Interim Results
Anite Group PLC
08 December 2005
For immediate release Thursday, 8 December 2005
ANITE GROUP PLC
Interim results for the six months ended 31 October 2005
Anite Group plc ('Anite' or 'the Group'), the worldwide IT solutions and
services company, today announces its unaudited interim results for the six
months ended 31 October 2005.
This is the first set of results issued under IFRS; all numbers including
comparatives are stated accordingly.
Highlights:
• Underlying results* slightly ahead of expectations:
• profit before tax of £7.7m (2004: £7.3m) on revenues of £83.6m (2004:
£80.3m)
• profit before tax, post utilisation of contract provisions, £10.1m
(2004: £10.3m)
• basic earnings per share, post utilisation of contract provisions,
2.2p (2004: 2.2p); basic earnings per share 1.5p (2004: 1.3p)
• Continuing investment in development expenditure on new products
• Good progress on Pericles and State of Victoria ('SoV') - no additional
contract provisions required
• Net cash and deposits of £25.6m (2004: £11.3m; 30 April 2005: £37.4m)
• After a slow start, improving order momentum in the first half with intake
of £71.7m, down 14% compared to strong comparisons last year, giving book
to bill ratio of 0.9
• IFRS has had a minimal effect on the underlying operating performance of
the Group in this period
• 7.7m shares bought back at a cost of £5.0m
• Statutory results:
• Group profit after tax £9.2m (2004: £9.7m)
• total Group revenues £83.6m (2004: £96.5m)
• Group operating profit £9.6m (2004: £6.6m)
• total basic and diluted earnings per share 2.6p (2004: 2.7p)
*ongoing businesses (before impairment of goodwill, disposed and discontinued
operations, and utilisation of contract provisions). For a reconciliation to
reported profit before tax, see attached Income Statement and notes 2.2.
Commenting on today's results, Steve Rowley, Anite's Chief Executive, stated:
'With our strengthening financial position and well positioned businesses, we
are continuing investment in new products to take advantage of growth
opportunities.
'The first half finished strongly following a slow start to the year. This,
combined with the success of our new products, strong prospect pipeline and the
continuing de-risking of both Pericles and SoV since we last reported, has
increased our confidence and the outlook for the year as a whole is therefore
unchanged.'
For further information, please contact: www.anite.com
Anite Group plc 01753 804000
Steve Rowley, Chief Executive
Christopher Humphrey, Group Finance Director
Smithfield 020 7360 4900
Reg Hoare/Sara Musgrave/Sarah Richardson
An analysts' meeting will be held at 11.00 for 11.15 a.m. at the offices of
Smithfield, 10 Aldersgate, EC1.
Notes to editors
Anite is an international IT company whose primary business is the provision of
business critical solutions based on its deep sector knowledge of the public
sector, travel and telecoms markets. These solutions almost always include at
their core the supply of Anite-owned software products. The Group offers a
comprehensive service to its customers, including implementation, systems
integration, maintenance and managed services, enabling it to maximise customer
satisfaction and financial returns.
Headquartered in the UK, the Group, following recent disposals, now employs
around 1400 staff in 10 countries across Europe, America, and Asia Pacific.
Anite solutions are recognised as market leaders in their fields:
• the top 10 global mobile phone handset manufacturers all use Anite
testing technology
• 3 out of 4 UK Local Authorities use Anite applications
• around 40% of UK package holiday bookings were made using Anite systems
last year.
Telecoms
Anite provides specialist systems and software for mobile phone network
simulation and handset testing to customers around the globe. We supply all of
the world's leading tier one mobile phone manufacturers, and many operators,
component manufacturers and test houses.
Public Sector
Anite is a market leader in providing software and services that enable local
authorities to operate more efficiently - as well as an important supplier of
secure information systems into the central government and criminal justice
markets.
Travel
Anite is one of the leading reservation systems and e-commerce providers to UK
tour operators and to cruise, ferry and rail operators worldwide, providing
critical software systems and managed services.
International
International brings together Anite's German consultancy businesses, focusing on
IT consultancy and systems integration in a range of vertical markets including
finance, telecoms and public sector.
Print resolution images are available for the media to view and download from
www.vismedia.co.uk
Interim results for the six months ended 31 October 2005
Chairman's Statement
Introduction
I am pleased to report continued progress by Anite in the six months ended 31
October 2005. As stated in our AGM trading statement on 4 October 2005, after
experiencing a slow start to the year we expected the first half performance to
be weighted to the final weeks of the period. The outcome is better than was
anticipated at that time.
This is our first set of results reported under the new IFRS accounting
standards. The principal changes relate to goodwill, share based payments and
the capitalisation of certain development costs and have had minimal effect on
the underlying operating performance of the Group in this period.
Results
Underlying profit before tax*, pre utilisation of contract provisions, rose to
£7.7m (2004: £7.3m). Although ongoing results continue to be affected by the
costs relating to the completion of the SoV and Pericles' contracts, there has
been no increase in the contract provisions. We have been making steady progress
with them since we last reported and anticipate further milestones being reached
in the second half. As we continue to de-risk these contracts it is more
appropriate that we disclose our results on a post utilisation basis going
forward. On this basis, underlying profit before tax*, post utilisation of
contract provisions, was £10.1m (2004: £10.3m) with underlying basic earnings
per share of 2.2p (2004: 2.2p).
Underlying profit benefited from a net £0.9m improvement in interest (net
interest receivable of £0.5m against net interest payable of £0.4m in 2004), but
was impacted by a planned increase in research and development expenditure to
£5.9m (2004: £4.6m) and the reduction of income from VME, a legacy local
government product.
Divisional performance is discussed in more detail in the Chief Executive's
Operating Review.
For continuing operations Group turnover for the period was £83.6m (2004:
£82.4m), profit after tax was £7.7m (2004: £5.7m), and basic earnings per share
were 2.2p (2004: 1.6p).
*of ongoing businesses, before goodwill impairment, disposed and discontinued
operations
Share buyback and dividend policy
Following the Board's decision to buy back shares as a means of enhancing long
term shareholder returns, the Group has bought back and cancelled 7.7 million
shares since July at a total cost of £5m and at an average price of 64.6p per
share. In line with this, a dividend in respect of the period is not being
declared.
The introduction of IFRS has not affected the Group's ability to buy back its
shares or pay a dividend, and in addition the Company has significant
distributable reserves, enhancing its flexibility in this respect.
Balance sheet and cash
Net cash and deposits as at 31 October 2005 stood at £25.6m (2004: £11.3m; 30
April 2005: £37.4m). Net cash fell during the period due to normal first half
seasonal operating cash outflow, increased tax payments and the £5m cost of the
share buy back programme. The net proceeds of the disposal of Anite Austria of
£1.4m were received in July.
The Board
At the AGM in October, we completed our Board succession planning and
transformation following the appointment of new directors over the last two
years.
Following the conclusion of the AGM, Alec Daly retired, and I joined as
Chairman, the final part of our succession planning. Alec Daly served as
Chairman for ten years and on behalf of the Board I would like to recognise and
thank him for his commitment and contribution over that long period.
People
On behalf of the Board, I would like to thank all employees for their
contribution, hard work and support during the period.
Summary
I am pleased to have taken over the Chair at a time when Anite is in robust
health and I look forward to building on the transformational work undertaken by
the new management team.
The Board remains optimistic about future prospects.
Clay Brendish
Chairman
Chief Executive's Operating Review
Strategy
Anite's primary business is the provision of business critical solutions based
on its deep sector knowledge of the public sector, travel and telecoms markets.
These solutions almost always include at their core the supply of Anite-owned
software products. Our strategy is to be number one or two in each of these
markets as we believe that businesses with strong market positions have
demonstrably superior returns.
We can claim that position in many of our chosen sectors within the public
sector, travel and telecoms markets, achieved by virtue of our expertise and
experience. We aim to build on these market leading positions by investing in
growth opportunities and by building up the critical mass and market position of
those businesses.
Divisional performance
Divisional performance* was as follows:
6 months to 31 October 2005
£m Revenue Operating Share Operating Utilisation Operating %
profit/ based profit/ of profit/
(loss) payments (loss)* provisions (loss)**
pre SBP
Public Sector 33.8 3.6 (0.1) 3.5 - 3.5 10.4
SoV 1.3 (2.0) - (2.0) 2.0 - -
Pericles 1.4 (3.1) - (3.1) 0.4 (2.7) -
Total Public
Sector 36.5 (1.5) (0.1) (1.6) 2.4 0.8 2.2
Travel 14.6 3.2 (0.1) 3.1 - 3.1 21.2
Telecoms 24.8 6.3 (0.1) 6.2 - 6.2 25.0
International 7.7 0.6 (0.1) 0.5 - 0.5 6.5
83.6 8.6 (0.4) 8.2 2.4 10.6 12.7
*Ongoing businesses before goodwill impairment, disposed and discontinued
operations and utilisation of contract provisions. Also stated before
unallocated Group central costs of £1.0m (net of share based payments of £0.2m)
and interest receivable of £0.5m.
**After utilisation of contract provisions
Telecoms
Underlying revenues and profits grew in the first half by 14% and 13%
respectively, reflecting a strong order backlog carried over from last year.
Order intake was slow to take off due to the later than expected introduction of
new products and a slow start to the period, although last year included some
one off hardware sales that distort the comparison. There is a steady technology
transition as orders for 2G and 2.5G systems slow, whilst orders covering 3G and
3.5G technology are increasing.
The business continues to benefit from its global reach which has been extended
with new sales and support offices in Shanghai, Sales presence in Bangalore and
Copenhagen. Deliveries of our new platform, based on Anite and Agilent
components, started in mid-summer. This platform supports all current 2G, 3G and
3.5G technologies including HSDPA and HSUPA, and has been very well received by
the market. Research and development spending continues to grow across all our
products to take advantage of the many market opportunities.
In May, Telecoms moved into its new modern freehold property in Fleet,
Hampshire, which enabled us to consolidate all our UK activities into one
building and to undertake increased R&D more effectively. The move
will provide long-term property cost savings and efficiencies, scope for future
expansion, and improved communications within the business.
Availability of our new product, our strong international presence and good
order pipeline are expected to result in improving order momentum during the
second half.
Public Sector
Orders grew by 14% and revenues by 10% year on year driven by improving demand
for software and services that assist local authorities to operate more
efficiently and also by further contract wins with police and non-departmental
public bodies.
Orders for our new Integrated Children's System for local authorities continue
to gain momentum with 27 customers now contracted for the software solution,
with phased delivery over the next twelve months.
Underlying profits fell during the period reflecting investment in sales and
marketing and research and development, as well as the expected reduction of
income from our legacy Council Tax and Benefits product, VME. The core public
sector business excluding Pericles and SoV delivered double digit margins and
for the year as a whole Public Sector should benefit from second half
seasonality as in prior years.
Pericles
Progress on Pericles continues in line with our expectations with a further six
customers being implemented on the benefits module in the first half.
These implementations, together with new software releases, have been
implemented on time with improvements in predictability, stability and
performance. As a result no increase in the provision has been necessary.
The next release of the software at the end of the second half will represent
another significant milestone in de-risking the Pericles contracts.
State of Victoria
This contract, where completion is due during 2007, continues to make progress.
Testing of stage one of the software is now in the final stages and deployment
is planned early in the New Year. The latter phases of the project are also
under development with releases scheduled for 2006 and 2007. No increase in the
related provision has been made during the period.
Travel
Travel reported stable underlying profits on slightly lower revenues in the
period. Orders were lower compared to a very strong order intake in the same
period last year. Margins improved this year due to lower hardware sales. Travel
saw strong recurring and services revenues from its installed base during the
period, as well as growing interest in @com, our new product suite.
As more customers commit to @com, we expect to increase our development
expenditure in the second half year, having under spent against plan in the
first half.
Since 31 October 2005, Travel has experienced much improved order momentum, with
£5.5m worth of orders booked in November alone, including additional orders for
@com software modules and services.
International
Although underlying revenues and profits fell overall, Germany continues to be
profitable despite difficult market conditions.
Outlook
With our strengthening financial position and well positioned businesses, we are
continuing investment in new products to take advantage of growth opportunities.
The first half finished strongly following a slow start to the year. This,
combined with the success of our new products, strong prospect pipeline and the
continuing de-risking of both Pericles and SoV since we last reported, has
increased our confidence and the outlook for the year as a whole is therefore
unchanged.
Steve Rowley
Chief Executive
Anite Group plc
Consolidated income statement
Six months ended 31 October 2005
Notes 6 months 6 months Year ended
ended ended 30.4.05
31.10.05 31.10.04
(unaudited) (unaudited) (audited)
£000 £000 £000
-------------------- ------ --------- -------- -------
Continuing operations
-------------------- ------ --------- -------- -------
Revenue - ongoing businesses 83,566 80,347 162,951
Revenue - disposed businesses - 2,057 2,192
-------------------- ------ --------- -------- -------
Revenue 2 83,566 82,404 165,143
-------------------- ------ --------- -------- -------
Cost of sales
-------------------- ------ --------- -------- -------
Cost of sales before utilisation
of contract provisions (49,902) (47,530) (94,640)
Utilisation of contract
provisions 2,419 3,000 5,634
-------------------- ------ --------- -------- -------
Total cost of sales (47,483) (44,530) (89,006)
-------------------- ------ --------- -------- -------
Gross profit 36,083 37,874 76,137
Net operating costs
-------------------- ------ --------- -------- -------
Goodwill impairment - (2,199) (17,347)
Distribution costs (5,340) (5,315) (10,925)
Administrative expenses (21,134) (21,590) (41,527)
-------------------- ------ --------- -------- -------
Total net operating costs (26,474) (29,104) (69,799)
-------------------- ------ --------- -------- -------
Operating profit
-------------------- ------ --------- -------- -------
Ongoing businesses - before
utilisation of contract provisions 7,190 7,714 17,908
and goodwill impairment
-------------------- ------ --------- -------- -------
Ongoing businesses - utilisation
of contract provisions 2,419 3,000 5,634
-------------------- ------ --------- -------- -------
Ongoing businesses before
goodwill impairment 9,609 10,714 23,542
Disposed businesses - 255 143
Goodwill impairment - (2,199) (17,347)
-------------------- ------ --------- -------- -------
Continuing operations before
profit on disposal of businesses 9,609 8,770 6,338
Profit on disposal of businesses 3(a) - - 1,565
-------------------- ------ --------- -------- -------
Operating profit from continuing
operations 2 9,609 8,770 7,903
Investment income 457 - 76
Finance charges - (410) (609)
-------------------- ------ --------- -------- -------
Profit on ordinary activities
from continuing operations
before tax 10,066 8,360 7,370
Income tax expense 4 (2,374) (2,696) (5,108)
-------------------- ------ --------- -------- -------
Profit for the period from
continuing operations 7,692 5,664 2,262
Discontinued operations
Profit for the period from
discontinued operations 3(b) 1,490 4,032 4,395
-------------------- ------ --------- -------- -------
Profit for the period 9,182 9,696 6,657
-------------------- ------ --------- -------- -------
Profit attributable to equity
holders of the parent 9,182 9,696 6,657
-------------------- ------ --------- -------- -------
Continuing and discontinued
operations
Earnings per share - basic 5 2.6p 2.7p 1.9p
- diluted 2.6p 2.7p 1.9p
Continuing operations
Earnings per share - basic 5 2.2p 1.6p 0.6p
- diluted 2.2p 1.6p 0.6p
-------------------- ------ --------- -------- -------
Consolidated balance sheet
as at 30 October 2005
Notes 6 months ended 6 months ended Year ended
31.10.05 31.10.04 30.4.05
(unaudited) (unaudited) (audited)
£000 £000 £000
--------------- --- ----- ------ --------- --------- --------
Non-current assets
Goodwill 34,619 49,769 34,619
Other intangible
assets 3,427 1,975 2,650
--------------- --- ----- ------ --------- --------- --------
Intangible assets 38,046 51,744 37,269
Property, plant and
equipment 12,363 9,583 12,027
Deferred tax assets 2,489 2,803 2,896
--------------- --- ----- ------ --------- --------- --------
52,898 64,130 52,192
--------------- --- ----- ------ --------- --------- --------
Current assets
Inventories 4,043 3,350 4,279
Trade and other
receivables 6 50,031 45,038 49,577
Current tax assets 331 - 331
Short-term deposits - 953 -
Cash and cash
equivalents 25,598 10,407 37,443
Assets classified as
held for sale 3(c) - 17,102 1,415
------------------- ------ --------- --------- --------
80,003 76,850 93,045
--------------- --- ----- ------ --------- --------- --------
Total assets 132,901 140,980 145,237
--------------- --- ----- ------ --------- --------- --------
Current liabilities
Trade and other payables 7 (57,998) (61,739) (69,564)
Current tax payable (15,003) (12,547) (14,728)
Obligations under finance
leases (50) (392) (151)
Provisions 9 (4,246) (8,330) (8,247)
Liabilities directly
associated with assets
classified as
held for sale 3(c) - (7,231) (1,464)
------------------- ------ --------- --------- --------
(77,297) (90,239) (94,154)
--------------- --- ----- ------ --------- --------- --------
Non-current liabilities
Other payables 8 (148) (86) (268)
Provisions 9 (12,840) (10,117) (12,694)
Obligations under
finance leases - (47) -
---------------- ----- ------ --------- --------- --------
(12,988) (10,250) (12,962)
--------------- --- ----- ------ --------- --------- --------
Total liabilities (90,285) (100,489) (107,116)
--------------- --- ----- ------ --------- --------- --------
--------------- --- ----- ------ --------- --------- --------
Net assets 42,616 40,491 38,121
--------------- --- ----- ------ --------- --------- --------
Equity
Share capital
Issued 10 34,773 35,359 35,446
Shares to be issued - 295 -
--------------- --- ----- ------ --------- --------- --------
34,773 35,654 35,446
Share premium account 23,611 23,273 23,390
Own shares (569) - -
Merger reserve 6,538 12,605 6,538
Capital redemption
reserve 773 - -
Retained earnings (22,510) (31,041) (27,253)
--------------- --- ----- ------ --------- --------- --------
Total equity 42,616 40,491 38,121
--------------- --- ----- ------ --------- --------- --------
Consolidated statement of changes in equity
for the six months ended 31 October 2005
Share Share Own Merger Capital Retained
capital premium shares reserve redemption earnings
account reserve
£'000 £'000 £'000 £'000 £'000 £'000
----------- ---------- ------ ------- ------- ------ -------- -------
Balance at 1 May 2005 35,446 23,390 - 6,538 - (27,253)
-------------------- ------ ------- ------- ------ -------- -------
Exchange differences
arising on translation
of foreign operations - - - - - 72
-------------------- ------ ------- ------- ------ -------- -------
Net income recognised
directly in equity - - - - - 72
Profit for the period 9,182
-------------------- ------ ------- ------- ------ -------- -------
Total recognised
income and expense
for the period - - - - - 9,254
Issue of share capital 100 221 - - - -
Purchase of own shares - - (569) - - -
Share buy back (773) - - - 773 (5,026)
Recognition of
share-based payments - - - - - 515
-------------------- ------ ------- ------- ------ -------- -------
Balance at 31
October 2005 34,773 23,611 (569) 6,538 773 (22,510)
-------------------- ------ ------- ------- ------ -------- -------
Consolidated cash flow statement
For the six months ended 31 October 2005
6 months ended 6 months ended Year ended
31.10.05 31.10.04 30.4.05
£000 £000 £000
----------------------- ----- --- --- -------- -------- -------
Net profit after tax
- Continuing 7,692 5,664 2,262
- Discontinued 1,490 4,032 4,395
----------------------- ----- --- --- -------- -------- -------
9,182 9,696 6,657
Adjustments for:
Income tax expense 2,374 2,756 5,220
Profit on disposal of
discontinued operations (1,490) (6,209) (5,540)
Profit on disposal of
businesses - - (1,565)
(Investment income)/
finance charges (457) 400 517
Depreciation 2,354 2,146 4,062
Amortisation of intangible
assets 897 535 1,212
Goodwill impairment - 5,510 20,658
(Profit)/Loss on disposal
of fixed assets (91) (23) 28
Share-based payment expense 596 412 872
Decrease in provisions (3,093) (3,070) (2,687)
----------------------- ----- --- --- -------- -------- -------
Operating cashflows before
movements in working capital 10,272 12,153 29,434
(Increase)/decrease in
inventories (164) 526 (878)
(Increase)/decrease in
receivables (409) 1,158 (3,179)
(Decrease)/increase in
payables (13,345) (12,179) 331
----------------------- ----- --- --- -------- -------- -------
Cash (used in)/generated
from operations (3,646) 1,658 25,708
Interest received 381 61 51
Interest paid - (362) (443)
Interest element of
finance lease rental
payments (7) (33) (66)
Taxation (paid)/
refunded (1,777) 403 (185)
----------------------- ----- --- --- -------- -------- -------
Net cash (used in)/
generated from operating
activities (5,049) 1,727 25,065
--------------------------- --- -------- -------- -------
Cashflow from investing activities
Sale of subsidiary undertakings
(net of cash disposed) 1,381 7,042 19,372
Disposal of fixed asset investment - 170 170
Proceeds from previously
closed businesses 31 - 216
Deferred consideration paid - (1,037) (1,061)
Purchase of tangible fixed
assets (2,020) (4,398) (9,219)
Purchase of software licences (200) (17) (162)
Expenditure on capitalised
product development (1,469) (736) (1,943)
Proceeds on disposal of property,
plant and equipment 87 2 31
--------------------------- --- -------- -------- -------
Net cash (used in)/generated
from investing activities (2,190) 1,026 7,404
--------------------------- --- -------- -------- -------
Cashflow from financing activities
Decrease in short-term deposits - 142 1,095
Issue of ordinary share capital 321 110 238
Share buyback (5,019) - -
Capital element of finance lease
rental payments (105) (476) (783)
Redemption of vendor loan
note instruments (28) (3,299) (6,838)
-------------------------- --- --- -------- -------- -------
Net cash used in financing
activities (4,831) (3,523) (6,288)
----------------------- ----- --- --- -------- -------- -------
Net (decrease)/increase in
cash and cash equivalents (12,070) (770) 26,181
Effect of exchange rate changes 225 (176) (91)
Cash and cash equivalents at
1 May 37,443 11,353 11,353
----------------------- ----- --- --- -------- -------- -------
Cash and cash
equivalents at
31 October and
30 April 25,598 10,407 37,443
--------------------------- --- -------- -------- -------
Notes to the accounts
1. Basis of preparation and accounting policies
The transition date for the application of IFRS for the Group was 1 May 2004.
The Group will adopt IFRS for the first time in its consolidated financial
statements for the year ended 30 April 2006, which will include comparative
financial information for the year ended 30 April 2005. IFRS 1 requires that an
entity develop accounting policies based on its standards effective at the
reporting date of its first IFRS financial statements.
In accordance with the Listing Rules of the UKLA this Interim Report for the six
months period ended 31 October 2005, including comparative information for the
six months period ended 31 October 2004 and for the year ended 30 April 2005,
has been prepared on a basis consistent with its anticipated 2006 IFRS
accounting policies, except for IAS 32/39 where UK GAAP was adopted in the
comparative period. The accounting policies adopted assume that all existing
standards in issue from the IASB will be fully endorsed by the EU. These are
subject to ongoing amendment by the IASB and subsequent endorsement by the EU
and therefore subject to possible change.
A reconciliation and explanation of the effect of the transition from UK GAAP to
IFRS for the six months ended 31 October 2004 and year ended 30 April 2005 have
been published on the Anite corporate website (www.anite.com), together with a
full description of the Company's anticipated IFRS accounting policies.
The financial information contained in this Interim Report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. No
statutory accounts for the period have been delivered to the Registrar of
Companies. 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 2005 are based upon the Group's audited
accounts prepared under UK GAAP at that date and adjusted under IFRS. The
statutory accounts for the year ended 30 April 2005 have been delivered to the
Registrar of Companies. The auditors' report on those accounts was unqualified
and did not contain a statement under Section 237(2) or 237(3) of the Companies
Act 1985.
2. Segmental information
2.1 Business segments
At 31 October 2005, the Group is organised into four business segments: Public
Sector, Travel, Telecoms and International Consultancy. These four business
segments are the Group's primary reporting format for segment information.
Part of the International Consultancy operation was sold in the previous year.
Details are as disclosed in note 3.
Segment results, assets and liabilities include items directly attributable to a
segment as well as those than can be allocated on a reasonable basis.
Unallocated items comprise several income-earning assets and revenue, interest-
bearing loans, corporate assets and liabilities and expenses.
Segment information under the primary reporting format is as disclosed in the
table below:
Public Sector Travel Telecoms International Total
Consultancy
2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
---------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Revenue
- ongoing
businesses 36,598 33,111 15,228 16,779 24,830 21,786 8,119 9,948 84,775 81,624
- disposed
businesses - 823 - - - 1,234 - - - 2,057
Inter-segment
revenue1 (75) - (674) (746) - - (460) (531) (1,209) (1,277)
-------- ------- ------- ------- ------- ------- ------- ------ ------ ------- -------
Revenue -
continuing
operations 36,523 33,934 14,554 16,033 24,830 23,020 7,659 9,417 83,566 82,404
Revenue -
discontinued
operations - - - - - - - 14,068 - 14,068
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Total 36,523 33,934 14,554 16,033 24,830 23,020 7,659 23,485 83,566 96,472
Revenue ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
---------
Segment
profit
- ongoing
businesses 801 3,006 3,083 2,983 6,210 5,494 525 796 10,619 12,279
- disposed
businesses - 92 - - - 163 - - - 255
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
- continuing
operations 801 3,098 3,083 2,983 6,210 5,657 525 796 10,619 12,534
Unallocated
corporate
costs (after
recharges) (1,010) (1,565)
------- -------
------- -------
Operating
profit for
continuing 9,609 10,969
operations
before
goodwill
- Goodwill
impairment - (2,199) - - - - - - - (2,199)
--------- ------- ------- ------- ------- ------- ------- ------ -------
Operating
profit
-continuing
operations 801 899 3,083 2,983 6,210 5,657 525 796
Operating
loss
from
discontinued
operations - - - - - - - (2,127) - (2,127)
(note 3(b)) ------- ------- ------- ------- ------- ------- ------ -------
---------
Operating
profit/(loss) 801 899 3,083 2,983 6,210 5,657 525 (1,331)
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Total
operating
profit 9,609 6,643
Profit on
disposal of
businesses -
discontinued
operations
(note 3(b)) 1,490 6,209
Investment
income/(finance
charges)
- continuing 457 (410)
- discontinued
(note 3(b)) - 10
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Profit on
ordinary
activities
before tax 11,556 12,452
Taxation -
continuing
(note 4) (2,374) (2,696)
Taxation -
discontinued
(note 3(b)) - (60)
-------------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Profit for the
period 9,182 9,696
-------------- ------- ------- ------- ------- ------- ------ ------- ------- -------
-------
1 - inter-segment revenues are charged at prevailing market rates.
2. Segmental information continued
2.2 Ongoing businesses before goodwill impairment
Public Sector Travel Telecoms International Total
Consultancy
2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Revenue on
ongoing
businesses 36,523 33,111 14,554 16,033 24,830 21,786 7,659 9,417 83,566 80,347
Underlying
operating
profit1 -
before
utilisation
of
provisions
and share
based
payments (1,489) 114 3,193 3,066 6,325 5,571 554 824 8,583 9,575
Share based
payments (129) (108) (110) (83) (115) (77) (29) (28) (383) (296)
Contract
provisions
utilised2 2,419 3,000 - - - - - - 2,419 3,000
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Underlying
operating
profit 1 801 3,006 3,083 2,983 6,210 5,494 525 796 10,619 12,279
Unallocated
corporate
costs (797) (1,449)
Share based
payments (213) (116)
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Underlying
operating
profit 9,609 10,714
Finance
income/(charges)
net 457 (410)
-------------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Underlying
profit before
taxation1 10,066 10,304
-------------- ------- ------- ------- ------- ------- ------ ------- ------- -------
-------
Underlying profit
before taxation1
- before
utilisation of
contract
provisions 7,647 7,304
- contract
provisions
utilised 2,419 3,000
------- -------
------- -------
- after
utilisation of
contract
provisions 10,066 10,304
------- -------
------- -------
2.3 Additional analysis of Public Sector ongoing businesses
Public Sector Pericles State of Total
(Excluding development Victoria
Pericles and SoV)
2005 2004 2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000 £000 £000
--------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
Revenue on
ongoing
businesses 33,822 30,686 1,418 1,338 1,283 1,087 36,523 33,111
Operating
profit2 -
before
utilisation of
provisions and
share based
payments 3,615 5,706 (3,141) (4,112) (1,963) (1,480) (1,489) 114
Share based
payments (129) (108) - - - - (129) (108)
Contract
provisions
utilised2 - - 456 1,473 1,963 1,527 2,419 3,000
------------------- ------- ------- ------- ------- ------- ------- ------- -------
Total
operating
profit/(loss)1 3,486 5,598 (2,685) (2,639) - 47 801 3,006
------------------- ------- ------- ------- ------- ------- ------- ------- -------
2.4 Additional analysis of revenue on ongoing businesses
2005 2004
£000 £000
---------------------------------------------------------------- ------- -------
IT Consultancy 4,357 7,554
Own product software licences 14,839 13,435
Bespoke services, systems integration and implementation
of software products 21,076 19,230
Managed services (includes software maintenance and support) 27,139 24,581
Originating from third party 16,155 15,547
---------------------------------------------------------------- ------- -------
83,566 80,347
---------------------------------------------------------------- ------- -------
This additional information has been given to give a clearer understanding of
the results of the core ongoing businesses
1 Ongoing businesses before goodwill impairment.
2 Contract provisions relate to the utilisation of the contract provisions made
for the State of Victoria and Pericles contracts.
3.Disposed businesses/discontinued operations
a) Disposed businesses
6 months ended 6 months Year
31.10.05 ended ended
31.10.04 30.4.05
£000 £000 £000
--------------------------- --------- --------- ---------
Profit on sale of business and assets
of:
Telecoms Billing business (Anite
Calculus Limited) - - 742
Transport division (Anite Public
Sector Limited) - - 823
--------- --- --- --- ---------------- --------- --------- ---------
- - 1,565
--------- --- --- --- ---------------- --------- --------- ---------
In the opinion of the directors, the disposed businesses do not meet the
criteria to be classified as discontinued operations under IFRS 5 ' Non -
current assets held for sale and discontinued operations' as they do not
represent a separate major line of business within the Group.
b)Discontinued operations
6 months ended 6 months Year
31.10.05 ended ended
31.10.04 30.4.05
£000 £000 £000
--------- --- --- --- ---------------- --------- --------- ---------
Loss after tax for the period from
discontinued operations
Revenue - 14,068 24,260
Cost of sales - (10,450) (18,096)
--------- --- --- --- ---------------- --------- --------- ---------
Gross profit - 3,618 6,164
Goodwill impairment - (3,311) (3,311)
Operating expenses - (2,434) (3,902)
------------- ---------------- --------- --------- ---------
Operating loss before
interest - (2,127) (1,049)
Investment income - 10 16
------------- ---------------- --------- --------- ---------
Loss before tax - (2,117) (1,033)
Attributable tax expenses - (60) (112)
------------- ---------------- --------- --------- ---------
Loss after tax - (2,177) (1,145)
------------- ---------------- --------- --------- ---------
Profit on sale of discontinued operations
Profit on disposal of Anite Austria 1,490 - -
Profit on disposal of Anite Systems GmbH - 6,209 6,187
Loss on disposal of Datavance Informatique
SAS - - (479)
Loss on disposal of French Space Business
(Delta Partners SAS) - - (168)
--------- --- --- --- ---------------- --------- --------- ---------
Net profit before tax on sale of
discontinued operations 1,490 6,209 5,540
Attributable tax expenses - - -
--------------------------- --------- --------- ---------
Net profit after tax on sale of
discontinued operations 1,490 6,209 5,540
--------------------------- --------- --------- ---------
--------------------------- --------- --------- ---------
Total 1,490 4,032 4,395
--------------------------- --------- --------- ---------
c) Assets/(liabilities) classified as held for sale
On 29 June 2004, the Directors resolved to dispose of some of the non-core
businesses within the International Consultancy division. The assets and
liabilities of Anite Austria and Datavance Informatique SAS which were expected
to be, and were sold, within twelve months, have been classified as a disposal
group held for sale and are presented separately in the balance sheet at 31
October 2004 and 30 April 2005 (Anite Austria only). The results of these
businesses are included in the International consultancy division as
discontinued operations for segment reporting purposes (see note 2).
The Directors also resolved to dispose other non-core businesses, which included
the assets and liabilities of Anite Calculus Limited - telecoms billing business
(Telecoms division) and Transports (Public Sector division) prior to 1 May 2004.
The assets and liabilities of both businesses which were expected to be, and
were sold within twelve months, have been classified as a disposal group held
for sale and are presented separately in the balance sheet at 1 May 2004 and 31
October 2004.The results of these businesses are included in Telecoms and Public
Sector divisions as disposed businesses for segment reporting purposes for the
period (see note 2). The telecoms billing and Transport businesses were
subsequently sold on 12 November 2004 and 3 December 2004, respectively.
Disposed businesses/discontinued operations continued
The major classes of assets and liabilities of these disposed and
discontinued businesses classified as held for sale are as follows:
6 months ended 6 months Year ended
31.10.05 ended 30.4.05
31.10.04
£000 £000 £000
-------------------------------------- --------- --------- ---------
Goodwill - 8,245 556
Property, plant and equipment - 332 105
Trade and other receivables - 8,525 754
-------------------------------------- --------- --------- ---------
Total assets classified as
held for sale - 17,102 1,415
Trade and other payables, and total
for liabilities associated with
assets classified held for sale - (7,231) (1,464)
-------------------------------------- --------- --------- ---------
Net assets/(liabilities) - 9,871 (49)
-------------------------------------- --------- --------- ---------
4. Income tax expense
6 months 6 months Year
ended ended ended
31.10.05 31.10.04 30.4.05
Current tax £000 £000 £000
----------------------------------- -------- -------- --------
UK corporation tax 1,118 1,780 4,073
Foreign tax 1,021 421 709
----------------------------------- -------- -------- --------
2,139 2,201 4,782
----------------------------------- -------- -------- --------
Adjustments in respect of
prior years
- UK corporation tax (91) - (228)
- foreign tax - - 24
----------------------------------- -------- -------- --------
(91) - (204)
----------------------------------- -------- -------- --------
Total current tax expense 2,048 2,201 4,578
----------------------------------- -------- -------- --------
Deferred tax
UK 326 192 (79)
Foreign - 303 609
----------------------------------- -------- -------- --------
Total deferred tax expense 326 495 530
----------------------------------- -------- -------- --------
----------------------------------- -------- -------- --------
Total income tax expense 2,374 2,696 5,108
----------------------------------- -------- -------- --------
In addition to the income tax expense above, there was a corporation tax charge
of £nil (October 2004: £60,000; April 2005: £112,000) on the profit from
discontinued operations (see note 3b above).
No tax arose on the profit on sale of discontinued operations.
Corporation tax for the interim period is charged at 23.6% (October 2004:
25.5%), representing the best estimate of the weighted average annual
corporation tax rate expected for the full year on the profit (before goodwill
impairment) on continuing operations.
5. Earnings per share
The calculations of profit and underlying earnings per share are based on the following
profit and underlying profit and number of shares:
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
31.10.05 31.10.04 30.4.05 31.10.05 31.10.04 30.4.05
Pence per Pence per Pence per £000 £000 £000
share share share
-------------------------- -------- ------- ------- ------- ------- -------
Profit for the period-
basic and diluted 2.6 2.7 1.9 9,182 9,696 6,657
-------------------------- -------- ------- ------- ------- ------- -------
Adjustment:
Profit for the period from
discontinued operations (0.4) (1.1) (1.3) (1,490) (4,032) (4,395)
-------------------------- -------- ------- ------- ------- ------- -------
Profit for the period on
continuing operations -
basic and diluted 2.2 1.6 0.6 7,692 5,664 2,262
-------------------------- -------- ------- ------- ------- ------- -------
Reconciliation to underlying
earnings:
- Operating profit from
disposed businesses - - - - (255) (143)
- Goodwill impairment - 0.6 4.9 - 2,199 17,347
- Profit on disposal of
businesses - - (0.4) - - (1,565)
- Tax charge on the
results of the - - - - 60 49
discontinued businesses
-------------------------- -------- ------- ------- ------- ------- -------
Underlying earnings -
profit for the period on
ongoing businesses before
goodwill impairment, disposed
businesses and discontinued
operations 2.2 2.2 5.1 7,692 7,668 17,950
-------------------------- -------- ------- ------- ------- ------- -------
- ongoing businesses -
utilisation of (0.7) (0.9) (1.4) (2,282) (3,000) (4,991)
contract provisions
(net of tax)
-------------------------- -------- ------- ------- ------- ------- -------
Underlying earnings (as
above) before utilisation
of contract provisions 1.5 1.3 3.7 5,410 4,668 12,959
-------------------------- -------- ------- ------- ------- ------- -------
Number of shares ('000)
Weighted average number
of shares in issue used to
calculate basic earnings
per share 351,768 352,554 353,046
-------------------------- -------- ------- ------- ------- ------- -------
Effect of dilutive ordinary shares
- SAYE and share option schemes 6,115 5,383 5,122
- contingent consideration - 234 -
-------------------------- -------- ------- ------- ------- ------- -------
Number of shares used to
calculate diluted earnings per
share 357,883 358,171 358,168
-------------------------- -------- ------- ------- ------- ------- -------
-------------------------- -------- ------- ------- ------- ------- -------
Underlying earnings per share based on ongoing businesses excluding goodwill
impairment
a) Before utilisation of contract provisions
-basic 1.5p 1.3p 3.7p
- diluted 1.5p 1.3p 3.6p
b) After utilisation of contract provisions
-basic 2.2p 2.2p 5.1p
- diluted 2.2p 2.1p 5.0p
Underlying earnings per share on ongoing businesses excluding goodwill
impairment, disposed businesses and discontinued operations have been included
as the Directors consider that this figure provides a meaningful measure of the
ongoing businesses.
6. Trade and other receivables
6 months 6 months Year
ended ended ended
31.10.05 31.10.04 30.4.05
£000 £000 £000
------------------------------------ ------- ------- --------
Trade debtors 33,118 33,011 34,540
Less:
Provision for impairment of
trade debtors (831) (1,226) (840)
------------------------------------ ------- ------- --------
------------------------------------ ------- ------- --------
Trade debtors 32,287 31,785 33,700
Other debtors 1,520 1,053 1,784
Prepayments 5,779 5,461 6,050
Accrued income 10,445 6,739 8,043
------------------------------------ ------- ------- --------
------------------------------------ ------- ------- --------
50,031 45,038 49,577
------------------------------------ ------- ------- --------
7. Trade and other payables
6 months 6 months Year
ended ended ended
31.10.05 31.10.04 30.4.05
£000 £000 £000
-------------------------------------- -------- -------- -------
Vendor loan notes 932 3,616 77
Trade creditors 9,597 10,419 12,203
Other taxes and social security 3,180 5,166 5,919
Other creditors 3,170 2,240 3,426
Payments received on account 4,769 1,656 6,304
Accruals 18,666 16,811 18,720
Deferred income 17,684 21,831 22,915
-------------------------------------- -------- -------- -------
57,998 61,739 69,564
-------------------------------------- -------- -------- -------
-------------------------------------- -------- -------- -------
8. Non current liabilities - other payables
6 months 6 months Year ended
ended ended 30.4.05
31.10.05 31.10.04
£000 £000 £000
--------------------------- -------- -------- -------
Other payables 148 86 268
--------------------------- -------- -------- -------
148 86 268
--------------------------- -------- -------- -------
9. Provisions for liabilities and charges
Deferred Warranties Surplus Onerous Other Total
consideration property contract provisions
provisions
£000 £000 £000 £000 £000 £000
------------------- -------- -------- ------- ------- ------- -------
At 1 May 2005 1,024 5,675 5,225 7,592 1,425 20,941
Reclassification to
creditors (883) - - - - (883)
Release of provision
credited to income
statement - - - - (273) (273)
Established during the
period - - 131 - 21 152
Utilised during the
period - - (275) (2,419) (470) (3,164)
Unwinding of discounting - - 119 - - 119
Foreign exchange
adjustment - 19 1 161 13 194
------------------- -------- -------- ------- ------- ------- -------
------------------- -------- -------- ------- ------- ------- -------
At 31 October 2005 141 5,694 5,201 5,334 716 17,086
------------------- -------- -------- ------- ------- ------- -------
6 months 6 months Year
ended ended ended
31.10.05 31.10.04 30.4.05
£000 £000 £000
------- ------- -------
Analysed as:
Current liabilities 4,246 8,330 8,247
Non-current liabilities 12,840 10,117 12,694
------- ------- -------
17,086 18,447 20,941
------- ------- -------
10. Share capital issued
Ordinary shares Deferred redeemable Total
shares
of 10p each of £1 each
Numbers £000 Numbers £000 £000
------------------- ---------- -------- -------- ------- -------
Allotted, issued and fully
paid:
At 1 May 2005 353,956,998 35,396 50,000 50 35,446
Issued during the period 1,001,567 100 - - 100
Cancelled during the period (7,733,332) (773) - - (773)
------------------- ---------- -------- -------- ------- -------
At 31 October 2005 347,225,233 34,723 50,000 50 34,773
------------------- ---------- -------- -------- ------- -------
The shares cancelled during the period were acquired at an average price of 64.6
pence per share, as part of the Group's share buy back programme.
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