Half Yearly Report

RNS Number : 7359D

Anite PLC

08 December 2009

 



For immediate release                                                                                                                               8 December 2009

ANITE PLC

Half year results for the six months ended 31 October 2009

Anite plc ("Anite" or "the Company"), the international software and solutions company, today announces its half year results for the six months ended 31 October 2009.

Financial highlights (adjusted)1:

• Revenue of £35.2m (2008: £47.4m):

• Operating profit of £3.5m (2008: £12.4m):

• Operating margin of 9.9% (2008: 26.2%)

• Profit before tax of £2.5m (2008: £11.3m) 

• Basic earnings per share 0.6p (2008: 2.3p)

• Interim dividend of 0.3p per share (2008: 0.3p per share) 

• Net cash2 of £26.0m (April 2009: £27.3m; October 2008: net cash £41.5m) 

Statutory results:

• Revenue from continuing operations £35.2m (2008: £47.4m)

• Operating profit from continuing operations £0.2m (2008: £5.9m)

• (Loss)/profit from continuing operations before tax: £(1.1m) (2008: £4.4m)

• Profit for the period £0.2m (2008: £31.6m)

• Basic earnings per share 0.1p (2008: 9.5p) )

• Diluted earnings per share 0.1p (2008: 9.2p)

Operating highlights:

• Wireless: 

  • reduced revenue reflecting reduced demand for older technologies and constrained customer budgets

  • initial sales, commercialisation and growing pipeline of Anite 4G LTE product range 

  • Agilent LTE partnership ended (announced separately today) 

• Travel:

• • underlying trading in line with rebased expectations and further progress with @comRes

  • go live with TUI Germany phase 2

• Orders:

• • intake £33.0m (2008: £39.2m)

  • closing order book £56.3m (2008: £62.5m) 

  • book to bill ratio 0.9 (2008: 0.8)

1Adjusted results are for continuing operations before share based payments, amortisation of acquired intangible assets, restructuring costs, other gains and losses and recycled hedge losses.

2See note 7 for summary of net cash.

Christopher Humphrey, Chief Executive, said:

"We are today clarifying our new LTE product strategy focusing on our own hardware offering, which has already been sold to several leading Tier 1 customers.  This platform is being rapidly progressed to a full commercial solution ('Anite 9000 Mobile Test Accelerator') during the next few months to enable us to complete our development roadmap and take advantage of the market leading position that we are establishing.

"Overall we are trading in line with our expectations for this year as a whole and we continue to believe that the longer-term outlook for our travel system and the growing opportunities for our new LTE product range are encouraging, and that the investments we are undertaking this year are already building strong foundations for future profitable growth."

For further information, please contact:
Anite plc	www.anite.com
Christopher Humphrey, Chief Executive Richard Amos, Group Finance Director	01252 775200
Smithfield	020 7360 4900
Reg Hoare/Will Henderson

An analysts' meeting will be held today at 9.15 for 9.30 a.m. at the offices of JP Morgan Cazenove,    20 Moorgate, EC2

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 450 staff in 13 countries across Europe, America, Asia and the Middle East.

  Half year results for the six months ended 31 October 2009

All references to adjusted profit relate to continuing operations for the period before share-based payments, amortisation of acquired intangible assets, restructuring costs, other gains and losses and recycled hedge losses. See the attached income statement and notes for details. A reconciliation of adjusted results to reported statutory results is given below.

Introduction

The first half of the 2009/10 financial year was characterised by challenging trading conditions. We continue to invest in our wireless 4G LTE ("LTE") product range and ongoing development of our @comRes travel system.  The results for the period were in-line with our expectations at the time of the Interim Management Statement.  Overall, the Board believes that the investments we are undertaking this year are already building strong foundations for future profitable growth.

We have announced separately today an update clarifying our LTE product strategy putting us in a much stronger position to control the pace of commercialisation of Anite's offering. This should enable us to deliver LTE testing solutions faster thereby meeting our customers' roadmaps.

Wireless remains a long-term growth market, which has high barriers to entry and limited competition in those areas in which Anite operates. We believe that the new LTE technology will provide significant long term growth and margin opportunities. 

In Travel, our strategy is to optimise the business's long-term value by continuing to strengthen and improve its market position through continuing success with @comRes. 

Results

Revenue from continuing operations was £35.2m (2008: £47.4m); stated at constant currency, revenue would have been £33.8m. EBITDA was £6.1m (2008: £15.3m). Adjusted operating profit was £3.5m (2008: £12.4m) and operating margin was 9.9% (2008: 26.2%). The overall effect on profit of relative movements in currencies was to reduce overall operating profit by approximately £0.3m, details of which are given in the financial review below. 

Revenue fell due to reduced customer demand in Wireless and the effect of last year's previously reported one-off customer events in Travel. Profitability was impacted by a number of factors. In Network Testing, although gross margin percentages have remained stable, lower revenue and less favourable exchange rates reduced operating margins. In Handset Testing, reduced 2G / 3G demand combined with the increased planned development spending on 4G LTE impacted operating margins. Underlying trading in Travel, including operating margins, was in line with the rebased expectations for the business.

The reconciliation of adjusted operating profit to profit before tax from continuing operations is as follows:

	2009 £m	2008 £m
Adjusted operating profit 1	3.5	12.4
Share-based payments (charge)/credit	(1.2)	0.4
Restructuring costs (see note 2.3)	-	(5.0)
Amortisation of acquired intangible assets	(2.1)	(1.9)
Operating profit from continuing operations	0.2	5.9
Other gains and losses	0.2	(0.4)
Finance income	0.1	0.7
Adjusted finance charges before recycled hedge losses	(1.1)	(1.8)
Adjusted net finance charges	(1.0)	(1.1)
Recycled hedge losses ( see note 8)	(0.5)	-
Net finance charges ( see note 4)	(1.5)	(1.1)
(Loss)/ profit before tax from continuing operations	(1.1)	4.4

1    Before share-based payments, amortisation of acquired intangible assets and restructuring costs.

Adjusted profit before tax of £2.5m (2008: £11.3m) is derived from adjusted operating profit of £3.5m (2008:£12.4m) less adjusted net finance charges of £1.0m (2008:£ 1.1m)

The reconciliation of adjusted operating profit to adjusted EBITDA from continuing operations is as follows:  

	2009	2008
	£m	£m
Adjusted operating profit	3.5	12.4
Depreciation	1.4	1.6
Amortisation	1.2	1.3
Adjusted EBITDA from continuing operations	6.1	15.3

Dividend 

The Board has declared an interim dividend of 0.3p per ordinary share (2008: 0.3p per ordinary share). The dividend will be paid on 19 February 2010 to shareholders on the register at 29 January 2010.

Balance sheet and cash

Net cash at 31 October 2009 was £26.0m (April 2009: £27.3m; October 2008: net cash £41.5m). The Company also has additional funds available in the form of a £20m (2008: £20m) revolving credit facility and a £5m (2008: £10m) overdraft facility, both of which are undrawn and the directors believe are appropriate for the business's expected future requirements. The liability on the Group's currency swap was unchanged from the year end position at £22.8m. 

Board

During the current financial year, a number of board changes occurred, reflecting the continuing development of the Company.

On 2 November 2009, Richard Amos was appointed as Group Finance Director.  Previously Richard was Group Finance Director at a number of private and public companies and is a chartered accountant.  

On 5 October 2009 Paul Taylor was appointed as a Non-Executive Director and has today been appointed chairman of the Audit Committee, Paul has held the position of Group Finance Director with AVEVA Group plc since March 2001. Paul is a Fellow member of the Chartered Association of Certified Accountants. 

David Hurst-Brown, a Non-Executive Director since 2004, has also today been appointed the Company's Senior Independent Director.

Peter Bertram, a Non-Executive Director since 2004, steps down from the Board today. The Board thanks Peter for the valuable contribution that he has made both as a board member and as Chairman of the Audit Committee. 

FINANCIAL REVIEW

Overview

The adjusted results for the continuing operations were as follows:

• Revenue fell by 25.7% to £35.2m (2008: £47.4m) reflecting difficult market conditions in Wireless and the rebasing of Travel following the loss of Norwich Union and MyTravel contracts in the prior year.

• Operating profit decreased by 71.8% to £3.5m (2008: £12.4m) reflecting mainly lower revenue and additional handset development costs, offset by overhead savings. 

• Profit before taxation reduced by 77.9% to £2.5m (2008: £11.3m)

Currency effect

Period on period the average exchange rate for the US dollar strengthened 14.2% against sterling from £1= $1.887 to £1 = $1.619 and the average rate of the euro strengthened by 9.8% from £1= €1.263 to €1.139, both of which had a favourable translational effect on converting the results of overseas subsidiaries. The effect of these changes on the translation of results from overseas subsidiaries was to improve revenue by £1.4m and adjusted operating profit by £0.2m. 

The Group is also impacted by the transactional effect of business units trading in currencies other than their local currency. In the period this adversely impacted operating profit by approximately £0.5m, resulting in an overall net impact on operating profit resulting from currency of £0.3m. The relative currency impacts on divisional results are stated in the divisional reviews below.

Finance charges

The interest income on the Company's cash balance continues to be very modest due to lower deposit rates, whereas the interest expense on the Company's term loan is effectively at a fixed rate; this has resulted in there being a net finance charge in the period.

Included within the £1.5m net finance charges, incurred in the period, is £0.5m of non-cash related losses on interest rate hedges that were previously taken to reserves in prior periods. These have now been 'recycled' from reserves to the income statement as the underlying instruments to which they relate are no longer considered 'effective' under IAS 39. The £0.5m charge ('recycled hedge loss') has been excluded from the calculation of adjusted profit before tax. Further details are given in note 8 to the accounts.

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:

Group KPIs	2009	2008
Order intake, £m	33.0	39.2
Revenue, £m	35.2	47.4
Adjusted operating profit1, £m (note 2.2)	3.5	12.4
Operating margin, %	9.9	26.2
EBITDA, £m	6.1	15.3
Free cash2, £m	1.3	13.9
R&D P&L expense, £m (note 2.3)	6.3	5.6
R&D total spend3, £m	6.0	5.1
Headcount (closing)	464	507

1    Profit from continuing operations before 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 effects of capitalisation and amortisation. Net amortisation of research and development costs (R&D) in the period reduced profit by £0.3m (2008: £0.5m).

OPERATING REVIEW 

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
Orders, £m	21.0	26.9
Revenue, £m	23.9	29.7
Adjusted operating profit1, £m	1.9	8.2
Operating margin %	7.9	27.6
EBITDA, £m	3.7	10.6
R&D P&L expense, £m	6.3	5.6
R&D total spend2, £m	6.0	5.1
Headcount (closing)	258	256

1 Profit from continuing operations before share-based payments, amortisation of acquired intangible assets and restructuring costs.

2 R&D total spend is the total development cost before the effects of capitalisation and amortisation. Net amortisation of research and development costs (R&D) in the period reduced profit by £0.3m (2008:£0.5m)

Wireless results 

Overall Wireless orders were down 21.9% in the period, reflecting an anticipated reduction resulting from weaker market conditions in the Wireless market. Revenue was down by 19.5% and operating profit was down by 76.8% as a result of lower revenue and increased R&D expenditure on LTE. The total R&D spend in the period was £6.0m (2008: £5.1m). 

The effect of translating our overseas subsidiaries revenue on a constant currency basis resulted in a translation benefit of approximately £1.4m (Handset Testing £0.6m and Network Testing £0.8m) to revenue and £0.2m (all Network Testing) to profit. However, the net impact on profit of translational and transactional currency movements was an overall loss of £0.5m compared to the previous year. 

In Handset Testing, the division made a small operating profit of £0.4m (2008: £3.5m), on revenue of £15.2m (2008: £18.6m) reflecting declining 2G / 3G demand combined with the planned increase in development spending of £0.9m on LTE, and some restructuring costs offset by other overhead savings. 

Network Testing reported a reduced operating profit of £1.5m (2008: £4.7m) on revenue of £8.7m (2008: £11.1m), having experienced challenging market conditions compared to the same period last year. Revenue and profitability were impacted by constrained customer budgets, although gross margins have remained relatively stable. The impact of exchange rate exposure to the dollar/euro, due to its trade in both America and the Far East, has resulted in a transactional exchange rate impact reducing profit by around £0.8m compared with the previous year. In addition, the business took a £0.7m provision against certain outstanding receivables contracted on extended credit terms.

Progress on LTE (4G) 

We have today clarified our new LTE product strategy focusing on our own hardware offering, which has already been sold to several leading Tier 1 customers.  This platform is being rapidly progressed to a full commercial solution ('Anite 9000 Mobile Test Accelerator') during the next few months to enable us to complete our development roadmap and take advantage of the market leading position that we are establishing. 

Anite and LG Electronics recently announced the successful verification of the industry's first LTE protocol conformance test case, an important milestone in the delivery of 4G devices and networks. LG uses Anite's LTE solution to develop their devices and to ensure that these meet the industry's rigorous certification requirements during the earliest stages of their development cycle. Although this will be the first of thousands of such test cases, it demonstrates that Anite is leading the market. 

As a result of this milestone, and in response to customer demand, Anite has taken the decision to commercialise its own LTE offering (to be known as the 'Anite 9000 Mobile Test Accelerator') to enable it to develop a comprehensive and seamless roadmap for the future.

We are pleased to report that Anite has made a number of initial sales of its LTE solution to several leading Tier 1 customers who are at the forefront of the development and roll out of LTE. Anite's own solution has been successfully installed for some months with several of these customers, receiving encouraging feedback. This resulted in the early sales and a growing new business pipeline. 

These sales have resulted in some limited revenues being generated in Anite's first half ended 31 October 2009. Revenues are anticipated to build up during the second half ending 30 April 2010 with LTE revenues in the fourth quarter of Anite's financial year, expected to be critical to the full year outcome. 

Agilent LTE partnership ended

As a result of the above successes, and the Board's decision to progress with the rapid commercialisation of Anite's own hardware platforms, the strategic partnership between Anite and Agilent to develop an LTE platform, announced in November 2007, has been terminated. Anite will continue to work with Agilent on delivery of market leading 2G and 3G solutions under separate existing arrangements. Anite does not expect any material one off costs due to the termination of the LTE partnership.  

Wireless 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.

Wireless outlook

The outlook for the LTE testing market continues to improve with significant numbers of network operators committing to their roll out strategies for what is now the dominant global standard. To date according to independent analyses*, some 120 network operators globally have announced their LTE deployment status, with a variety of commitment levels including intentions to trial, deploy and migrate, whilst some 33 networks are expected to be in service by the end of 2012.

*GSA, 3G Americas

In addition, clear LTE market and thought leadership is being provided by Tier 1 participants, with a much stronger focus on more rapid deployment and greater global collaboration between network operators and hardware/device and software/application developers than was evidenced with 3G. LTE technology also provides significant potential compared to legacy technology to exploit innovative devices, applications and content for both the consumer and business markets.

This impetus is already being reflected in the encouraging trends in our LTE order pipeline. Although the nature of this leading-edge development programme means that risks remain around timing and delivery, the Board believes that the company is now in a much stronger position to control the commercialisation of Anite's own solutions and establish a larger share of the market.  

In Network Testing, although market conditions are still challenging with pressure continuing on customer budgets, there are signs of stabilisation. 

Travel

Anite is a 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, manage the system themselves, or - as many do - take advantage of our fee based service where we provide hosting and 24/7 system availability from our secure data centre. 

Travel KPIs - based on adjusted results1	2009	2008
Orders, £m	12.0	12.3
Revenue, £m	11.3	17.7
Adjusted operating profit1, £m	2.5	6.4
Operating margin, %	22.1	36.2
EBITDA, £m	3.1	6.6
R&D P&L expense and total spend, £m	-	-
Headcount (closing)	182	215

1    Profit from continuing operations before share-based payments.

Travel results

Travel orders were down slightly in the period as the order intake stabilised following the previously reported customer changes* (the comparative includes a one-off order of £2.3m in respect of the MyTravel contract settlement). Revenue was down by 36% and operating profit down by 61% reflecting those customer changes. Underlying trading in Travel was in line with the rebased expectations for the business excluding the effect of the customer changes. There is limited translational currency impact in this division as overseas subsidiaries are immaterial. The transactional effect of euro denominated trading increased profit by a net £0.2m.

*The one-off customer changes were principally the loss of the Norwich Union contract, a non-travel legacy customer, the non-repetition of the benefit from the early settlement of the MyTravel contract and the XL administration.  

Good progress continues to be made with the TUI Group and other key UK and international customers including Finnair and Superbreak. The reduction in headline revenue has been partly mitigated through new business and the migration of existing customers from ATOP to @comRes.

Travel 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. This will 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. 

Travel outlook 

There is a strong UK and international order pipeline for @comRes. This reflects the convincing business case it represents for vertically integrated customers who need to reduce their processing and distribution costs and overcome the integration challenges that have arisen through rapid market consolidation. Due to the high value and mission critical nature of its work, Travel's order intake tends to be focused on a few significant long term orders and is characterised by lengthy sales cycles.  

People

On behalf of the Board, we would like to thank all employees for their contribution, hard work and support during the period.

Group summary and outlook 

We have today clarified our new LTE product strategy focusing on our own hardware offering, which has already been sold to several leading Tier 1 customers.  This platform is being rapidly progressed to a full commercial solution ('Anite 9000 Mobile Test Accelerator') during the next few months to enable us to complete our development roadmap and take advantage of the market leading position that we are establishing.

Overall we are trading in line with our expectations for this year as a whole and we continue to believe that the longer-term outlook for our travel system and the growing opportunities for our new LTE product range are encouraging, and that the investments we are undertaking this year are already building strong foundations for future profitable growth.

Clay Brendish  Chairman                                  Christopher Humphrey  Chief Executive

7 December 2009

  Key risks and uncertainties, going concern and Statement of Director's Responsibilities

Risks and uncertainties

The principal risks and uncertainties faced by the Group have not changed since the publication of the latest annual report dated 30 April 2009. These risks include;

• Business asset risk

• Political climate risk

• Project delivery risk

• Strategic and operational risks

• Human resource and organisation risks, and

• Financial risks

For a detailed explanation of these risks, please refer to pages 26 to 28 of the 2009 annual report and accounts. The Directors have implemented procedures to monitor all of these risks and uncertainties and action is taken where possible to mitigate these risks.

Outlook

Any forward looking statements, made within this interim half year report, have been made in good faith by the Directors based on the information made available up to the date of the Directors' approval of this report, and these forward looking statements should be treated with caution due to the inherent uncertainties, including macroeconomic, IT service and solution market uncertainties and business risk factors which may affect the outcome.

Going concern

In considering going concern and liquidity risk, the Directors have reviewed the Group's future cash requirements and earnings projections. The Directors believe these forecasts, which show the Group being covenant compliant for the foreseeable future, have been prepared on a prudent basis, and have also considered the impact of a range of reasonably possible changes to trading performance. The Directors have concluded that given these circumstances, together with the significant cash balances and unused loan facilities, it is appropriate to prepare the financial statements of the Group on a going concern basis.

Statement of Directors' responsibilities

The Directors confirm that to the best of their knowledge:

• The condensed set of financial statements have been prepared in accordance with IAS 34; and

• The financial highlights and review of business performance includes a fair review of the information required by the Disclosure and Transparency Rules (DTR) of the Financial Services Authority, paragraph DTR 4.2.7R and DTR 4.2.8R.

By order of the Board

Richard Amos

Group Finance Director

7 December 2009 

INDEPENDENT REVIEW REPORT TO ANITE PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2009 which comprises the income statement, the statement of comprehensive income, the statement of changes in equity and expense, the balance sheet, and the cash flow statement and related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditors

London, United Kingdom

7 December 2009

Condensed consolidated income statement

		Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
		(unaudited)	(unaudited)	(audited)
	Note	£000	£000	£000
Continuing operations
Revenue	2.1	35,195	47,433	90,098
Cost of sales		(13,563)	(18,325)	(34,835)
Gross profit		21,632	29,108	55,263
Distribution costs		(5,290)	(4,987)	(10,755)
Research and development		(7,239)	(6,264)	(12,474)
Administrative expenses		(8,857)	(11,942)	(22,673)
Operating expenses	2.3	(21,386)	(23,193)	(45,902)
Operating profit before share-based payments, amortisation ofacquired intangible assets and restructuring costs		3,501	12,409	20,045
Share-based payments		(1,154)	386	(1,874)
Amortisation of acquired intangible assets		(2,101)	(1,879)	(4,040)
Restructuring costs		-	(5,001)	(4,770)
Operating profit		246	5,915	9,361
Other gains and losses		232	(353)	(1,057)
Finance income	4	133	683	1,199
Finance charges	4	(1,682)	(1,831)	(3,090)
(Loss) / profit from continuing operations before tax		(1,071)	4,414	6,413
Tax credit / (expense)	5	231	(2,618)	(1,454)
(Loss) / profit from continuing operations		(840)	1,796	4,959
Profit from discontinued operations	3	1,000	29,784	31,384
Profit for the period		160	31,580	36,343
Profit attributable to equity holders of the parent		160	31,580	36,343
Continuing and discontinued operations
Earnings per share - basic	6	0.1 p	9.5p	11.3p
- diluted		0.1 p	9.2p	10.8p
Continuing operations
Earnings per share - basic	6	(0.2)p	0.5p	1.5p
- diluted		(0.3)p	0.5p	1.5p

  Condensed consolidated statement of comprehensive income

		Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
		(unaudited)	(unaudited)	(audited)
	Note	£000	£000	£000
Retained profit for the period		160	31,580	36,343
Exchange differences arising on translation of foreign operations1		(432)	994	449
Cash flow hedges taken to equity		89	(581)	(1,514)
Recycling of fair value loss on cash flow hedges from equity to profit or loss2		559	-	-
Fair value losses on net investment hedges (net of foreign exchange and tax)3		(294)	(1,300)	(3,731)
Share buy back and cancellation		-	(9)	(660)
Recognition of share-based payments before tax		1,154	(372)	2,783
Tax credit taken directly to other comprehensive income	5	92	711	669
Total comprehensive income		1,328	31,023	34,339

1    Includes £nil (2008: £363,000) recycled through the income statement on disposal of businesses.

2    The fair value losses recycled to the income statement in the period are disclosed within finance charges (note 4).

3    The net loss of £294,000 (2008: £1,300,000) comprises the fair value loss on the net investment hedge of £88,000 (2008: £1,745,000) relating to the effective portion of the cross currency swaps less the foreign exchange loss of  £206,000 (2008: gain £445,000) 

Condensed consolidated statement of changes in equity

	Issued share capital	Share premium account	Own shares	Merger reserve	Capital redemption reserve	Other reserves	Retained earnings	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Balance at 1 May 2008 Changes in equity for the period to 31 October 2008	33,854	25,406	(5,132)	6,538	2,485	(940)	333	62,544
Total comprehensive income for the period	-	-	250	(5,816)	-	(176)	36,765	31,023
Issue of share capital	46	79	-	-	-	-	-	125
Purchase of own shares into treasury	-	-	(125)	-	-	-	-	(125)
Dividend paid	-	-	-	-	-	-	(1,992)	(1,992)
Balance at 31 October 2008	33,900	25,485	(5,007)	722	2,485	(1,116)	35,106	91,575
Changes in equity for the periodto 30 April 2009
Total comprehensive income for the period	(256)	-	1,420	-	256	(3,971)	5,867	3,316
Issue of share capital	-	-	-	-	-	-	-	-
Purchase of own shares into treasury	-	-	(70)	-	-	-	-	(70)
Dividend paid	-	-	-	-	-	-	(10,911)	(10,911)
Balance at 30 April 2009	33,644	25,485	(3,657)	722	2,741	(5,087)	30,062	83,910
Changes in equity for the periodto 31 October 2009
Total comprehensive income for the period	-	-	-	-	-	14	1,314	1,328
Issue of share capital	8	14	-	-	-	-	-	22
Purchase of own shares into treasury	-	-	(158)	-	-	-	-	(158)
Dividend paid	-	-	-	-	-	-	(1,912)	(1,912)
Balance at 31 October 2009	33,652	25,499	(3,815)	722	2,741	(5,073)	29,464	83,190

  Condensed consolidated balance sheet

		31 October 2009	31 October 2008	30 April 2009
	Note	£000	£000	£000
Non-current assets
Goodwill		63,740	57,482	64,415
Other intangible assets		23,856	26,469	26,553
Property, plant and equipment		10,186	11,545	10,893
Deferred tax assets		2,178	-	1,731
		99,960	95,496	103,592
Current assets
Inventories		2,274	2,783	2,289
Trade and other receivables		22,806	26,403	24,297
Derivative financial assets		102	-	75
Current tax assets		381	894	381
Cash and cash equivalents		45,898	61,376	47,177
		71,461	91,456	74,219
Total assets		171,421	186,952	177,811
Current liabilities
Trade and other payables		(22,852)	(27,185)	(24,699)
Bank borrowings	7	(4,986)	(4,987)	(4,979)
Current tax payable		(5,646)	(8,950)	(7,236)
Derivative financial liabilities		(78)	(5,318)	-
Provisions		(4,515)	(7,454)	(5,389)
		(38,077)	(53,894)	(42,303)
Non-current liabilities
Bank borrowings	7	(14,958)	(14,895)	(14,936)
Deferred tax liabilities		(5,503)	(6,384)	(6,181)
Derivative financial liabilities	8	(24,254)	(13,981)	(24,487)
Provisions		(5,439)	(6,223)	(5,994)
		(50,154)	(41,483)	(51,598)
Total liabilities		(88,231)	(95,377)	(93,901)
Net assets		83,190	91,575	83,910
Equity
Issued share capital	9	33,652	33,900	33,644
Share premium account		25,499	25,485	25,485
Own shares		(3,815)	(5,007)	(3,657)
Merger reserve		722	722	722
Capital redemption reserve		2,741	2,485	2,741
Other reserves		(5,073)	(1,116)	(5,087)
Retained earnings		29,464	35,106	30,062
Total equity		83,190	91,575	83,910

The accompanying notes are an integral part of this consolidated balance sheet

  Condensed consolidated cash flow statement

		Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
		(unaudited)	(unaudited)	(audited)
	Note	£000	£000	£000
(Loss) / profit for the year
Continuing operations		(840)	1,796	4,959
Discontinued operations		1,000	29,784	31,384
		160	31,580	36,343
Adjustments for:
Tax credit - continuing and discontinued	5	(1,231)	(112)	(1,194)
Profit before tax on disposal of discontinued operations	3	-	(25,604)	(28,182)
Hedge ineffectiveness on the net investment hedge		(232)	353	1,057
Finance charges - continuing and discontinued	4	1,549	1,048	1,791
Depreciation and impairment of property, plant and equipment		1,424	1,916	3,535
Amortisation and impairment of intangible assets		1,224	2,351	3,605
Amortisation of acquired intangible assets		2,101	1,879	4,040
Loss on disposal of property, plant and equipment		-	13	-
Share-based payments		1,154	(372)	2,783
(Decrease) / increase in provisions		(1,133)	305	(1,946)
Increase in provisions - restructuring costs		-	5,001	4,770
Operating cash flows before movements in working capital		5,016	18,358	26,602
Decrease in inventories		15	754	1,248
Decrease in receivables		1,494	13,253	15,360
Decrease in payables		(1,263)	(12,887)	(14,548)
Movements in working capital		246	1,120	2,060
Cash generated from operations before exceptional cash payments		5,262	19,478	31,312
Cash payments for onerous property lease		-	-	(2,650)
Cash generated from operations		5,262	19,478	28,662
Interest received		142	648	1,297
Interest paid		(985)	(1,659)	(2,664)
Income taxes paid		(1,392)	(1,256)	(3,410)
Net cash generated from operating activities		3,027	17,211	23,885
Cash flow from investing activities
Proceeds from disposal of subsidiary undertakings		-	53,239	53,835
Net bank balance disposed with subsidiary undertakings		-	(8,315)	(8,315)
Net payments to previously closed businesses		-	(87)	(201)
Deferred consideration paid		(364)	-	-
Part settlement of cross currency swap		-	-	(8,884)
Purchase of property, plant and equipment		(862)	(2,145)	(3,184)
Proceeds from disposal of property, plant and equipment		-	-	34
Purchase of software licences		(302)	(411)	(544)
Expenditure on capitalised product development		(587)	(751)	(1,142)
Net cash (used in) / generated from investing activities		(2,115)	41,530	31,599
Cash flow from financing activities
Issue of ordinary share capital		22	125	125
Share buy back for cancellation		-	(9)	(660)
Purchase of own shares into treasury		(158)	(125)	(195)
Dividend paid to Company's shareholders		(1,912)	(1,992)	(12,903)
Decrease in bank loans		-	(25,000)	(25,000)
Net cash used in financing activities		(2,048)	(27,001)	(38,633)
Net (decrease) / increase in cash and cash equivalents		(1,136)	31,740	16,851
Effect of exchange rate changes		(143)	262	952
Cash and cash equivalents at beginning of period		47,177	29,374	29,374
Cash and cash equivalents at end of period	7	45,898	61,376	47,177

  1 BASIS OF PREPARATION AND accounting policies

The unaudited condensed consolidated financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union and in accordance with International Accounting Standard (IAS) 34: 'Interim Financial Reporting'.

Except as set out in note 1.1, the accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in preparation of the Group's annual financial statements for the year ended 30 April 2009 as available on our website www.anite.com.

1.1   Changes in accounting standards

The IFRIC interpretations, amendments to existing standards and new standards that are mandatory and relevant for the Group's accounting periods beginning on or after 1 May 2009 have been adopted in the Group's October 2009 Interim Report. The changes relate to disclosure points only, have not resulted in changes to the Group's accounting policies and include the adoption of

·          IFRS8: ‘Operating Segments’ whereby the operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board of Directors in order to allocate resources to the segments and to assess their performance, and

·          IAS1 (revised): ‘Presentation of Financial Statements’ whereby a statement of comprehensive income is presented as a primary statement, separate from the income statement and the statement of changes in equity.

In both instances, the disclosures of prior period amounts have been restated.

1.2   Other information

The financial information contained in this Interim Report does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The financial information contained in this Interim Report has been reviewed by the auditors but not audited.

The figures for the year ended 30 April 2009 do not constitute the statutory accounts for that period but are based upon the Group's audited accounts prepared under IFRS. The statutory accounts for the year ended 30 April 2009 have been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

On 7 December 2009, this unaudited Interim Report was approved by the Board of Directors for issue.

2 Revenue and segmental information

2.1 Revenue from continuing and discontinued operations

		Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	Note	£000	£000	£000
Own product software licences		11,881	16,104	31,037
Bespoke services, systems integration and implementation of software products		4,475	4,452	8,983
Managed services		2,694	5,105	10,089
Software maintenance and support		10,434	10,722	21,405
Sale of third-party products and services		5,711	8,750	16,284
Other - contract settlement		-	2,300	2,300
Revenue from continuing operations	2.2	35,195	47,433	90,098
Finance income	4	133	683	1,199
Total revenue from continuing operations		35,328	48,116	91,297
Discontinued operations
Revenue	2.2	-	28,810	28,810
Finance income	4	-	100	100
Total revenue		35,328	77,026	120,207

  2.2 Operating segments - primary basis

The Group is organised into four operating segments: Handset Testing, Network Testing, Travel and Group.

Operating segment information under the primary reporting format is as disclosed in the tables below:

	Handset Testing	Network Testing	Total Wireless	Travel	Group	Total
Six months ended 31 October 2009	£000	£000	£000	£000	£000	£000
Total revenue	15,226	8,634	23,860	11,335	-	35,195
Segment adjusted1 profit / (loss) before tax	375	1,517	1,892	2,512	(1,893)	2,511
Net finance charges before recycled hedge loss	-	-	-	-	990	990
Segment adjusted1 operating profit / (loss)	375	1,517	1,892	2,512	(903)	3,501
Share-based payments	(193)	(121)	(314)	(178)	(662)	(1,154)
Amortisation of acquired intangible assets	(309)	(1,792)	(2,101)	-	-	(2,101)
Restructuring costs	-	-	-	-	-	-
Segment operating (loss) / profit	(127)	(396)	(523)	2,334	(1,565)	246
Other gains and losses	-	-	-	-	232	232
Finance charges (net)	-	-	-	-	(1,549)	(1,549)
(Loss) / profit from continuing operations before tax	(127)	(396)	(523)	2,334	(2,882)	(1,071)
Tax credit	-	-	-	-	231	231
(Loss) / profit from continuing operations	(127)	(396)	(523)	2,334	(2,651)	(840)
Profit from discontinued operations	-	-	-	-	1,000	1,000
(Loss) / profit for the period	(127)	(396)	(523)	2,334	(1,651)	160
Segment total assets	27,695	8,026	35,721	12,660	123,040	171,421

	Handset Testing	Network Testing	Total Wireless	Travel	Group	Total
Six months ended 31 October 2008	£000	£000	£000	£000	£000	£000
Total revenue	18,625	11,108	29,733	17,700	-	47,433
Segment adjusted1 profit / (loss) before tax	3,529	4,718	8,247	6,355	(3,341)	11,261
Net finance charges before recycled hedge loss	-	-	-	-	1,148	1,148
Segment adjusted1 operating profit / (loss)	3,529	4,718	8,247	6,355	(2,193)	12,409
Share-based payments	273	(246)	27	79	280	386
Amortisation of acquired intangible assets	(265)	(1,614)	(1,879)	-	-	(1,879)
Restructuring costs	-	-	-	-	(5,001)	(5,001)
Segment operating profit / (loss)	3,537	2,858	6,395	6,434	(6,914)	5,915
Other gains and losses	-	-	-	-	(353)	(353)
Finance charges (net)	-	-	-	-	(1,148)	(1,148)
Profit / (loss) from continuing operations before tax	3,537	2,858	6,395	6,434	(8,415)	4,414
Tax expense	-	-	-	-	(2,618)	(2,618)
Profit / (loss) from continuing operations	3,537	2,858	6,395	6,434	(11,033)	1,796
Profit from discontinued operations	-	-	-	-	29,784	29,784
Profit for the period	3,537	2,858	6,395	6,434	18,751	31,580
Segment total assets	30,822	9,999	40,821	13,165	132,966	186,952

	Handset Testing	Network Testing	Total Wireless	Travel	Group	Total
Year ended 30 April 2009	£000	£000	£000	£000	£000	£000
Total revenue	37,745	21,243	58,988	31,110	-	90,098
Segment adjusted1 profit / (loss) before tax	7,130	6,862	13,992	9,542	(5,380)	18,154
Net finance charges before recycled hedge loss	-	-	-	-	1,891	1,891
Segment adjusted1 operating profit / (loss)	7,130	6,862	13,992	9,542	(3,489)	20,045
Share-based payments	(103)	(131)	(234)	(329)	(1,311)	(1,874)
Amortisation of acquired intangible assets	(606)	(3,434)	(4,040)	-	-	(4,040)
Restructuring costs	139	-	139	-	(4,909)	(4,770)
Segment operating profit / (loss)	6,560	3,297	9,857	9,213	(9,709)	9,361
Other gains and losses	-	-	-	-	(1,057)	(1,057)
Finance charges (net)	-	-	-	-	(1,891)	(1,891)
Profit / (loss) from continuing operations before tax	6,560	3,297	9,857	9,213	(12,657)	6,413
Tax expense	-	-	-	-	(1,454)	(1,454)
Profit / (loss) from continuing operations	6,560	3,297	9,857	9,213	(14,111)	4,959
Profit from discontinued operations	-	-	-	-	31,384	31,384
Profit for the period	6,560	3,297	9,857	9,213	17,273	36,343
Segment total assets	30,036	9,726	39,762	11,518	126,531	177,811

1    Profit / (loss) from continuing operations before share-based payments, amortisation of acquired intangible assets, restructuring costs, other gains and losses and recycled hedge losses

2.3 Operating expenses

	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	£000	£000	£000
Distribution costs
- amortisation of acquired intangible assets	1,165	1,196	2,234
- other	4,125	3,791	8,521
	5,290	4,987	10,755
Research and development
- amortisation of internally generated assets	859	965	1,855
- other	5,444	4,616	8,952
	6,303	5,581	10,807
- amortisation of acquired intangible assets	936	683	1,806
- restructuring costs	-	-	(139)
	7,239	6,264	12,474
Administrative expenses
- restructuring costs	-	5,001	4,909
- share-based payments	1,154	(386)	1,874
- other	7,703	7,327	15,890
	8,857	11,942	22,673
Total operating expenses	21,386	23,193	45,902
Analysed as:
- amortisation of acquired intangible assets	2,101	1,879	4,040
- amortisation of internally generated assets	859	965	1,855
- restructuring costs	-	5,001	4,770
- share-based payments	1,154	(386)	1,874
- other	17,272	15,734	33,363
	21,386	23,193	45,902

  3 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.

	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)
	£000	£000	£000
Profit after tax for the period from discontinued operations
Revenue	-	28,810	28,810
Cost of sales	-	(16,323)	(16,323)
Gross profit	-	12,487	12,487
Operating expenses	-	(11,137)	(12,033)
Operating profit before interest	-	1,350	454
Finance income	-	100	100
Profit before tax	-	1,450	554
Tax charge	-	(406)	(488)
Profit after tax	-	1,044	66
Profit on sale of discontinued operations
Net movement in provision in relation to previously discontinued operations	-	556	574
Profit on disposal of Anite Public Sector	-	25,048	27,608
Net profit before tax on sale of discontinued operations	-	25,604	28,182
Tax credit relating to activities discontinued in prior periods	1,000	3,136	3,136
Profit after tax on sale of discontinued operations	1,000	28,740	31,318
Total	1,000	29,784	31,384

4 Net finance charge

	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)
Continuing operations	£000	£000	£000
Finance income
Interest receivable and similar income	9	39	92
Interest on short-term deposits	124	615	1,107
Gains on financial instruments in a hedging relationship:
- Interest rate swaps and caps - cash flow hedges	-	29	-
Total finance income	133	683	1,199
Finance charges
Bank loans and overdrafts1	(243)	(1,575)	(2,023)
Other loans/commitment fees	(56)	(58)	(101)
Losses on financial instruments in a hedging relationship:
- Interest rate swaps and caps - cash flow hedges	(437)	-	(121)
- Cross currency swaps - net investment hedge	(303)	(122)	(638)
Unwinding of discount on provisions 2	(84)	(76)	(207)
Finance charges before recycled hedge loss	(1,123)	(1,831)	(3,090)
Recycling of fair value loss on cash flow hedges 3	(559)	-	-
Total finance charges	(1,682)	(1,831)	(3,090)
Adjusted net finance charge before recycled hedge loss	(990)	(1,148)	(1,891)
Recycling of fair value loss on cash flow hedges 3	(559)	-	-
Net finance charge - continuing operations	(1,549)	(1,148)	(1,891)
Finance income - discontinued operations	-	100	100
Net finance charge - continuing and discontinued operations	(1,549)	(1,048)	(1,791)

1    Finance charges on bank loans and overdrafts include amortisation of issue costs of £33,000 (2008: £58,000).

2    The unwinding of discount on provisions relates to property and deferred consideration provisions.

3    The recycling of fair value loss on cash flow hedges arises due to the future repayments of the term loan reducing the interest payments causing some of the interest cash flows to be classed as no longer probable. In accordance with IAS 39, an equivalent proportion of the fair value losses under the interest rate swap arrangement, previously taken to equity, are released to profit and loss ( see note 8).

5 tax CREDIT/(expense)

Continuing operations	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)
	£000	£000	£000
Current tax
UK corporation tax	(130)	(631)	(1,110)
Foreign tax	(671)	(1,877)	(3,151)
	(801)	(2,508)	(4,261)
Adjustments in respect of prior years
Foreign tax	-	-	(70)
	-	-	(70)
Total current tax expense	(801)	(2,508)	(4,331)
Deferred tax
UK	447	(165)	1,754
Foreign	585	55	1,123
Total deferred tax credit / (expense)	1,032	(110)	2,877
Total income tax credit / (expense)	231	(2,618)	(1,454)

Income tax for the interim period is charged at 29.3% (October 2008: 31.3%), representing the weighted average of the estimated annual effective income tax rate expected for the full year in each jurisdiction and major category of income within continuing operations.

Discontinued operations	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)
	£000	£000	£000
Current tax
UK corporation tax	-	(508)	(488)
Foreign tax	-	3	-
	-	(505)	(488)
Adjustments in respect of prior years
UK corporation tax	1,000	3,136	3,136
	1,000	3,136	3,136
Total current tax credit	1,000	2,631	2,648
Deferred tax
Foreign	-	99	-
Total deferred tax credit	-	99	-
Total income tax credit	1,000	2,730	2,648

Total tax credit - continuing and discontinued operations

1,231

112

1,194

Tax credit taken directly to other comprehensive income	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)
	£000	£000	£000
Deferred tax relating to share based payments	-	-	20
Deferred tax relating to foreign exchange on  acquired intangible assets	92	123	(948)
UK corporation tax relating to foreign exchange	-	588	1,597
	92	711	669

6 Earnings per share

The calculations of earnings per share are based on the Group profit for the period, adjusted profit1 and weighted average number of shares in issue:

		Basic			Diluted
	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)
EPS summary
Basic EPS	0.1 p	9.5p	11.3p	0.1 p	9.2p	10.8p
Basic EPS for continuing operations	(0.2)p	0.5p	1.5p	(0.3)p	0.5p	1.5p
Adjusted EPS2	0.6 p	2.3p	4.4p	0.6 p	2.3p	4.2p
	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
	(unaudited)	(unaudited)	(audited)	(unaudited)	(unaudited)	(audited)
	Pence per share	Pence per share	Pence per share	£000	£000	£000
Profit for the period	0.1	9.5	11.3	160	31,580	36,343
Profit from discontinued operations	(0.3)	(9.0)	(9.8)	(1,000)	(29,784)	(31,384)
(Loss) / profit for the year on continuing operations	(0.2)	0.5	1.5	(840)	1,796	4,959
Reconciliation to adjusted profit:
Other gains and losses (net of tax)	(0.1)	0.1	0.2	(167)	254	761
Recycled hedge losses3 (net of tax)	0.1	-	-	402	-	-
Amortisation of acquired intangible assets (net of tax)	0.5	0.5	0.9	1,516	1,824	2,917
Share-based payments (net of tax)	0.3	0.1	0.7	865	271	2,097
Restructuring costs (net of tax)	-	1.1	1.1	-	3,601	3,434
Adjusted profit1	0.6	2.3	4.4	1,776	7,746	14,168

1    Profit from continuing businesses before other gains and losses, recycled hedge losses, amortisation of acquired intangible assets, share-based payments and restructuring costs.

2    Earnings per share on adjusted profit1 have been included to give a clearer understanding of the results of the continuing businesses.

3    Recycled hedge losses relate to the recycling of fair value losses on cash flow hedges reclassified from equity to profit or loss in the period.

Number of shares ('000)	Six months ended 31 October 2009	Six months ended 31 October 2008	Year ended 30 April 2009
Weighted average number of shares in issue - used to calculate basic earnings per share	293,176	330,830	321,714
Effect of potentially dilutive ordinary shares
- SAYE and share option schemes	14,193	13,377	13,507
Number of shares used to calculate diluted earnings per share	307,369	344,207	335,221

7 Net CASH

	31 October 2009	31 October 2008	30 April 2009
	£000	£000	£000
Cash and cash equivalents	45,898	61,376	47,177
Bank borrowings - current	(4,986)	(4,987)	(4,979)
Bank borrowings - non-current	(14,958)	(14,895)	(14,936)
Net cash	25,954	41,494	27,262

  8 DERIVATIVE FINANCIAL LIABILITIES

When Anite purchased Nemo (Network Testing) in December 2006, it entered into a number of swaps designed to hedge against movements in foreign exchange rates 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 liability on the Group's non-current currency swaps at 31 October 2009 was £22.8m (30 April 2009:  £22.8m, 31 October 2008: £13.3m). 

The hedge against the net investment in Nemo continues to be fully effective with all effective foreign exchange movements being taken directly to reserves. The maturity date of the currency swap is 31 October 2011 and the value of any final settlement will depend on exchange rates at that time.

In December 2006, at the time of entering into the Group's £40m syndicated facility, Anite entered into interest rate swaps to provide protection against fluctuations in interest movement on 50% of the loan principal. These hedge instruments expire on 31 October 2011. Following the £20m loan repayment in October 2008 the protection increased to 100%. Under an effective hedging relationship, the cumulative movements in the valuation of the swap are held in reserves and released over the period of the arrangement. Following the £5m term loan repayment in November 2009 one of the interest rate swaps ceases to be effective and as a result the accumulated valuation losses of £559k, previously held in equity (other reserves), have been recycled through the profit and loss account and taken as a finance charge in the period. The balance of the amount held in reserves (currently £0.3m) will also be recycled to finance charges over the remainder of the swap as it is repaid. The unwinding of the ineffective swap liability (currently £0.8m), which if it had remained effective would have been reversed through reserves, will now be released over the remaining period to 'other gains and losses'. In the current period, the charge of £559k, taken to finance charges and classified as a ' recycled hedge loss', has been excluded from the calculation of adjusted profit before tax. The outstanding liability on the interest rate swaps at 31 October 2009 was £1.5m (30 April 2009: £1.7m, 31 October 2008: £0.7m).

9 Called up share capital

	Ordinary shares of 11.25p each		Deferred redeemable shares of £1 each
	Number	£000	Number	£000
Allotted, issued and fully paid:
At 1 May 2009	298,609,840	33,594	50,000	50
Issued during the period	73,355	8	-	-
At 31 October 2009	298,683,195	33,602	50,000	50

10 Dividends

The Company paid a final dividend of 0.65p (2008: 0.6p) per share, totalling £1,912,000 (2008: £1,992,000) on 20 October 2009.

11 Contingent liabilities

There are contingent liabilities that arise in the normal course of business in respect of indemnities, warranties, guarantees and legal claims. However, the Directors have considered that none of these claims is expected to result in a material loss to the Group. There has been no change in the Directors' assumptions in regard to contingent liabilities since the year ended 30 April 2009.

 

END

 

 

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