FULCRUM PHARMA PLC
('the Group' or 'the Company')
Final Results for the Year Ended 31 August 2008
Fulcrum Pharma plc (AIM: FUL), the professional services company, today announces its final results for the year ended 31 August 2008.
Highlights
Revenue growth of 29% to £14.8m ( 2007: £11.5m )
Operating profit increased 258% to £666,000 ( 2007: £186,000 )
Cash position strong at £2,903,000 ( 2007: £2,217,000 )
EBITDA* doubled to £1,139,000 ( 2007: £573,000 )
New Chief Executive, Chairman designate and non-executive Directors appointed
* EBITDA is defined as earnings before interest, taxation, depreciation and amortisation
Commenting on the results, Chairman Prof. Sir Charles George said:
'The Board is encouraged by the improved performance of the Group in terms of operating profit and cash generation. We remain committed to continue to grow our services business both organically and by acquisition.'
These final results for the year ended 31 August 2008 are available from the Company's website www.fulcrumpharma.com.
For further information, please contact:
Fulcrum Pharma plc |
|
Frank Armstrong, Chief Executive |
Tel: 07815 191565 |
|
|
Seymour Pierce |
|
Jonathan Wright |
Tel: 0207 107 8000 |
Fulcrum Pharma plc
Final Results for the Year Ended 31 August 2008
Chairman's Report
Introduction
I am pleased to report continued growth in sales, operating profit and cash generation during the year.
Strategic Review
Dr Frank Armstrong, who was appointed Chief Executive on 1 April 2008, has conducted a strategic review of the business with the management team. This review has refined the Group's service offerings and branding and confirmed that the Group is committed to increase scale through both organic growth and selective acquisitions.
Financial Results
The Group has adopted International Financial Reporting Standards as adopted by the EU ('IFRS') in these results for the first time and the comparative figures have been restated accordingly. The impact of adoption of IFRS on the Group's income statement for the period ended 31 August 2008 has been to increase the retained profit, as compared to UK GAAP, by £259,000 (2007: £109,000) as a result of the changes in accounting for employee benefits, business combinations and lease inducements.
Sales have risen by 29% to £14.8m compared with last year. Operating profit has increased 258% to £666,000 (2007: £186,000). The profit before tax has increased by 201% to £454,000 (2007: £151,000). Earnings before interest, tax, depreciation and amortisation ('EBITDA') were £1,139,000 (2007: £573,000). The retained profit for the year was £324,000 (2007: £141,000) and the basic earnings per share was 0.19p (2007: 0.10p).
The balance sheet remains strong with an increase in cash during the year of £686,000 to £2,903,000 (2007: £2,217,000) after repayment of bank loans and loan notes of £732,000.
The directors do not propose a dividend. (2007: nil).
Average headcount for the year has increased from 105 to 137, with 140 at the year end.
Following the end of the earn-out period relating to the acquisition of Unicus Regulatory Services Limited on 31 July 2008, the liability for deferred consideration has been increased from £250,000 to £815,000, reflecting the strong post-acquisition performance.
Operating Review
Commercial, Sales and Business Development
The Group has developed the Fulcrum Pharma brand through a rebranding exercise based on a new Vision, Mission and Values.
The new Mission is that 'Fulcrum Pharma is a professional service company providing clients with expert solutions for the development of therapeutic products'.
The main elements of the business strategy are to build a substantial Regulatory business and to deliver bigger projects from diversified clients from the Product Development Consultancy business, while opportunistically pursuing chances to add complementary skills to Fulcrum Pharma's offerings and alliances with other service providers that will increase Fulcrum Pharma's revenues.
The corporate website has been redesigned and there has been wide participation at major scientific, biotechnology and partnering conferences in the US, Europe and Japan. The Group has continued to look for opportunities to sell services across its geographical regions and provide complete and expert solutions to clients. In particular, the business development efforts of the Japanese subsidiary have generated significant fee sales from Japanese clients for the Europe and US businesses.
The organisation has been strengthened with the creation of a focussed Commercial Operations group to lead sales and business development and a Professional Development group to support staff development and training.
As part of the strategy to expand Pharmacovigilance services, Fulcrum Pharma has formed a strategic collaboration with Quantum Solutions, India. This collaboration enables Fulcrum Pharma to deliver high capacity processing and reporting of safety information whilst maintaining necessary quality standards.
Product Development Consultancy
Dr Sarah Arbe-Barnes has been appointed as General Manager for Product Development Consultancy (PDC). This specialist group has been established to provide global, strategic consultancy to the Pharma and Biotech industries, the Investment Community and the Neglected Diseases sector and to lead Fulcrum Pharma's development programmes. PDC has the target of winning larger Drug Development projects from a more diverse client base and to pursue opportunities to retain a greater amount of the project work within the Fulcrum Pharma organisation. PDC operates on a global basis with staff based in Europe and the US.
Europe
On 1 April 2008, Fulcrum Pharma Developments Limited was renamed Fulcrum Pharma (Europe) Limited and became the single trading entity in Europe, with Dr Phil Birch subsequently appointed as General Manager. This integrated the businesses of the acquired subsidiary companies, Quadramed Limited and Unicus Regulatory Services Limited ('Unicus') with that of Fulcrum Pharma Developments Limited. This has enabled the integration of processes across Europe and has simplified the organisational structure.
Sales in Europe have grown by 20% to £9,831,000 (2007: £8,191,000) reflecting the full year contribution of Unicus, which was acquired in March 2007. The initial issues experienced with Unicus have been resolved and the strong sales performance has demonstrated the value created by the acquisition of Unicus by the Group.
US
The US business recorded a strong performance. Sales grew by 72% to £2,431,000 (2007: £1,411,000) reflecting the recovery of the business.
Mr John Larus joined the Company as General Manager for the US and has restructured the US organisation in preparation for future growth. Staff numbers have increased from 16 to 22 with expanded operational and business development resource including extending the Group's US presence with the opening of an office in Ann Arbor, Michigan in November 2007. Additionally, in order to better service the needs of the clients, a dedicated regulatory affairs group, with electronic submission capabilities, has been established in the US.
Japan
The Japanese organisation has continued to consolidate its position as a leading specialist CRO in the oncology field. Organic growth over the last year has seen sales increase by 35% to £2,564,000 (2007: £1,902,000) and headcount increase by 20%. The domestic client base is predominately first tier Pharma companies and government funded organisations.
Long-term, stable contracts with these clients allow the Japanese business to maintain an order book showing a good level of predictability in a two year horizon.
Board Changes
I informed the Board of my intention to stand down as Chairman at the forthcoming Annual General Meeting to be held on 22nd December 2008. Mr Grahame Cook joined the Board on 28 August 2008 as a non-executive Director and Chairman designate. In addition, Mr Frank Condella and Mr Ken Lacey joined the Board as non-executive Directors on 25 September 2008. With these additions, I am convinced Fulcrum Pharma has a strong Board, capable of delivering the Company's strategy.
I would also like to thank Dr Jon Court, who stepped down from the Board on 31 March 2008, for his years of leadership of the Fulcrum business.
Future Strategy and Outlook
The Group continues to see a trend for increased demand for outsourcing as clients pursue more productive research and development. The turbulent market conditions have increased the focus of all clients on selective and efficient use of capital in progressing Drug Development projects. While the Group has experienced a slowing in commitments from clients to progress such projects, the diversification of the client base, to include the focus on Neglected Diseases and novel models of Drug Development, coupled with distinctive offerings from Fulcrum Pharma, convince the Group of the continuing business opportunity, despite the more difficult market conditions.
The Group has a clear strategy to deliver a growing, sustainable and profitable business. The steps that management has taken provide a strong platform to grow the Fulcrum Pharma business by building a substantial Regulatory business and delivering bigger projects from diversified clients.
The operating profit of £666,000 is in line with market expectations. Current trading is satisfactory and the Board is further encouraged by the strengthened order book since the year end.
Finally, I would like to thank the management and staff for their contribution to the business in 2008.
Consolidated income statement
For the year ended 31 August 2008
|
|
Year ended |
Year ended |
|
|
31 August 2008 |
31 August 2007 |
|
|
Unaudited |
Unaudited |
|
Note |
£'000 |
£'000 |
Revenue |
|
14,826 |
11,503 |
Cost of sales |
|
(7,966) |
(6,805) |
Gross profit |
|
6,860 |
4,698 |
Selling expenses |
|
(757) |
(504) |
Administrative expenses |
|
(5,437) |
(4,102) |
Other operating income |
|
- |
95 |
Operating profit |
|
666 |
186 |
Finance income |
|
69 |
42 |
Finance costs |
|
(281) |
(77) |
Profit on ordinary activities before taxation |
|
454 |
151 |
Tax on profit on ordinary activities |
(130) |
(10) |
|
Profit for the year |
|
324 |
141 |
Earnings per share (pence) |
|
|
|
Basic |
|
0.19p |
0.10p |
Diluted |
|
0.18p |
0.09p |
Consolidated statement of recognised income and expense
For the year ended 31 August 2008
|
|
Year ended |
Year ended |
|
|
31 August 2008 |
31 August 2007 |
|
|
Unaudited |
Unaudited |
|
Note |
£'000 |
£'000 |
Fair value gains net of tax:
|
|
1 |
104 |
Net gain recognised directly in equity |
|
1 |
104 |
Profit for the year |
|
324 |
141 |
Total recognised income for the year |
|
325 |
245 |
Currency translation differences |
|
53 |
12 |
Total recognised gains attributable to the shareholders |
|
378 |
257 |
Consolidated balance sheet
As at 31 August 2008
|
|
31 August 2008 |
31 August 2007 |
|
|
Unaudited |
Unaudited |
|
Note |
£'000 |
£'000 |
Assets Non current assets Intangible assets Property, plant and equipment Available-for-sale financial assets Deferred tax assets |
|
3,973 627 378 57 |
3,591 715 574 - |
|
|
5,035 |
4,880 |
Current assets Trade and other receivables Cash and cash equivalents |
|
5,704 2,903 |
5,923 2,434 |
|
|
8,607 |
8,357 |
Liabilities Current liabilities Trade and other payables Current income tax liabilities Bank and other borrowings Loan notes Deferred cash consideration |
|
(5,520) (102) (365) (443) (372) |
(5,363) (31) (1,248) (450) - |
|
|
(6,802) |
(7,092) |
Net current assets |
|
1,805 |
1,265 |
Non current liabilities Bank loans and other borrowings Loan notes Deferred cash consideration Deferred tax liabilities |
|
(571) - - (73) |
(116) (136) (114) - |
|
|
(644) |
(366) |
Net assets |
|
6,196 |
5,779 |
Equity Share capital Share premium account Merger reserve Retained earnings |
|
1,779 6,082 (454) (1,211) |
1,779 6,082 (454) (1,628) |
Total equity |
6,196 |
5,779 |
Consolidated cash flow statement
For the year ended 31 August 2008
|
|
Year ended |
Year Ended |
|
|
31 August 2008 |
31 August 2007 |
|
|
Unaudited |
Unaudited |
|
|
£'000 |
£'000 |
Continuing operations Profit before tax Adjustments for: Depreciation of property, plant and equipment Amortisation of intangible assets Share based payments Loss on disposal of fixed assets Net finance costs Changes in working capital: Decrease/(increase) in trade and other receivables (Decrease)/Increase in payables |
|
454 283 191 38 - 212 335 (20) |
151 275 111 64 48 35 (1,390) 1,580 |
Cash generated by operations |
|
1,493 |
874 |
Cash absorbed by operating activities Interest received Interest paid - bank and other loans Taxation paid |
|
72 (108) (64) |
39 (44) (78) |
Net cash absorbed by from operating activities |
|
(100) |
(83) |
Cash used in investing activities Purchase of property, plant and equipment Acquisition of a subsidiary |
|
(180) 135 |
(450) (2,456) |
Net cash used in investing activities |
|
(45) |
(2,906) |
Financing activities Issuing of ordinary shares Increase in bank borrowings Repayment of bank loans Repayment of obligations under finance leases Loan note repayments Sale/(purchase) of shares by ESOP Trust for employee share options and awards |
|
- 43 (282) (10) (450) 1 |
2,029 1,043 (104) (17) (740) (20) |
Net cash (used by)/generated from financing activities |
|
(698) |
2,191 |
Effect of foreign exchange rate changes on cash and cash equivalents |
|
36 |
56 |
Net increase in cash and cash equivalents |
|
686 |
132 |
Cash and cash equivalents at the beginning of the period |
|
2,217 |
2,085 |
Cash and cash equivalents at the end of the period |
|
2,903 |
2,217 |
Notes to the financial statements
For the year ended 31 August 2008
1. BASIS OF PREPARATION
The results for the year ended 31 August 2008 set out above are unaudited and do not constitute the Group's statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 August 2008 will be delivered to the Registrar of Companies and sent to all shareholders shortly.
The statutory accounts for the year ended 31 August 2008 are the Company's first financial statements prepared under International Financial Reporting Standards ('IFRS'). The statutory accounts, including the comparative information for the year ended 31 August 2007 have been prepared in accordance with IFRS as adopted by the European Union, International Financial Reporting Interpretations Committee ('IFRIC') interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. An explanation of how the transition from UK GAAP to IFRS has impacted the Company's financial position, financial performance and cash flows is disclosed in note .
2. ACCOUNTING POLICIES
IFRS accounting policies were drawn up as part of the Group's IFRS transition and implementation process completed in the year to 31 August 2008. These accounting policies were disclosed in the Group's interim report published on 20 May 2008. The Group has finalised its IFRS accounting policies as part of its 2008 financial year end. The substance of the accounting policies has remained unchanged from those previously reported. The accounting policies will be disclosed in full within the Group's forthcoming statutory accounts.
3. INCOME TAX EXPENSE
Group
|
|
|
|
2008 |
2007 |
|
|
|
|
£'000 |
£'000 |
Current taxation |
|
|
|
111 |
(10) |
Adjustments in respect of prior periods |
|
|
|
(3) |
- |
Total current taxation |
|
|
|
108 |
10 |
Deferred taxation |
|
|
|
22 |
- |
Taxation charge |
|
|
|
130 |
10 |
The tax charge in the group's profit before taxation differs from the theoretical amount using the weighted average tax rate applicable to profits of consolidated entities as follows:
|
|
|
2008 |
2007 |
|
|
|
£'000 |
£'000 |
Profit on ordinary activities before tax |
|
|
454 |
151 |
Tax calculated at domestic tax rates applicable to profits in the respective countries |
|
|
161 |
53 |
Effects of: |
|
|
|
|
- Differences between capital allowances and depreciation |
|
|
1 |
(1) |
- Expenses not deductible for tax purposes |
|
|
185 |
71 |
- Tax losses for the period not relieved |
|
|
- |
75 |
- Tax losses for the period carried forward |
|
|
(55) |
(35) |
- Research and development tax credits |
|
|
(181) |
(153) |
Tax charge for the year |
|
|
111 |
10 |
The weighted average applicable tax rate was 35.5% (2007: 35.1%). The increase is caused by a change in the profitability of the group's subsidiaries in the relative countries.
4. EARNINGS PER SHARE
|
|
|
2008 |
2007 |
Basic earnings per share |
|
|
0.19p |
0.10p |
Diluted earnings per share |
|
|
0.18p |
0.09p |
|
|
|
2008 |
2007 |
|
|
|
Number |
Number |
Weighted average number of shares |
|
|
177,940,745 |
147,633,249 |
Weighted average number of shares held by the ESOP Trust |
|
|
(4,264,364) |
(4,093,963) |
Weighted average number of shares for basic earnings per share |
|
|
173,676,381 |
143,539,286 |
Number of dilutive shares under option |
|
|
2,107,701 |
9,222,003 |
Weighted average number of shares for diluted earnings per share |
|
|
175,784,083 |
152,761,291 |
The basic earnings per ordinary share is based on the Group's profit for the year of £421,000 (2007: £141,000) divided by the weighted average number of ordinary shares in issue, excluding those shares held by the ESOP Trust.
5. STATEMENT OF CHANGES IN EQUITY
Group
|
|
|
|
|
Share |
|
|
|
|
|
|
|
Called up |
premium |
Merger |
Retained |
|
|
|
|
|
share capital |
account |
reserve |
earnings |
Total |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
At 1 September 2006 |
|
|
|
1,285 |
4,547 |
(454) |
(1,929) |
3,449 |
Retained profit for year |
|
|
|
- |
- |
- |
141 |
141 |
Fair value gains/(losses) on available for sale assets |
|
|
|
- |
- |
- |
104 |
104 |
Issue of ordinary shares |
|
|
|
494 |
1,535 |
- |
- |
2,029 |
Options compensation charge |
|
|
|
- |
- |
- |
64 |
64 |
Purchase of shares by ESOP Trust |
|
|
|
- |
- |
- |
(20) |
(20) |
Unrealised exchange gain/(loss) on consolidation |
|
|
|
- |
- |
- |
12 |
12 |
At 31 August 2007 |
|
|
|
1,779 |
6,082 |
(454) |
(1,628) |
5,779 |
Retained profit for year |
|
|
|
- |
- |
- |
324 |
324 |
Fair value gains/(losses) on available for sale assets |
|
|
|
- |
- |
- |
1 |
1 |
Issue of ordinary shares |
|
|
|
- |
- |
- |
- |
- |
Options compensation charge |
|
|
|
- |
- |
- |
38 |
38 |
Purchase of shares by ESOP Trust |
|
|
|
- |
- |
- |
1 |
1 |
Unrealised exchange gain/(loss) on consolidation |
|
|
|
- |
- |
- |
53 |
53 |
At 31 August 2008 |
|
|
|
1,779 |
6,082 |
(454) |
(1,211) |
6,196 |
6. COPIES OF ANNUAL REPORT
Copies of the Annual Report will be sent to shareholders and will also be available at the registered office of Fulcrum Pharma plc, Hemel One, Boundary Way, Hemel Hempstead, Hertfordshire, HP2 7YU.
EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
Transitional arrangements
Under the provisions of IFRS 1 'First time Adoption of IFRS' specific exemptions may be applied in certain areas as part of the transition of the financial statements to IFRS. The Group has elected to apply the following exemptions:
IRFS 3 'Business Combinations'
IFRS 3 has been adopted from the transition date and is only being applied to acquisitions made on or after 1 September 2006.
IFRS also requires goodwill to be carried at cost with impairment reviews carried out at least annually. The Group has applied the standard from the transition date and so the net carrying value of goodwill at 31 August 2006 has been brought forward as the cost at 1 September 2006, with no amortisation charge from that date.
IAS 21 'The Effects of Changes in Foreign Exchange Rates'
Under IAS 21 cumulative translation differences arising on the consolidation of overseas subsidiaries are being accumulated for each individual subsidiary from the date of transition to IFRS and not from the original acquisition date.
IAS 17 'Leases'
IAS 17 requires companies to make an adjustment with respect to 'Rent Free' periods. Under UK GAAP, lease inducements such as rent free periods are apportioned over the lease term until the first break point of the lease; under IFRS, the inducement is spread over the full term of the lease.
IAS 19 'Employee Benefits'
IAS 19 requires companies to make an accrual for holiday pay.
IAS 38 'Intangible assets'
Under UK GAAP, goodwill is amortised over its expected useful life. IAS 38 does not permit amortisation and instead is reviewed annually for impairment.
IAS 39 'Financial asset available for sale'
Under UK GAAP, financial assets are carried at historic cost. Under IAS 39, the asset is 'marked to market' and shown on the balance sheet at the current market value and using the current foreign exchange rate. Movements in market value are recorded in equity unless there is an impairment, in which case the cumulative loss is reported in the income statement.
IFRS 3 'Business Combinations'
IFRS 3 deals with accounting for business combinations including goodwill and intangible assets.
Under UK GAAP, the Group adopted FRS 10 'Goodwill and intangible assets' from March 2000 and goodwill arising on acquisitions after this date was capitalised and amortised over its useful economic life, which was presumed to be ten years. Goodwill arising before this date was eliminated against reserves. In addition, the Group tested for impairment when there was an indication that the carrying value of an asset might be impaired.
Under IFRS 3 this policy has been replaced by impairment tests performed annually or whenever there is an indication that the carrying value of an asset might be impaired. Goodwill amortisation has also ceased.
At the transition date, the Group had goodwill assets with a net book value of £1,216,000, which under the transitional arrangements laid out in IFRS 1 was deemed to be the costs carried forward for these assets from that date.
Although the Group has adopted IFRS 3 from the transition date, 1 September 2006, the Group completed the acquisition of Unicus Regulatory Services Limited on 19 March 2007. The accounting treatment of this acquisition has therefore been reviewed in accordance with the requirements of IFRS 3. As a result of this review, intangible assets have been separately identified, and goodwill has been reduced by the corresponding net amount. The newly identified intangible assets are being amortised over one to six years.
The transition from UK GAAP to IFRS does not change the cash flows of the Group nor does it impact Group strategy or commercial decisions.
EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
Reconciliation of the consolidated income statement for the period ended 31 August 2008 from UK GAAP to IFRS
|
|
|
|
|
|
|
Year ended 31 August 2008 |
|
|
Reformatted UK GAAP |
Revenue Reclassification |
IAS 17 Leases |
IAS 19 Employee benefits |
IAS 38 Intangible assets |
IAS 39 Financial asset available for sale |
IFRS 3 Business Combinations |
As restated in accordance with IFRS |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Revenue Cost of sales |
22,953 (16,053) |
(8,127) 8,127 |
- - |
- (40) |
- - |
- - |
- - |
14,826 (7,966) |
Gross profit |
6,900 |
- |
- |
(40) |
- |
- |
- |
6,860 |
Selling expenses Administrative expenses Amortisation of intangible assets |
(757) (5,234) (461) |
- - - |
- (2) - |
- (10) - |
- - 461 |
- - - |
- - (191) |
(757) (5,246) (191) |
Operating profit |
448 |
- |
(2) |
(50) |
461 |
- |
(191) |
666 |
Finance income |
69 |
- |
- |
- |
- |
- |
- |
69 |
Finance costs |
(184) |
- |
- |
- |
- |
(97) |
- |
(281) |
Profit on ordinary activities before taxation |
333 |
- |
(2) |
(50) |
461 |
(97) |
(191) |
454 |
Tax on profit on ordinary activities |
(171) |
- |
- |
41 |
- |
- |
- |
(130) |
Profit for the year |
162 |
- |
(2) |
(9) |
461 |
(97) |
(191) |
324 |
Earnings per share (pence) Basic Diluted |
0.09 0.09 |
- - |
- - |
(0.01) (0.01) |
0.27 0.26 |
(0.06) (0.06) |
(0.10) (0.10) |
0.19 0.18 |
EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (continued)
Reconciliation of the consolidated balance sheet as at 31 August 2008 from UK GAAP to IFRS
|
|
|
|
|
|
|
31 August 2008 |
|
|
Reformatted UK GAAP |
IAS 17 Leases |
IAS 19 Employee benefits |
IAS 38 Intangible assets |
IAS 39 Financial asset available for sale |
IFRS 3 Business Combinations |
As restated in accordance with IFRS |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Assets Non current assets Goodwill Intangible assets Property, plant and equipment Available-for-sale financial assets Deferred tax assets |
3,553 - 627 370 12 |
- - - - - |
- - - - 45 |
722 - - - - |
- - - 8 - |
(611) 309 - - - |
3,664 309 627 378 57 |
|
|
4,562 |
- |
45 |
722 |
8 |
(302) |
5,035 |
|
Current assets Trade and other receivables Short-term investments Cash and cash equivalents |
5,704 500 2,403 |
- - - |
- - - |
- - - |
- - - |
- - - |
5,704 500 2,403 |
|
|
8,607 |
- |
- |
- |
- |
- |
8,607 |
|
Liabilities Current liabilities Trade and other payables Current income tax liabilities Bank and other borrowings Loan notes Deferred cash consideration |
(5,293) (102) (365) (443) (372) |
(13) - - - - |
(214) - - - - |
- - - - - |
- - - - - |
- - - - - |
(5,520) (102) (365) (443) (372) |
|
|
(6,575) |
(13) |
(214) |
- |
- |
- |
(6,802) |
|
Net current assets |
2,032 |
(13) |
(214) |
- |
- |
- |
1,805 |
|
Non current liabilities Bank loans and other borrowings Deferred tax liabilities |
(571) (73) |
- - |
- - |
- - |
- - |
- - |
(571) (73) |
|
|
(644) |
- |
- |
- |
- |
- |
(644) |
|
Net assets |
5,950 |
(13) |
(169) |
722 |
8 |
(302) |
6,196 |
|
Equity Share capital Share premium account Merger reserve Retained earnings |
1,779 6,082 (454) (1,457) |
- - - (13) |
- - - (169) |
- - - 722 |
- - - 8 |
- - - (302) |
1,779 6,082 (454) (1,211) |
|
Total equity |
5,950 |
(13) |
(169) |
722 |
8 |
(302) |
6,196 |
EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (continued)
Reconciliation of the consolidated income statement for the period ended 31 August 2007 from UK GAAP to IFRS
|
|
|
|
|
|
|
Year ended 31 August 2007 |
|
|
Reformatted UK GAAP as previously reported |
IFRS Reclassification |
IAS 17 Leases |
IAS 19 Employee benefits |
IAS 38 Intangible assets |
IAS 39 Financial asset available for sale |
IFRS 3 Business Combinations |
As restated in accordance with IFRS |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Revenue Cost of sales |
19,237 (14,510) |
(7,734) 7,734 |
- - |
(29) |
- - |
- - |
- - |
11,503 (6,805) |
Gross profit |
4,727 |
- |
- |
(29) |
- |
- |
- |
4,698 |
Selling expenses Administrative expenses Amortisation of intangible assets Other operating income |
(504) (3,980) (261) 95 |
- - - - |
- (4) - - |
- (8) - - |
- - 261 - |
- - - - |
- - (111) - |
(504) (3,992) (111) 95 |
Operating profit |
77 |
- |
(4) |
(37) |
261 |
- |
(111) |
186 |
Finance income |
42 |
- |
- |
- |
- |
- |
- |
42 |
Finance costs |
(77) |
- |
- |
- |
- |
- |
- |
(77) |
Profit on ordinary activities before taxation |
42 |
- |
(4) |
(37) |
261 |
- |
(111) |
151 |
Tax on profit on ordinary activities |
(10) |
- |
- |
- |
- |
- |
- |
(10) |
Profit for the year |
32 |
- |
(4) |
(37) |
261 |
- |
(111) |
141 |
Earnings per share (pence) Basic Diluted |
0.02 0.02 |
- - |
- - |
(0.03) (0.03) |
0.18 0.17 |
- - |
(0.08) (0.07) |
0.10 0.09 |
EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (continued)
Reconciliation of the consolidated balance sheet as at 31 August 2007 from UK GAAP to IFRS
|
|
|
|
|
|
|
31 August 2007 |
|
|
Reformatted UK GAAP as previously reported |
IAS 17 Leases |
IAS 19 Employee benefits |
IAS 38 Intangible assets |
IAS 39 Financial asset available for sale |
IFRS 3 Business Combinations |
As restated in accordance with IFRS |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Assets Non current assets Goodwill Intangible assets Property, plant and equipment Available-for-sale financial assets |
3,441 - 715 469 |
- - - - |
- - - - |
261 - - - |
- - - 105 |
(611) 500 - - |
3,091 500 715 574 |
|
|
4,625 |
- |
- |
261 |
105 |
(111) |
4,880 |
|
Current assets Trade and other receivables Short-term investments Cash and cash equivalents |
5,923 500 1,934 |
- - - |
- - - |
- - - |
- - - |
- - - |
5,923 500 1,934 |
|
|
8,357 |
- |
- |
- |
- |
- |
8,357 |
|
Liabilities Current liabilities Trade and other payables Current income tax liabilities Bank and other borrowings Loan notes Deferred cash consideration |
(5,206) (31) (1,248) (450) - |
(11) - - - - |
(146) - - - - |
- - - - - |
- - - - - |
- - - - - |
(5,363) (31) (1,248) (450) - |
|
|
(6,935) |
(11) |
(146) |
- |
- |
- |
(7,092) |
|
Net current assets |
1,422 |
(11) |
(146) |
- |
- |
- |
1,265 |
|
Non current liabilities Bank loans and other borrowings Loan notes Deferred cash consideration |
(116) (136) (114) |
- - - |
- - - |
- - - |
- - - |
- - - |
(116) (136) (114) |
|
|
(366) |
- |
- |
- |
- |
- |
(366) |
|
Net assets |
5,681 |
(11) |
(146) |
261 |
105 |
(111) |
5,779 |
|
Equity Share capital Share premium account Merger reserve Retained earnings |
1,779 6,082 (454) (1,726) |
- - - (11) |
- - - (146) |
- - - 261 |
- - - 105 |
- - - (111) |
1,779 6,082 (454) (1,628) |
|
Total equity |
5,681 |
(11) |
(146) |
261 |
105 |
(111) |
5,779 |
EXPLANATION OF TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (continued)
Reconciliation of the consolidated balance sheet as at 31 August 2006 from UK GAAP to IFRS
|
|
|
|
|
|
|
31 August 2006 |
|
|
Reformatted UK GAAP as previously reported |
IAS 17 Leases |
IAS 19 Employee benefits |
IAS 38 Intangible assets |
IAS 39 Financial asset available for sale |
IFRS 3 Business Combinations |
As restated in accordance with IFRS |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Assets Non current assets Goodwill Intangible assets Property, plant and equipment Available-for-sale financial assets |
1,216 - 552 469 |
- - - - |
- - - - |
- - - - |
- - - - |
- - - - |
1,216 - 552 469 |
|
|
2,237 |
- |
- |
- |
- |
- |
2,237 |
|
Current assets Trade and other receivables Short-term investments Cash and cash equivalents |
3,657 524 1,571 |
- - - |
- - - |
- - - |
- - - |
- - - |
3,657 524 1,571 |
|
|
5,752 |
- |
- |
- |
- |
- |
5,752 |
|
Liabilities Current liabilities Trade and other payables Current income tax liabilities Bank and other borrowings Loan notes Deferred cash consideration |
(3,025) (77) (82) (690) - |
(7) - - - - |
(114) - - - - |
- - - - - |
- - - - - |
- - - - - |
(3,146) (77) (82) (690) - |
|
|
(3,874) |
(7) |
(114) |
- |
- |
- |
(3,995) |
|
Net current assets |
1,878 |
(7) |
(114) |
- |
- |
- |
1,757 |
|
Non current liabilities Bank loans and other borrowings Loan notes |
(145) (400) |
- - |
- - |
- - |
- - |
- - |
(145) (400) |
|
|
(545) |
- |
- |
- |
- |
- |
(545) |
|
Net assets |
3,570 |
(7) |
(114) |
- |
- |
- |
3,449 |
|
Equity Share capital Share premium account Merger reserve Retained earnings |
1,285 4,547 (454) (1,808) |
- - - (7) |
- - - (114) |
- - - - |
- - - - |
- - - - |
1,285 4,547 (454) (1,929) |
|
Total equity |
3,570 |
(7) |
(114) |
- |
- |
- |
3,449 |