Final Results
For Immediate Release
Wednesday, 2 July 2014
Anite plc
Final results for the year ended 30 April 2014
Anite plc ("Anite" or "the Group"), the leading provider of software and hardware solutions to the international wireless market, today announces its final results for the year ended 30 April 2014.
Financial highlights (adjusted) 1
· Revenue £109.2m (2013: £113.1m)
· EBITDA £24.0m (2013: £35.5m)
· Operating profit £15.3m (2013: £29.7m)
· Operating margin of 14% (2013: 26%)
· Profit before tax £14.9m (2013: £29.5m)
· Diluted adjusted earnings per share 3.9p (2013: 7.1p)
· Closing order book up 14% to £30.9m (2013: £26.9m)
· Strong operational cash conversion
· Net cash of £6.1m (April 2013: net debt £0.9m)
Statutory results
· Revenue from continuing operations £109.2m (2013: £113.1m)
· Profit from continuing operations £7.8m (2013: £15.6m)
· Profit from discontinued operations £4.5m (2013: £3.7m)
· Profit for the year £12.3m (2013: £19.3m)
· Basic statutory earnings per share from continuing operations 2.7p (2013: 5.5p)
· Diluted earnings per share from continuing operations 2.6p (2013: 5.1p)
Dividend maintained
· Proposed final dividend 1.265p (2013: 1.265p)
- total dividend 1.84p (2013: 1.84p)
Operating highlights1
· Results in line with expectations
· Handset Testing - progressive improvement in second half
· Network Testing - strong performance throughout year
· Maintained strong R&D investment £20.8m (2013: £18.9m)
· Travel disposal 29 May 2014 for total consideration £45m
- £43.3m cash received on completion
- Travel revenue £20.5m (2013: £19.4m); operating profit (before share-based payment charge) £5.5m (2013: £4.8m)
Current trading
· Trading ahead of the same period last year
1Adjusted results are for continuing operations (excluding Anite Travel) before share-based payments, amortisation of acquired intangible assets and restructuring costs.
Christopher Humphrey, Chief Executive, said:
"We are pleased to report that Anite had a strong finish to the financial year despite the challenging first half market conditions in the Handset Testing business. Second half trading improved progressively in Handset Testing with a good performance throughout the year by Network Testing.
"Since the start of the new financial year we have sold our Travel business which will enable us to focus on growth opportunities in the wireless market. We believe that with two well-positioned, complementary businesses and a strong balance sheet, Anite is entering an exciting new phase in its development."
For further information, please contact:
Anite plc www.anite.com
@AniteNews
Christopher Humphrey, Chief Executive 01252 775200
Richard Amos, Group Finance Director
MHP Communications 020 3128 8100
Reg Hoare/Giles Robinson
An analysts' meeting will be held today at 9.15 for 9.30am at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS
Notes to editors
Anite plc is a leading provider of software and solutions to the international wireless market, supplying major device, chipset and network equipment manufacturers, mobile operators and test houses. It provides mobile device, infrastructure and network testing systems based on its specialist sector knowledge and on its proprietary software and hardware products.
Its 400+ staff work from headquarters in the UK and from offices in 14 countries across Europe, the Americas, Asia and the Middle East.
This preliminary results announcement contains forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results to differ from any future results or developments expressed or implied from the forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement and, save to the extent required by the applicable law or regulation, we do not undertake any obligation to update or renew any forward-looking statement.
Final results for the year ended 30 April 2014
All references to adjusted results relate to continuing operations for the period, before 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 in the Financial Review.
Chairman's and Chief Executive's statement
We are pleased to report that Anite had a strong finish to the financial year despite the challenging first half market conditions in the Handset Testing business. Second half trading improved progressively in Handset Testing with a good performance throughout the year by Network Testing.
The sale in May 2014 of our Travel business was in line with our stated strategy to reinforce our position as a global leader in wireless test solutions and has resulted in Anite now being focused as a pure-play wireless company.
We continue to believe that the underlying drivers for the business, namely the evolution to more complex mobile technology, the demand for faster, multi-generational smart devices and the growth in mobile data traffic, remain undiminished. In addition, new technology is enabling operators to collect, report and analyse more customer experience and network performance data from multiple sources which can then be fed back into network improvements to optimise the customer's experience. These drivers increase the level and quantity of testing that needs to be undertaken by our customers to ensure the quality of new devices and mobile networks.
Strategy
Our strategy is to reinforce Anite's position as a global leader in wireless test solutions.
The Board believes that both Handset Testing and Network Testing operate in long-term growth markets, which have high barriers to entry and relatively few major competitors. This enables good profit margins and return on investments to be generated. As a focused wireless business with a strengthened balance sheet, we will be better able to take advantage of the growth opportunities in the wireless market through sustained investment in our products to maintain market leadership.
As our customers demand a broader range of more sophisticated wireless testing products to help them develop more complex devices and networks, we will use our considerable domain knowledge and technological expertise to grow our customer base. We will achieve this by investing in new and existing products, executing on our technology roadmap and expanding into adjacent market areas that we believe have good growth potential. Growth will also continue to come from the lengthy and cumulative product and technology life cycles driven by the ongoing evolution of the wireless mobile market.
The Board anticipates that the majority of our growth will be driven organically and supplemented by modest product, technology or intellectual property acquisitions to bolster our positions in current markets and to expand our potential opportunities in adjacent markets.
Acquisition opportunities are available in both of our businesses, principally in new and evolving technology and growth areas that are closely related to current expertise and where we can exploit our global sales and marketing capability. In a rapidly changing industry such as wireless mobile, there are many acquisition opportunities presented to us, most of which are relatively small. Timing is difficult to predict and we are highly selective in what we target. Underlying our acquisition strategy is a commitment that each potential acquisition target meets our strict financial criteria. Anite has a good recent track record of identifying, negotiating, completing and integrating acquisitions.
Results summary
Anite had a disappointing first half, notably in our Handset Testing business where market growth was interrupted and we, along with other vendors, experienced a reduction in revenue. This was primarily caused by a lack of revenue generating catalysts due to two factors, firstly a well-documented consolidation in our customer base due to merger and acquisition activity and secondly, a notable lack of specific technology drivers which tend to drive orders and revenue. There was also an expected decline in 2G/3G business.
During the second half, there was progressive improvement in Handset Testing as a number of these technology and customer-related revenue catalysts were triggered and started to benefit the business. Additionally, the Propsim Channel Emulator product line, acquired in January 2013, has been fully integrated into the Handset Testing business and performed well, delivering positive revenue and profit contribution in the year.
The impact of lower revenue was compounded by the fixed costs that came with the Propsim acquisition. This resulted in a significant reduction in Handset Testing profitability in the year.
Network Testing performed well throughout the year and achieved its full year expectations. Management changes earlier in the year have strengthened its team. Growth was driven by strong market demand for LTE 4G products and new products such as customer experience monitoring solutions and scanners, particularly in Asia Pacific and Caribbean Latin America. This was supplemented by the acquisition of Genetel, our previous French distributor, made in July 2013, which performed well following a successful integration.
Throughout the year we continued to invest in R&D in both businesses to ensure that we remain well placed to achieve our strategic goals. Total R&D spending was £20.8m (2013: £18.9m), representing 19% of revenues. We are confident the investment in providing the products our customers need, will deliver organic growth in future years.
Group adjusted operating profit from continuing operations was down 48% to £15.3m (2013: £29.7m), on revenue down 3%, to £109.2m (2013: £113.1m). Diluted adjusted earnings per share were down 45%, to 3.9p (2013: 7.1p).
Dividend
The Board is pleased to recommend a final dividend of 1.265p per share, which is unchanged on the prior year. This will result in a total dividend for the year of 1.84p per share, also unchanged on the prior year. The maintained dividend reflects the Board's confidence in Anite's future prospects and its strong balance sheet.
Going forward, the Board's intention is to maintain a progressive dividend policy, broadly in line with underlying earnings growth, and to retain strong dividend cover. The Board continues to balance the need to maintain the financial flexibility that enables a high level of investment in the business and provides funds to make selective acquisitions, whilst delivering attractive shareholder returns.
Disposal of Travel
In May 2014 Anite sold its Travel business to LDC, the leading UK mid-market private equity house, and Travel's management for a total cash consideration of £45.0m. The consideration is subject to customary completion adjustments and £1.7m was held in escrow at completion. In this report Travel is treated as a discontinued operation and its net assets and liabilities are shown as held for sale in the balance sheet at 30 April 2014.
The disposal reflects Anite's strategy to focus on the wireless market, the inflection point reached in the performance of Travel and the prospects for the underlying leisure travel industry. A good level of interest and indicative prices were received from a number of potential buyers prior to proceeding with the disposal to LDC. The ultimate disposal price was considered to be a fair reflection of the value of Travel taking into account its prospects and market position.
In summary, the disposal enables Anite to focus on growth opportunities in the wireless mobile market, whilst continuing to concentrate on maximising long-term shareholder value.
Financial summary
Robust cash generation enabled Anite to maintain a strong financial position at the year-end with net cash of £6.1m (2013: net debt £0.9m). The net cash position has significantly increased since the year-end following receipt of the proceeds from the Travel disposal.
It is the Board's intention that Anite should maintain a strong financial position to provide financial flexibility. It will achieve this through a combination of optimising cash management, while retaining access to appropriate bank facilities to fund selective acquisitions.
People
We are grateful to the management and staff across the Group for their hard work and ongoing commitment. The Board acknowledges that Anite's success is testament to both the quality of our solutions and the skills and exceptional industry expertise of our people.
Summary and outlook
Over the last ten years, Anite has progressively sold non-core assets and reinvested the proceeds in its wireless businesses. This will be the first year when management can focus solely on the wireless mobile market. We have two well-positioned complementary businesses and a strong balance sheet, which we intend to capitalise on to enhance shareholder value. We believe that Anite is entering an exciting new phase in its development, and is well placed to take advantage of growth opportunities.
The technology and customer-related revenue catalysts that we saw benefit the second half of the year have sustained our confidence in the underlying drivers supporting our longer-term growth aspirations for both businesses. These trends have continued in the first two months of the new financial year with trading ahead of the same period last year.
As we saw last year however, markets can be unpredictable in the short-term, with continued industry consolidation and ebbs and flows in the pace of technology developments that drive purchasing in Handset Testing in particular. Handset Testing also retains a trading bias to its second and fourth quarters, whilst both businesses by their nature have short order books. This is why we remain conservative with our short-term guidance, which is towards the lower end of a wide range of current market expectations at this early stage of the year.
Overall, we expect the coming financial year to be one of recovery with Group revenue percentage growth in high single digits and similar growth rates expected from both businesses. With continued focus on cost control and the benefit of operational gearing, we expect a significant rebound in profitability in the coming year.
Clay Brendish Christopher Humphrey
Chairman Chief Executive
1 July 2014
Review of operations
All references to adjusted results relate to continuing operations for the period, before 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 in the Financial Review.
Overall Wireless Trends
The world has "gone mobile". Emerging markets, particularly in Asia, are the principal drivers of the growth in subscribers and it is forecast that, by the end of 2014, the number of mobile subscriptions will be equal to the world's population.
A country's mobile infrastructure fuels and supports growth in the wider economy and is now as vital as its energy grid or transport network. It needs a high level of continued investment to ensure that additional capacity and capability can be built to meet growing consumer demand and technical innovation and to find new ways of connecting people and industries -- including automotive, utilities, health and education - and new ways of managing financial transactions.
Growth in mobile data traffic continues. Driven by the proliferation of smartphones and tablets, it has been made possible by the evolution of technology from lower- to higher-generation network connectivity (2G to 3G, 3.5G and LTE 4G). Devices' increased capabilities, combined with faster, higher bandwidth and more intelligent networks, lead to ever more data traffic. A single smartphone that is used to download videos, data and audio can, for example, generate as much data traffic as 49 basic feature phones and a tablet can generate as much as 127 - and many people in the developed world now own both. Mobile data traffic, driven by mobile video - which is expected to grow a further 11-fold by 2018 - will put more stress on the networks. While mobile network connection speeds more than doubled in 2013, consumers are demanding ever faster download speeds while still expecting good quality service at all times.¹
LTE 4G technology will go some way towards meeting the demand: service providers around the world are busy rolling out LTE 4G networks to help meet the need for more bandwidth, higher security and faster mobile connectivity. New LTE 4G features such as Voice over LTE ("VoLTE") and Carrier Aggregation are gaining ground. Although only around 245 million of the world's nearly 7 billion mobile phone users currently subscribe to LTE 4G, it already carries around 30% of all mobile data traffic. In 2013, an LTE 4G connection consumed an average of 14.5 times more data than a non-4G connection. ¹ ²
Maintaining the quality of experience for the consumer has become a key differentiator for operators. To succeed in today's market, it is vital to ensure that complex mobile networks and devices operate effectively and work intelligently. Devices need to support multi-technology networks (2G, 3G, 4G LTE, LTE-Advanced), be able to select the best mode of access to the network and support more than 40 frequency bands.
Devices are at the centre of this complexity and are critical to operators' success. They need to be well tested, not simply to check that they work, but also to check how well they work on specific networks so that they provide a seamless user experience. More tools are required to test and bring devices to market quickly. Assuring their interoperability and performance before accepting them on a network enables operators to verify service quality and reduces customer churn. Network quality and coverage also need to be constantly measured, monitored and optimised.
Plans for further growth are in place. While the next iteration of LTE, LTE-Advanced ("LTE-A"), will be able to squeeze even more capacity out of existing radio spectrum, it will not support future growth indefinitely. As a result, the foundations are now being laid for 5G, the next generation mobile and wireless communications system; 5G will address the predicted huge surge in mobile data consumption where data will become available anywhere and anytime, to anyone and anything.
In the race for differentiation, device manufacturers - including operating system developers - are driving innovation by making devices faster, lighter and more intuitive. Supported by a vast and growing eco-system, operators, network infrastructure vendors and content providers are all responding to demands to develop their technology into areas beyond pure mobile telecommunications. Connected living, "wearable devices" and the "Internet of Things" are all realities - wireless connections between objects, machines or sensors control machine-to-machine technologies at home, in the community and across a broad range of industries. In time, this will also create more opportunities for testing.
¹Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013-2018
²GSA Evolution to LTE Report, June 2014
Performance
Handset Testing
The adjusted results for the Handset Testing business reflect the market conditions in the first half and a progressively improving second half. Order intake fell 9%, to £81.3m (2013: £88.9m), revenue by 11% to £77.3m (2013: £87.0m) and adjusted operating profit reduced by 59%, to £10.8m (2013: £26.3m) as the impact of reduced revenue was compounded by lower margins, a £1.5m bad debt in China and a higher fixed cost base following the acquisition of the Propsim Channel Emulator product line in January 2013. The closing order book increased 15%, from £26.8m at the start of the year to £30.8m at 30 April 2014, due to the signing of a number of multi-year maintenance deals.
Year-on-year comparison is impacted because of the full year impact of the acquisition of Propsim. Propsim performed well in the year, generating revenue of £10.1m (2013: £2.7m for the three months post acquisition) and adjusted operating profit of £1.8m (2013: £0.5m post acquisition). Adjusting for this, and for minimal foreign exchange translation impacts, the underlying organic reduction in revenue and adjusted operating profit for the Handset Testing business was 20% and 65% respectively.
A number of factors influenced the organic reduction in revenue of the business, particularly in the first half of the year. Initially the year started slowly, partly because there was a lack of technology catalysts in the first half of the year that typically drive customer buying decisions. Additionally the first half of the year was adversely impacted by significant corporate activity that disrupted the investment plans of a number of industry participants, with actions such as Microsoft buying Nokia, Broadcom buying assets from Renesas and the well documented challenges experienced by Blackberry. These impacts resulted in revenue in the first half that was organically down 33%. The second half of the year has seen a progressive recovery, driven by a resumption of certain technological and customer catalysts. Of specific note has been spending by customers on TD-LTE solutions, in large part to support their investments in products for China Mobile following its receipt, in December 2013, of licences to operate LTE 4G networks.
Adjusting for the full year effect of channel emulators, the split of revenue by product was largely unchanged year-on-year, with conformance testing retaining the largest share. Further analysis of the technology drivers behind buying decisions is harder than in the past, as early in the year we launched a multiple technology platform that combined LTE 4G and 3G. However it is clear that a significant part of the reduction in revenue has come because spending on new platforms for legacy 2G and 3G technologies has significantly decreased, as we expected it would, following on from the growing momentum with LTE 4G.
The factors described above affected the regional revenue split. Revenue in Asia Pacific increased 43% to £41.1m (2013: £28.7m), making it our largest region. EMEA revenue fell 35%, to £13.0m (2013: £19.9m), while revenue for the Americas decreased 40% to £23.2m (2013: £38.4m) following the exceptional performance in the prior year.
Handset Testing's net revenue margin (revenue, less third-party hardware costs, as a percentage of revenue) decreased in the year, as predicted, to 75% (2013: 77%). Some pricing pressure was inevitably experienced, given the challenging market conditions. This was partially offset by an increase in the proportion of revenue from maintenance services which went from 27% to 35% across the year.
Despite the challenging market conditions, we have continued to invest in research and development to ensure the product portfolio remains at the forefront of the industry. The cash spent on R&D projects increased to £15.7m (2013: £14.8m), with the increase due to the full year effect of Propsim partially offset by slightly lower staff costs elsewhere. The amount incurred this year on capitalised R&D fell, following the significant level of investment in previous years writing LTE 4G conformance testing ("CT") and interoperability ("IOT") scripts. As a result, net capitalisation of R&D costs was £0.4m (2013: £1.0m). After adjusting for net capitalisation, the income statement charge for R&D increased in the period to £15.3m (2013: £13.8m).
The key R&D focus has been LTE-Advanced enhancements to all the main product lines. Additional enhancements to the Anite 9000 hardware platform have included extensions to 3G, fading and new generation tools to further enhance the customer experience. The emphasis for development testing ("DT") has remained on supporting development of leading edge new features in chipsets, whilst the primary focus in CT and IOT has been the creation of new test cases for LTE-A (in particular carrier aggregation), for VoLTE and for performance tests such as data throughput and battery performance. The Channel Emulator product has been developed to prepare for the Multiple-Input-Multiple-Output Over-the-Air ("MIMO OTA") standards announcement and investment has increased the software content of channel emulation solutions. These innovations will enhance revenue in the current year. Additionally looking out to the longer-term, work has included commencing initial 5G research activities including involvement as the sole test and measurement partner in the EU funded METIS research consortium, although it is likely to be some years before this generates significant revenue.
Other fixed costs in Handset Testing increased by £4.5m to £31.6m (2013: £27.1m), with the Propsim full year effect representing around £2.9m of the increase. The rest was essentially due to a £1.5m bad debt incurred in Asia Pacific in the second half of the year following an apparent fraud at a Chinese distributor. Sensible fixed cost containment was a feature of the year, including a rebalancing of permanent employees and short-term contractors with Handset Testing having 296 employees at the year-end (2013: 288) and 30 contractors (2013: 59), to give a total headcount of 326 (2013: 347).
Overall, as a result of the factors described above, Handset Testing's adjusted operating margin decreased to 14% (2013: 30%).
Prior to the year-end the business undertook a redundancy programme to re-align costs with on-going requirements. The cost of that programme was £0.5m and is included within restructuring costs that sit outside of adjusted operating profit. The programme is expected to result in annual savings of £1.0m.
Handset Testing Growth
As the wireless mobile market continues to grow, more tools are required to test and bring quality devices to market quickly. To enable our customers to exploit developments in technology and to expand our markets, we will continue to increase our range of products and to develop our proprietary hardware platform.
Since the launch of the Anite 9000 platform, our development team has spent some of their time adapting legacy technology onto that platform, as well as keeping up with the significant pace of change required by the enhancements to LTE 4G technology brought about by LTE-A, Carrier Aggregation and VoLTE. Much of this legacy work is now complete, enabling more resource to concentrate on additional innovation.
We will maintain our technology leadership in CT and will continue to work in partnership with industry-leading customers to enable them to build new quality products using our DT solutions. We expect demand for IOT to continue to increase and will expand the number of new worldwide IOT eco-systems by anticipating and responding to operators' needs. Our Propsim channel emulation solutions will enable us to increase our presence in the performance testing market.
We will continue to expand into adjacent markets, as appropriate, to meet our customers' demands. We are planning for generations of technology beyond LTE 4G and LTE-A and will also continue to support our products that deal with legacy technologies.
Network Testing
Network Testing achieved a 22% increase in revenue to £31.9m (2013: £26.1m) with order intake up 22% at £31.9m (2013: £26.2m). This business has no significant closing order book. Adjusted operating profit increased by 7%, to £6.0m (2013: £5.6m). These results are impacted by the acquisition of the business's former French distributor, Genetel, in July 2013, which contributed £1.9m of incremental revenue and £0.3m of adjusted operating profit. Adjusting for this impact and for small positive foreign exchange translation impacts, the underlying organic revenue growth was 13% with adjusted operating profit decreasing by 1% partly due to one-off costs in the second half of the year.
The business performed well overall, in market conditions that reflected the increased adoption of LTE 4G and hence a willingness on the part of operators to invest in tools that support roll-out, commissioning and optimisation. Network Testing's revenue in EMEA increased 23% to £13.0m (2013: £10.6m), mainly because of the Genetel acquisition, whilst in Asia Pacific revenue grew by 39% to £11.0m (2013: £7.9m) due to strong market conditions. In the Americas, revenue was broadly flat at £7.8m (2013: £7.6m).
The underlying revenue growth came in part from the first sales of the new Customer Experience Monitoring ("CEM") product that was launched during the year. It also came from increased sales of scanner products for which there was strong demand, particularly in Asia. This included sales of our Nemo FSR1 scanner product that was purchased in January 2011 with the Invex products and also included sales of third party scanners on which we typically make lower margins. The impact of the lower margins made on third party sales led to the net revenue percentage decreasing by 4 percentage points to 68% (2013: 72%).
The year saw significant investment in product development to support the growth with improvements made to all the Network Testing products during the period. R&D costs increased 13% to £4.4m (2013: £3.9m), including £1.0m of capitalised development (2013: £0.4m). The overall product portfolio was extended significantly with a focus on application testing and accurate end-user experience measurements including with the Anite CEM Solution which was introduced in the year whilst the drive test and benchmarking products were developed to support additional popular smartphones, data modems and tablets including specific functionality for devices running the Android operating system to allow our customers to better reflect real consumer use cases at data speeds up to and including LTE 4G categories 4 and 6. The handheld measurement product portfolio was extended with the new Walker Air concept which offers our customers a flexible and cost efficient walk test option, specifically optimised for indoor measurements. Our post-processing toolset was extended with the Nemo Commander solution that introduces an efficient remote control framework for managing Anite network test units, such as Nemo Outdoor, Nemo Invex and Nemo Explorer, in the field. This brings our customers significant cost optimisation opportunities as it allows engineers to monitor and manage multiple drive tests simultaneously from a central location.
Other fixed cost of sales and overheads increased £2.1m to £11.4m (2013: £9.3m). £1.0m of the increase related to overhead acquired with Genetel. Of the balance, £0.4m incurred in the second half were essentially one-off costs, with £0.3m a provision for potential bad debts and £0.1m redundancy costs. Headcount in Network Testing at the year-end was 140, including 10 employees taken on as a result of the acquisition of Genetel (30 April 2013: 113).
Overall, after the factors above, adjusted operating margins for the Network Testing business decreased slightly to 19% compared to the 21% achieved in the prior year.
Network Testing Growth
LTE 4G business is expected to increase as the wireless mobile market continues to grow and more commercial networks are rolled out and enter into the maintenance phase when testing tools will need to be refreshed and upgraded. We have the most comprehensive LTE 4G product portfolio on the market and will continue to develop next-generation solutions to meet market requirements and to expand our sales channels. We also expect to continue to make progress with our market-leading scanner and benchmarking solutions and with our CEM solution. The expected growth in mobile data traffic will drive technological innovations to enable this data to be more intelligently collected, reported and analysed and then fed back into network improvements to optimise Quality of Experience ("QoE").
Network Testing's product development programmes are increasing the range of products to enable our Network Testing customers, worldwide, to capitalise on changes in technology and will expand into adjacent markets, as appropriate, to meet our customers' needs.
We will continue to support products that address legacy technologies and are planning for future generations of technology beyond LTE 4G and LTE-A.
Corporate costs
The divisional performances discussed above are stated before unallocated corporate costs which include an element of head office staff costs, Directors' remuneration, professional fees and other non-operational costs. During the year, unallocated corporate costs decreased by £0.7m to £1.5m (2013: £2.2m), largely because of lower bonus provisions and reduced property costs.
Christopher Humphrey
Chief Executive
1 July 2014
Financial review
Throughout this review, reference to adjusted results means the results for continuing operations before, where applicable, share-based payments, amortisation of acquired intangible assets and restructuring costs.
On 1 July 2013, we acquired Genetel SAS ("Genetel") for £1.6m including costs. The acquisition was funded through existing cash resources. The results for the 10 months since acquisition are included within the Network Testing business.
After the year end, on 29 May 2014, we disposed of Anite Travel Ltd and its wholly owned subsidiary Anite Travel Pty Ltd, which had previously comprised the Travel division. The results for Travel are therefore included within discontinued operations, with comparative numbers in the income statement similarly adjusted. Travel's underlying assets and liabilities are included as held for sale on the balance sheet at 30 April 2014, but remain disclosed within individual line items at 30 April 2013. The profit on sale will be recorded in the results to 30 April 2015.
The Propsim business was acquired on 31 January 2013, and the results for the year to 30 April 2013 therefore only include three months of Propsim trading within the Handset Testing business. A full twelve months' trading is included in the results to 30 April 2014.
Financial results
Revenue from continuing operations was down 3% at £109.2m (2013: £113.1m) and adjusted profit before tax decreased 49% to £14.9m (2013: £29.5m).
Reconciliations of the adjusted EBITDA, of £24.0m (2013: £35.5m), to the operating profit, of £9.3m (2013: £22.3m), and adjusted operating profit, of £15.3m (2013: £29.7m), to the reported profit from continuing operations before tax for the year, of £8.9m (2013: £22.1m), are set out in the tables below. The reconciling items are those that, in the opinion of the Board, are either one-off in nature or are non-cash related and are not, therefore, indicative of the Group's underlying trading. In the opinion of the Board, the adjusted results give a better representation of the underlying performance of the Group.
|
£m |
2014 |
|
2013 |
|
Adjusted EBITDA |
24.0 |
|
35.5 |
|
Depreciation |
(5.2) |
|
(3.2) |
|
Amortisation of intangible assets |
(3.5) |
|
(2.6) |
|
Adjusted operating profit |
15.3 |
|
29.7 |
|
Restructuring costs |
(0.5) |
|
- |
|
Genetel/Propsim acquisition costs |
(0.5) |
|
(1.2) |
|
Share based payments |
(0.2) |
|
(3.2) |
|
Amortisation of acquired intangible assets |
(4.8) |
|
(3.0) |
|
Operating profit |
9.3 |
|
22.3 |
|
Adjusted operating profit |
15.3 |
|
29.7 |
|
Net finance charges |
(0.4) |
|
(0.2) |
|
Adjusted profit before tax |
14.9 |
|
29.5 |
|
Restructuring costs |
(0.5) |
|
- |
|
Genetel/Propsim acquisition costs |
(0.5) |
|
(1.2) |
|
Share based payments |
(0.2) |
|
(3.2) |
|
Amortisation of acquired intangible assets |
(4.8) |
|
(3.0) |
|
Profit from continuing operations before tax |
8.9 |
|
22.1 |
Currency effects
Movements in exchange rates in the year had a limited effect on the results compared with the previous year. Year-on-year, the average exchange rate for the US Dollar weakened by 1% against Sterling, from £1 = US$1.58 to £1 = US$1.60, with the average rate of the Euro strengthening by 2%, from £1 = €1.22 to £1 = €1.19. The net effect of these changes on the translation of results from overseas subsidiaries was to reduce revenue by £0.1m and increase profit by £0.1m.
The closing exchange rates at the year-end, which affect the conversion of foreign exchange-denominated balance sheet items - such as cash, and trade debtors and creditors - saw a weakening of both the Euro and US Dollar against Sterling. The closing rate for the Euro weakened by 2% against Sterling, from £1 = €1.19 to £1 = €1.22 and the Dollar by 8% from £1 = US$1.55 to £1 = US$1.68.
Where possible, exposures associated with foreign currency balance sheet accounts are hedged or minimised by converting into local currencies, as are the transactional effects of business units trading in currencies other than their local currency. In the year, these transactional exposures had a net £0.7m negative profit impact - split equally between Handset Testing and Network Testing - predominantly due to the weakening of the Dollar. The overall translational and transactional currency movements resulted in a £0.6m negative year-on-year impact on operating profit.
Revenue
Revenue from continuing operations decreased in the year by 3% to £109.2m (2013: £113.1m). On a constant currency basis and excluding the impact of acquisitions, the underlying organic Group revenue reduction was 12%.
On a geographic basis, Group revenue by destination showed a reversal on last year's trend, with Asia regaining its position as the most significant region, and representing nearly half of Group revenue as the Americas experienced a reversal of the strong increases in 2013. The proportions of total revenue by region were: UK 3% (2013: 4%); EMEA 21% (2013: 23%); Americas 28% (2013: 41%); and Rest of World (mainly Asia) 48% (2013: 32%).
The principal changes in our type of revenue in the year were the 16% growth in recurring software maintenance revenue to £31.6m (2013: £27.3m), representing 29% of total revenue (2013: 24%). This increase was offset by the reduction in sales of software product licences and hardware/third-party equipment, which fell by 9% to £77.6m (2013: £85.8m).
Cost of sales and gross profit
Variable cost of sales increased 10% from £26.9m in 2013 to £29.5m. This was partly because the mix of business shifted towards Network Testing products that typically carry a slightly higher proportion of variable cost of sales. Additionally in both businesses there was a slight increase in variable cost of sales as a proportion of revenue as explained in the Review of operations. As a result the net revenue percentage for the Group fell from 76% to 73% in the year.
Fixed cost of sales also increased by 22% to £16.9m (2013: £13.9m). This was predominantly because of the cost of resources from the acquired businesses. As a result of the above, the gross margins fell by 6 percentage points to 58%.
Operating expenses
Total operating expenses in the period increased 7% to £53.5m (2013: £50.0m). A detailed breakdown of operating expenses is given in note 2(e).
Excluding one-off and non-cash items, adjusted operating expenses increased 11% or £4.8m to £47.5m (2013: £42.7m).
£2.2m of the £4.8m increase is related to the acquisitions, with the full year impact of the extra overhead acquired with Propsim and the ten months since acquisition of Genetel. Of the remainder, £1.7m relates to net provisions for bad debts incurred in the period which compares to net debt provision releases in 2013 of £0.5m. Other fixed costs are essentially flat, with lower bonus and commission payments offsetting increased depreciation.
After underlying operating expenses, the adjusted operating profit was down 48% to £15.3m (2013: £29.7m). Propsim contributed £1.8m (2013: £0.5m in the three months from acquisition), whilst Genetel contributed £0.3m in the ten months from acquisition. The underlying organic profit reduction was 55%, after adjusting for currency and acquisition impacts. Adjusted EBITDA was down 32%, at £24.0m (2013: £35.5m).
One-off and non-trading operating expenses for continuing operations, excluded from adjusted profit calculations, totalled £6.0m (2013: £7.4m). These included £0.5m of one-off acquisition and integration costs for the Genetel business (2013: £1.2m for Propsim) plus £0.5m redundancy costs incurred in Handset Testing towards the year-end in restructuring the cost base going forward. It also included amortisation of acquired intangible assets of £4.8m (2013: £3.0m) and a reduced charge for share-based payments of £0.2m (2013: £3.2m) due mainly to a reduction in the provision for National Insurance costs reflecting the lower share price.
After these non-operational costs, the Group reported an overall statutory operating profit of £9.3m (2013: £22.3m).
Group finance costs
Net finance charges increased in the year to a net £0.4m (2013: £0.2m). The increase reflected the fact that the Group's facilities were only drawn part way through the prior year on the acquisition of Propsim.
Taxation
The tax charge for the year on continuing operations was £1.1m (2013: £6.5m). The tax rate on the statutory operating profit was 12.3% (2013: 29.4%). This was lower than would be expected due to the impact of reducing corporation tax rates in Finland and the UK on deferred tax liabilities. The underlying adjusted tax rate on adjusted profit before tax is 22.5% (2013: 26.3%). This was again lower than might be naturally expected due to the reduced proportion of Group revenue and profits from North America which has a higher underlying tax rate.
Discontinued operations
Profit from discontinued operations of £4.5m comprises two items: The post-tax results for the Travel business unit disposed of shortly after the year-end of £4.0m and the release of an expired warranty provision relating to a previous disposal of £0.5m.
The Travel business had a good year, with order intake of £22.0m (2013: £10.2m) as it signed a number of new implementations for its @com tour reservation system. Additionally it made progress on the long-term implementations it has been working on for some time. Revenue was £20.5m, up 6% from the £19.4m in the prior year. The impact of the increased revenue on a fixed cost base resulted in a proportionally higher adjusted operating profit increase of 15% from £4.8m in 2013 to £5.5m in 2014. After share-based payment charges of £0.2m (2013: £0.2m) and tax of £1.3m (2013: £0.9m), the profit after tax was £4.0m (2013: £3.7m).
Shareholder returns
After taking account of the factors described above, adjusted basic earnings per share were 4.0p (2013: 7.6p) and diluted adjusted earnings per share were 3.9p (2013: 7.1p). The statutory basic earnings per share for continuing operations were 2.7p (2013: 5.5p).
The Board is proposing to hold the final dividend at 1.265p per share (2013: 1.265p) making a total for the year unchanged at 1.84p which is covered 2.2 times by adjusted basic earnings.
Balance sheet
Non-current assets
Non-current assets have decreased from £116.4m to £103.6m largely due to the transfer to assets held for sale of £6.2m of goodwill and £0.8m of property, plant and equipment relating to the Travel business. Additionally the deferred tax asset has reduced from £4.8m to £2.2m due to share-based payment effects.
Inventories
The carrying value of inventories has decreased by £1.9m to £10.1m at 30 April 2014 (30 April 2013: £12.0m). This reflects the benefit of inventory management initiatives taken within the Handset Testing business to reduce manufacturing lead times and hence inventory holding levels.
Trade and other receivables
Trade and other receivables were £41.6m at 30 April 2014 (30 April 2013: £47.6m including £6.6m relating to Travel). Within this, trade debtors net of provisions reduced to £34.1m (30 April 2013: £37.4m including £4.4m relating to Travel). The increase in the amount for continuing operations was largely because the timing of orders in Handset Testing in 2014 allowed more of April's revenue to be invoiced compared to last year when £2.4m ended up being invoiced shortly after the year end. Debtor days at 30 April 2014 were 65 days (30 April 2013: 76 days for continuing businesses). Accrued income (revenue taken to the income statement, but not yet invoiced to customers) decreased by £3.4m, to £2.2m (30 April 2013: £5.6m of which £1.9m related to Travel). The underlying reduction relates to Handset Testing and reflects the order timing point discussed above.
Trade and other payables
Trade and other payables were £42.1m at 30 April 2014 (30 April 2013: £46.6m, of which £4.7m related to Travel). Within the balance, deferred income relating to the continuing operations (amounts invoiced to customers but not yet recognised as revenue in the income statement) has increased from £19.4m to £23.4m reflecting the signing in the year of a number of three year maintenance deals with accelerated billing profiles. Offsetting this, accruals have decreased to £8.1m (30 April 2013: £13.8m including £1.0m relating to Travel). The underlying decrease is partly because of reclassifying to provisions a £2.5m balance relating to anticipated National Insurance costs on share-based payments. Additionally there are lower accruals for bonuses and commissions plus the resolution during the year of Propsim completion working capital adjustments that had been accrued at 30 April 2013.
Provisions
Provisions were £5.3m at 30 April 2014 (30 April 2013: £5.3m including £0.6m relating to Travel). The main underlying change was the reclassification of the National Insurance provision from accruals.
Cash flow
Cash flow in the year has been strong. Cash generated from operations (continuing and discontinued) increased to £33.0m (2013: £31.0m) on EBITDA (continuing and discontinued operations) of £29.8m (2013: £40.5m) representing a conversion rate of 111% (2013: 77%). The significant increase in the conversion rate was primarily due to a reversal of the buildup in working capital that had occurred in the prior year, partly because of inventory management actions and partly because of a smoother profile of invoicing in the fourth quarter in Handset Testing.
Capital expenditure in the period increased to £7.3m (2013: £5.5m). Significant purchases included £3.0m (2013: £1.7m) on Anite 9000 development equipment and £1.4m within the Propsim product line. In addition £3.8m (2013: £3.4m) was incurred on capitalised development expenditure with the increase in Network Testing as we accelerated the pace of its product development.
Net payments for finance costs were £0.5m (2013: £0.1m) while tax payments decreased to £3.6m (2013: £7.1m), a reflection of decreased profits. Dividends paid to shareholders increased 8% to £5.3m (2013: £4.9m) and an additional £3.5m (2013: £4.0m) was incurred on the purchase of shares for the Company's employee benefit trust.
The total cash incurred on acquisitions in the year was £3.3m including £0.5m costs for Genetel and a £0.7m final purchase price adjustment for Propsim. These costs were offset by £0.9m of cash acquired with Genetel.
The gross cash balance at 30 April 2014 was £17.0m (30 April 2013: £16.7m) and with £10.9m of borrowing outstanding at 30 April 2014 (30 April 2013: £17.6m) the net cash position at 30 April 2014 was £6.1m (30 April 2013: net debt of £0.9m).
Borrowings and facilities
The Group's banking facilities totalled £30.0m (2013: £25.0m) including a revolving credit facility ("RCF") of £20.0m (2013: £20.0m) and a net overdraft facility of £10.0m (2013: £5.0m). The RCF is due to expire on 31 October 2016 and the overdraft is due for renewal on 31 July 2014. The Group repaid £6.7m in the year of drawings previously made under its facilities to take the outstanding balance to £10.9m at 30 April 2014. This left £9.1m undrawn on the RCF and with no drawings against its net £10m overdraft facility, at 30 April 2014 the Group had a total of £19.1m of undrawn facilities (2013: total undrawn facilities £7.4m). Since the year-end, the remaining £10.9m of drawings has been repaid by the proceeds from the disposal of Travel.
In adopting the going concern basis for preparing the financial statements, the Directors have considered the business activities set out above as well as the Group's principal risks and uncertainties. Based on the Group's cash flow forecasts and projections, the Board is satisfied that the Group will be able to operate within the level of its facilities for the foreseeable future.
Richard Amos
Group Finance Director
1 July 2014
Consolidated income statement
|
|
|
2014 |
2013 |
|
|
Note |
£000 |
£000 |
|
Continuing operations |
|
|
|
|
Revenue |
2(a) |
109,216 |
113,113 |
|
Variable cost of sales |
|
(29,504) |
(26,910) |
|
Net revenue |
|
79,712 |
86,203 |
|
Fixed cost of sales |
|
(16,866) |
(13,891) |
|
Gross profit |
|
62,846 |
72,312 |
|
Distribution costs |
|
(13,120) |
(12,326) |
|
Research and development |
|
(21,865) |
(18,501) |
|
Administrative expenses |
|
(18,545) |
(19,210) |
|
Operating expenses |
2(e) |
(53,530) |
(50,037) |
|
Operating profit before share-based payments, amortisation of acquired intangible assets and restructuring costs |
2(b) |
15,324 |
29,651 |
|
Share-based payments |
|
(188) |
(3,200) |
|
Amortisation of acquired intangible assets |
|
(4,832) |
(3,014) |
|
Restructuring costs |
3 |
(988) |
(1,162) |
|
Operating profit |
2(b) |
9,316 |
22,275 |
|
Finance income |
|
25 |
102 |
|
Finance charges |
|
(469) |
(324) |
|
Profit from continuing operations before tax |
|
8,872 |
22,053 |
|
Tax expense |
5 |
(1,090) |
(6,481) |
|
Profit from continuing operations |
|
7,782 |
15,572 |
|
Profit from discontinued operations |
4(b) |
4,489 |
3,760 |
|
Profit for the year |
|
12,271 |
19,332 |
|
Profit attributable to equity holders of the parent |
|
12,271 |
19,332 |
|
Continuing and discontinued operations |
|
|
|
|
Earnings per share - basic |
6 |
4.3p |
6.8p |
|
- diluted |
|
4.1p |
6.3p |
|
Continuing operations |
|
|
|
|
Earnings per share - basic |
6 |
2.7p |
5.5p |
|
- diluted |
|
2.6p |
5.1p |
Consolidated statement of comprehensive income
|
|
|
2014 |
2013 |
|
|
Note |
£000 |
£000 |
|
|
|
|
|
|
Retained profit for the year |
|
12,271 |
19,332 |
|
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss |
|
|
|
|
Exchange differences arising on translation of foreign operations |
|
(2,554) |
2,566 |
|
Tax credit taken directly to other comprehensive income |
5 |
721 |
298 |
|
Total comprehensive income attributable to equity holders of the parent |
|
10,438 |
22,196 |
Consolidated statement of changes in equity
|
|
Issued share capital |
Share premium account |
Own shares |
Merger reserve |
Capital redemption reserve |
Other Reserves a |
Retained earnings |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 1 May 2012 |
33,702 |
25,628 |
(9,982) |
722 |
2,741 |
(11,488) |
50,778 |
92,101 |
|
Changes in equity for the year to 30 April 2013 |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
- |
- |
2,864 |
19,332 |
22,196 |
|
Issue of share capital |
142 |
273 |
- |
- |
- |
- |
- |
415 |
|
Purchase of own shares into employee benefit trust |
- |
- |
(3,957) |
- |
- |
- |
- |
(3,957) |
|
Gain on sale of shares from employee benefit trust |
- |
- |
1,582 |
- |
- |
- |
(1,211) |
371 |
|
Transfer of SIP shares to employees |
- |
- |
693 |
- |
- |
- |
(693) |
- |
|
Recognition of equity-settled share-based payments after tax |
- |
- |
- |
- |
- |
- |
2,967 |
2,967 |
|
Dividend paid |
- |
- |
- |
- |
- |
- |
(4,881) |
(4,881) |
|
Balance at 30 April 2013 |
33,844 |
25,901 |
(11,664) |
722 |
2,741 |
(8,624) |
66,292 |
109,212 |
|
Changes in equity for the year to 30 April 2014 |
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
- |
- |
- |
(1,833) |
12,271 |
10,438 |
|
Issue of share capital |
29 |
106 |
- |
- |
- |
- |
- |
135 |
|
Redemption of preference shares |
(50) |
- |
- |
- |
50 |
- |
- |
- |
|
Purchase of own shares into employee benefit trust |
- |
- |
(3,469) |
- |
- |
- |
- |
(3,469) |
|
Gain on sale of shares from employee benefit trust |
- |
- |
2,131 |
- |
- |
- |
(2,131) |
- |
|
Transfer of SIP shares to employees |
- |
- |
41 |
- |
- |
- |
(41) |
- |
|
Recognition of equity-settled share-based payments after tax |
- |
- |
- |
- |
- |
- |
201 |
201 |
|
Dividend paid |
- |
- |
- |
- |
- |
- |
(5,272) |
(5,272) |
|
Balance at 30 April 2014 |
33,823 |
26,007 |
(12,961) |
722 |
2,791 |
(10,457) |
71,320 |
111,245 |
a Other reserves comprise net exchange differences arising on the translation of foreign operations, along with the
related tax impact.
Consolidated balance sheet
|
|
|
2014 |
2013 |
|
|
Note |
£000 |
£000 |
|
Non-current assets |
|
|
|
|
Goodwill |
|
54,496 |
61,777 |
|
Other intangible assets |
|
34,048 |
36,943 |
|
Property, plant and equipment |
|
12,841 |
12,834 |
|
Deferred tax assets |
|
2,198 |
4,837 |
|
|
|
103,583 |
116,391 |
|
Current assets |
|
|
|
|
Inventories |
|
10,096 |
11,975 |
|
Trade and other receivables |
8 |
41,627 |
47,626 |
|
Derivative financial assets |
|
53 |
30 |
|
Current tax assets |
|
1,463 |
846 |
|
Cash and cash equivalents |
10 |
16,993 |
16,658 |
|
Assets classified as held for sale |
4(c) |
13,499 |
- |
|
|
|
83,731 |
77,135 |
|
Total assets |
|
187,314 |
193,526 |
|
Current liabilities |
|
|
|
|
Trade and other payables |
9 |
(42,084) |
(46,637) |
|
Bank borrowings |
10 |
(10,938) |
(17,559) |
|
Current tax payable |
|
(6,555) |
(8,549) |
|
Provisions |
|
(4,978) |
(4,266) |
|
Liabilities directly associated with assets classified as held for sale |
4(c) |
(6,292) |
- |
|
|
|
(70,847) |
(77,011) |
|
Non-current liabilities |
|
|
|
|
Deferred tax liabilities |
|
(4,915) |
(6,243) |
|
Provisions |
|
(307) |
(1,060) |
|
|
|
(5,222) |
(7,303) |
|
Total liabilities |
|
(76,069) |
(84,314) |
|
Net assets |
|
111,245 |
109,212 |
|
Equity |
|
|
|
|
Issued share capital |
12(a) |
33,823 |
33,844 |
|
Share premium account |
|
26,007 |
25,901 |
|
Own shares |
|
(12,961) |
(11,664) |
|
Merger reserve |
|
722 |
722 |
|
Capital redemption reserve |
|
2,791 |
2,741 |
|
Other reserves |
|
(10,457) |
(8,624) |
|
Retained earnings |
|
71,320 |
66,292 |
|
Total equity |
|
111,245 |
109,212 |
The financial statements of Anite plc (Company no. 01798114) were approved by the Board on 1 July 2014 and signed on its behalf by:
Christopher Humphrey
Chief Executive
Richard Amos
Group Finance Director
Consolidated cash flow statement
|
|
|
2014 |
2013 |
|
|
Note |
£000 |
£000 |
|
|
|
|
|
|
Profit for the year |
|
|
|
|
Continuing operations |
|
7,782 |
15,572 |
|
Discontinued operations |
|
4,489 |
3,760 |
|
|
|
12,271 |
19,332 |
|
Adjustments for: |
|
|
|
|
Tax charge - continuing and discontinued |
5 |
2,355 |
7,321 |
|
Net finance charges - continuing and discontinued |
|
416 |
169 |
|
Charged to operations discontinued in a prior period |
4(b) |
34 |
- |
|
Depreciation of property, plant and equipment |
|
5,387 |
3,407 |
|
Amortisation of intangible assets |
|
3,575 |
2,673 |
|
Amortisation of acquired intangible assets |
|
4,832 |
3,014 |
|
Loss on disposal of property, plant and equipment |
|
46 |
17 |
|
Share-based payments charge - continuing and discontinued |
|
435 |
3,437 |
|
Decrease in provisions - continuing operations |
|
(1,436) |
(1,941) |
|
Decrease in provisions - discontinued operations |
|
(500) |
- |
|
Operating cash flows before movements in working capital |
|
27,415 |
37,429 |
|
Decrease/(increase) in inventories |
|
1,922 |
(736) |
|
Decrease/(increase) in receivables |
|
1,468 |
(10,148) |
|
Increase in payables |
|
2,164 |
4,459 |
|
Decrease/(increase) in working capital |
|
5,554 |
(6,425) |
|
Cash generated from operations |
|
32,969 |
31,004 |
|
Interest received |
|
12 |
100 |
|
Interest paid |
|
(550) |
(168) |
|
Income taxes paid |
|
(3,616) |
(7,120) |
|
Net cash generated from operating activities |
|
28,815 |
23,816 |
|
Cash flow from investing activities |
|
|
|
|
Acquisitions of subsidiaries |
7 |
(2,774) |
(26,562) |
|
Net bank balance acquired with subsidiary undertakings |
7 |
905 |
1,555 |
|
Purchase of property, plant and equipment |
|
(6,372) |
(4,439) |
|
Purchase of software licences |
|
(885) |
(1,024) |
|
Expenditure on capitalised product development |
|
(3,802) |
(3,382) |
|
Net cash used in investing activities |
|
(12,928) |
(33,852) |
|
Cash flow from financing activities |
|
|
|
|
Issue of ordinary share capital |
|
135 |
415 |
|
Purchase of own shares into employee benefit trust |
|
(3,470) |
(3,957) |
|
Proceeds from sale of own shares from employee benefit trust |
|
- |
371 |
|
Dividend paid to Company's shareholders |
13 |
(5,272) |
(4,881) |
|
(Repayment)/drawdown of bank loans |
10 |
(6,668) |
17,559 |
|
Net cash (used in)/generated from financing activities |
|
(15,275) |
9,507 |
|
Net increase/(decrease) in cash and cash equivalents |
|
612 |
(529) |
|
Effect of exchange rate changes |
|
(277) |
240 |
|
Cash and cash equivalents at 1 May |
|
16,658 |
16,947 |
|
Cash and cash equivalents at 30 April |
10 |
16,993 |
16,658 |
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. This announcement does not, however, 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 2014 have been prepared following accounting policies consistent with those for the year ended 30 April 2013. 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 2014, which were approved by the directors on 1 July 2014. Statutory accounts for the year ended 2013 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 498 of the Companies Act 2006. Statutory accounts for the period ended 30 April 2014 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 2014 was approved by the Board of Directors on 1 July 2014.
2 Revenue and segmental information
2(a) Revenue from operations
|
|
|
2014 |
2013 |
|
|
Note |
£000 |
£000 |
|
|
|
|
|
|
Own product software licences |
|
47,757 |
58,634 |
|
Hardware and other third-party product |
|
29,906 |
27,174 |
|
Software maintenance and support |
|
31,553 |
27,305 |
|
Revenue from continuing operations |
2.2 |
109,216 |
113,113 |
|
Finance income |
|
25 |
102 |
|
Total revenue from continuing operations |
|
109,241 |
113,215 |
|
|
|
|
|
|
Revenue from discontinued operations |
4 |
20,542 |
19,396 |
|
Finance income |
|
28 |
59 |
|
Total revenue |
|
129,811 |
132,670 |
The Group has no customer that accounted for greater than 10% of its total revenue from continuing and discontinued operations.
2(b) Operating segments - primary basis
The Group is organised into three operating segments: Handset Testing, Network Testing and Group. The Travel operating segment has been classed as a discontinued operation and has not been included in the disclosure of operating segments. With the exception of Group, which performs the head office function, both Handset Testing and Network Testing derive their revenue from the development and support of products, mainly software, relating to its relevant industry sector.
The key profit metric that represents the measure of profit reviewed by the chief operating decision maker is "segment adjusted operating profit".
Operating segment information under the primary reporting format is as disclosed in the tables below:
|
|
Handset Testing |
Network Testing |
Total Wireless |
Group |
Total |
|
Year ended 30 April 2014 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
External revenue |
77,353 |
31,863 |
109,216 |
- |
109,216 |
|
Internal revenue |
- |
- |
- |
1,696 |
1,696 |
|
Total segment revenue |
77,353 |
31,863 |
109,216 |
1,696 |
110,912 |
|
Segment adjusteda profit/(loss) before tax |
10,804 |
6,007 |
16,811 |
(1,931) |
14,880 |
|
Net finance charges |
- |
- |
- |
444 |
444 |
|
Segment adjusteda operating profit/(loss) |
10,804 |
6,007 |
16,811 |
(1,487) |
15,324 |
|
Share-based payments |
(118) |
(173) |
(291) |
103 |
(188) |
|
Amortisation of acquired intangible assets |
(2,191) |
(2,641) |
(4,832) |
- |
(4,832) |
|
Restructuring costs |
(484) |
- |
(484) |
(504) |
(988) |
|
Segment operating profit/(loss) |
8,011 |
3,193 |
11,204 |
(1,888) |
9,316 |
|
Finance income |
|
|
|
|
25 |
|
Finance charges |
|
|
|
|
(469) |
|
Profit/(loss) from continuing operations before tax |
|
|
|
|
8,872 |
|
Tax expense |
|
|
|
|
(1,090) |
|
Profit/(loss) from continuing operations |
|
|
|
|
7,782 |
|
Profit from discontinued operations |
|
|
|
|
4,489 |
|
Profit/(loss) for the period |
|
|
|
|
12,271 |
|
|
|
|
|
|
|
|
|
Handset Testing |
Network Testing |
Total Wireless |
Group |
Total |
|
Year ended 30 April 2013 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
External revenue |
87,031 |
26,082 |
113,113 |
- |
113,113 |
|
Internal revenue |
- |
- |
- |
2,129 |
2,129 |
|
Total segment revenue |
87,031 |
26,082 |
113,113 |
2,129 |
115,242 |
|
Segment adjusteda profit/(loss) before tax |
26,315 |
5,567 |
31,882 |
(2,453) |
29,429 |
|
Net finance charges |
- |
- |
- |
222 |
222 |
|
Segment adjusteda operating profit/(loss) |
26,315 |
5,567 |
31,882 |
(2,231) |
29,651 |
|
Share-based payments |
(800) |
(50) |
(850) |
(2,350) |
(3,200) |
|
Amortisation of acquired intangible assets |
(554) |
(2,460) |
(3,014) |
- |
(3,014) |
|
Restructuring costs |
- |
- |
- |
(1,162) |
(1,162) |
|
Segment operating profit/(loss) |
24,961 |
3,057 |
28,018 |
(5,743) |
22,275 |
|
Finance income |
|
|
|
|
102 |
|
Finance charges |
|
|
|
|
(324) |
|
Profit/(loss) from continuing operations before tax |
|
|
|
|
22,053 |
|
Tax expense |
|
|
|
|
(6,481) |
|
Profit/(loss) from continuing operations |
|
|
|
|
15,572 |
|
Profit from discontinued operations |
|
|
|
|
3,760 |
|
Profit/(loss) for the period |
|
|
|
|
19,332 |
|
|
|
|
|
|
|
a Segment adjusted operating profits are stated prior to the adjusting items of share-based payments, amortisation of acquired intangible assets and restructuring costs.
2(c) Other information
|
Year ended 30 April 2014 |
Handset Testing |
Network Testing |
Total Wireless |
Group |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
Total assets |
74,983 |
72,896 |
147,879 |
25,936 |
173,815 |
|
Including: |
|
|
|
|
|
|
Non-current asset additions in the year |
8,942 |
1,780 |
10,722 |
100 |
10,822 |
|
Non-current assets acquired in the year |
353 |
1,811 |
2,164 |
- |
2,164 |
|
|
|
|
|
|
|
|
Adjusted EBITDA calculation |
|
|
|
|
|
|
Segment adjusted operating profit/(loss) |
10,804 |
6,007 |
16,811 |
(1,487) |
15,324 |
|
Depreciation |
4,485 |
403 |
4,888 |
249 |
5,137 |
|
Amortisation of intangible assets |
2,888 |
618 |
3,506 |
37 |
3,543 |
|
Adjusted EBITDA |
18,177 |
7,028 |
25,205 |
(1,201) |
24,004 |
|
|
|
|
|
|
|
|
Year ended 30 April 2013 |
Handset Testing |
Network Testing |
Total Wireless |
Group |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
Total assets |
77,693 |
73,719 |
151,412 |
27,295 |
178,707 |
|
Including: |
|
|
|
|
|
|
Non-current asset additions in the year |
7,459 |
859 |
8,318 |
367 |
8,685 |
|
Non-current assets acquired in the year |
29,007 |
- |
29,007 |
- |
29,007 |
|
|
|
|
|
|
|
|
Adjusted EBITDA calculation |
|
|
|
|
|
|
Segment adjusted operating profit/(loss) |
26,315 |
5,567 |
31,882 |
(2,231) |
29,651 |
|
Depreciation |
2,661 |
315 |
2,976 |
210 |
3,186 |
|
Amortisation of intangible assets |
2,144 |
444 |
2,588 |
49 |
2,637 |
|
Adjusted EBITDA |
31,120 |
6,326 |
37,446 |
(1,972) |
35,474 |
|
|
|
|
|
|
|
2(d) Geographic segment - secondary basis
The operating segments operate in four principal geographic areas, as set out below.
The following analysis of the Group's revenue is based on the geographic location of customers irrespective of the origin of the goods or services. The corresponding segment assets are based on the geographic location of the assets.
|
|
Revenue Continuing operations |
Revenue Discontinued operations |
Revenue Total |
|||
|
|
2014 |
2013 |
2014 |
2013 |
2014 |
2013 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
United Kingdom |
3,455 |
4,732 |
13,879 |
12,892 |
17,334 |
17,624 |
|
EMEA - excluding UK |
22,568 |
25,735 |
6,441 |
6,252 |
29,009 |
31,987 |
|
The Americas |
31,057 |
46,073 |
- |
- |
31,057 |
46,073 |
|
Rest of the World |
52,136 |
36,573 |
222 |
252 |
52,358 |
36,825 |
|
|
109,216 |
113,113 |
20,542 |
19,396 |
129,758 |
132,509 |
|
|
Non-current assets |
|
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
United Kingdom |
11,176 |
17,340 |
|
EMEA - excluding UK |
87,027 |
90,784 |
|
The Americas |
2,986 |
3,271 |
|
Rest of the World |
196 |
159 |
|
|
101,385 |
111,554 |
2(e) Operating expenses
|
|
Continuing operations |
Discontinued operations |
Total |
|||
|
|
2014 |
2013 |
2014 |
2013 |
2014 |
2013 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Distribution costs |
|
|
|
|
|
|
|
- amortisation of acquired intangible assets |
2,679 |
2,223 |
- |
- |
2,679 |
2,223 |
|
- other underlying operating expenses |
10,441 |
10,103 |
1,082 |
1,019 |
11,523 |
11,122 |
|
|
13,120 |
12,326 |
1,082 |
1,019 |
14,202 |
13,345 |
|
Research and development |
|
|
|
|
|
|
|
- amortisation of internally generated assets |
2,679 |
2,161 |
- |
- |
2,679 |
2,161 |
|
- other underlying operating expenses |
17,033 |
15,549 |
- |
- |
17,033 |
15,549 |
|
|
19,712 |
17,710 |
- |
- |
19,712 |
17,710 |
|
- amortisation of acquired intangible assets |
2,153 |
791 |
- |
- |
2,153 |
791 |
|
|
21,865 |
18,501 |
- |
- |
21,865 |
18,501 |
|
Administrative expenses |
|
|
|
|
|
|
|
- share-based payments |
188 |
3,200 |
247 |
237 |
435 |
3,437 |
|
- restructuring costs |
988 |
1,162 |
- |
- |
988 |
1,162 |
|
- other underlying operating expenses |
17,369 |
14,848 |
3,823 |
3,195 |
21,192 |
18,043 |
|
|
18,545 |
19,210 |
4,070 |
3,432 |
22,615 |
22,642 |
|
Total operating expenses |
53,530 |
50,037 |
5,152 |
4,451 |
58,682 |
54,488 |
|
|
|
|
|
|
|
|
|
Analysed as: |
|
|
|
|
|
|
|
- amortisation of acquired intangible assets |
4,832 |
3,014 |
- |
- |
4,832 |
3,014 |
|
- restructuring costs |
988 |
1,162 |
- |
- |
988 |
1,162 |
|
- share-based payments |
188 |
3,200 |
247 |
237 |
435 |
3,437 |
|
One-off and non-trading operating expenses excluded from adjusted profit |
6,008 |
7,376 |
247 |
237 |
6,255 |
7,613 |
|
- amortisation of internally generated assets |
2,679 |
2,161 |
- |
- |
2,679 |
2,161 |
|
- other underlying operating expenses |
44,843 |
40,500 |
4,905 |
4,214 |
49,748 |
44,714 |
|
Total operating expenses |
53,530 |
50,037 |
5,152 |
4,451 |
58,682 |
54,488 |
3 RESTRUCTURING COSTS
Restructuring costs primarily relate to the costs incurred on the acquisition of and subsequent integration into the Group of new businesses.
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Costs incurred on the acquisition and integration of Genetel |
492 |
- |
|
Costs incurred on the acquisition and integration of Propsim |
12 |
1,154 |
|
Reorganisation and redundancy costs |
484 |
- |
|
Net property provision established |
- |
8 |
|
|
988 |
1,162 |
4 Discontinued operations
4(a) Accounting treatment
On 29 May 2014, the Group completed its disposal of the Anite Travel division with the sale of its 100% interest in the ordinary share capital of Anite Travel Limited and its subsidiary Anite Travel Systems Pty Limited.
The Group has treated the Travel division as a discontinued operation in the consolidated income statement for the year end 30 April 2014. The results of the Travel division, including the results from businesses discontinued in prior periods, are shown below:
4(b) Profit after tax relating to discontinued operations
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Profit after tax for the year from Anite Travel |
|
|
|
Revenue |
20,542 |
19,396 |
|
Cost of sales |
(10,130) |
(10,398) |
|
Gross profit |
10,412 |
8,998 |
|
Operating expenses |
(4,905) |
(4,214) |
|
Adjusted operating profit |
5,507 |
4,784 |
|
Share-based payments |
(247) |
(237) |
|
Operating profit |
5,260 |
4,547 |
|
Net finance income |
28 |
53 |
|
Profit before tax |
5,288 |
4,600 |
|
Tax expense |
(1,265) |
(840) |
|
Profit after tax from Anite Travel |
4,023 |
3,760 |
|
Profit after tax for the year from other discontinued operations |
|
|
|
Release of provision in relation to previously discontinued operations |
500 |
- |
|
Charge in respect of previously discontinued operations |
(34) |
- |
|
Profit after tax for the year from other discontinued operations |
466 |
- |
|
Total |
4,489 |
3,760 |
4(c) Assets classified as held for sale
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
|
|
|
2014 |
|
|
|
£000 |
|
Assets classified as held for sale |
|
|
|
Goodwill |
|
6,200 |
|
Other intangible assets |
|
32 |
|
Property, plant and equipment |
|
845 |
|
Deferred tax assets |
|
420 |
|
Trade and other receivables |
|
6,002 |
|
Total assets classified as held for sale |
|
13,499 |
|
|
|
|
|
Liabilities directly associated with assets classified as held for sale |
|
|
|
Trade and other payables |
|
(4,473) |
|
Current tax payable |
|
(1,238) |
|
Provisions |
|
(581) |
|
Liabilities directly associated with assets classified as held for sale |
|
(6,292) |
|
|
|
|
|
Net assets of disposal group |
|
7,207 |
During the year Anite Travel contributed £5,601,000 (2013: £4,032,000) to the Group's cash generated from operating activities and paid £198,000 (2013: £245,000) in respect of investing activities.
5 Income tax expense
|
|
Continuing operations |
Discontinued operations |
Total |
|||
|
|
2014 |
2013 |
2014 |
2013 |
2014 |
2013 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Current tax |
|
|
|
|
|
|
|
UK corporation tax |
775 |
3,748 |
1,244 |
774 |
2,019 |
4,522 |
|
Foreign tax |
1,660 |
3,464 |
- |
3 |
1,660 |
3,467 |
|
|
2,435 |
7,212 |
1,244 |
777 |
3,679 |
7,989 |
|
Adjustments in respect of prior years |
|
|
|
|
|
|
|
UK corporation tax |
(61) |
342 |
(5) |
(14) |
(66) |
328 |
|
Foreign tax |
5 |
33 |
- |
- |
5 |
33 |
|
|
(56) |
375 |
(5) |
(14) |
(61) |
361 |
|
Total current tax expense |
2,379 |
7,587 |
1,239 |
763 |
3,618 |
8,350 |
|
Deferred tax |
|
|
|
|
|
|
|
UK |
465 |
(385) |
26 |
77 |
491 |
(308) |
|
Foreign |
(1,754) |
(721) |
- |
- |
(1,754) |
(721) |
|
Total deferred tax (credit)/expense |
(1,289) |
(1,106) |
26 |
77 |
(1,263) |
(1,029) |
|
Total income tax expense |
1,090 |
6,481 |
1,265 |
840 |
2,355 |
7,321 |
UK corporation tax is calculated at 22.84% (2013: 23.92%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
(Credited)/charged to equity |
|
|
|
Deferred tax relating to the translation adjustment to acquired intangibles |
(135) |
19 |
|
UK corporation tax relating to foreign exchange |
(586) |
(317) |
|
Income tax relating to components of other comprehensive income |
(721) |
(298) |
|
Deferred tax relating to share-based payments |
1,825 |
(40) |
|
Current tax relating to share-based payments |
(441) |
(715) |
|
|
663 |
(1,053) |
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:
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Profit before tax |
|
|
|
Continuing operations |
8,872 |
22,053 |
|
Tax on Group profit at standard UK corporation tax rate of 22.84% (2013: 23.92%) |
2,026 |
5,275 |
|
Effects of: |
|
|
|
Impairments and sale/closure of discontinued operations |
106 |
- |
|
Disallowed expenses and non-taxable income (net) |
43 |
401 |
|
Ineligible depreciation |
22 |
23 |
|
Change in tax rates |
(756) |
6 |
|
Short term timing differences |
65 |
(201) |
|
Tax losses carried forward |
71 |
127 |
|
Utilisation of tax losses |
(296) |
(169) |
|
(Lower)/higher tax rates on overseas earnings |
(164) |
651 |
|
Deferred tax not provided |
37 |
13 |
|
Adjustments to current tax charge in respect of previous periods |
(56) |
347 |
|
Other |
(8) |
8 |
|
Income tax expense for year |
1,090 |
6,481 |
|
Tax rate for continuing operations |
12.3% |
29.4% |
The Group earns its profits in the UK and overseas. The tax rate used for tax on profit on ordinary activities is 22.84% (2013: 23.92%), being the standard rate for UK corporation tax, as the Group's head office is in the UK. As a result of the reduction in the prospective rate of UK and Finnish corporate taxes, the tax charge for the year was decreased by £756,000 (2013: £6,000 increase).
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.
6 Earnings per share
The calculations of earnings per share ("EPS") are based on the Group profit for the year, adjusted profit a and weighted average number of shares in issue:
|
|
Basic |
Diluted |
||
|
|
2014 |
2013 |
2014 |
2013 |
|
EPS summary |
|
|
|
|
|
EPS for continuing and discontinued operations |
4.3p |
6.8p |
4.1p |
6.3p |
|
EPS for discontinued operations |
1.6p |
1.3p |
1.5p |
1.2p |
|
EPS for continuing operations |
2.7p |
5.5p |
2.6p |
5.1p |
|
Adjusted EPS b |
4.0p |
7.6p |
3.9p |
7.1p |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
2013 |
2014 |
2013 |
|
|
Pence per share |
Pence per share |
£000 |
£000 |
|
Profit for the year |
4.3 |
6.8 |
12,271 |
19,332 |
|
Profit from discontinued operations |
(1.6) |
(1.3) |
(4,489) |
(3,760) |
|
Profit for the year from continuing operations |
2.7 |
5.5 |
7,782 |
15,572 |
|
Reconciliation to adjusted profit: |
|
|
|
|
|
Amortisation of acquired intangible assets (net of tax) |
0.9 |
0.7 |
2,517 |
2,108 |
|
Share-based payments (net of tax) |
0.1 |
1.0 |
375 |
2,865 |
|
Restructuring costs (net of tax) |
0.3 |
0.4 |
856 |
1,162 |
|
Adjusted profit a |
4.0 |
7.6 |
11,530 |
21,707 |
a Profit from continuing businesses before amortisation of acquired intangible assets, share-based payments and restructuring costs.
b Earnings per share on adjusted profit a have been included to give a clearer understanding of the results of the continuing businesses.
|
Number of shares ('000) |
2014 |
2013 |
|
Weighted average number of shares in issue used to calculate basic earnings per share |
285,390 |
285,488 |
|
Effect of dilutive ordinary shares |
|
|
|
- SAYE and share option schemes |
13,132 |
20,389 |
|
Number of shares used to calculate diluted earnings per share |
298,522 |
305,877 |
7 ACQUISITIONS
On 1 July 2013, Anite plc acquired 100% control of Genetel SAS, a full service distributor of network testing products to French-speaking markets. The acquisition enables Anite plc to strengthen its position in the French network testing market as LTE 4G networks roll-out across Europe.
Recognised amounts of assets acquired and liabilities assumed are:
|
|
Fair value |
|
|
£000 |
|
Intangible assets - customer-related |
1,438 |
|
Intangible assets - other |
165 |
|
Fixed assets |
32 |
|
Inventory |
43 |
|
Trade and other receivables |
1,793 |
|
Net cash |
905 |
|
Trade and other payables |
(1,861) |
|
Deferred tax liability |
(479) |
|
Total |
2,036 |
|
|
|
|
Consideration |
|
|
Cash |
2,036 |
Genetel contributed £1.9m to Group revenue and £0.3m to Group operating profit for the period between 1 July 2013 and the balance sheet date.
The total amount paid in the period of £2,774,000, disclosed in the cash flow statement under the heading of "acquisition of subsidiary undertakings", includes both the £2,036,000 consideration paid for the acquisition of Genetel and £738,000 purchase price adjustment relating to the acquisition of the Propsim Channel Emulation business that completed on 31 January 2013. The initial accounting for both the Genetel and Propsim acquisitions is now complete.
Acquisition and integration costs of £504,000 have been expensed in the consolidated income statement of Anite plc during the period under the heading "restructuring costs".
8 Trade and other receivables
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Current assets |
|
|
|
Trade receivables |
36,011 |
37,939 |
|
Less: provision for impairment of trade receivables |
(1,864) |
(526) |
|
Trade receivables net of provision |
34,147 |
37,413 |
|
Other receivables |
1,694 |
1,561 |
|
Prepayments |
3,624 |
3,013 |
|
Accrued income |
2,162 |
5,639 |
|
|
41,627 |
47,626 |
The amounts presented in the table above are net of provision for doubtful recoverability and foreseeable losses.
The table below shows the movements in the provision for impairment of trade receivables:
|
|
|
|
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
At 1 May |
526 |
983 |
|
Provision acquired |
- |
67 |
|
Provision transferred to assets held for sale |
(50) |
- |
|
Charge for the year through income statement |
1,820 |
10 |
|
Released in the year |
(120) |
(519) |
|
Utilised for bad debt written off |
(312) |
(15) |
|
At 30 April |
1,864 |
526 |
9 Trade and other payables
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Trade creditors |
9,296 |
8,268 |
|
Other taxes and social security |
827 |
2,026 |
|
Deferred income |
23,383 |
21,644 |
|
Accruals |
8,058 |
13,755 |
|
Other creditors |
520 |
944 |
|
|
42,084 |
46,637 |
10 Net cash/(debt)
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Cash and cash equivalents |
16,993 |
16,658 |
|
Bank borrowings |
(10,938) |
(17,559) |
|
Net cash/(debt) |
6,055 |
(901) |
|
A reconciliation of the movement in net cash/(debt) for the year is as detailed below: |
|
|
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Net (debt)/cash at 1 May |
(901) |
16,947 |
|
Net increase/(decrease) in cash and cash equivalents |
612 |
(529) |
|
Decrease/(increase) in bank borrowings |
6,668 |
(17,559) |
|
Exchange movement |
(324) |
240 |
|
Net cash/(debt) at 30 April |
6,055 |
(901) |
11 Provisions
|
|
National |
Warranties |
Property |
Other |
|
|
|
insurance |
|
provision |
provisions |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
At 1 May 2013 |
- |
3,210 |
713 |
1,403 |
5,326 |
|
Transferred from accruals |
2,508 |
- |
- |
- |
2,508 |
|
Release of provision - continuing operations |
(1,150) |
- |
(25) |
(337) |
(1,512) |
|
Release of provision - discontinued operations |
- |
(500) |
- |
- |
(500) |
|
Transferred to classified as held for sale |
- |
- |
(581) |
- |
(581) |
|
Established during the year |
- |
- |
187 |
- |
187 |
|
Utilised during the year |
- |
- |
(111) |
- |
(111) |
|
Exchange movement |
- |
- |
- |
(32) |
(32) |
|
At 30 April 2014 |
1,358 |
2,710 |
183 |
1,034 |
5,285 |
|
|
2014 |
2013 |
|
|
£000 |
£000 |
|
Analysed as: |
|
|
|
Current liabilities |
4,978 |
4,266 |
|
Non-current liabilities |
307 |
1,060 |
|
|
5,285 |
5,326 |
The national insurance provision relates to the Group's liability to pay employer's national insurance contributions on the exercise of share options. The amount and timing of these outflows depends on the share price on the date of exercise, the date of the exercise and the rate of national insurance at the time. The provision relating to shares that are not currently exercisable is classified as non-current. The current provision relating to share options that are exercisable is expected to be utilised within one year.
The warranty provision has been made to cover any potential claims made by disposed businesses during the contractual warranty period. The amount and timing of these outflows depends on the nature of any claim that may arise. It is expected to be utilised within one year.
The property provision is in respect of dilapidation provisions on buildings currently occupied by the Group. The amount and timing of these outflows depend on the Group's future requirements for office space. It is expected to be utilised in one to nine years.
Other provisions include contractual provisions that are expected to be utilised in one to two years. In the event of a claim under one of these contractual provisions, the Group has recognised an asset of £250,000 in respect of an expected reimbursement from a third party.
12 share capital
12(a) Issued share capital
|
|
Ordinary shares of 11.25p each |
Deferred redeemable shares of £1 each |
||
|
|
||||
|
|
||||
|
|
Number |
£000 |
Number |
£000 |
|
Allotted, issued and fully paid: |
|
|
|
|
|
At 30 April 2013 |
300,395,476 |
33,794 |
50,000 |
50 |
|
Issued during the year |
249,912 |
29 |
- |
- |
|
Redeemed during the year |
- |
- |
(50,000) |
(50) |
|
At 30 April 2014 |
300,645,388 |
33,823 |
- |
- |
12(b) Deferred redeemable share capital
The deferred redeemable shares were originally issued to Keymont Trust Limited, a company dissolved in 1988. Efforts to trace their successors, heirs or assignees over the past 15 years have been unsuccessful. The deferred redeemable shares of £1 each were redeemed in accordance with Article 32 of the Articles of Association for 1p and the funds for the redemption of the shares of £500 have been placed in a segregated account of the Company for the benefit of the redeemable shareholders, their heirs, successors or assignees. Should no validated claim be received during this financial year the funds held will be donated to charity.
13 Dividends
Dividends paid during the year are set out below:
|
|
Payment date |
2014 |
2014 |
2013 |
2013 |
|
|
|
pence |
|
pence |
|
|
|
|
per share |
£000 |
per share |
£000 |
|
For the year ended 30 April 2012 |
|
|
|
|
|
|
Final dividend |
23 October 2012 |
|
|
1.125 |
3,233 |
|
For the year ended 30 April 2013 |
|
|
|
|
|
|
Interim dividend |
15 February 2013 |
|
|
0.575 |
1,648 |
|
Final dividend |
29 October 2013 |
1.265 |
3,624 |
|
|
|
For the year ended 30 April 2014 |
|
|
|
|
|
|
Interim dividend |
14 February 2014 |
0.575 |
1,648 |
|
|
|
|
|
|
5,272 |
|
4,881 |
At the AGM on 12 September 2014, a final dividend in respect of the year ended 30 April 2014 of 1.265p per share (expected total £3.6m) is to be proposed.
14 EVENTS AFTER THE BALANCE SHEET DATE
On 29 May 2014, the Group sold its Travel business through the divestment of the entire issued share capital of Anite Travel Limited for a total cash consideration of £45.0m. The consideration is subject to completion adjustments and £1.7m will be held in escrow at completion, subject to the satisfactory resolution of certain commercial considerations.
For the financial year ending 30 April 2015, the Group's estimated profit on disposal will be at least £30.0m after disposal costs of approximately £2.4m and a further £0.6m in respect of the settlement of certain contractual commitments that existed in Anite plc in respect of the Travel business.
Five-year summary
|
|
2014 £000 |
2013 £000 |
2012 £000 |
2011 £000 |
2010 £000 |
|
Revenue |
|
|
|
|
|
|
Revenue - continuing operations |
109,216 |
113,113 |
102,467 |
73,691 |
55,779 |
|
Revenue - discontinued and disposed operations |
20,542 |
19,396 |
20,079 |
20,003 |
22,991 |
|
Total revenue |
129,758 |
132,509 |
122,546 |
93,694 |
78,770 |
|
|
|
|
|
|
|
|
Results |
|
|
|
|
|
|
Adjusted operating profit - continuing operations |
15,324 |
29,651 |
24,150 |
13,454 |
6,281 |
|
Operating profit/(loss) - continuing operations |
9,316 |
22,275 |
17,898 |
9,785 |
(7,087) |
|
Profit/(loss) attributable to equity holders of Anite plc |
12,271 |
19,332 |
18,466 |
9,435 |
(3,427) |
|
|
|
|
|
|
|
|
Assets employed |
|
|
|
|
|
|
Non-current assets |
103,583 |
116,391 |
85,628 |
89,661 |
88,938 |
|
Current assets |
70,232 |
77,135 |
60,247 |
75,038 |
74,896 |
|
Assets classified as held for sale |
13,499 |
- |
- |
- |
- |
|
Current liabilities |
(64,555) |
(77,011) |
(50,306) |
(75,978) |
(42,845) |
|
Liabilities related to assets classified as held for sale |
(6,292) |
- |
- |
- |
- |
|
Non-current liabilities |
(5,222) |
(7,303) |
(3,468) |
(7,021) |
(43,039) |
|
|
111,245 |
109,212 |
92,101 |
81,700 |
77,950 |
|
Key statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
Adjusted - basic |
4.0p |
7.6p |
6.0p |
3.0p |
1.2p |
|
- diluted |
3.9p |
7.1p |
5.6p |
2.8p |
1.1p |
|
|
|
|
|
|
|
|
Proposed dividend per share history |
|
|
|
|
|
|
Dividend per share - interim |
0.575p |
0.575p |
0.375p |
0.315p |
0.30p |
|
- final |
1.265p |
1.265p |
1.125p |
0.735p |
0.65p |
|
Total dividend per share |
1.84p |
1.84p |
1.50p |
1.05p |
0.95p |
The five year summary restates all years for the impact of Travel becoming a discontinued operation. All references to adjusted measures and continuing operations exclude the results of Travel.
This information is provided by RNS
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