Preliminary Results

RNS Number : 3184H
Microgen PLC
18 February 2010
 



microgen

 

18 February 2010

MICROGENplc ("Microgen")

Audited Preliminary Results for the Year ended

31 December 2009

 

Microgen reports a strong operating performance for the twelve months ended 31 December 2009.

HIGHLIGHTS

·           Revenue from continuing operations of £29.1m (2008: £26.7m) representing 9% growth overall with revenue growth of 55% from the Microgen Aptitude Solutions Division

·           Adjusted operating profit from continuing operations of £5.9m (2008: £4.1m).  All internal research and development costs have been expensed as incurred with no capitalisation of development costs.

·           Adjusted diluted earnings per share increases to 5.0p (2008: 3.4p)

·           £9.8m (2008: £8.9m) of cash generated from operations with year end cash of £24.2m (2008: £14.7m)

·           Disposal of the Billing Services Division for £7.5m completes the transition of Microgen into a software-based group

·           Proposed final dividend of 1.5p per share making a total of 2.3p for the year (2008: 2.1p) in addition to the 4.0p special dividend paid in December (£5.5m in total for the year)  

STATUTORY RESULTS

·           Profit for the year attributable to equity shareholders of £8.5m (2008: £5.6m) including exceptional gain on disposal of Billing Services Division of £6.2m less £2.9m goodwill and property impairment. 2008 includes benefit of £1.0m on property disposal.

·           Diluted earnings per share of 9.6p (2008: 5.5p)

 

Contacts

Martyn Ratcliffe, Chairman

01252-772300

David Sherriff, Chief Operating Officer


Philip Wood, Group Finance Director


James Melville-Ross, Financial Dynamics

020-7831-3113

Haya Herbert-Burns, Financial Dynamics

 


* Throughout this statement adjusted operating profit and margin from continuing operations excludes goodwill, property and intangible impairment/amortisation, exceptional items and discontinued operations, unless stated to the contrary.



18 February 2010

MICROGEN plc ("Microgen")

Audited Preliminary Results for the Year ended

31 December 2009

Chairman's Statement

Microgen reports another year of strong operating performance for the 12 months ended 31 December 2009. Revenue growth from continuing operations of 9%; operating margins from continuing operations of 20% (2008: 16%) while expensing all research and development costs; strong growth of 55% from the Microgen Aptitude Solutions Division ("MASD"); and excellent cash flow; summarise the performance in 2009.

The past year has seen considerable change in the Group. The continued success of Microgen Aptitude and its associated application products validates the considerable investment made in this business and, despite a weak market environment, forecasts for the Group were upgraded twice during 2009 as demand for these products and associated consultancy services increased. As a result, MASD reported a profit in the year, ahead of the Board's plans for this business.

The disposal of the Billing Services Division in November completed the transformation of Microgen into a software-based Group and enabled the Board to return £3.5 million to shareholders. In total, over the past three years, Microgen has now returned £17.2 million to shareholders through dividends and the 2008 tender offer, while continuing to invest in the Group's business operations and retaining a robust balance sheet with £24.2 million cash and £22.0 million net funds at 31 December 2009.

Following the disposal, Microgen now comprises two divisions, with different investment characteristics but with operating synergies.

·              Microgen Aptitude Solutions Division is anticipated to continue to deliver growth in 2010 as the global customer base expands and existing customers undertake additional projects using the Microgen Aptitude technology. As the business scales, and with all research and development costs having been expensed as incurred, the profitability of MASD should increase accordingly.

·              Financial Systems Division ("FSD") provides software products and services in mature market sectors where, in the current economic climate, growth is more limited. However, by having fully integrated the operations of the acquisitions that formed FSD, the division is highly profitable producing operating margins of 48% in 2009 (47% in 2008) with strong cash flow and high recurring revenues. The Board anticipates the market and business characteristics of FSD to continue in 2010.

In summary, the Board is pleased with the performance of the Group in 2009 and satisfied with the position as we start the New Year. Whilst remaining cautious on the economic outlook for 2010, the success of MASD during 2009 and the stable foundations of FSD provide a good platform for the Group in the year ahead and enable the Board to explore strategic opportunities as they arise. Reflecting this performance, the Board is maintaining its progressive dividend policy and recommending a final dividend of 1.5 pence per share, making a total of 2.3 pence for the year (2008: 2.1 pence) in addition to the special dividend of 4.0 pence per share paid in December 2009. The final dividend will be payable on 1 April 2010 to shareholders on the register at the close of business on 19 March 2010.

 

Martyn Ratcliffe

Chairman

Group Financial Performance and Finance Director's Report

Revenue from continuing operations for the year ended 31 December 2009 was £29.1 million (2008: £26.7 million) producing an adjusted operating profit of £5.9 million (2008: £4.1 million). (Throughout this statement adjusted operating profit and margin from continuing operations excludes goodwill, property and intangible impairment/amortisation, exceptional items and discontinued operations, unless stated to the contrary.)

The Group reported a profit for the year attributable to equity shareholders of £8.5m (2008: £5.6m) including the exceptional gain on disposal of the Billing Services Division of £6.2 million less a £2.9 million goodwill and property impairment. 2008 includes a benefit of £1.0 million on property disposal.

As advised in the Group's November Interim Management Statement, the Board has decided to end-of-life a number of smaller product lines within FSD. The revenue in 2009 from these products was £0.5 million and the Board has subsequently reviewed the associated goodwill, resulting in a £2.0 million impairment for the year. The exceptional costs incurred during the year also include an impairment of £0.9 million associated with the freehold property in Fleet to reflect the decline in commercial property valuations. 

In accordance with IFRS, the Board has continued to determine that all internal research and development costs incurred in the year are expensed and therefore the Group has no capitalisation of development expenditure. This is consistent with the Group's conservative accounting policies.  The overall group expenditure on research, development and support activities in 2009 was £4.9 million (2008: £5.1 million) of which £2.8 million (2008: £2.7 million) was incurred by the Microgen Aptitude Solutions Division.

Adjusted diluted earnings per share for the year ended 31 December 2009 was 5.0p (2008: 3.4p) with diluted earnings per share of 9.6p (2008: 5.5p). The Group's tax rate used in calculating adjusted earnings per share is 26.4% (2008: 25.1%). The total tax charge of £1.0 million (2008: £0.4 million) represents 43% (2008: 8%) of the Group's profit before tax of £2.3 million. The rate of 43% in 2009 (2008: 8%) is higher than the UK corporate tax rate due principally to the goodwill (£2.0 million) and property (£0.9 million) impairments which are not deductible for corporation tax purposes.

Cash generated from operations in the year was £9.8 million (2008: £8.9 million). After returning £5.4 million of cash to shareholders through dividends (including the special dividend), the disposal of the Billing Services Division and the disposal of 79% of Microgen's shareholding in Scisys plc (realising £1.1m and a profit of £0.2m), the Group continues to have a strong balance sheet with cash of £24.2 million (2008: £14.7 million) and net funds of £22.0 million (2008: £11.0 million) at 31 December 2009. The remainder of Microgen's shareholding in Scisys plc was disposed of subsequent to the year end realising further proceeds of £0.3 million.

 

Philip Wood

Group Finance Director

 



Divisional Review and Chief Operating Officer's Report

Following the disposal of the Group's Billing Services Division, Microgen is now organised into two operating divisions, with the benefits of scale being achieved through shared central services which are charged into each business.

Approximately 95% of the continuing revenue of the Group is now derived from Microgen's software activities, comprising software licence, maintenance, support and associated consultancy. The Board continues to promote software licence sales on multi-year annual licence contracts, with a conservative revenue recognition policy, although some customers with capital budgets do require traditional initial/perpetual software licensing models.

The Group has maintained its disciplined approach to overhead and operating costs, while selectively investing in those areas which the Board anticipates will potentially deliver the best return for shareholders. Headcount at 31 December 2009 was 259 including 18 contractors and associates (31 December 2008: 286, including 45 in the Billing Services Division and 9 contractors and associates).

·       Microgen Aptitude Solutions Division ("MASD")

Microgen Aptitude, the Group's Business Process Management Suite enables organisations to implement and manage change without compromising control and is designed to meet the demand for high volume transaction processing. In a single integrated platform Microgen Aptitude delivers Business Process Management, Business Rules, Data Management/Extract Transform & Load ("ETL"), Integration, Services Orchestration and Simulation/Optimisation. The software suite has been designed to support and deliver transparency through collaboration between business and IT users by the use of a common graphical language that is used across all the modules.

Combining the capability of Microgen Aptitude with the Group's business domain knowledge and experience, Microgen provides products and solutions for markets including: commercial, energy, financial services, media and transport & logistics. As an example, the Microgen Accounting Hub is  increasingly being recognised by blue-chip clients for its capability in the areas of finance integration, product line P&L and financial control. Microgen also provides additional Microgen Aptitude-based solutions around invoice management, digital rights management and charge allocation to the commercial sector.

In 2009, MASD transitioned from its investment phase into a profitable business.  Demand for Microgen Aptitude was in-line with the Board's growth target while the Microgen Accounting Hub experienced particularly strong demand with a number of complex financial projects on-going. Revenue in MASD increased by 55% to £11.8 million (2008: £7.6 million) and the division reported an operating profit of £0.3 million (2008: loss of £2.4 million). While the Board planned for the business to become profitable on a monthly basis during 2009, it is pleasing to report a profit for the year as a whole.

As a result of the high level of innovation that has been, and continues to be, applied to the development of Microgen Aptitude, a number of patent applications have now been filed in order to protect the intellectual property and investment in Microgen Aptitude.

·       Financial Systems Division ("FSD")

The Financial Systems Division operates within mature market sectors where growth is more limited, especially in the current market environment. However, FSD has a well-established customer base with 83% of divisional revenue being derived from financial systems software.  Recurring revenues account for approximately 79% of the divisional revenue.  FSD also markets Microgen Aptitude into the division's customer base with 15 customers of the division now using the Microgen Aptitude software.

The Financial Systems Division delivers :

·    Wealth Management software and solutions;

·    Banking software and solutions;

·    Asset Management software and solutions; and

·    Energy software and Application Management.

While underpinned by the high recurring revenue, FSD did experience slower market conditions for new systems and major enhancements during 2009. Furthermore, the Board completed the transition from generic IT consultancy during the year and also determined to end-of-life a number of smaller product categories, although some of these will have a "tail" through 2010 as Microgen supports its customers through the transition process. As a result, revenue in 2009 declined to £17.3 million including £0.5 million from the products being discontinued, (2008: £19.0 million) but with operating margins maintained at a very high 48% (2008: 47%). The Board anticipate conditions within the FSD market sectors remaining similar in 2010.

Operations Summary

The Group has a strong portfolio of products and solutions, combining domain and industry expertise with leading technical and functional capability. The benefits of scale are achieved through the use of shared services centres for support functions. This foundation provides a good platform from which to leverage the success of Microgen Aptitude and its associated application products. The underlying stability of the FSD financial services customer base provides a very profitable and established operation for potential add-on acquisitions.

 

David Sherriff

Chief Operating Officer



MICROGEN PLC

Group Income Statement

for the year ended 31 December 2009

 



Year Ended

31 Dec 2009

Year Ended

31 Dec 2009

Year Ended

31 Dec 2009

Year Ended

31 Dec 2008

Restated

Year Ended

31 Dec 2008

Restated

Year Ended

31 Dec 2008

Restated


Notes

 

Before goodwill, property and

intangible impairment /

amortisation

and

exceptional

items

Goodwill, property and

intangible impairment /

amortisation

and

exceptional

items

 

 

 

 

 

 

 

 

Total

 

Before

intangible

amortisation

and

exceptional

items

 

 

 

 

Intangible

amortisation

and

exceptional

items

 

 

 

 

 

 

 

 

Total

Continuing operations


£000

£000

£000

£000

£000

£000

Revenue


29,060

-

29,060

26,660

-

26,660

Operating costs

1

(23,116)

(3,635)

(26,751)

(22,526)

(95)

(22,621)

Operating profit


5,944

(3,635)

2,309

4,134

(95)

4,039









Finance income


162

-

162

931

-

931

Finance cost


(198)

-

(198)

(380)

-

(380)



(36)

-

(36)

551

-

551

Profit before income tax


5,908

(3,635)

2,273

4,685

(95)

4,590









Income tax expense

3



(974)



(365)

Profit for the year from continuing operations




1,299



4,225









Discontinued operations








Profit for the year from discontinued operations

2



7,243



1,366

PROFIT FOR THE YEAR




8,542



5,591









Earnings per share








Basic

4



9.8p



5.6p

Diluted

4



9.6p



5.5p

















Dividends



pence per share

£000


pence per share

£000

Paid

5


2.2p

1,900


2.1p

2,151

Proposed

5


1.5p

1,303


1.4p

1,209









Special Dividend








Paid

5


4.0p

3,472


-

-

 



 

MICROGEN PLC

Group Statement of Comprehensive Income

 

 

 


Year ended

31 Dec 2009

Year ended

31 Dec 2008


£000

£000

Profit for the year

8,542

5,591

Other comprehensive income



Fair value gain/(loss) on investment

70

(354)

Reversal of prior year impairment

354

-

Cash flow hedges, net of tax

37

(217)

Currency translation difference

39

85

Other comprehensive income for the period, net of tax

500

(486)

Total comprehensive income for the period

9,042

5,105

 

 

 

 



MICROGEN PLC

Group Balance Sheet

 


As at

31 Dec 2009

As at

31 Dec 2008


Notes

£000

£000

ASSETS




Non-current assets




Property, plant and equipment


5,224

6,574

Goodwill


41,774

44,334

Intangible assets


490

881

Investments


336

916

Deferred income tax asset


1,350

1,360



49,174

54,065

Current assets




Inventories - raw materials


-

46

Trade and other receivables

6

7,627

7,806

Financial assets  - derivative financial instruments


87

48

Cash and cash equivalents


24,178

14,675



31,892

22,575

TOTAL ASSETS


81,066

76,640

LIABILITIES




Current liabilities




Financial liabilities




- borrowings associated with property


(370)

(525)

- derivative financial instruments


(74)

(182)

Trade and other payables

7

(17,537)

(15,773)

Current income tax liabilities


(648)

(378)

Provisions for other liabilities and charges

8

(43)

(104)



(18,672)

(16,962)





Net current assets


13,220

5,613





Non-current liabilities




Financial liabilities - borrowings associated with property


(1,852)

(3,150)

Provisions for other liabilities and charges

8

(179)

(287)



(2,031)

(3,437)





NET ASSETS


60,363

56,241





SHAREHOLDERS' EQUITY




Ordinary shares

9

4,344

4,341

Share premium account

10

11,285

11,285

Capital redemption reserve

10

804

804

Other reserves

10

37,293

37,256

Retained earnings

10

6,637

2,555





EQUITY SHAREHOLDERS' FUNDS


60,363

56,241



MICROGEN PLC

Group Cash Flow Statement

for the Year Ended 31 December 2009

 


Year ended

Year ended


31 Dec 2009

31 Dec 2008

Notes

£000

£000




11

9,788

8,885


162

931


(205)

(244)


(1,057)

(2,216)


8,688

7,356








-

(1,270)


1,118

-


-

1,980


6,928

-


(541)

(806)


-

(11)


7,505

(107)








153

10


(5,372)

(2,151)

Repayment of mortgage


(1,453)

(592)


-

(8,039)


(6,672)

(10,772)





9,521

(3,523)


14,675

18,081


(18)

117

Closing cash and cash equivalents


24,178

14,675

 

 


Notes to the Audited preliminary results for the year ended 31 December 2009

 

1.            Segmental analysis

 

The segmental information below reflects the divisional operating structure of the Group which is the primary segmentation of the operating performance reviewed by the Board.  The segmental analysis is split into Microgen Aptitude Solutions Division ("MASD") and Financial Systems Division ("FSD").

      

The principal activity of the Group is the provision of IT services and solutions, generating the majority of its revenue from software licences, maintenance, support, funded development and related consultancy. 

 

The divisions and business categories are allocated central function costs in arriving at operating profit/(loss).  Group overhead costs are not allocated into the divisions or business categories as the Board believes that these relates to Group activities as opposed to the division or business category.

 

1(a)         Revenue and operating profit by division

Year ended 31 December 2009

 

 

 

MASD

FSD

 

 

Group

 

 

Total



£000

£000

£000

£000

CONTINUING OPERATIONS






Revenue


11,806

17,254

-

29,060

Operating costs


(11,476)

(9,042)

-

(20,518)

Operating profit before Group overheads 


330

8,212

-

8,542

Unallocated Group overheads




(2,598)

(2,598)







Operating profit before goodwill, property and intangible impairment/

amortisation and exceptional items 





5,944







Goodwill impairment


-

(2,000)

-

(2,000)

Property impairment


-

-

(896)

(896)

Intangible amortisation


-

(391)

-

(391)







Exceptional items






- Gain on sale of shares held in investments




205

205

- Other




7

7

- Goodwill adjustment




(560)

(560)



-

(2,391)

(1,244)

(3,635)

Operating profit/(loss)


330

5,821

(3,842)

2,309

Net finance cost





(36)

Profit before income tax





2,273

Income tax expense





(974)

Profit for the year from continuing operations





1,299

DISCONTINUED OPERATIONS






Profit for the year from discontinued operations





7,243

PROFIT FOR THE YEAR





8,542

 


 

Year ended 31 December 2008

- restated

 

 

 

MASD

FSD

 

 

Group

 

 

Total



£000

£000

£000

£000

CONTINUING OPERATIONS






Revenue


7,614

19,046

-

26,660

Operating costs


(10,004)

(10,157)

-

(20,161)

Operating (loss)/profit before Group overheads 


(2,390)

8,889

-

6,499

Unallocated Group overheads




(2,365)

(2,365)







Operating profit before intangible

amortisation and exceptional items 





4,134







Intangible amortisation


-

(422)

-

(422)







Exceptional items






- Property provision


-

-

(139)

(139)

- Sale of property, plant and equipment


-

-

1,025

1,025

- Other


-

-

(13)

(13)

- Goodwill adjustment


-

-

(546)

(546)



-

(422)

327

(95)

Operating (loss)/profit


(2,390)

8,467

(2,038)

4,039

Net finance income





551

Profit before income tax





4,590

Income tax expense





(365)

Profit for the year from continuing operations





4,225

DISCONTINUED OPERATIONS






Profit for the year from discontinued operations





1,366

PROFIT FOR THE YEAR





5,591

 



1(b)    Geographical analysis

 

The Group's operations are located in two main geographical areas, the United Kingdom & Ireland and the Rest of the World.

 

The following table provides an analysis of the Group's sales by origin and by destination.

 


Sales revenue by origin

Sales revenue by destination


Year ended

Year ended

Year ended

Year ended


31 Dec 2009

31 Dec 2008

Restated

31 Dec 2009

31 Dec 2008

Restated







£000

£000

£000

£000

United Kingdom and Ireland

21,732

20,306

11,760

11,798

Rest of World

7,328

6,354

17,300

14,862


29,060

26,660

29,060

26,660

 

 

 

2.         Discontinued operations

 

The Billing Services Division was disposed of on 30 November 2009.

 

The results for Billing Services Division are as follows:

 


11 months ended

Year ended


30 Nov 2009

31 Dec 2008


£000

£000




Revenue

5,257

6,381

Operating costs

(3,796)

(4,471)

Operating profit before exceptional items

1,461

1,910

Exceptional income

6,189

-

Profit from discontinued operations - before income tax

7,650

1,910

Income tax

(407)

(544)

Profit from discontinued operations - after income tax

7,243

1,366

 

The exceptional income relates to the consideration received for the business of £7,531,000 less all associated costs of £537,000 and the net assets of the Billing Services Division as at the time of disposal £805,000, which included cash of £172,000.

 

Operating costs include employee benefits of £1,805,000 (2008: £1,882,000), depreciation of £72,000 (2008: £106,000) and other operating costs of £1,919,000 (2008: £2,483,000).

 

Income tax expense has been calculated using the standard corporation tax rate of 28% (2008: 28.5%).

 

 



 

3.         Income tax expense

 


Year ended

Year ended


31 Dec 2009

31 Dec 2008

Restated




Analysis of charge in the year

£000

£000

Current tax:



- current year charge

(1,105)

(769)

- prior year (charge)/credit

(44)

455


(1,149)

(314)




Deferred tax:



- current year credit

264

87

- prior year charge

(89)

(138)


175

(51)

Income tax expense

(974)

(365)

 

 

The total tax charge of £974,000 (2008: £365,000) on continuing operations represents 42.9% (2008: 7.9%) of the Group's profit before tax of £2,273,000 (2008: £4,590,000). 

 

After adjusting for the impact of goodwill, property and intangible impairment/amortisation, goodwill adjustment, exceptional items, tax impact of share options, change in tax rates and prior year tax charges the tax charge for the year of £1,569,000 represents 26.4% of the profit before goodwill, property and intangible impairment/amortisation and exceptional items (2008: 25.1%), which is the tax rate used for calculating the adjusted earnings per share.

 

At the balance sheet date, the Group has unused tax losses from of £13,399,000 (2008: £15,807,000) available to offset against future profits.  A deferred tax asset has been recognised in respect of £1,642,000 (2008: £1,846,000) of such losses.  No deferred tax asset has been recognised in respect of the remaining £11,757,000 (2008: £13,961,000) due to the unpredictability of future profit streams.



3.        Taxation (continued)

 

The difference between the total tax charge and the amount calculated by applying the effective United Kingdom corporation tax rate of 28% to the profit on ordinary activities before tax is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

 


Year ended

Year ended


31 Dec 2009

31 Dec 2008

Restated





£000

£000

Profit on ordinary activities before tax

2,273

4,590




Tax at the UK corporation tax rate of 28% (2008: 28.5%)

(636)

(1,308)




Effects of:



Adjustment to tax in respect of prior period

(133)

317

Adjustment in respect of foreign tax rates

5

(70)

Expenses not deductible for tax purposes



- Goodwill and intangibles impairment

(560)

-

- Income not taxable

56

292

- Share based payment expenses

84

(55)

- Revaluation of property

(251)

-

- Goodwill adjustment

(157)

(156)

- Changes in UK corporation tax rates

-

13

- Other

(26)

56

Movement in unrecognised deferred taxation

560

546

Utilisation of losses not previously recognised

84

-

Total taxation

(974)

(365)

 

 



 

4.         Earnings per share

 

To provide an indication of the underlying performance per share the adjusted profit after tax figure shown below excludes goodwill, property and intangibles impairment/amortisation, exceptional items and discontinued operations and has a tax charge using the effective rate of 26.4% (2008: 25.1%).

 


Year ended

Year ended


31 Dec 2009

31 Dec 2008

Restated


£000

£000

Profit on ordinary activities before tax, goodwill and intangible impairment/amortisation, discontinued operations and exceptional items.

5,908

4,685

Tax charge at a rate of 26.4% (2008: 25.1%)

(1,560)

(1,176)

Adjusted profit on ordinary activities after tax

4,348

3,509




Discontinued operations

7,243

1,366

Exceptional items net of tax

(1,401)

182

Prior years' tax charge

(133)

317

Share options

129

-

Amortisation of intangibles net of tax

(288)

(308)

Goodwill impairment

(2,000)

-

Recognition of tax losses

644

525

Profit on ordinary activities after tax

8,542

5,591

 

 

 


2009

Basic

EPS

2009

Diluted

EPS


Pence

Pence

Profit on ordinary activities after tax

9.8

9.8




Amortisation of intangibles net of tax

0.3

0.3

Discontinued operations

(8.3)

(8.3)

Exceptional charge net of tax

1.6

1.6

Prior years' tax charge

0.2

0.2

Share options

(0.1)

(0.1)

Goodwill impairment

2.3

2.3

Tax losses recognised

(0.7)

(0.7)

Impact of dilutive securities

-

(0.1)




Adjusted profit on ordinary activities after tax

5.1

5.0

 

Adjusted earnings per share are calculated using adjusted profit after tax.



 

5.        Dividends

 


2009 pence per share

2008 pence per share

2009

2008




£000

£000

Dividends paid:





Interim dividend

0.8

0.7

691

717

Final dividend (prior year)

1.4

1.4

1,209

1,434

Special dividend

4.0

-

3,472

-


6.2

2.1

5,372

2,151






Proposed but not recognised as a liability:





Final dividend

1.5

1.4

1,303

1,209

 

 

The proposed final dividend was approved by the Board on 17 February 2010 but was not included as a liability as at 31 December 2009, in accordance with IAS 10 'Events after the Balance Sheet date'. If approved by the shareholders at the General Meeting this final dividend will be payable on 1 April 2010 to shareholders on the register at the close of business on 19 March 2010.

 

 

 

6.         Trade and other receivables

 


31 Dec 2009

31 Dec 2008


£000

£000

Trade receivables

6,462

7,206

Less: provision for impairment of receivables

(112)

(255)

Trade receivables - net

6,350

6,951

Other receivables

68

72

Prepayments and accrued income

1,209

783


7,627

7,806

 

7.         Trade and other payables - current

 


31 Dec 2009

31 Dec 2008


£000

£000

Trade payables

817

222

Other tax and social security payable

618

1,023

Other payables

405

585

Accruals

3,691

3,430

Deferred income

12,006

10,513


17,537

15,773



 

 

8.         Provisions

 


Property provision


31 Dec 2009

31 Dec 2008


£000

£000

Group



At 1 January

391

415

Additions

93

100

(Credited)/charged to income statement

(42)

126

Utilised in the year

-

(250)

Disposal of Billing Services Division

(220)

-

At 31 December

222

391

 

 

Provisions have been analysed between current and non-current as follows:

 


Property provision


31 Dec 2009

31 Dec 2008


£000

£000

Current

43

104

Non-current

179

287


222

391

 

 

 

9.         Share Capital

 

The movement in authorised and issued Ordinary Share Capital of 5 pence each during the period is detailed below.

 


Authorised

Issued and fully paid


Number

Amount

Number

Amount



£000


£000

At 1 January 2009

145,000,000

7,250

86,830,192

4,341

Issued under share option schemes

-

-

67,085

3






At 31 December 2009

145,000,000

7,250

86,897,277

4,344

 



 

 

10.        Movement on reserves

 


Share

Premium

Account

Capital Redemption Reserve

 

Other

Reserves

 

Retained

Earnings


£'000

£'000

£'000

£'000

At 1 January 2009

11,285

804

37,256

2,555






Profit for the year

-

-

-

8,542

Share options - value of employee service

-

-

-

158

Corporation tax on share options

-

-

-

73

Deferred tax on financial instruments

-

-

-

18

Reversal of impairment of investment

-

-

-

354

Unrealised gain on Scisys revaluation

-

-

-

70

Share options issued from Microgen Employee Share Participation Scheme Trust

-

-

-

160

Exchange rate adjustments

-

-

-

39

Dividends

-

-

-

(5,332)

Cash flow hedges at net fair value in the period

-

-

37

-






At 31 December 2009

11,285

804

37,293

6,637

 

 



11.        Notes to the Group Cash Flow Statement

(i)         Reconciliation of profit for the year to net cash inflow from operating activities

 


Year ended

31 Dec 2009

Year ended

31 Dec 2008


£000

£000

Profit for the year

8,542

5,591




Adjustments for:



Taxation

1,381

909

Depreciation

841

795

Profit on disposal of property, plant and equipment

-

(1,045)

Profit on disposal of subsidiary

(6,189)

-

Trading assets of Billing Services Division on disposal

(552)

-

Profit on disposal of investments

(205)

-

Amortisation of intangible assets

391

422

Property impairment

896

-

Goodwill impairment

2,000

-

Share-based payment expense

158

282

Change in value of goodwill

560

546

Finance income

(162)

(931)

Finance costs

198

380




Changes in working capital:



Decrease in inventories

46

15

Decrease in receivables

179

1,113

Increase in payables

1,873

832

Decrease in provisions

(169)

(24)




Cash generated from operations

9,788

8,885

 

(ii)  Reconciliation of Net Funds

 


31 Dec 2009

31 Dec 2008


£000

£000

Cash and cash equivalents

24,178

14,675

Borrowings

(2,222)

(3,675)

Net Funds

21,956

11,000

 

 

 



12.        Statement by the directors

 

The preliminary results for the year ended 31 December 2009 and the results for the year ended 31 December 2008 are prepared under International Financial Reporting Standards as adopted for use in the EU ("IFRS").  The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 31 December 2008.

 

The financial information set out in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 December 2009 or 31 December 2008.  The financial information for the year ended 31 December 2008 is derived from the Annual Report delivered to the Registrar of Companies.  The auditors reported on those accounts; their report was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985.

 

The Board of Microgen approved the release of this audited preliminary announcement on 17 February 2010.

 

The Annual Report for the year ended 31 December 2009 will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company.  The report will also be available on the investor relations page of our web site (www.microgen.com).  Further copies will be available on request and free of charge from the Company Secretary at Fleet House, 3 Fleetwood Park, Barley Way, Fleet, Hampshire. GU51 2QJ.


This information is provided by RNS
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