Final Results

RNS Number : 2077Z

Access Intelligence PLC

05 March 2013

 

FOR RELEASE                                                                                                    

7.00AM

05 march 2013

ACCESS INTELLIGENCE PLC

("Access Intelligence" or "the Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2012

Access Intelligence Plc (AIM: ACC), a leading supplier of Software-as-a-Service (SaaS) solutions for the full life cycle management of a company's governance, risk and compliance, announces its unaudited results for the year ended 30 November 2012 .

Highlights

*     Turnover from continuing activities increased by 11% to £8,053,000 (2011: £7,223,000)

*     Contracted not yet invoiced revenue up 101% to £5,453,000 (2011: £2,713,000)

*     Recurring revenue up 16% to £5,562,000 (2011: £4,807,000) at 69% of sales (2011:  66%)

*     Adjusted EBITDA on continuing activities down  49% to £368,000 (2011:£720,000)*

*     Loss after tax on continuing activities was £114,000 (2011: loss £91,000)

*     Loss after tax on continuing and discontinued activities was £114k (2011: profit £2,101,000)

*     Loss per share on continuing and discontinued operations 0.05p (2011: profit 0.84p)

*     Cash balance of £2,772,000 (2011: £4,162,000).

*     Total technology spend of £1,929k (2011:£639k) of which £706,000 (2011:£314,000) was capitalised

*     Proposed final dividend of 0.05p per share (2011: 0.2p) payable on 26 April 2013.

*The adjusted EBITDA has been arrived at before development cost impairment, share based payments and exceptional costs.

Michael Jackson, Executive Chairman, commented: -

2012 has seen strategic investment in both the Company and its solutions. We have already started to see the early signs of return on this investment, with a significant increase in revenues contracted not yet invoiced and an increase in long term shareholder value with a growing recurring revenue base. Our strategy continues to evolve and the synergies and interoperability between our products continues to grow, with customers recognising considerable benefits from utilising our combined suite of brands.

For further information:

Access Intelligence plc  

Michael Jackson (Chairman)                                                       020 7831 5088

Joanna Arnold (COO)                                                                 020 7831 5088

Kole Dhoot (CFO)                                                                      020 7831 5088

Cubitt Consulting

Gareth David                                                                              020 7367 5100

Northland Capital Partners

William Vandyk                                                                         020 7796 8800

Notes to Editors:

Access Intelligence plc. has a portfolio of Software-as-a-Service ("SaaS") brands delivering Governance, Risk and Compliance solutions to the public and private sector.  The board is headed by Michael Jackson as Executive Chairman, Joanna Arnold as COO and Kole Dhoot as CFO.

Forward looking statements

This document contains forward-looking statements.

These statements appear in a number of places in this document and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, revenue, financial condition, liquidity, prospects, growth, strategies, new products, the level of product launches and the markets in which we operate.

Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors.

These factors include any adverse change in regulations, unforeseen operational or technical problems, the nature of the competition that we will encounter, wider economic conditions including economic downturns and changes in financial and equity markets. We undertake no obligation publicly to update or revise any forward-looking statements, except as may be required by law.

CHAIRMAN'S STATEMENT

I am pleased to announce our results for the year ended 30 November 2012, a period in which the Company has made significant investment, whilst continuing to deliver considerable strategic and top line progress.

The year has seen strategic investment in both the Company and its solutions. We have already started to see the early signs of return on this investment, with a significant increase in revenues contracted not yet invoiced (up 101%) and an increase in long term shareholder value with a growing recurring revenue base.

RESULTS

Revenue was up by 11% to £8,053,000 (2011: £7,233,000).

Our continued commitment to the software-as-a-service business model has enabled us to build  long-term visibility of revenues and in 2012 recurring revenues on continuing operations, at £5,562,000 (2011: £4,807,000), accounted for 69% (2011: 66%) of total revenues.

At 30 November 2012, deferred revenue stood at £2,732,000 (2011: £2,553,000) reflecting the growth in our already invoiced but not recognised revenue. A further £5,453,000 (2011: £2,713,000) of contracted but not yet invoiced revenue reflects the strong growth in SaaS contract sign ups.

Operating loss before taxation was £390,000 (2011: loss £156,000). In arriving at the operating loss we have charged £276,000 (2011: £208,000) for the depreciation and amortisation; no impairment charge (2011: £299,000) and £36,000 (H1 2011: £35,000) for share-based payments.

Cost of sales increased to £2,398,000 (2011: £2,142,000) due to higher messaging costs at AIControlPoint and sub-contractor costs suffered in the first half of the year. Messaging services were tendered resulting in a 76% reduction in on-going costs, while sub-contractors have now been replaced by permanent hires.

Total operating costs rose to £6,009,000 (2011: £5,212,000), these include exceptional costs, which are explained separately in Training and Competence. The increase in total operating cost reflects the significant investment made with the creation of a cutting edge development centre in York, housing specific staff in functional roles for research, development, programme management and quality assurance, rather than developers covering all areas. Significant investment has also been made in central functions as well as at brand operating level.

2013 will see continued investment across the Company's brands with the full benefits starting to come through in the latter parts of the current financial year. The proposed dividend is a sign of our confidence in the future.

Loss per share

The basic loss per share was 0.05p (2011: earnings 0.84p).

Cash

The Company had net cash at the end of the year of £2,772,000 (2011: £4,162,000), the change reflecting the significant investments made, which continue to be made into 2013.

Dividend

On 20 April 2012, the directors paid a final dividend of 0.2 pence per share. The directors propose a final dividend of 0.05p for those shareholders on the register on 22 March 2013 and payable on 26 April 2013 if approved by the shareholders at the AGM to be held on 22 April 2013.

OPERATIONS

2012 saw the launch of the Access Intelligence centre of excellence for product development in York, which has enabled us to align R&D strategy, methodologies and deliverables. This evolution in our development process has enabled the brands to benefit from shared technologies, reducing the time to market for new product innovations. In addition we have invested in the latest software testing technology and processes, ensuring we deliver robust solutions to market and providing customers with greater confidence and value.

Training and Competence

AITalent went through significant restructuring in 2011 and operating losses at AITalent have decreased to £236,000 (2011: loss £656,000) including exceptional costs of £171,000 (2011: £633,000) relating to the re-organisation and centralisation of the brand, moving location to Access Intelligence's head offices, with a focus on tighter cost controls.

2012 has seen an increased investment in sales and marketing, which has had a positive impact during the year with growth in new and existing business. Pipeline generation each quarter is up significantly compared to the same point in the previous period, whilst at the same time delivering a shortened lead time and an improved conversion rate.

Product innovation at AITalent has continued to be strong with the launch of the new reporting module, which has given AITalent a competitive advantage in the market.

Business Performance Management

AITrackRecord continues to be fundamental to the on-going operations of its customers and has enabled them to meet the requirements of the Retail Distribution Review, whilst ensuring minimal impact on sales operations. AITrackRecord has continued to leverage its customer base of industry leading financial services institutions and the results from this work have been recognised in early 2013 with a significant increase to the recurring revenue.

The investment AITrackRecord has made in R&D is already starting to benefit the Company's brands and has enabled AITalent to bridge the gap between the pure compliance training market and that of talent and performance management. The resulting combination of AITalent and AITrackRecord has enabled the commercial team to offer prospects additional functionality that outperforms that of its competitors, which both brands will benefit from during 2013.

e-Procurement and Supplier Risk Management

AIProcurement has had continued successes, opening 20 new accounts in the public and private sectors in the year. Despite a continued reduction in Government spending, AIProcurement continues to see growth from the public sector and now delivers e-Procurement solutions for 8 of 9 of the government's regional improvement and efficiency partnerships. AIProcurement has also delivered significant savings for one of the UK's leading pub chains, Spirit Pub, continuing to demonstrate the value the solution delivers for the private sector.

As a result of the investment in new functionality and commercial activities during 2012, AIProcurement has been selected by leading technology research house, Gartner, to appear on their highly regarded Magic Quadrant for Strategic Sourcing Suites. This will help with the development of brand equity in both the public and private sector during 2013.

AIProcurement has also launched a new solution, Pure Tenders, designed for use by the supply chain of the public and private sectors and marketing activities have been specifically focused on AIProcurement's network of over 180,000 suppliers. The Pure Tenders product is a dynamic live search solution for UK and European tender opportunities and has unique selling points compared to other similar portals currently available. The current focus is to continue to develop functionality for the product and to significantly increase awareness.

Business Continuity and Incident Management

AIControlPoint has continued to deliver strong growth during 2012 and has established itself as the primary incident management solution for the UK Oil and Gas industry. The business has continued to improve on its strong presence in its core verticals of aviation, finance and oil and gas, with key customer acquisitions during 2012 including; Chevron and Edinburgh Airport. In addition AIControlPoint has seen a growing interest from the leisure industry and during 2012 has signed the largest hotel chain in the world, Intercontinental Hotel Group.

Through the sales and marketing activities and unique innovations in the solution, AIControlPoint has been noted in a number of Gartner Research papers over the past 12 months and selected as a 'cool vendor', which has helped to increase visibility and build upon the reputation of AIControlPoint as the "weapon of choice" for Emergency Response teams in high risk industries.

Stakeholder and Reputation Management

AIMediaComms' strong market position in the public sector continued despite tough market conditions, with customer acquisitions including Edinburgh Council, one of the largest authorities in the UK. The release of the new Freedom of Information (FOI) management product has proved successful in the NHS and Central Government. In the private sector, the Vuelio product has continued to strengthen its brand equity within the wider stakeholder and reputation management market, benefiting from customer wins including Debenhams, Trafigura and Electricity North West.

2012 also saw the launch of enhanced stakeholder management functionality, including the launch of an advanced integrated political database in conjunction with Zetter's online, broadening the product for public affairs and other communications teams.

Infrastructure (IaaS), Cloud and Data Security Management

Willow Starcom has continued to move away from its previously traditional channel of hardware maintenance, towards direct end-user hosted services. This shift led to a significant improvement in product margins, with the replacement of channel business by revenue generated from direct end user relationships. We have continued to invest and develop the cloud based solutions and services both for SMEs, predominantly in the North West of England, and to support the hosting requirements of the Access Intelligence Company brands.

2012 saw the launch of AICloud, as the standard infrastructure solution for the delivery of our SaaS proposition. With successful security and penetration testing, by the security and IT teams of market leading customers, the AICloud solution has continued to demonstrate the resilience and value of its offering. 2012 saw the acquisition of AICloud's first large enterprise solution, outside of the SaaS platform it delivers for Access Intelligence customers.

Strategy and Market

The Company continues to drive market leading innovation across its suite of GRC solutions with investment of £706,000 in R&D during 2012. The investment has enabled Access Intelligence to competitively engage with both industry leading companies and SME businesses, providing value driven solutions to support their compliance and risk management life cycle.

With the significant growth of cloud computing, the SaaS model continues to demonstrate itself as the most value driven deployment option for both customers and vendors. While customers benefit from a lower total cost of ownership, improved solution availability and increased data security, it enables Access Intelligence to take advantage of a stable recurring revenue base (through multi-year contracts), reduced implementation costs and greater scalability. In addition, synergies in the development of product functionality across the brands, enables significant return on investment through the SaaS model, with a prime example being customisable reporting.

The markets in which we operate continue to experience ever more stringent regulation, with substantial consequences for companies that fail to meet them. Access Intelligence's solutions are core to companies achieving compliance and there continues to be significant opportunities for growth, both within our enviable customer base and regulated markets as a whole. The Board continues to review acquisition opportunities that will add value to the management of our customer's compliance and risk management lifecycle and drive additional value to the Company.

In 2013 will we will continue to invest in the development of our products and our focus is on recognising the benefits from our brand synergies, both for product innovation and commercial activities, with cross selling of the products already proving to deliver significant value for our existing customers.

Directors and Staff

2012 has continued our core belief of building a company based on the expertise, experience and integrity of our staff.  A key example of this has been the investment made in additional staff during the year to support the growth in demand and product innovation across the company.

I would like to thank all our staff for their hard work and commitment, which has enabled us to recognise considerable progress both during 2012 and that we will continue to benefit from in the coming years. As a Company, we have delivered significant advances and I look forward to our continued success 2013.

Outlook

Organisations operating in both regulated and non-regulated markets across the world, continue to recognise the fundamental importance of utilising software solutions to provide the necessary governance, risk and compliance data combined with insightful and responsive management information that enables them to reduce costs, improve performance and mitigate risks. Meeting this demand will continue to be at the core of our strategy and be the driver for our continued innovation of our leading SaaS based solutions.

Our strategy continues to evolve and the synergies and interoperability between our products continues to grow, with customers recognising considerable benefits from utilising our combined suite of brands.

Michael Jackson

Chairman

5 March 2013

Consolidated Statement of Comprehensive Income for the Year Ended 30^th November 2012

		2012	2011
	Note	£'000	£'000
Revenue - continuing operations	3	8,053	7,233
Cost of sales		(2,398)	(2,142)
Gross profit		5,655	5,091
Administrative expenses		(6,009)	(5,212)
Share-based payment		(36)	(35)
Operating loss	5	(390)	(156)
Financial income		23	26
Financial expense		(130)	(149)
Loss before taxation		(497)	(279)
Taxation credit	6	383	188
Loss for the year from continuing operations		(114)	(91)
Profit for the year from discontinued operations
net of income tax expense	7	-	2,192
(Loss)/profit for the year attributable to the
equity holders of the parent company		(114)	2,101
Other comprehensive income		-	-
Total comprehensive income for the period
attributable to the owners of the parent company		(114)	2,101
Earnings per share
Continuing and discontinued operations
Basic (loss)/profit  per share		(0.05)p	0.84p
Diluted (loss)/profit  per share		(0.05)p	0.64p
Continuing operations
Basic loss per share		(0.05)p	(0.04)p
Diluted loss per share		(0.05)p	(0.04)p

Consolidated Statement of Financial Position as at 30^th November 2012

		2012	2011
	Note	£'000	£'000
Non-current assets
Property, plant and equipment		472	249
Intangible assets	9	8,846	8,130
Deferred tax assets		720	199
Total non-current assets		10,038	8,578
Current assets
Inventories		191	253
Trade and other receivables		2,244	1,932
Cash and cash equivalents		2,772	4,162
Total current assets		5,207	6,347
Total assets		15,245	14,925
Current liabilities
Trade and other payables		1,012	803
Accruals and deferred income		3,400	2,973
Bank overdraft		-	2
Total current liabilities		4,412	3,778
Non-current liabilities
Trade and other payables		37	-
Interest bearing loans and borrowings		1,217	1,183
Deferred tax liabilities		494	368
Total non-current liabilities		1,748	1,551
Total liabilities		6,160	5,329
Net assets		9,085	9,596
Equity
Share capital		1,286	1,286
Treasury shares		(148)	(148)
Capital redemption reserve		191	191
Share option reserve		284	226
Equity reserve		126	126
Retained earnings		7,346	7,915
Total equity attributable to the equity holders of the parent company		9,085	9,596

Consolidated Statement of Changes in Equity for the Year Ended 30^th November 2012

Attributable to equity holders of the parent

			Share	Capital	Share
	Share capital	Treasury shares	premium account	redemption reserve	option reserve	Equity reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Group
At 1 December 2010	1,286	-	13,490	191	319	176	(7,627)	7,835
Total comprehensive income for the year	-	-	-	-	-	-	2,101	2,101
Capital re-organisation	-	-	(13,490)	-	-	-	13,490	-
Equity component of convertible loan notes
- equity portion	-	-	-	-	-	(50)	28	(22)
Share-based payments
- lapsed/exercised in year	-	-	-	-	(32)	-	32	-
Share-based payments
- current year	-	-	-	-	22	-	-	22
Tax reversal relating to share-based payment	-	-	-	-	(83)	-	-	(83)
Dividends recognised as distributions to owners	-	-	-	-	-	-	(257)	(257)
Treasury shares	-	(148)	-	-	-	-	148	-
At 30 November 2011	1,286	(148)	-	191	226	126	7,915	9,596
At 1 December 2011	1,286	(148)	-	191	226	126	7,915	9,596
Total comprehensive loss for the year	-	-	-	-	-	-	(114)	(114)
Share-based payments
- current year	-	-	-	-	36	-	-	36
Tax reversal relating to share-based payment	-	-	-	-	22	-	-	22
Dividends recognised as distributions to owners	-	-	-	-	-	-	(455)	(455)
At 30 November 2012	1,286	(148)	-	191	284	126	7,346	9,085

Consolidated Cash Flow Statement for the Year Ended 30^th November 2012

		2012	2011
		£'000	£'000
Loss for the year from continuing operations after tax		(114)	(91)
Adjusted for:		-
Taxation		(383)	(188)
Depreciation		154	86
Amortisation and impairment of intangible assets		122	421
Share option charge		36	35
Interest income		(23)	(26)
Interest expense		130	149
Loss on disposal of property, plant and equipment		-	1
Operating cash (outflow)/ inflow before changes in working capital		(78)	387
(Increase)/decrease in trade and other receivables		(555)	286
Decrease/(increase) in inventories		62	(5)
Increase in trade and other payables		634	126
Net cash inflow from the continuing operations		63	794
Taxation received		20	61
Net cash inflow from continuing activities		83	855
Cash flows from investing in continuing activities
Interest received		23	26
Acquisition of property, plant and equipment and software licences		(462)	(134)
Proceeds of release of escrow (2011 sale of subsidiary (net))		243	2,345
Cost of software development		(715)	(314)
Net cash (outflow)/inflow from investing in continuing activities		(911)	1,923
Cash flows from financing continuing activities
Interest paid		(80)	(118)
Redemption of loan notes		-	(500)
Repayment of borrowings		(25)	(25)
Payment of dividend		(455)	(257)
Net cash outflow  from  financing continuing activities		(560)	(900)
Net (decrease)/increase in cash and cash equivalents		(1,388)	1,878
Cash from discontinued operations		-	68
Opening cash and cash equivalents		4,160	2,214
Closing cash and cash equivalents		2,772	4,160

1.         BASIS OF PREPARATION

This announcement has been prepared in accordance with the Company's accounting policies, which in turn are in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") applied in accordance with the provisions of the Companies Act 2006. IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The accounting policies comply with each IFRS that is mandatory for accounting periods ended 30 November 2012.

The results are unaudited, however we do not expect there to be any difference between the numbers presented and those within the annual report.

The financial information set out above does not constitute the group's statutory accounts, but is derived from those accounts. The statutory accounts for the year ended 30 November 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the group's annual general meeting.

2.         Basis of consolidation

The group results comprise the financial statements of Access Intelligence plc and its subsidiaries as at 30^th November 2012. They are presented in Sterling and all values are rounded to the nearest thousand pounds (£'000).

3.         Revenue

The group's revenue is primarily derived from the provision of services with the value of sales of  goods being not significant in relation to total group revenue.

The group's revenue was split into the following territories:-

	2012	2011
	£'000	£'000
United Kingdom	7,412	6,699
European Union	182	162
Rest of the World	459	372
	8,053	7,233

All non-current assets are held in the United Kingdom as they were in 2011.

No customer represents 10% or more of revenue as was the case in 2011.

4.      Segment reporting

Segment information is presented in respect of the group's operating segments which are based upon the group's management and internal business reporting.

Inter-segment pricing is determined on an arm's length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses.

Segment non-current asset additions show the amounts relating to property, plant and equipment and intangibles including goodwill.

Operating segments

The group operating segments have been decided upon according to their revenue model and product or service offering. The software as a service segment derives its revenues from software licence sales and support and training revenues. The IT support services revenue derives from maintenance and back-up services. The segments are:-

·      Software as a service

·      IT support services

·      Division in recovery - AI Talent Ltd (formerly Cobent Ltd)

·      Head Office

The segment information for the year ended 30 November 2012, is as follows:

2012	Software
	as a	IT support	Head	AI Talent Ltd	Discontinued	Consolidation
	service	services	office	(Cobent Ltd)	operations	adjustment	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
External revenue	5,343	1,736	-	974	-	-	8,053
Internal revenue	-	263	-	-	-	(263)	-
Operating profit/(loss)	1,072	173	(1,365)	(236)		(34)	(390)
Finance income	11	1	11	-	-	-	23
Finance Costs	-	-	(125)	(5)	-	-	(130)
Taxation	107	10	210	19	-	37	383
Profit/(loss) after taxation	1,190	184	(1,269)	(222)	-	3	(114)
Reportable segment assets	8,001	1,458	10,545	501	-	(5,260)	15,245
Reportable segment liabilities	3,479	849	4,529	1,255	-	(3,952)	6,160
Other information:
Additions to property, plant and equipment	67	129	212	3	-	(34)	377
Depreciation and amortisation	152	77	33	14	-	-	276

The segment information for the year ended 30 November 2011, is as follows:-

2011
	Software as a service	IT support services	Head office	AI Talent Ltd (Cobent Ltd)	Discontinued operations	Consolidation adjustment	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
External revenue	4,369	1,895	-	969	-	-	7,233
Internal revenue	5	15	-	-	-	(20)	-
Operating profit/(loss)	1,162	210	(803)	(656)	-	(69)	(156)
Re-allocation of exceptional costs	-	-	283	(283)	-	-	-
Internal dividend	(350)	(100)	450	-	-	-	-
Finance income	17	1	8	-	-	-	26
Finance Costs	-	-	(144)	(5)	-	-	(149)
Taxation	23	(6)	179	170	-	(178)	188
Profit from discontinued operations	-	-	-	-	2,192	-	2,192
Profit/(loss) after taxation	852	105	(27)	(774)	2,192	(247)	2,101
Reportable segment assets	6,249	1,482	11,660	481	-	(4,863)	15,009
Reportable segment liabilities	2,736	972	3,858	1,138	-	(3,393)	5,311
Other information:
Additions to property, plant and equipment	65	57	12	-	-	-	134
Depreciation and amortisation	81	37	-	21	-	69	208
Impairment of development cost	-	-	-	299	-	-	299

5.        Operating loss                                                                                              

Operating loss is stated after charging:-

	2012	2011
	£'000	£'000
Depreciation of property, plant and equipment	154	86
Amortisation of development costs	37	54
Amortisation of brand values	68	68
Amortisation of software licences	17	-
Loss on disposal of property, plant and equipment	-	1
Exceptional costs (see below)	446	633
Operating lease charges - land and buildings	398	262
Auditor's remuneration	60	68
Share based payments	36	35
Research and development and other technical expenditure	1,224	325
(a further £706k (2011: £314k) was capitalised)
Cost of inventories	400	513
Provision/(release of provision)  for receivables	50	(16)
Impairment losses and (recoveries) on trade receivables	-	(31)
The exceptional costs are made up of the following:
	2012	2011
	£'000	£'000
Compensation for loss of office - director	-	30
Compensation and notice payments - all staff	180	122
Impairment of development cost	-	299
Recruitment and temporary staff fees	213	78
Legal Costs	-	24
Legal costs on the sale and purchase agreement & lease termination	53	80
	446	633

6.         Taxation

	2012	2011
	£'000	£'000
Current income taxes (credit)/charge:
UK corporation tax credit for the year	-	-
Adjustment in respect of prior year	(10)	30
Total current income tax (credit)/charge	(10)	30
Deferred tax
Impact of change in tax rate	(11)	(10)
Origination and reversal of temporary differences	(362)	(161)
Adjustment in respect of prior year	-	(47)
Total deferred tax	(373)	(218)
Total tax credit	(383)	(188)

As shown above, the tax assessed on the loss on ordinary activities for the year is higher than (2011: higher) the standard rate of corporation tax in the UK of 24% (2011: 26%).

The differences are explained as follows:

	2012	2011
Factors affecting tax credit	£'000	£'000
Loss on ordinary activities before tax	(497)	(279)
Loss on ordinary activities by effective rate of tax  of 24.7% (2010: 26.7%)	(122)	(74)
Expenses not deductible for tax purposes and other temporary differences	22	37
Adjustment in respect of prior year	(10)	(17)
Additional R&D claim CTA 2009	(273)	(134)
Total tax credit	(383)	(188)

7.      Discontinued Operations

During the year ended 30 November 2012 there were no disposals or discontinued operations.

On 30 June 2011 the Group sold the share capital of Solcara Limited for £2,500,000 less costs and a subsequent £110,623 working capital adjustment. This company was the legal market arm of Solcara Ltd purchased by the Group in November 2008. The Spotlight and ControlPoint products had been transferred to other parts of our Group in December 2009.

	2012	2011
	£'000	£'000
Profit from discontinued operations	-	2,192
Cash used in discontinued operations	-	68
	2012	2011
Results of discontinued operation	£'000	£'000
Revenue	-	541
Expenses	-	(673)
Results from operating activities	-	(132)
Financial expense		2
Pre-tax loss of the discontinued operation	-	(130)
Related tax expense	-	-
Loss after tax of discontinued operations	-	(130)
Consideration received, satisfied in cash	-	2,610
Net assets of the Group disposed of	-	(250)
Costs directly attributable to disposal	-	(38)
Profit after tax for the period	-	2,192
Basic profit per share	-	1.0p
Diluted profit per share	-	0.8p

Effect of disposal on the financial position of the Group	2012	2011
	£'000	£'000
Property, plant and equipment	-	3
Trade and other receivables	-	153
Cash and cash equivalents	-	227
Trade and other payables	-	(191)
Accruals	-	(224)
Net liabilities at date of disposal	-	(32)
Associated goodwill disposed of	-	282
Net assets of Group disposed of	-	250

8.      Earnings per share

         The calculation of earnings per share is based upon the loss for the continuing and discontinued business after taxation of £114,000 (2011: profit of £2,101,000) divided by the weighted average number of ordinary shares in issue during the year which was 227,604,029 (2011: 251,581,201). The loss for continuing operations of the Group of £114,000 (2011: loss of £91,000). The weighted average number of ordinary shares used in the calculation of diluted earnings per share is 296,536,627 (2011: 329,197,511), taking account of the effect of potentially dilutive share options granted under the Company's share option schemes and convertible loan notes issued.

         This has been computed as follows:

		2012			2011
	Loss after tax	Weighted average no. of	Loss per share	Profit after after tax	Weighted average no. of	Earnings per share
	£'000	shares	(pence)	£'000	shares	(pence)
Continuing and discontinued operations
(Loss)/earnings
attributable to ordinary
shareholders from
continuing activities	(114)	227,604,029	(0.05)	2,101	251,581,201	0.84
Dilutive effect of options	n/a	n/a	n/a	-	35,955,351	-
Dilutive effect of loan note conversion	nn/a	n/a	n/a	-	41,660,959	-
Diluted (loss)/earnings per share for the year	(114)	227,604,029	(0.05)	2,101	329,197,511	0.64

On the 21 September 2011 29,666,667 shares were returned to the Company and were held in Treasury at the year end. Once in treasury they were removed from the earnings per share calculation.

         The total number of options and warrants granted at 30 November 2012 of 38,543,208 would generate £1,172,448 in cash if exercised. At 30 November 2012 they were all priced above the mid-market closing price of 3.03p per share.

         At the 30 November 2012 9,954,314 staff options were eligible for exercising at an average price of 3.7p. Also eligible for exercising are the 21,300,000 warrants priced at 2.75p per share held by M Jackson, D Lowe and Elderstreet VCT plc consequent to their investment in October 2008.

         The outstanding loan notes will be redeemed at par or convert to 31,250,000 shares in June 2014.

         In 2012 and 2011 potential ordinary shares from the share option schemes and convertible loan notes have an anti-dilutive effect due to the Group being in a loss position. As a result, dilutive loss per share is disclosed as the same value as basic loss per share.

9.         Intangible Fixed Assets

	Brand		Development	Software
	value	Goodwill	costs	Licences	Total
	£'000	£'000	£'000	£'000	£'000
Cost
At 1 December 2010	1,369	12,287	413	-	14,069
Capitalised during the year	-	-	314	-	314
Disposal of subsidiary	-	(282)		-	(282)
At 30 November 2011	1,369	12,005	727	-	14,101
At 1 December 2011	1,369	12,005	727	-	14,101
Capitalised during the year	-	-	706	132	838
Disposal of subsidiary	-	-	-	-	-
At 30 November 2012	1,369	12,005	1,433	132	14,939
Amortisation and impairment
At 1 December 2010	-	5,550	-	-	5,550
Amortisation in year	68	-	54	-	122
Impairment  in year	-	-	299	-	299
At 30 November 2011	68	5,550	353	-	5,971
At 1 December 2011	68	5,550	353	-	5,971
Amortisation in year	68	-	37	17	122
Impairment in year	-	-	-	-	-
At 30 November 2012	136	5,550	390	17	6,093
Net Book Value
At 30 November 2012	1,233	6,455	1,043	115	8,846
At 30 November 2011	1,301	6,455	374	-	8,130

10.        AGM date

It is intended that the AGM will take place at the company's registered office, 32 Bedford Row, London, WC1R 4HE, at 2.30 pm on Monday, 22^nd April 2013.

 

END

 

 

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