Interim Results
Anite Group PLC
07 December 2004
For immediate release Tuesday, 7 December 2004
ANITE GROUP PLC
Interim results for the six months ended 31 October 2004
Anite Group plc ('Anite' or 'the Group'), the worldwide IT solutions and
services company, today announces its unaudited interim results for the six
months ended 31 October 2004.
Highlights:
•Underlying profit before tax* of £8.5m (2003: £5.5m) on revenues* of
£92.9m (2003: £85.2m)
•Total reported profit before tax of £9.5m (2003: loss £14.3m) on total
revenues of £96.5m (2003: £95.6m)
•Underlying basic earnings per share* 1.7p (2003: 1.1p); basic earnings
per share 1.9p (2003: loss per share 4.4p)
•Underlying operating margin* improved to 9.6% (2003: 7.5%)
•Net funds of £7.3m (2003: net debt £10.8m; 30 April 2004: net funds
£5.0m)
•Order intake of £94.5m up 8.4% on last year giving book to bill ratio of
1.0
•Recent disposals of Anite Space, Calculus and Transport in line with
strategic review
*Ongoing businesses (before exceptional items and restructuring costs,
amortisation and impairment of goodwill and closed businesses and utilisation of
provisions). For a reconciliation to reported profit before tax, see attached
tables - Segmental information and Earnings/(loss) per ordinary share.
Commenting on today's results, Steve Rowley, Anite's Chief Executive, stated:
'These interim results demonstrate the satisfactory progress made in the current
financial year to date. Since the half year end, the Group's performance has
continued to be in line with the Board's expectations and ahead of last year
(excluding the impact of disposals).
'We are confident in the progress of Anite's recovery and as a result the Board
remains cautiously optimistic about future prospects.'
For further information, please contact: www.anite.com
Anite Group plc 01753 804000
Steve Rowley, Chief Executive
Christopher Humphrey, Group Finance Director
Smithfield 020 7360 4900
Reg Hoare/Sara Musgrave/Tehsin Nayani
Print resolution images are available for the media to view and download from
www.vismedia.co.uk
Interim results for the six months ended 31 October 2004
Chairman's Statement
Introduction
Anite is an international IT company that provides software, systems
integration, consultancy and managed services across the travel, telecoms and
public sector markets. Headquartered in the UK, the Group employs around 1700
staff in 12 countries across Europe, America, Asia and Australasia. Anite
solutions are recognised as market leaders in their fields:
•the top 10 global mobile phone handset manufacturers all use Anite
testing technology
•3 out of 4 UK Local Authorities use Anite applications
•around 40% of UK package holiday bookings were made using Anite systems
last year.
A year of recovery
Anite is in much better shape following the significant period of consolidation
and transition undergone by the Group over the last two years as it resolved a
number of legacy issues. In the current financial year our emphasis has changed
and the Board is focused both on boosting the recovery in the Group's underlying
performance as well as increasing the momentum of strategic change by means of
disposals of non-core activities and the pursuit of growth opportunities. These
interim results demonstrate that we have made satisfactory progress to date and
are in line with our expectations.
In respect of our priorities, we have achieved a small profit in Public Sector
(before utilisation of contract provisions) and good growth in Telecoms and
Travel, and as expected there are no exceptional items (save those related to
disposals) or goodwill impairment. Overall, the Group has seen good order intake
and sales growth on the back of improving market conditions, and the benefits
from its cost cutting in prior years is coming through.
Results
Underlying profit before tax (of ongoing businesses, before exceptional items
and restructuring costs, amortisation and impairment of goodwill and utilisation
of contract provisions) rose to £8.5m (2003: £5.5m). All divisions were
profitable in the period, with a strong turnaround in profitability in Public
Sector and good growth being reported by Telecoms and Travel, although both the
latter businesses did benefit from some one off product and hardware sales in
the first half. The Group has benefited from lower interest charges as a result
of continued cash control. However, there was an increase in the Group's long
standing property provision of £0.6m reflecting the decision to consolidate
Telecoms' five Fleet sites into one location together with the costs of other
Group property consolidation particularly in Public Sector. Operating profits
for the ongoing businesses (before goodwill and exceptional items and before
utilisation of provisions) rose to £8.9m (2003: £6.4m) and operating margins
were 9.6% (2003: 7.5%).
The reported pre-tax profit (after amortisation and exceptional items) of £9.5m
(2003: loss £14.3m) is the Group's first reported profit in any period for over
two years. As well as the underlying improvement in the Group's performance,
this also reflects the absence of the significant exceptional items and goodwill
impairment incurred in recent reporting periods as the Group resolved its legacy
issues, although we have accelerated the goodwill amortisation of the April 2001
acquisition of the government applications business of ICL. A £6.2m profit on
the disposal of Anite Space is included, together with the expected utilisation
of £3.0m of contract provisions in respect of Pericles and the State of Victoria
('SoV') contract.
Adjusted underlying basic earnings per share (ongoing businesses, before
goodwill amortisation, exceptional items and before utilisation of contract
provisions) were 1.7p (2003: 1.1p). Basic earnings per share after goodwill
amortisation and exceptional items were 1.9p (2003: loss per share 4.4p).
Turnover (of ongoing businesses) rose 9% in the first half, almost entirely due
to growth in Telecoms and Travel, with Public Sector and International sales
broadly in line with the same period last year. The Group's order intake
totalled £94.5m, up 8.4% compared with last year giving a book to bill ratio of
1.0.
Balance sheet and cash
The Group has paid out £4.3m of earnout commitments during the period. Remaining
earnout payments total £4.6m in cash/loan notes and £0.3m in shares, of which
£3.6m in cash is payable in the second half. Reflecting the benefit of the £7.0m
net disposal proceeds of Anite Space, net funds at the half year end stood at
£7.3m (2003: net debt £10.8m; 30 April 2004: net funds £5.0m). Net interest
payable fell to £0.4m (2003: £0.9m) reflecting the reduction in debt and was 22
times covered (2003: 7 times) by underlying operating profits before goodwill
amortisation and exceptionals and before utilisation of contract provisions.
Disposals
During the current financial year, we have continued to review certain non-core,
peripheral businesses, either by geography or vertical market, in line with our
strategy to focus better on our three core vertical markets. This has resulted
in three recent disposals being made, and we hope to announce further
developments by our financial year end in April 2005.
In September, we sold our Space consultancy business based in Darmstadt,
Germany, to Vega Group plc for a total consideration of £7.5m. In November,
following the half year end, we sold the trade and assets of Calculus, our
Telecoms billing systems business, to Azure Solutions Limited for a
consideration of £0.75m, and of Transport, our solutions, services and
consultancy business focussed on the passenger transport industry, to Trapeze
Inc. for £0.9m. The consideration proceeds are being used to benefit the Group's
cash position and provide greater financial flexibility for the Group to pursue
growth opportunities.
The Board
As previously announced, we have made further board changes during the period.
We appointed two new non-executive directors, Peter Bertram and David
Hurst-Brown, respectively replacing David Thorpe who stepped down in August, and
Graham Caleb, who retired at the AGM in September. We thank both for their
significant contribution and commitment and welcome Peter and David.
With Steve Rowley, as Chief Executive, and the rest of the new board now
appointed, we stated at the AGM that the Group has engaged headhunters to
identify my successor as Chairman and once this appointment is confirmed, I will
step down.
People
On behalf of the Board I would like to thank all employees for their
contribution, hard work and support during this year of significant change.
Dividend policy
Following resolution of the earnout commitments and reflecting the Group's
strong financial platform, the Board continues to review its dividend policy.
Summary
We are confident in the progress of Anite's recovery and as a result the Board
remains cautiously optimistic about future prospects.
Alec Daly
Chairman
Chief Executive's Operating Review
Strategic update
As previously stated, our aim is to be number one or two in each of the markets
we serve. The strategic review of the Group, undertaken earlier in the year,
identified that the long term prospects for our three core vertical markets of
public sector, telecoms and travel are excellent and that within these we are
already market leaders in many of our chosen areas of focus. We aim to build on
these market leading positions by investment in growth opportunities.
In businesses which are less strong, within our Public Sector, Travel and
Telecoms divisions, our objective is to build up their critical mass and market
position. If this is not possible, within a reasonable timeframe and cost, we
will consider other strategic options, such as disposal.
Over time we therefore aim only to operate where we can establish and maintain
critical mass and market leading positions. In line with the above, the recent
disposals of Space, Calculus and Transport, three non-core, peripheral
businesses, enable us to focus better on our three core vertical markets whilst
reinvesting the proceeds in growth opportunities.
Divisional performance
Divisional performance* before unallocated Group central costs and property
provision of £1.5m and interest of £0.4m was:
•Public Sector: turnover £33.1m, operating profit £0.1m, margin 0.3%
•Travel: turnover £16.0m, operating profits £3.1m, margin 19.4%
•Telecoms: turnover £21.8m, operating profits £5.2m, margin 23.8%
•International: turnover £22.0m, operating profits £2.0m, margin 9.1%
*ongoing businesses before goodwill amortisation and impairment, exceptional
items and utilisation of contract provisions.
Public Sector
Anite is a market leader in applications for key parts of local government -
such as local tax collection, benefits payments, housing management and social
care solutions - as well as an important supplier into the central government
and police markets.
Strategy
In line with the Group's strategy, our objective is to identify those Public
Sector offerings which can sustain number one or two market positions and to
pursue growth opportunities therein, whilst disposing of those offerings which
do not meet these criteria (as indicated by the recent disposal of Transport).
Financial performance
Public Sector's improved operating performance has continued into the current
financial year and it was profitable in the period (before and after utilisation
of contract provisions of £3.0m, split equally between Pericles and SoV),
benefiting from the cost cutting of prior periods and better margins. Excluding
Pericles and SoV, all areas of Public Sector's business were profitable in the
first half. The contract provisions carried forward total £9.7m, of which £6.9m
relates to SoV and the balance Pericles, in line with expectations. Although we
continue to focus on resolving these two long term legacy issues, and are making
progress in line with our current expectations, implementation risks remain.
Pericles
Pericles is our Local Government product for revenues and benefits
administration. The problematic Pericles Benefits module has now gone live at
seven customer sites (compared to two at the last year end), with a number of
other major clients due to go live in the second half of the current financial
year. Implementation of our previously contracted Pericles Benefits' customers
is not due until our financial year ending April 2006. Our regular review of
these contracts has resulted in additional costs of £0.3m being added to the
provision and expensed during the period. The scale, number and complexity of
these and other Pericles module implementations continues to be a risk to the
business. We have also accelerated the amortisation of the goodwill relating to
the April 2001 acquisition of ICL's government applications business, which
included Pericles.
State of Victoria
The State of Victoria contract, where completion is due by April 2007, continues
to be the subject of management focus. Progress has been made in reducing the
risk of the project with the majority of development work now taking place in
Australia close to the customer. Implementation of the first phase of the
software is planned for early in our financial year ending April 2006 and
successful completion of this milestone would signal significantly reduced risk
for the project overall.
Operational review
Our operating focus is on restructuring our 'go to market' model in line with
customer practice and the evolving public sector market place. We have also made
additional management appointments to strengthen our individual offerings and
are performing well in areas such as Health & Social Care and Document
Management with good contract wins during the period under review. Overall order
intake was below last year, which included the benefit of the £12.3m IPCC
contract win.
Travel
Anite is one of the leading reservation systems and e-commerce providers to
tour, cruise, ferry and rail operators worldwide, providing mission critical
managed services and solutions.
Recovery in the travel market has fuelled increased demand for Travel's products
and services from existing, and most encouragingly, new customers during the
first half. Good growth in order intake was underpinned by significant
development and long term managed services contracts with STA Travel for £5.0m,
Center Parcs for £2.2m and MyTravel for £5.0m (including additional hardware and
software and a three year extension of the managed services contract),
respectively. The growth in first half revenue was enhanced partly due to the
inclusion of this hardware business, which is one off in nature, which resulted
in margins being constrained.
Changes in the travel market, whereby customers are seeking to select the
individual components of a holiday separately, known as 'Dynamic Packaging', is
creating demand for systems capable of offering these features. The Anite
@comRes system is intended to meet these requirements and we are already seeing
increasing interest in this new product suite.
Telecoms
Anite provides specialist systems and software for mobile phone network
simulation and handset testing around the globe for a growing, global Tier 1
client base.
A good first half performance, with both revenues and profits rising, reflects
the improving although still competitive sector outlook, and recent 3G launches.
The market has responded well to our Agilent-based 2G systems, and we are seeing
steady development of 3G business and strong interest in HSDPA (High Speed
Downlink Packet Access) solutions ('3.5G'). Order intake and profit was also
boosted by significant orders for Type Approval systems (which are not expected
to be repeated in the second half). In addition the business benefited from its
expansion into the Far East (especially in China and Taiwan) and the US West
Coast, together with a strengthening of the management team.
As expected we increased research and development spending on our 2G products,
as well as 3G and 3.5G, to take advantage of the current market opportunities.
In August we exchanged contracts on the purchase of a freehold property in
Fleet, Hampshire, with the intention of consolidating the activities of the
Telecoms division into this one site. The total cost of the property, including
fit out, is expected to be in the region of £5.25m, with occupation expected in
Spring 2005. This consolidation is expected to provide both long-term property
cost savings and efficiencies, scope for future expansion, as well as benefits
to the management and operation of the Telecoms business.
International
International brings together Anite's remaining European consultancy businesses,
focusing on IT consultancy and systems integration in a range of vertical
markets including finance, telecoms and public sector.
As previously indicated, market conditions continue to be difficult in the
International businesses, with performance under pressure. France is, as
reported in July, performing slightly better, partly offsetting the continued
weakness in Austria and Germany.
Order Book
The Group has seen satisfactory order intake of £94.5m, up 8.4% compared with
last year on a like for like basis, giving an overall Group book to bill ratio
of 1.0 (2003: 1.0).
Divisional order intake was:
•Public Sector - an order intake to revenue ratio of 0.9
•Travel - an order intake to revenue ratio of 1.4
•Telecoms - an order intake to revenue ratio of 1.2
•International - an order intake to revenue ratio of 0.7
Outlook
These interim results demonstrate the satisfactory progress made in the current
financial year to date. Since the half year end, the Group's performance has
continued to be in line with the Board's expectations and ahead of last year
(excluding the impact of disposals). Overall the business is in much better
shape, with lower costs, a stronger financial foundation and a growing order
book, with more benign market conditions in evidence.
For the year as a whole, we expect continued growth in Telecoms and Travel and a
further fall in sales and profits in the International businesses (excluding
disposals). In Public Sector, whilst much has been achieved to return the
business to profitability (before contract provision utilisation), order intake
and sales require an injection of impetus in the second half to maintain this
progress.
Steve Rowley
Chief Executive
Anite Group plc
Consolidated profit and loss account
for the six months ended 31 October 2004
Goodwill
amortisation,
Ongoing exceptional
businesses items and
before goodwill results from Unaudited six Unaudited six Audited 12
amortisation disposed/ months to months to months to
exceptional closed 31 October 31 October 30 April
and items businesses 2004 2003 2004
Notes (Restated) (Restated)
£'000 £'000 £'000 £'000 £'000
------ ------- ------- ------- ------ -------
Turnover
========================== ====== ======= ======= ======= ====== =======
Ongoing businesses 92,927 - 92,927 85,210 179,459
Disposed/closed businesses
- continuing operations - 3,545 3,545 10,413 16,773
========================== ====== ======= ======= ======= ====== =======
Turnover - continuing
operations 2 92,927 3,545 96,472 95,623 196,232
Cost of sales
========================== ====== ======= ======= ======= ====== =======
Cost of sales before
exceptional items (59,018) (2,104) (61,122) (55,322) (114,307)
Redundancy costs 3 - - - (1,124) (1,147)
Contract and purchasing
provisions 3 - - - - (14,194)
Utilisation of contract
provisions 2 3,000 - 3,000 - 4,284
========================== ====== ======= ======= ======= ====== =======
Cost of sales (56,018) (2,104) (58,122) (56,446) (125,364)
-------------------------- ------ ------- ------- ------- ------ -------
Gross profit 36,909 1,441 38,350 39,177 70,868
Net operating costs
========================== ====== ======= ======= ======= ====== =======
Goodwill amortisation - (8,404) (8,404) (8,437) (16,558)
Goodwill impairment - - - (8,750) (18,480)
Redundancy and
restructuring costs 3 - - - (3,306) (5,033)
Aborted acquisition
costs - recovery 3 - - - 379 379
Other operating costs (24,984) (1,232) (26,216) (32,576) (64,025)
========================== ====== ======= ======= ======= ====== =======
Net operating costs (24,984) (9,636) (34,620) (52,690) (103,717)
-------------------------- ------ ------- ------- ------- ------ -------
Operating profit/(loss)
========================== ====== ======= ======= ======= ====== =======
- Ongoing businesses
before utilisation of
contract provisions 8,925 (8,404) 521 (14,814) (38,821)
- Ongoing businesses -
utilisation of contract
provisions 2 3,000 - 3,000 - 4,284
-------------------------- ------ ------- ------- ------- ------ -------
- Ongoing businesses 11,925 (8,404) 3,521 (14,814) (34,537)
- Disposed/closed
businesses - continuing
operations - 209 209 1,301 1,688
========================== ====== ======= ======= ======= ====== =======
Operating profit /(loss)
for continuing
businesses 11,925 (8,195) 3,730 (13,513) (32,849)
Profit on
disposal/closure of
businesses 3 - 6,209 6,209 77 4,407
-------------------------- ------ ------- ------- ------- ------ -------
Profit/(loss) on ordinary
activities before finance
charges 11,925 (1,986) 9,939 (13,436) (28,442)
Profit on sale of
fixed asset investment - - - 57 57
Finance charges - net (400) - (400) (954) (512)
-------------------------- ------ ------- ------- ------- ------ -------
Profit/(loss) on ordinary
activities before tax 11,525 (1,986) 9,539 (14,333) (28,897)
========================== ====== ======= ======= ======= ====== =======
Tax on profit/(loss)
on ordinary activities 4 (2,131) (130) (2,261) (1,097) (2,220)
(Charge)/credit in
respect of deferred
tax 4 (417) - (417) 140 345
Release of prior years'
tax provisions 4 - - - - 829
========================== ====== ======= ======= ======= ====== =======
Tax charge on profit/(loss)
on ordinary activities (2,548) (130) (2,678) (957) (1,046)
-------------------------- ------ ------- ------- ------- ------ -------
-------------------------- ------ ------- ------- ------- ------ -------
Profit/(loss)
for the period 8,977 (2,116) 6,861 (15,290) (29,943)
-------------------------- ------ ------- ------- ------- ------ -------
Earnings/(loss) per share
- Basic 5 1.9p (4.4)p (8.6)p
- Diluted 5 1.9p (4.4)p (8.6)p
Adjusted earnings per
share based on ongoing
operations
excluding amortisation of
goodwill and exceptional
items
a) Before utilisation of
contract provisions
- Basic 5 1.7p 1.1p 2.9p
- Diluted 5 1.7p 1.1p 2.9p
b) After
utilisation of
contract
provisions - Basic 5 2.5p 1.1p 4.2p
- Diluted 5 2.5p 1.1p 4.1p
Anite Group plc
Consolidated balance sheet
as at 31 October 2004
Unaudited Unaudited Audited
31 October 31 October 30 April
Notes 2004 2003 2004
£'000 £'000 £'000
------------------------------ ------ ------- ------ ------
Fixed assets
Goodwill 55,120 82,356 63,523
Other intangible assets 21 201 52
------------------------------ ------ ------- ------ ------
Intangible assets 55,141 82,557 63,575
Tangible assets 10,356 9,597 7,741
Investments - 4 1
------------------------------ ------ ------- ------ ------
65,497 92,158 71,317
Current assets
Stocks 3,350 8,065 4,111
Debtors 6 55,074 49,696 57,729
Current asset - - 170
investments
Short-term deposits 953 1,039 1,095
Cash at bank and in hand 10,407 11,662 11,353
------------------------------ ------ ------- ------ ------
69,784 70,462 74,458
Creditors: Amounts
falling due within one year 7 (80,648) (95,432) (94,103)
------------------------------ ------ ------- ------ ------
Net current liabilities (10,864) (24,970) (19,645)
------------------------------ ------ ------- ------ ------
Total assets less current
liabilities 54,633 67,188 51,672
Creditors: Amounts falling
due after more than one
year 8 (153) (1,865) (681)
Provisions for
liabilities and charges 9 (18,988) (21,992) (22,680)
------------------------------ ------ ------- ------ ------
Net assets 35,492 43,331 28,311
------------------------------ ------ ------- ------ ------
Capital and reserves
Called-up share capital 35,359 35,040 35,239
Share premium account 11 23,273 22,482 22,856
Merger reserve 11 12,572 22,173 14,227
Shares to be issued 11 295 575 800
Profit and loss account 11 (36,007) (36,939) (44,811)
------------------------------ ------ ------- ------ ------
Shareholders' funds 35,492 43,331 28,311
------------------------------ ------ ------- ------ ------
Shareholders' funds are
analysed as:
2004 2003 2004
£'000 £'000 £'000
------------------------------ ------ ------- ------ ------
Equity interests 35,442 43,281 28,261
Non-equity interests 50 50 50
------------------------------ ------ ------- ------ ------
35,492 43,331 28,311
------------------------------ ------ ------- ------ ------
Anite Group plc
Consolidated cash flow statement
for the six months ended 31 October 2004
Unaudited Unaudited Audited 12
six months to six months to months to
31 October 31 October 30 April
2004 2003 2004
(Restated) (Restated)
£'000 £'000 £'000
----------------------------------------- ----- ----- -----
Net cash inflow from operating activities 922 11,346 30,080
----------------------------------------- ----- ----- -----
Returns on investments and servicing of
finance
Interest received 61 193 203
Interest paid (362) (997) (1,688)
Interest element of finance lease
rental payments (33) (60) (100)
----------------------------------------- ----- ----- -----
Net cash outflow from returns on
investments and servicing of finance (334) (864) (1,585)
----------------------------------------- ----- ----- -----
Taxation
Foreign taxation refunded/(paid) 261 - (788)
UK corporation tax refunded/(paid) 142 409 (43)
----------------------------------------- ----- ----- -----
Net cash inflow/(outflow) from
taxation 403 409 (831)
----------------------------------------- ----- ----- -----
Capital expenditure and financial
investment
Purchase of tangible fixed assets (4,415) (1,190) (3,205)
Sale of tangible fixed assets 2 17 1,513
----------------------------------------- ----- ----- -----
Net cash outflow from capital
expenditure and financial investment (4,413) (1,173) (1,692)
----------------------------------------- ----- ----- -----
Acquisitions and disposals
Sale of subsidiary undertakings 7,302 - 811
Net bank balance of businesses sold (260) - (743)
Disposal of current asset investment 170 75 75
Proceeds from previously closed
businesses - 77 766
Recovery in respect of aborted
acquisition costs - 379 379
Deferred consideration paid for
current and previous years'
acquisitions (1,037) (375) (1,304)
----------------------------------------- ----- ----- -----
Net cash inflow/(outflow) from
acquisitions and disposals 6,175 156 (16)
----------------------------------------- ----- ----- -----
Cash inflow before management of
liquid resources and financing 2,753 9,874 25,956
----------------------------------------- ----- ----- -----
Management of liquid resources
Decrease in short term deposits 142 1,009 953
----------------------------------------- ----- ----- -----
Net cash inflow from management of
liquid resources 142 1,009 953
----------------------------------------- ----- ----- -----
Financing
Issue of ordinary share capital 110 10 558
Decrease in bank loans - (1,092) (15,191)
Capital element of finance lease
rental payments (476) (495) (1,085)
Redemption of vendor loan note
instruments (3,299) (7,525) (9,686)
Proceeds from sale of own shares - 314 314
----------------------------------------- ----- ----- -----
Net cash outflow from financing (3,665) (8,788) (25,090)
----------------------------------------- ----- ----- -----
(Decrease)/increase in cash in the
period (770) 2,095 1,819
----------------------------------------- ----- ----- -----
Reconciliation of movements in consolidated shareholders' funds
for the six months ended 31 October 2004
Unaudited Unaudited Audited 12
six months to six months to months to
31 October 31 October 30 April
2004 2003 2004
(Restated) (Restated)
£'000 £'000 £'000
----------------------------------------- ------ ------ ------
Profit/(loss) for the period 6,861 (15,290) (29,943)
Other recognised gains/(losses)
relating to period (net) 210 (291) (1,622)
Amounts recovered from own shares - 134 134
Share capital issued 615 8,001 8,740
Shares to be issued (net) (505) (8,607) (8,382)
----------------------------------------- ------ ------ ------
Net increase/(reduction) in shareholders'
funds 7,181 (16,053) (31,073)
Opening shareholders' funds 28,311 59,384 59,384
----------------------------------------- ------ ------ ------
Closing shareholders' funds 35,492 43,331 28,311
----------------------------------------- ------ ------ ------
Consolidated statement of total recognised gains and losses
for the six months ended 31 October 2004
Unaudited Unaudited Audited 12
six months to six months to months to
31 October 31 October 30 April
2004 2003 2004
(Restated) (Restated)
£'000 £'000 £'000
----------------------------------------- ------ ------ ------
Profit/(loss) for the period as
previously stated 6,861 (15,156) (20,809)
Prior period adjustment - amounts
recovered from own shares - (134) (134)
----------------------------------------- ------ ------ ------
Profit/(loss) for the period as restated 6,861 (15,290) (20,943)
Net gain/(loss) on foreign currency
translation 210 (291) (1,622)
----------------------------------------- ------ ------ ------
Total recognised gains and losses since
last annual report and financial
statements 7,071 (15,581) (22,565)
----------------------------------------- ------ ------ ------
Reconciliation of operating profit/(loss) to net cash inflow
from operating activities for the six months ended 31 October 2004
Unaudited Unaudited Audited 12
six months to six months to months to
31 October 31 October 30 April
2004 2003 2004
£'000 £'000 £'000
----------------------------------------- ------ ------ ------
Operating profit/(loss) for the period 3,730 (13,513) (32,849)
Depreciation 2,301 3,576 6,988
Amortisation of software licences 31 59 94
Goodwill amortisation 8,404 8,437 16,558
Goodwill impairment - 8,750 18,480
Decrease/(increase) in stock 526 (215) 1,749
Decrease in debtors 1,158 19,695 9,536
Decrease in creditors (12,135) (13,197) (226)
(Decrease)/increase in provisions (3,070) (2,377) 9,537
(Profit)/loss on disposal of
fixed assets (23) 510 592
Recovery of aborted acquisition costs - (379) (379)
----------------------------------------- ------ ------ ------
Net cash inflow from operating activities 922 11,346 30,080
----------------------------------------- ------ ------ ------
Analysis and reconciliation of net funds
for the six months ended 31 October 2004
Notes Audited Cash Non-cash Exchange Unaudited
1 May 2004 flow items movement 31 October
2004
£'000 £'000 £'000 £'000 £'000
-------------------------- ----- ----- ----- ----- ----- -----
Cash at bank
and in hand 11,353 (770) - (176) 10,407
Finance leases (906) 476 (29) - (459)
Current asset
investments 170 (170) - - -
Short- term
deposits 1,095 (142) - - 953
-------------------------- ----- ----- ----- ----- ----- -----
Net funds
excluding loan
notes 11,712 (606) (29) (176) 10,901
Vendor loan
notes due
within one
year 7 (6,750) 3,299 (165) - (3,616)
-------------------------- ----- ----- ----- ----- ----- -----
Net funds 10 4,962 2,693 (194) (176) 7,285
-------------------------- ----- ----- ----- ----- ----- -----
Anite Group plc
Notes to the accounts
1. Introduction
This interim report was approved by the Board of Directors on 6
December 2004 and follows the accounting policies adopted in the 2004
annual report except as noted below.
The company has adopted UITF abstract 38 'Accounting for ESOP trusts'
and has accordingly restated prior period results to show the amounts
recovered from own shares through the statement of total recognised
gains and losses and cash receipts within financing in the consolidated
cashflow statement. The financial information contained in this interim
report does not constitute statutory accounts as defined in section 240
of the Companies Act 1985. The comparative information is based on the
interim results for the six months ended 31 October 2003.
The figures for the year ended 30 April 2004 are an abridged statement
from the Group's audited accounts at that date, which have been
delivered to the Registrar of Companies as adjusted for the adoption of
UITF 38. The auditors' report on those accounts was unqualified and did
not contain a statement under Section 237(2) or 237(3) of the Companies
Act 1985.
2. Segmental Information
Ongoing businesses before goodwill and exceptional items
for the six months ended 31 October 2004
Public Sector Travel Telecoms International Total
Consultancy
2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Turnover on
ongoing
businesses 33,111 32,748 16,033 13,705 21,786 16,793 21,997 21,964 92,927 85,210
Ongoing
profit* -
before
utilisation of
provisions 86 (2,070) 3,058 2,992 5,179 4,130 2,047 2,243 10,370 7,295
Contract
provisions
utilised** 3,000 - - - - - - - 3,000 -
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Operating
profit * 3,086 (2,070) 3,058 2,992 5,179 4,130 2,047 2,243 13,370 7,295
---------------- ------ ----- ------ ------ ------ ----- ------ ------
Unallocated
corporate
costs (1,445) (871)
Finance
charges (net) (400) (954)
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Profit before
taxation* 11,525 5,470
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Profit before
taxation*
- before
contract
provisions 8,525 5,470
- contract
provisions
utilised ** 3,000 -
------ ------
11,525 5,470
------ ------
Ongoing businesses before goodwill and exceptional items
for the year ended 30 April 2004
Public Sector Travel Telecoms International Total
Consultancy
2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Turnover on
ongoing
businesses 72,216 72,993 28,304 32,014 34,346 33,679 44,593 50,245 179,459 188,931
Ongoing
profit* -
before
utilisation of
provisions (477) 205 6,158 6,832 8,726 6,845 4,123 8,087 18,530 21,969
Contract
provisions
utilised** 4,284 - - - - - - - 4,284 -
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Operating
profit * 3,807 205 6,158 6,832 8,726 6,845 4,123 8,087 22,814 21,969
Unallocated
corporate
costs (2,318) (2,868)
Finance
charges (net) (1,594) (2,359)
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Profit before
taxation* 18,902 16,742
---------------- ------ ----- ------ ------ ------ ----- ------ ------ ------ ------
Profit before
taxation*
- before
contract
provisions 14,618 16,742
- contract
provisions
utilised** 4,284 -
------ ------
18,902 16,742
------ ------
This information is provided to show comparison on a consistent basis.
* Ongoing businesses before goodwill and exceptional items.
**Contract provisions relate to the utilisation of the contract provisions made for the
State of Victoria and Pericles contracts.
2. Segmental information continued
Group analysis including goodwill and exceptional costs
for the six months ended 31 October 2004
Public Sector Travel Telecoms International Total
Consultancy
2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
(Restated)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover
- Ongoing
businesses 33,111 32,748 16,033 13,705 21,786 16,793 21,997 21,964 92,927 85,210
-
- Disposed/closed
businesses 823 793 - - 1,234 1,738 1,488 7,882 3,545 10,413
---------------- ------ ----- ----- ------ ------ ----- ------ ------ ------ ------
Turnover -
continuing
operations 33,934 33,541 16,033 13,705 23,020 18,531 23,485 29,846 96,472 95,623
---------------- ------ ----- ----- ------ ------ ----- ------ ------ ------ ------
Segment profit
- ongoing
businesses 3,086 (2,070) 3,058 2,992 5,179 4,130 2,047 2,243 13,370 7,295
- Common
corporate
costs ( after
recharges) (1,445) (871)
------ ------
- ongoing
businesses 11,925 6,424
-
- Disposed/closed
businesses 92 (126) - - 163 588 (46) 839 209 1,301
- Goodwill
amortisation (3,802) (2,260) (998) (997) - - (3,604) (5,180) (8,404) (8,437)
---------------- ------ ----- ----- ------ ------ ----- ------ ------
Operating
profit/ (loss)
before
exceptional
costs and
unallocated
corporate
costs (624) (4,456) 2,060 1,995 5,342 4,718 (1,603) (2,098)
------ ------
Operating
profit /
(loss) before
exceptional
costs 3,730 (712)
- Goodwill
impairment - - - - - - - (8,750) - (8,750)
- Other
exceptional
costs (note 3) - (2,814) - 726 - (119) - (373) - (2,580)
- Exceptional
corporate
costs (note 3) - - - - - - - - - (1,471)
---------------- ------ ----- ----- ------ ------ ----- ------ ------ ------ ------
Operating
profit/(loss)
before
unallocated
corporate
costs (624) (7,270) 2,060 2,721 5,342 4,599 (1,603) (11,221)
---------------- ------ ----- ----- ------ ------ ----- ------ ------
---------------- ------ ----- ----- ------ ------ ----- ------ ------
Operating
profit/ (loss)
before
exceptional
costs 3,730 (13,513)
Exceptional
items - non
operating
(note 3) 6,209 77
Profit on sale
of fixed asset
investment - 57
Finance
charges (net) (400) (954)
------ ------
Profit / (loss)
on ordinary
activities
before tax 9,539 (14,333)
------ ------
Segment net
assets 32,532 44,972 2,962 4,161 6,605 5,710 28,525 31,059 70,624 85,902
------ ----- ----- ------ ------ ----- ------ ------
Non-operating
liabilities (42,417) (31,771)
Net
funds/(debt)
(excluding
current asset
investments) 7,285 (10,800)
------ ------
Net assets 35,492 43,331
------ ------
Disposed/closed businesses comprise the turnover and operating results of continuing operations which have
ceased during the year and which do not meet the definition of discontinued operations under FRS 3. Ongoing
businesses comprise the turnover and operating results of continuing operations less the turnover and operating
results of disposed/closed businesses.
2. Segmental information continued
Group analysis including goodwill and exceptional costs
for the year ended 30 April 2004
Public Sector Travel Telecoms International Total
Consultancy
2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
(Restated)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
---------------- ------- ------ ----- ----- ----- ----- ------ ------ ------ ------
Turnover
- Ongoing
businesses 72,216 72,993 28,304 32,014 34,346 33,679 44,593 50,245 179,459 188,931
- Disposed/closed
businesses 1,688 1,922 - - 2,938 5,948 12,147 19,535 16,773 27,405
---------------- ------- ------ ----- ----- ----- ----- ------ ------ ------ ------
Turnover -
continuing
operations 73,904 74,915 28,304 32,014 37,284 39,627 56,740 69,780 196,232 216,336
---------------- ------- ------ ----- ----- ----- ----- ------ ------ ------ ------
Segment profit
- ongoing
businesses 3,807 205 6,158 6,832 8,726 6,845 4,123 8,087 22,814 21,969
- Common
corporate
costs (after
recharges) (2,318) (2,868)
------ ------
- ongoing
businesses 20,496 19,101
- Disposed/closed
businesses (26) (1,004) - - 318 (227) 1,396 (1,239) 1,688 (2,470)
- Goodwill
amortisation (4,455) (6,887) (1,997) (2,455) (193) (2,624) (9,913) (12,329) (16,558) (24,295)
---------------- ------- ------ ----- ----- ----- ----- ------ ------
Operating
(loss) /
profit before
exceptional
costs and
unallocated
corporate
costs (674) (7,686) 4,161 4,377 8,851 3,994 (4,394) (5,481)
------ ------
Operating
profit/(loss)
before
exceptional
costs 5,626 (7,664)
- Goodwill
impairment (3,558) (12,953) - (9,060) - (29,723) (14,922) (22,942) (18,480) (74,678)
- Other
exceptional
costs (note 3) (18,655) (5,412) 622 (763) (119) (1,100) (241) (728) (18,393) (8,003)
- Exceptional
corporate
costs (note 3) - - - - - - - - (1,602) (1,770)
---------------- ------- ------ ----- ----- ----- ----- ------ ------ ------ ------
Operating
(loss)/profit
before
unallocated
corporate
costs (22,887) (26,051) 4,783 (5,446) 8,732 (26,829) (19,557) (29,151)
---------------- ------- ------ ----- ----- ----- ----- ------ ------
---------------- ------- ------ ----- ----- ----- ----- ------ ------
Operating loss (32,849) (92,115)
Exceptional
items - non
operating(note
3) 4,407 (17,042)
Amounts
recovered/(wri
tten off)
investments
and own shares - (964)
Profit on sale
of fixed asset
investment 57 -
Finance
charges (net) (512) (2,359)
------ ------
Loss on
ordinary
activities
before tax (28,897) (112,480)
------ ------
Segment net
assets 21,659 47,450 2,580 5,235 3,390 3,837 24,939 34,122 52,568 90,644
------- ------ ----- ----- ----- ----- ------ ------
Non operating
liabilities (29,049) (14,927)
Net
funds/(debt)
(excluding
current asset
investments) 4,792 (16,333)
------ ------
Net assets 28,311 59,384
------ ------
Disposed/closed businesses comprise the turnover and operating results of continuing operations which have ceased
during the year and which do not meet the definition of discontinued operations under FRS 3. Ongoing businesses
comprise the turnover and operating results of continuing operations less the turnover and operating results of
disposed/closed businesses.
2. Segmental information continued
Additional analysis of Public Sector business
for the six months ended 31 October 2004
Public Sector** Pericles State of Total
Victoria
2004 2003 2004 2003 2004 2003 2004 2003
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover
- Ongoing
businesses 30,686 29,904 1,338 1,445 1,087 1,399 33,111 32,748
- Closed
businesses 823 793 - - - - 823 793
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Turnover -
continuing
operations 31,509 30,697 1,338 1,445 1,087 1,399 33,934 33,541
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Segment profit
(loss)
- Ongoing
businesses 5,698 1,778 (4,132) (2,401) (1,480) (1,447) 86 (2,070)
- Closed
businesses 92 (126) - - - - 92 (126)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Segment
profit/(loss)
before
utilisation of
contract
provisions 5,790 1,652 (4,132) (2,401) (1,480) (1,447) 178 (2,196)
Utilisation of
contract
provisions - - 1,473 - 1,527 - 3,000 -
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Segment
profit/(loss)
after
utilisation of
contract
provisions 5,790 1,652 (2,659) (2,401) 47 (1,447) 3,178 (2,196)
Goodwill
amortisation (1,603) (1,631) (2,199) (629) - - (3,802) (2,260)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Operating loss
before
exceptional
costs 4,187 21 (4,858) (3,030) 47 (1,447) (624) (4,456)
Exceptional costs
- Other
exceptional
costs (note 3) - (2,814) - - - - - (2,814)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Exceptional
costs - (2,814) - - - - - (2,814)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Operating loss 4,187 (2,793) (4,858) (3,030) 47 (1,447) (624) (7,270)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Additional analysis of Public
Sector business
for the year ended
30 April 2004
Public Sector** Pericles State of Total
Victoria
2004 2003 2004 2003 2004 2003 2004 2003
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Turnover
- Ongoing
businesses 67,198 68,372 2,888 2,664 2,130 1,957 72,216 72,993
- Closed
businesses 1,688 1,922 - - - - 1,688 1,922
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Turnover -
continuing
operations 68,886 70,294 2,888 2,664 2,130 1,957 73,904 74,915
-------------------- ----- ----- ----- ------ ------ ----- ------ ------ ------ -----
Segment (loss)/
profit
- Ongoing
businesses 8,788 5,945 (5,079) (3,841) (4,186) (1,899) (477) 205
- Closed
businesses (26) (1,004) - - - - (26) (1,004)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Segment loss
before
utilisation of
contract 8,762 4,941 (5,079) (3,841) (4,186) (1,899) (503) (799)
Provisions
Utilisation of
contract
provisions - - 98 - 4,186 - 4,284 -
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Segment
profit/(loss)
after
utilisation of
contract
provisions 8,762 4,941 (4,981) (3,841) - (1,899) 3,781 (799)
Goodwill
amortisation (3,448) (5,880) (1,007) (1,007) - - (4,455) (6,887)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Operating loss
before
exceptional
costs 5,314 (939) (5,988) (4,848) - (1,899) (674) (7,686)
Exceptional costs
- Goodwill
impairment
(note 3) 250 (12,953) (3,808) - - - (3,558) (12,953)
- Other
exceptional
costs (note 3) (4,462) (2,912) (4,028) - (10,165) (2,500) (18,655) (5,412)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Exceptional
costs (4,212) (15,865) (7,836) - (10,165) (2,500) (22,213) (18,365)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
Operating loss 1,102 (16,804) (13,824) (4,848) (10,165) (4,399) (22,887) (26,051)
------------------------------ ------ ------ ------ ----- ------ ------ ------ -----
This additional information has been given to give a clearer understanding of the results of the
underlying Public Sector businesses.
** Public Sector businesses excluding Pericles and State of Victoria.
2. Segmental information continued
Additional analysis of turnover
--------------------
Unaudited Unaudited Audited
six months to six months to 12 months to 30
31 October 2004 31 October 2003 April 2004
£'000 £'000 £'000
------------------------------------------------ ------ ------ -------
IT Consultancy 9,745 10,121 18,995
Own product software licences 13,702 12,883 29,588
Bespoke services, systems integration and
implementation of software products 31,492 35,722 75,147
Managed services (includes software
maintenance and support) 24,985 24,060 49,020
Originating from third party 16,548 12,837 23,482
------------------------------------------------ ------ ------ -------
96,472 95,623 196,232
------------------------------------------------ ------ ------ -------
This information is given to show the main areas from which the group's turnover is derived.
Geographic analysis of turnover
---------- Origin------------------- ----------- Destination ---------
Unaudited Unaudited Audited Unaudited Unaudited Audited
six months six months 12 months six months six months 12 months
to to to to to to
31 October 31 October 30 April 31 October 31 October 30 April
2004 2003 2004 2004 2003 2004
£'000 £'000 £'000 £'000 £'000 £'000
---------------------------- ------ ------ ------- ------ ------ -------
Europe - United Kingdom 63,739 62,972 122,954 47,733 46,340 101,370
Europe - Other 23,653 30,763 57,908 32,220 37,089 72,314
North America 4,214 112 8,025 4,390 4,907 8,141
Rest of the World 4,866 1,776 7,345 12,129 7,287 14,407
---------------------------- ------ ------ ------- ------ ------ -------
96,472 95,623 196,232 96,472 95,623 196,232
---------------------------- ------ ------ ------- ------ ------ -------
Geographical analysis of profit/(loss) on ordinary activities before taxation and net assets
Unaudited Unaudited Audited
six months to six months to 12 months to
31 October 2004 31 October 2003 30 April 2004
Profit Net assets Loss before Net assets Loss before Net assets
before taxation taxation
taxation
(Restated) (Restated)
£'000 £'000 £'000 £'000 £'000 £'000
---------------------------- ------ ------ ------ ------ ------ ------
Europe - United Kingdom 9,637 716 134 21,563 11,912 1,222
Europe - Other 7,670 42,563 2,668 21,609 3,110 35,283
North America (169) 897 13 82 754 1,128
Rest of the World 805 (8,684) 39 77 (9,635) (9,322)
---------------------------- ------ ------ ------ ------ ------ ------
Profit on ordinary
activities before
goodwill amortisation
and impairment 17,943 35,492 2,854 43,331 6,141 28,311
Less: goodwill amortisation
and impairment (8,404) - (17,187) - (35,038) -
---------------------------- ------ ------ ------ ------ ------ ------
Total 9,539 35,492 (14,333) 43,331 (28,897) 28,311
---------------------------- ------ ------ ------ ------ ------ ------
3. Exceptional items
Exceptional items (excluding goodwill) reported before operating profit
Unaudited Unaudited Audited
six months to six months to 12 months to
31 October 31 October 30 April
2004 2003 2004
£'000 £'000 £'000
----------------------------------------------- ------- ------- ------
Redundancy and restructuring costs - 1,124 1,147
Contract and purchasing provisions - - 14,194
----------------------------------------------- ------- ------- ------
Charged to cost of sales - 1,124 15,341
----------------------------------------------- ------- ------- ------
Redundancy and restructuring costs - 3,306 5,033
Aborted acquisition costs - recovery - (379) (379)
----------------------------------------------- ------- ------- ------
Charged to net operating costs - 2,927 4,654
----------------------------------------------- ------- ------- ------
Total operating exceptional items - 4,051 19,995
----------------------------------------------- ------- ------- ------
In addition, in prior years, exceptional goodwill impairment of £8,750,000 was charged in October
2003, and £18,480,000 in April 2004.
Included within net finance charges at 30 April 2004 is an exceptional exchange gain of £1,082,000
on foreign currency intercompany financing.
Unaudited Unaudited Audited
six months to six months to 12 months to
31 October 31 October 30 April
Exceptional items reported after operating 2004 2003 2004
profit: £'000 £'000 £'000
----------------------------------------------- ------- ------- ------
Closed businesses:
Loss on disposal of Anite Benelux BV - - (1,102)
Net profit on disposal of
Anite Space 6,209 - -
Discontinued businesses:
Consideration received in respect of
previously disposed businesses - 77 1,287
Write back of tax warranty and earnout
provisions no longer required on
previously disposed businesses - - 4,222
----------------------------------------------- ------- ------- ------
Profit on disposal/closure of businesses 6,209 77 4,407
----------------------------------------------- ------- ------- ------
4. Tax charge on profit/(loss) on ordinary activities
The tax charge is made up as follows:
Unaudited Unaudited Audited
six months to six months to 12 months to
31 October 31 October 30 April
2004 2003 2004
£'000 £'000 £'000
----------------------------------------------- ------- ------- ------
Current tax
----------------------------------------------- ------- ------- ------
UK corporation tax 1,780 770 1,452
Foreign tax 481 327 768
----------------------------------------------- ------- ------- ------
2,261 1,097 2,220
----------------------------------------------- ------- ------- ------
Adjustments in respect of prior years
- UK corporation tax - - 10
- Foreign tax - - (839)
----------------------------------------------- ------- ------- ------
- - (829)
----------------------------------------------- ------- ------- ------
Total current tax charge 2,261 1,097 1,391
----------------------------------------------- ------- ------- ------
Deferred tax
UK 114 (344) (252)
Foreign 303 204 (93)
----------------------------------------------- ------- ------- ------
Total deferred tax 417 (140) (345)
----------------------------------------------- ------- ------- ------
Total tax on profit/(loss) on ordinary
activities 2,678 957 1,046
----------------------------------------------- ------- ------- ------
5. Earnings/(loss) per ordinary share
The calculations of profit and adjusted earnings per share are based on the following profit and adjusted profit and
number of shares:
Unaudited Unaudited Audited Unaudited Unaudited Audited
six months six months 12 months six months six months 12 months
to to to to to to
31 October 31 October 30 April 31 October 31 October 30 April
2004 2003 2004 2004 2003 2004
(Restated) (Restated)
Pence per Pence per Pence per
share share share
£'000 £'000 £'000
---------------------------- ------ ------ ------- ------ ------ -------
Profit/(loss) for the period
- basic 1.9 (4.4) (8.6) 6,861 (15,290) (29,943)
---------------------------- ------ ------ ------- ------ ------ -------
Reconciliation to adjust
earnings:
- Goodwill amortisation 2.5 2.4 4.8 8,404 8,437 16,558
Exceptional items
- Goodwill impairment - 2.5 5.3 - 8,750 18,480
- Other (note 3) - 1.2 5.7 - 4,051 19,995
- Profit on sale of fixed
asset investment - - - - (57) (57)
- Exchange gain on net
foreign currency
borrowings - - (0.3) - - (1,082)
- Profit on disposal /
closure of businesses (1.8) - (1.3) (6,209) (77) (4,407)
- Release of prior year tax
provisions and tax credit - (0.2) (0.9) 130 (556) (3,340)
on exceptional operating items
Profit from closed businesses (0.1) (0.4) (0.5) (209) (1,301) (1,688)
---------------------------- ------ ------ ------- ------ ------ -------
Adjusted earnings -
Profit for the period on
ongoing businesses 2.5 1.1 4.2 8,977 3,957 14,516
before goodwill amortisation,
impairment, closed businesses
and exceptional items - basic
---------------------------- ------ ------ ------- ------ ------ -------
- Ongoing businesses -
utilisation of contract
provisions (0.8) - (1.3) (3,000) - (4,284)
---------------------------- ------ ------ ------- ------ ------ -------
Adjusted earnings (as
above) before utilisation of
contract provisions - basic 1.7 1.1 2.9 5,977 3,957 10,232
---------------------------- ------ ------ ------- ------ ------ -------
Number of shares ('000)
Weighted average number
of shares in issue - used
to calculate basic earnings
per share 352,554 345,771 348,340
---------------------------- ------ ------ ------- ------ ------ -------
Effect of dilutive ordinary
shares
- SAYE and share option
schemes 5,383 102 4,342
- Contingent
consideration 234 595 1,128
---------------------------- ------ ------ ------- ------ ------ -------
Number of shares used to
calculate diluted
earnings per share 358,171 346,468 353,810
---------------------------- ------ ------ ------- ------ ------ -------
Adjusted earnings per share on ongoing businesses excluding goodwill amortisation, impairment, closed businesses and
exceptional items have also been included as the directors consider that this figure provides a meaningful measure of
the underlying business.
6. Debtors
Unaudited Unaudited Audited
six months to six months to 12 months to 30
31 October 2004 31 October 2003 April 2004
£'000 £'000 £'000
----------------------------------------- -------- -------- -------
Trade debtors 39,759 36,335 45,175
Deferred tax asset 1,511 1,890 1,928
Other debtors 1,115 - 798
Prepayments 5,621 6,661 5,128
Accrued income 7,068 4,810 4,700
----------------------------------------- -------- -------- -------
55,074 49,696 57,729
----------------------------------------- -------- -------- -------
7. Creditors - Amounts falling due within one year
Unaudited Unaudited Audited
six months to six months to 12 months to 30
31 October 2004 31 October 2003 April 2004
£'000 £'000 £'000
----------------------------------------- -------- -------- -------
Bank loans and overdrafts - 12,850 -
Obligations under finance leases and
hire purchase arrangements 392 899 696
Vendor loan notes 3,616 7,959 6,750
Trade creditors 11,492 10,903 13,811
Corporation and overseas tax 12,628 10,698 9,997
Other taxes and social security 7,171 9,742 12,996
Other creditors 2,757 750 2,548
Payments received on account 1,671 6,647 3,878
Accruals and deferred income 40,921 34,984 43,427
----------------------------------------- -------- -------- -------
80,648 95,432 94,103
----------------------------------------- -------- -------- -------
8. Creditors - Amounts falling due after more than one year
Unaudited Unaudited Audited
six months to six months to 12 months to 30
31 October 2004 31 October 2003 April 2004
£'000 £'000 £'000
----------------------------------------- -------- -------- -------
Obligations under finance leases and
hire purchase contracts 67 544 210
Bank loans - 1,249 -
Other creditors 86 72 471
----------------------------------------- -------- -------- -------
153 1,865 681
----------------------------------------- -------- -------- -------
9. Provisions for
liabilities and charges
Deferred Warranties Surplus Onerous Other Group
consideration property contract provisions total
provisions
£'000 £'000 £'000 £'000 £'000 £'000
At 1 May 2004 1,495 538 5,988 12,380 2,279 22,680
Reclassificati
on to
creditors - - - - (11) (11)
Crystallisation
of earnout
and
transferred to
vendor loan
notes payable (165) - - - - (165)
Release of
provision
credited to
profit and
loss - - (229) - (23) (252)
Established
during the
period - 477 860 350 400 2,087
Disposal of
subsidiaries - (28) - - (1) (29)
Utilised
during the
period (306) - (1,031) (3,000) (1,113) (5,450)
Foreign
exchange
adjustment - 2 (1) 5 18 24
Unwinding of
discounting of
surplus
property
provision - - 104 - - 104
-------------------------- -------- ------ ------ ------- ------- ------
At 31 October
2004 1,024 989 5,691 9,735 1,549 18,988
-------------------------- -------- ------ ------ ------- ------- ------
10. Reconciliation of net funds/(debt)
Unaudited Unaudited Audited
six months to six months to 12 months to 30
31 October 2004 31 October 2003 April 2004
£'000 £'000 £'000
---------------------------------------------- -------- -------- -------
(Decrease)/increase in cash in the period (770) 2,095 1,819
Cash inflow from decrease in current
asset investment (170) - -
Cash outflow from decrease in bank loan
and lease financing 476 1,587 16,276
Cash inflow from decrease in liquid
resources (142) (1,009) (953)
---------------------------------------------- -------- -------- -------
Change in net funds resulting from cash flows (606) 2,673 17,142
Increase in finance lease (29) (25) (78)
Receipt of shares - - 170
Exchange movement (176) (263) (296)
Net funds/(debt) at 1 May excluding loan
notes 11,712 (5,226) (5,226)
---------------------------------------------- -------- -------- -------
Net funds/(debt) excluding loan notes 10,901 (2,841) 11,712
Vendor loan notes (note 7) (3,616) (7,959) (6,750)
---------------------------------------------- -------- -------- -------
Net funds/(debt) 7,285 (10,800) 4,962
---------------------------------------------- -------- -------- -------
11. Reserves
Shares to be Share premium Merger Profit and loss
issued account reserve account
£'000 £'000 £'000 £'000
------------------------------------- ------ ------ ------ ------
At 1 May 2004 800 22,856 14,227 (44,811)
Retained profit for the period - - - 6,861
Premium on shares issued - 417 78 -
Transfer goodwill amortisation
and impairment to merger reserve - - (1,733) 1,733
Shares issued against earnouts in
the period (505) - - -
Net gain on foreign currency
translation - - - 210
------------------------------------- ------ ------ ------ ------
At 31 October 2004 295 23,273 12,572 (36,007)
------------------------------------- ------ ------ ------ ------
12. Post balance sheet events
In November we sold the trade and assets of Anite Calculus Limited, our Telecoms billing
systems business to Azure Solutions Limited for a consideration of £0.75m, and in December our Transport business, to
Trapeze Inc., for £0.9m.
INDEPENDENT REVIEW REPORT TO ANITE GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 October 2004 which comprises the consolidated profit and
loss account, the consolidated balance sheet, the consolidated cash flow
statement, the reconciliation of movements in shareholders' funds, consolidated
statement of total recognised gains and losses, reconciliation of operating
profit to net cash inflow from operating activities, analysis and reconciliation
of net funds and related notes 1 to 12. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom auditing standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2004.
Deloitte & Touche LLP
Chartered Accountants
London
6 December 2004
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