Final Results

RNS Number : 6804J

IDOX PLC

08 December 2008

 



8 December 2008

IDOX plc

Strong growth in revenues and profits following integration of Plantech

IDOX plc (AIM: IDOX, 'the Group', 'IDOX'), the supplier of software and services to the UK public sector, announces its final results for the year ended 31 October 2008.

Financial highlights

• Revenues up 65% to £34.0m (2007: £20.6m); 9% organic growth in core software business
• Gross margin of 79% (2007: 74%)
• Normalised pre-tax profit* increased 193% to £7.4m (2007: £2.5m) 
• Pre-tax profits up 267% to £6.6m (2007: £1.8m) 
• Normalised EPS up 80% to 1.62p (2007: 0.90p)
• Basic EPS up 122% to 1.40p (2007: 0.63p)
• £7.7m cash at bank (2007: £8.9m) after acquisition of Plantech for net cost of £3.8m 
• Net funds of £1.0m including all borrowings (2007: £1.3m)
• Recurring revenues make up 46% of core software revenues 
• Dividend proposed of 0.115p per share

Operational highlights

• Record £2.3m contract win in Scotland, delivery on schedule
• Plantech integration strengthens market position 
• Now serving more than 71% of local authorities

Martin Brooks, Chairman, said:

'We have made decisive progress in our aim to become a leading supplier of high-quality software and services to the public sector. Despite the current economic conditions, demand in our core local government market remains robust, with more than 330 local authorities using IDOX software. Having successfully integrated Plantech, which was acquired in February 2008, IDOX ended the financial year as a larger and demonstrably more successful company.  

'We have begun the new financial year well, with sales visibility ahead of 2008, a leading position in our core market, an excellent suite of products, strong recurring revenues and a healthy balance sheet. This is a good starting position from which to face a very challenging year for the UK economy.'

* Normalised pre-tax profit is derived by adding back amortisation, share option costs, capitalised R&D expenditure (£0.4m) and fair value movements on interest rate swaps (£0.1m). 

Enquiries:

IDOX
Martin Brooks, Chairman	020 7332 6000
Richard Kellett-Clarke, Chief Executive
Will Edmondson, Chief Financial Officer
College Hill
Adrian Duffield/Carl Franklin	020 7457 2020
Noble & Company Limited
John Llewellyn-Lloyd/Sam Reynolds	020 7763 2200

About IDOX plc www.idoxplc.com

IDOX plc is a leading developer and supplier of software and services for the management of local government and other organisations. More than 71% of UK authorities use IDOX software and managed services for document and knowledge management and for the provision of web-based services such as planning applications and public information.

The Group's acquisition of CAPS Solutions for £22 million in June 2007, and of Plantech for a net cost of £3.8 million in February 2008, has reinforced IDOX's position as a significant player in the local authority information software sector.

IDOX also supplies decision-support content and additional specialist services through the IDOX Information Service. Under the TFPL brand the Group is transforming approaches to knowledge and content management via consultancy and training as well as providing these specialist skills to customers through its recruitment division.

IDOX is headquartered in London, United Kingdom with offices in Glasgow and Newbury.

Chairman's Statement

I am pleased to report that we have made decisive progress in our aim to become a leading supplier of high-quality software and services to the public sector. Full-year revenues increased 65% to £34.0m, with profitability increasing even more strongly, up 267% to £6.6m.

Our increase in profitability resulted from good like-for-like organic growth in our main software business and from cost savings achieved by integrating the software activities of IDOX, CAPS Solutions and Plantech into a single unit. We expect this integration to deliver additional operational benefits and savings in the new financial year. 

Cash flow was strong, particularly in the first half of the year when we collected annual maintenance revenues, and we ended the year with net cash of £1.0m after acquisition costs and our first payments of corporation tax. We are proposing to increase our dividend to 0.115p pence per share (2007: 0.1p). 

Despite the current economic conditions, demand in our core local government market remains robust. With more than 330 local authorities using IDOX software, we are the leader in the supply of land and property solutions and a growing provider of software to revenues and benefits departments. 

Building on this market-leading position in land and property services, we have a growing capability to cross sell and to provide web-based public access services or portals across the entire range of local authority activities and potentially into the wider public sector as well. This is also true of our proprietary document management software.

Although our smallest business, being consulting and content-based solutions, experienced a softening in revenues in the second half of the year, our recruitment business sustained the improvement seen in the first half of the year. 

We completed our management team by welcoming William Edmondson as our new Chief Financial Officer at the end of September 2008. Will was previously Finance Director for the Europe, Middle-East, India & Africa Region of Autodesk Inc. (NASDAQ: ADSK), which experienced rapid growth in revenues during his tenure to $1bn and where he controlled a budget of $250m, in addition to integrating a number of acquisitions.

Having successfully integrated Plantech, which was acquired in February 2008, we continue to look for suitable opportunities to acquire complementary businesses that will enable us to gain market share in the public sector, improve cross-selling and cut costs where necessary. 

IDOX ended its 2008 financial year as a larger and demonstrably more successful company and I would like to thank all of those who have worked so hard to make it possible.  

We have begun the new financial year well, with sales visibility ahead of 2008, a leading position in our core market, an excellent suite of products, strong recurring revenues and a healthy balance sheet. This is a good starting position from which to face a very challenging year for the UK economy. 

Chief Executive's Review

The market for software and services for local government has remained robust against a backdrop of difficult conditions in the wider economy. Driven by the need to improve services and become more accessible to their communities, local authorities are continuing to invest in software and services that deliver tangible benefits and a rapid return on investment. 

However, the consolidation of suppliers and IT platforms has changed the local government market significantly over the past year, reducing both choice and competition and leaving IDOX as the only quoted company in the sector.

With the addition of Plantech we now supply more than 71% of the UK's local authorities with leading products that are fully integrated from public-access web pages through to back-end databases and case-management systems. From our leading position in segments such as land & property and revenues & benefits, we will build the IDOX business through product innovation, higher levels of cross selling and strategic acquisitions.

Software business

On a like-for-like basis revenues grew 9% year on year with a higher percentage of revenues coming from product and services and less from low margin contracted out backscanning or hardware purchases.

The Software business has undergone significant change in the past year, with the integration of Plantech, a strengthening of management and continuing improvements in processes and quality. The impact has been that major projects have been delivered on time but to an even higher quality.  

Our Glasgow office delivered the first part of a new planning and appeals portal for the Scottish Executive. This was IDOX's largest contract to date, worth £2.3m over three years.

In addition, IDOX gained notable contract wins at authorities including Eastleigh, Sheffield, South Gloucester, Shropshire, West Lindsay and Westminster, with further development work completed for the Northern Ireland Planning Department. 

Our software development team has made considerable progress in improving quality control and resource planning, successfully delivering on schedule significant upgrades to all our product lines. Other achievements include the completion of a two year development of a new public access system, and a significant upgrade to our revenues & benefits document management and workflow solution that integrates with market-leading back-office systems from other vendors. The Group's product portfolio has been further enhanced with the launch of Plantech's Enterprise Management tool, which is being made available to our wider Uniform customer base.

We have merged the operations and customer support areas of the three software businesses and strengthened the business with management from across the Group. We have introduced a new resource-planning system using our own in-house technology, the Enterprise Management tool, to deliver improvements to the delivery process. After the roll out of this in the final quarter of the 2008 financial year, it is now being linked to a market leading software-as-a-service CRM system to deliver end-to-end paperless processing.

Solutions business

Demand for the Solutions business, which accounts for just 8% of Group revenues, has suffered from the economic downturn with key private-sector projects being delayed or postponed indefinitely. Because our consultancy business is involved in the early-stage design and architecture phases of major IT projects, it is therefore among the first to be affected. In the public sector a number of managed content-rich web sites have been withdrawn due to changes in government policy. Overall revenues declined year on year by 22%.

However, we continue to see a steady flow of opportunities for consultancy, recruitment and training particularly from non-departmental public bodies (NDPBs) and are addressing this by focusing on services connected with efficient and effective SharePoint deployment and the marketing of programmes delivering Knowledge Harvesting and Knowledge Management Health Checks to protect the IP of businesses during restructuring.

Recruitment business

The Recruitment business, which accounts for 13% of Group revenues, increased turnover by 7% year on year through a growth in contract and interim staff services to the banking, legal and government sectors. Permanent placements have also held up despite the economic outlook. The recruitment market in the specialist area of knowledge and information management remains stable with continued demand for interim managers and senior appointments.

Summary and Outlook 

Through a strategy of acquisition and reorganisation, IDOX has transformed itself into a leading force in local government software, with a reputation for delivering innovative products and services backed by high-quality implementation and support. At the same time, this transformation has delivered substantial cost savings and strong growth in revenues, profitability and cash generation, all underpinned by a high level of recurring licence and maintenance revenues. Though vigilant to the challenges ahead, we are cautious but confident about our future.  

Chief Financial Officer's review

Revenues increased by 65% to £34.0m (2007: £20.7m) following robust organic growth, the maiden contribution of Plantech, acquired in February 2008, major contract wins across the business and the full-year impact of revenues from the Uniform product range.

The Software business doubled its revenue in the year and now accounts for 80% of Group revenues, or £27.1m (2007: 64%, £13.2m), while the Solutions business contributed £2.6m or 8% of Group revenues (2007: 16%, £3.3m). Revenues in the Recruitment business increased by 7% to £4.4m, representing 13% of Group revenues (2007: 20%, £4.1m). 

Recurring revenues are a salient feature of our business, deriving from maintenance and subscription services linked to annual increases with inflation. Some 46% of our core Software revenues are recurring.

Gross margins have improved significantly as a result of the increasing proportion of software sales making up Group revenues. In 2008 the Group achieved a gross margin of 79% (2007: 74%).

Although operating costs increased as a consequence of the two acquisitions, the integration and cost-saving programmes undertaken resulted in a substantial improvement in EBITDA which increased threefold to £8.6m (including capitalisation of certain R&D costs as required by IFRS and excluding share option costs). The EBITDA margin was 25% against 14% in 2007. We continue to be vigilant on our cost base going into 2009 and expect to incur a small restructuring charge in 2009 as we finalise the integration of our acquisitions.

Normalised pre-tax profits, excluding amortisation and share options costs and including capitalised R&D expenditure, increased almost threefold to £7.4m (2007: £2.5m). Pre-tax profits on an IFRS basis, which the Group has adopted in the current financial year, more than tripled to £6.6m (2007 (restated for IFRS): £1.8m). Further explanation on the impact of transition to IFRS was provided in our 2008 interim report.

Segmental profit for the software division increased nearly fourfold to £7.5m (2007: £2.1m). The Solutions business fell into a small loss of £0.2m as a result of the downturn in consulting services during the year (2007: breakeven). As a result, decisive action has already been taken to return the division to profitability by reducing its cost base and driving operational efficiencies. The recruitment business returned to profitability, turning a loss of £0.3m in 2007 into a profit of £0.2m.

The Group has continued its successful integration of CAPS (acquired in June 2007) and of Plantech, which was acquired in February 2008. During the 2008 financial year Plantech contributed revenue of £3.2m and profit before tax of £1m. Certain provisions and accruals, established in relation to the CAPS acquisition have been successfully resolved within original estimates and therefore have been released in the year (see note 5)

Adjusted earnings per share increased by 80% from 0.90p to 1.62p. Reported earnings per share increased by 122% to 1.40p, (2007: 0.63p).

The Board proposes to pay an increased dividend of 0.115p per share, subject to shareholder approval. 

The business is strongly cash generative, ending the year with £7.7m in cash and a net cash position of £1.0m, after repaying £1.0m of debt and funding the acquisition of Plantech from existing cash resources. In addition, for the first time, the Group was required to make advance payments of corporation tax as a result of its recent move to strong profitability.

- ends -

  Consolidated Income Statement

For the year ended 31 October 2008

	Note	2008	2007
		£000	£000
Revenue	2	34,034	20,625
External charges		(7,017)	(5,435)
		27,017	15,190
Staff costs		(14,745)	(8,639)
Other operating charges		(3,697)	(3,710)
		8,575	2,841
Depreciation		(340)	(342)
Amortisation		(920)	(362)
Share option costs		(108)	(359)
Operating profit		7,207	1,778
Finance income		263	336
Finance costs		(901)	(318)
Profit before taxation		6,569	1,796
Income tax expense	3	(1,785)	(109)
Profit for the year		4,784	1,687
Earnings per share
Basic	4	1.40p	0.63p
Diluted	4	1.38p	0.63p

Consolidated Balance Sheet

At 31 October 2008

	Note	2008	2007
		£000	£000
ASSETS
Non-current assets
Property, plant and equipment		500	513
Intangible assets		31,887	27,722
Deferred tax assets		265	651
Total non-current assets		32,652	28,886
Current assets
Trade & other receivables		8,276	6,963
Cash and cash equivalents		7,688	8,927
Total current assets		15,964	15,890
Total assets		48,616	44,776
LIABILITIES
Current liabilities
Trade & other payables		2,845	5,167
Other liabilities		8,113	6,220
Provisions		370	574
Current tax		1,086	581
Deferred tax liabilities		250	202
Derivative financial instruments		96	-
Borrowings		1,000	1,000
Total current liabilities		13,760	13,744
Non-current liabilities
Trade and other payables		422	619
Deferred tax liabilities		3,292	3,112
Borrowings		5,696	6,611
Total non-current liabilities		9,410	10,342
Total liabilities		23,170	24,086
Net assets		25,446	20,690
EQUITY
Called up share capital		3,442	3,420
Capital redemption reserve		1,112	1,112
Share premium account		9,883	9,706
Share options reserve		364	359
Merger reserve		1,294	1,294
ESOP trust		(96)	(104)
Retained earnings		9,447	4,903
Total equity		25,446	20,690

Consolidated Cash Flow Statement

For the year ended 31 October 2008

		2008	2007
		£000	£000
Cash flows from operating activities
Profit before taxation		6,569	1,796
Adjustments for:
Depreciation		340	342
Amortisation		920	362
Impairment		-	400
Finance income		(263)	(336)
Finance costs		816	282
Debt issue costs amortisation		85	36
Share option costs		108	359
Movement in receivables		(538)	(160)
Movement in payables		(1,830)	(3,189)
Cash generated by operations		6,207	(108)
Tax on profit paid		(1,280)	-
Net cash from operating activities		4,927	(108)
Cash flows from investing activities
Acquisition of subsidiary net of cash acquired		(3,833)	(13,305)
Purchase of property, plant & equipment		(291)	(320)
Purchase of intangible fixed assets		(353)	-
Interest received		263	336
Net cash used in investing activities		(4,214)	(13,289)
Cash flows from financing activities
Proceeds from issue of share capital		199	11,000
Debt issue costs		-	(425)
Share issue costs paid		-	(647)
Interest paid		(816)	(318)
Proceeds from long-term borrowing		-	8,000
Loan repayments		(1,000)	-
Equity dividends paid		(343)	(108)
Sale/(purchase) of own shares		8	(8)
Net cash flows from financing activities		(1,952)	17,494
Net movement on cash and cash equivalents		(1,239)	4,097
Cash and cash equivalents at the beginning of the period		8,927	4,830
Cash and cash equivalents at the end of the period		7,688	8,927

Consolidated Statement of Changes in Equity

At 31 October 2008

The Group	Called up share capital	Capital redemption reserve	Share premium account	Merger reserve	Share option reserve	ESOP trust	Retained earnings	Total
	£000	£000	£000	£000	£000	£000	£000	£000
At 1 November 2006	1,953	1,112	820	1,294	-	(96)	3,324	8,407
Profit for the year	-	-	-	-	-	-	1,687	1,687
Total recognised income and expense for the year	-	-	-	-	-	-	1,687	1,687
Issue of share capital	1,467	-	9,533	-	-	-	-	11,000
Share issue costs	-	-	(647)	-	-	-	-	(647)
Share options granted	-	-	-	-	359	-	-	359
Equity dividends paid	-	-	-	-	-	-	(108)	(108)
ESOP trust	-	-	-	-	-	(8)	-	(8)
At 31 October 2007	3,420	1,112	9,706	1,294	359	(104)	4,903	20,690
Profit for the year	-	-	-	-	-	-	4,784	4,784
Total recognised income and expense for the year	-	-	-	-	-	-	4,784	4,784
Issue of share capital	22	-	177	-	-	-	-	199
Share issue costs	-	-	-	-	(103)	-	103	-
Share options grants	-	-	-	-	108	-	-	108
Equity dividends paid	-	-	-	-	-	-	(343)	(343)
ESOP trust	-	-	-	-	-	8	-	8
At 31 October 2008	3,442	1,112	9,883	1,294	364	(96)	9,447	25,446

IDOX plc

Notes to the announcement

For the year ended 31 October 2008

1. Basis of preparation

This preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), the Companies Act 1985 applicable to companies reporting under IFRS and under the historical cost convention as modified by the revaluation of certain financial assets and liabilities, being derivative financial instruments carried at fair value through profit or loss.

 
The principle accounting policies have been revised from those set out in our 2007 Annual Report and Accounts, following the adoption of IFRS in the current financial year. The impact of adoption of IFRS has been disclosed in our 2008 Interim Report.

 
The financial information set out in this announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The consolidated balance sheet at 31 October 2008 and the consolidated profit and loss account, consolidated cash flow statement and associated notes for the year ended 31 October 2008 have been extracted from the statutory accounts upon which the audit report has yet to be signed.  

Those financial statements have not yet been delivered to the Registrar of Companies

2.  Segmental Analysis

As at 31 October 2008 the Group is primarily organised into three main business segments, which are detailed below.

Financial information is reported to the Board on a business unit basis with revenue and operating profits split by business unit. Each business unit is deemed a reportable segment as each offer different products and services.

• Software - delivers software and service solutions to mainly local government customers across a broad range of departments
• Solutions - delivering both an information service and consultancy services to a diverse range of customers across both private and public sectors
• Recruitment - providing personnel with information, knowledge, records and content management expertise to a diverse range of customers 

Segment revenue comprises sales to external customers. Segment profit reported to the board represents the profit earned by each segment before the allocation of tax.  

All assets and liabilities are allocated to reportable segments in line with the percentage of total revenue.  

The Group does not place reliance on any specific customer and has no individual customer that generates 10% or more of its total Group revenue.

The Group generates all its revenue from UK domiciled customers and hence further geographical disclosure is not required.

The segment results for the year ended 31 October 2008 are as follows:

	Software	Solutions	Recruitment	Total
	£000	£000	£000	£000
Revenues from external customers	27,060	2,556	4,418	34,034
Interest revenue	222	21	20	263
Interest expense	(4)	-	-	(4)
Net interest revenue	218	21	20	259
Depreciation	259	66	15	340
Amortisation	920	-	-	920
Segment profit/(loss) (see reconciliation below)	7,509	(234)	226	7,501
Segment total assets	38,655	3,578	6,310	48,543
Expenditures on segment non-current assets	294	23	3	320
Segment total liabilities	18,547	1,740	3,008	23,295

The segment results for the year ended 31 October 2007 are as follows:

	Software	Solutions	Recruitment	Total
	£000	£000	£000	£000
Revenues from external customers	13,222	3,269	4,134	20,625
Interest revenue	324	9	3	336
Interest expense	-	-	-	-
Net interest revenue	324	9	3	336
Depreciation	235	79	28	342
Amortisation	966	193	280	1,439
Segment profit/(loss) (see reconciliation below)	2,076	6	(286)	1,796
Segment total assets	26,077	6,447	8,152	40,676
Expenditures on segment non-current assets	281	108	33	422
Segment total liabilities	13,316	3,292	4,164	20,772

Segment result of the Recruitment segment includes an impairment loss in relation to goodwill of £Nil (2007: £400,000).

Reconciliations of reportable profit/(loss) and assets and liabilities:

	2008	2007
	£000	£000
Profit/(loss):
Total profit for reportable segments	7,501	1,796
Write-back amortisation	73	1,077
Impairment of goodwill	-	(400)
Other adjustments	(1,005)	(677)
Profit before taxation	6,569	1,796

Assets:
Total assets for reportable segments	48,543	40,676
Deferred tax on fair value of goodwill	-	3,423
Write-back of amortisation	73	1,077
Impairment of goodwill	-	(400)
Total assets	48,616	44,776

Liabilities:
Total liabilities for reportable segments	23,295	20,772
Deferred tax on fair value of goodwill	-	3,423
Release of deferred tax to Income Statement	(125)	(109)
Total liabilities	23,170	24,086

In 2008, one reportable segment included costs for amortisation under UK GAAP. Other adjustments relate to interest and share option expenses that have not been allocated to the reportable segments.

Segments used by management for internal reporting in 2007 were done so under UK GAAP and excluded all IFRS adjustments. The reconciling items relate to the annual impairment review of the goodwill rather than an amortisation charge and the recognition of a deferred tax liability on the intangible assets.

3. Taxation

The tax charge is made up as follows:

	2008	2007
	£000	£000
Current tax
Corporation tax on profits for the period	2,149	523
Under provision in respect of prior periods	(272)	58
Total current tax	1,877	581
Deferred tax
Origination and reversal of timing differences	(205)	(6)
Adjustments in respect of prior periods	113	(466)
Total deferred tax	(92)	(472)
Total tax charge	1,785	109

Unrelieved trading losses of £121,000 (2007: £796,250) which, when calculated at the standard rate of corporation tax in the United Kingdom of 28% (2007: 30%), amounts to £33,880 (2007: £238,875). These remain available to offset against future taxable trading profits. During the year ended 31 October 2007 £624,000 of tax losses surrendered in exchange for the research and development tax credits in respect of the year ended 31 October 2003 were reinstated.

Factors affecting the tax charge in the period:

	2008	2007
	£000	£000
Profit before taxation	6,569	1,796
Profit on ordinary activities multiplied by the standard
rate of corporation tax in the UK of 28% (2007: 30%)	1,839	539
Effects of:
Expenses not deductible for tax purposes	262	102
Expenses in respect of share options	217	-
Capital allowances in excess of depreciation	19	-
Marginal relief	-	(5)
Difference in tax rate	84	(7)
Adjustments in respect of prior period	(158)	(411)
Net movement on deferred tax on intangibles	(478)	(109)
	1,785	109

4. Earnings per Share

The earnings per ordinary share is calculated by reference to the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during each period, as follows:

	2008	2007
	£000	£000
Profit for the year	4,784	1,687
Basic earnings per share
Weighted average number of shares in issue	342,059,867	267,538,092
Basic earnings per share	1.40p	0.63p

Diluted earnings per share
Weighted average number of shares in issue used in basic earnings per share calculation	342,059,867	267,538,092
Dilutive share options	5,061,729	564,869
Weighted average number of shares in issue used in dilutive earnings per share calculation	347,121,596	268,102,961
Diluted earnings per share	1.38p	0.63p

	2008	2007
	£000	£000
Normalised earnings per share
Profit for the year	4,784	1,687
Add back:
Amortisation	920	362
Share option costs	108	359
Interest rate swaps	96	-
Less:
Capitalised research & development	(353)	-
Normalised profit for the year	5,555	2,408
Basic earnings per share
Weighted average number of shares in issue	342,059,867	267,538,092
Normalised earnings per share	1.62p	0.90p

  5. Acquisitions

Plantech Limited

On 21 February 2008, the Group acquired the entire share capital of Plantech Limited for a consideration of £5,133,000, satisfied in cash. Goodwill arising on the acquisition of Plantech Limited has been capitalised. The purchase of Plantech Limited has been accounted for using the acquisition method of accounting.

	Book value £000	Fair value adjustments £000	Fair value £000
Intangible assets:
Customer relationships	-	1,160	1,160
Trade names	-	520	520
Software	-	840	840
Research & development	153	-	153
Property, plant and equipment	56	(20)	36
Trade receivables	677	(32)	645
Other receivables	130	-	130
Cash at bank	1,526	-	1,526
TOTAL ASSETS	2,542	2,468	5,010
Trade payables	(66)	-	(66)
Deferred revenue	(69)	-	(69)
Corporation tax	(9)	-	(9)
Social security and other taxes	(133)	-	(133)
Accruals	(727)	-	(727)
Deferred tax liability	-	(706)	(706)
TOTAL LIABILITIES	(1,004)	(706)	(1,710)
NET ASSETS	1,538	1,762	3,300
Purchased goodwill capitalised			2,059
			5,359
Satisfied by:
Cash to vendor			5,133
Costs of acquisition			226
Total cash paid			5,359

The fair value amounts are considered provisional.

The fair value adjustment for the intangible assets relates to customer relationships, trade names and software. A related deferred tax liability has also been recorded as a fair value adjustment.

Other adjustments were made to bring the carrying values of property, plant and equipment and trade receivables in line with their fair value.

The profit after taxation of Plantech Limited for the period from 1 May 2007, the beginning of the subsidiary's financial year, to the date of acquisition was £85,828. The profit after taxation for the year ended 30 April 2007 was £294,056.

Residual goodwill comprises the workforce, any immaterial intangible asset values and a strategic premium paid to acquire the business. These do not form identifiable intangible assets under IFRS 3.

Further details on the profit of Plantech Limited are provided below:

	1 November 2007 to date of acquisition	Post acquisition to 31 October  2008
	£000	£000
Turnover	1,166	3,161
Operating profit	149	1,008
Profit before taxation	165	1,042
Taxation	(37)	(193)
Profit for the period	128	849

There were no material recognised gains and losses in the period to the date of acquisition other than the profit for the period.

The subsidiary undertaking acquired during the year made the following contribution to, and utilisation of, group cash flow.

	2008
	£000
Net cash inflow from operating activities	856
Increase in cash	856

Analysis of net outflow of cash in respect of the purchase of the subsidiary undertaking:

	2008
	£000
Cash at bank and in hand acquired	1,526
Cash consideration paid	(5,359)
	(3,833)

CAPS

Certain fair value adjustments, accruals and provisions were originally made as part of the initial accounting for the CAPS acquisition.  The Group has been successful in resolving these matters within original estimates.  As such resolution occurred outside the period in which IFRS 3 would permit the initial accounting to be adjusted, £0.6m has been released through the income statement in the current year.

6 Further Copies

Copies of this announcement will be available, free of charge, for a period of one month from the Company's Nominated Adviser and Broker Noble & Company Limited, 120 Old Broad Street, London, EC2N 1AR, Tel: [phone] or from IDOX plc, 2nd floor, 160 Queen Victoria Street, London, EC4V 4BF, Tel: [phone]. Copies of the annual report and accounts will be posted to shareholders in due course.

 

END

 

 

FR UNVARWSRURRA