RNS Number:3951Z
CybIT Holdings PLC
02 July 2007
Cybit Holdings PLC - Preliminary Results
Cybit Holdings Plc, ("Cybit") the innovative Telematics Service Provider, today
announces its preliminary results for the year ended 31 March 2007.
Audited Audited
year ended year ended
31 March 2007 31 March 2006
#'000 #'000
Turnover 13,289 10,190
EBITDA 2,345 1,770
Operating profit 1,718 1,338
Profit before taxation 613 200
Cash 2,120 2,693
Key Achievements
*Two key acquisitions in the year
*30% increase in turnover
*306% increase in profit before taxation
*200% increase in the number of corporate customers through organic growth
and acquisition activity
*256% increase in monthly free cash flow
*Telematics related forward revenue stream across the business now
represents approximately #5 million of future profit which will be
recognised over the next three to five years
Neil Johnson, Non Executive Chairman commented:
" We are delighted to announce an excellent set of results. Trading during the
period has been strong and we have successfully integrated two important
acquisitions. This has improved both the scale and international footprint of
our operations. It has also strengthened our product portfolio and broadened our
customer base.
" The telematics market is extremely dynamic. Companies increasingly appreciate
the significant cost savings and operational efficiencies that telematics based
fleet management solutions can offer. In the UK, we are winning new contracts
across a broad spectrum of the market from large corporate clients to small
businesses.
" Looking forward, the future is positive. We have established a solid platform
from which we can significantly increase the scale of the business. We remain
alert to acquisition opportunities and we have the resources and experience to
move quickly when appropriate.
" Current trading is strong and we are confident that we will continue to make
good progress during the year."
-ends-
Date: 2 July 2007
For further information please contact:
Cybit Holdings Plc cityPROFILE KBC Peel Hunt Ltd
Richard Horsman, Simon Courtenay Richard Kauffer
Chief Executive William Attwell 020-7418-8900
Kevin Lawrence, 020-7448-3244
Finance Director
01480 389100
CHAIRMAN'S STATEMENT
Overview
I am delighted to report an excellent set of results. This has been an exciting
year for the group and we have continued to build a solid platform from which we
intend to drive the growth of the business over the medium term. We completed
two important acquisitions during the year. Both have strengthened the
visibility of our future revenue streams and helped to diversify our customer
base. These transactions have also enabled us to expand our overseas client base
within both the corporate and government sectors. Cybit has now established
itself firmly as a consolidator in the UK and European markets. There is
excellent potential for further local and international growth.
The acquisitions, together with the organic growth driven from within the
business, have positioned Cybit firmly as the market leader in terms of Online
Fleet Management solutions. The group's financial performance has improved
dramatically and we are confident about the future prospects.
Results
Turnover for the year increased by 30% to #13.3 million and pre-tax profit
increased 306% to #613,000. The cash position remained healthy with a balance of
#2.1 million at 31 March 2007.
Our business is typified by long-term recurring income and we are pleased that
20% of telematics business was placed on our own internal leasing book during
the year. The telematics related forward revenue stream across the business now
represents approximately #5 million of future profit which will be recognised
over the next three to five years. Free cash flow has improved, up 256% from
#200,000 to #512,000 per month after the acquisition and integration of Thales
Telematics.
Operations
The year under review has been particularly successful. We now have more than
1,600 corporate customers, typically on long-term contracts. We have won a
number of significant new contracts during the year and continue to enjoy high
levels of contract renewals across the product portfolio. Repeat business from
our customer base remains strong, reflecting the quality of our products and
service offerings. Sainsbury's Online extended its existing contract to add more
than 150 delivery vehicles, while Sunderland Housing renewed a contract for 200
vehicles in September. We have continued to extend our penetration with our
larger corporate customers such as Interserve PLC, SIG PLC and Alfred McAlpine
PLC who are all extending the use of our solutions within their businesses.
Acquisitions
We completed the acquisition of two telematics businesses during the year.
BlueFinger was bought for #1.84 million in June 2006 and Thales Telematics was
acquired for #1 million in February 2007. These businesses were integrated
rapidly into our existing structure and have proved to be earnings enhancing
since acquisition. We have been pleased with their subsequent performance and
both businesses have won a considerable number of new contracts during the year,
strengthening our position as the leaders in the market place.
The acquisition of BlueFinger added further international vehicle telematics and
maritime project delivery capabilities. We are now positioned firmly as a world
leader in vessel management and fisheries protection. This is an excellent
revenue stream, as it is typified by long-term contracts with government agency
customers. Since the BlueFinger acquisition, we are pleased that we have won a
#1 million Economic Exclusion Zone (EEZ) contract with a North African Country
and a similar #0.5 million contract extension with the Ghanaian Government. This
acquisition has also created scale such that we can support other overseas
markets, a notable win being the implementation of the ArabTrak contract in
Saudi Arabia.
In addition to strengthening our core vehicle telematics capabilities, the
acquisition of Thales Telematics in February strengthened our position in
Private Mobile Radio (PMR) based tracking solutions for land and maritime
customers. This enables customers to benefit from specialist precise positioning
solutions. This has a particular strength in the Oil and Gas exploration and
mining markets. Since acquisition, this business unit (subsequently renamed
Cybit Positioning Solutions Limited) has extended existing contracts with
Subsea7 and signed new contracts with international companies such as Sercel,
Western Geco and Lafarge.
Outlook
The outlook remains bright. There remain interesting opportunities to build the
scale of the business by further acquisitions. The telematics market remains
fragmented with many small players struggling to build scale. This should
present Cybit with opportunities to buy and build further scale. The group has
the resources and the track record necessary to continue its acquisitive
strategy and we are reviewing opportunities continually.
The market for telematics is expanding and Cybit is well placed to continue
improving its market share. The user base for telematics is broadening and we
see significant opportunities with customers in local authorities and the
utilities sector.
We have plans to extend our international reach and together with our technical
expertise, we are confident that the future for the Company remains very bright
indeed.
Neil Johnson
Chairman
2nd July 2007
CHIEF EXECUTIVE'S REVIEW
Operating Review
Cybit has made very encouraging progress during the year. Trading has been
strong and the acquisitions we have made have added significant scale to the
business. This gives us a real platform for growth.
The Vehicle Telematics Marketplace
The market is continuing to develop at both the simple and complex levels,
although it does remain highly competitive.
Increasingly, customers appreciate the significant tangible and intangible
benefits that can be derived from using our solutions, enabling them to cut
costs and improve efficiencies. In addition, there is an increasing legislative
and compliance burden that comes with the management of a remote workforce. Our
telematics solutions can help customers comply with recent legislative changes
including the Working Time Directive and Duty of Care legislation. Our solutions
can also play a key part in the development of an overarching corporate
governance strategy and an element of risk management encompassing both
companies and their employees.
Our vehicle telematics customer base now boasts more than 1,600 corporate
clients, including Sainsbury's Online, Alfred McAlpine PLC, Coca Cola
Enterprises Limited, Fowler Welch - Coolchain, River Island, Interserve PLC, SIG
PLC and May Gurney PLC. We are very pleased to have grown the number of fixed
and mobile assets under management within our vehicle telematics portfolio to
over 35,000. We have a range of products tailored to suit different markets and
we can see considerable potential for our solutions within the local authority
and utilities sectors. During the year, we won a number of new contracts with
the NHS and local authorities including a significant win with Aberdeen City
Council worth in excess of #220,000.
Customer Growth and Development
Since the recent acquisitions, we have restructured the vehicle telematics sales
teams across the UK so that we now have dedicated teams focused on generating
new business and managing the installed base. The initial results have been very
positive, as both customers and prospects have access to solutions from within
the entire portfolio. We continue to benefit from a high level of customer
renewal with more than 2,500 units either being renewed or migrated over the
period. We expect this element of our business to increase significantly.
In addition to contract renewals, many existing customers are either extending
the use of the solutions further into their fleets, or purchasing additional
modules and services from us. During the year we have sold a record number of
extra units to a significant proportion of our existing customers. Significant
expansion contracts have been signed with NCP and NCP Services, Interserve PLC,
May Gurney PLC, Sainsbury's Online and SIG PLC.
In addition to customers joining the business through acquisition, Cybit has
also added many new customers during the year including Isis Accord (part of
Accord PLC), EIC, Epsilon, AR Lunn Transport and Warehousing, Denman Group and
Bullwell Trailer Solutions.
The acquisition of BlueFinger increases our project capability, both in the UK
and overseas, from both a delivery and functionality perspective. As a result,
the Fleetstar solution has now been extended to include a client/server
capability which allows for customer specific communication, functional or
mapping requirements to be implemented within the customer environment without
impacting the core Fleetstar-Online application.
Examples of success in this area include Isis Accord where we have implemented a
"Winter Maintenance" package to include gritting, white lining and gully
emptying and an overseas solution in Saudi Arabia which includes local mapping
and integration with local IDEN and GPRS networks.
Enhanced Service Delivery
During the year, we built upon our existing range of services and launched new
initiatives. Our consultancy and training team managed the Structured
Implementation Planning Process (SIPP) successfully in conjunction with a number
of clients. The team also worked with customers defining and measuring Key
Performance Indicators (KPIs) within their own businesses and helped others to
measure the return on investment achieved from the implementation of our
solutions. It is also encouraging to note that there is an increased level of
interest and uptake of the Fleetstar-Online Duty of Care module.
During the latter part of the year, we launched a premium level service
programme offering enhanced response times and service levels to customers. This
initiative has received a positive response.
Operational Achievements
The net addition of approximately 800 customers and 15,000 vehicle assets over
the past 12 months has presented both challenges and opportunities to our
vehicle telematics team.
From an operational management perspective, all of the key customer and
operational activities associated with BlueFinger, Cybit Positioning Solutions
and the Cybit Limited vehicle telematics operations have been centralised within
Cybit Limited. This has allowed us to streamline all aspects of the 'cradle to
grave' management of the customer base with a significant reduction in overall
staff costs.
Time to benefit has been a key focus in these activities. Typically integration
has taken place within a few weeks ensuring minimum disruption and continuity
for both staff and clients.
From a cost management perspective, Cybit has been able to use the increased
buying power associated with scale to reduce hardware, distribution and
operating costs whilst at the same time allowing us to reduce the cost of
servicing the installed base through the development of our own internal
engineering resource. This last initiative has also allowed us to deliver
consistent quality and improved customer response at a reduced cost.
Over the past few years, Cybit has achieved considerable cost savings through
the implementation of ISO9001 procedures within the business. This focus on
process and procedure has been further supported through the implementation of
an integrated ERP system which went live at the half year. This focus will be
driven through the newly acquired businesses to ensure further savings are
achieved in the future.
The launch of workflow management within the Fleetstar-MRM module also presented
a further opportunity to improve the productivity of our field engineering team.
Cybit was the first company to go live on this solution and immediately achieved
productivity gains of 20%.
At the end of March, Cybit implemented the first phase of a field customer
service initiative. This initiative is intended to move our customer services
team closer to the customer thereby improving response times and improving our
knowledge and understanding of customer needs. Another key benefit of this
approach will be the acceleration of the order to installation to cash cycle.
Product Development
During the period Cybit launched a number of enhancements to the Fleetstar
application. The most significant of these was the launch of the new Mobile
Resource Management module. Called Fleetstar-MRM, this module incorporates
Personal Data Assistant (PDA) based workflow management combined with vehicle
performance monitoring.
Other core Fleetstar developments included business versus private mileage
monitoring and geo-fence management. The team also delivered Fleetstar-Reporter
- a low end version of the solution aimed at the reseller channel and larger
scale "Duty of Care" type installations and created specialist extensions to
support gritting, gulley emptying and white lining operations.
Cybit now has a significant internal development capability with a wealth of
experience and sector knowledge. The Company has an extensive development
programme scheduled over the coming year. Key projects include scaling the
current Fleetstar-Online environment to support 100,000 vehicles and above and
expansion of the current mapping sets further into Europe. The team will also be
extending the current Fleetstar-MRM module to incorporate local "route me"
capabilities via a PDA and other significant developments to help larger
corporate clients organise and manage their fleets.
Indirect Channels
During 2006, Cybit launched Fleetstar-AVL and Fleetstar-Reporter. These products
were developed to address the emerging SME requirement for a simple, low cost
vehicle tracking solution. In order to maximise margins in what is a highly
price sensitive and competitive segment, it was decided that this market would
primarily be addressed through a reseller channel.
From what was effectively a standing start 12-months ago, our reseller team has
recruited a national network of approximately 30 resellers It is pleasing to
report that this channel added in the region of 100 new customers during the
year.
We intend to focus additional resources into this sector over the coming year.
In addition to our direct reseller channel, Cybit continues to partner with
leading companies involved in vertical markets such as routing and scheduling,
workflow management and service management. A number of our existing customers
including Sainsbury's Online, River Island and Allport Freight have integrated
Fleetstar with these "back office" applications and an increasing number of
prospective customers require support in this area.
European Subsidiaries
Our strategy to grow our presence in Europe is progressing well.
Revenues from our operation in Sweden, Cybit AB, are increasing steadily such
that the business is broadly cash neutral. The leading UK car share company,
citycarclub, has continued to expand its fleet of vehicles with in excess of 220
units now installed. We expect further growth from the continued interest in car
sharing.
The Fleetstar-Online platform has seen modest growth although market activity is
increasing. In addition to a direct sales presence in the market, Cybit AB is
seeking additional local reseller channels.
From a standing start, Cybit GmbH made reasonable progress during the period
with a number of new customer contracts. Although there are significant
challenges recruiting and retaining good sales staff, we have recently appointed
a local technical resource to support the German customer base.
With relatively low market penetration outside the HGV sector, Germany
represents a significant growth opportunity for the future which we intend to
pursue.
Other Markets
The telematics market is continuing to develop and we are experiencing a two
tier market. Primarily there is a large market for simple Advanced Vehicle
Location solutions and there is also a growing market for more complex
integrated solution that helps customers to monitor and assess the performance
of their assets. This in turn drives their programmes to improve efficiencies
and ultimately cut their own costs.
Cybit has retained its margins in the AVL market through an effective reseller
channel, selling the Fleetstar-AVL and Fleetstar-Reporter products. This market
plays heavily on Cybit as a low-risk, UK based service provider with significant
critical mass. This remains a very competitive market and we have seen a number
of our competitors struggle, creating more opportunities for the group. A number
of smaller competitors have withered and either been acquired or withdrawn from
the market. We expect this trend to continue.
In the more complex market for more sophisticated systems, Cybit has increased
delivery capability through the acquisition of BlueFinger and Thales Telematics
and by the development of our existing internal product suite.
Looking forward, our strategy will be to increase our efforts to cross-sell a
fuller range of products and services solutions into the existing customer base
in order to strengthen our embedded position with them. This should help to lock
out our competition. We are confident that this will be achieved by the steps we
have taken to strengthen our sales team and centralise our marketing effort.
This team will concentrate on delivering increased penetration of products and
services within the wider group's growing customer base. We believe that this
will help us to increase our share of the telematics market, both in the UK and
in overseas markets.
Financial review
This was another year of significant growth for the Company. Revenues were up
30% from #10.2 million to #13.3 million with pre-tax profits increasing 306%
from #200,000 to #613,000. This has been achieved through a combination of
organic and acquisitive growth. Gross margins have remained healthy at 63% (2006
- 67%) reflecting a continued focus on managing both fixed and variable costs
across the business.
Despite significant revenue growth and acquisition activity, administrative
expenses only increased by 22%. Financing costs reduced from #1.14 million to
#1.10 million and reduced as a percentage of overall turnover from 11.2% to
8.3%.
As stated in last year's report, a key strategic goal is to increase the levels
of predictable forward profit and cash through the use of both our internal
leasing book and a monthly billing programme. Continuing that strategy, 20% of
telematics revenues were placed on the internal lease book over the year.
Overall the Group internal lease book has increased significantly through the
acquisition of Thales and BlueFinger, both of whom operated a similar strategy.
In total, the forward value of this asset has increased from #2 million in 2006
to approximately #5 million, the majority of which will be recognised over the
next three years. This high quality revenue stream coupled with a forward order
book worth in excess of #2 million within the BlueFinger maritime and CPS PMR
businesses has helped the Company to build a strong platform for future
profitable growth.
Cash in the period reduced by #0.9 million as a result of the use of the
internal leasing book and the acquisition activity. The business remains cash
generative at the operating level with net cash inflow from operating activities
increasing from #373,000 to #1.3 million in the period. During the period, the
Company has also secured overdraft and loan facilities of #1.5 million to
support acquisition activities. At the end of the period, none of these
facilities were being utilised. Predictive cash flow has also increased
significantly and is up 256% from #200,000 to #512,000 per month after the
acquisition and integration of Thales Telematics. This now represents around 60%
of group monthly cash requirements for the business.
Outlook
We have made good progress during the year under review. The future looks very
encouraging. We have established an excellent platform to grow the scale of the
business organically and by further acquisition. The market for telematics is
growing and customers are benefiting from the ability of our products to help
control their costs, increase efficiencies and ensure that they comply with
important legislation that affects their businesses. The market acceptance of
telematics is broadening beyond the traditional HGV and service sectors to
include local authority and utilities sectors.
We are expanding our operations both in the UK and overseas and we are confident
that this growth will continue. We will continue to consider suitable
acquisition opportunities.
I would like to take the opportunity to thank all of the growing team at Cybit
for their hard work and dedication during what has proved to be an exciting year
for the Company. We have an excellent team which includes some of the most
experienced individuals in our sector. Between us we look forward to an exciting
future as the telematics market continues to develop.
Richard Horsman
Chief Executive
2nd July 2007
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 March 2007 Year ended
Continuing Acquisitions Total 31 March
operations (continuing) 2006
# # # #
Turnover 10,289,385 2,999,234 13,288,619 10,190,382
Cost of sales (3,766,412) (1,089,096) (4,855,508) (3,338,521)
------------------------------------------------------------------------------------
Gross profit 6,522,973 1,910,138 8,433,111 6,851,861
Administrative expenses
Other operating expenses (4,959,141) (1,129,171) (6,088,312) (5,081,553)
Depreciation and goodwill (409,645) (217,471) (627,116) (431,949)
amortisation
Total administrative expenses (5,368,786) (1,346,642) (6,715,428) (5,513,502)
------------------------------------------------------------------------------------
Operating profit 1,154,187 563,496 1,717,683 1,338,359
Net interest and financing (1,104,619) (1,138,349)
costs
------------------------------------------------------------------------------------
Profit on ordinary activities 613,064 200,010
before taxation
Tax on profit on ordinary (47,166) (77,049)
activities
------------------------------------------------------------------------------------
Profit transferred to reserves 565,898 122,961
------------------------------------------------------------------------------------
Earnings per share - basic 2.63p 0.62p
------------------------------------------------------------------------------------
Earnings per share - diluted 2.60p 0.62p
------------------------------------------------------------------------------------
Reconciliation of movements in shareholders' funds
The The
group group
year ended year ended
31 March 31 March
2007 2006
# #
Profit for the year 565,898 122,961
Shares issued on the acquisition
of BlueFinger Limited 1,026,600 -
Reserve arising on issue of warrants on 288,172 -
acquisition of BlueFinger Limited
Other recognised gains and losses in the year (301) 10,912
------------------------------------------------------------------------------
Net increase in shareholders' funds 1,880,369 133,873
Shareholders' funds at 1 April 2006 6,461,412 6,327,539
------------------------------------------------------------------------------
Shareholders' funds at 31 March 2007 8,341,781 6,461,412
------------------------------------------------------------------------------
Statement of total recognised gains and losses
The The
group group
year ended year ended
31 March 31 March
2007 2006
# #
Profit for the year 565,898 122,961
Exchange adjustments offset in reserves (301) 10,912
------------------------------------------------------------------------------
Total recognised gains for the year 565,597 133,873
------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET AT 31 MARCH 2007
Note 2007 2006
# #
Fixed assets
Intangible assets 3,038,833 539,186
Tangible assets 824,533 600,527
---------------------------------------------------------------------------
Total fixed assets 3,863,366 1,139,713
Current assets
Stocks 1,638,204 454,322
Debtors: amounts falling due after more than 3,844,266 1,026,476
one year
Debtors: amounts falling due within one year 6,955,745 3,810,152
Cash at bank and in hand 2,119,985 2,693,308
---------------------------------------------------------------------------
14,558,200 7,984,258
Creditors: amounts falling due
within one year (6,293,806) (2,392,554)
---------------------------------------------------------------------------
Net current assets 8,264,394 5,591,704
---------------------------------------------------------------------------
Total assets less current liabilities 12,127,760 6,731,417
Creditors: amounts falling due
after more than one year (880,355) (270,005)
Pension liability 5 (2,905,624) -
---------------------------------------------------------------------------
Net assets 8,341,781 6,461,412
---------------------------------------------------------------------------
Capital and reserves
Called up share capital 7,150,882 7,046,127
Share premium account 8,020,059 7,098,214
Equity reserve 288,172 -
Other reserve (4,090,553) (4,090,553)
Profit and loss account deficit (3,026,779) (3,592,376)
---------------------------------------------------------------------------
Shareholders' funds 8,341,781 6,461,412
---------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended
31 March 31 March
2007 2006
# #
Net cash inflow from operating activities 1,303,678 381,949
Returns on investments and servicing of finance
Interest received 66,805 106,994
Finance costs of assigning debts to finance (1,159,452) (1,217,057)
companies
Interest received on finance leases 13,834 9,360
Finance lease interest paid (20,736) (21,851)
Interest paid (5,070) (15,795)
-------------------------------------------------------------------------------
Net cash outflow from returns on investments and (1,104,619) (1,138,349)
servicing of finance
-------------------------------------------------------------------------------
Taxation - (2)
-------------------------------------------------------------------------------
Capital expenditure
Purchase of tangible fixed assets (111,525) (138,103)
Purchase of intangible fixed assets (496,537) (159,424)
Disposal proceeds of tangible fixed assets 1,031 1,048
-------------------------------------------------------------------------------
Net cash outflow from capital expenditure (607,031) (296,479)
-------------------------------------------------------------------------------
Acquisitions
Purchase of subsidiary undertakings (308,093) -
Net overdrafts acquired with subsidiary (108,759) -
undertakings
-------------------------------------------------------------------------------
Net cash outflow from acquisitions (416,852) -
-------------------------------------------------------------------------------
Financing
Receipts from borrowing 500,000 224,297
Finance lease repayments (154,254) (113,984)
Repayment of loans (462,009) (67,675)
-------------------------------------------------------------------------------
Net cash (outflow)/ inflow from financing (116,263) 42,638
-------------------------------------------------------------------------------
Decrease in cash (941,087) (1,010,243)
-------------------------------------------------------------------------------
Net cash inflow from operating activities
Year ended Year ended
31 March 31 March
2007 2006
# #
Operating profit 1,717,683 1,338,359
Depreciation and amortisation 627,114 431,949
Decrease/(increase) in stock 210,254 (333,501)
Increase in debtors (1,000,620) (1,057,916)
(Decrease)/increase in creditors (196,397) 57,792
Decrease in deferred income (54,356) (54,734)
-------------------------------------------------------------------------------
Net cash inflow from operating activities 1,303,678 381,949
-------------------------------------------------------------------------------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2007 2006
# #
Decrease in cash in the year (941,087) (1,010,243)
Net debt acquired with subsidiary undertakings (451,896) -
Receipts from borrowings (500,000) (224,297)
Finance lease repayments 154,254 113,984
Repayment of loans 456,384 67,675
-------------------------------------------------------------------------------
(1,282,345) (1,052,881)
Effect of foreign exchange 60 (54)
-------------------------------------------------------------------------------
Movement in the year (1,282,285) (1,052,935)
Net funds at 31 March 2006 2,369,803 3,422,738
-------------------------------------------------------------------------------
Net funds at 31 March 2007 1,087,518 2,369,803
-------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
1. The financial information set out in this preliminary announcement
does not constitute statutory accounts as defined in section 240 of the
Companies Act 1985.
2. The financial information has been extracted from the group's 2007
financial statements. Those financial statements have not yet been delivered to
the Registrar. However the group's auditors have given an unqualified audit
opinion on those financial statements.
3. Basis of preparation
The preliminary results have been prepared under the historical cost convention
and in accordance with applicable accounting standards. The principal accounting
policies of the group are set out in the group's 2006 annual report and
financial statements. The policies in this preliminary announcement have
remained unchanged from those 2006 financial statements with the exception of
the policy relating to the treatment of share options which has been changed in
accordance with the provisions of FRS 20. The implementation of this new
standard has had no significant effect on the group's existing disclosures.
4. Earnings per share
The calculation of the basic earnings per share is based on the profits
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential ordinary
shares. The group has two classes of dilutive potential ordinary shares: those
share options granted to employees where the exercise price is less than the
average market price of the Company's ordinary shares during the year and the
warrants issued to the previous shareholders of BlueFinger Limited as part of
the consideration for the acquisition of the company in June 2006.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
Year ended 31 March 2007 Year ended 31 March 2006
Weighted Weighted
average average
number of Per-share number of Per-share
Earnings shares amount Earnings shares amount
# No. Pence # No. Pence
Basic earnings per share
Earnings attributable to
ordinary shareholders 565,898 21,529,155 2.63p 122,961 19,864,554 0.62p
Effect of dilutive securities
Options and warrants 299,099 45,461
---------------------------------------------------------------------------------------------------------
Diluted earnings per share
Adjusted earnings 565,898 21,828,254 2.60p 122,961 19,910,015 0.62p
---------------------------------------------------------------------------------------------------------
5. Pensions
By virtue of the acquisition of Thales Telematics plc in February 2007, the
group participates in a number of funded group defined benefit schemes. The
group's share of assets and liabilities in the schemes are derived on a
proportionate basis related to the cash contributions made. However, under the
terms of the sale and purchase agreement for the acquisition of Thales
Telematics plc, the vendor Thales UK Limited (the Thales Group), has provided a
perpetual indemnity over any pension scheme deficit arising both before and
after acquisition in respect of the various defined benefit schemes that were
operated and participated in by the company prior to its acquisition.
Consequently, although the group has a pension liability representing the
shortfall between the schemes' assets and the present value of defined
obligations, this is offset on a pound for pound basis by the indemnity provided
by Thales UK Limited and accordingly a corresponding pension asset has been
recognised in debtors falling due in more than one year. Under the terms of the
agreement there will be no net profit and loss charge for the group in either
the current year or future years in respect of these defined benefit schemes.
6. Dividends
No dividends have been paid in respect of the year.
Copies of the Company's Annual Report and Accounts will be available from the
Company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UKSBRBORNUAR
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