Final Results
First Derivatives PLC
09 May 2006
First Derivatives plc (FDP)
Preliminary results for the year ended 28th February 2006
9th May 2006
The principal activities of FDP ('the Company') are the provision of a range of
support services to the investment banking market and the derivatives technology
industry and the provision of its own range of e-business applications.
Financial highlights
• Turnover £6.313m (2005: £3.793m) +66%
• Earnings before tax, depreciation and amortisation £1.916m (2005: £1.126m)
+ 70%
• Normalised PBT of £1.717m (2005: £0.991m) +73%
• Pre-tax profit £1.537m (2005: £0.811m) +90%, the first year to exceed £1.0m
• Earnings per share 8.6p (2005: 4.6p) + 87%
• Normalised EPS 10.0p(2005:6.1p) +64%
• Proposed final dividend more than doubled to 3.0p per share (2005: 1.46p)
• Cash balances as at 28th February 2006 of £1.061m (2005: £788,000) +35%
Business highlights
• Capital Markets consulting, support and development services continue to
grow: this and other recurring revenues account for 70% of FDP's income
• A new partnership with Kx on enhanced terms and the Company, after exercising
options, now holds approximately 4% of Kx
• Post year end - signed two more major Kx contracts with US banks
• FDP is now working with two other non-competing software vendors
• e-commerce division - remains small in relative terms but contributes to
profitability
David Anderson, Chairman of FDP, commented:
'2005-06 has seen another year of growth for the Company, with the second half
finishing strongly. For the first year, pre-tax profits have exceeded £1.0
million. The Company continues to increase its Capital Markets activity,
increasing levels of business with existing customers and adding new customers.
The Company's relationship with Kx has enhanced our credibility with the world's
major investment banks and has resulted in additional consultancy work for the
Company. Headcount has increased substantially in the past year and the
Company's plans for staffing for future growth are well in hand.'
For further information please contact:
First Derivatives Corporate Synergy Parkgreen Communications
Brian Conlon Brian Stockbridge Justine Howarth/Victoria Thomas
Managing Director T: 020 7448 4419 T: 020 7493 3713
T: 02830 252242
www.firstderivatives.com
Chairman's Statement
2005/2006 has seen another year of growth for the Company with the second half
finishing strongly. Turnover for the year was £6.313 million, up from £3.793
million, and earnings before tax, depreciation and amortisation were £1.916
million compared with £1,126,000 in the previous year, an increase of 70%.
Pre-tax profits for the year were £1.537 million compared with £811,000 in the
previous year, an increase of 90%. This is the first year that pre - tax profits
have exceeded £1.0 million.
Earnings per share increased by 87% from 4.6p to 8.6p. The Board is recommending
a dividend for the year of 3.0 p which will be covered approximately three times
by earnings. The Board continues to review its dividend policy and barring
unforeseen circumstances, intends to pay a maiden interim dividend in the
financial year ending 28th February 2007.
In my interim statement I referred to a further increase in our Capital Markets
activity. This has continued in the second half of the year and the company
continues to increase the level of business with its existing customer base and
at the same time adding new customers. This activity continues to benefit from
the relationship with Kx which has enhanced our credibility with the world's
major investment banks resulting in additional consultancy work for the Company.
The sales and support for Kx database technology continues to be a significant
part of our continuing business. There were further substantial sales to new
customers in the second half of the year both in the USA and in the UK.
Increasingly the company is receiving orders from existing customers for other
areas of their activities. A new partnership agreement with Kx has recently been
signed on enhanced commission terms and the company, after exercising options,
now holds approximately 4% of the share capital of Kx.
During the year two partnership agreements were entered into and the Company
continues to look for further opportunities.
The e-business activity has continued at a relatively low level during the
current year.
The company has continued its policy of acquiring residential properties to
accommodate staff supporting contracts with London and New York based clients.
The company has acquired further units which bring the portfolio to 8
properties. Shareholders' funds now stand at £3.372 million compared with £2.297
million a year ago.
I would like to thank Brian Conlon and his team for their continued and
dedicated hard work which has led to the further growth during the financial
year. There has been a significant increase in headcount in the financial year
and the plans for staffing to cater for future growth are well in hand.
Since the financial year end the company has signed two major Kx contracts with
US banks and the level of Capital Markets activity has seen a further increase.
(Whilst it is too early in the year to predict the outcome for the whole year,
management accounts to date together with the current order book indicate that
the company will show further growth in the first half of the year.
David Anderson 9 May 2006
Chairman
Managing Director's Statement
FDP operates primarily in the capital markets sector and major financial
institutions continue to invest heavily in technology. Banks continue to focus
on getting value for money from suppliers and are placing severe pressure on
charge out rates, increasingly looking to outsource non-core functions. FDP has
secured a small number of lucrative nearshore support contracts but the
challenge from low cost centres such as India remains.
Review of activities
First Derivatives operates loosely as four profit centres. Personnel can easily
transfer from one profit centre to another. Capital markets and Sales
Partnerships contribute the vast majority of our current turnover and
profitability but our investment in R&D has started to bear fruit and we made
some small sales in this financial year. We are currently effectively operating
at 100% utilisation of staff and have plans to increase our headcount by 25% in
the coming year.
Capital Markets - FDP provides highly skilled resources to the capital markets
in the areas of consulting, support and development services. We have ongoing
contracts with 5 of the largest banks in Europe and have 4 nearshore support
contracts in place. These nearshore contracts involve providing remote support
services from our offices in Newry. This and other recurring revenues accounts
for about 70% of our income.
Sales Partnership - FDP continues to provide sales and marketing support for all
industry sectors (excluding insurance) to KX Systems on a worldwide basis. The
contract was renegotiated with more favourable commercial terms, effective as of
1 January 2006. Their products continue to be widely used by some of the world's
leading financial institutions including JP Morgan, Merrill Lynch, Deutsche Bank
and Dresdner. We have provided consulting and support services to 20 of these
organisations in the past year at various locations including London, New York
and Tokyo. Most of these contracts are recurring in nature. We continue to build
our portfolio of alliances with other non-competing software vendors and are
currently working with 2 other vendors.
Product Development - this group is still in the process of developing a number
of products, primarily for the use of customers of KX Systems. No significant
revenue will accrue from this division until the next financial year.
e-business - this division is now quite small in relative terms but makes a
contribution to profits and will continue to do so.
Personnel
The company now employs more than 70 people and has staff based in London, New
York and Stockholm. We will continue to source staff in Ireland due to the
favourable cost differential vis-a-vis major financial centres. Many of our
employees are participating in options schemes which we see as a key driver in
retaining staff. Our staff turnover is relatively low which means that we are
seeing increasing wage inflation as the experience profile of staff changes.
Once again I would like to pay tribute to all FDP employees who without
exception are hard working, talented, flexible and dedicated. Our customer
retention rates are evidence of this.
Property Portfolio
As the number of staff working on-site in the major financial centres increases
we will continue to buy property in lieu of paying for hotels and rented
accommodation. As at the balance sheet date we had purchased 6 properties in
London financed by cash and term loans and a further property in New York
purchased with cash
Financial Review
Our pre-tax profit (2006: £1,537,000; 2005: £811,000), EBITDA (2006: £1,916,000;
2005: £1,126,000) and turnover (2006: £6,313,000; 2005: £3,793,000) were
significantly up on last year. This was largely due to increased consultant
utilisation and sales commission from partner agreements. Our operating margins
increased to 26% from 23%. Our balance sheet is strong with a cash balance of
£1,061,000 and equity shareholders' funds of £3,372,000. This and our confidence
in our ability to generate cash going forward enables us to declare a dividend
of 3p per share.
Outlook
We are increasing headcount to meet demand from the current sales pipeline and
to develop product. Our outlook for the year ahead is for trading to continue in
line with previous trends and the further strengthening of our balance sheet. We
now have a spread of activities with our recurring revenue stream insulating us
against general industry downturn and our interest in the sale of various
software products giving us the benefit of considerable potential upside.
Brian Conlon 9 May 2006
Managing Director
First Derivatives plc
Profit and loss account
Year ended 28 February 2006
Year ended Year ended
28 February 28 February
Note 2006 2005
Restated
£'000 £'000
Turnover - continuing operations 2 6,313 3,793
Cost of sales (3,959) (2,411)
______ ______
Gross profit 2,354 1,382
Administrative expenses (812) (560)
Other income 101 55
______ ______
Operating profit - 1,643 877
continuing operations
Interest receivable 7 8
Interest payable and other 4 (113) (74)
similar charges
______ ______
Profit on ordinary 3 1,537 811
activities before taxation
Tax on profit on ordinary 5 (468) (242)
activities
______ ______
Profit for the financial year 18 1,069 569
______ ______
Earnings per share - basic 9a 8.6p 4.6p
- diluted 9a 8.5p 4.5p
______ ______
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.
The notes on pages 15 to 27 form part of these financial statements.
First Derivatives plc
Balance sheet
Year ended 28 February 2006
At 28 At 28
February February
2006 2005
Restated
Note £'000 £'000 £'000 £'000
Fixed assets
Intangible assets 10 360 540
Tangible assets 11 3,238 2,032
Investment in associates 12 90 -
Other investments 12 111 111
______ _____
3,799 2,683
Current assets
Debtors 13 2,251 1,046
Cash at bank and in hand 1,061 788
3,312 1,834
Creditors - amounts falling
due within one year 14 (2,082) (928)
______ _____
Net current assets 1,230 906
______ _____
Total assets less current 5,029 3,589
liabilities
Creditors - amounts falling
due after more than one year 15 (1,717) (1,289)
Provisions for liabilities 16 - (3)
and charges
______ _____
Net assets 3,312 2,297
______ _____
Share capital and reserves
Called-up share capital 17 64 62
Shares to be issued 18 4 9
Share premium account 18 910 780
Profit and loss account 18 2,334 1,446
______ _____
Shareholders' funds 19 3,312 2,297
______ _____
These financial statements were approved by the board of directors on 4 May
2006.
Brian Conlon
Director
The notes on pages 14 to 27 form part of these financial statements.
First Derivatives plc
Cash flow statement
Year ended 28 February 2006
Year ended Year ended
28 February 28 February
Note 2006 2005
£'000 £'000
Cash inflow from operating
activities 25 1,606 752
Returns on investment and servicing
of finance 26a (106) (66)
Taxation 26b (232) (160)
Capital expenditure 26c (1,389) (1,318)
Equity dividends paid (181) (135)
______ _______
Cash inflow before financing (302) (927)
Financing 26d 574 867
______ _______
Increase/(decrease) in cash in the 272 (60)
year
______ _______
Reconciliation of net cash flow to
movement in net debt
Year ended 28 February 2006
Year ended Year ended
28 February 28 February
Note 2006 2005
£'000 £'000
Increase/(decrease) in cash in the year 272 (60)
Decrease in debt 103 93
______ _______
Change in net debt resulting from 27 375 33
cash flows
New long term loan (550) (932)
______ _______
Movement in net debt in the year (175) (899)
Net (debt)/funds at start of the year (622) 277
______ _______
Net debt at end of the year 27 (797) (622)
______ _______
The notes on pages 14 to 27 form part of these financial statements.
First Derivatives plc
Notes
(forming part of the financial statements)
1 Accounting policies
The following accounting policies have been applied consistently in dealing with
items which are considered material in relation to the financial statements,
except as noted below.
In these financial statements the following new standards have been adopted for
the first time:
• FRS 21 'Events after the balance sheet date';
• FRS 22 'Earnings per share'; and
• FRS 28 'Corresponding amounts'
The adoption of FRS 22 'Earnings per share' has not resulted in any material
difference to the company's calculation of earnings per share.
The adoption of FRS 21 'Events after the balance sheet date' has been discussed
in note 8. FRS 28 'Corresponding amounts' has had no material effect as it
imposes the same requirements for comparatives as previously required.
Basis of preparing the financial statements
The financial statements have been prepared under the historical cost
convention, and in accordance with applicable accounting standards.
Intangible fixed assets
Intangible fixed assets comprise intellectual property rights over software and
are capitalised where purchased on an arm's length basis. Such assets are
amortised over their estimated useful lives, estimated to be 5 years and are
reviewed for impairment only if there is some indication that an impairment may
have occurred.
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
Buildings - 2% straight line
Tangible fixed assets are reviewed for impairment only if there is some
indication that an impairment may have occurred.
Fixed asset investments
Fixed asset investments are stated at cost unless, in the opinion of the
Directors, there has been an impairment, in which case an appropriate adjustment
is made. For shares acquired on the exercise of an option previously granted to
the company, cost includes any in the money element of the option, as calculated
at the date the option was granted. The fair value of this in the money element
of the option reviewed is recorded in turnover and held as a current asset until
the option has been exercised. Fixed asset investments are reviewed for
impairment only if there is some indication that an impairment may have
occurred.
First Derivatives plc
Notes (continued)
1 Accounting policies (continued)
Research and development
All research and development expenditure is written off in the period in which
it is incurred.
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.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transactions or at a contracted rate. The resulting monetary assets and
liabilities are translated at the balance sheet rate or the contracted rate and
the exchange differences are dealt with in the profit and loss account.
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.
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 excludes value added tax and represents the fair value of services
delivered to customers in the accounting period. Services are deemed to have
been delivered to customers when, and to the extent that, the entity has met its
obligations under its service contracts. Credit for enterprise software licence
revenue is deferred and released over the period of the licence on a straight
line basis. Share options received in lieu of services are recorded in turnover
at the fair value of the services provided.
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.
First Derivatives plc
Notes (continued )
3 Profit on ordinary activities before taxation
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
Profit on ordinary activities before taxation
has been arrived at after charging:
Depreciation 93 69
Amortisation 180 180
Auditors' remuneration - audit 18 17
- other services 7 7
Hire of premises - rentals payable 15 14
under operating lease
Grants received (85) (11)
_________ ________
4 Interest payable and other similar charges
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
On bank loans 113 74
_________ ________
5 Tax on profit on ordinary activities
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
UK corporation tax for the period 492 246
Adjustments relating to earlier years - -
_________ ________
Total current tax charge 492 246
Deferred tax (see note 16) (24) (4)
_________ ________
468 242
_________ ________
The basis by which taxation is calculated is stated in Note 1.
First Derivatives plc
Notes (continued )
5 Tax on profit on ordinary activities (continued)
The current tax charge for the period is lower (2005: lower) than the standard
rate of corporation tax in the UK. The differences are explained below:
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
Current tax reconciliation
Profit on ordinary activities before tax 1,537 811
_________ ________
Current tax at 30% (2004: 30%) 461 243
Effects of:
Expenses not deductible for tax purposes 29 6
Capital allowances for period in excess of 9 15
depreciation
Other differences 44 -
Small companies relief - (18)
Relief on share options exercised (70) -
Timing of pension contributions 19 -
_________ ________
Total current tax charge 492 246
_________ ________
The directors are not aware of any issues that will significantly impact on the
future tax charge.
First Derivatives plc
Notes (continued )
6 Staff numbers and costs
The average weekly number of persons (including the directors) employed by the
company during the year is set out below.
Year ended Year ended
28 February 28 February
2006 2005
Average No. Average No.
Administration 1 1
Technical 57 38
_________ ________
58 39
_________ ________
Their total remuneration was:
£'000 £'000
Wages and salaries 2,133 1,180
Social security costs 226 132
Other pension costs 70 70
_________ ________
2,429 1,382
_________ ________
7 Emoluments of directors
The remuneration paid to the directors was:
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
Aggregate emoluments (including benefits 187 140
in kind)
Company pension contributions 27 22
_________ ________
214 162
_________ ________
During the period there were 2 directors accruing benefits under a defined
contribution pension scheme (29 February 2005: 2). No directors exercised share
options in the year.
The aggregate emoluments and company pension contributions of the highest paid
director amounted to £84,133 and £20,135 respectively during the year (2005:
£55,000 and £16,056 respectively).
First Derivatives plc
Notes (continued )
8 Dividends
Year ended Year ended
28 February 28 February
2006 2005
Restated Restated
£'000 £'000
Dividend paid 1.46p (2005: 1.1p) per share 181 135
_________ ________
Following the adoption of FRS21: Events after the balance sheet date, dividends
have been accounted for in the financial year in which they were declared and
approved. A prior year adjustment has been made in this regard which has
resulted in the following adjustments:
Profit and loss Dividend paid in Profit and loss
account at the year ended account at
1 March 2004 28 February 1 March 2005
2005
£'000 £'000 £'000
As previously stated 877 181 1,265
Add back dividend previously
accounted for 135 (181) 181
Correct dividend based on
approved date - 135 -
_______ _______ _______
Restated 1,012 135 1,446
_______ _______ _______
9 (a) Earnings per ordinary share
Basic
The calculation of basic 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 £1,069,000 (2005: £569,000). The weighted
average number of ordinary shares for the year ended 28 February 2006 and
ranking for dividend was 12,494,139 (2005: 12,360,620).
Year ended Year ended
28 February 28 February
2006 2005
Pence per share Pence per share
Basic earnings per share 8.6 4.6
______ ______
First Derivatives plc
Notes (continued )
9 (a) Earnings per ordinary share (continued)
Diluted
The calculation of diluted 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 £1,069,000 (2005: £569,000). The weighted
average number of ordinary shares for the year ended 28 February 2006 and
ranking for dividend was 12,634,363 (2005: 12,560,149). Weighted average number
of shares has been increased by 140,224 to reflect the shares under option
disclosed in note 17.
Year ended Year ended
28 February 28 February
2006 2005
Pence per Pence per
share share
Diluted earnings per share 8.5 4.5
_____ _____
9 (b) Adjusted earnings per ordinary share
Adjusted earnings per share are based on profit before taxation of £1,537,000
(2005: £811,000). The number of shares used in this calculation is consistent
with note 9(a) above.
Year ended Year ended
28 February 28 February
2006 2005
Pence per share Pence per share
Basic adjusted earnings per ordinary 12.3 6.6
share
Diluted adjusted earnings per ordinary 12.2 6.5
share
_____ _____
Reconciliation from earnings per ordinary share to adjusted earnings per
ordinary share.
Year ended Year ended
28 February 28 February
2006 2005
Pence per share Pence per share
Basic earnings per share 8.6 4.6
Impact of taxation charge 3.7 2.0
_____ _____
Adjusted basic earnings per share 12.3 6.6
_____ _____
Diluted earnings per share 8.5 4.5
Impact of taxation charge 3.7 2.0
_____ _____
Adjusted diluted earnings per share 12.2 6.5
_____ _____
Adjusted earnings per share has been presented to facilitate pre-tax comparison
returns on comparable investments.
First Derivatives plc
Notes (continued )
10 Intangible fixed assets
2006
£'000
At 1 March 2005 540
Additions -
Amortisation (180)
_____
At 28 February 2006 360
_____
The intangible fixed asset relates to a software asset used in the company's
trading activities.
11 Tangible fixed assets
Office
Land and Plant and furniture and
buildings equipment equipment Total
£'000 £'000 £'000 £'000
Cost
At 1 March 2005 2,015 193 25 2,233
Additions 1,286 13 - 1,299
_______ _______ _______ _______
At 28 February 2006 3,301 206 25 3,532
_______ _______ _______ _______
Depreciation
At 1 March 2005 49 128 24 201
Charged during period 51 42 - 93
_______ _______ _______ _______
At 28 February 2006 100 170 24 294
_______ _______ _______ _______
Net book value
At 28 February 2006 3,201 36 1 3,238
_______ _______ _______ _______
At 1 March 2005 1,966 65 1 2,032
_______ _______ _______ _______
The basis by which depreciation is calculated are stated in Note 1.
12 Other investments
(1) Investment in (2) Other 2006
associates investments £'000
Unlisted investments
At 1 March 2004 - 111 111
Additions 90 - 90
______ ______ ______
At 28 February 2006 90 111 201
______ ______ ______
First Derivatives plc
Notes (continued )
12 Other investments (continued)
(1) Investment in associates
The unlisted investment in which the company's interest is more than 20% is as
follows:
Country of Class and percentage
Name incorporation Principal activity of shares held
Carrickbridge Northern Ireland Property 45% ordinary shares
Developments investment
Limited and development
Carrickbridge Developments Limited was incorporated on 24 February 2006 and its
registered office is 21 Arthur Street, Belfast, BT1 4GA. Its share capital and
net assets on incorporation were £200,000. No material transactions have
occurred between 24 February 2006 and 28 February 2006 and as such no profit or
loss has been accounted for in these financial statements.
(2) Trade investment
The company's investment in Kx Systems Inc., a company resident in the United
States was valued on acquisition by the directors, on the basis of financial
information available at that time.
13 Debtors
28 February 28 February
2006 2005
£'000 £'000
Trade debtors 1,872 828
Amounts due from related undertaking - 19
Sundry debtors 319 109
Deferred tax asset 21 -
Prepayments 39 39
Accrued income - 51
_____ _____
2,251 1,046
_____ _____
All debtors in the current and prior year are due within one year.
14 Creditors - amounts falling due within one year
28 February 28 February
2006 2005
£'000 £'000
Bank loans 140 121
Trade creditors 272 182
Corporation tax 551 291
Other taxation and social security 272 111
Other creditors 313 34
Accruals and deferred income 534 189
_____ _____
2,082 928
_____ _____
First Derivatives plc
Notes (continued )
15 Creditors - amounts falling due after more than one year
28 February 28 February
2006 2005
£'000 £'000
Loans 1,717 1,289
_____ _____
Analysis of debt:
Debt can be analysed as falling due:
In one year or less 140 121
Between one and two years 151 133
Between two and five years 524 466
In five years or more 1,042 690
_____ _____
1,857 1,410
_____ _____
The company refinanced its borrowings during the year into one loan. Interest
will be charged on this loan at the aggregate amount of 1.5% per annum above the
Bank of Ireland's Northern Ireland Base rate (at present 4.5% but subject to
variation).
16 Provisions for liabilities and charges
28 February 28 February
2006 2005
£'000 £'000
Deferred taxation
At beginning of period 3 7
(Release)/charge for the period (see note 5) (24) (4)
Transfer to debtors 21 -
_____ _____
At end of period - 3
_____ _____
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
2006 2005
£'000 £'000
Difference between accumulated depreciation and
amortisation and capital allowances 1 (4)
Other timing differences 20 1
_____ _____
Deferred tax asset/(liability) 21 (3)
_____ _____
First Derivatives plc
Notes (continued )
17 Share capital
28 February 28 February
2006 2005
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 12,714,858 64 12,397,825 62
__________ ______ ___________ ______
Options have been granted as set out below under the company's two share option
schemes which are open to all directors and employees of the company. The
options are subject to performance conditions as set by the company prior to the
grant of the option, and are exercisable following the satisfaction of the
performance criteria for a period not exceeding 10 years.
Options granted are as follows:
Number of
Number of shares
shares under
under option at
option 28 Exercise
at 28 Granted Exercised Lapsed February price
February 2006
2005
195,000 - 110,000 - 85,000 26.5 pence
219,000 - 62,000 20,000 137,000 51.0 pence
329,000 - 67,033 10,000 251,967 53.5 pence
70,000 - 60,000 - 10,000 40.0 pence
279,000 - 15,000 18,000 246,000 62.0 pence
285,000 - - 285,000 102.0 pence
314,033 share options were exercised during the year, giving rise to an increase
in share capital of £1,585 and an increase in share premium of £129,869.
18 Share premium and reserves
Shares to Share Profit and
be premium loss
issued account account
Restated
£'000 £'000
At beginning of year as previously stated 9 780 1,265
Prior year adjustment - dividend paid - - 181
____ ____ _______
At beginning of year - restated 9 780 1,446
Retained profit for the period - - 1,069
Premium on shares issued - 130 -
In the money element of options accrued (5) - -
Dividend paid - - (181)
____ ____ _______
At end of year 4 910 2,334
____ ____ _______
First Derivatives plc
Notes (continued )
19 Shareholders' funds
28 February 28 February
2006 2005
Restated Restated
£'000 £'000
Profit for the financial year 1,069 569
Dividend (restated) (181) (135)
Net proceeds on issue of share capital 132 28
In the money element of options accrued (5) 2
______ ______
Increase in shareholders' funds 1,015 464
Opening shareholders' funds as originally 2,116 1,698
stated
Prior year adjustment - dividend paid 181 135
_____ _____
Opening shareholders' funds - restated 2,297 1,833
______ ______
Closing shareholders' funds 3,312 2,297
______ ______
20 Commitments and contingencies
There was a capital commitment at the period end in relation to an apartment
purchased in London for £460,000 which was completed post year end.
21 Leasing commitments
Annual commitments under non-cancellable operating leases are as follows:
28 February 2006 28 February 2005
Land and Land and
buildings buildings
£'000 £'000
Operating leases which expire:
In the next 12 months 15 -
In the second to fifth years - 14
_____ ______
15 14
_____ ______
22 Pension contributions
The company makes contributions to the personal pension schemes of certain
employees. The pension charge for the year amounted to £70,000 (2005: £70,000).
Contributions amounting to £10,000 (2005: £Nil) were payable to the scheme and
are included in creditors.
First Derivatives plc
Notes (continued )
23 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 the grant.
24 Related party transactions
Brian Conlon is a shareholder of e-hub.com Limited. During the current and prior
period the company did not trade with e-hub.com Limited. The amount due by
e-hub.com Limited to the company at 28 February 2006 amounted to £13,287 (2005:
£14,542). A full provision has been made against this receivable balance in the
current year. The amount owed to e-hub.com Limited at 28 February 2006 amounted
to £11,525 (2005: £11,525).
Brian Conlon is the majority shareholder in k-hub Limited. The company did not
trade with k-hub in the current or prior year. The amount due from k-hub to the
company at 28 February 2006 amounted to £15,933 (2005: £15,933). A full
provision has been made against this receivable balance in the current year.
The company is charged rent annually for the use of apartments owned by the
managing director, located in London. The charge incurred during the financial
year amounted to £52,800 (2005: £52,800). Rent deposits of £26,400 have been
paid to Brian Conlon in respect of these apartments.
The company provided a short term loan of £240,000 to its associate,
Carrickbridge Developments Limited in February 2006 which was repaid in April
2006.
25 Ultimate controlling party
The company is controlled by Brian Conlon, its majority shareholder.
26 Reconciliation of operating profit to net cash
inflow from operating activities
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
Operating profit 1,643 877
Depreciation on tangible fixed assets 93 69
Amortisation of intangible asset 180 180
(Increase)/decrease in debtors (1,184) (445)
(Decrease)/increase in creditors 879 69
In the money element of options accrued (5) 2
_______ _______
Net cash inflow from operating activities 1,606 752
_______ _______
First Derivatives plc
Notes (continued )
27 Analysis of cash flows for headings in the cash flow statement
Year ended Year ended
28 February 28 February
2006 2005
£'000 £'000
a) Returns on investment and
servicing of finance
Interest paid (113) (74)
Interest received 7 8
_______ _______
Net cash inflow from returns on
investment and servicing of (106) (66)
finance
_______ _______
b) Taxation
Corporation tax paid (232) (160)
_______ _______
c) Capital expenditure
Purchase of tangible fixed assets (1,389) (1,318)
_______ _______
d) Financing
Repayment of long term loan (103) (93)
Issue of share capital 127 28
Receipt of new long term loan 550 932
_______ _______
574 867
_______ _______
28 Analysis of changes in net debt during the year
Cash in Bank Debt due Debt due
hand overdrafts within one after one
year year Total
£ £ £ £ £
Balance at 1 March 848 - (48) (523) 277
2004
Cash flow (60) - 48 45 33
New long term loan - - (37) (895) (932)
Other non cash change - - (84) 84 -
______ ______ _______ _______ _______
Balance at 1 March 788 - (121) (1,289) (622)
2005
Cash flow 272 - 103 - 375
New long term loan - - (122) (428) (550)
Other non cash change - - - - -
______ ______ _______ _______ _______
Balance at 28 February 1,060 - (140) (1,717) (797)
2006
______ ______ _______ _______ _______
First Derivatives plc
Notice of Annual General Meeting
Notice is hereby given that the Ninth Annual General Meeting of First
Derivatives plc ('the company') will be held at the offices of Mills Selig, 21
Arthur Street, Belfast, BT1 6DH on Thursday, 1 June 2006 at 11.30am for the
following purposes.
Ordinary business
1 That the directors' report, statement of accounts and independent auditor's
report for the year ended 28 February 2006 be received and approved.
2 That a dividend of 3.0p per share be declared for the year ended 28 February
2006.
3 To re-elect David Anderson as a director of the company in accordance with
Article 115 of the Articles of Association of the company.
4 To re-appoint KPMG as auditors of the company to hold office from the conclusion
of this meeting until the conclusion of the next general meeting at which
accounts are laid before the company at a remuneration to be fixed by the
directors.
5 That in substitution for all existing and unexercised authorities, the directors
of the company be and they are hereby generally and unconditionally authorised
pursuant to Article 90 of the Companies (Northern Ireland) Order 1986 (the
'Order') to allot relevant securities (as defined in the Article) up to an
aggregate nominal amount of £20,000, such authority to expire on the earlier of
the date falling 15 months after the date of passing of this resolution, and the
next Annual General Meeting of the company, whichever is the later, but so that
the company may, before such expiry, make an offer or agreement which could or
might require relevant securities in pursuance of any such offer or agreement as
if such authority has not expired.
6 That in substitution for all existing and unexercised authorities and subject
to the passing of the immediately preceding resolution, the directors of the
company be and they are hereby empowered pursuant to Article 105 of the Order to
allot equity securities pursuant to the authority conferred by the preceding
resolution as if Article 99(1) of the Order did not apply to any such allotment
provided that the power conferred by the resolution, unless previously revoked
or varied by special resolution of the company in general meeting, shall be
limited:
(a) to the allotment of equity securities in connection with a rights issue in
favour of ordinary shareholders where the equity securities respectively
attributable to the interest of all such shareholders are proportionate (as
nearly as may be) to the respective numbers of the ordinary shares held by them
subject only to such exclusions or other arrangements as the directors of the
company may consider appropriate to deal with fractional entitlements or legal
and practical difficulties under the laws of, or the requirements of any
recognised regulatory body in, any territory, and;
(b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of
equity securities up to an aggregate nominal amount of £xx representing 10% of
the current issued share capital of the company;
and shall expire on the date of the next Annual General Meeting of the company
or (if earlier) 15 months from the date of the passing of this resolution save
that the company may before such expiry make an offer or agreement which would
or might require equity securities to be allotted after such expiry and the
directors may allot equity securities in pursuance of such offer or agreement as
if the power conferred hereby had not expired.
By order of the Board Registered Office:
21 Arthur Street
Belfast
BT1 4GA
John F Gibbons
Secretary
4 May 2006
Notes
1 A member entitled to attend and vote at this meeting is entitled to appoint
one or more proxies to attend and vote in his/her stead. A proxy need not be a
member of the company.
2 A proxy form is enclosed with this notice. Proxies must be lodged at the
office of the company, Kilmorey Business Park, Kilmorey Street, Newry, BT34 2DH,
not less than 48 hours before the time of the meeting.
3 The completion and return of a proxy will not prevent a member from attending
and voting in person at the meeting if so desired.
4 To be entitled to attend and vote at all the annual general meetings (and for
the purpose of determination by the company of the number of votes they may
cast), members must be entered in the Companies Register of Members by xx May
2006.
5 Copies of the executive directors service contracts of service together with
the engagement letters of the non-executive directors are available the register
of directors (and their families) interest in the share capital of the company
and the Memorandum and Articles of Association for inspection at the registered
office of the company during usual business hours, and will be available for
inspection at the Annual General Meeting from 11.15 am until the conclusion of
the meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
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