Final Results
GB Group PLC
05 June 2007
Embargoed until 07.00 5 June 2007
GB GROUP PLC
('GB' or the 'Group')
Preliminary Results for the Year Ended 31 March 2007
GB Group is today pleased to announce preliminary results for the year ended 31
March 2007.
Highlights
• Group revenue increased by 16% to £15 million (2006: £12.8 million)
• DataAuthentication revenue more than doubled to £4.8 million (2006:£1.9 million)
• DataAuthentication has increased its customer base to 174 as at 31
May 2007 from 101 at 31 March 2006.
• Group has invested over £1 million in new technology and infrastructure to
provide a platform for future growth.
• DataIntegrity has launched online web-based delivery solutions and has
successfully displaced competing products and services.
• International ID verification service launched during the year. DataAuthentication's
solutions are now able to confirm a person's identity electronically, within seconds,
in 26 countries covering a combined population of some 800 million individuals.
• Cash balances at 31 March were £5.2 million (2006: £6.7 million).
• Proposed full year dividend of 0.75p per share (2006: 0.75p per share).
Commenting on current trading, John Walker-Haworth, Chairman, said:
'GB has substantially improved its prospects over the course of the year through
its continued investment in developing its businesses.
These developments mean that the Group is well placed to continue its growth in
the year ahead.'
- Ends -
For further information, please contact:
GB Group plc
Richard Law, Chief Executive 01244 657333
Mona Navin-Mealey, Finance Director
Weber Shandwick Financial 020 7067 0700
Richard Hews
Helen Thomas
Website www.gb.co.uk
Notes to Editors
About GB Group plc
GB Group plc provides a range of products and services to enable organisations
to capitalise on their greatest asset - their customers. GB has expertise across
a range of sectors and is able to transform customer data into valuable
information, enabling clients to truly fulfil the strategic objective of 'know
your customer' and in doing so make better, more informed decisions.
We are constantly improving our products and services by applying our core
values of Innovation, Quality and Excellence. This has been demonstrated over
the course of the last year by the launch of ID3-Check(TM), GB's international
identity verification service and by the launch in January 2007 by
DataIntergrity of online services which replace the periodic supply of data on
disk to the real time availability of data via a web-based delivery solution.
Know Your Customer ('KYC')
Many people will be aware that there is a regulatory requirement in the
Financial Services sector for organistaions to 'Know Your Customer'. We believe
that knowing your customer is fundamental to all businesses, not just those in
financial services, and GB has three complimentary offerings enabling our
clients to achieve that. These are
• DataAuthentication helps businesses validate personal identity information and
provides anti-fraud solutions to fight crime.
• DataIntegrity helps companies capture and maintain accurate customercontact
data, an essential foundation for any profitable customer relationship.
• DataSolutions empowers companies to consolidate and analyse customer data from
various sources, enabling them to make better, more informed
decisions.
Established since 1989, GB's core competencies combined with industry sector
knowledge have enabled the company to deliver significant value to organisations
such as DSG International, Scottish Power and Lloyds TSB in helping them derive
maximum value from their customer relationships and sustain real advantage over
their competition.
GB Group is supported by its key relationships with major organisations with
whom it works on major initiatives (an example being British Telecom),
together with a team of highly talented and motivated staff successfully
delivering business solutions.
GB Group plc is listed on the London Stock Exchange (www.gb.co.uk).
DataAuthentication, GB's fastest growing business area, specializes in
electronic ID verification through its URUTM and ID3-CheckTM services.
About URU(TM)
URU is an online identity verification service which was developed jointly with
BT and is DataAuthentication's principle offering. URU, which is powered by GB's
ID3(TM) search engine and decision making technology, provides access to GB's
comprehensive range of identity data and BT's high capacity web delivery. It
helps organisations to protect themselves from the growing problem of identity
theft and fraud, which is estimated to cost the UK economy over £1.7 billion per
annum. URU enables companies subscribing to the service to make an instant
decision whether to accept the identity claimed by any given individual and
confirm their age in seconds.
URU works by cross checking personal information provided by an individual at
the point of acquisition against a comprehensive range of datasources to confirm
that an individual is who they claim to be, live where they claim to live and
meet certain minimum legal age requirements.
No personal data is disclosed by the reference databases and as a result URU is
compliant with the Data Protection Act.
URU also provides a valuable audit trail demonstrating that the necessary checks
have taken place, thereby helping companies comply with legislation, including
the 2nd European Money Laundering Directive, Proceeds of Crime Act and Minimum
Legal Age requirements of certain industry sectors.
The addition of data from CallCredit also enables users of URU to incorporate
credit reference data.
As a result of legislation, new opportunities and social responsibility
requirements, the market for online ID verification is significant and growing.
Although an estimated 0.5 billion manual ID checks are conducted annually in the
UK, less than 6%* of these are currently performed electronically.
(* figures as at November 2006)
URU has demonstrated that online checks are more effective, less expensive and
more robust.
The market is moving towards online checks as fraudulent documents become ever
more sophisticated, more readily available and more difficult to check manually.
It is estimated that by 2010, the market for online ID checks could be 0.3
billion checks per annum.
GB works closely with trade and industry associations, such as the Finance and
Leasing Association, the Remote Gambling Association and the Financial
Technology Research Centre, to advise businesses that more robust processes can
prevent financial crime. We have worked closely with the Gaming Industry to
address social issues such as underage gambling and addiction and our Social
Responsibility Consultancy helps Gaming operators formulate best practice to
comply with regulatory requirements and improve profitability.
About ID3-Check(TM)
ID3-Check is an international online identity verification service developed by
GB's DataAuthentication business. It is a hybrid international version of the
technology underpinning URU, GB's joint project with BT which is now the UK's
leading online age and identity verification service.
The service helps organisations to protect themselves from the growing global
problem of identity theft and fraud. ID3-Check enables organisations subscribing
to the service to make an instant decision whether to accept the identity
claimed by an individual and confirm their age in seconds. ID3-Check can confirm
the age and identity of some 800 million individuals in 25 countries including
Australia, Canada, the USA and most Western European countries.
ID3-Check works by cross checking personal information provided by an individual
at the point of acquisition against a comprehensive range of data sources to
confirm that an individual is who they claim to be, live where they claim to
live and meet certain minimum legal age requirements.
No personal data is disclosed by the reference databases and as a result
ID3-Check is compliant with Data Protection laws.
ID3-Check also provides a valuable audit trail demonstrating that the necessary
checks have taken place, thereby helping companies comply with international
legislation, As a result of legislation, new opportunities and social
responsibility requirements, the market for online ID verification across
borders is significant and growing.
CHAIRMAN'S STATEMENT
GB has substantially improved its prospects over the course of the year through
its continued investment in developing its businesses.
When GB issued its trading update in April 2007, we indicated that the results
of this investment had brought with it increased revenue for the Group with the
expectation that revenue from GB's DataAuthentication business would more than
double.
The final results for the year ended 31 March 2007 were in line with the
expectations set at the time of the trading update; Group revenue increased to
£15 million (2006: £12.9 million), revenue from DataAuthentication increased to
£4.8 million (up from £1.9 million in 2006), pre-tax losses were £1.2 million
and cash balances were £5.2 million.
As I indicated in April, the Directors will recommend a maintained final
ordinary dividend of 0.75p per share which, if approved, will be paid in July
2007.
GB's businesses developed well during the year and, as explained in more detail
in the Chief Executive's Report, DataAuthentication has successfully established
itself as a leader in the growing market for electronic identity management
solutions. At the same time, our DataIntegrity and DataSolutions businesses have
continued to update their principal products and services to embrace online
technology and create product differentiation in competitive markets.
These developments mean that the Group is well placed to continue its growth in
the year ahead.
With respect to the current year, like-for-like revenue for the two months to
the end of May 2007 is ahead of the same period last year and is in line with
the Directors' expectations at this stage. Growth plans for the current year
overall are exciting and reflect principally the continuing rapid development of
the market for electronic identity verification both in the UK and
internationally.
J L Walker-Haworth
Chairman
CHIEF EXECUTIVE'S REVIEW
GB made excellent progress in the year ended 31 March 2007 towards achieving its
vision of becoming an international leader in the field of electronic identity
verification (EIDV). Revenue in our DataAuthentication business, which provides
EIDV services, more than doubled. In the UK market, URU (our joint EIDV offering
with BT) consolidated its leadership and new services were introduced under GB's
own brand, ID3-Check, to authenticate individuals in 25 other countries.
In our DataIntegrity and DataSolutions businesses, new services based on the
online delivery of valuable data were introduced to give these businesses added
differentiation in their markets.
The Group also invested over £1 million in new technology and infrastructure to
provide a platform for future growth.
Since 31 March 2007, our businesses have traded well and our strategic progress
has continued. DataAuthentication has continued to grow its customer base for
URU and ID3 and DataIntegrity and DataSolutions have gained substantial
contracts with Her Majesty's Revenue & Customs (HMRC) and MyTravel UK for their
new services.
GB remains financially strong with £5.2 million of cash at the end of March 2007
and, taken together with our market leading products and services, the prospects
for the year ahead and beyond are encouraging.
DataAuthentication
We believe that the markets served by DataAuthentication continue to represent
an exceptional opportunity for GB.
The ability of organisations to confirm that individuals are who they claim to
be, before they trade with them, is both a commercial and a legal requirement in
an increasing number of countries across the world. Identity theft and fraud
continue to grow and the globalisation of money laundering has prompted many
countries to increase legislation to counter it.
GB's vision is to provide its clients with the ability to confirm, quickly and
effectively, the identity of their customers, irrespective of nationality and,
in so doing, reduce fraud losses and comply with legislation. This, for instance,
enables organisations to trade with their customers in many countries over the
Internet immediately and with confidence.
GB is now able to confirm a person's identity electronically, within seconds, in
26 countries covering a combined population of some 800 million individuals. We
believe that the GB offering is unique, making it a global leader in this field
with the ability to build a business of considerable value as the market moves
rapidly towards electronic verification solutions and away from paper-based
methods.
DataAuthentication made substantial progress in the year ended 31 March 2007,
building its customer base from 101 to 164 and more than doubling revenue to
£4.8 million. In addition, contracted prepaid revenue deferred to future periods
as at 31 March 2007 was £1.2 million, £0.9 million of which will be recognised
in the year to 31 March 2008.
As expected, revenue run rate in the current year to date is around 24% higher
than the same period last year. This largely excludes the contracted prepaid
revenue referred to above which will be predominantly recognised in the latter
half of this year. Accordingly, growth is expected to continue in the current
year assisted by the increase in contracted URU clients which, at 31 May 2007,
had increased to 174.
GB's strategy for the year ahead is to continue developing the UK market for URU
where we expect to deliver the majority of our growth. The Financial Services
sector, which remains our largest and most valuable market, will continue to
utilise the majority of our resource as we seek to add new clients and also to
grow the usage of URU within key existing accounts such as Lloyds TSB, HBOS and
The Royal Bank of Scotland Group. We will also continue to address new
sub-sectors within Financial Services where the lack of legacy systems, together
with GB's superior service and technology, provides the opportunity to create a
market leading position. An example is the emergence of companies providing
pre-paid debit cards where URU is being used by 80% of the organisations in
this growing sector.
Elsewhere, we are confident of maintaining and extending our market leading
positions in Online Gaming and Mobile Telecommunications and in further
developing emerging electronic markets such as Retail.
Although the UK market will continue to be our largest source of revenue
throughout the year to 31 March 2008, we expect the number of clients using our
international services to increase substantially.
DataIntegrity and DataSolutions
The DataIntegrity and DataSolutions markets, essentially the capture, processing
and analysis of data, are moving from the present periodic supply of data on
disks to the real time availability of data via web-based delivery solutions.
GB has developed such an online solution and since its introduction in January
2007, has successfully displaced competing disk-based products. In particular,
HMRC signed a substantial contract with GB in May 2007 for the provision of data
services to assist them in the collection of tax and payment of Tax Credits and
Child Benefit.
As planned, investment in sales and marketing has increased in these business
areas in order to capitalise on the differentiation which has led to this early
success.
Summary
GB has products and services which are clearly differentiated and have a strong
identity in their respective markets. We are seeing success in terms of our
ability to identify and develop new markets, increase new business and displace
competing products and services. The current year has started well with revenue
at the end of May ahead of the same period last year and cash balances remaining
strong at £5.4 million (March 2007: £5.2 million).
R A Law
Chief Executive
BUSINESS AND FINANCIAL REVIEW
The Group's Business
The Group's principal business activities represent a single segment but
correspond to three distinct business propositions: DataAuthentication,
DataIntegrity and DataSolutions.
DataAuthentication provides electronic identity verification services. Services
are provided under two brands, URU(TM) and ID3-Check. URU was jointly developed
with BT and principally verifies the identity of UK residents. URU now has 174
live customers. ID3-Check is GB's international verification service which was
developed independently and was launched during the year to 31 March 2007. The
market for electronic identity verification continues to grow and represents a
significant future growth opportunity for the Group.
DataIntegrity offers a range of solutions to maintain the integrity of clients
customer data through a suite of products and services which include
GBAccelerator(TM), GBAccelerator e-Trace(TM) and DataCare(TM).
DataSolutions specialises in designing, building and managing marketing
databases.
Group Vision, Objectives and Strategy
The Group's vision is to become a global leader in the provision of electronic
identity management solutions and to reinstate growth in its mature business
areas by creating products and services which are unique compared to competitor
offerings and consequently add greater value for GB's clients.
The Group's strategy is, therefore, to create and maintain unique products which
have additional value for clients and that are of sufficient strength to enable
the Group to consistently win new business and displace the competition. The
Group achieves this through investment in business development opportunities and
the application of innovation, quality and excellence in everything it does.
Group Overview
The year ended 31 March 2007 was significant in terms of developing the
opportunity for DataAuthentication in the rapidly growing market for electronic
verification. Also during the year, DataIntegrity and DataSolutions successfully
developed online delivery solutions for many of their products and services and,
in so doing, have created additional differentiation against competitor
offerings.
The following table sets out the results of the Group for the year ended 31
March 2007.
Years ended 31 March
2007 2006
£'000 £'000
Revenue 14,952 12,835
-------- --------
Operating loss (1,519) (570)
Finance revenue 294 302
-------- --------
Loss before tax (1,225) (268)
Income tax (expenses)/credit (16) 26
-------- --------
Loss for the financial year (1,241) (242)
-------- --------
2007 Financial Year Compared to 2006 Financial Year
In the year to 31 March 2007, revenue for the Group increased 16% to £15.0
million (2006: £12.8 million) resulting from growth in DataAuthentication.
Losses before taxation were £1.2 million (2006: £0.3 million) after continued
investment in business development across the Group.
Explanations of the significant items in the Income Statement during the year
are as follows:
Revenue
Revenue for the Group showed good growth as a result of increased
DataAuthentication revenues. Revenues from DataAuthentication more than doubled
to £4.8 million (2006: £1.9 million). Combined revenues from DataIntegrity and
DataSolutions were £10.2 million (2006: £10.9 million).
Gross Profit and Cost of Sales
Group gross profit margins were 49% compared with 55% for the year to 31 March
2006. The reduction was due primarily to the increase in DataAuthentication
revenues, as a proportion of Group revenue. Revenue from DataAuthentication
attracts higher cost of sales than GB's other business areas. The principal
cost of sales for DataAuthentication is represented by payments to BT under GB's
joint URU agreement with BT. Consequently, DataAuthentication generates a lower
underlying gross margin compared to that generated in DataIntegrity and
DataSolutions.
Other Operating Expenses
Other operating expenses were £8.8 million (2006: £7.5 million). The increase in
operating expenses was due to further investment in DataAuthentication,
specifically the areas of sales, marketing and development combined with
investment in infrastructure and technology associated with the Group's online
delivery platforms.
Exceptional Items
Exceptional items totalled £100,000 (2006: £58,000). This related to the one-off
costs associated with moving the Group's place of business during the year in
order to support future growth.
Group Loss
The Group generated an operating loss of £1.5 million (2006: £0.6 million) and
finance revenue earned during the year was £0.3 million (2006: £0.3 million)
resulting in a loss before tax of £1.2 million (2006: £0.3 million).
Taxation
The current tax charge of £16,000 (2006: £12,000 credit) reflects an adjustment
for taxation credits with respect to research and development provided in
previous years.
Dividend
The Board of Directors will propose a maintained final ordinary dividend of 0.75
pence per share, amounting to £628,000 (2006: £621,000). The final ordinary
dividend with respect to the year ended 31 March 2007, if approved, will be paid
on 30 July 2007 to ordinary shareholders whose names were on the register on 6
July 2007.
Amounts Transferred From Reserves
The amount transferred from reserves is £1.6 million (2006: £447,000) after
accounting for the previous year's dividend of £621,000 (2006: £404,000) which
was paid during the year ended 31 March 2007.
Balance Sheet and Liquidity
Explanations of the most significant items in the Balance Sheet during the year
are as follows:
Intangible Assets
Intangible assets are carried at £6.7 million (2006:£6.5 million). This includes
the carrying value of goodwill at 31 March 2007 of £6.5 million (2006: £6.5
million) comprising of goodwill arising on the acquisition of GB Mailing Systems
in 1998 and e-Ware Interactive in 2002. It also includes the carrying value of
product development costs capitalised in accordance with IAS 38 'Intangible
Assets' of £162,000 (2006: £Nil). Intangible assets are tested annually for
impairment and no impairment was required for the year ended 31 March 2007.
Trade and Other Receivables
The value of trade and other receivables increased by £884,000 to £3.8 million
at 31 March 2007, compared to the same date last year, principally as a result
of higher overall revenues particularly in March 2007.
Cash Flows
Cash and cash equivalents reduced by £1.5 million (2006: £2,000) during the year
due primarily to the investment in property, plant and equipment and dividends
paid. Further analysis of this movement is included in the Consolidated Cashflow
Statement below.
Cash and Cash Equivalents
At 31 March 2007, the Group held cash and short-term deposit balances of £5.2
million (2006: £6.7 million) and in accordance with the Group's treasury policy,
all funds are placed with major UK clearing banks and building societies.
Trade and Other Payables
The value of trade and other payables has increased by £1.8 million to £5.1
million (2006: £3.3 million) at 31 March 2007 compared to the same date last
year. The increase is as a result of increased revenue and the growth of
deferred income which has been carried forward for recognition in future
periods. Deferred income at 31 March 2007 was £1.2 million (2006: £558,000).
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 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 its performance and
propositions.
o Revenue (Group & DataAuthentication)
Revenue and revenue growth are used for internal performance analysis and by
investors to assess progress against outlook statements in the market.
o Operating result
Operating result and profitability growth is used by the Group for internal
performance analysis and by investors to assess progress against outlook
statements in the market.
o Earnings per share
Earnings per share is calculated as basic earnings per share from continuing
operations.
o Cash
Cash and cash equivalent balances are used by the Group for internal performance
analysis and by investors to assess progress against outlook statements.
• Customers
o DataAuthentication Live Client Numbers
Client based KPIs for the rapidly growing DataAuthentication market are
important measures for internal performance analysis and management also
believes that it provides useful information for investors regarding the success
of the Group's customer acquisition activities. The data used to calculate the
KPI is derived from the Group's billing and financial systems for those
contracted clients who have begun utilising the services.
• Transaction Based
o Underlying Identity Verifications
Management believe that DataAuthentication's 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 URUTM and ID3-CheckTM 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.
Years ended 31 March
2007 2006
Group Revenue Growth 16% 14%
Operating (Loss)/Profit Growth (166%) (325%)
Loss Per Share (1.4)p (0.3)p
Cash (£'000) 5,213 6,747
DataAuthentication Revenue Growth 151% 218%
DataAuthentication Live Customer Numbers 164 101
Underlying Identity Verifications 3,508,006 1,534,559
Group revenue growth remains positive and has increased from 14% in the year to
31 March 2006 to 16% in year ended 31 March 2007. The Board believes that growth
will continue as the Group continues to derive value from its business
opportunities.
The investment in business development across both years has resulted in an
operating loss being reported. The Group should realise the results of this
investment during future years as increased revenue flows through.
Principal Risks and Uncertainties
Management use a common 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 more significant
risks and uncertainties faced by the Group are 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 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 could adversely
affect the Group's operations and could result in additional expenditure by the
Group.
• Disaster recovery and business continuity: the Group has an
understandable reliance on its place of business, IT systems and people and
currently operates from a single site. 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.
Relationships
Other than our shareholders, the Group's performance and value are influenced by
other stakeholders principally our customers, 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
provide genuine access to clients, supplier groups, decision makers in
government and other regulatory bodies.
Treasury Policy and Financial Risk Management
The Group's treasury operation is managed within formally defined policies which
are reviewed by the Board. The Group finances its activities with cash and
short-term deposits. 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.
MT Navin-Mealey
Group Finance Director
CONSOLIDATED INCOME STATEMENT
Year ended 31 March 2007
-----------------------------------------------------------------------------------
2007 2006
£'000 £'000
Note
Revenue 14,952 12,835
Cost of sales (7,617) (5,800)
------- -------
Gross profit 7,335 7,035
Other operating expenses (8,754) (7,547)
Exceptional items (100) (58)
------- -------
Operating loss (1,519) (570)
Finance revenue 294 302
------- -------
Loss before tax (1,225) (268)
Income tax (expense)/credit (16) 26
------- -------
Loss for the year attributable to equity holders of the
parent (1,241) (242)
------- -------
Loss per share
- basic loss per share for the year 1 (1.4)p (0.3)p
- diluted loss per share for the year 1 (1.4)p (0.3)p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2007
-------------------------------------------------------------------------------------------
Equity Merger Capital Retained Total
share reserve redemption earnings equity
Capital reserve
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2005 5,171 6,575 3 1,869 13,618
------- ------- ------- ------- -------
Loss for the period - - - (242) (242)
------- ------- ------- ------- -------
Total income and expense
for the period - - - (242) (242)
Exercise of options 279 - - - 279
Cost of share-based payments - - - 199 199
Equity dividend - - - (404) (404)
------- ------- ------- ------- -------
Balance at 31 March 2006 5,450 6,575 3 1,422 13,450
------- ------- ------- ------- -------
Loss for the period - - - (1,241) (1,241)
------- ------- ------- ------- -------
Total income and expense
for the period - - - (1,241) (1,241)
------- ------- ------- ------- -------
Exercise of options 167 - - - 167
Cost of share-based payments - - - 217 217
Equity dividend - - - (621) (621)
------- ------- ------- ------- -------
Balance at 31 March 2007 5,617 6,575 3 (223) 11,972
------- ------- ------- ------- -------
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2007
-------------------------------------------------------------------------------------------
Equity Merger Capital Retained Total
share reserve redemption earnings Equity
capital reserve
£'000 £'000 £'000 £'000 £'000
Balance at 1 April 2005 5,171 6,575 3 4,185 15,934
------- ------- ------- ------- -------
Loss for the period - - - (242) (242)
------- ------- ------- ------- -------
Total income and expense
for the period - - - (242) (242)
Exercise of options 279 - - - 279
Cost of share-based payments - - - 199 199
Equity dividend - - - (404) (404)
------- ------- ------- ------- -------
Balance at 31 March 2006 5,450 6,575 3 3,738 15,766
------- ------- ------- ------- -------
Loss for the period - - - (1,241) (1,241)
------- ------- ------- ------- -------
Total income and expense
for the period - - - (1,241) (1,241)
Exercise of options 167 - - - 167
Cost of share-based payments - - - 217 217
Equity dividend - - - (621) (621)
------- ------- ------- ------- -------
Balance at 31 March 2007 5,617 6,575 3 2,093 14,288
------- ------- ------- ------- -------
CONSOLIDATED BALANCE SHEET
As at 31 March 2007
-------------------------------------------------------------------------------------
2007 2006
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 1,108 331
Intangible assets 6,668 6,506
Deferred tax asset 360 360
------- -------
8,136 7,197
------- -------
Current assets
Trade and other receivables 3,752 2,868
Current tax - 57
Cash and short-term deposits 5,213 6,747
------- -------
8,965 9,672
------- -------
TOTAL ASSETS 17,101 16,869
------- -------
EQUITY AND LIABILITIES
Capital and reserves
Equity share capital 5,617 5,450
Merger reserve 6,575 6,575
Capital redemption reserve 3 3
Retained earnings (223) 1,422
------- -------
Total equity attributable to equity holders of the parent 11,972 13,450
------- -------
Current liabilities
Trade and other payables 5,129 3,311
Provisions - 108
------- -------
5,129 3,419
------- -------
TOTAL LIABILITIES 5,129 3,419
------- -------
TOTAL EQUITY AND LIABILITIES 17,101 16,869
------- -------
COMPANY BALANCE SHEET
As at 31 March 2007
------------------------------------------------------------------------------------
2007 2006
£'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 1,108 331
Intangible assets 162 -
Investments 9,317 9,317
Deferred tax asset 360 360
------- -------
10,947 10,008
------- -------
Current assets
Trade and other receivables 3,768 2,884
Current tax - 57
Cash and short-term deposits 5,213 6,747
------- -------
8,981 9,688
------- -------
TOTAL ASSETS 19,928 19,696
------- -------
EQUITY AND LIABILITIES
Capital and reserves
Equity share capital 5,617 5,450
Merger reserve 6,575 6,575
Capital redemption reserve 3 3
Retained earnings 2,093 3,738
------- -------
Total equity 14,288 15,766
------- -------
Current liabilities
Trade and other payables 5,640 3,822
Provisions - 108
------- -------
5,640 3,930
------- -------
TOTAL LIABILITIES 5,640 3,930
------- -------
TOTAL EQUITY AND LIABILITIES 19,928 19,696
------- -------
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March 2007
------------------------------------------------------------------------------------
2007 2006
£'000 £'000
Cash flow from operating activities
Operating loss (1,519) (570)
Depreciation 230 187
Provision against tangible fixed assets 25 -
Loss on disposal of property, plant and equipment 5 3
Share-based payments 217 199
Decrease in provisions (108) (122)
Increase in trade and other receivables (884) (688)
Increase in trade and other payables 1,818 972
------- -------
Cash consumed from operations (216) (19)
Income tax credit received 41 -
------- -------
Net cash consumed from operating activities (175) (19)
------- -------
Cash flows from investing activities
Purchase of property, plant and equipment (1,027) (160)
Expenditure on product development (172) -
Interest received 294 302
------- -------
Net cash flows from investing activities (905) 142
------- -------
Cash flows from financing activities
Proceeds from issue of shares 167 279
Dividends paid to equity shareholders of the parent (621) (404)
------- -------
Net cash flows from financing activities (454) (125)
------- -------
Net decrease in cash and cash equivalents (1,534) (2)
Cash and cash equivalents at the beginning of the 6,747 6,749
period ------- -------
Cash and cash equivalents at the end of the period 5,213 6,747
------- -------
COMPANY CASH FLOW STATEMENT
Year ended 31 March 2007
-------------------------------------------------------------------------------------
2007 2006
£'000 £'000
Cash flow from operating activities
Operating loss (1,519) (570)
Depreciation 230 187
Provision against tangible fixed assets 25 -
Loss on disposal of property, plant and equipment 5 3
Share-based payments 217 199
Decrease in provisions (108) (122)
Increase in trade and other receivables (884) (688)
Increase in trade and other payables 1,818 972
------- -------
Cash consumed from operations (216) (19)
Income tax credit received 41 -
------- -------
Net cash consumed from operating activities (175) (19)
------- -------
Cash flows from investing activities
Purchase of property, plant and equipment (1,027) (160)
Expenditure on product development (172) -
Interest received 294 302
------- -------
Net cash flows from investing activities (905) 142
------- -------
Cash flows from financing activities
Proceeds from issue of shares 167 279
Dividends paid to equity shareholders of the parent (621) (404)
------- -------
Net cash flows from financing activities (454) (125)
------- -------
Net decrease in cash and cash equivalents (1,534) (2)
Cash and cash equivalents at the beginning of the period 6,747 6,749
------- -------
Cash and cash equivalents at the end of the period 5,213 6,747
------- -------
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. 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.
2007 2007 2006 2006
pence £'000 pence £'000
per per
share share
Loss attributable to equity holders of
the parent (1.4) (1,241) (0.3) (242)
-------- -------- -------- --------
Diluted
Diluted earnings per share amounts are calculated by dividing the net 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.
2007 2006
No. No.
Basic weighted average number of
shares in issue 83,380,985 81,061,685
Dilutive effect of share options - -
---------- ----------
Diluted weighted average number of
shares in issue 83,380,985 81,061,685
---------- ----------
The loss for the period and the weighted average number of ordinary shares for
calculating the diluted earnings per share for the period to 31 March 2007 are
identical to those used for the basic earnings per share. This is because the
outstanding share options would have the effect of reducing the loss per
ordinary share and would therefore not be dilutive under the terms of
International Accounting Standard No. 33 (IAS 33).
2007 2007 2006 2006
pence £'000 pence £'000
per per
share share
Loss attributable to equity holders of
the Company (1.4) (1,241) (0.3) (242)
------- ------- ------- -------
OTHER INFORMATION
1. The above financial information, which is unaudited, does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
financial information for the year ended 31 March 2007 has been extracted from
the draft statutory accounts on which an unqualified audit opinion is expected
to be issued. Statutory accounts for the year ended 31 March 2007 will be
delivered to the Registrar in due course. The preliminary announcement is
prepared on the same basis as set out in the previous year's statutory accounts.
Those accounts, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies.
2. The preliminary statement was approved by the Board of Directors of GB Group
plc on 4 June 2007.
3. The ex-dividend date is 4 July 2007; the record date is 6 July 2007; the
payment date is 30 July 2007.
4. The AGM will take place on 19 July 2007.
5. The 2008 interim results announcement is expected to be on 27 November 2007.
6. This report will also be available on the GB Group web site: www.gb.co.uk
from 5 June 2007.
7. The Company intends to dispatch to shareholders printed copies of the full
annual report and accounts for the year to 31 March 2007 by 26 June 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
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