Final Results
Flomerics Group PLC
03 March 2006
IMMEDIATE RELEASE 3 March 2006
FLOMERICS GROUP PLC
Preliminary Results
Flomerics Group PLC, supplier of virtual prototyping software to the electronics
industries, announces its results for the year ended 31 December 2005.
Key Points
• Turnover up 12% at £11.4 million (2004 : £10.2 million)
• Profit before tax and amortisation of goodwill increased by 49% to £1.1
million (2004: £753,000).
• Basic Earnings per Share up 62% at 6.28p (2004 : 3.88p)
• Strong increased cash position of £4.1 million (2004 : £3.3 million)
• Dividend increased by 18% to 1.3p per share (2004 : 1.1p)
• Successful acquisition in April 2005 of Microelectronics Research and
Development Ltd (MicReD) which has contributed £162,000 to profit before
tax.
• The turnover from the electromagnetic product lines (FLO/EMC and
Micro-Stripes) increased by 13% and accounts for 15% of total revenues.
Commenting on the results, David Mann, Chairman, said:
"The Company has a clear strategy for both organic and non-organic growth and a
management team committed to delivering it. With a more sales led approach,
world leading technologies, a team of experts across various different fields
and a good financial base, the Directors believe the prospects for the Company
are excellent."
Enquiries:
Flomerics 020 8487 3000
Gary Carter, Chief Executive
Chris Ogle, Finance Director
Buchanan Communications 020 7466 5000
Tim Thompson/Susanna Gale
CHAIRMAN'S STATEMENT
Results
Flomerics has delivered an excellent set of results for the year ended 31
December 2005. Turnover has increased by 12% to £11.4 million (2004: £10.2
million) and profit before tax and amortisation of goodwill has been increased
by 49% to £1.1 million (2004: £753,000). Earnings per share has increased by 62%
to 6.3p. The Group's cash balances have increased to £4.1 million (2004: £3.3
million). The Board is recommending an 18% increase in the dividend to 1.3 p per
share.
Organic Development
Flomerics has maintained its position as the global market leader in thermal
analysis for electronics with its flagship product, FLOTHERM. The Company has
recently been tackling thermal issues earlier in the design cycle, in particular
with its FLO/PCB product released in 2004, and this has strengthened the market
position of FLOTHERM itself. Revenue from the thermal product lines increased by
6% relative to 2004. Revenues from the other long-established business line in
building services, with the product FLOVENT, grew by 3%. The Company maintains
a very significant commitment to R&D on these and associated products, which are
expected to continue providing a strong foundation for the development of
business in complementary areas for many years to come.
For some years we have been investing in products for electromagnetic analysis
of electronics, initially with our acquisition of Micro-Stripes and then with
the development of FLO/EMC. It has been very encouraging to see revenue from the
electromagnetic product lines increase by 13% as they are increasingly
recognised as providing valuable tools, e.g. for addressing large-scale
electromagnetic interference problems in the defence sector. We continue to
invest in expanding our resources for sales and support of these products around
the world.
Turnover in each of our regions of operation (US, Europe and Asia Pacific)
excluding MicReD has grown at the same rate and I am particularly pleased that
there has been an increase in contribution from each of the Company's major
lines of business. I am also pleased to see increasing opportunities for us to
sell a suite of tools to the same customer, as was done with the significant
order of over €300,000 from Galileo Avionica in 2005.
Acquisitions
During the year we were pleased to announce the acquisition of a Hungarian
company, Microelectronics Research and Development Limited (MicReD). Their
principal product is the "T3Ster" measuring device, which is used for thermal
characterisation of electronic chip packages. It has other applications, for
example in measuring the efficiency of Thermal Interface Materials, which have
barely been exploited yet. Since the acquisition, MicReD have produced another
tool, the "Teraled", for measuring the thermal behaviour of LEDs. The first
Teraled sale was made just before the end of 2005. Both of these products are
world-leading technologies, which have a great market potential. The Company
also has some promising software products that could complement the rest of our
portfolio. In the period since the acquisition MicReD made a profit before tax
of £162,000.
This is the first acquisition that the Company has made since we embarked on our
growth strategy in 2004. Flomerics has a very good world-wide infrastructure of
offices that is able to support more business through the sale of complementary
technologies. Acquisitions are a key part of the Company's strategy and we
believe that they are vital component of increasing shareholder value.
Personnel
Last year I reported that I expected Gary Carter to take over as CEO from David
Tatchell by mid-2006. It is some measure of how comfortable David felt working
with Gary that we were able to appoint Gary as CEO in September 2005. I am
personally very grateful to David for the magnanimous way that he has enabled
this to happen. It has been a pleasure to see him contributing in a very
significant way to the Company's future in his current position as Chief
Technology Officer.
The management team has been further strengthened in the year by the appointment
of Andy Farrington as the President of our US subsidiary, Flomerics Inc.
I would like to thank Gary, his management team and all Flomerics employees for
the dedication and hard work that has delivered these results.
Outlook
The Company is now far less dependent on it flagship product, FLOTHERM, which
accounted for 70% of revenue in 2005 (2004: 75%). It is becoming a more rounded
provider of solutions to engineers which, following the acquisition of MicReD,
are not limited to software. Consequently the Company is less exposed to the
fortunes of one particular sector and has several opportunities for growth.
The Company has a clear strategy for both organic and non-organic growth and a
management team committed to delivering it. With a more sales led approach,
world leading technologies, a team of experts across various different fields
and a good financial base, the Directors believe the prospects for the Company
are excellent.
David Mann
Chairman
3 March 2006
CHIEF EXECUTIVE'S REVIEW
I have just completed my first year with Flomerics having joined as Chief
Operating Officer in January 2005 and moved into the post of Chief Executive
Officer in September. In this time I have been encouraged by many of the things
I have seen but none more so than by the on-going commitment to demonstrate
leadership in the industries we serve and to manage the change that is required
to maintain that position.
With the revenue and profit having returned to growth in 2004, the challenge for
2005 was to build on this and demonstrate that Flomerics continues to be the
major force in the thermal simulation markets that we have dominated for so
long. At the same time we planned to accelerate our growth in the complementary
electromagnetic simulation market as we seek to diversify our product range. I
am pleased to be able to report that we have succeeded in both of these
objectives.
2005 Achievements
As indicated above I am delighted to be able to report on the continued
improving trends in the growth of both the thermal (revenue up 6%) and
electromagnetic (revenue up 13%) lines of business. A significant area of growth
in 2005 was in the requirement for simulation of electromagnetic interference
(EMI), a trend that looks like continuing for some time. I would also like to
mention the contribution from FLOVENT which performed particularly well in
Europe and remains at 9% of total revenues.
In any company, the financial health of your biggest clients is a good barometer
of how the market is performing. I am pleased to report that our largest
customers reported good results in 2005 and that we experienced strong growth in
revenue from our two biggest, Intel and Siemens.
We were delighted in April 2005 to be able to complete the acquisition of the
Hungarian based MicReD. Formed in 1997 as a spin-off from Budapest University
of Technology and Economics (BUTE), MicReD's main product is the "T3Ster"
(pronounced "Trister"), which provides fast, repeatable and accurate thermal
characterisation of electronic chip packages. Organisations already using the
T3Ster include IBM, Infineon, Intel, Philips and ST Microelectronics - all of
which are also users of our FLOTHERM thermal analysis software. We have an
exciting opportunity to build on MicReD's success in Europe and Asia-Pacific by
starting to exploit the opportunities for sales of the T3Ster in North America.
This acquisition therefore has strong synergy with Flomerics' core business, and
represents a significant step for Flomerics towards providing a complete
thermal-design solution for its customers.
Partnerships
As we increase our focus on the design and simulation process rather than just
on point solutions, we have seen the need to develop relationships with other
companies in our industry. Most recently, in partnership with Cadence and a
joint customer, CISCO, we were able to develop and launch a new product, 'FLO/
PCB for Allegro' which provides a link to Cadence(R) Allegro(R) PCB Editor
software. Designers can simply call up a menu item on the Cadence software and,
with a few mouse clicks, generate a thermal model of their design. This enables
them to quickly analyse the design from a thermal standpoint and identify
problems at a stage in the design process when they can be quickly and
inexpensively corrected.
Another partnership announced in 2005 is with SimLab GmbH where together we have
created a software interface linking board-level and system-level
electromagnetic compatibility (EMC) analysis for the first time.
Similarly, with Applied Wave Research Inc. (AWR(R)), we have announced a
partnership that will enable Microwave/RF engineers analyzing circuit layouts
using AWR's Microwave Office(R) software to study the electromagnetic
performance of key components in 3D using the MicroStripes software from
Flomerics.
Of course, the most important partnerships of all are with our customers. When
done well, this benefits both Flomerics and the customer. Galileo Avionica is a
great example of this. Earlier in 2005, they selected FLOTHERM and FLO/PCB as
their standard thermal modelling software across their design centres and
business units. After extensive evaluation of several options, they concluded
that these thermal simulation software tools will enable them to save time in
modelling while integrating the design process to a higher degree than with
other tools. This order for over €300,000 was a great example of our Integrated
Analysis Environment where we are providing multiple tools to solve customer
problems across a range of customer applications.
Industry Leadership
It has long been the case at Flomerics that individual contributions from our
employees have been critical to the success and reputation of the company. They
are the most important factor in meeting the needs our customers and
shareholders. I would like to thank all Flomerics staff for an excellent
performance throughout 2005.
Since the origins of the company, Flomerics has believed strongly in being
actively involved in research. Whilst this helps us keep our products current
and in line with the changing demands of the industry, it also illustrates our
commitment to the development of future technologies on which our own success
depends. This provides a level of visibility to our customers that reinforces
our position as the market leader. We continued many joint research projects
with collaborators in 2005 including world-leading universities and some of our
largest customers. I would like to highlight two recent examples of this.
In addition to great technology, MicReD brings to Flomerics world-leading
experts in the field of microelectronics. In December, we were proud to announce
that Professor Marta Rencz (MicReD CEO and head of department of electron
devices at the Technical University of Budapest) was elected to the Board of
Management of an EU funded project, 'Design for Micro and Nano Manufacture' as
manager of the Modelling and Simulation work package. This project has been set
up to ensure that problems affecting the manufacture and reliability of products
based on micro nano technologies can be addressed before prototype and
pre-production.
SEMI-THERM is the premier forum for the exchange of information between
industrial and academic communities on topics related to semiconductor thermal
measurement, modelling and management. In 2005, we were delighted that the
General Chair of SEMI-THERM was held by John Parry, head of research at
Flomerics.
People
In addition to the change to my position, 2005 saw a number of other changes in
terms of new people coming into Flomerics. As already mentioned, we were
delighted to welcome our new colleagues from MicReD. We were also pleased to
introduce a new Regional Director for our North American operations. Andy
Farrington joined Flomerics in the summer bringing with him strong sales
management experience.
With my move into the Chief Executive role, the former CEO, David Tatchell has
moved into the role of Chief Technology Office. Whilst I continue to draw upon
the many years of experience that David has in this industry, we have both
welcomed this change and the new opportunities it presents for David to focus on
a key area of managing the company.
Industries, Products and Users
The range of industries in which Flomerics' products are used continues to be
diverse. The use of electronics in a fast growing range of applications
continues. For example, in 2003, 25% of the manufacturing cost of an average
car was related to electronics. By 2010 this will rise to 40%1. What we take
for granted as the latest electronic wizardry in our car represents a
significant design challenge for the thermal and EMC engineering community.
Flomerics continues to stay very close to these trends, adapting our products
and sales and marketing strategies in order to best meet our customers needs
whilst maximising our opportunity to drive revenues.
A great example of this is the recently announced development from MicReD of the
'Teraled', a device designed for the thermal characterisation of power LED's
which are increasingly being used to replace conventional lighting units in
automotive applications.
As the distribution by industry of our typical user shifts then so do the
profiles of the users themselves. Traditional barriers between thermal
engineers, EMC engineers and designers for example are changing. The skills and
needs of the users are also changing and so we continue to develop and evolve
products to meet those needs. There is no better example of this than 'FLO/PCB
for Allegro' where we have targeted a product at a very specific user community.
The simulation of EMC is another great example where we have seen a market
need in advance and developed a product to allow our customers to design around
these problems.
The Future
We enter 2006 in a strong position. We have both new and also established
market leading products. Whilst continuing to focus on the requirements of our
customers we will continue to look for new opportunities for investment, from
research and development, to sales, engineering and marketing. Key areas of
investment in 2006 include a MicReD sales and engineering team in the US and the
expansion of our already successful European FLOVENT sales team. We are
committed to hiring good people and to grow and adapt our global coverage to
meet the needs of an ever changing world.
1Source: Centre for Automotive Research, Ann Arbor, MI
Gary Carter
Chief Executive
3 March 2006
OPERATING AND FINANCIAL REVIEW
Group Financial Performance
Turnover for the year was up by 11.6 % at £11.4 million. The turnover figure
includes the contribution of MicReD, which was acquired part way through the
year. On a like-for-like basis turnover was up by 7.3% (6.7% at constant
exchange rates).
Profit before tax and amortisation of goodwill was up by 49% at £1.1 million.
This includes a contribution from MicReD of £162,000. Excluding the contribution
from MicReD, the increase is 28%. The profit margin (before goodwill
amortisation) has improved from 7.4% to 9.8%.
Profit before tax after amortisation of goodwill is up by 44% at £966,000. The
goodwill figure of £158,000 includes an amount of £76,000 attributable to the
acquisition of MicRed, which is a pro-rated charge as the company was acquired
at the end of April 2005.
The Group headline tax rate is only 3.8% this year. This is low partly because
of the Research and Development tax credit, which is available in the UK, but
has been impacted this year particularly by an expected one-off repayment in the
United States of tax that has been over paid in previous years. The effect of
this is £80,000.
The result is an increase in the basic earnings per share of 62%. Without the
one-off tax benefit from the United States the increase would have been 52%.
Revenues
Each of the operating regions excluding MicReD enjoyed revenue growth at the
same level. The revenue split for 2005 including the contribution from MicReD
is:
USA: 40%
Europe: 39%
Asia Pacific: 21%
The split of revenue by business line demonstrates our continued progress in
diversifying our product base. The primary part of the business, which is
analysis for cooling of electronics and comprises the products FLOTHERM and FLO/
PCB (released in 2004), saw an increase in revenues of about 6%. This part of
the business now accounts for 72% of total revenue (2004: 76%).
The electromagnetic product lines (FLO/EMC and Micro-Stripes) enjoyed an
increase in revenues of 13% and account for 15% of total revenues.
Revenue from FLOVENT increased by 3% and accounts for 9% of total revenue.
The improvement in the market and the traction of the newer products is
illustrated by the sales generated in 2005 with two of our largest customers -
Intel and Siemens. Intel increased the number of FLOTHERM licences by 33% and
also invested in FLO/EMC and FLO/PCB. Total revenue from this account was up by
38% compared to the previous year. Total revenue from Siemens was up by 18% and
also includes an investment in FLO/EMC.
Most of the Group's revenue is from software licences, which in the year
accounted for 73% of total revenue, with the remaining 27% from maintenance
(13%), services (10%), and hardware (4%).
Most licence revenue is from annual licences. However, the Group also sells
perpetual licences and multi-year (generally 3 year) licences. Multi-year and
perpetual licences accounted for 36% of total licence revenues, slightly lower
than 2004, when the comparable figure was 38%.
The Group has a high level of recurring revenues in the form of annual
maintenance on perpetual licences and annual (or multi-year) renewals. In 2005
this represented 53% of total revenue. In 2004 this was 56%. The decrease is
explained by the contribution from MicReD, which is not recurring revenue.
Costs
Cost of sales, which includes royalties paid to third party licensors was
£291,000 or 2.5% of revenues. This includes the cost of sales for MicReD
(manufacturing costs of hardware), which was £129,000. Without this cost of
sales was thus £162,000, down a little from last year - £201,000.
Research and development costs were down marginally (2.5%) in absolute terms at
£2.2 million. This includes a small amount from MicReD. As a percentage of total
revenue research and development costs were 19.4 % compared to 22.2% in 2004. We
had indicated in the past our intention to bring research and development down
as a percentage of revenue and this has been achieved partly through the
off-shore development operation that we have in India.
Staff related costs, the Group's biggest expense increased by 5.0% compared to
2004 but as a percent of revenue came down from 57.9% to 54.5%. This is despite
an increase in average staff numbers of 16% from 117 to 136.
Cashflow and Financing
Cash generated from operating activities was £1.9 million, compared to £1.1
million in 2004.
Major non-operating cashflows included capital expenditure of £380,000 and net
cash spent on the acquisition of MicRed of £405,000, dividends of £161,000 and
tax paid of £126,000. The net increase in cash was £767,000 to £4.1 million.
The Group has borrowings of £443,000, being the mortgage on a freehold property
that is being repaid over ten years. With our cash balance of £4.1 million, net
funds are thus £3.6 million.
Trade debtors at the end of 2005 were £3.4 million. Debtor days at 31 December
were 76 (2004:72.)
Acquisition
On April 28 Group acquired the Hungarian Company Microelectronics Research and
Development ("MicReD"). Details of the acquisition are given in note 8. The cost
of the acquisition in the year was £695,000. This is comprised of:
£'000s
Cash 445
Shares 167 (200,530 issued, 50,130 in escrow at 66.6 pence)
Costs 83
Total 695
For the purposes of the goodwill calculation it has been assumed that the total
consideration will be £1.2 million, however the maximum consideration under the
terms of the agreement is £1.4 million.
For the period since the acquisition MicReD contributed £434,000 of sales and a
profit before tax of £162,000 - a margin of 37%.
Dividend
The Board is recommending a dividend of 1.3p per share (2004: 1.1p). Subject to
approval from shareholders, the dividend will be paid on 5 May 2006 to
shareholders on the register at the close of business on 7 April 2006. The cash
effect of this is £193,000.
Accounting Standards
As reported last year the Group will be adopting International Financial
Reporting Standards (IFRS) with effect from 1 January 2007. When the 2007
results are reported the 2006 results will be restated under IFRS. The first
statements to be published under IFRS will be the interim accounts for the six
months to 30 June 2007.
We have been working with our auditors to assess the impact of IFRS on our
accounts. We have not quantified the impact but we expect the biggest area to be
effected will be Research and Development expenditure where it is likely that
some capitalisation of costs will be required. In addition IFRS requires that
goodwill is not amortised but is subject to impairment.
From 1 January 2006, in accordance with FRS 20 the Group will account for the
cost of share options granted in the profit and loss account and we will need to
restate the 2005 accounts for this charge.
Chris Ogle
Finance Director
3 March 2006
FLOMERICS GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2005
Continuing
activities Acquisitions Group
2005 2005 2005 2004*
(Unaudited) (Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000 £'000
Turnover 10,990 434 11,424 10,241
Cost of sales (162) (129) (291) (201)
_________ _________ _________ _________
Gross profit 10,828 305 11,133 10,040
Administrative expenses
Research and development cost (2,187) (27) (2,214) (2,271)
Goodwill amortisation (82) (76) (158) (82)
Other (7,801) (116) (7,917) (7,096)
________ ________ ________ ________
Total administrative expenses (10,070) (219) (10,289) (9,449)
________ ________ ________ ________
758 86 844 591
Other operating income 66 - 66 75
________ ________ ________ ________
Operating profit 824 86 910 666
Other interest receivable and similar income 92 - 92 71
Interest payable and similar charges (36) - (36) (66)
________ ________ ________ ________
Profit on ordinary activities before taxation
(Note 3) 880 86 966 671
Tax on profit on ordinary activities (1) (36) (37) (102)
_________ _________ _________ _________
Profit for the financial year 879 50 929 569
Dividends (161) - (161) (146)
_________ _________ _________ _________
Retained profit for the financial year 718 50 768 423
_________ _________ _________ _________
Earnings per share (Note 4) 6.28p 3.88p
Diluted earnings per share (Note 5) 6.01p 3.85p
* As restated (see Note 6)
FLOMERICS GROUP PLC
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2005
2005 2005 2004* 2004*
(Unaudited) (Unaudited) (Audited) (Audited)
£'000 £'000 £'000 £'000
Fixed assets
Intangible assets 1,353 376
Tangible assets 1,726 1,658
_______ _______
3,079 2,034
Current assets
Stock 59 -
Debtors 3,953 3,891
Cash at bank and in hand 4,081 3,314
_______ _______
8,093 7,205
Creditors: amounts falling due
within one year (4,386) (3,444)
_______ _______
Net current assets 3,707 3,761
_______ _______
Total assets less current liabilities 6,786 5,795
Creditors: amounts falling due after
more than one year (377) (446)
________ ________
Net assets (Note 3) 6,409 5,349
_______ _______
Capital and reserves
Called up share capital 148 146
Shares to be issued 33 -
Share premium account 1,602 1,602
Merger reserve 892 759
Profit and loss account 3,734 2,842
________ ________
Equity shareholders' funds 6,409 5,349
_______ _______
* As restated (see Note 6)
FLOMERICS GROUP PLC
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
2005 2004*
(Unaudited) (Audited)
£'000 £'000
Operating Activities
Operating profit 910 666
Depreciation and amortisation charges 492 395
Loss on disposal of fixed assets (1) -
Exchange differences 113 (72)
(Increase) / decrease in stocks (6)
(Increase) / decrease in debtors 53 (375)
Increase / (decrease) in creditors 283 513
________ ________
Net cash inflow from operating activities 1,844 1,127
Net cash inflow from returns on
investment and servicing of finance 56 5
Tax received / (paid) (126) 227
Net cash outflow from capital expenditure (376) (302)
Net cash paid for acquisition (405) -
Equity dividend paid (161) (146)
________ ________
Net cash inflow before financing 832 911
Net cash outflow from financing (65) (60)
________ ________
Increase in cash in the year 767 851
________ ________
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Increase in cash in period 767 851
Cash outflow from decrease in debt and lease financing 65 60
Foreign exchange differences - (27)
Movement in net funds in the year 832 884
Net funds at 1 January 2,805 1,921
Net funds at 31 December 3,637 2,805
* As restated (see Note 6)
Notes:
1. The Group recognised unrealised gains on translation of foreign
currency net investments of £124,000 (2004: loss £105,000) in the year, which
were taken to reserves and are not included in the profits above.
2. The financial information shown for the years ended 31 December 2005
and 2004 set out above does not constitute statutory accounts but is derived
from those accounts. The results have been prepared using accounting policies
consistent with those used in the preparation of the statutory accounts. The
financial information contained in this announcement does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The financial information for the year ended 31 December 2004 has been extracted
from the statutory accounts for that year, which have been filed with the
Registrar of Companies and which contain an unqualified audit report. The
financial information for the year ended 31 December 2005 has been extracted
from the draft statutory accounts for that year upon which the auditors have yet
to report. Copies of this announcement are available at the registered offices
of the Company (81 Bridge Road, Hampton Court, Surrey, KT8 9HH) and at the
offices of the Company's nominated advisors, Oriel Securities Limited. (125 Wood
Street, London, EC2V 7AN) for a period of 14 days from the date hereof.
3. The Group's turnover and profit before tax for each geographic area of
operation is:
Turnover Profit Before Taxation
2005 2004 2005 2004
£'000 £'000 £'000 £'000
United States of America 4,609 4,291 250 261
Europe 4,438 3,899 (241) (532)
Asia Pacific 2,377 2,051 957 942
_______ _______ _______ _______
11,424 10,241 966 671
_______ _______ _______ _______
The loss in Europe is after central costs including research and development.
The net assets attributable to each geographic area are:
2005 2004*
£'000 £'000
United States of America 1,211 759
Europe 5,064 4,552
Asia Pacific 134 38
_______ _______
6,409 5,349
_______ _______
* As restated (see Note 6)
4. The earnings per share figure for 2005 has been calculated based on the
profit on ordinary activities after taxation and the weighted average number of
shares in issue of 14,782,635 (2004: 14,646,580 ).
5. In accordance with FRS14 issued in October 1998 the fully diluted
earnings per share were 6.01 pence per share (2004: 3.85p). The diluted number
of shares was 15,439,000 (2004: 14,791,000)
6. In order to conform with the requirements of FRS 21 'Events after the
Balance Sheet Date', dividends have been restated and are recorded in the profit
and loss in the period that they have been declared. The effect of this change
in accounting policy on the comparative is that net assets have increased by
£161,000 as at 31 December 2004, and reported dividends have decreased by
£15,000 in the year ended 31 December 2004.
7. The AGM will be held at 10.30 am on 25 April 2006 at the registered
office of the company (81 Bridge Road, Hampton Court, Surrey, KT8 9HH).
8. On 28 April 2005, the Group acquired the entire share capital of
Microelectronics Research and Development Limited ("MicReD") for a maximum total
consideration (before expenses) of approximately €2.1 million (approximately
£1.4 million). The maximum consideration is only payable on an over-target
performance. For an "on target" performance the total consideration will be
approximately £1.2 million. This figure has been assumed in the provisional
calculation of the goodwill shown below:
2005
£'000
Fair value of net assets acquired: 178
Goodwill 1,135
_______
1,313
_______
Satisfied by:
Shares issued 134
Shares to be Issued 33
Cash 445
Acquisition costs 83
Deferred consideration:
Cash less than 1 year 201
Cash more than 1 year 201
Shares 216
_______
1,313
_______
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