Final Results

RNS Number : 0960H

FDM Group (Holdings) plc

11 March 2015

 



11 March 2015

FDM Group (Holdings) plc

Preliminary Results

FDM Group (Holdings) plc (formerly Astra Topco Limited) and its subsidiaries ("the Group," "FDM", or "the Company"), an international professional services provider focusing principally on Information Technology ("IT") today announces its results for the year ended 31 December 2014.

Highlights

	2014	2013	% change
Revenue	£123.3m	£105.6m	+17%
Mountie revenue	£88.9m	£73.8m	+20%
Group operating profit	£19.5m	£20.9m	-7%
Adjusted1 Group operating profit	£24.9m	£22.6m	+10%
Group profit before tax	£19.0m	£19.9m	-5%
Adjusted1 Group profit before tax	£24.4m	£21.7m	+12%
Basic earnings per share	12.7p	14.1p	-10%
Adjusted1 earnings per share	17.5p	15.4p	+14%
Net cash/ (debt) position	£12.3m	(£9.0m)	-
Cash flows generated from operations	£19.3m	£21.5m	-10%
Adjusted1 cash generated from operations	£24.6m	£22.8m	+8%
Proposed maiden plc dividend per share	7.5 p	-	-

¹ Adjusted group operating profit, adjusted profit before tax and adjusted cash generated from operations are calculated before the impact of exceptional items.  Adjusted earnings per share is calculated before the impact of exceptional items (net of tax).

·     FDM's ordinary shares were admitted to the Premium Listing segment of the Official List, commencing trading on the London Stock Exchange on 20 June 2014

·     Strong operational and financial performance

·     Mountie Headcount for the Group saw good growth throughout the year, with 1,539 Mounties placed on site at the year end, an increase of 377 (32%) on 2013 (2013: 1,162)

·     Mountie utilisation rate, the proportion of available time that Mounties are placed on site, was 98.4% (2013: 97.6%)

·     During 2014 the Group opened new offices with combined academy and sales facilities in Toronto (January 2014) and Glasgow (July 2014). Each has made a positive financial contribution to the Group's performance

·     Operations commenced in both China and Ireland and the Group also placed its first Mounties in South Africa during 2014

·     Encouraging growth outside FDM's core financial services sector, with Mounties deployed in government and local authorities, and the manufacturing, energy, transport and charity sectors

·     Proposed interim dividend of 7.5p per share for the year ended 31 December 2014

·     Group well positioned for continued success in 2015 and beyond

Rod Flavell, Chief Executive Officer, said:

"Following a strong performance in 2014, we continue to focus on widening the Group's international footprint and on developing new service areas and sectors to provide a robust base from which to drive future growth. We have identified new office space in Leeds, a replacement for and upsizing of our closing Manchester office,  which will be fully operational during the second half of 2015. We also have under consideration other potential sites outside the UK that meet our requirements.

The addition of the UK ex-Forces Programme in January 2014 has delivered much for the Group and its clients; we will continue to fund and nurture such investments to spread the reach and attraction of FDM.

2015 has started with all parts of the Group performing well. While it is early in the new financial year, our expectations are underpinned by continuing strong customer demand and good levels of applications for our Mountie programme, driven by a healthy marketplace and our growing reputation".

Enquiries

For further information:

FDM	Rod Flavell - CEO Mike McLaren - CFO	020 7067 0000 (today) 0203 056 8240 (thereafter)
Weber Shandwick	Nick Oborne/ Tom Jenkins	020 7067 0000

Forward-looking statements

This announcement contains statements which constitute 'forward-looking statements'. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. The Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

About FDM

FDM is an international professional services provider with a focus on IT. Operating from offices in Europe, North America and Asia, FDM specialises in recruiting, training and deploying its own permanent IT Consultants ("Mounties") across a number of service areas including: Development, Testing, Project Management Office, Data and Operational Analysis, Business Analysis, Business Intelligence and Production Support. 

With a large number of blue chip clients across its operational territories, FDM meets the demands of its customers through the provision of highly-trained and geographically flexible Consultants that are employed by FDM. FDM offers a high-value, low risk proposition to both trainees and clients and looks principally to recruit:

•           Graduates local to each of the territories in which it operates, typically but not exclusively training them in-territory and then placing them onto client sites within the same territory; and

•           Ex-military personnel local to each of the territories in which it operates, training them as IT or business Consultants in that territory and placing them on client sites in the same territory.

FDM strongly supports the recruitment of women into the IT industry and actively encourages their advancement through their global 'Women in IT' initiative.

FDM GROUP (HOLDINGS) PLC

INTRODUCTION

2014 was a pivotal year for FDM with the successful admission to the London Stock Exchange ("Admission") in June providing a stable ownership base for the Group to deliver on its ambitious growth plans.

The year saw the Group hit a number of important milestones, with over 1,500 Mounties placed on site at its close, the successful openings of our Toronto and Glasgow operations and the full operational benefits of our flagship London headquarters coming through following our move to the significantly larger premises in late 2013. We also returned a strong financial performance, growing revenues and underlying profits (before exceptional items) and ended the year with no borrowings and a net cash balance. 

STRATEGY

FDM's strategy is to deliver sustainable growth and advancement on a consistent basis. This strategy requires that all activities and investments are customer led, produce the required level of profit and cash returns, deliver sustained and measurable improvements for all stakeholders including customers, staff and shareholders and further FDM's objectives of offering career starts to talented people.

To drive its strategy FDM looks to leverage its core service areas through increased Mountie headcount, the establishment of new academies, increased penetration into its existing customer base and expansion of the customer base including geographic expansion across the territories in which it operates.

GROUP RESULTS

Reflecting its successful growth strategy, the Group delivered a strong operating performance during the year, with Group revenues increasing by 17% to £123.3 million (2013: £105.6 million).

Gross margins in 2014 were unchanged from 2013 at 39% which, taken with the step change in overheads relating principally to the increase in academy locations opened in London (December 2013), Toronto (January 2014) and Glasgow (June 2014), combined to generate an increase in operating profit before exceptional costs of 10% to £24.9 million (2013: £22.6 million).

Exceptional expenses related primarily to the costs associated with the Admission of the Group of £4.9 million and exceptional staff costs (principally share based payments) of £0.5 million (2013: total exceptional items of £1.8 million). These reduced the Group operating profit to £19.5 million (2013: £20.9 million).

Earnings per share before exceptional items was 17.5 pence (2013: 15.4 pence) whilst earnings per share after exceptional items was 12.7 pence per share (2013: 14.1 pence per share).

Total headcount placed on site at the beginning of week 52 2014 was 1,845 (2013: 1,450). Of this total 1,539 were Mounties (2013: 1,162) and 306 contractors (2013: 288). This represents a 27% increase in the total headcount placed on site and a 32% increase in Mounties placed on site.

Mountie revenue for the year to 31 December 2014 was 20% higher at £88.9 million (2013: £73.8 million). Within this total, and reflecting the planned geographic expansion of the Group's customer base, UK and Ireland Mountie revenue increased by 15% to £61.7 million (2013: £53.5 million), North American Mountie revenue increased by 53% to £18.0 million (2013: £11.8 million), whilst Mountie revenue in EMEA increased by 1% to £7.3 million (2013: £7.2 million) and APAC increased by 46% to £1.9 million (2013: £1.3 million).

Mountie utilisation (a measure of efficiency) for the year to 31 December 2014 increased to 98.4% compared to 97.6% in 2013.

The relative movement in Mountie and contractor headcount and related revenues reflect the Group's intention to increase Mountie revenues, which generate a higher gross margin. This is being driven by growth in the number of Mounties placed at existing and new customers, as well as the launch of new Mountie service areas.

Net finance expense

Finance income was £0.004 million and finance costs £0.5 million, giving a net finance cost of £0.5 million. The net finance expense relates principally to interest on the drawn element of the Group's revolving credit facility, non-utilisation charges on the undrawn element of the Group's revolving credit facility and fees arising from the Group's working capital facility.

Taxation

The Group's effective tax rate for the year was 28.9% (2013: 26.0%) which is higher than the underlying UK tax rate of 21.5% (2013: 23.25%) due to profits earned in higher tax jurisdictions as well as non-deductible expenses incurred in relation to Admission. The adjusted effective tax rate (calculated before the impact of exceptional items) for the year was 23.6% (2013: 25.7%).

Statement of financial position and net funds

The Group generated net cashflows from operations of £19.3 million in the year, contributing to closing net funds of £12.3 million (2013: net debt £9.0 million). Admission on 20 June 2014 included the issue of 2.8 million new shares for consideration in cash which raised approximately £8.0 million of funds for the Group; this cash was used to meet the expenses of Admission that fell to the Group and to repay £3.0 million of the Group's revolving credit facility. The remainder of the facility has been repaid through cash flows generated during the year.  

At the end of the financial year, the Group held total facilities of £30.0 million (2013: £30.0 million). Of the committed facilities, £10.0 million was available to February 2015 (now expired) and £20.0 million available until August 2018. The committed facilities are in place to support the Group's financing needs and provide headroom against forecast requirements.

Banking facilities and treasury

The Group treasury policy aims to ensure that capital held is not put at risk and the treasury function is managed under policies and procedures approved by the Board. These policies are designed to reduce the financial risk arising from the Group's normal trading activities, which primarily relate to credit, interest, liquidity and currency risk. The Group is, and expects to continue to be, cash positive and currently holds net funds.

SEGMENTAL PERFORMANCE

UK and Ireland

The Group's UK and Ireland operations performed well in 2014, passing the target of 1,000 Mounties on customer site, ending the year with 1,018 Mounties on site and a further 101 undergoing training in our academy. The UK is the test bed for new initiatives and service areas for the Group, the newest service area being Data and Operational Analysis, which has grown to over 130 Mounties on site and will be replicated in other FDM offices.

In January 2014, we launched our Ex-Forces Programme in the UK to replicate for ex-military personnel the training and career opportunities that we have traditionally provided for graduates. It is pleasing to report that our Ex-Forces Programme exceeded our expectations in 2014, with more than 50 people with a Forces background on placement as Mounties at 31 December 2014. There is not a 'typical' member of ex-forces personnel recruited by the Group; these men and women may have been in any of the Armed Services, in front-line or supporting roles and have served any number of years in the Forces. What typifies them is that they are capable, motivated and keen to start a new career working for FDM.

We added notably to our client base throughout 2014 across many sectors; our growth outside of our core financial services operations was encouraging and we now operate across a number of Government and local authority departments, more widely in manufacturing, energy and transport and have Mounties deployed in a number of charitable organisations.

2014 saw the UK operation source, train and place its first Irish Mounties with customers in Dublin, Cork and the UK. We see Ireland as an important source of talent and customer opportunity.

North America

Growth in the USA during the year, while strong, was slower than we had anticipated due to delays in customer-driven programmes on a small number of key accounts. These delays have now been resolved and we are confident that the USA, which had 272 Mounties on site at the beginning of week 52 2014 (2013: 186), is well placed for further growth in 2015.

Our Canadian office was opened in Toronto in January 2014 and has exceeded our expectations, with 69 Mounties on site at week 52 2014 (2013: 12) and a further 20 in training in the academy at the year end. So far we have secured new customers for the Group from Toronto and Montreal and have successfully placed Mounties in other regions for a number of these customers.

Effective from 1 January 2015 we have combined the operational management of our New York and Toronto offices into a single function.

EMEA (Europe, Middle East and Africa, excluding UK and Ireland)

Our German operation has benefited from the appointment of a new leader in the fourth quarter of 2013. 2014 operations saw a record number of Mounties joining the Frankfurt academy and Mounties on site with our German customers. In Switzerland the decline in Mountie headcount at our two major customers experienced during 2013 has been reversed,with 117 Mounties  placed on site across EMEA at the start of week 52 2014. The German and Swiss operations have benefited from a refocusing of operations away from the contractor market to expanding the Mountie programme; this has increased the number of Mounties on site, although total revenue and operating profit in the region has reduced during the transition. It is our intention to increase the footprint of our Frankfurt operation and broaden the training and service areas that we offer.

APAC (Asia Pacific)

Our APAC operation performed robustly in 2014 ending the year with 63 Mounties on site (2013: 31) and a strong pipeline of Mounties in training and new customer wins. As we operate through a sales office rather than an academy in this region it remains more difficult to balance supply and demand, with Mounties recruited as they complete their university education and undergoing FDM training in other operating regions. Now that we have started to achieve critical mass in APAC we are evaluating the feasibility of opening an academy in Singapore to assist in the recruitment and training of graduates.

Initiatives

The FDM Women in IT initiative is going from strength to strength, with 25% of the Group's workforce female, which is higher than many other companies in the technology sector.

Championing diversity in the workplace beyond gender is also a key focus for us.

DIVIDEND

The Board believes in a progressive dividend policy for the Company which will seek to maximise shareholder value and returns and reflect the strength of earnings and cash flows generated by the Group. It is the Directors' intention to declare an interim dividend of 7.5 pence per ordinary share in respect of the period from Admission on 20 June 2014 to 31 December 2014. The proposed interim dividend is subject to final Board approval at a meeting of the Board to be held on 30 April 2015.

PEOPLE

The Board would like to thank all of our employees and other stakeholders for their hard work and dedication over the past year. FDM is a people business and the expertise and commitment of our people enables us to drive the business forward and helps to underpin our strong reputation with our customers.

THE BOARD

Upon Admission the Group welcomed three new Non-Executive Directors to the Board, Peter Whiting, Jonathan Brooks and Robin Taylor, who between them bring many years of relevant and valuable experience to the team. At the same time our Inflexion colleagues John Hartz and Richard Swann resigned, and we thank them for their contribution to the Group during their period of stewardship.

SUMMARY AND OUTLOOK

Following a strong performance in 2014 we continue to focus on widening the Group's international footprint and on developing new service areas and sectors to provide a robust base from which to drive future growth. We have identified new office space in Leeds, a replacement for and upsizing of our closing Manchester office, which will be fully operational during the second half of 2015. We also have under consideration other potential sites outside the UK that meet our requirements.

The addition of the UK Ex-Forces Programme in January 2014 has delivered much for the Group and its clients; we will continue to fund and nurture such investments to spread the reach and attraction of FDM.

2015 has started with all parts of the Group performing well. While it is early in the new financial year, our expectations are underpinned by continuing strong customer demand and good levels of applications for our Mountie programme, driven by a healthy marketplace and our growing reputation.

Consolidated Income Statement

for the year ended 31 December 2014

	Note		2014	2013
			£000	£000
Revenue	4		123,257	105,620
Cost of sales			(74,859)	(64,027)
Gross profit			48,398	41,593
Administrative expenses			(23,530)	(18,975)
Exceptional expenses	6		(5,412)	(1,763)
Total administrative expenses			(28,942)	(20,738)
Operating profit	5		19,456	20,855
Financial income	7		4	1
Financial expense	7		(490)	(964)
Net finance expense			(486)	(963)
Analysis of profit before income tax
Operating profit before exceptional items			24,868	22,618
Exceptional items			(5,412)	(1,763)
Net finance expense			(486)	(963)
Profit before income tax			18,970	19,892
Taxation	8		(5,473)	(5,162)
Profit for the year			13,497	14,730

Earnings per ordinary share

			2014	2013
			pence	pence
Basic and diluted	9		12.7	14.1

The results for the year shown above arise from continuing operations.

Consolidated Statement of Comprehensive Income

for the year ended 31 December 2014

			2014	2013
			£000	£000
Profit for the financial year			13,497	14,730
Items that may be subsequently reclassified to profit or loss:
Exchange differences on retranslation of foreign operations (excluding tax)			124	21
Tax on items that may be subsequently reclassified to profit or loss			(27)	(4)
Other comprehensive income			97	17
Total comprehensive income recognised for the year			13,594	14,747

Consolidated Statement of Financial Position

as at 31 December 2014
				2014	2013
		Note			(Restated)¹
				£000	£000
Non-current assets
Property, plant and equipment				2,522	2,504
Intangible assets				19,429	19,399
				21,951	21,903
Current assets
Trade and other receivables				25,072	21,028
Cash and cash equivalents				12,287	6,010
				37,359	27,038
Total assets				59,310	48,941
Current liabilities
Trade and other payables				14,013	11,136
Current income tax liabilities				2,515	2,174
				16,528	13,310
Non-current liabilities
Borrowings		10		-	15,000
Deferred income tax liabilities				259	25
				259	15,025
Total liabilities				16,787	28,335
Net assets				42,523	20,606
Equity attributable to owners of the parent
Share capital		12		1,127	1,018
Share premium				8,364	543
Treasury shares				-	(22)
Translation reserve				143	46
Retained earnings				32,889	19,021
Total equity				42,523	20,606

¹ See note 2.

Consolidated Statement of Cash Flows

for year ended 31 December 2014

				2014	2013
		Note			(Restated)¹
				£000	£000
Cash flows from operating activities
Group profit before tax for the year				18,970	19,892
Adjustments for:
Depreciation and amortisation				643	497
Finance income		7		(4)	(1)
Finance expense		7		490	964
Share based payment cost				421	114
Loss on disposal of non-current assets				-	17
(Increase)/ decrease in trade and other receivables				(4,044)	26
Increase/ (decrease) in trade and other payables				2,852	(30)
Cash flows generated from operations				19,328	21,479
Interest received				4	1
Income tax paid				(4,898)	(5,090)
Net cash generated from operating activities				14,434	16,390
Cash flows from investing activities
Acquisition of property, plant and equipment				(601)	(2,003)
Acquisition of intangible assets				(70)	(68)
Net cash used in investing activities				(671)	(2,071)
Cash flows from financing activities
Proceeds from issuance of ordinary shares				7,902	-
Drawdown of borrowings				-	20,000
Repayment of borrowings				(15,000)	(9,808)
Finance costs paid				(466)	(798)
Dividends paid		13		-	(19,920)
Net cash used in financing activities				(7,564)	(10,526)
Net increase in cash and cash equivalents				6,199	3,793
Exchange gains/ (losses) on cash and cash equivalents				78	(2)
Cash and cash equivalents at beginning of year				6,010	2,219
Cash and cash equivalents at end of year				12,287	6,010

¹ See note 2.

Consolidated Statement of Changes in Equity

for year ended 31 December 2014

	Share capital	Share premium	Treasury shares	Other capital reserves	Translation Reserve	Retained earnings	Total equity
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2014	1,018	543	(22)	-	46	19,021	20,606
Profit for the year	-	-	-	-	-	13,497	13,497
Other comprehensive income for the year	-	-	-	-	97	-	97
Total comprehensive income for the year	-	-	-	-	97	13,497	13,594
Share based payments	-	-	-	421	-	-	421
Transfer to retained earnings	-	-	-	(421)	-	421	-
Sale of treasury shares	-	-	22	-	-	(22)	-
Bonus issue of shares	81	(53)	-	-	-	(28)	-
Proceeds from shares issued	28	7,874	-	-	-	-	7,902
Balance at 31 December 2014	1,127	8,364	-	-	143	32,889	42,523
	Share capital	Share premium	Treasury shares	Other capital reserves	Translation reserve	Retained earnings	Total equity
		(Restated)¹				(Restated)¹
	£000	£000	£000	£000	£000	£000	£000
Balance at 1 January 2013	1,018	543	(75)	318	29	23,832	25,665
Profit for the year	-	-	-	-	-	14,730	14,730
Other comprehensive income for the year	-	-	-	-	17	-	17
Total comprehensive income for the year	-	-	-	-	17	14,730	14,747
Share based payments	-	-	-	114	-	-	114
Transfer to retained earnings	-	-	-	(432)	-	432	-
Purchase of treasury shares	-	-	(428)	-	-	-	(428)
Issue of treasury shares	-	-	481	-	-	(53)	428
Dividends paid (note 13)	-	-	-	-	-	(19,920)	(19,920)
Balance at 31 December 2013	1,018	543	(22)	-	46	19,021	20,606

¹ See note 2.

1              Corporate information

FDM Group (Holdings) plc is a public limited company incorporated and domiciled in the UK with a Premium Listing on the London Stock Exchange. The Company was admitted to trading on the London Stock Exchange's main market for listed securities on 20 June 2014. The Company's registered office is Third Floor, The Cottons Centre, Cottons Lane, London, SE1 2QG and its registered number is 07078823.

2              Basis of preparation

The financial information set out in this preliminary announcement does not constitute statutory accounts for the years ended 31 December 2014 and 31 December 2013, for the purpose of the Companies Act 2006, but is derived from those accounts. The audited statutory accounts for 2013 have been delivered to the Registrar of Companies and those for 2014 were approved for issue on 10 March 2015.The Group's auditor reported on the Annual Report and Accounts for the year ended 31 December 2014 on 10 March 2015. Their report was unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

Whilst the financial information included in this preliminary announcement has been prepared in accordance with the International Financial Reporting Standards (IFRSs) as adopted for the use in the European Union and as issued by the International Accounting Standards Board, this announcement does not itself contain sufficient information to comply with IFRS. The accounting policies applied in preparing this financial information are consistent with the Group's financial statements for the year ended 31 December 2013 with the exception of the following new accounting standards and amendments which were mandatory for accounting periods beginning on or after 1 January 2014, none of which had any material impact on the Group's results or financial position:

·      IFRS 10 'Consolidated financial statements' (effective 1 January 2014)

·      IFRS 12 'Disclosures of interests in other entities' (effective 1 January 2014)

·      IAS27 (revised 2011) 'Separate financial statements' (effective 1 January 2014)

·      Amendments to IFRS 10, 11 and 12 on transition guidance (effective 1 January 2014)

·      Amendments to IFRS 10, 12 and IAS 27 on consolidation for investment entities (effective 1 January 2014)

·      Amendments to IAS 32 on Financial instruments asset and liability offsetting (effective 1 January 2014)

·      Amendments to IAS 36, 'Impairment of assets' on recoverable amount disclosures (effective 1 January 2014)

·      Amendment to IAS 39 'Financial instruments; Recognition and measurement', on novation of derivatives and hedge accounting (effective 1 January 2014)

·      IFRIC, 'Levies' (effective 1 January 2014)

The Retained Earnings and Share Premium accounts as at 31 December 2013 have been restated to adjust for a reclassification in the accounting for disposals of Treasury shares in previous years amounting to £175,000. In addition, minor reclassifications have been made within the Consolidated Statement of Cash Flows for the year ended 31 December 2013. These reclassifications have no impact on the reported net cash generated from operating activities, net cash used in investing activities or the net increase in cash and cash equivalents for the year. These adjustments are individually and in aggregate immaterial to the financial information.

3              Going concern

The Group's continued and forecast global growth, positive operating cash flow and liquidity position, together with its distinctive business model and infrastructure, enables the Group to manage its business risks. The Group's forecasts and projections show that it will continue to operate with adequate cash resources and within the current working capital facilities. The Group passed all bank covenants tested in the year and forecasts that all covenants will be passed for a period of at least twelve months from the date of signing this annual report.

The Directors therefore have a reasonable expectation that the Company and the Group will have adequate resources to continue in operational existence for the foreseeable future. Accordingly the Directors continue to adopt the going concern basis for preparing the financial statements.

4              Segmental reporting

Management has determined the operating segments based on the operating reports reviewed by the Board of Directors that are used to assess both performance and strategic decisions. Management has identified that the Executive Directors are the chief operating decision maker in accordance with the requirements of IFRS 8 'Operating segments'.

At 31 December 2014, the Board of Directors consider that the Group is organised on a worldwide basis into four core geographical operating segments:

(1)   UK and Ireland;

(2)   North America;

(3)   Europe, Middle East and Africa, excluding UK and Ireland ("EMEA"); and

(4)   Asia Pacific ("APAC").

Each geographical segment is engaged in providing services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

Sales between segments are carried out at arm's length. All segment revenue, profit before taxation, assets and liabilities are attributable to the principal activity of the Group being an international IT services provider.

For the year ended 31 December 2014

	UK and	North
	Ireland	America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
Revenue	90,313	22,122	8,909	1,913	123,257
Depreciation and amortisation	(456)	(165)	(20)	(2)	(643)
Operating profit before exceptional items	18,089	5,490	1,032	257	24,868
Exceptional expenses	(5,339)	(73)	-	-	(5,412)
Segment operating profit	12,750	5,417	1,032	257	19,456
Finance income	4	-	-	-	4
Finance costs	(473)	(5)	(11)	(1)	(490)
Profit before tax	12,281	5,412	1,021	256	18,970
Total assets	47,101	7,546	3,676	987	59,310
Total liabilities	11,551	3,435	1,357	444	16,787

4              Segmental reporting (continued)

For the year ended 31 December 2013

	UK and Ireland	North America	EMEA	APAC	Total
	£000	£000	£000	£000	£000
Revenue	77,323	14,822	12,171	1,304	105,620
Depreciation and amortisation	(335)	(136)	(24)	(2)	(497)
Operating profit before exceptional items	17,390	3,459	1,687	82	22,618
Exceptional expenses	(1,720)	(43)	-	-	(1,763)
Segment operating profit	15,670	3,416	1,687	82	20,855
Finance income	1	-	-	-	1
Finance costs	(964)	-	-	-	(964)
Profit before tax	14,707	3,416	1,687	82	19,892
Total assets	40,042	4,380	3,926	593	48,941
Total liabilities	24,409	2,350	1,373	203	28,335

Information about major customers

Revenue from each customer that represents 10% or more of the Group's revenues is attributable to all four operating segments and is presented as follows:

		2014	2013
		£000	£000
Customer A		30,252	24,871
Customer B		7,035	10,568

5          Operating profit

Operating profit for the year has been arrived at after (crediting)/ charging:

	2014	2013
	£000	£000
Hire of property - operating leases	2,048	1,957
Net foreign exchange differences	(46)	96
Depreciation and amortisation	643	497
Loss on disposal of fixed assets	-	9

6              Exceptional items

During 2014, the Group incurred £5,412,000 of exceptional expenses. These comprised £4,887,000 in respect of its listing on the London Stock Exchange and exceptional staff costs, including share based payments, of £525,000.

During 2013, the Group incurred £1,763,000 of exceptional expenses. These comprised exceptional property costs upon relocation of the London office and dilapidation provisions for operating leases expiring in 2014 of £1,295,000, exceptional staff costs of £362,000 and exceptional investment costs of £106,000.

7          Financial income and expense

			2014	2013
			£000	£000
Bank interest			4	1
Financial income			4	1
			2014	2013
			£000	£000
Interest payable on working capital facility			(51)	(63)
Interest payable on revolving credit facility			(351)	(227)
Finance fees and charges			(88)	(674)
Financial expense			(490)	(964)

8          Taxation

The major components of income tax expense for the years ended 31 December 2014 and 31 December 2013 are:

		2014	2013
		£000	£000
Current income tax:
Current income tax charge		5,540	5,017
Adjustments in respect of prior periods		(301)	-
Deferred tax:
Relating to origination and reversal of temporary differences		67	70
Adjustments in respect of prior periods		167	75
Total tax expense reported in the income statement		5,473	5,162

The standard rate of Corporation Tax in the UK changed from 24% to 23% with effect from 1 April 2013, and to 21% with effect from 1 April 2014. Accordingly, the Company's profits for the respective accounting periods are taxed at an effective rate of 21.5% (2013: 23.25%).

The main UK corporation tax rate will further reduce to 20% from 1 April 2015. Therefore, at 31 December 2014 and 31 December 2013, deferred tax assets and liabilities have been calculated based on a rate of 20% where the temporary difference is expected to reverse after 1 April 2015. These reductions may also reduce the Group's future current tax charges accordingly.

8              Taxation (continued)

Reconciliation of effective tax		2014	2013
		£000	£000
Profit before income tax		18,970	19,892
Profit multiplied by UK standard rate of corporation tax of 21.5% (2013: 23.25%)		4,079	4,625
Effect of different tax rates on overseas earnings		644	333
Adjustments in respect of prior periods		(135)	75
Expenses not deductible for tax purposes		885	129
Total tax charge		5,473	5,162

9              Earnings per ordinary share

Basic earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares in issue during the year. For detail of the change in the number of shares, please refer to note 12. There is no difference between basic and diluted earnings per share for the year.

				2014	2013
Profit for the year			£000	13,497	14,730
Average number of ordinary  shares in issue			Number	106,219,238	104,730,049
Earnings per share (ordinary shares)			pence	12.7	14.1

Adjusted  earnings per share is calculated by dividing the profit attributable to ordinary equity holders of the parent company, excluding exceptional items, by the weighted average number of ordinary shares in issue during the year.

Earnings per share before Exceptional Items				2014	2013
Profit for the year			£000	13,497	14,730
Exceptional Items (net of tax)			£000	5,137	1,353
Profit for the year before Exceptional Items			£000	18,634	16,083
Weighted average number of ordinary shares in issue			Number	106,219,238	104,730,049
Earnings per share before Exceptional Items (ordinary shares)			pence	17.5	15.4

10           Borrowings

			Current	Non-current	Current	Non-current
			2014	2014	2013	2013
			£000	£000	£000	£000
Secured - at amortised cost
Revolving credit facility (i)			-	-	-	15,000
Working capital facility (ii)			-	-	-	-
			-	-	-	15,000

10           Borrowings (continued)

(i)            Revolving credit facility

The Group has a £20,000,000 Revolving Credit Facility ("RCF") with HSBC Bank plc, expiring on 14 August 2018. The facility is available to be repaid and redrawn at the discretion of the Group.

The RCF is secured by way of a debenture on the assets of the Company, Astra 5.0 Limited, FDM Group Limited and FDM Group Inc. The interest rate on the RCF is fixed at 2.75% over LIBOR per annum. There is a charge of 1.0% per annum on non-utilised funds.

(ii)           Working capital facility

At 31 December 2014 the Group had a working capital facility of £10,000,000 provided by HSBC Bank plc. The facility expired in February 2015 at the end of the facility term.

11        Analysis of net cash/ (debt) (non-GAAP measure)

			2014	2013
Analysis of net cash/ (debt)			£000	£000
Revolving credit facility			-	(15,000)
Total debt			-	(15,000)
Add cash and cash equivalents			12,267	6,010
Net cash/ (debt)			12,267	(8,990)

Net debt is defined as borrowings less net cash and cash equivalents. The Group had undrawn borrowings at 31 December 2014 of £30,000,000 (2013: £15,000,000).

	2014	2013
Movement of net cash/ (debt)	£000	£000
Net debt at beginning of year	(8,990)	(2,589)
Net increase in cash and cash equivalents	6,257	3,791
Drawdown of borrowings	-	(20,000)
Repayment of borrowings	15,000	9,808
Total net cash/ (debt)	12,267	(8,990)

12        Share capital

Authorised, called up, allotted and fully paid share capital
		2014	2014	2013	2013
		Number of shares	£000	Number of shares	£000
Ordinary shares of £0.01 each		107,517,506	1,075	-	-
Deferred shares of £0.01 each		5,200,392	52	-	-
A ordinary shares		-	-	61,500,000	615
B ordinary shares		-	-	36,454,805	365
C ordinary shares		-	-	2,045,195	20
D shares		-	-	1,839,520	18
Consolidated Exit shares		-	-	8,090,921	-
		112,717,898	1,127	109,930,441	1,018

12        Share capital (continued)

On 20 June 2014 a reorganisation of the Company's share capital took place. The reorganisation involved the following steps being taken in respect of the share capital of the Company:

i)          Certain of the distributable profits of the Company and an amount standing to the credit of the Company's share premium account were capitalised in order to pay up in full 809,084,009,079 new Exit shares (the "New Exit shares") on a 99,999:1 basis to the holders of the existing Exit shares;

ii)         The 809,084,009,079 New Exit shares and the 8,090,921 existing Exit shares were consolidated into 8,090,921 Exit shares of £0.01 each (the "Consolidated Exit shares");

iii)       A number of shares were reclassified as deferred shares of £0.01 each, having the rights set out in the articles of association of the Company; and

iv)        The remaining A ordinary shares, B ordinary shares, C ordinary shares, D shares and Consolidated Exit shares were reclassified into ordinary shares of £0.01 each having the rights set out in the articles of association of the Company.

Immediately following the reorganisation the Company issued 2,787,457 new ordinary shares to investors as part of its initial public offering and admission to the Premium Listing segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market for listed securities. Directly attributable expenses of £98,000 were incurred and these costs have been deducted from the proceeds of shares issued which have been recognised in the share premium.

All ordinary shares rank equally for all dividends and distributions that may be declared on such shares.  At general meetings of the Company, each shareholder who is present (in person, by proxy or by representative) is entitled to one vote on a show of hands and, on a poll, to one vote per share.

The deferred shares are not entitled to any dividend or distribution and the holders have no right to attend, speak or vote at any general meeting of the Company by virtue of their holdings of any deferred shares. The holder of each deferred share has the right to receive, after the holders of all other shares in the capital of the Company (other than the deferred shares) then in issue have received £10,000,000 in respect of each such share held by them. It is proposed that the deferred shares will be cancelled at the AGM to be held on 30 April 2015.

13        Dividends

			2014	2013
			£000	£000
Dividends paid
Paid to shareholders			-	19,920
			-	19,920

The Group did not pay a dividend during the year. It is the directors' intention to declare an interim dividend of 7.5 pence per ordinary share (2013: interim dividend of 20 pence per share for the year) in respect of the period from Admission on 20 June 2014 to 31 December 2014. The proposed interim dividend is subject to final Board approval at a meeting of the Board to be held on 30 April 2015. During the year ended 31 December 2013 the Company paid dividends of £19,920,000 (£0.20 per share).

13           Dividends (continued)

			2014		2013
Dividends paid per share			£000		£000
A ordinary shares; £nil per share (2013:£0.20)			-	12,300
B ordinary shares; £nil per share (2013:£0.20)			-	7,211
C ordinary shares; £nil per share(2013: £0.20)			-	409
D shares; £nil per share (2013: £0.00)			-	-
Exit shares; £nil per share (2013: £0.00)			-	-
			-	19,920

14       Directors' remuneration

Details of the Directors' (key management personnel) remuneration in respect of the year ended 31 December 2014 is set out below:

		2014	2013
		£000	£000
Short term employee benefits		1,780	1,693
Post-employment benefits		24	17
Share based payments		421	114
		2,225	1,824

15       Financial instruments

There are no differences between the fair value of the financial assets and liabilities included within the following categories in the condensed consolidated statement of financial position and their carrying value:

•      Trade and other receivables

•      Cash and cash equivalents

•      Trade and other payables

 

END

 

 

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