Final Results
Eckoh Technologies PLC
29 May 2003
29 May 2003
Eckoh Technologies plc
Full Year and Fourth Quarter Results
Preliminary announcement
"A year of considerable achievement"
Highlights of the Year and Fourth Quarter (£'000s) Quarter Quarter Year ended Year
ended ended ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
Turnover 13,845 13,244 55,085 54,920
Continuing operations 13,727 12,287 54,166 45,079
Discontinued operations 118 957 919 9,841
Gross profit 4,101 4,015 18,165 17,598
Operating (loss)/profit (101) (6,515) (7,472) (34,742)
Profit/(loss) before tax 2 (6,189) (9,082) (33,460)
Cash and short-term investments 11,985 14,100 11,985 14,100
Twelve months ended 31 March 2003
• Turnover from continuing operations up 20% to £54.2m (2002 - £45.1m)
• Maiden profit before tax of £0.2m generated in second half of financial year (2002 - loss £14.7m)
• Successful completion of restructuring, including new Board and management appointments
• Exclusive 2-year alliance with BT to provide hosted Speech Solutions
• New commercial contracts with William Hill, Granada, Centrica and Hasbro
• Successful Mobile Wholesale digital satellite television strategy - five-fold increase in turnover
• £12m of cash and short-term investments at year-end
Fourth quarter ended 31 March 2003
• Continuing operations turnover of £13.7m - an increase of 12% from last year
• Profit before tax of £2,000 (Q4 2002 - loss of £6.2m)
• Launch of Phoneworld channel on Sky in February 2003
• Speech Solutions agreement to provide Wyevale Garden Centres with Store Locator
Current Developments
• Intention to move to AIM
• Imminent completion of new speech-enabled call processing platform with BT
• Speech Solutions contract to provide US utility services
company TFCC with speech recognition hosting capability across the UK.
• Announcement of intention to participate in the relaunch of L!VE TV channel on Sky
• New strategic trading agreement with Energis
• New distribution agreement with DeTeWe for Network Services
• Difficult trading conditions for Mobile Wholesale since year end
Martin Turner, Chief Executive Officer, commented today:
"Following the completion of our restructuring programme, we have made
significant improvements in both operational and financial performance and moved
the Group into pre-tax profit for the first time in the second half of the
financial year on full year turnover of £55m.
We continued to invest heavily in our Speech Solutions activities, concluded a
strategic alliance with BT and demonstrated that digital television can be a
highly successful distribution medium for telephony products and services.
Despite challenging market conditions, we have ambitious plans to take all of
our divisions forward and in order to increase our flexibility to engage in
acquisitions, joint ventures and partnerships, have decided to move Eckoh from
the Official List to AIM.
With £12m of cash at year-end, a debt free balance sheet and three profitable
operations, Eckoh has created a strong platform for further progress this year."
For further enquiries, please contact
Eckoh Technologies plc
Martin Turner, Chief Executive Officer
Nik Philpot, Chief Operating Officer
Brian McArthur Muscroft, Group Finance Director
www.eckoh.com Tel: 01442 458 355
Buchanan Communications
Jeremy Garcia/Fergus Mellon Tel: 020 7466 5000
Operating Review
This year we have clearly demonstrated the financial success of our
restructuring programme and have delivered substantial revenue growth from
continuing operations.
The key operations of the Group are now based at our head office in Hemel
Hempstead which, as well as driving general efficiencies, has facilitated
increased levels of cross-selling and better communication between the
divisions. We retain three smaller satellite offices: a distribution and call
centre supporting Mobile Wholesale in Milton Keynes; IVR transcription and sales
activity in London; and Speech Solutions software development in Montpellier.
The coming year is a critical period for Eckoh as we emerge from our
restructuring, and look to build on the progress we have made over the past
twelve months. All four divisions are well positioned to expand without
significant increases in fixed cost, and we have yet to see financial benefit
from the significant investment that we have made to date in Speech Solutions.
Speech Solutions
This year we have taken further steps forward in delivering on our strategy of
becoming Europe's market leader in hosted Speech Solutions. The key milestone
was undoubtedly the exclusive two-year alliance with BT to deliver hosted speech
recognition and advanced IVR services to its corporate customer base, which
commenced in January 2003.
We have capitalised on our initial success by adding major new contracts with
Centrica, William Hill, Hasbro, Wyevale Garden Centres and Phoneworld, and have
now completed many of the key speech applications described in last year's
annual report.
The benefits of the hosting model and the pricing flexibility this delivers are
becoming more significant, and we are encouraged by increasing demand from
prospective customers.
As well as using BT as an indirect sales channel for our current product
portfolio, we are also contracted to supply them with speech application
development services and to provide minimum levels of dedicated call processing
capacity. These services are billed directly to BT by Eckoh.
The imminent completion of the installation of 2,500 additional lines into BT's
hosting facility will take our overall capacity to over 7,000 lines, with the
capacity to process over 500,000 calls an hour. This will be an unparalleled
facility in the UK speech market, and further enhances our technical and
commercial proposition to future customers.
Interactive Voice Response (IVR)
Whilst we believe speech recognition is the natural evolution of traditional
touch-tone services, established IVR technology continues to deliver an
appropriate user experience for a wide variety of applications at a relatively
modest cost.
Eckoh's IVR division, which operates predominantly in the media sector, is
beginning to see speech recognition enhance its data capture capabilities and
generate new commercial opportunities in conjunction with more innovative TV
programme formats.
The enlarged call processing capacity brought about by the BT alliance also
creates a significant competitive advantage, especially when handling high
volume DRTV (direct response television) services. As a BT partner, we can
combine our call handling platform with their existing capacity, to
simultaneously terminate thousands more calls than our competitors.
We are also continuing to position ourselves as a one-stop-shop for media owners
as clients increasingly prefer their audience to be able to respond through a
variety of channels - phone, SMS, web and television - and for these services to
be managed by a single supplier.
Finally, we are seeking alternative ways of controlling the distribution
channels which we use to market IVR services directly to consumers. In
particular, digital television, which we have already seen succeed as part of
Mobile Wholesale's strategy, is becoming an increasingly important route to
market for Eckoh, as it allows us to promote a wide portfolio of products and
services in a low-cost and extremely flexible environment.
Mobile Wholesale
Our Mobile Wholesale division ("Phones Express"), which sells bespoke mobile
phone packages to consumers, has seen dramatic growth this year after expanding
its successful distribution model of targeting niche audiences via specialised
print publications onto digital television.
The collaboration with the Auctionworld channel (which broadcasts on Sky)
demonstrated for the first time that mobile phones on contract could be sold
successfully through television. This strategy was extended in February 2003
with the launch of Phoneworld, a 24-hour channel dedicated to the provision of
mobile phones, accessories and related services, for whom Phones Express are the
exclusive supplier. Speech Solutions also provided Phoneworld with an end-to-end
transactional service which has enabled customer acquisition costs to be kept to
a minimum.
Phones Express see television as the best medium for presenting the increasingly
complex array of products and services and is seeking to extend its TV strategy
by broadening the range of channels for which it acts as supplier.
The success of Phones Express has come despite a mobile industry in a state of
transition, as the Mobile Network Operators move their business models away from
customer acquisition and towards customer retention and increased revenue per
user ("RPU"), particularly from data services. Management feels that Phones
Express will benefit from these changes due to its flexible distribution model,
product range, and customer profile.
Network Services
The Network Services division, trading as "Symphony", has seen a complete
turnaround in financial performance following its restructuring, and is now
generating significant levels of profit for the Group.
The business reseller market continues to be competitive, but a focus on
providing the highest quality products, combined with pro-active customer
service, has maximised customer retention and kept churn levels to a minimum.
The high volume of aggregated call traffic driven through our network suppliers
ensures that our wholesale prices remain very competitive, and although gross
margins have experienced some erosion, they remain strong by industry standards.
Our customers continue to benefit from the introduction of new complementary
products, as illustrated by the launch of Vodafone's "BlackBerry" GPRS e-mail
device this year. In addition, the upgrade to our billing platform means we can
now offer customers convenient online access to their billing information, as
well as providing us with a more comprehensive range of management tools.
In May 2003 we signed a strategic trading agreement with Energis to take
ownership of a large number of their end-user customers, providing further
evidence that Symphony continues to be a major player in the reseller market.
This contract illustrates how we are able to take on incremental business with
relatively little overhead expansion, and demonstrates the potential benefit to
Symphony of further consolidation in the reseller market.
Financial Review
The Financial Results for the year reflect the continuing transition of the
Group into a fully integrated business. Strong operating performances, tight
cost control and a cash rich balance sheet have put the Group in a position to
further grow the business as well as take advantage of strategic opportunities
as they arise.
Turnover and gross profit
Group turnover for the year was £55.1m, up by £0.2m from the previous year.
After excluding discontinued Hardware Services operations, turnover from
continuing operations was up 20.2% to £54.2m (2002 - £45.1m). The Group
generated a gross profit of £18.2m, representing a 33.0% gross margin (2002 - 32.4%).
The Speech Solutions division generated £2.0m of turnover during the year, up
75.3% from the previous year. Turnover is a combination of set-up charges,
monthly maintenance fees and, in most cases, a share of end-user call revenues.
Gross profit more than doubled to £0.9m from last year, assisted by an
improvement in gross margin to 45.9% (2002 - 38.2%).
IVR turnover, which is generated when users access the Company's call-processing
platform using a fixed line or mobile telephone, totalled £20.6m for the year
(2002 - £23.8m). The decrease in revenue, and reduction in gross margin from
32.6% to 25.9%, reflects the increased competition for the provision of IVR
services to third parties as well as increased media spend required to offset
competition from low-premium operators in the own-brand market. During the year
the IVR division generated 44.6 million minutes (defined as the number of
minutes recorded by Eckoh and its carriers in respect of calls to Eckoh's voice
services) of voice traffic (2002 - 56.7 million) from its own-brand IVR
products.
Mobile Wholesale turnover represents connection commissions, the sale of
handsets and accessories directly to consumers and a share of ongoing consumer
call revenue. During the year Mobile Wholesale expanded its distribution model
to include digital satellite television on Sky, resulting in a five-fold
increase in turnover to £11.8m. There is significant uncertainty at present in
the mobile market, although the Mobile Wholesale model allows for fluctuations
in turnover to be partially offset by reduced commission payments to channel
providers. Nevertheless the profitability of this area of the business is
expected to be depressed in the short term. Gross profit, which is after handset
and accessory costs, increased to £5.7m for the year (2002 - £0.7m), at a gross
margin of 47.8% (2002 - 36.7%). During the year £1.9m of commission expenditure
was incurred (2002 - nil), and is treated as a selling and distribution cost
within administrative expenses.
Network Services turnover includes revenue generated by the Company's
wholly-owned subsidiary Symphony Telecom and six 50%-owned joint ventures which
are fully consolidated in the Company's financial statements in accordance with
UK GAAP. Excluding discontinued Hardware Services, Network Services turnover was
up 9.5% at £19.7m (2002 - £18.0m). Despite increasing competition among
resellers, gross margin improved to 29.8% (2002 - 28.6%). Network Services
customers (defined as the number of business customers at the month end who have
been billed for that month) increased by 6.5% during the year, from 6,035 in
March 2002 to 6,426 at the year end.
Administrative expenses
Administrative expenses (excluding intangible asset amortisation and impairment
and exceptional items) decreased by 37.6% to £18.3m for the year (2002 -
£29.4m). This is as a result of discontinuing Internet and Hardware Services
operations, the integration of continuing businesses and a strong focus on
operational efficiency and cost control.
Included in administrative expenses are selling and distribution costs, which
this year for the first time include commissions paid to digital television
channel partners in relation to the Mobile Wholesale business. Excluding these
commissions, administrative expenses (excluding intangible asset amortisation
and impairment and exceptional items) were equivalent to 30% of turnover for the
year, a substantial reduction from 53% for the previous year.
Intangible asset amortisation totalled £1.6m for the year (2002 - £7.8m).
Following an impairment review of acquisitions made during previous financial
years, and taking into consideration the fundamental changes that have taken
place within those businesses over the past eighteen months, it is considered
appropriate to write down the remaining intangible asset balances to zero.
Impairment write-downs totalling £5.7m (2002 - £8.6m) have therefore been
expensed.
Provision against fixed asset investment
The Group continues to hold a 40% trade investment in Rivals Digital Media
Limited to which it sold its internet content operation during 2001. The
Directors consider the carrying value of the investment to be nil due to
uncertainty over its realisability, and a provision of £2.0m has therefore been
charged to the profit and loss account.
Discontinued operations
During the first quarter of this year the exit from Hardware Services in the UK
was completed. This included the disposal of various customer bases to three
former employees and a third party. In return for these assets the purchasers
have entered into exclusive distribution agreements with Symphony to sell
network services to the acquired customer bases. These agreements contain an
element of contingent consideration, however due to the uncertainty regarding
the future performance of these businesses this has not been recognised as an
asset. Residual turnover of £0.4m and an operating loss of £0.1m for the year
relates to UK Hardware Services.
In March 2003 the decision was made to close down our loss-making Hardware
Services operation in Ireland. During the year this operation generated £0.5m
(2002 - £0.4m) of turnover and an operating loss of £0.4m (2002 - £0.4m)
Operating Loss and Net Loss
Despite an ongoing investment in Speech Solutions in the form of research and
development as well as capital expenditure, continuing operations generated an
operating profit (before intangible asset amortisation and impairment and
exceptional items) of £0.3m for the year (2002 - loss of £2.6m). The operating
loss from continuing operations was £7.0m (2002 - £11.7m).
The operating loss for the year reduced to £7.5m (2002 - £34.7m) as the Group
completed its restructuring, which included the disposal or closure of
loss-making operations. Following the write off of most of the goodwill on
acquisitions, amortisation charges will be significantly reduced in future.
Minority interests represent the interests of Eckoh's joint venture partners in
the profit or loss of each joint venture company during the relevant accounting
period. Minority interests are computed with reference to shares owned by the
joint venture partners. The Company owns at least 50% of the voting shares in
each joint venture company, and they are fully consolidated on the basis of the
actual exercise of dominant influence. As at 31 March 2003, there were 6 active
joint ventures (2002 - 6).
Eckoh has incurred a cumulative net loss since inception. Due to the uncertainty
surrounding the future benefits of the net tax losses carried forward, the
Company has not recognised a deferred tax asset.
The Group recorded a loss of £9.1m (2002 - £33.6m), or 4.4p per share, for the
year ended 31 March 2003 (2002 - 16.5p). Excluding the effect of intangible
asset amortisation and impairment, exceptional items and the provision against
the Rivals investment, the profit for the year was £0.2m compared to a £10.6m
loss for the previous year. Eckoh has never paid or declared a dividend.
Fourth quarter results
During the fourth quarter, continuing operations generated turnover of £13.7m
(Q4 2002 - £12.3m), a 29.8% gross margin (Q4 2002 - 31.1%) and £0.1m of
operating profit (Q4 2002 - loss £3.5m). The operating loss for the quarter was
£0.1m, significantly lower than last year (Q4 2002 - £6.5m).
The increase in the Group's fourth quarter turnover was generated by Mobile
Wholesale, which increased turnover to £2.7m (Q4 2002 - £0.7m). Turnover from
Network Services (£4.7m) and Speech Solutions (£0.5m) were on a par with the
same quarter last year. IVR turnover of £5.7m for the fourth quarter was 8.6%
lower than the previous year (Q4 2002 - £6.2m) and gross margin was
significantly down on last year at 22% (Q4 2002 - 33%). This reflects a
proportional increase in lower margin client business.
Balance sheet
Equity shareholders' funds decreased from £20.7m last year to £11.6m at the
year-end. Of this reduction £9.3m relates to goodwill amortisation and
impairment charges and the provision against the Rivals trade investment.
Excluding these charges, underlying equity shareholders' funds increased for the
first time since flotation by £0.2m.
Net current assets of £9.9m at 31 March 2003 were £1.7m lower than last year, as
a result of a reduction in cash and short-term investments of £2.1m as noted
below.
As a result of the goodwill impairment write-offs during the year, and in
accordance with the Group's accounting policy, the remaining balance of the
merger reserve was released to the profit and loss reserve.
Cash Flow Statement
During the year ended 31 March 2003, the Group's cash and short term investment
balances reduced by £2.1m due to the payment of restructuring costs.
Capital expenditure and financial investment during the year totalled £1.3m
(2002 - £1.8m), which included expenditure relating to the building of a
speech-enabled call-processing platform and related infrastructure at BT's
hosting centre in St Albans. This cash outflow was funded by cash generated
from operating activities (excluding restructure related payments).
Net deferred and contingent cash consideration of £0.1m (2002 - £1.4m) was paid
during the year in respect of acquisitions made during prior years. This
included a final cash payment of £0.5m in respect of the acquisition of Teletalk
and a refund of £0.5m in respect of a previous Hardware Services acquisition.
Corporate Developments
As a small company, in order to maximise the ability and flexibility to pursue
strategic opportunities such as partnerships, joint ventures and acquisitions,
the Directors intend to seek approval from the United Kingdom Listing Authority
("UKLA") to transfer Eckoh from the Official List to the Alternative Investment
Market ("AIM"). The Directors believe that AIM is more suited to a company of
Eckoh's size and ambitions and that it will provide the Company with access to
an expanded and more appropriate pool of investors and shareholders. Eckoh will
also be able to further reduce its corporate costs.
Outlook
Today we have announced a partnership with L!VE TV Library Sales to participate
in the re-launch of L!VE TV on Sky Digital in the Summer. L!VE TV is perceived
as both an opportunity to drive revenue growth for Eckoh, as well as create new
innovative products that can be distributed to other clients. We also plan to
launch our own SMS service capability within the next three months.
We are seeking to increase our share of termination payments from Originating
Network Operators to boost gross margins, which may involve direct
interconnection with BT or a contractual arrangement with a suitable third
party.
Since the end of the financial year the mobile industry has entered a period of
volatility and uncertainty as the Mobile Network Operators react to recent
regulatory intervention by the Competition Commission. This is expected to
result in significantly lower revenues and profitability from Eckoh's Mobile
Wholesale operation in the first half of the new financial year.
Nevertheless, our other businesses continue to trade in line with expectations
despite challenging market conditions, and with £12.0m of cash at year end and a
debt-free balance sheet, we have created a platform for further growth and
progress in the coming year.
Consolidated profit and loss account
for the quarter and year ended 31 March 2003
Quarter Quarter Year ended Year ended
ended ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
unaudited unaudited unaudited audited
Note £'000 £'000 £'000 £'000
Turnover 13,845 13,244 55,085 54,920
Continuing operations 13,727 12,287 54,166 45,079
Discontinued operations 118 957 919 9,841
Cost of sales (9,744) (9,229) (36,920) (37,322)
Gross profit 4,101 4,015 18,165 17,598
Administrative expenses before intangible (4,177) (6,159) (18,324) (29,355)
asset amortisation and impairment and
exceptional items
Amortisation of intangible assets (25) (779) (1,657) (7,847)
Impairment of intangible assets - (438) (5,656) (8,643)
Exceptional items - (3,154) - (6,495)
Total administrative expenses (4,202) (10,530) (25,637) (52,340)
Operating profit/(loss) before intangible (76) (2,144) (159) (11,757)
asset amortisation and impairment and
exceptional items
Continuing operations 99 (895) 312 (2,602)
Discontinued operations (175) (1,249) (471) (9,155)
Operating profit/(loss) (101) (6,515) (7,472) (34,742)
Continuing operations 74 (3,525) (7,001) (11,718)
Discontinued operations (175) (2,990) (471) (23,024)
Provision against trade investment - - (2,000) -
Profit on disposal of internet operations - 187 - 490
Net interest receivable 103 139 390 792
Profit/(loss) on ordinary activities 2 (6,189) (9,082) ( (33,460)
before taxation
Taxation - 54 (20) 60
Profit/(loss) on ordinary activities after 2 (6,135) (9,102) (33,400)
taxation
Minority interests 149 (31) 19 (163)
Profit/(loss) for the period 151 (6,166) (9,083) (33,563)
Earnings/(loss) per ordinary share 2
Basic and diluted earnings/(loss) per 0.1p (3.0p) (4.4p) (16.5p)
share
Basic and diluted earnings/(loss) per 0.1p (0.9p) 0.1p (5.2p)
share before intangible asset amortisation
and impairment and exceptional items
Statement of total recognised gains and losses
for the quarter and year ended 31 March 2003
Quarter ended Quarter Year ended Year ended
ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
unaudited unaudited unaudited audited
£'000 £'000 £'000 £'000
Profit/(loss) for the period 151 (6,166) (9,083) (33,563)
Exchange adjustments offset in reserves 75 35 75 74
Total recognised gains/(losses) for the period 226 (6,131) (9,008) (33,489)
Consolidated balance sheet
as at 31 March 2003
31 March 2003 31 March 2002
unaudited audited
Note £'000 £'000
Fixed assets
Intangible fixed assets 100 7,376
Tangible fixed assets 1,980 2,316
Investment - 2,000
2,080 11,692
Current assets
Stock 687 501
Debtors 6,526 9,554
Investments - short term deposits 9,510 10,500
Cash at bank and in hand 2,475 3,600
19,198 24,155
Creditors: amounts falling due within one year (9,333) (12,613)
Net current assets 9,865 11,542
Total assets less current liabilities 11,945 23,234
Creditors: amounts falling due after more than one year (4) (57)
Provisions for liabilities and charges (342) (2,472)
Net assets 11,599 20,705
Capital and reserves 3
Called up share capital 519 515
Shares to be issued 38 253
Share premium account 72,461 72,429
Merger reserve - 2,973
Profit and loss account (61,429) (55,494)
Total equity shareholders' funds 4 11,589 20,676
Minority interests 10 29
Capital employed 11,599 20,705
Consolidated cash flow statement
for the quarter and year ended 31 March 2003
Quarter Quarter Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
unaudited unaudited unaudited audited
£'000 £'000 £'000 £'000
Note
Net cash inflow/(outflow) from operating 5 89 (120) (1,109) (9,203)
activities
Return on investments and servicing of finance
Net interest 140 189 411 916
Taxation 121 (217) 121 (217)
Capital expenditure and financial investment
Purchase of tangible fixed assets (450) (538) (1,350) (1,160)
Proceeds from sale of tangible fixed assets 10 54 10 54
Purchase of trade investment - - - (670)
(440) (484) (1,340) (1,776)
Acquisitions and disposals
Consideration paid in respect of prior period (37) (248) (637) (1,120)
acquisitions
Refund of consideration paid in respect of prior - 500 -
year acquisitions
Net cash disposed of with subsidiary - (71) - (71)
undertakings
Costs relating to the disposal of internet - (212) - (212)
operations
(37) (531) (137) (1,403)
Cash outflow before use of liquid resources and (127) (1,163) (2,054) (11,683)
financing
Management of liquid resources
(Increase)/decrease in short-term investments (1,010) 2,088 990 13,750
Financing
Issue of shares - 6 5 6
Share issue costs (7) - (7) -
Capital element of finance lease payments (4) (85) (59) (175)
(11) (79) (61) (169)
(Decrease)/increase in cash in the period (1,148) 846 (1,125) 1,898
Notes to the fourth quarter and full year results
1. Basis of preparation
The financial statements for the quarter and year ended 31 March 2003 have been
prepared using accounting policies consistent with those set out in the
Company's consolidated 2002 statutory accounts. These statements do not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985 and are unaudited.
Financial information for the quarter and year ended 31 March 2003 has been
extracted from the accounting records of the Group.
The balances and results as at 31 March 2002 have been extracted from the
statutory accounts, which have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain any
statement under section 237 of the Companies Act 1985.
The results for the quarter and the preliminary results for the year ended 31
March 2003 were approved by the Board on 28 May 2003 and will be posted on the
Company's web site, www.eckoh.com, on 29 May 2003.
2. Earnings/(loss) per ordinary share of 0.25p each
Quarter Quarter Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
£'000 £'000 £'000 £'000
Profit/(loss) for the period before the 176 (1,795) 230 (10,578)
following:
Intangible asset amortisation and impairment (25) (1,217) (7,313) (16,490)
Exceptional items - (3,154) - (6,495)
Provision against fixed asset investment - - (2,000) -
Profit/(loss) for the period 151 (6,166) (9,083) (33,563)
Weighted average number of shares in the period:
Basic and diluted 207,562,394 205,313,052 207,188,362 203,041,315
Basic and diluted earnings/(loss) per share 0.1p (0.9p) 0.1p (5.2p)
before the following:
Intangible asset amortisation and impairment - (0.6p) (3.5p) (8.1p)
Exceptional items - (1.5p) - (3.2p)
Provision against fixed asset investment - - (1.0p) -
Basic and diluted earnings/(loss) per share 0.1p (3.0p) (4.4p) (16.5p)
The dilutive effect of share options in issue and shares to be issued is not
material enough to impact on the disclosed earnings per share for the current
quarter. In addition no dilution of losses per share will arise due to losses
in the period.
3. Share capital and reserves
Ordinary Shares Share Merger Profit
share to be premium reserve and loss
capital issued account account
£'000 £'000 £'000 £'000 £'000
At 1 April 2002 515 253 72,429 2,973 (55,494)
Loss for the year - - - - (9,083)
Exchange adjustments offset in reserves - - - - 75
Shares issued in respect of share options 2 - 3 - -
exercised
Contingent share consideration for acquisitions 2 (138) 36 100 -
in prior years
Movement in fair value of contingent share - (77) - - -
consideration for acquisitions in prior years
Share issue costs charged to share premium - - (7) - -
account
Realisation of merger reserve - - - (3,073) 3,073
At 31 March 2003 519 38 72,461 - (61,429)
Shares to be issued represent the contingent consideration of up to 333,333
shares payable, based on revenue targets, in respect of an acquisition during a
prior year.
4. Reconciliation of movement in equity shareholders' funds
Quarter Quarter Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
£'000 £'000 £'000 £'000
Opening shareholders' funds 11,370 27,117 20,676 54,362
Loss for the period 151 (6,166) (9,083) (33,563)
Net movement in contingent share consideration 2 (316) (77) (203)
Employee share options exercised - 6 5 6
Share issue costs charged to share premium account (9) - (7) -
Exchange adjustments offset in reserves 75 35 75 74
Closing equity shareholders' funds 11,589 20,676 11,589 20,676
5. Net cash inflow/(outflow) from operating activities
Quarter Quarter Year Year
ended ended ended ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
£'000 £'000 £'000 £'000
Operating loss (101) (6,515) (7,472) (34,742)
Depreciation and impairment of tangible fixed assets 390 608 1,327 1,769
Amortisation and impairment of intangible fixed assets 25 1,217 7,313 16,490
(Increase)/decrease in stock (12) 173 (186) 677
(Inccrease)/decrease in debtors (84) 796 2,866 4,591
(Decrease)/increase in creditors/provisions (124) 3,497 (4,952) 1,835
Loss on disposal of tangible fixed assets (5) 104 (5) 177
89 (120) (1,109) (9,203)
This information is provided by RNS
The company news service from the London Stock Exchange SDSELI
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