TIDMIOM
RNS Number : 5739P
Iomart Group PLC
09 June 2015
9 June 2015
iomart Group plc
("iomart" or the "Group" or the "Company")
Final Results for the Year ended 31 March 2015
iomart (AIM:IOM), the cloud computing company, is pleased to
report its consolidated final results for the year ended 31 March
2015.
FINANCIAL HIGHLIGHTS
-- Revenue growth of 18% to GBP65.8m (2014: GBP55.6m)
-- Adjusted EBITDA(1) growth of 23% to GBP29.1m (2014: GBP23.6m)
-- Adjusted profit before tax growth(2) of 14% to GBP16.6m (2014: GBP14.6m)
-- Adjusted diluted earnings per share(3) from operations
increased by 16% to 12.63p (2014: 10.85p)
-- Cashflow from operations increased by 13% to GBP27.2m (2014: GBP24.0m)
-- Adjusted EBITDA(1) margins increased to 44% (2014: 42%)
-- Proposed final dividend increased by 43% to 2.50p per share (2014: 1.75p per share)
OPERATIONAL HIGHLIGHTS
-- Building relationships for Hybrid Cloud opportunities with major players
-- Continued M&A activity with the acquisition of ServerSpace
-- Acquisition of SystemsUp to address the Public Cloud opportunity
Statutory Equivalents
The above highlights are based on adjusted results. A full
reconciliation between adjusted and statutory results is contained
within this statement. The statutory equivalents of the above
results are as follows:
-- Profit before tax growth of 11% to GBP10.8m (2014: GBP9.7m)
-- Basic earnings per share from operations increased by 14% to 8.34p (2014: 7.30p)
(1) Throughout this statement adjusted EBITDA is earnings before
interest, tax, depreciation and amortisation (EBITDA) before share
based payment charges and acquisition costs. Throughout this
statement acquisition costs are defined as acquisition related
costs and non-recurring acquisition integration costs.
(2) Throughout this statement adjusted profit before tax is
profit before tax, amortisation charges on acquired intangible
assets, shared based payment charges, mark to mark adjustments in
respect of interest rate swaps, acquisition costs and in the
previous year the accelerated write off of arrangement fees on the
bank borrowing facilities which were repaid early during that
year.
(3) Throughout this statement adjusted diluted earnings per
share is earnings per share before amortisation charges on acquired
intangible assets, shared based payment charges, mark to mark
adjustments in respect of interest rate swaps, acquisition costs
and in the previous year the accelerated write off of arrangement
fees on the bank borrowing facilities which were repaid early
during that year, including the taxation effect of these.
Angus MacSween, CEO commented,
"We are working hard to ensure we remain at the leading edge in
terms of the skill sets and experience to provide an ever more
complex set of services to our customers and are confident of our
abilities to do so, reinforced by the acquisition of SystemsUp in
recent days.
We are well positioned for further significant growth."
For further information:
iomart Group plc Tel: 0141 931 6400
Angus MacSween
Richard Logan
Peel Hunt LLP Tel: 020 7418 8900
(Nominated Adviser
and Broker)
Richard Kauffer
Euan Brown
Newgate Tel: 020 7653 9850
Adam Lloyd
Bob Huxford
Ed Treadwell
Robyn McConnachie
About iomart Group plc
Award winning cloud company iomart Group PLC (AIM:IOM) enables
businesses and organisations to operate their online data and IT
environments safely and securely. Headquartered in Glasgow,
Scotland, iomart partners with leading vendors such as VMware,
Amazon, EMC, Microsoft, Asigra, Arbor and Dell to offer customers a
centrally managed, controlled and completely agnostic set of
hybrid, private and public cloud platforms. By owning a global
network and datacentre infrastructure, iomart can support any
customer who wishes to move seamlessly between any and all of these
platforms with a consultative level of knowledge and expertise,
delivering cloud services to meet exact business needs.
For further information about the Group, please visit
www.iomart.com
CHAIRMAN'S STATEMENT
Once again it is extremely pleasing to report on another very
good year for your Group. We continue to make excellent progress as
we execute on our combined strategy of growing our business both
organically and by acquisition. Our reputation as one of the UK's
leading cloud computing companies continues to develop.
We have again enjoyed a substantial increase in profitability
over the year, driven by both organic and acquisitive growth. This
year we have only made the one acquisition during the year,
ServerSpace, in December 2014, and we also have benefited from a
full year contribution of both Redstation and Backup Technology
which were acquired last year.
After the year end we completed the acquisition of Systems Up
Limited, a consultancy company with a particular focus on Public
Cloud.
All of this progress is a result of a great deal of hard work by
our executives and staff and I thank them all on behalf of the
Board and the shareholders for their efforts over the year.
The Group has pursued a progressive dividend policy for a number
of years now. As a consequence of our continued strong performance
we intend to adopt a dividend policy aimed at improving shareholder
returns whilst maintaining a strong capital position for future
acquisitions. Accordingly, our intention will be, over time, to
increase the dividend pay-out to 25% of adjusted diluted earnings
per share. This year the Board is proposing to pay a final dividend
of 2.5p per share on 1 September 2015 to shareholders on the
register on 14 August 2015, representing an increase of 43% over
the dividend last year and equivalent to a pay-out ratio of 19.8%
of adjusted diluted earnings per share. We continue to offer
shareholders the option to participate in a Dividend Reinvestment
Plan (DRIP) as an alternative to receiving cash. Details of the
DRIP scheme will be distributed with the annual accounts in due
course.
We have started the 2015 financial year in a strong position and
I look forward to another exciting year of growth with considerable
confidence.
Ian Ritchie
Chairman
8 June 2015
CHIEF EXECUTIVE'S REVIEW
Introduction
I am pleased once more to report on another excellent year for
iomart. We have increased our revenues and profits both organically
and through acquisition as we continue to deliver a widening range
of cloud solutions.
Our revenues in the year were GBP65.8m, an increase of 18% over
the previous year and our adjusted EBITDA of GBP29.1m showed a 23%
increase over the previous year and our profit before tax increased
by 11% to GBP10.8m.
The opportunity remains to continue to grow both organically and
through a disciplined acquisition strategy.
Market
The market continues to grow and evolve. The number of companies
offering cloud services also continues to grow alongside an ever
faster consolidation of companies to achieve scale and
presence.
Potential cloud customers are confronted by an ever more complex
set of decisions in terms of cost, value, effectiveness,
complexity, security and compliance. In response, an ecosystem of
managed services providers and large infrastructure providers is
growing to serve these customers. Because the cloud has disrupted
the traditional IT value chain, cloud service providers (CSPs) are
now forming key alliances allowing them to excel at the delivery of
one or more service whether it be the delivery of infrastructure as
a service (IaaS), platform as a service (PaaS) or software as a
service (SaaS).
Microsoft, Amazon (AWS) and Google (Public Cloud Providers) all
have their own long term strategies to capture market share and all
three of them have stated that we are at the very beginning of a
long journey to full cloud adoption. All of these companies will
require channel partners to go to market.
iomart is well placed to strengthen its position around that
very complexity as customers look to find the best way forward for
their own needs, whether that be private infrastructure in a
datacentre of their choice, Public Cloud infrastructure or more
likely a mixture of the two combined with legacy on-premise
infrastructure. The effective management of all these is the
opportunity for iomart which we would collectively term the Hybrid
Cloud.
iomart is investing in the relationships and skills to help
customers make an informed choice across the cloud spectrum and to
help them manage these environments moving forward.
Acquisitions
We again augmented our organic growth through the acquisition of
ServerSpace in December 2014. This has performed well over the
period and integration is well underway.
We have just announced the acquisition of Systems Up Limited
("SystemsUp") on 5 June 2015. SystemsUp has gained a reputation in
the cloud market for expertise across a wide range of cloud
products and services, with an emphasis on Public Cloud
consultancy. We believe the skills and experience we have acquired
will accelerate our progress in becoming credible suppliers of
Hybrid Cloud to ensure we can make the 'best fit' recommendation
for our customers along with the subsequent deployment and
management of their ever more complex cloud environments.
We continue to look for businesses that fit our acquisition
criteria with a view to making further acquisitions in the coming
year.
Operational Review
Whilst all of our activities involve the provision of services
from common infrastructure we are organised into two operating
segments.
Hosting
Our Hosting segment continued to perform well over the year,
delivering an overall revenue growth rate of 23% and a satisfactory
organic growth rate of 9% whilst increasing adjusted EBITDA margins
from 48.6% to 50.0%.
We provide a wide range of managed hosting services to both SMEs
and corporate customers. All our solutions are delivered from our
network of datacentres.
The more complex managed hosting solutions are delivered by
iomart Hosting and customers typically pay for these services on a
monthly basis on contracts ranging between one and three years in
length. These solutions are provided to a wide range of customers,
all of whom are at various stages of development and over the year
we have seen some casualties amongst our base as customers
experience funding difficulties, drop out of markets or become
acquired and, as a result, are integrated elsewhere. All of which
has resulted in some additional customer churn and some pricing
pressure at contract renewal which, in turn, has adversely impacted
our organic growth in the segment though we are still pleased with
the level of growth achieved over the year. This area of our
activity is the one which has the greatest opportunity arising out
the Hybrid Cloud. However, the choice of direction to an adopter of
Cloud is much more complex than before and thus we will require to
become Hybrid Cloud Experts, especially in the consultation process
an organisation will go through before making a final choice. We
believe the acquisition of SystemsUp will provide us with a strong
platform from which to attack the Hybrid Cloud opportunity.
We address the dedicated physical server market, or bare metal
as it is becoming known, through our RapidSwitch and Redstation
operations largely through online marketing. Melbourne delivers
complex managed hosting solutions and provides us with a strong
presence in the North West of England with a particular emphasis on
the creative sector. Backup Technology provides enterprise class
cloud backup and business continuity services. iomart Cloud
Services provides a range of Cloud products, mainly through channel
partners and this unit also provides Cloud services in the USA,
following on from our investment in cloud infrastructure and backup
assets in that region during the year. All these business units use
common infrastructure and processes but there are different
dynamics in each customer base.
Revenues in this segment have grown by 23% to GBP55.0m (2014:
GBP44.7m) partly as a result of the continued organic growth and as
a result of acquisitions.
Easyspace
The Easyspace segment has performed as expected over the
year.
Our activities within this segment provide a range of products
to the micro and SME markets including domain names, shared,
dedicated and virtual servers and email services.
As anticipated, revenues of GBP10.8m (2014: GBP11.0m) have
remained around the same level as in the previous year, and with
the benefit of delivering strong levels of cash for the Group.
Trading Results
Revenue
Revenues for the year grew by 18% to GBP65.8m (2014: GBP55.6m)
through the combination of continued organic growth and the impact
of acquisitions.
Our Hosting segment grew revenues by 23% to GBP55.0m (2014:
GBP44.7m). This growth was helped by a full year contribution from
Redstation and Backup Technology both of which we acquired in
September 2013 and ServerSpace which was acquired in December 2014.
The growth in the Hosting segment revenues excluding the impact of
acquisitions was 9%.
Revenues within the Easyspace segment of GBP10.8m (2014:
GBP11.0m) were close to the level of the previous year showing a
very modest 2% decrease.
We continue to have good revenue visibility and high levels of
recurring revenue. With our larger customers we have multi-year
contracts for the provision of complex managed hosting solutions.
Many of our smaller customers pay in advance for the provision of
hosting services resulting in a substantial sum of deferred revenue
which we then recognise during the period over which we provide our
services.
Gross Margin
Our gross profit for the year was GBP44.3m (2014: GBP37.8m) and
this increased as a result of the additional revenues we generated.
In percentage terms we maintained our margin at 67.4% (2014: 68.0%)
with both operating segments maintaining their respective
percentage margins.
Adjusted EBITDA
The adjusted EBITDA for the year was GBP29.1m (2014: GBP23.6m)
an increase of 23%. Our percentage adjusted EBITDA margin has also
significantly improved to 44.2% (2014: 42.5%). The Hosting segment
increased both its absolute and relative margin over the period
whilst the Easyspace segment performed very much in line with the
previous year.
The Hosting segment's adjusted EBITDA was GBP27.5m (2014:
GBP21.7m), an increase of 26.7%. In percentage terms the adjusted
EBITDA margin has improved to 50.0% (2014: 48.6%). This greatly
improved performance is a direct result of the additional gross
margin delivered by the increase in sales revenue from the Hosting
segment offset by an increase in administrative expenses.
Administrative expenses have increased principally due to the
impact of the acquisitions made in the period and the full impact
of the acquisitions made in the previous period. The inclusion of
Redstation and Backup Technology for the full year has contributed
to the improvement in the adjusted EBITDA in both absolute terms
and percentage terms. The contribution from ServerSpace since its
acquisition in December has contributed to the level of absolute
margin improvement.
The Easyspace segment's adjusted EBITDA was GBP4.9m (2014:
GBP5.0m) which was slightly less than in the previous year. In
percentage terms the adjusted EBITDA margin has improved slightly
to 45.5% (2014: 45.2%) due to careful control of costs.
Group overheads, which are not allocated to segments, include
the cost of the Board, the running costs of the headquarters in
Glasgow, Group marketing, human resource, finance and design
functions and legal and professional fees for the year. These
overhead costs have increased to GBP3.3m (2014: GBP3.0m) mainly due
to increased payroll and staff related costs.
Adjusted profit before tax
Depreciation charges of GBP10.1m (2014: GBP7.2m) have increased
largely as a consequence of the full year effect of acquisitions
made in the previous year, the impact of the acquisition of
ServerSpace in this financial year, as a result of charges for the
equipment bought to provide services to the additional Hosting
segment customers and charges in respect of the fit out of our
Maidenhead datacentre which was completed at the start of this
financial year.
The charge for amortisation of intangibles, excluding
amortisation of intangible assets resulting from acquisitions
("amortisation of acquired intangible assets") of GBP1.0m (2014:
GBP0.7m) has increased over the year as a consequence of the full
year impact of the acquisition of Backup Technology which was
acquired during the previous financial year and also due to the
charge resulting from an increase in the level of capitalised
development costs.
Finance income in the period was GBPnil (2014: GBP0.1m). Finance
costs of GBP1.3m (2014: GBP1.2m), excluding the mark to market
adjustment in respect of interest swaps on the Company's loans and
in the previous year the accelerated write off of arrangement fees
on the early repayment of bank facilities, remained static over the
period as our level of net borrowings remained at a similar level
over the period.
After deducting the charges for depreciation, amortisation,
excluding the charges for the amortisation of acquired intangible
assets, and finance costs, excluding mark to market adjustments on
the interest rate swap and in the previous year the accelerated
write off of arrangement fees on the early repayment of the bank
facilities, and crediting the finance income from the adjusted
EBITDA, the Group's adjusted profit before tax was GBP16.6m (2014:
GBP14.6m) an increase of 14%.
The adjusted profit before tax margin for the year was 25%
(2014: 26%). This modest reduction is largely due to the
improvement of 1.7% in the adjusted EBITDA margin over the year
offset by the increase in depreciation charges as a percentage of
revenue of 2.5%. That relative increase in the depreciation charge
is mainly a consequence of the mix of sales revenue within our
Hosting segment over the year, including the impact of a full year
contribution from both Redstation and Backup Technology, and the
commencement of depreciation charges on the Maidenhead datacentre
which was completed early in this financial year
Profit before tax
The measure of adjusted profit before tax is a non-statutory
measure which is commonly used to analyse the performance of
companies particularly where M&A activity forms a significant
part of their activities.
A reconciliation of adjusted profit before tax to reported
profit before tax is shown below:
Reconciliation of adjusted profit 2015 2014
before tax to profit before tax GBP'000 GBP'000
Adjusted profit before tax 16,613 14,612
Less: Amortisation of acquired
intangible assets (4,368) (3,093)
Less: Acquisition costs (526) (374)
Less: Share based payments (809) (1,257)
Less: Mark to market adjustment
on interest rate swaps (125) (20)
Less: Accelerated write off of
arrangement fees on early repayment
of bank facilities - (153)
Profit before tax 10,785 9,715
---------------------------------------- --------- ---------
The adjusting items are: charges for the amortisation of
acquired intangible assets of GBP4.4m (2014: GBP3.1m) which have
increased substantially as a result of the acquisition made in the
year and the full year effect of acquisitions made in previous
years; costs of GBP0.5m (2014: GBP0.4m) as a result of acquisition
costs; share based payment charges in the period of GBP0.8m (2014:
GBP1.3m) which have decreased substantially as the charge in
respect of share options granted in previous periods comes to an
end; a mark to market adjustment in respect of interest rate swaps
on the Company's loans of GBP0.12m (2014: GBP0.02m) and the
accelerated write off of arrangement fees on the early repayment of
bank facilities during the year of GBPnil (2014: GBP0.15m).
After deducting charges for the amortisation of acquired
intangible assets; acquisition costs; share based payments; mark to
market adjustments in respect of interest rate swaps and in the
previous year the accelerated write off of arrangement fees on the
early repayment of bank facilities during the year from the
adjusted profit before tax; the reported profit before tax was
GBP10.8m (2014: GBP9.7m) an increase of 11%. In percentage terms
the profit before tax margin was 16% (2014: 17%) with the reduction
due to the same reasons as the adjusted profit before tax
percentage margin reduction together with increased amortisation of
acquired intangible assets charges offset by reduced shared based
payment charges.
Taxation
There is a tax charge for the year of GBP1.9m (2014: GBP2.0m).
The tax charge for the year is made up of a corporation tax charge
of GBP2.7m (2014: GBP2.5m) with a deferred tax credit of GBP0.8m
(2014: credit GBP0.5m). At the year end, the Group has unused tax
losses of GBP1.2m (2014: GBP4.0m) available for offset against
future profits, of which all have been provided for within deferred
tax.
Profit for the year from total operations
After deducting the tax charge for the year from the profit
before tax the Group has recorded a profit for the year from total
operations of GBP8.9m (2014: GBP7.7m) an increase of 15%.
Earnings per share
Adjusted diluted earnings per share is based on profit for the
year attributed to ordinary shareholders before share based payment
charges, amortisation charges of acquired intangible assets, mark
to market adjustments in respect of interest rate swaps, the
accelerated write off of arrangement fees on the early repayment of
bank facilities in the previous year, acquisition costs and the tax
effect of these items was 12.63p (2014: 10.85p) an increase of
16%.
The measure of adjusted diluted earnings per share as described
above is a non-statutory measure which is commonly used to analyse
the performance of companies particularly where M&A activity
forms a significant part of their activities.
The calculation of both adjusted earnings per share and basic
earnings per share is included at note 6.
Basic earnings per share from continuing operations was 8.34p
(2014: 7.30p), an increase of 14% over the year.
Acquisitions
On 3 December 2014 the Company acquired ServerSpace for a
maximum consideration of GBP4.2m; on a no cash no debt, normalised
working capital basis. At completion an initial payment of GBP2.6m
in cash was made. No payment was due in respect of the additional
debt assumed, cash acquired and normalised working capital position
of the company at completion. An additional sum is due related to
the profitability of ServerSpace in the period to September 2015
and the estimated amount to be paid in this regard is GBP1.6m,
which is also the maximum amount which could be due. Payment of
this sum is expected to be made before the end of the 2015 calendar
year.
On 5 June 2015 the Company acquired the entire share capital of
SystemsUp on a no debt, no cash, normalised working capital basis.
At completion an initial payment of GBP9m in cash was made and in
addition an amount of GBP0.5m was paid as an interim settlement of
the expected amount due in respect of the no debt, no cash,
normalised working capital adjustment. A further sum is contingent
on a measure revenue for the year to 31 March 2016 which is
expected to be paid in either May or June 2016. The potential
contingent consideration payable has been initially estimated to be
in the region of GBP1.0m to GBP3.5m.
Cash flow and net cash
Net cash flows from operating activities
The Group continued to generate high levels of operating cash
over the year. Cash flow from operations was GBP27.2m (2014:
GBP24.0m) with the significant increase of 13% over the previous
year's level largely due to the improvement in adjusted EBITDA.
After deducting payments for corporation tax of GBP3.2m (2014:
GBP2.3m) the net cash flow from operating activities was GBP24.0m
(2014: GBP21.7m).
Cash flow from investing activities
In line with our strategy of accelerating our growth by
acquisition the Group continued to incur substantial sums on
investing activities, spending a total of GBP15.8m (2014: GBP31.5m)
in the period. Of this amount, GBP2.4m (2014: GBP19.0m), was
incurred in relation to acquisition activities described above. In
addition the Group incurred expenditure of GBP1.3m (2014: GBP0.1m)
in respect of contingent consideration due on the acquisition of
Redstation.
The Group continues to invest in property, plant and equipment
through expenditure on datacentres and on equipment required to
provide managed services to both its existing and new customers. In
addition the Group invested in cloud infrastructure and backup
assets in the USA during the year. As a result the Group spent
GBP10.7m (2014: GBP11.7m) on assets, net of related finance lease
drawdown, trade creditor movements and non-cash reinstatement
provisions.
Expenditure was also incurred on development costs of GBP1.0m
(2014: GBP0.6m) and on intangible assets of GBP0.4m (2014:
GBPnil).
Cash flow from financing activities
There was net cash spent on financing activities of GBP12.9m
(2014: GBP11.4m cash generated). The Company's borrowing facilities
were restructured in the period with a term loan of GBP13.5m being
repaid and an additional revolving credit facility of GBP13.5m
being drawn down (2014: GBP37.5m drawdown). In addition further
bank loan repayments of GBP8.5m were made resulting in total
repayments of GBP22.0m (2014: GBP16.5m) in the year. We repaid
borrowings on acquisitions of GBPnil (2014: GBP5.7m). We received
GBPnil (2014: GBP0.2m) from the issue of shares as a result of the
exercise of options by employees. We also made a dividend payment
of GBP1.9m (2014: GBP1.5m) and incurred finance costs of GBP1.3m
(2014: GBP1.2m).
Net cash flow
As a consequence, our overall cash expenditure during the year
was GBP4.7m (2014: GBP1.6m cash generated) which resulted in cash
and cash equivalent balances at the end of the year of GBP8.3m
(2014: GBP13.0m). After recognising bank loans of GBP21.5m (2014:
GBP30.0m) and finance lease obligations of GBP2.2m (2014: GBP2.8m)
net debt balances at the end of the period stood at GBP15.4m (2014:
GBP19.8m) a level the Board is comfortable with given the strong
cash generation of the Group.
Financial position
The Group is now in a position where it is generating
substantial amounts of operating cash. The generation of that cash
flow together with the committed bank loan facility for
acquisitions and finance lease facilities which are available to
fund capital expenditure, means that the Group has the liquidity it
requires to continue its growth through both organic and
acquisitive means.
Current trading and outlook
Trading since the year end remains encouraging and in line with
our expectations.
We are working hard to ensure we remain at the leading edge in
terms of the skill sets and experience to provide an ever more
complex set of services to our customers and are confident of our
abilities to do so, reinforced by the acquisition of SystemsUp in
recent days.
We are well positioned for further significant growth.
I look forward, once again, with confidence to the year
ahead.
Angus MacSween
Chief Executive Officer
8 June 2015
Consolidated Statement of Comprehensive Income
Year ended 31 March 2015
2015 2014
Note GBP'000 GBP'000
Revenue 65,797 55,618
Cost of sales (21,477) (17,794)
--------- ---------
Gross profit 44,320 37,824
Administrative expenses (32,121) (26,767)
-------------------------------------- ----- --------- ---------
Operating profit 12,199 11,057
Analysed as:
Earnings before interest,
tax, depreciation, amortisation,
acquisition costs and share
based payments 29,053 23,611
Share based payments (809) (1,257)
Acquisition costs (526) (374)
Depreciation (10,142) (7,170)
Amortisation - acquired intangible
assets (4,368) (3,093)
Amortisation - other intangible
assets (1,009) (660)
-------------------------------------- ----- --------- ---------
Finance income 45 68
Finance costs (1,459) (1,410)
--------- ---------
Profit before taxation 10,785 9,715
Taxation 4 (1,890) (1,995)
--------- ---------
Profit for the year from
total operations 8,895 7,720
Other comprehensive income
Amounts which may be reclassified
to profit or loss
Currency translation differences (49) 3
-------------------------------------- ----- --------- ---------
Other comprehensive income
for the year (49) 3
-------------------------------------- ----- --------- ---------
Total comprehensive income
for the year 8,846 7,723
Attributable to equity holders
of the parent 8,846 7,723
Basic and diluted earnings
per share
Total operations
6 8.34 7.30
Basic earnings per share p p
6 8.24 7.23
Diluted earnings per share p p
-------------------------------------- ----- --------- ---------
Consolidated Statement of Financial Position
As at 31 March 2015
2015 2014
Note GBP'000 GBP'000
-------------------------------- ----- --------- ---------
ASSETS
Non-current assets
Intangible assets - goodwill 8 47,342 44,879
Intangible assets - other 8 19,041 19,488
Lease deposits 2,416 2,416
Property, plant and equipment 9 34,846 32,533
103,645 99,316
Current assets
Cash and cash equivalents 8,347 13,025
Trade and other receivables 11,389 7,696
19,736 20,721
Total assets 123,381 120,037
LIABILITIES
Non-current liabilities
Non-current borrowings 10 (1,346) (13,716)
Trade and other payables (703) -
Provisions (2,440) (1,566)
Deferred tax 5 (2,087) (2,443)
--------------------------------- ----- --------- ---------
(6,576) (17,725)
Current liabilities
Contingent consideration
due on acquisitions 12 (1,650) (1,271)
Trade and other payables (18,680) (15,158)
Current income tax liabilities (1,401) (1,868)
Current borrowings 10 (22,395) (19,128)
(44,126) (37,425)
Total liabilities (50,702) (55,150)
Net assets 72,679 64,887
--------------------------------- ----- --------- ---------
EQUITY
Share capital 1,078 1,078
Own shares (538) (556)
Capital redemption reserve 1,200 1,200
Share premium 21,067 21,067
Merger reserve 4,983 4,983
Foreign currency translation
reserve (47) 2
Retained earnings 44,936 37,113
--------------------------------- ----- --------- ---------
Total equity 72,679 64,887
--------------------------------- ----- --------- ---------
Consolidated Statement of Cash Flows
Year ended 31 March 2015
2015 2014
Note GBP'000 GBP'000
Profit before taxation 10,785 9,715
Finance costs - net 1,414 1,342
Depreciation 9 10,142 7,170
Amortisation 8 5,377 3,753
Share based payments 809 1,257
Movement in trade receivables (3,277) 250
Movement in trade payables 1,956 503
------------------------------------ ------ --------- ---------
Cash flow from operations 27,206 23,990
Taxation paid (3,212) (2,277)
Net cash flow from operating
activities 23,994 21,713
Cash flow from investing
activities
Purchase of property,
plant and equipment 9 (10,683) (11,651)
Capitalisation of development
costs (1,041) (557)
Purchase of intangible
assets 8 (367) (24)
Proceeds on disposal of
property, plant and equipment - 22
Payments for current period
acquisitions net of cash
acquired (2,445) (19,016)
Contingent consideration
paid on prior period acquisition (1,271) (125)
Deferred consideration
paid on prior period acquisition - (201)
Finance income received 33 91
Net cash used in investing
activities (15,774) (31,461)
Cash flow from financing
activities
Issue of shares 13 154
Draw down of bank loans 13,500 37,500
Repayment of finance leases (1,245) (1,384)
Repayment of bank loans (22,000) (16,503)
Repayment of borrowings
on acquisition of business - (5,731)
Finance costs paid (1,299) (1,172)
Dividends paid (1,867) (1,483)
Net cash received from
financing activities (12,898) 11,381
Net (decrease)/increase
in cash and cash equivalents (4,678) 1,633
Cash and cash equivalents
at the beginning of the
year 13,025 11,392
----------------------------------- ------ --------- ---------
Cash and cash equivalents at the
end of the year 8,347 13,025
Consolidated Statement of Changes in Equity
Year ended 31 March 2015
Foreign
Own Own currency Capital Share
Changes in Share shares shares translation redemption premium Merger Retained
equity capital EBT Treasury reserve reserve account reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Balance at
1 April 2013 1,058 (70) (506) (1) 1,200 20,936 - 29,599 52,216
Profit in
the year - - - - - - - 7,720 7,720
Currency
translation
differences - - - 3 - - - - 3
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Total
comprehensive
income - - - 3 - - - 7,720 7,723
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Dividends
- final (paid) - - - - - - - (1,483) (1,483)
Share based
payments - - - - - - - 1,257 1,257
Deferred tax
on share based
payments - - - - - - - 19 19
Issue of own
shares for
option
redemption - - 20 - - - - 1 21
Issue of new
shares for
option
redemption 3 - - - - 131 - - 134
Issue of new
shares for
business
acquisition 17 - - - - - 4,983 - 5,000
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Total
transactions
with owners 20 - 20 - - 131 4,983 (206) 4,948
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Balance at
31 March 2014 1,078 (70) (486) 2 1,200 21,067 4,983 37,113 64,887
---------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Profit in
the year - - - - - - - 8,895 8,895
Currency
translation
differences - - - (49) - - - - (49)
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Total
comprehensive
income - - - (49) - - - 8,895 8,846
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Dividends
- final (paid) - - - - - - - (1,867) (1,867)
Share based
payments - - - - - - - 809 809
Deferred tax
on share based
payments - - - - - - - (19) (19)
Issue of own
shares for
option
redemption - - 18 - - - - 5 23
Total
transactions
with owners - - 18 - - - - (1,072) (1,054)
--------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Balance at
31 March 2015 1,078 (70) (468) (47) 1,200 21,067 4,983 44,936 72,679
---------------- --------- -------- ---------- ------------ ------------ --------- --------- ---------- --------
Notes to the Yearly Financial Information
Year ended 31 March 2015
1. GENERAL INFORMATION
iomart Group plc is a company incorporated and domiciled in
Scotland. The company has a primary listing on the AIM stock
exchange. The address of its registered office is Lister Pavilion,
Kelvin Campus, West of Scotland Science Park, Glasgow G20 0SP.
2. BASIS OF PREPARATION
These financial statements have been prepared in accordance with
the International Financial Reporting Standards (IFRS) as adopted
by the European Union (EU) and the Companies Act 2006 applicable to
companies reporting under IFRS.
The financial statements have been prepared under the historical
cost convention.
The financial information set out in the announcement does not
constitute the Group's statutory accounts for the years ended 31
March 2015 and 31 March 2014 within the meaning of section 434 of
the Companies Act 2006. The financial information for the year
ended 31 March 2014 is derived from the statutory accounts for that
year which have been delivered to the Registrar of Companies. The
financial information for the year ended 31 March 2015 is derived
from the statutory accounts for that year which were approved by
the Directors on 8 June 2015. The statutory accounts for the year
ended 31 March 2015 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting. The auditors
reported on those accounts; their report was unqualified and did
not contain a statement under Section 498(2) or (3) of the
Companies Act 2006.
3. SEGMENTAL ANALYSIS
The chief operating decision-maker has been identified as the
Chief Executive Officer ("CEO") of the Company. The Group has two
operating segments and the CEO reviews the Group's internal
reporting which recognises these two segments in order to assess
performance and to allocate resources. The Group has determined its
reportable segments which are also its operating segments based on
these reports.
The Group currently has two operating and reportable
segments.
-- Easyspace - this segment provides a range of shared hosting
and domain registration services to micro and SME companies.
-- Hosting - this segment provides managed hosting facilities
and services, through a network of owned datacentres, to the larger
SME and corporate markets. The segment uses several routes to
market and provides managed hosting services through iomart
Hosting, RapidSwitch, Melbourne, iomart Cloud Services. Redstation
and Backup Technology. ServerSpace was acquired during the year and
has been reported as part of the Hosting segment since
acquisition.
Information regarding the operation of the reportable segments
is included below. The CEO assesses the performance of the
operating segments based on revenue and a measure of Earnings
before Interest, Tax, Depreciation and Amortisation (EBITDA) before
any allocation of Group overheads, charges for share based payments
or costs associated with acquisitions. This segment EBITDA is used
to measure performance as the CEO believes that such information is
the most relevant in evaluating the results of the segment.
The Group's EBITDA for the year has been calculated after
deducting Group overheads from the EBITDA of the two segments as
reported internally. Group overheads include the cost of the Board,
all the costs of running the premises in Glasgow, the Group
marketing, human resource, finance and design functions and legal
and professional fees.
The segment information is prepared using accounting policies
consistent with those of the Group as a whole.
The assets and liabilities of the Group are not reviewed by the
chief operating decision-maker on a segment basis. Therefore none
of the Group's assets and liabilities are segmental assets and
liabilities and are all unallocated for segmental disclosure
purposes. For that reason the Group has not disclosed details of
segmental assets and liabilities.
All segments are continuing operations. No customer accounts for
more than 10% of external revenues. Inter-segment transactions are
accounted for using an arms-length commercial basis.
Operating Segments
Revenue by Operating Segment
2015 2014
------------------------------ ------------------------------
External Internal Total External Internal Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- --------- --------- -------- --------- --------- --------
Easyspace 10,782 - 10,782 10,959 - 10,959
Hosting 55,015 950 55,965 44,659 932 45,591
--------- --------- -------- --------- --------- --------
65,797 950 66,747 55,618 932 56,550
----------- --------- --------- -------- --------- --------- --------
Geographical Information
In presenting the consolidated information on a geographical
basis, revenue is based on the geographical location of customers.
The United Kingdom is the place of domicile of the parent company,
iomart Group plc. All of the Group's revenue originates from the
United Kingdom.
Analysis of Revenue by Destination
2015 2014
GBP'000 GBP'000
------------------------- -------- --------
United Kingdom 54,253 48,005
Rest of the
World 11,544 7,613
-------- --------
Revenue from operations 65,797 55,618
-------------------------- -------- --------
Profit by Operating Segment
2015 2014
----------------------------------------------- -----------------------------------------------
EBITDA Depreciation, EBITDA Depreciation,
before amortisation, before amortisation,
acquisition acquisition acquisition acquisition
costs costs costs costs
and share and share and share and share
based based Operating based based Operating
payments payments profit/(loss) payments payments profit/(loss)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------- --------------- --------------- ------------- --------------- ---------------
Easyspace 4,905 (416) 4,489 4,953 (605) 4,348
Hosting 27,481 (15,103) 12,378 21,700 (10,318) 11,382
Group overheads (3,333) - (3,333) (3,042) - (3,042)
Acquisition
costs - (526) (526) - (374) (374)
Share based
payments - (809) (809) - (1,257) (1,257)
------------- --------------- --------------- ------------- --------------- ---------------
Profit before
tax
and interest 29,053 (16,854) 12,199 23,611 (12,554) 11,057
Group interest
and tax (3,304) (3,337)
------------- --------------- --------------- ------------- --------------- ---------------
Profit for
the year 29,053 (16,854) 8,895 23,611 (12,554) 7,720
----------------- ------------- --------------- --------------- ------------- --------------- ---------------
Group overheads, acquisition costs, share based payments,
interest and tax are not allocated to segments.
4. TAXATION
2015 2014
GBP'000 GBP'000
--------------------------------------- -------- --------
Tax charge for the year (2,782) (3,002)
Adjustment relating to prior
years 36 480
---------------------------------------- -------- --------
Total current taxation charge (2,746) (2,522)
Origination and reversal
of temporary differences 871 486
Effect of different statutory
tax rates of overseas jurisdictions 14 -
Effect of changes in tax
rates (29) 41
---------------------------------------- -------- --------
Total deferred taxation
credit 856 527
Total taxation charge (1,890) (1,995)
---------------------------------------- -------- --------
The Group has a deferred tax asset which has been recognised in
respect of tax losses within one subsidiary company, which has
generated taxable profits and is expected to continue to do so.
The differences between the total current tax shown above and
the amount calculated by applying the standard rate of UK
corporation tax to the profit before tax are as follows:
2015 2014
GBP'000 GBP'000
----------------------------------------- -------- --------
Profit before tax 10,785 9,715
------------------------------------------ -------- --------
Tax charge @ 21% (2014 - 23%) 2,265 2,234
Expenses disallowed for tax purposes 71 263
Non-taxable income (6) -
Adjustments in respect of prior
years (36) (480)
Effect of different statutory
tax rates of overseas jurisdictions (14) -
Movement in deferred tax relating
to changes in tax rates 29 (41)
Effect of research and development
tax reliefs (395) (350)
Tax effect of share based remuneration 155 142
Movement in unprovided deferred
tax related to property, plant
and equipment - 103
Movement in deferred tax relating
to prior periods (179) 124
Taxation charge for the year 1,890 1,995
------------------------------------------ -------- --------
5. DEFERRED TAX
The Group recognised deferred tax assets and liabilities as
follows:
2015 2014
---------------------------------- ----------------------------------
Deferred Deferred Deferred Deferred
tax Recognised tax Unrecognised tax Recognised tax Unrecognised
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------------- ----------------- --------------- -----------------
Tax losses carried forward 289 - 831 -
Share based remuneration 575 - 600 -
Capital allowances timing
differences 873 - 414 -
Deferred tax on acquired
assets with no capital
allowances (605) - (765) -
Deferred tax on customer
relationships (3,219) - (3,523) -
---------------------------- --------------- ----------------- --------------- -----------------
Deferred tax liability (2,087) - (2,443) -
---------------------------- --------------- ----------------- --------------- -----------------
At the year end, the Group has unused tax losses of GBP1.2m
(2014: GBP4.0m) available for offset against future profits. A
deferred tax asset has been recognised in respect of GBP1.2m (2014:
GBP4.0m) of such losses as these losses are expected to be used up
by taxable profits by the end of the period covered by future
projections.
The movement in the deferred tax account during the year
was:
Deferred
Capital tax on
Tax losses allowances acquired
carried Share timing assets Customer
forward based differences with no relationships Total
GBP'000 remuneration GBP'000 capital GBP'000 GBP'000
GBP'000 allowances
GBP'000
------------------- ------------ -------------- ------------- ----------- --------------- ---------
Balance at
1 April 2013 1,167 681 282 (949) (1,649) (468)
Acquired on
acquisition
of subsidiary - - 215 - (2,736) (2,521)
Credited to
equity - 19 - - - 19
(Charged)/credited
to statement
of comprehensive
income (222) (41) (64) 104 709 486
Effect of
changes in
tax rates (114) (59) (19) 80 153 41
------------------- ------------ -------------- ------------- ----------- --------------- ---------
Balance at
1 April 2014 831 600 414 (765) (3,523) (2,443)
Acquired on
acquisition
of subsidiary 89 - (13) - (557) (481)
Debited to
equity - (19) - - - (19)
(Charged)/credited
to statement
of comprehensive
income (673) 2 550 131 861 871
Effect of
different
tax rates
of overseas
jurisdictions 44 - (30) - - 14
Effect of
changes in
tax rates (2) (8) (48) 29 - (29)
Balance at
31 March 2015 289 575 873 (605) (3,219) (2,087)
------------------- ------------ -------------- ------------- ----------- --------------- ---------
6. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year, after deducting
any own shares held by an Employee Benefit Trust in a Joint Share
Ownership Plan ("JSOP"). Diluted earnings per share is calculated
by dividing the earnings attributable to ordinary shareholders by
the total of the weighted average number of ordinary shares in
issue during the year, after deducting any own shares (JSOP), and
adjusting for the dilutive potential ordinary shares relating to
share options, including the dilutive effect of JSOP shares that
have vested.
Total operations 2015 2014
GBP'000 GBP'000
-------------------------------------- -------- --------
Profit for the financial
year and basic earnings
attributed to ordinary shareholders 8,895 7,720
---------------------------------------- -------- --------
No No
Weighted average number
of ordinary shares: 000 000
Called up, allotted and
fully paid at start of year 107,803 105,760
Own shares held in Treasury (971) (1,016)
Shares held by Employee
Benefit Trust (141) (141)
New shares issued during
year - 1,101
---------------------------------------- -------- --------
Weighted average number
of ordinary shares - basic 106,691 105,704
Dilutive impact of share
options 1,236 1,005
Weighted average number
of ordinary shares - diluted 107,927 106,709
--------------------------------------- -------- --------
Basic earnings per share 8.34 7.30
p p
Diluted earnings per share 8.24 7.23
p p
----------------------------------------- -------- --------
Adjusted earnings 2015 2014
per share GBP'000 GBP'000
Profit for the financial
year and basic earnings
attributed to ordinary shareholders 8,895 7,720
* Amortisation of acquired intangible assets 4,368 3,093
* Acquisition costs 526 374
* Shared based payments 809 1,257
* Mark to market interest adjustment 125 20
* Accelerated write off of arrangement fees - 153
* Tax impact of adjusted items (1,093) (1,039)
Adjusted profit for the
financial year and adjusted
earnings attributed to
ordinary shareholders 13,630 11,578
---------------------------------------------------- -------- --------
Adjusted basic earnings 12.77 10.95
per share p p
Adjusted diluted earnings per 12.63 10.85
share p p
------------------------------------------------------ -------- --------
7. ACQUISITIONS
ServerSpace Limited
The Group acquired 100% of the issued share capital of
ServerSpace Limited ("ServerSpace") on 3 December 2014.
ServerSpace is a London based provider of managed hosting
services to over 300 customers. The acquisition is in line with the
Group's strategy to grow its hosting operations both organically
and by acquisition.
During the current period the Group incurred GBP116,000 of third
party acquisition related costs in respect of this acquisition.
These expenses are included in administrative expenses in the
Group's consolidated statement of comprehensive income for the
period ended 31 March 2015.
The following table summarises the consideration to acquire
ServerSpace and the provisional amounts of identified assets
acquired and liabilities assumed at the acquisition date:
GBP'000
------------------------------------------- --------
Recognised amounts of net assets acquired
and liabilities assumed:
Cash and cash equivalents 155
Trade and other receivables 376
Property, plant and equipment 453
Intangible assets 2,778
Trade and other payables (1,458)
Current borrowings (13)
Non-current borrowings (23)
Deferred tax liability (481)
Identifiable net assets 1,787
Goodwill 2,463
------------------------------------------- --------
Total consideration 4,250
------------------------------------------- --------
Satisfied by:
Cash - paid on acquisition 2,600
Contingent consideration - payable 1,650
Total consideration transferred 4,250
------------------------------------------- --------
The recognised amounts of all the net assets acquired and
liabilities assumed are provisional.
The share purchase agreement, in respect of the acquisition of
ServerSpace, included a provision under which the total
consideration payable may have been adjusted by a payment to be
made either to or by the Company, depending on the level of cash,
debt and working capital shown in an agreed set of accounts (the
Completion Accounts) made up to, and as at, the completion date.
Following agreement of the Completion Accounts it was agreed by the
Company and the former shareholders of ServerSpace that no payment
was due either to or by the Company under the terms of this
provision. The contingent consideration arrangements require the
Company to pay the former shareholders of ServerSpace additional
amounts contingent on the completion of the migration of existing
customer services to an iomart datacentre ("the Migration Payment")
and on the level of profitability and the mix of revenue delivered
by ServerSpace in the year ending 30 September 2015 ("the Earn-out
Payment").
The potential undiscounted amount of the total payments that the
Company could be required to make is between GBPnil and
GBP1,650,000. The amount of contingent consideration payable which
was recognised as of the acquisition date was GBP1,650,000.
The amount of contingent consideration payable in respect of the
Migration Payment is between GBPnil and GBP125,000 and the amount
of contingent consideration payable in respect of the Earn-out
Payment is between GBPnil and GBP1,650,000. The total contingent
consideration payable in respect of the Migration payment and the
Earn-out payment is restricted to GBP1,650,000 and, if the total of
the two payments would exceed this amount, the Earn-out payment
will be reduced by the amount required to reduce the total to
GBP1,650,000.
ServerSpace earned revenue of GBP1,003,375 and generated a loss
before tax of GBP128,093 in the period since acquisition.
Redstation Limited and Backup Technology Holdings Limited
The fair values of acquired assets and liabilities, including
goodwill, previously disclosed as provisional for Redstation
Limited and Backup Technology Holdings Limited have been finalised
in the current period with no changes to the fair values disclosed
in the Annual Report and Accounts 2014.
Pro-forma full year information
The following summary presents the Group as if the business
acquired during the year had been acquired on 1 April 2014. The
amounts include the results of the acquired business, a charge for
interest on the additional debt incurred to finance the acquisition
and depreciation and amortisation of the acquired property, plant
and equipment and intangible assets recognised on acquisition. The
amounts do not include any possible synergies from the acquisition.
The information is provided for illustrative purposes only and does
not necessarily reflect the actual results that would have
occurred, nor is it necessarily indicative of the future results of
the combined companies.
Pro-forma
year ended
31 March 2015
------------------------------- ----------------
GBP'000
------------------------------- ---------------
Revenue 67,721
Profit after tax for the year 8,207
-------------------------------- ---------------
8. INTANGIBLE ASSETS
Domain
Goodwill Development Customer Beneficial names
costs relationships contracts & IP
Software addresses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
Cost
At 1 April
2013 31,781 2,111 9,644 600 86 31 44,253
Additions - - - 24 - - 24
Disposals - - - (15) - - (15)
Acquired on
acquisition
of subsidiary 13,098 - 13,335 1,048 - 249 27,730
Development
cost capitalised - 557 - - - - 557
At 1 April
2014 44,879 2,668 22,979 1,657 86 280 72,549
Additions - - 598 435 - - 1,033
Currency
translation
differences - - 76 22 - - 98
Acquired on
acquisition
of subsidiary 2,463 - 2,778 - - - 5,241
Development
cost capitalised - 1,041 - - - - 1,041
At 31 March
2015 47,342 3,709 26,431 2,114 86 280 79,962
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
Accumulated
amortisation:
At 1 April
2013 - (1,396) (2,478) (534) (5) (31) (4,444)
Disposal - - - 15 - - 15
Charge for
the year - (473) (3,086) (156) (7) (31) (3,753)
At 1 April
2014 - (1,869) (5,564) (675) (12) (62) (8,182)
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
Currency
translation
differences - - (20) - - - (20)
Charge for
the year - (627) (4,361) (328) (7) (54) (5,377)
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
At 31 March
2015 - (2,496) (9,945) (1,003) (19) (116) (13,579)
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
Carrying amount:
At 31 March
2015 47,342 1,213 16,486 1,111 67 164 66,383
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
At 31 March
2014 44,879 799 17,415 982 74 218 64,367
------------------- ----------- -------------- ---------------- ---------- ------------- ------------ ---------
Of the total additions in the year of GBP1,033,000 (2014:
GBP24,000), GBP182,000 (2014: GBPnil) were funded by finance
leases, GBP484,000 (2014: GBPnil) was included in trade payables as
unpaid invoices at the year end resulting in a net GBP484,000
(2014: GBPnil) movement in trade payables. Consequently, the
consolidated statement of cash flows discloses a figure of
GBP367,000 (2014: GBP24,000) as the cash outflow in respect of
intangible asset additions in the year.
All amortisation and impairment charges are included in the
depreciation, amortisation and impairment of non-financial assets
classification, which is disclosed as administration expenses in
the statement of comprehensive income.
During the year, goodwill was reviewed for impairment in
accordance with IAS 36 "Impairment of Assets". No impairment
charges (2014: GBPnil) arose as a result of this review. For this
review goodwill was allocated to individual Cash Generating Units
(CGU) on the basis of the Group's operations. The goodwill acquired
in the ServerSpace acquisition has been allocated to the Hosting
CGU, as this is the CGU expected to benefit from the business
combination.
The carrying value of goodwill by each CGU is as follows:
Cash Generating 2015 2014
Units (CGU) GBP'000 GBP'000
Easyspace 17,137 17,137
Hosting 30,205 27,742
-------------------- --------- ---------
47,342 44,879
----------------- --------- ---------
9. PROPERTY, PLANT AND EQUIPMENT
Freehold Leasehold Datacentre Computer Office Motor
property improve-ments equipment equipment equipment vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ---------- --------------- ----------- ----------- ----------- ---------- ---------
Cost:
At 1 April
2013 837 5,180 11,215 17,138 1,251 43 35,664
Additions
in the year - 1,195 5,305 6,290 249 - 13,039
Acquisition
of subsidiaries 1,225 357 325 4,831 59 5 6,802
Disposals
in the year - - - (192) - - (192)
At 31 March
2014 2,062 6,732 16,845 28,067 1,559 48 55,313
Additions
in the year - 109 1,522 9,705 582 - 11,918
Acquisition
of subsidiary - 16 - 434 3 - 453
Disposals
in the year - - - (322) - - (322)
Currency
translation
differences - - - 94 - - 94
At 31 March
2015 2,062 6,857 18,367 37,978 2,144 48 67,456
------------------ ---------- --------------- ----------- ----------- ----------- ---------- ---------
Accumulated
depreciation:
At 1 April
2013 (79) (1,097) (3,675) (10,218) (679) (32) (15,780)
Charge for
the year (37) (321) (1,109) (5,535) (164) (4) (7,170)
Disposals
in the year - - - 170 - - 170
At 31 March
2014 (116) (1,418) (4,784) (15,583) (843) (36) (22,780)
Charge for
the year (34) (440) (1,469) (7,925) (269) (5) (10,142)
Disposals
in the year - - - 322 - - 322
Currency
translation
differences - - - (10) - - (10)
------------------ ---------- --------------- ----------- ----------- ----------- ---------- ---------
At 31 March
2015 (150) (1,858) (6,253) (23,196) (1,112) (41) (32,610)
------------------ ---------- --------------- ----------- ----------- ----------- ---------- ---------
Carrying
amount:
At 31 March
2015 1,912 4,999 12,114 14,782 1,032 7 34,846
At 31 March
2014 1,946 5,314 12,061 12,484 716 12 32,533
------------------ ---------- --------------- ----------- ----------- ----------- ---------- ---------
Of the total additions in the year of GBP11,918,000 (2014:
GBP13,039,000), GBP458,000 (2014: GBP894,000) were funded by
finance leases, GBP2,354,000 (2014: GBP1,577,000) was included in
trade payables as unpaid invoices at the year end resulting in a
net GBP777,000 (2014: GBP65,000) movement in trade payables and
GBPnil (2014: GBP429,000) related to non-cash reinstatement
provisions. Consequently, the consolidated statement of cash flows
discloses a figure of GBP10,683,000 (2014: GBP11,651,000) as the
cash outflow in respect of property, plant and equipment additions
in the year.
10.
10. BORROWINGS
2015 2014
GBP'000 GBP'000
---------------------------- -------- --------
Current:
Obligations under finance
leases (938) (1,038)
Bank loans (21,457) (18,090)
Current borrowings (22,395) (19,128)
Non-current:
Obligations under finance
leases (1,346) (1,780)
Bank loans - (11,936)
Total non-current
borrowings (1,346) (13,716)
Total borrowings (23,741) (32,844)
------------------------------- -------- --------
11. ANALYSIS OF CHANGE IN NET CASH/(DEBT)
Finance
Cash and Bank Other leases
Analysis of change cash equivalents loans loans and hire
in net cash/(debt) GBP'000 GBP'000 GBP'000 purchase Total
GBP'000 GBP'000
-------------------------- ------------------ --------- --------- --------- --------
At 1 April 2013 11,392 (8,848) - (2,972) (428)
Repayment of bank
loans - 16,500 - - 16,500
New bank loans - (37,500) - - (37,500)
Impact of effective
interest rate - (174) - - (174)
Inception of finance
leases - - - (896) (896)
Acquired on acquisition
of subsidiary 1,355 (4) (5,731) (334) (4,714)
Cash flow 278 - 5,731 1,384 7,393
-------------------------- ------------------ --------- --------- --------- --------
At 31 March 2014 13,025 (30,026) - (2,818) (19,819)
Repayment of bank
loans - 22,000 - - 22,000
New bank loans - (13,500) - - (13,500)
Impact of effective
interest rate - 69 - - 69
Inception of finance
leases - - - (640) (640)
Acquired on acquisition
of subsidiary 155 - - (36) 119
Currency translation
differences - - - (35) (35)
Cash flow (4,833) - - 1,245 (3,588)
At 31 March 2015 8,347 (21,457) - (2,284) (15,394)
-------------------------- ------------------ --------- --------- --------- --------
12. CONTINGENT CONSIDERATION
2015 2014
GBP'000 GBP'000
--------------------------------- -------- --------
Contingent consideration due
on acquisitions:
* ServerSpace Limited (1,650) -
* Skymarket Limited - (32)
* Redstation Limited - (1,239)
Total contingent consideration
due on acquisitions (1,650) (1,271)
---------------------------------- -------- --------
13. ANNUAL REPORT AND ACCOUNTS
The Annual Report and Accounts for 2015 will be posted to
shareholders on 30 June 2015 and will also be available free of
charge on request from the Company's registered office; Lister
Pavilion, Kelvin Campus, West of Scotland Science Park, Glasgow G20
0SP and on the Group's web-site at www.iomart.com.
14. POST BALANCE SHEET EVENT
The Group acquired 100% of the issued share capital and voting
rights of SystemsUp on 5 June 2015 on a no debt, no cash,
normalised working capital basis.
SystemsUp is a consultancy operation based in London which
specialises in the provision of Public Cloud consultancy largely in
the UK public sector. The company has formed strong relationships
with the Public Cloud providers and its consultants are highly
skilled in Public Cloud consultancy and deployment. The acquisition
is in line with the Group's strategy to grow its managed cloud
computing operations both organically and by acquisition.
At completion, an initial payment of GBP9.0m in cash was made
and in addition an amount of GBP0.5m was paid as an interim
settlement of the expected amount due in respect of the no debt, no
cash, normalised working capital adjustment. A further sum is
contingent on a measure of revenue for the year to 31 March 2016
which is expected to be paid in either May or June 2016. The
potential fair value of the contingent consideration payable has
been initially estimated to be in the region of GBP1.0m to GBP3.5m.
This is a provisional estimate of the likely range of the
contingent consideration payment. The contingent consideration is
not limited.
As the completion date of the acquisition was after the balance
sheet date of the Group, there is no revenue or profit before tax
from SystemsUp included in the Group's Consolidated Statement of
Comprehensive Income for the year ended 31 March 2015. In addition,
financial information from SystemsUp for the year ended 31 March
2015 has not been included in the pro-forma full year information
as shown in note 7.
15. ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held at
10.00am on 26 August 2015 at the Company's registered office.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAXKPEFPSEFF
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