Final Results

RNS Number : 3658E

GB Group PLC

30 May 2012

Embargoed until 7.00 a.m.

GB GROUP PLC

("GB", the "Group" or the "Company")

Annual Results Announcement for the Year Ended 31 March 2012

GB Group Plc, the identity management specialist, is pleased to announce its annual results for the year ended 31 March 2012.

Highlights

· Revenues and profits higher than the trading statement announced on 22 March 2012.

· Successful acquisition and integration of three businesses; Data Discoveries, Advanced Checking Services and Capscan - adding capabilities and customers, extending GB Group's service range and strengthening its position in the emerging cross-border identity management market

· Acquisitions performing well, and in line with the Board's expectations during the year

· 31% increase in revenues to £31.8 million (2011 restated: £24.2 million) with underlying organic revenue growth of 11% (2011 organic revenue growth: 9%)

· Margin improvement at both the gross and operating levels, due to greater scale and effective cost control

· 114% increase in adjusted operating profits*, ahead of the upgraded profit announced in March, to £3.7 million (2011 restated: £1.7 million)

· 100% increase in adjusted* basic earnings per share to 5.0p (2011 restated: 2.5p)

· Number of countries covered by the Group's International electronic ID Verification service increased to 14 (2011:6)

· The Group has a strong balance sheet and good cash generation. Cash generated by operations before working capital movements increased by 70% to £3.4 million (2011: £2.0 million). Cash and cash equivalents at the year-end of £4.8 million (2011: £6.2 million) after payment of a dividend of £1.1 million during the year

· Proposed 7.8% increase in dividend per share to 1.375p (2011: 1.275p), reflecting the strong results and the Board's confidence in future prospects

*Adjusted figures exclude certain non-operational or exceptional items which the Directors have defined as costs of staff reorganisations, share-based payment costs, share of associates, amortisation and impairment of acquisition-related intangible assets, costs of acquisitions and deferred and contingent fair value adjustments.

Commenting, David Rasche, Chairman, said:

"I am pleased to report a year of significant achievement for GB Group. Revenue and profit growth were strong, our strategic objectives have been well executed and three successful acquisitions were completed. This pleasing performance is a demonstration of GB Group's strong vision and its ability to create shareholder value, through market leading products and services and the quality of its people."

Commenting, Richard Law, Chief Executive, said:

"2012 was a very successful year for GB Group, both in strategic development and growth. Looking forward, I believe we have created an opportunity of real value and we will endeavour to exploit this opportunity at a good rate of progress. We have an extremely strong team of people at GB Group working to a clear vision and, therefore, the Board and I are optimistic for the Group's future prospects."

GB Group plc	01244 657333
Richard Law, Chief Executive
Dave Wilson, Finance Director

Peel Hunt LLP (Nominated Adviser and Broker)	020 7418 8900
Richard Kauffer
Daniel Harris

Newgate Threadneedle	020 7653 9850
Caroline Evans-Jones
Heather Armstrong

Editors' Notes

Who are GB Group

The most successful organisations recognise the value of understanding your individual identity - who you are, what you need and what you like. GB combines this concept of identity with technology to create an environment of trust so that organisations can connect, communicate and transact with consumers safely, responsibly and profitably. We call this identity management.

GB Group has four complementary identity management offerings:

· ID Verification, which provides the ability to verify consumers' identities remotely, without the physical presentation of documentation, in order to combat ID fraud, money laundering and restrict access to under age content, purchases and gambling

· ID Customer Registration, which includes software and services for quick and accurate customer registration and validation of records

· ID Marketing Services, which provides database services so our clients can better understand, target and retain their customers and offers accurate and up-to-date identity information for their contact strategies

· ID Tracing Services, which provides the largest and most accurate picture of the UK's population and properties in order to locate and contact the right individual, first time

This enables our clients to make informed business decisions based on a thorough knowledge of consumer identity and behaviour, leading to more effective communication and interaction with the customer.

GB Group is listed on the London Stock Exchange (GBG). For more information, please visit GB Group's website: www.gb.co.uk

GB Group - because identity matters®

CHAIRMAN'S STATEMENT

I am pleased to report a year of significant achievement for GB Group. Revenue and profit growth were strong, our strategic objectives have been well executed and three successful acquisitions were completed. This pleasing performance is a demonstration of GB Group's strong vision and its ability to create shareholder value, through market leading products and services and the quality of our people.

Strategic Developments

During the year we announced the acquisition of three businesses, each of them important in advancing the Group's strategy to be the leader in the market for Identity Management. The acquisitions, which have been integrated within the existing DataSolutions and DataAuthentication businesses, have all performed well and in line with our expectations during the year. The management team has clearly demonstrated its ability to identify, purchase and integrate businesses which can add real value to GB Group. We will continue to seek further acquisitions that meet the right criteria for our business.

Performance

We have delivered against the targets we set ourselves at the start of the year and have grown revenues year-on-year by 31%. Margins also improved at both the gross and operating levels as the effects of greater scale, a wider product set and effective cost control took effect. As a result of these activities, strong growth in both adjusted* operating profit of 114% and in adjusted* earnings per share of 100% was achieved. Importantly, cash conversion was robust and the Group's financial position remains very sound.

The Executive Team at GB Group, led by our Chief Executive, Richard Law, has driven the organic growth of the business in a year of significant organisational change and has also pursued our objective of making earnings enhancing acquisitions with enthusiasm and success. Our share price and total shareholder return have both been strong in absolute and relative terms over the year and, indeed over the four years to 31 March 2012, which is a firm measure of our achievements. The Chief Executive's Review and the Finance Director's Report set out the performance of the Group in more detail.

Dividend

Our excellent results and confidence in the future prospects for GB Group have enabled the Board to maintain its progressive dividend policy. A final dividend of 1.375 pence per share will, therefore, be recommended to shareholders at the forthcoming Annual General Meeting. This represents an increase of 7.8% over the dividend of 1.275 pence paid last year.

People

On behalf of the Board, I would like to thank the 168 original members of GB Group staff and extend a warm welcome to the 72 new people of the acquired businesses. The excellent results for the year are testament to the hard work and enthusiasm of the entire team across the enlarged group.

Outlook

GB Group has again started the new financial year in good shape and is well positioned to capitalise on our quickly developing markets. Although the trading environment and economy remain challenging, we faced similar challenges last year and have prospered. Accordingly, we look to the future with confidence.

D A Rasche

Chairman

* Adjusted figures exclude certain non-operational or exceptional items which the Directors have defined as costs of staff reorganisations, share-based payment costs, share of associates, amortisation and impairment of acquisition-related intangible assets, costs of acquisitions and deferred and contingent fair value adjustments.

CHIEF EXECUTIVE'S REVIEW

Overview

After a year during which we undertook three acquisitions and maintained our strategy and track record of delivering unique products and services, I can report that we have delivered a strong set of results in 2012. These results are ahead of market expectations and again demonstrate our ability to deliver on our vision for the Group in the UK and internationally.

In our 2009 report, we first described our vision to be the recognised leader in the field of identity management and a fundamental enabler of online business. At that time we set out the strategies we would employ to realise that vision and to grow the business. In the three years since then, we have successfully implemented this plan and have delivered an increase of over 200% in adjusted* operating profits to £3.7 million by 2012.

In 2012, the Group achieved a 31% increase in revenues to £31.8 million (2011 restated†: £24.2 million). Organic growth remained strong at 11%, with the net impact from acquisitions in the year adding another 20% to Group revenues. Adjusted* operating profits increased by 114% to £3.7 million (2011 restated†: £1.7 million). The 2012 adjusted operating profit of £3.7 million is arrived at by adjusting the operating profit before exceptional items of £3.2 million, as presented in the Consolidated Statement of Comprehensive Income, by the aggregate value of share-based payments and amortisation of acquisition-related intangibles of £0.5 million.

The acquisitions made during the year of Data Discoveries Holdings Limited ("Data Discoveries") in June 2011, Advanced Checking Services Limited ("ACS") in July 2011 and Capscan Parent Limited ("Capscan") in November 2011 have expanded our customer base in our core areas of business in the UK. Additionally, and of equal importance, they have enabled us to add new capabilities to our services, extend our product range and increase our ability to help our clients to trade successfully and safely online.

During the year our international electronic ID Verification service also saw significant new interest in response to the addition of six new countries into the service, together with a continued move by businesses to trade online and cross-border. I believe that this opportunity represents significant future potential for the Group.

In the year ahead our principle priorities will be to continue organic growth, further improve margins and complete the integration of our acquisitions, whilst continuing to add new country services to our portfolio and serve a greater proportion of the total transactions undertaken online.

DataAuthentication

Our DataAuthentication business provides the electronic ID Verification component of GB Group's identity management offerings. It continues to be the market leader in this developing market with a growing presence in online retail and Government sectors as well as a strong presence in mobile telecoms, online gaming and financial services.

With the acquisition of ACS, the DataAuthentication business further enriched its ID verification solutions to include confirmation of a driver's entitlement to drive as well as extending its reach into new markets such as transportation and fleet management.

Revenues in the DataAuthentication segment increased by 28% to £12.9 million (2011: £10.0 million) and included a 2% contribution from the in-year effect of the acquisition of ACS. This revenue growth delivered increased profitability in DataAuthentication with adjusted operating profits of £0.9 million (2010: £0.5 million).

During the year the business continued to expand its international ID verification capability and more than doubled the number of countries where we have the capability to carry out verifications that satisfy stringent anti-money laundering legislation. Together, these countries account for 44% of global GDP and approximately 22% of the worlds internet users. GB Group's focus on expanding its international coverage moves us closer to our vision to provide verification of 'Anyone, Anywhere in the World, Anytime'.

Additional and enhanced services are planned for the current year and we expect the demand for the verification of domestic and overseas nationals to continue to increase in line with the rise in the volume of online and cross-border transactions undertaken by individuals.

DataSolutions

DataSolutions provides the remaining three of GB's identity management offerings, namely ID Customer Registration, ID Marketing Services and ID Tracing software and services.

The DataSolutions business continued to focus on growing its organic business as well as completing and commencing the integration of Data Discoveries and Capscan. These acquisitions provide us with the opportunity to enhance our client and sector base across our ID Registration and ID Tracing offerings and enable the combined business to address the market more effectively and efficiently from a cost perspective. DataSolutions performed well and increased its overall revenues by 34% to £19.0 million (2011 restated†: £14.2 million) including a 32% contribution from the acquired businesses. Acquisitive and organic revenue growth resulted in adjusted operating profits increasing by 108% to £3.1 million (2011 restated†: £1.5 million).

The addition of Capscan in particular also added new strategic capability through Capscan's access to strategically important international address data. It is our intention in the year ahead to build upon this expertise and leverage it through the Group.

Our strategy for DataSolutions is to continue to demonstrate strong differentiation of our services from our competitors and to link these services with the ID Verification services provided by DataAuthentication.

Outlook

2012 was a very successful year for GB Group, both in strategic development and growth. Looking forward, I believe that we have created an opportunity of real value and we will endeavour to exploit this opportunity at a good rate of progress. We have an extremely strong team of people at GB Group working to a clear vision and, therefore, the Board and I are optimistic for the Group's future prospects.

R A Law

Chief Executive

† Following acquisitions in the year, the Group took the opportunity to re-examine all revenue recognition policies throughout the Group and assess whether the current applications of its policies were the most appropriate to take the enlarged business forward and to better align with the approach that future accounting standards are likely to take. As a consequence of this it made a reassessment of its application of its revenue recognition policy and adjusted the proportion of revenue being deferred. The Consolidated Balance Sheets as at 31 March 2011 and 2010 and the Consolidated Statement of Comprehensive Income for the year ended 31 March 2011 have been restated accordingly. The impact of this restatement has been detailed in full in the Finance Director's Report and in the Annual Report.

FINANCE DIRECTOR'S REPORT

The Group's Business

GB Group is a leading Identity Management business. It helps organisations recognise and verify all elements of an individual's identity at every interaction. Through the application of our proprietary technology, we enable organisations to connect, communicate and transact with people safely, responsibly and profitably.

The performance of the Group is reported by segment, reflecting the management responsibilities and economic characteristics of each division. The Group's two operating segments are as follows:

· DataAuthentication - which provides electronic ID Verification services for combating ID fraud, money laundering and under-age gambling

· DataSolutions - which provides ID Customer Registration, ID Marketing Services and ID Tracing software and services that provide accurate and up-to-date customer information and facilitate better understanding, targeting and retention of profitable customers

Group Vision, Objectives and Strategy

The Group's vision is to be the recognised leader in the field of identity management, a fundamental enabler of online business.

The Group's strategy is to create and maintain unique online products and services which provide additional value for clients and are of sufficient strength to enable the Group to create new markets and to consistently win new business against our competition. The Group achieves this through its investment in people and business development opportunities and the application of innovation, quality and excellence in everything it does.

Group Overview

The Group uses adjusted figures as key performance measures in addition to those reported under adopted IFRS. Adjusted figures exclude certain non-operational or exceptional items which is consistent with prior year treatments. In view of changes to IFRS 3, applicable to the Group from 1 April 2010, the Directors have defined these as costs of staff reorganisations, share-based payment costs, share of associates, amortisation and impairment of acquisition-related intangible assets, costs of acquisitions and deferred and contingent fair value adjustments. Unless otherwise stated, profit and earnings figures referred to below are adjusted measures.

The following description of the Group's performance is complemented by the segmental analysis in note 4 to the accounts which show the contributions from the DataSolutions and DataAuthentication segments. The full impact of our acquisitions in the year will not be fully evident in our segments until 2013.

	2012	restated 2011	Increase/ (Decrease)	Increase/ (Decrease)
	£'000	£'000	£'000	%

Revenue	31,827	24,230	7,597	31%
Adjusted operating profit	3,669	1,716	1,953	114%
Share based payments	(137)	6	(143)	(2,383%)
Amortisation of acquired intangibles	(358)	-	(358)	-
Operating profit before exceptional items	3,174	1,722	1,452	84%
Exceptional items	(676)	(206)	(470)	228%
Share of associates	24	-	24	-
Net finance (costs)/income	(16)	28	(44)	(157%)
Group profit before tax	2,506	1,544	962	62%
Total tax credit	1,094	379	715	189%
Group profit for the year attributable to shareholders	3,600	1,923	1,677	87%
Adjusted profit for the year attributable to shareholders	4,747	2,123	2,624	124%
Basic weighted average number of shares ('000)	94,741	85,738	9,003	11%
Adjusted basic earnings per share (p)	5.0	2.5	2.5	100%

The results for 2012 demonstrate the ability of the Group to achieve continued organic growth as well as utilising our capacity to invest in selective earnings-enhancing acquisitions.

Adjusted operating profit for the year increased by 114% to £3.7 million, reflecting:

· revenue growth of 31% to £31.8 million. This increase comprised organic growth of 11% and a combined contribution from acquisitions of 20%; and

· an improvement in the adjusted operating profit margin which increased from 7.1% to 11.5%, notwithstanding continued investment for growth.

Adjusted earnings per share was up 100% to 5.0p (2011 restated: 2.5p). Basic earnings per share was 3.8p (2011 restated: 2.2p). Group cash conversion was strong with net cash generated from operations of £3.6 million (2011: £1.7 million) compared to operating profit before depreciation, amortisation, share-based payments and exceptional items (EBITDA) of £4.1 million (2011 restated: £2.2 million).

The Group's balance sheet and financing ability remain strong, and although unutilised at the year end, the Group has a £7 million revolving credit facility, expiring in 2015.

Prior Period Restatements

As a consequence of the acquisition of similar businesses during the year and cognisant of the evolving nature of accounting standards concerning revenue recognition, the Group took the opportunity to re-examine all revenue recognition policies throughout the Group. In addition, the Group undertook an assessment of whether the current applications of its policies were the most appropriate to take the enlarged business forward and how best to align with the approach that future accounting standards are likely to take. Consequently, the 31 March 2011 and 2010 balance sheets have been restated as a result of a reassessment of the appropriate proportions of revenue that are spread over the contract duration for certain software licences where there is an online delivery component.

This following table shows the impact of this adjustment to the Consolidated Statement of Comprehensive Income and the Consolidated Balance Sheet:

	Consolidated Statement of Comprehensive Income		Consolidated Balance Sheet
	Revenue	Operating profit	Trade and other payables	Net assets
	£'000	£'000	£'000	£'000

At 31 March 2010 - as reported	-	-	7,215	13,065
Revenue recognition adjustment	-	-	1,044	(1,044)
At 31 March 2010 - as restated	-	-	8,259	12,021

At 31 March 2011 - as reported	24,411	1,697	7,125	14,287
Revenue recognition adjustment	(181)	(181)	1,225	(1,225)
At 31 March 2011 - as restated	24,230	1,516	8,350	13,062

The impact on profit for the year ended 31 March 2011 was a reduction of £181,000. The impact on net assets at 31 March 2011 was £1,225,000.

The impact on the 2011 basic and diluted earnings per share was a decrease of 0.3p and 0.2p per share respectively.

EBITDA

EBITDA was £4.1 million (2011 restated: £2.2 million), consisting of adjusted operating profit of £3.7 million (2011 restated: £1.7 million) and depreciation of £0.4 million (2011: £0.5 million).

Exceptional Items

Exceptional costs of £0.7 million (2011: £0.2 million) were incurred by the Group in the year. These costs consisted of £0.53 million of costs associated with making the acquisitions such as fees and expenses and also £0.15 million of staff reorganisation costs following the acquisitions. Costs of £0.25 million that were incurred as a result of a placing of 20,000,000 ordinary shares in the year were offset directly against equity and so do not go through the Consolidated Statement of Comprehensive Income.

Net Finance Costs/Income

The Group has incurred net finance costs for the year of £16,000 compared with net finance income of £28,000 in 2011. The increase in net finance costs was primarily due to interest and other borrowing costs associated with the revolving credit facility that was put into place during the year and which still remains available to the Group.

Acquired Intangibles Amortisation

The charge for the year of £0.4 million (2011: £nil) represents the non-cash cost of amortising separately identifiable intangible assets including brands, trademarks, technology-based assets and customer relationships that were acquired through business combinations.

Taxation

The Group tax credit of £1.1 million (2011: £0.4 million credit) reflects the recognition of an increased deferred tax asset relating to capital allowances and tax losses. There was a negligible amount of current tax payable on the Group's profits in the year (2011: £negligible).

Dividend

The Board of Directors will propose a final ordinary dividend of 1.375 pence per share (2011: 1.275 pence per share), amounting to £1.5 million (2011: £1.1 million). The final ordinary dividend with respect to the year ended 31 March 2012, if approved, will be paid on 10 August 2012 to ordinary shareholders whose names were on the register on 13 July 2012.

Earnings per Share

The earnings per share analysis in this report and in note 7 cover three measures: adjusted basic earnings per share (profit after tax, before share-based payment costs, share of associates, amortisation and impairment of acquisition-related intangible assets and exceptional items); basic earnings per share (after all adjustments); and diluted earnings per share (adjusting for dilutive effect of share options). Adjusted earnings (net profit after tax attributable to shareholders before amortisation, share-based payments, share of associates and exceptional items) were £4.7 million (2011 restated: £2.1 million) resulting in a 100% increase in adjusted earnings per share from 2.5p to 5.0p. The weighted average number of shares at 31 March 2012 increased to 94.7 million (2011: 85.7 million).

Cash Flows

Group operating activities generated £3.6 million of cash and cash equivalents (2011: £1.7 million). Operating cash flows continue to be healthy and the Group continually monitors its measures of cash generation and collection. Cash generated by operations before working capital movements increased by 70% to £3.4 million (2011: £2.0m). Net cash generated from operations increased by 113% from £1.7 million to £3.6 million representing an EBITDA to cash conversion ratio of 88% (2011 restated: 76%). Group investing activities resulted in net outflows of £12.0 million (2011: £0.4 million) including £11.6 million (2011: £nil) in respect of acquisitions and £0.4 million (2011: £0.3 million) on plant and equipment purchases. Financing activities generated £7.0 million (2011: £0.9 million outflow) of net cash inflows in the year following £8.1 million raised in a share issue and £1.1 million of dividend paid. The Group's overall cash and cash equivalents decreased by £1.4 million (2011: £0.4 million increase) in the year. Further detailed analysis of this movement is included in the Consolidated Cash flow Statement.

Acquisitions

The Group made three acquisitions during the year. The first of these was of 100% of the voting shares of Data Discoveries Holdings Limited (Data Discoveries), an unlisted company based in the United Kingdom providing trace software to the debt collection industry and to UK Government agencies. The consideration was in cash and shares of £0.8 million with no deferred or contingent consideration. The second acquisition was of 100% of the voting shares of Advanced Checking Services Limited (ACS), an unlisted company based in the United Kingdom providing electronic checking of driving licences. The initial purchase consideration on this acquisition was £0.5 million of cash with further payments of up to £5 million of cash and shares being payable upon the achievement on stretching future profit targets. The third acquisition was of 100% of the voting shares of Capscan Parent Limited (Capscan), an unlisted company based in the United Kingdom providing customer registration and address management software. The total cash consideration paid net of cash acquired was £11.1 million with £0.5 million of the payment being deferred. Further information on these acquisitions can be found in note 30 to the accounts.

Deferred Income

Deferred income balances at the end of the year increased by 101% to £4.4 million (2011 restated: £2.2 million). This balance principally consists of the amount of prepaid committed usage for the DataAuthentication business combined with contracted licence revenues and profits that are payable up front but spread over the contract durations in line with the Group's revenue recognition policy on certain software that is delivered online. The increase has been driven by strong contracted sales which will deliver their profits in the forthcoming year and beyond.

Net Assets

Group net assets at the end of 2012 were £23.9 million, an increase of £10.8 million on the restated 2011 level of £13.1 million. This increase is driven by the increase in equity capital of £8.2 million combined with the total comprehensive income for the year of £3.6 million, less dividends paid of £1.1 million and after adjusting for share based payments of £0.1 million.

Key Performance Indicators

The Board monitors the Group's progress against its strategic objectives and the financial performance of the Group's operations on a regular basis. Performance is assessed against the strategy and budgets using financial and non-financial measures.

The following details some of the principal Key Performance Indicators (KPIs) used by the Group, their purpose, the basis of calculation and the source of the underlying data. A summary of performance against these KPIs is given below.

· Financial

The Group uses the following primary measures to assess the performance of the Group and its propositions.

- Revenue

Revenue and revenue growth are used for internal performance analysis and by investors to assess progress against outlook statements in the market.

- Adjusted operating profit

This is used by the Group for internal performance analysis and by investors to assess progress against outlook statements in the market.

- EBITDA

This is used by the Group for internal performance analysis and by investors to assess progress against outlook statements in the market and cash generation.

- Earnings per share

Earnings per share is calculated as basic earnings per share from continuing operations on both an adjusted and unadjusted basis.

- Cash

Cash and cash equivalent balances are used by the Group for internal performance analysis and by investors to assess progress against outlook statements.

· Non-Financial

- Underlying Identity Verifications

Management believe that DataAuthentication transaction-based measures provide useful information for investors regarding trends in client revenue derived from electronic identity verification services and the extent to which clients have adopted the service. The data used to calculate this KPI is extracted from the Group's billing and financial systems. Underlying identity verifications is the total number of verifications on the Group's URU™ and ID3-Check™ systems and excludes one-off batch verifications.

Performance Against KPIs

A summary of the Group's progress in achieving its objectives, as measured against KPIs, is set out below.

	Year ended 31 March
	2012	restated 2011

Revenue Growth	31.4%	9.1%
Organic Revenue Growth	11.3%	9.1%
DataAuthentication Revenue Growth	28.1%	3.7%
DataSolutions Revenue Growth	33.7%	13.3%

Adjusted operating profit	3,669	1,716
Adjusted operating profit %	11.5%	7.1%

EBITDA	4,064	2,196
EBITDA%	12.8%	9.1%

Earnings per share - basic	3.8p	2.2p
Earnings per share - adjusted basic	5.0p	2.5p

Cash (£'000)	4,757	6,168

Underlying identity verifications	13,680,615	9,758,636

Principal Risks and Uncertainties

Management use a model to identify and assess the impact of risks to the business under four key headings - financial, strategic, operational and knowledge. For each risk, the likelihood and consequence are identified, management controls are confirmed and results reported. The corporate governance report in the Annual Report provides further detail about the Group's risk management process. The significant risks and uncertainties faced by the Group are as set out below:

· Regulatory risk: legislation in all the markets we serve changes on a regular basis, and interpretation of existing laws can also change to create ever tightening standards, often requiring additional human and financial resources and the provision of new assets and systems. Whilst the Group is committed to respond positively to new regulation and legislation, changes could affect the pricing for, or adversely affect the revenue from, the services the Group offers.

· Competitive position: the Group operates in competitive markets and intensified competition could lead to both pricing pressures, a reduction in the rate at which the Group adds new customers and to a decrease in the size of the Group's market share if clients chose to receive services from other providers.

· Non-supply by major supplier: the Group sources some of its data and infrastructure from third party suppliers and partners. The removal from the market of one or more of these third party suppliers or interruption in supply could quickly affect the Group's operations adversely and could result in loss of revenue or additional expenditure for the Group.

· Disaster recovery and business continuity: the Group has an understandable reliance on its place of business, IT systems and people. The loss of key components could affect the Group's operations and result in additional expenditure whilst the established business continuity plan is effected following an incident.

· New product development: in order to maintain competitive advantage, the Group invests significant amounts of resources into product development. The development of all new technologies and products involves risk, including the product being more expensive, or taking longer, to develop than originally planned; that the market for the product is smaller than originally envisaged; or that the product fails to reach the production stage.

· Intellectual property risk: we generally protect our proprietary application software products and services by licensing rights to use the applications, rather than selling or licensing the computer source code. We rely on trademark, copyright, patent and other intellectual property laws to establish and protect our proprietary rights in these products and services. However, there is a risk that our proprietary rights could be challenged, limited, invalidated or circumvented.

In each case, there is an ongoing process for identifying, evaluating and managing the principal risks of the Group.

Relationships

Other than our shareholders, the Group's performance and value are influenced by other stakeholders, principally our clients, suppliers, employees and our strategic partners. Relationships are managed both on an individual basis and via representative groups. The Group participates in industry groups which give a genuine access to client and supplier groups and decision makers in government and other regulatory bodies.

Treasury Policy and Financial Risk

The Group's treasury operation is managed within formally defined policies which are reviewed by the Board. The Group finances its activities principally with cash and short-term deposits but has the ability to draw down up to £7 million of further funding from a revolving credit facility that is in place. Other financial assets and liabilities, such as trade receivables and trade payables, arise directly from the Group's operating activities. Surplus funds of the Group are invested through the use of short-term deposits with the objective of maximising fixed interest rate returns whilst still providing the flexibility to fund on-going operations when required. It is not the Group's policy to engage in speculative activity or to use complex financial instruments.

D J Wilson

Group Finance Director

Consolidated Statement of Comprehensive Income

Year ended 31 March 2012

			restated
		2012	2011
		£'000	£'000
	Note

Revenue	3	31,827	24,230

Cost of sales		(14,521)	(11,512)

Gross profit		17,306	12,718

Other operating expenses excluding exceptional items		(14,132)	(10,996)

Operating profit before exceptional items		3,174	1,722

Exceptional items	5	(676)	(206)

Share of associate investment result		24	-

Group operating profit		2,522	1,516

Finance revenue		18	28

Finance costs		(34)	-

Profit before tax		2,506	1,544

Income tax credit		1,094	379

Total comprehensive income for the year attributable to equity holders of the parent		3,600	1,923



Earnings per share	7
- basic earnings per share for the year		3.8p	2.2p

- diluted earnings per share for the year		3.7p	2.2p

Consolidated Statement of Changes in Equity Year ended 31 March 2012


	Equity share capital	Merger reserve	Capital redemption reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000

Balance at 1 April 2010 (restated)	6,021	6,575	3	(578)	12,021

Profit for the period	-	-	-	1,923	1,923

Total comprehensive income for the period	-	-	-	1,923	1,923

Issue of share capital	150	-	-	-	150

Share-based payments credit	-	-	-	(6)	(6)

Equity dividend	-	-	-	(1,026)	(1,026)

Balance at 31 March 2011 (restated)	6,171	6,575	3	313	13,062

Profit for the period	-	-	-	3,600	3,600

Total comprehensive income for the period	-	-	-	3,600	3,600

Issue of share capital	8,424	-	-	-	8,424

Share issue costs	(250)	-	-	-	(250)

Share-based payments charge	-	-	-	137	137

Equity dividend	-	-	-	(1,100)	(1,100)

Balance at 31 March 2012	14,345	6,575	3	2,950	23,873

Company Statement of Changes in Equity Year ended 31 March 2012


	Equity share capital	Merger reserve	Capital redemption reserve	Retained earnings	Total Equity
	£'000	£'000	£'000	£'000	£'000

Balance at 1 April 2010 (restated)	6,021	6,575	3	1,721	14,320

Profit for the period	-	-	-	1,923	1,923

Total comprehensive income for the period	-	-	-	1,923	1,923

Issue of share capital	150	-	-	-	150

Share-based payments credit	-	-	-	(6)	(6)

Equity dividend	-	-	-	(1,026)	(1,026)

Balance at 31 March 2011 (restated)	6,171	6,575	3	2,612	15,361

Profit for the period	-	-	-	3,752	3,752

Total comprehensive income for the period	-	-	-	3,752	3,752

Issue of share capital	8,424	-	-	-	8,424

Share issue costs	(250)	-	-	-	(250)

Share-based payments charge	-	-	-	137	137

Equity dividend	-	-	-	(1,100)	(1,100)

Balance at 31 March 2012	14,345	6,575	3	5,401	26,324

Consolidated Balance Sheet

As at 31 March 2012

			restated	restated
	Note	2012	2011	2010
		£'000	£'000	£'000
ASSETS

Non-current assets
Plant and equipment	8	933	848	1,023
Intangible assets	9	20,045	6,707	6,604
Investments accounted for using the equity method		58	-	-
Deferred tax asset		2,206	1,200	815

		23,242	8,755	8,442

Current assets
Trade and other receivables		10,630	6,495	6,165
Cash and short-term deposits		4,757	6,168	5,747

		15,387	12,663	11,912

TOTAL ASSETS		38,629	21,418	20,354


EQUITY AND LIABILITIES

Capital and reserves
Equity share capital	10	14,345	6,171	6,021
Merger reserve		6,575	6,575	6,575
Capital redemption reserve		3	3	3
Retained earnings		2,950	313	(578)

Total equity attributable to equity holders of the parent		23,873	13,062	12,021

Non-current liabilities
Deferred/contingent consideration	13	571	-	-
Deferred tax liability		1,360	-	-
		1,931	-	-

Current liabilities
Trade and other payables		12,744	8,350	8,259
Current tax		81	6	22
Provisions		-	-	52

		12,825	8,356	8,333

TOTAL LIABILITIES		14,756	8,356	8,333

TOTAL EQUITY AND LIABILITIES		38,629	21,418	20,354

Approved by the Board on 29 May 2012

R A Law - Director

Registered in England number 2415211

	Company Balance Sheet
	As at 31 March 2012

				restated	restated
		Note	2012	2011	2010
			£'000	£'000	£'000
ASSETS

Non-current assets
Plant and equipment		8	840	848	1,023
Intangible assets		9	201	201	98
Investments			26,961	9,317	9,317
Deferred tax asset			2,206	1,200	815

			30,208	11,566	11,253

Current assets
Trade and other receivables			8,158	6,495	6,165
Cash and short-term deposits			2,371	6,168	5,747

			10,529	12,663	11,912

TOTAL ASSETS			40,737	24,229	23,165


EQUITY AND LIABILITIES

Capital and reserves
Equity share capital		10	14,345	6,171	6,021
Merger reserve			6,575	6,575	6,575
Capital redemption reserve			3	3	3
Retained earnings			5,401	2,612	1,721

Total equity attributable to equity holders of the parent			26,324	15,361	14,320

Non-current liabilities
Deferred/contingent consideration		13	571	-	-
			571	-	-

Current liabilities
Trade and other payables			13,841	8,862	8,771
Current tax			1	6	22
Provisions			-	-	52

			13,842	8,868	8,845

TOTAL LIABILITIES			14,413	8,868	8,845

TOTAL EQUITY AND LIABILITIES			40,737	24,229	23,165

Approved by the Board on 29 May 2012

R A Law - Director

Consolidated Cash Flow Statement

Year ended 31 March 2012

			restated
	Note	2012	2011
		£'000	£'000

Group profit before tax		2,506	1,544

Adjustments to reconcile Group profit before tax to net cash flows

Share of associate investment result		(24)	-
Finance revenue		(18)	(28)
Finance costs		34	-
Depreciation of plant and equipment		376	431
Amortisation of intangible fixed assets		377	49
Share-based payments	11	137	(6)
Increase in trade and other receivables		(2,299)	(330)
Increase in trade and other payables		2,527	91
Decrease in provisions		-	(52)

Cash generated from operations		3,616	1,699
Income tax paid		(21)	(22)
Net cash generated from operating activities		3,595	1,677


Cash flows from investing activities

Acquisition of subsidiaries, net of cash acquired	13	(11,581)	-
Purchase of plant and equipment		(404)	(256)
Expenditure on product development		(19)	(152)
Interest received		18	28

Net cash flows used in investing activities		(11,986)	(380)


Cash flows from financing activities

Finance costs		(34)	-
Proceeds from issue of shares		8,364	150
Share issue costs		(250)	-
Dividends paid to equity shareholders		(1,100)	(1,026)

Net cash flows used in financing activities		6,980	(876)


Net (decrease)/increase in cash and cash equivalents		(1,411)	421
Cash and cash equivalents at the beginning of the period		6,168	5,747

Cash and cash equivalents at the end of the period		4,757	6,168

Company Cash Flow Statement

Year ended 31 March 2012

			restated
	Note	2012	2011
		£'000	£'000

Company profit before tax		2,747	1,544

Adjustments to reconcile Company profit before tax to net cash flows

Finance revenue		(18)	(28)
Finance costs		34	-
Depreciation of plant and equipment		359	431
Amortisation of intangible fixed assets		19	49
Share-based payments	11	137	(6)
Increase in trade and other receivables		(1,663)	(330)
Increase in trade and other payables		4,979	91
Decrease in provisions		-	(52)

Cash generated from operations		6,594	1,699
Income tax paid		(6)	(22)
Net cash generated from operating activities		6,588	1,677


Cash flows from investing activities

Acquisition of subsidiary undertakings	13	(17,013)	-
Purchase of plant and equipment		(351)	(256)
Expenditure on product development		(19)	(152)
Interest received		18	28

Net cash flows used in investing activities		(17,365)	(380)


Cash flows from financing activities

Finance costs		(34)	-
Proceeds from issue of shares		8,364	150
Share issue costs		(250)	-
Dividends paid to equity shareholders		(1,100)	(1,026)

Net cash flows used in financing activities		6,980	(876)


Net (decrease)/increase in cash and cash equivalents		(3,797)	421
Cash and cash equivalents at the beginning of the period		6,168	5,747

Cash and cash equivalents at the end of the period		2,371	6,168

Notes to the Accounts

1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRSs

The Group and Company financial statements of GB Group plc (the 'Company') for the year ended 31 March 2012 were authorised for issue by the Board of Directors on 29 May 2012 and the balance sheets were signed on the Board's behalf by R A Law and D J Wilson. GB Group plc is a public limited company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the Alternative Investment Market of the London Stock Exchange.

The Group and Company's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union as they apply to the financial statements of the Group and Company for the year ended 31 March 2012.

The Company has taken advantage of the exemption provided under section 408 of the Companies Act 2006 not to publish its individual Statement of Comprehensive Income and related notes.

2. ACCOUNTING POLICIES

Basis of Preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. A summary of the significant accounting policies is set out below.

The accounting policies that follow set out those policies that apply in preparing the financial statements for the year ended 31 March 2012. The Group and Company have applied the same policies throughout the year but have made a reassessment of its application of its revenue recognition policy and adjusted the proportion of revenue being deferred. The Consolidated Balance Sheets as at 31 March 2011 and 2010 and the Consolidated Statement of Comprehensive Income for the year ended 31 March 2011 have been restated accordingly. This restatement is detailed in the notes to the accounts.

The Group and Company financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

Basis of Consolidation

The Group financial statements consolidate the financial statements of GB Group plc and its subsidiary undertakings drawn up to 31 March each year.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement. The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All intragroup balances and transactions, including unrealised profits arising from them, are eliminated.

The Company's Investments in Subsidiaries

In its separate financial statements the Company recognises its investments in subsidiaries at cost less any provision for impairment.

Interests in Associates

Associates are undertakings that are not subsidiaries or joint ventures over which the Group has significant influence and can participate in financial and operating policy decisions. Investments in associated undertakings are accounted for using the equity method. The Consolidated Statement of Comprehensive Income includes the Group's share of the profit after tax of the associated undertakings. Investments in associates include goodwill identified on acquisition and are carried in the Group balance sheet at cost plus post-acquisition changes in the Group's share of the net assets of the associate, less any impairment in value.

Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated to write off cost less estimated residual value based on prices prevailing at the balance sheet date on a straight-line basis over the estimated useful life of each asset as follows:

Plant and equipment - over 3 to 10 years

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the Statement of Comprehensive Income in the year the item is derecognised.

Residual values and estimated remaining lives are reviewed annually.

Business Combinations

GB Group has applied the business combinations exemption in IFRS 1. It has not restated business combinations that took place prior to the 1 April 2004 transition date.

Business combinations from 1 January 2010

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity.

Goodwill is initially measured at cost being the excess of the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree) over the net identifiable amounts of the assets acquired and the liabilities assumed in exchange for the business combination. Assets acquired and liabilities assumed in transactions separate to the business combinations, such as the settlement of pre-existing relationships or post-acquisition remuneration arrangements are accounted for separately from the business combination in accordance with their nature and applicable IFRSs. Identifiable intangible assets, meeting either the contractual-legal or separability criterion are recognised separately from goodwill. Contingent liabilities representing a present obligation are recognised if the acquisition-date fair value can be measured reliably.

If the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the non-controlling interest (and where the business combination is achieved in stages, the acquisition-date fair value of the acquirer's previously held equity interest in the acquiree) is lower than the fair value of the assets, liabilities and contingent liabilities and the fair value of any pre-existing interest held in the business acquired, the difference is recognised in profit and loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units (or groups of cash generating units) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units to which goodwill is allocated shall represent the lowest level within the entity at which the goodwill is monitored for internal management purposes and not be larger than an operating segment before aggregation.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Impairment of Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the Statement of Comprehensive Income in those expense categories consistent with the function of the impaired asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only on assets other than goodwill if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Intangible Assets

Goodwill

Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill already carried in the balance sheet at 1 April 2004 or relating to acquisitions after that date is not amortised. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill is allocated to the cash-generating unit expected to benefit from the synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit, including the related goodwill. Where the recoverable amount of the cash-generating unit is less than the carrying amount, including goodwill, an impairment loss is recognised in the Statement of Comprehensive Income. The carrying amount of goodwill allocated to a cash-generating unit is taken into account when determining the gain or loss on disposal of the unit, or an operation within it. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an individual project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete and the availability to measure reliably the expenditure during the development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure capitalised is amortised on a straight line basis over 2 to 4 years.

Acquired intangibles

Separately identifiable intangible assets such as patent fees, licence fees, trademarks and customer lists and relationships are capitalised on the balance sheet only when the value can be measured reliably, or the intangible asset is purchased as part of the acquisition of a business. Such intangible assets are amortised over their useful economic lives on a straight line basis.

Separately identified intangible assets acquired in a business combination are initially recognised at their fair value. Intangible assets are subsequently stated at fair value or cost less accumulated amortisation and any accumulated impairment losses. Amortisation is recognised in the Consolidated Statement of Comprehensive Income on a straight-line basis over the estimated useful life of the asset. The carrying value of intangible assets is reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable.

Estimated useful lives typically applied are as follows:

· Technology based assets 2-3 years

· Brands and trademarks 2-3 years

· Customer relationships 10 years

Trade and Other Receivables

Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectable amounts. A provision is made against a trade receivable only when there is objective evidence that the Group may not be able to recover the entire amount due under the original terms of the invoice. The carrying amount of the receivable is reduced through the use of a provision for doubtful debts account. Impaired debts are derecognised when they are assessed as uncollectible.

Cash and Short-Term Deposits

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity date of three months or less.

For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of any outstanding bank overdrafts.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

Pensions

The Group does not have a contributory pension scheme. Payments are made to individual private defined contribution pension arrangements. Contributions are charged in the Statement of Comprehensive Income as they become payable.

Exceptional Items

The Group presents as exceptional items on the face of the Statement of Comprehensive Income, those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

Dividends

Dividend distribution to the Company's shareholders is recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders.

Share-Based Payment Transactions

Employees (including directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

The Group has taken advantage of the exemption in IFRS 1 in respect of equity settled awards so as to apply IFRS 2 only to those equity settled awards granted after 7 November 2002 that had not vested on or before 1 January 2005.

Equity-Settled Transactions

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The fair value is determined by an external valuer using a binomial model. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of GB Group plc ('market conditions') and non-vesting conditions, if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('the vesting date'). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The Statement of Comprehensive Income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting conditions were satisfied, provided that all other vesting conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised over the remainder of the new vesting period for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it was granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected in the computation of earnings per share (see note 13).

Revenue Recognition

Revenue is measured at the fair value of the consideration received from the sale of software and rendering of services, net of value-added tax, rebates and discounts and after the elimination of inter-company transactions within the Group. Revenue is recognised as follows:

(a) Sale of software licences

Revenue in respect of software licences where the Group has no further obligations and the contract is non cancellable is recognised at the time of sale. Revenue in respect of software licences where there are further contractual obligations, in the form of additional services provided by the Group, such as software delivered online is recognised over the duration of the licence in line with when the costs are incurred and delivery obligations fulfilled.

(b) Rendering of services

Revenue from the rendering of services is recognised by reference to the stage of completion. Stage of completion of the specific transaction is assessed on the basis of the actual services provided as a proportion of the total services to be provided.

Revenue is recognised as interest accrues using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to its net carrying amount.

Operating Leases

Payments made under operating leases (net of any incentives received from the lessor) are charged to the Statement of Comprehensive Income on a straight-line basis over the period of the lease.

Deferred Income Tax

Deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and liabilities included in the financial statements and the amounts used for tax purposes, that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:

No provision is made where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction which is not a business combination that at the time of the transaction affect neither accounting nor taxable profit.

No provision is made for deferred tax that would arise on all taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, where the timing of the reversal of temporary differences can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised only to the extent that the directors consider that it is probable that there will be suitable taxable profits from which the future reversal of the underlying temporary differences and unused tax losses and credits can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the asset is realised or liability settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Foreign currencies

The Company's functional currency and presentation currency is pounds sterling. Transactions in foreign currencies are initially recorded in the functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to the Consolidated Statement of Comprehensive Income.

Finance costs

Finance costs consist of interest and other costs that are incurred in connection with the borrowing of funds. Finance costs are expensed in the period in which they are incurred.

New Accounting Standards and Interpretations Applied

The accounting policies adopted in the preparation of these financial statements are consistent with those followed in the preparation of the financial statements for the year ended 31 March 2011, except for the adoption of relevant new Standards and Interpretations noted below. Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group and the Company.

International Financial Reporting Interpretations Committee (IFRIC)

Adoption date

IFRIC 19

Extinguishing Financial Liabilities with Equity Instruments

1 July 2010

International Accounting Standards (IAS / IFRS)		Adoption date
IFRS 1	Amendment to IFRS 1 - Limited Exemption from Comparative IFRS 7 disclosures	1 July 2010
IAS 24	Related Party Disclosures (revised)	1 January 2011
	Improvements to IFRS (issued May 2010)	May 2010

New Accounting Standards and Interpretations not Applied

During the year, the IASB and IFRIC have issued the following standards and interpretations applicable to the Group with an effective date after the date of these financial statements:

International Accounting Standards (IAS / IFRS)		Effective date

IAS 1	Financial Statement Presentation - Presentation of Items of Other Comprehensive Income	1 July 2012
IAS 12	Income Taxes - Recovery of Underlying Assets	1 January 2012
IAS 19	Employee Benefits (Revised)	1 January 2013
IAS 32	Offsetting of Financial Instruments	1 January 2014
IFRS 7	Financial Instruments: Disclosures - Enhanced Derecognition Disclosure Requirements	1 July 2011
IFRS 7	Offsetting of Financial Instruments	1 January 2013
IFRS 9	Financial Instruments: Classification and Measurement	1 January 2015
IFRS 10	Consolidated Financial Statements	1 January 2013
IFRS 11	Joint Arrangements	1 January 2013
IFRS 12	Disclosure of Involvement with Other Entities	1 January 2013
IFRS 13	Fair value measurement	1 January 2013

The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the Group's or the Company's financial statements in the period of initial application.

Judgements and Key Sources of Estimation Uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.

In the process of applying the Group's accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

Impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy in note 2 above. An analysis of the Group's goodwill and the assumptions used to test for impairment are set out in the Annual Report and Accounts.

Impairment of other assets

The Group reviews the carrying value of all assets for indications of impairment at each balance sheet date. If indicators of impairment exist the carrying value of the asset is subject to further testing to determine whether its carrying value exceeds its recoverable amount. The recoverable amount represents the higher of the asset's fair value less costs to sell and its value in use, which is determined by measuring the discounted cash flows arising from the asset (including ultimate realisation on disposal).

Deferred tax assets

Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits. The carrying value of the recognised deferred tax asset at 31 March 2012 was £2,206,000 (2011: £1,200,000) and the unrecognised deferred tax asset at 31 March 2012 was £3,173,000 (2011 restated: £5,083,000). Further details are contained in the Annual Report and Accounts.

Share-based payments

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Judgement is required in determining the most appropriate valuation model for a grant of equity instruments, depending on the terms and conditions of the grant. Management are also required to use judgement in determining the most appropriate inputs to the valuation model including expected life of the option, volatility and dividend yield. The assumptions and models used are disclosed in Note 11.

Valuation and asset lives of separately identifiable intangible assets

The Group has made judgements in relation to the potential future cash flows to be determined from separable intangible assets acquired as part of business combinations. This assessment involves assumptions relating to potential future revenues, appropriate discount rates and the useful life of such assets. These assumptions impact the Consolidated Statement of Comprehensive Income over the useful life of the intangible asset.

Contingent/deferred consideration

Contingent consideration relating to acquisitions is included based on management estimates of the most likely outcome (Note 13). Under IFRS 3 subsequent re-measurement of contingent consideration is recognised in the Consolidated Statement of Comprehensive Income.

Prior Period Restatements

As a consequence of the acquisition of similar businesses during the year and cognisant of the evolving nature of accounting standards concerning revenue recognition, the Group took the opportunity to re-examine all revenue recognition policies throughout the Group and assess whether the current applications of its policies were the most appropriate to take the enlarged business forward and to better align with the approach that future standards are likely to take. Consequently, the 31 March 2011 and 2010 balance sheets along with the 2011 Consolidated Statement of Comprehensive Income have been restated as a result of a reassessment of the most appropriate proportions of revenue that are spread over the contract duration for certain software licences where there is an online delivery component. This following table shows the impact of this adjustment to the Consolidated Statement of Comprehensive Income and the Consolidated Balance Sheet:

	Consolidated Statement of Comprehensive Income		Consolidated Balance Sheet
	Revenue	Operating profit	Trade and other payables	Net assets
	£'000	£'000	£'000	£'000

At 31 March 2010 - as reported	-	-	7,215	13,065
Revenue recognition adjustment	-	-	1,044	(1,044)
At 31 March 2010 - as restated	-	-	8,259	12,021

At 31 March 2011 - as reported	24,411	1,697	7,125	14,287
Revenue recognition adjustment	(181)	(181)	1,225	(1,225)
At 31 March 2011 - as restated	24,230	1,516	8,350	13,062

The impact on profit for the year ended 31 March 2011 was a reduction of £181,000. The impact on net assets at 31 March 2011 was £1,225,000.

The impact on the 2011 basic and diluted earnings per share was a decrease of 0.3p and 0.2p per share respectively.

3. REVENUE

Revenue disclosed in the Consolidated Statement of Comprehensive Income is analysed as follows:

		restated
	2012	2011
	£'000	£'000

Sale of goods	12,698	7,522
Rendering of services	19,129	16,708
Revenue	31,827	24,230

Finance revenue	18	28
Total revenue	31,845	24,258

4. SEGMENTAL INFORMATION

The Group's operating segments are internally reported to the Group's Chief Executive Officer based on two separable areas grouped into two operating segments: DataAuthentication - which provides electronic identity verification services and DataSolutions - which provides identity capture, maintenance and analysis services. The Directors believe that the best measure of performance of those segments is operating profit before finance revenue and income tax as shown below.

All revenues and all non-current assets are derived from UK operations. Segment results include items directly attributable to either DataAuthentication or DataSolutions. Unallocated items for 2012 represent Group head office costs (£435,000), share of associate investment (£24,000), exceptional costs (£676,000), Group finance income (£18,000), Group finance costs (£34,000), Group income tax credit (£1,094,000) and share-based payments charge (£137,000). Unallocated items for 2011 represent Group head office costs (£293,000), exceptional costs (£206,000), Group finance income (£28,000), Group income tax credit (£379,000) and share-based payments credit (£6,000).

Information on segment assets and liabilities is not regularly provided to the Group's Chief Executive Officer and is therefore not disclosed below.

	Data Authentication	Data Solutions	Unallocated	2012
Year ended 31 March 2012	£'000	£'000	£'000	£'000
Revenue	12,869	18,958	-	31,827
Operating profit before depreciation	1,039	3,460	(1,111)	3,388
Depreciation and amortisation	(110)	(643)	-	(753)
Operating profit before finance revenue and income tax	929	2,817	(1,111)	2,635
Share of associate investment			24	24
Finance revenue			18	18
Finance costs			(34)	(34)
Share-based payments credit			(137)	(137)
Income tax			1,094	1,094
Profit for the period				3,600

	Data Authentication	Data Solutions	Unallocated	2011
Year ended 31 March 2011 (restated)	£'000	£'000	£'000	£'000
Revenue	10,049	14,181	-	24,230
Operating profit before depreciation	619	1,870	(499)	1,990
Depreciation and amortisation	(99)	(381)	-	(480)
Operating profit before finance revenue and income tax	520	1,489	(499)	1,510
Finance revenue			28	28
Share-based payments credit			6	6
Income tax			379	379
Profit for the period				1,923

The acquisitions made during the year have been absorbed and are managed in the Group's operating segments and reported as follows:

· Data Discoveries is reported within the DataSolutions segment.

· Advanced Checking Services is reported within the DataAuthentication segment.

· Capscan is reported within the DataSolutions segment

Information about major customers

Annual revenue from one (2011: one) customer amounted to £3,276,000 (2011: £2,835,000) arising from sales reported in the DataAuthentication segment.

5. EXCEPTIONAL ITEMS

Exceptional costs of £676,000 in the year ended 31 March 2012 consist of £530,000 of costs associated with the acquisitions during the year along with £146,000 of staff reorganisation costs. Exceptional costs in the year ended 31 March 2011 of £206,000 were costs principally associated with the Company's move to AIM on 27 August 2010 along with staff reorganisation costs.

6. DIVIDENDS PAID AND PROPOSED
	2012 £'000	2011 £'000

Declared and paid during the year
Final dividend for 2011: 1.275p (2010: 1.20p)	1,100	1,026


Proposed for approval at AGM (not recognised as a liability at 31 March)
Final dividend for 2012: 1.375 (2011: 1.275p)	1,484	1,099
7. EARNINGS PER ORDINARY SHARE

Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the basic weighted average number of ordinary shares in issue during the year.

			restated	restated
	2012 pence per share	2012 £'000	2011 pence per share	2011 £'000

Profit attributable to equity holders of the parent	3.8	3,600	2.2	1,923

Diluted

Diluted earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

	2012	2011
	No.	No.

Basic weighted average number of shares in issue	94,741,029	85,737,711
Dilutive effect of share options	2,767,829	1,256,829
Diluted weighted average number of shares in issue	97,508,858	86,994,540

			restated	restated
	2012 pence per share	2012 £'000	2011 pence per share	2011 £'000

Profit attributable to equity holders of the Company	3.7	3,600	2.2	1,923

8. PLANT AND EQUIPMENT

Group
							Plant and equipment
							£'000
Cost
At 1 April 2010							3,004
Additions							256
Disposals							(105)
At 31 March 2011							3,155

Acquired on acquisition							57
Additions							404
At 31 March 2012							3,616

Depreciation and impairment
At 1 April 2010							1,981
Provided during the year							431
Disposals							(105)
At 31 March 2011							2,307

Provided during the year							376
At 31 March 2012							2,683

Net book value
At 31 March 2012							933

At 31 March 2011							848

At 1 April 2010							1,023

The net book value in respect of assets held under finance leases and hire purchase agreements is £nil (2011: £nil).

8. PLANT AND EQUIPMENT (continued)

Company
							Plant and equipment
							£'000
Cost
At 1 April 2010							3,004
Additions							256
Disposals							(105)
At 31 March 2011							3,155

Additions							351
At 31 March 2012							3,506

Depreciation and impairment
At 1 April 2010							1,981
Provided during the year							431
Disposals							(105)
At 31 March 2011							2,307

Provided during the year							359
At 31 March 2012							2,666

Net book value
At 31 March 2012							840

At 31 March 2011							848

At 1 April 2010							1,023

The net book value in respect of assets held under finance leases and hire purchase agreements is £nil (2011: £nil).

9. INTANGIBLE ASSETS

Group	Customer relationships £'000	Other acquisition intangibles £'000	Total acquisition intangibles £'000	Goodwill £'000	Internally developed software £'000	Total £'000

Cost
At 1 April 2010	-	-	-	6,506	293	6,799
Additions - product development	-	-	-	-	152	152
At 31 March 2011	-	-	-	6,506	445	6,951

Additions - business combinations	5,290	734	6,024	7,672	-	13,696
Additions - product development	-	-	-	-	19	19
At 31 March 2012	5,290	734	6,024	14,178	464	20,666


Amortisation and impairment
At 1 April 2010	-	-	-	-	195	195
Amortisation during the year	-	-	-	-	49	49
At 31 March 2011	-	-	-	-	244	244

Amortisation during the year	238	120	358	-	19	377
At 31 March 2012	238	120	358	-	263	621

Net book value
At 31 March 2012	5,052	614	5,666	14,178	201	20,045

At 31 March 2011	-	-	-	6,506	201	6,707

At 1 April 2010	-	-	-	6,506	98	6,604

The customer relationship intangible asset acquired through the acquisition of Capscan Parent Limited has a carrying value of £3,878,000 and a remaining amortisation period of 9.6 years.

Goodwill arose on the acquisition of GB Mailing Systems Limited, e-Ware Interactive Limited, Data Discoveries Holdings Limited, Advanced Checking Services Limited and Capscan Parent Limited. Under IFRS, goodwill is no longer amortised and is annually tested for impairment.

9. INTANGIBLE ASSETS (continued)

Company	Development costs £'000	Total £'000

Cost
At 1 April 2010	293	293
Additions - product development	152	152
At 31 March 2011	445	445

Additions - product development	19	19
At 31 March 2012	464	464


Amortisation and impairment
At 1 April 2010	195	195
Amortisation during the year	49	49
At 31 March 2011	244	244

Amortisation during the year	19	19
At 31 March 2012	263	263

Net book value
At 31 March 2012	201	201

At 31 March 2011	201	201

At 1 April 2010	98	98

10. EQUITY SHARE CAPITAL
	2012	2011
	£'000	£'000
Authorised

147,663,704 (2011: 93,609,520) ordinary shares of 2.5p each	3,692	2,340

Issued and fully paid
Allotted, called up and fully paid	2,699	2,155
Share premium	11,646	4,016
	14,345	6,171

	2011	2011
	No.	No.

Number of shares in issue at 1 April	86,213,881	85,535,692
Issued on exercise of share options	1,591,670	678,189
Issued on acquisition of subsidiary	150,943	-
Issued on share placing	20,000,000	-
Number of shares in issue at 31 March	107,956,494	86,213,881

During the year, the Company received £8,364,000 (2011: £150,000) on the issue of shares in addition to issuing shares with a fair value of £60,000 as part of the consideration for the acquisition of Data Discoveries. The nominal value of these shares was £544,000 (2011: £17,000). The costs associated with this issue of shares were £250,000.

11. SHARE-BASED PAYMENTS

Group and Company

The Group operates Executive Share Option Schemes under which executive directors, managers and staff of the Company are granted options over shares.

Executive Share Option Scheme

Executive Share Option Scheme (Section C Scheme)

Options are granted to executive directors and employees on the basis of their performance. Options are granted at the full market value of the Company's shares at the time of grant and are exercisable between three and ten years from the date of grant. The percentage of an option that will vest and be capable of exercise will depend on the performance of the Company. A minimum of 50 per cent. of the options will vest when the Total Shareholder Return (TSR) performance of the Company, as compared to the TSR of the FTSE Computer Services Sub-Sector over a three-year period, matches or exceeds the median company. The percentage of shares subject to an option in respect of which that option becomes capable of exercise will then increase on a sliding scale so that the option will become exercisable in full if top quartile performance is achieved.

Executive Share Option Scheme (Section D Scheme)

Options are granted to executive directors and employees on the basis of their performance. Options are granted at the full market value of the Company's shares at the time of grant and are exercisable between three and ten years from the date of grant. The vesting of awards under the Section D Scheme is subject to the achievement of normalised EPS growth at an annual compound rate of 20 per cent. over the performance period. The base year for the purposes of the EPS target will be the financial year of the Company ended immediately prior to the grant of the award. The performance period will be the three financial years following the base year. Section D Scheme options will only become exercisable to the extent they have vested in accordance with the EPS target.

Share Matching Plan

In the year ended 31 March 2012, the Remuneration Committee introduced the Share Matching Plan. Participants who invest a proportion of their annual cash bonus in GB Group shares can receive up to a multiple of their original investment in GB Group shares, calculated on a pre-tax basis. Any matching is conditional upon achieving pre-determined EPS growth targets set by the Remuneration Committee for the following 3 years. Share Matching Plan options will only become exercisable to the extent they have vested in accordance with the EPS target.

GB Sharesave Scheme

The Group has a savings-related share option plan, under which employees save on a monthly basis, over a three or five year period, towards the purchase of shares at a fixed price determined when the option is granted. This price is usually set at a 20% discount to the market price at the time of grant. The option must be exercised within six months of maturity of the savings contract, otherwise it lapses.

The charge recognised from equity-settled share-based payments in respect of employee services received during the year is £137,000 (2011: £6,000 credit).

11. SHARE-BASED PAYMENTS (continued)

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year.

	2012 No.	2012 WAEP	2011 No.	2011 WAEP

Outstanding as at 1 April	7,836,170	26.85p	8,178,842	27.51p
Granted during the year	1,709,255	10.79p	1,500,000	25.75p
Forfeited during the year	(563,490)	29.92p	(862,211)	32.23p
Cancelled during the year	(5,040)	27.60p	(62,272)	28.35p
Exercised during the year	(1,591,670)	22.85p²	(678,189)	22.07p³
Expired during the year	-	-	(240,000)	36.50p
Outstanding at 31 March	7,385,225	23.76p	7,836,170	26.85p

Exercisable at 31 March	3,013,200	30.73p	3,772,000	27.32p

¹ Included within this balance are options over 5,000 (2011: 120,000) shares that have not been recognised in accordance with IFRS 2 as the options were granted on or before 7 November 2002. These options have not been subsequently modified and therefore do not need to be accounted for in accordance with IFRS 2.

² The weighted average share price at the date of exercise for the options exercised is 55.03p

³ The weighted average share price at the date of exercise for the options exercised is 34.07p

For the shares outstanding as at 31 March 2012, the weighted average remaining contractual life is 6.6 years (2011: 5.8 years).

The weighted average fair value of options granted during the year was 33.45p (2011: 7.82p). The range of exercise prices for options outstanding at the end of the year was 2.50p - 43.00p (2011: 11.75p - 36.50p).

The fair value of equity-settled share options granted is estimated as at the date of grant using a binomial model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model for the years ended 31 March 2012 and 31 March 2011.

	2012	2011

Dividend yield (%)	2.9	4.7
Expected share price volatility (%)	40	45
Risk-free interest rate (%)	0.5 - 1.1	1.8
Lapse rate (%)	5.0	5.0
Expected exercise behaviour	See below	See below
Market-based condition adjustment (%)	48.00	48.00
Expected life of option (years)	2.4 - 3.0	3.0
Exercise price (p)	2.50p - 43.00p	25.75p
Weighted average share price (p)	43.00p	25.75p

Other than for Matching Scheme options, it is assumed that 50% of options will be exercised by participants as soon as they are 20% or more "in-the-money" (i.e. 120% of the exercise price) and the remaining 50% of options will be exercised gradually at the rate of 20% per annum for each year they remain at or above 20% "in-the-money".

For Matching Scheme options, it is assumed that participants will chose to exercise at the earliest opportunity (i.e. vesting date) since the exercise price is nominal amount and is therefore not expected to influence the timing of a participant's decision to exercise the options.

The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome.

The market-based condition adjustment takes into account the likelihood of achieving market conditions, and allows for the fact if a Section C option vests it does not always vest at 100%.

No other features of options granted were incorporated into the measurement of fair value.

12. RELATED PARTY TRANSACTIONS

During the year, the Group entered into transactions, in the ordinary course of business, with other related parties. Transactions entered into and trading balances outstanding at 31 March are as follows:

Group	Sales to related parties	Purchases from related parties	Net amounts owed to related parties
	£'000	£'000	£'000

Associates:
2012	-	27	-
2011	-	-	-

Directors (see below):
2012	-	20	-
2011	-	-	-

Company	Sales to related parties	Purchases from related parties	Net amounts owed to related parties
	£'000	£'000	£'000

Subsidiaries:
2012	616	29	3,213
2011	-	-	-

Associates:
2012	-	27	-
2011	-	-	-

Directors (see below):
2012	-	20	-
2011	-	-	-

The Chairman of the Company undertakes some general and operational consultancy for the business outside of his directorship remit through his consultancy business Rasche Consulting Limited.

Terms and conditions of transactions with related parties

Sales and balances between related parties are made at normal market prices. Outstanding balances with entities other than subsidiaries are unsecured, interest free and cash settlement is expected within 30 days of invoice. Terms and conditions for transactions with subsidiaries are the same, with the exception that balances are placed on intercompany accounts with no specified credit period. During the year ended 31 March 2012, the Group has not made any provision for doubtful debts relating to amounts owed by related parties (2011: nil).

12. RELATED PARTY TRANSACTIONS (continued)

Compensation of key management personnel (including directors)

Group & Company

	2012	2011
	£'000	£'000

Short-term employee benefits	904	768
Post-employment benefits	56	62
Share-based payments	387	63

	1,347	893

13. BUSINESS COMBINATIONS

Acquisition of Data Discoveries Holdings Limited

On 30 June 2011, the Company acquired 100% of the voting shares of Data Discoveries Holdings Limited ("Data Discoveries"), an unlisted company based in the United Kingdom providing trace software to the debt collection industry and to UK Government agencies. The Company acquired Data Discoveries because its activities are similar to those of GB Group's existing ID Trace business within DataSolutions and it will enlarge the customer base of the Group in this market, making the combined business the market leader. The Consolidated Statement of Comprehensive Income includes the results of Data Discoveries for the nine month period from the acquisition date.

The fair value of the identifiable assets and liabilities of Data Discoveries as at the date of acquisition was:

		Fair value recognised on acquisition £'000

Assets
Brand and technology intellectual property		42
Customer relationships		378
Non-compete agreements		3
Plant and equipment		18
Trade and other receivables		377
Cash		214
Trade and other payables		(375)
Deferred tax liabilities		(103)
Total identifiable net assets at fair value		554
Goodwill arising on acquisition		276
Total purchase consideration transferred		830

Purchase consideration:
Cash		770
Fair value of shares issued (150,943 shares at 39.75p)		60
Total purchase consideration		830

Analysis of cash flows on acquisition:
Transaction costs of the acquisition (included in cash flows from operating activities)		(82)
Net cash acquired with the subsidiary (included in cash flows from investing activities)		214
Cash paid		(770)
Net cash outflow		(638)

The fair value of the acquired receivables amounts to £377,000. The gross amount of receivables is £377,000. None of the receivables have been impaired and it is expected that the full contractual amounts can be collected.

The goodwill recognised above is attributed to intangible assets that cannot be individually separated and reliably measured from Data Discoveries due to their nature. These items include the expected value of synergies and an assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

The transaction costs of £82,000 associated with this acquisition have been expensed and are included in exceptional items in the Consolidated Statement of Comprehensive Income and are part of operating cash flows in the cash flow statement.

From the date of acquisition, Data Discoveries has contributed £1,384,000 of revenue and operating losses before exceptionals of £9,000 to the Group. If the combination had taken place at the beginning of the year, the Group profit before taxation for the period would have been £2,544,000 and revenue would have been £32,278,000.

Acquisition of Advanced Checking Services Limited

On 27 July 2011, the Company acquired 100% of the voting shares of Advanced Checking Services Limited ("ACS"), an unlisted company based in the United Kingdom providing electronic checking of driving licences to enable organisations to comply with their obligations under health & safety and corporate manslaughter legislation. The Company acquired ACS to broaden its product portfolio in the DataAuthentication business and widen its offering to the insurance market. The Consolidated Statement of Comprehensive Income includes the results of ACS for the eight month period from the acquisition date.

The fair value of the identifiable assets and liabilities of ACS as at the date of acquisition was:

		Fair value recognised on acquisition £'000

Assets
Brand and technology intellectual property		36
Customer relationships		198
Non-compete agreements		3
Plant and equipment		4
Trade and other receivables		108
Cash		88
Trade and other payables		(88)
Deferred tax liabilities		(57)
Total identifiable net assets at fair value		292
Goodwill arising on acquisition		284
Total purchase consideration transferred		576

Purchase consideration:
Cash		452
Contingent consideration		124
Total purchase consideration		576

Analysis of cash flows on acquisition:
Transaction costs of the acquisition (included in cash flows from operating activities)		(60)
Net cash acquired with the subsidiary (included in cash flows from investing activities)		88
Cash paid		(452)
Net cash outflow		(424)

The fair value of the acquired receivables amounts to £108,000. The gross amount of receivables is £108,000. None of the receivables have been impaired and it is expected that the full contractual amounts can be collected.

The goodwill recognised above is attributed to intangible assets that cannot be individually separated and reliably measured from ACS due to their nature. These items include the expected value of synergies and an assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

The transaction costs of £60,000 associated with this acquisition have been expensed and are included in exceptional items in the Consolidated Statement of Comprehensive Income and are part of operating cash flows in the cash flow statement.

From the date of acquisition, ACS has contributed £267,000 of revenue and operating losses before exceptionals of £35,000 to the Group. If the combination had taken place at the beginning of the year, the Group profit before taxation for the period would have been £2,502,000 and revenue would have been £31,947,000.

Contingent consideration

As part of the share sale and purchase agreement, a contingent consideration of up to a maximum of £5 million has been agreed. There will be additional payments comprising of both cash and shares due to the previous owners of ACS annually up to 31 March 2015. These payments are subject to certain future targets being met on profits before interest and taxation. At the acquisition date and as at 31 March 2012, the fair value of the contingent consideration was estimated at £124,000 having been determined from management's estimates of the ranges of profit forecasts and their respective likelihoods.

Acquisition of Capscan Parent Limited

On 3 November 2011, the Company acquired 100% of the voting shares of Capscan Parent Limited ("Capscan"), an unlisted company based in the United Kingdom providing customer registration and address management software. The Company acquired Capscan to create a clear number 2 in the customer registration and address management market and to enlarge the customer base of the Group. The Consolidated Statement of Comprehensive Income includes the results of Capscan for the five month period from the acquisition date.

The fair value of the identifiable assets and liabilities of Capscan as at the date of acquisition was:

		Fair value recognised on acquisition £'000

Assets
Brand and technology intellectual property		650
Customer relationships		4,714
Plant and equipment		35
Investments		33
Trade and other receivables		1,358
Cash		5,130
Trade and other payables		(1,500)
Deferred tax liabilities		(1,294)
Total identifiable net assets at fair value		9,126
Goodwill arising on acquisition		7,112
Total purchase consideration transferred		16,238

Purchase consideration:
Cash		15,791
Deferred consideration		447
Total purchase consideration		16,238

Analysis of cash flows on acquisition:
Transaction costs of the acquisition (included in cash flows from operating activities)		(388)
Net cash acquired with the subsidiary (included in cash flows from investing activities)		5,130
Cash paid		(15,791)
Net cash outflow		(11,049)

The fair values above contain certain provisional amounts which will be finalised no later than one year after the date of acquisition. Provisional amounts have been included at 31 March 2012 as a consequence of the timing and complexity of the acquisitions and due to the fact that completion accounts associated with the acquisition are yet to be finalised.

The fair value of the acquired receivables amounts to £1,358,000. The gross amount of receivables is £1,358,000. None of the receivables have been impaired and it is expected that the full contractual amounts can be collected.

The goodwill recognised above is attributed to intangible assets that cannot be individually separated and reliably measured from Capscan due to their nature. These items include the expected value of synergies and an assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

The transaction costs of £388,000 associated with this acquisition have been expensed and are included in exceptional items in the statement of comprehensive income and are part of operating cash flows in the cash flow statement.

From the date of acquisition, Capscan has contributed £3,204,000 of revenue and operating profits of £803,000 to the Group. If the combination had taken place at the beginning of the year, the Group profit before taxation for the period would have been £3,572,000 and revenue would have been £37,827,000.

Deferred consideration

As part of the share sale and purchase agreement, deferred cash consideration of £447,000 will be due upon receipt of specific corporation tax repayments due to Capscan. This is expected to be finalised no later than one year after the date of acquisition.

14. POST BALANCE SHEET EVENTS

On 3 April, the Group made a further investment of £90,000 in its associated undertaking Loqate Inc. This investment was for 466,667 of new shares as part of a wider rights issue that took place.

OTHER INFORMATION

i. The above financial information, which is unaudited, does not constitute statutory accounts as defined in section 435 (1) and (2) of the Companies Act 2006. The financial information for the year ended 31 March 2012 has been extracted from the draft statutory accounts on which an unqualified audit opinion has been issued. Statutory accounts for the year ended 31 March 2012 will be delivered to the Registrar in due course. The annual results announcement is prepared on the basis set out in the note 2. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.

ii. The annual results announcement was approved by the Board of Directors of GB Group plc on 29 May 2012.

iii. The ex-dividend date is 11 July 2012; the record date is 13 July 2012; the payment date is 10 August 2012.

iv. The AGM will take place on 9 July 2012.

v. The 2012 interim results announcement is expected to be on 30 November 2012.

vi. This report will also be available on the GB Group web site: www.gb.co.uk from 30 May 2012.

vii. The Company intends to dispatch to shareholders copies of the full annual report and accounts for the year to 31 March 2012 and to make it available on the Group's website (www.gb.co.uk) by 18 June 2012.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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Final Results

Group operating profit

Profit before tax

Earnings per share

Balance at 1 April 2010 (restated)

Balance at 31 March 2011 (restated)

Balance at 31 March 2012

Balance at 1 April 2010 (restated)

Balance at 31 March 2011 (restated)

Balance at 31 March 2012

Current assets

TOTAL ASSETS

EQUITY AND LIABILITIES

Capital and reserves

Merger reserve

Total equity attributable to equity holders of the parent

Non-current liabilities

Deferred/contingent consideration

Deferred tax liability

Current liabilities

TOTAL LIABILITIES

TOTAL EQUITY AND LIABILITIES

Current assets

TOTAL ASSETS

EQUITY AND LIABILITIES

Capital and reserves

Merger reserve

Total equity attributable to equity holders of the parent

Non-current liabilities

Deferred/contingent consideration

Current liabilities

TOTAL LIABILITIES

TOTAL EQUITY AND LIABILITIES

Cash generated from operations

Income tax paid

Net cash generated from operating activities

Cash flows from investing activities

Net cash flows used in investing activities

Cash flows from financing activities

Net cash flows used in financing activities

Cash and cash equivalents at the end of the period

Cash generated from operations

Income tax paid

Net cash generated from operating activities

Cash flows from investing activities

Net cash flows used in investing activities

Cash flows from financing activities

Net cash flows used in financing activities

Cash and cash equivalents at the end of the period

Notes to the Accounts

Share-Based Payment Transactions

19,129

16,708

OTHER INFORMATION

Companies

UK 100

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