Final Results
First Derivatives PLC
03 June 2003
for immediate release
FIRST DERIVATIVES PLC (the 'Company' or 'FDP')
Final results for the year ended 28 February 2003
First Derivatives Plc, today announces its year end results for the year ended
to 28 February 2003. The highlights were:
• Turnover at £1.65m (2002: £1.78m);
• Pre tax profit reduced to £406,000 (2002: £612,000) as a result of
investment in additional revenue streams;
• Recovery in pre tax profits for the second six months to 28 February
2003 from £125,000 to £281,000;
• Exclusive rights to market and support Kx Systems products;
• Acquisition of IPR for e-business software from e-hub.com plc; and
• Announced in May 2003 a joint venture with British Telecom using the
marketing e-business products.
David Anderson, Chairman, commented: 'Despite the difficult market place in
which the Company operates it has enjoyed a successful first year on AIM and has
benefited from the increased profile the market has given the Company in the
United Kingdom, the United States and Europe.'
Chairman's statement
I have pleasure in reporting on the financial year ended 28th February 2003 of
First Derivatives plc its first year as a company listed on the AIM market. At
the interim stage the company reported a pre-tax profit of £125,000 on revenues
of £689,000.
The pre-tax profit for the year was £406,000 compared with a profit of £612,000
in the previous year. Turnover at £1.649 million compared with £1.778 million
in the previous year. Earnings per share for the year was 2.4p against 4.3p in
the previous year. The Board has not recommended a dividend as the funds
generated during the year are required to finance future growth.
The benefits of the Kx Systems Inc ('Kx') investment started to show strength in
the second half of the year. Combined with a recovery in the level of
consultancy business this led to a sharp improvement in profitability in the
second half of the year.
The year has seen a number of strategic moves, further development of business
into capital markets, the strengthening of the relationship with Kx and other US
companies and entry into the e-commerce market. The client base in capital
markets has been broadened and a significant part of the revenue generated is
now from support contracts which tend to be of a recurring nature.
The company now supports the Kx range of software products worldwide and a new
contract has recently been negotiated in favourable terms. After the year end
the company exercised its vested options to subscribe for shares in Kx and
further options have been granted. The continuing success of the Kx product
suite should lead to further revenues from support, customisation and
implementation. Kx products are currently being used by many leading financial
institutions including J P Morgan, Credit Suisse and Credit Lyonnais.
In February this year the company signed an agreement with BT to market a range
of e-business solutions under the BT name. The range was officially launched
after the financial year end in early May. Due to the fact that a significant
part of the package was based on software developed by First Derivatives for
e-hub.com plc, it was felt prudent to bring this in-house. Therefore, this
software was acquired in February this year.
Our first year as a plc has seen the transformation of the company from being
one highly dependent on consultancy to a more broadly based business with two
divisions involved in capital markets, partnership arrangements and e-commerce.
There has been an encouraging start to the new financial year with the
continuation of the recovery seen in the second half of the financial year.
David Anderson
Chairman
Profit and loss account
Year ended 28 February 2003
Year ended Year ended
28 February 28 February
Note 2003 2002
£'000 £'000
Turnover - continuing operations 2 1,649 1,778
Cost of sales (1,186) (1,152)
Gross profit 463 626
Administrative expenses (284) (85)
Other income 236 92
Operating profit - continuing operations 415 633
Interest receivable 9 -
Interest payable and other similar charges 4 (18) (21)
Profit on ordinary activities before taxation 3 406 612
Tax on profit on ordinary activities 5 (113) (182)
Profit on ordinary activities after taxation 293 430
Retained profit brought forward 307 492
600 922
Dividends paid 8 - (575)
Transfer from reserves - (40)
Retained profit carried forward 600 307
Earnings per share 9 2.4p 4.3p
The company has no recognised gains or losses other than those included above
and therefore no separate statement of total recognised gains and losses has
been presented.
There is no material difference between the company's results as reported and on
a historical cost basis. Accordingly no note of historical cost profits and
losses has been prepared.
The turnover and operating profit amounts as stated above are derived solely
from continuing operations.
Balance sheet
Year ended 28 February 2003
At 28 February At 28 February
2003 2002
Note £'000 £'000 £'000 £'000
Fixed assets
Intangible assets 10 900 -
Tangible assets 11 313 37
1,213 37
Current assets
Debtors 12 741 1,514
Cash at bank and in hand 555 -
1,296 1,514
Creditors - amounts falling due
within one year 13 (913) (1,184)
Net current assets 383 330
Total assets less current liabilities 1,596 367
Creditors - amounts falling due
after more than one year 14 (215) -
Provisions for liabilities and charges 15 (5) (10)
Net assets 1,376 357
Share capital and reserves
Called-up share capital 16 61 50
Share premium account 17 715 -
Profit and loss account 17 600 307
Equity shareholders' funds 18 1,376 357
These financial statements were approved by the board of directors on 30 May
2003.
Brian Conlon
Director
Cash flow statement
Year ended 28 February 2003
Year ended Year ended
28 February 28 February
Note 2003 2002
£'000 £'000
Cash inflow from operating activities 24 694 844
Returns on investment and servicing
of finance 25a (9) (22)
Taxation 25b (170) (130)
Capital expenditure 25c (412) (15)
Equity dividend 25d - (575)
Cash inflow before financing 103 102
Financing 25e 720 (15)
Increase in cash in the period 823 87
Reconciliation of net cash flow to
movement in net funds/(debt)
Year ended 28 February 2003
Year ended Year ended
28 February 28 February
Note 2003 2002
£'000 £'000
Increase in cash in the period 823 87
Decrease in debt 8 16
Change in net debt resulting from cash flows 26 831 103
New long term loan (237) -
Movement in net debt in the period 594 103
Net debt at start of the period (271) (374)
Net funds/(debt) at end of the period 26 323 (271)
1 Accounting policies
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the company's financial
statements.
Basis of accounting
The financial statements have been prepared under the historical cost accounting
rules.
Basis of preparing the financial statements
The financial statements have been prepared on the going concern basis which
assumes that the company will continue in operational existence for the
foreseeable future.
Intangible fixed assets
Intangible fixed assets such as intellectual property rights over software are
capitalised where purchased on an arm's length basis. Such assets are amortised
over their estimated useful lives, assumed to be 5 years.
Tangible fixed assets
Tangible fixed assets are stated at historical cost, less accumulated
depreciation. Depreciation is calculated to write off the original cost less
the expected residual value of fixed assets over their anticipated useful lives
at the following annual rates:
Motor vehicles - 25% straight line
Office furniture and equipment - 25% straight line
Plant and equipment - 25-50% straight line
Land and buildings - 2% straight line
Government grants
Government grants are recognised in the profit and loss account so as to match
them with the expenditure towards which they are intended to contribute.
Pension plans
The company operates 'Personal Pension Plans' whereby the company agrees to pay,
for eligible employees, a defined contribution into the employee's own personal
pension scheme. The pension charge represents contributions payable by the
company for the period. The company's liability is limited to the amount of the
contribution. The liability for meeting future pension payments rests solely
with the employee's personal pension scheme.
Taxation
The charge for taxation is based on the profit for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. Deferred tax is recognised,
without discounting, in respect of all timing differences between the treatment
of certain items for taxation and accounting purposes which have arisen but not
reversed by the balance sheet date, except as otherwise required by FRS 19.
2 Turnover
Turnover represents the invoiced value of services to third parties exclusive of
value added tax and trade discounts and includes expenses recharged to
customers.
The directors are of the opinion that disclosure of the analysis of turnover and
profit by geographical market would be prejudicial to the interests of the
company.
3 Profit on ordinary activities before taxation
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
Profit on ordinary activities before taxation
has been arrived at after charging:
Depreciation 20 19
Auditors' remuneration - audit 10 10
- tax 47 14
Hire of premises - rentals payable under operating lease 14 13
4 Interest payable and other similar charges
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
On bank loans and overdrafts 3 21
On other loans 4 -
Other 11 -
18 21
5 Tax on profit on ordinary activities
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
UK corporation tax for the period 136 175
Adjustments relating to earlier years (18) -
Total current tax charge 118 175
Deferred tax (see note 15) (5) 7
113 182
The basis by which taxation is calculated is stated in Note 1.
The current tax charge for the period is lower (2002: lower) than the standard
rate of corporation tax in the UK. The differences are explained below:
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
Current tax reconciliation
Profit on ordinary activities before tax 406 611
Current tax at 30% (2002: 30%) 122 183
Effects of:
Expenses not deductible for tax purposes 9 (5)
Capital allowances for period in excess of depreciation 5 1
Small companies relief - (4)
Adjustments to tax charge in respect of previous periods (18) -
Total current tax charge 118 175
6 Staff numbers and costs
The average weekly number of persons (including the directors) employed by the
company during the year end is set out below. The company employed 28 people at
the year end (2002: 22).
Year ended Year ended
28 February 28 February
2003 2002
Average No. Average No.
Administration 2 3
Technical 25 19
27 22
Their total remuneration was:
£'000 £'000
Wages and salaries 723 607
Social security costs 71 60
Other pension costs 26 26
820 693
7 Emoluments of directors
The remuneration paid to the directors was:
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
Aggregate emoluments (including benefits in kind) 99 37
Company pension contributions 20 17
119 54
During the period there were two directors accruing benefits under a defined
contribution pension scheme (28 February 2002: 2).
The aggregate emoluments and company pension contributions of the highest paid
director amounted to £55,000 and £4,000 respectively during the year (2002:
£24,000 and £16,000 respectively).
8 Dividend paid
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
Interim dividend paid on ordinary shares - 575
No final dividend for either year was proposed.
9 Earnings per ordinary share
The calculation of earnings per share is based on the profit on ordinary
activities after taxation and before deduction of dividend appropriations in
respect of equity shares, namely £293,000 (2002: £430,000). The number of
ordinary shares outstanding at 28 February 2003 and ranking for dividend was
12,296,158. Earnings per share for the period ended 28 February 2002 have been
calculated based on 10,000,000 shares outstanding.
Year ended Year ended
28 February 28 February
2003 2002
Pence per share Pence per share
Earnings per share 2.4 4.3
10 Intangible fixed assets
2003
£'000
At 1 March 2002 -
Additions 900
At 28 February 2003 900
The purchase of the intangible fixed asset in the current year relates to the
purchase of the software asset discussed in note 22. The purchase was made on
28 February 2003 and accordingly no depreciation has yet been charged.
11 Tangible fixed assets
Land and Plant and equipment Office furniture
buildings and equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 March 2002 - 94 25 119
Additions 292 4 - 296
At 28 February 2003 292 98 25 415
Depreciation
At 1 March 2002 - 63 19 82
Charged during period 2 15 3 20
At 28 February 2003 2 78 22 102
Net book value
At 28 February 2003 290 20 3 313
At 28 February 2002 - 31 6 37
The basis by which depreciation is calculated are stated in Note 1.
12 Debtors
28 February 28 February
2003 2002
£'000 £'000
Trade debtors 470 1,065
Sundry debtors 255 58
Prepayments 16 391
741 1,514
13 Creditors - amounts falling due within one year
28 February 28 February
2003 2002
£'000 £'000
Bank overdraft - 267
Trade creditors 59 141
Other taxation and social security 24 103
Accruals and deferred income 59 300
Corporation tax 311 360
Other creditors 111 9
Other loans 18 4
Capital creditor 331 -
913 1,184
14 Creditors - amounts falling due after more than one year
28 February 28 February
2003 2002
£'000 £'000
Loan 215 -
28 February 28 February
2003 2002
£'000 £'000
Analysis of debt:
Debt can be analysed as falling due:
In one year or less, or on demand 17 -
Between one and two years 19 -
Between two and five years 68 -
In five years or more 141 -
215 -
The loan is secured on the company's property in London.
15 Provisions for liabilities and charges
28 February 28 February
2003 2002
£'000 £'000
Deferred taxation
At beginning of period 10 3
(Release)/charge for the period (see note 5) (5) 7
At end of period 5 10
The basis by which taxation is calculated is stated in Note 1. There is no
unprovided deferred tax.
The elements of deferred taxation are as follows:
28 February 28 February
2003 2002
£'000 £'000
Difference between accumulated depreciation and
amortisation and capital allowances 5 10
Deferred tax liability 5 10
16 Share capital
28 February 28 February
2003 2002
Number £'000 Number £'000
Equity shares
Authorised
Ordinary shares of 0.5pence each 20,000,000 100 20,000,000 100
Issued, allotted and fully paid
Ordinary shares of 0.5pence each
12,296,158 61 10,000,000 50
During the financial year 2,296,158 Ordinary shares of 0.5 pence were
issued at 50 pence each.
17 Share premium and reserves
Share premium Profit and loss
account account
£'000 £'000
At beginning of year - 307
Retained profit for the period - 293
Premium on share issues 1,137 -
Share issue expenses (422) -
At end of year 715 600
18 Equity shareholders' funds
28 February 28 February
2003 2002
£'000 £'000
Profit for the financial year 293 430
Dividends paid - (575)
Net proceeds on issue of share capital 726 -
Increase/(reduction) in shareholders' funds 1,019 (145)
Opening shareholders' funds 357 502
Closing shareholders' funds 1,376 357
19 Commitments and contingencies
There were no capital commitments at either period end, with the exception of
the contingent commitment to make additional payments under a software purchase
agreement (note 22).
20 Leasing commitments
Annual commitments under non-cancellable operating leases are as follows:
28 February 2003 31 March 2002
Land and Land and
buildings buildings
£'000 £'000
Operating leases which expire:
In the second to fifth years inclusive 12 12
21 Contingent liabilities
Contingent liabilities exist in respect of grants received by the company,
whereby, in the event of the company failing to meet one or more of the
conditions contained in the letters of offer to the company, the company would
be liable to repay grant.
22 Related party transactions
Brian Conlon is a shareholder of e-hub.com plc. During the period the company
traded with e-hub.com plc on a normal commercial basis resulting in sales of
£228,760 (2002: £202,000). The amount due by e-hub.com plc to the company at 28
February 2003 amounted to £Nil (2002: £536,000).
Included within capital creditors is an amount due to e-hub.com plc of £331,000.
During the year the company purchased a software asset from e-hub.com plc for a
minimum consideration of £900,000. Of this total consideration £550,000 was
offset against a debtor balance owed by e-hub.com plc. Additional consideration
will be paid, at a rate of 20% of future sales of the software to e-hub.com plc
up to a maximum of another £1,100,000. This transaction was approved by the
shareholders at an extraordinary general meeting.
The company is charged rent annually for the use of the managing director's
apartment located in Kensington, London. The charge incurred during the
financial year amounted to £14,500 (2002: £29,000).
23 Ultimate controlling party
The company is controlled by Brian Conlon, its majority shareholder.
24 Reconciliation of operating profit to
net cash inflow from operating activities
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
Operating profit 415 633
Depreciation on tangible fixed assets 20 20
Decrease in debtors 224 275
Increase/(decrease) in creditors 35 (84)
Net cash inflow from operating activities 694 844
25 Analysis of cash flows for headings in the cash flow statement
Year ended Year ended
28 February 28 February
2003 2002
£'000 £'000
a) Returns on investment and servicing of finance
Interest paid (18) (22)
Interest received 9 -
Net cash inflow from returns on
investment and servicing of finance (9) (22)
b) Taxation
Corporation tax paid (170) (130)
c) Capital expenditure
Purchase of tangible fixed assets (412) (15)
d) Equity dividends paid
Dividends on equity shares - (575)
e) Financing
Repayment of long term loan (5) (15)
Issue of share capital 725 -
720 (15)
26 Analysis of changes in net debt during the period
Cash in Bank Debt due Debt due
hand overdrafts within one year after one year Total
£ £ £ £ £
Balance at 1 April 2001 - (354) (16) (4) (374)
Cash flow - 87 16 - 103
Other non cash change - - (4) 4 -
Balance at 1 April 2002 - (267) (4) - (271)
Cash flow 556 267 8 - 831
Other non cash change - - (22) (215) (237)
Balance at 28 February 2003 556 - (18) (215) 323
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago The Renewables Infrastructure Group Limited
- 1 day ago Smurfit Westrock (DI)
- 1 day ago Menhaden Resource Efficiency
- 1 day ago BP