Final Results
22 December 2008 - 6:00PM
UK Regulatory
RNS Number : 5458K
Net b2b2 PLC
22 December 2008
22 December 2008
Netb2b2 plc
Preliminary results for the year ended 30 June 2008
Netb2b2 plc ('Netb2b2' or 'the Group'), the digital communications business, today announces its preliminary unaudited results for the
year ended 30 June 2008.
Enquiries, please contact:
Geoffrey Griggs
Netb2b2 PLC
020 7689 8800
Azhic Basirov / Siobhan Sergeant
Smith & Williamson Corporate Finance Limited
Tel: 020 7131 4000
CHAIRMAN'S STATEMENT
Introduction
The year ended 30 June 2008 has been a year of transition.
Both during and since the year end we have been reviewing our overhead structure and we continue to reduce headcount and simplify our
structure.
As part of this progress we regret to announce that following six years of service as Group Managing Director, Andy Gannon has decided
to step down with effect from 22 December 2008.
We would like to place on record our sincere thanks for his leadership, commitment and perseverance over this period and we wish him
well in his several other business interests.
Financial and operational review
Group turnover has increased to �7.4 million (2007: �6.7m). Unfortunately the problematic major project, alluded to last year has
resulted in a litigation claim which has been settled since the year end for �400,000 payable in instalments over the next 3 years. This
prior period item has been fully provided for in these accounts. Prior to this claim and the provision for goodwill impairment, the Group
managed to record a considerably lower full year loss after tax of �17,000 (2007: �236,000) and it traded profitably in the final quarter.
The loss per share was 17.9p compared with 6.5p in 2007.
Good progress continues to be made in resolving the deficit resulting from a pension fund operated by a liquidated subsidiary of the
Group and a further write back of the amount previously provided has been made.
We are pleased to report that cScape grew its revenues by 15% year on year and acquired a number of new blue chip clients during the
period which offer a fair degree of promise in the medium term. cScape has also recently signed two new 3 year contracts with significant
long term clients.
In addition cScape's Customer Engagement Unit gained greater prominence in its field and produced two influential reports, the second
online "Customer Engagement Survey" and "Winners and Losers".
cScape, because of its Microsoft skills, was also chosen by Microsoft to create a global demo site for Sharepoint.
Blue Sky Hosting continues to provide good returns with a solid trading result. The adoption of the VMWare platform and the subsequent
partnership has enabled Blue Sky to further enhance its value proposition increasing its capacity for 24 x 7 operation without a
disproportionate increase in infrastructure costs.
IBM continue to position Blue Sky Hosting as one of their top Domino Hosting partners and this position is now well complemented by a
strong Microsoft and Open Source offering. We have recently seen sustained support from existing customers such as Riverford and indeed the
return of APTN to the fold after having "in-sourced" their infrastructure some 3 years ago.
Although Fernhart had a disappointing bottom line result it won a number of new clients during the period including in the public
sector.
ITM had a reasonable trading year although it continues to operate in a challenging business environment.
In view of the above it is considered prudent to provide in full for impairment of the goodwill relating to Fernhart and ITM and this
has resulted in a charge for the year of �1,026,000 (2007: �160,000).
Outlook
Unfortunately the general economic outlook for 2009 looks challenging but the effects of this on the Group will be mitigated to some
extent through our strong position in chartered membership organisations and our long term hosting contracts.
Keith Young
22 December 2008
Chairman
UNAUDITED GROUP PROFIT & LOSS ACCOUNT
Year ended 30 June 2008
2008 2007
Note �000 �000
TURNOVER 7,433 6,657
Cost of sales (2,114) (1,885)
______ ______
GROSS PROFIT 5,319 4,772
______ ______
Administrative expenses before exceptional item (5,746) (5,187)
Exceptional item (1,026) (160)
______ ______
Administrative expenses (6,772) (5,347)
OPERATING LOSS (1,453) (575)
______ ______
Non-operating exceptional items
Discontinuance of business and settlement of
pension liabilities in respect thereof 3 75 231
Interest payable and similar charges (104) (52)
Interest receivable and similar income 24 -
______ ______
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION (1,458) (396)
Tax on loss on ordinary activities - -
______ ______
LOSS FOR THE FINANCIAL YEAR (1,458) (396)
______ ______
BASIC LOSS PER SHARE (PENCE) 4 (17.90)p (6.53)p
______ ______
DILUTED LOSS PER SHARE (PENCE) 4 (17.90)p (6.53)p
______ ______
All turnover and results arose from continuing operations apart from the non-operating exceptional items which relate to the closure of
discontinued operations.
No separate statement of Total Recognised Gains and Losses has been presented as all such gains and losses have been dealt with in the
profit and loss account.
UNAUDITED GROUP BALANCE SHEET
As at 30 June 2008
2008 2007
�000 �000 �000 �000
FIXED ASSETS
Intangible assets 1,252 2,278
Tangible assets 631 532
______ ______
1,883 2,810
CURRENT ASSETS
Stocks 77 75
Debtors 1,498 1,483
Cash at bank 409 272
______ ______
1,984 1,830
CREDITORS: amounts falling due
within one year (2,615) (2,844)
______ ______
NET CURRENT LIABILITIES (631) (1,014)
______ ______
TOTAL ASSETS LESS CURRENT
LIABILITIES 1,252 1,796
CREDITORS: amounts falling due
after more than one year (494) (41)
______ ______
NET ASSETS 758 1,755
______ ______
CAPITAL AND RESERVES
Called up share capital 1,106 606
Share premium 514 553
Capital redemption reserve 6 6
Profit and loss account (868) 590
______ ______
EQUITY SHAREHOLDERS' FUNDS 758 1,755
______ ______
UNAUDITED GROUP CASHFLOW STATEMENT
Year ended 30 June 2008
Note 2008 2007
�000 �000
Net cash inflow/(outflow) from operating activities 5 (13) 465
Returns on investments and servicing of finance (80) (52)
Capital expenditure (341) (162)
Acquisitions - -
______ ______
Net cash inflow/(outflow) before financing (434) 251
Financing 577 (165)
______ ______
Increase/(decrease) in cash in the year 143 86
______ ______
Reconciliation of net cash flow to movement in net
funds
Increase/(decrease) in cash in the year 6 143 86
Decrease/(increase) in debt and lease financing (112) 165
______ ______
Movement in net funds in the year 31 251
Net (debt)/funds at start of year (278) (529)
______ ______
Net debt at end of year 6 (247) (278)
______ ______
Notes:
1. FINANCIAL INFORMATION
The unaudited financial information set out above does not constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. Statutory accounts for the year ended 30 June 2008 will be finalised based on the information in this preliminary announcement and
will be delivered to the Registrar of Companies in due course. The accounts for the year ended 30 June 2007, which received an unqualified
auditor*s report, have been filed with the Registrar of Companies.
2. SEGMENTAL INFORMATION
The Group operates in the UK and the whole of its turnover is in the UK market.
Turnover Operating Profit/(Loss)
2008 2007 2008 2007
�000 �000 �000 �000
Internet services 4,148 3,525 440 80
Publishing and digital 1,901 1,632 36 20
communication services
Specialist hosting 842 770 190 198
Media and interactive 542 730 (87) (30)
technology
Central and other costs/net - - (606) (683)
assets
Provision for liabilities - - (400) -
Impairment of goodwill - - (1,026) (160)
______ ______ ______ ______
Group 7,433 6,657 (1,453) (575)
______ ______ ______ ______
Profit/(Loss) before tax Net assets/(liabilities)
2008 2007 2008 2007
�000 �000 �000 �000
Internet services 447 56 1,152 1,105
Publishing and digital 11 2 118 231
communication services
Specialist hosting 186 194 701 515
Media and interactive (90) (31) 436 526
technology
Central and other costs/net (661) (688) (623) (462)
assets
Exceptional items (325) 231 - -
Impairment of goodwill (1,026) (160) (1,026) (160)
______ ______ ______ ______
Group (1,458) (396) 758 1,755
______ ______ ______
3. EXCEPTIONAL ITEMS
The Directors have reviewed the elements of goodwill and have concluded that it would be prudent to make a provision for impairment of
�1,026,000 relating to ITM Graphics Ltd and Fernhart New Media Ltd.
An amount of �75,000 previously provided in respect of pension liabilities has been written back in the year to reflect the current state of
negotiations with relevant parties.
4. LOSS PER ORDINARY SHARE
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary
shares during the year.
The diluted loss per share is the same as the actual loss per share. Due to the loss incurred in the year, there is no dilution effect from
the issued share options.
2008 2007
Basic earnings attributable to ordinary shareholders: (1,458) (396)
�000
______ ______
Weighted average number of ordinary shares 8,144,902 6,061,569
______ ______
Loss per share: (17.90)p (6.53)p
______ ______
5. RECONCILIATION OF OPERATING (LOSS) TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
2008 2007
�000 �000
Operating loss (1,453) (575)
Impairment provision 1,026 160
Depreciation 218 171
Loss on disposal/write off of tangible fixed assets (1) 28
Other provision 400 -
Decrease/(increase) in stocks (2) 66
Increase in debtors 10 (85)
Increase/(decrease) in creditors (211) 700
______ ______
Net cash inflow/(outflow) from operating activities (13) 465
______ ______
6. ANALYSIS OF CHANGES IN NET DEBT
At 1 July 2007 Cash flow At 30 June 2008
Net cash: �000 �000 �000
Cash at bank 272 137 409
Bank overdrafts (206) 6 (200)
______ ______ ______
66 143 209
______ ______ ______
Debt:
Bank loans (including invoice (193) (33) (226)
discounting)
Hire purchase obligations (151) (79) (230)
______ ______ ______
Total (278) 31 (247)
______ ______ ______
7. ACCOUNTING FOR GOODWILL
The board has assessed each subsidiary with reference to its durability, ability to sustain future long term profitability and assessed
ability to maintain market position. Based on this assessment the board is of the opinion that the goodwill elements have indefinite
economic lives. The board has carried out impairment reviews on these goodwill elements and has concluded that a write back of �1,026,000 is
sufficient.
8. COPIES OF PRELIMINARY STATEMENT
Copies of this announcement are available on the Company*s website www.netb2b2.com or from the company secretary at 4th Floor Central House,
142 Central Street, London, EC1V 8AR. Copies of the Annual Report and Accounts of the Company for the year ended 30 June 2008 will be sent
to shareholders in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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