.9m in relation to the empty space within the Group's corporate office in Slough resulting from the disposal of Anite Public Sector in October 2008 and is included within restructuring costs in the income statement. The property provision of £3.4m utilised during the year includes £2.6m in respect of the cost of exiting a non operational property during the year. Additional dilapidation provisions for properties were established during the year amounting to £0.5m (2008: £0.9m). These were capitalised in 'property, plant, and equipment' and will be charged to the income statement on a straight line basis over the remaining term of the relevant property lease.
Other provisions include provisions for contractual items expected to be utilised within one year.
11 Called up share capital
|
|
Ordinary shares of 11.25p each |
Deferred redeemable shares of £1 each |
||
|
|
||||
|
|
||||
|
|
Number |
£000 |
Number |
£000 |
|
Authorised: |
|
|
|
|
|
At 30 April 2008 |
400,000,000 |
40,000 |
50,000 |
50 |
|
Share consolidation |
(44,444,444) |
- |
- |
- |
|
At 30 April 2009 |
355,555,556 |
40,000 |
50,000 |
50 |
|
Allotted, issued and fully paid: |
|
|
|
|
|
At 30 April 2008 |
338,036,645 |
33,804 |
50,000 |
50 |
|
Issued during the year |
460,124 |
46 |
- |
- |
|
Cancelled during the year |
(2,560,698) |
(256) |
- |
- |
|
Share consolidation |
(37,326,231) |
- |
- |
- |
|
At 30 April 2009 |
298,609,840 |
33,594 |
50,000 |
50 |
a) Redeemable share capital
These deferred shares of £1 each may be redeemed at any time at the option of the Company at a price of 1p each. They are non-equity shares and have no voting rights.
b) Shares issued during the year
i) 194,239 ordinary shares were issued, at prices between 23p and 46p each, in connection with options exercised under the Company's Save As You Earn (SAYE) schemes.
ii) 265,885 ordinary shares were issued at prices between 10p and 56.5p each in respect of the exercise of options under the Approved Share Option Scheme, the Long Term Incentive Plan ('Executive Share Option Schemes') and the Performance Share Plan.
c) Share consolidation
On 2 February 2009, the Group carried out a share consolidation in which 8 new shares were granted for each 9 shares redeemed. This resulted in an increase in the nominal share value to 11.25p and a reduction of 44.4m in the number of authorised shares. The number of allotted, issued and fully paid Ordinary 11.25p shares reduced by 37,326,231.
d) Outstanding options
As at 30 April 2009, the following options over the Company's ordinary shares had been granted and were still outstanding:
|
|
Executive |
|
|
|
|
Share Option |
SAYE Option |
|
|
|
Grants/Awards |
Schemes |
Total |
|
Outstanding at 1 May |
22,439,013 |
354,440 |
22,793,453 |
|
Granted during the year |
4,361,317 |
- |
4,361,317 |
|
Exercised during the year |
(1,483,105) |
(194,239) |
(1,677,344) |
|
Lapsed during the year |
(7,493,102) |
(126,435) |
(7,619,537) |
|
Outstanding at 30 April |
17,824,123 |
33,766 |
17,857,889 |
|
Subscription price |
0p - 207p |
23p - 128p |
|
|
Dates exercisable |
August 2009- |
May 2009- |
|
|
|
August 2014 |
August 2009 |
|
|
Weighted average exercise price |
20p |
46p |
|
e) Cancelled shares
2,560,698 shares were cancelled during the year, having been acquired at an average cost of 25.8p per share, as part of the Group's share buy-back programme.
f) Own shares reserve
The own shares reserve £3,657,000 (2008: £5,132,000) represents the cost of shares in Anite plc purchased in the market for the following trusts of the Company:
i) At the start of the year, 6,542,355 shares at a cost of £4,375,000 were held in the Company's Employee Share Ownership Plan ('ESOP') to satisfy some of the PSP and SMP awards, that part of the employers' NIC liability of the Group's share options schemes and all of the MIP awards. These shares will be held until the performance conditions of the relevant share plan awards are fulfilled. During the year 1,217,220 shares were sold at fair value of £354,000 to satisfy awards that were vested and 591,682 shares were redeemed under the share consolidation.
ii) 1,712,524 shares at a cost of £953,000 are held for the Company's Share Incentive Plan (SIP) under the SIP scheme. These shares will be held until the conditions of the SIP are fulfilled. Of this amount, 568,906 shares were purchased at a cost of £195,000 during the year.
This information is provided by RNS
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