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GB Group PLC (GBG)

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Tuesday 02 June, 2009

GB Group PLC

Final Results

RNS Number : 1644T
GB Group PLC
02 June 2009
 



Embargoed until 07.00

2 June 2009



GB GROUP PLC 

('GB' or the 'Group')


Annual Results Announcement for the Year Ended 31 March 2009



GB Group Plc, the identity management specialists, is pleased today to announce its annual results for year ended 31st March 2009.


Highlights


  • Pre-tax profits increased by £1.8 million to £1.4 million (2008: £0.4 million loss). Profit before tax and share-based payments increased to £1.7 million (2008: £0.2 million loss), in line with expectations.


  • Group revenue in the year increased by 23% to £23.8 million (2008: £19.4 million) driven by growth across all areas of the business. 


  • Revenue in DataAuthentication, GB's identity verification business, increased by 56% to £11.7 million (2008: £7.5 million). 


  • DataIntegrity and DataSolutions, providers of identity based marketing services, generated increased revenues of £12.1 million (2008: £11.9 million). 


  • Cash balances at the year-end of £4.5 million (2008: £4.3 million) after payment of a dividend of £845,000 during the year.


  • 15% increase in the level of dividend to 1.15p per share (2008: 1.00p) to be recommended to shareholders at the forthcoming AGM.


  • Revenue in the current year to date of £3.4 million was approximately £0.4 million below that of last year, however, the same period last year included a one-off settlement of licence arrears of £0.35 million.


Commenting, Richard Law, CEO, said: 


'GB made excellent progress in the year ending 31 March 2009 and, despite more subdued market conditions, we continue to demonstrate leadership in the emerging market for identity management. We believe that identity management is a fundamental enabler of online business and, accordingly, represents an exceptional opportunity for the Group.'  



For further information, please contact:


GB Group plc

01244 657333

Richard Law, Chief Executive

Dave Wilson, Finance Director




Weber Shandwick Financial 

Nick Oborne

Clare Perks 

Katie Matthews

020 7067 0700



Website

www.gb.co.uk


Notes to Editors


About GB Group plc


The most successful organisations recognise the value of understanding your individual identity - who you are, what you need and what you like. GB combines this concept of identity with technology to create an environment of trust so that organisations can connect, communicate and transact with consumers safely, responsibly and profitably. We call this identity management.


GB Group has three complementary identity management offerings:


  • Identity Verification - combating ID fraud, money laundering and under-age gambling 

  • Identity Capture and Maintenance - providing accurate and up-to-date customer information for your contact strategy 

  • Identity Analysis - understanding, targeting and retaining profitable customers 


This enables our clients to make informed business decisions based on a thorough knowledge of consumer identity and behaviour, leading to more effective communication and interaction with the customer.


GB is listed on the London Stock Exchange (GBG). For more information, please visit GB's website: www.gb.co.uk


GB Group - because identity matters™  



CHAIRMAN'S STATEMENT

This was a year of strong performance for the Group and, against a backdrop of increasingly difficult economic conditions, revenue grew by 23% and the business completed the transition into full year profitability.


Since 2003, GB has developed from a traditional marketing services business into one that is now focused on being a leading identity management business. GB addresses how businesses verify and manage the identity of their customers online, not only to minimise fraud and regulatory risk, but also to enable them to develop relationships with those customers and maximise their revenue opportunities.


Our established UK leadership in the electronic age and identity verification market with URU™, our joint business with BT plc, along with our international ID verification service, ID3 Check™, can now be linked with our other complementary identity management services, developed from our traditional marketing services businesses, to provide integrated solutions. This allows our clients accurately to capture, verify and maintain identity details of their customers as well as to analyse aspects of an individual's identity in order to understand, target and retain their most profitable customers.


The Group is well placed to respond to the continuing shift in purchasing behaviour as consumers spend increasing amounts of time and money purchasing online as their confidence and familiarity in doing business over the internet increases. Within this environment, the traditional use of documents to verify age and identity is not practical or time or cost efficient. Accordingly, our growth prospects are linked to an increasing need for businesses to verify and manage their customers online and we believe that a new industry sector of 'Identity Management' is emerging to address this need.  


Given the underlying momentum of the business and the strength of GB's balance sheet - no debt and £4.5 million in cash - the Board is recommending a 15% increase in the level of the ordinary dividend to 1.15p per share (2008: 1.0p per share). This dividend will be proposed at the AGM in July.  


Our people remain a key ingredient to our success in managing our opportunities and challenges and, on behalf of the Board, I would like to thank the GB team, led by Richard Law, for their achievements this past year, their continuing commitment and their drive to succeed.



J L Walker-Haworth

Chairman



CHIEF EXECUTIVE'S REVIEW


Overview

The Group performed well and made good progress during the year. Significant revenue growth was achieved which enabled GB to generate a creditable full year profit. Through the execution of our strategy to align all of our products and services with Identity Management and to develop them simultaneously to operate in the online environment, we have successfully positioned the Group to benefit from the continuing move to doing business online.


Group revenue increased year-on-year by 23% to £23.8 million (2008: £19.4 million) and the full year pre-tax profits increased by £1.8 million to £1.4 million (2008: £0.4 million loss). Group profit before tax and share-based payments increased to £1.7 million (2008: £0.2 million loss). The Group has now been profitable for the last six consecutive quarters. These reported results are in line with those indicated in the trading update issued on 21 April 2009.


Throughout the second half of the year being reported on, and in the current year to date, levels of consumer activity, on which our transactional services are based, have moderated somewhat. During April and May 2009, the Group's underlying level of business was slightly lower than that of the previous year. Revenue in the current year to date of £3.4 million was approximately £0.4 million below that of last year, however, the same period last year included a one-off settlement of licence arrears of £0.35 million.


Cash balances at the end of the year remained strong at £4.5 million (2008: £4.3 million).


DataAuthentication

GB continues to lead the market for electronic age and identity verification with its URU and ID3 Check services.


In the year to 31 March 2009, our DataAuthentication business recorded a 56% increase in its revenues to £11.7 million (2008: £7.5 million) with growth coming from new clients and increased volume usage by existing clients. Lower levels of consumer activity in the economy experienced from October 2008 onwards moderated our growth in the second half of the year and in the current year to date, overall activity remains slightly behind that of last year.


Our strategy for the DataAuthentication business continues to be to grow the client and usage base for both its URU and ID3 Check services across our core sectors of Financial Services, Mobile Telecoms and Online Gaming where our presence is well established. We continue to target the Online Retail sector where, as an example of an area where our services can assist our clients, the underage purchase of age restricted or regulated products (such as alcohol) over the internet remains a problem for businesses. There has recently been a second reading in the House of Lords of a private members bill which, if enacted, would make it a requirement for online retailers to verify whether a person buying goods or services meets the legal minimum age, in a similar way that online gaming companies are required to verify the age of their subscribers. Developments in this and other evolving markets look promising as regulation increases.  


Our international verification service, ID3 Check, has seen growth over the course of the year which we expect to continue in the future with increases in the breadth and depth of identity-based data accessible through the service. Our recent announcement of a strategic partnership with SCHUFA, enabling GB to offer the highest possible level of identity verification for clients wishing to engage in business in Germany, is an example of this development.


Identity Based Marketing Services

During the year, GB's DataSolutions and DataIntegrity activities were combined to enable them to achieve both operational and strategic synergies. Strategically, the combined business is now firmly aligned with the Identity Management market and customer identity is now at the core of all GB's products and services. The combined business, which took the name of DataSolutions, generated revenues of £12.1 million in the year (2008: £11.9 million) and increased its profitability through cost and operational synergies.


During the year, an increasing proportion of revenue came from services newly developed to operate in the online environment. Our strategy is to continue this trend by increasingly integrating the identity based marketing services of this business with the identity verification services provided by DataAuthentication, thereby enabling our clients to effectively manage the identity of their customers throughout their lifecycle.  


In the current year-to-date, revenues are slightly lower than the same period last year although last year's revenue did include a non-recurring amount of £0.35 million in relation to a one-off licence settlement. After adjusting for this, revenue has increased marginally.


Outlook

GB made excellent progress in the year ending 31 March 2009 and, despite more subdued market conditions, we continue to demonstrate leadership in the emerging market for identity management. We believe that identity management is a fundamental enabler of online business and, accordingly, represents an exceptional opportunity for the Group.



R A Law

Chief Executive



BUSINESS AND FINANCIAL REVIEW



The Group's Business

The most successful organisations recognise the value of understanding your individual identity - who you are, what you need and what you like.  GB combines this concept of identity with technology to create an environment of trust so that organisations can connect, communicate and transact with consumers safely, responsibly and profitably. We call this Identity Management.


The Group's principal business activities utilise the same assets and resources and correspond to three complementary identity management offerings:


  • Identity Verification - combating ID fraud, money laundering and under-age gambling 

  • Identity Capture and Maintenance - providing accurate and up-to-date customer information for your contact strategy 

  • Identity Analysis - understanding, targeting and retaining profitable customers 


This enables our clients to make informed business decisions based on a thorough knowledge of consumer identity and behaviour, leading to more effective communication and interaction with the customer.


Group Vision, Objectives and Strategy

The Group's vision is to be the recognised leader in the field of identity management, a fundamental enabler of online business.

 

The Group's strategy continues to be to create and maintain unique online products and products and services which provide additional value for clients and that are of sufficient strength to enable the Group to create new markets and to consistently win new business against our competition. The Group achieves this through its investment in people and business development opportunities and the application of innovation, quality and excellence in everything it does.


Group Overview


The year ended 31 March 2009 was significant in terms of the return to profitability for the Group following a period of investment in developing the opportunities for DataAuthentication in the rapidly growing market for electronic ID verification.

 

The following table sets out the results of the Group for the year ended 31 March 2009.




Years ended 31 March



2009


2008




£'000



£'000






Revenue


23,799


19,365






Operating profit/(loss) before share based payments


1,479


(455)






Operating profit/(loss)


1,205


(680)






Finance revenue


184


242






Profit/(loss) before tax


1,389


(438)






Income tax credit


111


40






Profit/(loss) for the financial year


1,500


(398)



2009 Financial Year Compared to 2008 Financial Year

In the year to 31 March 2009, revenue for the Group increased 23% to £23.4 million (2008: £19.4 million) resulting from strong growth in DataAuthentication.  Profitability increased significantly with profits before taxation of £1.4 million compared to a loss of £0.4 million in the previous year.


Explanations of the significant items in the Income Statement during the year are as follows:


Revenue

Revenue for the Group showed strong growth as a result of increased DataAuthentication revenues. Revenues from DataAuthentication grew by 56% to £11.7 million (2008: £7.5 million) and combined revenues from DataIntegrity and DataSolutions were £12.1 million (2008: £11.9 million) including the settlement of licence arrears in the year of £350,000.


Gross Profit and Cost of Sales

Group gross profit margins were 51% compared to 49% for the year to 31 March 2008.


Other Operating Expenses

Other operating expenses were £10.7 million (2008: £10.2 million) with the increase principally as a result of further levels of investment in areas of sales, marketing and development for the DataAuthentication business area.


Exceptional Items

Exceptional items totalled £94,000 (2008: £nil). This related to final salary payments following a staff reorganisation.


Group Profit/(Loss)

The Group generated an operating profit of £1.2 million (2008: £0.6 million loss) and finance revenue earned during the year was £0.2 million (2008: £0.2 million) resulting in a profit before tax of £1.4 million (2008: £0.4 million loss).


Taxation

The current tax credit of £111,000 (2008: £40,000 credit) reflects the recognition of an increased deferred tax asset relating to decelerated capital allowances and tax losses, partially offset by current tax.


Dividend

The Board of Directors will propose a final ordinary dividend of 1.15 pence per share, amounting to £981,000 (2008: £845,000). The final ordinary dividend with respect to the year ended 31 March 2009, if approved, will be paid on 13 August 2009 to ordinary shareholders whose names were on the register on 17 July 2009.


Amounts Transferred To/(From) Reserves

The amount transferred to reserves is £929,000 (2008: £805,000 transfer from reserves) after accounting for the previous year's dividend of £845,000 (2008: £632,000) which was paid during the year ended 31 March 2009.


Balance Sheet and Liquidity

Explanations of the most significant items in the Balance Sheet during the year are as follows:


Property, Plant and Equipment

The amount invested in property, plant and equipment during the year was £353,000 (2008: £220,000).


Intangible Assets

The carrying value of goodwill at 31 March 2009 was £6.5 million (2008: £6.5 million). The carrying value of product development costs capitalised in accordance with IAS 38 'Intangible Assets' was £85,000 (2008: £136,000). Intangible assets are tested annually for impairment and no impairment was required.


Trade and Other Receivables

The value of trade and other receivables increased by £0.8 million to £6.1 million at 31 March 2009, compared to the same date last year. This was principally due to an increase in the level of trade receivables as a result of higher revenues.


Cash Flows

Cash and cash equivalents increased by £0.2 million (2008: £0.9 million decreaseafter taking into account the investment in fixed assets and dividend paid. Further analysis of this movement is included in the Consolidated Cashflow Statement.


Cash and Cash Equivalents

At 31 March 2009, the Group held cash and short-term deposit balances of £4.5 million (2008: £4.3 million) and in accordance with the Group's treasury policy, all funds are placed with major UK clearing banks and building societies.


Trade and Other Payables

The value of trade and other payables has decreased by £0.1 million to £6.4 million (2008: £6.5 million) at 31 March 2009, compared to the same date last year.


The value of deferred income at 31 March 2009 was £0.8 million (2008: £1.0 million).


Key Performance Indicators

The Board monitor the Group's progress against its strategic objectives and the financial performance of the Group's operations on a regular basis. Performance is assessed against the strategy and budgets using financial and non-financial measures.


The following details some of the principal Key Performance Indicators (KPIs) used by the Group, their purpose, the basis of calculation and the source of the underlying data. A summary of performance against these KPIs is given below.


  • Financial

The Group uses the following primary measures to assess the performance of the Group and its propositions.


  • Revenue (Group and DataAuthentication)

Revenue and revenue growth are used for internal performance analysis and by investors to assess progress against outlook statements in the market.


  • Operating result

Operating result and profit growth is used by the Group for internal performance analysis and by investors to assess progress against outlook statements in the market.


  • Earnings per share

               Earnings per share is calculated as basic earnings per share from continuing operations.


  • Cash

Cash and cash equivalent balances are used by the Group for internal performance analysis and by investors to assess progress against outlook statements.


  • Customers

    • DataAuthentication Live Client Numbers

Client based KPIs for the rapidly growing DataAuthentication market are important measures for internal performance analysis and management also believes that it provides useful information for investors regarding the success of the Group's customer acquisition activities. The data used to calculate the KPI is derived from the Group's billing and financial systems for those contracted clients who have begun utilising the services.


  • Transaction Based

    • Underlying Identity Verifications

Management believe that DataAuthentication transaction-based measures provide useful information for investors regarding trends in client revenue derived from electronic identity verification services and the extent to which clients have adopted the service. The data used to calculate this KPI is extracted from the Group's billing and financial systems. Underlying identity verifications is the total number of verifications on the Group's URU™ and ID3-Check™ systems and excludes one-off batch verifications.



Performance Against KPIs

A summary of the Group's progress in achieving its objectives, as measured against KPIs, is set out below.



Years ended 31 March


2009


2008





Revenue Growth

23%


30%





Operating Profit/(Loss) Growth

277%


55%





Earnings/(Loss) Per Share

1.8p


(0.5)p





Cash (£'000)

4,504


4,309





DataAuthentication Revenue Growth

56%


57%





DataAuthentication Live Customer Numbers

258


223





Underlying Identity Verifications

9,334,531


5,564,920



Principal Risks and Uncertainties

Management use a model to identify and assess the impact of risks to the business under four key headings - financial, strategic, operational and knowledge. For each risk, the likelihood and consequence are identified, management controls are confirmed and results reported. The corporate governance report on page in the Annual Report describes more about the Group's risk management process. The more significant risks and uncertainties faced by the Group are set out below:


  • Regulatory risk: legislation in all the markets we serve changes on a regular basis, and interpretation of existing laws can also change to create ever tightening standards, often requiring additional human and financial resources and the provision of new assets and systems. Whilst the Group is committed to respond positively to new regulation and legislation, changes could affect the pricing for, or adversely affect the revenue from, the services the Group offers.

  • Competitive position: the Group operates in competitive markets and intensified competition could lead to a reduction in the rate at which the Group adds new customers and to a decrease in the size of the Group's market share if clients chose to receive services from other providers.

  • Non-supply by major supplier: the Group sources some of its data and infrastructure from third party suppliers and partners. The removal from the market of one or more of these third party suppliers or interruption in supply could quickly affect the Group's operations adversely and could result in loss of revenue or additional expenditure for the Group.

  • Disaster recovery and business continuity: the Group has an understandable reliance on its place of business, IT systems and people and currently operates from a single site. The loss of key components could affect the Group's operations and result in additional expenditure whilst the established business continuity plan is effected following an incident.



Relationships

Other than our shareholders, the Group's performance and value are influenced by other stakeholders, principally our customers, suppliers, employees and our strategic partners. Relationships are managed both on an individual basis and via representative groups. The Group participates in industry groups which give a genuine access to client and supplier groups and decision makers in government and other regulatory bodies.


Treasury Policy and Financial Risk

The Group's treasury operation is managed within formally defined policies which are reviewed by the Board. The Group finances its activities with cash and short-term deposits. Other financial assets and liabilities, such as trade receivables and trade payables, arise directly from the Group's operating activities. Surplus funds of the Group are invested through the use of short-term deposits with the objective of maximising fixed interest rate returns whilst still providing the flexibility to fund on-going operations when required. It is not the Group's policy to engage in speculative activity or to use complex financial instruments.



CONSOLIDATED INCOME STATEMENT

Year ended 31 March 2009





2009


2008




£'000



£'000


Note









Revenue





  - excluding exceptional item

3

23,449


19,365

  - exceptional item

3

350


-


3

23,799


19,365






Cost of sales


(11,768)


(9,893)






Gross profit


12,031


9,472






Other operating expenses excluding exceptional items


(10,732)


(10,152)






Exceptional items

5

(94)


-






Operating profit/(loss)


1,205


(680)






Finance revenue


184


242






Profit/(loss) before tax


1,389


(438)






Income tax credit


111


40






Profit/(loss) for the year attributable to equity holders of the parent


1,500


(398)
















Earnings/(loss) per share


7




  - basic earnings/(loss) per share for the year


1.8p


(0.5)p






  - diluted earnings/(loss) per share for the year


1.8p


(0.5)p












































CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Year ended 31 March 2009








Equity

share 

capital


Merger reserve


Capital redemption reserve


Retained earnings


Total

equity




£'000


£'000


£'000


£'000


£'000













Balance at 1 April 2007



5,617


6,575


3


(223)


11,972













Loss for the period



-


-


-


(398)


(398)













Total recognised income and expense for the period



-


-


-


(398)


(398)













Exercise of options



66


-


-


-


66













Cost of share-based payments



-


-


-


225


225













Equity dividend



-


-


-


(632)


(632)













Balance at 31 March 2008



5,683


6,575


3


(1,028)


11,233













Profit for the period



-


-


-


1,500


1,500













Total recognised income and expense for the period



-


-


-


1,500


1,500













Exercise of options



184


-


-


-


184













Cost of share-based payments



-


-


-


274


274













Equity dividend



-


-


-


(845)


(845)













Balance at 31 March 2009



5,867


6,575


3


(99)


12,346



COMPANY STATEMENT OF CHANGES IN EQUITY

Year ended 31 March 2009








Equity

share 

capital


Merger reserve


Capital redemption reserve


Retained earnings


Total

Equity




£'000


£'000


£'000


£'000


£'000













Balance at 1 April 2007



5,617


6,575


3


2,093


14,288













Loss for the period



-


-


-


(398)


(398)













Total recognised income and expense for the period



-


-


-


(398)


(398)













Exercise of options



66


-


-


-


66













Cost of share-based payments



-


-


-


225


225













Equity dividend



-


-


-


(632)


(632)













Balance at 31 March 2008



5,683


6,575


3


1,288


13,549













Profit for the period



-


-


-


1,483


1,483













Total recognised income and expense for the period



-


-


-


1,483


1,483













Exercise of options



184


-


-


-


184













Cost of share-based payments



-


-


-


274


274













Equity dividend



-


-


-


(845)


(845)













Balance at 31 March 2009



5,867


6,575


3


2,200


14,645



CONSOLIDATED BALANCE SHEET

As at 31 March 2009



Note


2009


2008





£'000



£'000







ASSETS












Non-current assets












Property, plant and equipment

8


983


987

Intangible assets



6,600


6,642

Deferred tax asset



563


400
















8,146


8,029







Current assets












Trade and other receivables



6,145


5,351

Cash and short-term deposits



4,504


4,309










10,649


9,660







TOTAL ASSETS



18,795


17,689













EQUITY AND LIABILITIES












Capital and reserves 












Equity share capital

10


5,867


5,683

Merger reserve



6,575


6,575

Capital redemption reserve



3


3

Retained earnings



(99)


(1,028)













Total equity attributable to equity holders of the parent



12,346


11,233













Current liabilities












Trade and other payables



6,345


6,456

Current tax



52


-

Provisions



52


-










6,449


6,456







TOTAL LIABILITIES



6,449


6,456







TOTAL EQUITY AND LIABILITIES



18,795


17,689

                



COMPANY BALANCE SHEET

As at 31 March 2009



Note


2009


2008





£'000



£'000

ASSETS












Non-current assets












Property, plant and equipment

8


983


987

Intangible assets

9


94


136

Investments



9,317


9,317

Deferred tax asset



563


400










10,957


10,840







Current assets












Trade and other receivables



6,145


5,367

Cash and short-term deposits



4,504


4,309










10,649


9,676







TOTAL ASSETS



21,606


20,516













EQUITY AND LIABILITIES












Capital and reserves 












Equity share capital

10


5,867


5,683

Merger reserve



6,575


6,575

Capital redemption reserve



3


3

Retained earnings



2,200


1,288













Total equity



14,645


13,549













Current liabilities












Trade and other payables



6,857


6,967

Current tax



52


-

Provisions



52


-










6,961


6,967







TOTAL LIABILITIES



6,961


6,967







TOTAL EQUITY AND LIABILITIES



21,606


20,516




CONSOLIDATED CASH FLOW STATEMENT 

Year ended 31 March 2009



Note


2009


2008





£'000



£'000







Group profit/(loss) before tax



1,389


(438)







Adjustments to reconcile Group profit/(loss) before tax to net cash flows












Interest income



(184)


(242)

Depreciation of property, plant and equipment

8


357


341

Amortisation of intangible fixed assets

9


69


69

Share-based payments

11


274


225

Increase in trade and other receivables



(794)


(1,599)

(Decrease)/increase in trade and other payables



(111)


1,327

Increase in provisions



52


-







Net cash generated from/(used in) operating activities



1,052


(317)













Cash flows from investing activities












Purchase of property, plant and equipment



(353)


(220)







Expenditure on product development



(27)


(43)







Interest received



184


242







Net cash flows used in investing activities



(196)


(21)













Cash flows from financing activities












Proceeds from issue of shares



184


66







Dividends paid to equity shareholders



(845)


(632)







Net cash flows used in financing activities



(661)


(566)













Net increase/(decrease) in cash and cash equivalents



195


(904)

Cash and cash equivalents at the beginning of the period 



4,309


5,213







Cash and cash equivalents at the end of the period



4,504


4,309









COMPANY CASH FLOW STATEMENT 

Year ended 31 March 2009



Note


2009


2008





£'000



£'000







Company profit/(loss) before tax



1,372


(438)







Adjustments to reconcile Group loss before tax to net cash flows












Interest income



(184)


(242)

Depreciation of property, plant and equipment

8


357


341

Amortisation of intangible fixed assets

9


69


69

Share-based payments

11


274


225

Increase in trade and other receivables



(778)


(1,599)

(Decrease)/increase in trade and other payables



(110)


1,327

Increase in provisions



52


-







Net cash generated from/(used in) operating activities



1,052


(317)













Cash flows from investing activities












Purchase of property, plant and equipment



(353)


(220)







Expenditure on product development



(27)


(43)







Interest received



184


242







Net cash flows used in investing activities



(196)


(21)













Cash flows from financing activities












Proceeds from issue of shares



184


66







Dividends paid to equity shareholders



(845)


(632)







Net cash flows used in financing activities



(661)


(566)













Net increase/(decrease) in cash and cash equivalents



195


(904)

Cash and cash equivalents at the beginning of the period 



4,309


5,213







Cash and cash equivalents at the end of the period



4,504


4,309








NOTES TO THE ACCOUNTS


1.  CORPOARATE INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRSs


GB Group plc is a public limited company incorporated and domiciled in England & Wales. The Company's ordinary shares are traded on the London Stock Exchange.


The Group and Company's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union as they apply to the financial statements of the Group and Company for the year ended 31 March 2009.



2. ACCOUNTING POLICIES


Basis of Preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSsas adopted by the European Union and IFRIC interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.  A summary of the significant accounting policies is set out below.


The Group and Company financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.


Basis of Consolidation

The Group financial statements consolidate the financial statements of GB Group plc and its subsidiary undertakings drawn up to 31 March each year.



3. REVENUE


Revenue disclosed in the Income Statement is analysed as follows:


2009


2008


£'000


£'000





Sale of goods

6,277


6,121

Rendering of services

17,172


13,244

Exceptional item

350


-

Revenue

23,799


19,365





Finance revenue

184


242

Total revenue

23,983


19,607


The £350,000 exceptional item is related to back-dated revenues which resulted from a licence dispute that was settled on 28 May 2008.



4. SEGMENTAL INFORMATION


All of the revenue, profits/(losses), operating assets and liabilities relate to the Group's principal business activities, all of which are continuing, being the development, sale and support of business application software, the provision of marketing database and anti-fraud services and the licensing of technology.  This represents a single segment.  Revenue is stated net of value added tax. Revenue and operating profit/(loss) arise principally in the United Kingdom.



5. EXCEPTIONAL ITEMS



2009


2008


£'000


£'000

Recognised in arriving at the operating profit:




Reorganisation costs

94


-


94


-


Reorganisation costs relate to final salary payments following a staff reorganisation.



6. DIVIDENDS PAID AND PROPOSED







2009

£'000


2008

£'000










Declared and paid during the year









Final dividend for 20081.00p (2007: 0.75p)






845


632



















Proposed for approval at AGM (not recognised as a liability at 31 March)







Final dividend for 20091.15p (20081.00p)






981


845











7. EARNINGS/LOSS) PER ORDINARY SHARE


Basic

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to equity holders of the Company by the basic weighted average number of ordinary shares in issue during the year.




2009

pence per

share


2009

£'000


2008

pence per

share


2008

£'000










Profit/(loss) attributable to equity holders of the parent


1.8


1,500


(0.5)


(398)











Diluted

Diluted earnings/(loss) per share amounts are calculated by dividing the profit/(loss) for the year attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 




2009


2008



No.


No.






Basic weighted average number of shares in issue


84,979,900


84,264,385

Dilutive effect of share options


780,546


-

Diluted weighted average number of shares in issue


85,760,446


84,264,385





2009

pence per

share


2009

£'000


2008

pence per

share


2008

£'000










Profit/(loss) attributable to equity holders of the Company


1.8


1,500


(0.5)


(398)












8. PROPERTY, PLANT AND EQUIPMENT


Group and Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Plant and equipment
 
 
 
 
 
 
 
£’000
Cost
 
 
 
 
 
 
 
At 1 April 2007
 
 
 
 
 
 
1,976
Additions
 
 
 
 
 
 
220
At 31 March 2008
 
 
 
 
 
 
2,196
 
 
 
 
 
 
 
 
Additions
 
 
 
 
 
 
353
Disposals
 
 
 
 
 
 
(7)
At 31 March 2009
 
 
 
 
 
 
2,542
 
 
 
 
 
 
 
 
Depreciation and impairment
 
 
 
 
 
 
 
At 1 April 2007
 
 
 
 
 
 
868
Provided during the year
 
 
 
 
 
 
341
At 31 March 2008
 
 
 
 
 
 
1,209
 
 
 
 
 
 
 
 
Provided during the year
 
 
 
 
 
 
357
Disposals
 
 
 
 
 
 
(7)
At 31 March 2009
 
 
 
 
 
 
1,559
 
 
 
 
 
 
 
 
Net book value
 
 
 
 
 
 
 
At 31 March 2009
 
 
 
 
 
 
983
 
 
 
 
 
 
 
 
At 31 March 2008
 
 
 
 
 
 
987
 
 
 
 
 
 
 
 
At 1 April 2007
 
 
 
 
 
 
1,108

 

 


The net book value in respect of assets held under finance leases and hire purchase agreements is £nil (2008: £nil).



9. INTANGIBLE ASSETS


Group

Development costs

£'000


Goodwill


£'000


Total


£'000







Cost






At 1 April 2007

172


6,506


6,678

Additions - product development 

43


-


43

At 31 March 2008

215


6,506


6,721







Additions - product development

27


-


27

At 31 March 2009

242


6,506


6,748













Amortisation and impairment






At 1 April 2007

10


-


10

Amortisation during the year

69


-


69

At 31 March 2008

79


-


79







Amortisation during the year

69


-


69

At 31 March 2009

148


-


148







Net book value






At 31 March 2009

94


6,506


6,600







At 31 March 2008

136


6,506


6,642







At 1 April 2007

162


6,506


6,668








Goodwill arose on the acquisition of GB Mailing Systems Limited and e-Ware Interactive Limited.  From 1 April 2004, goodwill is no longer amortised and is annually tested for impairment (see note 15).


Company

Development costs

£'000


Total


£'000





Cost




At 1 April 2007

172


172

Additions - product development

43


43

At 31 March 2008

215


215





Additions - product development

27


-

At 31 March 2009

242


242









Amortisation and impairment




At 1 April 2007

10


10

Amortisation during the year

69


69

At 31 March 2008

79


79





Amortisation during the year

69


69

At 31 March 2009

148


148





Net book value




At 31 March 2009

94


94





At 31 March 2008

136


136





At 1 April 2007

162


162







10.    EQUITY SHARE CAPITAL







2009


2008






£'000


£'000


Authorised
















93,609,520 (2008: 93,609,520) ordinary shares of 2.5p each 




2,340


2,340


















Issued and fully paid









Allotted, called up and fully paid





2,133



2,112


Share premium




3,734


3,571






5,867


5,683






















2009


2008






No.


No.










Number of shares in issue at 1 April




84,451,382


83,742,748


Issued on exercise of share options




862,860


708,634



Number of shares in issue at 31 March





85,314,242



84,451,382



11. SHARE-BASED PAYMENTS


Group and Company


The Group operates Executive Share Option Schemes under which executive directors, managers and staff of the Company are granted options over shares.

 

Executive Share Option Scheme

Options are granted to executive directors and employees on the basis of their performance. Options are granted at the full market value of the Company's shares at the time of grant and are exercisable between three and ten years from the date of grant. The options vest when the Company's earnings per share growth is greater than the growth of the Retail Prices Index (RPI) over a 3 year period prior to the exercise date. There are no cash settlement alternatives.



Executive Share Option Scheme (Section C Scheme)

Options are granted to executive directors and employees on the basis of their performance. Options are granted at the full market value of the Company's shares at the time of grant and are exercisable between three and ten years from the date of grant. The percentage of an option that will vest and be capable of exercise will depend on the performance of the Company.  A minimum of 50 per cent. of the options will vest when the Total Shareholder Return (TSR) performance of the Company, as compared to the TSR of the FTSE Computer and CPU Services Sub-Sector over a three-year period, matches or exceeds the median company. The percentage of shares subject to an option in respect of which that option becomes capable of exercise will then increase on a sliding scale so that the option will become exercisable in full if top quartile performance is achieved.


GB Sharesave Scheme

The Group has a savings-related share option plan, under which employees save on a monthly basis, over a three or five year period, towards the purchase of shares at a fixed price determined when the option is granted. This price is usually set at a 20% discount to the market price at the time of grant. The option must be exercised within six months of maturity of the savings contract, otherwise it lapses.


The expense recognised from equity-settled share-based payments in respect of employee services received during the year is £274,000 (2008: £225,000).


The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year.



2009

No.


2009

WAEP


2008

No.


2008

WAEP









Outstanding as at 1 April

8,744,601


28.62p


8,676,487


27.45p

Granted during the year

1,999,931


31.13p


1,878,439


28.24p

Forfeited during the year

(438,647)


33.55p


(738,950)


31.58p

Cancelled during the year

(117,640)


26.54p


(252,741)


27.62p

Exercised during the year

(863,310)


21.28p2


(708,634)


9.08p3

Expired during the year

(85,000)


31.50p


(110,000)


36.84p

Outstanding at 31 March

9,239,935


29.61p


8,744,601


28.62p









Exercisable at 31 March

4,313,166


28.50p


3,070,832


26.12p


1 Included within this balance are options over 551,176 (2008676,176) shares that have not been recognised in accordance with IFRS 2 as the options were granted on or before 7 November 2002. These options have not been subsequently modified and therefore do not need to be accounted for in accordance with IFRS 2.


2 The weighted average share price at the date of exercise for the options exercised is 32.36p


3 The weighted average share price at the date of exercise for the options exercised is 31.62p


For the shares outstanding as at 31 March 2009, the weighted average remaining contractual life is 5.3 years (2008: 5.2 years).

The weighted average fair value of options granted during the year was 10.23p (200810.60p). The range of exercise prices for options outstanding at the end of the year was 11.75p - 100.50p (200811.60p - 100.50p).



12. RELATED PARTY TRANSACTIONS


Compensation of key management personnel (including directors)


 
Group & Company
 

 
 
 
2009
 
2008
 
 
 
£’000
 
£’000
 
 
 
 
 
 
Short-term employee benefits
 
416
 
579
Post-employment benefits
 
38
 
44
Share-based payments
 
11
 
5
 
 
 
 
 
 
 
 
465
 
628
 
 

 


RESPONSIBILITY STATEMENT BY MANAGEMENT


We confirm that to the best of our knowledge:

 

a.   the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities,  financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and

b.   the Annual Results Announcement includes a fair review of the development, performance and position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that it faces.



By order of the Board



R A Law

Director



OTHER INFORMATION


(i)

The above financial information, which is unaudited, does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the year ended 31 March 2009 has been extracted from the draft statutory accounts on which an unqualified audit opinion has been issued. Statutory accounts for the year ended 31 March 2009 will be delivered to the Registrar in due course. The annual results announcement is prepared on the same basis as set out in the previous year's statutory accounts. Those accounts, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies.


(ii)

The annual results announcement was approved by the Board of Directors of GB Group plc on 1 June 2009.


(iii)

The ex-dividend date is 15 July 2009; the record date is 17 July 2009; the payment date is 13 August 2009.


(iv)

The AGM will take place on 30 July 2009.


(v)

The 2009 interim results announcement is expected to be on 24 November 2009.


(vi)

This report will also be available on the GB Group web site: www.gb.co.uk from 2 June 2009.


(vii)

The Company intends to dispatch to shareholders printed copies of the full annual report and accounts for the year to 31 March 2009 by 30 June 2009.





This information is provided by RNS
The company news service from the London Stock Exchange
 
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