Interim Results
Feedback PLC
28 February 2008
FEEDBACK PLC
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2007
CHAIRMAN'S STATEMENT
Core operating profits show a welcome improvement over those for the previous
comparable period. Total operating profits were substantially impacted by a
number of extraordinary items consequent upon the placing in July last year and
the arrangements with the PPF and the sale of the company's freehold property in
Park Road, Crowborough.
With a number of legacy issues behind us, management is now able to focus on
developing our two principal businesses, Feedback Instruments and Feedback Data,
both of which enjoy significant market positions. Although much remains to be
done these results are encouraging and your board looks forward to the future
with optimism.
Michael G. Burt
Chairman
28 February 2008
Enquiries:
Philip Davies 020 7149 6000
Charles Stanley Securities
(Nominated Adviser)
UNAUDITED CONSOLIDATED INCOME STATEMENT
Restated Restated
6 months to 6 months to 30 14 months to
30 November 2007 September 2006 31 May
Note 2007
£'000 £'000 £'000
Revenue 4,704.7 4,177.9 9,639.4
Cost of sales (2,778.5) (2,548.4) (5,534.8)
------------- ------------- -------------
Gross profit 1,926.2 1,629.5 4,104.6
Other operating expenses (1,582.4) (1,530.8) (3,782.0)
------------- ------------- -------------
Operating profit 343.8 98.7 322.6
Profit on sale of fixed asset 87.2 - 307.6
Reorganisation costs (142.4) (153.0) (763.9)
Gain on cancellation of loan 402.7 - -
------------- ------------- -------------
691.3 (54.3) (133.7)
Finance costs (5.1) (232.4) (391.2)
------------- ------------- -------------
Profit / (loss) before tax 686.2 (286.7) (524.9)
Tax expense 592.4 (0.3) (2.9)
------------- ------------- -------------
Profit /(loss) for the period attributable to the 1,278.6 (287.0) (527.8)
equity shareholders of the parent
====== ====== ======
Basic earnings/(loss) per share 2 1.80p (2.32)p (3.46)p
Diluted earnings/(loss) per share 2 1.73p (2.32)p (3.46p)
All activities are classed as continuing.
UNAUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Restated Restated
6 months to 6 months to 30 14 months to
30 November September 2006 31 May
2007 2007
£'000 £'000 £'000
Fair value gains net of tax:
- actuarial (loss)/gain on retirement benefit - (102.0) 20.0
obligations
Currency translation differences (39.7) 50.4 22.9
Profit / (loss) for the period 1,278.6 (287.0) (527.8)
------------- ------------- -------------
Total recognised income/(expense) for the period
attributable to the company's equity shareholders
1,238.9 (338.6) (484.9)
====== ====== ======
UNAUDITED CONSOLIDATED BALANCE SHEET
Restated Restated
30 November 2007 30 September 2006 31 May
2007
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 35.0 39.7 59.9
Intangible assets 1,065.5 1,077.3 1,086.2
Deferred tax asset 564.9 - -
------------- ------------- -------------
1,665.4 1,117.0 1,146.1
------------- ------------- -------------
Current assets
Inventories 1,279.3 885.9 1,179.5
Trade and other receivables 2,809.8 2,464.5 2,630.9
Cash and cash equivalents 1,276.9 96.2 486.4
------------- ------------- -------------
5,366.0 3,446.6 4,296.8
------------- ------------- -------------
Non current asset held for sale - 658.2 -
------------- ------------- -------------
Total assets 7,031.4 5,221.8 5,442.9
====== ===== =====
EQUITY
Capital and reserves attributable to the
Company's equity shareholders
Called up share capital 206.2 1,234.5 1,761.2
Share premium account - 409.8 936.6
Revaluation reserve - 595.6 -
Capital reserve 299.9 299.9 299.9
Retained earnings (3,530.1) (9,379.3) (8,906.0)
------------- ------------ ------------
Total equity (3,024.0) (6,839.5) (5,908.3)
------------- ------------ ------------
LIABILITIES
Non-current liabilities
Borrowings - 535.3 505.5
Deferred tax liabilities 298.3 323.2 325.8
Retirement benefit obligations 6,794.1 8,257.0 7,974.4
------------- ------------ ------------
7,092.4 9,115.5 8,805.7
------------- ------------ ------------
Current liabilities
Borrowings 385.0 1,070.8 414.8
Trade and other payables 2,578.0 1,875.0 2,130.7
------------- ------------ ------------
2,963.0 2,945.8 2,545.5
------------- ------------ ------------
Total liabilities 10,055.4 12,061.3 11,351.2
------------- ------------ ------------
Total equity and liabilities 7,031.4 5,221.8 5,442.9
====== ====== =====
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
Restated Restated
6 months to 6 months to 30 14 months to
September 2006
30 November 2007 31 May
2007
£'000 £'000 £'000
Cash flows from operating activities
Profit / (loss) before tax 686.2 (286.7) (524.9)
Adjustments for:
Cash flows in respect of exceptional reorganisation - - 30.7
costs
Finance charges 5.1 232.4 391.2
Depreciation and amortisation 230.6 243.8 557.6
Foreign exchange difference (39.7) - (46.8)
Increase in inventories (99.8) 114.4 (179.3)
Increase in trade and other receivables (178.9) (848.2) (110.0)
Increase in trade and other payables 448.3 424.7 345.3
Pension contributions paid (734.9) (209.0) (486.6)
Share option charge 10.5 - -
Loan written back (402.7) - -
-------------- -------------- --------------
Cash generated in operations (75.3) (328.6) (22.8)
Tax paid - - -
-------------- -------------- --------------
Net cash used in operating activities (75.3) (328.6) (22.8)
-------------- -------------- --------------
Cash flows from investing activities
Interest received - - 3.7
Purchase of tangible fixed assets (9.1) - (32.2)
Proceeds from sale of tangible fixed assets - - 50.0
Purchase of intangible assets (175.9) (227.7) (504.4)
-------------- -------------- --------------
Net cash used in investing activities (185.0) (227.7) (482.9)
-------------- -------------- --------------
Cash flows from financing activities
Issue of ordinary shares 1,085.7 - -
Interest paid (5.1) (17.4) (50.9)
Repayments bank and other loans - (15.0) (32.5)
Capital element of finance leases and rental payments
(16.1) - (8.1)
-------------- -------------- --------------
Net cash used in financing activities 1,064.5 (32.4) (91.5)
-------------- -------------- --------------
Net decrease in cash and cash equivalents 804.2 (588.7) (597.2)
Cash and cash equivalents at beginning of period 87.7 684.9 684.9
-------------- -------------- --------------
Cash and cash equivalents at end of period 891.9 96.2 87.7
======= ======= =======
NOTES TO THE UNAUDITED INTERIM REPORT
1. SUMMARY OF ACCOUNTING POLICIES
As explained below the group will be presenting its financial statements in accordance with IFRS for the
first time in the 31 May 2008 full year financial statements. Set out below are the accounting policies
that differ from the full financial statements prepared at 31 May 2007 that management expect to apply
in the 31 May 2008 IFRS-compliant full year financial statements.
(a) Basis of preparation
These interim consolidated financial statements are for the six months ended 30 November 2007. These
interim financial statements have been prepared in accordance with those IFRS standards and IFRIC
interpretations issued and effective or issued and early adopted for the year ended 31 May 2008, with
the exception of IAS 19 'Employee Benefits'. As disclosed in the May 2007 Annual Report and Accounts,
an actuarial valuation of the Feedback Pension Scheme (a defined benefit scheme) was carried out as at
28 February 2007 and that valuation, amended to reflect payments made between February and May 2007, was
used to represent the liability in the balance sheets of the Group and of the Company. The directors are
of the opinion that this treatment gives a true valuation at the balance sheet date of 30th November
2007, given the successful negotiation of an agreement with the Pension Regulator and the Pension
Protection Fund. Consequently, the actuarial valuation at 28 February 2007 has been used, amended to
reflect payments made to the Scheme after that date, including those made under the terms of the Company
Voluntary Arrangement which was approved by shareholders on 2 July 2007.
Feedback plc's consolidated financial statements were prepared in accordance with UK Generally Accepted
Accounting Principles (UK GAAP) until 31 May 2007. UK GAAP differs in some areas from IFRS. In preparing
the consolidated interim financial statements, management has amended certain accounting methods applied
in the UK GAAP financial statements to comply with IFRS. The comparative figures were restated to
reflect these adjustments.
Reconciliations and descriptions of the effect of the transition from UK GAAP to IFRS on the Group's
equity and its net income and cash flows are provided in Note 4.
These consolidated interim financial statements have been prepared under the historical cost convention.
The Group changed its Accounting Reference Date from 31 March to 31 May with effect from 31 May 2007.
Consequently the period under review is for the six months ended 30 November 2007, whilst the
comparative figures are for the six months ended 30 September 2006 and the fourteen months ended 31 May
2007. It was not considered necessary to restate the comparative interim period to 30 November 2006 as
it was impracticable to do so and given the business is not cyclical, the period to 30 November 2006 was
not considered to be any more comparable.
The information set out in this interim report for the six months ended 30 November 2007 does not
comprise statutory accounts within the meaning of section 240 of The Companies Act 1985. The results for
the period ended 31 May 2007 are based on the published accounts for that period on which the auditors
gave a report which did not contain statements under section 237(2) or (3) of the Companies Act 1985.
The auditors included an emphasis of matter paragraph in relation to going concern in their report but
their opinion was not qualified in this respect. The accounts for the period ended 31 May 2007 have been
filed with the Registrar of Companies.
This interim report was approved by the directors on 27 February 2008.
Research and development
(b)
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from the Group's business development is recognised only if
all of the following conditions are met:
• an asset is created that can be identified;
• it is probable that the asset created will generate future economic
benefits;
• the development cost of the asset can be measured reliably;
• the product or process is technically and commercially feasible; and
• sufficient resources are available to complete the development and
to either sell or use the asset.
Where no internally-generated intangible asset can be recognised,
development expenditure is recognised as an expense in the period in
which it is incurred.
Internally-generated intangible assets are amortised on a straight-line
basis over a period of 36 months.
(c) Taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit
as reported in the income statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated by using tax rates that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities
are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction which affects neither the tax profit nor the accounting
profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the
reversal of the temporary difference and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by
the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates
to items credited or charged directly to equity, in which case the deferred tax is also dealt with in
equity.
(d) Employee share options
The Group has applied the requirements of IFRS 2 Share-based Payment.
The Group issues equity-settled share-based payment transactions to certain employees. Equity-settled
share-based payment transactions are measured at fair value at the date of grant. The fair value determined
at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group's estimate of shares that will eventually vest. Fair value is measured
by use of a binomial model. The expected life used in the model has been adjusted, based on management's
best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.
2. EARNINGS/(LOSS) PER SHARE
The calculation of the earnings/(loss) per share is based on the following
earnings/(loss) and number of shares:
Six months to Six months to Fourteen months to
30 November 2007 30 September 2006 31 May
2007
Earnings/(loss) for the period (£'000) 1,278.6 (287.0) (527.8)
======= ======= =======
Weighted average number of shares (000s) 71,198,631 12,344,986 15,263,305
Dilutive potential ordinary shares:
Share options (000s) 2,525,833 - -
Preference share conversion - 3,891,195 -
-------------------- -------------------- -------------------------
Diluted weighted average number of shares 73,724,463 16,236,091 15,263,305
(000s)
========== ========== ==========
Six months to Six months to Fourteen months to
30 November 2007 30 September 2006 31 May
2007
Basic Diluted Basic Diluted Basic Diluted
Earnings/(loss) per share 1.80p 1.73p (2.32)p (2.32)p (3.46)p (3.46)p
====== ====== ====== ====== ====== ======
3. TRANSITION TO IFRS
The Group's financial statements for the year ending 31 May 2008 will be the first annual financial
statements that comply with IFRS. These interim financial statements have been prepared as described in
Note 1. The Group has applied IFRS 1 in preparing these consolidated interim financial statements.
Feedback plc's transition date is 1 April 2006. The Group prepared its opening IFRS balance sheet at that
date. The reporting date of these interim consolidated financial statements is 30 November 2007. The
Group's IFRS adoption date is 1 June 2007.
4. EXPLANATION OF THE EFFECT OF THE TRANSITION TO IFRS
The following explains the material adjustments on the transition to IFRS.
Intangible assets
IAS 38, Intangible Assets, requires the capitalisation of development expenditure that meets certain
criteria. Under UK GAAP such treatment was optional and the Group had previously written off such
expenditure. At the transition date the Group has now recognised an asset of £1,076.3k.
Deferred tax
The adoption of IAS 38 creates a temporary timing difference between the accounting and the tax
treatment relating to the development expenditure. This timing difference gives rise to a deferred tax
liability under IAS 12, Income Taxes. At the transition date the Group has now recognised a liability
of £322.9k.
4(a). RECONCILIATION OF EQUITY AT 1 APRIL 2006
UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 714.9 (664.9) 50.0
Intangible assets - 1,076.3 1,076.3
------------- ------------- -------------
714.9 411.4 1,126.3
------------- ------------- -------------
Current assets
Inventories 1,000.3 - 1,000.3
Trade and other receivables 1,616.3 - 1,616.3
Cash and cash equivalents 805.7 - 805.7
------------- ------------- -------------
3,422.3 - 3,422.3
------------- ------------- -------------
Non-current asset held for sale - 664.9 664.9
------------- ------------- -------------
Total assets 4,137.2 1,076.3 5,213.5
====== ====== =====
EQUITY
Capital and reserves attributable to the
Company's equity shareholders
Called up share capital 1,234.5 - 1,234.5
Share premium account 409.9 - 409.9
Revaluation reserve 595.6 - 595.6
Capital reserve 299.9 - 299.9
Retained earnings (9,794.2) 753.4 (9,040.8)
------------- ------------- ------------
Total equity (7,254.3) 753.4 (6,500.9)
------------- ------------- ------------
LIABILITIES
Non-current liabilities
Borrowings 579.0 - 579.0
Deferred tax liabilities - 322.9 322.9
Retirement benefit obligations 8,233.0 - 8,233.0
------------- ------------- ------------
8,812.0 322.9 9,134.9
------------- ------------- ------------
Current liabilities
Borrowings 1,132.1 - 1,132.1
Trade and other payables 1,447.4 - 1,447.4
------------- ------------- ------------
2,579.5 - 2,579.5
------------- ------------- ------------
Total liabilities 11,391.5 322.9 11,714.4
------------- ------------- ------------
Total equity and liabilities 4,137.2 1,076.3 5,213.5
====== ====== =====
4(b). RECONCILIATION OF NET INCOME FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006
UK GAAP Adjustments IFRS
£'000 £'000 £'000
Revenue 4,177.9 - 4,177.9
Cost of sales (2,548.4) - (2,548.4)
------------- ------------- -------------
Gross profit 1,629.5 - 1,629.5
Other operating expenses (1,509.8) (21.0) (1,530.8)
------------- ------------- -------------
Operating profit before reorganisation costs 119.7 (21.0) 98.7
Reorganisation costs (153.0) - (153.0)
------------- ------------- -------------
OPERATING PROFIT (33.3) (21.0) (54.3)
Finance costs (232.4) - (232.4)
------------- ------------- -------------
Loss before tax (265.7) (21.0) (286.7)
Tax expense - (0.3) (0.3)
------------- ------------- -------------
Loss for the period (265.7) (21.3) (287.0)
====== ====== ======
4(c). RECONCILIATION OF EQUITY AT 30 SEPTEMBER 2006
UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 697.9 (658.2) 39.7
Intangible assets - 1,077.3 1,077.3
------------- ------------- -------------
697.9 419.1 1,117.0
------------- ------------- -------------
Current assets
Inventories 885.9 - 885.9
Trade and other receivables 2,464.5 - 2,464.5
Cash and cash equivalents 96.2 - 96.2
------------- ------------- -------------
3,446.6 - 3,446.6
------------- ------------- -------------
Non-current asset held for sale - 658.2 658.2
------------- ------------- -------------
Total assets 4,144.5 1,077.3 5,221.8
====== ====== =====
EQUITY
Capital and reserves attributable to the
Company's equity shareholders
Called up share capital 1,234.5 - 1,234.5
Share premium account 409.8 - 409.8
Revaluation reserve 595.6 - 595.6
Capital reserve 299.9 - 299.9
Retained earnings (10,111.5) 732.2 (9,379.3)
------------- ------------- ------------
Total equity (7,571.7) 732.2 (6,839.5)
------------- ------------- ------------
LIABILITIES
Non-current liabilities
Borrowings 535.3 - 535.3
Deferred tax liabilities - 323.2 323.2
Retirement benefit obligations 8,257.0 - 8,257.0
------------- ------------- ------------
8,792.3 323.2 9,115.5
------------- ------------- ------------
Current liabilities
Borrowings 1,070.8 - 1,070.8
Trade and other payables 1,853.1 21.9 1,875.0
------------- ------------- ------------
2,923.9 21.9 2,945.8
------------- ------------- ------------
Total liabilities 11,716.2 345.1 12,061.3
------------- ------------- ------------
Total equity and liabilities 4,144.5 1,077.3 5,221.8
====== ====== =====
4(d). RECONCILIATION OF NET INCOME FOR THE PERIOD ENDED 31 MAY 2007
UK GAAP Adjustments IFRS
£'000 £'000 £'000
Revenue 9,639.4 - 9,639.4
Cost of sales (5,534.8) - (5,534.8)
------------- ------------- -------------
Gross profit 4,104.6 - 4,104.6
Other operating expenses (3,779.0) (3.0) (3,782.0)
------------- ------------- -------------
Operating profit 325.6 (3.0) 322.6
Profit on sale of fixed asset 307.6 - 307.6
Reorganisation costs (763.9) - (763.9)
------------- ------------- -------------
(130.7) (3.0) (133.7)
Finance costs (391.2) - (391.2)
------------- ------------- -------------
Loss before tax (521.9) (3.0) (524.9)
Tax expense - (2.9) (2.9)
------------- ------------- -------------
Loss for the period (521.9) (5.9) (527.8)
====== ====== ======
4(e). RECONCILIATION OF EQUITY AT 31 MAY 2007
UK GAAP Adjustments IFRS
£'000 £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 59.9 - 59.9
Intangible assets - 1,086.2 1,086.2
------------- ------------- -------------
59.9 1,086.2 1,146.1
------------- ------------- -------------
Current assets
Inventories 1,179.5 - 1,179.5
Trade and other receivables 2,630.9 - 2,630.9
Cash and cash equivalents 486.4 - 486.4
------------- ------------- -------------
4,296.8 - 4,296.8
------------- ------------- -------------
Total assets 4,356.7 1,086.2 5,442.9
====== ====== =====
EQUITY
Capital and reserves attributable to the Company's
equity shareholders
Called up share capital 1,761.2 - 1,761.2
Share premium account 936.6 - 936.6
Revaluation reserve - - -
Capital reserve 299.9 - 299.9
Retained earnings (9,653.5) 747.5 (8,906.0)
------------- ------------- ------------
Total equity (6,655.8) 747.5 (5,908.3)
------------- ------------- ------------
LIABILITIES
Non-current liabilities
Borrowings 505.5 - 505.5
Deferred tax liabilities - 325.8 325.8
Retirement benefit obligations 7,974.4 - 7,974.4
------------- ------------- ------------
8,479.9 325.8 8,805.7
------------- ------------- ------------
Current liabilities
Borrowings 414.8 - 414.8
Trade and other payables 2,117.8 12.9 2,130.7
------------- ------------- ------------
2,532.6 12.9 2,545.5
------------- ------------- ------------
Total liabilities 11,012.5 338.7 11,351.2
------------- ------------- ------------
Total equity and liabilities 4,356.7 1,086.2 5,442.9
====== ====== =====
4(f). RECONCILIATION OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2006
UK GAAP Adjustments IFRS
£'000 £'000 £'000
Cash flows from operating activities
Loss before tax (265.7) (21.0) (286.7)
Adjustments for:
Finance charges 232.4 - 232.4
Depreciation and amortisation 17.0 226.8 243.8
Decrease in inventories 114.4 - 114.4
Increase in trade and other receivables (848.2) - (848.2)
Increase in trade and other payables 402.8 21.9 424.7
Pension contributions paid (209.0) - (209.0)
-------------- -------------- --------------
Cash used in operations (556.3) 227.7 (328.6)
Tax paid - - -
-------------- -------------- --------------
Net cash used in operating activities (556.3) 227.7 (328.6)
-------------- -------------- --------------
Cash flows from investing activities
Purchase of intangible assets - (227.7) (227.7)
-------------- -------------- --------------
Net cash used in investing activities - (227.7) (227.7)
-------------- -------------- --------------
Cash flows from financing activities
Interest paid (17.4) - (17.4)
Repayments bank and other loans (15.0) - (15.0)
-------------- -------------- --------------
Net cash used in financing activities (32.4) - (32.4)
-------------- -------------- --------------
Net decrease in cash and cash equivalents (588.7) - (588.7)
Cash and cash equivalents at beginning of period 684.9 - 684.9
-------------- -------------- --------------
Cash and cash equivalents at end of period 96.2 - 96.2
======= ======= =======
4(g). RECONCILIATION OF CASH FLOWS FOR THE PERIOD ENDED 31 MAY 2007
UK GAAP Adjustments IFRS
£'000 £'000 £'000
Cash flows from operating activities
Loss before tax (521.9) (3.0) (524.9)
Adjustments for:
Cash flows in respect of exception reorganisation costs 30.7 - 30.7
Finance charges 391.2 - 391.2
Depreciation and amortisation 63.1 494.5 557.6
Foreign exchange difference (46.8) - (46.8)
Increase in inventories (179.3) - (179.3)
Increase in trade and other receivables (110.0) - (110.0)
Increase in trade and other payables 332.4 12.9 345.3
Pension contributions paid (486.6) - (486.6)
-------------- -------------- --------------
Cash used in operations (527.2) 504.4 (22.8)
Tax paid - - -
-------------- -------------- --------------
Net cash used in operating activities (527.2) 504.4 (22.8)
-------------- -------------- --------------
Cash flows from investing activities
Interest received 3.7 - 3.7
Purchase of tangible fixed assets (32.2) - (32.2)
Proceeds from sale of tangible fixed assets 50.0 - 50.0
Purchase of intangible assets - (504.4) (504.4)
-------------- -------------- --------------
Net cash used in investing activities 21.5 (504.4) (482.9)
-------------- -------------- --------------
Cash flows from financing activities
Interest paid (50.9) - (50.9)
Repayments bank and other loans (32.5) - (32.5)
Capital element of finance leases and rental
payments
(8.1) - (8.1)
-------------- -------------- --------------
Net cash used in financing activities (91.5) - (91.5)
-------------- -------------- --------------
Net decrease in cash and cash equivalents (597.2) - (597.2)
Cash and cash equivalents at beginning of period 684.9 - 684.9
-------------- -------------- --------------
Cash and cash equivalents at end of period 87.7 - 87.7
======= ======= =======
5. UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Restated Restated
6 months to 6 months to 30 14 months to
September 2006
30 November 2007 31 May
2007
£'000 £'000 £'000
Profit attributable to shareholders 1,278.6 (287.0) (527.8)
Other recognised gains and losses relating to the (39.7) (51.6) 42.9
period
Issue of shares 1,634.9 - -
Conversion of preference shares - - 1,053.4
Preference share issue costs - - 24.1
Change in share-based payment reserve 10.5 - -
------------- ------------- -------------
Movement in period 2,884.3 (338.6) 592.6
Opening shareholders' funds (5,908.3) (6,500.9) (6,500.9)
------------- ------------- -------------
Closing shareholders' funds (3,024.0) (6,839.5) (5,908.3)
====== ====== ======
6. POST BALANCE SHEET EVENTS
As noted in the 31 May 2007 accounts, after lengthy and complex negotiations
with the Trustees of the Feedback Pension Scheme, The Pensions Regulator and the
Pension Protection Fund (PPF) an agreement was reached whereby responsibility
for the deficit was assumed by the PPF in return for certain conditions being
met. A formal Company Voluntary Arrangement (CVA) was announced under which all
creditors other than the PPF were to be paid in full. As part of this
agreement, the Group would pay the PPF £1,200,000 (£700,000 from the proceeds of
a £1,400,000 placing and £500,000 after vacation of the Park Road premises) plus
provide shares totalling 18% of the enlarged share capital after restructuring.
The CVA and restructuring was agreed at meetings of shareholders and creditors
held on 2 July 2007. The £700,000 payment and the issue of shares was made to
the PPF during July 2007.
Legal completion of the sale of the Park Road premises took place on 21 December
2007 and on the same day the final payment of £500,000 was made to the Pension
Protection Fund (PPF). The company was formally released from the CVA on 11
February 2008. The following pro-forma Balance Sheet is for illustrative
purposes only. If the above events had taken place on 30 November 2007 the table
shows how the Balance Sheet would have changed.
Unaudited Unaudited
Actual Pro-forma
30 November 2007 30 November 2007
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 35.0 35.0
Intangible assets 1,065.5 1,065.5
Deferred tax asset 564.9 564.9
------------- -------------
1,665.4 1,665.4
------------- -------------
Current assets
Inventories 1,279.3 1,279.3
Trade and other receivables 2,809.8 1,817.6
Cash and cash equivalents 1,276.9 1,413.3
------------- -------------
5,366.0 4,510.2
------------- -------------
Total assets 7,031.4 6,175.6
------------- -------------
LIABILITIES
Non-current liabilities
Deferred tax liabilities 298.3 298.3
Retirement benefit obligations 6,794.1 -
------------- -------------
7,092.4 298.3
------------- -------------
Current liabilities
Borrowings 385.0 29.2
Trade and other payables 2,578.0 2,578.0
------------- -------------
2,963.0 2,607.2
------------- -------------
Total liabilities 10,055.4 2,905.5
------------- -------------
NET (LIABILITIES)/ASSETS (3,024.0) 3,270.1
====== ======
INDEPENDENT REVIEW REPORT TO FEEDBACK PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the interim financial report for the six months ended 30 November
2007 which comprises the Consolidated Income Statement, the Consolidated
Statement of Total Recognised Income and Expense, the Consolidated Balance
Sheet, the Consolidated Cash Flow Statement and the Notes to the Unaudited
Interim Report. We have read the other information contained in the interim
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
This report, including the conclusion, has been prepared for and only for the
Company for the purpose of meeting the requirements of the AIM Rules for
Companies and for no other purpose. We do not, therefore, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Directors' Responsibilities
The interim financial report, is the responsibility of, and has been approved by
the directors. The directors are responsible for preparing and presenting the
interim financial report in accordance with the AIM Rules for Companies.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with International Financial Reporting Standards and
International Financial Reporting Interpretations Committee ('IFRIC')
pronouncements as adopted by the European Union. The condensed set of financial
statements included in this interim financial report has been prepared in
accordance with the measurement and recognition criteria of International
Financial Reporting Standards and International Financial Reporting
Interpretations Committee ('IFRIC') pronouncements, as adopted by the European
Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the interim financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the interim financial report
for the six months ended 30 November 2007 is not prepared, in all material
respects, in accordance with the measurement and recognition criteria of
International Financial Reporting Standards and International Financial
Reporting Interpretations Committee ('IFRIC') pronouncements as adopted by the
European Union, and the AIM Rules for Companies.
Baker Tilly UK Audit LLP
Chartered Accountants
Hanover House
18 Mount Ephraim Road
Tunbridge Wells
Kent
TN1 1ED
27 February 2008
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 22nd November 2024
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