Interim Results
Corero PLC
27 September 2007
Corero plc
('Corero' or 'the Group')
Interim Results for the six months ended 30 June 2007
Corero PLC, the specialist provider of software solutions to the banking &
securities and education markets, announces its interim results for the six
months ended 30 June 2007. The Results are the first reported under IFRS.
• Business better balanced despite pre tax loss of £0.6 million in H1
(2006:break-even)
• Revenues £2.6 million (2006: £2.7million)
• Business Systems Division profits increased by 22% to £391,000 (2006:
£320,000)
• Group Loss after taxation £0.55m (2006: profit £0.03m)
• Group loss per share 1.34p (2006: earnings 0.08p)
• Delayed CAPS contracts now received and being implemented in the
Financial Markets Division
- US office set up and £400,000 invested to support Blue Curve
- Hosted solutions deployed for Blue Curve with strong customer interest
shown
• Strong performance by Business Systems with approaching 25% market share
in growing City Academies marketplace
• Following review cost savings to deliver £0.5m per annum and H2 to be
operating profitably.
Peter Waller, Executive Chairman, said:
'Despite a disappointing result for the first half substantial progress has been
made. We are a more streamlined and effective business following the merging of
our two financial businesses and we have additional opportunities in the
education markets.
Order flow since July gives us confidence that the Business Systems Division
will continue its momentum in H2 and with the receipt of the delayed CAPS
contract, which is now being implemented, the Financial Markets Division will
have a considerably improved performance.
The action we have taken gives us confidence of reporting further progress for
the year as a whole.'
27 September 2007
The interim accounts for the six months ended 30 June 2007 are available on the
Company's website www.corero.com
Enquiries:
Corero PLC
Peter Waller, Executive Chairman Tel: 07785228080
Ian Selby, Finance Director Tel: 01923 695191
John East & Partners Limited Tel: 020 7628 2200
College Hill Tel: 020 7457 2020
Matthew Smallwood Tel: 07831 379122
About Corero
Corero designs, develops and delivers market leading software products for
financial institutions through its Financial Markets Division, and business and
education markets through its Business Systems Division.
Blue Curve software allows organisations to vastly improve the production and
distribution of their financial research. It collates and presents complex
financial data efficiently and quickly for analysts to make informed opinions on
market conditions and trends. It speeds up the process of content creation,
content approval and publishing. And it also makes sure that each piece of
content conforms to the correct regulatory requirements, and that it gets sent
to the right people, using the right method and at the right time.
Radica CAPS is a European leading software system that addresses the needs of
asset servicing operations for the global banking & securities sector. By fully
automating the life-cycle of corporate actions, dividends, including taxation
and new issues and placings, Radica reduces the serious operational risk of
missing or miscalculating corporate events. This area of operations has
traditionally been very manual with all the risk and cost associated with such
processes. Radica is designed for a global market and can address the needs of
financial institutions from Europe, North America or Asia Pacific.
ICAEW accredited, Resource Financials, is at the core of the Corero suite of
business applications. Also featured are solutions for eProcurement, Project
Costing, HR & Payroll, Continuing Professional Development and Learning
Management. Together with Workflow and Web Applications, covering Reporting,
Timesheets, Expenses and Requisitions, there are over 60 highly integrated
modules offering large and small enterprises modern and dynamic business
solutions. Eclipse Learner Management system manages the students, tutors and
processes within Further and Higher Education environments by electronically
capturing the information required throughout the 'learning lifecycle' and to
satisfy Government reporting requirements and, most importantly, secure the
funding upon which Colleges depend.
Chairman's Statement
For the six months ended 30 June 2007
Results
Corero's performance in the first half of 2007 has been mixed. Our Business
Systems division traded strongly but, as announced in July, our Financial
Markets division was adversely impacted by the delay in a large customer
project. As a result the period under review has been disappointing.
Group revenues at £2.6 million were similar to those recorded for the first half
of last year. However, our underlying costs increased by £0.5 million, which
included £400,000 of investment to support growth in Blue Curve. As a result the
Group recorded a loss before taxation of £0.6 million (2006: break-even). The
slower than expected revenue increase led to a restructuring of the Company, as
announced on 26 July, with further changes announced today.
Financial Markets Division
Customer activity in the Blue Curve business has remained high. The significant
number of new customer contracts secured in 2006 contributed to high activity
levels in our project delivery teams and thus to our professional services
revenues. Several new orders were received, amongst them a licence extension for
Blue Curve from a Russian customer.
The last six months has seen two new customers go live on our Blue Curve hosted
service. This allows the customer to outsource the system operation to Corero
and to access the system over the Internet. Indications are that a high
proportion of new customers will choose this option, providing a new and
sustainable revenue stream.
As already referred to, Radica CAPS revenues were adversely impacted by the
delayed contract for one major project. However, we were pleased to report a
significant order for a CAPS licence extension from a major client during the
period, which indicates their ongoing commitment to both the product and the
company.
The period has been one of substantial change, with the merger of the Radica
CAPS and Blue Curve businesses into one division. This further integration has
brought opportunities to merge the customer facing parts of our business and to
introduce improved processes. The end result will be to provide improved
customer service and support whilst increasing sales efficiency. The full
benefits of this integration should be evident by the end of the year.
There was a significant reduction in headcount towards the end of the period and
this has been managed in line with the new structure and strategic focus. Part
of our strategy has been to staff our New York office which started in May with
the relocation of key personnel from London. Our presence in New York allows us
to support more easily our North American customers and will increase our
ability to gain more customers in that market.
Business Systems Division
This division has had a strong first half, especially in its key Education
market, with ten new contract wins including eight city academies. This
particular market is proving to be very fruitful with a high degree of
acceptance for our financial and web based applications. These new wins mean
that at the end of this reporting period the division had achieved approaching
25 per cent. market share of the 83 academies to be opened since the initiative
began. Current government plans are to increase this figure to 400 by the year
2010 which represents an exciting opportunity for the division.
Other wins of note during the period were Haringey Sixth Form Centre, part of
Haringey Council, which bought our integrated finance and learner administration
solution and Sir George Monoux Sixth Form College, which invested in our
financial and web solutions.
The division also continues to develop strategic web applications for key
customers and during the period won contracts to deliver On-Line Enrolment
solutions to streamline the process of enrolling students via the Internet
whilst also optimising and securing cash flows by automating the collection of
fees paid via credit cards. This is carried out in real time in partnership with
the global payment provider, Cybersource. Again, with an increasing focus on the
Internet to effect enrolment, these recent implementations provide the division
with a platform for further growth.
Investment into new product offerings continues and activity is well underway to
capitalise on potential additional revenue by offering new and
innovative products to both existing and future customers. We are already seeing
positive results from this investment.
Financial Review
This has been the first period under which Corero has reported under IFRS. These
have favourably impacted Administrative Costs by approximately £94,000 in the
first half. Our full interim accounts are available on the Company's website
www.corero.com.
Revenues were £2.6 million (2006: £2.7 million). The decrease arose within the
Financial Markets Division and stemmed from the Radica CAPS product line. This
was partially offset by a small increase in Blue Curve revenues. Financial
Markets licence revenues were lower than 2006, which included a significant
licence renewal and the addition of several new clients. Professional services
revenues increased because of a high level of customer project work in the first
quarter on projects from Blue Curve customers closed in the second half of 2006.
Radica CAPS services revenues fell due to the previously announced large project
delay. Support revenues in the Financial Markets division increased due to the
enlarged user base.
Business Systems Division revenues rose slightly compared to last year
underpinned by the success in winning business from city academies and an
increase in the support base which offset slightly lower licence and services
revenues.
Operating costs prior to adjustments required under IFRS increased by £500,000
to £2.9 million largely due to increases in headcount at Blue Curve and
centrally to support growth, and the re-branding exercise that was completed in
2007. Our cost of sales (which arose from the resale of third party software or
services) increased by approximately £75,000 due to a greater use of external
consultants on Blue Curve projects and a higher level of third party software
being included in Business Systems Division projects.
The Business Systems Division increased its profits by 22% to £391,000 (2006:
£320,000) due to a higher level of new name sales and the increased support
base. The Financial Markets Division recorded a loss of £177,000 (2006: profit
£289,000) as a result of the decreased level of new sales wins and professional
services slippage combined with investment in delivery capability. When combined
with central costs, as defined in note 5 below, the group recorded an operating
loss before financing costs of £435,000 (2006: profit £161,000).
Interest costs (excluding 'notional' interest required under IAS 32) were £0.15m
(2006: £0.13m). The increase was due to an enlarged principal following the
August 2006 renegotiation of our Convertible Unsecured Loan Stock ('CULS') which
was partially offset by a reduction in the coupon rate from 8.75 per cent. to
8.00 per cent.
Financial Position
Goodwill increased to £2,361,000 (2006: £1,204,000) due to the additional
consideration paid on the earnout for the Blue Curve acquisition. Intangible
assets, as required by IFRS, comprise of three categories - the Blue Curve
customer list, computer software and research and development. During the period
£190,000 (2006: £165,000) of research and development costs were capitalised.
Our cash balances were £807,000 (2006: £534,000). Cash balances decreased from
the start of the year due to trading losses, which were partially offset by a
favourable movement in working capital. Net cash flow from operations was
£304,000 (2006:£189,000). Trade debtors were £1,364,000 (2006: £1,107,000). The
increase in relative aging was due to some extended payment terms being granted
in Financial Markets and a higher proportion of billings made at the end of the
period.
Deferred income at 30 June 2007 rose to £1,398,000 (2006:£1,295,000) due to the
enlarged customer base.
In April 2007 the Group issued the final element of deferred consideration under
the Blue Curve acquisition. This had been previously accrued as a deferred
equity reserve. The deferred consideration was settled by the issue of 8,720,952
new ordinary shares.
The net debt, since the beginning of the year, increased due to a reduction in
cash balances of £100,000 and the application of IAS 32 which required an
increase in the CULS balance by £67,000.
Excluding the impact of IAS 32 the long term debt of the Company stood at £4
million (2006: £3 million) following the issue of £1 million new 8 per cent.
CULS in August 2006.
Management Changes
Ian Selby, our Finance Director for more than eight years, has informed the
board that he would be resigning to join a larger listed company in a similar
role. I would like to thank Ian for his excellent contribution to the Company
and the board wishes him well for the future. We have a strong team and rather
than immediately appointing a new Finance Director, Duncan Swallow FCCA,
currently Financial Controller, will be appointed Group Financial Controller and
Company Secretary. Colin Peters FCA, our senior non executive director will take
board responsibility for finance. Ian will remain with the Company for the next
few weeks to work on this transition and will resign as a director on 31 October
2007.
Re-structuring and Cost Reduction
Your Board is committed to bringing costs into line with the revised market
opportunity and to further reduce the cost base. A cost reduction exercise is
under way although we will continue to invest in the skills and resources
required to grow the successful parts of our business. A streamlined management
team and reductions in marketing, human resources, finance and in under
performing parts of the business will augment those savings already announced in
July. Integration will enable us to improve productivity in the Financial
Markets sales team. We expect these changes to make a contribution to the second
half of 2007 and to be fully reflected in 2008 at an annualised rate of £0.5
million. As outlined above some of these savings will be reinvested in
identified growth opportunities.
Business Strategy
Following a review of our operations it remains our intention to seek strong
organic growth across both divisions and all four product lines - Blue Curve,
Radica Caps, Resource Financial Management and Learning Management Systems. We
believe there is the management capability and financial resource to support
this approach. Whilst we do not currently envisage further acquisitions the
Board will remain open to any event that can deliver a substantial increase in
shareholder value.
Outlook
Since July a number of orders have been announced which give confidence that
Business Systems will maintain its first half momentum and Financial Markets
will have a much improved second half of 2007.
In conjunction with the cost reductions that have or will be implemented we are
confident of being operationally profitable for the remainder of 2007. Our
ability to meet market expectations for the year as ever depends on two main
factors. Firstly, the speed at which we can implement a major project already
contracted in the Financial Markets Division, which will dictate when we can
recognise revenue. Secondly, we remain highly dependent upon the sale of
additional licences in the fourth quarter and could be vulnerable to any
significant downturn in confidence in financial markets.
However, as a company Corero is in a much stronger and in a more balanced
position since the acquisition of Blue Curve and this makes us confident of
future growth and success.
Consolidated Income Statement (unaudited)
For the six months ending 30 June 2007
June 2007 June 2006 December 2006
(unaudited) (unaudited) (unaudited)
£'000 £'000 £'000
Revenue 2,587 2,690 6,294
Cost of sales (144) (69) (217)
---------- ---------- -----------
Gross profit 2,443 2,621 6,077
Administration costs (2,859) (2,393) (5,314)
Restructuring charge (19) (67) (170)
---------- ---------- -----------
Operating (loss)/profit (435) 161 593
Finance income 9 3 10
Finance costs (note 8) (175) (173) (672)
---------- ---------- -----------
Loss before taxation (601) (9) (69)
Taxation (note 7) 48 38 38
---------- ---------- -----------
(Loss)/profit for the period (553) 29 (31)
---------- ---------- -----------
Basic and diluted (loss) /
earnings (1.34) 0.08p (0.09p)
per share ---------- ---------- -----------
Consolidated Balance Sheet (unaudited)
At 30 June 2007
June 2007 June 2006 December 2006
(unaudited) (unaudited) (unaudited)
£'000 £'000 £'000
Assets
Non-current assets
Goodwill 2,361 1,204 2,361
Other intangible assets 1,232 1,080 1,116
Property, plant and equipment 67 77 78
---------- ---------- ---------
3,660 2,361 3,555
Current assets
Trade and other receivables 1,598 1,308 2,463
Cash and cash equivalents 807 534 907
---------- ---------- ---------
2,405 1,842 3,370
Liabilities
Current liabilities
Trade and other payables (767) (957) (1,067)
Provisions (20) - (19)
---------- ---------- ---------
(787) (957) (1,086)
Net current assets 1,618 885 2,284
Deferred income (1,398) (1,295) (1,466)
Non-current liabilities
Convertible 8 per cent. Unsecured
loan stock 2011 (4,014) (2,865) (3,947)
Provisions (35) - (48)
---------- ---------- ---------
(4,049) (2,865) (3,995)
---------- ---------- ---------
Net (liabilities)/assets (169) (914) 378
---------- ---------- ---------
Shareholders' equity
Shares to be issued - 388 1,531
Ordinary share capital 4,557 3,644 3,685
Share premium 6,369 6,353 6,369
Merger reserve 1,023 364 364
Convertible unsecured loan stock
equity reserve 146 146 146
Share options reserve 21 9 15
Retained earnings (12,285) (11,818) (11,732)
---------- ---------- ---------
Total (deficit)/equity attributable
to equity holders of the parent (169) (914) 378
---------- ---------- ---------
Interim Consolidated Cash Flow Statement (unaudited)
For the six months ended 30 June 2007
June 2007 June 2006 December 2006
(unaudited) (unaudited) (unaudited)
£'000 £'000 £'000
Net cash from operating activities 304 189 (108)
Cash flows from investing activities
Acquisition of subsidiaries (net of
cash) - 74 64
Purchase of intangible assets (242) (165) (305)
Purchase of property, plant and
equipment (19) (23) (53)
Interest received 9 3 10
---------- ---------- -----------
Net cash used in investing
activities (252) (111) (284)
Cash flows from financing activities
Net proceeds from issue of ordinary
shares - 186 243
Interest paid (152) (127) (257)
Borrowings raised - - 916
---------- ---------- -----------
Net cash used in financing
activities (152) 59 902
Net (decrease)/increase in cash and
cash equivalents (100) 137 510
Cash and cash equivalents at 1
January 907 397 397
---------- ---------- -----------
Cash and cash equivalents at balance
sheet date 807 534 907
---------- ---------- -----------
Notes to the interim financial statements (unaudited)
1. General information and basis of preparation
The consolidated interim financial statements have been prepared in accordance
with the AIM Rules for Companies and on a basis consistent with applicable
accounting policies, which will be applied when the Group prepares its first set
of annual financial statements in accordance with International Financial
Reporting Standards (IFRS) as adopted by the EU for the financial year ending 31
December 2007. Applicable accounting policies can be found in the full interim
statement available from the company's website at www.corero.com.
These are the Group's first interim financial statements prepared under IFRS and
therefore IFRS 1 'First-time Adoption of International Financial Reporting
Standards' has been applied.
Corero's consolidated interim financial statements are presented in Pounds
Sterling (£), which is also the functional currency of the parent company.
The interim financial statements are unaudited and do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. They do
not include all of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial statements of
the Group for the year ended 31 December 2006.
The financial information for the year ended 31 December 2006 has been derived
from the published statutory accounts as restated by the IFRS adjustments set
out in note 9. A copy of the full accounts for that period, on which the
auditors issued an unqualified report that did not contain statements under
section 237 (2) of the Companies Act 1985, has been delivered to the Registrar
of Companies.
These consolidated condensed interim financial statements have been approved for
issue by the Board of Corero plc on 26th September 2007. The full interim
accounts are available on the Company's website www.corero.com.
2. Significant accounting policies
Basis of preparation
The Group and parent company financial statements have been prepared in
accordance with EU endorsed International Financial Reporting Standards (IFRS),
International Financial Reporting Interpretations Committee (IFRIC)
interpretations and those parts of the Companies Act 1985 applicable to
companies reporting under IFRS.
The Group and parent company financial statements have been prepared under the
historical cost convention except for the valuation of financial instruments.
The accounts have been prepared on a going concern basis, although the Group
incurred significant trading losses and cash outflows during the 6 month period
ended 30 June 2007, the directors believe that the effects of internal
restructuring combined with the current sales pipeline should bring about
improved operating results. The sales pipeline includes large individual items,
the timing of which can be uncertain when selling to large financial
institutions. The directors have made this assessment based on internal
forecasts and cash-flow projections.
Notes to the interim financial statements (unaudited)
continued
The preparation of financial statements which comply with IFRS requires the use
of estimates and assumptions, and for management to exercise its judgement in
the process of applying the Group's accounting policies.
3. Segment reporting
Business segments
The Group is managed according to two operating divisions: Financial Markets and
Business Systems. These divisions are the basis on which the Group reports its
primary segment information. The principal activities of each division are as
follows:
The Business Systems Division supplies accounting and associated management
information systems primarily to the education sector.
The Financial Markets Division sells application software to the global
financial markets including stockbrokers, asset managers and investment banks.
The two main products improve the processes involved in producing and
distributing complex financial documents such as analyst research and help firms
to automate the areas of corporate actions processing and new issues and
placings.
There are no inter-segment sales. Segment results, assets and liabilities
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated assets and liabilities comprise
items such as cash and cash equivalents, taxation, accruals, prepayments and
borrowings. Within central costs are central overheads which include functions
such as finance, board, professional advice which cannot due to their nature, be
reasonably split between the divisions. Furthermore certain business support
costs such as marketing which can be applied across both divisions are held
centrally as they are not wholly under the control of a single division.
Details of segmental financial performance can be found in the full interim
statement available from the company's website at www.corero.com.
Notes to the interim financial statements (unaudited)
continued
4. Loss per share
Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average of ordinary shares outstanding
during the period.
The CULS and share options were non-dilutive for both periods and thus the
diluted loss per share is the same as the basic amount.
June 2007 June 2006 December 2006
(unaudited) (unaudited) (unaudited)
Earnings /(Loss) £'000 (553) 29 (31)
after taxation
Basic earnings per share (1.34p) 0.08p (0.09p)
Weighted average number 41,208,601 35,757,937 36,251,573
of ordinary shares
5. Tax on loss on ordinary activities
The amount represents a tax refund regarding Research and Development tax
credits received during the period.
6. Finance costs
June 2007 June 2006 December 2006
(unaudited) (unaudited) (unaudited)
Interest payable on
other loans (160) (130) (283)
Bank interest paid (1) (1) (2)
---------- ----------- -----------
(161) (131) (285)
Notional charges from
variation of CULS under
IAS 32 arising from a
change in fair value
assumptions (14) - (262)
Amortisation of notional
CULS interest charges and
renegotiation costs under
IAS 32 - (42) (62)
Renegotiation of CULS - - (63)
---------- ----------- -----------
(14) (42) (387)
---------- ----------- -----------
Financing Costs (175) (173) (672)
---------- ----------- -----------
Notes to the interim financial statements (unaudited)
continued
7. Cash flows from operating activities
a. Cash generated from operations
June 2007 June 2006 December 2006
(unaudited) (unaudited) (unaudited)
£'000 £'000 £'000
Loss before taxation (601) (9) (69)
Adjustments for:
Depreciation 31 40 78
Amortisation 125 75 170
Finance income (9) (3) (10)
Finance expense 175 173 672
(Decrease)/increase in provisions (13) - -
Share based payment charge 6 6 13
Changes in working capital
Decrease/(increase) in trade and
other receivables 866 (286) (1,441)
(Decrease)/increase in payables (324) 155 441
----------- ----------- -----------
Cash generated from continuing
operations 256 151 (146)
Corporation tax received 48 38 38
----------- ----------- -----------
Net cash flows from operating
activities 304 189 (108)
----------- ----------- -----------
b. Analysis of changes in net debt
Notional
CULS
Interest
At Jan to
1 January June Interest As at 30
2007 2007 Paid Cash Flow June 2007
£'000 £'000 £'000 £'000 £'000
Cash and cash 907 - - (100) 807
equivalents
CULS (3,947) (175) 108 - (4,014)
--------- -------- -------- --------- ----------
Net debt (3,040) (175) 108 (100) (3,207)
--------- -------- -------- --------- ----------
Notes to the interim financial statements (unaudited)
continued
8. Statement of changes in shareholder's equity
For six months ended 30 June 2007
Shares Share CULS Share Profit
Group to be options equity Merger premium and loss
issued Capital reserve reserve reserve account reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
1 January 2007 1,531 3,685 15 146 364 6,369 (11,732) 378
Retained loss
for period
ended
30 June 2007 - - - - - (553) (553)
Share based
payments - 6 - - - - 6
Deferred
consideration
for the
acquisition of
Blue Curve
Limited (1,531) 872 - - 659 - - -
------ ------ ------ ------ ------ ------- ------- ------
30 June 2007 - 4,557 21 146 1,023 6,369 (12,285) (169)
------ ------ ------ ------ ------ ------- ------- ------
Shares issued
In April 2007, Corero issued 8,720,952 ordinary 10 pence shares to satisfy the
deferred consideration due to Blue Curve Limited under the acquisition agreement
entered into at the time of the acquisition.
Share options reserve
A charge of £6,000 was made during the six months ended 30th June 2007
representing the estimated cost of any share options. The estimate was
calculated using the Black Scholes option pricing model. No employee share
options were exercised during the period.
Merger reserve
The premium on the issue of 5,606,060 10 pence ordinary shares in relation to
the acquisition of Blue Curve Limited was transferred to the merger reserve
during the year ended 31 December 2006. The premium on the issue of 8,720,952 10
pence ordinary shares in relation to the deferred consideration for Blue Curve
Limited was transferred to the merger reserve during the six month period ended
30 June 2007.
Notes to the interim financial statements (unaudited)
continued
9. Reconciliation of equity and profit under UK GAAP to IFRS (Unaudited)
Corero plc reported under UK GAAP in its previously published financial
statements for the year ended 31 December 2006. The analysis below shows a
reconciliation of equity and profit as reported under UK GAAP as at 31 December
2006 to the revised equity and profit under IFRS.
Reconciliation of consolidated profit for year ended 31 December 2006
UK GAAP (a) (b) (c)
Audited IAS 19 IAS 38 IFRS 2 IFRS
£'000 £'000 £'000 £'000 £'000
Revenue 6,294 - - - 6,294
Cost of sales (217) - - - (217)
-------- -------- -------- --------- ---------
Gross profit 6,077 - - - 6,077
Administrative expenses (5,702) (39) 427 - (5,314)
Restructure expense (170) - - - (170)
-------- -------- -------- --------- ---------
Operating profit 205 (39) 427 - 593
Finance income 10 - - - 10
Finance costs (672) (672)
-------- -------- -------- --------- ---------
Loss before taxation (457) (39) 427 - (69)
Taxation 38 - - - 38
-------- -------- -------- --------- ---------
Loss for the year
attributable to (419) (39) 427 - (31)
shareholders -------- -------- -------- --------- ---------
Notes to the interim financial statements (unaudited)
continued
10. Reconciliation of equity and profit under UK GAAP to IFRS (unaudited)
(continued)
Reconciliation of consolidated equity at 31 December 2006
UK GAAP (a) (b) (c) IFRS
Audited IAS 19 IAS 38 IAS 1
£'000 £'000 £'000 £'000 £'000
Assets
Non-current assets
Goodwill 2,734 - (373) - 2,361
Other intangible assets - - 1116 - 1116
Property, plant and 92 - (14) - 78
equipment ------- ------- -------- ---------- ---------
2,826 - 729 - 3,555
Current assets
Trade and other 2,463 - - - 2,463
receivables
Cash and cash equivalents 907 - - - 907
------- ------- -------- ---------- ---------
3,370 - - - 3,370
Liabilities
Current liabilities
Trade and other payables (1,095) (39) - 67 (1,067)
Provisions - - (19) (19)
------- ------- -------- ---------- ---------
Net current assets/ 2,275 (39) - 48 2,284
(liabilities)
Deferred income (1,466) - - - (1,466)
Non-current liabilities
Convertible 8.00 per
cent. (3,947) - - - (3,947)
Unsecured loan stock 2011
Provisions - - - (48) (48)
------- ------- -------- ---------- ---------
(3,947) - - (48) (3,995)
------- ------- -------- ---------- ---------
Net (liabilities)/assets (312) (39) 729 - 378
------- ------- -------- ---------- ---------
Shareholders' equity
Shares to be issued 1,531 - - - 1,531
Ordinary share capital 3,685 - - - 3,685
Share premium 6,369 - - - 6,369
Merger reserve 364 - - - 364
Convertible unsecured
loan stock 146 - - - 146
equity reserve
Share options reserve 15 - - - 15
Retained earnings (12,422) (39) 729 - (11,732)
------- ------- -------- ---------- ---------
Total equity attributable
to equity (312) (39) 729 - 378
holders of the parent ------- ------- -------- ---------- ---------
Notes to the interim financial statements (unaudited)
continued
10. Reconciliation of consolidated equity and profit under UK GAAP to IFRS
(unaudited) (continued)
Explanation of reconciling items between UK GAAP and IFRS
The standards and interpretations giving rise to the most significant changes to
the previously reported profit and equity of the Group are:
(a) IAS 19 Employee benefits
In accordance with IAS 19 an accrual has been made for annual leave which can be
carried forward in to the next year.
(b) IAS 38 Intangible Assets
Under UK GAAP all capitalised software was included within tangible fixed
assets. IAS 38 'Intangible Assets' requires software that is not an integral
part of an item of computer hardware to be classified within intangible assets.
Under UK GAAP goodwill was amortised over its estimated useful life. IAS 38
requires that goodwill is subject to annual impairment reviews and not
amortisation. IAS 38 requires that Research and development costs be capitalised
providing they meet certain criteria.
(c) IAS 1 Reclassifications
The portion of provisions for onerous leases expected to be settled within
twelve months of the balance sheet date has been reclassified to current
liabilities in accordance with IAS 1.
11. Sundry Information
This press release was approved by the Board on 26th September 2007. Copies of
the full interim report which was approved on the same day by the Board are
available on the company's website at www.corero.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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